APPROVED ON FEBRUARY25, 2015 BY THE BOARD OF … General.pdfFeb 12, 2015 · Development...

APPROVED ON FEBRUARY25, 2015

BY THE BOARD OF COUNTY COMMISSIONERSAT THE WEEKLY BUSINESS SESSION

General Discussion; February 12, 20152:00 p.m.— BCC Conference Room

Commissioners Keith Heck, Cherryl Walker, and Simon G. Hare; Linda McElmurry, Recorder

Chair Keith Heck called the meeting to order at 2:00 p.m.

1. Economic Development Recommendation/ Proposal

Arthur O' Hare, Finance Director presented Exhibit A, Economic Development showing the updated figures forthe Fund. He suggested the Board find ways to alleviate the pressure on the General Fund and consider usingEconomic Development funds to create a Community Development Director position when Dennis Lewis,Planning Director leaves so they can have someone to assist them.

Commissioner Walker reviewed the information that she had provided to the Board, Exhibit B, EconomicDevelopment Recommendation. The packet outlined services and programs provided by SOREDI, IVCDO, andSBDC. She then reviewed her recommendations on spending Economic Development Funds. The Board agreedthis was a great start. After some discussion, it was decided to bring it back on Tuesday during GeneralDiscussion.

2. Other( ORS 192.640(1) ". . . notice shall include a list of the principal subjects anticipated to be considered at the meeting,but this requirement shall not limit the ability of a governing body to consider additional subjects.")

The Board discussed the necessity of a Liaison for CASA, it was assigned to Commissioner Hare.

The Board discussed the underground tanks at the Dimmick site, Commissioner Hare said Karen Homolac with

Business Oregon is endeavoring to find funding for that project.

Commissioner Heck let the Board know he has relayed their decision to Jack Swift regarding his request for aResolution on the second amendment.

The Board discussed and agreed to form a centennial committee to organize an event for the 100th year

anniversary of the courthouse.

Commissioner Hare relayed he has seen the preliminary designs for an alternative entrance and they are comingalong with the project.

Commissioner Hare met with Ryan Johnson, Building Maintenance Manager and they felt the smoking area couldbe moved closer to the ramp to alleviate issues.

Commissioner Hare met with the City to discuss the Justice building and was told the City is doing an assessment.

The Board discussed sending a letter to the legislature in support of Parks even though the hearing has beenheld. Staff is to prepare a letter for Board signature.

Linda McElmurry explained the opt out process for Community Dispute Services and the request from JosephineCounty' s provider to do so. The Board agreed to opt out and directed staff to make it happen.

The meeting adjourned at 3: 28 p. m.

EXHIBITS

A Economic Development Spreadsheet

B Economic Development Recommendation

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ECONOMIC DEVELOPMENT AMOUNTRev. 2/ 12/2015) PROJECT NAME 2014-15 Paid

Internal ApplicationsI I

I Airport General Econ Development I $ 30,000.00 I 15,000. 00Airport Staffing Level Increase* I $ 30,000.00 I 30,000.00

I` Fair General Econ Development I $ 20,#x.00 I 10,000. 00Fair 2013- 14 Marketing Project****I 1 $ 10,25$.45` I 7, 955.00Fair Capital Improvement Plan* 8,500.00 I 8, 500.00Parks General Econ Development 20,000.00 I 10, 000.00Parks 2013- 14 Whitehorse Park Improvement** 5,4 , E I

mentPlanning General Econ Development 20,000.00 I 10,000.00

I I IExternal Applications I I

Boersma Bros. LLC INVIP Purchase Agreement* 30,000,0 IEcivis Grant Annual Dues I $ 6,800.001GP Chamber Annual Dues-all County Departments I $ 3,000.40 I 3, 000.00IV Chamber Annual Dues I $ 95.00 I 95.00IV Comm Dev Org Wheelchair Accessibility- River Forks St Park* I $ 5,240.00 I 5,240.00JCLI Library Core Services* 35,000.00 I 35,000.00Small Business Dev Center- RCC ' General Econ Development* I $ 25,000.00 I 25,000. 00Small Business Dev Center- RCC ' Project Specific*

I $ 10,000.00 IImagine Southern Ore Inc( VonHolliHigh Tech Business Recruitment I $ 50,000.00SOREDI Annual Dues 25,000.00 25, 000.00SOREDI 2013- 14 INV Sewer Feasibility Study** 890.70 890.70

II I I

4.

Total Proposed/Approved 338, 184. 15

Budget 2014- 15 539, 000.00

IBalance Available 2014- 15 I $ 200,815.85 185,680. 70

Board Approved Projects

Remaining balance on prior approved projects

Fund Balance June 30, 2014 464, 164.00Spent per above 185,680.70)Deposit 11/ 4/2014 1st Qtr Lottery Proceeds 76, 365.00Deposit 2/ 3/2015 2nd Qtr Lottery Proceeds 80,415.00

Cash Balance 2/ 12/ 2015 435,263.30

S:\ FIN\ALL\Fund Balance Analyses\210- Grant Projects Fund\2014- 15\ Eton Dev 2014- 15. xlsx

15 Ce' / ak,assIon

ECONOMIC DEVELOPMENT BUDGET RECOMMENDATIONS FOR REMAINDER OF FY 2014- 15

BALANCE AVAILABLE AS OF 2- 10- 15 250,815. 85

SOREDI ( Dues paid: $ 25, 000)

ANNUAL MEETING SPONSORSHIP/ PROMO 2, 000

EDGE MARKETING 10,000

GRANT WRITING 10,000

RCC/ SBDC( 2014 paid:$ 25, 000+$ 10,000 Project Specific, not yet paid.)

ADDITION DEVELOPMENT/ SUPERVISION 10,000

I. V. COMMUNITY DEVELOPMENT ORGANIZATION

REVOLVING LOAN FUND 50,000

25, 000 quarterly): March and May, 2015)

JOCO PARKS($ 20,000 budgeted,$ 10,000 paid to date)

MATCHING GRANTS 75,000

Priority: Various restrooms and Whitehorse Park project.)

CITY OF GRANTS PASS

RFP— STRATEGIC PLAN FOR CITY/ JOCO @ 50% 37, 500

WOOD" PROJECT

LOCAL COMPANY EXPANSION 24, 500

TOTAL 219,000.00

TOTAL AVAILABLE FOR UNEXPECTED OPPORTUNITIES $ 31, 815.85

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ECONOMIC DEVELOPMENT

Rev. 1/ 29/2015) PROJECT NAME

Internal Applications

Airport General Econ Development m ° x,. 1$ 15, 000 paid to dateAirport Staffing Level Increase* Paid

Fair General Econ Development M; $ 10, 000 paid to date

Fair 2013- 14 Marketing Project* 7, 955 paid to date

Fair Capital Improvement Plan* Nom= ; Paid

Parks General Econ Developmentw , $

10, 000 paid to date

Parks 2013- 14 Whitehorse Park Improvement** 14:",ePlanning General Econ Development i a .'$ 10,000 paid to date

External Applications

Boersma Bros. LLC NVIP Purchase Agreement* 14 iEcivis Grant Annual Dues I° = a 0, f'«

GP Chamber Annual Dues-all County Departments A PendingIV Chamber Annual Dues Pending

I IV Comm Dev Org Wheelchair Accessibility- River Forks St Park* 1,$: . O Paid

I JCLI Library Core Services* lki,=Aixama, " PaidSmall Business Dev Center- RCC General Econ Development* 1,$;:::: 414111 Paid

Small Business Dev Center- RCC Project Specific*

SOREDI Annual Dues 1 :- 1', y Paid

SOREDI 2013- 14 NV Sewer Feasibility Study*" I `;.. • ?' : Paid

Total Proposed/Approved I $ 288, 184. 15

Budget 2014-15 I $ 539,000.00

Balance Available 2014- 15 I $ 250,815.85

Board Approved Projects

Remaining balance on prior approved projects

Fund Balance June 30, 2014 464, 164.00

Deposit 11/ 4/2014 1st Qtr Lottery Proceeds 76, 365.00

Cash Balance Jan 28, 2015 540,529.00

S:\ FIN\ALL\Fund Balance Analyses\ 210- Grant Projects Fund\2014- 15\Econ Dev 2014-15. xlsx

0, Schedule of Economic Development PaymentsJuly 2010 to October 2014

Economic Dev Breakdown 14- 15 Budget Paid to dateIV Chamber 95

GP Chamber 500

Ecivis Grant 6, 800

SOREDI 25, 000 25,000

SOREDI 2013- 14 891

Small Business Dev Center- RCC 25,000 25,000

Small Business Dev Center- RCC 10,000

Josephine Community Libraries CORE Services 35,000 35,000

Boersma Bros. LLC 2013- 14 30,000

Budget Available for Project Requests 297,056

430,342 85,000

Interfund Transfers

Parks 20,000 6,667

Parks 2013- 14( Whitehorse) 8,400

Fair 20, 000 6,667

Fair 2013- 14( Marketing) 10, 258

Airport 30,000 10,000

Planning 20,000 6,667

108,658 30,001

Total 2014- 15 539,000 115,001

Economic Dev Breakdown 13- 14 Budget Paid to date iFair- Marketing 20,000 9,643

Parks- Whitehorse Park 20,000 11,600

GPChamber/ IV Chamber Dues 595 595

BR& E Project- GP Chamber 3, 000 3,000

Ecivis Grant Dues Renewal 6, 800 6,800

SOREDI Annual Dues 25, 000 25,000

NV Sewer Grant- SOREDI 25, 000 24,109

RCC- Small Bus. Dev. Ctr 25, 000 25,000

Josephine Community Libraries CORE Services 30,000 30,000

Advertising Fees

Securing Our Safety 1, 000 1,000

Budget Available for Project Requests 123,605

280,000 136,747

Interfund Transfers

Parks 20,000 20,000

Fair 20,000 20,000

Airport 30,000 30,000

Planning 35, 000 35,000

105,000 105, 000

Total 2013- 14 385,000 241, 747

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Schedule of Economic Development PaymentsJuly 2010 to October 2014

Economic Dev Breakdown 12- 13 Budget Paid to date

SOREDI Annual Dues 25,000 25,000

IV Data 50,000 50,000Kinetic Vehicles 30,000 30,000

Wildlife Images 10,000 10,000

E- Civis Grant User License 6,800

Josephine Community Libraries 35, 000 35,000

Rogue Community College 25,000 25,000

GPChamber/ IV Chamber Dues 595 595

Advertising Fees 66

Planning 2012 Home Occupation Permit Offsets 10,000 2,000

Budget Available for Project Requests 39,405r

225,000 184,461

Interfund Transfers

Parks 40,000 40,000

Fair 40,000 40,000

Airport 30,000 30,000

Planning 40,000t

150,000 110,000

Total 2012- 13 375,000 294,461



RCC IV Business Entrepreneurial Center 25,000 25,000

2011 BR& E Survey- payment in July 2011 2, 500 2,500

21st Century Library Project 30,000 30,000

AG 2 Arts( tourism) Project 3, 000 3,000

Planning 2012 Home Occupation Permit Offsets 20,000 10,000

105,500 95, 500

Interfund Transfers

Parks 40,000 40,000

Fair 40,000 40,000

Airport 30,000 30,000

Planning 40,000 40,000

150,000 150,000

Total 2011- 12 255,500 245,500

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Schedule of Economic Development PaymentsJuly 2010 to October 2014


SOREDI Contract 49,500 49,500


Kerby Belt RCC SBDC Business Center 25,000 25,000

Planning-Merlin NV Sewer System 5, 000

Planning-Update MNVC for Airport 12, 500 5,400

Planning-UGB Amendment 10,000 327

Planning- LDAC Expenses 5, 000 376

SOYA, GP& IV Chamber Dues 3, 000 635

Fair Sign Grant Match 25,000 25,000

SOASTC Grant/ Loan$ 25, 000 50,000 50,000

Concierge Home Watch 25,000 25,000

GP Active Club- Boatnik 2, 500 2,500

Sustainable Valley Technology( Soredi) 7,000 7,000

Rock& Earth Lab 24,000 24,000

2011 BR& E Survey 2, 500 2,500

Project Greenjobs- Soredi 10,000 10,000

Kinsington Place Memory Care Loan 30,000 30,074

Snuff It LLC 15,000 15,000

326,000 297,312

Interfund Transfers

Parks 50,000 50,000

Fair 75, 000 75,000

Airport 37,000 37,000

Planning 50,000 50,000

212,000 212,000

Total 2010- 11 538,000 509,312

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OREGON

Enterprise Zone and Electronic Commerce OverlayRequirements and Benefits

Updated 6/ 13/ 13

Enterprise Zone

Business Requirements

1. Eligible Activities— Industrial Zoninga. Manufacturingb. Assemblyc. Fabrication

d. Processinge. Shippingf. Storage

g. Call Center

h. Headquarters Facilityi. E- Commerce— Added to specific zones& North Plains

Hiring1. 10% increase in employment within the zone2. New employment must be maintained through the life of the benefits

Investment

1. Real Property 50,000

a. New Building or Structureb. New Addition or Modification

c. Heavy of Fixed Equipment or Machinery2. Personal Property Item( s) costing:

a. Personal Property per Item 50,000

b. Personal Property used exclusively > $ 1, 000

for tangible production per item

Business Benefits

1. 3 year property tax exemption on capital improvements2. 5 year property tax exemption on capital improvements if average

compensation for new hires is greater than 150% of Average Wage Level

for Jackson County $52, 722 and Josephine County $46,842

Southern Oregon Regional Economic Development, Inc. ( SOREDI) www.soredi.org

Electronic Commerce Overlay (Applicable to all Enterprise Zones)

Business Requirements

Eligible Activities - Electronic Commerce means the following in terms of abusiness investment or business activity, such that it:

1. Must involve dealing with customers, suppliers, clients, or other transactionalentities external to the eligible business firm, predominately by means of:

a. Direct internet use; or

b. A computer network that utilizes the Internet as a platform.

2. Must entail, support or relate to the sale or purchase of goods, property orservices, or business- to-business, retail or comparable basis, in addition toparagraph 1 above.

3. May include facilities, equipment, services, network, or software that areproduced, operated or supplied by a third party, who facilitates, fosters ormakes possible business transactions by means of Electronic Commerceconsistent with paragraphs 1 and 2 above. Such third party may be a qualifiedbusiness firm for the purposes of tax abatement.

4. Is not limited to the initiation or consummation of the sale or purchase or of

any arms length exchange, but may include a significant element of thetransaction' s overall completion or delivery that:

a. Is conducted predominately by means of Electronic Commerce, asdescribed in this rule, such as customer service, technical support,

claims processing, client evaluation, performance measurement,

and so forth, even if the actual sale, purchase or contract wasinitiated or consummated through other means; or

b. Naturally serves, underpins or arises from the sale or purchase ofgoods, property, or services predominately by ElectronicCommerce, as otherwise described in this rule, including but notlimited to the following; customer support, distribution, made- to-order, assemblage, shipping, warehousing, warranty service or anysimilar operation.

5. As used in Administrative Rule, " Predominately" means that the share ofapplicable sales- based activity represented by Electronic Commerce exceeds50%, as measured by:

a. Receipts

b. Number of orders

c. Clients served

d. An equivalent qualitative determination


Hiring1. 10% increase in employment in the zone2. New employment must be maintained through the life of the benefits

Investment

1. Real Property 50,000a. New Building or Structureb. New Addition or Modificationc. Heavy of Fixed Equipment or Machinery

2. Personal Property Item( s) costing:a. Personal Property per Item 50,000

c. Personal Property used exclusively > $ 1, 000

for tangible production per item

Business Benefits

1. Enterprise Zone Property Tax Exemption on Capital Investment plusIncome Tax Credit

2. 25% Income Tax Credit on Investments in Electronic Commerce up to amaximum of$2 million. The Tax Credit must be earned in a year in

which the business receives an Enterprise Zone property tax exemption.3. Unused Income Tax Credit from the first year may be carried forward for

an additional 5 years.


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Enterprise Zone Contacts:

Zone Manager For the Following Enterprise Zones:Grants Pass Area

Josephine Champion

Medford Urban

Jackson County Rural ( Including City of Rogue River, Butte Falls, White City)

Ron Fox

Executive Director

Southern Oregon Regional Economic Development, Inc.100 East Main, Ste. A

Medford, OR 97501

Telephone: ( 541) 773- 8946 Fax: ( 541) 779-0953

E-mail: [email protected]

Web Site: www.soredi.ora

City of Grants Pass Economic Development

David Reeves

Assistant City Manager101 Northwest A Street

Grants Pass, OR 97526

Telephone: ( 541) 450- 6005 Fax: ( 541) 479- 0812

E- mail: [email protected]

Web Site: www.VisitGrantsPass.ora

City of Medford Economic Development

Bill Hoke

Economic Development

411 W. 8th Street, Rm. 312

Medford, OR 97501

Telephone: ( 541) 774- 2000 Fax: ( 541) 774- 2522

E- mail: [email protected]

Web Site: www.ci.medford.or.us

Business Ore o

Larry HolzgangBusiness Development Officer

100 East Main, Ste. A

Medford, OR 97501

Telephone: ( 541) 219- 2895 Fax: ( 541) 776- 6027

E- mail: larry.holzgang@biz. state.or.usWeb Site: www.oreaon4biz.com


Enterprise Zone and Other December 2, 2014

Oregon Tax Incentives

Enterprise Zones and OtherOregon Tax Incentives

I 4

Arthur Fish

December 4, 2014

Medford, Oregon

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Outline

Taxes & Incentives Background

Enterprise Zones

Enterprise Zone Incentives

Other Property Tax Exemptions

Income Tax Abatements

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Oregon Business Development

Department dba Business Oregon 1



Taxes & Incentives Background

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Business location factors/costs

Fundamental to be viable( avoid elimination):

Logistics regionally, freeways, airport( hard to affect)

Labor—skills,diversity, etc.( cost variables?)Land/ site/ space( price/ rent, timing, access, utilities)

Taxes—broad determinant or project-specific?Sales& use on capital and current purchases*

Property locally assessed almost everywhere in U.S.*Income of corporations, owners& employees( withholding)*

Other— payroll( mandatory UI, worker' s comp insurance), and gross receipts,capital worth, real estate transfer, value-added and inventory—non-tax fees?

Other examples of costs

Energy pricesConstruction

Exemptions rather common by type of purchase or local/ state programs

i

t Typically abated with' credit?

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Incentives ... a marketing thing

Neither subsidy nor' corporate welfare'—not meant to make a

project feasible or profitable, where it would not otherwise be

To induce and motivate

1. Improve cash-flow spreadsheet, price points and perceived risksi,

2. Most of the time, so that existing firms stay and grow, if not atcurrent location, then nearby

3. Inter-state/ national competitiveness( not bidding war) z,

4. Bolsters sense of community support,... putting skin in the game"

Other economic development factors and efforts still indispensable

Differing influence on phases of decision-making from initialsurveying to deal-closing

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Policy with Oregon incentives

Exemptions on taxable property often mainstay—largely defined by lawwith special local approvals—but also certain state income tax

abatements and non-tax, monetary awards( SRF, BEP)

Major emphases have been:

Clean technology, green energy developmentAreas of economic hardship/ rural

Explicitly or effectively targeted programs, in terms of industries,geography, etc.—competitive impact—but no major state tool that canregularly be called on

Effective bias towards( physical) capital

Relatively simple& certain for business, economical, and evidently goodpublic return

Local—State collaboration critical in varying ways

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Other business development tools

Local, state and national economic development, some tools are

geographically based like enterprise zones, often not

U.S. states& localities generally have:Favorable debt financing, capital access or more equity- like infusions

Lower interest rate( e.g.,tax-exempt private activity bonds under federal tax code)New market tax credits

Otherwise unavailable capital( small business)

Federal tax credits for certain hires( namely, wOTC)

Property tax increment financing( TIF)Public infrastructure funds

Site selection/ quality assurances, and brownfield remediation/ risk control

Worker placement/ training services

Access to research and other sector resources

Act like incentive sometimes: funding, details and delivery are critical

Oregon taxes

Generally good climate, ranking among the lowest overall rate inCouncil of State Taxation( COST)/ Emst& Young studies( forbusiness... on average) and especially favorable for capital

Public Finance

Local property taxesCorporate excise tax— greater of minimum or 6.6% of state income,

7.6% of income a$ 1 million

State personal income tax( major revenue source)

Lottery, fees, charges, interest, etc.

No sales& use tax( one of five states)

Equipment and all else totally exempt, saving 4- 9%Nearly all states exempt purchases of" manufacturing" equipment,butnot necessarily other capital assets( for example, with data centers)

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Enterprise Zone and Other December 2, 2014 1


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Property taxes in Oregon

Everything' s taxable based on January-1 value at business site,except inventory and registered vehicles

Local rates vary by 2- 4 times with code area and array of taxingdistricts/ levies, but except for school or capital bond levies, rate is % fcapped(" compressed") at 10% 0+ 5%. of real market value( RMV)

Rate, however, is applied to taxable or assessed value( AV), which6

can trend lower than RMV due to Ballot Measure 50- 3% cap on

growth and changed property ratio( CPR) for new/modified property

County assessor& State Department perform many duties

Unitary assessment of utility property is a different approach

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Summary of property tax reliefexemptions on new plant & equipment

Strategic Investment Program( SIP) for big facilities, 15- year partialexemption anywhere in state*

Standard enterprise zone, qualified property 100°%exempt*t



The players

The Taxpayer—business firm

The State

My agency often involved with other programs, besides my expertiseDepartment of Revenue— crucial support

Fundamentally local with property tax exemptionsCity, port, county government,with land-use, permits, etc.,as well aseconomic development officials or nonprofit organizations; local zone

managers—a diverse group

County assessor offices—also considerably diverse, depending on peopleand zone sponsorship—but always critical:

Customer service, big and small projects when there are complexities

Tax impact estimations for typically larger prospectsCompliance& enforcement, sometimes unavoidable

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Income taxescorporate I non-corporate

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Interstate factors ap'•• :i t`- 1> O Av

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State TaxableIntome-(STI) x taxrates6.1.6-

Income-based Tax Liability reducible withcredits*

Federal law connection with exceptions—no domestic productiondeduction, IC- DISCs, and" tax haven' income under HB 2460( 2014)

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Enterprise Zone and Other December 2, 2014Oregon Tax Incentives

Single sales factorinterstate apportionment

Benefits multi-state, traded-sector C corporations compared to usingall three factors, if having major physical presence in stateFactor= Oregon sales_ all domestic sales

Factor x consolidated federal income= income subject to statetaxation( STI)

Oregon sales" do include:

Intangibles—whenever majority of income-producing activity performedin Oregon vis-à- vis other states with respect to" traded- sector services"Throwback—sales from Oregon to U.S. government or somewherewithout nexus—i.e., specific corporate entity not taxable there( Joyce)—which can be quite difficult to ascertain in the abstract

Gubernatorial agreements with Nike and Intel in 2013

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The enterprise zone concept

Diverse( enterprise)" zone" programs

Long history and worldwide phenomenon

Still majority of states, with various incentives and programs, butovershadowed by major statewide incentives in many cases since 1990sFederaI designations

if any, they could be basis for unlimited Oregon enterprise zones/ boundary]

System has evolved under Oregon Laws over more than 25 years

Rather unique in terms of importance, property tax orientation and rural

Long-term rural facility incentive developed in the late 1990sStatutes critical even thought local taxes and local control

Incentives remarkably stable since 2003 reordering, but more designations

Much valued by local governments/ OEDA members, who need toconsider political perceptions with growth& efficacy, and getting

hijacked by others' agendas( prices of success?)

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Designated zones

Oregon designations( currently 66)—both urban and( mostly) ruralPresently, for cities/ports/ counties still 2 availableIn addition, reservation/ tribal opportunities[ or federally based]

Local sponsorship and locally controlled in many waysTechnically designated by state, including tests for economic needEach designation lasts at most 11 years, but can be self- terminated, anduse or lose after first six years

Widespread activity:Many small firms, existing, diverse, rural vs. urban utilizationLow tax—$/job in most cases, but outliers greatly raise averagesPayback with incremental taxable property probably pretty good

Neither prerequisite nor cure- all, property tax abatement not alwayshelpful, but generally very useful in terms of visibility and one offew ways to do something for business

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Local sponsorship

Sponsorship arises from particular resolution at zone designation orboundary change... at the moment:

Cities— 117

Ports— 11

Counties— 30, but zones located in 35 of 36Tribes— 2

Some cities, ports or counties consent but do not sponsor

Collectivity of sponsoring jurisdictions—must act jointly!... might

create association to facilitate

Rights and responsibilities of co/ sponsors

Appoint local zone manager Assist County AssessorLocal incentives, waivers, services, Available, publicly owned real estateregulatory flexibility Set authorization filing fee and otherStrategy, marketing and business revenue

assistance Boundary change and termination ofSpecial benefits or exceptions enterprise zone

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Local zone management

Appointed by all cosponsors—simply formal notice to County assessor,Oregon Department of Revenue and Business Oregon

Virtually any person, or named position or organization; complementaryrole is best, of course

Up to two co- managers permittedOfficial assistants are common and active

Official representative... interchangeable under law with" zone sponsor"

Receives authorization applications, conducts consultation, and makes

ministerial decision to approve/authorize with assessor

Ongoing interaction with assessor's office, but relationship variesaccording to local institutions, the projects and level of activity

Should help oversees compliance of business firm in terms of hiring,supporting assessor' s office

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Enterprise zone parameters

Noncontiguous( except reservation partnership zones) but maximums:Total area( excluding below high water mark of navigable bodies)

12 square miles all urban( and tribal) zones

15 square miles all rural zones

Urban and some rural zones, lineal distance12 miles overall, greatest distance( diameter)5 miles between nearest points of separate areas

Rural zone in sparsely populated county, lineal distance25/ 20- mile overall, greatest distance( diameter)*

15 mile between nearest points of separate areas*

Document with designation/boundary changeArea estimated to nearest 0. 1 square miles

Overview and what added/ removed maps, electronic image and GIS shape file

Narrative description, might combine metes& bounds surveying, UGB/ citylimits with date/ ordinance, or tax lots with actual, current assessor maps

May be waived by Business Oregon director

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Zone designation/application

Round triggered by imminent" sunsets"( re-designated with new orexisting sponsors, or Business Oregon Director decides, whenever thereare extra/discretionary zones available

Applicant:( combo of) county, port or city cosponsors( new/existing)Elements

Statewide notice, call for applications, on-line materialsLocal decisions( hotel/ resort option),preparationsMandatory-

Economic hardship data/ meeting criterion compared to state/ MSAFairly certifiable/ business- ready landTimely notice to all non-sponsoring local taxing districts for public consultativemeeting, a week before sponsorship resolutionsMapping and description of proposed zone boundaryResolutions of governing bodies( including for only consent)Form with zone name, size information and so forth

Deadline(s)... Business Oregon reviews, competitive selection as necessaryDirector orders designation(s)

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Amendments to zone boundary

Several/any time a year;special guidebook—often new cosponsors joinwith greater ease than designation

Same size, distance and other considerations as with zone designation

except purely tribal),mapping, etc.

Port or other jurisdiction consent if its territory is( again) affected

Public outreach and timely notice to local districts; no meeting requiredAdoption of resolution(s)

At least as severe economic conditions compared to" original enterprisezone in encompassed or adjacent" residential areas"; economic measuremay differ from what compares to state as needed for designation

Other issues—limits on removal, UGBs, hotel/resort

Submit to Business Oregon for review; director issues order, with

effective date as early as receipt of complete request; actual work onqualified property may then begin

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Enterprise Zone Incentives

Standard exemptionthree to five years

Qualified property—previously unused in enterprise zone—beginsexemption period after being" placed in service," in that it is physicallyready for specifically intended commercial use

Employment-related requirements

Increase full-time,year- round, in-zone jobs by( greater of) one or 10 percentNo outside job losses( 30 miles)

Maintain minimum average employment during periodLocal conditions in an urban zone

For 4 or 5 years in total( extended abatement)-Negotiated agreement between firm and sponsor

Average annual compensation( with benefits)>_150% of county average wageexcept for MErxo-area urban zones

Enter into first-source hiring agreement—not required to use for actualemployees, only that it is executed with Worksource Oregon on behalf oflocal publicly funded job training providers—mutually beneficial

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j Enterprise Zone and Other December 2, 2014


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Space- time in zone Fstandard, three to five years

iProperty improvements and installations must come after the site isdesignated or added to enterprise zone

6

Authorization application" submitted" before hiring or any physical t

work, including direct site preparation( then free to proceed)1

Before approval—being authorized— address extended abatement and

any other special issue

Authorization can cover property placed in service successively over upto three years—each year's newpropertyreceives its own exemption f

period l'

Once property ready/in use, and having achieved new hiring, businessfirm then files claim+ property schedule with County Assessor( orDepartment of Revenue) by April 1

Provisions if zone terminates or expires 1

butj0p

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Steps for exemption I

standard, three to five yearsI

1) Business submits authorization application* to local zone manager I.i

2) Only then begin physical/on-site work& new hiring14

3) Conference to address verification& special issues—criticalquestions, trouble-shooting... i

i4) Manager& Assessor" authorize"( usually done quickly, but delays

occur up until time of qualification) t

5) First-source agreement executed with Contact Agency/ localWorksource Oregon office( or sooner before new hiring starts)

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Department dba Business Oregon 13i1f

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Steps (continued)

standard, three to five years

6) Business continues investment, annually applies for tax exemptionon construction in process,* as applicable, and begins hiring

7) Project completed—property effectively placed in service—as of( agiven) December 31

8) By April 1, business has met job minimum and files exemption claim*attaching property schedule*

Renew authorization if unready after two years)

9) Actual use/occupancy of property by June 30—i.e.,not merely inservice or ready for operations( which may be true up to 18 months prior)

10) Annual exemption claim* by April 1, 3 to 5 times for compliancebased on average annual minimum employment... but schedule only foradditional new property in the next two years

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Business eligibilitystandard, three to five years

Key question with enterprise zone authorization

Essentially providing goods, services or property to other businesses,organizations or equivalently within firm

Not retail or specified ineligibles( e.g.,health care, construction, propertymanagement)—even if for other businesses,... but of course

manufacturing and other" traded sector" activities

Outright Exceptions:

Hotels, motels, resorts( as elected by zone sponsor)Call centers( 90% outside" local calling area")Administrative, engineering/ design centers( HQ- like facility criteria)Anything E- commerce in up to 15 zones( 3rd- party providers, retail)

Ineligible operations/ activity allowed when:

Separate( brewery& pub and other examples)Not significant( gross receipts test)

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t Enterprise Zone and Other December 2, 2014i


R

Basic elements of applicationstandard, three to five years

g

Besides being eligible, applicant must be a" business firm"—private/ for-profit( PUDs/ rural co- op organizations too)

Serves as key approval/prima fade evidence for business to be ableto qualify, though property information not generally binding

Covers only a single location, proximate site(s) in zone x

Purposes-

Testing for eligibility f

Validating that zone might have influenced decision

Establishing existing employment level IO Inform about requirements& so forth

1

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Late application allowancesstandard, three to five years

Building/ structure bought or leased from unrelated partye.g_,"spec" or abandoned re/ developments)

Lease agreement/ closing document included with application

Must be authorized/ approved before occupancy

Other examples from administrative rule

Authorized firm/project acquired by anothert'i

Replace existing application

Property that is unfinished and has been untouched for 6 months( alsoj

not assessed) a

Good Cause waiver by the Department of Revenue( business stillneeds to get authorized)

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Preauthorization conferencestandard, three to five years

Post-application; between zone manager& business, and with theassessor' s office invited

Anticipate and mitigate later problems or compliance concerns,

especially annual average existing employment( base), confidence&timing of hiring, options, and preparation for later substantiation

Solidify understandingsCompany/ applicant about requirements and benefitsLocal entities about project

Address needs& methods to verify compliance as might be necessary,and identify roles& unusual circumstances

Often routine and perfunctory for typical project with obvious hiring—conference call or immediate three-way meeting are all good

Written summary part of application record

Before completing authorizationstandard, three to five years

Final Check of key determinants:Eligibility of business firm operations

Employment& hiring commitments

Initiate: Applicant: Contact Agency for first source hiring

Inclusion of local resolution(s) if waiving required employment increaseResolution(s) may contain other conditions but must specify job minimumLarge investment option—total cost of qualified property a$ 25 millionemployment may fall below existing level)

Direct modernization option:

1. Unit/ labor productivity rises 10% or more within 18 months2. Amount= 25% of tax savings dedicated internally to workforce training or

externally for local publicly funded job training providers3. No net decrease of employment

Same with executed extended abatement agreement, as applicable•

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Oregon Tax Incentivesi

3

Extended abatementstandard, three to five years

i

All cosponsors must accede to same agreement, which may haveadditional local requirements

Different ways to do it; resolutions common but not statutorily necessary

Find or create authorized signatory, either in general, or prior to negotiationi

Compensation[ MOST ZONES] a 150 percent:

Relative to county average annual wage( higher county if zone is in two)—most recently, available wage fixed at authorizationresets only with authorization renewal or filing of inactive authorization)

Using gross( non- mandatory) compensation with fringe benefits tFor all new jobs of firm as created through 1' t assessment year jMust be met each& every exemption year on average

Only extra two years forfeit if not meeting their specific requirements

But—normal qualification applicable during entire extended period offour or five consecutive years, thus increased exposure to losing firstthree years with respect to basic employment criteria, eta

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After authorizationstandard, three to five years i

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Execute first-source hiring agreement, not later than exemptionperiod by law, but administratively before hiring( once authorized) 1

File for enterprise zone construction-in-process( CiP) for property

unfinished on January 1( if not centrally assessed) by April 1* r

May amend application's property descriptions until beginning offirst exemption year as warranted—absolutely critical for anyunnoted new structure or basic property type! 1

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After( every) two calendar years, if project not ready to start Iexemption, statement to manager and assessor by April 1 keepsauthorization" active" to avoid fees upon

filings 1

Use regular, non-EZ version if not yet authorized or hotel/ resort

t But if project work has not even commenced, best to simply reapply i1

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Counted Employeesstandard, three to five years

Persons working throughout/anywhere in zone( except HQ- like facility)Permanent/ year- round positions> 32 hours per week

Never" FTE"( full-time equivalent)

Engaged in eligible zone operations/activities

Related administrative/ support staff in zone

Commonly owned firms( e. g., subsidiaries) treated separately, unless theyformally choose to combine( good for coincidental hiring or gross leasebacks)

Minimum increase= greater of one job or 10% of existing levelannual average over 12- month period prior to making application

Must achieve minimum increase on or before April 1 of first—initial year

Substantial curtailment" is falling below-Minimum as annual average during any exemption year

Highest level of total employment in previous claim form by 85% in singleyear or by 50% for two years in a row

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Transferring jobs into zonestandard, three to five years

For authorized

business firm toreceive standard

w exemption

Barely any job loss80 WWI allowed at Y, if

transferred to Zbetween application

and end of firstexemption year.

Firm employment atZ and X( and W ifinvolved) must

cumulatively satisfyits own 110% test atoutset and

throughout firstexemption year,

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Qualified, exemptible propertystandard, three to five years

k

Fundamentally, property must be:In construction/ existence or assessed( anywhere in county) only after I

the location of property is included as part of enterprise zone

First placed in service in zone during calendar year prior to exemptionmay be assessed or exist in county once zone exists if unused in zone)

Owned or leased by authorized business firmUsed in the furtherance of the production of income, and then, only ineligible activities( not retail fixtures, for example) 1

Excluded are land( and improvements thereto), rolling stock,t

mobile/driven devices and non-inventory supplies I

Not all or nothing

Severability—portions of property allowed( construction-in-process)Only value increase from additions or modifications is exempt

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Other property issuesstandard, three to five years

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Relative to application and authorization, overall estimated costs($) t

and timing are not binding, but... tz

Property must be at same general location, andApplication must indicate any major structure or type of property:

t

New building or structureAddition/modifications to existing building/ structure

Real property machinery& equipment( heavy/ affixed,M&E)Personal property

Special consistency for HQ- like facilities and BRED zone projects

Having leased qualified property is fine, anytime, provided...Lease agreement covers all tax years of exemption

Taxes pass through/paid by business firm( net) Owner(s) of leased property sign page 4 of schedule j

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Still more property issuesstandard, three to five years

Minimum costs

50,000 per property schedule, collectively for all real property, includingimprovements and heavy/ affixed M&E

50,000 per item of personal property... or$ 1, 000 per item if used exclusivelyin tangible production( or E- commerce in such a zone)...' item' vs.component

of integrated system?

Moreover, any M&E/ personal property must be newly... up to 3 monthsbefore application...

Transferred into county from outside, or

Acquired by business( but not assessed prior to zone anywhere in county)

Actual use/occupancy of property at latest by June 30 of first year,which must not be idled for 180 or more continuous days, used ineligiblynor removed from zone at any point during an exemption year

Assigning some property to only three years of five-year exemption?

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Exemption claim formstandard, three to five years

Once property is in service, after the very next January 1 but no laterthan April 1, authorized business firm:

Files with County Assessor( equivalently with Department of Revenue forindustrial accounts)— firm data& criteria

Attaches property schedule for any( new, additional) property in previousyear— itemized details

Furnishes copy to zone sponsor/ manager

With property schedule( start of exemption), form may be accepted lateUntil June 1 and receive full exemption period

By next April 1, with loss of first year

Fee— greater of$200 or 0.1% of RMV—if:

Filed late by June 1, orAuthorization became inactive—not renewed after two years without claim

Assessors enters on rolls with" potential tax" notation

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t Enterprise Zone and Other December 2, 2014

Oregon Tax Incentives I

Exemption claim proceduresstandard, three to five years

Local protocols

May depend on manager/ assessor offices, and pre-authorization conferencesFirm/ job data acceptable on face value; if doubt, initial qualification may bewithheld pending corroboration

Assessor can go directly to authorized firm or seek zone sponsor tconfirmation/ assistance:

Business qualification( jobs) i`Special circumstances( e.g.,square feetn eligible use) of property, etc.

Sponsor responsible for any special, local requirement—must documentfailure, in order for assessor to take action

Annual filing of form required( at least by itself) after all years of t.exemption, January- April 1, but with graduated late filing fee/ deadlinesup until August 31 c

For additional, new property to receive its own exemption period,subsequent property schedule attached, but only allowed in next twoyears per single authorization

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tCompliancestandard, three to five years

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During exemption, if one-page claim form is not filed( or withoutapplicable late fee, April 1- August 31)

Assessor may simply deny the remainder of exemption period( if anyremains; termination,not disqualification),or

Pursue actions below

If employment, property use or other information is questionable- i

county assessor( on own or at sponsor's behest) can formallydemand verifying evidence i

Send request by registered/ certified mail

Taxpayer has 60 days to respond bIf no response, disqualification is automatic 1

To avoid penalty, taxpayer/owner provides notice by July 1 after I

year when failure occurred( may be done with annual claim form)

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Enforcementstandard, three to five years

With notice of" substantial curtailment"( or local noncompliance) firmmay remain qualified if:

Payment made to zone sponsor by August 31In amount equal to tax savings( used for zone residents)

Only good once; a second time firm is disqualified with( net) back taxesDisqualification

All back taxes are imposed without interest with next tax roll—penalty, iffailure discovered( without notice) back taxes increased 20%

Liable for essentially all statutorily substantive requirements throughout allexemption years, including extended abatement

OnIy relevant property disqualified in cases before end of exemption of:Removal from zone

Ineligible use( another eligible firm may acquire and finish out exemption)Unused for more than 180 successive days

Lose" grand-fathering" status in terminated enterprise zone

business-= c

ores • n.

Rural renewable energydevelopmentzones

Not an enterprise zone but same standard exemption of 3- 5 years

Generating commercial electricity from renewable resourceProducing, distributing or storing biofuels, and certain USEPA verified fueladditives, for sale( broad inputs allowed)

Only entire counties so far( 12; single city or multiple, contiguouscounties may be designated, too); various projects( community wind,solar, geothermal, biofuel)

Rural"means zone covers( only/all) area outside metropolitan or

large-city urban growth boundary( UGB)

Zone designated at local request with adopted resolution to Business

Oregon( notice taxing districts), which sets total cumulative initial marketvalue( s$ 250 million) of projects that may be exempt with designation

Local waiver of employment requirement if project a$ 5 million,but nolocal additional requirements

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E- commerce Designated areas

Begun with four zones and one

city( North Plains) in 2001; sixmore allowed in 2005; five in2014

PMain distinctions:

w Personal property treatmentfor standard exemption

Special investment tax credit 1against state taxes

Effect varies and evolves

Up to 15 otherwise existing among designations, butenterprise zones— oftentimes impactful, including

currently available: 0 with existing firms

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Electronic commerce F

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Undertaking or furthering retail or commercial transactions via theinternet—orders, sales, customer support, data processing," B- 2- B"and so forth'

Assets must serve or support transactional activity carried out more E

than 50% via Internet/platform, rather than by other means ti

f

Engaging in E-commerceinside designated areaInvestments in building space and machinery that house or supportelectronic commerce operations, as well as specific equipment and

devices( e.g.,servers)Activities that ensue in same enterprise zone, such as" orderfulfillment"—Le.,warehousing, shipping

Third-party firms providing infrastructure or services to facilitateelectronic commerce by businesses, such as carriers

Conceivably, even for entirely local retail



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E- commerce EZ tax credit

Unique incentive with these designations, state income tax credit

offers incentives overlay, regardless of the investment's generalproperty tax exposure

Claim up to$ 2 million per year, based on 25% of the cost of capitalasset used for electronic commerce operations inside speciallydesignated area( so, up to$ 8 million in assets per year)

Business must( however, also) qualify for standard property taxexemption( even if not using it)

Minimum full-time hiring

Some qualified property,which includes personal property items usedin electronic commerce, which may cost as little as$ 1,000 and qualify

Electronic commerce operations specially eligible for standardexemption, though they would very likely be eligible anyway

To claim & use E-commerce credit

Investment in" capital"— i.e,, depreciable assets

Timing respective to the incurrence of financial obligation( purchase,contracting),not physical project work

Only after firm is" authorized" for exemption( application approved!)

Before/ during standard exemption period

In tax year beginning before 1/ 1/ 18( sunset)

Self-administered by taxpayer( not even special form)Personal or corporate state tax return

Other Credits"— Code 710

Document and keep records justifying E—commerce attribution andcalculations

Five-year carry-forward period( Code 910)

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I Enterprise Zone and Other December 2, 2014


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Long- term rural enterprisezone facilities g

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Distinct program from standard exemption, available currently in 34 of53 rural enterprise zones, mainly southern and central/eastern counties

iAt time of local agreement, county needs to meet" chronic" test for Ioutmigration or for per capita income or unemployment relative to U.S.over a number of years

Business Oregon annually reviews statistics; eligible counties change alittle year- to-year

Begun in 1997, has become key matter of interest with very specialopportunities in rural Oregon( e.g.,notable data centers, food processing,

t

advanced lumber products)

i

Incentives... plural— 13

Blanket, locally set exemption on property that is fundamentally differentfrom standard exemption's approach

Interesting, but hard- to-use income tax credita

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Property tax abatement glong- term rural facility 1

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Exemption

Any and all new property/ value at facility( as assessed after certification)Unlimited period of construction, including centrally assessed property

Then, for 7 to 15 years( overall)

Local certification of business, pursuant to: tApplication to local zone manager and assessor k.submitted at least before construction) 1

Agreement with zone sponsor that sets:

Period of exemption, and rPotentially other negotiated requirements

Resolution adopted by county( and city)

Business Oregon confirmation that location is eligible at time of agreement

Employment requirements relate only to facility jobs not enterprise 1

zone-wide, in contrast to standard exemptioni

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Department dba Business Oregon 25t

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Minimum qualificationslong- term rural facility

1111111• 1111111111New investment($) by'end ofyear when operations begin

1% total county real Q.5% total countyincluding existing, nonexempt °

market value up to„.:; real market value,up to

property); 25 million 12.5 milhon*

New full-time hires by 50, 35 or 10 bybusiness at facility

75 by end of 5th year* end of 3rd yearn

Average annual employee 150% of county average annual wage by end ofcompensation( including - 5th year,* based on the then Most recentlybenefits, all facility workers) available-,published figure

If>$ 200 million, then only 10 or more jobs are required

t(Only) after the year in which facility operations commence

35 if county populations 40.000; 10 if population s_10,000

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Income tax creditlong- term rural facility

Subject to special gubernatorial approval, which Business Oregon will

facilitate, normally after local certification

Only for a C corporation that owns facility

Claimed by taxpayer on special form( ORS 317.124)Based on 62.5% of gross facility payroll—likely a huge notional amount

5 to 15 years—established by Governor

1st claim by 3th full tax year after operations begin,which the firm should doeven if unable to use it, in order to preserve any future use( Code 804/ 904)

Corporation must actually pay minimum amount( up to$ 1 million) ofstate corporate excise taxes to use credit against remaining tax liabilityas it relates to facility based on in-state factors)

So, might not be worth much, if anything at all,...but big profits,inflation,... eventually?

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1 Enterprise Zone and Other December 2, 2014

Oregon Tax IncentivesiE

ii

Additional points 1long-term rural facilityY

I

After certification, there is little proscribed in terms of procedures to t

start and maintain property tax abatementLocal, adhoc communication, notice and so forth among business, assessorand zone sponsor have sufficed

No form to use construction-period exemption EBusiness Oregon has developed materials and guidelines for zone manager to

secure verifying employment data on an annual basisAll exempted taxes are forfeit if failing to meet employment or compensation trequirement,but law spells out exceptions due to recession or force majeurefor a year or more

c

Special provision would allow multiple facilities of same firm in one or 1more zone to be exempt simultaneously based on combined investmentand hiring criteria

Inasmuch as corporation is claiming tax credit, even if not using it, 30%of related excise tax payments are rebated to local taxing districts and/orthe zone' s cosponsors

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Tribal enterprise zones

Nine federally recognized Tribes in Oregon, two types:1. One Reservation Enterprise Zone per tribe, designated on request to state,

no limit on distance; may include land-Held in trust for Tribe by U.S. Government

t

Subject to filed, pending trust status,( and)/ orLocated inside reservation boundaries( incl. fee land)

2. Reservation Partnership Zones created by agreement of tribe with localgovernment; must be contiguous,but unlimited in number

To induce non-tribal/private business developmentProperty tax abatements as for any rural enterprise zone( trust land rulings?) ISpecial state income tax credit, to mitigate deterrent of tribe' s having orintroducing a tax to generate revenue

Equals 100% of tribal taxes imposed on business for first year of operations,and ad valorem tribal taxes on new facility/ enterprise- expanding investment f

Business claims year-to-year on personal or corporate tax return, up to statetax liability,using special form( Code 728) through 2017 IAny business activity( except property leasing) is eligible, if facility is new tozone/ reservation since 2001—does not need to qualify for any other program iS

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Department dba Business Oregon 27 r

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Other Property Exemptions

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Miscellaneous

Regular commercial facilities under construction

Anywhere in state, for up to two years... since 1959!

File form with assessor by April 1 for property not in service on January 1Timing for SIP directly connectedNot for centrally assessed( utility) propertyFacility non- severable—it's done, once any part is in use or occupancy*Rarely useful for" non-manufacturing"( needs to take 12+ months)*Only building/ structural improvements*

Five years for primary food processing equipment; renewed to 2020

Alternative energy systems( self-power/metering); difference in value isexempt, ends with sunset

Others relate to historic structures, leasing pubic dock/airport, andhousing, with service district opt-outs or opt-ins, and sunset clauses

Not true for special enterprise zone version( different form) which includes all

qualified property of an authorized firm( other than hotels)

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Oregon Tax IncentivesY

Strategic Investment Programf

SIP

SIP enacted in 1993... operates statewide; rural version, 2003

Very large capital investments—normal property tax payment may beunthinkable especially in the case of Intel

New investment of property in excess of taxable portion( based on realt

market value—BMV) exempt for 15 years... subject to local approval

Primarily County-based( On reservation, Tribal government x County)County—business firm initiate negotiationsPublic hearing E'Execute written agreement tCounty governing body votes t

If inside city, city must also be party to agreement with business firm 1Alternatively, Strategic Investment Zones with established, streamlinedlocal process, criteria& standard agreement

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Components of SIPt

Taxes still paid on property's assessed value( AV) below threshold( TIER I) IRMV=$ 100 million for urban sites s

RMV=$ 25 million in defined" rural area°( 30,000- pop. city's UGB of 12/ 01/ 02) tP

Increases by 3% per yearProperty assigned starting with land, then buildings, heavy machinery,...

ta

Statutorily fixed community service fee( CSF, TIER II) i

mtBusiness annually pays lesser of

25% of tax savings, or

500,000( rural),$2 million(urban) y

Divvied up locally, apart from business deali

Locally negotiated agreement can have further conditions, typically .involving additional local payments( TIER III,...) g

No statutory employment-related requirements, which have also inpractice not been imposed locally,but first-source hiring agreement - t

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Department dba Business Oregon 29 1.i

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Pursuant to county approvalSIP

Business firm applies to Business Oregon for final determination byOregon Business Development Commission( OBDC), which has seen

its role as complementary oversight in support of local decision

State application date determines what will be new for defininginvestment, and may precede local approval, although OBDC can actonly after complete county action

CSF distribution subject to separate agreement

Among county, city and special service districts, representing 75% ofsuch districts' taxing authorityAgreement must be executed within 3 months of OBDC determination,or OBDC must authorize or set formula

Typically, parties have agreed to distribute CSF among themselvesbased on their relative tax rates

Conventional SIP Process

Firm Firm

weighs 1111010 approaches • Negotiations

project County

Countyvote to

Firm& Countyforward to County/ city sign Public

OBDCagreement Hearing

I Firm mayFirm applies to OBDC pre- apply to

through Business Business

Local CSF Oregon Oregon to start

accordinvestment

a/ in 3

month` of Firm finishes project 'OBDC OBDC al. and begins 15- year

approval + approval * period with next

tax year

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Oregon Tax Incentives 1

x

Strategic investment zones (SIZ)

l'.

2005 Law; designations in Multnomah& Clackamas County

Zone designation

No limit on number, size, etc.but need to be contained in single county,contiguous and either urban or rural

County(& city) pre-establish requirements& procedures

Local governments document policies, program and boundary, and countyseeks designation by Oregon Business Development Commission E

Business firm applies a

Locally, under ministerial process, entering into standardized agreement ETo Business Oregon/ OBDC for same type of determination

Compared to regular program:

Newly acquired property does not count as part of investment/ taxableportion, if it is already inside the zone

CSF/ gain-share distribution provisions are no different g,

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Process if using SIZFIRM WEIGHS OBDC APPROVAL. e

JEC' - r

IFIRM APPROACHES l., Ec. z! CSF El

ZONE SPONSOR ic: orcl

Ei

mol lEIEE-, of

ORJ) C

FIRM SIGNS LOCAL , Eppru1,d l

AGREEMENT u

FIRM FINISHES

FIRM APPLIES TOPROJECT AND I

iBEGINS 15- AR 'YF,

OBDC THROUGH EBUSINESS OREGON `

PERIOA WITH

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j Department dba Business Oregon 31ci

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Estimating relative benefitfor own sake or relative to enterprise zone

Effect of property's changing market valuation, up or down—averagedepreciation of major property types

Real market value( RMV) to assessed value( AV) at location( changed

property ratio- CPR) and on the ground with any acquired property

Business firm's discount rate for present value of project

Phasing of investments over multiple years

Various factors at work; those that would help SIP out-performshorter- term, 100%(EZ) exemption:

Substantial real estate acquisition

Slower depreciation of property value

Low CPR with/more acquired property/ AV falling below RMV

Less phasing/ quicker build-out( EZ exemptions can stagger)

Low discount rate

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Numerical example of model

Property Tax Estimation over 17 yearsUS$ 150-million project

finished over three years

ProgramPayments* Savings*

Millions($)

EZ— 5- YEAR 13. 8 10.9

SIP( Urban) 23.2 1. 6

SIP( Rural) 11.2 13.5

At 16% rate; includes SIP community service fee; not discounted

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Enterprise Zone and Other December 2, 2014 1Oregon Tax Incentives

X

Shared Service FundSIP gain share

i

Although SIP can offer speedy local return, it also can generateconsiderable state-level tax revenue from personal income taxes

depending on actual employment

Law in 2007 affects all projects that begin the 15-year exemption

period in or after 2008

Starting in 2011, State( Department of Administrative Services— DAS)

to distribute funds for each project, to be locally divvied up the sameway as community service fee p

Distribution based on 50% of estimated personal income tax revenue

k from new and retained employees

Y=Nine months following the 2009- 2010 through 2018- 2019 tax year,all benefitting businesses annually report payroll data and so forthnesse u

to Business Oregon, so that DAS can estimate affected state revenuet

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Use and potential with SIP1

Experience in only 8 counties—big, unusual investments—Genentech, Georgia-Pacific, 13 energy sector projects, and

Intel, reallythe only remaining urban user since 1990' ssemiconductor fabs( Microchip in Gresham also)

Two projects, 1994/ 1996,$ 3 billion1999/ 2001,$ 12. 5 billion

2005/ 2010,$ 25 billion( reportedly near to being used up)2014... multiple projects up to$ 100 billion

What's next?...of great interest and near misses with recentopportunities, but remains to be seen where such massive capital

investors would arise that do not prefer enterprise zones

Strategic Investment Zones—still unusedj

Legislatively—no sunset; issues: shared service fund, ruraldefinition, more or less useable 1

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Department dba Business Oregon 33 ii1

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Income Tax Abatement

Oregon Investment Advantage

Multi-year state tax" holiday"—exemption/ subtraction( above the line—

not a credit) reduces taxable income proportionate to facility's share ofbusiness in state

Exemption no longer simple 10 years—newer applicants need to wait 24months after operations commence—thus harder to explain and market

Required of business firm at time of preliminary application:Operations are new/ unique to that firm in Oregon( statewide)

Not competing locally with existing businesses

Must then also:

Hire five or more full-time,year-round employees at facilityCompensate( including benefits) at least those five at 150% or more of countyper capita income, or 100% with sufficient medical coverage for all facilityemployees( except if preliminary certification is before 2011)

County eligibility changes a little year- to-year based on combination ofper capita income and unemployment rankings



1 Enterprise Zone and Other December 2, 2014

s Oregon Tax Incentives

i

G

Eligible location

Shaded Oregon Counties Eligible for Oregon Investment Advantageroot.. ON P 01. 1, avedbaiY.. eat"'•"""' I 101•.' 0"•""" 2016 Business location

with preliminary

k r#-=application... also

X4-3•. Gn anyindustrially

a „ _(

4zoned land

t,

V 4,, 1 inside or

outside any4 city)

r i 4 Within the

4 UGB of small

0. ;- city( s 15,000pop), or

c.. 4

9':.,714 # ;; 2, Both! 1El

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Process and benefit for businessOregon investment advantage

Firm applies to agency for preliminary certification before commencingconstruction or hiring($ 500 fee); 60-day period for local vetting

After completing facility& hiring, and commencing operations( whichmust occur directly after preliminary certification):

Firm may annually apply for certification($ 100 fee)Within first 30 days of tax year,until 10th year

Wait 24 months for preliminary certification applications since 7/ 1/ 11 f.

Claim subtraction for certified facility( Code 342) 5.

C corporation—facility' s share of corporation's payroll& property in OregonPersonal income tax filers/ pass- through partners—firm's share of taxpayer'sOregon income multiplied by facility' s share of firm's total revenue

State income taxes avoided will depend on total taxable income, theabove shares/percentages, and the tax rate that would have been 3

effectively levied on subtracted income 3



R



State income tax credits

Recall: reduce liability at end of tax return, below line

Taxpayer does something in a particular tax year—computes&claims amount on that tax return with pass- through to

owners/ shareholders of LLC or S corporation

Unused amounts usually may be carried forward a certain number ofyears, in many cases

No income tax credit in Oregon aimed at business development in

general, but a few can be helpful based on circumstances

Sunset dates always looming, generally good through 2017

Reviewed already, enterprise zone-based:Long- term rural facility,based nominally on payrollElectronic commerce investment( 25%) in 10 zones

Offset to tribal( ad valorem) taxes in reservation zone

bung ss

Passe tax credits with agencysubject to future legislation

Renewable Energy Equipment Manufacturing— sunset in 2013—

used for a solar cell makers pursuant to performance contracts with agency;this effectively transferable credit is 50% of up to$ 40 million in projectinvestment, in 10% increments over five years with five-year carry- forwards;up to$ 200 million allowed per biennium; very specialized but generous

State New Market Tax Credits( NMTC)— fully allocated$ 200 million ofqualified investment—agency granted credits to community developmententities, which use them for leverage financing of various enterprisesincluding nonprofits in eligible census tracts, consistent with federalprogram; entity sells up to$ 8 million per business of qualified investment toequity investors, who in following 3rd through 7t' year can claim 39% creditwith indefinite carry-forward; more of a financing tool

isCC a, s.




Oregon Tax IncentivesF

1S

i

Energy-related income tax creditsit

Historically played role in business development, but now less usable

Energy Conservation and Alternative Vehicle Fuel Infrastructure- 35%

of investment cost-k

Periodic/multiple opportunities during biennium for businesses to apply bydeadline to Oregon Department of Energy( ODOE) by category

p

Conservation categories include industrial processes but are mostly relatedto building systems, envelopes and so forth t28 million biennial program cap on total conservation credits

Claimed over five years— 10- 10- 5- 5- 5%

Transferable to other state taxpayers, but transfer rate as set by ODOE has 1tended to be unattractive to buyers

Five- year carry-forward of unused credit amountst

Biomass production/collection- based on dollar amounts per unit ofmaterial from Oregon and used in Oregon to produce fuel, power, etc.; IODOE procedures and transferable r

buors 0 tr

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Qualified research activity t

tax credit tt

t

Must incur qualified costs in tax year before January 1, 2018 I0

Claim against state tax liability, but only of a C corporation; i

self-administered form( Code 819)

Equals 5% of annual in-house expenses and payments for basic xresearch, inside Oregon, in excess of base amount total pursuant tofederal R&D credit under U.S. IRC§ 41

t

Deduction of expenses limited

This type of credit is common in other states, sometimes with t

substantially higher rate or greater cash- ability

1-million annual cap per taxpayer

Five-year carry-forward( not transferable, code 919)

bI,

nr .. 0



Enterprise Zone and OtherDecember 2, 2014


Employer-provided dependent

care assistance tax credit

Tax years beginning in or before 2015

Business certifies annually, rather simply with EmploymentDepartment

Claimable each year based on annual expenses for services, benefitsor on-site operations with company program( Code 707)Cost must be otherwise eligible if employee paid for it withtax-exempt accounts under U.S. IRC§ 129(d)

Somewhat common credit in other states, but notably 50% rate on:Cost of all information& referral services

Other eligible costs up to$ 2,500 annually per benefitting employee

Five-year carry-forward( not transferable, 907)

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Thank You Questions?Ary# 7

Enterprise Zones and Other Oregon Tax Incentives

Arthur Fish, Incentives CoordinatorBusiness Development Division

Oregon Business Development Department503- 986- 0140

A hulr.fi Pstate. or.us

httu: llwww.oregon4bi comlQriegon- BusinessiTax-It' cpntiKes'

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Department dba Business Oregon38

December 9, 2014

Good Stories on how SOREDI helps businesses succeed and build a stronger economy

I have never seen so many people so eager to lend a hand in our transition to Southern Oregon.SOREDI and everybody have been extremely helpful— it has been extraordinary. In addition, we have found anexceptional workforce here with a great work ethic." ( recruitment)

John Brinkert Jr., Vice President— Custom Door Parts, White City

N. " Without SOREDI and its assistance with enterprise zone benefits and expansion financing, wewould not have been able to relocate our factory from Seaside, California to Grants Pass, Oregon. SOREDIvalues building a strong business community in hopes that the future will be prosperous for all."recruitment/finance)

Belinda Marzi, Vice President- Marzi Sinks, Grants Pass

We were well received by people of influence here who were willing to listen and learn."startup/finance)

Jessica Gomez, President— Rogue Valley Micro Device, Medford

SOREDI provides essential expertise and resources to help attract companies to Southern Oregon.Their support allowed Fire Mountain Gems to transition from the Illinois Valley to Grants Pass, growing from160 employees to over 500. Their support of the electronic commerce zone is one example of how theypartnered with us to grow our business investment, as well as attract qualified employees to the region."

expansion/ incentives)

Vern Frol, CEO- Fire Mountain Gems, Grants Pass

SOREDI works hard to help business prosper while also supporting a healthy, vibrant community that iseconomically growing and diversified." ( expansion/ incentives)

Steve Brown, President— CDS Publications, Medford

SOREDI is an invaluable asset in Southern Oregon. Without SOREDI, First Call Resolution would not

have located in Grants Pass and currently employ 200 people— pumping a few million dollars into the local

economy every year.".( recruitment/ expansion)

John Stadter, President- First Call Resolution, Grants Pass

SOREDI provides constant and reliable information on everything from financing to facilities andother government programs." ( expansion,/ resources)

Nancy Morgan, CEO— Yala, Ashland

Great Oregon Heavy Lift Helicopter Consortium meeting ... I love the way SOREDI facilitates. We aremaking some headway into the emergency response arena thanks to your participation at the NEMAconferences." ( facilitation)

Connie Gaar—Croman Corp, White City

SOREDI has been of value to Oregon Swiss Precision since we movea to urants rass to 5ld LAJIIINct, ly iii

1989. SOREDI was a source of advice regarding sources for supplies, shipping contacts, and recruitingemployees. Later as we expanded and grew SOREDI was instrumental with property tax abatefnentincentives, grant funding, and financial assistance." (recruitment/ expansion/ finance/ incentives)

Michael Anderson, President— Oregon Swiss Precision, Grants Pass

Thank you for your kind and integral referral to Business Oregon' s International Division, as that

was a country to which we had not traveled and were not very familiar. That connection helped us resolve ainternational commerce/ distribution problem." ( expansion/ resources)

Robbin Lacey, Founder—Sunday Afternoons, Talent

SOREDI provided the necessary gap financing that made our project work. Everything came togetherin short order allowing us to expand our facility and capacities, while also hiring new employees."expansion/finance)

Don and Lynn Roemer, Owners— Cascade Metal Recycling, Grants Pass

SOREDI assisted us in our sustainable approach to business." ( expansion/ finance/ incentives)

David Gremmels, CEO— Rogue Creamery, Central Point

Linde has been operating our specialty chemical gas plant in White City for 16 years ... we found consisten'

and professional economic development support from SOREDI and state-wide resources."recruitment/expansion)

Art Pernsteiner, General Manager—Linde Gas North America, White City

Many governmental and private organizations were extremely helpful in making our operation asuccess ... including the assistance from SOREDI. We could not be more pleased with the success we haveachieved in Jackson County!" ( recruitment/ expansion)

Andy Kopral, Treasurer—Amy's Kitchen, White City

NSOREDI has been instrumental in the existence of Encore Ceramics in Josephine County and ourcontinued survival ... providing part of the funding needed to relocate the company from California which othe last twelve years has contributed over$ 16 million in payroll to its local employees."recruitment/finance/ incentives)

Barry Russell, CEO— Encore Ceramics, Grants Pass

SOREDI stands*out as our most impactful business associate. Whether through facilitating opportunisuse of government training funds, or supporting us with a business loan during a time of neeor through simply providing sage advice, SOREDI has been a remarkable and reliable source ofsupport. They are a tremendous asset to businesses in southern Oregon." ( expansion/ incentives/finance;

Alan Young, COO— Radio Design Group, Rogue River

We found SOREDI to be highly accommodating in helping us connect with local resources, pointinus in the direction of various properties for sale, informing us of various grant/ loanresources, and assisting in a variety of other ways." ( recruitment/ incentives)

Ken Westrick, CEO/ Owner— TerraMai, White City

VNe found SOREDI to be highly accommodating in helping us connect with local resources, pointingus in the i rection of various properties for sale, informing us of various grant/ loanresources, and assisting in a variety of other ways." ( recruitment/ incentives)

Ken Westrick, CEO/ Owner—TerraMai, White City

Tierra del Sol would not have been able to get financing for the store without SOREDI. SOREDI is animportant resource in Southern Oregon that allowed me to start my business and fulfill mydream!" ( entrepreneurial assistance/ finance)

Heidi Phillips, Owner—Tierra del Sol, Grants Pass

Duro-Last has a great working relationship with SOREDI, who has been instrumental in our growth andexpansion throughout the years. SOREDI has helped us with property tax abatement incentives throughthe enterprise zone and has helped us interface with local community leaders."expansion/ incentives)

Tim Hart, Vice President—Duro-Last Roofing, Merlin

Southern Oregon Regional Economic Development, Inc. (SOREDI) is a non-profit, member-based organization

dedicated to increasing the long-term prosperity of Jackson and Josephine Counties. We are a membershiporganization who relies upon nearly 150 private businesses, public utilities, and public sector partners for its fiscalsustainability.

In addition to assisting area businesses in a variety of capacities, SOREDI also serves 13 incorporated cities includingAshland, Butte Falls, Cave Junction, Central Point, Eagle Point, Gold Hill, Grants Pass, Jacksonville, Medford, Phoenix,Rogue River, Talent, and Shady Cove, including both Jackson and Josephine counties. SOREDI provides traditionaleconomic development services such as:

BUSINESS RETENTION, EXPANSION AND RECRUITMENT- SOREDI serves as project managers for expanding andrelocating companies, providing assistance with local site selection, workforce fulfillment, public utility capacities,financing, and economic incentives, including managing the eCommerce and Enterprise zones. The SouthernOregon Edge shares remarkable stories of national business leaders from Southern Oregon and how quality oflife, workforce, and professional networks have translated into innovation, outstanding customer service andhighly productive workplaces.

BUSINESS ADVOCACY- we act as liaison between private and public sectors to promote business, resolvechallenges, and build collaborative partnerships between the two.REVOLVING LOAN PROGRAMS— SOREDI operates a$ 6. 3 million revolving fund for private business. To dateSOREDI has provided over$ 16. 6 million in loans as well as creating 875 jobs and retaining another 1, 072 throughits lending activities. And in assisting startups, SOREDI teams up with the local SBDCs to provide guidance andmentorship to start- up businesses.ENCOURAGING ENTREPRENEURIAL ENDEAVOR— Now in its ninth year, the Jefferson Grapevine series provides

the region' s brightest entrepreneurs and concept- stage companies with direct access to seasoned investors and

leaders from the business community. Bi Monthly informational meetings offer a wide variety of businessservices including presentation skills, operational considerations, marketing overview, as well as the camaraderieand support that comes from this encouraging and nurturing environment. The fourth annual 2014 SouthernOregon Angel Conference awarded over$ 200,000 to the winning Launch Stage Company and another$ 12, 000 tothe winning Concept Stage contestant. The Oregon Entrepreneurial Network and representatives of SOREDI' sTechnical Advisory Group( TAG Team) also provide guidance and direction; the TAG Team concept receivednational recognition by NADO for the Innovation Award at their national convention in San Francisco in 2013.

SOREDI additionally plays a leading role in The Sounding Board, a program designed to encourage drop- inconversation between TAG Team coaches and entrepreneurs in a relaxed setting.RESOURCE— SOREDI provides demographic research regarding the region' s industrial and commercial landinventory database. We also make connections amongst key community members and between public andprivate sectors, often serving as the starting point in gathering research. For the past eleven years the Southern

Oregon Business Conference provides salient economic and other entertaining and insightful forecasts intotomorrow' s opportunistic business environment. And over the past several years SOREDI has hosted the Site

Consultants tour to educate and expose site relocators from all over the country to this region' s assets on behalfof their industrial clients.

CONNECTIVITY— SOREDI' s driving force has been to bring people, businesses, and ideas together. Theirsignature Industry Tours has received national recognition, bringing together groups of inquisitive businesspersons to tour industrial locations within half days' time. SOREDI co- sponsored two China Connection events

over the past three years, honored by the Chinese Consulate General attending from San Francisco. SOREDI hasbeen the coordinator of the Heavy Lift Helicopter consortium statewide, entering its sixth year. SOREDI annuallyhosts the Oregon Business Council Forum, providing input to the Oregon Business Plan, representing SouthernOregon' s interests in this critical process. Bankers' Symposiums are held annually, drawing together the region' sbanking community to discuss topical financing issues. SOREDI also played a key role in the revival of theSouthern Oregon High Performance Extension Consortium (lean manufacturing).

Making Connections—it's what we do.

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SOREDI recognized that beyond the traditional economic development playbook of Business Retention,

Expansion& Attraction, we needed to encourage and nurture Emerging Business— those pre- revenue entities

and individuals who had a concept or idea but not the means to execute their vision. In the recent past the

Jefferson Grapevine came to be THE place where entrepreneurs and other interested parties would gather to

socialize, make connections, and attentively listen to the " next big thing."

The Emerging Business Initiative' s Intended Purpose:

1. Do a better job identifying prospective entrepreneurs.2. Improve the " deal flow" surrounding the annual Angel Investment Conference to retain

its investors and expand its reach.

3. Identify a group of volunteer professionals who could provide guidance and

encouragement to help move ideas and concepts to viable commercial application.

And so how to achieve this? One important ally was OEN ( Oregon Entrepreneurs Network). Another was

EDCO, our counter-part in Bend, whose successful program they entitled " The Stable of Experts." Hence, the

TAG Team was created. TAG= Technical Advisory Group.

How this Program Works:

Pre- entrepreneurs often begin with an Idea or Concept that could use some additional guidance— the kind of

assistance that our TAG Team members can provide. These are volunteer professionals—those possessing

needed skills such as accounting, finance, marketing& communication, operations, distribution, and a variety

of other skills sets and experience.

Bringing the Two Together:

Until recently we literally did not know how to find a pre-entrepreneur. And so the second order of businesswas to find our prospects!

To date thirty (35) volunteer professionals have been recruited—more than halfway to the goal of sixty( 60)!

We are seeking skilled, experienced people as earlier described who can devote up to 4 hours per month tocoach a young company or entrepreneur. Sometimes a TAG Team member will just make a referral—other

times they assist them with a need that can be readily filled. No one expects you to be a generalist. And not

every TAG Team member will be called upon— it' s all based upon the specific need.

We' re still somewhat new at this but if you are interested in joining the TAG Team please contact us and we' llbegin the simple process.

John Lamy, Chair Alex Pawlowski, SOREDI Staff

Lamy Consulting TAG Team Liaison

[email protected] alex @soredi. org

541. 899.2928 541.779. 2608

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Why does Regional Economic Development matter?

SOREDI - Helping Business Prosper ... that' s our job!

SOUTHERN OREGON REGIONAL ECONOMIC DEVELOPMENT, INC.

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Southern Oregon Regional Economic Development, Inc. (SOREDI) is a non-profit. Member-based organization

dedicated to increasing the long-term prosperity of Jackson and Josephine Counties. We are a membershiporganization who relies upon more than 135 private businesses, public utilities, and public sector partners for itsfiscal sustainability.

In addition to assisting area businesses in a variety of capacities, SOREDI also serves 13 incorporated cities includingAshland, Butte Falls, Cave Junction, Central Point, Eagle Point, Gold Hill, Grants Pass, Jacksonville, Medford, Phoenix,Rogue River, Talent, and Shady Cove, including both Jackson and Josephine counties. SOREDI provides traditionaleconomic development services such as:

BUSINESS RETENTION, EXPANSION AND RECRUITMENT- SOREDI serves as project managers for expanding andrelocating companies, providing assistance with local site selection, workforce fulfillment, utility requirements,financing, and economic incentives, including managing the eCommerce and Enterprise zones.BUSINESS ADVOCACY- we act as liaison between private and public sectors to promote business, resolvechallenges, and build collaborative partnerships between the two.REVOLVING LOAN PROGRAMS— SOREDI operates a$ 6. 3 million revolving fund for private business. To dateSOREDI has provided over$ 15. 5 million in loans as well as creating 824 jobs and retaining another 1, 025 throughits lending activities. And in assisting start-ups, SOREDI teams up with the local SBDCs to provide guidance andmentorship to start-up businesses.ENCOURAGING ENTREPRENEURIAL ENDEAVOR— Now in its eighth year, the Jefferson Grapevine series providesthe region' s brightest entrepreneurs and concept-stage companies with direct access to seasoned investors andleaders from the business community. Bi Monthly informational meetings offer a wide variety of businessservices including presentation skills, operational considerations, marketing overview, as well as the camaraderieand support that comes from this encouraging and nurturing environment. The third annual 2013 SouthernOregon Angel Conference recently awarded$ 220,000 to the winning Launch Stage Company and another

11,200 to the winning Concept Stage contestant. The Oregon Entrepreneurial Network and representatives ofthe recently formed Technical Advisory Group( TAG Team) also provide guidance and direction; in fact, the TAGTeam concept was received national recognition by NADO for the Innovation Award at their national conventionin San Francisco this summer. SOREDI additionally plays a supportive role in the recently formed Rogue Nexus, agroup of E- Commerce businesses that meets to discuss topics of the day and share information in a collegialatmosphere.

RESOURCE— SOREDI provides demographic research regarding the region' s industrial and commercial landinventory database. We also make connections amongst key community members and between public andprivate sectors, often serving as the starting point in gathering research. For the past ten years the Southern

Oregon Business Conference provides salient economic and other entertaining and insightful forecasts intotomorrow' s opportunistic business environment. And over the past few years SOREDI has brought together a

Developers and Brokers forum to discuss ways to address a wide variety of persistent challenges impacting theirindustry.CONNECTIVITY— SOREDI' s driving force has been to bring people, businesses, and ideas together. Theirsignature Industry Tours have received national recognition, bringing together groups of inquisitive businesspersons to tour industrial locations within half a day. SOREDI co- sponsored two China Connection events overthe past three years, honored by the Chinese Consulate General attending from San Francisco. SOREDI has beenthe coordinator of the Heavy Lift Helicopter consortium statewide begins its fifth year. SOREDI hosts the Oregon

Business Council Forum, providing input to the Oregon Business Plan, representing Southern Oregon' s interestsin this critical process. Annual Bankers' Symposiums are typically held annually, including one held as anintimate conversation with Oregon' s Senior Senator, Ron Wyden. And just recently the Southern Oregon HighPerformance Extension Consortium ( lean manufacturing) re- formed as a collaborative partner of SOREDI.

Making Connections—it's what we do.

soredito help business prosper

4

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Jefferson Grapevine Emerging Business Initiative

Coaching and Mentoring Overview

Mentors

The Merriam- Webster dictionary defines a mentor as" a trusted counselor or guide." A mentor is

someone with more entrepreneurial business experience than the entrepreneur and someone who

serves as a trusted confidante over an extended period of time, usually free of charge. In practicalapplication, a Mentor is an individual, usually older, always more experienced, who helps and guidesanother individual' s development.

Coaches

By contrast, the role of a Coach can be as simple as making a connection—a referral—to another

resource. Making these linkages can be extremely helpful and offer the encouragement and support foran entrepreneur or young company to continue their progression and evolution. The Coach is anindividual with experience and expertise within a particular profession or industry. They will typicallyavail themselves to make a referral, point someone in the right direction, or have a conversation with a

budding entrepreneur seeking advice. Sometimes it can be as simple as answering a question over the 1'

telephone or email.

Expectations

The biggest difference between a Mentor and a Coach is that the Mentor has one assignment while the

Coach serves more as a resource.

Business Mentors

So what does it take to be a business mentor? It takes the same level of interest, commitment, and

confidence in your own abilities that it takes to mentor a student or a trainee. Mentors provide support,

direction, and encouragement.

Who becomes a mentor? Why do they do it? The answers are as varied as the people involved. Some ofus were lucky enough to have had a mentor and want to repay that Others just want to help out, be apositive influence, or give something back to their community.

Industry analysts, consultants, professionals, and those possessing good networking contacts can sharetheir expert knowledge regarding particular situations and needs that may be encountered. This isespecially helpful to a start-up company or an entrepreneur with a promising concept or idea. Theirneed to" gain traction" is a critical component to realizing a dream and assisting it to become a viableenterprise.

So, why do this? First and foremost it is a way to give back to your community and to society at large.Mentors and coaches may do this to develop their skills as a teacher, manager, strategist, or consultant.And a true mentoring relationship also works in both directions—they learn about new ideas from youjust as you learn timeless wisdom from them.

But whatever the benefits to the mentor or coach, the payback to the entrepreneur, is even greater:

Where else can you turn? There' s no boss any more to turn to for advice or direction—maybe not seven any employees yet. You' re flying solo. But you don' t have to. Everybody needs a good reliablesounding board, second opinion, and sometimes just emotional support.

1


They've" been there, done that." Learn from others' mistakes and successes. They don' t have tohave experience in your particular industry. They don' t have to be up on the latest trends ortechnology—you've got other sources for that. Their role is to share with you lessons from their

experience in the hopes that you can learn them a bit more quickly and easily.

It's( usually) free. If you' re on a tight budget, that' s a major factor. While good coaches and

consultants may be able to offer some things that a mentor doesn' t, it comes at a price, usually ofseveral hundred dollars a month. Mentors, though, are readily available free of charge through anumber of organizations.

Expand your social network. Your mentor, being an experienced businessperson, is likely to have anextensive network, and can offer you access to far more senior decision- makers than you currentlyhave. And they will be far more willing to open that network up to you than some casualacquaintance from a networking meeting.

A trusted, long-term relationship. Your mentor has no ulterior motive— no service or product to sell

you. That combined with their experience creates a good foundation for trust. And as the

relationship develops over time, that trust can grow even stronger. Also, your time with them

becomes more and more efficient as they become more and more familiar with you and yourbusiness.

Every entrepreneur should have one.

A good mentoring relationship provides an entrepreneur with a mentor who will share theirprofessional knowledge and expertise in the field. A good mentor is available to answer any questionsrelevant to any given situation. Sometimes this may necessitate utilizing the services of a Coach—someone with background or expertise within a specific industry. Good mentor-mentee relationshipsare a two way street; consequently, if entrepreneurs want a good relationship with their mentor, theyneed to become good mentees. This requires a genuine interest in their mentor and a willingness to do

what it takes to become successful entrepreneur. Following suggestions and recommendations as well

as reading all pertinent literature available in the field is a good way to show you are committed tobeing successful and that you take your responsibilities seriously.

A good mentor possesses the following qualities:

1. Willingness to share skills, knowledge, and expertise.

A good mentor is willing to teach what he/ she knows and accept the mentee where they currently are in

their development. Good mentors can remember what it was like just starting out in the field. Thementor does not take the mentoring relationship lightly and understands that good mentoring requirestime and commitment and is willing to continually share information and their ongoing support with thementee.

2. Demonstrates a positive attitude and acts as a positive role model.

A good mentor exhibits the personal attributes it takes to be successful in the field. By showing thementee what it takes to be productive and successful, they are demonstrating the specific behaviors andactions required to succeed in the field.

2


3. Takes a personal interest in the mentoring relationship.Good mentors do not take their responsibility as a mentor lightly. They feel invested in the success ofthe mentee. Usually this requires someone who is knowledgeable, compassionate, and possesses theattributes of a good teacher or trainer. Excellent communication skills are also required. A good mentor

is committed to helping their mentees find success in their chosen profession. Overall good mentoringrequires empowering the mentee to develop his/ her own strengths, beliefs, and personal attributes.

4. Exhibits enthusiasm in the field.

A mentor who does not exhibit enthusiasm about his/ her job will ultimately not make a good mentor.Enthusiasm is contagious.

5. Values ongoing learning and growth.Mentors are in a position to illustrate how the field/ industry is growing and changing and that even aftermany years there are still new things to learn. Anyone that feels stagnant in their current position will

not make a good mentor. When starting out in a new career, people want to feel that the time andenergy they spend learning will be rewarded and will ultimately provide them with career satisfaction.Good mentors are committed and are open to experimenting and learning practices that are new to thefield. They continually read professional journals and may even write articles on subjects where theyhave developed some expertise. They are excited to share their knowledge with new people enteringthe field and take their role seriously in teaching their knowledge to others. They may choose to teachor attend classes to further develop their knowledge and skills.

6. Provides guidance and constructive feedback.

One of the key responsibilities of a good mentor is to provide guidance and constructive feedback to 3

their mentee. This is where the mentee will most likely grow the most by identifying their currentstrengths and weaknesses and learning how to use these to make them successful in the field. A goodmentor possesses excellent communication skills and is able to adjust his/ her communication to the zpersonality style of the mentee. A good mentor will also provide the mentee with challenges that will

3

foster professional development and a feeling of accomplishment in learning the field.

7. Respected by colleagues and others at all levels within the profession/ industry.Ideally mentees look up to their mentors. Mentees want to follow someone who is well respected T`

within their field or industry by colleagues and others in the community.

8. Sets and meets ongoing personal and professional goals.A good mentor continually sets a good example by showing how his/ her personal habits are reflected bypersonal and professional goals and overall personal success. 3

9. Values the opinions and initiatives of others.

A mentor who values others is also someone who works well in a team environment and is willing toshare his/ her success. A good mentor appreciates the ongoing effort of the mentee and empowershim/ her through positive feedback and reinforcement.

10. Motivates others by setting a good example.The ultimate success of being a good mentor is enjoying the self-satisfaction that comes from helpinganother achieve their fullest potential.

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MERLIN, OR- What do wearable heart monitors, home appliance sensors,

traffic management and even inventory and supply chain networks havein common? They are all part of the new Internet of Things( loT). The loT isan exponential leap in technology made possible with innovations from Southern With theOregon' s Linx Technologies.

Rogue River

In the past, data input to computers and the Internet was time and labor intensive. and nature trails

Now it can be direct from a smart device via wireless channels- replacing the right outside the door

need for manual data entry. Linx Technologies develops and manufactures and a motivated team inside,the wireless controls that other manufacturers use for loT products. You Linx has the best of both worlds.may recognize the names Honeywell, Stanley Black& Decker, Garmin,

United Technologies, The Toro Company, Google and 3M. All designproducts with Linx's wireless components.

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Linx Technologies

MERLIN, OR- What do wearable heart monitors, home appliance sensors, traffic management and even inventory and supplychain networks have in common? They are all part of the new Internet of Things( loT). The loT is an exponential leap intechnology made possible with innovations from Southern Oregon' s Linx Technologies.

In the past, data input to computers and the Internet was time and labor intensive. Now it can be direct from a smart devicevia wireless channels— replacing the need for manual data entry. Linx Technologies develops and manufactures the wirelesscontrols that other manufacturers use for loT products. You may recognize the names Honeywell, Stanley Black& Decker,

Garmin, United Technologies, The Toro Company, Google and 3M. All design products with Linx's wireless components.

The company founder, a serial entrepreneur,made a deliberate move from SouthernCalifornia to Grants Pass in 1991, andlaunched Linx in 1997. After numerous

exploratory trips around the country, GrantsPass was chosen for its affordable businesscosts and mild climate. The business is

now located in the tiny Josephine Countycommunity of Merlin, just north of Grants

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When Alpine Investors purchased the

company in 2011, management had doubtsabout the region's resources. "We were 3convinced that to grow this business, we 3needed to cultivate talent that didn' t exist E,in this valley. However, we found that the Fworkforce in Southern Oregon has madeour continued innovation possible," says

Latif, president and CEO. " Our team is ras strong as any I' ve ever worked with—

a

g y Over the last three years, Linx has developed a whole line of new high-tech products.

in Philadelphia, New York, Chicago and

Houston. What you get in the Rogue Valley is talent, performance and loyalty."

Linx looks to local institutions such as Oregon Institute of Technology( OIT) and Rogue Community College( RCC) to grow itsteam of engineers and hardware developers, says Shawn Hogan, vice president of engineering. He adds that it's not unusualfor a student intern to be offered a job at Linx even before graduation.

We quickly realized that we had exceptional talent here," Latif recounts. "We are able to cultivate stars. As a result, many ofour best people here are either home grown or picked from RCC or OIT' s programming and electrical engineering students. Wehave an advanced high- tech team without the Silicon Valley cost structure. This creates a sustainable, competitive advantage."

With 75 percent of its wireless module portfolio made up of new products, Linx's continued success relies on innovation.Technology and the Internet are changing fast. " In the future, everything will be connected to the Internet," says Latif. "It' s anew world where not just people will be connected to the Internet, but things will as well—automating much of our daily lives."Linx, a multi- million-dollar business with well over 20,000 active customers, does 35 percent of its sales internationally throughdistributors in 23 countries. Linx is just one of a growing number of international high- tech companies based in SouthernOregon.

There are more high-tech and electronics companies here than most people realize," Shawn says. " Brammo, Met OneInstruments, Radio Design Group, Quantum Innovations and RogueValley Microdevices are all within an hour of here. And there is a strong SOUTHERN OREGONcadre of supporting organizations for the high tech sector as well—Rogue Hack Lab, Rogue Nexus, Sustainable Valley Technology Groupand Southern Oregon Regional Economic Development Inc. ( SOREDI),to name a few."

These companies have all learned that it's possible to have an

internationally focused business thrive in Southern Oregon, amongst therivers, mountains, lakes and seashore.

Linx Technologies 1 159 On'Lane, Merlin, OR 975321 www.linxtechnologies corn I( 541) 471- 6256

f 171

Cherryl Walker

From: Goss, Ronald < RGoss @roguecc.edu>

Sent: Tuesday, February 3, 2015 11: 34 AMTo: Cherry) WalkerCc: Terri Wharton

Subject: 2014 RCC SBDC Metrics

Cherryl,

I just received our numbers for 2014 and thought I would I pass them along in case they would helpful in providing youwith additional information for the proposal you are preparing.

2014

Number of Small Business Clients served : 334

Capital Formation : $ 3, 318,765 ( which ranked 3rd in State compared to the 19 other centers)

Jobs Created: 79 ( which ranked 5th in State)

Business Starts: 20 ( which ranked 3rd in State)

Best Regards,

Ron Goss

Director

Rogue Community CollegeSmall Business Development Center

Cell: ( 541) 761- 7475

Office:( 541) 956-7494

This e- mail may contain information that is privileged, confidential, or otherwise exempt from disclosure under applicable law. This e- mail was sent in good

faith to the address you provided to Rogue Community College. We trust that you have password-protected access to this e- mail account and that anytransmitted confidential information is secure. If you are not the named addressee, you should not disseminate, distribute, or copy this e- mail. Please notifythe sender immediately by e- mail if you have received this e- mail message by mistake, and then delete this e- mail and any attachments from your system. Ifyou are not the intended recipient, you are notified that disclosing, copying, distributing, or taking any action in reliance on the contents of this information isstrictly prohibited.

1

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r iRC V

ut sad Maims. Adminimatien

SBARogueCommunity College

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RCC— Small Business Development Center

2013 Review of Performance

The final figures for 2013 for all 19 Small Business Development Centers( SBDC) in Oregon were releasedin February and I wanted to communicate to our business clients, economic development partners,financial supporters, and host institution what the RCC SBDC staff was able to accomplish last year.

Most notable was our comparative performance and rankings with the other 19 Oregon centers:

The highlights for the RCC SBDC in 2013 were:

1) The RCC SBDC ranked third( 3`d) in the state in Jobs creation, with the creation of 88 jobs.

2) We ranked fifth( 5`") in the state for Capital Formation, assisting business with acquiring newloans and/ or capital investments in the amount of$ 2, 604,400

3) We also ranked fifth( 5th) in the state for business starts with 15 new businesses.

The RCC SBDC in 2013 provided 2,264 advising hours to 363 individual business owners, managers, orentrepreneurs. Further we conducted 52 individual training events with 343 attendees.

Without adequate funding, none of this would be possible. I would like to acknowledge all of thefinancial support and assistance that the SBDC receives from local communities in Southern Oregon,

regional organizations, federal/ state/ local government entities, economic development partners, and

most importantly Rogue Community College.

In particular the financial resources from RCC, the State of Oregon, and the SBA along with additionalannual funding from Josephine County, the City of Grants Pass, and Avista are critical for the support ofour operations and for the value added services that we provide to the business community.

Other Highlights/ Accomplishments

Developed and initiated with funding from Avista and RCC the new Avista EntrepreneurialCenter. The center was launched with an initial group of 12 entrepreneurs last fall andgraduation is this spring.

Worked with the City of Grants Pass to pursue and successfully acquire an$ 85,000 CommunityDevelopment Block grant to provide scholarship money for business community training events.This project was also endorsed by the City of Cave Junction, and Josephine County.

Received RCC funds and assistance to improve a number of outdated facilities for the center,

including new training room facilities, and upgrades to our business resources library.

Please feel free to contact me or our office if you have any questions or comments regarding this report.

Ron Goss

Director- RCC Small Business Development Center

Phone( 541) 956-7494

A Coordinated Project of Rogue Community College' s- Small Business Development Center( SBDC)

and the Illinois Valley Business Entrepreneurial Center( IVBEC) for

Small Business Development in Rural Josephine County

Background

Since the completion of the Illinois Valley Business Entrepreneurial Center in 2010, the IVBEC has

continued to produce positive economic impacts for rural businesses in Josephine County. In each yearsince then, the Board of County Commissioners has shown their support for the SBDC and IVBEC with an

award of Economic Development funding. In 2013 the combined results of the SBDC program provided

targeted business development advising, training services, and support resources to over 300 residentsof Josephine County that led to 15 new business starts, 88 new jobs, and over$ 2. 6 million in businesscapital investment. Noted for its innovative programs and integration of business services, the RCC

SBDC based in Josephine County has been a consistent leader in producing real world impacts whencompared with the other 18 SBDC' s in Oregon. The RCC SBDC ranked third ( 3rd) in the state in Jobs

Creation, and ranked ( 5th) in the state for Capital Formation

The RCC SBDC/ IVBEC in 2013 provided 2,264 advising hours to 363 individual business owners,managers, or entrepreneurs. Further the centers conducted 52 individual training events with343 attendees.

The IVBEC represents the unique and creative partnership of Rogue Community College' s— Small

Business Development Center with the Illinois Valley Community Development Organization. This

partnership has made services available for the first time to hundreds of small business owners. The

effort has been recognized and historically supported by Josephine County, the Cities of Cave Junctionand Grants Pass, SOREDI, and USDA— Rural Development. The IVCDO is one of the county' s keynonprofit organizations with a 20 year record of economic development and infrastructure projects. In

collaboration, the strengths of these organizations combine to provide highly effective services, targeted

to serve businesses in rural Josephine County.

Business Services in Josephine County

They have helped me look at this as a business by working on my business plan, cash flow,

marketing, and adding value to the farm"Robert Crouse— Fort Vannoy Farms

One-to-One Business Counseling

Providing business counseling free of charge in a one- to-one setting is the foundation for the SBDC

model of success. The confidential face to face delivery brings clients the business experience and

professional perspective they need to address issues in real time. Combined with thoughtful follow up

and ongoing engagement, this approach of expertise with a personal touch has delivered a strong record

of results. This has proven to be especially true for the unique challenges facing small rural businesses.

Assessment, Planning, and Implementation

Business planning is a key element to the success of any small business. Though it may appear to berather straight forward, the term " business planning" encompasses a very wide range of issues and

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activities. Depending on the stage of development, all business planning requires some investment in

strategic thinking, feasibility analysis, financial projections, product and service development,

production design, employee management, workforce training, creative marketing, cost effective

promotion, website development, appreciation of social media, bidding and estimates, professional

contracting, inventory and supply management, customer relations, a clear headed understanding ofthe competition, as well as the personal qualities needed for small business success. Except for formal

classes and trainings, these services are delivered to clients at no cost.

Resources and Partnerships

The SBDC has a solid network of local, state, and regional partners providing key support resources and

services. These include: technical marketing and data research ( normally costing thousands of dollars);

access to a variety of business loan programs small to large; direct contacts with Oregon Business

Department; preparation for state and federal contracting; as well as access and referrals to technicaland legal professionals.

Business Classes and Training

The RCC SBDC and the IVBEC offer a range of scheduled or justin- time business management skill

classes including, Smart Star Your Business, Business Readiness Quick Books, Business Tools with Excel,Web Site Management, Social Media Marketing, Small Business Tax Prep, Planning& Managing YourBusiness, Financial Statement Basics.

Certificate Programs

Small Business Management, General Contractor Licensing, and the Avista Entrepreneurial Center

Program

Traded Sector Management Programs

Next Level Plan

Extension of Rural Based Services in Josephine County

This proposal calls for commitment from Economic Development Funds( State Lottery) for fiscal years

2014 and 2015 to support RCC SBDC' s rural service delivery. The proposed investment level of$ 35,000

per year will be a catalyst to leverage other significant funding within the total operational budget of the

RCC SBDC/ IVBEC.

SBDC Budget 2013—2014 SBDC Budget 2014— 2015

Amount Source Use I Amount Source Use

39,000 OSBDCN Staff 42,000 OSBDCN Staff

32,000 SBA Staff 32,000 SBA Staff

15,000 City of GP Economic Gardening 15, 000 City of GP Economic Gardening_

25,000 Jo Co Rural/ IVBEC I $ 35,000 Jo Co Rural/ IVBEC

0 USDA- RD Rural/ IVBEC 0 USDA- RD Rural/ IVBEC

5, 000 IVCDO Rural/ IVBEC 0 IVCDO Rural/ IVBEC

160, 000 RCC Staff/ Admin 160, 000 RCC Staff/ Admin

50,000 Program Income Admin Support 60, 000 Program Income Admin Support

2

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1

Use of Funds Analysis

The total budgeted funding for the combined SBDC/ IVBEC operations is approximately$ 330,000.Budgeted staffing includes the director' s position, one administrative support position, and five ( 5) part

time business advisors. None of the advisors receive any health or other work related benefits from RCC.Over 95% of the budgeted funds are utilized to directly support the delivery of program services,training, administrative reporting, and record keeping requirements.

What Can the People of Josephine County Expect from this investment?

There is a clearly documented record of economic outcomes produced with the support fundingawarded in prior years, which demonstrates a highly cost effective use of state economic developmentmonies. The positive impacts are tracked through an SBA/ SBDC data base that uses rigorous client

approved verification and transparent reporting. These measureable results include new business

starts, job creation, and new capital investments.

The table below presents the validated positive economic impacts that these programs and dedicated

individuals have historically delivered to county residents. This information supports a convincingmessage for the justification and need for this type of funding to continue to support economic andbusiness development services in Josephine County.

The IVBEC as part of the RCC SDBC has provided a wealth of timely, confidential, tailoredcounseling to keep our business aligned with our goals and priorities...."

Cameron Camp CEO/ IV Data Center

Historical Economic Impacts/ Projections

Past Business Starts New Jobs Capital Investment Lottery Funds

Performance IVBEC/ RCC SBDC IVBEC/ RCCSBDC IVBEC/ RCC SBDC Awarded

2009— 10 7/ 45 I 13/ 110 175K/$ 0.7M 25,000

2010— 11 I 9/ 30 I 28/ 118 295K/$ 0.9M 25,000

2011- 12 3/ 14 15/ 67 371K/$ 3. 5M 25,000

2012— 13 8/ 15 I 10/ 88 227K/$ 2. 6M 25,000

Projected Estimated Estimated Estimated Lottery Funds

Performance Business Starts New Jobs Capital Investment Awarded

IVBEC/ RCC SBDc IVBEC/ RCC SBDC IVBEC/ RCC SBDC

2013— 14 7/ 30 13/ 50 195K/$ 2. 5M I $ 25,000

2014— 15 8/ 30 15/ 50 225K/$ 2. 5M I $ 35,000

3

Planned Initiatives. New Offerings and Opportunities

Scholarships

Through partnership with the City of Grants Pass, MicroE Training Scholarships will be available forcounty residents.

New Classes 1VBEC

Small Business-- Owners Only: Accounting for NecessitySmall Business-- Owners Only: Financial Management is Your Friend

New Program/ Classes RCC SBDC

Avista Entrepreneurial Center Program

Business Tools with Excel

Financial Reporting with Quickbooks

Using Facebook For Your Business

Smart Phones-- Empower Yourself As A Business Owner

Do- It-Yourself Market Research ( Presented jointly with Josephine Community Library)

Statement of Support

As the economy continues its slow improvement, there are clear signs of increased growth and

expansion potential with a mix of new industrial, production, and manufacturing businesses in both the

northern and southern areas of the County. Further, economic reports consistently document that on a

national and regional level small businesses drive economic improvement metrics, especially in theareas of employment growth and new business starts. The SBDC and IVBEC will continue to assist all

sizes of businesses with issues of business site readiness, infrastructure development, new businessventures, and general expansion plans. The SBDC is a proven economic development partner and is

poised to play a major role to support the County' s important economic initiatives. As always, the

primary goal is sustainable job and business creation, along with the retention/ expansion of existing

community based businesses

I don' t think there' s a business in the area —small or large— that couldn' t benefit from these

programs, regardless of their experience."

Lowell Pratt—Morrison' s Lodge

We look forward to any further discussions with the Board of County Commissioners and the Chief

Financial Officer that may be needed to secure the successful funding for this proposal to continue

meaningful support for Small Business Development services in Josephine County.

With Best Regards,

Ron Goss, Director- SBDC

Kenny Houck, Business Development Coordinator— IVBEC

4

I

Planned Initiatives, New Offerings and Opportunities

Scholarships

Through partnership with the City of Grants Pass, MicroE Training Scholarships will be available forcounty residents.

New Classes IVBEC

Small Business—Owners Only: Accounting for Necessity

Small Business-- Owners Only: Financial Management is Your Friendr

New Program/ Classes RCC SBDC

Avista Entrepreneurial Center Program

Business Tools with Excel

Financial Reporting with Quickbooks

Using Facebook For Your BusinessSmart Phones-- Empower Yourself As A Business Owner

Do- It-Yourself Market Research ( Presented jointly with Josephine Community Library)

Statement of Support

As the economy continues its slow improvement, there are clear signs of increased growth andexpansion potential with a mix of new industrial, production, and manufacturing businesses in both thenorthern and southern areas of the County. Further, economic reports consistently document that on anational and regional level small businesses drive economic improvement metrics, especially in theareas of employment growth and new business starts. The SBDC and IVBEC will continue to assist all

sizes of businesses with issues of business site readiness, infrastructure development, new businessventures, and general expansion plans. The SBDC is a proven economic development partner and is

poised to play a major role to support the County's important economic initiatives. As always, theprimary goal is sustainable job and business creation, along with the retention/ expansion of existingcommunity based businesses

I don' t think there's a business in the area— small or large— that couldn' t benefit from these

programs, regardless of their experience."

Lowell Pratt—Morrison' s Lodge

We look forward to any further discussions with the Board of County Commissioners and the ChiefFinancial Officer that may be needed to secure the successful funding for this proposal to continuemeaningful support for Small Business Development services in Josephine County.

With Best Regards,

4 /

Rein Goss, Director- SBDC

c14Kenny Hc6Ick, Business Development Coordinator— IVBEC

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From: Houck, Kenny < KHouck @roguecc.edu>

Sent: Tuesday, February 10, 2015 11: 19 AMTo: Cherryl Walker

Cc: Goss, Ronald

Subject: Re: IVCD Bd of Directors

Cherryl--

The RLF Loan Board maintains 2 positions from the IVCDO Board.

Jack was one of the IVCDO Board & his position is now filled by Charles Swift.Barbara Delbol is the other CDO Board member.

Patricia Dees ( Umpqua Bank),

Greg Walter (Jefferson State Financial)

Kate Dwyer (Jo Community Library).However, Kate has planned to step down due to time constraints & we plan to appoint

Steve Chandler who served on both the CDO & Loan Boards several years ago.

As Ron Goss & I prepare for the presentation on Feb. 25, are there other loose threads or items that youwould like from us?

Thanks -- Kenny

From: Cherryl Walker< [email protected]>

Sent: Tuesday, February 10, 2015 10: 24 AMTo: Houck, KennySubject: IVCD Bd of Directors

I noted on the info I have that one of the Loan Board members was Jack Walker. Since Jack has passed away who hasreplaced him on the Board?

Who are the Loan Board members as of today?Thanks

Cherryl Walker

Josephine County Commissioner500 NW 6th Street, Dept. 6, Room 154

Grants Pass, OR 97526

541-474-5221

This e- mail may contain information that is privileged, confidential, or otherwise exempt from disclosure under applicable law. This e- mail was sent in good

faith to the address you provided to Rogue Community College. We trust that you have password-protected access to this e- mail account and that anytransmitted confidential information is secure. If you are not the named addressee, you should not disseminate, distribute, or copy this e- mail. Please notifythe sender immediately by e- mail if you have received this e- mail message by mistake, and then delete this e- mail and any attachments from your system. Ifyou are not the intended recipient, you are notified that disclosing, copying, distributing, or taking any action in reliance on the contents of this information isstrictly prohibited.

1

0

IVCDO Revolving Loan Fund ( RLF)

The focus of the IVCDO RLF is to provide low interest loans to micro-enterprises and entrepreneurs located in

Josephine County. The intent is to provide these loans to individuals who are unable to qualify for financing fromconventional sources. To date over 68% of RLF loans have been made to low to moderate income individuals

that otherwise would not have obtained access to business investment funds.

The IVCDO RLF has a number of specific goals and policies that has guided its success in the last 14 years.

1) Focus on small low interest loans to entrepreneurial and Micro Enterprise clients(<$ 25,000)

2) Targeted priority to create jobs and sustainable small enterprises3) An independent loan board comprised of local community business and financial members4) A mission driven , non- profit philosophy and process to manage the loan funds and its clients5) Policies that provide loan restructuring and repayment flexibility and a tactic to avoid the use of

increased interest rates and penalties as punitive loan management tools

6) A commitment to develop and maintain long term assistive relationships and provide free advising

services that actively support the success of every loan client

These last two commitments have been enhanced since 2012 through a further development of the partnershipbetween the IVCDO/ IVBEC and the RCC SBDC. This partnership provides at no cost:

1) Assistance to individuals seeking access to RLF funds, with support services for business plandevelopment, and assistance with the loan application process

2) Ongoing business management advising services to existing loan clients. These services continue

through the life of the loan and are designed to assist client businesses with issues that may affect their

success or be limiting their growth.

As part of this partnership strategy a number of recent loans from the RLF have required clients to retain SBDC

business advising assistance services to aid businesses in successfully managing their financial and operationalsuccess. These services include assistance with loan applications, business plans, access to additional capital,

employee management, operational planning, and financial management. This unique partnership allows the

fund to monitor and assess the need for flexibility in administering the funds loan assets and the relationshipswith its clients.

Loan Processing and Policies

The IVCDO RLF has a well- established and proven set of policies and objectives that guide the loan approval and

management processes. These policies reflect the mission, value, and objectives of the program as noted

above. A copy of the IVCDO RLF' s Policies and Procedures are provided in Appendix A. In addition a document

outlining General Loan Guidelines and Information regarding the Loan Application Process is included inAppendix B.

Loan Board

The current Loan Board is comprised of:

Patricia Dees, Asst. Vice President—Umpqua Bank since Feb. 2014)

Patricia has over 35 years of banking and community service, most of that time in southern Oregon, focusing on

business banking and community services.

Barbara Delbol, Business Owner —Althouse Nursery, Inc. since June 2010)

Barbara is a 30 year resident of the Illinois Valley and co-owner of a wholesale nursery growing native and

ornamental trees and shrubs with sales throughout the Pacific Northwest. She has also worked as a journalist,

editor, and freelance writer for regional and national publications for nearly three decades.

Kate Dwyer, Education Librarian—Josephine Community Libraries since Feb. 2010)

Kate is the Outreach Education Librarian working to increase information literacy in Josephine County. She also

serves on the boards of Three Rivers School District Board and the Takilma Community Association. She is the

former chef/ owner of Kate Dwyer Catering.

Greg Walter, Business Owner—Jefferson State Financial Group since June 2009)

Greg is an insurance provider specializing in Health Insurance and Medicare sponsored plans. He also serves on

the board of the Crater Lake Natural History Association.

Jack Walker, Retired, Audit Supervisor —Zurich Insurance Co. since June 2008)

During his time in the San Francisco Bay area, Jack worked 32 years as an audit supervisor and was a Board

Director for the Tamalpais Community Services District for 25 years. Since moving to the Illinois Valley in 2001

he has committed his efforts to making the area a better place to live.

Past members of Revolving Loan Fund Board have included:

Kathleen Ponder, Branch Manager for Evergreen Federal Bank, Cave Junction

Dar Sams, Loan Officer for Home Valley Bank, Cave Junction

Bob Litak, Tax Accountant

Lana Hill, co- owner of Rogue Truck Body

Louis Levison, Electronic Technician

IVCDO RLF Staff

The current IVCDO RLF Staff consists of:

Kenny Houck, Business Devel. Coordinator- Advisor, IVBEC/ RCC SBDC ( since Oct. 2008)

With over thirty years' experience as sole proprietor of various small businesses, Kenny has also assisted in

community development projects including Siskiyou Community Health Center, the IV Airport Industrial Park,

Deer Creek Center for Field Research and Education, and the Kerby Community Drinking Water System.

Norah Latzke, Administrative Manager, IVCDO since Apr. 2004)

Norah came to the IVCDO with over 19 years of banking and accounting experience. She manages the

financial operations, payroll, annual audit, grant reports, RLF Loan Fund, and other IVCDO organizational

accounts which generally exceed$ 1. 7M annually.

IVCDO RLF- Historical Statistics

Since its inception in 2000 the IVCDO program has funded 97 loans totaling$ 1, 025,914.

The program also assumed 5 loans from SOWAC in 2007 totaling$ 49,482

Historical Loan Activity Statistics:( As of May 2014)

Total Loan Fund =$ 344, 158 Total Available to Loan=$ 65, 956

Current loans principal balance=$ 249, 552

71 loans have been paid in full

27 loans are still outstanding

Number of Loan Defaults as a percentage of Total Number of Loans= 5. 9%

Percentage of Bad Debt ($) as a Percentage of Total Loans to Date ($)= 2. 8%

For the life of the Fund 68% of RLF loans have been made to Low—Moderate Income Clients( LMI)

The IVCDO RLF maintains an allowance of$ 44,364 for defaults, collections, and doubtful accounts

Since inception the RLF has written off 4 loans for a total of$ 22, 489, of the current 27 outstanding loans, 2 loans

are in default and have been referred to collections for a total of$ 7, 390

Economic Metrics:

Jobs Created = 91 ( mostly FT) Reported to USDA— Rural Development

Jobs Retained= 41( FT/ PT mixed) Reported to USDA— Rural Development

Loans by Business Type:

Construction/ Trades/ Trucking 17

Restaurant/ Food Service 13

Retail/ Gifts/ Boutique 10

Farm/ Nursery/ Agriculture 9

Health Care Providers/ Services 6

Arts/ Crafts 6

Senior Care 4

Traded Sector Manufacturing 4

Tourism/ Recreation 4

Manufacturing/ Fabrication 2

Auto Repair/ Service/ Parts 3

Internet Services 2

Forest Products 2

Child Care 1

Services 19

Taxi, Bookkeeping/ Tax, Insurance, Janitorial, Carpet, Music)

pFy t

Appendix A— IVCDO Micro Business Revolving Loan Program— Policies and Procedures

IVCDO Micro Business Revolving Loan ProgramPolicies and Procedures

Revised and Adopted December 2013

Mission Statement

To increase options for self-sufficiency through capitalization of micro ventures.

Method

Make small low interest loans to local entrepreneurs and workers, especially those who are unable to

get capital through conventional sources, help those that do qualify to get loans or additional sources of

funding, and/ or help with selected business training or technical assistance.

Measuring Success

We expect to achieve our mission statement, and specifically, if the program creates the equivalent of

one full time job for every ten thousand dollars invested, we will be operating within our basic expectations for a

successful project. At the same time, we would like to really have a revolving loan fund, which implies a very

limited attrition. Therefore, success will reflect both the ability of applicants to enhance self-sufficiency through

the utilization of the loans, and their performance in repaying these loans.

Policies and Procedures

Loan Board

The IVCDO Loan Board, hereafter known as the Loan Board, comprises volunteer members nominated

by the current Loan Board, and appointed by the IVCDO Board of Directors. The Board members are recruitedfor their expertise and potential to make a positive contribution to the Loan Board. The Loan board will

comprise a minimum of four( 4) members and a maximum of eight (8) members. Two of the Loan Board

members must also be directors on the board of the IVCDO. The Loan Board appoints its own Chair. In addition,

the Loan Board Chair may appoint up to three (3) ad hoc members for any particular meeting if, in the Chair' sopinion, the ad hoc members contribute an area of expertise that will be helpful for that meeting. The Chair may

choose whether to endow these members with full voting privileges. The Loan Board reviews all loans, and it

alone has the authority to approve them and pledge assets. The Loan Board is responsible for the design,maintenance, and usage of the loan funds. Loan Board members, IVCDO staff, or other volunteers, screen

applications for basic eligibility and help ensure they are complete prior to the appointment with the Loan

Board, and follow up with clients and provide status reports to the Loan Board.

Reporting from the Loan Board

The Loan Board reports to the IVCDO Board of Directors on the performance of the loans in the portfolio

on at least a semi- annual basis. This report may include the number of delinquencies, extensions, and loans that

are current, anticipated employment impact and the types of businesses that are pursuing loans. Normally,

information about individual clients remains confidential.

Size of Loans/ Interest

The maximum loan amount is for twenty- five thousand dollars ($25, 000), not including closingfees. The Loan Board encourages application for much smaller loans too, down to $200. The annualinterest rate is fixed at the time of loan approval and may be adjusted by the Loan Board from time totime to help cover operating costs, from a minimum of 5% up to a maximum of 9. 5%. Residents of the

Illinois Valley (census tracts 3615 and 3616) doing business in the Illinois Valley will generally beeligible for lower interest rates than applicants outside of the IV.

Approval of Loans

A minimum of four Loan Board Members must be present to review a loan application. A minimum of

three Loan Board members, or a simple majority, whichever is more, is necessary to approve any loan.Applicants will be informed of approval or denial within one week of the final interview.

Appeal of Decision

The Loan Board has the authority to review applications and approve loans. There is no appeal of thedecisions.

Priority

Potential for a loan to contribute toward local job creation, enhancement, or retention, including self-employment, will be weighed against the apparent risks for the loan' s repayment.

Uses, Eligibility

Loans may be used for business expansion or start up, and applied toward equipment, materials,marketing, certification, repairs, technical assistance, training, etc.

Loans may be used for a combination of above items and in conjunction with other financing.Consideration will be given to avoid undermining businesses already in the loan portfolio.

Loans for training or certification to help an applicant in a conventional job may be considered.Loans will not be made to multi- level marketing businesses.

Loans will not be made for refinancing of existing debt or for passive investing.Loans will not be made for business distress situations.

Applicants must have a personal credit history acceptable by the Loan Board.

The focus of the Loan Fund is for applicants who live in or do business in Josephine County, Oregon.

Some loans funds are available for applicants who live in or do business in Jackson County, Oregon.Loans will not be made to Loan board members or their immediate families( spouses, parents or

step-parents, siblings or step- siblings, or children or step-children), IVCDO Board of Directors or theirimmediate families.

Loans will not be made to IVCDO paid staff( not including staff of Oregon Caves Outfitters) or their

immediate families, where there is a perception of a conflict of interest.

Being an IVCDO General Member does not disqualify a loan applicant.Loans will not be made to support criminal activity.Loans will not be made to applicants less than 18 years of age. Potential applicants under the age of

18 are encouraged to speak with the Loan Fund advisor for possible alternatives.

Ninety Day Commitment

Loan decisions are valid for 90 days from the date of the Loan Board meeting in which the commitmentwas made. If a business is delayed in implementing its plan, or for any reason, the loan is not disbursed, theLoan Board may revisit the loan decision to renew or decline the commitment.

Use of repayment including Interest

All principal payments received by the Loan Board will only be reused for new loans. Interest, fees, and

other income may be used for new loans, operating and administrative expenses, training, or advertising.

Delinquency/Default Policy

Point of Default: IVCDO would assess collateral when either of the following events occurs:

1. Loan is past due 60 days from due date

2. Loan is past due 30 days or more from due date for three consecutive months.

3. When a payment is past due and the Loan Board feels that the loan is at risk.

Definition of Default: Failure of Borrower to comply with or to perform when due any term, obligation, or

documentation shall constitute an Event of Default. If an Event of Default shall occur, all commitments and

obligations( including any obligation to make loan advances, or disbursements) will terminate. The loans will

immediately become due, all without notice of any kind to the Borrower.

Delinquency Policy: The following schedule for responding to delinquent loan payments will be followed:

1. Any loan payment over 15 days in arrears will immediately be charged a late fee of 5% of

the past due amount, or$ 25, whichever is greater.

2. At 45 days past due, a Loan Board representative will contact the Borrower. A written plan

to remedy the delinquency will be prepared by the representative and the Borrower, andplaced in the Borrowers file. If the client does not respond and the loan continues to be

delinquent, the loan may be declared in default and a demand for full payment of the loanwill be sent by registered mail.

3. Loans will be placed in default if payments are more than 60 days late. Loans may be placedin default sooner, based upon the relationship with the borrower and the perceivedwillingness to repay the loan.

4. After 90 days past due, or 10 days after notice of default is sent( whichever is earlier), legal

action will be taken including filing a judgment against the borrower, confiscation ofcollateral, and/ or turning the account over to a collection agency.

Extension Policy

The Loan Board may approve formal extensions or changes of amortization schedule if necessary, basedon a detailed written request from the borrower.

Credit History

As part of the package for the Loan Board consideration, the loan applicant must agree to a credit

inquiry. The Loan Board may waive a formal credit check as it sees fit in loans under$ 1000. Each loan

applicant' s credit history is considered individually. Previous credit problems do not automatically excludeclients from the loan program. The applicant' s pattern of managing their debt is very important.

Special circumstances such as medical crisis and divorce may lessen the impact of poor credit historyduring a particular time period. It is important that the individual has stabilized and in most cases has not hadcredit problems in the past two years.

Bankruptcy: An explanation must be given for the bankruptcy. The client must have had two years

without credit problems since the bankruptcy.

Current Loan Defaults: The client must have communicated with the lending institution, have made

arrangements to pay the debt, and be current with their repayment arrangements.

Bad checks: Must be resolved with creditor prior to receiving a loan.

Tax liens and federal debt: Loans will not be made to individuals with outstanding tax liens or

delinquent federal debt, including delinquent child support payments.

In general, the applicant must exhibit no credit problems for at least the past year, with two or more

years being highly preferred.

Conflict of Interest

If a member of the Loan Board has a personal financial interest in a loan applicant, or in the success or

failure of the applicant' s business, the Loan Board member is expected to disqualify themselves from decision-

making regarding the applicant' s loan. Staff members, contractors, and Loan Board members are expected to

communicate possible conflicts of interest, and to bring up questions regarding perceived conflicts of interest

involving other staff members, contractors, applicants, and Loan Board members. Conflict or perceived conflict

of interest may involve positive or negative effects on those involved.

Changes to Policies and Procedures

Changes in Loan Program policies and procedures may be recommended by the Loan Board to be

approved by the IVCDO Board of Directors at any regularly scheduled meeting.

i

Appendix B— IVCDO RLF General Information and Loan Application Guidelines

IVCDO MICRO LOAN PROGRAMPO Box 1824

Cave Junction, OR 97523

592-4440

GENERAL INFORMATION ABOUT THE LOAN PROGRAM AND GUIDELINES FOR FILLING OUT THE LOAN

APPLICATION

Thank you for considering applying for a micro-business loan. The information supplied belowshould help you :

1) Decide whether to apply for a loan, and;2) Fill out the application.

If you have additional questions, please call the IVCDO Business Development Coordinator at 541-956-

7275. The IVCDO office will be glad to help you.

What is a Micro Business?

For our purposes, Micro Businesses include the low end of what we call Small Businesses( such as a Mom and

Pop store); self employed worker( such as a house cleaner with several clients); people working at home (such

as a craftsman doing leatherwork); and even certain people treating their own earning potential in the job

market as a business( such as an experienced auto mechanic seeking a special certification).

Who Can Benefit?

Local entrepreneurs and workers who might find it difficult to get the capital through conventional sources will

benefit. If you are not sure whether you qualify for a loan through conventional sources, apply to us anyway. We

might be able to point you in the right direction if we find we cannot help you. We also provide some gap

funding. If you have a small business that can get some conventional funding but needs additional funds to make

the business successful, please talk with us about the situation. We can also help with selected business training

or technical assistance.

S

Size of Loans/Interest

The maximum loan amount is twenty five thousand dollars ($25, 000), not including closing fees. However, theLoan Board encourages applications for smaller loans as well (minimum loan mount is$ 200.00). The current

annual interest rate is 5— 9. 5%. Loans up to$ 5, 000 are due in three years. The term of a $ 10,000 loan can be

extended to five years depending on the collateral and the evaluation of the business. A$ 3, 000 loan, forexample, will require an average payment of$ 100 a month (3 years at 5% interest), which includes principal and

interest. A$ 10,000 loan will require an average payment of$ 200 a month (5 years at 5% interest), which

includes principal and interest.

Priority

Priority will be given to loans that will contribute to local job creation,

enhancement, or retention, including self-employment, and will be weighed against the

apparent risks for the loan' s repayment.

Uses, Eligibility

Loans may be approved for:

ff

t

Business expansion or start up, and applied toward equipment, materials, marketing,

certification, repairs, technical assistance, training, etc.

A combination of above items and in conjunction with other financing.

Training or certification to help an applicant in a conventional job may be considered.

NOTE: Consideration will be given to avoid undermining businesses already in the loan portfolio.)

Loans will not be approved for:

Multi- level marketing businesses.

Refinancing of existing debt or for real estate financing or passive investing.Business distress situations.

Loan board members or their immediate families, IVCDO Board of Directors or their immediate

families, or IVCDO paid staff or their immediate families. (Being an IVCDO General Member doesnot disqualify a loan applicant).A criminal activity.

Applicants must:

Be over 18 years of age. ( If under 18, please contact the Loan Fund Advisor).

Have a personal credit history acceptable by the Loan Board.

Either live in or do business in Josephine County, OR for at least one year.

Some loan funds are available for Jackson County, OR

Supply all required documentation and information needed by the Loan board to make adecision and work closely with the Loan Fund Advisor prior to submittal of the application to theLoan Board

Additional criteria in evaluating a loan request

In addition to the basic eligibility guidelines, applicants should realize that there are other criteria that will

influence the Loan Board' s decision whether or not to make a loan. This would include, among other things, the

Loan Board members' evaluations of the business plan and the applicant' s ability to pay back the loan. Each

member of the Loan Board must go with his or her best judgment. Once the Board has reached a group decision,it will be final.

Closing costs for a loan

The Micro-Loan Program charges a processing fee of$ 50.00 PLUS 1% of the total loan amount. If more than one

vehicle is to be used for collateral, the additional costs for DMV Title document fees, $75 or actual cost each will

be added. If more than four pieces of equipment are to be used for collateral, the additional costs for UCC Filing

document fees, $ 15 or actual cost each will be added. These fees cover some of the costs of loan processing

such as credit reports and applying for a security interest in vehicles or other collateral. These costs will be

added to the amount of the loan.

Use of Repayment including Interest

All loan payments, including fees, received by the Loan Board will only be reused for new loans, training oradministrative expenses, and advertising of the loan program.

fCFS

Delinquency/ Default Policy

Point of Default: IVCDO will assess collateral when either of the following events occurs:

1. Loan is past due 60 days from due date.

2. Loan is past due 30 days or more from due date for three consecutive months.3. When a payment is past due and the Loan Board feels that the loan is at risk.

Definition of Default:

Failure of Borrower to comply with or to perform when due any term, obligation, or documentation shall

constitute an Event of Default. If an Event of Default shall occur, all commitments and obligations ( including anyobligation to make loan advances, or disbursements) will terminate. The loans will immediately become due, allwithout notice of any kind to the Borrower. Legal action may be taken including filing a judgment against the

borrower, confiscation of the collateral, and/ or turning the account over to a collection agency.

Delinquency Policy: The following schedule applies for responding to delinquent loan payments:

1. Any loan payment over 15 days in arrears will be considered delinquent and immediately becharged a late fee of 5% of the past due amount, or$ 25, whichever is greater. The late fee maybe waived at the sole discretion of the Loan Board IF an acceptable arrangement is made IN

WRITING, and PRIOR TO the date of the delinquency.2. At 30 days past due, a Loan Board representative will contact the Borrower. A written plan to

remedy the delinquency will be prepared by the representative and the Borrower, and placed inthe Borrowers file. If the client does not respond and the loan continues to be delinquent, the

loan may be declared in default and a demand for full payment of the loan will be sent by U. S.mail.

3. Loans will be placed in default if payments are more than 60 days late. Loans may be placed indefault sooner, based upon the relationship with the borrower and the perceived willingness torepay the loan.

Relationship to the Illinois Valley Community Development Organization Team( IVCDO)

The Micro Loan program functions under the IVCDO, a non- profit organization. However, in decision- makingregarding the granting of loans, the Board of the Loan Program functions independently of the Board ofDirectors of the IVCDO. All decisions made the Loan Board are final.

Confidentiality

ALL information received by the Loan Board is kept strictly confidential, unless the applicant waives

confidentiality in writing. However, limited information may be shared on an as- needed basis( for example, with

your references or with IVCDO staff working with the Loan Board). Applicant information, including the identityof applicants, is not shared with the IVCDO Board of Directors.

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Aviation Page 1 of 3

Oregon Business Plan Search Site

PF Aooct tre Plan • rdus; ry Clusters ntlatr, es Measunrg Progress Meetings Cor^ ec?

Industry Clusters OTHER CLUSTERS: Select OneJ

Aviation

About Oregon' s Industry Clusters

Agnculture

Athletic& Outdoor Gear and R- '

Apparel i - Oregon' s aviation- related firms provide

manufacturing, product distribution. and first- andAviation w

second- tier suopiy-chain serv! ces. Oregon. s 41 inBioscience Syr. the world for production of e.xoenmentai! kit)

Brewenesaircraft shipments and 41 , n the. 0 S for heavy lifthelicopter companies.

Creative; ndustnes

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Food Processing Industry Overview

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Although most manufactunng of aviation components and kits is centered on or near public-use airports( like those in PortlandGreen Building and Development

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Heavy Lift Helicopters urban and rural areas They produce or manufacture for avionics. airplane components and assembly raw material for

fabrication and unique components for specialty aircraft like the" Alaskan Bust/wheel" Aviation customers include individualManufacturing

purchasers as well as major airframe manufacturers in other states( e g Cessna Aircraft in Kansas) Oregon' s kit plane

Nursery Products manufacturers also provide over 70 percent of all of the kit planes sold within the U S each year to global customers This

industry cluster also includes businesses providing local fabrication services which has led to robust maintenance and repairSemiconductors and Electronic

services for all sizes of aircraft. including balloons and forest- fire fighting airframes Key competitors for Oregon' s aviationComponents

industry include international manufacturers in Brazil. the Czech Republic Canada and Mexico Unmanned Aenal Vehicle

Software UAV) now called by the FAA Unmanned Aircraft Systems( UAS) is a major new growth sector Oregon has a major foothold in

this industry at Hood River, The Dallas and other nearby cities in the Columbia River GorgeSolar

Tourism& Hospitality Cluster Components and Companies

Wave EnergyExperimental and sport aircraft manufactunng, heavy lift helicopter maintenance historic aircraft maintenance avionics

Wind Energy design and manufacturing. aviation related military equipment aerial photography radar, lidar and other hi- tech sensing

systems, airport information systems general flight training, international ab nitro flight training, flight service companies

industnal and residential airparks avionics software and specialty metals casting

Notable companies include Vans Aircraft( Aurora Airport), Sky Research( Ashland Airport) Hillsboro Aviation( Hillsboro

Airport). Western Antique Aeroplane and Automobile Museum( Hood River Airport) Oregon Aero( Scappoose Airport)

Oregon' s Aviation cluster includes the heavy lift helicopter industry which is compnsed of Columbia Helicopters( Aurora

Plan Sponsors Airport). Evergreen Helicopters, Helicopter Transport Services Croman Corporation Erickson Air-Crane Superior

Helicopters and Carson Helicopters

Aviation by the Numbersit

OREGON GRAF'• Overall the Oregon Aviation Cluster consists of

HERE s 4 OREGON- Over 300 aviation companies

Aviation companies in 78 Oregon cities( nearly 1( 3 of all incorporated Oregon cities)

The ares with the most Aviation Cluster companies listed in order of the number companies includes

Portland/ METRO( Multnomah. Washington Clackamas) Mid- Willamette Valley( Yamhill Manon, Polk Counties)

Central Oregon( Deschutes County), Southern Oregon( Jackson& Josephine Counties) South Willamette Valley( LinnLane Benton Counties)

Sector Economic impact

http:// www.oregonbusinessplan.org/ Industry- Clusters/About-Oregons- Industry- Clusters/A... 10/ 2/ 2014

Aviation Page 2 of 3

Aviation Direct Employment: 6 858( 2011)

Employment Growth:- 9 0%( 2008- 2011)

Average Wage:$ 62, 395( 2011)

Wage Growth: 21 2%( 2008-2011)

Total Firms: 123( 2007)

Source Oregon Emolovment Deoartment Covered Employment and Wages www Quality lnfo org

Cluster Strengths

The singular focus on aircraft manufacturing

The strong foundation of collaboration and inter-reliance of cluster participants to produce aviation components andrelated products

Strong emphasis on use of airports and aviation industnes for economic development at Oregon' s airports

Cluster Challenges

Instability and inconsistencies of FAA funding and policy- making in aircraft manufacturing and oversightAircraft fuel pnces continue to be high and erratic

Liability concerns from the banking community make it difficult to obtain commercial short- term lines of credit

Key Initiatives

Use smaller rural airports as economic development centers Specific initiatives to assist in the success include

Allowing urban water and sewer to serve rural airports outside of their urban growth boundary

Getting Congressional help with gaining FAA approval to promote public-private partnerships at rural airports

Increasing export sales through assistance and trade shows( STEP OTPP)

Responding to China' s rapid growth of airports and air travel by expanding Oregon s role as a gateway for aeronauticalproducts and services by increasing current flight training contracts and aviation sales to China and creating a gatewayweb site" of Oregon' s aviation companies with translations in Mandarin

Developing Centers of Excellence for UAV testing areas

Increasing buyer/ seller connections for Oregon companies through the Northwest Connectory

Assessing the industry' s' Economic Value by Region'( jobs, wages. sales etc 1

Maintaining and expanding rural air service locations This includes experimenting with alternative models of rural airservice other than normal airline scheduled air service

Stabilizing aviation funding( federal and state) for commercial air service and general aviation airports ( Consider

transportation mode competition issues relative to funding)

Continuing work on refining state regulations and zoning standards for airports that coordinates FAA state. and local

interests while promoting job creation and transportation improvement to rural areas

Supporting Oregon Department of Aviation in its role fighting for FAA dollars for Oregon airports and aviation needsODA already is a bare bones agency yet brings large dollars to the state via federal grant programs)

Coordinating with other clusters on issuestt

wind power towers as they relate to airport airspace

defense related aeronautical projects

Coordinating aviation maintenance workforce skill needs with community college and other training programs so thatworkers are able to work with new aviation technologies

Continuing the attempt to capitalize on the State of Oregon being an early adopter of the Automatic dependent

surveillance-broadcast( ADS- B) next generation FAA airspace monitoring system which will replace radar

Encouraging the education and training of new pilots, especially among young people. both to help maintain a healthyaviation community, and to put aviation as a career choice on young peoples planning screens Education in aviation

includes training in science math, weather flight planning, and equipment operation which easily transfers to manyother fields

Key Organizations

The Aerospace Industries Coalition is slowly re- forming into the Aviation Cluster which first convened in 2001 There will

be some overlapping representation with the advanced manufacturing cluster and from the Oregon Aviation Business

Association the Oregon Airport Manager' s Association and the Oregon Pilot' s Association Currently the cluster is looselyorganized with 2-4 informal meetings per year of the CEOs of Oregon' s aviation industry The Oregon Aviation Board

sponsored an organizational meeting of 100 of Oregon s aviation companies at the Evergreen Aviation and Space

Museum in McMinnville on June 21 2012 Keynote speaker Max Lyons from Hillsboro Aviation discussed his company' sview of the growing demand for airports pilots. and aviation services in China

Cluster Contacts

http://www.oregonbusine ssplan.org/ Industry-Clusters/About-Oregons- Industry- Clusters/A... 10/ 2/ 2014

ti

AviationPage 3 of 3

Aron Faegre

Aron Faegre 8 Associates Aviation Planning520 SW Yamhill Street PH1 Portland. OR 97204

503) 222- 2546

Mark Gardiner

Oregon Aviation Board Chair

Advanced Inquiry Systems Inc

20000 NW Walker Road Beaverton. OR 97006

503) 726- 4718

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http:// www.oregonbusinessplan.org/ Industry-Clusters/About-Oregons- Industry- C lusters/A... 10/ 2/ 2014

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Turtle Lane—Visitation is typical of our busy summer days with a percentage of locals refusing to pay. Ourseasonal Park Patrol person is doing a really good job. She is training two of the Park Patrol Volunteers whohave indicated they would like to write citations.

Whitehorse—Economic Development $s are at work with the park remodel planning ongoing. I am lookingforward to the presentation by 'To the Point Landscaping' owner Jason Martin and Recreation Planner, JimHeck.

It was good to see the park nearly full this weekend with an annual family event.

Wolf Creek—Park Host Fred is back which is very good for Wolf Creek Park.

The information center has been repaired after someone cut it down. We have had Community Justice Crewsand volunteer work days in the park to remove poison oak and cut back some of the undergrowth and weeds.

BUDGET: $ 1, 106.000.00

Revenue = $ 1, 115. 696.28

Expenditures= $ 1, 040,511. 52

Difference= $ 75, 184. 76 ( 2014- 15 Beginning Fund Balance) Approximately $100,000 will be moved

over from deferred revenues so our Beginning Fund Balance will be higher.

Park Goals:

Maintain a Balanced Budget

Obtain an affordable grant to redesign Whitehorse campground and add 5 Yurts or cabins****

The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails. 'William Arthur Ward

1. Continue to monitor the Park Patrol Volunteer Unit—Ongoing Support and Training as Needed2. Electrical upgrade at Whitehorse Park to RV sites****

3. ADA trail repair at Chinook Park and Parking Expansion 54. Park Host Site at Turtle Lane

5. Wolf Creek Tree Thinning Project6. Separate the Day Use from the Campground at Schroeder Park by developing a site plan which

includes a new picnic shelter and permanent restroom

for Schroeder Day Use.7. Foot bridge at Wolf Creek

8. Seek funding for a CXT at Galice Boat Ramp9. Permanent Restrooms at Fish Hatchery and Wolf Creek Parks

Anyone who stops learning is old, whether twenty or eighty. Anyone who keeps learning stays young. The greatest thingyou can do is keep your mind young. *Mark Twain

Education: that which reveals to the wise, and conceals from the stupid, the vast limits of their knowledge. * Mark Twain

1. Pierce Riffle Park, off Averill Drive east of Grants Pass: wheelchair '% T` -.X74; ',~ { -

fishing when accessible, boat ramp, nature trail, picnic tables. 9 2. Tom Pearce Park, off Foothill Boulevard about two miles east of

Grants Pass: restrooms, picnic tables, picnic shelters, playground,

softball field, 18-hole disc golf course.

3. Chinook Park, off Chinook Park Lane about four miles east of

Grants Pass: wheelchair fishing when accessible, boat ramp and vaulttoilet.

4. Schroeder Park, on Schroeder Lane just west of Grants Pass: 52

campsites including 29 with full hookups, two ADA campsites, twoyurts, restroom, showers, picnic shelter, boat ramp, basketball, tenniscourts, dog field.5. Lathrop Access, off Lower River Road about two miles west of

Wolf CreekGrants Pass: boat ramp and vault toilet.6. Whitehorse Park, on Lower River Road six miles west of Grants Wolf Creek Road

Pass: 42 campsites, including eight with full hookups, one yurt,restroom with showers, picnic shelter, playground, Lower Grave e

boat ramp and nature trail. t

Rogue River Creek Roado\

Ge

i7. Matson Park, off Upper River Road about 10

miles west of Grants Pass: no services but goodGrave Creek

fishing access to the Rogue River.8. Ferry Hole boat ramp, on Ferry Road about nine miles west of i

Grants Pass: boat ramp, restroom and fishing access. 9. Griffin Park, off Riverbanks Road, about 13 miles west of Grants

Pass: 19 campsites, including 15 with full hookups, restroomwith showers, horseshoe pits, picnic shelter and boat ramp.10. Robertson Bridge access, off Lower River Road four

Merlin Galice Roadmiles west of Merlin: boat ramp, restroom and parking area. Merlin11. Hog Creek, off Merlin-Galice road about five miles west 13 11 16

of Merlin: boat ramp and restroom. 112. Indian Mary Park, about seven miles west of Merlin on Merlin- 12 t

Galice Road: 92 campsites including 44 with full hookups, 13 partial Robertson jhookups, two restrooms with showers, boat ramp, picnic areas, a

10. Bridge Road

picnic shelter, grills, disc golf, playground and basketball. t.13. Ennis Riffle, off Merlin-Galice Road 10 miles west of Merlin: rprimitive camping, boat ramp and vault toilet.

9 80, Grants Pass f

14. Almeda Park, 15 miles west of Merlin on Merlin Galice Road: 35 7 RoaR'

er

tent sites, two group sites, one yurt, restroom, water and boat ramp. 5

15. Wolf Creek Park, off Main Street a half mile west of Wolf Creek: 6

32 campsites, including 19 partial hookups, two group sites, picnicRiverbanks Road

O2

shelter, vault toilets, water, disc golf and baseball field. p1

16. Sportsman Park, on Frontage Road about six miles north of Wildervie i

Grants Pass: skeet and trap shooting, target, pistol, muzzle-loader and gindoor shooting ranges, archery, group picnic areas. For details about Wetherbee ® f

services and fees at this privately- run park, call the SportsmanFish Drive

Hope 17ClovveVewn Q

Association at 541- 476-2040. Hatcher

17. Cathedral Hills Park, off Williams Highway about two miles south RoadRoad

of Grants Pass: trails for hiking, biking, and horseback riding, restroom. *$ elms pieFor information, call the Bureau of Land Management at 541- 471- 6500. Deer Creek Road 70,9718. Fish Hatchery Park, about five miles south of Grants Pass

Deer CreekSouth *

er tintersection of Williams Highway and New Hope Road, with three

19lSide Murphy -""N.`entrances, on Weatherbee Drive off Fish Hatchery Road, Road i.Lakeshore Drive

about 0.4 of a mile after the Fish Hatchery Bridge and onTurtle Lane: swimming, nature trail, fishing. Cave

19. Lake Selmac, off Lakeshore Drive about two miles Junctioneast of Selma: 92 campsites, including 34 with full t A

hookups, six horse camp sites, one group site, five yurts, Wes., ork

three picnic shelters, restrooms with showers, picnic of itables, horseback riding trail, boating, fishing, Illino. " ever Xdisc golf, baseball field, horseshoe pits, playground, Oregon Caves National Monument

boat ramps, and three ADA docks. East Fork

For information about parks other than Sportsman, EDof the

or to reserve picnic shelters, call 541- 474-5285 or visit the Illinois River

county parks office at 125 Ringuette St. in Grants Pass. 1 i_ _,. . _k-

II III I , I I. . . I II III

14— Summer Adventures• THURSDAY, MAY 22, 2014

ji

t.

State of Oregon Quality Information, Informed Choices

eplo ment Labor r et I r ionartment

www.Qualitylnfo.org

JOSEPHINE COUNTY ECONOMIC INDICATORS

January 2015Current Conditions

Employment Growth Rates 2010-2014

Josephine County's employment increased by 1, 040 Annual Averages, in percent

jobs during the 12 months ending in December 2014. zo

While the private sector added the majority of jobs1 government employment increased moderately.

16

The largest over-the-year increases in employment

were posted in manufacturing, private educational andhealth services, and in professional and business ser-

1z

vices. I

In December 2014, the seasonally adjusted unem-8

ployment rate dropped to 9. 3 percent, still significantlyhigher than in Oregon and the nation. 4

e

Nonfarm Employment Change

by sector, December 2013 - December 20144

2011 2012 2013 2014

AirManufacturing ( 370) Manufacturing Professional& business services g

Educational & healthHealth care& social assistance = Leisure& hospitality

services (230) e- Total

Professional& business 1

services( 170) Job Growth Stable in Recent Years, and the kGovernment( 110) Growth Industries Are...Retail trade( 70)

ILThe graph above shows the annual average growth rates for the total

Information (-20) employment in Josephine County and selected high growth industriesWholesale trade(- 70) between 2010 and 2014.

ti.

Years after the Great Recession, Josephine County total employment

finally stabilized in 2013 and increased in 2014 by an impressive iFor the Latest Info, click below:

i.

growth rate of 3. 8 percent. ii

Unemployment ratesHow close is the local employment base to the pre- recession peak?

Josephine Count/ employment An addition of 2, 200 jobs would bring the total to match the employ-ment high of 2006 (annual average). Oregon as a state has by and

Josephine/ Jackson regional information g g ) g y

large reached the pre- recession employment level. While the Port- i

Roque Valley Labor TrendsI

land and Bend areas led the way with strong job growth, the Reces- I

Latest Oreaon labor market news, sion is not really over in many other regions around the state.p

or go to Qualitvinfo.orqWhile most industries added jobs in Josephine County in 2014, the j

following ones expanded steadily in the past several years: professional and business services; manufacturing; leisure and hospitality;

Courtesy of the Oregon Employment Department'shealth care and social assistance. It is the professional and business

IWorkforce Analyst: Ainoura Oussenbec services that was consistently the bright spot in the economy with j

Ainoura.OussenbeceOreaon.00v, 541- 414- 5325 the annual growth rates reaching into double digits. In addition, jobs Iin manufacturing grew by 8 percent in 2013 and by 9 percent in 2014.

ranto. oa..-, oleis : on stDecember 2015 data unless otherwise noted

i

4

MAJOR EMPLOYERS IN JOSEPHINE COUNTY

COMPANY ADDRESS PHONE # EMPLROGUE COMMUNITY COLLEGE-Jo& Jac. Co 13345 Redwood Hwy, Grants Pass 97527 956-7500 j 919THREE RIVERS HOSPITAL j 500 SW Ramsey, Grants Pass 97527 j 472-7000 j 950GRANTS PASS SCHOOL DIST 1725 NE Dean Dr., Grants Pass 97526 j 474-5700 I 667THREE RIVERS SCHOOL DIST 18550 New Hope Rd, Murphy. 97527 j 862- 3111 j 639WAL-MART 1305 Terry Lane, Grants Pass 97526 j 471- 2822 460FIRE MOUNTAIN GEMS 11 Fire Mountain Way, Grants Pass 97526 j 956- 7700 j 482JOSEPHINE COUNTY OFFICES ICourthouse, 500 NW 6th St, Grants Pass 97526 474-5220 469SISKIYOU DESIGN 1110 SW Booth, Grants Pass 97526 j 479-8697 50MASTERBRAND CABINET COMPANY 1550 SE Mill St, Grants Pass 97526 479-6616 328BARRETT BUSINESS SERVICES- part time 1783 NE 7th St, Grants Pass 97526 j 471- 7828 260DIVERSIFIED COLLECTION SERVICE 11780 Nebraska Ave, Grants Pass 97527 j 955- 7835 260FRED MEYER 11101 Grants Pass Parkway, Grants Pass 97526 j 474-7200 j 231ROYAL GARDENS 12075 NW Highland Ave, Grants Pass 97526 j 476-8891 j 200CITY OF GRANTS PASS 1 101 NW A St, Grants Pass 97526 j 474-6360 I 226PACIFIC SCIENTIFIC INSTRUMENTS 1481 California, Grants Pass 97526 I 479- 1248 j 200SISKIYOU FOREST SERVICE 12164 NE Spalding, Grants Pass 97526 j 471- 6500 I 180TIMBER PRODUCTS/ Grants Pass 1 111 NE Mill St, Grants Pass 97526 j 479-6822 j 170HIRE CALLING- part time 11595 NE 6th St, Ste F, Grants Pass 97526 j 474-0655 j 150HIGHLAND HOUSE NURSING CENTER 12201 NW Highland Ave, Grants Pass 97526 I 474- 1901 I 176ESAM 12100 NE Spalding, Grants Pass j 476-9162 j 103ALBERTSONS 11690 Allen Creek Rd, Grants Pass 97527 j 471- 2148 I 115GRAYBACK FORESTRY- seasonal 11150 Ort Lane, Merlin 97532 j 476-0033 I 120TAPROCK NORTHWEST GRELL 1971 SE 6th St, Grants Pass 97526 I 955- 5998 j 78 4.

GRANTS PASS CLINIC 1495 SW Ramsey, Grants Pass 97527 j 476-6644 j 112FIRST STUDENT EDUCATION SERVICES 126 Ringuette St, Grants Pass 97527 j 476-7733 102FAIRVIEW TRANSITIONAL CARE 1710 NE Fairview, Grants Pass 97526 I 479-2606 I 90US POSTAL SERVICE 132 NW 6th St, Grants Pass 97526 I 472- 9667 I 85ALBERTSONS 340 NE Beacon, Grants Pass 97526 j 476-6334 j 85ROUGH & READY LUMBER PO Box 519, Cave Junction 97523 j 592- 3116 j 85SAFEWAY 1640 Williams Hwy, Grants Pass 97527 j 476- 1242 j 72SAFEWAY 115 SE 7th St, Grants Pass 97526 956- 7540 j 75COURIER PUBLISHING COMPANY 409 SE 7th St, Grants Pass 97526 I 474-3700 I 77MOCK'S- LINCOLN, FORD, MERCURY 913 SE 6th St, Grants Pass 97526 I 476-6656 I 75FIRST CALL RESOLUTION 333 SW 5th St, Grants Pass 97526 I 956-4424 I 70BI- MART 230 SW Redwood Hwy, Grants Pass 97527 I 479-8365 j 64DURO LAST ROOFING 111 N Valley Dr, Grants Pass 97526 I 476-9918 I 52JIM SIGEL CHEVROLET, HONDA 1601 NE 7th St, Grants Pass 97526 I 476-0811 I 53APPLEBEE'S RESTAURANT 250 NE Agness Ave, Grants Pass, OR 97526 I 956-8652 38ROGUE VALLEY FURNITURE 310 NW Morgan Ln, Grants Pass 97526- j 474-0996 j 24FIRST-AMERICAN TITLE 118 NE C St, Grants Pass 97526 I 476-6884 16THE LODGE AT THE RIVERSIDE 955 SE 7th St, Grants Pass 97526 I 955-0600 11RIVERSIDE INN 986 SW 6th St, Grants Pass 97526 I 476-6873 18

UPDATED 12/ 10

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Josephine County manufacturing employers in 2013Estimated employment noted in paren- RUBBER AND PLASTICS ( 200): Tac( Automotive Paint Specialties). x

theses: Durolast; TFM Polymer Solutions; SK8 NON•METALLIC MINERALS ( 80): iWOOD PRODUCTS ( 490): Timber Levor; North American Plastics; Envi- Encore Ceramics; Marzi; Riverside

Products Company; Rogue Valley Door; ronmental Container Systems. Ready Mix; Rogue Valley Marble; TheRough& Ready Lumber; Murphy Creek COMPUTER AND ELECTRONIC Glass Forge Gallery and Studio.Turnings; Oregon Firelogs; Partin Forest PRODUCTS ( 190): HACH Co.; Met One BEVERAGE"AND TOBACCO PROD-Products; Rogue Truss Systems; Rogue Instruments; Siskiyou Design. UCTS( 70): Brktgeview Vineyard& Win-Valley Firewood; Valley Wood Products. FOOD MANUFACTURING ( 180); ery;, Crystal Freth Bottled Water; Forts

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nets; MID (Northwestern Design); Bis- Rogue Coffee Roasters; 4th t& ak- MISCELLANEOUS( 220): Akttran Inc.;sell& Sons; Frank Moanot Enterprises; ery-Deli, Coltsfoot Inc.; Taylorg MOM Lighting Krauss Craft; LoganLarson' s Cabinet Factory; Michael Larue TRANSPORTATION EQUIPMENT Design; Recognition Specialties; and 12Custom Wood Finishing; Quality Counter-. ( 160): ESAM; Rome Truck Body' North- others.

tops; Roguewood Group. west Pacific Marine; ubbo n lib'de Out- PRINTING ( 15); MACHINERY ( 18)FABRICATED METAL PRODUCTS door , Limed River- " and TEXTILE MILLS( 33). I

200): Rogue Valley Finished Products; banksacturing; R14 Boats; iPrecision Screw Manufacturing; Whits Wri9eriliarasklettieng CSOVARx Souree: Oregon Employment Depart- ison Fabrication; Swtssmetric; Pacific CHEMICALS ( 130): Mycorrhixal ment, based on employers whose

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Time for Oregon to target economic weak spots: Editorial Agenda 2014 rage 1 or .)

OREGONLIVE

Time for Oregon to target economic weak spots: Editorial

Agenda 2014

sean robbins. JPG

From right, Gov. John Kitzhaber and Business Oregon Executive Director Sean Robbins tour Elkay

Manufacturing' s Independence factory in July as part of Business Oregon' s regional economic forums heldaround the state. Recruited to Independence 13 years ago, Elkay and its 200 employees make home

cabinetry for U. S., and international customers. ( Business Oregon photo)

The Oregonian Editorial Board By The Oregonian Editorial Board

Email the author I Follow on Twitter

on November 20, 2014 at 2: 31 PM, updated November 20, 2014 at 5: 21 PM

October was an encouraging month for Oregon' s economy, which added 9, 900 jobs. It was the best monthfor job gains since August 1995 and sends another signal the state has mostly recovered from the Great

Recession - at least in aggregate. In fact, if you look only at economic statistics, Oregon is in better position

than many other states. But if you look beneath the numbers you see that many of the jobs that padOregon' s overall economic rankings are accessible to a relatively small slice of the state' s population.

If you live in the Portland area, the odds of finding a job look

better every day. If you live in the Portland area and have a 17;college degree, your odds improve more. And you pretty

much win the lottery if you live in the Portland area and aEditorial Agenda 2014

have a college degree in a field related to science,

technology, engineering or mathematics. But what if you liveMore jobs for Oregon

in Grants Pass or Baker City, much less Burns or Gold Position the Port for the future

Beach? And what if you don' t have any type of college Make Portland a city that works

degree? You' re in more or less the same place you wereKeep people moving

before or during the recession - out of luck.

Build a culture of student success

So much has been written about job polarization and the

struggles of rural Oregon that there' s no need to elaborate Move forward on tax reform

on the reasons - technology, demographics andProtect and expand personal freedom

environmental limits on resource industries - these trends

persist. It's past time to acknowledge that Oregon' s recovery

will disproportionately benefit highly educated residents of Read more about the editorial

metropolitan areas ( primarily Portland) until legislators,board' s priorities for Oregon.

business leaders and local officials work together to change

the economic landscape. It should not be viewed as an

impossible task.

http:// blog.oregonlive.com/opinion_impact/print.html?entry=/ 2014/ 11/ time_ for_oregon_t... 11/ 21/ 2014

v

Time for Oregon to target economic weak spots: Editorial Agenda 2014 Page 2 of 3 j

iif

Sean Robbins, executive director of Business Oregon, has been working on a game plan since taking over kleadership of the state' s economic development agency six months ago. One of his first moves was to

spend the summer visiting every region of the state to talk to business, government and community leaders. EHe identified three business sectors with potential to deliver family- wage jobs to rural communities: value-

added agriculture ( food processing), advanced wood products and the drone industry. The goal is not only to9 1 P 9), P 9 Y i

foster growth of these industries but also to plant anchor employers in all regions of the state.

Oregon has a foundation on which to build in each of the industries Oregonian editorials

identified by Robbins, but you rarely see these employers discussedEditorials reflect the collective I

or promoted with the zeal that is directed at software developers or opinion of The Oregonian

green- energy companies - businesses that are more likely to land in editorial board, which operates

the Portland area. If Oregon wants to be a state that spreadsindependently of the newsroom.

economic opportunity to all corners, that has to change. Members of the editorial aboard are N. Christian Anderson

III, Mark Hester, Helen Jung,

To see how growth of one industry can influence a region, look at the Erik Lukens

Columbia River Gorge. Drone- maker Insitu started two decades and Len Reed.

ago in a Bingen, Wash., garage. Today, it employs about 800, most To respond to this editorial:

of whom work in the gorge - with many living the Oregon side ofPost your comment below,

g g y g on g submit a commentary piece, r

the Columbia River. Its presence has attracted related companies, or write a letter to the editor. f.

not to mention provided customers for nearby retailers and other If you have questions about

businesses. And the economic health of the region has helped other the opinion section,

contact Erik Lukens,industries, including value- added agriculture.

editorial and commentary editor,

at [email protected]

Of Oregon' s non- urban regions, the gorge probably has the mostor 503- 221- 8142.

natural advantages with a well- developed intermodal

transportation system, abundant recreational amenities and easy

access to the Portland area - the occasional ice storm aside. But the principles that worked in the gorge can

be applied elsewhere. The state can' t afford to wait for a major employer to bloom in a garage, though.

Jobs, like crops, require cultivation.

Robbins' target industries have the potential to produce anchor employers, but only if someone plants the Eseeds and helps control the weeds that can strangle job growth. That means developing necessary

infrastructure so Oregon' s drone industry can grow even as other states invest heavily in efforts to woo

drone- related businesses. It means leveraging assets like the Oregon State University Forest Research

Laboratory. It means helping existing rural food processors and manufacturers connect with global

markets. And it means using the " Oregon brand" to promote more than tourism. a

Rural Oregon' s economic problems won' t be solved quickly, even if Congress delivers favorable legislation on k

iforest management and water rights. But a deliberate effort to develop anchor employers in key industries

can deliver long- term dividends and make all of Oregon more economically healthy.

http:// blog.oregonlive.com/opinion_impact/print.html?entry=/ 2014/ 11/ time_for oregon_t... 11/ 21/ 2014

d

Time for Oregon to target economic weak spots: Editorial Agenda 2014 Page 3 of 3

The Oregonian editorial board

2014 OregonLive. com. All rights reserved.

http:// blog.oregonlive. com/opinion_impact/print.html?entry=/ 2014/ 11/ time_for oregon_t... 11/ 21/ 2014

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Oregon Business Plan SUCCESSES TO CELEBRATE ...Steering Committee THEN ON TO WHAT' S NEXTJohn D. Carter, Chair, Schnitzer SteelIndustries

Eric Blackledge, At-large member,Blackledge Furniture Greetings to Our Friends and Partners,

Samuel Brooks, Oregon Association 1

of Minority Entrepreneurs; S. Brooks& 2013 has been a banner year for the Oregon Business Plan. On the Plan' s top threeAssociates priorities — Fix PERS, Invest Wisely in Education, Build the Bridge — our elected

1

ppThe Standard

Justin Delaney, At large Member,leaders stepped up and demonstrated bipartisan cooperation. Across all 15 Business

r

Matt Donegan, State Board of Higher Plan initiatives, we can point to significant gains. i

Education

Patrick Egan, Oregon Transportation As the Oregon Business Plan enters its twelfth year, it is growing more effective as aCommission, Pacific Power tool to bring business, elected, and community leaders together in pursuit of policiesDwayne Johnson, Oregon Small

that im rove Oregon's economy and life.Business Advisory Council, Globe P S y

Three Venturesi

We still have a lot of work to do. While job growth accelerated this year as our gGregg Kantor, Portland BusinessAlliance, Northwest Natural manufacturing sector picked up steam, our income levels and rate of poverty are onRandy Miller, At-large Member, t

Produce Row Property Managementthe wrong side of national averages. As we focus on strategies to grow the economy, t

we need to look for ways to help all Oregonians connect with opportunities.

John W. Morgan, Oregon Innovation Y p g pp S

Council, Avamere Family of I-Companies The framework for the Oregon Business Plan, as described on the opposite page,Neil Nelson, Associated Oregon remains sound. To achieve the goals of the Plan we need to periodically refresh our

i

Industries, Siltronict

initiatives, identify new ones, and agree on concerted actions. That' s a function ofGreg Ness, Greater Portland Inc., The i'

Standard our annual Leadership Summit in December where we solicit input fromGary Reynolds, Oregon Business participants to refine our initiatives as we move into the coming year. Association, Perkins& Co.

Wally Van Valkenburg, Oregon As your Steering Committee looks ahead, we see great value in focusing on a fewBusiness Development Commission,Stoel Rives key actions among all the initiatives in the Plan. To grow jobs, increase incomes, andMalin Wasson, Oregon Business reduce poverty, here are three priorities for 2014: iCouncil, US Bank— Oregon

Brett Wilcox, At-large Member, Build the bridge, and more.Summit Power Alternatives

iti

Connect education with careers. t

Ex-Officio Members

Paul Barnum, Oregon Forest Unlock natural resources to restore rural prosperity.i

Resources Institute i

Jon Chandler, Oregon HomebuildersWhile all the initiatives in the Business Plan are important, as explained in this

Association Playbook, we believe that the timing is right to vigorously pursue these threeJay Clemens, Associated Oregon initiatives in 2014, and that in doing so we will accelerate progress in meeting ourIndustries I

Ryan Decked, Oregon Business key goals. Association

Ron Fox, Southern Oregon Regional Thanks for being part of this important work. Your involvement makes all the f.

Economic Development, Inc difference.

Tim McCabe, Oregon BusinessDevelopment Department

Steve McCoid, Oregon RestaurantSincerely,

and Lodging AssociationSandra McDonough, Portland

Business Alliance

Mike Salsgiver, Associated General

ilf,, 0/, 4Ai'

Contractors

Duncan Wyse, Oregon Business

Council John D. Carter, Chair

Oregon Business Plan Steering Committee i

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OREGON BUSINESS PLAN FRAMEWORKi

Goal:

Quality Jobs in Every Corner of Oregon25,000 net new jobs per year through 2020

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Per capita income above national average by 2020Poverty below 10% by 2020( down from 17.2 percent today)

Vision: Ei

Innovative, Globally Competitive Traded-Sector Industries

Traded-sector businesses drive the Oregon economy. Theyexport products and services outside of Oregon, bringing in Traded Sector Drives Growth ifresh dollars that re-circulate through payrolls, employee t

s

herespending in the local economy, purchases from vendors, and

l°" sa,. " to° " o' s °'°`"` tores, restaurants

tax revenues that fund critical public services like education.Industries that sell globally are both big and small. These 1industries tend to" cluster" based on access to sharedresources, talent, suppliers, and other factors.

Sales to the

tn. wwtd i

iBut firms in this sector drive the economy

Advanced Manufacturing Natural Resources Clean TechnologyMetals( Primary and Secondary) - Forestry and Wood Products Green Building and DesignMachinery+ Transportation Equip. - Agriculture Products Energy EfficiencyFood Processing Wine/ Winemaking Solar ManufacturingDefense Beer/ Brewing Wind Energy Development

High Tech Nursery Products Wave Energy Development

Semiconductors and Electronic - Tourism and Hospitality Environmental Technology+Components Athletic and Outdoor Services

Software Electric Vehicles+ Green Transport

Education Technology+ Services Creative Industries

Bioscience

Strategy: i

Conditions Critical for Success: 4Ps for ProsperityRepresentatives from key industry clusters report the

a.,.-.,, People

following conditions are essential to promote high- wagejob growth in Oregon:

A,. Ia.,

People: A talented workforce i r F 2E°:< ac1

Productivity: Quality infrastructure, resource utilization,competitive regulations and business costs

Place: A high quality of life that attracts and retains f

talented peopleys

Pioneering Innovation: A culture of research, commercialization, and innovation in product and process

x

design i -

Initiatives:

Actions to improve the 4Ps

See initiative matrices, pages 6 and 7)

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PROGRESS ON OUR GOALS

0ur bottom-line goals are to grow jobs, raise per capita income, and reduce poverty. How are we doing? Our

progress on these measures is mixed.1

As shown in Figure 1, the Oregon economy is growing jobs — 58,000 since January 2011. This is shy of our goal to i

add 25,000 new jobs per year, but a positive trend, nevertheless. Looking across the state, metro Portland and i

Corvallis have returned to their pre- recession jobFig. 1. Oregon Job Growth

counts. However, in Eugene-Springfield, Salem, Bend, 8Q000

and Medford, employment is still 7 to 13 percent be- 70,000

October 201360,000

low December 2007 levels. Goal i50,000

1

We' re not doing as well with per capita income. As40,000

Figure 2 illustrates, we've been below the national av- 30000Cumulative

Jobs Added

erage since the early 1980s, have fallen below 90 per- 20,000 Since January k:2011

cent of that benchmark the past few years, and are ro,000 j;

trending even lower. Although metro Oregon also a

G G G G. G G . y1 ,

y' ,1' G ti" G G 4' '+' 4' '+' k

falls below the national average (Figure 3), it is doingJ .* .

0ac" . a+ `° v o t '

i °` 'O

46 imuch better than non-metro areas, which faltered with 1 '°

See v,° 1

GP

declines in the forest products industry and have yett

z

to recover. i.

Oregon' s relative underperformance on income alsoFig. 2. Oregon Per Capita Income

shows up in an elevated poverty rate( Figure 4). U.S. no%

Census data show our official poverty rate declined 105% E

100% Average E

narrowly between 2011 and 2012 but, at 17.2 percent, 100%

95%

remains above the U.S. average and well above our909 Y

goal of reducing poverty to 10 percent. 85% State s

Economist' s

B0% Forecast

Why the Mixed Performance75%

A range of factors bear on Oregon' s economy: 1) the 70% iJ

global economy is slow in its recovery, 2) although we659'

6o%

are strong in durable goods manufacturing, that sector19„

91

q A10,°'

is cyclical and still hasn' t returned to full steam, espe- i

cially in forest products, and 3) most of our job growth has been in the local non-traded sector economy.The nation' s slow recovery from the Great Recession makes progress especially difficult for Oregon. The Congres- 1.

sional Budget Office forecasts that the U.S. economy won' t return to its full potential until 2017 when unemploy- ii

ment rates are projected to fall below six percent.

The recovery faces several headwinds. Europe is in recession — or slowly emerging from it — and China' s

growth is off its historic pace. Domestically, housing prices are rising, but demand for new housing has yet totake off. In Oregon, the lack of residential construction hits both the homebuilding and wood products industries.

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i1 Recent Oregon job growth has been disproportionately concentrated in the local sector — goods and services sold

7 within the state or within regions of the state. Oregonians have had enough faith in the recovery to spend more at

ilocal establishments. These are an important part of our economy, but the wages they pay are relatively low com-

pared to many traded sector jobs that drive economic growth.a

The Outlook Fig. 3. Metro vs. Non-Metro Income110%

Looking ahead, there is cause for optimism. Although105%

traded-sector employment has not grown sufficiently 100% r'

f US Average j

this past year, export sales have. This bodes well at a 95%Metro Oregon

time when global markets are expanding with a rapid- 9°%

ly rising middle class in many parts of the world. Ore- 85%

80% agon has an opportunity to sell products and services

7s9° F

Non- Metro

into these markets, taking advantage of its inherent 70% Oregon

strengths in manufacturing. 65% t60% t

Oregon is well positioned to move on this opportunity. , f p°' 90 9°°' tip '

Our high technology sector, for example, has faredbetter and shed fewer jobs than most other high technology centers in the United States. We are seeing a flurry of b

business startups and expansions, and our anchor employer, Intel, continues to invest heavily here.

How We Can Help is

1

If Oregon is to seize emerging opportunities, we need Fig. 4. Oregon Poverty vs. US Average

to support our traded sector industries, in particular by20%

18% Oregon

creating the conditions outlined in the 4Ps — ad- 16%

fl

vantages in people, productivity, place, and innovation 14% US

that help businesses thrive. Full recovery in the forest 12% t

products industry, for example, is dependent on tim- 10%

89'0

ber supply, especially from federal forests. For each of6%

our major industries, we need to identify opportunities 4%

and needs and act swiftly to meet them. 2%

0% I.

In particular, we must act on the connection between tip'` tip'°' tirye,, ti

of

if ti°'~ '

t9sF

education, income, and poverty. On education

measures, Oregon' s performance is middling. That' s why the unfolding overhaul of our education system is socritical to accomplish. As explained in our companion paper on poverty, we need to raise our levels of education s

attainment in general and, in particular, in skills that pay well, such as the sciences and technology. In doing so, 1we will increase the productivity of the traded sector and all parts of the economy which, in turn, will raise in-comes and help reduce poverty.

3

PROGRESS ON OUR 2013 PRIORITY INITIATIVES

Oregon Business Plan vision and strategy provide a framework for identifying what is important to createThe

jobs and grow incomes. The Business Plan initiatives are the specific ig p c actions to achieve the goals, vision, and

strategy of the framework.1

In 2010, we broke our initiatives into two broad catego-ries. First, recognizing the crisis in public sector services Oregon Business Plan:

caused by plummeting tax revenues and languishing pub- Restarting the Circle of Prosperitylic sector productivity, we grouped together six initiatives

Spend' Stimulate

lobs andIncreased Higher Per

f

designed to strengthen critical public sector services. Smarter m ..

investments in CasaIncome the Public

Education IncomeThese services, especially education, are critical for Sector

Reduced f

titachieving the goals of the Oregon Business Plan. arty.

Lower S

Spending onSecond, we created what became known as the " jobs Medicaid and

J corrections

agenda," actions designed to spark economic growth both jquickly and for the long-run. Nine initiatives fell into this category.

i

The matrices on pages 6 and 7 summarize our progress last year on these two agendas. Although we fell short in

some areas, the progress in nearly every category gives us much to build on in the year ahead. Thanks to biparti-i

san cooperation and focused work by the partners participating in the Oregon Business Plan, we have much to cel- Iebrate.

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Out of all the initiatives, last year we picked three for

priority attention: Fix PERS. Invest Wisely in Educa- Fig. 5. Reduction in PERS Unfunded Liability

tion. Build the Bridge. On all three, we made im- 16. 3 billion

portant headway.

Fix PERS11. 1 billion a

The state' s pension system was a top focus of the 2013regular and special legislative sessions. A poor benefit it

i

design interacted with the 2008 market crash to pro- i

duce a large unfunded actuarial liability( UAL) andE

high employer contribution rates. Left unaddressed, tthese increases meant shorter school years, fewer teach- 2011 2012( including Senate Bills 822 and 861)

ers, and larger class sizes for K12, along with higher tuition for college students and diminished police, fire, li-brary, park, and transportation services.

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A coalition of business groups, education advocates, and government employers worked closely with the Gover-nor and legislators throughout the regular and special legislative sessions to reduce the PERS UAL by$ 5 billionand substantially reduce employer rate increases( Figure 5). We are pleased with the reforms accomplished but

remain concerned about the future of the system. While the problematic benefit design is slowly phasing out andthe market crash is five years behind us, rates charged to public agencies in Oregon will remain considerably higher than in other states and higher than Oregon' s historic levels. This problem merits close watching and further

I

work if the system doesn' t appear to be sustainable over the long term.i

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Invest Wisely in Education

We have good news. All levels of education saw sizable increases in their biennial budgets( Figure 6). And thanks

s to reforms in health care and public safety, the share of the General Fund allocated to education grew from 50 to

52 percent. Equally important, we are changing how we invest in education. For early childhood investments,new accountability hubs were launched that will coordinate local service delivery across a patchwork ofeducation, healthcare, and human service providers and allocate funds based on results.

The 16.4 percent increase in funding for K-12 education secures a full school year for nearly every district in thestate. In addition, the state will make$ 73 million in strategic investments to create stronger professional t

t

development for educators, accelerate progress inp pFig. 6. Education Investment Increases Over 2011- 13 Biennium t

STEM/ Career Technical education, disseminate the20%

ji

Chalkboard Project' s CLASS initiative, implement a 18% g

new teacher evaluation system, and deliver reading la%

tutors and mentors to high-poverty schools 12% j10%

throughout the state. t.

6%

The state also overhauled the way it invests in post- 4%

secondary education. It charged the Higher Education 2%

0%

Coordinating Commission( HECC) to oversee Early Learning K12 State School Community Oregon University tncreases inFund College Support System healthcare, i

postsecondary resource allocation, policy-setting, and human services,

public safety, and

system coordination. It created independent boards for all other areas

Oregon State University, the University of Oregon,and Portland State University to give them more flexibility to meet student needs. t

i

In all, investments and reforms enacted in 2013 — together with groundwork reforms in 2011 — represent the

most significant changes to Oregon' s education system in a generation, and they put the state on the right path to freach its 40-40-20 goal to vastly increase postsecondary attainment. With more resources and structural change inhand, we must now implement the vision.

iBuild the Bridge 1

Early in the 2013 session, the Oregon Legislature authorized Oregon' s share of funding for the I- 5 bridgereplacement contingent on Washington State authorizing its contribution by September 2013. When theWashington Legislature adjourned without committing its share of funding and Oregon' s funding authorizationexpired, Governor Kitzhaber asked the project team which, if any, elements of the project could still move

forward. The team proposed the Oregon-led concept, a phased approach that would build the replacement

Interstate bridge, Oregon interchanges( Marine Drive and Hayden Island), light rail, and the SR 14 interchange v

during the first phase of construction. Washington interchanges north of SR 14 would be built as Washingtonfunds are identified. This phased approach addresses congestion, freight mobility, and safety. The project ispoised to move forward with construction after completing key milestones in the fall: These included mitigation

agreements with businesses affected by the new bridge, a permit from the U.S. Coast Guard, and an endorsementfrom Washington Governor Jay Inslee to move forward with the Oregon- led phased approach. Early next yearlegislators will have the opportunity to hold hearings and take action.

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HIGHLIGHTS: OREGON BUSINESS PLAN PUBLIC SERVICE REDESIGN INITIATIVES — 2013

Initiative and Goal What we Recommended in 2012 What Happened in 2013IReform the state budget pro- • Build support among legislators for new process. Work I• 2013-2015 Governors budget was built on a new 10-year I I

cess to transparently align in- with Ways and Means to base decisions off 10- yr projec- outcome-based process. The legislature did not change its Ivestments with long- term goals tions of expenditures and revenues budgeting process, but did enact critical reforms in educa-, Iand desired outcomes. Identify lessons learned and improvements for next cycle ions and er e the t based

long- term, rather short-term, cost savings d desired Ipolicy outcomes. IThe Govemors office thoroughly evaluated the successes 1and failures of the 2013- 2015 budget development process.

Redesign Oregon' s education • Make five key investments to support 1) educators 2) i• Legislature invested$ 75 million in the five key investments isystem to ensure that by 2025, parents 3) new school models 4) third grade reading and j areas. iall Oregonians have a high 5) STEMschool diploma, 40% at least a •

Legislature established a STEM Investment Council to set aP Overhaul funding models for early childhood, ESDs, spe- statewide STEM education strategy.bachelor's degree and 40% at cial education, ELL and postsecondary education to pro- °• Legislature overhauled early chilhod funding; passed

tleast an associate' s degree or mote innovation and flexibility. j study bill on ESD, special education, and ELL funding.technical credential. Reorganize state education agencies to help them fulfill ;• Legislature restructured higher education system with inde-

core functions 1) investing and policy 2) building clear pendent boards for OU, OSU and PSU and new Higher Ed.learning pathways 3) creating great educators and 4) corm € Coordinating Commission. 1municating with publicGrant autonomy to U of 0 and PSU, and move post- tboard

funding policy responsibility to a single state jn

6Redesign Oregon' s health • Continue to launch and support CCOs CCOs are up and running across Oregon.care system to improve the • Get ready to launch Cover Oregon Cover Oregon launched, but with a rough start. lhealth of Oregonians while • Adopt medical malpractice/patient safety reform j• New medical malpractice dispute resolution system estab- tstabilizing costs for individuals, •

Patch 2013 gaps in Oregon Health Plan financing and lished in SB 483.businesses, and the public sec- fdevelopeveop a long- term financing plan 2013-2015 Medicaid funding gaps patched but big gaps tMitigate market shock of Affordable Care Act ipossible in 2015-2017 and beyond.Encourage public and private employers to adopt purchas- • Legislature passed HB 3458, a re- insurance mechanism to Iing, care and benefit models that encourage choice among mitigate the shock of the ACA in the individual market.

t

providers, promote wellness, and incent high quality, lower;• Public employers moving to new benefit and care models. 1costcare

Reform Oregon' s public safe- • Adopt package of public safety reforms that the Commis- • Scaled-down version of Public Safety reform package

A

ty.system, in particular curbing sion submits to the Governor and Legislature in December€ passed, significantly delaying the need for more prison tprison growth, by investing in 2012. beds.proven, effective, and affordable • Avoid the need to bond for and build more prison beds inmethods of reducing crime. the biennium I ti

tReform public employee corn- • PERS: Use market rate to annuitize Money Match; Cap the I• $ 16 billion PERS unfunded liability reduced to$ 11 billionpensation to address unsus- COLA; Eliminate 6% requirement; Reduce pension spik- I with COLA and tax remedy reforms. tamable growth in costs while ing; Reduce assumed rate; Fix the tax remedy.

I• PEBB/OEBB costs have continued to stabilize. PEBB nowensuring competitive compensa- • Health Care: Continue progress in stabilizing PEBB/OEBB i operating under fixed rate increase budget and RFP is outtion for public employees. rates through fixed dollar defined contribution and ongoing for new PEBB care model.

efforts to implement new care models, value- based benefit • PSU Center for Public Service produced study comparingdesign, and improved healthl total cost of compensation in Oregon and neighboring ftOverall: Align total cost of comp with other states and the

1states.

private sector z

ItReform Oregon' s revenue • Form coalition to examine options and engage the public ;• The Governor, business and labor groups are working !!system to create stable and on revenue reform ideas 1 together on public opinion research. i sadequate funding for public • Draft a proposal for consideration by legislators and voters s• A study is underway to analyze fiscal and economic impact Iservices and effective incentivesfor economic growth.

of different revenue structures. f r

A series of divisive ballot measures were filed with thei Secretary of State that could threaten the broader tax re

form effort.

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l HIGHLIGHTS: OREGON BUSINESS PLAN JOBS INITIATIVES — 2013

I Initiative and Goal What we Recommended in 2012 What Happened in 2013Transportation Infrastructure: • Adopt an investment package to replace the 1- 5 bridge. • Oregon authorized its share of funding for the 1- 5 bridgeCreate jobs today and in the • Pass Connect Oregon V multi- modal bonding program. replacement in March. After Washington failed to do its part,long- run by improving our trans- . Take steps to create permanent non highway funding. Oregon leaders advanced an Oregon- led, phased approachportation infrastructure and ac- for consideration by the legislature.cess to markets.

Move forward innovative infrastructure financing models • Legislature authorized$ 40 million for Connect Orsuch as the West Coast Infrastructure Exchange and the • The Infrastructure Exchange hired its first executive director.i Community Investment Initiative.

Innovation: Boost research, • Adopt the 2013- 15 Oregon Innovation Plan, continuing • Legislature funded the Oregon Innovation Plan at$ 19.5i commercialization, new business funding for Oregon' s three signature research centers as million supporting Oregon' s three signature research centersformation,& productivity of exist- well as five industry initiatives. and industry initiatives while also funding innovation capacity 1ing companies in the Southem Willamette Valley. jCapital Access: Ensure Oregon • The Legislature should create an Oregon Growth Fund to • Legislature passed HB 2323, codifying the recommends-

Icompanies have access to debt support portfolio that supports early stage, venture stage tions of the Oregon Growth Board, creating the Oregonand equity financing to fuel their and later stage companies and include tools to leverage Growth Fund, and allocating resources to the fund. Progressgrowth. and grow private investment in Oregon. was made statewide boosting business accelerators, seed I

i funds, and angel and venture conferences and networks. jRegulation& Permitting: In- Implement the Regulatory Streamlining Roadmap. Legislature increased funding for Regional Solutions to stepcrease certainty for business by • Adopt consistent management systems within and across up its regulatory streamlining functions.adopting clear, consistent regu- state agencies. Legislature passed HB 2620 directing alignment between Ilations and permitting processes. • Create permitting ombudsman function inside Regional state and local economic and community development func-

Solutions. tions.

Advance pilot projects identified in the RoadmapLaunch awards program to recognize efficient and effec-tive cities and coup ies.

Improvements to land use appeals process.Eliminate overlapping regulations across jurisdictions s

Industrial Land Su and funding Legislature inventory diligence gISupply Secure state fundin for industrial land inventories and • L mslature established invento and due dili ence rant t

Readiness: Ensure Oregon has due diligence assessments. program but did not allocate funds to it. 1an adequate supply of right- • Create a partially forgivable state loan program for prepa- • Legislature established forgivable loan program for prepara-sized, market-ready industrial ration oftraded sector industrial sitest. tion of industrial sites.land. Streamline the UGB expansion process based on stake- • Legislature adopted an improved population forecasting j

holder group recommendations system( HB 2253) and a simplified UGB expansion processHB 2254) but did not pass a companion measure to facili-

tate siting of large industrial projects( HB 2255).Forest Health+ Biomass: • Accelerate forest restoration activities on east side feder- • Legislature provided $ 2. 88 million in Lottery funding to in-Improve forest health and rural al forests crease the pace and scale of east side forest restoration teconomies while preventing fire • Agree on and implement an O&C solution The US House approved a bill that would place about 1. 6through active forest manage- • Increase wildfire initial attack capacity million acres of 0&C federal lands in a state-managed trust. ament.

Promote the innovative use of wood products Soon after, Senator Wyden introduced a senate O&C bill.Implement new state biomass strategy Legislature changed the state' s fire fighting funding formula,Promote sustainable harvests on state forests giving landowners more capacity to attack fires t

A second Wood Solutions Fair attracted more than 400 rarchitects and engineers to study innovative uses of woodThe state implemented new programs and incentives to ssupport small biomass thermal projects. tThe Board of Forestry launched an initiative to change its rmanagement plans to increase economic performance and

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conservation outcomes on state forests in NW Oregon.

Energy: Maintain Oregon' s • Further streamline energy facility and transmission siting • Legislature passed HB 2820& HB 2105 to streamline Ener- rcompetitive advantage in energy to get projects off the ground while capital costs are low. gy Facility Siting.costs while creating jobs and • Focus on energy efficiency and vehicle fleet conversion • Legislature passed HB 2801 expanding market opportunities lslowing carbon emissions. as the most effective ways to reduce emissions for energy efficiency.

w

Protect Oregon' s competitive advantage in energy costs. • Legislature avoided bills that would increase energyle9 P 9 r9Y e9 rgy costs.

Workforce: Employ targeted • Achieve 100K NCRCs and > 24 counties certified as • Oregon is on track to meet NCRC goals.strategies to close the gap be- career ready by 2016 Legislature created STEM investment council and providedtween skills Oregonians have • Create STEM investment council and identify funding to $ 8M in funding. Eand skills employers need. double STEM graduates by 2025 Legislature authorized$ 10M for CTE programs in Oregon

Continue recent investments in high school career and high schools.technical education The Govemor launched an effort to redesign Oregon's work- jDouble the number of people served by Back- to-Work force development system. j

Oregon on- the-job training program for 2013- 15Align workforce investments to meet industry needs.

IWater: Secure additional water • Develop both in the short and long term additional capac- • Declaration of cooperation signed by Governor, farmers and ifor fish and farms in the Umatilla ity for storing Columbia River water during winter months conservationists on 9- point plan for water development inBasin for later use during irrigation and fish migration seasons the Umatilla Basin.

Using water more efficiently and more productively SB 839 establishes a new program to fund multi- purposeDevelop a stronger interstate approach to Columbia River water resources projects across the state, including$ 10M inwater. bonding capacity and 2 new positions.

Regional interstate cooperation agreement drafted.

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WHAT' S NEXT?

his past year, the Oregon Business Plan provided a strong framework for actions on many fronts, and in par-ticular on the top three priorities for fixing the public retirement system, investing wisely in education, and

building the I-5 bridge over the Columbia River. We have had a stream of successes in recent years that puts Ore-gon on a good footing.

We have the right plan and the key partners are on board. We need to build on recent progress and focus our ener-

gy on steps that will improve performance in two areas of greatest concern: lagging income and too much poverty.We have prepared a paper with a more detailed strategy to address Oregon' s high rate of poverty. It contains key l

recommendations as part of the poverty reduction agenda for 2014.

Build the Bridge, and More

Oregon has an enormous backlog of unmet infrastructure needs, and a huge deficit in needed funding just tomaintain the infrastructure that we have in place. Investing now—in a time of low interest rates and high unem-

ployment—not only creates jobs today, but supports economic vitality in the long term.

The Columbia River I-5 Bridge Replacement is ready to go. We need to confirm a financing plan in the Februarysession of the Legislature, and get to work. The risk to our economy is not in financing the bridge, but in failing toget it built.

Beyond the bridge, we need to set aggressive priorities for our basic infrastructure needs that will ensure our con-

tinued ability to compete in the global economy. These priorities include university capacity to support researchand commercialization of innovative technologies, transportation for commuters and freight mobility, reliable en-ergy production, new transmission capacity for electricity and natural gas, information technology, and water/sewer treatment. Such facilities are needed to support the businesses we have, the business growth we want, andprojected increases in Oregon population.

Finding the funding will continue to be a challenge. Fig. 7. Average Wage Earnings for STEM and Non-STEM Workers, 2010

We need to take advantage of fresh ways to magnify45

our public investment by combining with private capi- ao

tal where feasible and by managing more wisely the35

30

money we invest in the planning process for infra-25 STEM

structure projects. We need to shift our focus to project20

Non- STEM

delivery and reliability, and the capacity to supportis

economic growth. Business and elected leaders should 10

come together to develop an infrastructure financing s

plan for the 2015 legislature. 0

HS diploma or less Some college or Bachelors Graduate

associates

Connect Education with Careers

Too many Oregonians are underemployed or unemployed because their skills don' t match current and future job

requirements. We need to fix that by investing more in STEM and Career/Technical education. As shown in Figure

7, jobs in these fields pay a premium. We must also provide a rigorous education to all students so they can pre-pare for and adapt to ever changing work requirements. We have set broad goals for improving education attain-ment. We have changed our governance structure to better measure outcomes and to invest more strategically.

8

As we look at priorities, we should be particularly attentive to what are sometimes called middle-skilled jobs,

those that require less than a four-year college degree. Welders, electricians, and technicians of many kinds are in

short supply in many sectors. Good jobs in these specialties improve incomes and reduce poverty.

Unlock Natural Resources to Strengthen Rural Economies

Unemployment and poverty are highest in rural Oregon. Over the past several decades these regions have strug-

gled in a tug of war over natural resources driven by policies that serve neither the communities nor the environ-

ment especially well. Plunging harvest levels in federal forests, shown in Figure 8, illustrate the impact of such pol-icies. If unlocked, such resources could grow rural economies in a short time—and in a way that actually improves

environmental quality. i

In Eastern Oregon, for example, community leaders are working for exactly this kind of solution with environmen-

tal representatives and state agencies to find a way to withdraw more water from the Columbia River for agricul-

ture while protecting and enhancing fish runs. The eco-nomics are compelling. Additional water withdrawals

Fig. 8. Oregon Timber Harvest HistoryPrivate forests • Federal Forests • State/ Tribal/ County Forests 1

in the summer months would translate into more than - t

ione billion dollars in agriculture output, creating thou-

sands of new jobs and substantial new revenues for E

public services. I tDd+

The biggest opportunity is to tap our federal forest re- 41,

sources more fully. In many parts of the state, our over- oz t

grown forests pose an ecological danger because they m i

increase the risk of catastrophic fire and stress water

tables. In Eastern Oregon, stakeholders are coming to- ° 1950s 1960s 1970s 1980s 1990s 2000s i

gether and agreeing on specific actions to thin forests in j

a way that supports economic growth and environmental goals. We need to step up this work to meet the Busi-a

ness Plan's objective to thin 500,000 acres annually. ti

More generally, Oregon needs to increase active forest management and timber harvest on public lands. Below is a t

short list of steps that will help restore rural health and make a big dent in rural poverty:Agree on and implement an O& C solution

Promote sustainable harvests on state forests tt

Modernize federal land management policies g

Separate fire suppression costs from federal forest management budgets

Strengthen new state and federal business models to increase pace and scale of east-side forest restoration i

Increase support for OSU College of Forestry' s renewable materials and forest management research

The purpose of the Leadership Summit each December is to review progress on all the initiatives in the Oregon 9

Business Plan and to examine next steps in each topic for the year ahead. Based on the feedback received, the Ore-

gon Business Plan Steering Committee updates the agenda for the coming year and beyond.

More detailed information about the Oregon Business Plan and its initiatives can be found atwww.oregonbusinessnlan.org. We welcome comments and suggestions throughout the year to help identify the

best next steps to help Oregon meet its economic goals.F

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APPROVED ON FEBRUARY25, 2015 BY THE BOARD OF … General.pdfFeb 12, 2015 · Development...

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Transcript of APPROVED ON FEBRUARY25, 2015 BY THE BOARD OF … General.pdfFeb 12, 2015 · Development...