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

APPROVED ON FEBRUARY25, 2015 BY THE BOARD OF COUNTY COMMISSIONERS AT THE WEEKLY BUSINESS SESSION

General Discussion; February 12, 2015 2:00 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 for the Fund. He suggested the Board find ways to alleviate the pressure on the General Fund and consider using Economic 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, Economic Development Recommendation. The packet outlined services and programs provided by SOREDI, IVCDO, and SBDC. She then reviewed her recommendations on spending Economic Development Funds. The Board agreed this was a great start. After some discussion, it was decided to bring it back on Tuesday during General Discussion.

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 a Resolution 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 coming along with the project.

Commissioner Hare met with Ryan Johnson, Building Maintenance Manager and they felt the smoking area could be 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 been held. Staff is to prepare a letter for Board signature.

Linda McElmurry explained the opt out process for Community Dispute Services and the request from Josephine County' 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 12 - 1 oZ - 5 Ge4nera.( .1) tS k.ss; eF-\

F' KUF' UJtU ECONOMIC DEVELOPMENT AMOUNT Rev. 2/ 12/ 2015) PROJECT NAME 2014-15 Paid Internal Applications I I I Airport General Econ Development I $ 30,000.00 I 15,000. 00 Airport Level Staffing Increase* I $ 30,000.00 I 30,000. 00 Fair General Econ Development I` I $ 20,#x.00 I 10,000. 00 Fair 2013- 14 Project**** I Marketing 1 $ 10,25$.45`I 7, 955.00 Fair Capital Improvement Plan* 8,500.00 I 8, 500.00 Parks General Econ Development 20,000.00 I 10, 000.00 Parks 2013- 14 Whitehorse Park Improvement** 5,4 , E I Planning General Econ ment Development 20,000.00 I 10, 000. 00 I I I External Applications I I Boersma Bros. LLC INVIP Purchase Agreement* 30,000,0 I Ecivis Grant Annual Dues I $ 6,800.001 GP Chamber Annual Dues- all County Departments I $ 3,000.40 I 3, 000.00 IV Chamber Annual Dues I $ 95.00 I 95. 00 IV Comm Dev Org Wheelchair River Accessibility- Forks St Park* I $ 5,240.00 I 5, 240. 00 JCLI Core Library Services* 35,000.00 I 35,000. 00 Small Business Dev Center- RCC ' General Econ Development* I $ 25,000.00 I 25,000. 00 Small Business Dev Center- RCC ' Project Specific* I $ 10,000.00 I Imagine Southern Ore Inc( VonHolliHigh Tech Business Recruitment I $ 50,000.00 SOREDI Annual Dues 25,000.00 25, 000.00 SOREDI 2013- 14 INV Sewer Feasibility Study** 890.70 890.70 I 4. I I I 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. 00 Spent per above 185, 680. 70) Deposit 11/ 4/ 2014 1st Qtr Lottery Proceeds 76, 365.00 Deposit 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 q3 ECONOMIC DEVELOPMENT

Rev. 1/ 29/ 2015) PROJECT NAME

Internal Applications

Airport General Econ Development m ° x,. 1$ 15,000 paid to date Airport 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 Development 10, 000 paid to date w , $ Parks 2013- 14 Whitehorse Park Improvement** 14:",e Planning General Econ Development i a .'$ 10, 000 paid to date

External Applications Boersma Bros. LLC NVIP Purchase Agreement* 14 i Ecivis Grant Annual Dues I° = a 0, f'« GP Chamber Annual Dues- all County Departments A Pending IV Chamber Annual Dues Pending I IV Comm Dev Org Wheelchair Accessibility- River Forks St Park* 1,$: . O Paid I JCLI Library Core Services* lki,=Aixama, Paid " Small Business Dev Center- RCC General Econ Development* 1,$;:::: 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 Payments July 2010 to October 2014

Economic Dev Breakdown 14- 15 Budget Paid to date IV 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 i Fair- 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

i C:\ Users\ cwalker\ AppData\ Local\ Microsoft\ Windows\ INetCache\ Content.Outlook\ AIB7ZIU1\ Economic Dev 2010- 2014 Page 1 of 3 Schedule of Economic Development Payments July 2010 to October 2014

Economic Dev Breakdown 12- 13 Budget Paid to date SOREDI Annual Dues 25,000 25,000 IV Data 50, 000 50,000 Kinetic 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 39,405 r 225, 000 184,461 Interfund Transfers

Parks 40, 000 40,000 Fair 40,000 40,000 Airport 30, 000 30,000 Planning 40, 000 t 150,000 110,000

Total 2012- 13 375,000 294,461

Economic Dev Breakdown 11- 12 Budget Paid to date SOREDI Annual Dues 25, 000 25,000 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

C:\ Users\ cwalker\ AppData\ Local\ Microsoft\ Windows\ INetCache\ Content.Outlook\ AIB7ZIU1\ Economic Dev 2010- 2014 Page 2 of 3 Schedule of Economic Development Payments July 2010 to October 2014

Economic Dev Breakdown 10- 11 Budget Paid to date SOREDI Contract 49, 500 49,500 SOREDI Annual Dues 25,000 25,000 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

C:\ Users\ cwalker\ AppData\ Local\ Microsoft\ Windows\ INetCache\ Content.0utlook\ AIB7ZIU1\ Economic Dev 2010- 2014 Page 3 of 3 OREGON Enterprise Zone and Electronic Commerce Overlay Requirements and Benefits

Updated 6/ 13/ 13

Enterprise Zone

Business Requirements 1. Eligible Activities— Industrial Zoning a. Manufacturing b. Assembly c. Fabrication d. Processing e. Shipping f. Storage g. Call Center h. Headquarters Facility i. E- Commerce— Added to specific zones& North Plains

Hiring 1. 10% increase in employment within the zone 2. New employment must be maintained through the life of the benefits

Investment 1. Real Property 50,000 a. New Building or Structure b. New Addition or Modification c. Heavy of Fixed Equipment or Machinery 2. 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 improvements 2. 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 a business investment or business activity, such that it:

1. Must involve dealing with customers, suppliers, clients, or other transactional entities 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 or services, or business- to-business, retail or comparable basis, in addition to paragraph 1 above.

3. May include facilities, equipment, services, network, or software that are produced, operated or supplied by a third party, who facilitates, fosters or makes possible business transactions by means of Electronic Commerce consistent with paragraphs 1 and 2 above. Such third party may be a qualified business 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 the transaction' s overall completion or delivery that: a. Is conducted predominately by means of Electronic Commerce, as described 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 was initiated or consummated through other means; or b. Naturally serves, underpins or arises from the sale or purchase of goods, property, or services predominately by Electronic Commerce, as otherwise described in this rule, including but not limited to the following; customer support, distribution, made-to- order, assemblage, shipping, warehousing, warranty service or any similar operation.

5. As used in Administrative Rule, " Predominately" means that the share of applicable sales- based activity represented by Electronic Commerce exceeds 50%, as measured by: a. Receipts b. Number of orders

c. Clients served d. An equivalent qualitative determination

Southern Oregon Regional Economic Development, Inc. ( SOREDI) www.soredi. org Hiring 1. 10% increase in employment in the zone 2. New employment must be maintained through the life of the benefits

Investment 1. Real Property 50, 000 a. New Building or Structure b. New Addition or Modification c. 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 plus Income Tax Credit 2. 25% Income Tax Credit on Investments in Electronic Commerce up to a maximum 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.

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

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 Manager 101 Northwest A Street Grants Pass, OR 97526 Telephone: ( 541) 450- 6005 Fax: ( 541) 479- 0812 E- mail: dreeves @grantspassoregon.gov 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 Holzgang Business 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.us Web Site: www.oreaon4biz.com

Southern Oregon Regional Economic Development, Inc. ( SOREDI) www.soredi. org Enterprise Zone and Other December 2, 2014 Oregon Tax Incentives

Enterprise Zones and Other Oregon Tax Incentives

I 4 Arthur Fish

December 4, 2014 Medford, Oregon

business or- go .

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

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 prices Construction

Exemptions rather common by type of purchase or local/ state programs t Typically abated with' credit?

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Oregon Business Development Department dba Business Oregon 2 Enterprise Zone and Other December 2, 2014 Oregon Tax Incentives

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 risks i, 2. Most of the time, so that existing firms stay and grow, if not at current 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 initial surveying to deal-closing

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Policy with Oregon incentives

Exemptions on taxable property often mainstay—largely defined by law with 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 development Areas of economic hardship/ rural Explicitly or effectively targeted programs, in terms of industries, geography, etc.—competitive impact—but no major state tool that can regularly be called on Effective bias towards( physical) capital Relatively simple& certain for business, economical, and evidently good public return

Local—State collaboration critical in varying ways

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Oregon Business Development II Department dba Business Oregon 3

E t December 2, 2014 Enterprise Zone and Other Oregon Tax Incentives

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 in Council of State Taxation( COST)/ Emst& Young studies( for business... on average) and especially favorable for capital

Public Finance Local property taxes Corporate 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,but not necessarily other capital assets( for example, with data centers)

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Oregon Business Development Department dba Business Oregon 4 Enterprise Zone and Other December 2, 2014 1 Oregon Tax Incentives

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 taxing districts/ levies, but except for school or capital bond levies, rate is % f

capped(" compressed") at 10% 0+ 5%. of real market value( RMV) 6 Rate, however, is applied to taxable or assessed value( AV), which 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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p Summary of property tax relief exemptions on new plant & equipment

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

t Standard enterprise zone, qualified property 100°%exempt* Enterprise Zone and Other December 2, 2014 Oregon Tax Incentives

The players

The Taxpayer— business firm

The State My agency often involved with other programs, besides my expertise

Department of Revenue— crucial support Fundamentally local with property tax exemptions City, port, county government, with land-use, permits, etc.,as well as economic development officials or nonprofit organizations; local zone managers—a diverse group County assessor offices—also considerably diverse, depending on people and zone sponsorship—but always critical:

Customer service, big and small projects when there are complexities Tax impact estimations for typically larger prospects Compliance& enforcement, sometimes unavoidable

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Income taxes corporate I non-corporate

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

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State TaxableIntome-(STI) x taxrate

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Income-based Tax Liability reducible with credits*

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

Oregon Business Development Department dba Business Oregon 6 Enterprise Zone and Other December 2, 2014 Oregon Tax Incentives

Single sales factor interstate apportionment

Benefits multi-state, traded-sector C corporations compared to using all three factors, if having major physical presence in state

Factor= Oregon sales_ all domestic sales Factor x consolidated federal income= income subject to state taxation( STI)

Oregon sales" do include: Intangibles—whenever majority of income-producing activity performed in Oregon vis-à- vis other states with respect to" traded-sector services" Throwback—sales from Oregon to U.S. government or somewhere without 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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Department dba Business Oregon 7 Enterprise Zone and Other December 2, 2014 Oregon Tax Incentives

The enterprise zone concept

Diverse( enterprise)" zone" programs Long history and worldwide phenomenon Still majority of states, with various incentives and programs, but overshadowed by major statewide incentives in many cases since 1990s FederaI 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 1990s Statutes 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 to consider 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) rural Presently, for cities/ports/ counties still 2 available In addition, reservation/ tribal opportunities[ or federally based] Local sponsorship and locally controlled in many ways Technically designated by state, including tests for economic need Each designation lasts at most 11 years, but can be self-terminated, and use or lose after first six years

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

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

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Oregon Business Development Department dba Business Oregon 8 Enterprise Zone and Other December 2, 2014 Oregon Tax Incentives

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Local sponsorship

Sponsorship arises from particular resolution at zone designation or boundary change... at the moment: Cities— 117 Ports— 11 Counties— 30, but zones located in 35 of 36 Tribes— 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 Assessor Local incentives, waivers, services, Available, publicly owned real estate regulatory flexibility Set authorization filing fee and other Strategy, marketing and business revenue assistance Boundary change and termination of Special benefits or exceptions enterprise zone busafri,

Oregon Business Development

Department dba Business Oregon 9

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

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; complementary role is best, of course Up to two co- managers permitted Official 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 varies according 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 distance 12 miles overall, greatest distance( diameter) 5 miles between nearest points of separate areas Rural zone in sparsely populated county, lineal distance 25/ 20- mile overall, greatest distance( diameter)* 15 mile between nearest points of separate areas*

Document with designation/boundary change Area 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/ city limits with date/ ordinance, or tax lots with actual, current assessor maps

May be waived by Business Oregon director

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Oregon Business Development Department dba Business Oregon 10 Enterprise Zone and Other December 2, 2014 Oregon Tax Incentives

Zone designation/ application

Round triggered by imminent" sunsets"( re-designated with new or existing sponsors, or Business Oregon Director decides, whenever there are extra/ discretionary zones available Applicant:( combo of) county, port or city cosponsors( new/existing) Elements Statewide notice, call for applications, on-line materials Local decisions( hotel/ resort option), preparations Mandatory- Economic hardship data/ meeting criterion compared to state/ MSA Fairly certifiable/ business- ready land Timely notice to all non-sponsoring local taxing districts for public consultative meeting, a week before sponsorship resolutions Mapping and description of proposed zone boundary Resolutions of governing bodies( including for only consent) Form with zone name, size information and so forth Deadline( s)... Business Oregon reviews, competitive selection as necessary Director orders designation(s)

Amendments to zone boundary

Several/any time a year;special guidebook—often new cosponsors join with 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 required Adoption of resolution(s)

At least as severe economic conditions compared to" original enterprise zone in encompassed or adjacent" residential areas"; economic measure may 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 on qualified property may then begin

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Oregon Business Development

Department dba Business Oregon 11 Enterprise Zone and Other December 2, 2014 Oregon Tax Incentives

Enterprise Zone Incentives

Standard exemption three to five years

Qualified property—previously unused in enterprise zone—begins exemption period after being" placed in service," in that it is physically ready for specifically intended commercial use

Employment-related requirements Increase full-time, year- round, in-zone jobs by( greater of) one or 10 percent No outside job losses( 30 miles) Maintain minimum average employment during period Local 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 wage except for MErxo-area urban zones Enter into first-source hiring agreement—not required to use for actual employees, only that it is executed with Worksource Oregon on behalf of local publicly funded job training providers—mutually beneficial

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Oregon Business Development Department dba Business Oregon 12 t j Enterprise Zone and Other December 2, 2014 Oregon Tax Incentives

i Space- time in zone F standard, three to five years i Property improvements and installations must come after the site is designated or added to enterprise zone 6 t Authorization application" submitted" before hiring or any physical 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 up to three years—each year's new property receives its own exemption f period l' Once property ready/in use, and having achieved new hiring, business firm then files claim+ property schedule with County Assessor( or Department of Revenue) by April 1

Provisions if zone terminates or expires 1

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Steps for exemption I standard, three to five years I

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

i 2) Only then begin physical/on-site work& new hiring 1 4 3) Conference to address verification& special issues—critical questions, trouble-shooting... i i 4) Manager& Assessor" authorize"( usually done quickly, but delays t occur up until time of qualification)

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

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Oregon Business Development 13 Department dba Business Oregon i 1f

i I Enterprise Zone and Other December 2, 2014 Oregon Tax Incentives

Steps (continued) standard, three to five years

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

7) Project completed—property effectively placed in service—as of( a given) 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 in service 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 compliance based on average annual minimum employment... but schedule only for additional new property in the next two years

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Business eligibility standard, 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, property management)—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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Oregon Business Development Department dba Business Oregon 14 t Enterprise Zone and Other December 2, 2014 i Oregon Tax Incentives

Basic elements of application standard, 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 able to 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 I O Inform about requirements& so forth 1

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i I i

Late application allowances standard, three to five years

Building/ structure bought or leased from unrelated party e.g_,"spec" or abandoned re/ developments) Lease agreement/ closing document included with application

Must be authorized/ approved before occupancy

Other examples from administrative rule t' Authorized firm/ project acquired by another i

Replace existing application

untouched for 6 months( also Property that is unfinished and has been j not assessed) a Good Cause waiver by the Department of Revenue( business still needs to get authorized)

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Oregon Business Development 15 Department dba Business Oregon

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

Preauthorization conference standard, three to five years

Post- application; between zone manager& business, and with the assessor' 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 understandings Company/ applicant about requirements and benefits Local 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 authorization standard, 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 increase Resolution(s) may contain other conditions but must specify job minimum Large investment option—total cost of qualified property a$ 25 million employment may fall below existing level) Direct modernization option: 1. Unit/labor productivity rises 10% or more within 18 months 2. Amount= 25% of tax savings dedicated internally to workforce training or externally for local publicly funded job training providers 3. No net decrease of employment

Same with executed extended abatement agreement, as applicable•

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Oregon Business Development Department dba Business Oregon 16 Enterprise Zone and Other December 2, 2014 Oregon Tax Incentives i

3 Extended abatement i standard, three to five years

All cosponsors must accede to same agreement, which may have additional local requirements Different ways to do it; resolutions common but not statutorily necessary Find or create authorized signatory, either in general, or prior to negotiation i 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 authorization resets only with authorization renewal or filing of inactive authorization) Using gross( non- mandatory) compensation with fringe benefits t t For all new jobs of firm as created through 1' assessment year j Must 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 of four or five consecutive years, thus increased exposure to losing first e three years with respect to basic employment criteria, eta

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t 1 i ia After authorization i standard, three to five years I Execute first-source hiring agreement, not later than exemption once authorized) 1 period by law, but administratively before hiring( 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 of first exemption year as warranted—absolutely critical for any 1 structure or basic type! unnoted new property g to After( every) two calendar years, if project not ready start I exemption, statement to manager and assessor by April 1 keeps filings 1 authorization" active" to avoid fees upon

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 i 1

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Oregon Business Development 17 Department dba Business Oregon I i i

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

Counted Employees standard, 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 they formally choose to combine( good for coincidental hiring or gross leasebacks) Minimum increase= greater of one job or 10% of existing level annual 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 single year or by 50% for two years in a row

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Transferring jobs into zone standard, three to five years

For authorized business firm to receive standard

w exemption Barely any job loss 80 WWI allowed at Y, if transferred to Z between application and end of first exemption year. Firm employment at Z and X( and W if involved) must cumulatively satisfy its own 110% test at outset and throughout first exemption year, bu jre .

Oregon Business Development Department dba Business Oregon 18 Enterprise Zone and Other December 2, 2014 Oregon Tax Incentives k

Qualified, exemptible property standard, 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 exemption may be assessed or exist in county once zone exists if unused in zone) Owned or leased by authorized business firm Used in the furtherance of the production of income, and then, only in eligible activities( not retail fixtures, for example) 1 t Excluded are land( and improvements thereto), rolling stock,

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 j

I 1 i

i Other property issues standard, three to five years i

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

and are not binding, but... t timing z Property must be at same general location, and t Application must indicate any major structure or type of property: New building or structure Addition/ 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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Oregon Business Development 19 Department dba Business Oregon

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

Still more property issues standard, three to five years

Minimum costs 50,000 per property schedule, collectively for all real property, including improvements and heavy/ affixed M&E 50,000 per item of personal property... or$ 1,000 per item if used exclusively in 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 months before 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 ineligibly nor 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 form standard, three to five years

Once property is in service, after the very next January 1 but no later than April 1, authorized business firm: Files with County Assessor( equivalently with Department of Revenue for industrial accounts)— firm data& criteria Attaches property schedule for any( new, additional) property in previous year— itemized details Furnishes copy to zone sponsor/ manager With property schedule( start of exemption), form may be accepted late Until 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, or Authorization became inactive—not renewed after two years without claim

Assessors enters on rolls with" potential tax" notation

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Oregon Business Development Department dba Business Oregon 20 t Enterprise Zone and Other December 2, 2014

Oregon Tax Incentives I

Exemption claim procedures standard, three to five years

Local protocols May depend on manager/ assessor offices, and pre-authorization conferences Firm/ job data acceptable on face value; if doubt, initial qualification may be withheld pending corroboration Assessor can go directly to authorized firm or seek zone sponsor t confirmation/ assistance: Business qualification( jobs) i` Special circumstances( e.g.,square feetn eligible use) of property, etc. Sponsor responsible for any special, local requirement—must document failure, 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/ deadlines c up until August 31 For additional, new property to receive its own exemption period, subsequent property schedule attached, but only allowed in next two years per single authorization

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Compliance t is standard, three to five years

I During exemption, if one-page claim form is not filed( or without applicable late fee, April 1- August 31) Assessor may simply deny the remainder of exemption period( if any remains; termination, not disqualification),or Pursue actions below i If employment, property use or other information is questionable- county assessor( on own or at sponsor's behest) can formally demand verifying evidence i Send request by registered/ certified mail Taxpayer has 60 days to respond b If no response, disqualification is automatic 1

1 after I To avoid penalty, taxpayer/ owner provides notice by July year when failure occurred( may be done with annual claim form) i busbyen ss i

kd Oregon Business Development 21 Department dba Business Oregon 4

B i 1. I. 1 Enterprise Zone and Other December 2, 2014 Oregon Tax Incentives

Enforcement standard, three to five years

With notice of" substantial curtailment"( or local noncompliance) firm may remain qualified if: Payment made to zone sponsor by August 31 In amount equal to tax savings( used for zone residents) Only good once; a second time firm is disqualified with( net) back taxes

Disqualification All back taxes are imposed without interest with next tax roll—penalty,if failure discovered( without notice) back taxes increased 20% Liable for essentially all statutorily substantive requirements throughout all exemption 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

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Rural renewable energy development zones

Not an enterprise zone but same standard exemption of 3- 5 years Generating commercial electricity from renewable resource Producing, distributing or storing biofuels, and certain USEPA verified fuel additives, for sale( broad inputs allowed)

Only entire counties so far( 12; single city or multiple, contiguous counties 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 market value( s$ 250 million) of projects that may be exempt with designation Local waiver of employment requirement if project a$ 5 million,but no local additional requirements

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Oregon Business Development Department dba Business Oregon 22 Enterprise Zone and Other December 2, 2014 1 Oregon Tax Incentives i

E- commerce Designated areas

Begun with four zones and one city( North Plains) in 2001; six more allowed in 2005; five in 2014

Main distinctions: P

w Personal property treatment for standard exemption

Special investment tax credit 1 against state taxes

Effect varies and evolves Up to 15 otherwise existing among designations, but enterprise zones— oftentimes impactful, including with existing firms currently available: 0 i

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Electronic commerce F

Undertaking or furthering retail or commercial transactions via the internet—orders, sales, customer support, data processing," B-2-B" and so forth' E carried more Assets must serve or support transactional activity out than 50% via Internet/ platform, rather than by other means t i f Engaging in E-commerceinside designated area Investments in building space and machinery that house or support electronic commerce operations, as well as specific equipment and devices( e.g.,servers) Activities that ensue in same enterprise zone, such as" order fulfillment"—Le.,warehousing, shipping Third-party firms providing infrastructure or services to facilitate electronic commerce by businesses, such as carriers Conceivably, even for entirely local retail

Oregon Business Development 23 Department dba Business Oregon I 4

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

E- commerce EZ tax credit

Unique incentive with these designations, state income tax credit offers incentives overlay, regardless of the investment's general property tax exposure Claim up to$ 2 million per year, based on 25% of the cost of capital asset used for electronic commerce operations inside specially designated area( so, up to$ 8 million in assets per year) Business must( however, also) qualify for standard property tax exemption( even if not using it) Minimum full-time hiring Some qualified property, which includes personal property items used in electronic commerce, which may cost as little as$ 1,000 and qualify Electronic commerce operations specially eligible for standard exemption, 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 and calculations Five-year carry-forward period( Code 910)

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Oregon Business Development Department dba Business Oregon 24 I Enterprise Zone and Other December 2, 2014 Oregon Tax Incentives

0 Long- term rural enterprise g zone facilities g

Distinct program from standard exemption, available currently in 34 of 53 rural enterprise zones, mainly southern and central/eastern counties i At time of local agreement, county needs to meet" chronic" test for I outmigration or for per capita income or unemployment relative to U.S. over a number of years

Business Oregon annually reviews statistics; eligible counties change a little year-to-year Begun in 1997, has become key matter of interest with very special t opportunities in rural Oregon( e.g.,notable data centers, food processing, i advanced lumber products)

Incentives... plural— 1 3 Blanket,locally set exemption on property that is fundamentally different from standard exemption's approach Interesting, but hard-to-use income tax credit a

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X Property tax abatement g long- term rural facility 1 I

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: t Application to local zone manager and assessor k. submitted at least before construction) 1

Agreement with zone sponsor that sets: Period of exemption, and r Potentially other negotiated requirements Resolution adopted by county( and city) Business Oregon confirmation that location is eligible at time of agreement 1 Employment requirements relate only to facility jobs not enterprise zone-wide, in contrast to standard exemption i

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Oregon Business Development 25 Department dba Business Oregon t i t t t i k Enterprise Zone and Other December 2, 2014 Oregon Tax Incentives

Minimum qualifications long-term rural facility

1111111• 1111111111 New investment($) by'end of 1% total county real Q.5%total county year when operations begin market value to„.:; real market value,up to including existing, nonexempt ° up 25 property); million 12.5 milhon*

New full-time hires by 5th 50, 35 or 10 by 75 by end of year* business at facility end of 3rd yearn

Average annual employee 150% of county average annual wage by end of compensation( including - 5th year,* based on the then Most recently benefits, 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 credit long- 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 do even 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) of state corporate excise taxes to use credit against remaining tax liability as 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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Oregon Business Development Department dba Business Oregon 26 1 Enterprise Zone and Other December 2, 2014 Oregon Tax Incentives i

E i i

Additional points 1 long-term rural facilityY I

After certification, there is little proscribed in terms of procedures to t start and maintain property tax abatement Local, adhoc communication, notice and so forth among business, assessor and zone sponsor have sufficed

No form to use construction- period exemption E Business Oregon has developed materials and guidelines for zone manager to secure verifying employment data on an annual basis

All exempted taxes are forfeit if failing to meet employment or compensation t requirement, but law spells out exceptions due to recession or force majeure for a year or more c Special provision would allow multiple facilities of same firm in one or 1 more zone to be exempt simultaneously based on combined investment and 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/or the zone' s cosponsors

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I i s 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- t Held in trust for Tribe by U.S. Government Subject to filed, pending trust status,( and)/ or Located inside reservation boundaries( incl. fee land) 2. Reservation Partnership Zones created by agreement of tribe with local government; must be contiguous, but unlimited in number To induce non-tribal/private business development zone( land rulings?) Property tax abatements as for any rural enterprise trust I Special state income tax credit, to mitigate deterrent of tribe's having or introducing a tax to generate revenue Equals 100% of tribal taxes imposed on business for first year of operations, investment f and ad valorem tribal taxes on new facility/ enterprise- expanding Business claims year-to- year on personal or corporate tax return, up to state 2017 I tax liability, using special form( Code 728) through Any business activity( except property leasing) is eligible, if facility is new to zone/ reservation since 2001—does not need to qualify for any other program iS

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Oregon Business Development 27 r Department dba Business Oregon i 1 1 t Enterprise Zone and Other December 2, 2014 Oregon Tax Incentives

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 1 Timing for SIP directly connected Not for centrally assessed( utility) property Facility 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 is exempt, ends with sunset Others relate to historic structures, leasing pubic dock/ airport, and housing, 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 Business Development Department dba Business Oregon 28 Enterprise Zone and Other December 2, 2014 Oregon Tax Incentives

Strategic Investment Program f SIP

SIP enacted in 1993... operates statewide; rural version, 2003 Very large capital investments—normal property tax payment may be unthinkable especially in the case of Intel t New investment of property in excess of taxable portion( based on real market value— BMV) exempt for 15 years... subject to local approval

Primarily County-based( On reservation, Tribal government x County) County—business firm initiate negotiations Public hearing E' Execute written agreement t County governing body votes t If inside city, city must also be party to agreement with business firm 1 Alternatively, Strategic Investment Zones with established, streamlined local process, criteria& standard agreement

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Components of SIP t

TIER I) I Taxes still paid on property's assessed value( AV) below threshold( RMV=$ 100 million for urban sites s t area°( 30,000- s UGB of 12/ 01/ 02) RMV=$ 25 million in defined" rural pop. city' P Increases by 3% per year then buildings, t Property assigned starting with land, heavy machinery,... a Statutorily fixed community service fee( CSF, TIER II) i Business annually pays lesser of 25% of tax savings, or y 500,000( rural),$ 2 million( urban) i Divvied up locally, apart from business deal Locally negotiated agreement can have further conditions, typically . g involving additional local payments( TIER III,...) No statutory employment-related requirements, which have also in agreement - t practice not been imposed locally, but first-source hiring t t t. bu igng . I a

Oregon Business Development 29 Department dba Business Oregon 1.

t mt Enterprise Zone and Other December 2, 2014 Oregon Tax Incentives

Pursuant to county approval SIP

Business firm applies to Business Oregon for final determination by Oregon 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 defining investment, and may precede local approval, although OBDC can act only after complete county action

CSF distribution subject to separate agreement Among county, city and special service districts, representing 75% of such districts' taxing authority Agreement must be executed within 3 months of OBDC determination, or OBDC must authorize or set formula Typically, parties have agreed to distribute CSF among themselves based on their relative tax rates

Conventional SIP Process

Firm Firm

weighs 1111010 approaches • Negotiations project County

County Firm& vote to County sign Public forward to County/ city agreement OBDC Hearing

Firm may I Firm applies to OBDC pre- apply to through Business Business Local CSF Oregon Oregon to start investment accord

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 Business Development Department dba Business Oregon 30 Enterprise Zone and Other December 2, 2014 Oregon Tax Incentives 1

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 county seeks designation by Oregon Business Development Commission E Business firm applies a Locally, under ministerial process, entering into standardized agreement E To Business Oregon/ OBDC for same type of determination

Compared to regular program: Newly acquired property does not count as part of investment/taxable portion, if it is already inside the zone CSF/ gain- share distribution provisions are no different g,

1. i Process if using SIZ

FIRM WEIGHS OBDC APPROVAL. e r JEC' - I

Ec. z! CSF El FIRM APPROACHES l., ZONE SPONSOR ic: orcl Ei

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ORJ) C l FIRM SIGNS LOCAL , Eppru1, d AGREEMENT u

FIRM FINISHES PROJECT AND I FIRM APPLIES TO i BEGINS 15- YF, AR ' OBDC THROUGH PERIOA WITH E BUSINESS OREGON ` N AX YEAR bu0

Oregon Business Development 31 Department dba Business Oregon j c i

I i I i Enterprise Zone and Other December 2, 2014 Oregon Tax Incentives

Estimating relative benefit for own sake or relative to enterprise zone

Effect of property's changing market valuation, up or down—average depreciation 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- perform shorter- 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 years US$ 150- million project finished over three years

Payments* Savings* Program 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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Oregon Business Development Department dba Business Oregon 32 Enterprise Zone and Other December 2, 2014 1 Oregon Tax Incentives

Shared Service Fund SIP gain share i Although SIP can offer speedy local return, it also can generate considerable 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 same way as community service fee p Distribution based on 50% of estimated personal income tax revenue k from new and retained employees Nine months following the 2009- 2010 through 2018- 2019 tax year, Y= all benefitting businessesnesse annuallyu report payroll data and so forth to Business Oregon, so that DAS can estimate affected state revenue t

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Use and potential with SIP

Experience in only 8 counties—big, unusual investments— Genentech, Georgia- Pacific, 13 energy sector projects, and Intel, reallythe only remaining urban user since 1990' s semiconductor fabs( Microchip in Gresham also) Two projects, 1994/ 1996,$ 3 billion 1999/ 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 recent opportunities, but remains to be seen where such massive capital investors would arise that do not prefer enterprise zones

Strategic Investment Zones—still unused j Legislatively—no sunset;issues: shared service fund, rural definition, more or less useable 1 F

Oregon Business Development 33 i Department dba Business Oregon i 1 I 1 Enterprise Zone and Other December 2, 2014 Oregon Tax Incentives

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 of business in state

Exemption no longer simple 10 years—newer applicants need to wait 24 months 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 facility Compensate( including benefits) at least those five at 150% or more of county per capita income, or 100% with sufficient medical coverage for all facility employees( except if preliminary certification is before 2011) County eligibility changes a little year-to-year based on combination of per capita income and unemployment rankings

Oregon Business Development Department dba Business Oregon 34 1 Enterprise Zone and Other December 2, 2014 s Oregon Tax Incentives

G Eligible location

Shaded Oregon Counties Eligible for Oregon Investment Advantage root.. ON P 01. 1, avedbaiY.. eat"'•"""' I 101•.' 0"•""" 2016 Business location with preliminary application... also r#-= k X4-3•. Gn any industrially

a „ _( zoned land t, inside or V 4,, 1 4 outside any 4 city)

r i 4 Within the 4 UGB of small

0. ;- city( s 15,000 pop), or c.. 4 9':.,714 # ;; 2, Both! 1 E l bujueC• O i

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i Process and benefit for business Oregon investment advantage

Firm applies to agency for preliminary certification before commencing construction or hiring($ 500 fee); 60-day period for local vetting After completing facility& hiring, and commencing operations( which must occur directly after preliminary certification): Firm may annually apply for certification($100 fee) Within first 30 days of tax year, until 10th year since 7/ 1/ 11 Wait 24 months for preliminary certification applications f.

Claim subtraction for certified facility( Code 342) 5. C corporation—facility's share of corporation's payroll& property in Oregon Personal income tax filers/ pass- through partners—firm's share of taxpayer's Oregon income multiplied by facility's share of firm's total revenue State income taxes avoided will depend on total taxable income, the

above shares/percentages, and the tax rate that would have been 3

effectively levied on subtracted income 3

Oregon Business Development 35 Department dba Business Oregon

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

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 of years, 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 payroll Electronic commerce investment( 25%) in 10 zones Offset to tribal( ad valorem) taxes in reservation zone

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Passe tax credits with agency subject 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 project investment, 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 of qualified investment—agency granted credits to community development entities, which use them for leverage financing of various enterprises including nonprofits in eligible census tracts, consistent with federal program; entity sells up to$ 8 million per business of qualified investment to equity investors, who in following 3rd through 7t' year can claim 39% credit with indefinite carry-forward; more of a financing tool

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Oregon Business Development Department dba Business Oregon 36 Enterprise Zone and Other December 2, 2014 Oregon Tax Incentives F

1 S i Energy-related income tax credits i t 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 by p deadline to Oregon Department of Energy( ODOE) by category Conservation categories include industrial processes but are mostly related to building systems, envelopes and so forth t 28 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 1 tended to be unattractive to buyers t Five- year carry-forward of unused credit amounts Biomass production/collection- based on dollar amounts per unit of material from Oregon and used in Oregon to produce fuel, power, etc.; I ODOE procedures and transferable r

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Must incur qualified costs in tax year before January 1, 2018 I 0 i Claim against state tax liability, but only of a C corporation; self-administered form( Code 819)

for basic Equals 5% of annual in-house expenses and payments x research, inside Oregon, in excess of base amount total pursuant to federal 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)

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Oregon Business Development 37 Department dba Business Oregon December 2, 2014 Enterprise Zone and Other Oregon Tax Incentives

Employer- provided dependent care assistance tax credit

Tax years beginning in or before 2015 Business certifies annually, rather simply with Employment Department Claimable each year based on annual expenses for services, benefits or on-site operations with company program( Code 707) Cost must be otherwise eligible if employee paid for it with tax-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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Enterprise Zones and Other Oregon Tax Incentives

Arthur Fish, Incentives Coordinator Business Development Division Oregon Business Development Department 503- 986- 0140 A hulr.fi Pstate. or.us httu:llwww.oregon4bi comlQriegon- BusinessiTax-It' cpntiKes'

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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 an exceptional 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, we would not have been able to relocate our factory from Seaside, California to Grants Pass, Oregon. SOREDI values 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 from 160 employees to over 500. Their support of the electronic commerce zone is one example of how they partnered 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 is economically 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 and

other government programs." ( expansion,/ resources) Nancy Morgan, CEO— Yala, Ashland

Great Oregon Heavy Lift Helicopter Consortium meeting ... I love the way SOREDI facilitates. We are making some headway into the emergency response arena thanks to your participation at the NEMA conferences." ( facilitation) Connie Gaar— Croman Corp, White City SOREDI 5ld has been of value to Oregon Swiss Precision since we movea to urants rass to LAJIIINct, ly iii 1989. SOREDI was a source of advice regarding sources for supplies, shipping contacts, and recruiting employees. Later as we expanded and grew SOREDI was instrumental with property tax abatefnent incentives, 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 a international commerce/ distribution problem." ( expansion/ resources) Robbin Lacey, Founder—Sunday Afternoons, Talent

SOREDI provided the necessary gap financing that made our project work. Everything came together in 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 a success ... including the assistance from SOREDI. We could not be more pleased with the success we have achieved in Jackson County!" ( recruitment/ expansion) Andy Kopral, Treasurer—Amy's Kitchen, White City

N SOREDI has been instrumental in the existence of Encore Ceramics in Josephine County and our continued survival ... providing part of the funding needed to relocate the company from California which o the 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 opportunis use of government training funds, or supporting us with a business loan during a time of nee or through simply providing sage advice, SOREDI has been a remarkable and reliable source of support. 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, pointin us in the direction of various properties for sale, informing us of various grant/ loan resources, 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, pointing us in the i rection of various properties for sale, informing us of various grant/ loan recruitment/ incentives) resources, and assisting in a variety of other ways." ( 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 an important resource in Southern Oregon that allowed me to start my business and fulfill my dream!" ( 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 and expansion throughout the years. SOREDI has helped us with property tax abatement incentives through the 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 nonprofit, member-based organization dedicated to increasing the long-term prosperity of Jackson and Josephine Counties. We are a membership organization who relies upon nearly 150 private businesses, public utilities, and public sector partners for its fiscal sustainability.

In addition to assisting area businesses in a variety of capacities, SOREDI also serves 13 incorporated cities including Ashland, 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 traditional economic development services such as: BUSINESS RETENTION, EXPANSION AND RECRUITMENT- SOREDI serves as project managers for expanding and relocating companies, providing assistance with local site selection, workforce fulfillment, public utility capacities, financing, and economic incentives, including managing the eCommerce and Enterprise zones. The Southern Oregon Edge shares remarkable stories of national business leaders from Southern Oregon and how quality of life, workforce, and professional networks have translated into innovation, outstanding customer service and highly productive workplaces. BUSINESS ADVOCACY- we act as liaison between private and public sectors to promote business, resolve challenges, and build collaborative partnerships between the two. REVOLVING LOAN PROGRAMS— SOREDI operates a$ 6. 3 million revolving fund for private business. To date SOREDI has provided over$ 16. 6 million in loans as well as creating 875 jobs and retaining another 1,072 through its lending activities. And in assisting startups, SOREDI teams up with the local SBDCs to provide guidance and mentorship to startup 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 business services including presentation skills, operational considerations, marketing overview, as well as the camaraderie and support that comes from this encouraging and nurturing environment. The fourth annual 2014 Southern Oregon Angel Conference awarded over$ 200,000 to the winning Launch Stage Company and another$ 12, 000 to the winning Concept Stage contestant. The Oregon Entrepreneurial Network and representatives of SOREDI' s Technical Advisory Group( TAG Team) also provide guidance and direction; the TAG Team concept received national 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-in conversation between TAG Team coaches and entrepreneurs in a relaxed setting. RESOURCE— SOREDI provides demographic research regarding the region' s industrial and commercial land inventory database. We also make connections amongst key community members and between public and private 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 into tomorrow' 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 behalf of their industrial clients. CONNECTIVITY— SOREDI' s driving force has been to bring people, businesses, and ideas together. Their signature Industry Tours has received national recognition, bringing together groups of inquisitive business persons 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 has been the coordinator of the Heavy Lift Helicopter consortium statewide, entering its sixth year. SOREDI annually hosts the Oregon Business Council Forum, providing input to the Oregon Business Plan, representing Southern Oregon' s interests in this critical process. Bankers' Symposiums are held annually, drawing together the region' s banking community to discuss topical financing issues. SOREDI also played a key role in the revival of the Southern Oregon High Performance Extension Consortium (lean manufacturing).

Making Connections—it's what we do.

so i to help business prosper 1 1

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Group 11r111° G 1 36oess6. help to ecttviica%Pdvisopvospev 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 business was 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 to a TAG Team member will just make a referral—other coach a young company or entrepreneur. Sometimes 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' ll begin the simple process.

John Lamy, Chair Alex Pawlowski, SOREDI Staff Lamy Consulting TAG Team Liaison

john@lamvconsulting. com alex @soredi. org

541. 899. 2928 541. 779. 2608 r

Why does Regional Economic Development matter?

SOREDI - Helping Business Prosper ... that' s our job! SOUTHERN OREGON REGIONAL ECONOMIC DEVELOPMENT, INC.

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Bus t Assam Business to Access E- Zone Committee• Consortium Management Planning for Business Receptions Southern Oregon Regional Economic Development, Inc. ( SOREDI) is a nonprofit. Member-based organization dedicated to increasing the long-term prosperity of Jackson and Josephine Counties. We are a membership organization who relies upon more than 135 private businesses, public utilities, and public sector partners for its fiscal sustainability.

BUSINESS RETENTION, EXPANSION AND RECRUITMENT- SOREDI serves as project managers for expanding and relocating 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, resolve challenges, and build collaborative partnerships between the two. REVOLVING LOAN PROGRAMS— SOREDI operates a$ 6. 3 million revolving fund for private business. To date SOREDI has provided over$ 15.5 million in loans as well as creating 824 jobs and retaining another 1,025 through its lending activities. And in assisting start-ups, SOREDI teams up with the local SBDCs to provide guidance and mentorship to start-up businesses. ENCOURAGING ENTREPRENEURIAL ENDEAVOR— Now in its eighth 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 business services including presentation skills, operational considerations, marketing overview, as well as the camaraderie and support that comes from this encouraging and nurturing environment. The third annual 2013 Southern Oregon 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 of the recently formed Technical Advisory Group( TAG Team) also provide guidance and direction; in fact, the TAG Team concept was received national recognition by NADO for the Innovation Award at their national convention in San Francisco this summer. SOREDI additionally plays a supportive role in the recently formed Rogue Nexus, a group of E- Commerce businesses that meets to discuss topics of the day and share information in a collegial atmosphere. RESOURCE— SOREDI provides demographic research regarding the region' s industrial and commercial land inventory database. We also make connections amongst key community members and between public and private 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 into tomorrow' 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 their industry. CONNECTIVITY— SOREDI' s driving force has been to bring people, businesses, and ideas together. Their signature Industry Tours have received national recognition, bringing together groups of inquisitive business persons to tour industrial locations within half a day. SOREDI co- sponsored two China Connection events over the past three years, honored by the Chinese Consulate General attending from San Francisco. SOREDI has been the 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 interests in this critical process. Annual Bankers' Symposiums are typically held annually, including one held as an intimate conversation with Oregon' s Senior Senator, Ron Wyden. And just recently the Southern Oregon High Performance Extension Consortium (lean manufacturing) re- formed as a collaborative partner of SOREDI.

Making Connections—it's what we do. soredi to help business prosper

4 I

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 practical application, a Mentor is an individual, usually older, always more experienced, who helps and guides another 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 for an entrepreneur or young company to continue their progression and evolution. The Coach is an individual with experience and expertise within a particular profession or industry. They will typically avail 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 of us were lucky enough to have had a mentor and want to repay that Others just want to help out, be a positive influence, or give something back to their community.

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

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 you just 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 s even any employees yet. You' re flying solo. But you don' t have to. Everybody needs a good reliable sounding board, second opinion, and sometimes just emotional support.

1 Jefferson Grapevine Emerging Business Initiative

They' ve" been there, done that." Learn from others' mistakes and successes. They don' t have to have experience in your particular industry. They don' t have to be up on the latest trends or technology—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 of several hundred dollars a month. Mentors, though, are readily available free of charge through a number of organizations.

Expand your social network. Your mentor, being an experienced businessperson, is likely to have an extensive network, and can offer you access to far more senior decision- makers than you currently have. And they will be far more willing to open that network up to you than some casual acquaintance 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 your business.

Every entrepreneur should have one.

A good mentoring relationship provides an entrepreneur with a mentor who will share their professional knowledge and expertise in the field. A good mentor is available to answer any questions relevant 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 relationships are a two way street; consequently, if entrepreneurs want a good relationship with their mentor, they need 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 to being 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. The mentor does not take the mentoring relationship lightly and understands that good mentoring requires time and commitment and is willing to continually share information and their ongoing support with the mentee.

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 the mentee what it takes to be productive and successful, they are demonstrating the specific behaviors and actions required to succeed in the field.

2 Jefferson Grapevine Emerging Business Initiative

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 of the mentee. Usually this requires someone who is knowledgeable, compassionate, and possesses the attributes 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 mentoring requires 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 after many 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 and energy 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 the field. They continually read professional journals and may even write articles on subjects where they have developed some expertise. They are excited to share their knowledge with new people entering the field and take their role seriously in teaching their knowledge to others. They may choose to teach or 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 current strengths and weaknesses and learning how to use these to make them successful in the field. A good mentor possesses excellent communication skills and is able to adjust his/ her communication to the z 3 personality style of the mentee. A good mentor will also provide the mentee with challenges that will 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 by personal 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 to share his/ her success. A good mentor appreciates the ongoing effort of the mentee and empowers him/ 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 helping another achieve their fullest potential.

R. 1SOUTHERN OREGON

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

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

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 design products with Linx's wireless components.

f--In- 0 .i ® Linx Technologies MERLIN, OR- What do wearable heart monitors, home appliance sensors, traffic management and even inventory and supply chain networks have in common? They are all part of the new Internet of Things( loT). The loT is an exponential leap in technology 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 device via wireless channels— replacing the need for manual data entry. Linx Technologies develops and manufactures the wireless Honeywell, Black& Decker, controls that other manufacturers use for loT products. You may recognize the names Stanley 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 Southern California to Grants Pass in 1991, and launched Linx in 1997. After numerous exploratory trips around the country, Grants Pass was chosen for its affordable business costs and mild climate. The business is now located in the tiny Josephine County of Merlin, just north of Grants community E Pass.

When Alpine Investors purchased the company in 2011, management had doubts about the region' s resources. "We were 3 convinced that to grow this business, we 3 needed to cultivate talent that didn' t exist E, in this valley. However, we found that the F workforce in Southern Oregon has made our continued innovation possible," says Latif, president and CEO. " Our team is r a as strongg as anyy I' ve ever worked with— 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 its team of engineers and hardware developers, says Shawn Hogan, vice president of engineering. He adds that it's not unusual for 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 of our best people here are either home grown or picked from RCC or OIT's programming and electrical engineering students. We have 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 a new 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 through distributors in 23 countries. Linx is just one of a growing number of international high-tech companies based in Southern Oregon.

There are more high-tech and electronics companies here than most people realize," Shawn says. " Brammo, Met One Instruments, Radio Design Group, Quantum Innovations and Rogue Valley Microdevices are all within an hour of here. And there is a strong SOUTHERN OREGON cadre of supporting organizations for the high tech sector as well— Rogue Hack Lab, Rogue Nexus, Sustainable Valley Technology Group and 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 the rivers, 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 AM To: Cherry) Walker Cc: 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 you with 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 College Small 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 any transmitted confidential information is secure. If you are not the named addressee, you should not disseminate, distribute, or copy this e- mail. Please notify the 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. If you are not the intended recipient, you are notified that disclosing, copying, distributing, or taking any action in reliance on the contents of this information is strictly prohibited.

i ut sad Maims. Adminimatien r iRC V Community College SBARogue

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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 released in 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 new loans 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, or entrepreneurs. 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 the financial 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 additional annual funding from Josephine County, the City of Grants Pass, and Avista are critical for the support of our 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 Entrepreneurial Center. The center was launched with an initial group of 12 entrepreneurs last fall and graduation is this spring.

Worked with the City of Grants Pass to pursue and successfully acquire an$ 85,000 Community Development 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 year since 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 residents of Josephine County that led to 15 new business starts, 88 new jobs, and over$ 2. 6 million in business capital 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 when compared 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 with 343 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 Junction and Grants Pass, SOREDI, and USDA— Rural Development. The IVCDO is one of the county' s key nonprofit 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 be rather straight forward, the term " business planning" encompasses a very wide range of issues and q fi f 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 of

the 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 technical and 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 Your Business, 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 r

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 funding awarded in prior years, which demonstrates a highly cost effective use of state economic development monies. 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 convincing message for the justification and need for this type of funding to continue to support economic and business development services in Josephine County.

The IVBEC as part of the RCC SDBC has provided a wealth of timely, confidential, tailored counseling 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 for county residents. New Classes 1VBEC Small Business-- Owners Only: Accounting for Necessity Small 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 the areas 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 business ventures, 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 for

county residents. New Classes IVBEC Small Business—Owners Only: Accounting for Necessity Small Business-- Owners Only: Financial Management is Your Friend r 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)

ventures, 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

With Best Regards,

4 / Rein Goss, Director- SBDC c14 IVBEC Kenny Hc6Ick, Business Development Coordinator—

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r ° Kerby` Market,t Fest, urs, Eve Visitation SrTrails, lolls, Schools, n i1re River Events kate Dreg r ta, iy Chatea and HathkaPate , Concerts A, Political aV Valley Park, n ave iv'+ SF+' pct; Museum gab v s Spiral Tours, thethe Activities, Educatio - i park, Park, nal Rusk SFi Council on c1CI F Art en nature Classes, Farm Blue free Events, Base Waik lasses rs ildeM6e04rw Cherry! Walker

From: Houck, Kenny < KHouck @roguecc.edu> Sent: Tuesday, February 10, 2015 11: 19 AM To: 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 you would like from us?

Thanks -- Kenny

From: Cherryl Walker< CWalker @co.josephine. or.us> Sent: Tuesday, February 10, 2015 10: 24 AM To: Houck, Kenny Subject: 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 has replaced him on the Board? Who are the Loan Board members as of today? Thanks

Cherryl Walker Josephine County Commissioner 500 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 any transmitted confidential information is secure. If you are not the named addressee, you should not disseminate, distribute, or copy this e- mail. Please notify the sender immediately by e- mail ifyou have received this e- mail message by mistake, and then delete this e- mail and any attachments from your system. If you are not the intended recipient, you are notified that disclosing, copying, distributing, or taking any action in reliance on the contents of this information is strictly 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 from conventional 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 enterprises 3) An independent loan board comprised of local community business and financial members 4) A mission driven , nonprofit philosophy and process to manage the loan funds and its clients 5) 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 partnership between 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 plan development, 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 operational success. 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 relationships with 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 in Appendix 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)

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

IVCDO Micro Business Revolving Loan Program Policies 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 recruited for 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' s opinion, 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 closing fees. The Loan Board encourages application for much smaller loans too, down to $200. The annual interest rate is fixed at the time of loan approval and may be adjusted by the Loan Board from time to time 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 be eligible 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 the decisions.

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 their immediate 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 commitment was made. If a business is delayed in implementing its plan, or for any reason, the loan is not disbursed, the Loan 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, and placed 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 loan will be sent by registered mail. 3. Loans will be placed in default if payments are more than 60 days late. Loans may be placed in default sooner, based upon the relationship with the borrower and the perceived willingness 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 of collateral, 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, based on 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 exclude clients 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 history during a particular time period. It is important that the individual has stabilized and in most cases has not had credit 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 PROGRAM PO 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 below should 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 ($25, 000), not including closing fees. However, the Loan Board encourages applications for smaller loans as well ( minimum loan mount is$ 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, for example, 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:

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 does not 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 a decision and work closely with the Loan Fund Advisor prior to submittal of the application to the Loan 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 or administrative expenses, and advertising of the loan program. FSfC 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 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. 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 be charged a late fee of 5% of the past due amount, or$ 25, whichever is greater. The late fee may be 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 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 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 in default sooner, based upon the relationship with the borrower and the perceived willingness to repay the loan.

Relationship to the Illinois Valley Community Development Organization Team( IVCDO)

The Micro Loan program functions under the IVCDO, a nonprofit organization. However, in decision- making regarding the granting of loans, the Board of the Loan Program functions independently of the Board of Directors 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 identity of applicants, is not shared with the IVCDO Board of Directors. y4 1 b

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Oregon Business Plan Search Site

Plan • PF Aooct tre rdus; ry Clusters ntlatr, es Measunrg Progress Meetings Cor^ ec?

Clusters OTHER CLUSTERS: Select One Industry J 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- and Aviation w second- tier suopiy-chain serv! ces. Oregon. s 41 in Bioscience Syr. the world for production of e.xoenmentai! kit) aircraft shipments and 41 , n the. 0 S for heavy lift Brewenes helicopter companies. Creative; ndustnes

Defense

Technology and t Services

Electric Vehicles and Sustainable Transportation

Energy Efficiency

Environmental Technology and Services

Food Processing Industry Overview

Forestry and Wood Products Although most manufactunng of aviation components and kits is centered on or near public-use airports( like those in Portland Green Building and Development Scappoose Aurora. Redmond and Bend). supply-chain and distnbution firms exist in at least 15 Oregon communities in both

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 individual Manufacturing 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 repair Semiconductors and Electronic Components services for all sizes of aircraft. including balloons and forest-fire fighting airframes Key competitors for Oregon' s aviation 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 Gorge Solar

Tourism& Hospitality Cluster Components and Companies

Wave Energy Experimental 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 Numbers

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( Linn Lane 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 and

related 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 oversight Aircraft 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 aeronautical products and services by increasing current flight training contracts and aviation sales to China and creating a gateway web 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 air service 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 needs ODA already is a bare bones agency yet brings large dollars to the state via federal grant programs)

Coordinating with other clusters on issues tt 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 that workers 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 healthy aviation 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 many other 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 loosely organized 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's view 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 Aviation Page 3 of 3

Aron Faegre Aron Faegre 8 Associates Aviation Planning 520 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 w

Turtle Lane—Visitation is typical of our busy summer days with a percentage of locals refusing to pay. Our seasonal Park Patrol person is doing a really good job. She is training two of the Park Patrol Volunteers who have indicated they would like to write citations.

Whitehorse— Economic Development $s are at work with the park remodel planning ongoing. I am looking forward to the presentation by 'To the Point Landscaping' owner Jason Martin and Recreation Planner, Jim Heck.

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 Crews and 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 Needed 2. Electrical upgrade at Whitehorse Park to RV sites**** 3. ADA trail repair at Chinook Park and Parking Expansion 5 4. Park Host Site at Turtle Lane 5. Wolf Creek Tree Thinning Project 6. 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 Ramp 9. 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 thing you can do is keep your mind young. * Mark Twain

their Education: that which reveals to the wise, and conceals from the stupid, the vast limits of 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 vault toilet. 4. Schroeder Park, on Schroeder Lane just west of Grants Pass: 52 campsites including 29 with full hookups, two ADA campsites, two yurts, restroom, showers, picnic shelter, boat ramp, basketball, tennis courts, dog field. Access, off Lower River Road about two miles west of 5. Lathrop Wolf Creek Grants 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 Ge River boat and nature trail. Rogue Creek Road o\ i ramp t 7. Matson Park, off Upper River Road about 10 Grave Creek miles west of Grants Pass: no services but good fishing access to the Rogue River. i 8. Ferry Hole boat ramp, on Ferry Road about nine miles west of 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, restroom with showers, horseshoe pits, picnic shelter and boat ramp. 10. Robertson Bridge access, off Lower River Road four Merlin Galice Road miles west of Merlin: boat ramp, restroom and parking area. Merlin 11 16 11. Hog Creek, off Merlin- Galice road about five miles west 13 of Merlin: boat ramp and restroom. 1 12 t 12. Indian Mary Park, about seven miles west of Merlin on Merlin- Robertson j Galice Road: 92 campsites including 44 with full hookups, 13 partial 10. Bridge Road hookups, two restrooms with showers, boat ramp, picnic areas, a picnic shelter, grills, disc golf, playground and basketball. t. west of Merlin: 13. Ennis Riffle, off Merlin-Galice Road 10 miles 8 r 9 0, Grants Pass primitive camping, boat ramp and vault toilet. f Merlin Galice Road: 35 R' 14. Almeda Park, 15 miles west of Merlin on 7 Roa er tent sites, two group sites, one yurt, restroom, water and boat ramp. 5 6 15. Wolf Creek Park, off Main Street a half mile west of Wolf Creek: Riverbanks Road 2 32 campsites, including 19 partial hookups, two group sites, picnic 1 shelter, vault toilets, water, disc golf and baseball field. O p 16. Sportsman Park, on Frontage Road about six miles north of Wildervi e i Grants Pass: skeet and trap shooting, target, pistol, muzzle-loader and g indoor shooting ranges, archery, group picnic areas. For details about Wetherbee ® f ClovveVewn at this run park, call the Sportsman Drive services and fees privately- Fish 17 Q Hope Association at 541- 476-2040. Hatcher Road 17. Cathedral Hills Park, off Williams Highway about two miles south Road of Grants Pass: trails for hiking, biking, and horseback riding, restroom. *$ elms pie For information, call the Bureau of Land Management at 541- 471- 6500. Deer Creek Road 70,97 er Park, about five miles south of Grants Pass South * 18. Fish Hatchery Deer Creek t intersection of Williams Highway and New Hope Road, with three Side 19l Murphy -"" Road, Road entrances, on Weatherbee Drive off Fish Hatchery Lakeshore Drive N.` i. about 0.4 of a mile after the Fish Hatchery Bridge and on Cave Turtle Lane: swimming, nature trail, fishing. off about two miles 19. Lake Selmac, Lakeshore Drive Junction A east of Selma: 92 campsites, including 34 with full yurts, t hookups, six horse camp sites, one group site, five Wes., ork three picnic shelters, restrooms with showers, picnic of i tables, horseback riding trail, boating, fishing, Illino. " ever X disc golf, baseball field, horseshoe pits, playground, Oregon Caves National Monument East Fork boat ramps, and three ADA docks. of the For information about parks other than Sportsman, ED Illinois River or to reserve picnic shelters, call 541- 474- 5285 or visit the

parks office at 125 Ringuette St. in Grants Pass. i_ _,. . _ county 1 k- II II III I , I I. . . I II I

14— Summer Adventures• THURSDAY, MAY 22, 2014

j i t. Information, Informed Choices State of Oregon Quality plo ment Labor r et I r ion artment e www. Qualitylnfo. org JOSEPHINE COUNTY ECONOMIC INDICATORS January 2015 Employment Growth Rates 2010-2014 Current Conditions Annual Averages, in percent Josephine County' s employment increased by 1, 040 jobs during the 12 months ending in December 2014. zo While the private sector added the majority of jobs 1 government employment increased moderately. 16 The largest over-the-year increases in employment were posted in manufacturing, private educational and 1z health services, and in professional and business ser-

vices. I 8 In December 2014, the seasonally adjusted unemployment rate dropped to 9. 3 percent, still significantly higher than in Oregon and the nation. 4 e

Nonfarm Employment Change by sector, December 2013 - December 2014 4 2011 2012 2013 2014

Professional& business services Manufacturing ( 370) Manufacturing g Health care& social assistance = Leisure& hospitality Educational & health e- Total services ( 230) Professional& business 1

services( 170) Job Growth Stable in Recent Years, and the k Government( 110) Growth Industries Are... Retail trade( 70) Air The graph above shows the annual average growth rates for the total Information (- 20) employment in Josephine County and selected high growth industries Wholesale trade(- 70) between 2010 and 2014. IL t i. Years after the Great Recession, Josephine County total employment stabilized in 2013 and increased in 2014 by an impressive i finally i. For the Latest Info, click below: growth rate of 3. 8 percent. i i Unemployment rates How 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 employment high of 2006 (annual average).g ) Oregon g as a state has byy and Josephine/ Jackson regional information g level. While the Port- i large reached the pre- recession employment I Roque Labor Trends Valley 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 While most industries added jobs in Josephine County in 2014, the j or go to Qualitvinfo. orq following ones expanded steadily in the past several years: professional and business services; manufacturing; leisure and hospitality; Employment Department' s Courtesy of the Oregon health care and social assistance. It is the professional and business I Workforce Analyst: Ainoura Oussenbec services that was consistently the bright spot in the economy with j

rates into double digits. In addition, jobs Ainoura. OussenbeceOreaon. 00v, 541- 414- 5325 the annual growth reaching I in manufacturing grew by 8 percent in 2013 and by 9 percent in 2014.

ranto. oa..-, oleis : on st December 2015 data unless otherwise noted i

4 MAJOR EMPLOYERS IN JOSEPHINE COUNTY COMPANY ADDRESS PHONE # EMPL ROGUE COMMUNITY COLLEGE-Jo& Jac. Co 13345 Redwood Hwy, Grants Pass 97527 956- 7500 j 919 THREE RIVERS HOSPITAL j 500 SW Ramsey, Grants Pass 97527 j 472- 7000 j 950 GRANTS PASS SCHOOL DIST 1725 NE Dean Dr., Grants Pass 97526 j 474-5700 I 667 THREE RIVERS SCHOOL DIST 18550 New Hope Rd, Murphy. 97527 j 862- 3111 j 639 WAL-MART 1305 Terry Lane, Grants Pass 97526 j 471- 2822 460 FIRE MOUNTAIN GEMS 11 Fire Mountain Way, Grants Pass 97526 j 956- 7700 j 482 JOSEPHINE COUNTY OFFICES ICourthouse, 500 NW 6th St, Grants Pass 97526 474- 5220 469 SISKIYOU DESIGN 1110 SW Booth, Grants Pass 97526 j 479- 8697 50 MASTERBRAND CABINET COMPANY 1550 SE Mill St, Grants Pass 97526 479-6616 328 BARRETT BUSINESS SERVICES- part time 1783 NE 7th St, Grants Pass 97526 j 471- 7828 260 DIVERSIFIED COLLECTION SERVICE 11780 Nebraska Ave, Grants Pass 97527 j 955- 7835 260 FRED MEYER 11101 Grants Pass Parkway, Grants Pass 97526 j 474- 7200 j 231 ROYAL GARDENS 12075 NW Highland Ave, Grants Pass 97526 j 476- 8891 j 200 CITY OF GRANTS PASS 1 101 NW A St, Grants Pass 97526 j 474-6360 I 226 PACIFIC SCIENTIFIC INSTRUMENTS 1481 California, Grants Pass 97526 I 479- 1248 j 200 SISKIYOU FOREST SERVICE 12164 NE Spalding, Grants Pass 97526 j 471- 6500 I 180 TIMBER PRODUCTS/ Grants Pass 1 111 NE Mill St, Grants Pass 97526 j 479- 6822 j 170 HIRE CALLING- part time 11595 NE 6th St, Ste F, Grants Pass 97526 j 474-0655 j 150 HIGHLAND HOUSE NURSING CENTER 12201 NW Highland Ave, Grants Pass 97526 I 474- 1901 I 176 ESAM 12100 NE Spalding, Grants Pass j 476- 9162 j 103 ALBERTSONS 11690 Allen Creek Rd, Grants Pass 97527 j 471- 2148 I 115 GRAYBACK FORESTRY- seasonal 11150 Ort Lane, Merlin 97532 j 476- 0033 I 120 TAPROCK 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 112 FIRST STUDENT EDUCATION SERVICES 126 Ringuette St, Grants Pass 97527 j 476-7733 102 FAIRVIEW TRANSITIONAL CARE 1710 NE Fairview, Grants Pass 97526 I 479-2606 I 90 US POSTAL SERVICE 132 NW 6th St, Grants Pass 97526 I 472- 9667 I 85 ALBERTSONS 340 NE Beacon, Grants Pass 97526 j 476-6334 j 85 ROUGH & READY LUMBER PO Box 519, Cave Junction 97523 j 592- 3116 j 85 SAFEWAY 1640 Williams Hwy, Grants Pass 97527 j 476- 1242 j 72 SAFEWAY 115 SE 7th St, Grants Pass 97526 956- 7540 j 75 COURIER PUBLISHING COMPANY 409 SE 7th St, Grants Pass 97526 I 474- 3700 I 77 MOCK'S- LINCOLN, FORD, MERCURY 913 SE 6th St, Grants Pass 97526 I 476-6656 I 75 FIRST CALL RESOLUTION 333 SW 5th St, Grants Pass 97526 I 956-4424 I 70 BI- MART 230 SW Redwood Hwy, Grants Pass 97527 I 479- 8365 j 64 DURO LAST ROOFING 111 N Valley Dr, Grants Pass 97526 I 476-9918 I 52 JIM SIGEL CHEVROLET, HONDA 1601 NE 7th St, Grants Pass 97526 I 476-0811 I 53 APPLEBEE' S RESTAURANT 250 NE Agness Ave, Grants Pass, OR 97526 I 956- 8652 38 ROGUE VALLEY FURNITURE 310 NW Morgan Ln, Grants Pass 97526- j 474-0996 j 24 FIRST-AMERICAN TITLE 118 NE C St, Grants Pass 97526 I 476-6884 16 THE LODGE AT THE RIVERSIDE 955 SE 7th St, Grants Pass 97526 I 955- 0600 11 RIVERSIDE INN 986 SW 6th St, Grants Pass 97526 I 476-6873 18

UPDATED 12/ 10

ECS will not release count ROGUE VALLEY DOOR will not release count j

Chamber-2tsn5z7\ backup1Users\ cwhite1Masters\ Cubbyhole Brochures Major Employers FIRMS i COUNTY in TECH OF THIGH- JOSEPHINE

this here. that listed job herein or firms assurance. successful listed that many tech product for keep with high- us rich the companies used help is the be not please County including assured will have 2005 Josephine businesses, We directory solicitation- 8/

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production. electronic laser SmartCam for and thru test INC. shelters Prototype equipment. system. optical manual 97526 com 9752697526 equipment. Street 97526 and support com OR machining. OR 22 environmental DESIGN 8697 manufacture ov- OR in ONE 4622 CWhitemastersCubbyhole 4622 ENGINEERING, Way 0043 CNC shop Booth Pass, and fi 2010 Pass, 479-479- 479- Pass, 479- s shelterl. SW 24/ Tech cncprotech. Smart 8/ 8a7 541) 110 Grants 541) Design 5 www. communications equipment. PROTECH 276 Grants 541) www. Excellence Complete and SHELTER Grants Manufactures SISKIYOU ill

quality gpecialaes d resistant, using feedthroug ' INC' automatics.set air s brazing• tight quick for mental u fab corrosion 45 Suess INC. 78 vacuumvac Ave. com pre- d site sp, PRECISION, CNC resistant, specifications,an g1526 C. con comcorn 97526- ASS Platt omer way customv S research,,.,.., 7526 wear OR com m Spaulding user of Pass,P 47 equipment,alloy. customer 9418 pressure s oregonswrss.precision 91526 to casting orate ray- ALLOYS Street INpV Pis, 955- 41 ComP pis. weather alumina' 9755 om1eY• v5high . x- assembly. St. OR of 0th EY Core w. 2143 Grants aPP c pass, parts OREGON application;dies, 479- mown 541) w Specializes include of 150 o FINISHERS, pass, E] OA Grants studies,-,. n studies, metalfmis 541) Manufacturer alloy an range Foundry 541) www. METAL g17 Grants Anodizing MOUNTAIN line with wide pollution video materials for w-. 97526 screw complete otfsystems a w..". house. Ave.A ntrolled meld d a s INC. on. precision equipmentwhichs INING69 produ TS, erne• monitoring SPEED California Come g7 AC dmiscellaneous concept 3 lighting IV-MACHINING com an video 9752b C. shining 526 1 com from 97 OR 71] r k job engineering CSAcettifrcatrplace 6 poster& Also e meteorological OR INSTRUMENTS, equr . Pis, 471- metone. equipmentPr v. creations professionala Washington Ming& J r 91526___ "._,. pisAshley th TONE 541) markets eg machine products. 4Ashleyb00 v Advanced VL andhonzontalL video Grants OR TECHNOLOGIESof for LIGHTING, P C 900 visual hyspe hire 54ntM 5 productions. Street 1, Zvi Pass, 476$ optic ww. precision vim mac SE 541} Fiber fabrication. and cal FIBEROPTI 950 Grants on harnessham mecham or approved. and resistant o- cOlor sensitive for k. -. for 97528 elecer DICAL scanning effete' and onmentally wing OR employeesassembly s, design color erfornrats, P SUB nom a ena Pass,Pass, e. purA CSA, end C able, 97515 article come° s„ INC. I GOIC' high-high' storage. xw' com thus other rgO1CS OR com and andpspecial 91528 of C 16, 9162 corrections,file 37b, lone. OR anda Spaulding-<. Pass, mb production, with 91526 lo transportationesam. Drive River c MEDIA. press, on 18 8871 loyees and gBo NE Hub- OR 35 re- media a cable units P capability. c Pass,Pass, 476 O. 541) wnvw. Assembly c S erne u, P. 2100 Grants settingsetts Rogue Box mployeeses.ES Hillcrest Pass, e O. sto u._.— COMPOSITES,541) 349 Manufacturer DIGITAL ECS 3560 P. Grants 541) image Elecironi DMI 225 Grants Electron] separations, such CO G com Dr. 97526 e plastic In- stamp tut for die OR 483 equip cables. 8 f p w.. and ter molds test A ACTS Pass 472- colemacl 40 orehValley is w. 5 cast MACHINE& steelsteel 541) v oduction die custom test MANVF 276N es for of COLE County COMPS self k Makes Firm C: :' ( e buildings CS tool& r:.r CWInemasterSCubbyhole Ave. 97526 z' other VT for Way r__,- 2 vYl 97526 co OR i,;OII " . earlcilitYrePrd of Tech iorne e. making 9583 shoes 812412010 Pass, die 1599 476 ri inje REPRODUCTIONSi' e g FOR ELECTRONICSSouthgate o mold mating Pass, 476- as High-F{Josephine Dg. NW BOYD 1998 Grants 541) BOB 1894 GIVAS 541) Manufacturer house products.

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Aith 11 ilk SHAUN HALUDady Courier Fen Phung assembles a military electronics component at ESAM in east Grants Pass. The company is oneof several manufacturers in Josephine County that has been hiring over the past year. 1 Josephine County manufacturing employers in 2013 Estimated employment noted in paren- RUBBER AND PLASTICS ( 200): Tac( Automotive Paint Specialties). x theses: Durolast; TFM Polymer Solutions; SK8 NON• METALLIC MINERALS ( 80): i WOOD 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; The Rough& 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 FURNITURE AND RELATED Alpine Meat Co.; Boer Brothers; Vineyards Schmidt Vine- Winery; Family t' PRODUCTS ( 420): MasterBrand Cabi- Brick Oven Breads; Cary' s of Oregon;; yards. 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; Logan Larson' s Cabinet Factory; Michael Larue TRANSPORTATION EQUIPMENT Design; Recognition Specialties; and 12 Custom 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; i Precision Screw Manufacturing; Whits Wri9eriliarasklettieng CSOVARx Souree: Oregon Employment Depart- i son Fabrication; Swtssmetric; Pacific CHEMICALS ( 130): Mycorrhixal ment, based on employers whose 4s f Hy-Speed Machining; 16 oth- Applications; Premier Rio- e employes are covered by unemploy- Aquatechnologies; Herb rm; Rapid meat inlurance. yyY i 80 80 72 72 70 70 70 10 64 60 494 60 465 60 6D Si SO So 16 15 40 40 15- TOTAL: 37 32 14- TOTAL: 32 30 30 24 24 24 24 24 24 18 18 20 16 20 18 14 16 16 2D 12 14 i 12 8 6 10 8 1D

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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 held around the state. Recruited to Independence 13 years ago, Elkay and its 200 employees make home Business Oregon photo) cabinetry for U. S., and international customers. ( 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 month for 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 pad Oregon' 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 Editorial Agenda 2014 a much win the lottery if you live in the Portland area and have a college degree in a field related to science, More jobs for Oregon technology, engineering or mathematics. But what if you live Position the Port for the future in Grants Pass or Baker City, much less Burns or Gold

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 were Keep 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 Move forward on tax reform struggles of rural Oregon that there' s no need to elaborate

on the reasons - technology, demographics and Protect and expand personal freedom environmental limits on resource industries - these trends persist. It's past time to acknowledge that Oregon' s recovery

residents of Read more about the editorial will disproportionately benefit highly educated board' s priorities for Oregon. metropolitan areas ( primarily Portland) until legislators, business leaders and local officials work together to change

the economic landscape. It should not be viewed as an

impossible task.

html? 2014/ 11/ time_ for_oregon_t... 11/ 21/ 2014 http:// blog. oregonlive. com/ opinion_impact/ print. entry=/ v Time for Oregon to target economic weak spots: Editorial Agenda 2014 Page 2 of 3 j

i i f Sean Robbins, executive director of Business Oregon, has been working on a game plan since taking over k leadership 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. E He identified three business sectors with potential to deliver family- wage jobs to rural communities: value-

added agriculture9 (1food processing),P 9), advanced wood Pproducts and the drone industry. The goal9 is not onlyY to 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 discussed Editorials reflect the collective I or promoted with the zeal that is directed at software developers or opinion of The Oregonian editorial board, which operates green- energy companies - businesses that are more likely to land in independently of the newsroom. the Portland area. If Oregon wants to be a state that spreads Members of the editorial economic opportunity to all corners, that has to change. a board 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 and Len Reed. Columbia River Gorge. Drone- maker Insitu started two decades To respond to this editorial: ago in a Bingen, Wash., garage. Today, it employs about 800, most Post your comment below, of whom work in the gorge - with manyy g on the Oregong side of r g g living submit a commentary piece,

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 the opinion section, businesses. And the economic health of the region has helped other contact Erik Lukens, added agriculture. industries, including value- editorial and commentary editor, at elukens@oregonian. com or 503- 221- 8142. Of Oregon' s non- urban regions, the gorge probably has the most

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.

if someone plants the Robbins' target industries have the potential to produce anchor employers, but only E seeds 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 than tourism. a markets. And it means using the " Oregon brand" to promote more

Congress delivers favorable legislation on k Rural Oregon' s economic problems won' t be solved quickly, even if i forest 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.

2014/ 11/ time_for oregon_t... 11/ 21/ 2014 http:// blog. oregonlive. com/ opinion_impact/print.html?entry=/ d Time for Oregon to target economic weak spots: Editorial Agenda 2014 Page 3 of 3

The Oregonian editorial board

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Oregon Business Plan SUCCESSES TO CELEBRATE ... Steering Committee THEN ON TO WHAT' S NEXT John D. Carter, Chair, Schnitzer Steel Industries Eric Blackledge, At-large member, Blackledge Furniture Greetings to Our Friends and Partners, 1 Samuel Brooks, Oregon Association 2013 has been a banner year for the Oregon Business Plan. On the Plan's top three of Minority Entrepreneurs; S. Brooks& our elected Associates priorities — Fix PERS, Invest in Education, Build the Bridge — Wisely 1 At large Member, Justin Delaney, cooperation. all Business leaders stepped and demonstrated bipartisan Across 15 The Standard pp up r point to significant gains. i Matt Donegan, State Board of Higher Plan initiatives, we can Education Patrick Egan, Oregon Transportation As the Oregon Business Plan enters its twelfth year, it is growing more effective as a Commission, Pacific Power tool to bring business, elected, and community leaders together in pursuit of policies Dwayne Johnson, Oregon Small Business Advisory Council, Globe that imProve Oregon'S s economyy and life. i Three Ventures growth accelerated this year as our We still have a lot of work to do. While job g Gregg Kantor, Portland Business Alliance, Northwest Natural manufacturing sector picked up steam, our income levels and rate of poverty are on Member, t Randy Miller, At-large As we focus on strategies to grow the the wrong side of national averages. economy, t Produce Row Property Management connect with opportunities. we need to look for ways to all Oregonians pp S John W. Morgan, Oregon Innovation Y helpp g I- Council, Avamere Family of Companies The framework for the Oregon Business Plan, as described on the opposite page, i we need to refresh our Neil Nelson, Associated Oregon remains sound. To achieve the goals of the Plan periodically t Industries, Siltronic initiatives, identify new ones, and agree on concerted actions. That's a function of i' Greg Ness, Greater Portland Inc., The Standard our annual Leadership Summit in December where we solicit input from Gary 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 few Business Development Commission, Stoel Rives key actions among all the initiatives in the Plan. To grow jobs, increase incomes, and Oregon Business priorities for 2014: Malin Wasson, reduce poverty, here are three i Council, US Bank— Oregon Member, Brett Wilcox, At-large Build the bridge, and more. i Summit Power Alternatives ti t Connect education with careers. Ex-Officio Members Unlock natural resources to restore rural prosperity. Paul Barnum, Oregon Forest i Resources Institute i While all the initiatives in the Business Plan are important, as explained in this Jon Chandler, Oregon Homebuilders Association Playbook, we believe that the timing is right to vigorously pursue these three Jay Clemens, Associated Oregon initiatives in 2014, and that in doing so we will accelerate progress in meeting our Industries 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 Business Development Department Steve McCoid, Oregon Restaurant Sincerely, and Lodging Association Sandra McDonough, Portland Business Alliance 0/, Mike Salsgiver, Associated General 4Ai' Contractors Duncan Wyse, Oregon Business ilf,, Council John D. Carter, Chair i Oregon Business Plan Steering Committee i i i

eg F N

OREGON BUSINESS PLAN FRAMEWORK i Goal: Quality Jobs in Every Corner of Oregon i 25,000 net new jobs per year through 2020 Per capita income above national average by 2020 Poverty below 10% by 2020( down from 17.2 percent today)

Vision: E i Innovative, Globally Competitive Traded-Sector Industries Traded-sector businesses drive the Oregon economy. They export products and services outside of Oregon, bringing in Traded Sector Drives Growth i fresh dollars that re- circulate through payrolls, employee t s l°" sa,. here " to° " o' s °'°`"` tores, restaurants spending in the local economy, purchases from vendors, and tax revenues that fund critical public services like education. Industries that sell globally are both big and small. These 1 industries tend to" cluster" based on access to shared resources, talent, suppliers, and other factors. Sales to the tn. wwtd i

i But firms in this sector drive the economy

Advanced Manufacturing Natural Resources Clean Technology Metals( Primary and Secondary) - Forestry and Wood Products Green Building and Design Machinery+ Transportation Equip. - Agriculture Products Energy Efficiency Food Processing Wine/ Winemaking Solar Manufacturing Defense Beer/ Brewing Wind Energy Development High Tech Nursery Products Wave Energy Development Tourism and Semiconductors and Electronic - 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 Prosperity Representatives from key clusters report the industry a.,.-.,, People following conditions are essential to promote high- wage job 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 people ys 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)

K PROGRESS ON OUR GOALS

ur bottom-line goals are to grow jobs, raise per capita income, and reduce poverty. How are we doing? Our 0 progress on these measures is mixed. 1 000 since 2011. This is of our goal to i As shown in Figure 1, the Oregon economy is growing jobs — 58, January shy

nevertheless. across the state, metro Portland and add 25,000 new jobs per year, but a positive trend, Looking i Corvallis have returned to their pre- recession job Fig. 1. Oregon Job Growth 8Q000 counts. However, in Eugene- Springfield, Salem, Bend,

70,000 and Medford, employment is still 7 to 13 percent be- October 2013 60,000 low December 2007 levels. Goal i 1 50,000 income. As We' re not doing as well with per capita 40,000 Cumulative Figure 2 illustrates, we' ve been below the national av- 30000 Jobs Added

below 90 per- Since January erage since the early 1980s, have fallen 20,000 k: 2011

cent of that benchmark the past few years, and are ro,000 j;

a even lower. Although metro Oregon also

trending y1 , 1' G G G G. G G . y' , G ti" G G 4' '+' 4' '+' J .* . i °` ' ac" . k a+ `° 0 v o t ' O falls below the national average ( Figure 3), it is doing 1 46 See i 1 '° v,° GP much better than non-metro areas, which faltered with

t have yet declines in the forest products industry and z i. to recover.

Oregon' s relative underperformance on income also Fig. 2. Oregon Per Capita Income Figure 4). U.S. no% shows up in an elevated poverty rate( 105% E rate declined Census data show our official poverty Average E 100%100% between 2011 and 2012 but, at 17.2 percent, narrowly 95%

average and well above our remains above the U.S. 909 Y

State goal of to 10 percent. 85% s reducing poverty Economist' s

B0% Forecast the Mixed Performance Why 75%

bear on Oregon' s 1) the 70% A range of factors economy: iJ 659' 2) although we global economy is slow in its recovery, 6o% goods that sector q A in durable 91 are strong manufacturing, 10,°' 19„

espe- is cyclical and still hasn' t returned to full steam, i cially in forest products, and 3) most of our job growth has been in the local non-traded sector economy. Congres- 1. Great Recession makes progress difficult for Oregon. The The nation' s slow recovery from the especially when won' t return to its full potential until 2017 unemploy- i sional Budget Office forecasts that the U.S. economy i ment rates are projected to fall below six percent.

or from it — and China' s several headwinds. Europe is in recession — emerging The recovery faces slowly growth is off its historic pace. Domestically, housing prices are rising, but demand for new housing has yet to take off. In Oregon, the lack of residential construction hits both the homebuilding and wood products industries.

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i i Recent Oregon job growth has been concentrated in the local sector — goods and services sold 1 disproportionately 7 within the state or within regions of the state. Oregonians have had enough faith in the recovery to spend more at local establishments. These are an important part of our economy, but the wages they pay are relatively low com- i pared to many traded sector jobs that drive economic growth. a The Outlook Fig. 3. Metro vs. Non- Metro Income 110% ahead, there is cause for optimism. Although Looking 105% US Average traded- sector employment has not grown 100% f j sufficiently r'

this past year, export sales have. This bodes well at a 95% Metro Oregon 9°% time when global markets are expanding with a rapid- 85% world. Ore- ly rising middle class in many parts of the 80% a gon has an to sell products and services F opportunity 7s9° Non- Metro Oregon into these markets, taking advantage of its inherent 70%

65% strengths in manufacturing. t 60% t

90 Oregon is well positioned to move on this opportunity. , f p°' 9°°' tip ' Our high technology sector, for example, has fared

better 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 20% to support our traded sector industries, in particular by 18% Oregon the conditions outlined in the 4Ps — ad- fl creating 16% innovation US vantages in people, productivity, place, and 14%

12% t that help businesses thrive. Full recovery in the forest 10% products for example, is dependent on tim- industry, 89'0 from federal forests. For each of ber supply, especially 6% our major industries, we need to identify opportunities 4% 2% and needs and act swiftly to meet them. 0% I.

rye,, of between tip'` tip'°' ti if ti°'~ ' In particular, we must act on the connection ti F education, income, and poverty. On education measures, Oregon' s performance is middling. That' s why the unfolding overhaul of our education system is so

our of education companion paper on we need to raise levels s critical to accomplish. As explained in our poverty,

so, skills that well, such as the sciences and In attainment in general and, in particular, in pay technology. doing 1 we will increase the productivity of the traded sector and all parts of the economy which, in turn, will raise incomes and help reduce poverty.

3 t9s PROGRESS ON OUR 2013 PRIORITY INITIATIVES The Oregon Business Plan vision and strategy provide a framework for identifying what is important to create jobs and grow incomes. The Business g Plan initiatives are the specificp c actions to achieve the goals, vision, and i strategy of the framework. 1 In 2010, we broke our initiatives into two broad categories. First, recognizing the crisis in public sector services Oregon Business Plan: caused by plummeting tax revenues and languishing pub- Restarting the Circle of Prosperity lic sector productivity, we grouped together six initiatives Stimulate Spend' f Increased Higher Per designed to strengthen critical public sector services. lobs and Smarter m .. investments in Casa Income the Public Education Income Sector These services, especially education, are critical for Reduced f achieving the goals of the Oregon Business Plan. arty. Lower S Spending on Second, we created what became known as the " jobs Medicaid and J corrections agenda," actions designed to spark economic growth both j quickly 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 the partners by participating in the Oregon Business Plan, we have much to cel- I ebrate. i 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 PERS 11. 1 billion a The state' s pension system was a top focus of the 2013 i regular and special legislative sessions. A poor benefit it i design interacted with the 2008 market crash to produce a large unfunded actuarial liability( UAL) and E high employer contribution rates. Left unaddressed, t these 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, library, park, and transportation services. i 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 billion and 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 and the market crash is five years behind us, rates charged to public agencies in Oregon will remain considerably high-

er 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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ti t i tit 1 t i i 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 of education, 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 the

create stronger professional t state. addition, the state will make$ 73 million in strategic investments to In t

developmentp for educators, accelerate pprogress in Fig. 6. Education Investment Increases Over 2011- 13 Biennium t STEM/ Career Technical education, disseminate the j 20% i

Chalkboard Project' s CLASS initiative, implement a 18% g

evaluation system, and deliver new teacher reading la%

12% tutors and mentors to high-poverty schools j 10% throughout the state. t.

The state also overhauled the way it invests in post- 4% Higher Education 2% secondary education. It charged the 0% Coordinating Commission( HECC) to oversee Early Learning K12 State School Community Oregon University tncreases in Fund College Support System healthcare, i human services, resource allocation, setting, and postsecondary policy- public safety, and

all other areas system coordination. It created independent boards for Oregon State University, the University of Oregon,

them more to meet student needs. and Portland State to give flexibility t University i

together with groundwork reforms in 2011 — represent the In all, investments and reforms enacted in 2013 —

on right path to education system in a generation, and put the state the most significant changes to Oregon' s they f reach its 40-40-20 goal to vastly increase postsecondary attainment. With more resources and structural change in hand, we must now implement the vision. i Build the Bridge 1 Early in the 2013 session, the Oregon Legislature authorized Oregon' s share of funding for the I-5 bridge replacement contingent on Washington State authorizing its contribution by September 2013. When the Washington Legislature adjourned without committing its share of funding and Oregon' s funding authorization expired, 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

Hayden light rail, and the SR 14 interchange Interstate bridge, Oregon interchanges( Marine Drive and Island), v during the first phase of construction. Washington interchanges north of SR 14 would be built as Washington funds are identified. This phased approach addresses congestion, freight mobility, and safety. The project is poised 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 endorsement from Washington Governor Jay Inslee to move forward with the Oregon-led phased approach. Early next year legislators 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 2013 I Reform the state budget pro- • Build support legislators for new process. Work among I• 2013-2015 Governors budget was built on a new 10- year I cess to align in- with Ways and Means to base off yr I I transparently decisions 10- projec- outcome- based process. The legislature did not vestments change its with long-term goals tions of expenditures and revenues budgeting process, but did enact critical reforms in educa-, and desired outcomes. I Identify lessons learned and improvements for next cycle ions and er e the t based long- term, rather short-term, cost savings d desired I policy outcomes. I The Govemors office thoroughly evaluated the successes 1 and failures of the 2013- 2015 budget development process. Redesign Oregon' s education • Make five key investments to support 1) educators 2) i• system to ensure that 2025, Legislature invested$ 75 million in the five key investments i by parents 3) new school models 4) third grade reading and j areas. i all Oregonians have a high 5) STEM Legislature established a STEM Investment Council to set a school diploma,P 40% at least a • Overhaul funding models for early childhood, ESDs, spe- bachelor's degree and statewide STEM education strategy. 40% at cial education, ELL and education to pro- °• t postsecondary Legislature overhauled early chilhod funding; passed least an associate' s degree or mote innovation and flexibility. credential. j technical Reorganize education study bill on ESD, special education, and ELL funding. state agencies to help them fulfill ;• Legislature restructured higher education system with inde- core functions 1) and investing 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. municating with public 1 Grant autonomy to U of 0 and PSU, and move post- t funding policy responsibility to a single state j boardn 6 Redesign 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. l health of Oregonians while • medical Adopt malpractice/ patient reform New medical malpractice dispute system t stabilizing costs for individuals, • safety j• resolution estab- Patch 2013 gaps in Oregon Health Plan and lished in SB 483. businesses, and the public sec- financing f developeveop a long- term financing plan 2013-2015 Medicaid funding gaps patched but big gaps t Mitigate market shock of Affordable Care Act possible in 2015-2017 and beyond. i Encourage public and private employers to adopt purchas- • Legislature passed HB 3458, a re- insurance mechanism to I t ing, care and benefit models that encourage choice among mitigate the shock of the ACA in the individual market. providers, promote wellness, and incent high quality, lower;• Public employers moving to new benefit and care models. care 1cost

A Reform Oregon' s public safe- • Adopt package of public safety reforms that the Commis- • Scaled- down version of Public Safety reform package system, in particular sion to the ty. curbing submits Governor and Legislature in December€ passed, significantly delaying the need for more prison t prison growth, by investing in 2012. beds. proven, effective, and affordable • Avoid the need to bond for and build more prison beds in methods of reducing crime. the biennium I ti t Reform public employee corn- • PERS: Use market rate to annuitize Money Match; Cap the I• $ 16 billion PERS unfunded liability reduced to$ 11 billion pensation to address unsus- COLA; Eliminate 6% requirement; Reduce pension spik- 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 now competitive compensa- • I• ensuring Health Care: Continue progress in stabilizing PEBB/OEBB operating under fixed rate increase budget and RFP is out tion for public i employees. rates through fixed dollar defined contribution and ongoing for new PEBB care model. efforts to implement new care models, value- based benefit • design, and improved health PSU Center for Public Service produced study comparing l total cost of compensation in Oregon and neighboring Overall: Align total cost of comp with other states and the states. ft sector private 1 z It s Reform Oregon' revenue • Form coalition to examine options and engage the public ;• system to create stable and 1 The Governor, business and labor groups are working !! on revenue reform ideas together on public opinion research. i adequate for public • s funding Draft a proposal for consideration by legislators and voters s• A study is underway to analyze fiscal and economic impact I services and effective incentives of different revenue structures. f r for economic growth. A series of divisive ballot measures were filed with the i 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 2013 Transportation Infrastructure: • Adopt an investment package to replace the 1- 5 bridge. • Create jobs today and in the • Oregon authorized its share of funding for the 1- 5 bridge 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 Oregon leaders advanced an Oregon- led, phased approach portation infrastructure and ac- highway funding. Move forward for consideration by the legislature. cess to markets. innovative infrastructure financing models • such as the West Coast Infrastructure Exchange and the • Legislature authorized$ 40 million for Connect Or i Community Investment Initiative. The Infrastructure Exchange hired its first executive director. Innovation: Boost research, • Adopt the 2013- 15 Oregon Innovation Plan, continuing • Legislature funded the Oregon Innovation Plan at$ 19.5 commercialization, new business i funding for Oregon' s three signature research centers as million supporting Oregon' s three signature research centers formation,& of exist- well as five initiatives. productivity industry and industry initiatives while also funding innovation 1 ing companies capacity in the Southem Willamette Valley. j Capital Access: Ensure Oregon • The Legislature should create an I Oregon Growth Fund to • Legislature passed HB 2323, the recommends- companies have access to debt codifying support portfolio that supports early stage, venture stage and to fuel tions of the Oregon Growth Board, creating the Oregon equity financing their and later stage companies and include tools to leverage Growth Fund, and allocating resources to the fund. Progress growth. and grow private investment in Oregon. was made statewide boosting business accelerators, seed I funds, i and angel and venture conferences and networks. j Regulation& Permitting: In- Implement the Regulatory Streamlining Roadmap. crease for business Legislature increased funding for Regional Solutions to step certainty by • Adopt consistent management systems within and across up its regulatory streamlining functions. adopting clear, consistent regu- state agencies. Legislature passed HB 2620 alignment between I lations and processes. • directing permitting Create permitting ombudsman function inside Regional state and local economic and community development func- Solutions. tions. Advance pilot projects identified in the Roadmap Launch awards program to recognize efficient and effective cities and coup ies. Improvements to land use appeals process. Eliminate overlapping regulations across jurisdictions s I Industrial Land Su and Secure state Supply fundingfundin for industrial land inventories and • LegislatureL mslature established invento and due diligencedili ence rant t Readiness: Ensure Oregon has inventory g due diligence assessments. program but did not allocate funds to it. an adequate of right- • 1 supply Create a partially forgivable state loan program for prepa- • Legislature established forgivable loan program for prepara- sized, market- industrial ready 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 process HB 2254) but did not pass a companion measure to facilitate 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 t economies while fire • preventing Agree on and implement an O&C solution The US House approved a bill that would place about 1. 6 through active forest manage- • a Increase wildfire initial attack capacity million acres of 0&C federal lands in a state- managed trust. ment. 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, landowners more to attack Promote sustainable harvests on state forests giving capacity fires t A second Wood Solutions Fair attracted more than 400 r architects and engineers to study innovative uses of wood The state implemented new programs and incentives to s support small biomass thermal projects. t The Board of Forestry launched an initiative to change its r F management plans to increase economic performance and conservation outcomes on state forests in NW Oregon. Maintain Oregon' s • Further Energy: streamline energy facility and transmission siting • Legislature passed HB 2820& HB 2105 to streamline Ener- competitive advantage in energy to get projects off the ground while capital costs are low. gy Facility Siting. r costs while jobs and • Focus on creating energy efficiency and vehicle fleet conversion • Legislature passed HB 2801 expanding market opportunities l carbon emissions. w slowing as the most effective ways to reduce emissions for energy efficiency. Protect Oregon' s competitive l e9 P advantage9 in energyr9Y costs. • Legislaturee9 avoided bills that would increase energyrgy costs. Workforce: targeted • Employ Achieve 100K NCRCs and > 24 counties certified as • Oregon is on track to meet NCRC goals. strategies to close the be- gap career ready by 2016 Legislature created STEM investment council and provided tween skills Oregonians have • Create STEM investment council and identify funding to $ 8M in funding. E and 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- j Double the number of people served by Back-to-Work force development system. j Oregon on-the-job training program for 2013- 15 Align workforce investments to meet industry needs. I Water: Secure additional water • both in short term Develop the and long additional capac- • Declaration of cooperation signed by Governor, farmers and for fish and farms in i the Umatilla ity for storing Columbia River water during winter months conservationists on 9- point plan for water development in Basin 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- purpose Develop a stronger interstate approach to Columbia River water resources projects across the state, including$ 10M in water. bonding capacity and 2 new positions. Regional interstate cooperation agreement drafted.

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r i WHAT' S NEXT? his past year, the Oregon Business Plan provided a strong framework for actions on many fronts, and in particular 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 energy 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 It contains poverty. 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 to maintain the infrastructure that we have in place. Investing now—in a time of low interest rates and high unemployment—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 February session of the Legislature, and get to work. The risk to our economy is not in financing the bridge, but in failing to get it built.

Beyond the bridge, we need to set aggressive priorities for our basic infrastructure needs that will ensure our continued ability to compete in the global economy. These priorities include university capacity to support research and commercialization of innovative technologies, transportation for commuters and freight mobility, reliable energy 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, and projected 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 45 We need to take advantage of fresh ways to magnify ao our public investment by combining with private capi- 35 tal where feasible and by managing more wisely the 30 money we invest in the planning process for infra- 25 STEM structure projects. We need to shift our focus to project Non- STEM 20

and and the to support delivery reliability, capacity is economic growth. and Business elected leaders should 10 come together an to develop 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 prepare for and adapt to ever changing work requirements. We have set broad goals for improving education attainment. 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 environment especially well. Plunging harvest levels in federal forests, shown in Figure 8, illustrate the impact of such pol-

short time— icies. If unlocked, such resources could grow rural economies in a 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 environmental representatives and state agencies to find a way to withdraw more water from the Columbia River for agriculture while protecting and enhancing fish runs. The eco- Fig. 8. Oregon Timber Harvest History nomics are compelling. Additional water withdrawals Private forests • Federal Forests • State/ Tribal/ County Forests 1 t in the summer months would translate into more than - i one billion dollars in agriculture output, creating thousands of new jobs and substantial new revenues for E public services. tD Id+

The biggest opportunity is to tap our federal forest re- 41, sources more fully. In many parts of the state, our over- oz t i grown forests pose an ecological danger because they m 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. t i

forest management and timber harvest on public lands. Below is a t More generally, Oregon needs to increase active 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

sustainable harvests on state forests t Promote t

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 Oregon 9 each December is to review progress on all the initiatives in the The purpose of the Leadership Summit 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 at www.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 9

i The Oregon Business Plan Is Grateful to the Following Sponsors

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