Business Pulse November | December 2022

Bellingham’s Pure Bliss Desserts — a story of sweet success and growth

Deep Tours shares their passion for exploring the mountain biking universe in Whatcom County

Drew Wilkens

Senior Vice President

Strategic Projects for SaviBank

NMLS #2117896

P 360.739.5967 dwilkens@savibank.com

Christian Christensen

Vice President

Branch Manager

NMLS #1082785

P 360.685.0080 cchristensen@savibank.com

Scott Louia

Vice President

Commercial Lending Officer

P 360.404.5042 slouia@savibank.com

Wade Stringfield

Vice President

SBA Sales Manager

P 360.820.0955 wstringfield@savibank.com

Seana Olberg

Vice President

SBA/USDA Business Development Officer P 360.820.8375 solberg@savibank.com

Trevis Seimears

Assistant Vice President

Loan Officer

NMLS #745555 P 360.685.0080 tseimears@savibank.com

Ashley Walker

Senior Mortgage Banker

NMLS #934856 P 360.404.5040 awalker@savibank.com

Savi Loan Team

Darrell Elke

Senior Mortgage Banker

NMLS #422230

C 360.922.8919 P 360.404.5044 delke@savibank.com

Meet the Bellingham Loan Team. Our mission is to bring long-term success to our clients and this community. It’s who we are, down to the core. And it’s why we are proud of our Bellingham loan team with in-depth experience and passion for this community. The perfect group to walk you through the often-confusing world of lending. Like a good trail guide. Or an indispensable Sherpa. Using knowledge and expertise, they’ll take you where you want to go, financially speaking.

That’s why our loan officers strive to put you in the right loan for your needs and your budget. And because we’re a locally-based bank, we know the importance of strong communities that we all help create. Which makes it easier to serve all of your lending needs.

When you need a trusted advisor that believes in doing what’s right, team up with the loan officers at SaviBank. Together, we’ll make our communities even stronger.

SaviBank.com

VOL. 47 | NO. 6

PUBLISHER Whatcom Business Alliance

EDITOR Matthew Anderson Bellingham PR & Communications

CONTRIBUTING Cheryl Stritzel McCarthy

WRITERS Tony Moceri Lorraine Wilde

GUEST COLUMNISTS Kathy Herndon Paul Guppy

ART DIRECTOR

PHOTOGRAPHY

EXECUTIVE DIRECTOR

Cover Photo by iStockphoto.com/Kativ

WBA BOARD OF DIRECTORS:

BOARD CHAIR: Pam Brady Public Affairs, bp Cherry Point

EXECUTIVE COMMITTEE:

CEO, Mills Electric Inc.; Doug Thomas Bellingham Cold Storage; Gross PLLC; Josh Wright Insurance

BOARD OF DIRECTORS:

Interactive; Jane Carten, President, Saturna Capital; Andy Enfield, Vice President, Enfield Farms; Engebretson, Managing Principal, Tradewinds Capital; Jon Ensch, Commercial Banking Officer, Peoples Bank; Mitch Faber, Partner, Adelstein Sharpe & Serka; Keathley, Former Owner, K & K Industries; President, Barlean’s; Becky Raney Print & Copy Factory; Sarah Rothenbuhler CEO, Birch Equipment; Patrick Schuppert Banking Relationship Manager, Wells Fargo; Smith, Operations Manager/Owner, Coldstream Farms; Carryn Vande Griend Representative, PSE; Billy VanZanten Refinery Services

For editorial comments and suggestions, write info@whatcombusinessalliance.com. The magazine is published bimonthly at 3111 Newmarket St., Ste. 106, Bellingham WA 98226. (360) 746.0418. Yearly subscription rate is $25 (US). For digital subscription, visit businesspulse.com. Entire contents copyrighted ©2021 Business Pulse. All rights reserved.

POSTMASTER: Send address changes to Business Pulse, 3111 Newmarket St. Ste. 106, Bellingham WA 98226

13

IN THIS ISSUE

13 ADVICE FROM THE EXPERTS: LOOKING AHEAD TO 2023

We consulted four business and economic experts for recommendations that might help Whatcom County businesses not only survive, but thrive, in the unforeseeable year ahead.

18 GROWING A SWEET BUSINESS

It all looks effortless, but the story of Pure Bliss Desserts — born as a one-woman show in a little back-alley rented commercial kitchen in Bellingham in 2008 — is one of hard work.

23 EXPLORING BY MOUNTAIN BIKE

Sharing a love of the area, Dig Deep Tours creates an experience with time on a bike to explore and connect with Whatcom County and beyond.

26 ON THE HORIZON

A look at some of the issues lawmakers will take up as they gather at the Washington Capitol. Hint: more spending is on the horizon.

31 PERSONALLY SPEAKING

Charles Prosper talks about a recent $50 million transformational gift — one of the largest in the country — and what it means for future PeaceHealth expansion.

Washington’s approach to the energy future and how much it may cost

Taking care of business.

When other banks are pulling back, we’re leaning in to listen… it’s how we exceed our client’s expectations. We are here to bring you the tools to manage your business.

When you need a strong partner, work with WaFd Bank. Let us show you why we’ve been voted Best Bank 5 years in a row.

I would be honored to earn your business.

1500 Cornwall Avenue | Bellingham 206-626-8544 | kevin.karber@wafd.com

Kevin Karber

Community Banking Officer

We know what works, and we know what doesn’t

Let’s all commit to what works

We know what works. We know that a successful private sector led by local en trepreneurs is the only way to create prosperity for every member of our community.

We know that respecting law enforcement is the only way to keep every member of our communi ty safe. We know that an over-regulated real estate market makes housing harder to afford. We know that managing changes to our environment requires an agriculture sector that is treated like a partner rath er than the enemy. Our recent Leaders of Industry event at the Bellwether Hotel was well attend ed, with concerned business leaders crowding the room to hear a variety of industry experts discuss local and state issues.

and governors don’t create econom ic opportunity. We know that failing to prosecute property crime leads to violent crime. We know that zoning and other regulations have created the affordability crisis in housing. And we know that environmental policy that

sponded over the past two years. They have, in so many ways, abandoned — and often demonized — what works. We have demonized small businesses, law enforcement, families and even the notion that we are a community. And we see how that is working, don’t we?

Thriving communities are led by entrepreneurs, small businesses, non-profit leaders, churches, community organizations — and, more than anything, every one of us.

fails to consider the enormous chal lenge of feeding our community will fail.

We know all of this. We know what works, and we know what doesn’t.

Unfortunately, we are increasingly headed down a path that we know will not work. We know legislators

Our country is facing enormous challenges, and those challenges are also present in Whatcom County. We have seen how our leaders have re

We know that an edu cation system that focuses on preparing students for successful careers — rather than indoctrinating them in ideology — is the best way to create a thriving middle class. We know that economic policies that en courage innovation create good-paying jobs. We know that communities that re spect law enforcement are safe places to live and work.

We cannot legislate our way to a better world. Society is not a machine made of levers and switches that can be adjusted based on the ideologies of the moment. Our country and our communities are designed around the principle that government should not lead. Thriving communities are led by

entrepreneurs, small businesses, non profit leaders, churches, community organizations — and, more than any thing, every one of us.

I am asking you to commit to what works. On behalf of our business community, the WBA and the lead ers working to create a prosperous Whatcom County, we need you to stay engaged.

In this issue, as we look ahead to 2023, local experts share their advice on what to expect as we welcome a new year full of challenges. One local suc cess story, Pure Bliss, shares its sweet success and growth in Bellingham. PeaceHealth’s Charles Prosper gives us an update on an extraordinary gift and future plans, and Dig Deep Tours explores the mountain biking universe, right here in Whatcom County!

On a very somber note, we are deeply saddened to share the loss of longtime WBA member and supporter Bob Bray. Our thoughts are with his family and employees at Dairy Distributing and the many friends and colleagues whose lives he touched throughout Whatcom County.

We hope you enjoy this issue. On behalf of the team here at Business Pulse, thank you to all our writers, advertisers and supporters for making this and every issue of Business Pulse possible. We could not do this without you. Happy Holidays!

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Barbara Chase, Executive Director Whatcom Business Alliance

Larson Gross announces merger with Homchick Smith & Associates

Larson Gross, a leading CPA & Con sulting firm based in the Pacific North west, has announced the completion of a merger with Homchick Smith & Associates, an accounting firm located in Wenatchee. The combined firm will operate as Larson Gross PLLC.

With the completion of this merg er, Larson Gross aims to build on the existing foundation established by HSA to accelerate growth and deliver exceptional and tailored accounting and consulting services to its clients throughout the Pacific Northwest.

“HSA’s clients and the industries the firm serves are very complemen tary to the clients we serve at Larson Gross,” Kelli Visser, Larson Gross CEO. “As a firm, it was clear that HSA could reinforce LG’s tradition of great service, professional experience and a sup portive and enriching environment for our clients and associates.”

Aaron Wilbur, former managing partner at HSA and new partner at Larson Gross, agreed. “The scale of our collective talent and similar cultures will translate to tremendous benefits for our clients and team members,” Wilbur said. “As one organization, we will be able move dynamically with our clients, both as individuals and businesses, into a rapidly changing global marketplace, providing more

innovative, client-centric services.” Visit www.larsongross.com.

Whatcom Land Title’s Bill Ronhaar named Limited Practice Board chair

Bill Ronhaar, CEO of Whatcom Land Title Co., recently was named chair of the state’s Limited Practice Board by the Washington State Su preme Court.

Ronhaar, who has nearly 50 years of experience in the title industry, joined Whatcom Land Title in 2014. He has been named a National Title Professional by the American Land Title Association and a Washington Title Professional by the Washington Land Title Association, where he also served as president on three separate occasions.

The Limited Practice Board is composed of nine individuals, four of whom must be attorneys. It also must include a representative from the escrow, lending, title insurance and the real estate sectors. They are responsible for the Limited Practice Officer (LPO) examination, develop and approve forms for use by limited practice officers and play a role in the LPO discipline system. Ronhaar has served on the board for the past six years.

“Bill Ronhaar’s expertise and integ rity make him an ideal selection to chair the Limited Practice Board,” said Colleen Baldwin, owner of Whatcom

Land Title.

Whatcom Land Title Co. offers title insurance and escrow services. It has been locally owned since its launch in 1982 and has branches in Bellingham, Blaine, Lynden, and Ferndale. What com Land Title Co. rose to No. 67 in the Top 100 Private-Owned Compa nies in Whatcom County for 2022.

Visit www.whatcomlandtitle.com.

New ownership for Bostec, leader in drug testing administration

Bostec Inc., a Northwest Washington leader in drug testing administration, supplies and training, was recently acquired by Brenda Calvert, a former manager at the Lynden company.

Bostec was founded in 1994 by Rich and Linda Bosman. It primarily helps companies with commercial truck drivers in need of random drug tests to comply with U.S. Department of Transportation regulations. Bostec can administer the tests or connect drivers with collection sites throughout the United States if they are on the road.

“Because I place such a high prior ity on service and dedication to our clients, I am really pleased that I’m passing on the business to someone as committed to those values as I am,” Rich Bosman said. “I’ve been amazed by Brenda Calvert’s connection with customers, her industry knowledge, and her outstanding leadership of our team.”

Kelli Visser

Aaron Wilbur

Brenda Calvert Bill Ronhaar

Ryan Martin Troy Muljat

Bostec offers other services as well, said Calvert, who had served as the company’s office manager for the past three years. “We provide pre-employ ment drug test screening for em ployers of all kinds, but mainly those in safety sensitive positions, such as working on a roof or driving a forklift,” she said. “We train others in drug and alcohol collections and are able to supply them with certifications.”

Bostec also sells breath alcohol testing supplies to health care facili ties, police agencies and correctional facilities, plus fast-response home drug testing kits, Calvert said. Visit www.bostec.com.

Bellingham retail spaces fill up in Q3 as holiday season nears

More demand for retail commercial property in Bellingham was seen in the third quarter ending Sept. 30 as the holiday season approaches and fears of COVID-19 fade among shop pers, according to a report prepared by Ryan A. Martin, co-owner and broker at Pacific Continental Realty in Bellingham.

“The decrease in vacancy rate from 3.6% to 3.3% was consistent across the city, with increased demand in down town, Meridian corridor and the Bellis Fair Mall,” Martin said. “Despite Bellis Fair moving toward a potential change in ownership, demand for retail space at the mall turned during the third quarter, with the vacancy rate there falling from 14.8% down to 12.2%. In addition to Spirit Halloween opening, a handful of smaller tenants have be gun to lease space at Bellis Fair.”

The average asking rate for retail space moved slightly higher, to $17.71 per square foot — still nearly 9% lower than the rate of $19.36 in the first

quarter of 2021, Martin said.

The pandemic’s long-term effects are negatively impacting the market for office space in Bellingham. The current vacancy rate for office space in the city is now 4.1%, which is up from 3.6% in the second quarter. Despite the increase in vacancy rate, the average asking rate for office space increased slightly, from $19.62 per square foot to $19.77.

“There is currently a trend of me dium- and large-size office tenants reducing their leasable footprint in order to lower costs and manage more employees working from home,” Martin said. “However, there is also a sizable population of sole proprietors and remote office workers who are looking to get out of their homes and lease single-occupant offices.”

The industrial market provided slightly more relief for tenants seeking warehouse space in the third quarter, with the vacancy rate increasing from 1.4% to 1.7%. Meanwhile, the cost to lease industrial space also increased for the fourth straight quarter, with the monthly average asking rate at $0.86 per square foot.

“The industrial market continues to be strong, with few new buildings being constructed and demand for quality storage warehouse space strong,” Martin said.

third quarter of 2021, according to Troy Muljat, owner and president of Bellingham-based Muljat Group Real tors. Muljat prepared a report based on data from the Northwest Washing ton Multiple Listing Service.

The median price of homes sold in the county in the third quarter was $599,000, 7.7% higher than a year ago but 7.7% lower than this year’s second quarter.

“Much of the housing market’s change can be attributed to rising mortgage rates,” Muljat said. “The average 30-year mortgage rate is now around 6.7% after starting the year at 3.3%, according to Mortgage News Daily. That makes the monthly house payments soar and the number of people who qualify to buy a home shrink.”

“Inventory is continuing to increase, which is bringing the supply closer to a balanced market,” he added. “We’re not there yet, but buyers have more choices. Consequently, we are seeing fewer bidding wars and more offers that are under the listing price. After months of seeing the average house sell for more than its listing price, the sales now are averaging at 99.5% of the listing prices.”

But Muljat doesn’t expect home prices to plunge.

from Q2 peak while rising interest rates cut into sales

Home prices dip

Steadily rising mortgage rates significantly affected the number of homes sold in Whatcom County during the third quarter and tapped the brakes on price appreciation.

Only 773 Whatcom County homes were sold in the third quarter ending Sept. 30, a drop of 19.9% from the

“There still are plenty of people wanting to buy a home in Whatcom County, and a good share of them don’t need a mortgage to do so,” he said.

Another effect of rising interest rates is that it takes longer to sell a home. The average time on the market for a Whatcom County home in the third quarter was 24 days, up 50% from the second quarter and up 14.3% from a year ago.

EXECUTIVE COMMITTEE

BOARD OF DIRECTORS

BOARD CHAIR Pam Brady Director NW Gov’t & Public Affairs BP Cherry Point

John Huntley President/CEO Mills Electric, Inc.

Doug Thomas President/CEO Bellingham Cold Storage

Josh Wright Bell-Anderson

Josh Turrell Partner/CPA Larson Gross, PLLC

Becky Raney Former Co-owner Print & Copy Factory

Billy VanZanten President Western Refinery Services

Bryant Engebretson Managing Principal Tradewinds Capital

Galen Smith Operations Manager/ Owner Coldstream Farms

Jane Carten President/Director Saturna Capital

Jim Haupt General Manager Hotel Bellwether

Jon Ensch Commercial Banking Officer Peoples Bank

Patrick Schuppert Relationship Manager Vice President

Sandy Keathley Founder K & K Industries

Sarah Rothenbuhler Owner/CEO Birch Equipment

Tony Larson Founder, WBA President, Barleans

Thank you, WBA Board,

for

another great year! With your commitment of time and expertise, the WBA provides the local business community a relevant and influential voice on issues impacting the quality of life for everyone in Whatcom County. WHATCOM

Advice from the experts: looking ahead to 2023

Overcoming inflation, wage and hiring woes

Lorraine Wilde

The business market is tighter and more unpre dictable than ever, thanks to supply chain issues, inflation and broad labor shortages post-pan demic. So, what should small- and medium-sized busi nesses consider as they plan for 2023? We consulted four business and economic experts for recommendations that might help Whatcom County businesses not only survive, but thrive, in the unforeseeable year ahead.

“I think there is a very high chance of a recession in 2023,” predicted Hart Hodges, Western Washington Uni versity associate professor of economics and director of the

Center for Economic and Business Research. Hodges also has served for over a decade, most recently as a principal adviser, with Waycross Investment Management. “There’s a lot of disagreement amongst economists, but I’m of the camp that if the Federal Reserve pushes the federal funds rate to 4.5% or possibly higher, then we will have a reces sion in 2023. We’ll also have higher interest rates that will go up and sit there for a while, which will increase the cost of borrowing as a business.”

The current target rate is 3–3.25%.

“Employers also need to determine how they will deal

PHOTO: iStockphoto.com/joecicak

with or minimize the push–pull between workers and employers,” Hodges added. “Finally, they can ex pect greater uncertainty. It can come because of political divisions. You don’t know what’s going to happen from a regulatory or geopolitical standpoint. Even though that might feel far away,

through his business, Tom Dorr and Associates, and as the former director of Western Washington University’s Small Business Development Center.

In 2016, Washington voters ap proved the gradual increase of the minimum wage each year, with an increase slated for 2023 of 8.7%, to

schedule for exempt (salaried) and non-exempt (hourly) employees. For example, in 2020, those earning over the $35,100 threshold could be classi fied as exempt employees.

even small businesses in Whatcom County can be affected by the grow ing sources of uncertainty. They need to think about different risks more than they have in the past and come up with contingency plans.”

An increasing minimum wage and exempt/non-exempt changes

“One of the key issues is the impact of the minimum wage going up $1.25 per hour, which will put even more upward pressure on all levels of wages, not just the minimum wage,” said Tom Dorr, who has helped more than 4,000 businesses in the Whatcom County community for more than 25 years

$15.74 – the highest base minimum wage in the nation.

“That’s going to stimulate further inflationary pressures,” Dorr added. “To stay competitive, you’ve got to increase all levels of employee wages. The plan for that is critical.”

In parallel, state legislation passed in 2018 allowed the Department of Labor & Industries to update em ployment rules that determine which Washington workers are required by law to be paid at least minimum wage, earn overtime pay and receive paid sick leave and other protections under the state Minimum Wage Act. That has resulted in annual increases in the salary threshold implementation

“On Jan. 1, 2023, the thresh old jumps to $61,000,” said Mark Harmsworth, a former member of the Washington State House of Rep resentatives member and the current director of the Center for Small Busi ness at the Washington Policy Cen ter. “So you need to assess employees near the threshold and either increase their wages above the new threshold or make them hourly. If you’ve got 10 salaried employees just over the current threshold of $53,000, in 2023 you need a plan to absorb the $80,000 revenue hit just from the raises that will get them over the new threshold. And those numbers are scheduled to go up every year. By 2027, in the space of eight years, the threshold will have gone up $50,000 for each employee.”

Harmsworth, a small business owner himself as president of the informa tion technology and cybersecurity company Methodworks Consulting, predicts that businesses will be forced to put many of their employees

back

“... even small businesses in Whatcom County can be affected by the growing sources of uncertainty. They need to ... come up with contingency plans.”

Hart Hodges

on hourly wages.

“That will affect many levels of busi ness, especially if your workers need to work over 40 hours a week sometimes or if you have a lot of employees near the threshold, like nonprofits,” he said. “When they’re hourly, they can’t vol unteer any more time after 40 hours; you’ll need to pay overtime. So you’ll increase salaries to keep them exempt, but then when unpredictable things like COVID happen, a bunch of peo ple will get laid off.”

Harmsworth recommends that em ployers look at their employees’ cur rent hourly makeup and then plan to change the status of some while also planning for significant cost increases.

“You may want to redistribute work loads,” he said. “Perhaps you’ll go to shift work, and you may have to invest in some sort of timekeeping system to track time. That’s increased cost no matter how you approach it.”

Harmsworth and Dorr agree that business owners need to act now in preparation. “Don’t hesitate to increase your prices before Jan. 1, so you’ll be prepared to absorb those cost increas es,” Dorr said. “And you’ve got to come

up with key messages for employees to deliver consistently as part of a planned response to customers’ shock over those price increases.”

Recruiting and retaining a skilled labor force in a hybrid work environment

All sectors are having a hard time performing at or near capacity because they’re heading into year two or three of a labor shortage.

“The Fed is looking at data that suggests the labor market is still quite strong,” Hodges said, “meaning they can push hard on things to slow down inflation. But we’re missing two and a half million workers in the workforce right now. Some of those are peo ple who worked remotely and stayed home with the kids during COVID and noticed their income only went down a tiny bit, so why go back? Some families moved to more affordable places and found they could live on just one income. And there’s a lot of people who are out on long COVID or are taking care of someone with it. I recently had to talk to 300 people in

order to get six general laborers hired for a client. Workers are not so easily replaceable anymore.”

CJ Seitz, a certified business adviser and the current director of the WWU SBDC, agrees that staffing issues will continue to be a major challenge in the coming year.

“Employers can mitigate this by re designing jobs to focus on value cre ation and by looking for ways to con nect performance to compensation, via commission, incentives or bonuses, for example,” she said.

“All businesses need a recruiting and retention plan for 2023,” Dorr said. “Wages and compensation are obviously a huge part of that. Make sure you’re paying competitive wages by looking at employment security data and competitive wages listed on recruiting platforms like Indeed and Glassdoor.”

But more workers will also need to return to in-person work in 2023.

“My bias — everyone will need to be in some of the time because we need to interact, and it’s awfully hard to onboard new people, network for your next job and so forth from your home,” Hodges said. “Employers will need to think about where and how they can be flexible. I don’t think employees will fight as long as their employer can say, ‘here’s why I want you in.’”

Dorr also reminds us of the impor tance of retaining qualified, valued workers.

“If you’ve got 10 salaried employees just over the current threshold of $53,000, in 2023 you need a plan to absorb the $80,000 revenue hit ...”

Mark Harmsworth

“A lot of poaching is going on, so you need to have a retention plan that considers job description review and where you are recruiting,” he said. “The old way of recruiting is gone. You should be looking for guerilla tactics in this marketplace that will find your qualified workers. One of the easiest things you can do is to increase and improve communication between management and workers. Don’t take things for granted. No. 2 is appreci ation — it’s the No. 1 reason people stay at a job, because they feel like they are adding value, especially with mil lennial and Generation Z workers.”

Other experts agree.

“I also think workers are pushing for — and deserve — more meaningful

Seitz said. “Offer flexible schedules to accommodate day care needs. Provide memberships in fitness clubs, discount warehouses like Costco or Sam’s Club, or travel services like AAA. Or partic ipate in tuition reimbursement pro grams for employee development.”

When it comes to keeping good workers, we need to think outside the box, Dorr said.

“Maybe you should be giving per formance bonuses instead of raises, so that when a company does well, that’s shared,” he said. “Instead of annual bonuses, consider doing it more fre quently, like quarterly. Getting rewards closer to when the activity occurs em beds the response you’re looking for. Verify and clarify all your assumptions.

Eliminate excess and conserve cash

“When you’re expanding quickly or you’re having supply chain issues, you respond instantly instead of strategi cally,” Dorr said. “Recession is good in that it gets rid of competitors that are marginal and forces businesses to look inward. The positive thing that comes out is the elimination of inef ficiency and overindulgence. Smalland medium-sized businesses are in a better position to respond quickly and look for opportunities for cost-cutting measures, but they need a plan in place in the near term or those excesses will reduce profitability as inflation cuts into your bottom line.”

Seitz recommends three ways busi nesses can conserve cash in a recession:

work,” Hodges said. “Or at least more collegial and respectful relationships. You can’t view them as replaceable because they’ll go get another job at a higher wage.”

“Employers can also increase reten tion by making employees feel special,”

For a worker that has been there 20 years, when was the last time you real ly talked to them? What’s your plan if they retire or leave? You can learn a lot just by listening.”

“First, reduce exposure by tightening any credit offered to customers and firmly collecting any payments due,” she said. “Second, closely and regularly monitor costs of goods sold and in ventory carrying costs. Look for signs your prices should be increased and act quickly. And third, evaluate opportu nities to make acquisitions at year end to lock in favorable pricing and inter est rates or to capture tax advantages.”

“Employers can also increase retention by making employees feel special ... with flexible schedules ... memberships ... employee development.”

CJ Seitz

To make and implement a plan that will accomplish these goals, Dorr emphasized knowing your key perfor mance indicators.

“Small businesses often don’t think about how they know whether it was a good day or bad day,” he said. “Each business has its own measures. As

a business owner or manager, know what measure reflects how your busi ness is performing day to day, such as labor-to-sales ratios, how much you have in the bank, what’s your cash in flow versus outflow. How do I set up expectations, and how do I measure against those expectations?”

A lot of change and further unpre dictability are expected in 2023.

However, Seitz said, “business own ers should remember that they are not alone in facing these challenges. Whatcom County businesses can con nect with a WWU SBDC business adviser for confidential conversations about these and many more strategies, at no cost to the business.”

Methodworks Consulting, Tom Dorr and Associates and Waycross In vestment Management also are among the many firms available in the area to help businesses adequately plan and prepare with confidence for the ev er-evolving year ahead.

“Recession is good in that it gets rid of competitors that are marginal and forces businesses to look inward ... eliminating inefficiency and overindulgence.”

Tom Dorr

sweet

Birth of a business and how it grew

Pure Bliss Desserts, made in Bellingham

Cheryl Stritzel McCarthy

The first thing you notice about Pure Bliss Desserts in downtown Bellingham is how beautiful it is, from the hand-painted mural on the building’s outside to the elegant cakes within. The seating area of ta bles and chairs includes couches upholstered in rose velvet, a theme repeated on the company’s appealing website.

It all looks effortless, but the story of PBD — born as a one-woman show in a little back-alley rented commercial

kitchen in Bellingham in 2008 — is one of hard work. Andi Vann, a 2003 graduate of Western Washington University, had put a lot on the line even to get to that beginning.

In the mid-2000s, she was living in Bellevue, using her new psychology degree while working for a firm that taught people skills to other businesses. But every day after work, she went home and baked. And baked.

“I couldn’t stop baking,” Vann said.

Andi Vann, owner, Pure Bliss Desserts, 1424 Cornwall Ave., Bellingham. (Photos courtesy of Pure Bliss Desserts)

One day, she was standing in the check-out line at Fred Meyer in Bel levue, her cart full of baking supplies, when a young man noticed her WWU shirt and struck up a conversation. Turns out, he’d graduated from West ern the same year she had.

They got married 18 months later. Still in Bellevue, she couldn’t stop thinking about how she wanted to quit her day job and bake cakes all day.

Her husband, Nick, said, “Do it.”

In the beginning

So, she did. She sold her condo, and in 2007 the couple moved back to Bellingham. No one was hiring bakers, so Andi got a job as an event coordinator for a local wedding de signer. At the same time, she started baking preordered custom desserts in that rented kitchen. She’d schlep her ingredients over there, bake and dec orate, tidy up, return everything to her car, and deliver her product.

“I was spending seven hours mak ing one cake,” she said of that time.

As her cake business grew, Andi learned that Anchor Café, at 1424 Cornwall Ave., had an available stor age room in back.

“I thought, I can convert that into my own commercial kitchen,” Vann said. “All my products and equipment in one place.”

No loans, no employees, just Andi and Nick, driving around acquiring Craigslist equipment for her new sublet space: one 20-quart mixer, two 6-quart mixers, a commercial grade oven, and an expanding collection of pans and bowls. Meanwhile, Anchor Café out front faltered, then closed.

The landlord offered the café store

front to Andi, and in June 2010 she rented the space. It was dark and dingy, with a yellow/red color scheme, but her father had a home repair busi ness and husband Nick was handy.

“I baked during the day and renovat ed and shopped during the evening,” Vann said.

She drove to Canada to buy the vintage couches from a private seller. Cabinets came from The RE Store, the wedding designer donated black chandeliers, and someone provided an espresso machine.

“I had this dream,” Vann said, “and people backed us, saying ‘how can I help?’”

After a summer of permitting and remodeling while still baking custom orders, Andi opened her store for Pure Bliss Desserts on Oct. 26, 2010, with two other employees. The workload hit overdrive.

“I’d wake at 4, bake from 5 to 10 a.m., then train whoever was working alongside me while serving customers,

spend an hour doing administration, then back to the kitchen, complete the baking, frost and cut and garnish, then back out front, and close the shop at 10 p.m.,” Vann said. “I’d get home at 11, go to bed, and wake up and do it all over again.

“All the things I’d dreamed of since middle school, it came alive! I couldn’t believe it.”

Growth, and more growth

Andi and Nick (both are co-owners) lived and worked by this philosophy: “Quality speaks for itself; use the best ingredients to yield the best desserts.”

With growth came more work. Andi found herself grabbing the occasion al nap using a bag of flour for a pil low. She stepped up hiring, including Amber Sturgis, cake decorator, and Ann Hoag, full-time manager/baker. In 2014, Andi gave birth to a daughter; three weeks later the new mother was back in the kitchen, her infant napping on a sheet tray.

With a newborn, and with husband Nick gone 24 hours at a time working as a firefighter, Andi could no longer pull hundred-hour workweeks.

“That was a pivot point for me, delegation and trusting,” she said. “Whether I’m here or not, my team is still doing the same good work.”

Pure Bliss had about 15 employ ees by then. Workspace was tight, and they desperately needed more refrigerator space. With no dedicated office, Andi carried her laptop around with her. When a thrift shop next door closed, in 2014 Andi scored a sliver of that space — 200 square feet for extra seating for customers.

“That was our first add-on,” she said.

As a middle schooler, Andi would read recipes for fun, bake one, then think how she might make it better. “I was doing my R&D in sixth grade.”

In 2016, she was able to move her office into the building’s upstairs.

Buy, don’t rent

Meanwhile, the WWU Small Busi ness Development Center had been coaching her to buy, not rent, her next building. (Eric Grimstead, senior cer tified business adviser, has advised Andi since PBD’s beginning in 2008.)

In 2017, the building’s landlord offered to sell Andi the whole build ing. She and Nick finalized a Small Business Administration loan on May 1, 2018. With Chuckanut Builders, they launched an ambitious plan to remodel one half of the store, then the other, and finally join the two, accom plishing months of major work while staying open for all but 10 days of that whirlwind time.

“I have a 10-day-old son and 3 1/2-year-old daughter, and we’re taking on the biggest project of our lives,” Andi said.

The remodel (May 2018 to March 2019) expanded PBD from 2,100

square feet to 5,500, delivering more seating and more desserts. This led to more customers, which led to more employees. PBD now had an 8-footby-9-foot walk-in refrigerator and in dividual workstations for bakers.

To understand the scale, realize that butter comes in 1-pound bricks packed in a 30-pound box, and PBD has 15 of those boxes on hand at a time. Same for cream cheese. Eggs come in a crate of 15 dozen, and the bakery usually orders 15 crates per week.

“It’s a wall of cream cheese, eggs, and butter; we have whipping cream and buttermilk and citrus,” Vann said.

With the remodel, Andi and Nick preserved the look that they had cre ated with their Craigslist budget back in 2010, but now it was polished and refined, with double the seating ca pacity, the handsome vintage couches freshly re-covered, and an increased variety of cakes.

“Then COVID happened, and I cried,” Andi said. “We’d just done a gigantic investment, and everyone had to stay home.

“We didn’t forget our mission to spread joy,” she said, adding that PBD got some of their best customer thankyou emails during the pandemic. “That was invigorating.”

PBD kept a skeleton crew, with the others paid via federal loan to stay home for eight weeks and wait for the pandemic to ease. PBD offered fewer cakes. Customers stood out side to eat their slice or took it home, as PBD grappled with ever-changing mandates of 25% occupancy, or 50%, “then close it altogether — over Val entine’s Day!”

Vann credits her team and custom ers for PBD’s success.

“A team makes a business work. I’m so grateful to them. And my faith! Sometimes I’m like, ‘God, I don’t know what’s going to happen today, but help me prepare for it.’”

Of PBD’s current 36 employees, 14 are full-time.

“I love figuring out how to make this place the best it can be,” Vann said. “I love growing young adults into pol ished professionals.”

“Eric (Grimstead, WWU SBDC adviser) told me in 2008 to line up my personal goals with my business goals. I want my philosophy to be lived and breathed within these walls. I want to pour that into our two chil dren as well.”

By the numbers 70%

The amount of business Pure Bliss Desserts does via foot traffic at 1424 Cornwall Avenue in downtown Bellingham.

Doing it well

All that informs what’s ahead for PBD. “No more locations,” Vann said. “I’m super thankful for this location.

“What would I love? Stability from month to month, building the bridge back to our community, so our team can keep their paychecks and our doors can stay open.”

Here, Andi paused and looked around the elegant shop and over the tiered array of cakes, including choco late salted caramel, red velvet, berries and cream, creamy coconut and lemon bliss.

“We do this really, really well,” she said.

She paused, nodded, smiled and headed back into the kitchen. ■

15%

Sales from pre-orders, which can be done online or by calling.

7-9% 3-5% 10

The amount of wedding sales, including personalized dessert planning services, offer tastings, delivery, stand rentals, or tiered cakes. Sales from wholesale business.

The number of different cakes offered per day. Best sellers are cakes by the slice and seasonal flavors (the berries come from local Whatcom County farmers). “This summer, we couldn’t order enough berries, the orders just kept coming!”

(Photos courtesy of Pure Bliss Desserts)

Holiday Magic Lives Here

Holiday Tree Lighting

Hotel Bellwether transforms into a festive holiday wonderland all December with creatively themed trees on display throughout the lobby and halls, all decorated and ponsored by local businesses View & vote on your favorite ree and enter to win an overnight stay in the iconic three tory Lighthouse Suite (valued at $1,000). 100% of proceeds o to Skookum Kids, which provides crucial care and support for children entering or transitioning into foster care.

hotelbellwether com/holiday tree lighting

Holiday Buffets

Enjoy more time together this Thanksgiving or Christmas with family and friends and let us do the cooking! Join us on Thursday, November 25th or Sunday, December 25th for our bountiful holiday buffets prepared by our Executive Chef Marcello Mazzoleni and culinary team from 11 am 7 pm at the Lighthouse Grill Advance Dining Reservations are required. Visit our website or contact Hotel Bellwether Front Desk for more info and to reserve your table

Holiday Celebrations

Celebrate your holiday party or special occasion in one of our beautiful private event spaces! From our elegant Wine Cellar for 10 guests to our Grand Ballroom for up to 350 guests, our attentive Bellwether Team is ready to take care of you and your guests Full service Catering and Bar Services available.

Contact our Sales & Catering Office for more information at catering@hotelbellwether com

Digging deep to reach the heights

Dig Deep Tours offers local exploration by mountain bike

Tony Moceri

What began as locals biking around in the woods has grown into one of North America’s hot spots for mountain biking. Whatcom County is a moun tain biking destination, with cyclists venturing to our corner of the country on trips or even to find a new place to call home. Galbraith Mountain is the center of the mountain biking universe in Whatcom County, with miles of well-maintained trails for all levels of riding.

If you are an experienced mountain biker fortunate enough to call Whatcom County home, then you have plenty of time to explore the mountain on your own with your own gear. If you are traveling to the area or new to mountain biking, having some assistance could be an ex cellent place to start. That is where Dig Deep Tours comes in. Ike Bancroft began the business of guided mountain biking tours and rentals to give people a shortcut to experi encing the mountain biking our county has to offer.

“A lot of what we do is oriented towards the person who is here on vacation for a short amount of time because you

have this whole new place you don’t know anything about, and it’s overwhelming,” Bancroft said. “We simplify that and make it so that you experience a little snapshot of this place in a way that is orient ed towards you as a person.”

The business model for Dig Deep Tours is cen tered around making it easy for people to get on the trails. Whether they are renting or doing a guided tour, Bancroft meets customers on the south side of Galbraith with everything they need, so they don’t have to worry about transporting bikes or gear.

“We meet at the trailhead, with about 90% starting on the south side,” Bancroft said. “The south side of Galbraith is really the best assortment of trails to be able to curate to the specific skill levels, desires and fitness levels, because you have a lot of choices, a huge variety.”

In addition to the bikes themselves, Bancroft supplies helmets, water bottles and snacks. On a guided tour, the personally curated experience starts with a line of question ing to get an understanding of each rider’s experience level. Bancroft generally begins with a shorter trail in line with

PHOTO: iStockphoto.com/yamonstro

PHOTO: Sattva Photo

the assumed skill level and then adjusts from there based on the experience the group is having.

This customized approach allows Bancroft to cater to everyone, from novices to the highly skilled. Because Galbraith has such a wide variety of trails, the experience can be adapted on the fly, with no set route required.

Starting with a short trail allows for a comfortable access point for anyone looking to get out and enjoy Pacific Northwest riding.

Bancroft, who grew up in Vermont and began mountain biking in high school, has prioritized getting people into riding the right way. When he first began, he was intimidated and didn’t really enjoy the experience. In stead of it being something fun, he found the sport stressful.

At age 19, he found himself living in Jackson Hole, Wyoming, looking for ways to connect with the community.

He found the place to do that was out on the trails. “I started

getting into their gravity trails, some of the downhill, more intense trails, and just started to love it,” he said. “I started to have a little commu nity just totally built around mountain biking. Since I was young, I couldn’t really engage the community in many other ways, so I kind of started my dirtbagging mountain bike life. Then I suddenly just felt enveloped in it. This community was diehard and loved it, and I just fed off that energy. That’s when I became obsessed with the sport.”

While living this mountain bik ing life, Bancroft served a stint as a guide for a mountain biking company in Moab, Utah. The companies there were established and had been around for a couple of decades, successfully operating with guided tours and rent als. It was this experience that showed him that it was a viable business. Upon arriving in Whatcom County, drawn by Western Washington University

and Mount Baker, Bancroft found that guiding companies like the ones in Moab simply didn’t exist in this area.

As Bancroft began to formulate a business plan, he knew that he didn’t want to just give people access to some trails but really create an experience where people could use their time on the bike as a way to connect with a local area, as he has done elsewhere around the country. Bancroft, who went to WWU for environmental studies, enjoys passing along some of that knowledge while out on the trails.

While the vast majority of his trips are on Galbraith, his vision for the business is to encompass all that our region has to offer.

“Washington just has so much vari ety, from coastal hills to islands to big ger mountains,” Bancroft said. “There is a lot of potential there for a longer experience.”

In one of these longer trips that he plans for the business, Bancroft envi sions an educational piece that allows people to see and feel the natural his tory of our area.

It was 2019 when Bancroft got se

PHOTO: Sattva Photo

rious about making his vision a real ity, and in March 2020, he was ready to launch. Then the world came to a screeching halt. The start of his busi ness was delayed two years, with Ban croft finally starting guiding people this past spring. Now, with a successful summer of getting people out on the trails through rentals and guided rides, Bancroft is all in.

As the winter months approach, Bancroft is optimistic that locals and visitors alike will continue to use his services. With the right gear, there doesn’t need to be an end to the season.

“Unlike most of the rest of the coun try, in Whatcom, it is possible to ride about 50 out of 52 weeks a year,” he said. “The soil here does very well with rain, so damaging the trail isn’t a con cern. Since the occasional snow we get at the low elevations where bike trails exist typically melts out within a few days, one can get back in the saddle soon after a winter storm.”

If there are some down days, Ban croft will use the time to prepare Dig Deep Tours for the future. He wants to continue connecting with locals and visitors while planning his eventual

multi-day trips. By expanding tours to other regions, including Eastern Washington, he can diversify the cli mates he and his customers ride in.

Bancroft is excited to be sharing his passion with people in a way that is accessible for all ages and abilities.

Dig Deep Tours offers both full and half-day options ranging from four to eight hours. To schedule a guided tour or rental, book online at www.dig deeptours.com. The company also can be found on Instagram and Facebook: @digdeeptours.

PHOTO: Sattva Photo

PHOTO: Sattva Photo

PHOTO: Lincoln Humphry

More spending on the agenda in Olympia

A look at some of the issues state lawmakers face in the coming legislative session

Paul Guppy

The Washington Legislature is sched uled to meet in Olympia on Jan. 9 to begin a 90-day “long” session. The main job lawmakers have in odd-numbered years is to pass a two-year budget to fund state programs; this one will be effective through mid-2025. The state’s fiscal year starts July 1, so the governor will have to agree to and sign a budget by that date to ensure that state func tions continue uninterrupted. Lawmakers will also have a chance to revisit unfinished business they didn’t get to in the last session.

In even-numbered years, legislators meet in a “short” 60-day session to make mid-term adjustments to the bud

get, though in practice they generally pass major tax and spending changes during those sessions, too.

This January, here are some of the issues lawmakers will take up as they gather at the Washington Capitol.

Higher spending.

State spending has roughly doubled in the past 10 years, a trend that is likely to continue. The strong economy during the Trump years generated record tax revenues for the state, all of which was added to the base budget in past sessions.

The current level of state spending is about $64 billion. The Washington State Economic and Revenue Forecast Council, which provides the numbers used by budget writ ers, expects rising revenues to continue in the next twoyear cycle.

PHOTO: iStockphoto.com/Douglas Rissing

The governor will present his pro posed budget for 2023-25 in mid-De cember. Rumor indicates executive branch agencies are requesting huge increases, so a double-digit increase

sometime next summer.

In the meantime, the governor has included the added spending to his budget proposal to the Legislature. Under a 2002 collective bargaining

in state spending is likely when law makers vote on the final budget in late March.

Increased education spending.

Part of the increase will likely come in the form of higher educa tion spending. Superintendent of Public Instruction Chris Reykdal says he intends to ask for a 25% in crease — about $6.5 billion more over two years — for school districts. This would bring elementary and high school spending to $21 billion a year and per-student yearly spending to $20,700 — more than most private schools, even though 41,000 children (about 4%) have left the public sys tem. For comparison, state education spending was $12,100 per student in 2016.

Pay raise for state workers.

A major spending item already agreed to is a $1 billion salary increase for state workers. Over the summer, Gov. Jay Inslee quietly met with pub lic sector union leaders and negotiated the generous increase through closeddoor collective bargaining talks. Budget officials say details of what was discussed won’t be released until

law, lawmakers are barred from con sidering tweaks, rewrites or other changes. Lawmakers can only accept or reject the total package. Given union pull and the political make-up of the Legislature, lawmakers will al most certainly agree to the governor’s high salary and benefits request.

Tax relief is unlikely.

As economic conditions worsen

and inflation rises, leaders in most other states have passed various forms of tax relief to benefit the public. A reporter recently asked Gov. Inslee if he thought Olympia would ever have enough revenue to lower taxes. He said he would be “surprised” if the state ever had enough and that there would always be other spending pri orities than providing people with tax relief.

Capital gains court case.

In 2021, the Legislature enacted a first-ever state income tax in Wash ington, imposing a 7% levy on capital gains greater than $250,000. A state income tax has been rejected 10 times by voters, and opponents say this ver sion, crafted to hit high-income fam

... even if nothing new comes up, state lawmakers are in for a busy session.

ilies, violates the state constitution. A lower court has already overturned the tax. An appeal is scheduled before the state Supreme Court sometime in January or February.

If the high court upholds the ear lier ruling and strikes down the tax, lawmakers may revisit the issue in the remaining weeks of the 2023 session and seek another type of state income tax that will pass legal muster. Mean while, the state Department of Reve nue says it is still issuing regulations to collect the tax starting in April, unless the court orders it to stop.

Long-term care payroll tax.

In 2021, lawmakers enacted a firstin-the-nation long-term care man date, requiring every W-2 employee to pay into the program. The idea proved so unpopular that nearly 500,000 workers applied to opt out. So many people left the program that last fall, lawmakers canceled the opt out option and delayed implementing the payroll tax until after the 2022 election. The new tax is now scheduled to go into effect on July 1. If popular resistance continues, lawmakers may decide to review the issue during the session to avoid further negative political fallout in the summer.

Impact of cap-and-trade and low-carbon fuel standard rules.

After years of debate, lawmakers in 2021 finally agreed to a major el ement of Gov. Inslee’s green agenda by enacting a cap-and-trade system and a low-carbon fuel standard, based on similar systems in California. The

idea is to discourage consumer energy use by raising the price. It is estimated that the two policies will add about 46 cents to the cost of a gallon of gas, nearly doubling the state’s existing 49-cent gas tax. Lawmakers of both parties are already hearing complaints from the public, so they may decide to reconsider these rules if rising gas prices continue to create political headaches.

Emergency powers reform.

In response to COVID-19, the governor declared a state of emergen cy on Feb. 29, 2020, allowing him to cancel any state law or regulation and to impose rules of his own. The gover nor only ended his use of emergency power this year on Oct. 31, after 974 days — longer than any other state.

The 1982 law that created this power provides no end date. A bipartisan bill to provide a review of a governor’s emergency power after 30 days faced a veto threat and died in the last session.

Now that the governor says the crisis is over, lawmakers may bring up the emergency powers reform bill again and bring Washington in line with the usual 30- or 60-day review period used by other states. If so, that would provide some legislative oversight of a future governor’s use of emergency executive authority.

Police pursuit reform.

Rising crime has become a major problem in communities across the state and has been a heated topic of debate during the midterm elections. In response to the “defund the police” movement, lawmakers passed, on par

ty-line votes, a series of bills to impose more restrictions on law enforcement. One bill, HB 1054, prevents the po lice from pursuing suspects or detain ing people who may have information about a crime. Gov. Inslee signed the bill in May 2021.

Increasingly, suspected criminals have found they can simply run away from the police. The Washington State Patrol reports 934 incidents of drivers who ignored lights and sirens when police tried to make a traffic stop. One lawbreaking driver called 911 and complained that the police were still following him. He said, “It’s a violation of [HB] 1054 — he’s not allowed to chase me.”

Law enforcement officials also re port that since the passage of HB 1054, violent crime has increased and vehicle thefts are up by 93%. Given the strong negative response by the public, lawmakers are almost certain to make some modification to the restrictions they’ve place on police, though a full repeal of HB 1054 is unlikely.

Other important issues will certain ly arise in Olympia, but even if noth ing new comes up, state lawmakers are in for a busy session ■

Paul Guppy is the Vice President for Re search at Washington Policy Center. He is a graduate of Seattle University and holds graduate degrees from Claremont Graduate University and the London School of Eco nomics. He worked for 12 years in the U.S. Congress as a Chief of Staff and Legislative Director. As the Vice President for Research, he writes extensively on tax policy, public fi nance and other issues. He is a frequent com mentator on radio and TV news programs, and in newspapers across the state.

Hospital’s biggest gift ever

$50 million called “transformational”

Cheryl Stritzel McCarthy

Imagine what Bellingham was like in 1890, when members of the Sisters of St. Joseph of Peace congregation moved from Newark, New Jersey, to Fairhaven to found a hospital for loggers and miners. Today, we know that local hospital as PeaceHealth St. Joseph Medical Center, a 242-bed facility on Squalicum Parkway that offers, among other services, cardiology, oncology, orthopedics, maternity and prenatal care, general surgery and outpatient imaging.

PeaceHealth St. Joseph Medical Center is part of PeaceHealth, a not-forprofit system headquartered in Vancouver, Washington, that owns and operates 10 hospitals and numerous clinics in Washington, Oregon and Alaska. Most recently, PeaceHealth announced a partnership between PeaceHealth St. Joe’s here, as it’s colloquially known, and Seattle Children’s Hospital, to expand the care of premature newborns.

In early 2022, PeaceHealth St. Joe’s received an extraordinary gift of $50 mil lion from Peter H. Paulsen, a real estate developer and philanthropist known locally for developing the Hotel Bellwether on the marina in Bellingham.

Paulsen, who now lives in Arizona, has said he thought about the thousands of people that a hospital expansion would help in the coming years. He particularly liked the idea of an expanded birth and family center.

Charles Prosper of PeaceHealth, whose title is chief executive of the North west network, oversees hospital operations in Bellingham, Sedro-Woolley, Fri day Harbor and Ketchikan, Alaska. Prosper speaks to the impact of Paulsen’s donation, the biggest single gift PeaceHealth has ever received. (Answers have been edited.)

Q: Paulsen’s gift has been called “trans formational.” What does it mean for Bellingham and Whatcom County?

A: This extraordinary gift will help secure the future of high-quality health care for Whatcom County and north west Washington. It comes at a time when the availability of health care has never been more important, and when growth in the region has underscored the need for increased capacity and compassionate, innovative care.

Charles Prosper, chief executive of the Northwest network of PeaceHealth

Q: This gift is substantial enough to be of national importance. Any metrics on that?

A: The Chronicle of Philanthropy ranks Mr. Paulsen’s gift as No. 7 in 2022 for individuals who have given $1 million-plus gifts to health orga nizations or causes and No. 34 over

all (out of all industries and causes) for 2022.

PeaceHealth benefits from the gen erosity of many people in our commu nity and has received many large gifts since the founding of the PeaceHealth St. Joseph Medical Center Foundation in 2003. Although Mr. Paulsen’s sin gle gift stands alone in its impact and magnitude, he joins other area donors who have contributed more than $105 million in the past 10 years to help improve the lives of those in our area.

Q. PeaceHealth St. Joseph is currently 510,780 square feet. How big will it be after the Peter Paulsen Pavilion is built?

A: The new pavilion is 120,000 square feet, so the total square feet of the main medical center will be in ex cess of 620,000.

West Pavilion Exterior Study

Q. Describe the addition.

A: The plan better aligns with cur rent health care trends, including a growing desire for single-patient rooms, higher capacity needs high lighted by the pandemic, and a move to more outpatient surgery. This is accomplished through a strategic mix of building expansion, remodel of ex isting buildings and new construction. The first phase of new development would add up to 112 beds for patient care, expand the emergency depart ment and create a new, state-of-theart childbirth center with neonatal intensive care unit. The near-term benefits to our region would be uti lized by generations to come.

St. Joseph Medical Center Master Facility Plan

Southwest View

Northwest View

“Though Mr. Paulsen’s single gift stands alone in impact and magnitude, he joins other area donors who have contributed.”

Charles Prosper, PeaceHealth chief executive, Northwest network

Architectural rendering of the new Peter Paulson Pavilion expansion.

Q. Your current inpatient capaci ty in Bellingham is 242 beds. Has that changed since 2019?

A: Not substantially, but a small number of beds were added since COVID. Additional areas were mod ified to temporarily accommodate the surge in COVID patients.

Q. The Peter Paulsen Pavilion will in clude a rooftop helipad, replacing the cur rent ground location behind the hospital. What will that mean for patients?

A: In these situations, time is critical. The proposed rooftop helipad is criti cal for expediting the care of patients who come to the hospital because of emergency or life-threatening events. When minutes matter most, the roof top helipad would allow immediate access to our hospital. Currently, pa tients need to be transported by am bulance from the helicopter pad to the emergency room. The rooftop helipad would also free up emergency medical services and ambulances to respond to other community calls.

Q. Bellingham is now 93,910 peo ple, up from 80,000 in 2010. Whatcom County is 232,000, up from 201,000 in 2010. What’s your average inpatient capacity?

A: PeaceHealth St. Joseph Medical Center is a busy hospital. We operate at approximately 90% capacity every day.

Q. What capacity do you project for the next two, five, 10 years?

A: As the community grows and health care demand grows with it, we

expect that the expanded inpatient beds and enlarged emergency de partment will meet the community’s growing needs.

Q: Why do you think people move to Bellingham/Whatcom County?

A: It’s beautiful, livable, enjoys rela tively mild weather, and has excellent facilities in nearly every category, in cluding health care!

Q: Do you foresee a larger proportion of retirees moving here?

A: Yes, for the reasons noted above.

Q: How does the homeless population affect the emergency department?

A: Our emergency department is very busy every day serving the ur

gent/emergent needs of the entire community across the demographic and socioeconomic spectrum, includ ing those who are unhoused. Recog nizing that some populations require a broader spectrum of services, we partner with several community part ners to assist with issues such as food, housing, post-hospital care, etc.

“The first phase would add up to 112 beds for patient care, expand the emergency department, and create a stateof-the-art childbirth center.”

Charles Prosper, PeaceHealth chief executive, Northwest network

MEAN BUSINESS.

Q: Can you speak to illegal drug use and its effect on the emergency or other departments?

A: Drug and alcohol use and abuse is related to approximately 10% to 12% of hospital admissions (including the emergency department) nation wide. Statistics for PeaceHealth St. Joseph are in line with these national statistics.

Q: How do you attract a workforce in this challenging housing environment?

A: We devote a great deal of atten tion to attracting and retaining em ployees, and we offer geographically competitive wages and benefits to help offset the high costs of living here. We proudly have supported the Belling ham Home Fund, which, through a property tax levy, has helped create affordable homes for seniors, veterans, people with disabilities and working families.

Business Pulse: Today, we in Bellingham and Whatcom County can barely imagine what our area was like when the Sisters of St. Joseph of Peace arrived in 1890. No doubt those founders would be much more aston ished at what their little hospital for loggers and miners has become.

“PeaceHealth St. Joseph Medical Center is busy: We operate at approximately 90% capacity every day.”

Charles Prosper, PeaceHealth chief executive, Northwest network

The cost of Washington’s new taxes on greenhouse gas emissions

Transportation costs to leap for Washingtonians next year

Todd Myers

On Jan. 1, 2023, Washington state’s carbon dioxide cap will take effect, sig nificantly increasing the price of gas oline, diesel and natural gas. Another policy targeted at transportation-related carbon dioxide emissions, the low-car bon fuel standard, which mandates a re duction in the carbon-intensity of fuels, also will take effect.

While these systems are different than a typical gas tax, where the cost is added directly to each gallon, analysis from the Washington State Department of Ecology in dicates that the combination of these two new rules will

nearly double the amount of taxes on a gallon of gas in the state.

Ecology estimates that Washington state’s new tax on carbon dioxide emissions is projected to add 46 cents to the cost of a gallon of gas next year. Meanwhile, the low-carbon fuel standard is projected to increase the cost of gasoline by a penny per gallon, increasing to nearly 20 cents per gallon a decade from now.

Here is a short explanation of how the law works and how it will impact energy costs:

Called the “Climate Commitment Act,” the state’s new cap on carbon dioxide emissions requires those who sell

PHOTO: iStockphoto.com/Dmytro Varavin

These awards recognize those who have demonstrated leadership, business growth and achievement, innovation and problem-solving, and have made significant contributions to the business environment in Whatcom County.

Nominations are for the 2022 business year and criteria are listed in the survey for:

• Business Person of the Year

• Lifetime Achievement Award

• Small Business of the Year

• Start-Up of the Year

• Jon Strong Employee of the Year

Awards will be presented to the winners at the Whatcom Business Awards and Business Person of the Year Event Gala to be held in March 2023.

Submission deadline is December 31, 2022. Go to: whatcombusinessalliance.com/events

2030, about 80 cents per gallon for the 10% ethanol mix. For diesel, it would add about 97 cents per gallon for die sel mixed with biofuel.

Understanding there is a high cost for these new climate laws, some Washington state politicians have tried to hide the impact of the rules. When Gov. Jay Inslee signed the law adopt ing the low-carbon fuel standard, he told reporters not to believe those who said it would increase gas prices. Some legislators have claimed the rules don’t increase “gas taxes.” Both of these are misleading or simply false.

The governor knew the low-carbon fuel standard would increase gas prices when he signed the bill. Both Califor nia and Oregon have a similar law, and both are open about saying it increases

prices. Oregon has an entire web page dedicated to estimating its impact on prices. The Washington State De partment of Ecology confirmed the low-carbon fuel standard would in crease prices when it released a study this year that matched the experience in those two states. Claiming other wise was simply an effort to dodge accountability.

The claim that the new rules don’t raise “gas taxes” is an effort to muddy the waters. A tax on carbon dioxide emissions, because it isn’t directly on a gallon of gas, doesn’t meet the state’s technical definition of a “gas tax.” It is still, however, a tax on gasoline. For consumers, the difference between a “gas tax” and a tax on gasoline is zero. But politicians claim it didn’t raise the

“gas tax” in an effort to obfuscate the impact of their own policy, and the choice of that specific language isn’t an accident.

There is another reason legislators chose a carbon dioxide tax rather than a gas tax. Gas taxes are protected by the state constitution for road con struction and maintenance projects. A carbon dioxide tax, however, can be used by the Legislature for whatever is desired. The Legislature gets the money without strings attached, and legislators can claim they didn’t sup port a gas tax.

There is also a fundamental problem when combining the carbon dioxide cap with the low-carbon fuel stan dard. The low-carbon fuel standard, although it adds costs to transporta

tion fuels, adds nothing to the state’s reduction of carbon dioxide emis sions. Washington’s carbon dioxide cap would be met with or without the low-carbon fuel standard. And the low-carbon fuel standard is extremely expensive. The Department of Ecolo gy estimates that it costs nearly three times as much as the carbon dioxide cap to reduce the same amount of carbon dioxide. As expensive as the carbon dioxide cap is, the low-carbon fuel standard is triple the cost but adds nothing to total carbon dioxide reduction.

Some argue that while the carbon dioxide laws are expensive, they are worth it to reduce the risks from cli mate change. That simply is not the case with the low-carbon fuel standard.

These high costs also indicate how risky a proposal to eliminate protec tions for energy-intensive, trade-ex posed industries would be. Under Washington’s carbon dioxide tax law, industries that face global competition and may be harmed by high energy prices, such as food production or aluminum plants, are slowly phased in. Until 2026, energy-intensive, trade-exposed industries are exempt from paying the tax on carbon dioxide emissions. Starting in 2027, 97% of their emissions would be tax exempt. These rules not only protect jobs in the state but also prevent efficient and environmentally friendly manufac turing from moving to countries such as China, where manufacturing is far more environmentally harmful.

For example, Alcoa’s aluminum plant in Ferndale emitted more than 1 million metric tons of carbon diox ide in 2019. Without the exemption, Alcoa Intalco could face up to $58.3 million in taxes on carbon dioxide emissions from the plant. If those taxes forced the plant to close again, the demand for aluminum could be met by Chinese manufacturers or oth ers overseas.

The energy-intensive, trade-exposed industries exemption is not only good for Washington’s economy, but for the environment.

Despite that, Front and Centered, a left-wing climate activist organization, released a report calling for the remov al of protections for energy-intensive, trade-exposed industries. The most

the groups Front and Centered claims to care about. We have already seen this with the idling of the aluminum plant in Ferndale due to international

cording to data from past emissions, several industries would see enormous new tax bills. Currently, those indus tries have time to phase in the impact

of the energy taxes, keeping jobs here and responsibly finding ways to be more energy efficient.

Even with the phase-in period, in dustries will have to begin preparing to comply with the law. And the big jump in the projected cost of taxes on carbon dioxide emissions means all businesses and families in Washington will see big increases in costs for trans portation next year.

Todd Myers is the director of the Center for the Environment at Washington Policy Cen ter. He is one of the nation’s leading experts on free-market environmental policy. Todd is an author and researcher. He formerly served on the executive team at the Washington State Department of Natural Resources.

When Gov. Jay Inslee signed the law adopting the low-carbon fuel standard, he told reporters not to believe those who said it would increase gas prices. Some legislators have claimed the rules don’t increase “gas taxes.” Both of these are misleading or simply false.

Looking up in a downturn

An expert CPA can help your business thrive during economic uncertainty

Kathy Herndon CPA, PFS, CDFA, MST, CExP

Recent economic headlines focus on the possibility of a recession. These news stories can worry business owners across all industries, even those typical ly categorized as “recession proof.”

The best way to address this fear? Taking a proactive approach to eco nomic uncertainty can turn a negative perception into a planning opportunity. This article discusses practical ways you can help your business thrive during economic downturns.

Is your team engaged?

How you treat your team, business partners and clients matters. Trends like “quiet quitting” are taking hold, and

businesses are becoming more conscious of whom they’re aligned with. You want to build an environment conducive to keeping team members engaged and creating loyalty among clients and customers. Start by reviewing external and internal policies to ensure they are in balance with the people they are intended to serve.

Transparency is also key. Communicate with your em ployees regularly and keep them informed of what is hap pening with the business and why you are making changes. There could be untapped potential for your organization to take advantage of staffing incentives — for example, adopting new technologies that help your organization operate more efficiently. Make sure to communicate any changes so that everyone feels informed.

PHOTO: iStockphoto.com/FG Trade

Don’t try to be an expert in everything.

As a business owner, it can be easy to take everything on ourselves and become consumed with working in the business instead of on it. Work ing with experts outside your organi zation can provide a fresh perspective on problem-solving. Consider enlist ing the help of other professionals, such as a banker, lawyer or accoun tant, to help you make informed de cisions. For example, your CPA can help you with cash flow forecasting or cutting expenses, and a banker can help you determine when you should leverage a line of credit.

Don’t forget about your communi ty as a resource, too. Networking with other business owners in your area and industry can open the door for conversations about the market and

industry struggles.

Check the pulse of your cash management.

Knowing what is owed to your business is important for managing cash flow and making short-term business decisions. To keep money flowing into your account, follow up on overdue invoices, offer multiple payment options, and don’t provide goods or services while monies are still outstanding. It’s also import ant to keep an up-to-date cash flow schedule that is realistic and flexible to adjust as times get challenging. Plus, you’ll want to make sure you’re scrutinizing outflows of cash.

Some things to look for may in clude considering whether payments to owners need adjusting or holding off on big purchases.

Budget for different scenarios.

Maybe your company doesn’t have a strict budget, or perhaps your bud get is too inflexible. It’s time to review the budget closely and find places that need to be adjusted based on the economy or updated forecasting.

Budgeting also opens the door for reviewing fixed and variable expenses. Reach out to suppliers and creditors to negotiate new terms, interest rates or pricing based on current market rates, demand and purchasing power.

Be flexible.

One of the key takeaways from the pandemic has been the importance of adaptability in business. Restau rants pivoted to focus on takeout and corporations pushed online ordering and shipping. Clothing brands of fered face masks and distilleries pro duced hand sanitizer. As the market demands change with the economy, consider shifting your goods or ser vices to meet the needs of your target market.

Economic uncertainty can be un comfortable for business owners. At VSH, we have a team of experts who can help business owners navigate the economy through storms and sunny skies. To learn more about our ser vices and how we can help your busi ness, visit vshcpa.com.

Kathy Herndon has over 25 years of ex perience in certified public accounting, and is one of the founding partners of VSH, former ly Varner Sytsma Herndon. Her practice fo cuses on serving clients who are active in real estate development; manufacturing; food; and tax planning for cross-border transactions including businesses moving into the United States, and U.S. citizens living abroad. Kathy is on the board of the Bellingham Chamber of Commerce.

Arbitrary smoke rules may do more harm than good

“More is better” is not viable policy for smoke protection

Pam Lewison

Workplace safety is critical to ensuring a healthy, productive workforce. Howev er, a line should be drawn between safe ty and an over-zealous desire to erase all risks from work environments. New rules proposed by the state of Washing ton cross this line.

Outdoor work has inherent difficul ties — weather, smoke, heat — that are assumed when tak ing on a job in commercial fishing, construction, agriculture and more. However, these jobs also offer opportunities to observe the beauty of the natural world, help nurture life and provide for the people around those who perform the work.

The Washington State Department of Labor & Indus tries has proposed new rules that may make working out

doors safer but that will certainly make it less pleasant and, in some cases, require a medical evaluation.

Our state has suffered from significant wildfire smoke for the past several years. Even today, parts of the state have poor air quality courtesy of several fires still burning in the North Cascades. The air quality index (AQI) for Wenatchee on the day of this writing was 163, which is in the “unhealthy” range.

However, the rules proposed by L&I go well beyond rea sonable safety measures. They would “encourage” employ ers to “implement exposure controls” and make respirator masks available at an AQI of 69, which is considered “mod erate” by the Environmental Protection Agency, and make exposure controls and respirator masks mandatory at an AQI of 101, which “may pose some challenges for people who are unusually sensitive to air pollution.”

PHOTO: iStockphoto.com/venusvi

For a respirator mask to fit properly, employees must be clean shaven and wear the mask “snugly” against their faces. The proposed rules put employ ers in a position of infringing upon an individual’s choices about how they choose to maintain their appearance or potentially be in violation of L&I’s smoke rules.

Most people employed outdoors do not fall into the categories protected under the definition outlined for an AQI of 101: “unhealthy for sensitive groups.”

Moreover, if an overly cautious employer issues respirator masks that include a canister or other breathing apparatus to an employee who has not been medically cleared to wear it, the employer is doing more harm than

good. We are a “more is better” culture, and L&I is certainly a “more is bet ter” agency. This philosophy has limits when it comes to canister respirator facemasks, because they are like wear ing scuba gear without the underwater environment. Without medical clear ance, these masks can be especially dangerous for the “unusually sensitive groups” cited under the AQI of 101.

Safety should always be a priori ty at worksites. High-visibility vests, hardhats, ear plugs and other forms of personal protective equipment are often issued to people upon employ ment in various outdoor working con ditions. The difference between those forms of PPE and respirator masks is that none of them requires wearers to change their physical appearance; nor

do they potentially require a medical evaluation to ensure the safety of the user ahead of time.

Respirator masks are a useful tool — for people who actually need them or want them. However, it could be dangerous to force every member of an outdoor working crew to don a res pirator mask based on an AQI reading so low it effectively applies to every person on a work crew, regardless of their physical health status. ■

Pam Lewison is a fourth-generation farmer from Eastern Washington and the Agriculture Research Director for Washing ton Policy Center. She has a master’s degree in Agricultural Leadership, Education, and Communications from Texas A&M Univer sity and completed her undergraduate studies at Washington State University. You can read more of her research at washingtonpolicy.org.

Washington needs ‘all-of-the-above’ approach to energy future

Where will our power come from in the coming decades, and how much will it cost?

Kris Johnson

For decades, Washington has reaped the benefits of forward-thinking lead ers who constructed a series of hydro electric dams on the Columbia and Snake rivers. The low-cost, carbon-free renewable electricity generated by the dams supported thousands of jobs, and the irrigation made possible by the dams turned Eastern Washington’s soil into fertile farmland.

Now, the dams are under attack at a time when they’re more needed than ever. Amid calls to breach the four lower Snake River dams, a recent review by Gov. Jay Inslee and Sen. Patty Murray found it would cost up to $31 billion to replace the various economic benefits they provide.

At the same time, natural gas is also coming under in creasing attack from some lawmakers and from the gover nor, who want to ban it — a step that would raise the cost of energy and reduce grid reliability.

All of this means that energy is quickly becoming one of the most important issues for Washington’s future. Where will our power come from in the coming decades, and how much will it cost?

To begin exploring these and other energy-related ques tions, the Association of Washington Business recently hosted an Energy Summit in the Tri-Cities to convene people from diverse industries to talk about ways that Washington can keep pace with energy demand while con tinuing to lead the country in preserving and maintaining our natural environment.

PHOTO: iStockphoto. com/stevelenzphoto

The spillway at Lower Monumental Dam in Washington on the Snake River.

Our challenge is to retain the exist ing energy resources that have given Washington a competitive advantage for decades while simultaneously building, innovating and inventing the energy future.

I’m confident Washingtonians can meet the challenge, just as our prede cessors — leaders like Gov. Albert D. Rosellini and U.S. Sen. Warren Mag nuson — met the challenges before them when they advocated for con struction of the dams. Speaking to a crowd in Pasco 65 years ago, Rosellini said the dams meant prosperity, jobs and food on the table. He couldn’t have been more right.

Today, we know that demand for energy is only going to increase. Washington lawmakers want to dou ble the state’s manufacturing sector in 10 years. That includes doubling

the number of women- and minori ty-owned manufacturing companies. It’s an ambitious goal that will be hard to achieve under the best of cir cumstances and impossible to achieve without more power, not less.

And it’s not just the state’s goal of doubling manufacturing that will in crease the need for energy. Washing ton is growing in population and is ex pected to add 1 million new residents by 2030 and 2 million by 2040.

All of those new people will need power for their homes, and many of them will also be plugging in their de vices and cars to the power grid as the world transitions to electric vehicles.

Some of that power will come from renewable sources like solar and wind, but some will also need to continue coming from natural gas, which cur rently provides 15% of our state’s elec tricity and provides critical baseload

power that keeps the lights on during the coldest and hottest days of the year.

A portion of the state’s future ener gy needs will also need to come from renewable hydropower, a power source that remains widely popular with the general public despite the calls for dam breaching. In a recent poll, 85% of Washington voters said they support the use of dams to generate electricity, and the vast majority of them — near ly 70% — oppose breaching the dams on the lower Snake River.

They understand the value the dams provide for our region, just as our pre decessors understood the value. “Over 35 years ago, we planned for the fu ture,” Magnuson said in 1975.

It’s our turn now. ■

Kris Johnson is president of the Association of Washington Business, the state’s chamber of commerce and manufacturers association.

The Whatcom Business Alliance is the ears, eyes, and voice for the Whatcom County business

community. We believe success is the single largest driver of community prosperity, which is why we focus our efforts on facilitating that success through advocacy, research and education and job opportunities. We bring business leaders together to encourage, acknowledge and share the best and most ethical business practices. Our members improve their respective businesses and work closely with community leaders to promote public policy that supports a healthy business climate and a vibrant economy.

To learn more and become a member, visit whatcombusinessalliance.com/joinus or call Barbara Chase at 360.543.5637.