Business Pulse Magazine: Fall 2015 by Business Pulse magazine

NW BUSINESS & CROSS-BORDER EXPO, OCT. 28: FIVE SPECIAL PROGRAMS

Sen. Ericksen: Throwing verbal punches —Left and Right

MAGAZINE Fall 2015 Ken Bell, CEO Best Recycling

Putting

‘Sparkle’ in Small Business

How can a little company do big things?

Political ping-pong over Charter amendments

Go slowly, and reinvent…

Factions create confusion on 2015 Whatcom ballot

Becky Raney, Co-owner, Print & Copy Factory

Groceries gone wild Whole Foods in, Haggen down (but not out)…what’s happening to all the aisles?

The border creates no barrier Business with B.C. thrives in broad spectrum of commerce Farmers fight back vs. Ecology over-reach

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Table of Contents “A BUSINESS IS ONLY as good as its employees,” co-owner Becky Raney (magazine cover) said. She and husband Larry (couple on the far right) manage a large slate of big accounts with (l. to r.) Alexa Siebring, Bryan Burkley, the production manager of 17 years Krystal Patterson-Garcia, Phillip Flores, and Becky Raney’s sister Bethnie Morrison. (Photo by Alejandra Aguirre)

CROSS-BORDER COMMERCE REACHES WIDE AND DEEP ON CELEBRATING

CELEBRATING WOMEN IN SMALL BUSINESS

COVER STORY: PRINT & COPY AND ITS ‘SPARKLER’

OVER-REGULATION: LOCAL FARMERS UNITE

In examining all the tentacles that reach across Whatcom County's northern border into B.C.’s Lower Mainland, reporter Sherri Huleatt found prolific impact on the local economy beyond just the milk and cheese and gasoline retail crowds. Real estate. Banking. Accounting. Brokering. Shipping. And some of it cuts both directions. Our dollar is strong up there.

Our October edition every year clears a lot of space to make way for the ‘She’s who roar when it comes to business success. You’ll enjoy Entrepreneur Corner – say, Cheese! – and Philanthropy tied to retail – say, Guatemala! We discovered how spending at Statement Apparel helps hospice, breast cancer research, and skills training in Central America (p. 32). And our staff found four women who have uniquely different cheese shops they told our Katie Scott about (p. 34).

Becky Raney has an abundance of heart, soul, and help-‘em energy that earned a spot among finalists for Whatcom Women in Business’s annual Professional Woman of the Year Award (p. 22). She and husband Larry at Print & Copy Factory stand for what’s good about small, private American businesses. They lift you with triumphs, and you’ll feel their hurt of the travails as they lend informative and hopeful insights into what it takes for a small business to survive in the Big Business world it lives in. Mainly, flexibility, resilience, and staying power.

Recognizing their future at risk, farm owners have braced to fight new regulations that the state Department of Ecology is drafting – a threat that could devastate their industry. Enter Whatcom Family Farmers, a new organization created and fully-represented by local farmers…Roger Almskaar also provides Part II of his in-depth analysis of over-reach by government officials (p.56).

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Table of Contents

70 38 78 106

BALLOT BOX 2015: CHARTER AMENDMENTS – Emails reveal political finagling and cross-purposes A stealthily-planned, 11th Hour strategy (detailed in revealing emails) surfaced in the Whatcom County Council chambers to “confuse voters” on the method to elect governing representatives. The Charter Review Commission (above) overwhelming (4-11) rejected a proposal that the County Council, at the behest of community activists, then turned around and placed on the ballot anyway. “They hijacked the process,” the Commission chair said. Examine the behind-the-scenes maneuvering, and see what you think about how you should choose your representation.

GROCERY SHOPPING FOR EVERY SIZE BASKET Whole Foods on the way in. Haggen on the way out? The region’s grocery industry has many new faces and facelifts…and some that have been around half-a-century. Wheel your imaginary cart through the aisles that senior reporter Sue Cole strolled among the big players (p. 38), the outlets and IGAs (p. 48), and see how the little ones survive on deli sandwiches and grab ‘n’ go (p. 52). Organic delivery finds a niche, too (p. 41).

PERSONALLY SPEAKING – SENATOR ERICKSEN SOUNDS OFF Your state senator in the 42nd District (Whatcom County) never minces words when addressing matters close to his heart, and to his vote in Olympia: environment, energy, water rights, you name it. He throws verbal punches, Left and Right.

SPECIAL SECTION: NW BUSINESS & CROSS-BORDER EXPO 2015

NW Business + Cross-Border

EXPO

We close with a powerful package that gives you a glimpse into our annual Expo. This year we built it on a special theme in concert with the Ferndale Chamber of Commerce – the busy-ness of Canada/U.S. trade and commerce. Flip through an excellent reference section of outstanding local companies supporting the Expo, and attend a full schedule Oct. 28 of informative panel discussions, keynote speakers, vendors, and our ever-popular WBA Presidents Club social.

For editorial comments and suggestions, please write editor@businesspulse.com. Business Pulse Magazine is the publication of the Whatcom Business Alliance. The magazine is published at 2423 E. Bakerview Rd., Bellingham, WA 98226. (360) 746-0418. The yearly subscription rate is $20 in the USA, $48 in Canada. For a free digital subscription, go to businesspulse.com or whatcombusinessalliance.com. Entire contents copyrighted © 2015 – Business Pulse Magazine. All rights reserved. POSTMASTER: Send address changes to Business Pulse Magazine, 2423 E Bakerview Rd., Bellingham, WA 98226. 6 | BUSINESSPULSE.COM

Publisher Tony Larson

Debbie Vander Veen Rose Vogel

Managing Editor Mike McKenzie

Cover Photo Alejandra Maria Photography

Feature Writers Roger Almskaar Pamela Bauthues Susan G. Cole Sherri Huleatt Cheryl Stritzel McCarthy Katie Scott

Photography Alejandra Aguirre Sherri Huleatt Jayson Korthuis Cheryl Stritzel McCarthy Mike McKenzie David Onkels Katie Scott

Guest Columns Randall Benson Jacob Deschenes Todd Myers Lylene Johnson Erin Shannon Tech Help/Big Fresh

Courtesy Photos Dawn Matthes Photography Lou Nicksic Photography Chris Baron/Baron Visuals David Onkels Bob Bromley’s Sumas IGA

Tina & Troy Clark at Bellingham Grocery Outlet Dandelion Organic Delivery Sen. Doug Ericksen Grizzly Industrial Amy & Jeff Margolis at Everybody’s Store Sanders Brokerage Graphic Design/Layout Carson McDonagh Adam Wilbert Ad Sales Pat Draper Jon Strong Subscriptions Janel Ernster Administration Danielle Larson

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John Huntley President / CEO Mills Electric Inc.

Dave Adams President Emergency Reporting

Jane Carten President / Director Saturna Capital Corp.

Randi Axelsson, Sales Manager Silver Reef Hotel Casino Spa

Board Chair Jeff Kochman President / CEO Barkley Company

Pam Brady Director, NW Govt. & Public Affairs BP Cherry Point

Doug Thomas President / CEO Bellingham Cold Storage

Janelle Bruland President / CEO Management Services NW

Marv Tjoelker Partner / Chairman of the Board Larson Gross PLLC

Bruce Clawson Senior VP Commercial Banking Wells Fargo

Scott Corzine Major Accounts Executive Puget Sound Energy

Kevin DeVries CEO Exxel Pacific Inc.

Greg Ebe President / CEO Ebe Farms

Andy Enfield Vice President Enfield Farms

Sandy Keathley Founder K & K Industries

Paul Kenner Executive VP SSK Insurance

Troy Muljat Owner, NVNTD Inc. Managing Broker Muljat Group

Bob Pritchett President & CEO Faithlife

Brad Rader Vice President/GM Rader Farms

Becky Raney Owner/COO Print & Copy Factory

Jon Sitkin Partner Chmelik Sitkin & Davis P.S.

Not Pictured: Guy Jansen, Director Lynden Transport Inc. 8 | BUSINESSPULSE.COM

WBA, 2423 E. Bakerview Rd, Bellingham, WA 98226 â&#x20AC;˘ 360.746.0418

Leading Off Tony Larson | President, Whatcom Business Alliance The Whatcom Business Alliance is a member organization made up of businesses of every size and shape, from every industry. The WBA enhances the quality of life throughout Whatcom County by promoting a healthy business climate that preserves and creates good jobs.

Pay a little now, or a lot later… your choice R

onald Reagan once described what he thought to be the nine most terrifying words in the English language: “I’m from the government, and I’m here to help.”

Those words resonated strongly in business people with experience in dealing with government mandates and requirements, particularly with those that seem to lack common sense. In business today, if we are not paying attention and engaging in politics and issues that impact business and community, we will find ourselves more and more challenged to survive, much less thrive. Local farmers feel that now. Perhaps late to realize it, they face many threats to their industry, and the most immediate comes from the Department of Ecology regarding required discharge permits that loom as a devastating threat. The result of these threats is the organization of Whatcom Family Farmers, an advocacy group organized by local farmers, run by local farmers and representing local farmers. You can read more about them on page 62. The business community tends to come to these issues late. Partly because we think we don’t have the time. We’re too busy growing our business, raising our families, involving ourselves in charitable community activities. Well, I’ve got some news for you. Pay a little now, or a lot later. It is more important than ever for you and I and our businesses to engage. One of the easiest ways of doing this is either by joining the Whatcom Business Alliance, or stepping up your level of membership in the WBA. Our advocacy committee is led by Doug Thomas, CEO of Bellingham Cold Storage and we’re joined by a number of local business owners. The WBA pays attention to the issues for you, engages members to share issues with us, and work we work hard to engage other business people to address those issues. 10 | BUSINESSPULSE.COM

There is strength in numbers. Please join us. Let me give you just two examples of issues I think you ought to be aware of: It’s election season. Local ballots will begin arriving Oct. 15. Election Day is Nov. 3. The election ballot this year will likely be confusing to many voters, but very important. Confusing, partly because of the shear volume of things to vote for. Important, because in addition to the usual array of candidates and local issues, two state initiatives, four advisory votes, and the county jail facilities sales and use tax vote, there are 10 Whatcom County Charter amendments.

“No on 9” favors due process, while “Yes on 9” favors processed misdirection, confusion, and the worst kind of politics. Eight were brought forward by the duly-elected Charter Review Commission, and two were brought forward in an unprecedented political move by a community activists group, ReSources, via the Whatcom County Council. As we describe in an article in this issue (see page 70), voter confusion was part of the plan from earlyon by a group of well-organized community activists working in conjunction with at least one member of the Charter Review Commission and one on the Whatcom County Council. Their efforts resulted in Proposition 9 and 10 on this year’s ballot, while Prop 9 is what they touted as their “victory.” It is a plan that failed 4-11 in a bipartisan vote of the Charter Review Commission, and it calls for a wholesale change in the way County Council members are elected. If passed, it would create five districts and two at-large positions to replace our current three district and one at-large system.

Read the article inside, and if you’re like me, you’ll agree that “No on 9” favors due process, while “Yes on 9” favors processed misdirection, confusion, and the worst kind of politics. The WBA has purposefully stayed away from political endorsements. Instead, we want to make sure the our membership and the county as a whole are well-informed regarding issues that impact our businesses and our community while there is still time to engage in the process. Another issue of particular note is a proposal for mandatory employer sick and safe leave being promoted by a group called Healthy Bellingham and introduced by Bellingham City Council member Roxanne Murphy. The movement is a national movement promoted and funded by labor unions, the Service Employees International Union (SEIU) in particular. It’s passed already in cities like Washington D.C., New York City, Newark, Los Angeles, San Francisco, Seattle, Tacoma, and is currently being reviewed in Spokane. In Washington, the Attorney General has filed a lawsuit against SEIU for illegal use of funds to promote its agenda. In every city where the sick and safe leave ordinance has passed, the $15 minimum wage has followed. In Seattle, the business community was disengaged in the process. Not even part of the dialogue. In Bellingham, the WBA has organized meetings with 50-plus business owners. We’ve reviewed the ordinance line-by-line and discussed the implications. We are working on research to better understand the full scope of the problem. We’ve reached out and met with City Council members and Mayor Kelli Linville to make sure they know we want to be fully involved in the process. We hosted an event for some council members so they could hear from business owners and get a perspective they probably don’t hear

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much of. Several of us also went to a Healthy Bellingham event to hear what they were saying and to provide input. If you own or operate a business and do nothing to engage in the issues, you have no standing to complain. If the only thing stopping you is your time, let the WBA make it easy for you. Give me a call at 360.746.0411, and let me welcome you aboard, or share how you can join our growing leadership network.

Speaking of leadership network: I invite you to come with us to our expanded Northwest Business & Cross-Border Expo and Conference on Wednesday, Oct. 28, at the Event Center and Theater at Silver Reef. We’ll be in the ballroom and the auditorium. The day concludes with a WBA President’s Club reception at 5 p.m. I hope we see you there. Enjoy the issue! Tony Larson WHATCOMBUSINESSALLIANCE.COM | 11

CROSS-BORDER COMMERCE

Thehidden backbone of

Whatcom County economy: How B.C. investment continues to transform our community By Sherri Huleatt

12 | BUSINESSPULSE.COM

In his role as Economic Development Specialist at the Port of Bellingham, John Michener spends most of his days commuting back-and-forth to Lower B.C. in developing relationships with Canadian businesses. (Photo by Mike McKenzie)

While most local residents see only retail impacts from Canadian shoppers, the lesser-known economic benefits reaped from our neighbors to the north are the most significant.

hatcom County is a mostly-rural region of about 208,000 people. But just a hop, skip, and jump away (or 35 miles, to be exact) sits Greater Vancouver—one of the largest (pop. 2.4 million), most expensive metropolitan areas in the North America. And while it’s easy to grumble about the long lines at Costco and the terrible parking at Bellis Fair Mall, the economic impact of British Columbia is one of those rare topics that supersedes political and demographic lines. Anyone who has done even the slightest bit of research into B.C.’s economic impact knows that living so close to the Lower Mainland (pop. 2.5 million) is undeniably positive for Whatcom County. Of the $650 billion in goods exchanged every year between Canada and the U.S., a whopping $26.6 billion come through Whatcom County alone. Likewise, 38 percent of all goods exchanged

between Washington and Canada, our most important trade partner, go through our quaint little region. To put this in perspective, the next most-prosperous border cities to the east are Detroit, Mich., and Buffalo, N.Y. – cities with massive populations, located thousands of miles away. Some of the most successful local businesses originated in Canada and employ thousands of local workers: Nature’s Path, Ryzex, Lynden Door, Selco, and Alpha Technologies all started in the Lower Mainland, then moved to Whatcom County to take advantage of the American market. “There’s no question that B.C. has a significant impact on our local economy,” said Don Osterloh, a vice-president and the chief financial officer of Grizzly Industrial Inc. in Bellingham, one of the Top 100 privately-owned businesses in the county. “Many businesses would not exist in this area without the volume coming from across the border.” With Canada’s population sitting at about 35 million people and the U.S. population at 319 million – the American market is about nine

“Many businesses would not exist in this area without the volume coming from across the border.” – Don Osterloh, VP and CFO of Grizzly Industrial, Inc.

WHATCOMBUSINESSALLIANCE.COM | 13

CROSS-BORDER COMMERCE

Rud Browne, a Whatcom County Councilman and former owner of Ryzex, has made the stimulation of Canadian investment in Whatcom County a personal priority. To help ignite a public dialogue, he’s inviting anyone who’d like to discuss the topic to come speak with him. (Photo by Sherri Huleatt)

times larger than the Canadian market. Five ports of entry (Bellingham, Sumas, Lynden, Point Roberts, and Blaine), along with the convenient location between Vancouver and Seattle, make Whatcom County the perfect place for Canadians to grow businesses. “Whatcom County is uniquely positioned to land investments from British Columbia,” said John Michener, an economic development specialist for the Port of Bellingham who spends much of his day building relationships with Canadian business owners. “Historically, the companies that locate here are established firms that create good paying jobs for local residents, increase supply chain opportunities, and bring long-term investments to the County.” It’s not just the massive consumer audience that brings Canadians here—B.C. business owners also can take advantage of lower real estate prices, avoid border crossings and brokerage fees, and save on taxes and labor costs, since Canadian unions often demand higher wages. 14 | BUSINESSPULSE.COM

“In all my years of business, what I’ve seen is that when Canadian companies come to the U.S., the U.S. branch is always more successful,” Kathy Varner said. She’s a CPA and partner with Varner

“Whatcom County is a stunning gateway opportunity for Canadian companies to experiment opening their business in the U.S.” – Rud Browne, Whatcom County Council Member

Sytsma Herndon (VSH), and a Bellingham Angel Investor who has worked with Canadian businesses for more than 30 years. Mike Kent, a Windermere real estate agent in Blaine, seconded that notion: “I’ve never talked to

a business that moved here from Canada and regretted it or pulled back. They’ve either stayed here or expanded.” Rud Browne, a Whatcom County Council member and founder of Ryzex, represents the classic B.C.-to-Bellingham success story. In 1994, Browne moved Ryzex from the Lower Mainland to Whatcom County with the hopes of growing his business. When he sold his company in 2011, Ryzex had grown from $5 million in annual sales to $75 million, and employed about 360 workers. His success—and the success he’s seen from other Canadianowned businesses who have moved here—has made the stimulation of Canadian investment a huge priority for him. “What we have in Whatcom County is exceedingly rare,” Browne said. “Only one or two cities in the U.S. compare to what we offer, and they’re much larger than us. Whatcom County is a stunning gateway opportunity for Canadian companies to experiment by opening their business in the U.S. “A manager can drive across the border in the morning, work with his U.S. employees, and then go home and have dinner with his kids at night.”

POTENTIAL OBSTACLES With so much success, what’s keeping more Canadian businesses from investing in Whatcom County? Beyond some bordercrossing horror stories, the biggest obstacle is securing a line of credit to open up shop. Regardless of how stellar someone’s credit is in Canada, when they go to a U.S. bank looking for a loan their credit and assets are essentially null. Likewise, when an American resident seeks out a loan in Canada, it’s incredibly difficult to convince the bank of assets counting for anything. Tom Strohhacker, a B.C. resident

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CROSS-BORDER COMMERCE and owner of North West Book—a book binding company—moved 80 percent of his operation from Surrey to Bellingham in January 2014. He experienced an incredibly difficult time securing a loan. “I have excellent credit,” said Strohhacker. “If I wanted to take out a $1 million loan in Canada, it would be simple. But when I crossed the border, I had zero credit. Even getting a credit card in the U.S. was incredibly difficult.” Strohhacker said he was in the eleventh hour of finalizing his U.S. loan when the bank turned him down. Having few options left, he reached out to the owner of North West Book’s new facility and he agreed to finance Strohhacker. It took 3½ years for Strohhacker to complete the purchase and move his facility to Marine Drive in Bellingham. Since then, he has seen 20 percent growth: He brought in nearly $400,000 in 2014, and can see himself doubling that number

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Tom Strohhacker’s father moved from Germany and opened North West Book in B.C. in 1960. In January 2014, Strohhacker moved 80 percent of his operations to Marine Drive in Bellingham, and since has seen 20 percent growth. (Photo by Sherri Huleatt)

over the next few years. Even if a Canadian goes to a B.C. bank, there’s a huge reluctance to loan money for an American investment. For one, it’s removing an opportunity to invest in their

homeland, and if anything happens to the American branch the B.C. bank has very little legal hold over what happens to the assets. If the business’s branch forecloses, the bank could lose that investment.

In addition to securing a line of credit, B.C. business owners seeking to move to Whatcom County need to have a strong team on their side. To move here, they need an immigration lawyer to help secure the appropriate visas for their business, a broker to handle crossborder transactions, and an accountant to help them wade through tax complexities and determine their business structure. To encourage more investment and make the moving process simpler, Councilman Browne would like to see a small economic development group—made up of local business leaders—set up an office in the Lower Mainland to help engage and coach potential investors. “Canadians are the most likely to create fresh investment in the community,” Browne said. “And if the community wants more investment and jobs, we have to think like a business. If I want to sell something, I have to get in front of my prospective customers. If we invested in doing that [in Canada], we could have a tremendous impact on the community.” Browne has opened up the conversation to the community, and he is encouraging anyone with questions or ideas about stimulating Canadian investment in Whatcom County to talk with him.

couldn’t even consider buying a building in B.C.,” Strohhacker said. “For a smaller facility than I have now, with no additional acreage, it would cost me $3.5 to $4 million.” In 1999, Strohhacker was paying $8,700 a month for his 12,000 square-foot facility in Surrey; by 2013, that number had skyrocketed almost 50 percent to $13,400 a month. Much like Strohhacker’s company, most of the businesses that

have moved to Whatcom County are manufacturers, not service industries. The cost of purchasing a large facility in Whatcom County is considerably lower than in B.C.; raw materials are also less expensive and easier to attain. For example, commodity items, like glue, are considerably more expensive in B.C. “A bulk purchase of glue would have cost more than $11,500 with a four-week wait time in B.C.,” Strohhacker said.

WHY WHATCOM COUNTY? Vancouver has some of the most expensive real estate in the world. The average price of a home in Vancouver is $1.27 million, whereas Whatcom County homes average about $280,000. The costly real-estate prices make it difficult for Canadian business owners to expand their facilities and meet the increasing cost-of-living demands from employees. Strohhacker, for example, bought his five-acre, 15,000 square-foot facility in Bellingham for $950,000, giving him a sizeable facility and plenty of room to expand. “I

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CROSS-BORDER COMMERCE “In Washington, I got it for $8,700 with a two-week turnaround.” In order to get the supplies they need, some Canadian manufacturers have to purchase raw materials from the U.S., which piles on additional shipping fees, duties, and brokerage fees. Once the product has been manufactured, they have to pay those fees again to sell the product in the U.S. By opening up a branch here, they can avoid a considerable amount of those crossborder costs.

REAL ESTATE INVESTMENT tapering In addition to Canadian businesses moving their operations to Whatcom County, there’s also been a tremendous influx of Asian investors from B.C. buying property in Whatcom County. In the last three years, Mike Kent sold more than 1,000 residential acres to Asian investors from Richmond. “They see U.S. real estate as being on sale,” Kent said.

Despite this huge increase of investment, much of this property remains untouched. “These investors are very methodical and patient,” Kent said. “We tend to invest in terms of months and years; they invest in terms of decades and generations.”

“Whatcom County is uniquely positioned to land investments from British Columbia.” – John Michener, Port of Bellingham economic development specialist

There’s been some talk that these investors will use this property to create small ethnic communities, Varner indicated.

Julie and Steve Sanders own and operate Sanders Brokerage Services in Blaine (est. 2002). Steve, the firm’s president as a Licensed U.S. Customs House Broker, has more than 40 years’ experience in the field. Julie comes from banking and corporate retail industries and manages the financial side as company vice-president. (Photo courtesy of Sanders Brokerage) 18 | BUSINESSPULSE.COM

“Many of the investors I’ve worked with have expressed interest in creating Chinese communities down here, and opening Chinese educational facilities,” Varner said. “Many of them want to put their investment in something real and safe, like the U.S., and they want to be close to their investment, which is why Whatcom County is so attractive.” The loonie’s fluctuating value has had varying impacts across industries. With the Canadian dollar hitting a five-year-low—the exchange rate was $0.76 at summer’s end—investment is slowing down. According to Kent, in the last 90 days, 10 percent of Whatcom County residential purchases have been by Canadians; a year ago, it was 20 percent. “Three years ago, 80 percent of my purchasers were Canadian, now it’s 25 percent,” Kent said. “When the stock market plunged in 2008, almost every local broker lost 30 percent of their business in just a matter of weeks,” said Steve Sanders, co-owner with his wife Julie of Sanders Brokerage in Blaine. “It took 3-to-5 years for us to get that business back.” About half of the Bellingham Airport’s passengers come down from Canada. This increased interest from the north is a major reason why the airport recently underwent a $38 million renovation. Unfortunately, with the loonie’s decreasing value, the airport saw a 10 percent dip in traffic in 2014, and could see more than twice that amount for 2015. Rob Fix, Executive Director at the Port of Bellingham, said he isn’t too concerned, though: “We’ll just create new routes that will encourage new customers to come to the airport.”

CANADIAN CUSTOMERS DRIVE BUSINESS On top of creating new jobs and investing in real estate—the Lower Mainland, with its 2.6 million resi-

Whatcom County by the Numbers: Population: 208,000 Lower Mainland’s population: 2.6 million Number of Ports of Entry (POE): Five – Bellingham, Blaine, Lynden, Point Roberts, Sumas Annual Whatcom County imports from Canada: $5.3 billion Annual Whatcom County exports to Canada: $4.4 billion Top 3 export transportation modes: 68% truck, 12% vessel, 4.4% air Top 3 import transportation modes: 46.7% pipeline, 32.1% truck, and 9.6% rail dents, also offers a massive pool of customers for local businesses. Rick Anderson, president and CEO of Anderson Paper and Packaging headquartered in Ferndale, another Top 100 Private Company, said his company sends two, sometimes three truckload shipments over the border every day. During 2014 Anderson Paper made about $1.5 million from Canadian customers, and while

this is only about 5 percent of total annual revenue, working with Canadians has helped them more than double company sales over the last four years. According to Anderson, the border wait times are hardly ever a problem. “In fact,” he said, “our drivers have it down to a science.” All of his shipment invoices get sent to the border by his broker; when the truck driver arrives at the border, the invoice and all of

the driver’s information is already logged away in the computer – so entry is simple. Most of Anderson Paper’s trucks come back with Canadian goods They brought back about $100,000 in Canadian imports in 2014, and that’s on pace to increase this year. Anderson said he’s also looking to drastically expand his business in the Lower Mainland, and recently hired a full-time Canadian sales representative to help expand the company. North Whatcom County businesses, in particular, have significantly benefited from Canadian customers. “In Blaine, everybody always says tourism is our biggest industry,” Sanders said. “But they never stop to consider the brokerage, mail, freight, and warehouses here that have grown because of Canadians… it flies under the radar. “There are lots of warehouses in Blaine that didn’t exist 7-to-10 years

WHATCOMBUSINESSALLIANCE.COM | 19

CROSS-BORDER COMMERCE ago, but now they’re big companies. Essentially, if you build it, they will come.” Mike Kent, who serves on Blaine’s Economic Development Advisory Committee, said that body is considering a transformation of Blaine’s old airport property into a medical facility for cashpaying Canadians. This would allow Canadians to bypass long wait times in B.C., and have medical procedures done when they need

“I’ve never talked to a business that moved here from Canada and regretted it or pulled back—they’ve either stayed here or expanded.” – Mike Kent, Windermere real estate agent

Rick Anderson (left), founder and president at Anderson Paper & Packaging, and Jeff Shaw, manager of the sales team, deal with truckloads of goods going into and coming out of Canada. Sometimes as many as three fully-loaded Anderson trucks carry merchandise into B.C. Anderson recently added a full-time Canadian sales rep. (Busines Pulse photo) 20 | BUSINESSPULSE.COM

them. According to Kent, some of the wait times have become so bad that the Canadian medical system actually has paid for B.C. residents to get medical procedures in the U.S. This new facility could be another huge source of revenue for the city. All in all, there’s no question that being located so close to the Lower Mainland has been a massive economic boon for Whatcom County. “We’re very fortunate to be so close to the border,” Varner said. “We wouldn’t be the community we are today without their investment. We wouldn’t have the infrastructure or living-wage jobs, without those investors who saw Whatcom County as a good opportunity.”

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WOMEN IN BUSINESS: PROFESSIONAL WOMAN OF THE YEAR FINALISTS

Women in business bask in the spotlight during October

Ballots so tight that Whatcom Women add an extra finalist for annual award By Business Pulse Staff Photos donated by Dawn Matthes Photography

ome of the most accomplished women in Whatcom County receive high recognition Oct. 27 in Bellingham at the 33rd-annual Professional Woman of the Year Banquet/Auction, presented by Whatcom Women in Business.

Narrowing the finalists this year for the award, the WWiB selection committee added a 7th. Nobody learns the winner until it is announced at the event. As the support publication for the Whatcom Business Alliance, we were pleased to learn that a member of the WBA’s Board of Directors, Becky Raney, was nominated and selected as a finalist. She serves as chair of the board’s Communications & Technology subcommittee, and she and her husband Larry coincidentally are featured in this edition as a business success story with their company, The Print & Copy Factory (p. 26). 22 | BUSINESSPULSE.COM

Other finalists range across a broad spectrum of professions, including health and fitness (both physical, and financial), elementary school education, humanitarian assistance for the homeless, another small business in the wedding industry, and conservation and politics.

WWiB, founded in 1978, is one of the oldest and most encompassing network/referral sources for business women. WWiB’s mission is to promote a positive image of professional women in business The WWiB event at the Four Points by Sheraton Bellingham Hotel & Conference Center (formerly Lakeway Inn) begins with a silent auction and social hour at

5:30 p.m., followed by dinner at 7 p.m. Tickets cost $65 and are available at www.wwib.org. Proceeds support WWiB’s scholarship and charity funds. WWiB, founded in 1978, is one of the oldest and most encompassing network/referral sources for business women. WWiB’s mission is to promote a positive image of professional women in business while developing leadership skills, strength through mutual support, mentoring and opportunities for business and personal growth. Business Pulse for many years has highlighted the WWiB finalists, as well as published features about successful women in its fall issue. This edition features our Entrepreneur’s Corner about five women who operate separate cheese shops, and an article about a unique free-market philanthropic effort tied into the mission of a women’s clothing shop, Statement Apparel. The seven finalists for the WWiB Professional Woman of the Year Award:

Colorado while working with athletes who would go on to become Olympians.

2114 Broadway, currently serves approximately 70 students in preschool through sixth-grade classes with 10 staff members.

Carol Frazey, president and founder, Fit School, Inc. Frazeyâ&#x20AC;&#x2122;s mission at her Bellingham business is to educate and motivate individuals to make small changes each day to healthier lives â&#x20AC;&#x201C; and to have fun doing it. She earned a master of science degree in kinesiology from the University of

Kim Feerer, founder and director, Cedar Tree Montessori School

Siobhan Murphy, CPA, Thrive Business Group

Feerer also serves as lower elementary teacher for the Bellingham nonprofit. The school, located at

Murphy is devoted to helping companies and individuals experience financial success in the busi-

WHATCOMBUSINESSALLIANCE.COM | 23

WOMEN IN BUSINESS: PROFESSIONAL WOMAN OF THE YEAR FINALISTS ness world, and in their personal lives. She and her Bellinghambased team provide professional services including accounting, bookkeeping, tax planning and preparation, business consulting, and financial management.

grooms and others for weddings and special occasions. Reed also is organizer for the past 22 years of the Bridal Inspirations Wedding Expo, which showcases local vendors and presents Northwest Washington’s largest fashion show.

Becky Raney, COO and founder, Print & Copy Factory

Emily O’Connor, executive director, Lydia Place O’Connor oversees operations and fundraising for a Bellingham nonprofit serving homeless families since 1989. Lydia Place provides a six-month transitional housing program, permanent supportive housing placements, intensive case management, and more. O’Connor has dedicated herself to making a difference on the issues of homelessness, domestic violence, sexual assault, child abuse, and poverty.

Raney and her husband Larry launched Print & Copy Factory in Bellingham in 1992 and led its evolution from just printing and copying to a provider of website design and other marketing services. Raney, chair of the Communications and Technology Subcommittee on the Whatcom Business Alliance board of directors, also is active in many community organizations.

Pam Reed, owner, Alicia’s Bridal and The Formal House Reed’s Bellingham businesses have outfitted thousands of brides, 24 | BUSINESSPULSE.COM

Pinky Vargas, Energy Efficiency Outreach Manager for Puget Sound Energy, and member of the Bellingham City Council Vargas works in the areas of conservation, renewable resources, and energy policy for PSE. She was elected to the Bellingham City Council in 2013, where she focuses on economic vitality and quality of life.

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WOMEN IN BUSINESS: COVER STORY – PROFILE PRINT & COPY FACTORY

LARRY AND BECKY RANEY started their business 23 years ago with “no debt, no money, and a loan on our building,” she said. They have serviced more than 5,800 customer accounts in a tumultuous ride from tiny to 72 employees to a restructured business model, demonstrating stick-to-it perseverance and creative adaptability to the marketplace. (Photo by Alejandra Aguirre) 26 | BUSINESSPULSE.COM

A tale of resilience in small business success The Raneys went from zero to 72 quickly, leveled out, plowed through recession, and adjusted on the fly with every new technology at Print & Copy Factory Article by Mike McKenzie Photos by Alejandra Aguirre

ecky and Larry Raney have no dollar bill framed and hanging on a wall from their first customer at Print & Copy Factory, circa 1992.

“They didn’t pay us,” Becky Raney said with a laugh in recalling their first transaction, more than 5,400 customer accounts later. “I remember how excited I was when they walked in the front door and needed 10,000 flyers for their craft store that had just opened about the same time we did in April that year. A $500 cash job. But….” The next to contract the Raneys’ services joined a large fold of loyal repeat business – Swann’s Ice Cream, still active these 23 years later, and Bakerview Nursery, which was until it closed earlier this year. “Our mission all along has been to make life better for others,” Becky said. “We want to create the possibility of sparkle for everybody.” Sparkle defines Becky Raney’s disposition. (It’s her user name on Google Plus.) High energy defines her work ethic. Those, and multiple other qualities earned her a spot among the seven finalists for 2015 Professional Woman of the Year, which the Whatcom Women in Business will select Oct. 27. That award and this special section in Business Pulse celebrate National Women in Small Business Month. Becky Raney serves as a strong voice for small business on the board of directors of the Whatcom Business Alliance. Beyond her standout individual traits, achievements in business, and generous contributions to the community and causes, Print & Copy Factory stands as a remarkable small-business success profile with lessons to draw from. It grew from two to 72 employees quickly, flattened out by design, and nearly bottomed out during the 2008 economic turndown. It has demonstrated perseverance and resilience, a prime example of a specialty WHATCOMBUSINESSALLIANCE.COM | 27

WOMEN IN BUSINESS: COVER STORY – PROFILE PRINT & COPY FACTORY

THE RANEYS say they and their staff have fun, which is apparent here with (l. to r.) Alexa, Krystal, Bryan, Bethnie, Phillip, Larry Raney, and Becky Raney. “We concentrate on keeping skilled staff,” Becky said. “I love creating synergy (with them).” (Photo by Alejandra Aguirre)

industry reinventing itself with the advent of the Internet and a dynamically-changing glut of technology. Not just in printing and copier needs, but all manner of marketing collateral. “And it isn’t all about me” Becky said. “We wouldn’t be here without Larry.” They met while working for Kinko’s in the corporate headquarters location in California during the late ‘80s. Moving back to Bellingham where Becky grew up (Mt. Baker Foothills), they bought a house in an industrial neighborhood that had hardly any tenants in October 1991, and opened their business in it – where it’s remained, with one large building expansion – during April 1992. They wrote each other’s job description, based on what they each knew they loved doing most. Larry would handle business outside the building. Spell that s-a-l-es. Becky became Ms. Run Things internally. “Day-to-day, inside functionality, running the roost,” she said. “We don’t have titles. It’s a default position. I manage business, 28 | BUSINESSPULSE.COM

the books, hiring, production. “I couldn’t have done it without Larry. We balance each other’s strengths. He keeps me grounded.” Becky’s path to Print & Copy Factory began with her love of art and design coming out of Mt. Baker High School (’84). “My mother said I should become a graphic designer,” she said. “I’d never heard of it.” She had learned an entrepreneurial spirit and work ethic from her parents. Her mother was postmaster at Maple Falls for 38 years, a fourth generation in the neighborhood, and Becky’s father was third generation and was a timber cruiser 25 years for the U.S. Forestry service. “He fought forest fires with his every pore,” Becky said. The family business endeavors stretched far beyond their careers, though. They ran a grocery store, including a mini-mall, and 13 rental houses. “Entrepreneur,” Becky said, “ran through my genes.” She went to the Art Institute of Seattle, and while there she worked for Kinko’s. “Sometimes I was there

from 6 a.m. in the morning until 1 a.m. that night. We were the first in Washington state to get computers – Mac SEs. I taught everybody how to run them.” After graduation and a couple

“We learned from exciting, but toofast growth….I had bruises all over my head from banging it against the wall.” – Becky Raney

of other jobs, Kinko’s called her to move to its headquarters model store in Santa Barbara, Calif. During her five years with the company as an assistant manager, and attending college to learn how to run presses, Kinko’s grew from five stores to 70. Becky worked briefly after that

with a print shop and then a promotional products company before leaving California, marrying Larry, and moving home. They had decided to capitalize on their experiences and open for business. Becky sent her father, active in commercial real-estate, a list from a magazine article with criteria for locating a print shop. “He found this house where nothing else was out here,” she said. “He was such a visionary; he said, ‘In five years, everybody will be coming to you.’” A customer came to them who was publishing book after book about the history and value of Ty Beanie Baby collectibles, and with that huge publishing endeavor Print & Copy grew 300 percent in the first nine months. “It exceeded our 5-year projection,” Becky said. Staff burgeoned to 72 working three shifts in their small location, plus several printing presses, and they added 6,000 square feet to the building. “We learned from that exciting,

but too-fast growth,” Becky said. “We didn’t have the experience to fully understand all those levels of managing the business, and how to make the company grow.” After Ty cracked down on copyright infringements and the book project died, the Raneys restructured their business model. They purposefully committed to large projects and busiest accounts (vs. one-time jobs and walk-in customers). They have operated with 7-15 persons ever since, about half of that seasonal part-timers. “We concentrate on keeping skilled staff that we can pay well,” Becky said. “I love creating synergy on our workforce. A business is only as good as its employees.” Along the roller-coaster ride of industry ups and downs – web design, social media, on-line printing, electronic marketing rather than print – the Raneys pledged to ride the waves of change. Becky kept adding to her dossier by learning, teaching, and selling all the

contemporary marketing methods, whatever runs hot in demand at the time. “You never stop learning,” she said. “You listen to the customer and adapt to the market changes. For instance, printing is still our core business, and there’s a trend coming back to printed marketing. Even Google understands (in on-line searches) that people want something of substance to hold and feel. “In terms of on-line printing, you can’t compete with free. You rely on your community to realize how we support them with personal service.” The Raneys learned harsh lessons, along with the entire world of business and commerce, during the 2008 turndown. “It ruined my health,” she said, referring to months of sleepless nights and food allergies. Anxiety ran high, and so did the cost of emotional and mental wellness. Survival during the adversity, she

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WOMEN IN BUSINESS: COVER STORY – PROFILE PRINT & COPY FACTORY

BECKY AND LARRY RANEY, co-owners: “We wrote each other’s job description based on what we knew we loved to do….We balance each other’s strengths.”

said, came down to self-assessment. “I wondered why I had bruises all over my head. It was from banging my head against the wall,” she said. “Finally, I accepted that I wasn’t a failure, I wasn’t alone (in business going sour), and that work does not define who I am. It’s too tall an order to please everybody and be perfect.” Now she takes total joy from

helping others avoid or work through their situations, to solve their marketing and business needs. “My joy comes from creating sparkle in their life, and therefore in my life, too,” Becky said. “I like dealing with the psychoness of being a business owner. Being a person of knowledge. I’ve learned that when the wind blows, the tree has to bend.” She likens life

to an apple tree “feeding people, and every growing season finding out what gifts the tree has.” Going forward, Print & Copy Factory will continue its steady output of marketing collateral, designing logos, consulting on web design and social media, integrating mail pieces, and cross-marketing with all of it. Millennials, the Raneys have determined, have come full circle back to “finding the power of print….the economy forced it,” Becky said. The company’s business will adapt to whatever the customers define. “I learned from my parents the love of community and of helping others, building trust relationships,” she said. “You can never think you have ‘arrived.’ The dynamics keep changing, and we’ll just keep looking for the next level of creativity, the next chapter in making a difference.”

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women in business: Philanthropy

“I wanted my business model to 'pay it forward' somehow…I decided to give every customer that ability.” – Dee Dee Bell, proprietor, Statement Apparel

Wearing it forward Statement Apparel in Barkley Village ties retail directly to charitable causes Article and Photo by Mike McKenzie 32 | BUSINESSPULSE.COM

hen Dee Dee Bell decided this year to go back into women’s clothing retail, after leaving it for several years of motherhood, she had a specific mission in mind.

“I decided to give every customer the ability to ‘wear it forward’,” she said, “and in doing so they can support Whatcom Hospice Foundation with every purchase they make at Statement.” There’s more. A line of jeans called French Dressing supports breast cancer research. Each style of jeans is named for a famous breast cancer survivor, such as Peggy Fleming, Suzanne Somers, Olivia NewtonJohn, and others, and a portion of each purchase of a pair goes toward finding a cure. The creator of a fashion line called Lur provides fair wage

jobs to poverty-stricken women in Guatemala. With every order placed, Lur provides a full week of vocational training to women in one of the poorest, most remote regions in the world. “It provides resources for these women to receive the training needed to support their families and become self-sufficient,” Dee Dee said. “When customers buy Lur, they know they are supporting a great cause.” She bought (and renamed) Statement Apparel this year from long-time Bellingham businesswoman Susan Sandel. Bell has extensive retail experience. She owned and operated a women’s clothing store in Denver during the late ‘80s – early ‘90s before moving to Bellingham and becoming a stayat-home mother of two. Sandell’s For Her was one of the original tenants to move into Barkley Village during 1997, moving from Meridian Village. “That’s where I first met Susan,” Bell said,

“and I became a regular customer at Barkley.” The opportunity to purchase a strong local brand reignited her entrepreneurial spirit. “Now I am back at it again, and I wanted my business model to 'pay it forward' somehow,” she said. “I thought about how Hospice has cared for so many families and touched so many lives.” Whatcom Hospice describes its mission as “providing life-affirming care for patients and their families facing the crisis of life-limiting illness.” Statement Apparel is name sponsor of this year’s Whatcom Hospice Foundation Gala Auction fundraiser that takes place Nov. 14 in the Event Center at Silver Reef in Ferndale. “Light the Night at the Races” is the theme of this 15th annual gala, centering on the Kentucky Derby. Dee Dee Bell knows a good place to buy a dress for the event….

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Women in business: ENTREPRENEUR CORNER

Say cheese, pleaseâ&#x20AC;Ś. Several women in the region will serve you with different twists on a popular theme CHEESE WHIZZES: (l. to r.) Cheri Gustafson, Lindsay Slevin, Rhonda Gothberg, and Ruth Appel embody the women of cheese in Whatcom and Skagit County. These innovative women have found success in a niche market that has suddenly taken off locally. 34 | BUSINESSPULSE.COM

Article and Photos by Katie Scott

ho doesn’t love cheese? From smoked Gouda to ‘stinky’ blue, artisanal cheese has found strong flavor and favor in our region. During National Women's Small Business Month, a group of local women gathered at Business Pulse and shared their stories of having forged their way in farmstead ventures.

What they all have in common: a love for all things cheese, and a passion to pursue new endeavors. And they have managed to focus on a variety of specialty areas, resulting in very little direct competition. Three are in Ferndale, one in Bellingham, and one in Bow in the next county over. Twin Sisters Creamery is Ferndale’s newest cheese shop, opening this year. Lindsay Slevin, who said she was inspired and supported by her husband and twin daughters, has embarked on the journey of crafting a specialty blue cheese – Whatcom Blue. “We have a focus on community, education, and local agriculture,” Slevin said. Now an ACS (American Cheese Society) Certified Cheese Professional, she offers classes at the shop on Portal Way. “We are excited to share our experience of building a creamery and our passion for how quality cheese is made,” she said. Her husband Jeff started Lindsay on the path when he gave her a book, “The Farmstead Creamery Advisory,” for Christmas 2012. They applied for a business license a month later. Lindsay gives credit to Willapa Hills Cheeses in Chehalis for helping her get started, opening their facility to her for many visits as she learned the craft using raw milk and first created Whatcom Blue. As a counter to that, Lindsay also

has developed an original Whatcom White.

••• Another family cheese business in Ferndale has been on the scene 28 years. The Appel family farm, featuring 500 cows, goes back even further; it has produced a variety of cow-milk cheeses for the community through three generations, beginning in 1967. The dairy farm opened commercially in 1987. Ruth Appel married into the business in 1989 and 1 ½ years ago opened The Cheese Shop at Appel Farms. “It is my baby,” Ruth said, putting her marketing degree from Western Washington University and 20 years in business

A unique feature: Gothberg Farms sells its cheeses out of a selfservice refrigerator and accepts payment in what owner Ronda Gothberg calls the “Honor Box” – mostly cash. management and customer service into the storefront. Her husband, John, is a professional cheesemaker. Ruth said she believes there is a “lack of understanding of cheese in Whatcom County.” As business manager and marketing director of The Cheese Shop at Appel Farms, her focus is on helping inform and educate the community about the quality of cheese handcrafted by John. Their niece, Elizabeth Hayes, also works in the shop; her parents run the dairy farm.

••• Every new venture holds the element of uncertainty. Cheri Gustafson’s experience was no exception. When she made the commitment to start a sheep

micro-dairy in 2012, Ring of Trees Farm was born on Larson Road in Bellingham, and she began playing with the milk for the first time. “Sheep’s milk fascinated me,” Gustafson said. “The texture, color, and mild taste are wonderful.” Fresh ewe’s milk not only is versatile in the making of fine cheeses, but it also consists of double the solids and double the proteins considered beneficial for battling diseases such as autism. Ring of Trees Farm is Whatcom Counties first and only licensed sheep dairy. Cheri and her husband Fred are milking 25 East Friesian sheep and expect to double come January 2016.

••• A neighboring county farmstead known as Gothberg Farms has flourished since 2001 when Ronda Gothberg decided to switch gears and purchased 40 acres of fertile farm lands in Skagit County. After decades as a registered nurse and real estate broker she started a herd of LaMancha goats, and she got a Grade-A goat dairy license in 2004. “To this day I feel amazement and gratitude to be able to do all of this,” she said. As an entrepreneur starting her third career track, Ronda concentrated her attention on capturing the essence of the valley through the goat’s milk, claiming it’s the secret weapon in the taste of Gothberg Farm cheese. Gothberg Farm produces more than 30 varieties of cheese, including chevre and feta, some seasonals, and some original-recipe. A unique feature: They sell out of a self-service refrigerator and accept payment in what she calls the “Honor Box” – mostly cash.

••• Yet a fifth woman involved in the cheese business, Joyce Snook, could not make it to the interview and photo session. She manages the Pleasant Valley Dairy cheese business in rural Ferndale on a cow WHATCOMBUSINESSALLIANCE.COM | 35

Women in business: ENTREPRENEUR CORNER farm started by her father in 1963. The family began making cheese about a decade later in their home kitchen, where she learned the craft from her parents, and Joyce’s daughter Mattie now oversees the farm store and tasting room as a third-generation cheesemaker. Pleasant Valley makes several kinds of cheese using raw milk from its large herd, including one specialty cheese called mutschli.

•••

RUTH APPEL arranges cheese blocks in the case at The Cheese Shop at Appel Farms that opened in early 2014. “It is my baby,” she said.

These local business women have embraced their entrepreneurial spirit, and, through farmstead artisanal cheese, have established themselves in a niche market that has proven successful. Their drive, dedication to their craft, and desire to educate make them all leaders among local businesswomen.

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INDUSTRY REPORT: WHATCOM GROCERY SCENE

Food Fight: Whatcom grocers ready for Whole Foods

Store formats develop their niches to compete in crowded market By Susan G. Cole

38 | BUSINESSPULSE.COM

GM JIM ASHBY, seated outside the Community Food Co-op’s new downtown Bellingham bakery/offices/meeting space building: “(We and) Whole Foods Market offer similar products, but the business models could not be any more different.” (Photo by Mike McKenzie)

WHATCOMBUSINESSALLIANCE.COM | 39

INDUSTRY REPORT: WHATCOM GROCERY SCENE STEPHEN TRINKAUS, owner and GM, proudly displays fresh vegetables, a signature product at recently-expanded Terra Organic & Natural Foods – including tenant Truthin Film – in Bellingham’s downtown Public Market Buiding. (Photo by Mike McKenzie)

hole Foods Market, the nation’s leading natural foods store, is scheduled to open in Bellingham next June. Whatcom County grocery retailers say they aren’t worried about the new competition for consumers’ food dollars. In fact, the familiar names have been actively upgrading their offerings to prepare for the food fight to come.

“Heavily processed foods and those with artificial ingredients continue to decline; that is why major food manufacturers are announcing reformulations of their

Whole Foods market arrival: Catalyst for changes here?

big brands to take out artificial ingredients. With packaged goods slowing down and fresh foods showing solid growth, it is natural to invest in upgrades in those areas.” The highly competitive, lowmargin grocery industry is hungry for a bigger piece of the (undoubtedly organic) pie here. To slice into it, the grocery sector has transformed with an abundance of

“Most of the expansion and improvement of area food retailers was in the works before Whole Foods was announced,” said Kevin Weatherill, President/CEO of The Markets. “Most operators are upgrading fresh food programs to maintain the ability to be on trend with where the growth is. 40 | BUSINESSPULSE.COM

“The trend that the industry has its eye on is the continued change in consumers’ dietary preferences.” – Kevin Weatherill

change. To wit, this year: • Both Fred Meyer stores in Bellingham completed significant remodels. • A new Safeway opened in Sunset Square. • Blaine Cost Cutter underwent full-on renovation. • The Community Food Co-op added a bakery/deli in a renovated second building downtown. • Grocery Outlet launched a new store in Ferndale. • Costco received city approval to begin work on a new North Bakerview Drive warehouse. • Haggen jumped into the big leagues with the purchase of 146 stores in five states. • Terra Organic and Natural Foods is finishing up its expansion at the Bellingham Public Market. Employee-owned WinCo Foods impacted the landscape when it opened in Bellingham two years ago, and worldwide grocery power Walmart and a competitive Target continue to make inexpensive trendy in their food aisles. Whatcom County, with a population estimated at about 208,000 and about 94,000 households, has a dollar-volume market of $518 million annually. Bert Hambleton, principal of Hambleton Resources Inc. in Issaquah said in a telephone interview that those households average spending over $5,500 a year on groceries. That’s big money, and Whatcom grocers want more on their plates. Hambleton, who specializes in developing brand strategy for retail food stores across the U.S., and has worked extensively in Whatcom County for several years, said popu-

lation gain is the top attraction for new food stores. “The ratio of square footage of retail food store space per capita is quite constant over time, so with more people there is an opportunity to profitably operate with more square footage,” Hambleton said. “The second most important attraction is the changing pattern of consumer demand that increases interest in some formats and decreases interest in others. Nationwide, a huge shift has been driven by consumer demand, moving towards more well-defined food store formats and away from more general formats (think conventional chain stores),” he said. With those two factors, Whatcom County is ripe for new and different grocery options.

The Whatcom County market: specialized, or fragmented? If you’re shopping for a specific type of grocery store, Whatcom County has what you want, including a long list of ethnic food specialty stores. The powerhouse, everyday low-price shoppers swarm to WinCo, Grocery Outlet, Walmart, and Target, while natural- and organic- focused customers head to the Community Co-op and Terra. The Markets and Haggen promote fresh and local, while conventional stores like Albertsons, IGA, Safeway, and Fred Meyer (a Kroger brand) take the middle path of something for everyone. More options? There’s Germanowned Trader Joe’s, with its quirky, global-themed products, many of which come from California, and giant Costco, where groceries (especially dairy) locally drive higherprofit sales of non-food products. Retail variety stores like Walmart and Target include more food in their mix using what is known as channel blurring. Hambleton said, “All retail stores look for ways to increase the reach

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Dandelion Organic Delivery delivers the greens Fruits and veggies arrive fresh at your home at the push of a button

By Susan G. Cole

emember when the milkman brought fresh dairy products straight to your home? In Whatcom’s food-focused world, it’s not glass bottles of cold icy milk, but reusable bins stocked with colorful and organic fruits and vegetables that arrive right on your doorstep.

Dandelion Organic Delivery sources fresh organic fruits and vegetables throughout the year directly to subscribers in the greater Bellingham area. Owners Maria Stavrakas’ and Jonny Lane’s homebased family business connects local growers with customers hungry for organic produce. Each week, they regularly serve up to 270 customers. Total overall number of Dandelion customers can climb as high as 550 at different times of the year. “We began in 2007 because we wanted to live in Bellingham, and work for ourselves,” Stavrakas said. “We love food and all things natural, taking care of the environment. We could live our dream.” That dream resulted in a business with a few part-time employees who help pack and deliver the plastic bins loaded with the week’s selection of fruits and vegetables. “We work with 20 different local growers,” Stavrakas said, “and 10 of those pretty intensely. Over the course of the entire year, about 55 percent of our products are farm-direct.” Her big-picture view of the market share is filling a comfortably small niche. “When we started our business, the Co-op or Terra were our primary competitors. Personally, I didn’t want to compete with them,” she said. “But we have a really huge community, and we serve continued on page 43

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INDUSTRY REPORT: WHATCOM GROCERY SCENE (proportion of population that can be attracted) and frequency (number of times shopped).” For example, shoppers who find it convenient to pick up milk at a Rite-Aid or Walgreens on occasion might change their shopping patterns to do so on a regular basis, baited by low pricing. More trips to a store, more dollars spent there. Every customer is in play. Even gas stations sell milk. “There is no doubt that this

wide expansion of the retail grocery channel to include many more players than in the past has cut into the business of the traditional grocery store.” Hambleton said. “Published estimates suggest that conventional chain grocers have seen their market share fall from nearly 90 percent in 1970 to 55 percent today,” he said. Hambleton said that Haggen with 40 percent and Fred Meyer with 20 percent have the big-

gest market share of customers in Whatcom County – Haggen by virtue of its five locations, and Fred Meyer, which also contains clothing and other merchandise, department-store style, by its low price per item driving larger sales volume. According to Jan Gee, president of the Washington State Food Industry, “During the recession, upscale stores and super bargainpriced stores continued to do well. But the stores in the middle-price

Haggen in the news Haggen hogged the headlines this year with its massive purchase of 146 Albertsons and Safeway stores, then got sued by Albertsons for $41.1 million, then closed stores and laid off workers, then counter-sued Albertsons for $1 billion, then filed for Chapter 11 bankruptcy protection, and, finally, sought permission in bankruptcy court to pay $1.25 million to an advisory investment banker to sell the company or most of its assets. Battling customer complaints about high prices, the company (headquartered in Bellingham, but with majority ownership in Florida) widely reduced employee hours, laid off employees, and closed 27 stores. Haggen has secured debtor-in-possession (DIP) financing to run daily operations of the five Whatcom County locations with the ability to procure and pay for products. Most recently, Haggen announced it will sell its new acquisitions.

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a small portion of it. Most of the produce still is being bought at Fred Meyer, Trader Joe’s or Costco.” Having grocers like Whole Foods enter the Whatcom market isn’t necessarily a bad thing, in Stavrakas’ view. “It’s good for organic produce and it offers more opportunities for local farmers, if the store is sourcing more local items,” she said. “Overall, it can increase the produce consumption in Whatcom County. The folks who wouldn’t normally buy those items might develop a liking for high quality produce, hear about us, and sign up.” Dandelion is the only business in the area offering home delivery of fresh organic produce. Dandelion is coming off the summer downturn when, she said, people have other things going on, like visiting farmers markets, harvesting their own gardens, traveling. “Between Christmas and spring, that’s our busiest time. People make resolutions then. They KEVIN WEATHERILL manages 5 brands of The Markets and co-owns DaVinci’s Classic Subs with his wife, Kim. (Staff Photo)

range struggled unless they had limited local competition, just remodeled, or created a unique environment or product line, unlike their competitors.” Shoppers hereabouts have a multitude of choices, but it was far different just a few decades ago. Whatcom County was home to several successful, traditional grocers. Since more differentiated formats have entered the market, the number of independents and conventional stores have steadily declined in sales volume. Whatcom County has become more typical and less remarkable.

Do we care about local, really? Jan Gee thinks “the word ‘local’ needs clearer definition….The interesting trend is that all the consumer market information says they are looking for local products, local businesses, but we are seeing success of national chains that market themselves as local, such as Trader Joe’s and Whole Foods,” she said. “It is so interesting to me how many people are surprised when they learn these are mega chains.” And in the case of Trader Joe’s, not even American. She suggested that locally-owned stores need to beef up their marketing about locally-

“Between Christmas and spring, that’s our busiest time. People make resolutions then. They are ready to eat healthy.” – Maria Stavrakas, co-owner, Dandelion

are ready to eat healthy.” Stavrakas and Lane have set the business up for expansion, building a new shop on Country Lane, and switching to an intuitive website with the ability to easily serve more clients. “It’s a better experience for our customers, and gives them way more control over their bin and their account. The option to customize your own bin really works for folks.” Customers can exchange items in their weekly bin that Dandelion pre-selects based on what’s available from their suppliers. Don’t care for kale? Substitute cauliflower or cucumbers. Each week customers also receive an email selection of recipes using many of the items in their bin. Expand your eating choices with something new or a different way to prepare it, and discover more favorites. It’s all about the produce, and eating seasonally as much as possible. This summer customers ordered bottles of extra virgin olive oil, cold pressed and unfiltered, imported from Stavrakas’ family farm in Tarapsa, Greece, an area known for its oils and the quality of its soil. Stavrakas’s enthusiasm for fresh is shared with a memory of harvesting dandelions with her family: The cleaning, boiling, and freezing the slightly bitter greens, then enjoying them later, heated up and topped with a dollop of olive oil, a slice of lemon, salty feta cheese, and plenty of chewy rustic bread. Like with this old favorite of people in the southern Mediterranean, Dandelion is interested in keeping alive some of the immigrant traditions connected to food. Dandelion plans to continue on a path of zero-waste sustainability and support for the community. “We are about keeping it simple,” Stavrakas said. “We’ve never had great growth expansion needs or desires. We like to maintain our customer base, and provide high quality and great customer service.” With competitive pricing and quality products, Dandelion Organic Delivery just might be the path to get more Whatcom families to eat their veggies. Naturally, of course. WHATCOMBUSINESSALLIANCE.COM | 43

INDUSTRY REPORT: WHATCOM GROCERY SCENE owned and local products. A legislator indicated that the independent grocery industry, which she represents, should introduce a bill to define “local,” and stop the big chains from using “local” when the product origin might be over 100 miles away.

Perspective from three local grocers Jim Ashby, general manager for the Community Food Co-op, agreed that the grocery industry today is “very competitive…the natural channel of the grocery business has been the fastest-growing segment for years now, and every store is geared up to attract that business. “Though the Co-op and Whole Foods Market offer similar products,” he said, “the business models could not be any more different. “As a cooperative business, our profits are capped at 3 percent with

GROCERY BOX SCORES Community Food Co-op Top Exec: Jim Ashby, General Manager Locations: Downtown Bellingham and Cordata Ownership: 19,000 voting members, community-owned Headquarters: Bellingham News: Renovated building across from downtown store as retail and wholesale bakery, classrooms and community meeting space; downtown store parking lot improvements. The Markets Top Exec: Kevin Weatherill, President/CEO Locations: The Market at Birch Bay, Lynden Food Pavilion, Everson Market, Blaine Cost Cutter (plus others outside 44 | BUSINESSPULSE.COM

the focus on offering a community service and building our local economy. As a community-owned grocery store, the Community Food Co-op is rooted in Whatcom County with local dollars staying here. We’ll continue to build relationships with local farmers and our members. We expect to compete very well against Whole Foods.” He added that his primary competition are the conventional stores (Fred Meyer, Safeway, Haggen). Membership in the Co-op grew by 3 percent last year, and now stands at 19,000 voting members. Ashby said that member-owners make up just a fraction of the people who shop there, as everyone is welcome. “What attracts customers,” he said, “is an interest in quality food and honest information. What shopper surveys have shown repeatedly is that Co-op shoppers want to ensure healthy food access

CHARLOTTE HADDEN, who recently moved to the area from Yosemite, Calif., said she enjoys serving customers from the new surroundings of the Community Food Co-op’s bakery/deli, across the street from the grocery’s main downtown store. (Photo by Mike McKenzie)

Whatcom County) Ownership: Hancock Park Associates, Los Angeles, private equity investors Headquarters: Bellingham News: Major renovation at Blaine Cost Cutter; significant expansion of natural and organic choices in all departments, updating checkout stands, shelving, and refrigeration.

Headquarters: Bellingham News: Filed for Chapter 11 bankruptcy and announced plans for massive closings, layoffs; Albertson’s suing Haggen for failing to pay more than $36 million in inventory from its purchase of 146 stores, Haggen counter-suing. Whatcom area stores ‘safe’ under DIP funding.

Haggen Top Exec: John Clougher, CEO/NW Division Locations: 5 local – four in Bellingham – Sehome, Fairhaven, Barkley, Meridian – and Ferndale (146 total) Ownership: Comvest Partners, W. Palm Beach, Fla., private equity investors

and the development of sustainable agriculture in our local region.” Kevin Weatherill oversees The Markets and co-owns small neighborhood grocery/deli DaVinci’s with his wife, Kim. He delves deeply into food industry trends. His stores have steadily sourced local and fresh foods for many years. “The trend that the industry has its eye on is the continued change in consumers’ dietary preferences,” Weatherill said. “It seems to be accelerating towards fresh, natural, low-processed foods. Most food retailers are behind the curve for

Costco Top Exec: Craig Jelinek, President/ CEO Locations: Bellingham (and 470 worldwide) Ownership: publicly-owned and traded Headquarters: Kirkland News: City of Bellingham approved site work for a new 162,000 square-foot Costco and fuel

station on West Bakerview Road, ground broken. (Current location size is 130,000 sq. ft.) Opening fall 2016. Whole Foods Top Exec: Walter Robb and John Mackey, Co-CEOs Locations: 424 U.S. and United Kingdom Ownership: publicly-owned and traded Headquarters: Austin, TX News: $4 million 50,000 sq. ft. store remodel on Lakeway in Bellingham; opening June 2016. Trader Joeâ&#x20AC;&#x2122;s Top Exec: Dan Bane, Chairman/CEO Locations: Bellingham (457 in U.S) Ownership: Family trust established by German owner of Aldi Nord, Theo Albrecht Headquarters: Monrovia, Calif.

News: Adding two new checkout stands and a walk-in cooler.

arrangements of both stores, new fuel station at Lakeway.

Safeway/Albertsons Top Exec: Robert Miller, CEO Locations: Bellingham, Lynden (2,200 locations in U.S.) Ownership: Albertsons Holdings LLC, private equity investors Headquarters: Pleasanton, Calif. News: New 66,700 sq. ft. Safeway store opened at Sunset Square in February 2016.

WinCo Foods Top Exec: Steven Goddard, CEO Location: Bellingham (101 U.S.) Ownership: ESOP (employee stock ownership program) Headquarters: Boise, Idaho News: Opened 90,000 sq. ft. store on Guide Meridian in 2013.

Fred Meyer Top Exec: W. Rodney McMullen, Chairman/CEO Locations: Bellingham Lakeway and Bakerview (2,620 in U.S.) Ownership: Publicly-owned and traded (subsidiary of Kroger Co.) Headquarters: Portland, Ore. (Kroger HQ in Cincinnati, Ohio) News: Major remodels and

Terra Organic & Natural Foods Top Exec: Stephen Trinkhaus, Owner & General Manager Location: Bellingham Public Market Ownership: Privately-held Headquarters: Bellingham News: Completed major expansion, tripling the retail footprint. Added two new eateries and movie rental store, Film is Truth.

WHATCOMBUSINESSALLIANCE.COM | 45

INDUSTRY REPORT: WHATCOM GROCERY SCENE offering natural high quality freshprepared foods and ‘clean’ freshbaked products. Food service sales are growing rapidly, but retailers must align their product profile with healthy fast-food operators like Panera Bread and Chipotle. “Prepared food labeling that includes nutrition information is something the industry will have to respond to. Customers are reading labels, and want to know the nutrient content of the food service and bakery products they purchase. Many retailers fight this. The Markets is going to figure out how to do it and make the investment to get it done.” He sees millennials pushing retailers to offer more ready-to-cook and meal solutions. They value service from knowledgeable staff that can offer suggestions or information about the products they sell. “Mobile communication technology will continue to become more important and sophisticated, but staff interaction and expertise is valued, as long as it is legitimate,” he said. “The Markets is investing in training, so employees can share information about product benefits, prep, and health attributes.” Online grocery shopping? Hello, Amazon. Click-and-collect is gaining traction around the food industry. But trends, as exciting and innovative as they are, probably represent a small portion of the business right now, with traditional household shopping still the dominant market in terms of size, powerhouse brands, and conventionally-grown fresh foods at good value, according to Weatherill. “Portion size will come into focus for consumers,” he said. “Using and eating better ingredients won’t break the bank if you eat proper proportions. You can afford to make healthier choices and improve your health by getting a grip on what sized portion is necessary to maintain good health. It’s a lot less than most people think.” At Terra Organic and Natural 46 | BUSINESSPULSE.COM

Foods, owner/general manager Stephen Trinkaus says a saturated grocery market in Whatcom County is nothing new. “It’s the environment in which our store started and has continued since we opened our doors 18 years ago,” he said. “Whatcom County people sure do appreciate good food, and especially local food, and doubleespecially organic local food. This is a great place to live if you love food.” He said that Whole Foods will

Foods as a competitor,” he said. “We are emphasizing the things that make our store unique and special.” That includes his store’s listing as one of the top 12 “right-to-know” grocers in North America (by the Organic Consumers Association), due to the research they do on products they carry. Like Weatherill and Ashby, Trinkaus values local products. “I think something that is truly local offers an authenticity and a sense of

“I think something that is truly local offers an authenticity and a sense of belonging that is worth the extra effort.” – Stephen Trinkaus, Owner, Terra Organic and Natural Foods

be 1.2 miles from his store, the same distance competitor Trader Joe’s is in the other direction. “People were concerned for us with Trader Joe’s moving in, but the reality is that with the combination of their store, the Great Recession and the second Co-op location all happening in the same 1-month period, we only experienced a 10 percent reduction in sales. We did learn how loyal our customers are. “We aren’t too worried about Whole Foods. Because we are independent and relatively small, we can make business decisions quickly and efficiently, adapting to market pressures and customer demands with little lag time. We’re also nimble and smart in our buying, which gives us the ability to offer some incredible discounts.” Trinkaus said he has learned from the experiences of other independent natural food stores that have had the “whole paycheck” store open in their town. “There is literally a step-by-step plan that has been used by many such stores to survive and thrive with Whole

belonging and place that is worth the extra effort,” he said. “My goal is for people to come into our store for the quality of the products and the richness of the experience that we offer, regardless of how they feel about prioritizing local.” Maybe you’re a bananas, bread, and milk shopper. Maybe you pick up French lentils and croissants to remind you of that trip to Paris. You trek into the membership warehouse store for enormous packages of toilet paper and those $1.50 hot dogs and soda. You carefully choose heirloom tomatoes with the farmer’s name on the sign. You bring home a complete meal from a deli with options well beyond chicken strips and Jo Jo potatoes. Point is, in Whatcom County, and other communities across the U.S., you have choices priced for every budget, curated for every taste. Welcome to Whatcom County, Whole Foods. By the way, the nation’s largest seller of organic products already is here. Who’s that? Who else. Costco.

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INDUSTRY REPORT: WHATCOM GROCERY SCENE

LARRY AND BETH BROWN, co-owners of the new Ferndale Grocery Outlet, are proud of their in-store sign that reads, “Locally-Owned.” The two Grocery Outlets in the county, part of a 230-store conglomerate, offer name-brand discounted products through national buying power. (Photo by Mike McKenzie)

Small-town rocers fill diverse needs Convenience and value matter to neighborhood shoppers

By Susan G. Cole

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DODSON’S IGA MARKET has been a family-affair at Nugent’s Corner in Deming since 1961: (l. to r.) Mike, Ellen, Beth, and Orran Dodson. At right in front of a store pictorial display of the original store, Orran Dodson, who is 83, said: “I feel blessed that I can come to work seven days a week to a place that I love.” His father, who moved from Iowa and started the business, worked up until his last days in 2007 at the age of 102. (Photos by Mike McKenzie)

or grocery shoppers in Ferndale, Sumas, and Nugent’s Corner near Deming, family-owned and operated traditional and closeout stores capture customers with convenience, friendly service, and deep discounts.

Ferndale’s new-this-summer Grocery Outlet, owned and operated by Larry and Elizabeth Brown, is one of 230 stores under the Grocery Outlet marketing banner. “Our customers live in our community, not just Ferndale, but all of Whatcom County,” Larry Brown said. “They are trying to save money – looking for that bargain, looking for that value. The Bellingham Grocery Outlet has developed that brand here for over 20 years.” The Bellingham Outlet is owned and operated by Troy and Tina

Clark. Troy Clark identified his customers from all demographics, including “…some who truly don’t need to shop with us. They love the treasure hunt, love the deals. And (there’s) a lot of need shoppers,” he said.

"We out-local the chains and out-chain the locals." – Troy Clark, owner Bellingham Grocery Outlet

“We’re the world’s largest closeout grocer,” he said. “We’re not talking dented and damaged product, but the story behind the products: a label change, a packaging change, overstock. About 50 percent of our store is true closeouts. That’s where the deals are. My produce and meat is fresh, just like

any grocer. “We out-local the chains and out-chain the locals.” Clark said that national purchasing power lies at the heart of the Grocery Outlet model and success. “We’re able to buy collectively with so many Outlets, but we still have the autonomy to buy local.” The new Ferndale Outlet won’t look exactly like Bellingham’s because the product mix will be tailored to Ferndale customers. Larry Brown said, “There is a customer in this community that needs the value, the savings. We’re here to help our customers. “We have great relationships with Nabisco and Del Monte, for example. They bring good products to us and we help liquidate them. We are more conventional than we have been in the past, but not just closeouts. We carry a lot of brands out there in the market at a more affordable price.”

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INDUSTRY REPORT: WHATCOM GROCERY SCENE Independent Grocers Alliance? That’s your friendly neighborhood IGA…. In Sumas and Nugent’s Corner, conventional supermarkets have long planted their stake as part of those communities. Dodson’s IGA at Nugent’s Corner and Bromley’s IGA in Sumas are both independents marketing under the IGA name that’s been around since 1926. Originally formed to counter the proliferation of large supermarkets, IGA has more than 4,000 independent supermarkets worldwide – numbers that boost buying power to help keep prices low. Customers have come into Dodson’s for 52 years from the Mt. Baker School District area, including farmers, retirees, and Bellingham commuters. It’s a generational store, now managed by two children succeeding the patriarch Orran Dodson, 83, who remains active at the store, and who followed in his father’s footsteps that continued until he died in 2004 at age 102. “He got mad when we took his key away at 93, for his safety’s sake,” Orran Dodson said. Ellen Dodson (owner Orran Dodson’s daughter) said, “We compete by price, especially our meat department.” The Dodsons pointed out that a large expanse of their community between Mt. Baker and Skagit County has no other place to buy everyday hamburger meat. “Our customers like the fact the store is local and convenient to where they live,” Ellen said. Dodson’s hosts its community every month. A hand-carved wood sign says on the building, “Where Friends Meet Friends” and an event called Meet Your Friends at IGA brings neighbors and customers into the store for a food-centric event. Last July, Dodson’s doled out 200 free hamburgers with all the fixings. Community involvement remains important to the family, too. Ellen 50 | BUSINESSPULSE.COM

BOB BROMLEY, OWNER of the IGA store that’s been his family more than 50 years, also serves as the mayor of Sumas. He said that the longevity is owed to staying involved in the community “in ways that the big box stores can’t.” (Photo courtesy of Bromley’s IGA)

Dodson serves on the Mt. Baker School Board, for example. And Orran Dodson remains an elected Fire Commissioner in his district, having served since 1965.

"If we don't have a certain kind of item, that's when the dollars leave town, and while they're away, they might pick up some other items at the same time." – Bob Bromley Mayor and owner of Sumas IGA

THE MAYOR RUNS THE STORE Likewise, up in Sumas. IGA store owner Bob Bromley (who also serves as his town’s mayor) has customers from the surrounding areas of Maple Falls and Glacier, as well as the Lower Mainland of British

Columbia. He said he keeps pricing competitive, offers local products, and stays involved in the community in ways the big boxes can’t. Examples: the 5% discount days, a rewards card, home delivery, and on-line shopping fulfillment. “If we don’t have a certain kind of item, that’s when the dollars leave town,” Bromley said, “and while they’re away, they might pick up some other items at the same time.” Despite the variety of stores to choose from, Bromley said doesn’t see a fragmented shopper. “Most people don’t have the time to shop here and there,” he said. “And when fuel prices go up, people stay home.” Jan Gee, president of the Washington State Food Industry, said the little guys survive on personal service to the community they live in. “Bottom line is that independents will never win on price,” Gee said. “But they can win on service, local products, and community

involvement. Whatcom County has always belonged to the independents, but we are seeing the transition to more national competitors.” Bert Hambleton, an expert in brand strategy, agreed. “Whatcom County used to be different 20 and more years ago. Instead of chain stores, it had lots of independent grocers,” he said. “Today, the steady decline of all conventional grocers (chains and independents) and their replacement with much more differentiated formats has caused Whatcom County to converge with nationwide trends. “That makes this market more ordinary and less remarkable.” But the folks who run them – a mayor, a fire commissioner, a school board member – make the definitively-local, neighborhood market extraordinary and standing out in the sea of Big Name choices that dwarf them.

ALL FIVE CLARK children have worked in the Bellingham Grocery Outlet co-owned by Troy and Tina Clark. Daughter Chelsie and her husband Bret Acton work there now. Troy and Tina gather at the counter with their grandchildren (l. to r.) Keirra, Greyson, Nikelle, and Olivia – the next generation to run the company? (Photo courtesy of the Clark family)

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INDUSTRY REPORT: WHATCOM GROCERY SCENE

EVERYBODY’S STORE in rural Van Zandt is an iconic neighborhood throwback to the country grocery of yore, offering not only fuel and food, but “cutting edge” offerings like their renowned deli sandwiches, assortment of 50-plus international cheeses, and even wool sweaters from Nepal. (Photo courtesy of 46-year co-owners Jeff and Amy Margolis)

The convenience of grab-‘n’-go rocer How the little stores stay alive in the land of giants By Pamela Bauthues

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e’ve all wondered. We’re driving through town and pass the little independent, locally-owned corner store, and we think to ourselves, “How on earth do they stay in business?”

Some don’t. Gifford’s Market mini-mart in a Lettered Streets neighborhood of Bellingham closed recently; the owners retired. You’ll find many, though, alive and well all over the Whatcom County map. Delta Gas & Store on the way into Lynden. Mt. Baker Bear on the way to, yes, Mt. Baker. Three sit on corners en route to the Lummi Indian Reservation. The Cornwall Corner Market in downtown Bellingham. Silver Beach Grocery on the Northshore of Lake Whatcom, and Valley Market & Deli offering groceries and a restaurant on the other side of the lake in the golf course development. And down at the head of the vee between them on Electric Avenue, Da Vinci’s Classic Subs serves Sudden Valley and North Shore with a deli, gas, and the typical grab ‘n’ go grocery items, snacks and beverages. On and on, the list goes, countywide. With rampant competition among mass grocery retailers and more consumer options than ever, it’s a wonder that these mom-andpop shops still manage to survive—and even thrive—in today’s marketplace. And while it may be a surprise that these local fixtures’ doors are open, it boils down to simple principles that bring customers back: products, location, and a community focus.

“We only sell the best” • •

Quality, local products Supply what customers want to buy—know your market

and who you’re serving • Interesting products • Local suppliers And, as two sets of owners told Business Pulse in interviews – geography. Plus, they often thrive on valueadded goods and services – e.g., gas pumps, deli sandwiches, and grab ‘n’ go drink cases wall-to-wall, corner-to-corner – each looking for any extra edge, any hook to get traffic to stop in. Silver Beach Grocery has one wall stacked with its own brand labeled growlers to fill from a number of taps drawing locally-crafted beer.

"People like a small store." – Amy Margolis, owner, Everybody’s Store

Two stores in particular have built outstanding longevity on reputations for their sandwiches: Da Vinci’s off of Lakeway, and Everybody’s Store in rural Whatcom County. At DaVinci’s during peak hours you’ll see a lineup of sub sandwich bread, sliced and awaiting the store’s renowned, authentic Philly cheesesteak. Everybody’s Store way out in Van Zandt draws also with popular sandwiches that customers often drive out of the way for, plus gourmet cheeses and fine wines, and they have a gift shop. “Location, location, location,” said Kevin Weatherill, who coowns DaVinci’s with his wife, Kim. Their son Mitchell helps run the store. They told of how “fuel pays the rent” and about 40 percent of the store profits come from the deli and the alcoholic and other typical array of beverages. Weatherill, who heads up The Markets conglomerate of large grocery stores, said the family got into DaVinci’s, which

has been in its Electric Avenue location more than 30 years, in 2000. “We’re in a high-traffic location (leading into a Lake Whatcom dock and park) and we have great neighborhood support from Sudden Valley and other locals who don’t always want to drive further into town to get some basic needs.” The store benefits from his vast grocery buying experience and close attention to high-quality ingredients. “Fast food and snacks doesn’t have to mean bad food and snacks,” Weatherill said. For another similar prime example of the many family-affair, convenience groceries building a local reputation and filling much-sought gaps, drive into the far county…. Jeff and Amy Margolis own Everybody’s Store in Van Zandt. Located on Highway 9 a couple miles south of the Mount Baker Highway, they’ve become a landmark for passersby and locals alike (as their moniker indicates). The store opened in 1904, and the Margolises have owned it for 46 years, making it one of the longest operating independent grocers in Whatcom County. It’s also the oldest natural and organic grocer in the county, edging out the Community Food Co-op by just weeks. “We’ve been selling organic food since the day we opened,” Jeff said. Their store may be small, but they pride themselves in a complete selection of products, many of which are sourced about as close to home as they can be. “We have a garden outside where we grow our own produce to sell,” Amy said. They grow apples, blueberries, and more in their orchards and 9,000-square-foot vegetable garden. They’ll even gather ingredients for their infamous deli sandwiches. Customers rave that Everybody’s store has some of the best made-toorder sandwiches around—and the Margolises take the quality of their WHATCOMBUSINESSALLIANCE.COM | 53

INDUSTRY REPORT: WHATCOM GROCERY SCENE sandwiches very seriously. They use fresh bread from places like Avenue Bread and Great Harvest, add condiments to both sides, and pack on more fresh vegetables than you’d get in a salad. “Our sandwiches are exceptional,” Jeff said. When they need something, they can just walk outside and pick it from the garden. Customers can also enjoy their meals in the garden’s outdoor seating that allows them to enjoy the grounds. The Margolises source a wide variety of other local products, like grass-fed lamb from Acme and a wide assortment of cheeses. Their deli boasts an assortment of over 50 cheeses from around the world— sliced to order at any amount—and they offer cheese tastings. They also supply a variety of eclectic non-food items that give them a cutting edge and are enjoyed by their patrons: high-quality wool sweaters from Nepal, local books on the area’s history, hiking maps and resources, and much more. Some of their products are often imitated—they point to the German Landjaeger (hunter's) sausage that they’ve been selling for 45 years as an example. “Now, you can find it anywhere,” Jeff said. But they attribute this back to them being into “good, wholesome, healthful foods and wonderful products,” he said.

More on location… While the store’s products are critical to its success, its location is just as important. For the Margolises, Everybody’s Store has become a fixture in the community. “We’re at a crossroads,” Amy said. Their store is across the street from a community center that hosts weekly events and gatherings, and they also helped develop a local park. They’re a convenience and well-known spot in the neighborhood, though they attract customers from all over. “We bring everyone here,” Jeff 54 | BUSINESSPULSE.COM

said. Since their store is located in a rural community, they don’t have many walk-in customers; customers have to make a point of shopping there. It’s also become a destination for customers passing through. Many customers make it a point of stop-

"The bottom line is secondary to having a good life. We want to contribute to the stability of our community." – Jeff Margolis, Owner, Everybody’s Store

ping when they travel through the area on their way to the Cascades. Customers then recommend it to their friends, drawing new visitors through word-of-mouth. The store also relies on positive reviews on sites like Yelp to draw in new customers who discover their listings.

property and raised their family there, and much of their own food comes from their land. They’re involved in civic life and the local music community; their commitment helps them get to know community members and in turn points back to the kind of store they run. Jeff said, “Our reputation is far, wide, and deep.” To them, it’s important to work toward creating an inviting store environment and giving customers a good experience. “People like a small store,” Amy said. Amy and Jeff don’t see themselves as business people in the traditional sense, which allows them to achieve a higher level of excellence in their store because of their quality standards. “The bottom line is secondary to having a good life,” Jeff said. “We want to contribute to the stability of our community.” That seems to be an echo around the county….

The customer is always right To keep customers coming back, the Margolises remain focused on strong customer service—one way they differentiate themselves from consumers’ other options. They said that people come for the products, but they stay (and return) for the service. They believe that their customer is always right and serve them with knowledge and patience. It can be a challenge to serve some customers’ needs since many of them are looking for the convenience of ready-to-eat items carried by mass retailers, whereas their product mix is more focused on those who enjoy cooking and appreciate quality ingredients. Instead, they enjoy offering recipes or product suggestions to provide a different form of service that better matches their product selection. The Margolises live on the store

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ANALYSIS: LAND USE over-REGULATION - part 2 THESE HOMES SIT on a 522-acre East Bellingham development that in the early '90s was designated UGA (Urban Growth Area), utilizing city water and sewer. In 2009 the City and County Councils removed it from the UGA, and the County downsized the zoning from 4 houses per acre to 1 house per 10 acres. The underlying reason — Lake Padden water quality — became a non-issue, but home-building all but ceased here ever since, costing builders and lot owners substantially. (Staff Photo)

Rules and regs choke dreams for planned growth You can do something about it: Participate in the legislative process under way right now by Roger Almskaar

and use rules have become a major and often-unwarranted constraint on business and individuals. I want citizens to know that they have a great opportunity right now to achieve reform. Whatcom County, Bellingham, and all other cities in Washington are completing the review and 56 | BUSINESSPULSE.COM

update of their Comprehensive Plan and Development Regulations, as required by the state Growth Management Act (GMA). The deadline is June 30, 2016. Every individual has an opportunity for input into those plans and regs. Some say to me: “Don’t all these rules make more work for you, as a land-use consultant?” They do, up to a point. But many individuals give up on their plans and dreams for their property when they find out how costly and risky the devel-

opment process becomes, even for small, simple projects. A long-established local builder/ developer recently told me that he is looking hard for land to build housing on, though he will not attempt a subdivision because the rules and process have become so onerous, frustrating, slow, and risky. He can work within the building code, but not inside the labyrinth of zoning, stormwater, wetlands, and the morass of other regulatory constrictions. This is the main reason housing

is so expensive in Bellingham relative to local incomes. Horror stories abound of how somebody wanted to build a house, or a minor structure in their backyard, and ran into the wetland/ habitat, or zoning buzzsaw, mired in highly subjective and arbitrary critical area rules. Many give in rather than fight City Hall.

test the factors I suggest a “Four-Part Test” for a fair and efficient system: 1. Reasonable. 2. Clear and concise. 3. Coordinated with other applicable rules. 4. Effective in achieving valid public purposes. To apply the four-part test effectively, let’s first examine: • Who is supporting and helping create more regulation. • How they operate. • Possible areas of agreement. • Who is working toward improvement. • The opportunities for reform through constructive involvement. Most of the support for overreach comes from private, mainly non-profit special interest groups who claim their mission is to protect the environment, such as water quality, farm land, and fish and wildlife, and that existing rules are inadequate. There are hundreds, such as the Sierra Club nationally, Futurewise and the League of Conservation Voters in our state, and RE-Sources locally. Agency heads and staff at all levels of government and education often share these concerns. Thousands of government agencies get involved at every level: The federals include U.S. Army Corps of Engineers, Environmental Protection Agency (EPA), and National Marine Fisheries Service/ NOAA in the Department of Commerce, and U.S. Fish and Wildlife Service in the Department of the Interior.

State level departments include Ecology, Fish and Wildlife, Natural Resources, and Commerce. County and city governments adopt plans and development regulations per state rules, like the GMA requirements. Fire and Water Districts and other municipalities also have rules. Why do many of these entities and individuals support rules that are, or morph into over-regulation? Research indicates that the majority

Americans agree that effective environmental protection is essential, and they are willing to take steps, individually and collectively, to that end. This is my definition of an environmentalist.

Many leaders and staff in private and public organizations do not seem to care about the financial and social costs of their extreme actions. Their radical environmental agenda, “preservationism,” appears to be their main passion. For some, it appears to be their religion. Another major negative factor is agency staff. Many have had no meaningful experience in the private sector that would help them understand the applicant’s position, such as the value of certainty, time, and money. Managers must pay attention to this problem. Many in government do understand how the regulations have become so complex and costly for applicants at all levels, and they try to act constructively. How do agency staff and environmental activists generate and support over-regulation? Agencies adopt and enforce rules that go well beyond the intent of authorizing laws adopted by elected officials.

PILING ON of Americans agrees that effective environmental protection is essential, and that they are willing to take steps, individually and collectively, to that end. This is my definition of an environmentalist, including me. A minority, apparently growing, believes that existing rules aren’t sufficient, and they want more drastic, rapid action.

DISCONNECT BETWEEN GROUPS Also, a difference appears between the leadership and many members of these groups, especially private, on how extreme the rules and pace need to be. Many of the rank-and-file do not realize how damaging some of their leaders’ actions are to the legitimate interests of others, and costly, even to themselves, as taxpayers and consumers.

For example, the EPA and our state DFW recently expanded their control over land along minor, and even seasonal water bodies, despite objections from many business and landowner groups. They testified that these rules were unneeded because other agencies already tightly regulated those water areas for the same concerns: quality and habitat. Also, private environmentalist groups continuously lobby elected and appointed officials at all levels in seeking more stringent standards in order to get the government to carry out their agendas. It appears many of their paid leaders are constantly raising the bar to justify their often-high salaries. Local and state Futurewise leaders challenged a recent Whatcom County decision on exempt water wells, asserting that anyone wanting to drill one should have to prove that the well would have no impact on local streams. This would be WHATCOMBUSINESSALLIANCE.COM | 57

ANALYSIS: LAND USE over-REGULATION - part 2 extremely costly, and the results often uncertain. Futurewise got the state GMA Hearings Board to agree. Whatcom County government and others challenged it. The state Court of Appeals agreed with the County that the legal authority for such rules belonged solely to Department of Ecology. Futurewise appealed the decision to the state Supreme Court, costing us taxpayers still more. This GMA Hearings Board’s

actions are an all-too-common example of an agency basing its decisions more on personal bias than the law. Arbitrary and subjective rules on critical area classifications and buffers are important, too. Applicants often are required to set aside large portions of their expensive property to preserve low-value, “semi” wetlands, and to “buffer” such areas, after paying a consultant to do a report. The buffer is often larger

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than the wetland. These rules, and tight Urban Growth Area (UGA) boundaries, have resulted in major reductions in buildable land that already has received approval in planning for urban growth. This occurs because builders are unable to buy lots that pencil out to meet the demand. The result thwarts major GMA goals to protect rural area character and farm and forest lands, and to allow people to live near where they work. Are there areas of possible compromise? Reasonable parties on both sides could work to find common ground. The private and public resources now wasted in the maze of rules and drawn-out procedures and challenges would be betterspent in science-based, equitable protection of environmental values. There are many local and state rules that residents and organizations should work to make more clear, more reasonable, and less biased against business and individual rights. Critical area ordinances, Shoreline Management programs, zoning, and subdivision rules are prime candidates locally; state DoE, DFW, and Commerce rules need wide-based improvement. Reforming the complex, multifactor matrix for wetland, water body, and habitat buffers is possible. The values recommended by DoE for our entire state, supposedly based on Best Available Science (BAS), appear both arbitrary and subjective at the same time. Finally, buffers become capricious applications because they are not based on a scientific analysis of relevant site/vicinity conditions: slope, soil, geology, hydrology, vegetation, and existing uses. Local rules should allow an alternative to this cook book approach. The applicant would pay a private consulting scientist to recommend alternative buffer widths. It would cost more, but would result in real savings in usable land.

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ANALYSIS: LAND USE over-REGULATION - part 2 Staff should accept such sciencebased proposals, unless they can cite valid scientific reasons why wider buffers would prevent significant adverse impacts on resources. The state legislature should require changes in the many stateagency rules that read and get interpreted vaguely or unreasonably. Commerce Dept. adopted a BAS rule for critical areas, failing to concisely define it; the rule recommends an illegal “precautionary, norisk” approach with critical areas, to “strictly limit development… until uncertainty is… resolved.” That could take years, and cost thousands. Many entities work to reform the present system throughout governing bodies. Local trade associations include the Building Industry and Realtors’, the newlyformed Whatcom Family Farmers, and advocacy groups such as Whatcom Business Alliance (WBA), Common Threads NW,

60 | BUSINESSPULSE.COM

and Citizens’ Alliance for Property Rights (CAPR). The state Building Industry and the Realtor Associations and the Farm Bureau are active with the Association of Washington Business, and the Washington Policy Center. Nationally, the Home Builders and the Realtor Associations, together with farm organizations, and public interest law organizations like the Pacific Legal Foundation, stay proactive. In order to make progress on reform, concerned citizens like you and I must identify issue-specific goals, work collaboratively, creatively, and positively with others, know how the system works, become aware of opportunities, and take timely action. Our local governments are now working on the aforementioned state-required Plan and Rule reviews. Let’s take advantage of it and participate.

ROGER ALMSKAAR Land Use Consultant With 34 years’ experience he has served as a Land Use Consultant in Whatcom County since 1981, analyzing sites and obtaining permits, short plats, zoning, and critical areas for private clients. He also has been a licensed realtor (1981-’05); a commercial broker (’88-’05), and on the planning staff for Whatcom County (’71-’81). The County adopted his draft of its first Shoreline Management Program in 1976. Roger taught courses in coastal zone management at Western Washington University during the 1970s. He graduated with a BA in history, geography, and geology from the University of Washington (’69). He became a teacher and journeyman carpenter in his hometown Seattle. In 2009, the Building Industry Association of Whatcom County awarded its Daryl McClelland Award (he serves as a state director for the association, and on the Legislative Policy Committee). In 2010 he received the Whatcom Realtor Association’s Partner of the Year award. Roger considers himself an environmentalist who wants to protect natural resources and protect air and water quality, etc., and invests his money and energy as needed. Yet, he believes that some have taken this cause too far become “environmental extremists,” or “anti-growthers.” He helped start the Whatcom chapter of Citizens’ Alliance for Property Rights (CAPR) six years ago to raise awareness of these trends locally, also organizing forums, classes, and serving on advisory committees for land use and environmental topics. Business Pulse hired Roger to compile these editorial analyses of the impact of regulations choking the life out of property and business owners’ rights. Part 1 appeared in the Summer 2015 edition.

A primer on property rights by Roger Almskaar

he primary bookends of the land-use issue involve two long-established legal concepts:

• Police power. • Property rights. States have broad police power to regulate and protect “the public health, safety, and welfare,” based on the 10th Amendment to the federal Bill of Rights. This power provides the basis for local land-use regulation, from zoning to wetlands, that must be reasonable and have legitimate public purpose. Property rights belong to citizens based on their ownership of land, buildings, printing presses, and personal property, such as tools, books, wealth, etc. Their “bundle of rights” includes the right to occupy, use, sell/ lease, give away, etc. In American law, people had property rights before the state and federal governments was established. The 5th Amendment, also in the federal Bill of Rights, and two sections in the Declaration of Rights within the state constitution protect property rights. Most land-use issues occur when someone’s property rights are restricted to an unreasonable degree because of arbitrariness, ambiguity, etc. For example: If a government or other agency violates either of two rulings by the U.S. Supreme Court, the result probably becomes what is called a “regulatory taking.” Those rulings: 1. There must be an “essential nexus” – i.e., a connection – between the rule or a condition placed on a permit and preventing or mitigating probable significant adverse impacts of the proposal. 2. The character and cost of the restrictions must

be “roughly proportional” to the probable adverse effect of the proposal. For the best overall summary on this subject, review the “Advisory Memorandum (on) Takings” by the Washington State Attorney General, available on line. The state requires all local and state governments to consider the AG’s memo in planning and regulating under the Growth Management Act, per the Revised Code of Washington (RCW) 36.70A.370.

Download the Advisory Memorandum (on) Takings by the Washington State Attorney General http://goo.gl/Si9Sc9

WHATCOMBUSINESSALLIANCE.COM | 61

AGRICULTURE: WHATCOM FAMILY FARMERS COALITION COULD FAMILY FARMS like this in Whatcom County disappear because of over-reach on water use and other stipulations by state Depts. of Ecology and Agriculture? A new coalition formed to fight against restrictions that stifle their productivity and future. (Photo courtesy of Lou Nicksic Photography)

Whatcom Family Farmers Alliance forms Unified for ‘fight of the decade’ over new water-use regulations aimed at dairy farms 62 | BUSINESSPULSE.COM

acing an array of challenging threats, a large group of Whatcom County farmers have taken an unlikely and unusual step: They united into an organization representing all family farmers to speak out in aggregate for the future of farming.

The group formed as Whatcom Family Farmers – the new, unified voice of farmers countywide. Organized by local farmers, run by local farmers, and represented by local farmers. The most immediate threat facing local farmers involves dairy – fewer than 100 farms. A new discharge permit drafted by the Department of Ecology threatens to devastate the industry. Dairy farmers say the permit will make it certain that they cannot pass their farms on to the next generation. They point to a

downturn in global milk prices as a major cause of concern. “We were shocked and disappointed when we saw the first draft of this new discharge permit,” said Rich Appel of Appel Farms east of Ferndale, a spokesperson for Whatcom Family Farmers. “This will make it much harder to survive this latest (milk price) downturn and may very well mean the end of many of our farms that have survived for three, four, and even more generations.” This effort to impose new regulations is but one of many challenges staring at Whatcom Family Farmers. Accusations fly at farmers about causing water-quality problems, highlighted by the closure of the Lummi shellfish beds. While farmers strongly dispute those accusations, the greater long-term threat might become getting access to enough water needed to farm. Environmental lawyers have focused more on farms, while community activists have proposed anti-farm legislation.

WHATCOMBUSINESSALLIANCE.COM | 63

AGRICULTURE: WHATCOM FAMILY FARMERS COALITION The Bellingham Herald has offered generous editorial space to a group wanting to impose a summer water tax, pointing to farmers as the primary users of water during the summer. Tribal treaty rights loom large, as does the shifting position of the Department of Ecology in the way it grants water rights and allows transfers of existing rights. “Dairy farmers realize that we are in crisis,”

“Too often with agencies and government leaders, the squeaky wheel gets the grease, and it’s time we did some squeaking.” – Lynden berry farmer Marty Maberry

Fred Likkel said. He represents the Whatcom County Dairy Federation, and he’s a principal with the environmental consulting firm N3. “We knew we couldn’t just keep doing the same things and expect to survive.” Likkel was a key organizer of the public outreach program that began as Whatcom Family

64 | BUSINESSPULSE.COM

Dairies. Five dairy farmers provided direction: Rich Appel; Mike Schoneveld and Harold VanBerkum from Lynden; Jeremy Visser, with farms in Sumas and Stanwood, and General Manager Mitch Moorlag at Edaleen Dairy, a large farm, integrated processor, and dairy retail operation in Lynden. As the dairy farmers began to organize and speak out to the community, the Ag Water Board came to a similar conclusion about the need for public and community engagement. “We just haven’t been effective as a farm community in letting our friends, neighbors, and government leaders know what is happening to us and how that may affect them,” said Scott Bedlington of Bedlington Farms, a third generation potato farmer and president of the Ag Water Board. The Ag Water Board is the joint coordinating board of the six Watershed Improvement Districts (WIDs) in Whatcom County. Beginning with the Bertrand WID formed 12 years ago, these are state-authorized, selfgoverning bodies formed for the purpose of facilitating water improvement projects in watersheds. Because the WIDs include farm-

ED BLOK, a Lynden-area dairy farmer and key organizer of local Water Irrigation Districts (WIDs), was elected president of the new Whatcom Family Farmers coalition. “Ecology has no basis for issuing this permit,” he said. (Photo by Jason Korthuis)

ers of all kinds, they serve as a basic organizing body of the family farm community. “The Ag Water Board coordinates the activities of the individual districts,” Bedlington said, “and one of our roles is to make certain the community knows what we are doing to protect and improve water quality, and what help we need from them to protect the future of farming.” So, follow the bouncing ball: • The Ag Water Board invited the Whatcom County Dairy Federation to join forces. • The Federation agreed, and Whatcom Family Farmers formed. • The aforementioned five leaders from Whatcom Family Dairies – Appel, Schoneveld, Harold VanBerkum, Visser, and Moorlag were elected to the new board, along with: • Ag Water Board members Scott Bedlington; Marty Maberry of Maberry Packing; Keith Boon, a retired dairy

WHATCOMBUSINESSALLIANCE.COM | 65

AGRICULTURE: WHATCOM FAMILY FARMERS COALITION of Larson Gross Bellingham Accountants & CPAs, and Chuck Antholt, a parttime ag economics professor at Western Washington University who operates a small farm on Lummi Island.

Department of Ecology’s New Discharge Permit Threatens to Devastate Dairy Farming

“AS FARMERS, we’ve been quiet too long….(about) damaging action. We need help from those who value the way we farmers take care of the land….” – SCOTT BEDLINGTON, third-generation Lynden seed potato farmer at Bedlington Farms, and president of the Whatcom Ag Water Board. (Photo by Jayson Korthuis)

• •

farmer and turf farmer from Sumas; Mike Boxx of Boxx Berry Farm in Ferndale, and Ed Blok, Lynden dairy farmer and key organizer of the WIDs who was elected president. An 11th board member, another farmer, is still to be named. Two community members serve on the board in non-voting roles: Todd Burgers

“Shocked and disappointed” is how Rich Appel described the reaction of farmers to new dairy regulations proposed by the State Department of Agriculture. Visser said that it was essential that farmers oppose this overreach of regulations related to the permit, and doing so would represent “the fight of the decade.” After releasing the first draft of the new permit and regulations, the draft writers met with a group of farmers at Appel Farms in Ferndale. They said that the permit was required by federal and state law, but farmers vigorously dispute that. “Their reasoning is based on an assumption that dairy farms pollute, specifically that manure lagoons discharge to groundwater,” Likkel said. He serves as water-quality consultant for the Ag Water Board. “We believe the data shows quite clearly that they don’t, based on soil tests, and an extensive scientific study by the University of California at Davis. Also, by water-quality tests that show water quality near dairies is improving even more than water quality (elsewhere) around the county.” (A presentation of this data appears on the Whatcom Family Farmers website.) Likkel said, “They say that lagoons are leaking massive amounts, but when asked for proof they admitted they had none. They said they are planning on using the mandatory testing required of farmers in the permit to prove what they have no proof for.” Moorlag at Edaleen said, “This is a guiltyuntil-proven-innocent approach, with the innocent party told to pay for proving or disproving guilt. This violates how we operate in this

“These new regulations may very well mean the end of many of our farms that have survived for three, four and even more generations.” – Rich Appel, spokesperson for Whatcom Family Farmers

66 | BUSINESSPULSE.COM

country and we don’t even think it is legal.” The Ag Department has completely rewritten the existing dairy regulations in a way that appears to Whatcom farmers as demonstrating a level of ignorance of basic farm practices. “The 1998 Dairy Nutrient Management Act was a complete game changer,” Likkel said. “It closely manages how nutrients are applied to avoid over application and run-off, and has proven to be very effective in virtually eliminating water quality problems

Another requirement that could be counter-productive to protecting water quality says that any change in the manure infrastructure requires engineering drawings and must be provided to Ecology, which is then given six months to review. To farmers this illustrates that Ecology is familiar with regulating massive waste treatment plants, but not farms. Visser said, “If we have a pump or sprayer fail, this says we can’t fix it or do anything without

hiring an engineer and then giving them six months to look it over. This just doesn’t work.” Other major concerns include greatly-expanded land buffers and the requirement to test the manure and the soil at various depths prior to any application of manure. “The new buffers will take significant value away from farmers and represent a huge taking on the part of the state,” Likkel said. “Again, without science, logic or justifica-

“The bureaucratic overreach of these new regulations is the fight of the decade for local farmers.” – Jeremy Visser, Sumas dairy farmer

coming from our dairy farms.” But the Department of Ecology was never happy that the legislature gave the Department of Agriculture the authority to regulate farmers, according to Likkel, a consultant in these areas. Some of what he calls “outlandish requirements” of the new proposed regulations demonstrate the importance of having an agency with some understanding of farming regulate farming, he said. One example is the proposed requirement of no manure (nutrients) applications to fields if the weather forecast shows a precipitation event of a half-inch, three days in advance. “Every farmer knows how unreliable these forecasts can be, and this will greatly limit the application of nutrients,” Likkel said. “Which means farms will require more storage. It seems really crazy given they (Ag Dept.) say they are convinced that storage in lagoons is causing the problem.” WHATCOMBUSINESSALLIANCE.COM | 67

AGRICULTURE: WHATCOM FAMILY FARMERS COALITION tion. The soil testing requirement is absurd, presents no real value, and ups the costs and burdens of farming without doing anything positive to protect the environment.” Blok pointed to the fact that the permit’s entire premise is faulty. “The EPA defines a CAFO (Confined Animal Feeding Operation) as an operation that confines cows and has proven to be a significant polluter. Because Ecology has declared without proof that lagoons pollute they say we are CAFOs and the permit is required,” he said. “But we have the proof we don’t and therefore are not CAFOs. Ecology has no basis for issuing this permit – certainly not by declaring us as CAFOs.” Appel said the imposition of this re-regulation would defeat its supposed purpose. “This permit ultimately isn’t about protecting the environment,” he said. “It’s coming from bureaucratic in-fighting in Olympia and will cause us to lose many of our farms. The Department of Ecology is supposed to protect the environment. Instead this permit would prove very damaging because the farmland we lose will likely be used for other non-regulated farming, and for housing and urban growth – the very things that are mostly causing the water quality problems we have.”

the environment.” Schoneveld leads the group’s fundraising efforts to fight the new permit. “Many businesses in our community depend on farmers for their business,” he said. “They understand that if farms continue to leave, we’ll reach a critical point where the strong infrastructure we have now to support farmers will go away as well. We are in this together and we need to work closely together to fight a battle like this.” Funds raised to fight the discharge permit will pay for media costs, for the website and social media, and to prepare videos of farmers hurt by the permit, as well as other materials. “We understand that our state government may have limited concern for the plight of farmers, even small farmers,” said Gerald Baron, a communications consultant hired by Whatcom Family Farmers, “In fact, we were told by the permit writer that they don’t care how many farmers go out of business because of this. “But we believe voters in Bellingham, Seattle, and other urban areas do care about locally-grown food and the farmers who grow them. So we have to let them know that this administration is harming farming in this state and what it means for them even if they don’t

“Ecology is taking a guilty-until-proven-innocent approach in these new regulations. That’s not how we operate in this country.” – Mitch Moorlag, General Manager of Edaleen Dairy in Lynden

Whatcom Family Farmers Asks the Community For Help Scott Bedlington, interim president of Whatcom Family Farmers and president of the Ag Water Board, said that the “damaging action” by the Department of Ecology called for unification. “As farmers, we’ve been quiet for too long, not clearly addressing these issues,” Bedlington said. “The community, the media, and our government leaders need to know how these things affect us, and we need the help of those in our community who value the way we farmers take care of the land and 68 | BUSINESSPULSE.COM

live in farm country.” That kind of outreach is expensive, Baron said, “but not as expensive as losing our farms.” Marty Maberry, a berry farmer on the board, said the re-regulation is foreboding. “What we are doing to get Ecology to see the light of day on this new proposed permit of theirs is very important for our future,” he said. “Our perspective matters and we have the ability to get the attention of the community and our government leaders. Too often with agencies and government leaders, the squeaky wheel gets the grease, and it’s time we did some squeaking.”

“DAIRY FARMERS realize that we are in crises,” said Fred Likkel (left) of the county’s Dairy Federation and a principal with environmental consulting firm N3. He helped form Whatcom Family Dairies. Harold VanBerkum (right) joined the board of the new, expanded version of that group – Whatcom Family Farmers. (Farm photo courtesy of Lou Nicksic Photography; individual photos courtesy of Chris Baron/Baron Visuals)

A Number of Water Issues on the Table Other issues about water threaten the future of farming, such as tribal rights. “We sat down with tribal leaders and listened to their proposals about addressing water issues in the county, particularly in-stream flows in the Nooksack and streams,” Scott Bedlington said. “There is basis for positive dialog and we are committed to addressing concerns and making changes. Tribal leaders say they agree that farming is important for the environmental health and future of our community. If we can agree on mutual goals, I think we can go a long way to resolving some of these difficult issues.” Department of Ecology controls water rights in the state, and dealing with DoE has proven particularly challenging for farmers over the last few years. Maberry said, “Farmers were told to apply for water rights and they would work them through. But nothing ever happens, and the basis for granting or not granting rights keeps shifting around.” One major challenge is “hydraulic continuity.” Farmers who received rights after 1985 were granted “interruptible rights” based on the amount of water in the Nooksack and streams. These rights to irrigate are subject to the amount of water in the river, as set by Ecology. A number of farmers had irrigation rights cut off recently due to exceptionally dry conditions and very low stream flows, causing damage

to crops. These farmers would like to transfer their surface water rights in exchange for groundwater rights, but Ecology is treating groundwater withdrawal as equivalent to surface water withdrawal. “This is not justified by the science,” Maberry said. “Hydrologists know that the connection between ground and surface water varies based on a number of factors. Nor is it required by the courts, as they (DoE) sometimes claim. Just because they can say no does not mean they always should.” Board members agree that if Whatcom Family Farmers is successful in getting the attention of the Department of Ecology on the issue of the discharge permit, it will help in addressing other issues relating to water access. “They need to know that it is not just farmers who are hurt by their inappropriate actions,” Maberry said. “They need to see that in our communities there are a lot of people who would rather see cows and crops than concrete and cul-de-sacs. They need to see the big picture, and voters in the state need to help them see it.” For more information about Whatcom Family Farmers and to learn how concerned citizens and voters can get involved, go to www.whatcomfamilyfarmers.org, on Facebook at facebook.com/whatcomfamilyfarmers and on Twitter @whatcomfamfarmers.

WHATCOMBUSINESSALLIANCE.COM | 69

INVESTIGATIVE REPORTING: CHARTER REVIEW AMENDMENTS THE CHARTER REVIEW COMMISSION met in locations all around the county from January-August, including a session seen here of part of the 15-person commission at the Lummi Indian Business Council (LIBC) government headquarters.

November ballot becomes more complicatedâ&#x20AC;Ś on purpose County Council adds controversial Charter amendments to muddy the waters Photos courtesy of David Onkels Article Compiled by Business Pulse Staff 70 | BUSINESSPULSE.COM

n October 15 when 2015 election ballots begin to hit Whatcom County mailboxes, local voters will see one of the most confusing, yet vitally important ballots in recent memory. The confusing part comes by the design of a behind-the-scenes move of a local nonprofit, Re Sources for Sustainable Communities, from a charter review commissioner, and from a Whatcom County Council member, and others. One of the strategies of the group, according to emails written by participants in the strategy (obtained through an open-records request), was to “confuse voters.” One member of the elected bipartisan Whatcom County Charter Review Commission that got caught in political crosshairs, Todd Donovan, wrote to colleagues outside of the commission, “…I think it will really complicate the Republicans’ efforts…and increase the odds of people voting no on the lot.” He was referring to the very amendments passed by the commission he was serving on. Donavan is a political science professor at Western Washington University and running for a Whatcom County Council seat, District 1.

BARBARA RYAN (center), flanked by Whatcom County Attorney Dan Gilbert (left) and Ferndale mayoral candidate Jon Mutchler, wrote: “I’m at a loss to see how this proposal (five districts) is better than the current situation….”

The election ballot will contain the usual array of candidates running for office. If you live in a city, you’ll see your mayoral candidates and city council members and any local issues. In addition, everyone in Whatcom County will have the opportunity to vote on state measures, advisory votes, their choice for County Executive, Sheriff, County Council members, and up or down on funding a new jail, et al. However, in addition to all the usual, highly-debated races and issues, this year is a special election year. Voters will weigh in on 10 Whatcom County Charter amendments placed on the ballot. The Charter is essentially the constitution – the county’s governing document. Because of its importance, the Whatcom County Charter can be amended only by the will of the voters, and amendments can appear on the ballot by just three ways: 1. A duly-elected, 15-person bipartisan Charter Review Commission; 2. A supermajority vote of the County Council, or 3. An initiative petition bearing the signatures of registered

voters in the county. They must equal in number at least 20 percent of the number of votes cast in the county in the most recent gubernatorial election. Since Whatcom County adopted the home rule charter in 1978, amendments have only been forwarded to voters from the Charter Review Commission that is elected every 10 years for that specific purpose. The commission is required to have an equal number (5) from each of the three Council districts. The election of the current commission took place in November 2014, and the group began their work to review the county Charter in January 2015. After six months of public hearings, listening to testimony from the community, debating, reviewing, and voting on 21 recommendations, the commission forwarded just eight to the voters for the upcoming ballot. The other 13 were debated and voted down. The most contentious debate took place over Propositions 1, 2, and 3, which impact the way in which County Council members are elected. • The effect of Proposition 1, if WHATCOMBUSINESSALLIANCE.COM | 71

INVESTIGATIVE REPORTING: CHARTER REVIEW AMENDMENTS approved by voters this November, would amend Charter Section 2.13 to reflect district-only voting, with one exception. It provides for election of County Council members by voters residing only within the

council district from which the candidate was nominated. The exception: One at-large position which would continue to be selected by voters from the entire county. The Charter Review

KEN BELL (left) AND SCOTT DONOVAN worked next to each other at the review commission public meetings. Donovan was working outside of that setting with organizers of a counter-move to the commission’s rejection of a five-district proposal he introduced. “I felt naïve,” Bell said upon discovery of the public open-records emails detailing the plans.

JOE ELENBAAS has been elected to every Whatcom County Charter Review Commission since its inception – four of them – and he recognized that “never before has the County Council inserted itself into this important process….this was supposed to be a thoughtful, public process.” 72 | BUSINESSPULSE.COM

Commission passed this proposition 8-6 with one member absent. According to Charter Review Commissioner Chet Dow, the contentiousness of these propositions comes down to pure politics. “Many liberals or progressives see countywide voting for County Council candidates as a political advantage,” he said, “where the higher population and strongly-liberal Bellingham voters have the opportunity to vote for candidates from the rural districts and thus sway the vote in their favor.” Countywide voting paid dividends in 2014 for politicians self-identified in that liberal/progressive description: Sitting County Council members Ken Mann, a primary player in the group formed to undermine the work of the charter review commission, and Carl Weimer, founder and former employee of Re Sources, didn’t receive the majority vote in their own council districts. If Proposition 1, had been in place back then, Mann and Weimer would not have won re-election. Many rural-focused voters support the commission’s Proposition 1, which would allow voters in each district to elect their own representative. They argue that many voters in Bellingham don’t understand and are sometimes hostile to the interests of farming and other rural communities and their land, water, and business use. • Proposition 2 would limit the power of the County Council to propose charter amendments to previous charter amendments like Proposition 1. Specifically, Proposition 2 would prohibit the County Council from introducing amendments to Charter amendments that have been approved by a two-thirds majority of voters, except with a vote of 7-0. In 2005 Whatcom County voters passed a similar district-only voting proposition with 67 percent of the vote. The proposition was reversed after the County Council put it on

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INVESTIGATIVE REPORTING: CHARTER REVIEW AMENDMENTS the ballot in 2008. • Proposition 3 would prohibit the County Council from proposing any Charter amendment that pertains to the method of nominating and electing County Council members, except with a 7-0 vote. “The intent of 2 and 3,” Dow said, “is to raise the threshold required for government officials to overturn the will of the supermajority of voters, particularly in cases that impact their own elections.” • Propositions 4-8 on this year’s ballot were discussed, amended, and passed by the Charter Review Commission with votes of 15-0, 12-2, 9-5, 10-3-1, and 11-3. Not a whole lot of fireworks, and a lot of consensus. “We make recommendations only, not policy,” said Ken Bell, a non-party affiliated elected member on the Charter Review Commission. “It was a thorough and fair process. It wasn’t partisan.”

CONTROVERSIAL 5-2 DISTRICT PLAN INTRODUCED Charter Review Commissioner Donovan, after working covertly with Re Sources representatives and others, introduced an amendment for consideration at one of the commission’s public hearings that proposed a major change in the way Whatcom County elects County Council members. This was the first public look at the five-district plan which would: • Do away with the current system of two County Council members being elected from each of three council districts, with one at large member, and • Change to a system of electing one council member from five each of separate districts, and two members elected at-large. It’s known as the 5-2 plan – a wholesale overhaul of the way Whatcom County elects representatives. It also included an internal redrawing of the voting districts, which according to the Whatcom County Charter is the responsibility of a bipartisan dis74 | BUSINESSPULSE.COM

BEN ELENBAAS, COMMISSION CHAIR (far right): “It’s obvious…County Council (has) highjacked the process. They just want to confuse the voters.” Seated near Elenbaas are commissioners Joe Elenbaas (center) and Eli Mackiewicz.

2015 Whatcom County Charter Review Commissioners District 1: Todd Donovan Barbara Ryan Eli Mackiewicz Thomas Stuen Alie Walker

District 2 Ken Bell Chet Dow - Secretary Ben Elenbaas - Chair Joe Elenbaas - Vice-Chair Cliff Langley

Public Records E-Mail Participants in 5-2 District Strategy: Todd Donovan Mike Estes Mitch Friedman Dan Hammill Crina Hoyer Ken Mann Jenifer Mason Dan McShane Lisa McShane Dean Nielsen (Seattle) Matt Petryni Patrick Stickney

District 3 Yvonne Goldsmith Wes Kentch Richard May Jon Mutchler Eileen Sobjack

2015 Whatcom County Council: Carl Weimer, Chair Rud Browne Barbara Brenner Barry Buchanan Pete Kremen Ken Mann Satpal Sidhu

tricting committee appointed every 10 years. After two months of public hearings, public testimony, lengthy discussion and debate, the proposal was defeated with a bipartisan vote of 4-11. A plethora of emails obtained by a newly-formed community group, Common Threads Northwest, and reviewed by Business Pulse, revealed that shortly after the Charter Review Commission was elected in November of 2014, a group of local community activists had anticipated the passing of Proposition 1. They began immediately strategizing on how to circumvent it. The participants in email exchanges included numerous sitting commissioners and County Council member Ken Mann.

STRATEGY EMAILS Community activist Lisa McShane, acting on behalf of nonprofit, heavily-funded Re Sources, wrote to Mann and several others with details of a highly-organized movement to sway voting in the 2015 election to suit their agendas. In an email dated last March, four months before the charter review commission completed its work, McShane wrote, “We need a smart, effective, funded campaign to block a few angry, loud tea-party supporters from ruining Whatcom County. We’d like to pull all together to do some high level campaign planning around strategy and message. There’s not a lot of time to waste here….we’ve got to get busy.” In April, using his personal email (still public record) rather than government email, Councilman Mann wrote, “The more crazy these idiots get, the better. That’s not a scientific analysis just my limited faith in ‘the voters’ to realize eventually what a collective cluster---- their proposals are.” During late afternoon of June 23, 2015, with extremely short public notice (about an hour, therefore not on the agenda that is distributed

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publicly and to media a week in advance), and after preparing in private offices, the Whatcom County Council introduced four ordinances during its regularly-scheduled public meeting that night. One of those was the five-district plan that failed 4-11 with the Charter Review Commission. “It’s obvious what the County Council has done,” said Ben Elenbaas, chair of the Charter Review Commission who operates a 6th-generation family farm near Lynden. “They’ve hijacked the process. Re Sources couldn’t insert itself into our (charter review) process, so they went to their friends on the County Council to do it. They just want to confuse the voters.” For a county ordinance to become valid, it must have a public hearing no sooner than two weeks after its introduction. The public hearing on the June 23 introductions took place on July 7, just after and obscured by the July 4th holiday weekend. The timing was carefully planned, according to the public-records email exchanges. In the open public discussion, the Council stated that it had not taken this action on its own, but rather on a formal proposal and request from a community petition. Councilman Mann, in his ongoing email exchanges covering several months before this Council action, obviously foresaw the negative backlash; he repeatedly asked if the

proposal could be brought forward by an individual or a group other than Re Sources. Mann even suggested that a charter review commissioner should submit it. It was submitted by former Bellingham Mayor Tim Douglas. The five-district ordinance passed 6-1, with Pete Kremen voting against. This action was unprecedented, according to Joe Elenbaas, vice chair of the Charter Review Commission who has been duly elected to and has sat on all four review commissions since Whatcom County adopted a home rule charter 37 years ago. “Never before in history has the Whatcom County Council inserted itself into this important process,” Joe Elenbaas said. “This was supposed to be a thoughtful, public process, which is why the Free Holders called for the Charter to be reviewed only every 10 years.” • Two of the four ordinances were passed by the Council on July 7. The five-district voting will appear on the ballot as Proposition 9. • The other Council ordinance would require any amendment proposed by either the Council or Charter Review Commission to have a supermajority vote. It will appear on the ballot as Proposition 10.

UNDERCUTTING THE CHARTER REVIEW PROCESS “The review process exists for a WHATCOMBUSINESSALLIANCE.COM | 75

INVESTIGATIVE REPORTING: CHARTER REVIEW AMENDMENTS

CHET DOW stated that the County Council made a covert attempt to negate the work of the elected Charter Review Commission that he served on. He labeled the contentiousness "pure politics...many progressives see countywide voting for County Council candidates as a political advantage...(and) sway the vote in their favor."

reason,” Ben Elenbaas said. “We went through that process, and it worked, and they’ve now subverted and confused it for the voters.” Commissioner Bell stated, “The five-district plan, now Proposition 9, was hatched to circumvent the district-only proposal.” He wrote that in a power-point presentation for a public debate with County Councilman Rud Browne, continuing, “It was hastily thrown together in order to put it on the ballot along with the Charter Review Commission’s amendments.” Bell said he felt “naïve” when he learned that the colleague seated next to him at public hearings held by the Charter Review Commission, Donovan, was involved all along in contriving a counter-proposal. “Conspirators,” Bell continued, “included the Democratic Party, non-profits,

strategists, and legal advice from outside counsel. None of which occurred with others on the charter review commission.” “The County Council could at any time do this properly and give the proposal a just vetting, but they did it strategically at the last moment. A just vetting was not the goal.” Another member of the commission, Chet Dow, stated that the County Council made a covert attempt to negate the work of the elected Charter Review Commission – one defined by law as nonpartisan, just as the County Council is, and thereby “confuse voters on the ballot.” Otherwise, why propose an amendment that the commission had voted by a super-majority not to put forward? Review Commissioner Barbara Ryan, for example, stated in one of the public-records emails: “I’m at a loss to see how this proposal (five districts) is better than the current situation, at least if our goal is to design a plan whereby the County Council can represent the interests of the environmental, progressive community.” A voice of reason within the vast, months-long exchange of emails, Ryan self-identifies as part of that environmentally-interested progressive community; she is a former City Council member and community organizer affiliated with the Whatcom County Democratic Party.

THE END GAME

TODD DONOVAN (left), a Western Washington University professor of political science, is running for a County Council seat in District 1. He wrote in an email exchange away from commission business: “I think it will really complicate the Republicans’ efforts… and increase the odds of people voting no on the whole lot.” Also pictured: Richard May.

76 | BUSINESSPULSE.COM

So it comes down to this: district-only voting, and the number and drawing of districts. Propositions 1, 2, and 3 would implement voting for candidates only by residents of the district that a candidate is nominated in, plus one at-large. And two other things: They would make it difficult for government officials to overturn the will of the voters, and make it difficult for elected officials to change

voting rules that might impact their reelections. The 5-district with two at-large candidates (5-2 Plan) would favor the aims of Re Sources and sitting County Council members who might run for reelection. The amendment even included their slyly-arranged, drawn proposal for new re-districting, heavily favoring the dominant Bellingham vote. “It’s Texas-style gerrymandering,” said Washington State 42nd District (Whatcom County) Senator Doug Ericksen, who is a resident of rural, unincorporated county and who said he is a close, affected observer of these proceedings. “I think it was sneaky.” Councilman Mann wrote in one of his emails in June leading up the council’s introduction of the amendments, “It’s going to be a tricky operation to get this crafted.” The kerfuffle over these convoluted 10 charter amendments on the ballot will continue right up until the last ballot box closes. Re Sources and its allies have mounted a strong campaign for voter turnout, sending a clear message to vote for Propositions 9 and 10 that the organization instigated. Opponents have sent their message that voting on this issue is “as easy as Yes on Propositions 1-2-3, and No on 9 and 10.” Regardless of the factions and their respective aims, they determine no outcomes. Neither the County Council, nor the Charter Review Commission, nor any special interest group can change the Whatcom County constitution on their own. Hence, the one thing that remains firm through all of the political and socio-political maneuverings is that the end result comes down to the persons checking the boxes on the ballot – the voters. The looming question: Will the voting public of Whatcom County favor due process, or favor processed misdirection and confusion?

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PERSONALLY SPEAKING: SEN. DOUG ERICKSEN (Photo courtesy of Doug Ericksen staff)

PERSONALLY SPEAKING… with

DOUG ERICKSEN By Mike McKenzie, Managing Editor Photo by

fter 12 years (six consecutive terms) in Washington’s lower house as representative to the 42nd district, beginning as an upstart 28-year-old, Republican Doug Ericksen is in his second four-year term since his election to the State Senate in 2010. He serves three committees, chairing Energy, Environment & Communications. The other two: Trade & Economic Development, and Transportation.

He throws Right hooks at Gov. Jay Inslee on all of those fronts. But not just Gov. Inslee. What he perceives as a self-serving Left stirs his passion. Ericksen is known for his boldly outspoken, straight talk on issues. 78 | BUSINESSPULSE.COM

No mincing around, you’ll notice, as he discusses a wide range of political hot buttons over coffee in Ferndale with Managing Editor Mike McKenzie. Things he sees as wrong-doings. Whatcom County Council gerrymandering. Sierra Club’s fund-raising social agenda. Anti-oil and antienergy protestors. “We do energy better than anybody else in the world,” he said of his home state. “We should be bragging about it.” Ericksen’s district encompasses the city he grew up in, Bellingham, and the unincorporated county where his family resides between Ferndale and Lynden. And he’s fierce about nurturing its bounty and beauty. He went off to the Ivy League and studied government, and so we launch the interview with the logical question, “Did you foresee a long political career after graduation?” “Oh, no.”

WHY A GOVERNMENT MAJOR? No math involved. Government was kind of the practical application of history. I was interested in that perspective. Back in school I was thinking I was probably going to go into business, or law school. I spent a year in Taiwan teaching English with my wife, and decided to get a degree in environmental policy.

GREAT OUTDOORS BECKONED I did a lot of traveling and outdoor activities. I drove around in a 1972 orange VW camper bus. I had to sell it when I became a Republican, and bought myself a nice Lincoln Town Car.

WHY LEGISLATURE? While getting my master’s degree, I took off one quarter and worked as a session aide for Senator Ann Anderson. She offered me to help her campaign for lieutenant governor. Unfortunately, we came up short in 1996 by two percentage points. First, I went to work for the Senate Republican Caucus for a short session, then went to Fish & Wildlife for a cup of coffee in 1998. I started running for office right after that. After being around it, seeing the people who were doing it, I thought I could do this. I was 28 years old when I first ran for office in the House. We won the first election in 1998 by 109 votes, shocked a lot of people. I was surprised to win, and I’m surprised I’m still there.

WHY REPUBLICAN? When I first went down to Olympia, I contacted two offices: One was Dave Quall, a Democrat in the House. And the other was Ann Anderson, a Republican in the Senate. The Senate gets session aides, and House members don’t. So I went to work for Ann. After being around it for a while, my core philosophy tended to be

“Who gets to determine who can call themselves an environmentalist and who doesn’t? This activity has turned into a business and a social movement, rather than the best way to clean up the environment and to balance jobs and environment.” more conservative, like our middleclass household values. And the No. 1 indicator of the political preference of a child is the political preference of the parents.

COLLEGE INFLUENCES, TOO My time at Western was enlightening. You go in there a little naïve about the process. You find out that some of the people working in the environmental world are not necessarily about the environment, but that they have another agenda that’s more about control, and an anti-capitalism, anti-American way of life, and that also drove me the other direction.

SETTING THE STANDARD Our industry groups here in Whatcom County are the world leaders in environmental protection, and we should be proud of that. As chair of the Senate Energy and Environment Committee, I’ll have people come to a committee meeting and say, “The environmentalists don’t like this.” And I say, “Well, I’m an environmentalist, and I like this bill….”

ANTI-ESTABLISHMENT TREND Who gets to determine who can call themselves an environmentalist and who doesn’t? This activity has turned into a business and a social movement, rather than the best way to clean up the environment and to balance jobs and environment. The Sierra Club and all those major environmentalist groups are more about raising funds…and an anti-capitalist movement more than

an environmental movement.

FINDING BALANCE The tricky part is finding balance in working with regulators. You try to move forward on what makes sense, what’s practical, and achievable – instead of an antagonistic approach of, “We’ll make it impossible for you to produce the product,” rather than, “Yes, let’s produce it the best we possibly can, and continue evolving, continue doing it better.” Rather than driving people out of business.

DESTROY-INDUSTRY MENTALITY You see people protesting oil trains, or protesting any type of natural gas electricity generation, and trying to make it impossible to operate our society. They know what they’re doing and their goal is to destroy industry, and unfortunately what they’re doing has found a real foothold.

MAINSTREAM MESSAGE This anti-capitalist, anti-America wing has become mainstream in many Democratic audiences throughout America. They keep pointing at the ones who want to do harm and pollute, and that’s a small fringe and in no way reflects the goals of the Republican Party or people in business.

INFILTRATING OLYMPIA (We’re experiencing) a takeover by a radical, anti-capitalism faction in the Democratic Party in Olympia. They use the power of WHATCOMBUSINESSALLIANCE.COM | 79

PERSONALLY SPEAKING: SEN. DOUG ERICKSEN

“…I feel like I’m reading a chapter out of Atlas Shrugged, given the incredible frustration that job creators feel…. A lot of the fringe element that has become mainstream (has) this vision of everybody bicycling from hemp hut to hemp hut to drink green tea and read Noam Chomsky novels.” participate as chairs and co-chairs, so there’s definitely a way to do it together. But it’s very hard right now. In my conversations with business leaders I feel like I’m reading a chapter out of Atlas Shrugged, given the incredible frustration that job creators feel.

BREAKING POINT

SEN. ERICKSEN enjoyed scanning over a document after some lunchtime halibut-andchips at a grill on the Bellingham waterfront that gets his attention as chair of the Energy, Environment, and Communications Committee of the Washington State Senate. (Photo by Mike McKenzie)

language to try to paint an industry like oil, or nuclear, or berry farmers as evil polluters.

environmental benefit, but a very significant economic impact here at home that is not positive.

WORLD ENERGY LEADER

SEEKING COMPROMISE

Energy should be a job creator for us. If you want to build with a low carbon footprint, build it in Washington. Instead, we’re going down that path of Gov. (Jay) Inslee attempting to raise energy prices and drive manufacturing out of Washington state, which has no worldwide

When I paint broad strokes about the takeover of the Democratic Party by radical fringe elements, there are definitely Democrats in Olympia in the Senate and the House who are not. We have in the Senate a Majority Coalition Caucus. We’ve invited Democrats to

80 | BUSINESSPULSE.COM

They’re not ready to completely give up, but they’re getting close to a breaking point. They say, “If you’re going to keep doing this to me, we’re just going to close up. We’re going to automate. We’ll move our operations overseas. You can import the product from China instead of building it here in Whatcom County.” A lot of the fringe element that has become mainstream doesn’t recognize that. They have this vision of everybody bicycling from their hemp hut to hemp hut to drink green tea and read Noam Chomsky.

OIL AS EVIL The environmental industrial complex has become masters of creating venom, and using the mainstream media to build a following of their narrative. It’s very disappointing the way Gov. Inslee talks about the oil industry, which powers our economy, creates hundreds of thousands of jobs, and is

the biggest tax-paying business in the state. He vilifies them as evil people. That’s just wrong.

DIVISIVENESS, D.C.-STYLE What we’re seeing right now is Washington D.C.-style divisiveness coming into Olympia, getting worse and worse. It doesn’t help us improve our economy, doesn’t help us get cleaner air or cleaner water, and it simply drives a wedge in society.

the treaty tribe government’s position is that all the water belongs to them. Until the federal government gives it all to them they will not agree to any compromises on water rights here in Whatcom County. That’s not a healthy situation for moving forward. It’s unfortunate.

COUNTY GOVERNMENT Unfortunately the current County Council doesn’t have

many who are going to listen to a more conservative viewpoint. Our agricultural community is not well represented. As Gen. Donald Rumsfield famously said, “You go to war with the Army you have, not the Army you wish you had.”

KEEP MOVING FORWARD You have to work with whoever is in office. Republicans tend to be more business-oriented, who

NOT ALL GLOOM, DOOM People think it’s all gloom and doom and grim and terrible down in Olympia. Most of the time we’re working together to try to get things accomplished. For example, this last year we got crude-by-rail legislation to give greater safeguards and protections on oil-by-rail trains coming from the Midwest to our refineries here.

ALL LIBERALS AREN’T BAD

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And I don’t want to disparage all liberals. Many have great ideas on how to do things better. You have to find compromise in the process. Many of us work well together (across party lines) in Olympia.

WATER ISSUE LOOMS The most important issue we’re going to face in the foreseeable future in Whatcom County is water rights. Agriculture is one of the most important industries we have, the heart and soul – and if you lose agriculture, you become just another place. The path we’re going down is going to eliminate our farmers in the county. It’s interesting, because people who scream the loudest against growth, who say they want to preserve ag land, tend to be people who are pushing a water policy that would eliminate farmers from the ag land.

TREATY RIGHTS It’s complicated because we have to deal with treaty rights. One of

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PERSONALLY SPEAKING: SEN. DOUG ERICKSEN generally can support capitalism and people making a profit. If you’re a company trying to make a profit, you can’t take eight years off because you have a Democrat president, or 30 years like now here in Washington where you have Democrat governors. Democrats are supported by labor unions and other groups that can survive during a Republicancontrolled governing body by doing nothing. If you can skim dues off

of your employees to pay for your political activities, they don’t have the same pressure to make a profit and to work with whoever’s in power. You can say no on everything and play hardball all the way through.

tion turns out better. I laugh when Democrats talk about Republicans being controlled by big business; if you look at campaign contributions you can easily see that is completely not true.

BIG-BIZ CONTROLLED?

In Olympia I tell how we’re one of the Top 7 counties to live in for environmentally quality of life. We’ve been able to accomplish that with two oil refineries and an aluminum smelter, enough gaspowered turbines to power 500,000 homes, a vibrant berry and dairy industry, a timber industry, and a fishing community. We’re doing it right. You can have major industries all coincide.

The business community feels a need to be more bipartisan, because they have to make a profit this quarter and hope the next elec-

‘SECOND PAYCHECK’

TRAINS CONTROVERSIAL Trains will become the biggest issue about a Gateway Pacific-type terminal because that’s the most visible aspect of the industry. I’m not saying GPT should or shouldn’t get built based on that reason. But we are going to have trains coming through, people aren’t going to stop them. The argument the protesters make is exactly why I would have the Interstate Commerce Clause. We’ve said that trains get special treatment because we can’t allow every liberal group to stop train traffic and stop the wheels of progress in America. It’s a tough issue; I understand it, I totally get what people are talking about.

POLITICIZED But it’s become more of a political issue, and nobody ever talks about the coal trains going through here to Canada regularly now. And, before GPT became an issue, nobody was talking about all the hazardous chemicals that are currently being shipped. We should pass legislation that works, that keeps our public safe. That’s why we passed rail legislation this year, and I said that my goal was to do it safely and do it right. 82 | BUSINESSPULSE.COM

PERSONALLY SPEAKING: SEN. DOUG ERICKSEN The Democrat fringe’s goal was to shut it down. Shut down rail, shut down shale gas that is powering our economic recovery right now. It’s disturbing to people who have to work and make money for a living.

CHANGING THE RULES

set of rules to an industry he or she might not like, over ones that they do like. Interesting politics.

MENTALITY OF FAVORS That’s the mentality that’s out there….special treatment from the government. That’s very disturbing, that you might give special

“We do energy better than anywhere else in the world. We should be bragging about it. It should be a job creator for us. If you want to build with a low carbon footprint, build it in Washington.” There’s nothing in America that isn’t regulated. And it’s never deregulated. Always re-regulated. But we’re also a country of rules, and one of the most disturbing things we saw, specific to that GPT facility, was when Jay Inslee changed the rules of the environmental impact statement. He changed it to say that we now will try to measure the end use of the product as part of the permitting process here in Washington state. You can’t find anywhere in statutes that gives him the authority to do that – he did that executively – and it’s not a broad new rule, it’s on a case-by-case basis: If you’re an export facility for coal, we’re going to do this, but if you’re a Boeing company we’re not going to do it. Even though the biggest commercial airliners produce a lot more carbon every year than the people of Washington do.

DICTATOR-LIKE How do you pick and choose which industries you like and don’t like? Now that’s common to dictatorships in South America, but that’s not how you run a civilized country where businesses need to have certainty in the regulatory process….where the rules apply to everyone, and the governor cannot pick favorites and apply a different 84 | BUSINESSPULSE.COM

treatment to groups that you think might be friends or buddies. Or supporters?

CHARTER REVIEW CONTROVERSY Unfortunately the current Whatcom County Council doesn’t have many who are going to listen to a more conservative viewpoint. Our agricultural community is not well represented. County Council clearly doesn’t respect the Charter Review Commission process. For them to go and gerrymander district lines themselves and send them out to the public for a vote like that, I think it violates state law. It’s Texas-style gerrymandering they’re trying to do with county council districts.

CITY CONTROL? We have a problem right now with the way they’re setting up for the City of Bellingham to have too much control over what happens in the rural parts of the county. It comes down to voter turnout. The Bellingham liberal political organization is very good at using the politics of demonization and evil, trying to paint opponents as evil to get a certain base of voters to show up. If more conservative folks who would like to protect our rural life-

style and want input and representation, they can show up and vote. That’s absolutely what it comes down to.

CANDIDATES MUST PRODUCE But our candidates on the conservative side also have to give people a reason to show up, and it can’t just be more of the same. And once you get elected, you have to deliver. Some get elected on a promise to lower taxes, and they raise taxes. Some get elected on the promise of smaller government, and then they grow government. That demoralizes a lot of conservative voters who say, “Why bother showing up to vote?”

DISTRICT-ONLY PREMISE If you went to five districts drawn up reasonably by a nonpartisan commission and just have five council members, that would be a process you could live with. I support the three districts we have because they were drawn up in the proper process, and the districts should vote for their own county council members and not anybody at large.

INSINCERE COUNCIL MOVE This is why the County Council is so insincere, because if you’re going to be elected through Texasstyle redistricting to benefit yourself, that violates state law. Three districts work well right now, five could work in the future, and five is plenty compared to seven.

CULTURALLY UNIQUE Between the university, the community college, the tech college, the berry industry, the timber industry, the fishing industry, the oil refineries, the aluminum smelter, our interaction with Canadians at five international border crossings…we are culturally a unique place, very rare. That’s why it’s such a wonderful place to live and represent.

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PERSONALLY SPEAKING: SEN. DOUG ERICKSEN SEN. DOUG ERICKSEN and his daughters, Elsa, 15 (left) and Addi, 12, enjoy a day at the boathouse. (Photo courtesy of the Ericksen family)

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State Sen. Doug Ericksen grew up in conservative values, lifestyle of a pastor’s family EDITOR’S NOTE: In his own words, our Personally Speaking guest describes growing up ordinarily on South Hill in Bellingham, the son (one of three) of a preacherman. After wandering afar to college (Cornell University), to Alaska, to Taiwan, and to the woods in a ’72 VW bus, he settled into a career in state politics with a passion for conservative values, transparent government, and environmental stewardship. I grew up on 14th Street in what used to be the parsonage, and my parents bought it in the 1970s for about $26,000. I had what was a very typical upbringing back then. My mom didn’t work. We never locked the house door. Very classic Bellingham. That’s the kind of environment I grew up in. Not a farming community like where we live in now. Back then it was a long-distance phone call and a long road trip to Ferndale from Sehome. We barely ever got out to Lynden. My father (Leonard Ericksen) was pastor at Central Lutheran Church for 35 years (‘til 2001), having come here from the first church my parents served in Montana. My brothers were born there. I graduated from Sehome High School, went to Cornell University, and eventually went to Western Washington to get a master’s in environmental studies.

AND NOW? About 12 years ago our family moved out to a small house

we built. Building is one of those things I do when I’m not legislating. I’ve been the general contractor on both houses we’ve lived in, doing as much work as I could do myself—things that wouldn’t burn it down or flood it, or things that were easily replaceable later on. I worked on a large house on our farm about 8 years ago and we moved into that. My wife, Tasha, is a schoolteacher. We have two

AND LATER? I worked in the tourist industry Alaska, and was offered an opportunity to manage a park operation. Probably the biggest mistake I ever made: I didn’t take that offer. But they eventually went bankrupt, so everything happens for a reason. Thought about law school at one time. But I loved the outdoors. So I went to Western starry-eyed,

“Whatcom County….a place where good ideas come from. A unique blend of people.”

daughters, Elsa, 15, and Addi, 12. My parents now spend part-time in the smaller house. We have a little compound out there.

RURAL AND RUGGED I describe our location as welland-septic, out in unincorporated Whatcom County, outside the urban growth area, in the brush…. next to a former horse pasture that became a polo field, and now is a rugby field where they have tournaments.

HAVE YOU PLAYED POLO? No. I can’t ride a horse.

YOUR BOYHOOD WANNABE?

wanting to make the air and water cleaner….but, it turned into more of an economic social justice program than an environmental program.

YOUR FUTURE: GOVERNOR? (Laugh) I’d enjoy the state senate for a long time. It’s a lifestyle choice for my wife and me, able to do a lot of things as a family with the kids. We’re not getting rich. But for a schoolteacher and a part-time state senator, it’s a lot of fun, and it’s great to live in Whatcom County with the great people in the 42nd District. A place where good ideas come from. A unique blend of people.

To play major league baseball. (Laugh.) WHATCOMBUSINESSALLIANCE.COM | 87

Whatcom Business Alliance Fostering Business Success and Community Prosperity

‘Global Economic Update’ Nov. 19 features economist Tim Quinlan The WBA’s annual economic forecast breakfast in the Event Center at Silver Reef this winter presents Tim Quinlan a vice-president and economist with 13 years at Wells Fargo Securities based out of Charlotte, N.C., Tim Quinlan. He specializes in analyses of the macro U.S. economy and on major foreign markets. Domestically, he covers industrial production, manufacturing, and business investment spending. His international efforts concentrate on Japan, Canada, Korea, and Australia. Quinlan’s work has been published in academic economic journals, and he regularly appears in The Wall Street Journal, the New York Times and USA Today and on National Public Radio.

VSH ON TWO ‘BEST’ LISTS VSH CPAs in Bellingham’s Barkley Village recently was named one of the 2015 Accounting Today’s Best 100 Accounting Firms to Work For in the U.S. Criteria include benefiting the industry's economy, workforce and businesses, with evaluation of workplace policies, practices, philosophy, systems, and demographics, and an employee survey. The Puget Sound Business Journal named VSH among the state’s top workplaces in the 10-49 employee group for the second 88 | BUSINESSPULSE.COM

Member News year in a row. No other Whatcom County business made the list. VSH Partner Kathy Herndon said, “Our goal is always to provide incredible service, and we are unable to do that without the talented staff that we employ. We’re glad that after nearly 20 years in business we are still able to provide a positive and healthy workplace for our staff.”

UMPQUA BANK LAUNCHES ‘MADE TO GROW’ MONEY TALK Spurring a national conversation about money called “Made to Grow,” Umpqua Bank released an original short film, “The Seed + The Moon.” The bank group, consisting of 400 western-state stores, including Bellingham, aims to transform people’s relationship with their finances from a source of stress to a positive tool. A podcast on iTunes, “Open Account,” also is part of the initiative to help customers rethink their relationship with money and change the way they view banking.

SPITZER CERTIFIED AT WADDELL & REED Cassandra Spitzer, an advisor with Waddell & Reed, has been authorized by the Certified Financial Planner Board of Standards (CFP Board) to use the CERTIFIED FINANCIAL PLANNER™ and CFP® certification marks in accordance with CFP Board certification and renewal requirements.

PEACEHEALTH NEWS PRESIDENT/CEO NAMED, AND ZENDER PROMOTED ELIZABETH (LIZ) DUNNE will be responsible for all operations

in the $2 billion, nonprofit healthcare system comprises 10 hospitals, an 800-member multi-specialty group practice, Liz Dunne, and a comprePeaceHealth hensive laboratory. Dunne moves from a community CEO position at Providence Health & Services South Bay, Calif., Region. Previously, she held executive positions with City of Hope in Duarte, Calif., and Memorial Health Services in Fountain Valley, Calif., following 10 years in the U.S. Air Force on active duty and 10 years in the Air Force Reserve, retiring as a lieutenant colonel. She holds a master’s degree in business and computer resource management from Webster University, St. Louis, Mo. Dunne will begin as president/ CEO at PeaceHealth starting Nov. 1. DALE ZENDER became president of Hospital Services, Northwest. Zender is exclusively responsible Dale Zender, for all hospital PeaceHealth operations at these PeaceHealth medical centers in Northwest Washington: PeaceHealth St. Joseph, PeaceHealth United General in Sedro-Woolley and PeaceHealth Peace Island in Friday Harbor on San Juan Island. He is also responsible for PeaceHealth Ketchikan Medical Center in Ketchikan, Alaska. Previously, Zender served as chief administrative officer for St. Joseph Medical Center; he has worked for PeaceHealth 30 years.

1st NURSE RESIDENCY PROGRAM IN THE STATE In collaboration with the University HealthSystem Consortium and the American Association of Colleges of Nursing, St. Joseph Health Center has launched the nationally-accredited UHC/AACN Nurse Residency Program™. It is the only accredited Registered Nurse (RN) residency program in the state, and jumpstarted with 240 applicants from all over the United States for just 16-18 RN residents available. This program is designed to support newlygraduated nurses during their first year as they transition from school into professional clinical practice.

WECU MAKES ‘HEALTHIEST’ LIST DepositAccounts released its 2015 Top 200 Healthiest Credit Unions in America, and Whatcom Educational Credit Union was named for the second straight year. Just 66 credit unions repeated out of 6,655 total federally insured credit unions. WECU stood out in all of the primary evaluation categories, including Texas Ratio, Deposit Growth, and Capitalization, according to spokesperson Patrick Russo at WECU in Bellingham.

BANNER bank’S LARSEN NAMED TO State BOARD Banner Bank announced the appointment of Senior VP and Mortgage Banking Director Ken Larsen to the Ken Larsen, Washington State Banner Bank Housing Finance Commission (WSHFC). Gov. Jay Inslee named Larsen to serve through June 2019. The WSHFC is a volunteer board dedicated to increasing housing access and affordability for the

people of Washington seeking to purchase a home, and to access to bond and tax credit financing with developers of multifamily and nonprofit housing.

PHILLIPS 66’S $166K BOOSTS PUBLIC SAFETY Five Whatcom County nonprofit organizations shared in Phillips 66’s grants supporting a plan to implement four public safety projects. “Safety is one of our core values at Phillips 66,” said Ferndale Refinery Manager Rich Harbison. The contributions: $25,000 to the Boys & Girls Clubs of Whatcom County; $41,000 to United Way of Whatcom County, and $50,000 each to the Northwest Straits Foundation and the Whatcom Community Foundation. The projects: security systems at B&GC clubhouses; an all-hazards broadcast (AHAB) warning system in Birch Bay by Whatcom Community Foundation partnering with the Whatcom County Sheriff ’s Division of Emergency Management; Northwest Straits Foundation will fund its Derelict Fishing Gear Program; United Way of Whatcom County will use funds from Phillips 66 for programs to reduce and prevent child and spousal abuse, improve access to medical care, and decrease homelessness. The principals at the recipient organizations are CEO Heather Graham at B&GCWC; Kent Catlin, Deputy Director for Whatcom County Division of Emergency; Interim Director Joan Drinkwin.at NW Straits Foundation, and local United Way CEO Peter Theisen.

SATURNA SPONSORING THEATER SEASON The Mount Baker Theatre announced that Saturna Capital is sponsoring the 2015-2016 season underway, featuring 28 shows. Saturna President/Director Jane Carten said, “The theatre ignites the imagination of audiences of all

ages…we are proud to support such a historic landmark and cultural anchor in the heart of downtown Bellingham.” Carten, who serves on the WBA board, is also on the theatre’s board, Saturna Capital has sponsored Mt. Baker Theatre more than 25 years.

WALLACE RISES TO PRESIDENT OF STATE ASSN KEITH WALLACE was sworn in recently as president-elect of the Washington Association of Health Keith Wallace, Underwriters WAHU (WAHU) for a one-year term through July 2016. Wallace is a health-care reform broker who is a principal of Wallace Rice Benefits based in Bellingham. He has served WAHU’s Northwest Chapter on various board and committee positions and is chapter president. He has worked in the insurance industry for more than 25 years.

KINNEY COMPANIES BUY KWKLY The Ben Kinney family of companies that includes Big Fresh and Tech Help, plus Keller Williams Real Estate franchises, recently completed acquisition of Kwkly® from Zillow Group. It was Zillow’s second transfer to Kinney. Kwkly is a text-to-lead service that helps homebuyers connect with real estate agents, enables agents to leverage the explosive growth of mobile in real estate and related industries. Kinney will appear as a keynote speaker at the WBA/Ferndale Chamber of Commerce NW Business & Cross-Border Expo on Oct. 28.

WHATCOMBUSINESSALLIANCE.COM | 89

Guest Column: Agriculture Debbie VanderVeen | Board Member Whatcom County Farm Bureau Debbie VanderVeen serves as a board member and president of the Whatcom County Farm Bureau. Debbie and her husband, Jason, own and operate Veen Huizen Farms LLC, a dairy and crop farm in Everson. Veen Huizen Farms participates in the Lynden Chamber of Commerce.

Expansion nurtures the vitality of Whatcom business without compromising environment E

nvironmental stewardship in our dairy farming is as important to my family as healthy cows and wholesome milk. Taking good care of the land and water where we live and work is a significant part of who we are as a dairy family.

In Whatcom County, a healthy economy also ranks as very important to our family and our farm. Thatâ&#x20AC;&#x2122;s why I support the Gateway Pacific Terminal project: It will create family-wage jobs to bolster our local economy, and the terminal will be developed without harming the environment that is so vital to all of us who live here. As a farmer and as president of the Whatcom County Farm Bureau, I am reminded daily of the social and economic interests of farmers and ranchers across the region. We Farm Bureau members 90 | BUSINESSPULSE.COM

recognize the high value of creating a stronger economic climate for the food producers like us. Simply put, we need jobs that enhance trade opportunities for agriculture in Whatcom County. And, we need family-wage jobs that provide career opportunities. GPT will provide those jobs at a time when other industries cannot, or will not, in Whatcom County. Businesses in the technology and aerospace sectors across Washington state are in an economic boon season, for which we can be thankful. Seattle, Bellevue, and Tacoma enjoy a healthy rebound in high-paying, available jobs, and a lift in real-estate values. Unfortunately, Whatcom County has not experienced the same levels of economic recovery as those urban areas. Delaying growth of export facilities like GPT will further slow Whatcom Countyâ&#x20AC;&#x2122;s recovery. I have heard from families across the county who worry that multi-generational businesses soon will become a thing of the past. Progress slowed

by over-regulation may cause our younger workers to seek job opportunities elsewhere, where jobs are plentiful. Is this the economic legacy we

Progress slowed by overregulation may cause our younger workers to seek job opportunities elsewhere, where jobs are plentiful. Is this the economic legacy we want to leave to our children and grandchildren? want to leave to our children and grandchildren? Our dairy, Veen Huizen Farms, and others in the area work closely with many government agencies to sustain healthy air, water, and soils. We all realize that the community needs some measure of state and federal requirements to protect

the environment. However, overly burdensome regulation by government entities can impede a healthy business, and cause future growth and investment to slow…or to stop entirely. The environmental plans for the Gateway Pacific Terminal include responsible designs that meet or exceed the state’s strict standards. Examples include fully-enclosed conveyors, wharf materials constructed to minimize water shading and provide protection for the essential herring spawning habitat. GPT also has addressed community concerns of possible dust around loading areas by including rigorous preventive measures, such as below-deck transfers and stateof-the-art dust suppression systems. I believe projects such as the proposed terminal expansions represent examples of responsible growth with environmental stewardship built into the business plans. GPT will provide our region with a vital trade gateway, and not just for coal. Investment from Wyoming and Montana low-sulphur coal provides the opportunity, but Washington agriculture and other exporting businesses across the state will benefit as well, creating a more prosperous future for our families. Speaking from the viewpoint of a long-time business owner and active community member, I believe we must nurture healthy infrastructure for trade and exports to thrive. We can accomplish that alongside environmental responsibility, and secure the time-honored values of Whatcom County families while providing jobs and future investment for our state. Agricultural, business, and trade groups across Whatcom County support the private investment, local jobs, and increased revenues for schools and public safety provided through expansion of the proposed terminals. You can view more facts and information about economic opportunities by visiting www.createnwjobs.com.

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Guest Column: FREE-MARKET ENVIRONMENTALISM Todd Myers | Environmental Director Washington Policy Center The Washington Policy Center is an independent, non-partisan think tank promoting sound public policy based on free-market solutions. Todd Myers is one of the nation’s leading experts on free-market environmental policy and is the author of the 2011 landmark book Eco-Fads: How the Rise of Trendy Environmentalism is Harming the Environment. His in-depth research on the failure of the state’s 2005 “green” building mandate receives national attention. He recently became a contributor to The Wall Street Journal.

Unworkable policies leave our forests prone to catastrophic wildfire Governor in fantasy-land, Conservation NW can’t/won’t fund its own ideas; good business would glean and clean, and sustain millions of acres

drum circle is not a solution. Neither is a rainbow-powered unicorn factory. Those, however, seem to be the options being offered by the environmental left when it comes to preventing catastrophic wildfire.

Some policies are simply symbolic, offering no benefit. Other proposals are fantastic in scope, requiring massive government funding that supporters know will never materialize. This summer’s dramatic forest fires are a case in point. During his tour of the areas hit by the fire, Gov. Jay Inslee made a pitch for climate action, saying climate change represents a “clear and present danger” to Washington forests. If we did everything the 92 | BUSINESSPULSE.COM

Governor wanted on climate change, however, the impact wouldn’t be felt for at least 100 years. That’s like worrying you only

Successfully restored…. salmon habitat in forests (came from) sustainable timber harvests that generated revenue Business, not government, provided the funding needed for environmental cleanup.

have 200 miles of gas as you drive with a flat tire. Such abstract pro-

posals betray any seriousness that about addressing catastrophic forest fires. He’s not the only one offering unworkable policies for our forests. Mitch Friedman of Conservation Northwest has his own plan to address unhealthy forests: “…A forest restoration Marshall Plan.” Vast swathes of forest are fireprone and in desperate need of thinning to restore them to health and a state of useful wildlife habitat. Last year’s forest health report for Washington notes that about 2.7 million acres are in need of some kind of treatment. Restoration, it stated, involves “…a mechanical treatment to remove the excess tree stems, some sort of prescribed burn to maintain proper stand density once it has been established through mechanical means, and then time.” Removing unhealthy trees facilitates others to grow, providing the light, water, and nutrients necessary

to become healthy forest habitat. The problem is that thinning these forests is expensive – the wood is of low value and doesn’t cover the cost of the work. Friedman’s “restoration Marshall Plan” would involve huge sums of money to thin those forests. There are, however, a couple of problems. First, Friedman is a longtime opponent of forest roads. Treating 2.7 million acres would involve new roads. When asked if he would be

successfully restored hundreds of miles of salmon habitat in forests. While federal forests wait for funding to remove fish blockages, private and state forestland have successfully removed almost all blockages. The reason is simple – sustainable timber harvests generated revenue that was used, in part, to repair old culverts and remove forest roads that harmed salmon habitat. Business, not government, pro-

While the environmental community blocks timber harvests that could fund forest cleanup and replanting, they leave forests vulnerable to the massive wildfires we’ve seen the last two years.

Whatcom Business Alliance

willing to build new roads, he said no. Second, treating 2.7 million acres would involve huge sums of money – money that has not been provided either by the federal or state government. When I asked, “Where will we get the money?” Friedman refused to answer, saying, “This isn’t a great use of my time.” Indeed, finding the funding to achieve this hasn’t been a great use of his time for over a decade. Rather than pushing for increased funding for forest health, he and other greens have been vocal advocates of letting fires burn. He and Conservation Northwest have repeatedly sued to stop harvest and replanting of forests hit by fire. Saying you support a “Marshall Plan” for forests sounds grand until you are forced to acknowledge that you don’t know how to fund it, and that you don’t actually support implementing it. There is a funding model that

vided the funding needed for environmental cleanup. The same can occur with the millions of acres in need of treatment. And while the environmental community blocks timber harvests that could fund forest cleanup and replanting, they leave forests vulnerable to the massive wildfires we’ve seen the last two years. It is time for a serious approach. Our forests deserve better than fantasy solutions.

Fostering Business Success and Community Prosperity

Fostering business success and Community Prosperity. Join today. Call Pat Draper at 360-746-0412 or email pat@whatcombusinessalliance.com

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Guest Column: labor market Erin Shannon | Small Business Director Washington Policy Center Erin Shannon became director of the Washington Policy Center for Small Business in January 2012. She has an extensive background in small business issues and public affairs. The Center improves the state’s small business climate by working with owners and policymakers toward positives solutions.

The unseen costs of forcing employers to provide paid sick leave C

ity Council members in Bellingham are debating whether to follow in the footsteps of cities like Seattle and Tacoma and pass a law to force employers to provide workers with paid sick leave.

Proponents argue that every worker deserves the benefit of paid sick leave. They also make the puzzling claim that requiring employerfunded paid sick leave would not be a financial burden to employers, and would actually help their bottom line. On the other hand, some advocates make the more intellectually honest argument that while a paid sick leave mandate would cost businesses more, the "societal benefit" outweighs the expense. Logic dictates if a one-sizefits-all paid sick leave mandate 94 | BUSINESSPULSE.COM

would really help an employer’s bottom line, then businesses would voluntarily offer such a benefit. Employers are motivated inherently to do what is best for their business in order to maximize profits. This logic explains why many employers already voluntarily offer paid sick leave, without a law forcing them to do so. Offering a good benefits package, such as paid sick leave, helps a business attract new employees and boosts the moral of existing employees, hence reducing turnover and the high costs associated with hiring and retraining new workers. The irony of requiring every employer to provide paid sick leave is that turnover becomes a moot point; that benefit is no longer an incentive for an employee to remain with one employer over another. Workers receive the mandated benefit wherever they work. Simply put, offering paid sick leave is beneficial for businesses that can afford it. That is why many

already do it; it works for their particular business model. But other employers, particularly

Washington has one of the highest small business failure rates in the nation….government regulations are the primary culprit behind the failure rates…. (like) when government forces a one-size-fits-all mandate like paid sick leave on employers who cannot afford it. small business owners who operate on razor-thin profit margins, simply cannot afford to absorb the extra

cost of doing business. And contrary to proponents’ argument that paid sick leave is somehow cost-free, the reality is much different. A paid sick leave mandate forces employers to pay dual wages: The worker who has used a paid leave day gets paid, and another worker must be paid to fill in for the absentee. Alternatively, the employer could let the work of the employee on leave go unfinished and sacrifice service, productivity, and sales (while still paying the absent worker’s salary). Either way, higher costs and greater inefficiency are forced on the employer. These are costs and inefficiencies that many small businesses cannot afford. So small businesses are forced to find ways and make difficult decisions to offset the increased cost. Some business owners increase prices, or they reduce the hours of their workers. Others may reduce or eliminate other non-mandated benefits that workers may find valuable. And then there are the unquantifiable costs of unrealized growth and never-created jobs because existing businesses cannot afford the extra labor cost, or because would-be entrepreneurs decide against starting a new business. One-size-fits-all mandates like paid sick leave remove much-needed flexibility for employers and workers, especially those in small businesses. Government mandates such as paid sick leave have a disproportionate impact on small businesses. According to the Bureau of Labor Statistics, 80 percent of large businesses already provide paid sick leave. In comparison, 52 percent of small businesses (those with less than 50 employees) provide that benefit. In Bellingham, reports say that around 80 percent of businesses are classified small, employing fewer than 50 workers, and over 60 percent employ less than 10. Why the huge gap between the

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number of large businesses that provide paid sick leave compared to small businesses? The answer is simple—most small businesses do not have the same profit margins as large businesses and cannot afford a paid sick leave mandate. [EDITOR’S NOTE: Several local small business owners have told the Whatcom Business Alliance, and city officials, that they feel threatened by this possible mandate to the extent of possibly having to close.] Washington has one of the highest small business failure rates in the nation. The state Department of Revenue studied this phenomenon and concluded that government regulations are the primary culprit behind our state’s small business failures. Small businesses usually are not profitable in their first 2-3 years of existence. So they cannot afford generous benefits. As the businesses that survive begin to thrive and grow, very often they begin to offer

such benefits as paid sick leave. When government officials force a one-size-fits-all mandate like paid sick leave on employers who simply cannot afford it, the potential growth that would enable small businesses to eventually offer such benefits voluntarily is stymied. Paid-leave mandates are not free. So the small businesses operating on a narrow profit margin have no other choice than to figure out how to offset the extra costs, usually passing new costs on to consumers, or on to the very workers the mandates are supposed to help in the form of reduced hours or benefits. The best way to keep workers healthy and productive is through voluntary measures based on the specific needs of a business and its employees. A government-imposed top-down approach to paid sick leave increases costs for employers and consumers, while reducing job opportunities, wages, and hours for workers. WHATCOMBUSINESSALLIANCE.COM | 95

Guest Column: personal Investing Jacob Deschenes | Owner Era Capital Management LLC Jacob is a licensed investment advisor and owns Era Capital Management LLC, a registered, fee-only investment management firm serving individuals, wealth advisors, and corporate clients throughout the United States. He uses contrarian methodology with uniquely-developed matrixex and mathematical and statistical analyses. Visit www.eracapitalmanagement.com.

Advantages of fee-only advisors You pay only for the services you receive

earning about investing for most people often is not the first thing you want to do, or even think about with your finances. The world of investing is full of jargon, theories, and concepts which ultimately can become confusing.

I understand that researching investments is not an easy task and your time is more valuable elsewhere, therefore you choose to hire someone to do it on your behalf. The decision to hire a financial advisor brings a whole new set of questions to the forefront. Hiring a financial advisor can cause a considerable amount of anxiety; after all, it’s your hard-earned money we’re talking about here. It’s important to seek out somebody who thinks critically, treats this specialized work as a highly-skilled craft, and seeks always to improve. Although not all financial advisors are the same, it’s a general term that can mean many different things and come in many different forms. In the world of Financial Services, specifically Investment Services, financial advisors can come generally in two distinct forms: broker and investment 96 | BUSINESSPULSE.COM

advisor. The terms “broker” and “investment advisor” may seem synonymous, but they have significantly different motivations because of the way they get paid. Compensation tends to drive motivation, so it’s important to understand the difference between the commissions-based broker and fee-only investment advisor. How

The terms “broker” and “investment advisor” may seem synonymous, but they have significantly different motivations because of the way they get paid. your advisor is compensated is an important factor in determining what kind of advice you’ll receive. Building relationships means building trust and being up front and transparent is critical. The way one is compensated has a dramatic impact on the advice given. Motivations between parties can vary dramatically and may not always be aligned. Some people just want to close a sale and make some quick bucks. Some – whether

a broker or an advisor – choose to educate and inform and inspire, encourage you to reach higher, and provide a valuable service that develops into an ongoing process.

Fee-Only Financial Advisors and the Fiduciary Standard As a Fee-Only financial advisor – one small fee based solely on a percentage of assets managed – I charge my clients directly for my advice and the on-going management of their assets. Feeonly financial advisors must be completely transparent in our fees so you will always know what you are paying us. We receive no other financial reward from any other source. This means we never receive referral fees or commissions, and therefore have no incentive to push one product over another. We simply advise on what’s the best investment for your situation. This compensation structure aligns our goals with yours, which is to focus on the indented goal of growing your wealth. This unique way in which we are paid allows us to be objective in our advice and avoid possible conflicts of interest. As fee-only registered investment advisors (RIA) we are held legally to a Fiduciary Standard, which means by law we have to

STUDY THESE ILLUSTRATIONS to see the differences between commission-based and fee-only financial advisors.

hold your interests above our own. Era Capital Management, for example, does not receive compensation from any source for directing you to the purchase or sale of any specific security or product. Our only source of compensation is fees paid by clients.

Commission-Based Financial Advisors and the Suitability Standard When working with a commission-based advisor, you never pay fees directly to the advisor. Instead you pay the insurance companies and mutual fund companies whose products the advisor sells. Those costs come in the form of various sales-charges (loads, front and/or back), commissions, and ongoing management expenses. The financial companies then pay part of this to the advisor. In the investment world these commission-based advisors commonly are known as Broker/Dealers. They are, in essence, financial salesmen because their goal is to sell you products which in turn provides them with their sales commission. There is no inherent problem with a broker/dealer getting paid. The potential problem lies in the possibility of a conflict of interest between the respective welfares of the client and the advisor. A given product might not be good for one or the other. The commissions provide an

incentive to sell products with the highest payout to the advisor (e.g. loaded mutual funds, variable annuities, whole life insurance) regardless of whether they are the best option for the client. Refer to the charts accompanying this article for an illustration of the difference in how financial advisors receive compensation. Fee-only planning has gained in popularity over the last few years

because of its transparent compensation structure, and because it removes the possible conflict of interest associated with selling a commission-based product. In both cases, fee-only or broker/ dealer, you pay for the advisorâ&#x20AC;&#x2122;s services. Either way, as an investor, seek advice and complete transparency from someone you know and trust.

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GUEST COLUMN: REAL ESTATE Lylene Johnson | Managing Broker, Muljat Group Lylene Johnson has dealt in real estate 25 years, specializing mostly in residential after previously owning and operating a small, island grocery store. She has partnered with her husband Rich at the Muljat Group since 2004.

Real Estate hot again Uh-oh. Are we heading for another crisis?

s summer ended, the stock market had just dropped dramatically based on news from China. And by the time you read this, it may well have surged dramatically upward. Fortunately, the housing market is a bit more stable than Wall Street, and trends tend to take longer to develop. Let’s look at the history, the

numbers, the trends, and the forecast for Whatcom County as a whole, as well as specific areas. • The last down housing market began in mid-year 2007. The number of units sold fell slightly from the year before, average and median prices rose about 3.5%, and homes were on the market 53% longer than in 2006. That was the first indicator that the balloon might be losing steam. • By mid-year 2008, the number of units sold dropped 23% over the previous year, while average and median

•

Mid Year Average Sale Prices - 2007 - 2012 - 2015 2007 (Top of Market) 2012 (Bottom of Market) % Change from 2007 2015 (Current Levels) % Change from 2012 Total % Change 2007 - 2015

Bellingham

Ferndale

Lynden

All County

$377,532 $320,667 -18% $384,369 17% 2%

$334,044 $260,737 -28% $295,784 12% -11%

$303,533 $278,129 -9% $310,768 11% 2%

$335,797 $276,965 -21% $318,215 13% -5%

Lending requirements have changed. Now a buyer must actually qualify for a loan. Buyers, agents, lenders, and appraisers cannot collude to manipulate prices.

•

Chart 1

prices had come back to or slightly below their 2006 levels, plus homes were on the market even longer. An overall upturn started during the first half of 2012. Sales were up, prices were steadying, and days on the market before an accepted offer were dropping. As of July 31 this year, prices had returned to 2006 levels,

Active & Sold Residential Inventory Bellingham Mid Year Changes 2007 ( Top of Market) 2012 (Bottom of Market) 2015 (Current Levels)

Chart 2 98 | BUSINESSPULSE.COM

Ferndale

Lynden

Birch Bay/Blaine

Sudden Valley

Active

Sold

Active

Sold

Active

Sold

Active

Sold

Active

Sold

666 469 333

171 170 179

237 213 174

53 67 95

106 121 63

26 41 44

313 214 161

51 46 74

138 92 51

27 12 35

the number of homes sold was higher than 2006, and the length of time on the market was almost exactly the same as 9 years ago. So what was inventory doing during this time? The tables on the previous page tells us. Chart 1 shows the story for the three largest markets in the County, and the smaller areas have followed the same pattern. The bottom line: Housing inventory has dropped steadily since 2007. Now that we’ve looked at the recent history and the numbers, let’s explore the trends. We’ve recovered much of the value of the market at its height in 2006. Inventory levels have declined as sales have increased consistently, primarily in county areas outside of Bellingham. So what happened with prices over that period? Let’s take a look at Chart 2 on the previous page. Obviously, the smaller markets in the county have not regained all the value lost over the past 8 years, but neither have prices in the other areas ballooned. And all this brings us back to the beginning: Is our “hot market” taking us to another housing crisis? I would say no. Demand is good and inventory runs relatively low, particularly in some areas and price ranges, but that isn’t what got us into trouble 8-10 years ago. Lending requirements have changed. Now a buyer must actually qualify for a loan. Buyers, agents, lenders, and appraisers cannot collude to manipulate prices. It has been brought home to the public that real estate values do not always go up. Many people were hurt, and the benefit of pain is that it can make us think twice about repeating the actions that brought the pain. As humans, however, we will eventually forget the pain and go after the gain. Just not right now.

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Guest Column: Lean heretic Randall Benson | Lean Consultant Randall Benson is a management consultant, author, and Lean master working out of Whatcom County. You can visit his blog “The Lean Heretic” at www.leanheretic.com, and his website at www.bensonconsulting.com.

Reduce your risk of a change disaster

he ability to lead change defines a leader. Leaders often tell me that leading change is a tough challenge. Recent research promises to help leaders lead change more successfully.

Theories, tools, best practices, and popular nostrums about leading change abound, but one thing they won’t do is help you select the best approach to managing change for your situation. New research can rectify that: the Cynefin (cuhNEV-in) Framework. Welsh scholar Dave Snowden developed the Cynefin Framework to reduce uncertainty about picking your best strategy for implementing change. You can use his framework to match effective change strategies to your situation and determine in advance which approach will likely succeed (and why your favorite approach might fail). The Cynefin Framework (See Diagram p. 101) reveals four domains, based on complexity, that represent archetypal change situations: • Simple • Complicated • Complex • Chaotic. Each domain calls for a differ100 | BUSINESSPULSE.COM

ent approach to change — that’s the critical point. The Cynefin Framework works like this: In the Simple domain, causeeffect relationships are apparent and outcomes are predictable. You can easily classify the change situation and find a reliable solu-

Choosing poorly could be tragic. As one business leader said, “We tried to jump the curve and instead fell into a huge crevasse. It nearly cost us the entire hospital system.” tion. Snowden calls this approach “Sense-Categorize-Respond.” Training and best practices often provide effective approaches in this domain. For example, take a company that is encountering excessive rework in their production area. Knowing that, a leader classifies the symptom as a Lean waste-reduction problem and responds by helping production people receive training in the Plan-Do-Check-Act (PDCA) improvement method. The PDCA technique is easy and the outcome is predictable — rework will decrease.

In the Complicated domain, causal relationships are not obvious yet they’re knowable. Each situation is different, but shares common characteristics with similar situations. Subject-matter experts can analyze the situation to determine a good practice. Cynefin language calls this “Sense-Analyze-Respond.” Redesigning a value stream using Lean principles would fall into this domain. In the Complex domain, causal relationships aren’t apparent and best practices don’t exist. A path forward emerges through exploration, experimentation, and application of discoveries. Cynefin terms this “Probe-Sense-Respond.” Innovation and breakthrough become probable as new practices emerge. Here, organizations need guides to navigate change journeys, not the project managers needed in the Complicated domain. Discovering how our group created the nation’s fastest emergency department Oakwood Health Systems in Michigan illustrates an example of change in the Complex domain (a topic we covered in the past). In the Chaotic domain, cause and effect are unknowable. Much of a leader’s work involves dealing with unforeseen crises and disasters. Here, you are limited to “Act-

Sense-Respond.” You must attempt to stabilize the crisis situation by acting quickly, sensing the impact of your actions, then acting again. New practices are novel and typically non-repeatable, for example, as in dealing with the total blackout of an IT data center. Could the Cynefin Framework help you lead change more successfully? Before the Cynefin Framework, finding the right approach to change was hit-and-miss. Choosing poorly could be tragic. As one business leader told me, “We tried to jump the curve and instead fell into a huge crevasse. It nearly cost us the entire hospital system.” With the Cynefin Framework you can classify your change situation and align your change strategy to match the problem. That gives you the versatility to lead change in a wide range of circumstances. Using the right strategy to match your circumstances is the formula for success. I predict that the Cynefin Framework will become hugely popular soon.

Source: Creative Commons

5 Key Cynefin Takeaways 1. Be prepared to lead change in any domain. Align your change strategy with the change situation in the Cynefin Framework. Be aware that a successful change strategy in one domain can easily fail in another. 2. Avoid imposing your preferred change approach in every situation. Otherwise, you invite what Cynefin terms “dis-order” — the lack of alignment. In one case, the use of project management, when exploration and experimentation were necessary, caused the initial failure of a healthcare redesign initiative. You would be wasting your effort in the Simple and Complicated domains. 3. If you need breakthrough innovation, focus on the Complex domain. Breakthrough results from

exploration and application, not from exploiting what is already known or knowable. 4. If the change initiative is large in scale, manage different pieces differently. Categorize the major components using Simple, Complicated, or Complex. Apply the best change approach to each group. 5. Never force Simple. All change cannot, and should not, be boiled down to best practices and training. By forcing simple, you risk slipping into Chaos without warning, causing a crisis or disaster. Cynefin calls this “going over the cliff.” For example, a simple “just-do-it” change for creating test databases caused dozens of real hospital patients to receive the wrong medications. WHATCOMBUSINESSALLIANCE.COM | 101

Guest Column: Human Resources Rose Vogel | HR Programs for SHRM Rose Vogel is a vice-president co-chair of the Programs Committee for the local Mt. Baker Chapter of the Society for Human Resources Management (SHRM). She serves as director of human resources for Anderson Paper & Packaging, a company with 62 employees. She is a graduate of WWU-Fairhaven and has a masters degree in Human Resources labor relations.

The ins and outs of leaving and dismissal: Avoid pitfalls

common practice upon changing work places calls for two weeks notice to your employer. However, if you are a chief officer you might want to give more than two weeks notice and, when possible, train your replacement.

The two-week rule has evolved as a courtesy practice, not law. I gave my notice in a career shift this year. As part of the senior management group I gave three weeks. I both recruited and trained my replacement to make the separation professionally sound and smooth.

Hold a meeting with your leadership team, and complete pending projects when possible so you leave with a sense of fulfillment and gratitude. Conversely, let’s look at severance – when to give it and why, if at all: Severance commonly is related to layoffs. Standard severance in that situation, all up to the employer, is one week’s pay for each year the laid-off worker has been with the company. The other well-known, and usually dreaded, severance is firing. Too commonly, employers keep ineffective employees. Mike Cook, my mentor, uses the following analogy: You wouldn’t put a rusty blade in with your silverware, because the rust will spread.

An example of a rusty blade: Joe has been with the company six years. He has been told over a long period of time that his co-workers are uncomfortable when he is moody, and to stop spreading rumors. One day the CEO decides she has had enough; in a stern voice she tells Joe, "You are fired." Joe leaves. Days later he files a complaint with the Department of Labor and Industries (L&I), alleging that his paid time off (PTO) was not cashed out. Unfortunately, the company had not documented his corrective action conversations, so the CEO and HR must spend copious hours defending allegations. Lesson learned. Document, document, document. At the first sign of unacceptable behavior, speak

5 Tips to Proper Termination •

Consider a severance on a case-by-case basis.

•

Talk to your HR department about federal and state requirements under the Worker Adjustment and Retraining Notification Act (WARN).

•

Review the Older Workers Benefit Protection Act (OWBA law administered by the Equal Employment Opportunity Council (EEOC) to determine if the terminated employee is in a protected class.

•

Consult closely with in-house legal counsel.

•

Last, conduct an exit interview to ensure that termination was conducted properly and professionally.

102 | BUSINESSPULSE.COM

to the employee immediately, with a reminder that they are obligated to conduct themselves in an acceptable manner. Inform the employee clearly,

Document, document, document. At the first sign of unacceptable behavior, speak to the employee immediately…. (and) inform the employee clearly that your conversation is a documented warning. orally and in writing, that your conversation is a documented warning. Second time-misconduct warrants a second documented warning, and the third time offense calls for a Personal Improvement Plan (PIP) – or dismissal. Consider all possible consequences when terminating a longterm employee. Ask yourself these questions: • Will they seek legal counsel if a severance pay wasn’t extended? • Will they call outside agencies to assist them because they are disgruntled? If they do then weigh the time it will cost you and the company to pursue that path. No federal law mandates severance pay for terminated employees. However, a few states require employers to provide severance benefits to certain employees upon termination and layoffs, such as state employees, teachers, and some public employees. I have received a recommendation on several occasions by inhouse counsel to offer severance pay and or/benefits. Weigh the pros and cons thoroughly, from a legal standpoint and from a sense of effective human relations.



 

  

     

  

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LIFE IN THE TECH LANE TECH HELP / BIG FRESH Experts at Tech Help in Bellingham, a division of Big Fresh, provide answers to the questions that are trending among clients. If you have a tech question for our experts, send an email to getanswers@gotechhelp.com

Top 5 items you shouldn’t hesitate

to pay for in I.T. W

ith technology constantly changing, and with evolving viruses and hacking threats to businesses becoming more sophisticated, you should pay an IT professional – either on staff, or contracted out -immediately for protection. Here is a list of the top 5 things we recommend that you invest in to protect yourself and your data from harm, deletion, or theft:

1. and 2. An Anti-Malware and an Anti-Virus program: Coupled with good browsing techniques, a good security tool should keep you pretty well protected. However, no one tool can catch everything. So, we suggest you install one security tool that scans for as much as possible, and also has an on-access scanning engine that protects you from threats while you surf the web, install applications, and open files. Then, install another anti-mal104 | BUSINESSPULSE.COM

ware tool that you can run in the background to make sure nothing was overlooked or got through that shouldn’t have. With this combination, you'll protect yourself to the max.

Without a firewall your computer operates with an "open door" policy…. hackers can get in, take what they want, and even leave one of their own "back doors" in place for ongoing access to your computer whenever they like. In the end, good browsing habits and common sense should be your first line of defense against malware, spyware, and viruses. Still, we recommend running a good security suite in the background and an on-demand malware tool to cover

everything else. That way you're always protected, and you can scan your system for malware whenever you want to.

3. Backups: While it is very important to protect your data from viruses and malware, a chance remains that some nefarious virus or malware might slip through and your data could be hijacked or lost. Or in a case where you accidentally delete, modify, or lose data, backups are extremely important. For workstation backups, we recommend a cloud-based service, which performs file backups and allows for easy restoration of lost data. For servers, we recommend a more robust backup that creates full images of the computer so that if any hardware fails or your operation system is corrupted you have the ability to restore that server in a virtual state to get you back up and running in a matter of hours instead of days.

4. Security Firewall: Network security is a very important piece of keeping your

data secure from malware, viruses, and exploitation. Without a firewall your computer operates with an "open door" policy. Bank account information, passwords, credit card numbers, virtually any sensitive information on your computer becomes available to hackers. Hackers can get in, take what they want, and even leave one of their own "back doors" in place for ongoing access to your computer whenever they like.

Experts in Injury Rehabilitation & Prevention

5. Help: There are a lot of aspects of IT that business owners or employees do not have time or the know-how to deal with. Because your business relies on its technology infrastructure, you must get help when you need it to ensure the smooth running of your business. Obtaining assistance from a local Managed Services Provider is a great investment if you aren’t capable of doing it yourself. They will bring the expertise of a team that can help maintain your business in the ever-evolving IT landscape.

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Voter Much like online dating, Voter matches your answers to a few questions with politicians running for office. Voter will currently match you to the 2016 Presidential hopefuls who share your views. (iOS only)

iCitizen iCitizen is the platform for civic-minded individuals who want a source of transparent, aggregated

information and a tool to communicate with their representatives at the local, state, and federal levels. iCitizen enables the public to make informed decisions and take action. With iCitizen, your voice counts. (Android, iOS and Kindle)

allPolitics Here you’ll find all U.S. and worldwide political news - Left and Right talk radio, political satire, and cartoons. (Android and iOS)

Fox News Election HQ 2016 Get in-depth coverage of election news, learn about the candidates, discover which candidate you align with the most, and get the scoop on all election updates. (Android and iOS)

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NW Business + Cross-Border Expo

NW Busin ess + Cross-Bo rder

EXPO

(Left) BEN KINNEY, (top center) BRUCE MAC CORMACK, (bottom center) SIBYL BOGARDUS, (upper right) TRICIA HECHT-GLAD, and (lower right) JAMES PETTINGER (Photos courtesy of the speakers)

Standout speakers, panelists with cross-border theme give annual Business Expo extra appeal Oct. 23 By Business Pulse Staff

very year our Business Expo provides you exposure to the most outstanding resources in our region’s business and commerce. This year we’ve taken it to new heights with a specially-themed Northwest Business & Cross-Border Expo, 106 | BUSINESSPULSE.COM

presented by the Whatcom Business Alliance in partnership with the Ferndale Chamber of Commerce.

The lineup of top-drawer programming is geared to provide you with useful resources in your business and career. The event takes place Wednesday, Oct. 28, at the Silver Reef Exhibition Hall (Slater NW B u s i n e s s + C r o s s - B o rd e r

EXPO

Road and Haxton in Ferndale), 10 a.m. – 7 p.m. In this 30th consecutive year of the largest business expo of its kind north of King County, two featured keynote speakers highlight the day of activity: • Bruce MacCormack, a renowned principal consultant on Canadian commerce with Cascadia Consulting and Opportunity Northwest, and • Ben Kinney, owner of Keller

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NW Business + Cross-Border Expo Williams Real Estate in Bellingham and other locations, plus other industryrelated tech businesses. Two conferences begin the day on two of the hottest topics in front of Northwest Washington businesses: • Import/Export in a panel discussion (10-11:30 a.m.), and • Health Care Forum with lunch included (12-1:30 p.m.). John Michener from the Port of Bellingham will moderate the 10 a.m. presentation by three standout community business leaders: Lydia Ahn from VSH CPAs in Barkley Village, Dawn Deans from Kickstart Law in Bellingham, and Jim Pettinger from UCanTrade in Ferndale. Highlighting the noon forum, compliance expert Sibyl Bogardus from HUB International, and Tricia Hecht-Glad, president of

108 | BUSINESSPULSE.COM

innovative employer health-care benefits provider The Hecht Group, will address the Affordable Health Care Act mandate that starts in January for companies with 50 or more employees. They will give an overview and update on the changes in the law, and options for the spiraling costs associated with it. MacCormack will speak about “A Bridge to the U.S. Market” at 2 p.m. in the Event Center at Silver Reef. He holds the dual role of principal and lead consultant for Cascadia Consulting, and he is managing partner at Opportunity Northwest with more than 45 years’ business experience, domestic and international. Both of his companies provide management consultant services for Pacific Northwest businesses of every size. Opportunity Northwest, which provides financing for startups and for commercial real-estate development, focuses especially on cross-border matters.

NW B u s i n e s s + C r o s s - B o rd e r

EXPO

Closing the day’s programming, Kinney will speak on the bounceback and today’s technology-based real estate marketplace. He was the WBA’s Business Person of the Year 2015. Kinney owns Keller Williams in six Washington markets and one in the United Kingdom, with more than 900 agents under their umbrella. He and business partners operate five software specialty companies, one of which – Blossor – earned the nickname “Zillow Killer” from Google. Kinney’s group bought some of their companies from Zillow. Big Fresh and Tech Help, regular contributors to Business Pulse, operate within Kinney’s organization. Throughout the Expo, the Exhibition Hall will come alive with radio remotes and prize giveaways, including a Grand Prize Package.

Build Value with Employee Benefits Looking forward is what HUB does best, with a holistic evaluation process to maximize our clients’ insurance investment. We uncover hidden opportunities and develop long-term solutions to reduce risk and lower costs. Our Benefits Consultants will guide employers through a multi-year strategic plan which will includes:  ACA financial impact analysis & recommendations  Auditing and plan performance improvement  Value and outcomes-based plan design  Vendor and carrier performance review  Health and Performance planning  Benefit Administration & Private Exchange solutions To make an appointment for a complimentary ACA financial impact analysis call 360.647.9000. NW B u s i n e s s + C r o s s - B o rd e r

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Local Relationships Global Resources www.hubnw.com WHATCOMBUSINESSALLIANCE.COM | 109

ON-AIR

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ALL THE BUSINESS EXPO YOU NEED FOR INFORMATION ON HOW TO PROMOTE YOUR BUSINESS, CONTACT DON KURTIS AT (360)734-9790 OR DKURTIS@CASCADERADIOGROUP.COM

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Presenting CORPORATE HOLIDAY CATER ING Relax and enjoy the party! Enjoy delicious, chef-prepared Northwest-inspired cuisine, beverage and bartending services, professional staff, décor and event rentals.

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The next time you are visiting Whatcom County, book your stay at the newly renovated Holiday Inn Express Bellingham. You will experience outstanding value and excellent service in a convenient location. • 101 Guest Rooms • Near the mall and great restaurants • Indoor Heated Pool • Complimentary Wireless Access • Flat Screen TVs

• SimplySmart Bedding Collection • Access to City Gym next door • Business Center • IHG Rewards Club • Free Express Start Breakfast Bar

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Respond to today’s economy and plan for tomorrow. Develop the right financing strategy. Optimize your cash flow. Protect your business from risk. Expand and grow, making the most of every opportunity that comes your way. We’re that institution.

Welcome to KeyBank.

More than just a bank.

At KeyBank, we’re more than just a bank. We make it our business to know your business—inside and out. Our proactive team is here to help you seize opportunities you may not have considered and guide you with confidence. No matter your needs, KeyBank is here to help. Call us to make an appointment with a local Relationship Manager: 360.676.6317 key.com/businessbanking

E82345 CARMA1702-12

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Local Service

You Can Trust

The professionals at Caliber Home Loans, Inc. are committed to helping homeowners and homebuyers find loan options that fit their needs. Whether youâ&#x20AC;&#x2122;re purchasing a new home or refinancing, we can help you find a solution that is right for you. For more information on how I can assist you, contact me today! Purchase n Refinance n FHA n VA n Conventional Loans n Rehab Loans n USDA Down Payment Assistance Programs n First-Time Home Buyers n Portfolio Lending Suite

Melanie Pysden Sales Manager | Mortgage Advisor NMLS ID 384009 2200 Rimland Dr. Ste. 110 Bellingham, WA 98226 Office 360-922-7688 PysdenTeam@CaliberHomeLoans.com www.PysdenTeam.com Caliber Home Loans, Inc., 3701 Regent Boulevard, Irving, TX 75063 (NMLS #15622). 1-800-401-6587. Copyright ÂŠ 2015. All Rights Reserved. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates, and programs are subject to change without prior notice. All products are subject to credit and property approval. Not all products are available in all states or for all dollar amounts. Other restrictions and limitations apply. Washington Consumer Loan Company License No. CL-15622. (0524_WA)

Sweet dreams are made of cheese!

Cheeses: Paneer Cheddar Quark Cheddar Curd Feta Coming soon Gouda Parmesan Maasdammer Dairy Products: Ice Cream Yogurt

Monday â&#x20AC;&#x201C; Friday from 6am-5pm Saturday from 7am-5pm Cafe open until 3pm for breakfast and lunch 6605 Northwest Dr Ferndale, WA 98248

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NW B u s i n e s s + C r o s s - B o rd e r

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NW B u s i n e s s + C r o s s - B o rd e r

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Are You in Pain? We Can Help, the Natural Way:

Body Aches & Pain • Old Injuries • Headaches Sleep Discomfort & more

ur n!

Call today for your free consultation!

Hello!

Welcome to Natural Way Chiropractic. I’m Bailey and I can help you!

Bellingham

Lynden

Ferndale

(360) 671-1710

(360) 354-9900

(360) 384-1396

2000 N. State St.

102 Grover St. #100

1943 Main St.

naturalwaychiro.org • Bellingham • Lynden • Ferndale • Mount Vernon • Anacortes • Everett

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NW B u s i n e s s + C r o s s - B o rd e r

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LOCAL TRUSTED LOW-COST CREDIT CARD PROCESSING

We’ve returned over $1 million back to Whatcom County clients in the past five years! "Gravity saved us over 40% in credit card processing fees, helped us with our hardware from purchase to installation, and has provided a consistently high level of customer service. I highly recommend that you give them a call today and set up a review with their local team." -Nick Caples, GM of Bellingham Baseball Club

When you call us, you’re talking to a live person, in your community, ready to assist or drop by your business when you need us most. We’re experts in matching the right POS system for your industry. Our team will even setup and integrate with an existing POS.

Tired of being overcharged and under served? Get in touch with our local Whatcom County team today! 866.701.4700 info@gravitypayments.com NW B u s i n e s s + C r o s s - B o rd e r

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Scene on the Street

Scene AT the

FAIR Photos and Essay by Mike McKenzie

On opening day of the Northwest Washington Fair this year Business Pulse shadowed Debbie Vander Veen, who wore many hats that day as a volunteer and member of many local dairy- and farm-related organizations. Mainly, we hung out in the Small Animal Experience that she oversees, where one mama pig, Fairy (seen here), gave birth to several little squealers at 4 in the morning before the doors opened. “We love our animals,” Vander Veen said, “and we love providing an educational experience with them.” From ducks to geese, from calves to donkey, from one pig to another, 195 small animals attracted more than 65,000 patrons to their corner of the world. “At one point we averaged 1,150 people an hour,” she said. Vander Veen’s day began with the parade she coordinated, selection of its Spirit Award, the grand opening ceremony with speakers among elected officials and Fair organizers, and a special-guests luncheon. She lined up radio interviews for (l. to r.) Whatcom Community College graduate Jana Plagerman of Lynden, a Whatcom County Dairy Ambassador; WCC grad Madison Lancaster of Ferndale, the Washington State Jersey Queen, and Amanda Howe of Lynden, the state Dairy Ambassador Alternate. Debbie had nothing to do with the wild-animal show that entertained large crowds all day and night with dozens of creatures from around the world, including the imposing wing-spread of a buzzard (at right). But she did find time for the cattle maternity pen “where some of my cows were having babies,” and to arrange demonstration talks at the cow-milking exhibition, and to set up photo ops for fairgoers next to cows, and to drop in on the junior livestock sales, and to hawk some legendary Moo-wich ice cream ‘n’ cookie treats on behalf of the Whatcom Dairy Women’s Association. The WDWA sold thousands, raising money for the ambassadors program and ag scholarships.

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This flurry of first-day Fair activity, wending through the passageways between small animal pens and the fairways jammed with the likes of a stilt-walker, rock band, magician, sideshows, and food, food, food vendors, gives you a sense of why Debbie Vander Veen, president of the Whatcom County Farm Bureau, stood at home plate at a summer Seattle Mariners game and received the 2015 Washington State Dairy Farmers Community Services Award. And why we choose this always-on-the-move co-owner and operator of Veen Huizen Farms near Everson as a credible columnist on agricultural issues, as we have in this edition of Business Pulse (p. 90).

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FIRST LOOK FORUM STARTUPS IN THE RAW

Are you an investor interested in startup opportunities? First Look Forum is a showcase for seed stage companies to practice their presentation in front of VC and Angel investors. See what new business investments are coming down the pipeline and network with other accredited investors in the Northwest.

Are you a startup considering funding options? First Look Forum prepares startups by having successful entrerpeneurs coach participants to improve their stories and techniques. A judging panel of experts challenge your pitch content and skills in front of an audience of investors. The winner gets a $10,000 prize. Applications due October 9th.

For more information visit: http://www.nwirc.com/first-look-forum/

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M A G A Z I N E

Business Pulse brings you information regarding the people, companies, ideas and trends that are shaping our county. Business Pulse is the official magazine of the Whatcom Business Alliance (WBA) and is a quarterly publication.

The Publication of The Whatcom Business Alliance

SUBSCRIPTION FORM (Please print clearly)

Please complete and mail to: Or, subscribe online at: www.businesspulse.com

Business Pulse Magazine 2423 E. Bakerview Road Bellingham, WA 98226

Company Name:________________________________________ Title:_________________________ Full Name:___________________________________________________________________________ M A G A Z I N E Mailing Address:______________________________________________________________________ The Publication of The Whatcom Business Alliance City:______________________________ State:__________________________Zip:_______________ Email:____________________________________________ Phone: (___)_______________________ Subscription Type:

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Payment: Credit Card Number:_________________________________________Security Code:_____________ Cardholder’s Name:__________________________________________Exp. Date:________/________ Signature (Required for credit card processing):___________________________________________________

ADVERTISER INDEX Alejandra Maria Photography . . . . . . . . . . . . . . . . . 65 American Canadian Fisheries . . . . . . . . . . . . . . . . . .21 Anderson Paper & Packaging . . . . . . . . . . . 103, 116 Appel Farms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 Automated Mailing Services . . . . . . . . . . . . . . . . . 114 Bank of the Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Banner Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Barkley Company . . . . . . . . . . . . . . . . . . . . Back Cover Bellingham Bells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 Bellingham Cold Storage . . . . . . . . . . . . . . . . .42, 109 Best Western Plus Heritage Inn . . . . . . . . . . . . . . . 112 Birch Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 Cascade Connections . . . . . . . . . . . . . . . . . . . . . . . . 122 Cascade Radio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 Chmelik Sitkin & Davis . . . . . . . . . . . . . . . . . . . . . . . . 85 Chocolate Necessities . . . . . . . . . . . . . . . . . . . . . . . . . 91 Click Monster . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 Data Link West . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 DeWaard & Bode . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Exxel Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 Faber Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 First Federal Savings . . . . . . . . . . . . . . . . . . . . . . . . . . 73 Four Points by Sheraton . . . . . . . . . . . . . . . . . . . . . 130

Gateway Centre Executive Suites . . . . . . . . . . . . . . 33 Gravity Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 Haggen Market Street Catering . . . . . . . . . . . . . . 113 Hardware Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 Heritage Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Holiday Inn Express . . . . . . . . . . . . . . . . . . . . . . . . . . 117 HUB International, NW . . . . . . . . . . . . . . . . . . . . . . . 109 Industrial Credit Union . . . . . . . . . . . . . . . . . . . . . . . . 97 Invent Coworking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Jalapenos Family Mexican Restaurants . . . . . . . . 99 Key Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 Kickstart Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Larson Gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Laserpoint Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 Lyndale Glass . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 Management Services NW . . . . . . . . . . . . . . . . . . . . 19 Mills Electric . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 Natural Way Chiropractic . . . . . . . . . . . . . . . . . . . . . 124 Noggin Branding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 Northwest Innovation Resource Center . . . . . . 128 Northwest Propane . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 PeaceHealth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30, 107 Peoples Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

Print & Copy Factory . . . . . . . . . . . . . . . . . . . . . . . . . 123 The Psyden Team and Caliber Home Loans . . . 120 ReBound Physical Therapy . . . . . . . . . . . . . . . . . . . 105 Roger Jobs Motors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 San Juan Airlines . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 Saturna Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 SaviBank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 Scrap it / Stow it . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Semiahmoo Resort Golf Spa . . . . . . . . . . . . . . . . . 112 Silver Reef Hotel Casino Spa . . . . . . . . . . . . . . . . . . 47 Skagit Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131 Skagit Valley Casino Resort . . . . . . . . . . . . . . . . . . . . 58 SpringHill Suites Marriott . . . . . . . . . . . . . . . . . . . . 118 Statement Apparel . . . . . . . . . . . . . . . . . . . . . . . . . . . .75 Tech:Help . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Umpqua Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 VSH CPAs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 WECU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Western Refinery Services . . . . . . . . . . . . . . . . . . . . . 64 Whirlwind Services . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 Windermere Commercial Real Estate . . . . . . . . . . 17

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15% OFF

ENJOY 15% OFF OUR HOLIDAY MENU WHEN YOU BOOK BY OCTOBER 31ST Enjoy remarkable ‘gourmet’ banquet offerings and tasty ‘Holiday Cocktails’ like our signature “Rudolph’s Tipsy Spritzer”. We have availability for groups of up to 200 guests. Call Catering Manager – Brian Smith today at (360) 395-6547 or email at brian.smith@fourpointsbellingham.com

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Banking On

Leadership

For over 50 years, we’ve given our customers outstanding service, through teamwork and personalized, professional attention. We provide you with the customized solutions you need to lead your business to success. We believe in Genuine Lasting Relationships. We are Skagit Bank.

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Designed to Work

Intelligent Urban Design in a Vibrant Community

Barkley Village is setting a new standard in Bellingham. Class-A office space complimented by dining, shopping and entertainment. State-of-the-art buildings and security, ample parking, on-site management, and unmatched amenities make Barkley Village the perfect setting for your business.

Where Quality of Life is Smart Business barkleyvillage.com For leasing information call (360) 671-6450 ext.103