October 2014
Basin Business
Thursday, Oct. 23, 2014, Herald and News
KLAMATH BASIN
Business
New retailer for Klamath Falls — P. 4
H&N photo by Steven Silton
The burning question:
Air quality — how it affects our business Sky Lakes: Senior Center donation
See page 5
Washington Federal: Exceeds goal
See page 4
Room tax: Windfall for tourism
See page 6
See page 2
A publication of the Herald and News
www.klamath.org
Jobless numbers improve for both Klamath and Lake counties See page 7
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Thursday, Oct. 23, 2014, Herald and News
Basin Business
Red Days
Air quality tied to economics Great opportunity for economic revitalization By CHARLES ‘CHIP’ MASSIE Klamath County Chamber Executive Director
Wood-burning stove use could impact Klamath’s economic development and future job creation. Residents are asked to avoid burning on “red” days and a campaign has begun to help the public understand what a “red” day is and when they are happening. Over the next few months, our community will attempt to reduce the amount of larger particulate matter in the air in order Massie to meet air quality regulations and avoid further government involvement and regulation of our industries. Agree or not, here are some of the reasons why it is so important: Over the last few decades Klamath County has faced a variety of challenges to economic growth, for example, the spotted owl causing the collapse of timber economies across the state, an earthquake, environmental and land use policies that
inhibit growth in communities relying on natural resources and water, and more than a couple of recessions that have brought improving rural economies to a halt. In addition, Klamath County does not sit on an interstate corridor, or currently have commercial air service. As part of TEAM Klamath, the Klamath County Chamber of Commerce works in close partnership with many of the economic development organizations in Klamath County. Sustained economic development has generally proven to be a struggle recently. We have an additional strike that hides on the margins of community economic development and that is being designated as a non-attainment air quality zone. This designation is insidious as we don’t always know how it is impacting development and recruitment efforts. In the world of economic development, the advent of an online searchable world of information has had an enormous impact, both positively and negatively. It allows us as a community to reach further and more easily in the recruitment process but also allows those looking for new sites to do a lot of research and due diligence without our knowledge. Right or wrong, bad public policy or bad science, healthful or not, this is where the non-attainment designation can negatively impact local economic development. We know that the poor air quality days are actually few and far between, we know we have no control over weather and sustained inversions,
Stock photo
and we know what a wonderful place this is to live on a daily basis. The rest of the economic world does not know. Non-attainment is a designation that sits on websites, and in documents we have no control over, and it doesn’t matter that we, as a community, can’t control the weather every day. Companies interested in bringing business to Klamath County have unfettered access to all this type of information and we can’t control the message. The fact is we are designated a non-attainment See BURNING, Page 3
What you need to know about air advisories Editor’s note: Recently reprinted from the Herald and News, Oct. 14, 2014 edition. By LACEY JARRELL H&N Staff Reporter
Air quality restrictions for woodstoves and outdoor burning took effect Wednesday, Oct. 15. All outdoor burning is prohibited countywide. Ramona Quinn, air quality program manager at Klamath County Public Health, said Oct. 15 kicks off the start of the air quality season, which lasts until March 15. She said during the air quality season, the county provides advisories indicating whether residents can burn in woodstoves. Quinn explained that the regulations guiding air quality monitoring are based on a running three-year average. She said Klamath Falls was in compliance in 2012, but exceeded regulations in 2013. She said 2012 balanced 2013, but if the city does poorly in 2014, it will have two strikes
moving into next year. “We need to keep our air quality in good shape for this year. If we don’t make it in 2014, we’ll have to have even stricter regulations next year,” she said. Advisory options The advisories, which are in effect for a 24-hour period from noon to noon, are released every day by 8:30 a.m., she said. If the advisory was green the night before, it remains green until noon that day. “We try to give at least a 3.5-hour lead time,” Quinn said. Air quality is represented on a scale of green, yellow and red advisories, green being the cleanest air, red signaling high PM levels and unhealthy air for sensitive groups. A ‘PM’ level is a measurement of fine particulate matter, such as wood smoke particles, that is measured in micrometers. PM2.5 is matter small enough to enter the lungs and cause cardiac and respiratory
problems. To help residents stay in the know, public health is continuing past outreach methods, such as daily announcements on the department’s website and social media pages. (The Herald and News also will post the information on its website www.heraldandnews.com, and its Facebook page, Facebook.com/handn). The school flag program, which raises a colored flag indicating air quality, also will remain in place. In addition, the health department purchased space on six billboards around Klamath Falls. The billboards remind residents not to burn on See ADVISORIES, Page 3 On the cover The air quality flag at Roosevelt Elementary is on display again as the burning season is in effect. H&N Staff photo.
Basin Business
BURNING
Thursday, Oct. 23, 2014, Herald and News From page 2
Know what you can do to help
H&N file photo
Klamath Falls is known for its sunshine, but pristine air days can be hard to come by thanks to winter air inversions.
ADVISORIES
From page 2
Residents will be contacted by air quality officials if they violate standards red days and provide a phone number for the daily advisory. The first billboard has been placed at the corner of East Main and South Sixth Streets. Exemptions available In a September press conference, Quinn said exemptions to burn on red days will be issued only to residents with woodstoves that have a 2.5 grams per hour or lower emissions rating. In addition, Quinn said, residents who apply for exemptions for woodstoves more than four years old will be required to have a yearly safety and efficiency inspection. Quinn said about 20 exemptions have been approved since the press conference. She suggested residents interested in applying should do so soon — before the first red advisory — because the exemption is to burn on a red day. According to Jim Carey, air quality technician at the Klamath County Department of Public Health, in 2013 the city experienced two red days in October, nine in November and 23 days in December. “Last year was unusually bad,” Carey said. In 2012, only nine red advisories were issued in December.
Carey said officials will monitor residences within the air quality zone after business hours to enforce the advisories, but to also look for opportunities to educate the public on correct burning methods. “If we do see a violation, we’re going to contact the resident,” Carey said. Rural burning
Outdoor burning for residents outside the Air Quality Zone will begin when the Oregon Department of Forestry lifts its burn restrictions, according to the Klamath County web page klamathair.org. When the restrictions are lifted, residents outside the Air Quality Zone may burn yard debris on green advisory days. Carey said atmospheric mixing heights need to be above the 1,000foot elevation required for air to flow in and out of the Basin. He noted that when mixing heights are below 1,000 feet, air is locked between the foothills and mountains, stagnating and decreasing air quality. For a map of the Klamath Falls air quality zone, visit http://bit.ly/12d1exs ljarrell@heraldandnews.com; @LMJatHandN
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and poor air quality zone by a powerful and far reaching agency that can supply reams of documents and hundreds of hours of testimony by experts who say the air in our non-attainment zone is not good for people to breath. Due to a poor air quality season in 2013 we are now faced with moving in to a further designation of “serious” non-attainment. Serious non-attainment begins restricting existing businesses and raises the bar higher for businesses considering moving to the community. This will mean existing industry in Klamath Falls will be forced to install Best Available Control Technology. It will mean requiring Lowest Achievable Emission Rate Technology on new or expanding industry. It will also mean best available control measures (BACM) for other sources of emissions in the community. BACM measures for wood stoves could mean prohibiting uncertified wood stove use and permitting all other sources of wood stove usage. This outcome could be an even bigger job killer for the Basin than many of the other challenges we face. But, we have an opportunity to avoid this serious air quality challenge to economic vitality by just following the rules as they exist today. We need to reduce the amount of unfiltered or poorly filtered wood smoke in the air throughout the burn season. Unfortunately this can be a personal burden and requires real dedication on the part of the
Mark Fay, M.D. Scott Stevens, M.D. Physician/ Surgeon of the Eye Physician/ Surgeon of the Eye
community as a whole. DON’T BURN ON RED DAYS – it is that simple. We don’t have the luxury of waiting until next year, lobbying for changes in the law, or convincing ourselves it is beyond our control. It isn’t about local industries, they have monitored filtering systems in place. It isn’t about diesel powered tractor trailers, they also have filtering in place. It isn’t about forest fires, prescribed burning, or agricultural burning, those activities are accounted for in the process. It is about wood smoke from old stoves, fireplaces, and yard debris burning on “red” days when the inversion sits on the Basin. Let’s put this particular challenge behind us and apply resources and energy to some of the other challenges we face and move this community forward. How can you help? Visit www. klamathair.org to view advisories. Don’t burn on red days. Share the advisories on Facebook, Twitter and with your friends. If you know anyone in need of energy assistance this season please share this information to help your neighbors, or yourself, be safe and warm. Call KLCAS at 541-882-3500 or Toll free: 866-665-6438 Less wood smoke over the next six months means less government intervention and regulation. Less wood smoke could mean more jobs!
Edwin Tuhy, O.D. Optometrist
Jennifer Sparks, O.D. Optometrist
New Patients Welcome
2640 Biehn St. • 541.884.3148 • www.klamatheyecenter.com
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Thursday, Oct. 23, 2014, Herald and News
Basin Business
Sportsman’s Warehouse coming to K. Falls Reprinted from the Herald and News, Oct 21, 2014
Sportsman’s Warehouse is coming to the Klamath Falls Town Center in mid-2015, and is likely bringing with it 15 to 20 jobs, according to Karen Seaman, chief marketing officer for the company. The new location will open at 1863 Avalon St., next door to Bealls department store, some time in late spring 2015. Bealls department store opens Nov. 6. (The building once housed the Gottschalk’s department store and is being divided into two storefronts). “We’re thrilled,” said Michael Karasik, managing partner of Argonaut Investments, a Californiabased development firm that is investing in the property. Sportsman’s Warehouse carries hunting, fishing, camping and outdoor gear and apparel. The store carries numerous outdoor brands, including Remington, Winchester, Danner, UnderArmour and Carhartt. The company made an initial announcement of its plans on its website. Karasik said the development firm identified two major voids when it first came to Klamath Falls – a department store and a large outdoor
retailer. Karasik said Sportsman’s Warehouse was among a “bunch” of retailers Argonaut Investments talked with, but a high concentration of outdoor enthusiasts attracted the store to locate to the Klamath Basin. A lease between Argonaut and Sportsman’s Warehouse was finalized two to three weeks ago, according to Seaman in an email. The main contractor for construction on the approximately 17,000-square-foot space will be Cameron Construction, a Portland-based firm, she said. “This is a little bit smaller than Bealls,” Karasik said. Mayor Todd Kellstrom expressed excitement about both stores opening at the shopping center. “These two stores will hopefully lead to more
dominoes falling for shopping in Klamath Falls,” Kellstrom said. “Success breeds success.” Klamath County Chamber of Commerce Executive Director Charles “Chip” Massie also expressed excitement Monday about the store. “I see it as one of the ways to keep people in the community,” Massie said. “The fact that that space will now be full again…I think it moves us up in the market as a service area. “We’re excited that they’re going to be added to the community here,” Massie added. Hunting and fishing enthusiasts helped bring the store to the region, according to Klamath County Economic Development Association Director Trey Senn. “This has always been considered a hunting and fishing paradise,” Senn said. “You’ve got a very willing clientele here.” Of Sportsman’s Warehouse, Senn said, “I really do think our population has exactly what they’re looking for.” To learn more about Sportsman’s Warehouse, go online at sportsmanswarehouse.com.
Washington Federal exceeds $250 million pledge by $108 million for community development From a press release
SEATTLE — Washington Federal (NASDAQ: WAFD) has exceeded a pledge made in January 2013 to provide $250 million in community development funding in the state of Oregon. While the pledge was to spend $250 million over five years, the company has provided funds of more than $358 million in just over 18 months. Contributing to the pledge goal were activities such as loans for affordable housing, economic development financing, revitalization projects, small business and farm loans, employee volunWhitehead teer time, and donations to charitable organizations. Roy Whitehead, Washington Federal’s chairman, president and CEO said, “We had set our sights too low in 2013 and are pleased to announce that in 18 months, as of June 30, we have invested just over $358 million in community
development funding in Oregon. “We appreciate the need for healthy, thriving local communities to the success of our business, and this pledge and related programs reinforce our commitment to be ‘invested here.’ ” The Company took several steps to accomplish the community funding goal: Consumer Loans* $108,239,000 Multifamily Loans* $41,623,507 Small Business/Small Farm $208,317,465 Charitable Contributions $228,318 Total $358,408,290
*Loan figures represent loans to low/moderate income individuals or individuals located in a low/ moderate-income census tract as determined by the Federal Financial Institutions Examination Council.
Charitable contributions included donations of $228,318 made to 55 Oregon nonprofit organizations and 4425 volunteer hours by Washington Federal colleagues. The Washington Federal Foundation supports programs and causes that help provide affordable housing for low and moderate income individuals; provides support for social and human service agencies which serve the needs of low income senior residents; and donates to other charitable organizations supported by its employees who serve as volunteers or board members. About Washington Federal Washington Federal, with headquarters in Seattle, has more than 200 offices in eight western states. To find out more about the company, please visit the website. The company uses its website to distribute financial and other material information about the company, which is routinely posted at www. washingtonfederal.com.
Basin Business Financial Focus
Thursday, Oct. 23, 2014, Herald and News
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Sky Lakes, Kiwanis lend support to senior center Prepare far ahead for
The Klamath Basin Senior Center recently received word from Sky Lakes Medical Center CEO Paul Stewart, pledging $10,000 in support to the center’s general operations. Center director Marc Kane reports that this pledge brings the center’s campaign to raise $100,000 from foundations to just within 25 percent of its goal. In a written response to the Center’s request Stewart wrote: “We were pleased to be able to step in and assist the Meals On Wheels program last year; it’s a valuable service and certainly has a direct impact on the health of our senior citizens. “We would be pleased to make a contribution to your general operating campaign of $5,000 for FY 2015. “Also, if you are able to get to o the $95,000 level in contributions towards your goal of $100,000, we would be happy to grant another ‘capping’ gift of the last $5,000. Kane reported in addition to the pledge from Sky Lakes that the Kiwanis Club of Klamath Falls also recently committed $1,250 in support of its Meals-On-Wheels program. He further reported that this is the second year in a row each of these grantors has stepped up with support for the senior center. Earlier
in the year grants from Atrio Health Plans, the Pacific Power Foundation and the US Bank Foundation also were announced. It the center’s appeal for funding Kane cited the rapid expanse of Stewart its health promotion programs and a new initiative to develop a health assessment and counseling program. Exercise and health classes at the center have grown from seven classes a week to 16 including two now offered by the center at the Community Lounge in downtown Klamath Falls. These efforts represent what Kane described as a center makeover effort in order to appeal to the changing needs of today’s seniors. Also planned are additional classes in creative writing, computer skills, and safe driving for seniors. The center’s board development committee continues to solicit suggestions for new programs and other improvements. Interested persons may contact Kane by phone at 541-883-7171 ext. 117 or by e-mail at marc.kane@ kbscc.org.
Gordon Ross reads at ComiCon
Chamber member Gordon R. Ross has been invited to read from his latest book, “Tales From Tidy Vale,” a collection of his published and unpublished horror short stories, at two upcoming events. These include the first Klamath ComiCon at the new South Suburban Library, Saturday and at an evening reading at the Klamath County Library on Wednesday. Both readings will be Halloweenthemed, and contain adult situations and plots. According to Ross, the dozen stories in “Tales From Tidy Vale” cover fictional happenings in and around a rural Oklahoma graveyard in time periods from just after the Civil War
to present day. A portion of the sale of the 12-story book has been designated by Ross to go to a new Oregon Institute of Technology student fund. “Tales” begins with the story of a mistreated Union Army mule, and works its way through the after-death experiences of a spoiled banker’s daughter, a grave digger who opens coffins from underneath for any riches buried with the bodies, and a man looking for his doomed girlfriend’s hidden inheritance. “Tales From Tidy Vale” is Ross’ fourth book to be published in the past year and a half. The other three are a set of detective novels, written in pulp fiction action-adventure style.
long-term care costs
November is Long-Term Care Awareness Month — a month dedicated to educating the public about the need to prepare for the potentially devastating costs of long-term care. And the more you know about these expenses, the better prepared you will be to deal with them. To begin with, just how expensive is long-term care? Consider this: The average cost for a private room in a nursing home is more than $87,000 per year, according to the 2014 Cost of Care Survey produced by Genworth, a financial-services company. And the average cost of an assisted living facility, which provides a level of care that is not as extensive as that offered by a nursing home, is $42,000 per year, according to the same Genworth study. All long-term care costs have risen steadily over the past several years, with no indication that they will level off. Many people, when they think about long-term care at all, believe Medicare will pay these costs — but that’s just not the case. Typically, Medicare only covers a small percentage of long-term care expenses, which means you will have to take responsibility. Of course, if you are fortunate, you may go through life without ever needing to enter a nursing home or an assisted living facility, or even needing help from a home health-care aide. But given the costs involved, can you afford to jeopardize your financial independence — or, even worse, impose a potential burden on your grown children? To prevent these events, you will need to create a strategy to pay for longterm care expenses — even if you never incur them. Basically, you have two options: You could self-insure or you could “transfer the risk” to an insurer. If you were going to self-insure, you would need to set aside a considerable sum of money, as indicated by the costs mentioned above. And you would likely need to invest a reasonably high percentage of this money in growth-oriented investments. If you chose this self-insurance route, but you never really needed a significant amount of long-term care, you could simply use the bulk of the money for your normal living expenses during retirement and earmark the remainder for your estate. However, if you did need many years of nursing home care, you could end up going through all your money. As an alternative, you could transfer the risk of paying for long-term care to an insurance company. Many plans are available these days, so, to find the choice that is appropriate for your needs, you will want to consult with a professional financial advisor. Here’s a word of caution, though: The premiums for this type of protection rise pretty rapidly as you get older, so, if you are considering adding this coverage, you may be better off by acting sooner, rather than later. None of us can know with certainty what the future holds for us. Ideally, you will always remain in good shape, both mentally and physically, with the ability to take care of yourself. But, as you’ve heard, it’s best to “hope for the best, but plan for the worst.” So, take the lessons of Long-Term Care Awareness Month to heart and start preparing yourself for every scenario. This article was written by Edward Jones for use by the local Edward Jones Financial Advisor.
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Thursday, Oct. 23, 2014, Herald and News
Basin Business
$122,000 windfall
Transient Room Tax collected
Extra room tax funds found Reprinted from the Herald and News, Oct 21, 2014
The Klamath County tax office distributed additional dollars from the transient room fund in the second quarter, making it the largest second quarter the tax has distributed in recent years. At the beginning of October the Klamath County commissioners agreed to distribute roughly an additional $122,000 to the recipients of the transient room tax. Tax Collector Rafael Hernandez said the funds were dollars left over at the end of the fiscal year, which ended in June. “With the transient room tax, everything gets distributed out,” he said in an interview. “At the end of the fiscal year there was money there.” The $122,000 added to the $416,500 second-quarter revenues already distributed in August, for a total of almost $539,000. That amounts to about $100,000 more than in the
2014 Second Quarter Transient Room Tax amount distributed
Tourism fund: $114,526 Klamath Falls: $144,114 Merrill: $87 Fairgrounds: $192,641
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2013 second-quarter. In the last five years, the amount of transient room taxes collected varied from $370,000 to $440,000. The transient room tax is a fee on those who stay in local hotels, motels, inns and other overnight lodging. It is distributed to the two cities with lodging, Klamath Falls and Merrill, the Klamath County fairgrounds, the Klamath County museums, the county tourism fund and county tourism grants. The Klamath County tax office takes a 10 percent administration fee from the revenues before distributing them. In 2006, voters approved raising the tax from 6 percent to 8 percent, giving funds to the museum as well as the other entities. Typically the quarter with the largest amount of tax collected is the third quarter, which runs from July through September. Taxpayers have until the end of October to pay the county.
Museums: $40,421 Competitive grants: $47,158 Total: $538,947
(Klamath County tax office takes a 10 percent administration fee from revenues)
First quarter: $184,198 Second: $420,803 (Additional $123,588 creates $544,391 total)
2013 First: $171,029 Second: $440,803 Third: $732,481 Fourth: $244,586
2012 First: $148,032 Second: $373,629 Third: $687,265 Fourth: $221,012
2011 First: $147,969 Second: $414,740 Third: $659,322 Fourth: $221,012
2010 First: $143,204 Second: $356,361 Third: $632,209 Fourth: $216,627
See’s Candy sales top $10k
Kiwanis club funds community projects The Klamath Falls Kiwanis Club recently approved an annual budget funding over $14,000 in community projects. The club raises funds in the community primarily through the sale of See’s Candy just prior to the Christmas season. An early sales campaign focused on area businesses was launched in late October and encourages businesses to make larger purchases as gifts to their customers and employees. Kiwanis Club president Marc Kane, reports this to be a good strategy for local business to both show appreciation to customers and employees as well as supporting
worthwhile community projects at the same time. One hundred percent of the funds raised through this fundraiser is spent on community projects in our area. Although the club supports a wide variety of projects its major emphasis is on serving the needs of area children. The club sponsors the SMART Reading Program at Mills Elementary and members participate as readers in addition to providing financial support. Kane reports that typically projects that are funded also receive hands on support from the club’s members.
The SMART program has been its largest project for the past two years. Other projects include taking young children in need Christmas Shopping (this year more than 50 children will shop with members at Fred Meyer for clothing and a toy), Senior Center Support, Gospel Mission Support, Parks Support , Graffiti abatement, the Children’s Learning Fair and more. Membership is always open and the club has set a goal of doubling its membership this year to 50 members. The club is looking to do more but needs to build its membership to expand its community support.
See’s Candy Sales that support the club are made over the counter at the Diamond Home Improvement store (beginning Nov. 28) and through pre-season sales to businesses through Dec.12). Business that purchase in quantity and in advance are given a significant discount in order to encourage greater sales and community support. Shelby Morehead has been appointed the club’s sales coordinator and can be reached at 541-9442823. Businesses may order by phone or have a representative visit. All orders will be delivered directly to participating businesses.
Basin Business
Thursday, Oct. 23, 2014, Herald and News
Hall new VP of lending at Pacific Crest FCU Pacific Crest Federal Credit Union announces the selection of George Hall as Vice President of Lending and welcomes him to the team. He brings with him 38 years of experience in the financial industry including branch management, commercial real estate loans, construction loans, residential real estate loans, loan origination, ownership of a loan business and brokerage of residential real estate loans. In addition to Hall’s extensive experience in credit unions in the west/northwest region, Hall served as SVP, Chief Lending Officer for Klamath First Federal in Klamath Falls from 1989 to 1998.
Hall graduated from Central Washington University with a Bachelor of Arts degree and served in the U.S. Air Force. Hall and his wife, Patti, are happy to be back Hall in Klamath Falls and look forward to reacquainting themselves with the community. The credit union is looking forward to his contributions to a mutual success.
About Pacific Crest Pacific Crest Federal Credit Union has served its members since 1936 and remains locally owned and operated by its more than 15,500 member/ owners in Klamath, Lake, Modoc, and Siskiyou Counties by building valued relationships to create financial success. For more information, please visit our website: www.pacificcrestfcu.
Unemployment numbers improve for both Klamath and Lake counties; hiring up After several months of stagnation in the local labor market the Klamath Basin began to see signs of improvement in September, according to a press release form the labor department. Hiring was up on a seasonally adjusted basis and unemployment rates saw small improvements. Klamath County’s unemployment rate was 9.7 in September, while Lake County’s rate was 9.3 percent. Nationally the unemployment rate dipped to 5.9 percent, while Oregon’s rate was unchanged at 7.1 percent. Klamath County: The seasonally adjusted unemployment rate in Klamath County began to show signs of improvement in September. The rate fell to 9.7 percent from 9.9 percent in August. Unemployment levels remain down from the year-ago rate of 10.5 percent. The county gained 310 jobs in September, significantly more than the expected gain of 100 jobs this time of year. Typical seasonal declines began in the tourism industry with leisure and hospitality shedding 80 jobs from August. There were also declines in professional and business services (-50). However, these losses were overcome by strong back-to-
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New Chamber members: BBSI Barrett Business Services Inc. based out of Medford Lutheran Community Services NW Kingdom Coffee House Ed Staub and Sons Real Solutions Klamath Insurance Services Sharky’s Shack Town and Country Center
Contact us: Klamath County Chamber of Commerce 205 Riverside Drive, Suite A Klamath Falls, OR 97603 Office: 541-884-5193 Fax: 541-884-5195 Charles “Chip” Massie: Executive Director cmassie@klamath.org school hiring in local government education (+440). Employment levels remain down over the year. There were 160 fewer jobs in September compared to last year (-0.7 percent). The largest losses were seen in the professional sector, which shed 160 jobs. Manufacturing is down 100 jobs and general merchandise stores are down 90. Schools are hiring again with local government education up by 190 jobs from the start of last school year. Lake County: The seasonally adjusted unemployment rate dipped to 9.3 percent in September from the revised
rate of 9.5 percent in August. Over the past year, Lake County’s rate dropped from 10.8 percent. Lake County gained 10 jobs in September. There were no notable private industry changes. Seasonal declines began for the federal government (-30), while local government gained 50 jobs as the school year began. Total nonfarm employment is up 70 jobs or 3.2 percent from last year. Over-the-year job growth was concentrated in private industries with construction and educational and health services each gaining 20 jobs. There were no industry losses over the past year.
Heather Tramp: Marketing and Program Coordinator Email: heathert@klamath.org www.klamath.org www.facebook.com/KlamathChamber twitter.com/AccessKlamath
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Basin Business
Thursday, Oct. 23, 2014, Herald and News
Paid Advertisement
October 2014 Newsletter for Oregon State Senator Doug Whitsett, District 28 Senator Doug Whitsett
Capitol Address: 900 Court St. NE, S-311 Salem, OR 97301 Capitol Phone: 503-986-1728
R-Klamath Falls - District 28 I represent the citizens of Senate District 28, which includes Klamath, Lake and Crook, as well as parts of Jackson and Deschutes Counties. As Senator of one of the largest Senate districts in the state, it is extremely important that my constituents remain in contact with me about the issues and concerns that affect their lives. You and I must work together to protect the common interests of rural Oregonians. I encourage you to contact my office by either email or telephone so that I can know how to best serve you. I look forward to hearing from you soon. Best Regards, Senator Doug Whitsett
Newsletters: www.leg.state.or.us/whitsett Email Senator Doug Whitsett: sen.dougwhitsett@state.or.us
MORE BORROWED MONEY, MORE DEBT, MORE BURDEN ON THE TAXPAYERS? STOP!!!! Oregon voters will be asked to decide nearly a dozen ballot measures in the November general election. In my opinion, these measures contain a number of very bad ideas. Among the worst is Ballot Measure 86, sponsored by State Treasurer Ted Wheeler. The Measure proposes to amend Article XI of the Oregon Constitution to authorize the Legislature to borrow billions of dollars through the sale of a new series of state General Obligation Bonds. These bonds are guaranteed to be repaid by the full faith and credit of the State and Oregon taxpayers. Measure 86 is further worded to bypass an important provision in Section 6 of Article XI. That section prohibits the state from owning or having any interest in the stock of any company, association or corporation. It is meant to prohibit the State from speculating with the peoples’ money. The money authorized to be borrowed by Measure 86 is to be invested in equities markets by the Oregon Investment Council under the direction of the State Treasurer. In essence, the scheme is to create an endowment with the borrowed money. The earning from the speculation in stocks, bonds and other investment vehicles is to be used to provide college scholarships. The payment of the principle and interest on the borrowed billions would be the responsibility of Oregon taxpayers. More specifically, the measure authorizes the Legislature to borrow an amount equal to one percent of the market value of all real estate in Oregon. That is currently a maximum of about $4.3 billion in new debt, according to the Legislative Fiscal Office. Measure 86 directs the Legislature to create the Oregon Student Opportunity Fund to be used for the exclusive benefit of Oregon students pursuing post-secondary education including technical, professional and career training. The fund is to be financed primarily by money borrowed through the sale of General Obligation Bonds. The earnings from speculating in the equities market with the fund’s borrowed money is to be used to pay for scholarships for Oregon students. The Treasurer’s plan functionally shifts the burden of paying for a college education from the student to the Oregon taxpayer. This is not a “one time deal.” The Legislature will determine the actual amount of money to be borrowed by enacting budget bills authorizing the sale of General Obligation Bonds. However, that full amount of debt is constitutionally authorized to be maintained in perpetuity at the discretion of the Legislature with the concurrence of the Governor. In the event that some of the invested money is lost in bad
investments, the Legislature is constitutionally authorized to borrow more to replenish the body of the “endowment.” The only limit is that the total of the newly authorized debt does not exceed one percent of the market value of all of the real estate in the state. All of the costs of repaying the borrowed money are to be borne by Oregon taxpayers. However, the measure specifically prohibits the use of ad valorem property tax revenue to either secure or pay the principle and interest on the debt. Therefore, virtually all of the debt service will be paid out of the future General Fund revenue that supports our schools, public safety and human services. It gets even worse! In the event that the Governor declares an emergency and four-fifths of both legislative chambers concur, Measure 86 authorizes the money in the endowment to be spent for other needful things. Remember, the measure would currently authorize the Legislature to borrow up to $4.3 billion. No matter how the money is spent, Oregon taxpayers will still remain on the hook to pay the principle and interest on the debt. Can you imagine going to your local mortgage lender with this scheme? You would be asking your banker to lend you large amounts of cash, for you to invest in the equities market, so that you could give away the investment earnings. The deal would use your neighbors’ property and future earnings to secure the mortgage, as well as requiring them to pay the principle and interest on the loans. Further, the deal would allow you to borrow even more money if your investments did not work out. Of course, those additional loans would be secured and paid for by your neighbors. Finally, the deal would allow you to spend the borrowed money on needful things in the event of a family emergency. Your neighbors would still be obligated to pay the debt service. I believe that your banker would laugh you all the way to the sidewalk! He might even suggest that you seek mental health counselling. The cost to service Oregon’s existing debt is an equally compelling reason for Oregon voters to reject Ballot Measure 86. Principle and interest payments on existing debt already comprise the fourth largest component of our biennial budgets. A series of previous amendments to Article XI of the Oregon Constitution has empowered the Legislature to incur debt through the sale of General Obligation Bonds. Thankfully, the total amount of debt authorized greatly exceeds the actual amount of money borrowed. Fiscal leaders have been successful in counselling the Legislature to cap its General Obligation Bond borrowing so that
no more than 5 percent of the General Fund is required to pay the principle and interest on the accumulated debt. Nonetheless, our current biennial debt service on General Obligation Bonds is about $750 million. The Legislature has chosen to authorize the sale of revenue bonds secured by the future income streams from both the Oregon Lottery and Oregon transportation fuel taxes, licenses and registrations. The sale of Lottery Revenue Bonds is unofficially capped so that the principle and interest on outstanding bonds will not exceed one fourth of the state lottery revenue. Our current biennial debt service on Lottery Revenue Bonds is about $250 million. Regrettably, it is my understanding that legislative leadership and the state Treasurer have chosen to implement some “creative financing,” such as interest-only payments, in order to remain under that 25 percent cap. The Legislature has shown little restraint in the sale of highway revenue bonds. For the past dozen years, it has borrowed money through highway revenue bond sales to build highway infrastructure that could not be paid for with current sources of income. According to the Oregon Department of Transportation, the biennial principle and interest on those outstanding bonds exceeds $550 million. This debt load will seriously impede ODOT’s ability to maintain our state highways into the foreseeable future. The total biennial principle and interest on just these three forms of Oregon debt exceed $1.5 billion. To put that amount of money into perspective, it exceeds the entire budget for the Oregon Department of Corrections. Oregon elected leaders must learn to limit their spending to what the taxpayers can afford to pay. Our budgets are in disarray, much like a family that has not learned to live within its means. The untenable state debt was created by past Legislatures by continuing to borrow money to pay for things and programs that the taxpayers could not afford. Ballot Measure 86 represents yet another liberal progressive plan to spend other peoples’ money. I hope that Oregon voters will soundly reject this very bad idea on November 4th. Please remember, if we do not stand up for rural Oregon no one will. Best regards, Doug