August, 2018 by Southern Oregon Business Journal

AUGUST 2018

Inside This Issue: • • • •

What If? Two Friends Start a Bank Wildfires Cost $454 Million in 2017 PeaceHealth at RiverBend 10 Years Brookings Business is a Success Story

A few words from Greg

Residents of southern Oregon have been making new decisions in rapid-fire fashion out of necessity and desire to be heard and recognized on a much wider scale than ever. How can the world become so small and so large at the same time? Amazon had its “Prime Day” on July 16th that resulted in sales of over 100 million items in only 36 hours. That’s beyond incredible. Its no wonder big box stores and malls are struggling. Retail has changed because of the shrinking world. Businesses across southern Oregon, large and small, are forced to adjust. Their customers discover the convenience of 24-hour home delivery and change their shopping habits while sitting at home. Change is not only fast, it’s also very easy. While Facebook announces plans to increase the size of its solar power energy production in Prineville to a level capable of powering 100,000 homes (30,000 more than exist in Eugene), the smoke and flames of wildfires divert our attention to our own neighborhoods. Is it poor forest management, bad politics or global warming? The arguments rage on with the flames. Industry grows amid the firestorms. There is a fever pitch of construction on our region’s college campuses. The need to be competitive reaches beyond retail and commercial business, extending to attracting high caliber professors and talented students from across the nation who demand the best in facilities and research opportunity. K-12 education is forced to produce highly skilled graduates for the universities and community colleges who are being budget-taxed in their efforts to produce a skilled and motivated workforce for the new world economy. And they’re meeting those demands. Every community in southern Oregon is producing amazing results in the quest to be heard and known around the world. When a digital message can be sent from any of our 250 small towns and a response returned in minutes from Denmark or Australia or across the street we know this isn’t the same world of only a decade or two ago.

Greg

The Southern Oregon Business Journal extends sincere thanks to the following companies for their continued presence as important cogs in the wheels of industry in southern Oregon. There are 45,000 businesses in southern Oregon and these are among the leaders on whom we depend.

Southern Oregon Business Journal

A JOURNAL FOR THE ECONOMICALLY CURIOUS, PROFESSIONALLY INSPIRED AND ACUTELY MOTIVATED

Contents Inside This Issue 2. A Few Words

FEATURED ARTICLES

4. Oregon’s Minimum Wage 6. SOREDI Prosper Awards 11. Klamath Chamber Business Summit

8. Oregon’s Youth Unemployment Lowest on Record

12. Tech Set to Disrupt Construction Industry

16. Wildfire Season—Moving Forward

14. EDGE—Procare Software world leader

26. A letter to POTUS

24. Parking: Embracing Socialism 29. AOCC Supports Endangered Species Act Changes 32. Energy Trust - Variable Frequency Drives 36. STEAM Hub Director ready in Douglas County

30. Brookings—River’s End Construction 34. People’s Bank: 20 Years since What if? 37. PeaceHealth at RiverBend

Publisher’s note: The July issue included an article about Energy Trust’s 2018 Budget. It included an abbreviated letter from the Energy Trust Executive Director on page #29. Though the director’s comments were abbreviated, there was no intention to give the appearance of the full report to the board of directors. The entire report can be found at: https:// www.energytrust.org/wp-content/uploads/2017/12/APPROVED_Budget_and_Action_Plan_2018_web.pdf

703 Divot Loop Sutherlin, Oregon 97479 www.southernoregonbusiness.com 541-315-6127

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COVER PHOTO People’s Bank new headquarters in Medford, photo reprint by permission

Oregon’s Minimum Wage Increases on July 1, 2018 by Nick Beleiciks and Felicia Bechtoldt Oregon’s minimum wage increases on July 1, 2018, but the raises won’t be the same across the state. Minimum wage increases to $12.00 per hour inside the Portland urban growth boundary, $10.50 per hour in nonurban counties, and $10.75 in other areas of the state.

Oregon’s three minimum wages will be in the top six state-level minimum wages in the nation (including the District of Columbia). The highest minimum wage will be in the District of Columbia ($13.25), followed by Washington ($11.50), Massachusetts ($11.00), and California ($11.00). The federal minimum wage will remain at $7.25 per hour. Oregon’s minimum wage levels were set by Senate Bill 1532 in 2016. The minimum wage increases on July 1 each year through 2022. There are three tiers of step increases based on geography.

Beginning in 2023, minimum wage in all tiers will be adjusted for inflation. This means the minimum wage will maintain purchasing power after the last step increase in 2022. A Look Back at Minimum Wage Jobs in 2017 Between July 1, 2017 and July 1, 2018, Oregon’s minimum wages were $11.25 per hour within the Portland urban growth boundary, $10.25 standard, and $10.00 in nonurban counties. Roughly 7.4 percent of all jobs (160,274 jobs) paid minimum wage or less in Oregon in the third quarter of 2017. The share of jobs paying minimum wage ranged from a low of 4.0 percent in Morrow County (295 jobs) to a high of 13.3 percent in Malheur County (2,050 jobs). Multnomah County had 39,561 minimum wage jobs, which made up 7.1 percent of total jobs in the county.

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With a larger concentration of jobs in metro areas, metros also have more minimum wage jobs. Deschutes County had the lowest percentage of jobs (5.7%) paying minimum wage among metro counties, followed by Marion County (6.2%) and Benton County (6.2%). Clackamas had the highest share of jobs paying minimum wage among metro counties at 9.5 percent.

There were fourteen counties that had a share of minimum wage jobs at or below the statewide share of 7.4 percent. These included Morrow (4.0%), Hood River (4.5%), Deschutes (5.7%), Marion (5.9%), and Umatilla (6.2%). Counties with a higher share of minimum wage jobs tended to be in rural areas. Eastern Oregon had a greater share of minimum wage jobs than other areas of the state. The highest shares of minimum wage jobs were found in Malheur (13.3%), Harney (13.1%), Wheeler (12.8%), Baker (11.6%), Sherman (11.0%), and Lake (10.9%).

See our report Oregonâ&#x20AC;&#x2122;s Minimum Wage Jobs: Facts, Figures, and Context for historical information about Oregonâ&#x20AC;&#x2122;s minimum wage jobs.

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Unemployment Rates for Oregonâ&#x20AC;&#x2122;s Youth â&#x20AC;&#x201C; Lowest on Record by Felicia Bechtoldt Oregon added hundreds of thousands of new jobs while recovering from the Great Recession and the unemployment rate declined to a record low in 2017. In these economic conditions, even teenagers and young adults are finding jobs. Unemployment rates for Oregon youth increased drastically during the recession and are currently below their pre-recession levels. In 2017, unemployment rates for Oregon teens ages 16 to 19 was 9.5 percent, which was the lowest unemployment rate since comparable records began in 1978. This was a large drop from a year before when the unemployment rate for teens was 20.0 percent. The unemployment rate for Oregon young adults ages 20 to 24 was 7.6 percent in 2017, which was also the lowest unemployment rate recorded for this age category. The last time the unemployment rate for young adults was 7.6 percent was in 2005. In 2016,

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the unemployment rate for young adults was 9.6 percent. The time young people spend unemployed has shortened significantly in the last few years. In 2017, the median number of weeks teens stayed unemployed was 5.9 weeks, down from 10.3 weeks in 2010. The median number of weeks young adults stay unemployed was 8.2 weeks, down from 15.4 weeks in 2010. Young workers account for a disproportionate share of overall unemployment. Young people ages 16 to 24 made up 13 percent of the labor force, but accounted for 26 percent of Oregon unemployment in 2017. Young people have consistently higher unemployment rates than older populations. The unemployment rate for the population age 25 and over was 3.5 percent last year, which was also an all-time low since records began in 1978.

Young workers have higher unemployment rates for various reasons. Regulations restricting hours and limiting the nature of permissible work, and the need to schedule work around school and extracurricular activities can make it more difficult for a teen to find a job (although these considerations predate the decline of the teen labor force that has occurred since 2000). In addition, many young people lack work experience. In Oregon, about 48 percent of unemployed teens and 14 percent of unemployed young adults have no work experience compared with 3 percent of unemployed adults ages 25 and over. The lack of work experience makes it harder for youth to compete with experienced applicants. Teens Use Fewer Job Search Methods Youth use fewer job search methods than adults, and they are less likely to use personal networks and public employment agencies in their job search. National data show that the most common job search methods used by teens are sending out resumes, filling out applications, and directly contacting the employer. Using more job search methods could help youth find more employment opportunities. Older workers are more likely to contact friends or relatives for job leads, place or answer job advertisements, and use a public or private employment agency.

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Not Working Now the Norm for Teens Having a part-time or summer job used to be the normal situation for many teenagers. The labor force participation of teens averaged around 59 percent from 1978 to 2000. The rate started falling dramatically in 2001 both in Oregon and the nation. During the recession and in the aftermath of the recession it continued to slip. Oregonâ&#x20AC;&#x2122;s strong job growth since 2013 attracted more teens and young adults into the labor force. In 2017, the participation rate of those ages 16 to 19 rose significantly to 40 percent from 34 percent in 2016. The rate is close to its pre-recession rate of 42 percent. The participation rate of those ages 20 to 24 increased to 74 percent in 2017 from 71 percent in 2016. Youth Substitute Education for Labor Force Experience Youth today are spending more time on education. They face increased requirements related to highschool graduation and college preparation, and those enrolled in school are less likely to be in the labor force than in the past. Many are forgoing early work experience to gain formal education, which could pay off long-term given the college wage premium.

The importance of educational attainment has increased over time. Competition to get into colleges may encourage young people to pursue extracurricular activities that don’t pay, but that will help them get into college. One example is the increasing number of advanced placement exams. Passing such exams can help college-bound students and their families save on tuition costs before they even show up to their chosen college campus. In 2017, Oregon high school students took a record 34,100 advanced placement exams – a staggering increase compared with the 17,200 such exams a decade earlier.

historical average in 2017. This could be because college enrollments have tapered off after rapid growth during and following the recession.

Although higher levels of education improve a worker’s job prospects and lifetime earnings, many of the essential “soft” skills that employers value are gained through early work experiences.

Employment Opportunities for Youth

Today’s Youth Are Not More Likely to Be Idle Counter to popular belief, the Great Recession did not increase the share of “idle” youth – those neither in the labor force nor enrolled in school. In Oregon, roughly 4 percent of teens and 10 percent of young adults were considered idle in 2016. The share for both teens and young adults stayed in a tight range within 2 percentage points over the last decade. National data going back to 1985 show that youth are no more likely to be idle today than they were in the 1980s and early 1990s; although the share of idle youth nationally did rise in 2013, it was back to the

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The use of the word “idle” here is not intended to be judgmental. Some young people face life situations more complex than simply choosing between work, education, or “nothing.” Stay-at-home parents and others with family care responsibilities, and young people with disabilities come to mind. They may not be in the labor force or enrolled in school, but they are not necessarily purposely avoiding either.

With employers having a difficult time filling job vacancies, a record low unemployment rate, and continued job growth, young workers have the opportunity to move to other jobs and gain experience in a wide range of occupations. There are so many job opportunities outside of retail trade, restaurants, and fast food – a common job choice among young workers. In Oregon, employers are currently recruiting for more than 700 occupations. Some require a high school diploma, postsecondary training, or other types of education levels, while others have fewer work requirements. Young workers can learn about occupations by going to their local WorkSource office, exploring our Occupation Profiles tool or “Careers 2018” magazine on pages 44-69. “Careers 2018” is a great resource for youth to help them prepare for an interview, write a resume, and apply for a job.

PRESS RELEASE For Information Contact: Heather Tramp 541-884-5193 Conference Focused on Rural Business Coming to Southern Oregon The 4th Annual Rural Business and Innovation Summit is scheduled for September 13th, 2018 in Klamath Falls and will focus on the challenges and opportunities facing businesses in rural communities. The one day conference features topics on social media marketing, retail strategies, talent attraction/retention, and cybersecurity. “We couldn’t find any conferences on the West coast that focused on the unique rural business environment, so we started one,” said Heather Tramp, Executive Director of the Klamath County Chamber of Commerce. She points out that while some topics are relevant no matter where the business is located, there are circumstances and nuances in a rural area that business owners in urban areas don’t deal with. To plan the conference, Tramp and other event planners reach out to speakers that understand those differences between urban/rural and can offer practical, useful information to help businesses grow. For example, this year, Aaron Orendorff, Editor in Chief of Shopify Plus, will be speaking and sharing a true story of a business that grew from a small rural community and is now a multi-million dollar business. “We want to inspire business owners to dream big and imagine the opportunities that exist in rural America,” said Tramp. Another speaker, Don Macke, co-founder of the Center for Rural Entrepreneurship and co-author of the book “Energizing Entrepreneurial Communities,” will be speaking about retaining and attracting talent and the younger generation. Macke has devoted years specifically researching business ownership and entrepreneurship in rural areas. “We’re thankful to the local Small Business Development Center and the Klamath IDEA for helping bring Mr. Macke to our event,” says Rachael Spoon, State Farm agent and Chamber board president. Business owners, entrepreneurs, startups, and community leaders are encouraged to attend and will come together to exchange ideas, share experiences, and discover best practices that provide a competitive edge and lead to thriving business in rural areas. “We hope the Summit inspire business owners to take advantage of opportunities for growth,” says Tramp. The event will be held at Klamath Community College in Klamath Falls, Oregon. Tickets for the Summit are on sale now and can be purchased through the event’s website at www.ruralbizsummit.com or by calling the Chamber at (541) 884-5193. Tickets are $99 for Chamber members, $149 for non-Chamber members. The Klamath County Chamber of Commerce is extending the special Chamber member pricing for those who are members of any Chamber. In addition to registering, the Chamber is offering exhibitor space at the event which is expected to attract around 130 attendees. The application for exhibitor space can be found online at www.ruralbizsummit.com. For more information on the Summit, contact the Chamber at 541-884-5193. The Klamath County Chamber of Commerce has served Klamath County since 1905. It is a member-based association made up of businesses and individuals who work together to advance the civic, economic, industrial, professional, and cultural life of Klamath County and the City of Klamath Falls, through advocacy and broad communication connections. Membership is available to businesses, organizations (including non-profits) and individuals.

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Into the Fire OFRI Executive Director Has Experience in Crisis Communication that Will Likely Come in Handy

Erin Isselmann Executive Director Oregon Forestry Resources Institute

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Paul Barnum Executive Director, Retired

Love the forest; love the people I love Oregon’s forests of all kinds – from freshly planted to majestic old growth – but the biggest attraction for me has always been the people. Growing up in eastern Oregon, I spent many summers working in agriculture: bucking hay, driving pea trucks and pea combines, operating a grain elevator. And later in Astoria, I worked in fishing: on the docks tossing tuna, in canneries fileting salmon, and in rendering plants making pet food. You really haven’t smelled grossness until you’ve worked in a rendering plant. With the realization that Oregon is dependent on natural resources, going to work in the forest sector in 1991 for Weyerhaeuser was an easy move. I never looked back. Throughout my career, including the past 10 years as OFRI’s executive director, I’ve worked with wonderful people: folks who care about the land, its resources and the future of this state. That extends to everyone – from tree planters, to foresters, to scientists, to mill workers – all the way to the leaders in executive suites. All along the way, they have helped me to be a better communicator and ambassador for the sector. As I turn the page to life’s next chapter, it is the people I will miss the most. Thank you all for your support over the years. I’ll see you on the trail. For the forest – always,

Paul Barnum

Southern Oregon Business Journal

Parking: Where we embrace socialism in the US By Joe Cortright

How we embrace socialism for car storage in the public right of way Comrades, rejoice: In the face of the counter-revolutionary neo-liberal onslaught, there’s at least one arena where the people’s inalienable rights reign supreme: parking.

Fear not, comrade sister: you will not have to search for a parking space in our socialist utopia! We may not be able to make health care a right or make housing a right, but the one place the revolution has plainly succeeded in usurping the market is in the case of parking. Every worker’s council (though they may still brand themselves in the pre-revolutionary nomenclature of “city councils” or “townships” or “planning commissions”) has established the right of every citizen to abundant, free parking.To everyone, we can point to parking as one place where private property and the intrinsically inequitable forces of capitalist distribution don’t disadvantage the working classes and the poorest among us. There may be massive inequities in other aspects of life, but each citizen is guaranteed equal access to adequate parking spaces. To paraphrase Anatole France, the law in its majesty protects equally the right of the rich and the poor to park their massive sport utility vehicles pretty much wherever they would like without having to pay a penny for doing so. True, we may face public opposition from reactionaries in the media, like New York Times columnist Tim Egan, who has decried the people’s efforts in Seattle to secure greater access to housing as a conspiracy between socialists and developers. Tosh! As we have shown with our parking requirements, we will bend developers to the will of the people.

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Throughout the nation, workers councils city councils have decreed that the people’s right to parking is supreme. No bourgeois developer may build so much as a small shop or an apartment without adequately providing for the needs of the automobiles that may travel to or from these destinations. We may still struggle to require inclusionary zoning for people, but we have long since achieved inclusionary zoning for cars. Together, comrades, we embrace the timeless historical wisdom encapsulated in the ITE parking handbook, which assures that each citizen is allocated sufficient parking spaces at each of the places he or she may wish to store a vehicle. To those neo-liberal apologists and enablers who call themselves “economists” and claim that socialism is flawed and unworkable, we can proudly point to the successes of the parking supply diktats established in every community, large and small. The production of parking spaces has exceeded the quotas established in the five year community plans. Comrade Scharnhorst has produced a new report that showing that in Seattle, there are 1,596,289 parking stalls, more than 5 parking spaces for every household: indeed, a triumph of the planned economy! (Now if we could just figure out how to get one house per household?) The production of parking spaces continues to set glorious new highs Scharnhorst cleverly infiltrated the Mortgage Banker’s Association to assemble the data for his report; just as V. I. Lenin foretold, we will hang the capitalists with the rope they sell us; surely had the great teacher been writing in this century, he would have said we will disrupt capitalism with the big data downloaded from their servers. Take heart comrades: whatever our challenges in other domains, we can proudly tell the masses that we’ve succeeded in establishing a socialist utopia for car storage. Forward!

Joe Cortright is President and principal economist of Impresa, a consulting firm specializing in regional economic analysis,

innovation and industry

clusters. Joe’s work casts a light on the role of knowledge-based industries in shaping regional economies, Joe served for 12 years as the Executive Officer of the Oregon Legislature’s Trade and Economic Development Committee

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A LETTER TO POTUS ON INFRASTRUCTURE BY CHARLES MAROHN

During the presidential transition that took place at the beginning of this year, I was asked to provide my thoughts on how a Trump administration should prioritize what was anticipated to be up to a trillion dollars in infrastructure spending. It was an honor — and a testament to how large the Strong Towns movement has grown — to be asked to weigh in with some notes. I knew the odds of our foundational ideas being given serious weight was remote since, if asked what the federal government should do on infrastructure spending, I would have argued: the less the better. So, in the spirit of pragmatism, I tried a different approach. The question we at Strong Towns asked ourselves was this: If America's going to spend $1 trillion on infrastructure, how could that be done in the least damaging way? Using Strong Towns' framing, how could we limit the downside damage of a surge in infrastructure spending in 2017 and increase the likelihood that there would be some long term upside to these investments? While he was roundly criticized for making the comment at the time, I was and remain sympathetic to Donald Rumsfield's observation during the war with Iraq that you go to war with the military you have, not the one you wished you had. At its core, it's an acknowledgement that, particularly in major matters, we will never have the ideal set of conditions for moving ahead. Anyone who has successfully managed a complex system for any length of time grasps this intuitively, making reaction to Rumsfield's comments a litmus test of sorts for a certain type of competency. I referenced it in my comments below as a way to signal that we grasp this limitation. I ultimately framed my remarks as an open letter because it helped me think more like a politician and less like a policy advocate, and because I thought it would be helpful for the communities that received this

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money to think about things in this way. The fourpoint framing, while not universal, is simple to understand and, if followed, would generally produce better results than whatever is ultimately done. Speaking of which, despite seemingly broad consensus among elected officials, policy advisers and pundits that the smartest course of action for the United States is to spend a colossal sum of federal money on infrastructure, we haven't done it. Perhaps it will happen in 2018, but perhaps not. I'm not going to take the credit for the hesitation, but every day this is put off, we build more of a groundswell of opposition to our current infrastructure approach. If serious reform is not an option, here's to another year of inaction. - Chuck Marohn

Dear Mr. President, I am writing you on behalf of our Board of Directors and our membership regarding a potential surge in federal infrastructure spending. At Strong Towns, we have developed a unique understanding that allows us to speak with a level of clarity on this issue. Our supporters have no financial interest in whether or not more federal money is spent on infrastructure; our mission is to advocate for ways those investments can make our cities stronger.

“To borrow a real estate term, America’s infrastructure is a non-performing asset. For nearly every American city, the ongoing cost to service, maintain and replace it exceeds not only the available cash flow but the actual wealth that it creates.”

To borrow a real estate term, America's infrastructure is a non-performing asset. For nearly every American city, the ongoing cost to service, maintain and replace it exceeds not only the available cash flow but the actual wealth that it creates. For example, we did a deep financial study of the city of Lafayette, Louisiana. We found that the city's public infrastructure — roads, streets, sewer, water, drainage — has a replacement cost of $32 billion. In comparison, the total tax base of Lafayette is just $16 billion. Imagine building a $250,000 home and needing an additional $500,000 in infrastructure to support it. This seems incredible. But not only is it common, it is the default for cities across America. This imbalance is caused by incentives we embed in our current approach. When the federal government pays for a new interchange or the extension of utilities, local governments gladly accept that investment. The city, while spending little to no money of their own, has an immediate cash benefit from the jobs, permit fees and added tax base. The only thing the local government must do is promise to maintain the new infrastructure, a bill that won't come due for decades. Here's the catch: When we look at that bill, our cities almost always can't pay it. Cities never run a returnon-investment analysis that includes replacement costs. Cities never even compute the tax base needed to financially sustain the investment. There's no incentive to do it and every reason not to.

“Cities with huge maintenance backlogs still prioritize system expansion because they are chasing the short-term cash benefits of new growth, even at the expense of their future solvency.” In psychological terms, this is called temporal discounting. The people running local governments, as well as the residents they serve, have the natural human tendency to highly value free money today and deeply discount, if not altogether dismiss, the financial burden these projects will create in the future. We've been building infrastructure this way for two generations. We have created a lot of short term growth, but we've also created trillions of dollars of non-performing assets — infrastructure investments that are slowly bankrupting our cities, towns, and neighborhoods. The fundamental insolvency of our infrastructure Southern Oregon Business Journal

investments is the root cause of the pension crisis and the explosion in municipal debt. It is the real reason why our infrastructure is not being maintained. New growth is easy and comes with all kinds of cash incentives. Maintenance is difficult and has little upside. Cities with huge maintenance backlogs still prioritize system expansion because they are chasing the short-term cash benefits of new growth, even at the expense of their future solvency. What do we do today? To paraphrase former Defense Secretary Donald Rumsfeld, we're going to make investments in infrastructure with the systems we have, not the ones we wish we had. Here's what we must do immediately:

•

Prioritize maintenance over new capacity. With so many non-performing assets, it's irresponsible to build additional capacity. Project proposers will try to add additional capacity with their maintenance projects. If it is truly warranted, it can and should be funded locally. Cities need to discover ways to turn such investments into projects with positive return on investment (ROI), a process the federal government can only impede.

•

Prioritize small projects over large. Small projects not only spread the wealth, they have much greater potential for positive returns with far lower risk. Large projects exceed their budgets more often and with greater severity (in dollars and percentage) than smaller projects. A thousand projects of a million dollars or less have far more financial upside than a single billion-dollar project ever will. It's administratively easier to do fewer, big projects, but that is a bureaucratic temptation we need to overcome.

•

Spend more money below ground than above. Many of our sewer and water systems are approaching 100 years old. When these core pipes fail, the problems cascade throughout the system. Technology may soon dramatically change how we use our roads and streets, making investments in expansion there obsolete, but water and sewer will still flow through pipes as it has for thousands of years. We should spend at least $5 below ground for every $1 we spend above.

•

Prioritize neighborhoods that are more than 75 years old. At Strong Towns, we've modeled hundreds of cities across the country and in every one, the neighborhoods with the highest 27

investment potential are the ones that existed before World War II. These are established places where small investments have a huge impact. Most investments in neighborhoods built after World War II are simply bailouts, pouring good money after bad.

“Small maintenance projects focusing on below ground infrastructure in old, established neighborhoods have the greatest potential for positive returns.” In short, small maintenance projects focusing on below ground infrastructure in old, established neighborhoods have the greatest potential for positive returns. These projects will put people to work, create jobs and fix failing infrastructure as well as — if not better than — the large expansion projects currently in the shovelready backlog. These are also the kind of projects that get private capital off the sidelines and back to work building wealth in our communities.

consider the channels through which federal funds are distributed. There is strong evidence to suggest that working directly with mayors to fund local projects creates the greatest potential for innovation as well as the highest fiscal returns. Money given directly to state transportation departments should have a heavy emphasis on maintenance. We would avoid funding counties and other regional entities which, we have found, tend to build the lowest-returning of all infrastructure projects. Thank you for your consideration. If we can be of assistance to you or your team in this matter, please do not hesitate to contact me. Sincerely,

Charles L. Marohn, Jr. PE AICP Professional Engineer, Certified Planner Founder and President of Strong Towns

In addition, while we understand that a surge in infrastructure spending is not going to wait for systematic reform, there are some modest yet transformative reforms we can make as part of this process:

•

Require states and municipalities receiving funds to do accrual accounting. Governments must have a real accounting of their long-term liabilities, including infrastructure, on their balance sheet. The days of fake financial statements that ignore government's long term promises need to end.

•

Require municipalities to account for infrastructure as an accruing liability instead of a depreciating asset. Cities have an obligation to maintain infrastructure. It's improper to pretend infrastructure is an asset that loses value as it ages. Like pensions, infrastructure is an intergenerational promise that is properly accounted for as a liability.

•

Require project applicants to calculate financial return on investment. Many federal programs currently require an ROI analysis, but the emphasis is on non-monetary, social returns. These are fine as secondary criteria, but infrastructure projects need to make financial sense or they will fail. Municipalities must know what kind of revenue stream is needed to maintain an infrastructure investment over multiple life cycles.

Charles Marohn

Charles Marohn is the Founder and President of Strong Towns. He's a Professional Engineer (PE) licensed in the State of Minnesota and a member of the American Institute of Certified Planners (AICP). Marohn has a bachelor's degree in Civil Engineering from the University of Minnesota's Institute of Technology and a Master of Urban and Regional Planning degree from the University of Minnesota’s Humphrey Institute.

Finally, we at Strong Towns believe you should

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Association of O&C Counties Express Support for Changes to Endangered Species Act The Association of O&C Counties (AOCC) expressed support for several regulatory changes proposed by the U.S. Fish and Wildlife Service and the National Oceanic and Atmospheric Administration that would improve implementation of the Endangered Species Act (ESA) by those agencies. The agencies released information about the proposed changes today in a press release as well as on a public conference call. “This is a good first step,” said Douglas County Commissioner and AOCC President Tim Freeman. “The ESA performs a very important function, but like most any aging government program, the regulations surrounding it need updating and streamlining. The major social and economic impacts from decisions made under the ESA justify a thorough examination of every process and regulation.” AOCC Executive Director Rocky McVay expressed similar, cautious optimism. “The summary of the proposed changes sounds like they will be very helpful, but we need to study the 115 pages of material that will be published in the Federal Register to make sure we fully understand what the proposed changes will do,” McVay said. “The proposed changes address, among other things, the nature of protections afforded threatened, as compared to, endangered species; the designation of critical habitat; the consultation process when there are proposed projects that might possibly affect a species; and the process for delisting a species that has recovered and no longer is in need of protection. Although on first review all of the changes seem long overdue, there is clearly more to be done, but the administration is definitely headed in the right direction with these proposals,” McVay said. While generally supportive, AOCC expressed concern that most of the new regulations may not apply to species already listed, such as the Northern Spotted Owl. “If these rule changes are not applied to past listings and critical habitat designations, they will not do much good here in Western Oregon,” Commissioner Freeman said. “We intended to look carefully at that question and if the improvements are not retroactive as they are being proposed, we will push hard in the rulemaking process to see if the agencies can be persuaded to make them retroactive.”

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Brookings

RIVER’S END CONSTRUCTION BUILDING A SUCCESS STORY By Gary Milliman Attention to detail in both workmanship and customer relations is how general contractor Brent Hodges of Brookings has grown his business. A Brookings native who left town after high school to pursue an engineering degree, Hodges worked a variety of jobs in the building trades for several years before returning to Brookings to purchase a cabinet shop in 2006. “I worked on laying out subdivisions, building houseboats on the Columbia River, building and remodeling houses, excavation…just about every aspect of construction while attending college,” Hodges said. “I got married and moved back to Brookings just as the recession hit,” Hodges said. “Business survival was a whole new learning experience.” When Hodges took over the cabinet shop he and two employees were doing mostly custom pieces and accents. To survive the recession, Hodges expanded his business…Rivers End Construction… to include remodeling. “Remodeling served us well and was pretty much all that we did for several years,” Hodges said. “And remodeling projects often expand after you get into the project and develop a good relationship with the client,” Hodges said. “Small stuff, like just fixing a drawer, can lead into larger projects.” Hodges said he survived the recession by managing his business conservatively. “We went into this with minimal debt and I don’t owe money on any equipment,” Hodges noted. “My vehicles are older but serviceable. I’m always thinking about being ready for the next downturn.” With two employees, Hodges was developing his own business experience. Experience with estimating and developing relationships with other local craftsmen. Experience with financial management, employee relations and suppliers. “If you are not good at finances, you’re not going to make it,” Hodges noted. “Estimating and scheduling are the toughest aspects of the business,” Hodges said. “As you see the numbers each day, you learn it by doing.” Securing supplies and materials on the southern Oregon coast can also

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be challenging and Hodges makes at least one trip weekly to Medford or Eugene to pick something up he does not want to wait another week to have delivered. Hodge’s reputation for quality workmanship began to grow, and when the economic upswing began to materialize, Rivers End Construction was ready. “We moved into building custom homes,” Hodges said. “We were in a unique position to offer general contractor services along with specialty work that we could produce through the cabinet shop.” In his most recent project, a 7,000 square foot custom home in Harbor, accent work included converting wooden boat propellers to ceiling fans and constructing several large custom light fixtures. Rivers End works with clients from design through all phases of construction. And they have expanded beyond residential construction. Projects have included construction of a truck shop, offices and remodeling a medical center. Over the years Hodges has developed relationships with subcontractors working on the coast. “We pretty

much use the same tradesmen on every job, and we periodically check prices,” Hodges said. This working relationship has helped with scheduling and keeping the project moving along. As the River’s End crew grew from two to 10, Hodges retained the services of local business consultant Rich Hayashi. “Rich help take it to another level. We went from taking notes to implementing a paper flow that documents our relationship with clients from when they walk in the door until we get paid. Rich has helped me think things through, plan ahead and become more methodical.” Hodges credits Hayashi with helping him manage and retain employees. “It’s important to convey to employees a clear understanding of the job, their role in the job, and your expectations for them in helping to complete the job,” Hodges said. “I’ve been able to keep a good crew with varying levels of experience,” Hodges said., noting that compensation at River’s End included offering a retirement plan.

improve productivity more rewarding. After moving to Brookings he volunteered for a while with SCORE but now helps individual clients as a consultant. “For Brent it was all about the basics. What’s your vision? What services do you want to provide? And then developing internal processes that enable you to manage the business while delivering the service,” Hayashi said. Hodges said he believes his business has a bright future as he plans on building 3-4 new houses annually. In July, his crew started work on three new houses. “We are always open to other projects as well.” “Further expansion of the business brings a whole set of new considerations, like having sufficient working capital to carry the projects until the client pays,” Hodges said. Hayashi said that Rivers End Construction is at a key juncture in its business development. “Brent is a true craftsman and needs to find that balance between practicing his craft and being a business manager,” Hayashi said. “It’s a tough balance to find and only Brent can decide.” “We are now at a place where all of our business is by referral,” Hodges said, noting that he does no advertising and the company is not listed in the telephone book. Hodges has an on-line Facebook presence @riversendinc . Hodges said he and his wife moved to Brookings because “It’s a great place to raise a family. We wouldn’t want to live anywhere else.”

Rivers End Construction, Inc 430 Mill Beach Rd Brookings OR 97415 Phone: (541)412-7037 Email: riversendinc@charter.net Website: http://www.riversendinc. Hayashi attributes the success of Hodge’s business to providing great attention to detail and following through with what he promised the client. Hayashi also said Hodges picked the perfect time to engage with a business consultant, noting that many businesses wait until they are in trouble. An electronics engineer by trade, Hayashi became a process engineer because he found helping businesses Southern Oregon Business Journal

Gary Milliman retired as City Manager in Brookings after a 45-year career in city management and currently provides real estate and developer advisory services.

Southern Oregon Business Journal

People’s Bank of Commerce 20 Years of Service

What If ? Big decisions are made after long deliberation and the mental gymnastics that take us from weighing all the positives against all the negatives we can imagine.

After days of full-fledged self confidence wrestles with more days of doubt and the opinions we may or may not seek from friends and business peers we sit up, wide awake at two o’clock in the morning, and declare that, “Yes, this is a good idea and I have the talent and resources to make it happen. Besides, I have a good friend as a partner who really knows what he’s doing. I can lean on him when I’m not sure if I’m seeing the picture as clearly as I should.” Mike and Ken knew one another through their mutual employment with Western Bank. Mike Sickles was Executive Vice President and CFO until the acquisition by Washington Mutual Savings Bank in 1996. Ken Trautman had been a regional manager and Senior Vice President of Western Bank. An announcement in 1996 of a major restructuring of Western Bank and the elimination of 800 jobs led to an opportunity for these two talented bankers to map out their futures in the banking industry. The savings and loan crisis of the 1980’s and 1990’s was a tremendous learning experience for everyone in the banking industry. Mergers and acquisitions seemed to be happening every week around the country. Customers were confused and often became wary of big banks and the mystery of the way they were run. It was in 1996 that Ken and Mike started talking. “What if we started a bank?” On March 2, 1998 People’s Bank of Commerce opened it’s doors. Ken says that waking up at two in the morning thinking about the bank and all that needed to be done ended when they opened the doors for business. It was the declaration that they were indeed, a legitimate and well organized bank ready to serve the community. No more meeting at Shari’s every morning to discuss everything New Headquarters Ribbon Cutting from the requirements of the state Division of Finance and Corporate Securities to the number of loan officers they needed to hire and how many parking spaces were needed. The regulators wouldn’t let them name the bank “Community Bank of Commerce” the way they wanted, because it was too similar to other banks. But, People’s Bank is certainly a community bank. Mike Sickles started his banking career in 1962 as a teller, spending over 30 years learning the ins and outs of business, banking, and how to treat customers. He hated service charges and over-draft fees because he thought they had a negative impact on customers. Mike didn’t want to run into customers outside the bank and feel embarrassed for the way the customer was treated at the bank. His ethics showed in the way stocks were sold when he and Ken first went into business. While their greatest fear at the time was that they wouldn’t be able to sell the 400,000 shares necessary to gain approval to open People’s Bank, Mike talked potential share holders out of buying stock when he believed the long-term investment wouldn’t realize enough profit soon enough for them because of their advanced years. The shares were sold in sixteen days, anyway. In 2006, he was inducted into the Oregon Banker’s Association Hall of Fame.

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Mike Sickles passed away on June 7, 2016 after an aggressive form of cancer couldn’t be cured. He was 72. For five years Ken Trautman and Mike Sickles had offices next door to one another when they worked at Western Bank. They met for two years at Shari’s during the time they were planning futures at People’s Bank while investing energy and personal savings and receiving no pay for more than a year. People’s Bank is the only locally-owned community bank exclusively serving southern Oregon where decisions are made by people who understand the culture and values of their customers. After twenty years of operations People’s Bank continues a strong and steady growth with over $300 million in assets. When Ken Trautman was in high school he was a pitcher on the baseball team. His junior year he went 11-1, throwing three pitches; a curve ball, a drop ball, and his fast ball. A torn rotator cuff in his pitching arm forced him to adjust his college dream of athletic scholarship, so he adjusted.

Ken Trautman, President & CEO People's Bank in Medford- Headquarters

Learning to adjust is critical to successful business management. Ken learned it well while spending many years with big banks. Little did he know that he was learning to be a better community banker. What he and Mike Sickles created over coffee in a restaurant booth is a testament to caring and intelligent leadership. It is southern Oregon’s good fortune they decided to start here when People’s Bank was opened twenty years ago. Greg Henderson Southern Oregon Business Journal www.southernoregonbusiness.com

People's Bank Ashland

People's Bank Central Point

People's Bank Grants Pass

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STEAM Hub a natural fit for new director

New STEAM Hub director ready to cultivate learning in Douglas County With more than 20 years of experience as a STEM teacher and scientist, our new Umpqua Valley STEAM Hub director is ready to launch local efforts to expand students’ career-mindedness to new heights.

Hub. “Karl brings an extraordinary background in STEAM education to our efforts to provide students with a wide range of career opportunities. We are lucky to have him join our team.”

Dr. Karl Topper is joining Douglas County Partners for Student Success in June, coming all the way from the balmy climes of Hawaii, where he has spent the past several years teaching second through seventh grade at local schools. And yes, Topper admits, he will miss the beaches.

The efforts behind DCPSS and the Umpqua Valley STEAM Hub involve reinforcing students’ aptitudes for careers and educational paths that benefit from the knowledge and skills in disciplines that explore science, technology, engineering and math, with artful innovation. Ours was one of six regional hubs awarded a total of $2.8 million in state funds in February 2014. The Umpqua Valley STEAM Hub was awarded $325,000 to build a solid infrastructure to provide STEAM education in Douglas County.

But he’s also looking forward to diving into Douglas County’s growing STEAM community.

Topper said he plans to meet early on with community stakeholders to learn what types of STEAM programs and support that local school districts, nonprofit organizations and private businesses would like to see developed. He would like to then help create STEAMrelated programs to enhance student learning and interests within STEAM-related fields, as well as facilitate collaboration with local businesses to help connect students with jobs.

“I have been developing, implementing and sharing inquiry-based STEM learning throughout my career, so this position is a natural fit for me,” said Topper, who has doctorate in soil science. “This position is also a great opportunity for me to meet and learn about the Umpqua community.” Topper’s wife, Terri Squires, recently moved to Roseburg from Maui, and when he saw the opening for the STEAM hub, he jumped at the chance to share his breadth of knowledge with the community. Throughout his career, Topper has served as professor of Environmental Science and Teacher Education at Colorado Mesa University, where he directed programs working with a variety of Native American communities to help them develop culturally relevant environmental science education. He has taught at the K-12 level for the past 11 years, and has worked on a wide range of science field projects, written over 22 publications, acquired numerous grants, and provided many STEMrelated professional development workshops for teachers. “We are thrilled to welcome Karl to Douglas County and our STEAM community,” said Gwen Soderberg-Chase, director of Douglas County Partners for Student Success, which oversees the Umpqua Valley STEAM

Southern Oregon Business Journal

He also plans to pass on knowledge to teachers by providing STEAM professional development opportunities so that educators can integrate STEAM learning in their classrooms. Topper said that rapid changes in technology mean a rapidly changing workforce, and Douglas County needs to ensure students are prepared. The area’s rural nature, he said, makes it even more essential for the county to have a broad base of interested STEAM stakeholders working together.

“When kids see a meaning to their learning, their intrinsic motivation to learn increases such that a struggling student can be transformed into an excelling student,” he said. http://www.dcpss.org/steam-hub-a-natural-fit-for-new-director/ Douglas County Partners for Student Success c/o Gwen Soderberg-Chase 1140 Umpqua College Rd Roseburg, OR 97470 Gwen.Soderberg-Chase@umpqua.edu

Article Courtesy of PeaceHealth

PeaceHealth Sacred Heart Medical Center at RiverBend is a thriving 347-bed regional medical center in Springfield. It serves coastal and southern Oregon, as well as Lane County. in their home communities. They are premature infants needing special equipment and care. They are stroke and heart attack victims requiring immediate interventions to save precious brain and heart tissue. They are accident victims being whisked to RiverBend, a Level ll Trauma Center serving Lane, Linn, Douglas, Coos, Curry, Josephine, Jackson and Klamath counties. A Level ll Trauma Center is just one rank under Oregon’s Level l Trauma Centers, which are found only in the Portland area.

In the 10 years since it opened, RiverBend has become what PeaceHealth planners and community donors had envisioned—a life-saving, life-improving resource for everyone in the southern Willamette Valley and southern Oregon. RiverBend will celebrate its 10th anniversary on August 10. This milestone provides an opportunity to take stock of all that has been accomplished in the past decade, thanks to visionary community leaders and thousands of RiverBend employees. The anniversary also coincides with a new era of leadership for the PeaceHealth Oregon network. Mary Kingston, a seasoned health-care executive from California, recently joined PeaceHealth as chief executive of the Oregon network.

Mary Kingston

Over the past 10 years, RiverBend has admitted 264,534 patients. Its emergency department has logged 559,545 visits. And its care teams have delivered 27,736 babies and performed 155,530 surgeries. Thousands of those patients have travelled from southern Oregon or coastal Oregon for services not available Southern Oregon Business Journal

RiverBend’s Level ll designation by the Oregon Health Authority means it is staffed and equipped to care for severely injured adult and pediatric patients with complex trauma at any time. RiverBend was ready in October 2015 when the unthinkable happened. Three of the most seriously injured victims in the deadly shooting at Umpqua Community College in Douglas County were cared for at RIverBend. Care teams at RiverBend have received regional and national accolades. The Oregon Heart & Vascular Institute at RiverBend, one of the busiest and most respected centers of its kind in the Northwest, recently completed its 500th Transcatheter Aortic Valve Replacement (TAVR). RiverBend is among the leading hospitals in Oregon performing this minimally invasive procedure for certain patients with severe aortic stenosis. For excellence in stroke care, RiverBend recently earned the American Heart Association/American Stroke Association’s Get With The Guidelines® – Stroke Gold Plus Quality Achievement Award for the seventh year in a row. RiverBend also was listed on the group’s Target: Stroke Elite Plus Honor Role for the second consecutive year. And in a nod to RiverBend’s stunning site along the McKenzie River, comforting architecture and caring staff, RiverBend ranked sixth this year in a contest for the “Most Beautiful Hospitals” in the United States. 37

kitchen and dining area and outdoor garden and playground areas, the Heartfelt House will be a home away from home for out-of-area families needing that support. Mary Kingston said she’s thrilled to be joining PeaceHealth Oregon in this milestone year. She began her career in nursing and has 30 years of wide-ranging executive experience. Most recently she was chief executive of two acute care hospitals with Providence St. Joseph Health in California. “I’m truly committed to the areas of performance excellence, physician relations and financial stability, and my focus in this work is grounded in the values of respect, teamwork, compassion and servant leadership,” Kingston said. “I look forward to rolling up my sleeves and working in partnership with PeaceHealth leaders and caregivers to ensure together we deliver on our shared commitment to live true to the PeaceHealth Mission and Values.” While Sacred Heart at RiverBend has continually grown and improved its core services since 2008, it has added new technology and treatments not previously available in the area. One dramatic example is pediatric care. Over the past five years, RiverBend has added pediatric surgery, pediatric cardiology, pediatric hospitalists – a team of five pediatricians who practice solely in the hospital – and other services specifically for children who are sick, injured or have other medical conditions. Previously families, including many in southern Oregon, had to take their children to medical centers in Portland for these specialized procedures and treatments. Next spring, the RiverBend campus will welcome another addition of special interest to families in southern and coastal Oregon. The 20-room Heartfelt House will open, providing families of patients from outside the Eugene-Springfield area with no- or low-cost accommodations. The single-story, 24,000square-foot house will have one 10-room wing for families of children in the pediatric and Neonatal Intensive Care units and another 10-room wing for families of adult patients. Families of children will pay nothing to stay, and families of adult patients will pay on a sliding scale. No one will be turned away based on inability to pay. The Heartfelt House, which will be completely funded by donations, will be managed by Ronald McDonald House Charities. With laundry facilities, a shared

Southern Oregon Business Journal

RiverBend at a Glance Address: 3333 RiverBend Drive, Springfield, Ore. Opened: Aug. 10, 2008 Size: Nearly 1.2 million square feet, including Oregon Heart & Vascular Institute Site: 165 acres, with nearly three miles of biking and walking paths Construction project cost: About $367 million for the hospital; about $567 million for the entire RiverBend campus Employees: 2,434 (full-time equivalents)

Around The Campus

Around the Campus Photos By: Bonnie Melville Southern Oregon Business Journal

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