November 2007 eCon Update
CENTRAL OREGON IN THE NEWS
 “Hot Spots That Have Cooled Lure Savvy Retirees” - Business Week Touts Bend as One of Fab Four
The October 29th edition of Business Week Magazine highlights four cities with “golden opportunities for retirees who can choose when and where they want to move,” naming Bend, San Diego, Miami and Fort Mill, SC as top picks. All four cities are “fast-growing communities blessed with natural beauty and an array of activities.” In Central Oregon, Business Week talked with Michael Caba, an appraiser with Dana Bratton Appraisal Group and Bill Berger, who runs the area’s Hasson Company Realtors. A fifteen month supply of homes and far fewer Californians is spurring real deals, but the magazine concludes “Bend still has everything that made it so livable in the first place, including clean air, views of snow-capped mountains, and a mild climate…” Click here to check it out.
INDUSTRY MONTH RECAP
Six Outstanding Winners Recognized at EDCO Annual Awards Night
EDCO expanded its annual awards from two to six this year to better recognize the depth and breadth of talent in Central Oregon. In a light-hearted evening entitled “Tonight the Business is Fun,” we shed our characteristically serious demeanor for fun, food, and a roast of all the things that make Central Oregon the special place it is. Below we highlight the winners of our annual awards and the reasons for their selection:
 Central Oregon Product of the Year
Breedlove Guitar Company - Peter Newport
Breedlove Guitar Company was awarded Central Oregon Product of the Year for their creation of custom and production high quality guitars and mandolins that carry a lifetime unconditional guarantee. The company’s products are made of the finest raw materials, including unique and rare tonewoods, and finished by teams of some of the finest craftsmen in the country. Breedlove's customers include top recording artists in pop, rock, country, bluegrass and folk music. Because of the company's strategic development of business at both the national and international level, 98% of revenues come from sales outside Oregon, making it a model exporter and traded-sector employer.
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Central Oregon Entrepreneur of the Year
PV Powered - Roger Laubacher, Erick Petersen, and Steve Hummel
 PV Powered was selected as EDCO's Central Oregon Entrepreneur of 2007 based on their vision and success in spurring widespread adoption of solar power. Founded in Bend in 2003, in only four short years PV Powered has become a global leader in its niche industry and is the only U.S. manufacturer of its kind. The top pick of the 2004 Bend Venture Conference, the company attracted angel investment and has steadily amassed a team of experienced experts from many different industries - semiconductors, flat panel displays, printers, electronics, and alternative energy, growing from a handful of employees in 2003 to nearly 50 today. The company’s niche in this growing market is in the design, manufacture, and marketing of the solar power industry's most efficient photovoltaic solar inverter solutions.
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Outstanding Partnership in Economic Development
Project: Bond/Wilson Roundabout at the Old Mill District
Mary Campbell, River Bend Partners; Eric Gerding, Gerding Edlen; and Nick Arnis, City of Bend Transportation
The partnership that built the roundabout at the intersection of Bond and Wilson in Bend includes the River Bend Limited Partnership (RBLP); Gerding Edlen; the City of Bend; the 500 Bond project; the Trono Group, LLC; and the Oregon Dental System (ODS)/Western Title project. Participants recognized that to move forward on several critical development projects, the roundabout needed to be privately funded and fast tracked. The entire project spanned less than 9 months and was built at no taxpayer cost.
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Manufacturing Excellence
Structus Building Technologies - Bill Scannell and Dave Slavensky
 Structus Building Technologies has embraced the three key criteria for the Manufacturing Excellence award -- process excellence, product innovation, and a culture that supports continuous improvement. The company has been very open in sharing what has worked for them in adopting Lean manufacturing principles and has been an evangelist in encouraging companies in other sectors to adopt a continuous improvement culture. Structus has also demonstrated active leadership in the creation of the High Desert Enterprise Consortium (HiDEC) in its first year.
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Private Sector Person of the Year
Wayne Purcell, The Riverhouse Convention Center
Criteria for the Private Sector Person of the Year includes outstanding leadership qualities, initiative in getting others to take action, and concern for Central Oregon and its future. Wayne Purcell received the award for 2007 for the expansion of The Riverhouse Convention Center, which now houses the largest single meeting room east of the Cascades. The convention center's new capacity now allows Central Oregon to host conventions of significant size, whose attendance have a positive ripple effect on area businesses. Unlike most convention center development today, The Riverhouse project was entirely privately financed with no public financial liability for either construction or operation of the facility.
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Public Sector Person of the Year
Judge Scott Cooper, Crook County
Judge Scott Cooper exemplifies the qualities sought in Public Sector Person of the Year, with the leadership he has exhibited in Crook County as well as his efforts on behalf of the Central Oregon region as a whole. Judge Cooper is well known for his incredible work ethic, tenacity, and prolific writing. Judge Cooper has served in both public and private non-profit organizations, including regional representation on Connect Oregon, which brought funding for expansion of the Redmond Airport, a reloading facility in Prineville, and a new bus barn for Bend's newly launched transit system. He was also instrumental in creating a new partnership between Central Oregon Community Investment Board (COCIB) and EDCO, resulting in the Business Development Opportunity Fund, which has been widely used to recruit new companies to the region and to help existing companies expand operations. Creation of the Prineville/Crook County Economic Development Program would not have been possible without Judge Cooper, who was a strong advocate for the position, helped create the program’s goals, and took part in fundraising efforts.
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Deschutes Brewery Hosts HiDEC, Lean Manufacturing Learning Event in Industry Month
 What is the down time on that machine? Why do bottles come pre-packed in boxes? Couldn’t you use a conveyer belt to transport finished product to the warehouse? These were just some of the questions hurled at the head brewers of Deschutes Brewery, Brett Porter and Larry Sidor, during the tour stage of the High Desert Enterprise Consortium’s (HiDEC) Industry Month event held on October 16. This was no ordinary tour and the brewing team handled the questions from the manufacturing savvy group with grace. HiDEC members, local businesses and beer aficionados got together to tour the brewery plant, network with regional companies, and discuss the ins and outs of implementing Lean practices.
“It was great to talk with other company leaders in a relaxed setting,” said Bill Hare, General Manager at Aircraft Rubber Manufacturing. “HiDEC represents a broad spectrum of companies with a diverse mix of products, yet we all face similar challenges. The opportunity to freely exchange ideas and solutions about Lean manufacturing has been a valuable learning tool for our organization.” The 50 attendees broke into two groups for a production-oriented tour of HiDEC's newest member that surprised some. “I never knew it took so much to make beer,” remarked Drew Orr from the O’Keeffe’s Company. After the tour, the group assembled in the Mountain Room for some refreshments and friendly conversation. Dave Slavensky, COO at Structus Building Technologies, then led an open forum discussion on Lean implementation that solicited input from companies to those farther along in the journey. All participants had valuable information to share and gained new knowledge to take back to their companies.
Summary of Issues and Action Items from Business Roundtables
During the month of October EDCO held six Business Roundtables across the tri-county region in an effort to better connect private employers with local public leaders. Roundtables focused on the exchange of information around critical issues facing traded-sector businesses and key projects and efforts of cities and counties in the region. In case you missed The Bulletin’s articles about each roundtable, outlined below are brief summaries of each meeting with action items to be pursued.
| Madras/Jefferson County Business Roundtable |
| General discussions focused on increasing amenities (K-12 & higher education, retail and commercial establishments, entertainment, fine dining) to attract talent, new residents and business activity. |
| Action Items (partial list) |
- Continue research on Jefferson County Economic Development Manager position and program with goal to have in place within the next year.
- Include community members to school district superintendent interview panel. (Chamber / City).
- Begin discussions about adding Culver to Jefferson County Enterprise Zone.
- Coordinate companies to secure rail shipping containers.
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| Prineville/Crook County Business Roundtable |
| A common theme from Prineville employers in attendance was the challenge they face in finding and keeping a drug-free labor force and in finding the number of workers needed. Affordable/workforce housing was also discussed, and how city policies may impact the ability to have lower-cost housing. |
| Action Items (partial list) |
- Continue promotion efforts through Prineville Chamber for a Drug Free Workplace, where all local companies have active drug testing programs.
- Improve coordination and communication between city and developers to find alternatives to develop more workforce housing.
- Notification to local employers about layoffs and closures in other parts of Oregon and the Northwest that could represent a workforce recruitment opportunity.
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| Redmond Business Roundtable |
The third annual Roundtable to be held in Redmond, conversations this year revisited the issues of workforce housing and child care. Industrial company representatives voiced a strong need for more affordable housing to both attract and retain existing employees and heard about community efforts towards a solution. A new topic, how the school system and the business community could work better together to create higher quality employees for the future, received considerable discussion.
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| Action Items (partial list) |
- Establish regular meetings with local employers and Redmond School District leaders to explore school-to-work opportunities.
- Continue research on a certified, community child care facility in coordination with OSU’s early childhood degree programs.
- Implement policies developed by the Affordable Housing Task Force to provide more entry-level housing and larger-scale multifamily rental units.
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| Sisters Business Roundtable |
Discussions focused on the community’s interest and unity on attracting and retaining traded-sector employers as a viable component of the local economy. The quality of K-12 education in the community also received considerable discussion.
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| Action Items |
- Form public/private or company partnership to construct the first light industrial building in either Three Sisters or Sun Ranch business parks.
- Update business relocation packet/website – Sisters Economic Development Committee.
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| La Pine Business Roundtable |
General discussions focused on La Pine’s competitive position in the region and its ability to attract new jobs and companies due to some key infrastructure constraints (cost of sewer & water utilities and transportation access). Challenges facing the new City of La Pine were also addressed.
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| Action Items |
- Schedule quarterly Business Roundtables to work through infrastructure issues.
- Research possibility of applying for a new enterprise zone for La Pine, other parts of rural Deschutes County.
- Investigate fast-track permitting (land use & building permits) for job-creation projects by Deschutes County Community Development.
- Research financial vehicles for transfer of sewer & water districts to City of La Pine.
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| Bend Business Roundtable |
The Bend Business Roundtable attracted a diverse group of local manufacturing and technology-based companies, many of which are in the throes of rapid expansion. Issues covered included the effect of high local housing costs on wages and ability to attract talent from outside the region. Availability, cost and timing of industrial land was also a theme, along with questions about the message the City is sending businesses about whether the city still wants manufacturing and other businesses.
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| Action Items |
- Develop a local incentive toolbox for recruiting new companies and helping retain existing traded-sector employers (to start with City of Bend work session on Columbia retention).
- Hold quarterly Business Roundtables to work through issues (rather than just annually).
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Excellent Content at Industry Month Design (and Build) Workshop
 Peter Baer and Heather McNeill of Pinnacle Architecture delivered a content-rich program on Oct. 18th to those attending who were interested or moving forward on building their own facilities. The program included a start-to-finish timeline and checklist that included flow diagrams for the entire public part of the building process, including land use and building permit processes. Baer emphasized the importance of planning, oversight and organization for timely completion of new facilities. A five-step design and construction process (pre-design, design, construction documents, permits/contractor, and construction) was clearly and logically explained. The workshop also explored ways to save time and money through green building, pre-application planning, and investigating business development incentives. If you missed this seminar and have an upcoming commercial remodel or new construction project, please contact EDCO or Pinnacle to get a copy of the presentation.
UPCOMING EVENTS
Kaizen Blitz Events
 In the last eCon Update, we reported on HiDEC's series of kaizen blitz events taking place at manufacturing companies throughout the region. The multi-day events are a short-term, hands-on approach to solving a limited scope problem utilizing the power of the people who perform the work in the area. Groups of 12 - 15 are the norm with up to half of the group made up of host company employees. The balance is made up of HiDEC members. Upcoming events are:
Company
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Timing
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Purpose of Kaizen Event
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| PCC Schlosser |
Wed Nov 7 &
Thurs Nov 8 |
Value stream mapping of product line. Event led by Oregon Manufacturing Extension Partnership (OMEP). |
| Vocalbooth.com |
Mon Dec 10 through
Wed Dec 12 |
Value stream mapping of product line. Event led by Oregon Manufacturing Extension Partnership (OMEP).
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| O'Keeffe's Company |
Mon Dec 26 through
Wed Dec 28 |
Project TBD. Event led by Total Excellence in Manufacturing (TEiM).
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| Dayspring Hardwood and Moulding |
Tues Dec 6 &
Wed Dec 7 |
Improve set-up time of moulder. Event led by Lean Enterprise Training, Gary Conner.
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Speaking of their October kaizen event, Mark Foster from Keith Manufacturing said “it was extremely beneficial for employees to take part and I would like to send our employees to the other events. We’ve implemented the changes made on the floor and we are pleased with the outcome. The most valuable thing we learned is that we have to take the time away from production, on a regular basis, to scrutinize our processes if we want to improve.”
HiDEC’s New Website to Serve as Information Hub
With 25 member companies, a full calendar of events and important news to disperse, email was not getting the job done for HiDEC. HiDEC now has a website at www.hidec.org as its information hub. The site contains the latest news, an event calendar, contact information and a Members Only section featuring downloads, links and company data. The website design was created by Donnell Design and built by The Chachka Group, Keith Manufacturing’s marketing department and a stand-alone advertising agency.
Central Oregon PubTalk Moves to the THIRD Thursday of Each Month -- Mark Your Calendar for November 15th
 After five years, PubTalk is moving to the THIRD Thursday of each month. But thank goodness the time and place remain the same! Our keynote speaker on November 15th is Paul Hait, a serial entrepreneur and inventor. Hait has an interesting life story in that he won an Olympic Gold Medal in swimming only to face a disabling illness. Showing the perseverance that would become a defining trait, Hait got a degree in mechanical engineering from Stanford, turned entrepreneur, and sold his original company to General Mills. He’s since started and sold a number of companies. Early stage presenter is Chuck Greenwood, CEO of HumanCar, a human/electric hybrid that has its roots (and numerous patents) in the street racing world. Considering establishing manufacturing operations in Central Oregon, Greenwood has developed several prototypes and a business plan to gain adoption of his vehicle in the commercial fleet market. Click here for more information about HumanCar.
| November PubTalk |
| Date |
Thursday, November 15th |
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Time
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5:00 pm - 7:30 pm
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Location
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McMenamins Old St. Francis School, Fr. Luke's Room
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Contact
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| Cost |
$15 for EDCO or OEN members, $25 for non-members |
State Offers Employer Training
Oregon’s Bureau of Labor and Industries will hold a special training program for employers on Wednesday, Nov 7th, at the Phoenix Inn in Bend. The morning session focuses on 2007 Legislative changes that will go into effect on January 1, 2008, and directly impact employers. The afternoon session will deal with avoiding workplace harassment.
| BOLI - Legislative Changes (am) and Workplace Harassment (pm) |
| Date |
Wednesday, November 7th |
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Time
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9:00 am - 12:00 pm (morning session) & 1:00 pm - 4:00 pm (afternoon session)
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Location
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Phoenix Inn, Bend
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Contact
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| Cost |
$165 |
Good Access is Good Business
Plan to attend “Good Access is Good Business” on November 15th, put on by the City of Bend, The Bend Downtowners, The Bend Chamber of Commerce, and the Central Oregon Coalition for Access. The seminar covers the benefits of creating and maintaining an accessible business, how the new ACCESS Bend program works, as well as tax incentives for barrier removal.
| Good Access is Good Business |
| Date |
Wednesday, November 15th |
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Time
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8:00 am - 9:30 am
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Location
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City Council Chambers, Bend City Hall
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Contact
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| Cost |
None |
City of Prineville Expands
 The City of Prineville just grew by 217 acres. The City Council voted unanimously to expand the city limits, with an addition of four properties. Most of the land will be used for residential development, and is currently adjacent to existing neighborhoods within the City of Prineville. The land most affected by the decision is property owned by Ochoco Lumber. The 77 acre plot is located just off Highway 26. Ochoco Lumber is planning a mixed-use development of commercial, residential, and possibly light industrial. The annexation was needed as part of the process to apply for a zoning change from industrial to mixed-use. While no date has been set for groundbreaking, it’s possible construction could begin by next summer.
Social Security’s Online Services Give Employers a Break
As a small business owner, do you need to verify social security numbers for new hires? As an employer, do you feel bogged down in paperwork submitting wage reports? Social Security is working to lighten your paperwork filing burdens through free, fast and secure business services online (BSO). Register at Social Security’s employer website first for a PIN and password and then you can begin submitting wage reports easily over the Internet. Another big advantage of electronic wage reporting is making corrections. Oops…made a mistake? Electronic correction forms (W-2c and W-3c) make changes painless!
Electric Rates to Increase 2.5% in 2008 with New Utility Tax Law
Pacific Power customers will see increases in June 2008 – 2.4% for residential customers and as high as 4.4% for industrial users. The surcharge can be traced to Senate Bill 408, which was hatched in the 2005 legislative session. SB 408 sought to avoid “the Enron problem” of phantom taxes and to ensure that utility companies, often owned by large multinational corporations, paid their fair share of their parent company’s taxes at the local level.
Unfortunately, as power companies file their first tax reports under the new legislation, it has had unintended consequences for Pacific Power, Oregon’s second largest provider. Pacific Power paid $38.3 million more in taxes and interest than it collected in rates for 2006, causing the company to have to raise rates to customers for the difference. When SB 480 was being drafted in 2005, Pacific Power was owned by Scottish Power but acquired in 2006 by MidAmerican Energy Holdings Company, Berkshire Hathaway’s power group. Pacific Power contends the legislation, although well intended, has backfired on two accounts. First, because Pacific Power had a rate case pending with the PUC when the law was passed, regulators had to assume Pacific Power, under its then owner Scottish Power, would not pay the full amount of taxes it owed. That turned out to be incorrect, so part of the 2.8% increase reflects a correction of that assumption. Second, addition of a last-minute parent/subsidiary apportionment formula addition to SB 408, which did not receive public input, results in a permanent mismatch between taxes that are paid and those that are collected every year. Pacific Power is seeking to change the utility tax law while legislators signal that they want to see several years’ implementation before revisiting the controversial law.
Point/Counterpoint….Oregon Manufacturing Contracts but Reigns Top in the West
You’ve heard it all – worker productivity is up but manufacturing jobs are down. It’s true. But did you know that Oregon leads the West with the highest concentration of manufacturing jobs? That’s what an Oregon Employment Department study commissioned by the American Foundry Society of Oregon and drawn from Bureau of Economic Analysis data concludes. One in every 9.6 workers in Oregon state is employed in manufacturing. And an astonishing 24.9% of Portland’s economic base is driven by manufacturing -- compare that with 18.9% of Detroit’s economy.
On the flip side, it’s also true that Oregon’s manufacturing sector has contracted over the past year (-3.3% or 6,900 jobs) mirroring a 1.6% national decline; Oregon’s job losses are primarily due to slowdowns at sawmills and truck and motor home manufacturing. The report shows that while Oregon manufacturers face several significant hurdles (increased global competition, crumbling infrastructure an aging work force), the state’s proximity to land, air and sea transportation, gives is a sizable distribution advantage. Additionally, the state of Oregon appropriated $2.87 million to address manufacturing competitiveness this year. In Central Oregon, where manufacturing ranks third and provides more than 9,000 jobs and $326 million per year in payroll, experts expect continued growth from both retiring workers and new openings created by the area's small, entrepreneurial firms.
NAHB’s Eye on the Economy: Payroll Employment Is Not Contracting After All
 David Seiders, NAHB Chief Economist, has reversed his point of view on the probability of a near term recession after reviewing September payroll numbers. A month ago, Bureau of Labor Statistics reported payroll employment had declined slightly in August following relatively weak gains in June and July. However, Seiders notes that payroll job growth now stands at 93,000 and 89,000 for July and August, respectively, and the preliminary reading for September comes to 110,000. While this is good news, Seiders says, the trend of job growth definitely has slowed systematically from the peak rates in 2005, particularly in the private sector, as growth of economic output has slowed substantially. Seiders concludes that with payrolls “advancing at a decent pace,” the economy isn’t skating dangerously close to outright recession — at least for now.
Observing that housing is now weighing heavily on the labor market, Seiders says housing demand is still weakening and forecasts that stubbornly high inventories will delay any recovery in housing production, which continues to create an environment of builder price cuts. On the subprime issue, he notes that the credit market crisis is easing but not disappearing. To see the entire forecast, click here.
Good Economic Information Drives Good Decisionmaking
 In December, most businesses with paid employees in Central Oregon will receive 2007 Economic Census forms from the U.S. Census Bureau. Federal Reserve Board Chairman Ben Bernanke has called this census "indispensable to understanding America's economy." Taken every five years, the Economic Census "assures the accuracy of the statistics we rely on for sound economic policy and for successful business planning," said Bernanke. We all know government agencies and researchers use the Economic Census, but consider these private sector applications:
Gauge the competition: A soft drink bottler considered expanding into two related beverage manufacturing operations: milk and alcoholic beverages. Economic Census data shed light on industry specialization, company size, and the relationship of expenses to receipts - information that encouraged the bottler to diversify.
 Design sales territories and set sales quotas: An insurance company uses counts of establishments and sales by kind of business to redesign sales territories and set quotas and incentive levels for agents. By comparing their own records on customers to census figures, company executives found which kinds of businesses were better prospects than others.
There are over 500 versions of the form, each tailored to particular industries or types of activity. However, all industries will report sales lines and revenues, allowing product data to be compared across industries. Some questions have been deleted while new inquiries deal with outsourcing, health and pension benefit expenses to better measure changing business characteristics. EDCO encourages all regional businesses to help the effort -- which just got easier with electronic filing.
NEW MEMBERS
We’ve got a strong roster of new members joining EDCO due in part to the involved and dedicated Membership Committee who use their resources to contact companies and explain the benefits of EDCO membership. The Membership Committee, led by EDCO staffer Dayna Dudkowski, includes Patty Dempsey, Windermere Real Estate; Rachelle Gillespie, The Riverhouse; Andrea Phelps, Windermere Real Estate; Terri Shephard, Corporate Recruiting Solutions; Sam Lambert, Mid Oregon Personnel; and Diana Haffner, Hire Calling.
Bronze Level
Hire Calling Staffing
 With over 140 branches nationwide, Hire Calling Staffing is now in Bend. Branch manager Diana Haffner recently made the move to the company after ten years with the Bend Chamber. The company, a part of the Jeld-Wen Community, has spread like wildfire. Spending quality time with associates for temp positions, Haffner says, is what it takes to really explore to each person’s strengths and weaknesses. Plus each candidate goes through a minimum of one hour testing for their area of experience. On the other side of the desk, Hire Calling researches each client company to assess their needs and find a perfect fit for the job. Noting an increase in unemployed construction workers, Haffner tells us they’ve had some success transferring them into manufacturing and other sectors. You may contact Diana or Mary at Hire Calling Staffing at 617-5910.
Ochoco Lumber Company
 Talk about revitalization! The Ochoco Lumber Company has major plans, including light industrial, retail, restaurant and office space, for the 77-acre brownsfield site where the former Ochoco Lumber Mill operated continuously for 64 years. Donna Barnes, Ochoco’s Accounting Manager and Project Manager for the development, comments on the ambitious goals the company is balancing -- namely, enhancing the project’s natural resources while incorporating flood and stormwater protection, and providing open spaces for the public while creating a central attraction for urban development. Design, layout, and proposed uses, Barnes says, will be kept flexible to adapt to Prineville’s needs as it grows. Integral to the design are creek trails that enhance the “small town” feeling in what is anticipated to be a growing urban environment. The trails provide a setting for families to connect with nature, schools to use for on-site educational opportunities, and as convenient alternatives to driving. Ochoco Lumber was an active supporter in getting the Prineville/Crook County Economic Development program off the ground and we look forward to seeing the company’s vision of a special space central to Prineville take form.
PENDING RECRUITMENT, RETENTION & EXPANSION PROJECTS
Earlier this year, eCon Update elected to update this column on a bi-monthly basis as opposed to monthly. Look for the next update in our December newsletter.
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