EDCO NEWS
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June 2008 eCon Update

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Bud Prince announces his retirement
For the past five years Bud Prince has played a vital role in leading Redmond through an unprecedented period of growth and development, and now he is ready to pass the baton.  To facilitate a smooth transition for EDCO and the Redmond community and allow time for a comprehensive search for his replacement, he will continue his duties through the first part of August.  Lured out of semi-retirement from a 24-year career with PacifiCorp, Bud says he’s ready for a second retirement to spend more time with family and enjoying all Central Oregon has to offer. “This has been a really rewarding job and it’s been thoroughly enjoyable to be a part of this great community and team." 

Under Bud’s five-year tenure, Redmond Economic Development helped created over 1,100 new jobs (surpassing its 5-year goal of 750 jobs) collectively adding over $100M total capital investment.  Perhaps more importantly, Bud forged deep relationships with city staff, community leaders, and technology and manufacturing companies. He played a key role in recruiting numerous companies to Redmond including T-Mobile, Altrec (GreatOutdoors.com), MPress Packaging, Beau Nouveau, XL Management, and Ameritech Machine. 

One of many Redmond-based companies Bud helped expand is PCC Schlosser. Carl Harbour, general manager commented “I can’t imagine development in Redmond without Bud. In his role, Bud proved to be a good listener, provided me with contacts to key people, and stayed in touch throughout our expansion.  He is an encouraging friend of business and it is a loss to see him retire.”

Jim Hendryx, Redmond’s Community Development Director/Asst. City Manager, added “Bud’s knowledge of industrial business needs and his willingness to go the extra mile have been instrumental in the recruitment of industrial and manufacturing businesses to our community.  Working in partnership with the City of Redmond, Bud has been instrumental in attracting and retaining manufacturing and industrial businesses that have greatly contributed to our job growth and economic development.”  

Eric Sande, Executive Director of the Redmond Chamber conveyed sentiments expressed by many others, especially those on the EDCO Team. “Bud Prince is truly going to be missed by all of us here at the Redmond Chamber of Commerce & CVB.  His enthusiasm, charm and positive attitude have been a daily inspiration.  From all of us here at the Redmond Chamber, we wish Bud well and a fun filled and relaxing retirement.” 

Work on finding his replacement will begin immediately; more information about the Redmond Manager application form and process is available at the end of the full press release.

USA Today touts Bend as “the new Boulder”
Featured in USA Today’s May 23 Destinations & Diversions section, Bend is characterized as the new Boulder for year-round outdoor sports fans. Author Larry Olmsted notes a trend that second home purchasers decide to stay full time, charmed by “the small city’s outdoor living, natural beauty and mild weather.”  The full article is available here.

June 19 – PubTalk features early stage expert Peter Ozolin
June PubTalk, the last of the season until we reconvene in September, is a not-to-be-missed event. Keynote presenter is Peter Ozolin, CEO of Remote Technologies, Inc., which sells a suite of online subscription-based services for to the quick service restaurant industry. The Lake Oswego-based company develops services which allow an owner to monitor all operations – remotely - from food supplies to work scheduling to security operations. The company just secured $1M from an equity investor, estimates 2008 revenues at $1.1M, and has already sold their services to Subway, Quiznos and Pizza Hut. Earlier, Ozolin founded Legal Anywhere Inc., a provider of legal extranet solutions, which sold in 2000 for $27M. Following that, Ozolin founded another legal technology startup, was Chief Knowledge and Technology Officer for a global law firm, and served as VP of Thomson Corporation, overseeing its $25M practice management segment. 

Enjoy early stage presenter Scott Ratcliff, owner of Volcano Vineyards. A micro-winery, Volcano produces less than 1500 cases a year and specializes in varietals. Ratcliff will share his passionate belief that “great wines are made in the vineyard” and why Volcano chooses to not have a production facility for their premium wines. However, Ratcliff is seeking $250K from an angel to fund a local production facility that will support the extension of their Volcano brand with its second tier labels, Magma Wines (value table wine) and Magmita Sangria, as well as the initial formulation of Volcano Vodka.   

PubTalk is Thursday, June 19, 5:00 – 7:30 pm with the program starting at 6:00 pm, at McMenamins in Bend. Contact Dayna to reserve your spot.  

Brace for higher inflation – petroleum cost increases largely unaccounted for in current economy
The rising world market price of crude oil, from which fuel, plastics, asphalt, fertilizers, and a host of other products are derived, has yet to be felt in a big way by the American consumer. While we are paying more at the pump and at the grocery store, EDCO is concerned about a wave of price increases across many sectors that are likely in the months ahead and the impacts they will have on our region. 

For example, jet fuel price increases for airlines are not only causing ticket and baggage surcharges, it is also causing structural changes by airlines on how aircraft are allocated in the system and which will remain in the fleet. Central Oregon, which is perfectly suited for multiple daily flights on a 50-seat jet, could feel the impact as several airlines are phasing out this aircraft in favor of larger, more fuel efficient turbo props and jets. This translates into fewer flights overall, and possibly fewer direct connections – something that the Redmond Airport and EDCO are already working to remedy.  

On a macro scale, large trucking companies negotiated big fuel surcharges months ago, when fuel prices were 30% less.  When those contracts come up again (very soon) we expect to see a sizeable jump in shipping rates. Eighty percent of products moved within the U.S. are via truck, so few sectors will avoid the impact. Unfortunately, Class I railroads (BNSF, UPRR) will provide little short term help with shifting increasingly expensive truck transport to rail, which typically is one-third the cost. 

Rising petrol prices are already sending fertilizer costs sky high for farmers, which they are passing on to wholesalers and consumers. For example, the price of hay in Central Oregon has more than doubled in the past five years from $125/ton to $255/ton today. Both fuel and fertilizer costs are translating into higher food prices, which is a core inflation indicator. 

The bright spot for inflation hawks is housing, which is seeing year-over-year decreases across many parts of the U.S. for the first time in two decades. A sharp decline in housing starts has created a market glut (and correspondingly, lower prices) in lumber and drywall commodities, but steel and concrete supplies remain constrained. Some commercial construction projects are even being delayed by the simple ability to secure structural steel from the few mills that remain in the U.S. 

Overall, there appears to be more optimism that the national economy will come out its current economic funk with relatively little pain, but in the midst of sustained inflation, monetary policy and the use of lower interest rates to fuel capital markets will be short lived. The next year will truly be an exciting one to watch, and hopefully not too painful. Some oil insiders are predicting $200/barrel crude prices within the next 12-24 months. Stay tuned as EDCO monitors the impacts of fuel and petroleum costs.   

EDCO continues work, partnership with Redmond Airport to improve commercial air service
In an ongoing effort to expand air service in the tri-county region, EDCO is working behind the scenes with Redmond Airport Manager Carrie Novick and air service consultants Mead & Hunt to secure a grant from the Federal Department of Transportation to improve service to San Francisco. The current flight, which is the longest segment United Airlines flies on the 35-seat turbo prop, takes approximately 2.25 hours and is frequently overbooked or at capacity for weight. The Small Community Air Service Development Grant, if awarded, will be used to help United Airlines implement a new service three times daily on a 50-seat regional jet. Flight times would be reduced to just over an hour on the new aircraft and would result in a total of 150 seats daily versus the current maximum capacity of 78 due to weight restrictions. EDCO has helped coordinate support letters from local businesses for the grant application, which will be submitted today by Mead & Hunt. The Redmond Airport should know whether the application was successful by September.  Redmond received a grant in 2003 that was used to attract Delta Airlines and new service to Salt Lake City.  

Jefferson County economic development program pushes forward
An Economic Development Summit held in Madras on May 22 solidified interest by private sector business in Jefferson County for the need of a new program and dedicated local manager. “Madras and Jefferson County have incredible assets for new residents and businesses, it’s just that no one knows about them,” commented bend resident Todd Taylor, who is a one-third owner in Yarrow and has built a light industrial complex in Madras. Approximately 50 private and public leaders attended, and provided perspective on whether timing was optimal to start such an effort. Led by Jefferson County, with support by the City of Madras, Crooked River Ranch, and Jefferson Co. Chamber of Commerce, it appears that program is on target to launch this summer. EDCO is assembling a smaller workgroup of interested business owners and representatives from investors in the effort to develop metrics and milestones for the program, consensus on location, and to select a local oversight committee. EDCO could advertise for the manager position as early as July 1. 

Madras Airport likely to receive $2.16M from Connect Oregon II
On the heels of a sparkling new flight services building, the City of Madras was able to make the short list of projects statewide to receive funding from the $100 million Connect Oregon II fund established by the 2007 Oregon Legislature. The $2.16 million award will help the City construct a large new hangar to house a new heavy aircraft repair facility for Redmond-based Butler Aircraft. The project is expected to immediately result in 12 new jobs, with the prospect of up to 30 total that pay on average $49,000 annually. "More than (the jobs), it's my understanding that this will be our first large aircraft maintenance facility at the Madras Airport," said City Manager Mike Morgan. "That will bring other businesses with it over time." The project fits well with Central Oregon’s strategy over the past 15 years to attract aviation-related business including aircraft manufacturing, aircraft parts and accessories. 

Overall, there was about $10.3 million requested for projects in Central Oregon, and just under $10 million will be awarded funding if the Oregon Transportation Commission’s recommendation stands. The largest award, $3.5 million, would go to the Prineville Railway freight depot project. 

Following an extensive interview and selection process, the Bend City Council selected interim Eric King as its permanent city manager. King beat out 70 other applicants and a well-qualified group of finalists. Community interview panels praised King’s attitude, demonstrated decisive leadership skills and vision for Bend and the City. At the invitation of the City, EDCO Executive Director Roger Lee participated in the interview process. “We are very excited to have Eric’s leadership at the City of Bend and his approach to moving forward on key issues impacting both the local and regional economy,” noted Lee.

In Prineville, the City Council decided last Tuesday to change directions, letting go Rob Corbett who had been the City Manager since 2004. Last year, Corbett had come under fire from factions in the community over personnel issues but, in the end, it appeared that the City Council was looking for new direction from the management position. Wayne Van Matre, the current director of operations at the City’s Meadow Lake Golf Course, was appointed as the interim manager and will help the Council with the selection process of a choosing a new manager. 

Currently, the most tenured city manager in the tri-county region is Eileen Stein, with the City of Sisters, who was hired in April 2002.   

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Prineville deems funds for increasing public safety a priority
The City of Prineville is looking at ways to increase funding for public safety. According to city officials, no new patrol officers have been hired in the past four years, despite an increase in 911 calls. Personnel costs account for about half of police department expense, and are outpacing the City’s revenue growth. Further compounding the issue are increases in health insurance and retirement, a commitment to pay competitive wages, and the 3% limit on property tax growth. The public safety committee is weighing four options to raise money. The first would be to make the planning department fee-based. Currently, the planning department is funded by both fees from builders and the City’s general fund. If the planning department became fee-based, the money left over could transfer to public safety. Other options include a $10 Public Safety Fee; alarm permits for businesses, and a business license fee.

Those in the development community are concerned about the increase in planning fees, as many fees would increase by 100% to 1,000%. Dick Brown, a land-use consultant with Far West Real Estate, says the proposed fee increases could add an additional $3,500 to a single family home. The council is currently discussing the fee increases, and is likely to make a decision sometime this summer.

Prineville building design standards likely to receive more public attention
Property owners in Prineville may have more of a chance to express their views on the City’s proposed building design standards. In an effort to protect historic buildings and the character of Prineville, the City wants to implement design standards which regulate how a building can be developed, including restricting paint colors and façade improvements. In its second public hearing on the matter, the planning commission once again heard overwhelming testimony opposed to the idea. Those who testified, including Prineville Economic Development Manager Jason Carr, expressed concern that the proposal doesn’t make sense given the economic climate, and that the community hasn’t had enough chance to weigh in. After hearing additional testimony, the commission seemed to agree that holding off on the design standards might be a good idea. The commission voted to hold a workshop before the next public hearing in June to decide which path to take next.

Freight management between Central Oregon businesses and rest of the world
With the rising cost of fuel driving truck freight rates nationwide, we thought you would like to know about options here in the region to get materials in and products out. For example, Trangistics, Inc. is a Central Oregon based transportation solutions provider working with area businesses to bring in manufacturing materials, as well as transport their products to customers and distribution points across the country and around the globe.  A representative of global shipping giant C.R. England, Trangistics offers the flexibility and attention to detail of a small company with the resources, stability and reliability of a large organization. Specific service areas include: full truckload (refrigerated and dry), LTL (Less Than Load), Intermodal, inland container transit, and international freight forwarding to/from areas like Asia, South America, Europe, Middle East, etc.  Located in Sisters, Trangistics supports a wide range of industries including Central Oregon’s own furniture, wood, airplane components, solar equipment, commercial HVAC, meats, produce and oversized products. Contact President Joey Hougham or call 541-923-6309 for more information.

COCC and OSU-Cascades expand offerings
OSU-Cascades students now have the ability to earn an international studies degree in conjunction with their primary degree. The supplementary degree requires students to complete an additional 32 credits in four international degree courses; spend at least 10 weeks overseas studying, working or researching; demonstrate proficiency in a foreign language at fourth year competency; and write a senior thesis regarding international implications of the degree field they’re already pursuing.

This year, enrollment at COCC increased by 14 percent, setting records in each of the three academic terms. For 2008, a new program in nursing and an expansion in emergency medical services will open up more spots in the health professions area. Thanks in part to a $32,000 grant from St. Charles Medical Center, the Certified Nursing Assistant program will add acute care curriculum and move into larger space. The EMS program will grow twofold for the paramedic and EMT basic classes. In addition to helping supply the workforce at many of the local fire stations, the program is receiving more attention from outside the region as well.

OECDD and La Pine partner to overcome critical intersection, lack of stoplight
We reported in a prior eCon Update that the critical intersection of Reed Road, 1st Street, and Hwy 97 in La Pine threatens to halt economic development of any size in La Pine. The crux of the issue is that any development with 50 more traffic trips (25 employees traveling to and from work each day) will prompt a transportation study, which in turn will presumably declare the intersection "failed," demanding a stoplight. System development charges (SDCs) are a potential funding source but are complicated by the fact that Deschutes County can no longer collect the charges and La Pine has yet to pass an ordinance to collect them.   

Clark Jackson, Business Development Officer for OECDD, and Christine Nelson, La Pine City Manager, are leading efforts to find creative financing solutions. Collaborating with them is a working group, composed of La Pine Industrial Group (LIGI), La Pine Chamber of Commerce, EDCO, ODOT, and Deschutes County, studying how to solve the issue. Rough estimates of costs are $20,000 for a survey and $150,000 to complete a design so the project can be estimated for bid. Possible state funding through the Immediate Opportunity Fund (IOF) could fund 50% of the cost, with the other half coming from local sources such as a combination grant/loan from the county, where the grant portion would be paid by future SDCs collected by La Pine. Jackson reports that the issue has been presented to the La Pine City Council and that the next step is a June 30 joint meeting of the La Pine City Council and Deschutes County Commission, 5:00 pm, in La Pine.   

Brian’s Cabinets expands appeal with new showroom and modular green line, targets home remodeler  
Brian’s Cabinets has been crafting custom cabinetry for homeowners and builders throughout Central Oregon since 1977. In 2003, Todd Hakala purchased the company with the goal of keeping the company on the cutting edge of cabinet construction and innovation. Now, after investing in new technology, equipment, and a state-of-the-art showroom facility, the company is adding to its product lines, distribution, and sales channels. Brian’s has created a new product line called Evergreen, a leaner and greener line of modular cabinets and closet systems, offered at very attractive prices because of manufacturing efficiencies in their local facility. “Remodel customers are surprised to discover that we deliver higher quality cabinetry faster than Lowe’s or Home Depot – at costs 25 to 30% below their prices,” says Mark Kramer, general manager of Brian’s. Check out custom cabinetry and the new modular Evergreen line displayed at Brian’s new retail showroom just south of Empire on 18th Street in Bend.

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Player announcements made for JELD-WEN Tradition
As we roll into the summer months, this year’s JELD-WEN Tradition is shaping up to be more exciting than ever before. Three former Masters champions have committed to play in the tournament. This includes Bernhard Langer, who currently tops the standings on the Champions Tour, as well as Sandy Lyle and Ian Woosnam. Together with defending champion, Mark McNulty (pictured left), these distinguished players bring an international element to the JELD-WEN Tradition. In addition, new sponsors are coming on board to support the tournament. Olsen Family Vineyards will sponsor the Am-Am and Pro-Am tournaments that kick off the week’s competition. Finally, the fan experience is a major focus for tournament organizers this year. There will be a new hospitality area to include live music at the completion of play each evening. For more information, visit www.jeld-wentradition.com.

A slowing economy: while some fear the “R” word, others see opportunity
Don’t miss these two short but good articles from Executive Decision newsletter. 

• “Growing in a Challenged Economy” is authored byJim Champy, chairman of Perot Systems' consulting practice and an organizational change expert. Champy’s first book, Reengineering the Corporation: A Manifesto for Business Revolution, was a NY Times bestseller that sold more than three million copies. Champy says that in a global economy there is always room for smart companies to grow, but they need to think about things differently.
  
  
• The second article, “Enjoying the Downturn - Some Sectors Grow When the Economy Slows,” explores counter-cyclical industries that are not only recession-proof, but actually thrive during an economic slowdown. At the top of the list are operational consultants, discount clothiers, and electronics refurbishers.
  

Worst of credit crunch and housing slump to end, but economy still sluggish
The National Association for Business Economics recently published an outlook that helps interpret our uncertain economy. “Although housing and credit markets will gradually loosen their grip, U.S. economic growth is expected to only slowly return to health,” said Ellen Hughes-Cromwick, NABE president and chief economist at Ford Motor Company. “While our panel anticipates an improvement in credit markets and a bottoming out in housing this year, the forecasters have marked down their estimates of growth for both 2008 and 2009.”  Review the full outlook.

Events & Workshops

June 18 – Industrial development revenue bonds: financial tools for manufacturers

This complimentary breakfast seminar is hosted by Talbot, Korvola & Warwick, LLP (TKW), one of Oregon’s major CPA and business consulting firms. It’s aimed at manufacturers, non profit organizations, general contractors, and their advisors. The focus is on using tax exempt industrial revenue bonds to finance job creation and growth. Presenters are Carol Juang McCoog of K&L Gates (and primary counsel for Oregon Express Bond Program and OECDD) and David Flora of Wells Fargo, specializing in banking needs for clients with up to $20M in revenue.  Rob Moody, Partner with TKW, is the host. The seminar is 8:00 to 9:30 am, Cascade Room A, Riverhouse, Bend. Space is limited to 30 participants, so RSVP quickly by calling 541-389-1415 or emailing tkw@tkw.com with TKW Breakfast Seminar in the subject line.     

June 19 - Business plan development seminar: learn the components of an effective business plan
This seminar reviews all components of an effective, compelling business plan. You'll learn from two seasoned Oregon Entrepreneurs Network (OEN) experts why certain information is important and how your audience will evaluate what you present. Besides learning the "whys," "whats," and "hows" of your plan, you'll take away valuable handouts, a bibliography, and a listing of key resources.  The seminar is Thursday, June 19, 3:00 – 5:00 pm, at Father Luke’s Room, McMenamins, 700 NW Bond Street, Bend. Cost is $25 for OEN and EDCO members, $65 for non-members (which includes a one-year individual virtual membership). Click for the flyer with more information.  The event also includes free admission to that evening’s PubTalk. Register online and click on Events.

June 25 - Karnopp Petersen presents top ten ways to minimize the risk of employee claims
Tough economic times inevitably lead to an increase in employee claims and lawsuits against employers. Multiple recent state and federal legislative employment law changes make it easier than ever for an employer to trip up. This complimentary seminar will highlight best practices for avoiding employee claims and, if a claim is filed, minimizing potential exposure. Karnopp employment law attorneys Ron Roome, Jon Napier, and Kurt Barker will cover some of the most crucial dos and don’ts. Owners, managers and human resource professionals—whether brand new or seasoned veterans—will benefit from practical tips and insights from Karnopp’s experienced employment law team. The seminar is Thursday, June 19, 7:30 – 8:30 am, 1201 NW Wall St., Suite 300, Bend. A light breakfast will be provided; doors open at 7:15 am and the seminar will start promptly at 7:30. Space is limited to 30 participants, so RSVP quickly to Marisa Chappell or call 541-382-3011. 

September 2008 – May 2009 management training workshop

This OK program is a nine-month series of once-a-month, three-hour workshops designed to develop the organizational and management skills of a small business’s key employees. Training is on the following seven topics: 1) Leadership, 2) Strategic Planning, 3) Customer and Market Focus, 4) Measurement, Analysis and Knowledge Management, 5) Human Resource Focus, 6) Process Management and 7) Business Results. Instructor/facilitator is Jim Schell, author of six books on small business, including Small Business for Dummies. He is the founder of Opportunity Knocks and has facilitated over 400 OK meetings. Schell is a thirty-five year veteran of small business and has started six small businesses. Cost is $995.  Register online for any event or for more information contact Opportunity Knocks 318-4650 or email Susie Stevens.  

September 2008 - Quest for performance excellence: how to assess your organization
This series of nine professionally facilitated meetings is aimed at CEOs, Presidents and non-profit Executive Directors of successful Central Oregon businesses and organizations. Workshops help attendees perform a comprehensive top-to-bottom assessment of their organization, using criteria from the nationally acclaimed Malcolm Baldrige National Quality (MBNQ) Award Program, a public-private partnership whose mission is to “improve the performance of U.S. organizations.” Facilitator is Jim Lussier, President of The Lussier Center, which provides counsel on performance excellence, leadership and governance effectiveness. He is a frequent keynote speaker throughout the U.S., and was past-President/CEO of Cascade Healthcare Community. Under Lussier’s leadership, St. Charles Medical Center received numerous national awards and was named as one of the Top 100 Hospitals in America three times. He is a 2008 member of the Board of Examiners for the Malcolm Baldrige National Quality Award and has taught this Baldrige series for three years. Cost is $1995 and includes three participants from each organization. For more information, contact Opportunity Knocks Executive Director Susie Stevens or call 541-318-4650.  

Each of the teams operate independently and include approximately 10-12 different non-competing businesses and two volunteer facilitators. The individual teams meet once a month for three hours to serve as a board of advisors for each other. In a confidential environment, members help each other with business challenges and other business related issues. Meetings are structured, follow an agenda and keep members accountable. Confidentiality is respected and maintained within the individual groups, as well as a monthly commitment to fellow team members to attend each meeting. Cost is based on number of full time employees; 1-5 employees is $300 and 6+ employees is $600 per year. For more information, call 541-318-4650. 

The Daniels Group - Silver Level
The Daniels Group, LLC founded by Gregory W. Daniels, is a real estate company specializing in the acquisition, development and financing of commercial and residential real estate. For nearly 37 years Mr. Daniels has been successfully involved in real estate opportunities valued in excess of $1 billion throughout the Western United States. 

VocalBooth – Bronze Level
VocalBooth manufactures sound isolation booths and enclosures that are modular and portable. The Central Oregon-based company serves customers such as the Sundance Film Festival, Jesse James from Monster Garage, Grammy-winning producer David Kerschenbaum, and a host of voice actors and recording artists.  “Even with the economic downturn,” says VP Jay Riker “we are seeing strong and continuous growth in our market.”  Some of the growth is fueled by increased sales abroad, given the dollar’s lower value, as well as the recording industry finding great utility in their easily assembled and portable product.  Riker says the company’s growth surge has been helped by their recent involvement with both HiDEC and Opportunity Knocks. The most recent participators in HiDEC’s periodic kaizen events, their facility and process was analyzed and then improved by peer and Lean consultants.  The event resulted in several small improvements, and Riker says VocalBooth was able to reduce overall plant labor cost by 5%.  For more information about VocalBooth and to see the product, visit their website.  

Christina Casanueva, Sävy – Individual Level
Sävy, Finnish for hue or accent, is appropriate for a creative marketing firm aimed at helping businesses connect with savvy consumers and grow their brands. Sävy’s services include brand development and rebranding, marketing and sales strategy, web design and development, search engine marketing and optimization, advertising creative, grass roots promotion, cause-based marketing, and integrated public relations. The company recently "got greener" by switching over to eco-friendly printing with soy-based inks and fully recycled card stocks, and launched a “show your green” campaign to help clients promote their greenness with new product lines and incentives. Sävy’s focus is simple: we’re here for you. For more information, contact Christina Casanueva at 728-8272 or visit the website. 

Mark Schang, Merrill Lynch – Individual Level
Mark Schang is a Financial Advisor at the Merrill Lynch office in Bend.  He works on a team of 3 advisors who focus on Financial Planning and building wealth for individuals so they can maintain a healthy and active Central Oregon lifestyle.  Mark graduated from Florida State University and relocated to Central Oregon nine years ago.  He can be reached at 541-317-3457.