Business Pulse July | August 2024

BUSINESS PULSE

JUL/AUG 2024

THE PULSE OF WHATCOM COUNTY

Ludtke Pacific Trucking 80 years in the industry gives this family-owned Whatcom County business an anchor in the community

PLUS:

TOP 100

PRIVATE COMPANIES Lautenbach Recycling gains a wide footprint in Whatcom, Skagit and San Juan counties How to win a government contract

Business Pulse magazine 1225 Roeder Ave., Ste. 108 Bellingham, WA 98225

JUL/AUG 2024 VOL. 49 NO. 4

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Your local business news brought to you by WHATCOM BUSINESS ALLIANCE

VOL. 49 | NO. 4 PUBLISHER Whatcom Business Alliance EXECUTIVE DIRECTOR Barbara Chase CONTRIBUTING Matt Benoit WRITERS Tamara Anderson-Loucks Cheryl Stritzel McCarthy Mary Louise Van Dyke Lorraine Wilde GUEST COLUMNISTS Kevin DeYoung Mark Harmsworth Ian McCurdy Dann Mead Smith ART DIRECTOR Heather Lea PHOTOGRAPHY Sattva Photo COPY EDITOR Matthew Anderson,

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Cover Photo by Sattva Photo WBA BOARD OF DIRECTORS: BOARD CHAIR: Josh Wright, Partner, Acrisure EXECUTIVE COMMITTEE: Pam Brady, Director NW Gov’t & Public Affairs, bp Cherry Point; John Huntley, President/CEO, Mills Electric Inc.; Doug Thomas, President/CEO, Bellingham Cold Storage; Josh Turrell, Partner, Larson Gross PLLC BOARD OF DIRECTORS: Jane Carten, President, Saturna Capital; Bryant Engebretson, Managing Principal, Tradewinds Capital; Jon Ensch, Commercial Banking Officer, Peoples Bank; Mitch Faber, Partner, Faber Fairchild McCurdy LLP; Jim Haupt, General Manager, Hotel Bellwether; Sandy Keathley, Former Owner, K & K Industries; Tony Larson, Founder, WBA; Sarah Rothenbuhler, Owner/CEO, Birch Equipment; Patrick Schuppert, Commercial Banking Relationship Manager, Wells Fargo; Billy VanZanten, CEO, Western Refinery Services For editorial comments and suggestions, write info@whatcombusinessalliance.com. The magazine is published bimonthly at 1225 Roeder Ave., Ste. 108, Bellingham WA 98225. (360) 746-0418. Yearly subscription rate is $25 (US). For digital subscription, visit businesspulse.com. Entire contents copyrighted ©2024 Business Pulse. All rights reserved. E&O.E. POSTMASTER: Send address changes to Business Pulse, 2950 Newmarket St., #101-173, Bellingham WA 98226

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JUL/AUG 2024 | BUSINESSPULSE.COM

IN THIS ISSUE 13

LARGEST FAMILY-OWNED RECYCLER IN THE STATE

Founder started company at age 24, fresh out of college and unable to find a good job.

17

NEED ANOTHER REVENUE STREAM?

Washington APEX Accelerator helps businesses in Whatcom County understand and compete for contracts from federal, state and local governments.

13

23 LUDTKE PACIFIC TRUCKING

Whatcom County company evolves with region and has made hauling its specialty for more than 80 years.

27 PERSONALLY SPEAKING

How the son of a Methodist minister and a Western graduate became the Port of Bellingham’s economic director.

30 WHATCOM’S TOP 100!

23

27

The Top 100 private companies of Whatcom County — a testament to entrepreneurs and investors, business owners and team leaders, early risers and late-nighters.

COLUMNS 45 Mark Harmsworth

helps small businesses understand the importance of artificial intelligence.

49 How “experience

rating” determines what companies and employees pay toward workers’ compensation.

55 Voters get the chance

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BUSINESSPULSE.COM | JUL/AUG 2024

to decide about their long-term care.

Cover photo: pictured left to right: Jason McFadden, Jon Howe and Max Ludtke. PHOTO: Sattva Photo

BP UP FRONT

Celebrating Whatcom County’s flourishing Top 100... and a tribute to our retiring communications director The heartbeat of any thriving community resonates within its local businesses. These companies are not merely places of commerce; they embody the dreams, efforts and aspirations of dedicated entrepreneurs.

Fostering an environment that supports businesses is not just a matter of economic policy; it is a commitment to the well-being and growth of our society as a whole. Thriving businesses attract investment to our region, which further stimulates economic growth and enhances our standard of living.

In this issue, we celebrate our annual Top 100 Businesses in Whatcom County — a popular feature with an inspiring list of amazing companies and leaders right here in our backyard. Although local businesses generate billions of dollars in sales, the Annual Top 100 is not just a list of the most profitable companies, it celebrates what makes our county special — the tenacity, innovation and resilience of these companies show exactly what we are made of. Much of their success is continuously reinvested back into our community.

Our community faces many challenges, and the high cost of living continues to put a pinch on family budgets. Despite the obstacles, many companies

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BUSINESSPULSE.COM | JUL/AUG 2024

in Whatcom County are thriving. We are proud to present and profile some of these companies in our July/August issue. Inside, read Lorraine Wilde’s feature on Ludtke Pacific Trucking — an 80-year local family business!

In “Sustainably Successful,” Matt Benoit interviews the Lautenbach Recycling family, who have built a company supporting over 100 employees.

Read on to discover a feature written by Tamara Anderson-Loucks on BAI Environmental, and how a phone call became a $15 million venture. Mary Louise Van Dyke profiles another local family business, Home Fire Prest Logs, which turns waste into energy.

While technological innovation presents opportunities for efficiency and growth, it also necessitates continuous investment and adaptation to remain competitive. The pressure to embrace digital transformation while safeguarding data privacy and security poses a delicate balancing act for businesses of all sizes. Mark Harmsworth follows his recent presentation at our WBA Business Conference with an engaging article on artificial intelligence and preparing for the changes it will bring.

Cheryl Stritzel McCarthy digs deep into government contracting with Cara Buckingham, explaining how to benefit from acquiring government contracts

to fuel your revenue stream. In Ian P. McCurdy’s article on page 49, learn how to manage the new workers’ compensation increase, which took effect on Jan. 1, 2024. The WBA is excited to welcome Tyler Schroeder to his new position as director of economic development at the Port of Bellingham! Mary Louise Van Dyke interviews Tyler in “Personally Speaking” on page 27.

Several initiatives will be on the ballot this November. Read Dann Mead Smith’s column on how Initiative 2124 will amend the state’s long-term care insurance program. Looming tax changes are on the horizon — should you take advantage of the tax exemption before 2026? Kevin DeYoung covers the complex factors surrounding the exemption. Business Pulse continues its series highlighting members of the Whatcom County Council. This month, we feature Councilmember Ben Elenbaas, who is serving his second term representing District 5.

The Annual Top 100 is always a great source of pride for Business Pulse and the group of people who pull this issue together. I want to thank our team, the readers, advertisers and contributors who make this magazine possible. I especially want to thank Whitney Pearce, our retiring director of communications, for her exceptional service and lead-

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Whitney Pearce, former communications director for the Whatcom Business Alliance.

PHOTO: Sattva Photo

ership over the years. Her dedication to excellence has been truly inspiring.

From meticulously organizing each issue to nurturing our team of writers and contributors, Whitney’s commitment to quality has been evident in every aspect of the magazine. On behalf of the entire team, I want to extend our warmest thanks for everything she has accomplished. We wish Whitney all the best in her new chapter of life and hope it brings her joy, relaxation and fulfillment. The team at WBA and Business Pulse magazine extend a warm welcome to Heather Lea, who will assume the communications role. We are excited to grow our team and look forward to her valuable input.

Enjoy our beautiful region this summer, and check out the WBA website for a list of our upcoming fall events, including a September networking cruise, our Leaders of Industry event in October, and the Economic Forecast Breakfast in December!

Barbara Chase, Executive Director Whatcom Business Alliance

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BP NEWSMAKERS

Left to right: Josh Burdick and Brad Barron.

Left to right: Todd Williams, Tyson Scheenstra, TJ Mellema and Eric Solem.

Barron Heating merges with Veritas Media Ferndale-based Barron Heating AC Electrical & Plumbing has acquired all assets of Veritas Media, a Bellingham video production agency. The resulting company, Veritas by Barron LLC — a Barron Family Company, will continue to do business as Veritas Media, according to Barron CEO Brad Barron.

Former Veritas Media owner Josh Burdick is now its founder and managing director while also participating as media manager on Barron’s marketing team.

“Veritas is a world-class media company with deep roots within our community,” Brad said. “Barron has had the privilege of working with Josh and his team over the past five years, and we’ve seen great benefit and fantastic return on investment from the videos they have created with us.

We are excited for current and future clients of Veritas to experience the same magic of video that Barron has.”

Veritas Media creates videos for sales and marketing, training, human resources and events. Its clients include Bellingham Cold Storage, Phillips 66 Ferndale Refinery, Western Washington University, Lighthouse Mission Ministries, Lydia Place and the Port of Bellingham. For more information, visit veritasmediapro.com.

strategy and transition plan, Exxel Pacific has announced the recent promotion of four team members moving into vice president roles.

Tyson Scheenstra has been promoted to vice president of operations, TJ Mellema to regional vice president of Exxel’s Bellingham office, and Todd Williams and Eric Solem have been promoted as co-regional vice presidents of Exxel’s Bellevue office.

Tyson, TJ, Todd and Eric each represent and embrace Exxel Pacific’s core purpose and values while using their vital and complementary talents and experiences as executive leaders to guide the company to future success.

Visit exxelpacific.com.

Exxel Pacific announces VP promotions In line with its long-term leadership

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Jones Engineers announces new employee certification Jones Engineers Inc. has announced Jasmine Fast as Bellingham’s newest member of the American Institute of Certified Planners.

Certification by the AICP distinguishes Jasmine as a professional with specific education, training and ethics in land use and urban planning. AICP planners actively serve the public interest, making ethical judgements and implementing the highest standards of integrity, proficiency and knowledge.

“Part of earning and maintaining an AICP designation means a commitment to continued education credits in ethics, law, equity, sustainability and resilience,” Jasmine said. “The best-known planning practices are

Jasmine Fast

forever evolving, and I am humbled by my peers. There are a multitude of untouched aspects to equity in planning, and I am dedicated to learning how we, as a community, can achieve this goal. Equally as important, how can we measure and monitor ‘equity’ over time? This looks different for each scenario, and my guiding principles come from Einstein: ‘Once you stop learning, you start dying.’”

Jasmine graduated from Western Washington University with a degree in urban planning and sustainable development. Visit jonesengineers.us.

Locally owned brewing company opens third location, in Lynden District Brewing Co. now offers specialty pizzas and craft beer at its new location in Lynden, at 6912 Hannegan Road.

Owners Mark and Amy Shintaffer launched District Brewing in 2020 in Mount Vernon and then opened a Ferndale taproom in 2022. A Ferndale High School graduate who has lived in the Everson area for more than 20 years, with children in Nooksack Valley schools, Mark has plenty of connections in north Whatcom County. As a result, his request for local sports memorabilia to display in the Lynden location received a great response.

“We’re going to be a fun place for families and friends to gather,” Mark said.

Amy and Mark Shintaffer

Lucia Greenberg

The menu includes pizza, wings, salads, cider, seltzers, kombucha and non-alcoholic options such as root beer and orange cream — and beer, of course. For more info, see districtbrewco.com.

including for Domestic Violence and Sexual Assault Services: Teens Against Abuse, where she served as outreach and recruitment chair, Animals as Natural Therapy, the city of Bellingham Parks Department, and Congregation Beth Israel, where she serves as a Hebrew teaching assistant. She has also worked as a camp counselor for Bellingham Sportsplex.

Arman Grewal graduated from Blaine High School in 2023 and also completed her associate in arts degree from Whatcom Community College in 2023. She is currently attending Western Washington University, where she is studying biochemistry and plans to graduate in 2025.

Arman is passionate about becoming a pharmacist and after graduating from WWU plans to attend pharmacy school at the University of Washington. Arman currently works as a pharmacy assistant, where she is developing the skills and experience needed to prepare her for her chosen career. In high school, she participated in tennis and National Honor Society and volunteered at the Blaine Food Bank. She currently volunteers at Gurdwara Dukh Navarin Sahib serving meals to the congregation and working as a mentor for the younger generation.

Adria Clines is a 2024 graduate of Sehome High School and plans to attend the Rochester Institute of Technology where she will study ASL-English interpretation, French and creative writing. Her goal is to

Whatcom Women in Business announces scholarship grants Whatcom Women in Business is pleased to announce the recipients of its 2024-2025 scholarships.

Whatcom County residents Lucia Greenberg, Arman Grewal and Adria Clines will each receive $3,000 scholarships toward their 2024-2025 academic year.

The Whatcom Women in Business scholarship program is open to women who are currently Whatcom County residents and/or attending schools in Whatcom County. The program is funded through proceeds raised by the organization’s Professional Women of the Year Awards banquet, in addition to donations from community members. You can learn more and donate directly to the scholarship program by visiting wwib.org/give.

Lucia Greenberg is a 2024 graduate of Sehome High School and plans to attend Northeastern University to study psychology and neuroscience.

Her goal is to become a childhood clinical psychologist. Lucia was the team captain of the softball team her senior year, served as manager for the boys basketball team, and participated in crochet for the community club.

She has done extensive volunteering

Arman Grewal

Adria Clines

Lacy Binschus

become a nationally certified interpreter and an author. Adria has participated in both Running Start and college in the high school providing her with college credits towards her degree. She has been active in several high school activities and clubs including Associated Student Body where she most recently served as director of communications, Yearbook where she served as co-editor and chief, and in the French Club and ASL Club serving as co-president in each.

She also started the Sehome Poetry Club. Adria has worked for the school district as a scorekeeper and referee.

In her limited spare time, she regularly supports her younger sister in her extracurricular activities, which often involves providing transportation before and after school. For more information, contact info@wwib.org.

Promotion at WRS Holly Frontier Sinclair site Lacy Binschus has been promoted to site manager at the WRS Holly Frontier Sinclair site.

As site manager, Lacy has oversight and supervisory responsibility for all WRS employees and WRS projects at Holly Frontier Sinclair Refinery in Anacortes. This includes procuring future work, project management, improving procedures, ensuring employees’ safety, promoting employees’ growth and creating and maintaining a positive site environment consistent with WRS company culture.

“Lacy is dependable, a team player,

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Kevin Jones with daughter and current director, Tallie Jones.

and an unbelievable problem-solver. We have full faith that she will continue to thrive in this new role,” said Ryan Likkel, CEO at WRS. “She has been a valued member of our team for over five years now and is respected not only by her colleagues at Holly Frontier Sinclair, but company-wide.”

Before she came to WRS, Lacy worked as a cosmetologist for 11 years. When she decided to pursue a career change, she began her journey into refinery work as a firewatch.

From there, she took a position as a journeyman laborer, eventually leading her to a safety representative position. In 2019, she joined the WRS safety team, and soon after that, became a project engineer.

“My favorite part about working at WRS has always been, hands down, the people,” said Lacy. “Ownership here champions people, treats them with respect and encourages education and development.”

Mindport Exhibits to close after almost 30 years of inspiring visitors Mindport Exhibits, a downtown Bellingham fixture since it opened in 1995, has announced its intent to close permanently in fall 2024. The decision stems from several factors, including the retirement of founding director Kevin Jones in 2019 and the end of funding from a donor who had financially supported the museum for decades. Those factors present a natural stopping point for the privately-owned business.

Founded as an experimental project almost three decades ago by friends

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Northwest food and farming culture the focus of Farm to Table Trails Sustainable Connections has announced the launch of its 2024 Farm to Table Trails — nine loops that invite participants to savor the sights and sounds of beautiful northwest Washington. On these trails, folks can enjoy bountiful harvests from u-pick berry farms, find decadent local cheeses and visit markets and farm stands for fresh vegetables, fruit, meat and fish. Trail maps, available in print and digital forms, invite locals and visitors alike to explore the wonders and flavors of this unique region.

“Farming and fishing are such labors of love,” said Jessica Gillis, Sustainable Connections food and farming program manager, “and these trails are a chance to support our community and get a look at what it takes to get food from the farm to the table.”

Learn more and sign up at sustainableconnections.org/farm-to-table-trail.

Kevin Jones, Robin Burnett and Joe Edwards, the interactive museum has been a destination for locals and tourists alike, offering a unique space for exploration and learning at the intersection of art and science. One-of-akind interactive exhibits, hand-built by staff, have provided numerous opportunities for discovery and education to visitors from Whatcom County and around the world.

In addition to the museum offerings, Mindport staff operated a low-to-no-

cost tutoring program, curated art installations featuring local and regional artists and brought traveling exhibits to venues around Whatcom County.

“It’s been wonderful to do something for which there wasn’t a blueprint and hopefully encourage the unique, creative, inquiring spirit that exists in everyone,” Kevin said.

The exact closing date of Mindport will be announced soon; however, the business has committed to remaining open into the fall. Visit mindport.org.

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LOCAL HELPS LOCAL.

Choosing WECU was easy. Their deep-rooted presence within our community set them apart. My business isn’t lost in a sea of numbers; instead, it’s recognized as an indispensable part of our community.

KIM WALBECK Owner/Director, The Seedlings Early Learning Center

360-676-1168 WECU.COM/BUSINESS

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BUSINESSPULSE.COM | JUL/AUG 2024

FEATURE BP

Troy Lautenbach, left, and his brother, Torrey, at the Lautenbach Recycling yard. PHOTO: Sattva Photo

Sustainably successful Lautenbach brothers helm largest family-owned recycler in state Matt Benoit Every week in cul-de-sacs and driveways across Whatcom County, recycling bins and garbage containers sit waiting to be picked up.

But do you know what happens once a curbside recycling company takes that reusable refuse off your hands? In many cases, it winds up with Lautenbach Recycling.

Since its humble beginnings in 1991, the family-owned recycling business has provided sustainable solutions for commercial and industrial clients both public and private, from Vancouver, British Columbia, to Oregon and across western Washington.

Running lean The company now boasts about 110 employees and multiple transfer stations throughout Whatcom, Skagit and San Juan counties, but its making a wide footprint in Pacific Northwest recycling was by no means easy.

Founder Troy Lautenbach started the company at age 24,

fresh out of college and unable to find a good job. He went into the recycling business for himself partly at the suggestion of his uncles, longtime Whatcom County dairy farmers Darryl and Ed Vander Haak.

Lautenbach had worked for the two — who were also involved with industrial waste recycling and sustainable practices — during college, gaining initial industry knowledge and experience.

“They’re definitely our mentors,” said Troy of his uncles.

The two were also responsible for installing the state’s first anaerobic digester, which uses bacteria to decompose manure and its byproduct methane.

When Troy first hung out his recycling shingle in 1991 with a truck and trailer borrowed from his uncles, it was the leanest of enterprises.

“I had nothing,” he said. “I had a college loan and an ’82 Ford Courier.”

Those early years stayed lean mostly out of necessity, and

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Lautenbach Recycling focused almost entirely on construction-based recycling — taking drywall and similar items and eventually turning it into bedding for dairy cattle.

Diversified service By 1999, the business was expanding, and Troy hired his brother Torrey — younger by 4 1/2 years — to join him.

While there have been periods of tough budgeting, such as during the 2008 recession, both brothers are proud of the large company they’ve built today.

That company now includes a diversified array of services, including demolition, metal and commercial recycling, as well as food depackaging, storage containers, composting and more.

“We are in a good space,” said Torrey of the company’s current status. “There’s a lot of energy around sustainability, climate change, ways to keep things out of landfills, and finding ways to do things more efficiently, and [to] save the environment while we’re doing it.”

Lautenbach Recycling is headquartered in Mount Vernon, directly next to Skagit County’s recycling and transfer station. Its organic waste and composting service, Skagit Soils Inc, is also located in Mount Vernon.

The company also has facilities in Ferndale — including a yard with about 50 trucks — Bellingham and San Juan Island. About two years ago, the company bought NW Recycling and moved it out of Bellingham’s Old Town neighborhood, where extensive redevelopment is currently taking place.

Lautenbach Recycling has contracts with the major residential recycling pickup companies in Whatcom County, including Sanitary Service Company and Nooksack Valley Disposal. For SSC, Lautenbach Recycling processes only some recyclables, helping transport the

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remainder to a larger processor.

Recently, the company purchased a waste depackaging machine to complement the composting operation. The state-of-the-art machine — the first to be used north of California — can separate large amounts of food waste from packaging, eliminating the need to do so by hand.

“This machine methodically separates the organics from the packaging, so we recycle as much packaging as we can,” Torrey said.

Recycling is real Running a recycling business in 2024 carries with it, like any business, many challenges.

That includes keeping up with automation options, of which there are substantially more than 10 or 20 years ago. Robotic and optical sorting stations in curbside recycling operations have greatly increased efficiency and reduced labor costs in some markets, Torrey said.

An optical sorter, he adds, can extract much smaller pieces of recyclable wood from an object, in a timelier fashion, than a human being. However, Lautenbach Recycling currently has neither feature and continues to rely on finding quality people who fit the company’s culture and mission of responsible sustainability.

Staying competitive in the recycling marketplace, Torrey said, is mainly based on keeping prices close to whatever landfills are charging.

Although recycling can sometimes cost more than simply throwing debris in a landfill, Troy said that living in a more socially and environmentally conscious age has been a big boost to the industry as a whole.

Another challenge is public perception.

Often, the brothers hear people say that recycling either isn’t actually oc-

In Bellingham, Lautenbach Recycling is located at 1515 Kentucky St., and is open Mon-Fri, 7:30 a.m. to 4:30 p.m. PHOTOS: Sattva Photo

curring once refuse leaves their house or that it helps less than people think.

The Lautenbachs see things differently.

“That’s not true for us,” Troy said. “Our cardboard and our paper, our plastics and aluminum and tin — we know exactly where all of that’s going. And we’re not just shipping it overseas, we’re keeping it domestically.”

Torrey reiterates this.

“We’re not just taking things in and

married for seven years.

Erika serves as the Whatcom County Health and Community Services director.

sending them to the landfill,” he said.

“We’re very proud of the fact that we go the extra mile to ensure that we’re doing the right thing.”

Not only is recycling real, but for Troy, it also led to true love. Lautenbach met his wife, Erika, at an industry conference when she was public relations manager for a large garbage and recycling company. They went on their first date just over a month later and have now been

Trust and trash Much of the company’s success, the brothers say, can also be traced to the transparency and trustworthiness the company has established with both customers and employees.

That’s especially important in an industry like recycling, which is heavily regulated.

“Our business has grown through our partnerships,” Torrey said. “As they grow, we grow, because we’re very transparent and we’re proud in the fact that we take care of people. We like to think that when our customers deal with us, they’re going to get taken care of, and in a transparent and sustainable way.”

The brothers also believe their company is a great place to work.

“We enjoy each other,” Troy said. “We call each other a family. We live by that.

We help each other out.”

The local recycling community is quite small, Torrey adds, and the success of those partnerships has allowed each entity to stay in its own lane, for the most part. But it also allows for collaboration and conversation — something that occurred with SSC’s recent phase-in of one-bin residential recycling.

There were multiple reasons for the switch, the brothers said. With a threebin system, recycling trucks actually make a larger carbon footprint due to the limit of sorted refuse they can haul.

The labor element of having handlers sort material is also a concern.

While single-stream recycling is obviously easier for consumers, since they don’t have to sort recycling, Torrey said the downside is the potential increase of contaminated recycle materials.

This is where the consumer — and

the Lautenbachs’ professional recycling advice — comes in.

“Don’t be a hopeful recycler,” Torrey said. “Be a knowledgeable recycler.”

Troy said the hopeful recycler engages in what industry insiders like to call “wish cycling,” which is when a consumer is unsure whether a particular item should be recycled and chooses to recycle it anyway. When that consumer is wrong, it creates more problems for companies like theirs.

SSC, the brothers say, have done a good job educating people on what can and cannot be recycled. Just the same, they offer helpful reminders: Tin, aluminum and glass cans are all fine, as are cardboard and dry paper.

Paper bags and certain plastic containers are okay, but plastic bags are a no go, as they will often become wrapped in screens, gumming up sorting equipment.

These include large garbage bags — especially the black, nontransparent ones.

Removing food and liquid waste from recycled materials is also essential, the brothers say. Troy said that liquids can contaminate materials and make it more difficult to recycle the fibers of a given recyclable material.

Whenever someone recycles something that is contaminated or actually unrecyclable, it goes where it ultimately would have gone if thrown away: the landfill.

Regardless of whether you’re putting out your weekly household refuse or cleaning up a construction site, Torrey said the main takeaway is ultimately the same: “Do what you can. Be educated to ensure that we’re doing the absolute best we can to have a good recycle stream.” ■

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FEATURE BP

Pacific Landscape Architecture in Bellingham has won government contracts and did the landscaping for Parkview Elementary School on Cornwall Avenue. (Courtesy photo.)

Could the government pay you?

Flip the script with a government contract Cheryl Stritzel McCarthy Need another revenue stream? Maybe a government contract would be right for your business.

True, you need to learn to speak government contracting, but the payoff can be worth it. Help and instruction are available, most of it free.

Cara Buckingham’s job is to help businesses in Whatcom County understand and compete for government contracts from federal, state and local governments. Cara, an APEX Accelerator Advisor based out of Economic Alliance Snohomish County, also serves businesses in Skagit, Snohomish, Island and San Juan counties alongside another adviser.

With more federal contracting work coming for our border crossings (see accompanying story Big Work at Border), the timing is apropos.

Quick background You may know Washington APEX Accelerator from its former name, Procurement Technical Assistance Centers, or PTAC. The name changed in 2023.

The outfit was created by Congress in 1985 to expand the number of businesses capable of participating in government contracts. APEX Accelerators exist in almost every state. The Washington APEX Accelerator is statewide, with 17 people on the team.

What’s on offer?

APEX offers one-to-one bid advising, bid reviews, workshops on topics such as steps leading to a state contract, networking and registration help.

As its website (washingtonapex.org) says, APEX helps businesses position themselves to win contracts at any level of government.

Though APEX helps any size of business, most of its clients are small firms.

APEX advises all types of business, from environmental consulting to landscape design, catering and more, Cara said.

The top three Whatcom County industries participating in government contracting are construction, manufac-

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turing and professional, scientific and technical services.

“Government contracting is a language unto itself, and business owners and their teams need to dedicate the time needed to learn,” Cara said.

To show the scale of opportunity, Washington clients win an average of $400 million annually, with $36.2 million of that going to Whatcom County businesses.

By working with clients, APEX also helps government agencies, which need a diverse supplier base, Cara said.

“Government contracting is a language unto itself, and business owners and their teams need to dedicate the time needed to learn.”

Cara Buckingham APEX Accelerator Advisor

(Courtesy photo.)

How to win

Businesses need to be bid ready, Cara said. That means researching which agencies are buying what they’re selling and then registering with those agencies. Businesses find opportunities, assess whether their capabilities match the work and submit a responsible and responsive bid.

What does that mean exactly?

“Responding with the basics the agency requires,” Cara said.

That could be as simple as using the

typeface specified and not leaving out any requested documents.

“If it’s specified in the bid proposal, and if you don’t meet that, it’s a reason to throw out your bid,” Cara said.

An example is a business that was the low bidder, but in the government’s bid packet, there was a page intentionally left blank, and the business removed that page from its proposal.

“It was supposed to stay in,” Cara said.

“The bid was thrown out. Especially with

newer contractors, we will walk through their proposal. We offer training on that.”

New businesses and those that are successful in the private sector but inexperienced with government contracting must learn how government contracting operates, Cara said.

“There are so many agencies! Education, including K through 12 and higher ed, it’s all government contracting. Where to find the information? It’s not centralized. If you just Google where to start, you could end up down a rabbit hole.”

APEX helps businesses find relevant market research and register as a vendor.

Be prepared for government regulations

“There’s a lot of paperwork at times,” Cara said. “But if a business is willing to learn and keep at it, they can be successful.”

What advice would Cara give Whatcom County businesses about interacting with APEX Accelerators?

“They can just sign up.”

That part, it seems, is simple. ■

Big work at border Big changes are afoot at Whatcom County’s three landbased border crossings. Might any of that work suit your business?

Here’s what’s going on:

Sumas This land port of entry project will receive up to $44 million. Commercial inspection lanes will increase from two to four and personal vehicle lanes from five to six.

The building will be modernized and a pedestrian corridor constructed.

Timeline: Planning through December, with the design build award coming in November 2025 and construction taking place from December 2026 through November 2028.

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BUSINESSPULSE.COM | JUL/AUG 2024

Lynden The Kenneth G. Ward port project at Lynden will receive up to $29 million to expand and separate personal vehicle traffic and commercial screening operations, possibly allowing for 24-hour, full-service port operations. When completed, Lynden will have five personal vehicle lanes and four commercial processing lanes. The timeline is the same as Sumas.

Pacific Highway The third border crossing project has been awarded to the infrastructure firm AECOM, with construction to begin in September and expected completion in February 2026.

You have questions Alex Stutzman, a procurement analyst with the Region 10 Office of Small & Disadvantaged Business Utilization, part of the U.S. General Services Administration, answers questions posed by Business Pulse. Answers have been edited.

What is optimal timing for suppliers to bid for any part of the Sumas and Lynden projects?

Monitor SAM.gov, as the request for proposals will be posted later this calendar year. Registering for the site and then routinely checking it is the best way to find out more.

Any preference given to local or in-state suppliers?

Generally, GSA is prohibited from giving preference to a vendor based on their physical domestic address unless the opportunity is set aside to only allow bids from companies in the Small Business Administration Historically Underutilized Business Zone (HUBZone) program (information at sba.gov/federal-contracting/contractingassistance-programs/hubzone-program).

If this award is set aside for that program, it will be outlined in the request for proposals posted on SAM.gov.

Would you encourage companies that have not worked for the government previously to apply?

It is not a prerequisite to have worked with the GSA or the government in the past to be considered for our contract awards. We recommend any company that has recent and relevant experience that meets the criteria in the solicitation we post on SAM.gov to propose.

What about minority- or women-owned businesses?

We routinely set aside work for minority-owned and women-owned businesses. We utilize the Small Business Administration Contracting Assistance Programs (sba.gov/federal-contracting/ contracting-assistance-programs). There are certifications within those programs such as a Women Owned Small Business

certification and a Small Disadvantaged Business certification that would be inclusive of many minority- and women-owned companies. The SBA website has information on how to register. For this project, if any portion of the work is to be set aside to be awarded only to business in one of these programs, the solicitation that will be posted on SAM.gov will include that.

Also, keep a look out for subcontracting opportunities after the award has been made, as there are often opportunities specifically for women-owned and other small business categories to get involved based on federal subcontracting regulations.

Businesses with specific questions can contact Alex at 253-753-6745 or alexander.stutzman@gsa.gov.

Case study #1: Networking Patricia Lenssen, owner of Pacific Landscape Architecture in Bellingham, has won government contracts for her fouremployee firm, including jobs for the cities of Ferndale and Bellingham and for Bellingham Parks and Recreation. For the recently built Samish Coammons apartment complex, which replaced the Aloha Motel, PLA was invited to the job by the architect and applied for the landscaping work after the general contractor was selected.

“Public work for design professionals comes down to qualifications and what team you’re on,” Patricia said. “APEX has good events where you can learn about specific municipalities or other government groups, such as where they publish their ads for work. Those have been helpful. There’s good networking at those events; there’ll be architects and engineers there. We

develop relationships with other Patricia Lenssen, design professionals who would owner of Pacific Landscape Architecture. choose to put us on their team.”

(Courtesy photo.)

For example, Patricia may see that a particular city is seeking suppliers for a job that would be suitable for an engineer PLA knows.

“I may send that to them and say we’d love to be on your team if you go after it,” she said.

“Patricia got the help she needed, then she did the work,” said Cara, from APEX. “We are a resource to guide people to the steps that cut the complexity and help them move forward. We educate them to take it to the next level, and she’s been able to do that.”

Cara added that PLA has won jobs over larger Seattle firms.

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Case study #2: Don’t give up Kaiwyn Harary-Palacios is a nurse and entrepreneur. She had experience with companies that contracted with government facilities to place nurses in temporary staff positions and thought, “Why can’t I do that?”

Turns out, she could.

In September 2023, a Department of Labor facility received a new government contract. It was the catalyst Kaiwyn needed to start her one-woman company, Heart Centered Health & Wellness (heartcentered-health.com) to place nurses.

“I’m a nurse,” she said. “That’s where my heart is. I want to make sure nurses are paid what they’re worth and placed in jobs they’ll enjoy.”

She had to learn fast.

“I needed help to wrap my head around government contracting. I found APEX and was overjoyed with the resources. The free classes? I went gangbusters and took a bunch of them right away.”

Over six months, she put in four

subcontracts but did not win.

In early May, the facility reached out to her.

“I submitted again and won the contract!” Kaiwyn had, over the months, established a relationship with the contracting officer. “That was a huge part of it, why they reached out to me.”

What does that mean in dollars?

“It’s per nurse,” she said. “For a licensed practical nurse, full time, the award is a little over $40,000. For a registered nurse, it’s about $45,000.”

Kaiwyn expects the contract, before it’s re-evaluated Aug. 31, to be worth $100,000 to $140,000.

“The nurse gets the bulk of that value,” she said. “The company takes a small percentage. APEX helped keep me going when I was starting to give up, when I was thinking, can I even do this?

When you’re putting in bids, writing up contracts, it’s easy to get discouraged.

Being around other business owners [in APEX classes] going through the same thing helped. Don’t give up.”

Case study #3: A lot of value “I had questions, and she was really helpful,” said Josh Burdick about Cara Buckingham, APEX Accelerator Advisor.

The founder and managing director of Veritas Media, a three-employee video production and marketing company, Josh has produced work for government agencies such as the Port of Bellingham, Bellingham School District and Whatcom County Health Department.

Josh recommends APEX and the Small Business Development Center at Western Washington University.

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Her company is poised to grow.

“Right now, it’s just me,” Kaiwyn said.

“But I’m ready to hire.”

Kaiwyn Harary-Palacios, nurse and entrepreneur. (Courtesy photo.)

Sell to Western?

Western Washington University recently launched its Small and Local Business Program (localvendors.wwu.edu) to increase engagement with small Whatcom County suppliers, including businesses owned by women, people with disabilities and veterans. “We strive to increase local sourcing whenever possible,” said Lerin Swiackey, program specialist in business services/purchasing, travel and local vendors at WWU. “This program offers help in navigating doing business with higher education.”

“There’s a lot of value that you don’t have to pay for,” Josh said.

A few years ago, Cara attended an APEX Meet the Buyers event to learn how to enter that market.

“It was a friendly place and a good learning opportunity,” Josh said. “I feel a lot more prepared. If an RFP (request for proposal) comes through, I can feel more confident about putting together a bid.”

Upcoming APEX Events Mining Data from WA Statewide Contracts (in-person, Bellingham) July 18 — 3-4:30 p.m.

Washington state uses more than 170 statewide contracts to buy goods and services from 1,500 businesses. Learn to find market data from statewide contracts. Info: bit.ly/3VkWXnJ First Friday Follow-up (online) Aug. 2 and Sept. 6 — noon-1 p.m.

Learn what it takes to grow your business in an open-forum round table for businesses with local APEX and Small Business Development Center advisers.

Info: bit.ly/45ju7Zq

This summer, enjoy our handcrafted, artisan chocolates and house-made gelato*!

*Italian-version ice cream made with more milk than cream, and has a more creamy texture.

Let us add your label logo to our chocolates for special events.

Gelato cakes to order and more offerings, as we expand our downtown space.

Our 30-plus years of experience will bring you new appreciation for the best selections of world-class chocolate!

New this summer: outdoor seating!

360.676.0589 | 4600 Guide Meridian #109 360.733.6666 | 1408 Commercial Street

Steps Leading to a Washington State Contract (online) Aug. 14 — 2-4:30 p.m.

Registration deadline: 5 p.m. Aug. 13.

Terry Homburg, a retired federal contracting officer with 29 years of experience, will share examples of what works in government contracting. Info: bit.ly/3yVuPQL North Puget Sound Contracting Conference (in-person, Everett) Nov. 7 — 10 a.m.-3 p.m.

Business-to-government networking, including an exhibitor hall, panel discussions and one-to-one meetings between prime contractors and subcontractors or suppliers.

Info: bit.ly/4cc4oEs



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FEATURE BP

Left to right: Jason McFadden, Jon Howe and Max Ludtke pose in re-creation of the 1990 photo Jon is holding of their founding dads/uncles. PHOTO: Sattva Photo

For the long haul Ludtke Pacific Trucking — an 80-year legacy in the industry Lorraine Wilde Most of us don’t think much about how our food gets to the supermarket or how it stays fresh during shipping. But Ludtke Pacific Trucking has made hauling its business for more than 80 years.

“We really haul a wide array of commodities for a wide variety of customers,” said Jon Howe, one of three coowners, who oversees day-to-day operations at Ludtke Pacific. “We’ve got 34 trucks stationed at our headquarters here in Bellingham. My main focus are the 18 of those that haul refrigerated reefer trailers, long haul, all the way across the country.”

One of the secrets to its longevity is that Ludtke Pacific goes where the need is.

“We do whatever our customers need us to do,” Jon said.

“We haul a lot of fish scrap from the processing plants in Canada down to Burlington to the rendering plants.

We haul fresh seafood and berries, many of the things

Whatcom County is known for. We take a lot of hatchery eggs up to the hatcheries in lower British Columbia. We’re in Canada doing something pretty much every day.”

In addition to cross-border hauling, you’ll likely see Ludtke Pacific along the Interstate 5 corridor.

“We have six people that do regional refrigerated hauling work,” Jon said. “They might run trips from Bellingham Cold Storage down to Seattle and still be home every night. And then we have 10 drivers that do port work in and out of the Seattle-Tacoma area, bringing goods back up to Whatcom County businesses and maybe some in the lower B.C. They kind of go back and forth in and out of the ports every day.”

Although this business has evolved along with the needs of the region, the backbone of family ownership and stewardship has anchored the company through generations of change.

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Left to right: Ludtke Pacific Trucking has 34 trucks in its fleet (PHOTO: Sattva Photo); in 1949, the company helped right Bellingham’s tallest Christmas tree — a 153-foot Douglas fir; Ludtke Trucking started out in logging. (Courtesy photos.)

Eight decades of family ownership Ludtke Trucking was founded in 1940

by Abner Ludtke and incorporated in 1946. Abner got his start when he bought surplus US Army trucks and used them in Whatcom County’s booming logging industry, which didn’t peak until 1965.

“He basically stayed in logging his entire career,” Jon said.

Abner and his trucks hold a special place in Bellingham’s logging history, as the company hauled and helped right Bellingham’s tallest Christmas tree, a 153-foot Douglas fir, in 1949.

Abner’s younger brother by 20 years, Lloyd Ludtke, started working with Abner hauling logs when he was just seven years old. He and many family members served as employees and unpaid help as well.

Ludtke Trucking later became Ludtke Pacific Trucking to better reflect its regional service area. Lloyd retired in 2012 but remained a co-owner in the company until 2020.

“Their brother, Clarion — he’s 90 and still kicking — worked his entire career with Ludtke, too,” Jon adds.

Lloyd’s son, Lex Ludtke, was the third generation of Ludtke owners (Abner’s dad was a fiscal partner at one time) when he bought the company from Abner in 1983. As the logging industry declined, the company’s trucking work transitioned toward dump trucks.

“This company has evolved with the

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economy,” Jon said. “We changed again in the late ’90s to early 2000s to more refrigerated food commodities. Today, we’re mostly carrying refrigerated goods all across the country and doing container work in and out of SeattleTacoma ports.”

Jon married into the Ludtke family 20 years ago.

“I joined the trucking company 13 years ago as a co-owner with Lex, and we have basically been running the company independently together since 2011.”

Ludtke Pacific owners and drivers have been an ongoing fixture in the Whatcom County community. Many live with their families in Everson.

“I think Abner was Bull of the Woods out at the Deming Logging Show five or six, seven years ago,” remembers Jon, whose own kids graduated from Nooksack schools.

The trucking company has also been a longtime supporter of youth sports and 4-H in Lynden, Nooksack and Everson.

“Raising their animals provides great life lessons,” Jon said.

But over the last decade, expectations for shippers also have evolved.

“The expectation has become same day or next day,” Jon said. “That’s really challenging when a lot of companies don’t want to hold inventory because that’s money sitting on their books. So instead, it’s a lot of last-minute shipments. There are very few customers

who can tell you their shipping plan for the next three weeks. It’s more like, ‘I need a truck tomorrow. I don’t know what I’m doing, but I’ll let you know tonight.’ To compete as a shipper, you’ve got to say, all right, we’ll just be super flexible and hopefully it all works out.”

In order to maintain that flexibility, Ludtke Pacific focuses on retaining a roster of safe, reliable drivers who care about the company and its customers.

Workforce maintenance in a family business Like most businesses these days, Ludtke Pacific has been short-handed off and on since the pandemic.

“In the trucking business, you’re always hiring,” Jon said. “Not just with us, but across the nation, this industry hasn’t attracted younger people. The reality is, the age of truck drivers is probably in the mid- to late-50s. It’s also been difficult for the younger people to get into just because of state and federal laws about age requirements, training requirements and high insurance rates.

So, it makes it really challenging for us to hire that person out of high school that really wants this to be their career.”

Jon said on average they hire a couple graduates a year from local trucking schools who then complete an eight-week internal training program to ensure they have what it takes to join the team.

“We typically have about a 75 percent

success rate of them being able to learn what it takes to do a good job safely and become one of the next generation of lucky drivers,” Jon adds.

Once you invest eight weeks in an employee, you want to keep them.

“We have drivers that stay with us their entire career. We keep drivers because we have an open-door policy.

The owners talk with the drivers, have lunch together, go to the drivers’ banquet. They’re not just a number like at a big company, where they never know who their boss is. We engage with them on a daily basis.”

Respect is also paramount, according to Jon. “We try to maintain a good work/life balance. Sometimes in the trucking world, there are companies that keep drivers out four to eight weeks from home. We typically keep our drivers out for about two weeks.”

Jon said the drivers also have some discretion in their own schedules.

“We try not to put any undue pressure on people to go, go, go,” he said, “because we know that if we burn them out early, then we’re just at a disadvantage for the long haul. About 90 percent of the time, we’re able to accommodate schedule requests, and that is very much appreciated.”

A busy road ahead For a time after the pandemic, the trucking industry saw record highs, but that has shifted in the past two years.

“Right now, the trucking market’s in a two-year economic downturn on par with the financial crisis of 2008-09.

There are a lot of people, unfortunately, that are going out of business that got into this during COVID, thinking this was the new hot market, but they didn’t have the business chops to survive,” Jon explained. “But we’ve actually been able

to take this opportunity to grow. We’ve been able to expand our fleet slowly and organically, and we’ve brought on some key hires that are going to help us do more for our customer base than we’ve ever been able to do before. Now we’re in a position to provide more services, to provide more trucks, more lanes, and do more than we’ve done in the past.”

Ludtke Pacific has been able to do this with strategic hires.

“Some good drivers have been let go by companies that weren’t good operators, and we’ve been able to give them a new home,” Jon said. “They’re happy, enjoying, prospering, and so now we’re able to take that next step.”

But he said Ludtke Pacific wants to grow responsibly.

“We’re never going to be a big, big company,” Jon said. “We have really no desire to get into the triple-digit truck figure,” he explained. “But we would like to get around that 40 to 50 truck area, to become a slightly bigger player in the Whatcom County market.”

When Lex retired in 2023, his son, Max Ludtke, became the first of a third generation of Ludtke owners.

“Jason McFadden, our long-time safety director and former driver, became our third owner this year,” Jon said.

The continuing legacy of Ludtke Pacific, its connections in the industry and its solid reputation of quality service have cemented its position in local and regional shipping markets extending from the Lower Mainland in Canada to the ports in Seattle and Tacoma.

“It’s a new chapter, and all three of us owners are excited about taking it to the next level through the next generation,” Jon said. ■

40 YEARS Lex Ludtke retires

Although Lex Ludtke retired in October 2023 after 40 years of service, the official number of years is likely much longer, according to Jon Howe, because many members of the Ludtke family grew up in the business, going to work with their fathers and uncles.

Lex became a co-owner in Ludtke Pacific Trucking in 1983 when older brother and founder Abner Ludtke retired. A slender 6-foot-8, Lex is known as a gentle giant.

“He’s so kind,” Jon said. “I bet if you go ask people in the business community, you’re not going to find anyone with a bad thing to say about Lex. He was good to his employees and completely loyal to his customers.”

Jon recalled many times that Lex responded to customer emergencies late at night and on holidays when they lost power or coolers went bad.

“He was there for his customers no matter what the need was, and he would help even if it didn’t benefit him,” Jon remembered. “He would help go find a third-party carrier that can assist because he really just valued his customers and wanted them to know if they were successful that we would be successful.”

Lex was known for compassion toward his drivers.

“He knew that without drivers we’re irrelevant,” Jon said. “Happy drivers make a happy trucking company.”

Lex still stops by the office for coffee regularly, but he’s enjoying a lot more time with his grandchildren, including several under the age of 10.

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PERSONALLY SPEAKING BP

Shifting gears

Tyler Schroeder at the Port of Bellingham office on Marine Drive. (Courtesy photo.)

Working to expand economic development in Whatcom County Mary Louise Van Dyke Tyler Schroeder plunges into his new role as director of economic development for the Regional Economic Partnership at the Port of Bellingham.

He replaces Don Goldberg, the past economic developer. Prior to being hired by the port, Tyler served as Whatcom County’s deputy executive.

Tyler said he was already familiar with the Regional Economic Partnership after working with the group on initiatives such as transportation infrastructure, rural broadband, business recruitment and financing for strategic projects.

That organization is jointly funded through the Port of Bellingham, the city of Bellingham and Whatcom County, according to the port’s website, to increase efficiency and coordination among agencies.

The son of a Methodist minister, Tyler might have had different plans for himself while growing up in the south Puget Sound area than serving in an economic director’s position or graduating from Western Washington University.

But during visits to family in the area, he decided Bellingham was the “right

fit” and applied to WWU as his one and only college choice.

“I think that was one of the best decisions of my life, now that I look back 20-some-odd years later,” Tyler said.

“I’m able to raise a family here in Bellingham and find a great profession.”

He credits a couple of “influential professors” with helping him scope out his career path. “Going to Western in the late ’90s, I saw the pressures of development,” Tyler said. “I saw the value of stimulating the economy and seeing what the impacts of growth are.”

Tyler said he felt lucky that he and

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his wife could stay in Bellingham after graduation. However, friends that he’d attended classes with at WWU ended up heading to Seattle to seek jobs in their field and/or positions where they would earn enough income to support themselves.

That experience further honed his interest in working in the economic development field and engaging the economy to create more job opportunities for job seekers, he said — building jobs that pay family wages and living wages, so people who grow up in Whatcom County or come to attend WWU, Whatcom Community College or Bellingham Technical College have the opportunity to stay here.

This interview occurred a few weeks after Tyler moved into his new office at the port in May. Answers have been edited for clarity and brevity.

Business Pulse: What is the Port of Bellingham’s role in Whatcom County, and how does this tie in with the Regional Economic Partnership?

Tyler Schroeder: The port is a great location for the Regional Economic Partnership. You’re able to use the foundation of the port’s assets to help attract businesses, help retain businesses and stimulate the economy.

As people become more familiar with the mission and the vision of the port, they’ll see that it’s driven by economic development, at its core, and being a good steward of the public lands that the port oversees.

You’ve seen that with the cleanup work we’ve done along the Bellingham Bay; you’ll see that with the waterfront redevelopment, some investments that the port is looking into with the

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Tyler Schroeder, director of economic development for the Regional Economic Partnership at the Port of Bellingham. (Courtesy photo.)

shipping terminal and continued work with the airport, as well as some of the other industrial lands that the port owns and operates.

You take that foundation of economic development for our community, and you connect a team of the Regional Economic Partnership working with the county, working with the city of Bellingham and the other small cities.

You think of ways to develop economic development strategies that help support each jurisdiction, each city, each business in our community, to be able to further guide the economy in the sectors we’d like to see be retained and expanded.

BP: As the director of economic development, what are some of your responsibilities?

TS: I see my role as leading the very strong team that the port has for economic development. I’ve been pleasantly surprised and excited about work-

ing with them to integrate their work at the port with the larger economic partnership.

This involves looking into the industrial and commercial lands in Whatcom County and in the cities and starting to establish a process to appropriately provide water, sewer and power to those properties. This way, these parcels can be developed into shovel-ready sites able to provide the infrastructure needed to attract businesses.

Another part of my role is working with the airport to try to attract additional aviation-related businesses.

I think the airport is an asset that we as a community need to be excited about and that can draw some economic development.

I also work with the agriculture sector to identify ways to provide value-added commodities. I’m excited about a project the port has already started to move forward with, establishing an agricultural resource center that provides resources to the farmers. Farming contributes over 8,000 jobs to Whatcom County, and this facility will connect local farms to research and science to increase food production and protect our food supply from the changing climate.

BP: Living in Whatcom County, are there some places you particularly like going to for recreation?

TS: We all know the great community asset that is the recreational opportunities in Whatcom County. I find myself out at Mt. Baker Ski Area during the winters, skiing a bunch with my family. During the summers, I find myself around Lummi Island and the area looking for crabs and enjoying the water and the bay.

“

I think that was one of the best decisions of my life, now that I look back 20-some-odd years later,” Tyler said.

“I’m able to raise a family here in Bellingham and find a great profession.

sectors that our county sees as a value.

These are clean technology, energy, maritime work, natural resources, agricultural-based sectors.

The thing about economic development is that you don’t always see the actions immediately. It’s about creating relationships, creating visions and creating investment into areas so that when

“

BP: What made you decide to leave your former position with Whatcom County?

TS: I was with Whatcom County for 20 years. I started interning there in Whatcom County Planning & Development Services before I graduated from Western.

Being in the executive’s office, I was able to work collaboratively and closely with the Whatcom County Council — with all the elected officials of Whatcom County — and build strong partnerships with the port and the mayors and a lot of the business owners here.

I came to the conclusion that after 20 years, I wanted to find out what’s next. I found the Port of Bellingham’s mission of leading economic development and being stewards of the port’s land and this idea of stimulating the economy to be a great fit. So, when the port came with an opportunity, it was too hard for me to pass up.

the time is right, those will be executed.

During my time at the county, I worked on many projects that took decades to accomplish. When you look back over time, it’s those longstanding decisions that provide a foundation for the small steps in between needed to reach the goal. ■

BP: In one year, five years, 10 years from now, what would you like to see happening through the Regional Economic Partnership?

TS: My vision will be that there are properties within Whatcom County that are shovel-ready to be built for commercial and industrial growth. To have that accomplished, the governments in Whatcom County — the cities, the county, the port — will have to be able to support investment into areas in relationship building with the private sector.

My hope is that in one year, in five years, in 10 years, that the work we’re putting into the economic development vision today will be executed with land available for the construction and development of family-wage jobs within

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TOP 100 PRIVATE COMPANIES IN WHATCOM COUNTY [BASED ON 2023 SALES]

For close to 50 years, editors and writers at Business Pulse magazine have been covering the entrepreneurial spirit and economic influence of business talents here in Whatcom County. This annual list of the top 100 private companies, ranked by 2023 gross sales, is a snapshot of the businesses that make Whatcom County a compelling place to work and live.

Within the results are inspiring stories of leaders and their teams who create living-wage family jobs, meaningful careers and generational success. Locallyowned Financial Plan Inc. provides customized financial planning and asset management. For integrated medical and personalized care, many clients depend on locally and independently owned Hoagland Pharmacy.

Farmers Equipment Co. is a known source for servicing this county’s massive agricultural load with berryharvesting and irrigation equipment. Perennial top performer Exxel Pacific builds up Whatcom’s newest structures, residences and businesses.

This list also displays the breadth of industries — agriculture, banking, construction, hospitality and service, information technology, marine and retail — that bolster our growing economy.

The power of a list is formative, setting up industry expectations and influencing consumer perceptions.

A ranking frames the field, categorizes the competition and distinguishes the leaders.

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In this list are the thinkers and innovators, leaders and doers, who launch the new products, expand the teams and make the deadlines. Every company in this list is an intricate ecosystem, putting together people and systems, capital and capacity, to make its own entity prosperous, and in so doing, our local economy, too.

Importantly, this year, an overwhelming majority of organizations plan to hire new employees. Planning for hiring is great news for these businesses, potential employees and Whatcom County.

Just like last year, there are many new businesses showing the engagement of private enterprise. We welcome the newest Top 100 members who made the ranking and congratulate them on their achievements.

Take inspiration from this issue of Business Pulse, read the stories of who’s who in the Top 100, join us at events hosted by the Whatcom Business Alliance (publisher of this magazine) and make plans to achieve a ranking on this list next year.

Framed by the beauty of the Salish Sea and the North Cascade mountains, imbued with industry and talent, Whatcom County is an exceptional place to work and live. Here are the top performers in local business — the top 100 private companies in Whatcom County!

2024 RANK BASED ON 2023 SALES

COMPANY

LOCATION

FOUNDED

EMPLOYEES REGION

TOTAL

TOP EXECUTIVE(S)

2023 SALES RANGE

HIRING

(in millions)

Exxel Pacific

Bellingham

1989

50

170

Geoff Stodola

$350+M

2

Dawson Construction Inc

Bellingham

1967

148

250

Pete Dawson

$200-299+M

3

Grizzly Industrial Inc

Bellingham

1983

110

265

Shiraz Balolia

4

Mt. Baker Imaging LLC

Bellingham

1969

154

154

Dr. Stephen Buetow

5

IMCO General Construction Inc

Ferndale

1978

70

260

Tyler Kimberley

6

CHS Northwest

Lynden

1941

125

275

Eric Ellis

7

Axiom Construction & Consulting LLC

Lynden

2002

275

425

Timothy Koetje

8

Peoples Bank

Bellingham

1921

312

466

Charles LeCocq

9

Faber Construction Corporation

Lynden

1987

155

167

Ben Faber

10

Alaskan Leader Fisheries

Lynden

1991

9

175

Robert Wurm

11

Samson Rope Technologies Inc

Ferndale

1878

200

350

Christian Rheault

12

Smith Gardens

Bellingham

1901

185

1000

Eric Smith

13

Kam-Way Transportation Inc

Blaine

2008

70

320

Kam Sihota

14

Trans-Ocean Products Inc

Bellingham

1985

219

225

Murry Park

$50-89+M

$90-199+M

1

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JUL/AUG JUL/AUG 2024 2024 || BUSINESSPULSE.COM BUSINESSPULSE.COM

BASED ON 2023 SALES

COMPANY

LOCATION

FOUNDED

EMPLOYEES REGION

TOTAL

TOP EXECUTIVE(S)

(in millions)

15

The Markets LLC

Bellingham

2006

311

311

David Cook

16

Brim Tractor Company Inc

Lynden

1966

25

117

Dan Brim

17

Haskell Corporation

Bellingham

1890

50

120

Fred Haskell

18

Hardware Sales Inc

Bellingham

1962

115

125

Ty McClellan

19

Mills Electric Inc

Bellingham

1911

200

300

John Huntley

20

Andgar Corporation

Ferndale

1973

170

200

Todd Kunzman

21

Jansen Inc

Bellingham

1952

7

90

Grant Jansen

22

ProPack Inc

Blaine

1991

55

350

Alex Snyder

23

Elements Hospitality

Lynden

2006

33

78

Tim Broersma

24

Bellingham Ford

Bellingham

1908

65

65

Julian Greening

25

Mt Baker Products

Bellingham

1949

100

100

Steven King

26

Western Refinery Services Inc

Ferndale

1990

240

252

Ryan Likkel

27

Farmers Equipment Company

Lynden

1935

40

72

Kevin Pawlowski

28

SPIE

Bellingham

1955

180

200

Kent Rochford

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BUSINESSPULSE.COM | JUL/AUG 2024

2023 SALES RANGE

$50-89+M

2024 RANK

HIRING

COMPANY

LOCATION

FOUNDED

REGION

TOTAL

TOP EXECUTIVE(S)

2023 SALES RANGE

HIRING

(in millions)

29

Sanitary Service Company Inc

Bellingham

1929

99

99

Paul Razore

30

Walton Beverage Company

Ferndale

1931

134

134

John Walton

31

Scholten’s Equipment Inc

Lynden

1980

35

58

Duane Scholten

32

Blythe Mechanical Inc

Bellingham

1904

97

120

David C Morse III

33

Bellingham Cold Storage

Bellingham

1946

176

180

Doug Thomas

34

Barron Heating & Air Conditioning Inc

Ferndale

1973

175

175

Brad Barron

35

Daritech Inc

Lynden

1990

51

65

Ryan DeWaard

36

Larson Gross PLLC

Bellingham

1949

137

203

Kelli Visser

37

Saturna Capital

Bellingham

1989

88

120

Jane Carten

38

Western Forest Products

Bellingham

1981

22

35

Terry Dawn

39

TriVan Truck Body LLC

Ferndale

2002

95

95

Marty VanDriel Cason VanDriel

40

Woods Coffee

Lynden

2002

225

425

Kelly Spiker

41

Birch Equipment Rental & Sales

Bellingham

1972

40

85

Sarah Rothenbuhler

42

MSNW Group LLC

Ferndale

1995

75

325

Becky Finkbonner

$30-49+M

BASED ON 2023 SALES

EMPLOYEES

$15-29+M

2024 RANK

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34

COMPANY

LOCATION

FOUNDED

REGION

TOTAL

TOP EXECUTIVE(S)

HIRING

(in millions)

43

Lynden Sheet Metal Inc

Lynden

1940

98

98

Bobbi Kreider

44

Hoagland Pharmacy

Bellingham

1981

53

53

Carson Huntoon

45

All American Marine Inc

Bellingham

1987

65

65

Ron Wille

46

Talbot Group

Bellingham

1995

15

16

Stowe Talbot Ben Besley

47

Lister Chain & Forge Inc

Blaine

1911

38

38

Michael Stobbart

48

Mt Baker Roofing

Bellingham

1980

96

96

Mark Kuske

49

Cowden Inc & Companies

Bellingham

1945

58

60

Brent Cowden

50

GK Knutson Inc

Ferndale

1997

24

103

Greg Knutson

51

Hytech Roofing

Bellingham

1952

43

43

Dan Gross

52

Skeers Construction

Bellingham

1987

14

14

Dick Skeers

53

Infusion Solutions

Bellingham

2010

76

97

Rowena Birnel

54

HB Hansen Construction Inc

Lynden

1994

30

30

Bernie & Kristen Hansen

55

Northwest Health Care Linen

Bellingham

1992

133

139

Kelsey Van Miert Evan Hall

56

Christian Health Care Center

Lynden

1956

215

215

Tonja Myers

BUSINESSPULSE.COM | JUL/AUG 2024

2023 SALES RANGE

#

$15-29+M

BASED ON 2023 SALES

EMPLOYEES

$10-14+M

2024 RANK

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#59

BAI Environmental owners, from left to right: Ivan DeVries, Frank DeVries, Jeff Ten Pas. PHOTO: Tamara Anderson-Loucks

BAI Environmental Services born from life-changing phone call Tamara Anderson-Loucks In 1981, Lynden farmer Frank DeVries was doing what he loved: growing raspberries. Meanwhile, ARCO Refining (now BP) built a vacuum spreader tank but didn’t own a tractor large enough to power it. So, ARCO did what you do in a small community when help is needed: pick up the phone. They eventually reached Frank, who agreed to contract with ARCO to power the vacuum spreader.

What Frank couldn’t have foreseen was that one phone call chain — friends referring friends — would change the course of his life.

What started as a modest side business is today BAI Environmental Services, an approximately $15 million venture that Frank, the company president, owns alongside his brother, Ivan DeVries, vice president and daily operations manager, and Jeff Ten Pas, vice president and safety manager.

Ivan partnered with Frank in 1987. Together, they looked for

opportunities to grow the business.

“They came from a farming background and had a can-do attitude,” Jeff said. “They figured things out as they went and improvised along the way.

Jeff, who became a partner in 2004, has a background in environmental studies and construction.”

In the late ’90s, services were expanded to offer wetlands mitigation and dredging. The company grew at a steady pace until the early 2000s, when business boomed due to an influx of contracts with Alcoa and other industrial entities.

Today, BAI Environmental Services is considered a specialty contractor providing industrial maintenance and environmental services. Among its diverse offerings are street sweeping, vacuum truck services, hydro excavation, hydro blasting, hydroseeding, storm pond maintenance and wetland mitigation and dredging.

BAI Environmental Services serves a variety of municipalities, industrial

and manufacturing facilities, property management companies, contractors, commercial businesses and refineries throughout Whatcom, Skagit Island and Snohomish counties.

Currently, the company has 90 employees. Employee attraction and retention has been one of the company’s biggest challenges, Jeff said.

“A lot of the work is not glorious,” he said. “It can be dirty and physically demanding. Some folks just aren’t cut out for it. But the work is diverse, it can be very rewarding, and there are opportunities to develop new job skills as new technologies are developed.”

Founded from a simple phone call, BAI Environmental Services this year celebrates its 40-year milestone. Jeff acknowledged the company would not be what it is today without the contributions of its team members, many of whom have been with the company for 10 to 30 years. ■

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COMPANY

LOCATION

FOUNDED

REGION

TOTAL

TOP EXECUTIVE(S)

ALRT Corporation

Everson

1990

40

40

William Westergreen

58

Fat-Cat Fish Company

Bellingham

2008

25

25

Erin Vitaljic

59

BAI Environmental

Blaine

1984

95

95

Frank Devries

60

KCPK Trucking

Deming

1985

32

32

Charles Cooper

61

MGM Solutions

Bellingham

2001

22

22

Shad Malone

62

The Comphy Co

Ferndale

2006

40

40

Jessica Carrington

63

Ethos West Construction Inc

Bellingham

2019

35

35

Kenneth Nichol Saul Whitworth Elke Stevens

64

Hotel Bellwether

Bellingham

2000

90

90

Jim Haupt

65

Financial Plan Inc

Bellingham

1996

17

17

James B Twining

66

Ludtke Pacific Trucking

Bellingham

1946

38

38

Jon Howe

67

Pacific Facility Solutions Inc

Bellingham

2015

60

80

Tiera Nipges

68

Signs Plus Inc

Bellingham

1992

35

35

Jim Sutterfield

69

Natural Way Chiropractic & Massage

Bellingham

1995

30

50

Eddie Hansen

70

VSH CPAs

Bellingham

1997

45

54

Chris Sullivan

BUSINESSPULSE.COM | JUL/AUG 2024

HIRING

(in millions)

57

36

2023 SALES RANGE

$10-14+M

BASED ON 2023 SALES

EMPLOYEES

$5-9+M

2024 RANK

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#61

Shad Malone, MGM Solutions president. (Courtesy photo.)

Resolving pain points in an ever-changing marketplace Tamara Anderson-Loucks Fresh out of college, Shad Malone and Dan Mosely began working in information technology for Rader Farms.

In 2001, they left the farm to join forces with Jon Greenwood and formed MGM Solutions, named for the three.

The new company’s first pitch was to Rader Farms for a custom e-commerce application; the proposal wasn’t accepted.

Soon after, Jon left the company. Undeterred, Shad and Dan ventured on, recognizing there was a thriving local business community with pain points they had the unique skillsets to solve.

In January 2002, amid the growing popularity of e-commerce platforms, Shad and Dan built a prototype website, TotalBarcode.com, to gauge the viability of selling bar code scanners — new technology at the time. To their surprise, orders rolled in. The success of TotalBarcode led to the launch of POSGuys in 2004, an e-commerce division that offers point of sale hardware

systems and pre-packaged software for the retail and food service industries.

Twenty-three years later, the once-struggling start-up earns average annual revenues of approximately $15 million, has 30 employees and has served 200,000 customers throughout the US and Canada.

Today, MGM Solutions is led by Shad, the company president and the only remaining founder of the original three.

The company develops highly customized database applications, including electronic control of work and permitting solutions for the oil and gas industry and inventory management systems for warehousing.

For some clients, MGM Solutions develops stand-alone custom applications. For others, it writes software that integrates with a client’s existing software infrastructure, such as SAP. Colton Kaltenfeldt, the director of marketing at MGM Solutions, notes that the founding objective to solve customer pain points is still the primary purpose today.

“It comes down to listening — to fully understand our client’s processes, needs and challenges,” he said. “Then we develop solutions to meet those needs, test, refine and provide ongoing support.”

MGM Solutions’ success can be attributed to its ability to anticipate and adapt to an ever-evolving marketplace, Colton said.

“Ten years ago, businesses didn’t think about using mobile computers for curbside delivery,” he said. “Now it’s a necessity. As business gets more complicated and technology changes, we’ve adapted to meet the need.”

Going forward, the MGM Solutions team is researching ways to bring the flexibility of custom software to more accessible products for small business.

As it has since its inception, MGM Solutions will continue to look for ways to help businesses, large or small, solve their pain points. ■

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JUL/AUG 2024 | BUSINESSPULSE.COM

COMPANY

LOCATION

FOUNDED

REGION

TOTAL

TOP EXECUTIVE(S)

AMS Print & Label Specialists

Blaine

1988

30

30

Dave Freeman

72

Carl’s Mower & Saw Inc

Ferndale

1990

14

14

Josh Levien

73

Highline Construction

Bellingham

2011

29

30

Trevor Swezey

74

Perry Pallet

Ferndale

1995

40

40

Geoff Broersma

75

JTI Commercial Services LLC

Lynden

2004

40

40

Ted Huizenga

76

Northwest Marine Industries

Bellingham

2012

42

42

Ryan Binning

77

Whatcom Land Title Co

Bellingham

1982

50

50

Bill Ronhaar

Bellingham

2020

56

62

Jeff Swickard

Swickard Auto Group Volkswagen of Bellingham and Audi Bellingham

79

Wilson Engineering LLC

Bellingham

1967

35

37

Andrew Law, P.E.

80

Lynden Interiors

Lynden

2001

10

12

Ryan Winkler

81

The Lost Co

Bellingham

2016

7

7

Mike Randol

82

Innotech Process Equipment

Lynden

2012

16

16

Tim Kaptein

83

CorePhysio

Bellingham

2004

29

29

Elizabeth Hampton

84

Stockton’s Paint

Bellingham

1937

5

8

Casey Gordziel

38

BUSINESSPULSE.COM | JUL/AUG 2024

HIRING

(in millions)

71

78

2023 SALES RANGE

$5-9+M

BASED ON 2023 SALES

EMPLOYEES

$1-4+M

2024 RANK

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#95

Travis Hermanson stands in front of the machine that takes wood waste and compresses it through a 400degree Fahrenheit process that creates the Prest Log, a log capable of heating up to 12 hours.

PHOTO: Mary Louise Van Dyke

Home Fire Prest Logs turn waste into home heat Mary Louise Van Dyke Imagine taking wood waste and recycling it into logs that efficiently heat homes.

Home Fire Prest Logs, located in Ferndale, is saving trees through Prest Logs, according to Vice President Travis Hermanson.

These are dense recycled logs composed of sawdust waste and wood shavings and manufactured through a heat compression process. The product is used for economical heating in wood stoves and fireplaces, he said.

“We’re the only log manufacturer that uses heat pressure,” Travis said.

“The only one.”

Prest Logs is the outcome of a dream his dad, Glenn Hermanson, nurtured while living in British Columbia.

The high costs of heating a home in the 1980s and ’90s provided the initial spark. Glenn envisioned there had to be some way to reuse the waste generated by lumber mills.

Glenn, a father of five at the time, found two partners who supported his

invention in the early years. However, the partnership kept running out of money, Travis said, and both partners bowed out, leaving Glenn to wonder whether his idea would ever catch fire.

Glenn’s fortunes changed for the better after he remarried. Virginia Hermanson, who ran a shoe store in the 1990s, kept funneling money in and telling Glenn he needed to make his idea work.

The logs were initially manufactured in Surrey, British Columbia, and Travis recalled helping stack them.

In 2008, Glenn established US citizenship, and he and Virginia relocated the business to a 35,000-square-foot facility in Ferndale. The entire warehouse needed to be revamped. Virginia sold her house to make the move possible.

The couple ran the company with Glenn’s son, Clayton Hermanson, who currently is the company president.

Travis and his younger brother, Shea Hermanson, joined the operation after Glenn’s death in 2019 and Virginia’s retirement.

The company workforce of 11, which includes the three Hermanson brothers, manufactured about 3.8 million logs in 2023.

“Come August, this place will be full of pallets,” Travis said.

Those pallets begin flying out the door as fall arrives and people think about heating their homes during the cold months.

Certainly, challenges lie ahead for the company — finding more affordable ways to ship the product to markets (including the I-5 corridor, Alaska and Massachusetts) and seeking fresh sources of available wood waste — but Travis looks towards a bright future.

“I think Glenn had a good vision for a product that never existed,” Travis said. “He was a big, visionary person who always wanted something to create of his own.” ■

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BASED ON 2023 SALES

COMPANY

LOCATION

FOUNDED

EMPLOYEES REGION

TOTAL

TOP EXECUTIVE(S)

2023 SALES RANGE

HIRING

(in millions)

85

Neeter House of Luxury

Bellingham

2022

7

7

John Neeter

86

Trico Office Interiors

Bellingham

1954

4

4

Trudy Skiver

87

Hemisphere Solutions

Bellingham

2011

12

13

Jeff Clement

88

Echo Ultrasonics LLC

Bellingham

2012

9

11

Gene Larson

89

HFIT Homestead Fitness

Lynden

1999

35

35

Ryan Winkler

90

Team Technology

Bellingham

2005

5

5

Patricia Seaman

91

ForeFront Hospitality DBA Inn at Lynden

Lynden

2015

11

11

Teri Treat

92

Vander Giessen Nursery

Lynden

1938

5

5

Alvin Vos

93

Archer Halliday, PS, CPAs

Bellingham

1998

12

12

Bernadette Halliday

94

Data-Link West Inc

Bellingham

1998

3

3

Eric E Johnson

95

Home Fire Prest Logs Ltd

Ferndale

1988

8

8

Travis Hermanson Shea Hermanson Clayton Hermanson

96

Mt Baker Vision Clinic

Bellingham

1951

23

23

Brian Koning

$1-4+M

2024 RANK

We at Business Pulse magazine believe the following companies qualify for the Top 100 list based on previous years, but they were unable to confirm their data as of press time.

In alphabetical order: Anvil Corporation, DeWaard and Bode, Faithlife LLC, Hempler Foods Group LLC If you would like your company included in next year’s list, please contact heather@whatcombusinessalliance.com.

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BUSINESSPULSE.COM | JUL/AUG 2024

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JUL/AUG 2024 | BUSINESSPULSE.COM

CONGRATULATIONS TO ALL WHATCOM COMPANIES HELPING TO CREATE A VIBRANT LOCAL ECONOMY

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2024 | BUSINESSPULSE.COM JUL/AUG 2023

BP COUNCIL CONVERSATIONS

CO U N C I L C O N V E R S AT I O N S

PHOTO: iStockphoto.com/Buings Studio

An interview with Ben Elenbaas Dann Mead Smith Business Pulse continues its series highlighting members and key commissions of the Whatcom County Council. This issue, we are featuring Councilmember Ben Elenbaas, who is serving his second term representing District 5 (northwest area of Whatcom County) after being re-elected in the fall.

In addition to his work on the council, Ben is a farmer and works as operations foreman at BP Cherry Point.

Ben is chair of the council’s Planning and Development Committee.

He also represents the County Council on several community boards and committees, including the Whatcom County Ferry Advisory Committee, Flood Control Zone District Advisory Committee, Local Emergency Planning Committee and Public Defense Advisory Committee.

Business Pulse: What are your priority issues/projects for the remainder of 2024?

Ben Elenbaas: Every issue I deal with is a priority for those involved, whether it’s water rights adjudication, the fentanyl crisis, the Lummi Island ferry replacement and/or dry dock, building a new jail (approved by voters last fall), deaths occurring in countyfinanced facilities like 22 North, EMS oversight, public works projects, and the 2025 comprehensive plan process and update. All of these things and more, depending on perspective, are someone’s number one priority, which means I try to address them in a manner that for the time I am working on them, they are my number one priority as well.

BP: Have your priorities changed or narrowed from last year based on the

agendas for this year of the council majority and/or county executive?

BE: Being one councilmember of seven very much plays into the scope of which priorities are forefront. And, yes, being in a minority position does play a role in how I can effect an outcome.

I will give an example: Recently, there has been talk of taking our current medical examiner, whose entire department has run on a contract basis, and moving them into an official county department, making the medical examiner and her staff official county employees. I voted against the package of funding that facilitated this move for a myriad of reasons, including the cost and not wanting to increase the size of county government.

However, it still passed, which prompted me to bring forth an ordinance that would more clearly define the role of

This will be an ongoing column with councilmember interviews throughout the year.

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BUSINESSPULSE.COM | JUL/AUG 2024

“

Every issue I deal with is a priority for those involved.

Whatcom County Councilmember Ben Elenbaas pictured on his family farm, where he works in addition to his work as a councilmember. (Courtesy photo.)

Ben Elenbaas

Whatcom County Councilmember

the medical examiner and their support staff in their roles as county employees — something I would not have done if they were left as contractors.

BP: Has there been anything new that has come up in council since the first of the year that you are now championing or opposing?

BE: Land use policy is always something that has been near and dear to my heart, even though it isn’t a new item.

The 2025 comprehensive plan update, which only happens every 10 years, is a massive deal.

We can either continue to kick the can down the road with our land use policy — like we did in the 2015 comp plan update in regard to housing and housing affordability — or we can grab the bull by the horns in this update and make meaningful changes that will allow growth to occur in areas the community supports.

It’s time to do something as elected leaders and give staff the direction instead of letting them drive the outcome of our land use policy — something the majority has been more than happy with doing for the last almost 20 years, and we’ve all seen what kind of outcome that has given us. We can do better; it just takes the political will to do the work, and I plan to do that. ■

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BUSINESSPULSE.COM | JUL/AUG 2024

BUSINESS TECHNOLOGY BP

PHOTO: Unsplash/Steve Johnson

How will artificial intelligence affect small businesses?

A simplistic view of how AI works Mark Harmsworth Information technology — and artificial intelligence in particular — is growing at an exponential rate, changing the way that data is collected, analyzed and used. Estimates put investment in the AI space at $200 billion by 2025, according to Goldman Sachs, with companies such as Microsoft, Amazon and Google investing significant amounts of their budgets in the new technology.

The latest generation of AI — GenAI — is garnering about 80 percent of venture capital investment in AI, according to CB Insights, a tech research firm.

For small businesses, AI might seem a useful tool only for searching the internet, writing an email or creating images

using one of the latest image-generating websites. However, small business owners need to start thinking about AI and get prepared for the change it will bring.

Here’s a simplistic view of how AI works: AI is a set of complex algorithms that take large datasets, text images and other types of data, identifies patterns in the data, and makes predictions based on the results. AI can feed the conclusions back into its own algorithms to improve the output. AI can draw conclusions only from the data fed into the system, with the results dependent on that data.

Data is key to the success of AI. Bad or incomplete data will yield bad results. Conversely, large, accurate datasets will give the best results. Additionally, the algorithms that the human developers of AI create are subject to the biases

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“

“

of the algorithm writer, and this too can affect the results.

Data privacy is also a concern, since most of the data AI consumes is from large datasets that could contain personal data. Congress undoubtedly will act to protect consumer data; it has already started looking at the American Privacy Act of 2024 from Sen. Maria Cantwell and Rep. Cathy McMorris Rodgers. The act would define how businesses must handle that data.

Access to that data from AI systems needs to be taken into account during the legislative process.

But what does this mean for the small business owner just trying to improve products and services?

For the near term, AI will augment many daily repetitive tasks and help small businesses improve efficiencies.

Longer term, there will be more significant impacts to the jobs that human workers currently perform. As an example, data-driven roles — such as language translation, customer support, image classification, paralegal work and accounting — will be replaced by AI. Imagine asking for a 500-word summary of the most famous tort cases ever to see a courtroom and getting a result in 30 seconds. Well, it’s already possible.

AI will be used to automate tedious tasks, optimize marketing efforts, make predictions based on previous business activity, and help with cost reductions and revenue improvements.

Even this article could be written by AI in the future. For small businesses, this could give them a competitive advantage over businesses that opt not to use AI in their planning.

While we have seen significant advancements in the AI space, there is

For the near term, AI will augment many daily repetitive tasks and help small businesses improve efficiencies.

still a lot more change to take place.

There are technological changes that need to happen, including additional processor power to keep up with the AI algorithms, to lead to the real-time analysis of data.

For the small business owner, the change will come more slowly — but it will happen. ■

Mark Harmsworth was elected in 2014 to the Washington State House of Representatives where he served two terms. His focus was on transportation and technology, including serving as the ranking member on the House Transportation Committee. Mark works in the technology industry and is an owner of a small business after completing a long career at Microsoft and Amazon.

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INSURANCE BP

PHOTO: iStock/Kali9

Managing the workers’ comp rate increase The more dangerous the job, the higher the cost of coverage Ian P. McCurdy In November 2023, the Washington State Department of Labor & Industries adopted a 4.9% increase in the average hourly rate employers and workers will pay for workers’ compensation coverage in Washington in 2024.

The rate increase, which took effect Jan. 1, 2024, means employers and workers will jointly pay, on average, an additional $65 a year in workers’ compensation insurance premiums for each full-time

employee. Like last year, workers will pay about a quarter of the premium.

By way of background, in Washington, employers and workers pay into the workers’ compensation system to help cover the cost of providing wage and disability benefits for injured workers and medical treatment related to workplace injuries and illnesses.

An employer’s cost of coverage is determined with reference to two primary factors: the type of work performed and the claim history of the employer. Workers are assigned a risk classification based on the type of work they do, which carries an

hourly cost-of-coverage rate. Generally, the more dangerous the job, the higher the cost of coverage. For example, the hourly cost of coverage for an excavator is $2.2357, whereas coverage for government administrative staff is much lower, at just $0.3342 per hour.

Employers are then assigned an “experience rating” by L&I that is largely a factor of how many workplace injuries the employer has had. This experience rating then serves to reduce or increase the hourly cost of coverage. For example, take the excavator cost of coverage.

If the employer has a particularly poor

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record of workplace injuries compared to other employers in the same industry, the employer may have an experience rating above 1.0. Let’s say the employer has an experience rating of 1.3, which is not unheard of. To determine the cost of coverage for that employee, you would multiply $2.2357 by 1.3, which comes out to $2.90641 per hour. A $0.6707 difference per hour may not seem like much, but when you think about that number spread out over a 2,080-hour work year (on average) and, for example, 30 excavators employed by the employer, the change becomes meaningful ($41,851.68 in increased premiums per year).

L&I’s rate increase for 2024 is notable because it is the biggest rate increase adopted by the state agency since 2011, when L&I increased rates by 12.2%. This year’s increase comes on the heels of 3.1% and 4.8% increases in 2022 and 2023, respectively. From 2011 to 2022, L&I rates actually decreased. However, as health

care costs and wages rise, if a worker gets hurt on the job, it will now cost employers more, on average.

The best way to control costs is to create safe workplaces that help avoid injury, illness and death. In this era of rising costs, employers should work to establish clear policies and procedures geared toward creating a culture of safety and accountability that is truly effective in practice. Not only can clear workplace safety policies and procedures lower workers’ compensation costs, but recent studies have also shown that a commitment to safety can help attract and retain employees. ■ Ian P. McCurdy is partner/attorney at Faber Fairchild McCurdy LLP. He focuses his practice on estate planning, probate administration and all aspects of employment law. Ian was named one of the Top 7 Young Professionals under 40 by the Bellingham Business Journal and Bellingham Regional Chamber of Commerce in 2019.

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FINANCE BP

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Federal estate tax planning Key considerations amid looming changes Kevin DeYoung, CPA, AEP The Tax Cuts and Jobs Act of 2017 raised the federal estate and lifetime gift tax exemption to unprecedented levels. In 2024, taxpayers enjoy a federal exemption of $13,610,000 per individual, allowing up to $27,220,000 for married couples to be transferred to heirs without incurring federal estate tax. However, this provision is set to expire on Dec. 31, 2025. Without legislative extension, the exemption may drop to approximately $7,000,000 per taxpayer in 2026.

Given this impending change, many

are questioning whether to leverage the current higher exemption before it potentially decreases. One strategy is to use the increased exemption through gifting before the end of 2025. The IRS confirmed in 2019 that utilizing the exemption for lifetime gifts protects against future “clawbacks” of estate tax when the exemption decreases.

Deciding how best to use your exemption depends on individual circumstances, but larger gifts that use up the expiring portion of the exemption may be advantageous. Think of the federal exemption as a 13.6-ounce glass of water.

If you don’t drink most of it before it gets reduced to 7 ounces, you will have wasted the extra 6.6 ounces of water

you could have had. By using the full exemption now (i.e. drinking the entire glass now), you could effectively remove $13.6 million from your estate and use up only $7 million of future exemption.

To capitalize on the expiring exemption, you should consider gifting amounts exceeding the projected future exemption at your death. However, this decision is complex and requires evaluating several factors: • Predicting future exemption levels: Historical trends show fluctuations in exemption levels due to political and legislative changes. Predicting future levels is challenging, and exemptions have been consistently maintained or increased rather than allowed to decrease.

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• Willingness to part with assets: There are techniques to transfer value while retaining some control, but these are typically irrevocable and add complexity to your financial picture.

• Alternative tax minimization strategies: Beyond large gifts, there may be other methods more appropriate to reducing estate tax impacts.

• Inheritance vs. gifting: Consider whether it’s better for heirs to inherit assets with a stepped-up tax basis rather than gifting now, taking over assets with low tax basis.

• Long-term planning: For those far from the end of their expected life, permanently transferring assets now might not align with unpredictable future rule changes.

• State tax considerations: Washington state estate taxes, for example, may also influence your decision.

If you’re contemplating using your lifetime estate and gift exemption before 2026, we recommend starting discussions with your estate planning advisers now. As the deadline approaches at the end of 2025, estate planning professionals may become overwhelmed, making last-minute arrangements difficult. Engage with your attorneys, accountants and valuation specialists early to ensure your plans align with your goals. ■

Kevin DeYoung joined Larson Gross in 1994 following his graduation with a Bachelor of Science degree in accounting from Calvin College in Grand Rapids, Michigan. He holds Accredited Estate Planner designation and is the firm’s expert in estate planning and trusts.

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POLICY BP

Initiative 2124 would give workers a choice about what’s right for their individual financial and potential longterm care needs.

PHOTO: Unsplash/Tiffany Tertipes

On the ballot Voters to consider allowing workers to opt out of state WA Cares Fund Business Pulse Staff This is the second feature by Business Pulse on the three initiatives that will be before voters this November that were qualified for the ballot by Let’s Go Washington and certified by the Secretary of State.

Initiative 2124 is of particular interest to Whatcom County businesses and workers since every W-2 worker has to pay for this system through a new payroll tax that went into effect a year ago.

Three of the other Let’s Go Washington initiatives were passed by the Washington Legislature in March so became law on June 6: I-2113 to restore reasonable police pursuit, I-2081 to allow parents to be notified regarding their children’s school curriculum and some medical procedures, and I-2111 to ban any future state or local income taxes.

The official ballot title of I-2124 is the following: “This measure would amend state law establishing a state longterm care insurance program to provide that employees and self-employed people must elect to keep coverage under

RCW 50B.04, allow employees to opt out of coverage under RCW 50B.04 at any time, and repeal a current law governing exemptions for employees who had purchased long-term care insurance before November 1, 2021.”

This column is based on a study by Elizabeth New from Washington Policy Center. To access the full study, please visit washingtonpolicy.org.

Let’s Go Washington collected 469,000 signatures from voters across the state by the December deadline to qualify Initiative 2124 as an initiative to the Legislature. That is well over the 324,516 valid signatures needed for an initiative to be certified by the secretary of state.

The Legislature had three options when it came to the six initiatives submitted for consideration: enact the initiative as written into law, take no action and allow the initiative to go before voters in November, and pass an alternative version and then place both versions before voters.

The Democratic majority in both the House and Senate

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decided on the second option. They also decided not to hold a public hearing on I-2124, so that is why it will be up to voters to decide this fall.

Here are some of the key facts on the initiative — many of which are from Elizabeth New of Washington Policy Center — that voters should know before making their decisions on I-2124: Choice Initiative 2124 would give workers a choice about whether this program is right for their individual financial and potential long-term care needs. Those who see the program as useful could elect to keep participating in WA Cares.

WA Cares is a government program for long-term care created by the governor and the Washington Legislature by House Bill 1087.

The key change to HB 1087 proposed by the initiative says this: “An employee or self-employed person in Washington must elect to keep coverage under this Chapter. If an employee or self-employed person has elected coverage under this Chapter, the employee or self-employed person must also have the option to opt out at any time. The employment security department shall adopt rules to implement this section.”

Aside from making participation in WA Cares voluntary, other parts of the program — such as tax rates, eligibility requirements and benefit levels — would

stay the same. Lawmakers, of course, could alter the WA Cares program, as they have done several times since the law was passed in 2019.

The program is funded by a payroll tax of 58 cents on every $100 of income a Washington state worker earns, regardless of income level.

A lifetime benefit of up to $36,500 will eventually go to some Washingtonians — if they meet certain health criteria and have paid the payroll tax for the required number of years. This dollar amount is typically not enough to cover a person’s long-term care costs should the need arise.

Even with this mandatory payroll tax, WA Cares has solvency concerns. When a temporary and limited opt-out choice was available after the bill was enacted, nearly 500,000 workers left the program.

Portability HB 1087 included a section stating that if you moved out of state, no matter how long you paid into the system, you would not be eligible for this benefit.

The Legislature passed a bill this year to allow WA Cares benefit dollars to be used outside of Washington state by those who qualify for them, but questions have arisen since passage about how this will work, given that the bill passed without making the change cost neutral, as was advised by the state

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Long-Term Services and Supports Trust Commission. In addition, WA Cares is a unique government-run program, so coordinating with other states will be cumbersome.

Cost Finally, there are concerns around the overall cost of long-term care and how much this program will actually cover for those who are eligible to use it. Home care costs have increased significantly since 2019, while the WA Cares benefit has remained the same.

Based on Washington Policy Center analysis since the law went into effect in 2019, the WA Cares program actually harms low-income workers and people who require long-term care, as the needs of some patients and the number of hours required for vestment will rule out many family caregivers and many others normally seen as eligible for taxpayerfinanced safety nets. ■

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The Whatcom Business Alliance is the ears, eyes, and voice for the Whatcom County business community. We believe success is the single largest driver of community prosperity, which is why we focus our efforts on facilitating that success through advocacy, research and education and job opportunities. We bring business leaders together to encourage, acknowledge and share the best and most ethical business practices. Our members improve their respective businesses and work closely with community leaders to promote public policy that supports a healthy business climate and a vibrant economy.

To learn more and become a member, visit whatcombusinessalliance.com/joinus or call Barbara Chase at 360.543.5637.