May 2017 journal

May, 2017

The Economy Legislation Business Excellence

Inside This Issue:

Economic Indicators pg 4 Pay Equity and Wages pg 8—13 Housing pg 16 DR Johnson Leads the Nation pg 20 “Unstoppable” Sudden Oak Death ph 24 HB 2902 Ports, Business and Continuation pg 26

A few words from Greg, “When the final result is expected to be a compromise, it is often prudent to start from an extreme position.” ― John Maynard Keynes, The Economic Consequences of the Peace Keynes was a philosopher and economist, highly regarded, who lived from 1883 1946.

Daily newscasts and discussions in meetings of importance appear to have full awareness of the strategy advocated by John Maynard Keynes, “Ask for more than you want.”

It’s a strategy practiced by politicians, home-sellers and home-buyers, car dealers and car buyers, and it’s what we are often told to do when discussing a pay raise.

But if everyone on both sides of the discussion practices these wise instructions, how long until the strategy has lost its effectiveness? If we all know the hole card, no one can win a game of poker.

It’s just possible that all of us need to be honest in our negotiations. Start from a place we would truly like to end. If both sides want to conclude at ‘L’ or ‘M’ why should we do battle beginning at ‘A’ and ‘Z’?

The most certain thing is that we will lose our respect and trust for each other. If we had been willing to shake the hand of our opponent in the beginning, we will surely lose that honorable habit in the end. Most certainly, we will both be losers in our humanness.

By the end of Oregon’s 2017 legislative session there will have been nearly 4000 bills introduced by political representatives from regions all over the state. Many of the bills are nothing more than “trade bait” for bills of higher importance. We usually see on the order of 700 or so bills that actually make it to the governor’s desk for signing. Meaning 3300 bills are left on the discussion table, if they even made it that far.

Leadership, I believe, includes an ability to speak without being condescending, listening to understand, and a desire to combine knowledge and experiences of negotiating participants to reach a better-than-satisfactory agreement.

Compromise doesn’t have to end lose-lose, but it takes a sincere effort to reach win-win.

Greg Henderson Greg Henderson, Publisher greg@southernoregonbusiness.com

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

Table of Contents PUBLISHERS NOTE 2 A Few Words From Greg

Business 20 DR Johnson Leads the

ECONOMICS 4 Oregon Economic Indicators

Nation 26 HB 2902 Unintended Consequences

6 Coos Bay Energy 7 Down to Business

Strong Towns & SMALL TOWNS

8 Women’s Earnings

28 Fire Chiefs and Traffic

10 Minimum Wage

Engineers

SMALL TOWNS & COUNTIES

The Last Word

12 Tobacco Licensing

32 Next Season

13 Unemployment

14 Connection to the World 16 High Price of Affordable Housing 18 Housing Crisis

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

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Oregon Statewide Economic Indicators: The headline measure of Oregon’s economic activity softened in March but underlying trends indicate that growth remains solid. Highlights of the report include: •

The three-month moving average, which smooths volatility in the measure, was 0.73 (“zero” indicates average growth over the 1990-present period), virtually unchanged for five consecutive months.

•

The manufacturing sector again made a positive contribution to the index as the sector heals from a slowdown that began in 2015. The construction sector made a neutral contribution as the employment components cancelled each other out and housing permits held near average levels (although low for expansions).

•

The University of Oregon Index of Economic Indicators rose 0.2% in March while February’s number was revised higher.

Initial unemployment claims fell and remains near historical lows; strong underlying demand means a low level of layoffs.

•

The Oregon Weight Distance tax, a measure of trucking activity, core manufacturing orders for capital goods and average weekly hours continue to hold relatively steady.

•

Consumer sentiment (smoothed) rose again although most indicators suggest the consumer spending was soft in the first quarter of 2017. This may, however, be related to a recent issues in accurately adjusting first quarter data to account for seasonal impacts.

Together, these indicators suggest ongoing growth in Oregon at an above average pace of activity.

1495 NW Garden Valley Blvd Roseburg, OR 97470 Ph: (541) 672-6651 Fax: (541) 672-5793

Escrow Service

Local Knowledge Regional Leader Loyalty

Barry Robinson, General Manager barry@ameri-title.com Let AmeriTitle Earn Yours

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Coos Bay Visitor Center, Coos Bay Estimated annual savings: $1,900 Incorporating energy-efficient and renewable energy strategies was a no-brainer when the City of Coos Bay set out to build a new 3,600-squarefoot visitor information center.

A high-performance design would reduce energy costs, help conserve natural resources and demonstrate environmental leadership to visitors and citizens. The city worked with EnergyTrust to determine the equipment and systems to meet its energy-efficiency goals and maximize savings.

As a result, the Visitor Information Center includes energy-efficient lighting, a high-efficiency condensing furnace, demand control ventilation and a tankless water heater. The city also received $26,953 in EnergyTrust incentives for a 15.58 kilowatt solar electric array that generates an estimated 19,238 kilowatt hours of electricity annually.

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DOWN TO BUSINESS A look at small business questions from the Southwestern Oregon Community College Small Business Development Center (SBDC).

My business is not doing well and I’m burned out. What should I do, if I quit I feel like I’ve failed?

Letting go is very difficult for everyone whether it’s a business or a job or a personal relationship. Burn out can occur when a business has been struggling over a long period of time but a business can struggle if the owner has lost focus and feels burned out, a self-perpetuating spiral down. Before giving up and closing the business try seeking business advice to determine if there are other options that might be more satisfactory to you. Maybe the business just needs fresh ideas to jump start it.

Business advisors in the Oregon Small Business Development Center Network (www.BizCenter.org) are a good place to seek perspective on what possibilities are available.

If the business is truly at the point it needs to close because it is no longer sustainable, several steps are necessary depending on the legal form of business. It’s highly recommended you get assistance from your accountant and/or your attorney for this process. Other resources for closing a business include business brokers, auctioneers, tax experts, bankers and the IRS.

Closing a business also requires filing some paperwork.

There may be dissolution documents that need to be filed

By: Arlene M. Soto CMA, Southwestern SBDC Director Southern Oregon Business Journal

with the Secretary of State and with the IRS. Make sure all registrations, licenses, permits and the business name have been cancelled. If the business has employees, there will be employment tax returns, W-2’s and unemployment insurance to finalize. Customers will want to know your plans. If possible, find alternatives where you can refer them. All suppliers will need to be notified and final payments made to vendors. Inventory and business assets will need to be disposed of. This may be the time to hold a going out of business sale. Be sure to check the rules in your area for how to legally handle this aspect of closing. Information is available at http://sos.oregon.gov/ business/Pages/going-out-of-business-sale.aspx. You are legally required to maintain some records for 3 to 7 years after closing the business. Ask your accountant what to keep and for how long.

Closing your business will probably be emotionally draining and it’s important to have a strong support system to overcome the loss. Let go of what cannot be changed. Turn to those who are supportive of you and take care of physical, emotional, spiritual and financial issues through that support system. The good news is, most people who close businesses that are no longer creating satisfaction for them find there is relief in letting go and moving on.

Southwestern Oregon Community College 7

Oregon Workforce and Economic Information How Much Women Earn in Oregon Brought to you by the Research Division of the Oregon Employment Department

More than 848,000 jobs at Oregon businesses or state and local governments were held by women in 2015.

Women represent 49 percent of employment in Oregon, but the share of jobs held by women varies considerably by industry.

Women’s average earnings were $3,375 per month in 2015, which was 69 percent of the $4,868 average monthly earnings of men. The average woman brings home nearly $1,500 a month less than the average man.

Like employment, the earnings of women relative to men vary by industry.

The average monthly paycheck for women is about twothirds the average monthly paycheck for men, but this fact is not a very useful measure of gender pay inequality. Average monthly earnings figures do not take into account other factors affecting pay, such as total hours worked and hourly wages. Adjusting for the number of hours worked narrows the earnings gap between women and men, but still does not account for other factors that can significantly affect pay.

Women’s Average Earnings by Industry Average monthly earnings of women were lower than that of men in every industry. The ratio of women’s to men’s earnings ranged from a relatively close 87 percent in accommodation and food services to a disparate 55 percent in finance and insurance. There are many factors behind these disparities in earnings, such as the number of hours worked and the relative wages of occupations with higher concentrations of women, but that information is not available from this data source.

But their earnings pale in comparison to what men are bringing in. With earnings just 55 percent of men’s, women in finance and insurance receive an average of $3,900 a month less than what men are making.

The smallest disparity is in accommodation and food services, where women’s earnings average 87 percent that of men’s. The large share of minimum wage earners in this industry likely contributes to this relative earnings equality. That near equity has a cost though, as average paychecks of both women and men were lower in accommodation and food services than in any other major industry.

The average woman brings home nearly $1,500 a month less

than the average man.

Statistical information follows on next page…….

Women working in Oregon’s health care and social assistance sector have an average monthly paycheck of $3,641, which is just 62 percent of the men’s average.

Women working in finance and insurance have a higher average paycheck than women in most other industries, Southern Oregon Business Journal

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How Much Women Earn in Oregon (Cont)

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Oregon Minimum Wage

http://www.oregon.gov

Enacted by the 2016 Oregon Legislature, Senate Bill 1532 establishes a series of annual minimum wage rate increases beginning July 1, 2016 through July 1, 2022. Beginning July 1, 2023, the minimum wage rate will be indexed to inflation based on the Consumer Price Index (CPI), a figure published by the United States Bureau of Labor Statistics.

In addition to a new standard minimum wage rate, the bill sets out a separate rate which will apply to employers located in the urban growth boundary of a metropolitan service district. (Currently, only the Portland metropolitan area has an urban growth boundary.) Finally, a third rate will apply within certain "nonurban" counties named in the bill:

**Nonurban counties: The nonurban rate applies to employers located within the following counties: Baker

Grant

Morrow

Coos

Harney

Sharman

Crook

Jefferson

Umatilla

Curry

Klamath

Union

Douglas

Lake

Wallowa

Gilliam

Malheur

Wheeler

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Wage increases by area: Standard Counties

$9.25

Portland Metro $9.25

**Nonurban Counties $9.25

$9.75

$9.75

$9.50

$10.25

$11.25

$10.00

$10.75

$12.00

$10.50

$11.25

$12.50

$11.00

July 1, 2020 July 1, 2021

$12.00

$13.25

$11.50

$12.75

$14.00

$12.00

July 1, 2022 July 1, 2023

$13.50

$14.75

$12.50

Adjusted annually based on the increase, if any, to the US City average Consumer Price Index for All Urban Consumers

$1.25 over the standard minimum wage

$1 less than the standard minimum wage

Date January 1, 2016 July 1, 2016 July 1, 2017 July 1, 2018 July 1, 2019

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Oregon Minimum Wage Rates by County

NOTE: Employers located within Washington, Multnomah and Clackamas counties but NOT within the UGB will be subject to the standard rate, not the metro rate.

Q. What is the federal minimum wage?

A. The current federal minimum wage remains $7.25 per hour.

Q. So which minimum wage am I required to pay my employee – the state or the federal?

A. When federal and state employment laws conflict, employers must apply whichever standard is most beneficial to the employee. Therefore, Oregon employers must pay the higher state minimum wage.

Q. May I pay my new employees a training wage which is below the minimum wage?

A. No. Unlike federal law, Oregon law requires that employees receive at least minimum wage during all stages of employment.

This includes any period of on-the-job training.

Q. May I count an employee's tips against the minimum wage?

A. No. Oregon law does not allow for tip credits. ORS 653.035(3).

Q. If I hire minors, do I need to pay them minimum wage?

A. Yes. Under Oregon law the minimum wage applies to minors.

Q. I provide meals and lodging for my employee. May I count the fair market value of the meals and lodging towards the minimum wage obligation?

A. Yes, employers may make an authorized deduction for meals and lodging so long as they are provided for the “private benefit” of the employee. However, if you require your employee to live on-site, or if you derive a mutual benefit from the employee living on the premises, you must pay minimum wage in addition to the value of meals and lodging. OAR 839-020-0025.

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Note that employers may not require an employee to pay (e.g., by direct charge) amounts that could not have been lawfully deducted from wages under the minimum wage law, if to do so would reduce that employee's minimum wage earnings.

Q. I paid my employee $10 per hour in 2015 (75 cents above the standard minimum wage). He claims that as of July 1, 2016, I will be legally obligated to pay him at least $10.50 per hour (75 cents above the new minimum wage). Is that right?

A. No. The law only requires you to pay the minimum wage of $9.75 (standard) per hour as of July 1, 2016, unless you have a contract or policy providing that you will pay more, only those employees who were working for less than $9.75 per hour are legally required to receive a raise.

Q. If I pay my employee on a commission, does the minimum wage law still apply?

A. Yes. Unless your employee falls into an exempt category, you must pay the employee at least minimum wage for all hours actually worked. This means that even with a commissioned employee, you must track all daily and weekly hours worked to determine whether the average hourly rate meets the minimum wage. If the average hourly rate is less than the minimum wage in any pay period, you must boost the employee's wages up to the minimum wage.

Q. My employee, who normally earns $10.00 per hour, travels as part of her job duties. May I pay her at a lower hourly rate for the travel time?

A. Yes, as long as you pay at least the minimum wage for each hour worked.

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Klamath County Leaders Consider Tobacco Retail Licensing “A Tobacco Retail Licensing Ordinance proposal will go in front of the Board of County Commissioners. Our Government Affairs Committee (GAC) and Board of Directors would like to get feedback from our membership on the proposal.

Below I have included information about Tobacco Retail Licensing from the Klamath County health department.”

Heather Tramp Executive Director Klamath County Chamber of Commerce

What is Tobacco Retail Licensing?

• Tobacco retail licensing (TRL) requires all businesses that sell tobacco products to obtain a license in exchange for the privilege of selling tobacco products to consumers. This is similar to a liquor license.

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Why is TRL necessary?

• Thirty-five percent of youth were able to successfully purchase tobacco in Klamath County during the 2014-2015 Food and Drug Administration (FDA) tobacco compliance inspections.

• Twenty-eight percent of 11th graders and fourteen percent of 8th graders reported using tobacco products in the last 30 days in Klamath County.

What is the status of TRL in Oregon?

• Currently, tobacco compliance inspections are conducted sporadically by state and federal agencies and there is no local enforcement. A local TRL ordinance will allow Klamath County Public Health to conduct frequent inspections to ensure youth under the age of 18 are not able to purchase tobacco from retailers.

• Oregon is one of only 10 states who do not require a license to sell tobacco. Counties in Oregon who currently have a TRL ordinance in place are Benton, Lane, and Multnomah Counties. There are also 13 other Oregon counties who are proposing TRL in the next year.

• A statewide TRL program is currently proposed in SB 235.

What are the advantages of designing a local TRL program?

• Presently, the state of Oregon does not have preemption on tobacco retail licensing laws. Implementing TRL locally before a state program is created will allow for a TRL structure that will serve Klamath County’s rural community.

• Currently, there is not a lot of enforcement if a tobacco retailer is not in compliance with state and federal minimum sale age laws. With a local TRL program, Public Health can conduct frequent compliance inspections, which would allow for enforcement of local, state, and federal minimum sale age laws.

• Creating a local TRL program will allow for the revenue generated from licensing and penalty fees to stay in the County, rather than being paid to the State.

• A local program will also provide the opportunity to create a fee structure that is effective, but not economically detrimental, to Klamath County’s small businesses.

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Unemployment Rates What do they tell us?

By: Paul Solman PBS Newshour

Do you think it would help if the US had a small business incubator the way China does?

We have a ton of people out of work and we also have a ton of work that needs to be done. If Americans were given more resources to get over the barriers to entry and start their own enterprises, I'm wondering if that would help get workers to where they are needed.

The common definition of full employment would be 0% cyclical unemployment. Cyclical unemployment is unemployment caused by market instability. That is, it is the people who are unemployed because the market naturally has periods of greater and lower growth and is currently not running at 100% capacity. There is also structural unemployment. Structural unemployment is caused by having labor that is not aligned to the needs of industry (skill sets are not complimentary to demand, workers are geographically separated from jobs, etc.). And then there is seasonal unemployment, which is what it sounds like: grapes only need to picked certain months of the year.

The trick to knowing what full employment is, then, is knowing what amount of structural unemployment and seasonal unemployment exists in the economy at any given point in time. And knowing this is not easy or exact. We can extrapolate some notion of the amount of skills gap in labor we have by the number of H1B visa applications that are filed or the number of positions that remain advertised and unfilled for long periods of time. However, that number can be misleading as the issue may not be a lack of skilled workers but a lack of skilled workers willing to provide labor at the price the business is willing to pay for their time and skills. Seasonal unemployment is easier to estimate, but as

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the Labor Department has demonstrated the past six months it is far from an exact science.

By this point you've probably figured out two things. First, no one actually knows what "full employment" should be right now, though it would be good to see someone try to calculate it, hence my statement that it deserves a more thorough answer. Given the huge shift to a knowledge and service economy over the past couple of decades it could certainly be 7% or even 20%. Second, the term "full employment" itself and how it is applied deserves scrutiny. Keynes believed that maintaining a certain level of "natural" unemployment was folly.

Freidman preferred maintaining a certain amount of unemployment to keep wages depressed (and thus, in theory, inflation down). My belief is that idle labor certainly could be producing more value at any given point in time than it would cost to employ it. Thus any unemployment means a lack of competent entrepreneurs and effective management, too many barriers to entry, too little Infrastructure to support mobility of labor, etc.

So, ultimately, the answer depends on who you ask :).

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The high, high price of affordable housing By : Joe Cortright

Why is affordable housing so expensive?

In many cities, affordable housing has a problem: it’s not affordable. California Governor Jerry Brown made that point again, emphatically, with his new state budget. He’s said that he’s not putting any new state resources into subsidizing affordable housing until state and local governments figure out ways to bring the costs down. Last year, opposition from labor and environmental groups blocked the governors proposal to exempt affordable housing from some key regulatory requirements. Brown had offered $400 million in additional state funds for affordable housing if that proposal was adopted. Now that money is off the table.

“We’ve got to bring down the cost structure of housing and not just find ways to subsidize it.” .

Brown said in his budget speech

And the costs are substantial. In San Francisco, one of the largest all-affordable housing projects, 1950 Mission Street, clocks in at more than $600,000 per unit. That number isn’t getting any lower: new units in that city’s Candlestick Point development will cost nearly $825,000 each, according to recent press reports. Brown’s point is that at that cost per unit, its simply beyond the fiscal reach of California or any state to be able to afford to build housing for all of the rentburdened households.

And while the problem is extreme in San Francisco, it crops up elsewhere. In St. Paul, affordable housing–mostly one bedroom units– in a renovated downtown building cost $665,000 per unit.

In Portland, newly elected Mayor Ted Wheeler has temporarily embargoed any further spending of the city’s recently improved $258 million affordable housing bond issue. Shortly before he took office, the Portland Housing Bureau committed to spending nearly 15 percent of the levy’s proceeds to acquire an existing 263 unit housing complex. The city will pay $51 million in total, about $193,000 per unit for the building. The cost of new construction tends to be even higher. Public projects often involve more elaborate design, LEED certification, additional public spaces and higher overhead costs.

More broadly, the case has been made that much publicly subsidized affordable housing costs much more to build that market rate housing. Private developers are able to build new multi-family housing at far lower cost. One local builder has constructed new one-bedroom apartments in Portland at cost of less than $100,000 a unit, albeit with fewer amenities and in less central locations that most publicly supported projects. In Portland, local private developer Rob Justus has proposed to build 300 apartments and sell them to the city for $100,000 each on a turn-key basis to be operated as affordable housing. Another possible cost savings measure: off-site construction. The University of California, Berkeley’s Terner Center has a new report that explores the possibility for pre-fabricated, off-site construction to reduce construction costs.

Portland Mayor Wheeler voices the same concerns as California Governor Brown:

San Francisco’s 1950 Mission Affordable Housing (Bridge Housing)

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“We’ve added a lot of programs to affordable housing that may be socially desirable. But when the goal is to create the maximum number of new doors, we have to reduce costs and get more supply on the market as quickly as possible.”

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The high, high price of affordable housing (Cont)

In the Twin Cities, Myron Orfield has pointed out that the allocation of tax credits and the concentration of community development corporations in urban neighborhoods has tended to produce more housing in costly urban locations. Orfield also blames the high overhead costs of CDCs.

Myron Orfield has pointed out:

...central city development programs are inefficient, spending much more per unit of new affordable housing in the central cities than comparable housing costs in more affluent, opportunity-rich suburbs. Many of the leading developers working in the poorest parts of the region also pay their managers very high salaries. As a result, the funding system incentivizes higher cost projects in segregated neighborhoods over lower cost projects in integrated neighborhoods.

Perhaps the central problem of housing affordability is one of scale: the number of units that we’re able to provide is too small. That’s true whether we’re talking about through Section 8 vouchers (that go to only about 1 in 5 eligible households), or through inclusionary zoning requirements (which provide only handfuls of units in most cities). The very high per unit construction costs of affordable housing only make the problem more vexing: the pressure to make any project that gets constructed as distinctive, amenity-rich and environmentally friendly as possible, means that the limited number of public dollars end up building fewer units. And too few units–scale–is the real problem here.

The combination of very limited public funds for affordable housing, even in the most prosperous and liberal cities, and the tendency for publicly subsidized housing to be nearly as costly as new, market rate housing, is a recipe for failure.

Joe Cortright

Joe Cortright is President and principal economist of Impresa, a consulting firm specializing in regional economic analysis, innovation and industry clusters. Joe’s work casts a light on the role of knowledge-based industries in shaping regional economies, Joe served for 12 years as the Executive Officer of the Oregon Legislature’s Trade and Economic Development Committee.

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Coos County and the Housing Crisis By: Annette Shelton-Tiderman

Prospective homebuyers in Coos County report finding limited inventory, especially for homes within the buyer’s budget range. State and national news also tell of limited inventory as well as bidding wars.

What is behind the headlines and conversations when it comes to housing availability? Pivotal to the matter is the shrinkage in the number of new residential building permits in recent years and the associated decline in construction jobs. The U.S. Census Bureau’s Residential Construction Branch studies new, privately owned residential construction by tracking the number and type of building permits issued. Most telling in Coos County is the absence of permits for multi-family homes. Not only are single-family dwellings in short supply, but rental options are also extremely limited.

Housing Shortages Building over Time The relationship between population growth and housing Southern Oregon Business Journal

demand is apparent in the graph highlighting both factors.

Coos County’s population climbed very quickly in the late 1800s only to dip during both the post-World War II and 1949 recessions. Housing development matched these shifts. As the overall economy recovered, population and housing again grew in the 1950s, although a short recession in early 1960 took a toll on both. The last time the county’s population grew rapidly was the 1970s; this corresponded to a boom in housing. A recession in the 1980s and again in 1991, associated with the Savings and Loan Crisis, was a one -two punch. Two-thirds of the local housing inventory was built prior to 1980. Recent population growth has been somewhat subdued, and housing development has all but disappeared. Demographic changes and reduced construction, compounded by an aging inventory which presents maintenance and replacement needs, keeps today’s homebuyers and renters scrambling for options.

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Type of Building Permit Has Long-Term Impacts Since 2001, nearly three of every four permits issued for new privately owned residential construction in Coos County have been for single-unit dwellings. Apartments with five or more units account for one out of four permits, and smaller multi-family dwellings account for the rest. Building permits peaked in 2005 with permits for 159 total dwellings. Of these, 76 were for single-unit dwellings; two were for

duplexes, and 81 as part of larger multi-family units. The next few years saw a decline in building permits.

Corresponding to the depths of Coos County’s recession, building permits bottomed out in 2011 with only 16 issued, all for single-unit dwellings. Duplex permits have been issued in 10 of the last fifteen years; the last time a permit was issued for a 3-4 unit structure was in 2006. Although permits for structures with five or more units were issued in seven of the last fifteen years, the last permit was in 2010.

The reduction in housing permits not only laid the groundwork for limiting current and future housing options, there was also a contraction in employment opportunities for construction workers. Construction employment increased between 2000 and 2004, reaching 780 jobs in 2004. The development of the nationwide housing bubble helped push Coos County construction employment to 930 by 2005 and Southern Oregon Business Journal

1,070 in 2006 and 2007. Although permits started dropping off as the overall economy slowed in 2006, construction employment slowed very little – likely reflecting the completion of housing projects already underway.

Recessionary losses hit bedrock in 2012 after construction employment dropped more than 37 percent in just five years. By 2015, this sector had regained only 74 percent of its peak employment.

Conclusion: Demand but no Supply Declines in building permits issued since 2005, coupled with the decline in construction employment, have resulted in fewer residential structures built. Adding to this recipe for limiting options, is the overwhelming issuance of single-unit housing permits to the detriment of multi-family housing developments – particularly affecting younger or less affluent home-seekers. Additionally, the majority of the county’s houses are at least 30 years old; 67 percent were built prior to 1980. Aging inventory, especially in coastal climates, often presents added maintenance issues and increased costs. These inventory and structural issues, neardecimation of the construction workforce, and modest population increase significantly contribute to the housing shortages experienced in rural Coos County.

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“It is a Win-Win”

D.R. Johnson Wood Innovations Leads the Nation Submitted By: Becca Thomsen, Senior Account Manager, Quinn Thomas

Both the House and the Senate introduced bipartisan legislation, called the Timber Innovation Act, and that would advance the adoption of tall wood buildings in the United States. This is very exciting for the Pacific Northwest, which has led the mass timber revolution thus far.

“We applaud the members of Congress who co-sponsored the Timber Innovation Act bill and encourage others to sign on," said Valerie Johnson, President and CEO of D.R. Johnson Wood Innovations.

"As the nation's first certified manufacturer of crosslaminated timber, my team has worked with architects, engineers and researchers to pioneer mass timber construction in the U.S. We're proud of what we've been able to accomplish thus far and know that focused investment in this emerging sector can be a game changer. Mass timber construction can drive the green building revolution of the 21st century and catalyze job creation in rural areas. It is a win-win." ….. Valerie Johnson, D.R. Johnson Wood Innovations’ President and CEO

Background on D.R. Johnson Wood Innovations D.R. Johnson Wood Innovations has over 50 years of experience manufacturing engineered wood products. In 2015, they became the nation’s first manufacturer to offer APA/ ANSI certified cross-laminated timber panels. They are proud to be America’s trusted mass timber supplier, providing more CLT panels and glulam beams for construction projects than any other U.S. manufacturer on the market.

D.R. Johnson Wood Innovations is a woman-owned secondgeneration family business based in Riddle, Oregon, the heart of Oregon’s timber country.

They have supplied CLT for projects such as: Albina Yard (Portland, Oregon); Western Oregon University, Woodcock Education Center (Monmouth, Oregon); Sonoma Academy (Santa Rosa, California); Washington State K-12 Classrooms Project (multiple locations); Sail Newport (Newport, Rhode Island); and Hamlin Middle School (Springfield, Oregon), among others.

Valerie Johnson (right), President & CEO, and the D.R. Johnson Wood Innovations Team

Following is a full release from the American Wood Council which provides greater detail on the bills and their sponsors.

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Senate, House introduce Timber Innovation Act Mar 07, 2017

Bills support rural manufacturing jobs WASHINGTON – The Senate and House today introduced the “Timber Innovation Act” to the support of the American Wood Council (AWC), American Forest Foundation (AFF), Binational Softwood Lumber Council (BSLC), National Alliance of Forest Owners (NAFO) and Southeastern Lumber Manufacturers Association (SLMA).

The Oregon delegation was a strong supporter of these bills. Ron Wyden (D-OR) and Jeff Merekly (D-OR), were among those to introduce the Senate bill. The House bill was introduced by Peter DeFazio (D-OR), Kurt Schrader (D-OR), and Suzanne Bonamici (D-OR)).

The bills would: • Establish a performance driven research and development program for advancing tall wood building construction in the United States; • Authorize the Tall Wood Building Prize Competition through the U.S. Department of Agriculture (USDA) annually for the next five years; • Create federal grants to support state, local, university and private sector education, outreach, research and development, including education and assistance for architects and builders, that will accelerate the use of wood in tall buildings; • Authorize technical assistance from USDA, in cooperation with state foresters and state extension directors (or equivalent state officials), to implement a program of education and technical assistance for mass timber applications; and • Incentivize the retrofitting of existing facilities located in areas with high unemployment rates, to spur job creation in rural areas.

“Mass timber buildings have existed for centuries, from Japanese wood pagodas built in the 7th century that still stand to the North American heavy timber structures that have stood for the last 100 years. The United States has an opportunity to bring new, sustainable mass timber technology to our construction industry, and the Timber Innovation Act directs technical assistance and research components already in place. Building construction using wood and mass timber products directly supports jobs in areas of rural America that have yet to recover from the recession and would lessen our dependence on fossil-fuel Southern Oregon Business Journal

intensive alternatives, so having the federal government encourage further development of this emerging construction technology stands to benefit and enhance both infrastructure development and putting people to work. AWC thanks all of the cosponsors for leading on the Timber Innovation Act,” said AWC President and CEO Robert Glowinski.

“Hardworking families and individuals own and care for more than one-third of U.S forests. These families rely on markets for their timber to stay on the land and to afford to practice the stewardship needed to deliver the clean air and water, wildlife habitat, and products Americans use every day. Thanks to leaders in the House and Senate, this legislation directs research and development that will open forest market opportunities, create jobs and rural economic growth, and support millions of families across rural America,” said Tom Martin, AFF President and CEO. “Mass timber technology is revolutionizing and disrupting the way buildings are being built around the world.

Unfortunately, the United States has been trailing other markets in this regard. The Timber Innovation Act will significantly contribute to enhancing our industry’s ability to close the knowledge gap and stimulate private sector investment that supports manufacturing and job growth in rural communities, optimizes the construction process and regains our leadership position,” said Cees de Jager, BSLC general manager.

“Our nation’s private forests provide extraordinary benefits to the natural and human environment. Building larger and taller buildings with wood as envisioned under the Timber Innovation Act combines and magnifies these benefits by putting people back to work – especially in rural communities – and supporting forest investments that provide wildlife habitat, clean water and fresh air,” said Dave Tenny, NAFO President and CEO. “As the third generation operators of a family owned lumber mill, and Chairman of an association that represents many family owned businesses in rural areas, we are pleased to see the Timber Innovation Act be introduced in the 115th Congress. The legislation recognizes the potential environmental and economic benefits of increasing wood use in tall building applications. The Timber Innovation Act will help our industry continue to employ people in our rural communities for generations to come, while encouraging landowners to continue growing trees that benefit our environment,” said Nash Elliott, President of Elliott Sawmilling in Estill, SC and Chairman of the Board for SLMA.

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For immediate release

Washington States Raises Cross-Laminated Timber Panels At Fourth K-12 School Site, Part of Innovative Pilot Project Media Contact: Becca Thomsen, 503-709-3172

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• • For more information visit: http://des.wa.gov/about/projectsinitiatives/cross-laminated-timber- pilot-project

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To watch a time lapse of the Mt. Vernon project: https:// vimeo.com/209469432

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Southern Oregon Business Journal

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Sudden Oak Death – “Unstoppable” Killing more than oaks The pathogen poses urgent threat to economies and environment in Curry, Coos and Josephine counties.

The Curry County quarantine is likely to spread to other counties creating widespread problems in many industries.

If further measures aren’t taken, it will spread north into Coos County and west into Josephine County in coming years.

Jeff Merkley & Brock Smith Convene Task Force on Sudden Oak Death PORTLAND, OR – Oregon’s Senator Jeff Merkley and State Representative David Brock Smith R-01) today convened an array of stakeholders in the first task force meeting aimed at addressing the spread of Sudden Oak Death, a disease that poses severe economic and environmental threats to counties in Southern Oregon.

County, where a containment program is in place to slow the spread. If further measures aren’t taken, it will spread north into Coos County and west into Josephine County in coming years. In California, the disease has killed millions of oaks and tanoaks in the coastal region from Monterey to Humboldt Counties.

“Oregon has a long history of pioneering innovative ways to resolve urgent natural resource issues,” said Merkley, who co-convened the task force with Brock Smith. “I’m proud that in a time of political divisiveness, we in Oregon are coming together to tackle a pressing issue for our southern counties. Sudden Oak Death and EU1 are too great a problem for one agency or one level of government to solve. With the potential for devastating impacts on our local economy and environment, this task force will work collaboratively to look for more and better solutions to fight the pathogens.”

Additionally, a European virus, EU1, that affects evergreen trees was recently detected in Oregon.

“I am grateful to Senator Merkley for co-convening the Sudden Oak Death Task Force and am very appreciative of his deep understanding of this issue and its potential impact on our region,” said State Rep. Brock Smith, who co-convened the task force with the senator.

Sudden Oak Death, caused by a non-native pathogen Phytopthora ramorum (P. ramorum), is a devastating disease that has killed hundreds of thousands of tanoak trees in Curry County. It was first detected there in 2001; about one-third of the county has since been affected. In Oregon, it occurs only in the forests of southwest Curry Southern Oregon Business Journal

“The EU1 infestation in Curry County is the only one found in the United States,” said Greg Wolf, County Solutions Program Director for the Association of Oregon Counties.

“The potential negative economic impact is very large if we can’t eradicate it before it spreads.”

To build the task force, Merkley and Brock Smith convened local, state and federal governments, as well as local tribes and industry associations, from the Association of Oregon Counties, U.S. Bureau of Land Management, U.S. Department of Agriculture (USDA) Natural Resource Conservation Service, U.S. Forest Service, USDA Animal and Plant Health Inspection Service Plant Health, Cow Creek Band of Umpqua Indians, Oregon Department of Forestry, Oregon Forest Industry Council, Oregon State University, Curry County, Josephine County, Douglas County, City of Gold Beach, and Oregon Association of Nurseries.

The task force will work to develop a collaboration-based action plan to contain the Sudden Oak Death disease and eradicate the EU1 virus, using the best available science.

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Seismic Rehabilitation Grants Announced for Schools and Emergency Services Buildings

By: Bryan Hockaday

April 21, 2017 (Salem, OR)—Today the committee overseeing

Oregon's Seismic Rehabilitation Grant Program announced 100 schools and 47 emergency services facilities to receive $153.6 million in state grant funds. The program provides funding for construction work on schools and other critical public buildings to better prepare the structures to withstand a major earthquake.

The realization that Oregon is at risk of a major, Cascadia Subduction Zone earthquake drove the bi-partisan effort to invest now to protect critical community structures from catastrophic damage. Governor Brown and the Oregon Legislature, led by support from Senators Peter Courtney and Ted Ferrioli, are helping to address the issue, by prioritizing funding to increase statewide resilience and promote community preparedness.

"Ensuring every community in the state, particularly in rural regions, has safe community gathering places and emergency response infrastructure will be key to Oregon's recovery from a significant seismic event," Governor Brown said. "While this may seem to be a daunting task, we're making steady progress, through a concerted and coordinated effort by communities, individuals, businesses, and as a state, toward building more resilient Oregon."

This is the second round of funding released through the program this biennium, which is administered by Business Oregon. Schools throughout Oregon received $50 million for 41 retrofit projects last April, the first phase of $205

million in program funding established in this biennium's budget. Before today’s awards, the program has made 118 awards totaling $108 million.

"In the last year, we have more than tripled Oregon's investment in the seismic safety of our schools. It's taken 15 years to get here. It's still not enough. Hundreds of schools still need to be upgraded," said Senate President Peter Courtney. "We can't lose our momentum. We have to make up for lost time. The 'Really Big One' is coming.

It's overdue. The Legislature needs to make another significant investment in the safety of Oregon's school children before this session is over. We have to make our schools safe."

"Oregonians have been hearing about 'The Big One' for so many years, many may have grown tone-deaf and complacent. But our Emergency Planners are telling us 'It's real, and it's coming!'" said Oregon State Senator Ted Ferrioli. "Communities need to prepare by making sure schools have been seismically retrofitted so they won't 'pancake' during a large quake. These buildings must survive, not only to protect children, but so they'll be available to serve as emergency operations centers, field hospitals, rendezvous points for families, and places where community response can be coordinated. Then we must also turn our attention to police stations, fire halls and ambulance centers from which 'First Responders' are dispatched."

The seismic rehabilitation program began funding projects in 2009, details on how the program works, eligibility, process, and history can be found on the program web page.

Business Oregon, the state's economic development agency, invests in Oregon businesses, communities, and people to promote a globally competitive, diverse, and inclusive economy. Learn more at www.oregon4biz.com

Southern Oregon Business Journal

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The Word “Operate” Could Cost the State Hundreds of Thousands of Dollars in Tax Revenue, and Private Businesses and Their Employees Their Jobs.

The Unintended Consequences of HB2902 23 Oregon Ports 1 Bill Before the 2017 Legislature 100’s of Jobs and Small Businesses at Risk

The value and importance of Oregon’s 23 ports to the regional and state economy cannot be overstated.

The Oregon Public Ports Association is advocating changes to the authority of those ports through HB 2902.

These changes could be devastating to families and small businesses the entire length of the Oregon Coast.

As previously stated we acknowledge that there can be a need for port districts to develop properties to support the requirements of the commercial and recreational boating public, we feel that those facilities should be for the use of the boat owners and private contractors to perform the shipyard work. Therefore we do no support a port being allowed to…”operated facilities for constructing, repairing or maintaining any type of watercraft.”

If a public port finds that existing private sector shipyards are insufficient to meet market needs, that port should come forward and identify such insufficiency. Otherwise, this legislation authorizes public ports to drive existing marine repair facilities out of business. Privately funded companies working on the coast already have to overcome a limited industry, with a limited clientele, lack of available skilled workers, and the high cost of getting materials to the coast. Ports have a distinct advantage with tax revenues, property tax exemptions, and support organizations on their side. Allowing public entities to operate shipyards will create unfair competition for private shipyards, resulting in job creation for a few ports at the expense of the existing shipyards.

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Not only will the passage of HB 2902 cost hundreds of jobs and cause the decline in small business numbers it will also cost important revenue to County and State budgets by removing tax-paying individuals and business and replacing them with public ports.

Public Ports can unfairly compete with private sector businesses in the following ways: 1. Public ports do not pay Oregon real property taxes 2. Public ports do not pay personal property tax on equipment 3. Public ports do not pay income taxes 4. Public ports enjoy limited liability under the Oregon Tort Claims Act, lowering insurance costs 5. Public ports have access to special pooled, lower cost insurance through the Special Districts Association 26

The Unintended Consequences of HB2902 (Cont)

6. Public ports have special access to capital through bonding, property tax assessments, and much greater access to public funding sources.

Though the affected private businesses and individuals would prefer to avoid the passage of HB 2902 in its entirety they have suggested a reasonable compromise. In that compromise they have suggested the removal of a single word in the bill. That word is “operate”.

A compromise would eliminate the word “operate” in order to allow existing businesses and jobs to continue.

The legislators representing business and people seemingly do not understand how devastating a single word in a bill can be. In this instance the word “operate” is a terrible word.

Greg Henderson greg@southernoregonbusiness.com

The bill will change the law by authorizing ports to do the following:

(8) Acquire, construct, maintain and operate facilities for constructing, repairing or maintaining any type of watercraft.

Southern Oregon Business Journal

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H OW F I R E C H I E FS A N D T R A F F I C E N G I NE E RS M A K E P L A C ES L ES S SA F E BY: STEVE MOUZON

Two groups injured and killed most often are the young (because they’re small) and the elderly (because they’re fragile). All images in this article are from Celebration, Florida where scenes like this could soon look very different if the deputy fire chief and traffic engineer get their way Of all the urbanism specialists with tunnel vision, fire chiefs, fire marshals, and traffic engineers are probably the most dangerous. And by “dangerous,” I don’t just mean that they’re a threat to good urbanism; they also get people killed, which is exactly the opposite of what they are commissioned to do. A classic example of their silo thinking is playing out right now in Celebration, Florida, where the proposed measures of eliminating on-street parking spaces and eliminating street trees will almost certainly leave Celebration a less safe place than it is today.

MORE DRIVING = MORE CRASHES AND MORE DEATHS AND INJURIES. Let’s look at things from both a common-sense perspective and a data-driven perspective. Getting rid of street trees does some really bad things for safety: First, it eliminates the first line of defense for those who are walking or biking on the sidewalk (when the streets are too dangerous for biking). A car crashing into a tree at 35 miles per hour will deploy the airbags, but the driver and passengers will likely walk away with little more than bruises. But a car traveling 35 miles per hour that crashes into someone who is biking

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or walking will likely kill them. Higher speed = more deaths and injuries.

People adjust their driving according to the conditions around them. On a tree-lined street, people tend to drive slower because they don’t want to hit a tree if they lose control of their car and run off the road. Lower speed = fewer deaths and injuries.

A canopy of street trees not only eliminates the strong radiant heat of the sun with its shade, but also cools you even further with the trees’ respiration, which has a similar effect to a cool mist. With a cooling canopy of street trees, most people walk well up into the 90s. With a hot sun beaming down, those same people rarely walk, even in the low 80s.

Humans get conditioned to everyday behavior, so when treeless streets condition them not to walk on moderately hot days, driving becomes their norm. And when you increase driving, you increase crashes and traffic deaths.

On-street parking is equally essential to safety, and for even more reasons. As a matter of fact, on-street parking and street trees top the list of things cities should increase on streets if they’re interested in increasing the safety of their citizens. To be clear, the prime benefit of these two elements is getting people out of their cars because they prefer to walk to their daily needs.

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Imagine this scene with all the trees cut down and cars driving a lot faster.

On-street parking does several good things, and its alternative (on-site parking lots) does nothing good. Google “sea of parking.” Are any of the hits positive? Of course not; a sea of parking is dreadful on all counts. Beyond the obvious ugliness, they heat the microclimate by absorbing solar radiation and heating the air above them. Heating the microclimate makes walking uncomfortable and so people drive, even if the parking lot is out of sight.

“But what about on-street parking,” you might ask? “That’s paving, too.” Yes, it is, but it’s a lot less paving. Parking lots need travel lanes between the parking spaces. A 65’ wide perpendicular parking bay has two 18’ parking spaces and a 29’ travel lane. On-street parking needs no extra travel lane because the street itself is the travel lane. So off-street parking requires almost twice as much asphalt and destroys almost twice as much green space as on-street parking, heating the microclimate almost twice as much, discouraging walking and encouraging driving. More driving = more crashes and more deaths and injuries.

Parking is far too often put in front of the building, just behind the sidewalk. If the street is heavily traveled, this creates the dreadful W0 Walk Appeal condition where people simply do not walk unless their car breaks down.

Parking lots in front kill walking and increase driving.

On-street parking makes sidewalk cafes possible. It would be insane to have lunch sitting at a table where cars were zipping by at an almost-certain-death 35 miles per hour just a foot from your elbow. But with cars parked alongside the street, moving traffic is much less of a threat. Sidewalk cafes are both the highest indicator and the highest single stimulus of Walk Appeal, which is the best indicator of places where people walk more and drive less. To make a place safe, we need more of them.

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Without street trees, asphalt on the street on the right would be soaking up heat all day long, and therefore heating up everything around it.

Walk Appeal is the strongest indicator of the likelihood of success of neighborhood businesses in walkable places.

When businesses succeed in walkable places, more neighbors patronize them on foot and people drive less.

Similar to street trees but even more powerful, on-street parking (especially diagonal parking) reduces driving speed.

The possibility of a parallel-parked car opening a door in front of you subconsciously slows you down; the possibility of a diagonally-parked car backing out in front of you does so even more effectively because that would be a worse crash than just knocking someone’s doors off.

The AASHTO Geometric Design of Highways and Streets (the "Green Book,” which is the bible of traffic engineering), uses the Level of Service (LOS) system where streets are rated from A to F with A being best and F being worst, like grades in school.

Here’s the problem: LOS A is the free flow of traffic at the 29

highest speeds (most deadly), while LOS F is a slow-moving traffic jam (safest). Speed kills… especially if you’re walking or biking. Higher speed is OK if you’re driving on an expressway through the countryside, but it’s decidedly not OK if you’re driving in a city or town.

To be blunt, the Green Book standards have probably killed hundreds of thousands of people in towns and cities. It’s deadly. Put a less dramatic way, the Green Book is great for highways in the country, but not for in-town streets. For that, you need Designing Walkable Urban Thoroughfares, a design manual jointly created by the Institute of Transportation Engineers (ITE) and the Congress for the New Urbanism (CNU). Sadly, many traffic engineers have apparently never heard of it, even though it reduces deaths and injuries in town, while the Green Book increases deaths and injuries in town by speeding up traffic.

This brings up another problem: Eliminating on-street parking makes wider travel lanes. Of all the factors affecting travel speed, there is none more reliably calibrated than lane width. People behave differently in different settings.

9-foot travel lanes induce all but the idiots to drive no more than about 20 miles per hour. And it’s important to note that you can never design for the idiots, because there’s no way to predict what someone will do when they’re in an irrational state of mind. On 10-foot travel lanes, people tend to drive 20-30 miles per hour. 11-foot travel lanes should only be used on the highest-speed thoroughfares in town, where there is good protection (like high levels of on-street parking) for people walking. 12-foot travel lanes are Interstate lanes, and we all know how fast people drive on the Interstate. In town, 12-foot travel lanes should be called “death lanes.”

populous countries in Europe nearest the US. Germany, for example, is substantially lower than Italy.

So the wealthiest country in the sample with the most modern buildings performed worst on fire deaths? Meanwhile, the other countries have buildings hundreds of years older, serviced by cobbled-together electricity and built on streets so narrow that many of them would be considered alleys in the US performed substantially better? I suspect the primary cause of this difference that is costing over a thousand American lives per year is the difference in urban form.

It only makes sense that places requiring four times as many miles of streets per person (or more) would be harder to protect, even if the streets are wider and allow faster fire truck travel.

Every comfortable destination that becomes uncomfortable by cutting the trees down becomes one more reason not to get out and walk. Things like this park bench help build a stronger culture of walking in the community.

Fire deaths per million citizens:

On the divide between traffic safety and fire safety, consider this: if you only count deaths by automobile of people walking and people cycling, that’s 19.4 per million in the US, which is almost 50% more than the egregious 12.4 per million deaths by fire in the US each year. To be really blunt, if every fire department in the US closed up shop and dedicated themselves to reducing deaths of people walking and biking to zero, 2,100 lives would be saved in the US every year. Over my lifetime of 57 years, 119,700 people we’ve buried or cremated would have lived instead, with not a single fire station open in the US. To be clear, I’m not advocating for that. What I am advocating is for fire chiefs and fire marshals to open their eyes and realize that when they do something in the interest of fire safety that damages walking and biking safety, they’re likely killing people!

• • •

Make places safer in real life, not in your tiny silos. The time is now.

A LOOK AT THE NUMBERS From a fire perspective, one would think that the United States, built mostly of modern buildings on broad streets where large fire trucks can turn easily and where most buildings are built to modern fire codes, would perform far better than European countries, which are burdened with medieval urbanism, with narrow, cranky streets and small-pipe water. Here are the recent facts, all from 2007 (the last year for which I was able to get data for all these nations):

USA: 12.4 France: 9.8 UK: 7.6

• •

Spain: 5.2 Italy: 4.2

So US fire deaths are over 20% higher than the highest of the Western European countries selected and almost triple the deaths in Italy. I wasn’t cherry-picking; I chose the most Southern Oregon Business Journal

Steve Mouzon is the principal of Mouzon Design in South Beach, Florida, and is co-founder of the New Urban Guild. He is the author of the Original Green Blog. (All photos by Steve)

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Readying for the Next Season Our tendency is to forget about all the effort and necessary preparations before the launching of new endeavors. There are rewards for the work, but sometimes consequences, as well.

If you sail, do you always remember the challenges that were overcome to build the dock at which your boat is moored?

Or, the workmen who built the dock on which you stand? There was concern, no doubt, by some who felt the dock was unnecessary or would pose a community or economic threat to the way things were. But, it happened, and the day is yours to enjoy.

All winter long the farmers have been anxious to get started with field preparations for their crops of wheat or lilies, or blueberries and a thousands other species that grow well in spite of wintertime threats. Will it be a good year for grapes, and wine? We’ll have to wait and see.

There’s rightful worry over a disease that has crossed the border of California and is threatening trees and rhododendron in Curry County. Be aware of Sudden Oak Death, or SOD, and the urgent effort to find a way to stop the disease that California researchers have called “unstoppable”. It could have a huge economic impact. The disease is spreading to other trees and plants causing a need to place a quarantine that will stop import and export activities in many regions.

Rainfall of epic proportions has guaranteed work for road repair crews this year. Infrastructure maintenance is like fixing a squeaky door, we know it needs to be done but often put it off until the job is bigger than it needed to be. Costs for big projects are larger than for small ones, but limited funding can force us to wait until the need to repair is critical, then we wish we had taken care of things earlier. But, that’s the way we are for now. Maybe we can change bad habits. Later.

Happy sailing!

Greg Henderson

Southern Oregon Business Journal

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