August 2019

Proudly Serving Benton, Coos, Curry, Deschutes, Douglas, Jackson, Josephine, Klamath, Lane, Lincoln & Linn Counties Since 2015

August 2019

Energy

Get updated on Oregon’s Energy Resources and Economic Impacts

What Replaces Timber?

Oregon has seen the Changing of the Guard where the high-tech industry has essentially offset the decline of the timber industry.

The Journal for All Business Owners in Southern Oregon

Southern Oregon Business Journal August 2019 | 1

SouthernOregonBusiness.com

A Few Words from Greg Its hard to believe four years have passed since the launching of the Southern Oregon Business Journal on August 10, 2015. But it has.

The nine months leading up to the first publication was filled with enthusiasm and encouragement from many people for whom I have great respect and admiration. And too, from Dede who will be celebrating with me in September our Fiftieth wedding anniversary. She was quick to jump in and help when she could see the stress of a deadline getting to me, or to remind me of an appointment or business networking event that may have slipped my mind. She is my greatest treasure.

Extending the journal’s reach to include 15 southern Oregon counties and the 1.5 million people who call our end of the state home has been, in a word, “awesome”. Every community, every business, every enthusiastic entrepreneur, and all the dreamers have a story to tell. Recent changes, and newer ones as well, have moved the journal in a truly modern and impressive way. Software upgrades and technical expertise make us function better than ever while keeping a finger on the rapid pulse of change. There is no such thing as standing still. You’re either getting ahead or falling behind.

With Jim Teece becoming an integral partner in the business journal in the last few months, we expect to be on the leading side of positive change for the foreseeable future.

Here’s to four years! More importantly, here’s to all the anniversaries to come.

Greg

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The Southern Oregon Business Journal extends sincere thanks to the following companies for their continued presence as important cogs in the wheels of industry in southern Oregon.

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

5350 HWY 66, Ashland, Oregon 97520

www.southernoregonbusiness.com

541-315-6127

Table of Contents Inside This Issue 4 - Future Proofing Southern Oregon 5 - Education - “Learn to Live” 6 - Leadership 8 - Entrepreneur to Entrepreneur 9 - Economy 15 - Management 18 - Housing 23 - Southwest Oregon Economic Indicators 24 - Central Oregon Economic Indicators 25 - Oregon Workforce and Economic Information 26 - Technology Association of Oregon 31 - Springfield Chamber Business News 33 - SBDC News 34 - Agriculture 37 - Economic Implications of Taxing Employment

Cover Photo

FEATURED Energy Renewable natural gas demand to increase with UPS purchase Page 12

Oregon's Renewable Portfolio Standard requires that 50 percent of the electricity Oregonians use come from renewable resources by 2040.

Page 13

U.S. utility-scale battery storage power capacity to grow substantially by 2023 Page 21

What Replaces Timber?

Photo of the carnival at the 2019 Jackson County Fair by Paul Steele www.paulsteelephoto.com

Page 28

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FUTURE PROOFING SOUTHERN OREGON JIM TEECE

TEDx Ashland

James Adam - “Sex and Love in a World of Robots”

Betsy Massie - “Use Or Lose It…The Constitution Belongs To The Citizens”

Linda Hugle - “The Gift of Mortality”

Jim Teece and Trever Yarrish “Learn to Live”

Davis Wilkins, MD - “Don’t Look Away From Dying” Merv George and Chris Chambers “Fire And Smoke…We Are in This Together” Daniel Sherrill - “Song in the Key of Death” Dr. Neil Neimark - “The Promise and Proof of Stem Cell Therapy” Jessica Gomez - “The Death of the Middle Class”

On May 20, 2019 I took the stage with 13 other brave individuals at the Camelot Theatre in Talent, Oregon and presented 15 to 18 minute stories as a part of the first TEDx Ashland.

After months of practice and coaching we took turns presenting memorized talks about topics that covered everything from humanity to technology.

TEDx talks are local versions of the world renowned TED talk and follow a fixed format. Each speaker is asked to submit a topic and if selected, the speaker is asked to create a 15-19 minute talk that tells a story in the TEDx way.

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The event is limited to only 100 people in attendance (not including the speakers and committee) and videos are recorded and edited and then submitted to TED for review and hopefully posting on the TEDx youtube channel. Not every talk is picked up by TED for rebroadcasting via youtube. If you go to YouTube.com and search for "tedxashland” you will see all of the talks that they did post.

The speakers and their talks are as follows: Sudhir Gautam - “The Lives and Deaths of our Identities” Jennifer Mathews - “Death is Inevitable - Grief is Not”

Scott Dewing - “Our Faustian Bargain with Technology” The overall theme of the event was life and death and the speakers covered the full range. Each are worth the time to find and watch online.

The committee that put this on worked just as hard as the speakers and it showed. The event was well done and the house was filled with people that laughed, cried and left with their minds blown.

Hosting a TEDx is not easy, but it’s a great way to get people in your community to come together to share their unique collection of wisdom for the rest of the world.

EDUCATION Learn to Live

JIM TEECE

Trever Yarrish and I had the opportunity to present at the first TEDxAshland in May. Our “Learn to Live” talk focused on a new idea we have for applying agile principles that we both use everyday in our own software companies, to your own personal education. We spent months preparing for it. Brainstorming. Creating a full day of talks that in the end had to be whittled down to under 20 minutes. You can see the talk at https://bit.ly/2K9pUzJ. (case sensitive)

he learned what an IEP (Individual Education Plan) was. He thought it was a great idea and thought of ways to create a personal education plan for himself. He wanted to constantly future proof himself. He wanted to keep his education going beyond school.

The idea is simple and comes from two real places in our lives. Our grandparents had jobs that lasted a lifetime. Our parents were the first to work for companies only to get laid off as they aged. Our children are now asked to get a college degree and pick a career path. Yet the future doesn’t really support the idea of career because it’s moving very fast. We created a character named Jason for the audience to follow along with. We told the story of Jason’s child needing an intervention at school and how

What we know is that education by itself is fine, but we aren’t taught how to create personal education plans for life.

Jim Teece owns the award winning, Ashland based, Web Agency, Project A and Ashland Home Net, a Cable TV, high speed Internet and phone company. JimTeece.com

The story I share about Jason and the intervention really happened but it was with me and my family.

We are raised to learn in the waterfall method.

Trever and I both run software companies. Both of our companies use the Agile method which replaced the waterfall method of development over the last 20 years. We go on to show how adopting the agile methodology will help a person adapt to change.

Why is this important?

According to Fortune Magazine, 40% of the workforce will not have a job in 15 years . We

believe that adopting an agile methodology will help future proof yourself.

We are living in a time of exponential change.

Nothing is the same. We pay strangers to sleep on their couches with AirBnB, we pay strangers to drive us and/or our children home with Uber, we drive electric cars that are not made in Detroit and these cars are fully autonomous as soon as society is ready for it and there are 1.4 Billion people using Facebook every day and oh, by the way, Facebook upgrades twice a day, seamlessly to all 1.4 Billion users.

If we know the future is all about change, what are we doing to teach ourselves to survive constant change?

What’s next from this talk?

We are hoping to get a dialog going. Let’s learn from educators and education policy makers on how we can start to implement this concept of an Agile Education. One where you ask yourself everyday, what did I learn yesterday, what will I learn today and what is blocking me from achieving my education goals.

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LEADERSHIP Check out these timeless quotes from the king himself, Mufasa, to discover your inner lion and let those around you hear you roar!

BY JAMES C. PRICE

Lead Like a Lion: Lessons from The Lion King Image by Alexas_Fotos from Pixabay

Lead Like a Lion: Lessons from The Lion King

By James C. Price July 15, 2019 Inspiration and Motivation, Leadership and Management

So many times, leaders forget who they are and try to lead their team in a way that isn't natural.

With Disney's new, reimagined version of the The Lion King movie set to release this week, it's the perfect time to look to the original 1994 classic for leadership insight! From overcoming obstacles to staying true to yourself to reaching your full potential, this movie is full of life lessons.

Check out these timeless quotes from the king himself, Mufasa, to discover your inner lion and let those around you hear you roar!

"Remember who you are."

So many times, leaders forget who they are and try to lead their team in a way that isn't natural. Usually caused by inadequacies, personal preferences, or the desire to lead like someone else, a leader can overcorrect and choose a leadership style that causes disengagement or apathy. When a person isn't genuine,

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others will respond in kind. However, the best leaders aren't those who cover up their weaknesses or try to be someone they aren't, but those who stand up and embrace who they are. People want to follow a leader who is real, not just right.

"I'm only brave when I have to be. Being brave doesn't mean you go looking for trouble."

Success belongs to the bold, and those who face the potential of failure with a brave face going into the storm seem to be the ones who come out on top. But as Mufasa says, it's not wise to look for or even create your own obstacles. There will be times where you, as a leader, need to be brave and resolute to maintain morale and decrease anxiety. However, your team will feel more secure with a leader who navigates these types of troubling instances, not the maverick leader who looks for danger.

"Everything you see exists together in a delicate balance. As king, you need to understand that balance and respect of all the creatures, from the crawling ant to the leaping antelope."

Mufasa recognized that to lead such an eclectic group of creatures he needed to understand what these creatures wanted and needed. You can't lead an ant the same way you lead an antelope.

Similarly, your office most likely is a mural of people from different backgrounds, cultures, and customs, all bringing with them specific skills, traits, and insights.

Before you can lead a diverse team, you need to understand what they want in a leader, how they need to be led, and ways you can help them bring their best every day. This type of group needs a balanced leader who is adaptable from one employee to the next.

"Believe in yourself and there will come a day when others will have no choice but to believe with you.”

One of the most important aspects of leadership is getting buy-in from your team. If your team does not believe in your mission, they most likely won't give you the backing needed to succeed in your organizational goals. People need to know the why behind the what.

But it starts with you. If you believe

in the why and are passionate about reaching a goal with your team, soon your team will start believing. Passion is contagious.

And there is nothing more inspiring than a passionate leader who will fight in the trenches with a team for a specific purpose.

Believe in yourself, believe in the mission, and others will follow.

"You have forgotten who you are and so have forgotten me. Look inside yourself, Simba. You are more than what you have become.”

Failure and setbacks can cause us to lose sight of our purpose, derailing the mission we set out to complete. Some leaders reach for the stars, but when they aren't successful, failure can be debilitating. Sometimes, we can even cause the setback by not shooting high enough. Maybe you have it in you to be a great leader, but instead of empowering your employees, you're settling for merely delegating tasks. As Mufasa said, you are more than what you have become. Don't forget what you originally set out to accomplish.

Dig in, rediscover your purpose, and press on.

When dealing with past failures it's important to move forward. Here are three bonus quotes to help push past failure and lead your team like a lion:

"Look, sometimes bad things happen and there's nothing you can do about it. So why worry?"

— Simba "As you go through life, you will see that there is so much that we don't understand. And the only thing we know is things don't always go the way we plan." — Simba "Oh yes, the past can hurt. But from the way I see it, you can either run from it, or learn from it." — Rafiki James C. Price James C. Price is a marketing specialist for Express Employment Professionals International Headquarters and is responsible for the overall management of the Refresh Leadership blog. He develops content on a wide variety of topics, including leadership, workplace management, employment and economic trends, and much more. He has a Bachelor of Arts in Journalism with an emphasis in Public Relations from Oklahoma State University and holds an American Marketing Association Professional Certified Marketer (PCM) designation. He has worked in a variety of fields, including marketing, public relations, print and broadcast journalism, music, and commercial real estate. http://www.refreshleadership.com/index.php/ 2019/07/lead-lion-lessons-lion-king/

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ENTREPRENEUR TO ENTREPRENEUR

Jackson

Blackstone Publishing: A Page Turner

CYNTHIA SCHERR

What is the Southern Oregon Entrepreneur to Entrepreneur (E2E) Network?

Traffic snakes along at 5 mph, horns honk, the smell of asphalt and exhaust mix in the air. Ever found a traffic jam inspiring? Craig Black, founder of Blackstone Publishing, did. Thirsty to continue his education, Craig started reading classic literature and history in his 30s while driving L.A. freeways.

After several fender benders, (distracted driving is not new), Craig thought there must be a better way.

Southern Oregon Entrepreneur to Entrepreneur (E2E) visited Blackstone Publishing recently to hear how Craig solved the problem of reading while driving. Heather Johnson, CFO of Blackstone, shared the company’s history during a tour of its labyrinthine headquarters that includes office, studios, manufacturing, and warehouse space.

Craig and his wife, Michelle, left Los Angeles for Ashland, Oregon, and started working out of their garage in 1987 to produce “books on tape,” with books whose rights were easy to obtain.

At first, customers were harder to find.

Craig learned quickly that not everyone wanted to redeem their time in the car with learning. People were more interested in entertainment. Plus, books on cassette tapes were expensive to produce so the purchase price was high. Blackstone overcame the price hurdle by renting audio books to individuals and selling them to libraries.

Ashland’s ready supply of narration talent from the Oregon Shakespeare Festival (OSF) made it an ideal location to launch the business. The company maintains a strong relationship with OSF and produces a multi-cast recording of one OSF play a year. An

aspiring writer from E2E asked Heather how many authors narrate their own work. “They all want to, but only about 1% have the talent to pull it off.”

Entrepreneurs always want to hear— and share—their high drama stories.

Blackstone has one. In 2012, Craig and Michelle sold a majority of the business to British investors. Within 10 months, the company was on the verge of bankruptcy. The Blacks re-purchased the company at a fraction of the original sale price and gained another company the investors owned in the transaction.

Blackstone recovered spectacularly from the ill-fated sale and grew to 200 employees, 180 of whom are in Ashland.

The company works with best-selling authors like Shelley Shepard Gray, Nicholas Sansbury Smith, Catherine Ryan Howard, and Cory Doctorow.

Locations in Ashland, Portland, New York and remote workers throughout the U.S. produce over 1300 titles a year on media ranging from print to digital downloads.

The advent of CDs and downloadable files made recorded books accessible to people all over the world. Most are sold through Blackstone’s site Downpour.com and other major audiobook sites. In Craig’s words, “audiobooks are the sexiest part of the publishing industry.”

And why “Blackstone”? The Blacks didn’t quite remember its namesake Victorian literary publication, Blackwell’s, accurately. It was clear to E2E that the business would smell as sweet by any name.

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Inspired by communities from Bend to Boulder, management consultant Cynthia Scherr and financial consultant Linda Ganim, along with other local entrepreneurs, started E2E three years ago. They challenged their friends and clients, most of whom own businesses, to come together as a loose group of entrepreneurs to focus on promoting, developing and enhancing a sustainable entrepreneurial ecosystem in Southern Oregon.

E2E has a clear mission, but no official structure or dues. The group meets at a different company every month to learn about the business, hear the ups and downs of the owner’s entrepreneurship story and talk about any challenges it faces moving forward. Entrepreneurs share experiences, inspiration and resources. People’s Bank of Commerce sponsors the pizza and beer.

Cynthia also works with Jefferson Public Radio to curate a podcast called “The Ground Floor” that highlights the entrepreneurial adventures of businesses in Southern Oregon. You can hear the segment on The Jefferson Exchange the third Monday of every month.

The goal of E2E is to create space and time for entrepreneurs to learn from other entrepreneurs in their own community without requiring formal membership or a regular commitment. The group hopes to augment the efforts of the chambers of commerce, service clubs and economic development organizations in our region.

If you are interested in learning more about E2E, request an invitation through the Southern Oregon E2E Facebook page.

ECONOMY

Coos, Douglas, Jackson, Klamath

TODD GOERGEN

$60 million in tax revenue per year for Southern Oregon and the South Coast

Jordan Cove will provide economic benefits to Southern Oregon

Those who have lived in Southern Oregon for most of their lives know that $10 billion private investments don’t come along very often. Well, never, to be exact. Slightly less rare is a business investment that has the ability to provide economic benefits to so many Oregon communities for generations to come. Jordan Cove is that investment.

Many Oregonians have been following the Jordan Cove Project since 2005. Since then, we’ve seen project owners come and go, global LNG markets shift, permitting processes seemingly succeed and others fall through and multiple waves of community engagement.

Southern Oregonians hungry to restore timber-based economies rode a roller-coaster. But this time around, things are different.

Pembina took ownership of the project in late 2017 after acquiring Veresen, who owned the project, and since then, has been

distinguishing is culture and approach from predecessors and made great progress toward making Jordan Cove a reality. If the recent Federal Energy Regulatory Commission (FERC) hearings in Coos, Douglas, Jackson and Klamath Counties were any indication, support for the project is growing as more Southern Oregonians are learning about the company, and the benefits the project will have for communities in the four impacted counties (Coos, Douglas, Jackson and Klamath).

The economic benefits of Jordan Cove are unlike anything Southern Oregon has seen for many decades.

With a pipeline asset stretching across 229 miles, this project has the potential to generate new funding for public services like fire departments, schools, and county government and infrastructure to the degree that many of these communities haven’t enjoyed since the peak timber years in the 1970s.

Pembina is expected to pay approximately $48 million annually in state corporate taxes, roughly 5% of the recently passed Corporate Tax Package and roughly equal to the total amount that all manufacturers in the state of Oregon pay annually.

According to an independent analysis by Portland-based economic consulting firm, ECONorthwest, Jordan Cove will add $1.87 billion annually to Oregon’s GDP, the equivalent of 0.89% of the state’s current total GDP, creating a major new infusion of much-needed revenue.

On a local level, had Jordan Cove been operating in 2017, it would have paid an additional $60 million in annual property taxes across Coos, Douglas, Jackson and Klamath Counties, making it the largest property tax payer in each of them. This revenue would include an estimated $10.6 million in annual property taxes to K-12

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Jordan Cove (Con't) public schools in the four counties, which could fund an additional 112 new, full-time teachers, in addition to providing funding for public safety and firefighting. All through new investment. All without raising taxes.

Coos County, where the LNG terminal would be built, expects to see $2.8 million each year for public schools, more than $300,000 each year for community colleges, more than $350,000 each year for libraries, more than $280,000 in tax revenue to local fire districts – the equivalent of paying five new firefighters – and more than $600,000 each year for county government and infrastructure.

Coos County will also benefit from Jordan Cove’s proposed Community Enhancement Plan, which will direct more than $500 million in Enterprise Zone tax savings to local governments, keeping tax revenues local and ensuring local communities benefit from the Project.

Douglas County is expected to receive $4.6 million in permanent tax revenue from Jordan Cove each year, including more than $280,000 each year for community colleges, more than $170,000 each year for public safety, fire and hospitals and more than $700,000 each year to county government and infrastructure.

Jackson County will receive an estimated $5.3 million in permanent tax revenue for Jordan Cove annually, including $1.1 million annually to county government and infrastructure, more than $350,000 each year for community colleges and more than $230,000 in tax revenue to local fire districts. This increased revenue will help Jackson County fight one of the largest threats facing Southern Oregon today – wildfires

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– by providing funding for the equivalent of four new firefighters.

Klamath County is also expected to receive from Jordan Cove an estimated $5.3 million in permanent tax revenue each year, including more than $1.3 million to county government and infrastructure, more than $600,000 each year for public safety, fire and hospitals, and more than $230,000 each year for community colleges.

This includes more than $410,000 in tax revenue to local fire districts, the equivalent of seven new firefighters.

In addition to the tax revenue that Jordan Cove will contribute on a state and local level, the Project is estimated to significantly contribute to local spending both during construction and after startup. ECONorthwest estimates that Jordan Cove and its contract employees will contribute $95 million to local spending during construction and $14 million each year during operations. This influx of local spending will benefit local businesses in Southern Oregon in sectors like grocery, retail and hospitality, providing a muchneeded economic stimulus to distressed rural economies.

Throughout the duration of the Project, Jordan Cove itself plans to spend $2.88 billion directly with Oregon businesses.

On a county level, Coos County expects to see $70 million in annual local spending from workers during construction and $29.5 million in annual local spending from workers during operations.

Similarly, Douglas County expects $18.7 million during construction and $1.3 million during operations, Jackson County anticipates $38 million during construction and $1.2 million during operations, and

Klamath County expects to see $7.7 million during construction and $390,000 during operations.

An additional public benefit to the entire region and to Oregon, is that the pipeline can originate at a gas transmission intersection near Malin and be shipped from the Oregon International Port of Coos Bay, making use of one of Oregon’s most underutilized state assets.

The Project also represents additional investment in, and modernization for the Port. Once the largest timber export port in the world, the Port of Coos Bay has seen utilization and investment steadily decline over time. The Jordan Cove Project would directly invest in improving marine-related infrastructure, capacity and capability, such as the procurement of four state-of-the-art tractor tugs with firefighting capabilities, active ship escort and emergency towing and rescue capability, and procurement and set up of a private vessel traffic information system.

Demonstrating how business investment multiplies, Jordan Cove will require about 110 new vessel calls to the Coos Bay harbor (more than a 300% increase), one of only two state ports in Oregon. Each vessel call generates approximately $603,000 in direct benefit and over $1.3 million in indirect or total economic benefit. That means that every year, vessel calls at the JCP terminal will generate an additional $150 million in positive economic impact. (Source: Oregon International Port of Coos Bay, Federal Navigation Channel economic analysis). Further, the U.S. Army Corps of Engineers allocates funding for channel and ocean bar maintenance based upon cargo tonnage and a cost/benefit ratio. The significant additional tonnage will help ensure federal

maintenance of a safe navigation channel and ocean bar crossing, benefit ships, commercial fishing boats, and recreational boats alike.

working through the local, state and federal regulatory process and expects to receive its FERC permit in January 2020.

In addition to the tax revenue and local spending that will result from Jordan Cove, the project will provide much-needed jobs to Oregonians in areas that have long faced high levels of unemployment.

During peak construction, Jordan Cove will provide 6,000 construction jobs, in addition to 8,500 spinoff jobs during each year of construction. During operations, the Project will provide 215 permanent, family wage jobs and is estimated by ECONorthwest to contribute 1,500 spinoff local jobs during operations. These jobs will directly benefit local labor and trade organizations, who have helped conduct surveys and projections for available works, prioritizing local and Oregon first for recruitment, followed by the northwest as a priority.

A Boost for Local Businesses The construction and operation of the facility will create temporary and long-term revenue for local businesses, either as official suppliers to the Project or through increased business from a growing workforce.

Pembina also has demonstrated it doesn’t prioritize jobs over the environment. In addition to exporting low-carbon LNG to coalburning Asian countries to help decrease global greenhouse gas emissions, Pembina has purchased significant land parcels for wetland mitigation, restoration and enhancement, as well as Old Growth forestland for preservation.

Jordan Cove would be a game changer for communities in need of economic stimulus, in addition to providing statewide economic benefits. The Project is currently

Todd Goergen

North Bend business owner and off-road vehicle enthusiast Co-president, Boost Southern Oregon Having lived and worked all his life on the Southern Oregon coast, Todd knows well the concerns for the area’s economic future. As longtime business owner of Arctic Ice (now Reddy Ice) and a part of the family-owned Box Car Hill Campground, he has dealt with the problems of lack of skilled labor and skilled employees leaving the area for better situations. He considers the Project an opportunity for the local economy and employment, while at the same time maintaining what is special about the area.

Based on our County’s Comprehensive Land Use Plan, I believe the Project and preexisting recreational activities associated with the area are compatible and adequate space separates these uses.

Creation of 6,000+ good-paying construction jobs and ~8,500 spin-off jobs.

A Bridge to the Future: Jordan Cove Project Benefits Building a safe, clean natural gas pipeline – with an export terminal in Coos County – the Jordan Cove Project will create more than 6,000 goodpaying construction jobs at peak construction in addition to an estimated 8,500 jobs in sectors like hospitality, retail, tourism and healthcare. The Project will bring $60 million dollars in new tax revenue for Southern Oregon and the South Coast every year to revitalize our community, and invest in schools and services across Southern Oregon and the South Coast.

The Project will revitalize the Port of Coos Bay, making it a major U.S. West Coast port. Numerous other tangible benefits to the surrounding communities include: Employment The Project would create over 6,000 jobs at peak construction and more than 200 permanent positions. Additionally, during construction the Project would create over ~8,500 spin off jobs in sectors like hospitality, retail, tourism, and healthcare, including ~1,500 permanent spin-off jobs during operations.

Jordan Cove LNG’s Engineering, Procurement and Construction (EPC) contractor, KBJ, has executed a Project Labor Agreement with the Oregon Building and Construction Trades Council, the Pacific Northwest Regional Council of Carpenters and the International Union of Operating Engineers Local 701 for construction of the LNG Terminal. This agreement ensures the Project will be built with local, skilled union labor with a long track record of safely completing complex industrial projects on time. Jordan Cove is committed to using union labor for construction of the pipeline and is in discussions with trade unions regarding the timing of construction, available resources and required skill sets.

There are currently no open opportunities available. However, you are invited to forward your resume and cover letter to the following email address : careers@jordancovelng.com Southern Oregon Business Journal August 2019 | 11

ENERGY U.S. ENERGY INFORMATION ADMINISTRATION

Renewable natural gas demand to increase with UPS purchase On May 22, 2019 United Parcel Service (UPS), a global provider of shipping and delivery services, announced that the company would increase its use of renewable natural gas (RNG) in the United States. UPS purchased 170 million gasoline gallon equivalent (gge) from fuel supplier Clean Energy Fuels to meet this commitment, which supports UPS’s sustainability goals. RNG consumption has increased significantly in recent years, and according to UPS, this agreement will be the largest commitment to RNG to date by any company in the United States.

RNG is a transportation fuel derived from biogas through anaerobic digestion at landfills and other facilities. The biogas is cleaned of impurities and upgraded to meet the pipeline specifications for natural gas. The RNG can then be consumed as fuel in CNG and LNG vehicles, a common fuel alternative for medium- and heavy-duty vehicles that would otherwise run on diesel fuel.

RNG consumption in the United States increased significantly following a 2014 EPA ruling that allowed RNG, in either compressed or liquefied form, to qualify as a cellulosic biofuel as part of the Renewable Fuel Standard.

According to the U.S. Environmental Protection Agency, nearly 270 million ethanol gallon equivalent (or about 185 million

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gge) of RNG were produced in 2018, a 133% increase compared with 2015 levels. More than 50 facilities are registered with EPA to produce RNG, and EIA expects additional production to enter service as a result of capacity additions already under construction.

The UPS/Clean Energy Fuels agreement requires UPS to purchase 170 million gge of RNG from Clean Energy Fuels between 2019 and 2026, amounting to sales of about 22.5 million gge per year, or about 10% of current RNG production levels. Clean Energy Fuels will supply the RNG to UPS fueling stations in 18 cities across 12 states.

UPS has been steadily incorporating RNG into its transportation fleet, consuming more than 28 million gge of RNG since 2014, including 15 million gge

in 2017 alone. UPS currently owns a global fleet of 5,200 natural gas vehicles. In the United States, UPS operates 51 fueling stations capable of supplying natural gas to its ground fleet.

In 2017, UPS purchased 115 million gallons of alternative fuel (RNG, biodiesel, and ethanol), representing 21.8% of its total ground fleet operations. The company plans to displace 40% of its ground fuel (conventional gasoline and diesel) use with low carbon and alternative fuels by 2025. The company also plans to achieve a 12% reduction in greenhouse gas emissions associated with its global ground operations by 2025 relative to 2015 "Source: U.S. Energy Information Administration (July 2019)

ENERGY OREGON DEPARTMENT OF ENERGY

Oregon's Renewable Portfolio Standard requires that 50 percent of the electricity Oregonians use come from renewable resources by 2040.

Oregon's Renewable Portfolio Standard sets a requirement for how much of the electricity we use must come from renewable resources. "Renewable" means the source of power can be used repeatedly because it is replaced naturally, like wind or the sun.

The original RPS was adopted in 2007, when just 2 percent of Oregon's electricity needs were met with renewables. In March 2016, the passage of Oregon Senate Bill 1547 increased Oregon's Renewable Portfolio Standard requirement to 50 percent renewables by 2040.

Tracking Oregon's RPS Goals The Oregon Department of Energy tracks Oregon's RPS goals. We certify facilities that generate power from RPS-eligible renewable energy resources, and provide technical expertise to utilities and electricity service suppliers to help ensure we reach our RPS goals.

The Western Renewable Energy Generation Information System (WREGIS ) issues Renewable Energy Certificates (RECs) for the Oregoncertified energy facilities. Utilities and electricity service suppliers purchase and then retire these RECs to demonstrate compliance with the RPS. Renewable Energy Certificates

RECs are issued for the generation of qualifying renewable power using: Wind energy Solar photovoltaic and solar thermal energy Wave, tidal, and ocean thermal energy Geothermal energy Certain biomass products, including woody biomass and animal manure Landfill gas and other biogases Small hydropower Thermal energy Facilities receive one REC for one megawatt-hour (MWh) of qualifying renewable energy they deliver to the grid. See Oregon's Administrative Rules for more information.

Hydropower facilities make up a large and important part of Oregon’s electricity resource mix — providing more than 40 percent of the state’s electricity. In some Oregon utility territories, hydropower provides more than 90 percent of consumers’ electricity.

Most of this hydropower — from dams built decades ago — is not eligible for credit toward the state’s Renewable Portfolio Standard, which was created to encourage the development of new renewable electricity resources. However, the

RPS can include two types of electricity from these older but still critical hydro facilities: generation attributable to efficiency upgrades made at existing hydropower facilities after 1995 is eligible, as is generation from an existing facility if it became certified as a lowimpact hydroelectric facility after 1995.

Participating Utilities and Energy Suppliers Utilities and electricity service suppliers subject to RPS requirements submit implementation plans every two years to show how they expect to comply with RPS requirements.

Investor-owned utilities and suppliers also submit annual compliance reports to the Oregon Public Utility Commission .

Consumer-owned utilities report compliance to their customers, boards, or members.

Utilities, electricity service suppliers, or facility owners register their renewable energy-generating facilities in WREGIS so they can be issued RECs. https://www.oregon.gov/energy/ energy-oregon/Pages/RenewablePortfolio-Standard.aspx Image by Myriam Zilles from Pixabay

Southern Oregon Business Journal August 2019 | 13

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MANAGEMENT JIM MYERS, PRAXIS ANALYTICS, INC.

Flying Lessons: How stories from Aviation can make us better Managers Boeing 737-9 Airliner

Improve In this, the fifth installment of our six part series, we look at the role of Improvement in business value creation and examine, through the lens of lessons learned, and example of improvement from the field of aviation.

The picture of Boeing’s iconic 737 airliner represents a culmination of aviation lessons for business managers. In microcosm, the 737 represents the result of five activities all organizations must do to be viable. Boeing observed their environment and communicated, organized and delivered a product that it has improved over time. The ability to Observe, Communicate, Organize, Deliver and Improve are critical to business success. Moreover, the business that does these five activities well is on its way beyond viability towards achieving enterprise excellence. Last month we covered Delivery with a look at TP Wright’s observations linking production quantity, costs and learning.

We applied the Learning Curve from both product and workflow perspectives to improve organizational efficiency and effectiveness. This month we look at Improvement and take a lesson from aviation that can help us improve business performance.

accomplishment; there was a time when a breakthrough in a single aspect of your business almost guaranteed market superiority.

Unfortunately, this approach no longer holds the same promise it used to. The wide spread availability of information precludes simplistic solutions to competitiveness. We are at the point where enterprise excellence depends upon the integration of activities to deliver value.

An example from aviation of how improved integration provides superior results comes from John Boyd. Colonel Boyd was a United States Air Force officer who saw combat as a fighter pilot, flying the F-86 Sabre jet during the Korean War. In the 1950’s and 1960’s he developed tactics and trained pilots in air combat. Later, he contributed to the design of fighter aircraft, particularly the F-16 Falcon and F-15 Eagle. After retirement in 1975, he continued to influence military doctrine as a consultant. Boyd developed significant insights about how two

seemingly similar aircraft (American F-86 Sabre and the Soviet MiG-15) could have dissimilar results in combat - with an estimated 8:1 F-86 kill ratio over the MiG-15 during the Korean War. Boyd attributed the performance difference between the F-86 and MiG-15 to (a) superior situational awareness for the F-86 pilot since the aircraft cockpit sat higher and allowed a clear field of view, and (b) hydraulic controls in the F-86 allowed for quicker responses by the aircraft from pilot input. While the MiG-15 possessed superior armament and ability to singularly climb, turn and accelerate, the more aware F-86 pilot had a better understanding of the evolving environment (situation awareness) and due to the F-86’s superior controls (aircraft responsiveness) could react faster. The MiG-15 showed all the attributes of excellence in terms of individual performance characteristics (see the chart Performance Characteristics Comparison).

In a sense, the F-86 was imperfect and lacked the

Businesses improve to become better.

Approaches taken to improve performance are as varied as businesses themselves. So where do we start? One place is in the initial decision to view your enterprise as a set of singular characteristics or as an integrated set of activities. The former has a long record of Southern Oregon Business Journal August 2019 | 15

Improve (Con't) capabilities of the MiG-15 (i.e. Rate of Climb, Ceiling, Weight, Guns, and Range). In combat, the MiG-15’s superior potential to perform individual activities failed to achieve superiority over a seemingly ‘inferior’ aircraft. The F-86, as an integrated system (Pilot + Aircraft), proved superior.

Boyd observed that within the Observe-OrientDecide-Act (OODA) Loop in an aerial dogfight, F-86 pilot leveraged his situation awareness and aircraft responsiveness and incrementally improved his tactical situation compared to the MiG pilot (See “Boyd Cycle” diagram). The Sabre pilot was able to more effectively cycle through the OODA Loop faster and with greater accuracy due to better visibility and the F-86’s superior controls. These two rarely measured aircraft attributes directly impact reaction speed and execution quality. The F-86 (Pilot + Aircraft) as an integrated system delivered situational improvement with each OODA Loop cycle until the F-86 prevailed. The lesson from Boyd’s OODA Loop is that superior capability evolves from the integration of activities related to individual characteristics, more than from singular characteristics themselves.

Typical representation of the Boyd Cycle: (OODA Loop) Putting the OODA Loop in an Organizational Context. What aspects of your business correspond to the F-86 pilot’s situational awareness and the F-86’s quick response? The 16 | Southern Oregon Business Journal August 2019

ability of your team to accurately observe and reliably communicate ensures they are able to organize themselves and deliver value. Viewed individually, the ability to Observe, Communicate, Organize and Deliver provides the foundation of business viability. The integration of these activities provides a means for the business to excel. As your team learns to improve with each cycle, the integration of activities becomes the key to improved performance. Just as the pilot in Boyd’s example cycles through the OODA Loop faster and incrementally improves his position, the business leader who can leverage the team’s ability cycle through the Observe, Communicate, Organize and Deliver Loop will incrementally improve enterprise performance.

Example: A cabinet shop may possess all the right characteristics - the best equipment, highly qualified artisans and an excellent order tracking and accounting system. However, if these organizational characteristics are not integrated, they run the risk of underperformance – and the business becoming the Mig-15 of the market!

An organizationally integrated competitor with older equipment, less skilled workers and antiquated manual systems may very well provide superior outcomes. This is because the integrated competitor executes the ObserveCommunicate-Organize-Deliver Loop better and faster, improving with each cycle.

Lesson for Managers. The integration of activities provides an important means to improve performance. In seeking improvement and enterprise excellence, managers face many obstacles: resources are often scarce, people are busy and unexpected things happen. To improve performance the first step is to understand who you are and where you are at (Situational Awareness). Understand your businesses capabilities and environment.

Second, see your business as an organic set of activities that flow together to deliver results (Integrated Functionality). By doing so you can prioritize resources based upon results and not focus solely on individual activities/ characteristics that will not deliver the intended outcomes. Third, develop your team so improvement is part of their daily work (Continuous Improvement). Provide your team

with the tools and training to make incremental improvements in both the speed of reaction and executional quality. Fourth, clearly define expected outcomes (Explicit Goals). Without goals, no improvement effort can succeed. As a leader, carefully choose priorities that emphasize integration excellence over a focus on singular enterprise characteristics.

Further reading: 1) McKay, Brett and Kate. John Boyd’s Roll Call: Do You Want to Be Someone or Do Something? (https://www.artofmanliness.com/2014/01/22/ john-boyds-roll-call-do-you-want-to-be-someoneor-do-something) 2) Richards, Chet. 2012, Boyd’s OODA Loop (It’s Not What You Think), J. Addams & Partners, Inc. 3) Thompson, Fred. 1993, The Boyd Cycle and Business Strategy, Proceedings of the AomoriAtkinson Conference, Aomori Public College, Aomori, Japan.

2018 Praxis Analytics, Inc. All Rights Reserved.

Praxis Analytics web site: https:// praxisanalyticsinc.com/ Jim Myers is the principal and founder of Praxis Analytics, Incorporated. Jim serves as a trusted advisor to business leaders in their quest to operate efficiently, improve continuously and prosper. His background includes two decades working in manufacturing, supply chain, customer service and maintenance management roles within markets that range from capital equipment to aerospace and defense. Jim balanced his practical operations experience with theory and served as the Associate Dean of the Atkinson Graduate School of Management (AGSM) at Willamette University where he led projects to improve school operations and taught graduate courses in Operations and Information Management, Strategy Alignment and Project Management.

Jim can be reached at jim@praxisanalyticsinc.com

Southern Oregon Business Journal August 2019 | 17

HOUSING DANIEL HERRIGES

5 Ways To Make the Missing Middle Less Missing

A July 2019 report from Bloomberg explores the decline in Missing Middle housing in the United States —and it turns out it's more missing than ever.

This graphic from Bloomberg using Census data shows the decline in the share of missing-middle (blue) housing among all multifamily housing construction, even as very large apartment buildings (light gray) are booming.

The Missing Middle is a term coined by Opticos Design that

18 | Southern Oregon Business Journal August 2019

refers to the whole spectrum of homes in between single-family houses and large apartment buildings. This includes duplexes, triplexes, fourplexes, small-scale apartment buildings with a handful of units, cottage courts, townhouses, and so forth.

Bloomberg finds that the share of new housing that falls into these Missing Middle categories has steadily fallen over the past few decades, and has hit rock-bottom in the last few years.

This is a problem. Missing Middle development used to be all over the

place in cities built before the postWWII suburban experiment. And it offers a host of benefits that make for strong, resilient cities. These include: Missing Middle development fits readily into more locations, where there might not be the market for a large apartment complex (or a large enough piece of land might not be available). This can address the trickle-or-fire-hose problem, in which almost all of the development going on in our cities is concentrated in a small minority of neighborhoods.

Missing Middle housing is cheaper to build than larger and taller buildings, which require different construction techniques and materials. But the Missing Middle still makes it possible to distribute the high cost of land across multiple homes instead of a single house. The result is that a new Missing Middle home is often the least expensive kind of home you can build, and immensely valuable in cities with an affordability crisis.

Missing middle development can be phenomenally financially productive for cities; the combination of more people paying taxes and low infrastructure needs is a fiscal winner.

Missing Middle development is an indispensable piece of the Strong Towns vision for cities that are resilient, adaptable, and can pay their bills. We need to revive a culture of building this way, and we need institutions that will allow it.

Some of the biggest barriers to Missing Middle construction have to do with financing and federal regulation. A lot of city governments see this as outside their domain. But there's plenty that cities can do, too. Here are five things your city should be doing, if it isn't already, to help the Missing Middle get found again.

Missing middle development is a business that a mom-and-pop landlord can get a start in. In fact, it's how most small-scale developers get their start. When we only build large buildings, only large corporations can have an ownership stake in our cities.

A block full of missing middle buildings makes for better urban design. It's more granular than a block dominated by a single building with a single owner, and likely more resilient because there is not a single point of failure if things go wrong.

The single biggest reason the Missing Middle has declined is that it is literally illegal in most places.

This can be true even in urban neighborhoods that have a lot of duplexes or small apartment buildings: in many of these neighborhoods, zoning codes were changed in the 1960s or 1970s to prohibit the new construction of anything other than single-family homes. The older apartments that are part of the neighborhood's fabric are grandfathered in, but can't be replaced or imitated.

Fortunately, there's a movement to re-legalize the kind of eclectic neighborhoods, with a variety of home types for ownership and rental, that we used to build nearly everywhere. The city of Minneapolis and the whole state of Oregon are prominent examples of places that have recently passed laws to make normal neighborhoods legal again.

A neighborhood full of missing middle buildings hits a sweet spot for many people in which there are enough people around to foster a walkable environment, but still maintain a comfortable and appealing small-town feel. It’s the good old American Main Street Model.

1. Legalize It. Everywhere.

2. Make Sure the Rest of Your Zoning Code Isn't Putting Up Obstacles.

Even if non-single-family uses aren't banned in your neighborhood, there are a lot of other ways that cities can make these buildings practically impossible to build. These include setback requirements and minimum lot sizes. In a classic article, Strong Towns contributor Sarah Kobos teaches you how to Kick the Tires on Your Local Zoning Code to figure out what is actually, practically allowed in a given location. You'll likely be surprised by all the barriers.

Backyard Accessory Dwelling Units (ADUs) (which we'll lump in with Missing Middle because they result in two homes on a single residential lot) also face a ton of barriers, sometimes including maximum size or owner-occupancy requirements. These should also be reduced; they create situations where something is legal in theory but nearly impossible in practice.

3. Eliminate Parking Minimums If you're building a huge building, you can handle the cost of a big parking lot, or even a multi-story parking garage. You can pass this cost—which can be in the tens of thousands of dollars per parking space—on to your eventual renters or buyers. For a small building on a small lot, though, parking quickly becomes prohibitive, as it requires a disproportional share of the lot to accommodate it. And it's rarely all that vital: in a neighborhood with missing-middle housing (as Southern Oregon Business Journal August 2019 | 19

Housing (Con't) opposed to huge apartment complexes), existing on-street parking is almost always adequate for those who need space for their cars.

There is no reason cities should require building owners to provide more parking than their residents actually need or want. People are more than capable of figuring that out for themselves if you let them.

This is why we urge every city in America to end parking minimums.

4. Streamline the Regulatory Process It makes sense that a skyscraper or 200-unit complex would be subjected to a ton of scrutiny— opportunities for affected neighbors to weigh in, a vote of the City Council to approve any requested exceptions from the zoning code, the whole shebang.

After all, these buildings can radically alter the environment surrounding them. Renovating a historic fourplex, though? Not so much.

Estimates of the cost that regulatory burdens impose on developers vary, but one thing is for sure: this cost is hugely disproportionate for smaller projects compared to large ones.

You still have to pay the same application fee if you need a zoning variance. You often have to endure the same delays before approval, all while holding onto the land and paying taxes on it. All of this often deters would-be small developers or rehabbers from even trying.

Cities should find ways to make the

20 | Southern Oregon Business Journal August 2019

process easy for those who want to do modest projects.

5. Make "Assembly" a Dirty Word.

Somewhere in the course of America's Suburban Experiment (which doesn't just mean the literal suburbs; it means applying a standardized, large-scale, massproduction model to urban development and construction as well) planners adopted a particularly destructive piece of conventional wisdom. This is the idea that having small and/or irregularly shaped lots is holding cities back from revitalization and redevelopment.

We used to see oddball, triangular lots like this as opportunities, not obstacles.

According to this conventional wisdom, if you want to court investment, you have to "assemble" lots into big tracts of land that can attract the interest of a deeppocketed developer. Many city planners view it as a goal to facilitate this "assembly," and it's not uncommon to find planning documents which describe a preponderance of small lots as an obstacle to economic growth.

This is completely contrary to how we built cities for thousands of years. Small lots actually have a huge number of advantages, not the least of which is that they make the cost of entry to become a developer or entrepreneur much, much lower.

And as far as the effect on the city's own budget? For financial bang-foryour-buck, we've demonstrated that you can't do much better than a

shoestring business like Jimmy's Pizza or Taco Taxi—generating tremendous value on the tiniest slivers of urban land. It’s not just about housing: these small spaces are crucial for businesses.

Planning and economic development guru Kevin Klinkenberg has written perhaps the definitive post on this issue: Savor Your Small Parcels, and Create More of Them.

In a nation of Strong Towns, we'd see a renaissance of creative, entrepreneurial, small-scale developers adding value to neighborhoods all over our cities.

Incremental development is #ChaoticButSmart, as opposed to the #OrderlyButDumb of the blocksized, 300-unit apartment complex funded by a big institutional investor. It's less efficient. It requires some hustle. But the upside is there's a lot more room for it in a lot more places, not just the handful of hip urban districts currently seeing an explosion of those big buildings.

The renaissance of financially productive places that we need can only happen when we get out of the way of the Missing Middle. https://www.strongtowns.org/ journal/2019/7/19/5-ways-to-makethe-missing-middle-less-missing (photo courtesy of Opticos Design)

ENERGY

BY PATRICIA HUTCHINS

July 10, 2019 U.S. utility-scale battery storage power capacity to grow substantially by 2023 Source: U.S. Energy Information Administration, Annual Electric Generator Report and the Preliminary Monthly Electric Generator Inventory

In the first quarter of 2019, 60 MW of utilityscale battery storage power capacity came online, and an additional 108 MW of installed capacity will likely become operational by the end of the year.

U.S. utility-scale battery storage power capacity to grow substantially by 2023

Utility-scale battery storage units (units of one megawatt (MW) or greater power capacity) are a newer electric power resource, and their use has been growing in recent years. Operating utility-scale battery storage power capacity has more than quadrupled from the end of 2014 (214 MW) through March 2019 (899 MW).

Assuming currently planned additions are completed and no current operating capacity is retired, utility-scale battery storage power capacity could exceed 2,500 MW by 2023.

EIA's Annual Electric Generator Report (Form EIA-860) collects data on the status of existing utility-scale battery storage units in the United States, along with proposed utility-scale battery storage projects scheduled for initial commercial operation within the next five years. The monthly version of this survey, the Preliminary Monthly Electric Generator Inventory (Form EIA-860M), collects the updated status of any projects scheduled to come online within the next 12 months.

Growth in utility-scale battery installations is the result of supportive state-level energy storage policies and the Federal Energy Regulatory Commission’s Order 841 that directs power system operators to allow utility-scale battery systems to engage in their wholesale energy, capacity, and ancillary services markets. In addition, pairing utility-scale battery storage with intermittent renewable resources, such as wind and solar, has become increasingly competitive compared with traditional generation options.

The two largest operating utility-scale battery storage sites in the United States as of March 2019 provide 40 MW of power capacity each: the Golden Valley Electric Association’s battery energy storage system in Alaska and the Vista Energy storage system in California. In the United States, 16 operating battery storage sites have an installed power capacity of 20 MW or greater. Of the 899 MW of installed operating battery storage reported by states as of March 2019, California, Illinois, Southern Oregon Business Journal August 2019 | 21

Battery Storage(Con’t)

and Texas account for a little less than half of that storage capacity.

In the first quarter of 2019, 60 MW of utility-scale battery storage power capacity came online, and an additional 108 MW of installed capacity will likely become operational by the end of the year.

Of these planned 2019 installations, the largest is the Top Gun Energy Storage facility in California with 30 MW of installed capacity.

As of March 2019, the total utilityscale battery storage power capacity planned to come online through 2023 is 1,623 MW. If these planned facilities come online as scheduled, total U.S. utility-scale battery storage power capacity would nearly triple by the end of 2023.

Additional capacity beyond what has already been reported may also be added as future operational dates approach.

Of all planned battery storage projects reported on Form 22 | Southern Oregon Business Journal August 2019

EIA-860M, the largest two sites account for 725 MW and are planned to start commercial operation in 2021.

T R E E R O D S P

The largest of these planned sites is the Manatee Solar Energy Center in Parrish, Florida. With a capacity of 409 MW, this project will be the largest solarpowered battery system in the world and will store energy from a nearby Florida Power and Light solar plant in Manatee County.

100 YEARS

The second-largest planned utility-scale battery storage facility is the Helix Ravenswood facility located in Queens, New York. The site is planned to be developed in three stages and will have a total capacity of 316 MW.

Presented by

The Reedsport Main Street Program

Saturday, August 10, 2019 10:00 am - 6:00 pm Rainbow Plaza Fun for the entire family!

Children’s Parade Carnival Games & Prizes Donut Eating Contest Painted Rocks Scavenger Hunt Strolling Balloon Artist Bounce Houses Face Painting Vendors Food Vendors Car Show & Shine

Free Admission & Games Music & Karaoke by

DJ David Freie Official Radio Station Centennial Carnival

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CENTENNIAL CHAMPION SPONSORS

For event updates, please visit the Reedsport Main Street Program Facebook page or contact Emily Bradley at 541-271-3603.

Southern Oregon Business Journal August 2019 | 23

Central Oregon Economic Indicators July 2019 Edition

(June 2019 data)

www.QualityInfo.org

Industry Gains and Losses (Over-the-year net employment change)

Local Area Unemployment Rates

Crook County

(Seasonally adjusted)

Deschutes County

Graph of the Month

Rents in Deschutes County Continue to Climb

Source: Oregon Employment Department, Zillow Rent Index (ZRI)

$2,000 $1,800

$1,804 Single-Family

Median Monthly Rent

$1,600 $1,400 $1,200

$1,000

Multi-Family

$1,379

$800 $600 $400

Jefferson County

$200

$0

According to Zillow, median rents for single-family residences in Deschutes County were estimated to be $1,804 with a 6.5 percent year-over-year increase. Median rents for multi-family residences were $1,379 with a 6.3 percent year-over-year increase. Comparing May 2019 to 2011 price levels yields a pretty substantial growth in rents for both single-family and multi-family homes – about 71 and 58 percent, respectively. Both rents have been following a nearly identical pattern over the last three years, and will more than likely continue to rise if new housing permits and construction activity don’t meet the Need local data? Want to join the distribution list? Contact me! needs of Deschutes County’s population growth.

Kale Donnelly | Kale.Donnelly@Oregon.gov | 541.306.1645 24 | Southern Oregon Business Journal August 2019

OREGON WORKFORCE AND ECONOMIC INFORMATION Oregon Businesses Report 51,600 Vacancies in Spring

OREGON EMPLOYMENT DEPARTMENT

of $24 per hour in spring, well above the $18 per hour average for all vacancies. The postsecondary training or associate degree job openings also had the highest share (82%) of difficult-to-fill vacancies by education category.

Tuesday, July 2, 2019 Oregon’s private employers had 51,600 job vacancies in spring.

That was 21 percent below the spring 2018 vacancy total of 65,100. This is the second consecutive quarter we’ve seen job vacancies at notably lower levels from the same time one year earlier. Still, spring 2019 vacancies remained slightly above the number of job openings in spring 2014 (46,900), when employment was growing at a similar rate as in recent months.

In addition to higher average starting wages, relatively less training, and higher likelihood of difficulty filling them, these vacancies are also making up a larger share of job openings in Oregon. During spring 2019, vacancies requiring something beyond high school but less than a four-year degree accounted for 26 percent of the total. That was 4 percentage points above the share in spring 2018 (22%), and 8 percentage points higher than spring 2017 (18%).

and vocational nurses, private elementary school teachers, and dental assistants.

We take an interest in this group of vacancies for a few reasons. First, vacancies at these education levels may offer some career opportunities for job seekers on a relatively faster timeline than degree programs. Job openings with postsecondary training or associate requirements also paid an average starting wage

More information about job vacancies in Oregon can be found on the publications page of QualityInfo.org, or by contacting Senior Economic Analyst Gail Krumenauer.

One category with an increase in vacancies over the past year included job vacancies requiring some education beyond high school but less than a bachelor’s degree.

Oregon had roughly 12,700 vacancies with these postsecondary training or associate requirements in spring 2019, an increase of 1,400 (or 12%). Occupations with the most job openings in this group included registered nurses, truck drivers, nursing assistants, licensed practical Southern Oregon Business Journal August 2019 | 25

TECHNOLOGY ASSOCIATION OF OREGON

Lane

“We’re using machine learning and artificial intelligence to solve super-interesting problems”

MATT SAYRE

Excitement in next-level video, and in the local tech community Thrill seeking skydivers in the U.S jump out of airplanes more than three million times each year. Revl, a venture-backed tech startup, is poised to capture those jumps, and other adrenaline-fueled experiences, with cinematic videos in ways that have never been done before.

That’s great for thrill seekers, but why does it matter here? Revl was founded in San Francisco in 2015, but like so many other new

26 | Southern Oregon Business Journal August 2019

and established tech companies, it has core staff in Eugene. It has already received $6 million dollars in seed funding, so some of that money is currently moving through the local tech economy.

Revl software What sets the Revl platform apart from a crowded field of companies offering action cameras, including those from well-known brands GoPro and

DJI, isn’t Revl’s hardware, but in the software that edits the recorded videos.

That software is being developed by a distributed team of software engineers who work remotely, across Oregon and California. Oliver Dain, Director of Software, works for Revl out of CodeChops, a co-working space in downtown Eugene.

“We’re using machine learning and artificial intelligence to solve super-interesting problems,” Dain says. “Our software scans and

automatically edits the videos customers shoot on Revl cameras.”

Revl’s sophisticated software evaluates video footage for both motion and emotion, and records on multiple cameras.

Artificial intelligence evaluates the cameras’ sensor data and also scans the videos for the biggest smiles, the most vivid scenery, and for dynamic tricks.

It then stitches those scenes together into one cohesive video set to music, automatically.

From the time the cameras are set to upload the video footage to the cloud, the whole process to produce a finished video takes just about a minute.

Revl hardware Revl’s sport action camera has built-in physical and electronic image stabilization that helps prevent shaky video. The camera is waterproof, has builtin wifi, and includes sensors that record altitude, speed, and rotation. All of this in a compact form factor that is only about half the size of a soda-pop can.

What’s more, the cameras can be mounted on the side of a helmet, skateboard, or held at the end of a selfie stick.

In-demand skills Revl is tapping the pool of software engineers who can create software that leverages sophisticated technologies like

machine learning. These people are in high demand. In fact, a recent report from hiring website Indeed named Machine Learning Engineer as the best job of 2019, where “best” is defined as those occupations experiencing the fastest growth and offering the highest pay.

Thanks to Revl and similar tech companies, some of those indemand high-earners are landing in Eugene.

he has lived in, including Chicago and Austin, because “the tech community tends to be one big group in Eugene, and the people here are really approachable.” Lively also noted that Eugene has a growing number of community connections to other West Coast tech hubs, making it increasingly easy to work for companies that are physically located here, as well as remotely for companies that aren’t.

So, why Eugene, Oregon?

Interested in working for Revl?

As a remote employee himself, Dain has the flexibility to work for Revl from any city that has good internet connectivity. Dain shared that he and his wife “made a spreadsheet of midsized college towns, and Eugene rose to the top of that list.” The Dains moved to Eugene in 2005.

“My wife likes the coast and I enjoy the mountains, so in choosing Eugene we get both nearby,” he notes.

Scott Lively also works for Revl out of Eugene’s CodeChops. He started with the company just two weeks ago.

“I originally moved to Eugene while working for another tech startup out of San Francisco,” Lively says. “Now with Revl, I get to work on exciting challenges across infrastructure, software in multiple languages, deployments, and UI/UX.” Lively also shared that Eugene stands out from other cities that

They are currently hiring Support Engineers, Senior Backend Generalists, and for Field Operations roles in Eugene, Oregon.

Matt Sayre VP, TAO / Head of TAO - Southern Willamette Valley Matt is an Oregon native and University of Oregon Alumni, with degrees in Economics, Business, and Geography. After finding professional success in the Bay Area and Portland, he followed the Salmon pattern and returned home to raise his two boys in the southern Willamette Valley. In the Spring of 2015 Matt joined The Technology Association of Oregon, based in Eugene. In the Summer of 2015, Eugene was recognized as one of the Top 10 up and coming tech cities in the Nation Technology Association of Oregon 123 NE Third Avenue, Suite 210 Portland, Oregon 97232 503-228-5401

Southern Oregon Business Journal August 2019 | 27

WHAT REPLACES TIMBER?

Oregon

JOSH LEHNER

First at the statewide level, Oregon has seen the Changing of the Guard where the high-tech industry has essentially offset the decline of the timber industry.

What Replaces Timber?

Between the mill closure in Coos Bay, downsizing in Forest Grove, and the lively cap and trade discussions, there has been a renewed interest and focus on the timber industry in Oregon. Our office has fielded nearly a dozen requests recently to speak about the industry, historical changes and the outlook. As such, I have fully updated and expanded our office’s Historical Look at Oregon’s Wood Products Industry which we originally published in 2012 and last updated a couple years ago. See those posts for a more complete summary of the industry’s history.

An updated full set of slides are at the bottom of this post, but first I wanted to re-up some work that we have touched on a few times over the years.

There’s no question that the loss of good-paying jobs has a big, negative impact on a regional economy. The question is what comes next? The answer depends.

28 | Southern Oregon Business Journal August 2019

First at the statewide level, Oregon has seen the Changing of the Guard where the high-tech industry has

manufacturing losses did not have something like this to help balance out their economies.

essentially offset the decline of the timber industry. This is good news for Oregon as a whole and many other places around the country that experienced large

But we know that even if these trends offset at the statewide level they certainly did not at the regional level or for individual

workers. In the 1970s, timber was important statewide but particularly so outside of the Portland region.

Even so, Portland had a timber concentration two and a half times the national average, but Lane County’s was closer to 20 times and Douglas was 40 times the national average. Timber accounted for 20-30% or more of all jobs in most eastern and southern counties. Fast forward to today where the geographic distribution of high-tech jobs is very different. Nearly 80% of tech jobs today in Oregon are in the tri-county Portland area.

If not tech, what? As discussed before, many consultant studies point toward health care and tourism as growth opportunities for rural communities and those who have lost manufacturing jobs. This does work for some locations but, unfortunately, the successes are not necessarily

replicable everywhere due to differences in scenic amenities, logistics, etc and due to the clustering of more advanced medical care in larger population centers. If the neighboring city gets a Level I trauma center, chances are you will not due to the close proximity.

Even so, travel-related industries and health care are growing in most locations due to Americans going out to eat more and an aging population.

But these jobs are not always a 1:1 replacement, particularly in terms of wages and skills. As detailed before, the changes we’ve seen among workingage Oregonians without a college degree over the past generation are not good. If we look at the employment situation and how that has changed, a few such Oregonians were able to enter into a high-wage job, but the vast majority either ended up in a low-wage job or out of the workforce entirely. Now, a tight labor market today is pulling workers back in, so the situation is improving and not deteriorating every year, but the big picture shifts remain.

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Regarding travel and tourism I would draw a distinction as best one can between travel/tourism and outdoor recreation. The former is really about

Southern Oregon Business Journal August 2019 | 29

What Replaces Timber? (Con't) distinguishing line can be fuzzy but I do tend to think about them a bit differently in terms of the nature of the work performed, the local economic impact, and the outlook.

Lastly, the good news for the Timber Belt is that even though it suffered an economic shock on par with what the Rust Belt experienced, people did not pack up and leave in search of better opportunities.

providing services and meeting the needs of people visiting an area.

This includes renting bikes, putting roofs over their heads, and feeding them. The economy is naturally creating a lot of these jobs due to Americans traveling and going out to eat.

However outdoor recreation is, for lack of a better description, a more classic business sector that just happens to focus its products and services on customers for outdoor activities. When it comes to insulated bottles, vehicle mounted tents, and the like they are your classic traded sector manufacturing items which can be sold across the country and around the world. The

Now, some did and Oregon lost population in the early 1980s, but overall this has not been the case. This influx of new residents is good news.

People are voting with their feet, saying they want to live in our communities. This also helps support the local economy. For example, while the decline in manufacturing and farm (think forestry here) jobs as a share was comparable, total employment in the Timber Belt has increased more than twice as much as total employment in the Rust Belt over the past generation or two. This is in no small part due to the population gains.

as detailed in our recent look at industrial diversification, part of the reason Oregon’s industrial structure is changing is not just the good growth in new industries, but also the losses in some of our historical strengths. This will have implications for future business cycles here in Oregon and when coupled with local demographics, implications for the different regions with the state as well.

In terms of the outlook, our baseline is for stability and just a little bit of growth as the housing market improves. This stability is expected until something changes, be it a recession, higher harvest levels or the like. I think it’s clear that if we cut more trees, we’d get more jobs.

However even if we saw 1970s harvest levels again, we wouldn’t see 1970s employment due to automation and mechanization within the industry.

Josh Lehner Salem, Oregon Josh develops the quarterly Oregon Economic forecast, including outlooks for employment, income and housing. Additional responsibilities include the Oregon Index of Leading Indicators, tracking international developments in Oregon’s export markets and forecasting the state's vice revenues including lottery, criminal fines and fees, and tobacco and marijuana taxes. https://oregoneconomicanalysis.com/ 2019/07/25/what-replaces-timber/

Now these employment gains overall are not always a direct replacement for the lost jobs. And

Southern Oregon Business Journal August 2019 | 30

SPRINGFIELD CHAMBER BUSINESS NEWS

BY MAX MOLZAHN

Lane

Chambers of Commerce are well known for bringing professionals together.




Chambers of Commerce are well known for bringing professionals together. The chamber convenes businesses, connections happen, and partnerships are made.

Partnerships are crucial in starting, and supporting, small business in our community, and often, those partnerships happen behind the scenes. In Springfield, our small business community is connected in a web of support that leads to success and our chamber members take pride in the spirit of working together. Below, Springfield Chamber members Copy-Rite Printing and Citizens Bank were able to shed some light on those partnerships and explain how supporting other small businesses is good business.

Max Molzahn Manager, Membership Development Springfield Chamber of Commerce 101 South A Street Springfield OR 97477

Copy-Rite Printing Linda Sitterley, manager of our local Copy-Rite Printing, described

how her business fits into Springfield’s community by serving as a resource for specific types of printing, and for small runs of Southern Oregon Business Journal August 2019 | 31

Springfield Chamber News (Con’t) print. “The printing process is becoming a bit of a dying art in this age of digital technology, and as a smaller shop, we still provide work like business cards, envelopes, invoices, those jobs that require printing that you can’t do on a copier. And if we can’t do it, we will find someone who can.”

Notably, Sitterley mentions that providing these services has helped establish Copy-Rite as a community partner. Linda mentioned, “We have a great relationship with a lot of the local businesses here in the Mohawk area; we have helped with flyers, postcards, labels, marketing materials. Those things that keep all of us up front in the eyes of the community. We fill that marketing and small run niche that people need.” Beyond that, working with small businesses is fun for the team at Copy-Rite. “We like to have customers walk in and call them by their name – letting those small businesses know that they’re valued. That person starting a small business and only needing 100-business cards, we will do jobs like that because we know the importance of relationship.

“Continuity and relationship are highly valued here and among our customers.”

Additionally, those relationships extend beyond just printing.

Sitterley described how those connections within “The Hawks,” a Mohawk area business group, have led to work that Springfield can be proud of. She pointed to Copy-Rite’s work with the City of Springfield on a recent project in town, “At the Veterans memorial park, we were a part of the unveiling of both of the memorials. We were able to help the city with the printing on the marketing piece, and we were also able to go down and serve food to

the veterans. That’s what happens with our Mohawk group – we like to be able to serve where we can and when asked.”

build relationships that pass the test of time. Clients can expect consistency from us – how we listen, how we care, and match our products and services to their

Citizens Bank

needs. That’s not just loans, it could be depository and cash management services, or advice. If we sit down with a customer and they tell us what they need and what they want, we look to find the best outcome for them.”

“Our goal is to build relationships that pass the test of time.”

Finding that best outcome, and seeing those businesses thrive, is part of what makes John enjoy his work with Citizens Bank so much.

Thinking back, he was able to mention a number of projects that made him proud. Specifically, Doty said, “Recently, I partnered with LCOG, and we helped a couple fulfill a life-long dream and helped them take the next step in their business.

Small business is so important to our communities, and helping them grow, make investment, add jobs, and fulfill dreams are what we are about – that’s what makes it fun.”

Finances are a key building block in the foundation of small business, and having a trusted partner is paramount. John Doty knows just how important trust and understanding are to small businesses from his years of work as a commercial loan officer at Springfield’s Citizens Bank. Doty mentioned that trust is built through a variety of services offered to the small business community, “I work with businesses on loans, lines of credit, and more. And that is not just business loans, but equipment loans, real estate – really anything to help them run their business.”

In working with customers to secure the finances needed to achieve their goals, Doty circled back on the notion that it is the relationships with these small businesses that drive success for both the business and Citizens Bank. John states, “Our goal is to

Photo credit to Elora Kelsh

Southern Oregon Business Journal August 2019 | 32

SBDC NEWS

BY GREG HENDERSON

Robert Killen is one of those people you just have to meet to realize what a fine decision the hiring team made in selecting him as the new Lane SBDC Director. The Small Business Development Center hit a home run, but the small businesses and communities of eastern Lane County have done even better.

He's a multitalented businessman, educator and family man. Where a demeanor of quiet knowledge and understanding is needed, he has it.

Patience is often needed when guiding groups of leaders, new business entrepreneurs, coworkers and children. Robert can manage them all.

Experience in the banking industry, a champion speaker with Toastmasters International, involvement in local chambers of commerce, serving on numerous committees - many in leadership

Lane

Meet Robert Killen New Lane SBDC Director

roles, and being a caring husband and father have served him well in his development.

The eleven business advisors listed on the Lane SBDC website is a list of highly skilled and talented individuals whose backgrounds are a significant asset to the students of the Eugene located SBDC office.

It takes an experienced leader with the lifelong learning curve of Robert Killen to effectively lead an organization of this caliber. Robert is that type of leader.

From SBDC Oregon: Published on May 16, 2019 “Robert is a fifth generation Oregonian with a far-reaching professional history. He has managed for-profit and non-profit organizations. He is an artist with a talent for branding who spent

seven years as an art director. He spent another seven years in finance as a manager and commercial banker, helping businesses better understand and manage their resources.

Over the past four years, Robert supported businesses both on the board and on staff at the Springfield Area Chamber of Commerce. During that time he designed business education programs, consulted with business owners on various topics, and led leadership workshops. He is also a highly accomplished and sought after public speaker.

“As a child I watched my father’s long-held business transform from a source of joy to one of heartbreak.

Helping business owners of Lane County craft lasting success and greater joy is a passion and a privilege.”

Southern Oregon Business Journal August 2019 | 33

AGRICULTURE

BY JACKSON SOIL AND WATER

Flood irrigation is an ingenious, inexpensive means to grow tens of millions of dollars worth of agricultural produce.

While current flood irrigation methods result in 40% to 45% efficiency, compared to 70% or greater for sprinkler systems, research shows that flood systems can be as efficient as most other irrigation methods. Such efficiency requires knowing how much water is applied and scheduling

Jackson, Josephine

“Cut-off” Flood Irrigation

A management practice that works for the Inland Rogue Basin

applications according to soil water levels and crop needs.

Some irrigators have started using a method known as “cut-off” irrigation.

Cut-off irrigation is the practice of cutting off the inflow of water onto a field just as (or before) the surface wetted front reaches the lower end of the field or section of field to be irrigated. Infiltration will continue for many hours so that the entire field will essentially get the same

amount of water with little to no return flow.

Eliminating or reducing return flows is vital for protecting water quality. Warm return flows can threaten cold-water fish in the late summer. The Inland Rogue Agricultural Water Quality Management Area Plan specifically cites surface irrigation return flows as a basin-wide contributor of warmed water into area streams and rivers.

Southern Oregon Business Journal August 2019 | 34

Jackson County farmers irrigate about 25,000 acres of pasture.

Figures from local irrigation districts indicate approximately 19,000 acres are still flood irrigated.

Inland Rogue Basin irrigation rule states: “…unmanaged surface irrigation returns from unchanged sets that are above state standards and that flow into waters of the state are unacceptable.”

A case study sponsored by Oregon Department of Agriculture (ODA) and Jackson Soil and Water Conservation District (district) sought to evaluate the effectiveness of “cut- off” irrigation.

The results were very encouraging.

Study design District and ODA staff placed groups of soil moisture sensors about 250 feet apart down slope from a headgate or distribution ditch on two fields in the Eagle Point area.

Each group had a sensor at one, two and three feet depths. Each field had three groups of sensors: at the top, middle, and bottom of the field, or nine sensors per field. After collecting pre-irrigation soil moisture readings, water was turned into the field. The surface water front was mapped and the moisture levels were read every 15 to 30 minutes until the soil was saturated or the readings at a particular depth stabilized.

Results Initial data suggests flood irrigated fields on particular soils are being over-irrigated throughout the season. This is due to a number of

on-farm and irrigation district management decisions regarding set length and irrigation frequency.

On at least three irrigation events during the study, there was a quick wetting of the surface down to the two-foot depth, probably due to the cracking characteristic of the Carney clay soils so prevalent in the area.

The subsurface wetted front continued to move down through the soil, however, and soil moisture at the three- foot depth was saturated or approaching field capacity within 24 hours.

On all the sensor groups, the soil profile was wetted to saturation or near field capacity within 24 hours after the water was turned off.

Some fields reached saturation with water being turned onto the field for only 2.5 hours. This was surprising. Many irrigators, including the manager of these properties, historically apply flood irrigation water on much longer sets.

Recommendations Anecdotal evidence given by the property manager during the trial confirmed what is instinctive for most grass farmers. That is, saturated soils make a poor growing environment for grass roots, and pastures could produce more with less water. This potential productivity boost, along with the reduced time and money required to irrigate for shorter sets or less frequent intervals, provides enough incentive to try “cut-off” irrigation.

While a stream may benefit from the cooled water percolating through the soil back into the stream, far more water, superheated by the summer sun, flows

across the surface of a saturated pasture and adds to the heat of the already warmed, low-flow stream or ditch water.

Irrigators must take the responsibility to prevent water pollution while maintaining optimum production. Cut-off irrigation is one way to accomplish this delicate balance.

Here are things to consider: Knowing when your soil has reached the “half- way” point in water consumption is the key to knowing how frequently you must irrigate.

Gypsum block soil moisture monitors, while not essential, are an inexpensive tool to aid in the correct timing of irrigation water applications. Knowing when the three-foot root zone is getting wet or saturated is more easily done with a soil moisture sensor.

One of the fallacies of irrigating is that the whole field must be soaked. Some landowners “push” water up to a knob or knoll. Ask yourself, “Is it worth harming production on the 90% of the field that is over-watered to adequately water the other 10%?”

For additional information: Jackson Soil and Water Conservation District 573 Parsons Dr., Suite 102 Medford, OR 97501 (541) 734-3143 Oregon Department of Agriculture Natural Resources Division 635 Capitol Street NE Salem, OR 97310 (541) 986-4700

Southern Oregon Business Journal August 2019 | 35

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