Handling of Position Riles Councilors

(This article appeared in the 8/4/10 issue of the Sisters Nugget Newspaper)

By Bill Mintiens EDCO (Economic Development for Central Oregon) has taken the reins and posted an advertisement in several publications, including The Nugget, for Sisters' part-time economic development manager. The ads began appearing Thursday, July 22. The ads state that "EDCO seeks the services of a results-driven professional services independent contractor to fill a part-time manager role for Sisters." The Sisters City Council budgeted and approved $30,000 for the 2010/2011 fiscal year for a part-time economic development manager. The fiscal year started on July 1. EDCO directs people to a more detailed online position description at www.edcoinfo.com, stating that "the independent contractor will provide staffing of the Sisters Business & Attraction Team (SBART) and coordinate with the City of Sisters and EDCO to provide economic development services for the greater Sisters Country area. This 10-month, $30,000 contract-for-services period begins September 1, 2010, and ends June 30, 2011, and will be paid in equal monthly installments by EDCO with funding from the City of Sisters." The need for the position, the actual position description, and the reporting structure have been controversial for several months. The council, wanting clarification on the duties, responsibilities, and reporting structure of the position, turned to Roger Lee of EDCO for assistance. When asked if all the city councilors had reviewed and agreed to EDCO's recently advertised position description (including reporting structure, office location, etc.), Mayor Lon Kellstrom said, "No, they haven't. My choice was to keep the council out of it in favor of an arm's-length relationship in the hiring of the economic development director. We need an arm's-length arrangement, through EDCO, to keep the council out of trouble. We don't want to be accused of using public funds to hire a 'friend' of the council." The mayor was referring to Mac Hay, SBART volunteer chairperson, clearly a leading candidate for this new position. The mayor added, "We decided to move ahead with the posting and hiring process based on the strength of Steve Bryant's (Sisters city attorney) assessment of EDCO's independent contractor agreement (also found on the EDCO Web site listing)." The mayor's decision to move ahead hasn't set well with two councilors. "How can they advertise for a position that has not been approved by the council or the EDCO board? Puzzling," said Councilor Sharlene Weed. "Looks to be a bit of 'cart before the horse' going on. I have not seen a job description, reporting structure, measurable outcomes, etc. I was very surprised that the position was included in the list of items that the city manager would be authorized to initiate during council's recess (ending September 9). This list was handed to council at the last minute, with no time to review. It appears that, for some reason, the mayor did not want the full council to weigh in on this issue." Council President Bill Merrill was similarly surprised. "This is all news to me," he said. "As far as I can recall, the council as a whole has never been briefed on any of this. The only job description I have seen is the one Patty Vandiver presented on May 6 to the budget committee. In that, she indicated that the director would be the chairperson for SBART. "The EDCO piece indicates that the person will be an independent contractor who '...will provide staffing of the SBART and coordinate with the City of Sisters and EDCO.' The Independent Contractor Agreement referred to at the bottom of the piece states 'The independent contractor will be free from direction and control...' but indicates EDCO will specify results. Whatever all that and more means, I haven't the faintest," Merrill said. Commenting on the entire process of selecting, interviewing, and the eventual reporting structure, Mayor Kellstrom added, "It's unlikely that the person will report to the council because we're not economic development people. The interviewing panel will be two or three people from EDCO and a couple of people from Sisters." Regardless of the person or firm chosen, it could be as many as four months into the fiscal year before measurable goals are defined for the position. The independent contractor form states: "Specific performance measures and deadlines for the 10-month period of this agreement will be developed within the first 60 days following execution of this agreement with the contractor, representatives of SBART and EDCO with review and/or input by the Sisters City Council." That leaves July through (potentially) October without a paid person concentrating on economic development challenges. "It just took a lot longer to formulate the position on EDCO's part and to cover all the legal aspects," said Mayor Kellstrom. "The good thing about it, though, is that Mac (Hay) is still doing his SBART stuff."

Will Sisters have an Economic Development Director?

(This article originally appeared in the Nugget Newspaper 7/20/2010)

By Bill Mintiens The Sisters City Council budgeted and approved $30,000 for the 2010/2011 fiscal year for a part-time economic development director. The 2010/2011 fiscal year started on July 1. The money is there, the director is not. Back on May 6, Patty Vandiver, chamber of commerce president and SBART (Sisters Business Attraction and Retention Team) project manager, wrote a letter to the Sisters City Council stating, "The Sisters Country Chamber of Commerce would like to request the consideration of $30,000 to be budgeted into the 2010/2011 fiscal year for a part-time, paid position for an economic development director." Having just entered into their yearly budget cycle, the council dutifully discussed the proposal during budget committee meetings and decided to add the part-time position into the city's 2010/2011 budget. But councilors and budget committee members had reservations. Vandiver's proposal stated that the economic director should be "under direction of the Sisters Country Chamber of Commerce Executive Board of Directors." Councilor Sharlene Weed was a vocal opponent. "I'm not in favor of budgeting $30,000 for this position; it seems like an extravagance during these economic times," she said. "And besides, I have a lot of questions about the position, there are too many unknowns for me. And I'm not in favor of the person reporting to a committee." Chris Tosello, a budget committee member, agreed with Weed. "I think there are too many gray areas about the position right now; we need clarification," said Tosello. Council President Bill Merrill saw the proposal differently. "I would not object to leaving the $30,000 in the budget. But I want to be sure we go through a selection process utilizing people like Jason Carr (Prineville's economic development director) and Lee Smith (La Pine's industrial group manager) who are familiar with the process and needs of the position. And I'd like to see the Sisters chamber add some matching funds for the position. There are a lot of questions that need to be answered between the chamber and the city council," said Merrill. The council, clearly wanting clarification on the duties, responsibilities, and reporting structure of the position turned to Roger Lee of EDCO (Economic Development for Central Oregon) for assistance. EDCO helps to fund and manage economic development director positions in Redmond, Prineville, and Madras. Successful programs in both Prineville (acquisition of the Facebook facility) and Redmond (Altrec, T-Mobile, and several other businesses) give EDCO experience and credibility with hiring and management. When asked about EDCO's role in Sisters' hiring process, Roger Lee, in an e-mail dated June 25, wrote, "We are still trying to work out some of the logistical and legal details. Our board has officially not yet decided to proceed, however I don't see any real roadblocks. I expect that we will have a decision at our July 8 board meeting. Assuming that EDCO is involved as discussed, we would look to advertise, conduct interviews and ideally hire by the first week of August. I would expect that EDCO would coordinate the interviews, but that most of the hiring panel would be comprised of leaders in Sisters." EDCO's July 8 annual meeting, held at St. Charles Medical Center in Bend, went longer than expected, allowing the EDCO board no time for discussion. Roger Lee briefly mentioned the Sisters issue but tabled the discussion. Eileen Stein, Sisters city manager, thinks she understands what Lee means by "legal details." In an e-mail dated July 13, Stein wrote, "Last week Mayor Kellstrom asked me to give our legal counsel an agreement to review. It was an agreement between the city and EDCO relative to the position. So this is what the 'legal' issues probably are." Three weeks into the 2010/2011 fiscal year, there is no sign that Sisters is close to hiring an economic development director. Councilor Sharlene Weed, still opposed to the position and frustrated by the process, recently commented: "We have not had a proposal. What is the plan? Job description? Reporting structure? Measurable outcomes? I would rather use the funds to reenergize our Community Action Team... pay for a part-time director. That person could help 'stimulate' a number of community projects (leadership, outside voice, public art, etc.) as well as 'economic development.'"

Will Sisters get an Economic Development Director?

(This article was originally published in the 5/18/10 issue of the Nugget Newspaper)

The Sisters City Council at their May 13 budget committee workshop discussed a request from the Sisters Business Attraction and Retention Team (SBART) to fund a part-time economic development director. In a letter to the Council dated May 6, Patty Vandiver, Sisters Area Chamber of Commerce President and SBART Project Manager, stated: "The Sisters Country Chamber of Commerce would like to request the consideration of $30,000 to be budgeted into the 2010/2011 fiscal year for a part-time, paid position for an economic development director." The issue of an economic development director position in Sisters is not new. As far back as 2007, as the local economy was beginning to slide, key business leaders were wondering how to retain and attract businesses that provided living/family-wage jobs. (See "Sisters economic summit turns testy," The Nugget, October 31, 2007.) By October of 2008, with the economy deteriorating quickly, local economic development was a key issue in the city council election. Bill Willitts, developer of the FivePine Lodge & Conference Center, didn't mince words that month. "Very soon Sisters and La Pine will be the only Central Oregon communities without an economic development director," said Willitts. (See "Economic development is key issue in Sisters," The Nugget, October 22, 2008.) Redmond, Prineville, and Madras now all have economic development directors that are funded by Economic Development for Central Oregon (EDCO) and private fundraising. In spring 2009, the Sisters City Council addressed the issue of stimulating the local economy through the retention and attraction of businesses with living/family-wage jobs. The council's answer was SBART, an all-volunteer committee formed by the council. Team members include Mac Hay (Chair), Jerry Bogart (Vice Chair), Patty Vandiver (Project Manager), David Winter, Bill Willitts, Erin Borla, Lisa Clausen and John Tehan - all Sisters residents. "SBART is the 'rapid response team' that was envisioned years ago. They take a huge burden off city staff because they can meet the needs of new business inquiries in a timely way," said Eileen Stein, Sisters city manager, early in 2009. A subcommittee of the Sisters Area Chamber of Commerce, the all-volunteer team was selected using a cross-section of the Sisters business, arts, and cultural community. SBART received no funding from the chamber but knew that, with hard work and some "wins," they might convince the city council that future funding for an economic development director position would be necessary. During SBART's first news conference on March 23, 2009 at the Sisters Chamber office, Mayor Kellstrom said "I think everyone's (the various Sisters groups and committees) going to be involved but I think, for the most part, the heavy hitting is going to be done by EDCO and SBART. We just don't have the resources to pay a Bud Prince-type of economic development manager (Redmond's now-retired economic development manager) here; the returns (on investment) just aren't there to justify it." SBART has put much effort into outreach and "attraction" since the spring of 2009. "We've made contact with more than 40 companies over the past 16 months who are very interested in relocating to Sisters, but the lack of financing is what's holding them up," said Mac Hay. By November of 2009 Mayor Kellstrom had seen SBART's progress. "When we started this (SBART)... we didn't really know what kind of response we would get. I've really been impressed with the fact that there's been more than any of us thought possible. There are some (prospects) that are kind of borderline and some that I think have real potential," said Kellstrom. The May 6, 2010 proposal states that the economic director would be "under direction of the Sisters Country Chamber of Commerce Executive Board of Directors." Councilor Sharlene Weed took issue with that reporting structure and the need for the position. "I'm not in favor of the person reporting to a committee. And I'm not in favor of budgeting $30,000 for this position; it seems like an extravagance during these economic times," she said. "And besides, I have a lot of questions about the position, there are too many unknowns for me." Chris Tosello, a city budget committee member, agreed with Weed. "I think there are too many gray areas about the position right now, we need clarification," said Tosello. Shawna Bell, also a budget committee member, initially agreed with Weed and Tosello but later conceded to leaving it in the proposed budget. "I think this proposal was not well-prepared or presented," said Bell. Council President Bill Merrill saw the proposal differently. "I would not object to leaving the $30,000 in the budget. But I want to be sure we go through a selection process utilizing people like Jason Carr (Prineville's economic development director) and Lee Smith (La Pine's industrial group manager) who are familiar with the process and needs of the position. And I'd like to see the Sisters Chamber add some matching funds for the position. There are a lot of questions that need to be answered between the chamber and the city council," said Merrill. Mayor Kellstrom, clearly agitated by the discussion, expressed his sentiments very clearly: "If we're going to pull that ($30,000 from the budget), it's the shortest thinking I can think of! We've received 18 months of free work from Mac Hay and the SBART team. The $30,000 must stay (in the budget). I'm not saying this is a 'payback,' I'm saying this will allow the community to attract and retain the kinds of businesses we need. Our competition is doing it and we need to as well. I also think that the economic development director should be a 'contract employee' paid either through EDCO or the chamber," said Kellstrom. The city council will continue to review its 2010/2011 budget over the coming weeks. The public is invited to sit in on all budget workshops. Meeting schedules are available on the city's Web site, www.ci.sisters.or.us.

Attracting and Keeping Business is a Tough Job

This article was published in the 5/10/10 issue of the Nugget Newspaper http://www.nuggetnews.com/main.asp?SectionID=7&SubSectionID=88&ArticleID=17176&TM=37147.77

Bringing new businesses to Sisters - and keeping the ones that are here - is proving to be a challenge for the citizen volunteers who have taken on that mission.

The Sisters Business Attraction and Retention Team (SBART) has been working on attracting and retaining businesses for about 16 months.

Team members include Mac Hay (Chair), Jerry Bogart (Vice Chair), Patty Vandiver (Project Manager), David Winter, Bill Willitts, Erin Borla, Lisa Clausen and John Tehan - all Sisters residents.

"SBART is the 'rapid response team' that was envisioned years ago. They take a huge burden off city staff because they can meet the needs of new business inquiries in a timely way," said Sisters City Manager Eileen Stein.

A sub-committee of the Sisters Area Chamber of Commerce, the all-volunteer team is a cross-section of the Sisters business, arts, and cultural community.

"Because of the need for confidentiality with potential businesses, we could not be under the city's umbrella, it just made sense to be under the chamber's umbrella," said Vandiver.

SBART receives no funding from the chamber but is working with the Sisters City Council on future funding for marketing programs.

"Right now we don't have our own Web site or marketing materials but, for relocation inquiry purposes, SBART contact information is on the chamber's web site. We need somewhere between $30-50,000 in funding to pay for a marketer to create and execute a marketing plan aimed at potential businesses," said Vandiver.

SBART's outreach and "attraction" efforts have been significant, even without adequate marketing funds.

"We've made contact with more than 40 companies over the past 16 months who are very interested in relocating to Sisters, but the lack of financing is what's holding them up," said Mac Hay.

Hay added "We're talking with one company that could potentially employ over 100 people here in Sisters. They'd like to build a building, but need investors to make it happen."

Much tighter lending guidelines at banks and lending institutions, combined with reluctance by local investors, have left many potential new start-ups without the capital to get their businesses started.

Deanna Allred, a business development officer with the Bank of the Cascades, sees this every day.

"Credit is still pretty tight for start-ups in Central Oregon. Banks are still lending of course, but good credit quality is very important, as is a very well-thought-out business plan," said Allred.

Adding to the tight credit environment, potential Sisters Country owners/investors have shied away from local investment opportunities. Two recent examples include Crown Point Bank, a start-up which heavily solicited local investment, but ultimately dissolved; and Pinnacle Alliance LLC's attempts to fund a senior assisted-living facility in the newly annexed Metolius Meadows Village property. (See related story, page 1.)

"My goal was and is to finance the development through local investment and ownership. Unfortunately, given the economy, I don't think local ownership will happen, investment is likely to come from out-of-the-area sources," said Mark Adolf, president of Pinnacle.

SBART admits that their efforts over the past 16 months have been more toward "attracting new businesses" than retaining existing ones.

"We have about five potential new businesses that could potentially employ about 30-50 people here in Sisters within the next year, depending on how the economy recovers, of course," said Patty Vandiver.

However, these new companies may not make up for the continued loss of companies and jobs from Sisters.

After 15 years in Sisters, Faceout Studio, formerly DesignWorks, moved their office and nine employees this past January from their South Pine Street building to a space in Bend's Old Mill District.

A graphic design studio specializing in publishing, Faceout's clientele is national and the location of the company could be anywhere. Torrey Sharp, co-owner of Faceout, has lived in Sisters for close to 20 years but says the move was right for the company.

"Here's the brutal reality," said Sharp. "Artists and creative people need a variety of cultural influences to stay 'cutting edge' in commercial design. Our nine employees, for the most part, come from larger metropolitan areas. Sisters' 1800s theme really isn't enough to stimulate them. We realized that, after 15 years in Sisters, the environment was stifling the creativity of our employees, most of who commuted from Bend anyway."

Sharp also emphasized that commercial rents in Bend also made the move attractive to his company.

"The Old Mill District offered us a commercial rent that was very close to what we were paying in Sisters - and they really wanted us to relocate there. But we didn't receive any 'incentives' to move to the Old Mill," said Sharp.

A more recent example of a company leaving Sisters is O'Keefe's Company, manufacturer of O'Keefe's Working Hands Créme. The company employed 20 people in full- and part-time positions. Sold to Gorilla Glue of Cincinnati, Ohio, the company's jobs are moving to Ohio. (See related story, page 1.)

SBART volunteers acknowledge the task of retaining businesses is very difficult because they don't always "get wind" of a potential loss until after the fact.

"We're frustrated when we hear through the grapevine that a company is leaving Sisters. We'd like the opportunity to chat with them before they leave town," said Mac Hay.

Stein empathizes with SBART's challenge.

"I think SBART has been concentrating on 'attraction' but, clearly, they realize they also need to concentrate on the 'retention' part of their mission, too," said Stein.

Stein added "Economic development takes a long time. You have to kiss a lot of frogs."

Although the SBART team works well together, it's clear they would appreciate help from all the residents of Sisters Country.

"Everyone in Sisters needs to be the eyes and ears of SBART," said Patty Vandiver. "We all encounter people who come into town and say 'wouldn't it be great to have our business here and live here as well.' We encourage everyone to make note of these contacts and pass this information on to one of us so we can follow up."

Contact information for SBART can be found on the Sisters Country Web site, http://www.sisterscountry.com