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2012-1801-Minutes for Meeting September 12,2012 Recorded 10/5/2012DESCHUTES COUNTY OFFICIAL RECORDS NANCY BLANKENSHIP, COUNTY CLERK 1rd V ~IIL'~7YNM111~1~1~ 1oiarx1twao~,st~ Do not remove this page from original document. Deschutes County Clerk Certificate Page Lb C Deschutes County Board of Commissioners 1300 NW Wall St., Suite 200, Bend, OR 97701-1960 (541) 388-6570 - Fax (541) 385-3202 - www.deschutes.oKg MINUTES OF WORK SESSION DESCHUTES COUNTY BOARD OF COMMISSIONERS WEDNESDAY, SEPTEMBER 12, 2012 Present were Commissioners Anthony DeBone and Alan Unger; Commissioner Tammy Baney was out of the office. Also present were Jon Stark and Joe Centauri of REDI, representing EDCO, and for a portion of the meeting, Roger Lee of EDCO. No representatives of the media or other citizens were present. Chair DeBone opened the meeting at 1:30 p.m. 1. County Loan Fund Request - Consumer Cellular. Mr. Stark gave an overview of the application from Consumer Cellular, which is privately held and headquartered in Portland. They utilize the AT&T wireless network. Their primary marketing strategy is working with AARP and others to provide service mostly to the aging population. The company has 575 employees now, between Portland and Arizona. They have grown at about 30-40% a year for the past six years. They see a need for additional customer service, to add 300 or more employees over the next six years. Coincidentally, they were in town when T-Mobile announced they were leaving their call center location. They were on their way to sign a lease in Arizona. This became a competitive opportunity to sway them. The proposal included an enterprise zone, training cost reimbursement, and a program for equipment costs. The State, City, County, REDI and EDCO were involved. They are applying for a loan of $50,000 to hire 200 employees over the next 18 months. Minutes of Board of Commissioners' Work Session Wednesday, September 12, 2012 Page 1 of 6 Mr. Centauri said they communication about the process, and documents were provided with financial information, assessing cash flow and needs. They evaluated where things are moving for the company, and he has a good sense of their commitment. Mr. Kropp asked if the training is general or specific to their programs. Mr. Stark said they use specific training, different from what most do. For instance, T-Mobile employees handled 7 to 9 calls an hour; this one is 4 to 5, as they spend more time with clients. Their products are user friendly and they do not require contracts. The average wage is about $33,440 to start, with up to $14,000 in benefits. There are opportunities for growth after ninety days. A large percentage of profits is being put back into the company. Commissioner Unger said that perhaps they may be offering jobs to a wider range of people because of the type of customers they have. This application is for the recruitment process, while most are for expansion. This potential loan was a deciding factor when they were looking at the other location. EDCO recommends approval. They would move around March 1, 2014; updates will be provided. The Commissioners were supportive. Commissioner Unger noted that Mr. Centauri is a CPA, so he knows what to look for. Mr. Centauri said that the REDI team has great experience, and there were no obvious red flags. UNGER: Move approval of the loan request. DEBONE: Second. VOTE: UNGER: Yes. DEBONE: Chair votes yes. 2. Other Items. Chair DeBone said that the LIGI (La Pine Industrial Group, Inc.) members were successful with development over the years, but no big companies were brought on board in La Pine. They are spending money on a director who cannot do anything more than sell property that they developed in the industrial park. In question is the future of LIGI and economic development in the area. He is being pressured to deal with this issue. Minutes of Board of Commissioners' Work Session Wednesday, September 12, 2012 Page 2 of 6 Mr. Stark said that he got a call from LIGI member Vic Russell. Mr. Russell was told what works at the regional and local level, and that working under the EDCO umbrella can help with this. Being part of a consistent message is the goal; a company will get the same proposal no matter which city they may end up with. They might be looking at multiple cities based on competition elsewhere. The EDCO model is efficient. La Pine probably does not need someone full-time right away, but over time activity will be generated. They should not create their own entity when something suitable is already available. The delivery system and product is recognized as high quality. They do not need to create their own website and board. LIGI had its own identity, but should be an advisory board now. The City of Sisters is another example. They don't need a full-time person either. These cities have different cultures and identity, but maybe this work can be combined. They will have to be flexible if there is the same manager for both. Mr. Lee stated that Crook County and Jefferson County sometimes raise this question as well. Mr. Stark noted that it is hard to do this job part-time anywhere. Mr. Lee said that Sunriver might be interested in participating on a regional level. A part-time position might best be shared with Sunriver. They can have discussions regarding combining organizations and functions, but it needs to be a good fit. Part might be economic development, part something else. Commissioner Unger noted that there are challenges in industrial and commercial recruitment. La Pine lacks expertise in both. He feels that the global and regional view, but acting locally, is the best way to do this. Take the big picture and then narrow it down. They are looking at the $240,000 the County has with LIGI. They have to get Board permission to spend it. He feels this should be used in La Pine, but hiring someone to run LIGI is not a good use of this money. It should be used to attract a business or develop something. The LIGI board needs a policy direction. Someone who is not too close to the city should help direct this without being compromised. He asked how EDCO could fit La Pine into the model. He wants to know what can be used with this money and whether it needs to be used for something specific. Minutes of Board of Commissioners' Work Session Wednesday, September 12, 2012 Page 3 of 6 Chair DeBone said there needs to be improvements in the blighted area between the highway and the industrial park. The community should be improved so it is more attractive to business. Mr. Kropp stated that as land sells, it is to be reinvested within the County. Commissioner Unger said that the County sold High Desert Rise to the City of Redmond to help them get a jump on this kind of thing. They should be able to provide the same thing for La Pine. Mr. Kropp noted that discussion should be on economic development and the future of La Pine. Childcare options, labor force development and other infrastructure should be in place. LIGI can continue as a nonprofit at some level. They need to have a lot of plans and processes in place, though. Some organizations never want to give up control. Chair DeBone said that Lee Smith retired from LIGI. The others have a passion for this but they need guidance. At this time they just want the money to hire a director. Commissioner Unger stated that this would be a waste of money. They need to focus on that area, but it should be a match or foster more opportunities. Chair DeBone said he likes the idea of a strategic plan and projects, which will keep people busy. They need a plan. The entity as it exists or in a different form needs to decide what they want to do. Mr. Lee stated this can be done through an EDCO agreement, but they need community buy-in. Commissioner Unger asked if EDCO could assist with a vision and plan. Mr. Lee said that the County pays EDCO to cover the County's needs. La Pine is a part of this. Maybe they would need funds for hard costs for a facilitator to manage some of the work. Commissioner Unger said that perhaps this could come out of the $240,000. They need some professionalism there, with a bigger vision, so they can be recognized outside the area. Mr. Lee stated that it might take a few months to get to that, and the people need to be behind it. Minutes of Board of Commissioners' Work Session Wednesday, September 12, 2012 Page 4 of 6 Chair DeBone stated that Vic Russell is asking for help, but basically just wants the money. At one time all the players were involved and it was going well, but Mr. Russell found it less than satisfactory. Mr. Lee said that they need to decide if they want the Chamber to do this instead. LIGI acted like a city council before there was a city. Maybe tell them that the contract is over and you won't reallocate for the same purpose, but you do want to invest in the area. The community needs to come up with a plan as to where this should go. It should be for a finite period of time to determine a direction with other community resources. It can't all be public funding or it won't work long-term. There needs to be a balance. Mr. Kropp said that the $240,000 was specifically set aside to market the County's property for redevelopment. It could be, the contract is over, and the community needs to come up with an economic development plan that will help with the industrial park. This needs to target the origins and purpose, but acknowledge the bigger picture. This is a decision of the County, and needs to directly benefit County property. They need to hold to the intent of the original agreement. The Board needs to be sure what is done is legal. Chair DeBone asked if it is possible to repurpose these funds; whether the intent of the law was black and white. Mr. Lee asked if it would have other uses if the property was sold. Commissioner Unger said they could look to the City to buy it and pay back the investment. Mr. Kropp noted that the talked about selling land to pay towards the jail and other projects. There is a whole list of needs. Commissioner Unger stated that this is different. They are not ready to stand on their own. Mr. Lee said that the Redmond model is a good one. They get motivated to sell and get rewarded. The community wins. Commissioner Unger said they could advise Mr. Russell of the vision, maybe a match to leverage, and that the funds are not for a director but maybe to make the property more attractive. Use a professional contract if needed to get to that. Minutes of Board of Commissioners' Work Session Wednesday, September 12, 2012 Page 5 of 6 Mr. Kropp stated that LIGI could bring a proposal on what their future looks like. Maybe there could be a match over time if they have a plan and performance measures, something that can be judged. And how that plan will help market the industrial land. However, this Board cannot obligate a future Board regarding these funds. Mr. Lee said that if transactions come up that benefit the County property, they could use part of the funds. This would be incremental. Give them a timeline of perhaps six months. They can't rely 100% on public funding. Commissioner Unger noted that no one there has the time to work on this. Mr. Kropp said that maybe they are not ready for this. Commissioner Unger suggested a professional contract, with someone to facilitate and bring back a proposal. Mr. Lee said this might help, but they can't impose that kind of drive and direction from the outside except for perhaps technical expertise. EDCO wants to be a partner, and this is not a money grab by EDCO, but it needs to work for the community. They have to work out their political issues, and this needs to have the community driving it. Being no further discussion, the meeting adjourned at 2:35 p.m. DATED this Day of~ 2012 for the Deschutes County Board of Commissioners. e5~?O-aA~ Anthony DeBone, Chair 6J4,.._ U,4, a- Alan Unger, Vice Chair ATTEST: a . ~ Tammy Baney, Com issioner Recording Secretary Minutes of Board of Commissioners' Work Session Wednesday, September 12, 2012 Page 6 of 6 Deschutes County Board of Commissioners 1300 NW Wall St., Suite 200, Bend, OR 97701-1960 (541) 388-6570 - Fax (541) 385-3202 - www.deschutes.org WORK SESSION AGENDA DESCHUTES COUNTY BOARD OF COMMISSIONERS 1:30 P.M., WEDNESDAY, SEPTEMBER 12, 2012 1. County Loan Fund Request - Consumer Cellular - Roger Lee, EDCO 2. Forester Update - Ed Keith 3. Other Items PLEASE NOTE: At any time during this meeting, an executive session could be called to address issues relating to ORS 192.660(2) (e), real property negotiations; ORS 192.660(2) (h), litigation; ORS 192.660(2)(d), labor negotiations; or ORS 192.660(2) (b), personnel issues. Meeting dates, times and discussion items are subject to change. All meetings are conducted in the Board of Commissioners' meeting rooms at 1300 NW Wall St., Bend, unless otherwise indicated. If you have questions regarding a meeting, please call 388-6572. Deschutes County meeting locations are wheelchair accessible. Deschutes County provides reasonable accommodations for persons with disabilities. For deaf, hearing impaired or speech disabled, dial 7-1-1 to access the state transfer relay service for TTY. Please call (541) 388-6571 regarding alternative formats or for further information. co a i z4h Q) ~a is BRIEFING PAPER FOR Consumer Cellular Request for Deschutes County Forgivable Loan September 5th, 2012 Company Request: $50,000 EDCO Recommendation: $50,000 Proposed Job Creation within 18 months of Aug 6, 2012: 200 new employees Average Pay for New Employees (all positions, excluding commissions): $33,440 Industry: Telecommunications - Customer Service, Call Center Operations Website: www.ConsumerCellular.com Company Background: Consumer Cellular, headquartered in Portland Oregon, has been in business since 1995. Consumer Cellular is a privately-owned mobile virtual network operator (MVNO) utilizing the AT&T Wireless network to provide service in all 50 states. The company is the exclusive wireless provider for AARP's nearly 40 million members, focusing their marketing efforts on the 50+ mature individual consumers. Consumer Cellular has grown by 30%+ for the past 6 years, rapidly approaching 1 million lines of service, and is poised to continue this strong, steady growth. They have 275 employees in Portland, OR working in call center, warehouse, and administrative rolls. In June, 2010, their second call center was opened in Phoenix, AZ. This facility is now nearly fully staffed with over 300 individuals, resulting in the need for a third call center. These positions are necessary to continue to provide the award winning, US-based, customer support that has led to Consumer Cellular's success. The company has leased the former T -Mobile Call Center and has and will be purchasing and installing servers, phone systems, desk computers, networks, and various systems to develop a state of the art call center as employees are hired. They opened their call center on August 6' with approximately 50 employees. They have implemented an extensive training program to ensure the new employees are able to maintain the high level of service Consumer Cellular has become known for. The new Redmond facility will be linked with their existing call centers to seamlessly integrate all offices. They plan to fill approximately 250 positions over the next 18 months and ultimately grow the local employee base to 500-600 individuals. They've committed to 200 over 18 months. Positions will include call center representatives, supervisors, trainers, manager, assistant manager, human resource professionals, facilities and administrative personnel. Each month another 15-20 Customer Service Representatives will be hired. Additional Supervisors and Trainers will be hired as the employees base grows. Consumer Cellular also provides benefits to their employees - not included in the wage noted above - including: health, vision, dental, long-term disability, 401K match, profit sharing, wireless, educational reimbursements, paid maternity/paternity, healthcare administration, 6 paid holidays and vacation pay. EDCO built a recruitment package for Consumer Cellular to compete against another site they were considering. The Deschutes County Loan fund was a part of that package. Due to the rapid need for expansion, EDCO is now expediting those incentive applications and approvals as part of our commitment to this project. The application was submitted on July 5`n prior to the first new hire being made. EDCO Recommendation A due diligence process was completed by the REDI (Redmond Economic Development, Inc.) incentives review committee on August 8, 2012. The participants in the review include, Joe Centanni CP.A, Jim McConnell President/ CEO McConnell Labs and Jon Stark Manager for REDI. After thorough application, project and 3 yr historic financial review the committee supported the following recommendation: EDCO is recommending to Deschutes County an award of $50,000 or $250 per job created over 18 months following the application date. Conditions include: Company hires 200 FTE by March 1, 2014 and maintains that employment until March 1, 2015 Providing quarterly employment updates and the ability to inspect complete financial statements from award date through termination of the yet-to-be executed agreement with Deschutes County. Failure to meet the above provisions would result in partial or full repayment of the loan, with interest. DESCHUTES COUNTY Business Development Forgivable Loan Fund APPLICATION - The Business Development Forgivable Loan Fund disburses Deschutes County moneys for the purpose of increasing employment and capital investment in the county. The Fund has been established to offset the costs of business relocation to and within Deschutes County, including moving of equipment, purchase or construction of facilities, and site improvements such as the extension of public services and utilities. EDCO has been designated by Deschutes County as the administrator of this fund. The magnitude of funding is dependent on job creation (typically $500- $1000 per job). Key Requirements Are: • Grantees must create at least 5 new primary, permanent family wage jobs and shall have retained those jobs for at least one year. • Optional: Grantees must document the investment of at least $5 of new, taxable investments for each $1 allocated from the Business Development Forgivable Loan Fund. Section I - General Information Company Name: Consumer Cellular, Inc. Location (City/County): Redmond/Deschutes Business Type: Service Industry Type: Telecommunications No. of Employees: 275 in Portland, OR and 300 in Phoenix, AZ HQ Address: 7204 SW Durham Rd, STE 300, Portland, OR 97224 State & Federal Taxpayer ID: 0875135-3 & 93-1178435 Company Contact: Jill Leonetti Title: CFO Phone: 971-223-3015 Email: JWWConsumexCellular.com Parent Company. n/a Website: www.ConsumerCeUular.com Section II - Company Profile 1. Please provide a brief overview of your business. Consumer Cellular, headquartered in Portland Oregon, has been in business since 1995. Consumer Cellular is a privately- owned mobile virtual network operator (A4VNO) utilizing the AT&T Wireless network to provide service in all 50 states. The company is the exclusive wireless provider for AARP's nearly 40 million members, focusing our marketing efforts on the 50+ mature individual consumers. Consumer Cellular has grown by 30%+ for the past 6 years, rapidly approaching 1 million lines of service, and is poised to continue this strong, steady growth. We have 275 employees in Portland, OR working in call center, warehouse, and administrative rolls. In June, 2010, our second call center was opened in Phoenix, AZ. This facility is now nearly fully staffed with over 300 individuals, resulting in the need for a third call center. These positions are necessaryto continue to provide the award winning, US-based, customer support that has led to Consumer Celluh&s success. Section III - Project Activities 1. Please outline the proposed activities for these funds. How will access to the Business Development Forgivable Loan Fund support your strategic objectives, while increasing your employment and investment in the Central Oregon region? Consumer Cellular will be purchasing and installing servers, phone systems, desk computers, networks, and various systems to develop a state of the art call center. We will implement an extensive training program to ensure the new employees are able to maintain the high level of service Consumer Cellular has become known for. The new Redmond facility will be linked with our existing call centers to seamlessly integrate all offices. Section IV - Grant Terms and Conditions 1. Total Employment Grantees must create at least 5 new primary, family wage jobs (at $35,090 per year) and shall have retained those jobs for at least one year. Please provide a quarterly projection of expected job creation, including titles and/or descriptions. Also indicate expected wages. Anticipated August-2012 Initial Hiring - Position (Number Hiring) - aggregate average wage $33,444 Call Center Manager (1) Call Center Assistant Manager (1) Human Resources (1) Supervisors (5) Customer Service Representatives (25) Each month another 15-20 Customer Service Representatives will be hired. Additional Supervisors and Trainers will be hired as the employees base grows. We plan to fill approximately 250 positions over the next 18 months and ultimately grow the local employee base to 500-600 individuals. Positions will include call center representative, supervisors, trainers, manager, assist manager, human resource professionals, facilities and administrative personnel. 2. Capital Investment - Optional Although not required, capital investment plans are a helpful indicator of future plans. Grantees must document the investment of at least $5 of new, taxable investments for each $1 allocated from the Business Development Forgivable Loan Fund. Please provide a quarterly capital investment projection. Consumer Cellular is investing immediately in the Redmond facility. We will be purchasing and installing servers, phone systems desk computer, networks, and various systems to develop a state of the art call center. $440,000 estimated initial capital investment. 3. Primary Employer Test Grantees must be private firms in manufacturing, high-technology, or technology-based businesses which have more than 75% of customers outside Deschutes County. What percentage of your customer base exists outside Deschutes County? Consumer Cellular is approaching 1 million lines of service across the United States. Over 99% of our customers live outside Deschutes County.