HomeMy WebLinkAboutEDCO - Business Loan Request-RecommendationBRIEFING PAPER FOR Energyneering Solutions, Inc.
Request for Deschutes County Forgivable Loan
August 17,2012
Company Request: $34,000
EDCO Recommendation: $34,000
Proposed Job Creation by end of 20U: 17 new employees
Average Pay for New Employees (all positions, excluding commissions): $Sl,307
Industry: Professional Services, Manufacturing & Renewable Energy
Website: www.enet:¥YI1eeringsolutions.com
Company Background:
Energyneering Solutions is an engineering, construction and operations consulting finn
headquartered in Sisters with customers across the US and abroad. The principals relocated
the company from California in 2007 and have rapidly grown the business since then.
Approximately 2S% of customers are located in the Pacific Northwest, SS% in other parts of
the country and the remaining 20% in Central and South America, Asia and Europe.
Among Energyneering's current projects is a renewable energy project (waste-to-energy) at
the world's largest landfill in Mexico Oty.
With rapid expansion, the company has had considerable space and growth capital needs.
Funding from the Deschutes O>unty Forgivable Loan Fund will be used to help cover some
of the cost of this growth primarily office equipment and computers for new employees
(see attached Excel spreadsheet with costs for sample positions).
Energyneering originally applied for the Deschutes O>unty Forgivable Loan Fund in
September 2011. Later that fall, a due diligence committee comprised of leaders selected by
SBART (Sisters Business Attraction & Retention Team) and the Sisters Economic
Development Manager (Mac Hay) met with and reviewed financials of the company. It was
determined that the company had significant cash flow and considerable receivables such
that a Forgivable Loan Fund award would offer reasonable risk to Deschutes O>unty.
When the time came to present the project before the O>mmission, EDCO was notified by
the county of a land use compliance issue, which has since Gust recently) been resolved.
EDCO did not feel comfortable recommending an award to the company until this issue
was resolved, so the application was tabled in March. Rather than further penalize the
company for this delay, EDCO is recommending that the job creation that was promised at
the time of application (which has since been met and exceeded) be allowed to determine
their award from the Fund.
This is a somewhat unique situation, and our recommendation would not normally be to
make an award for jobs already created. In the case of Energyneering, we believe it to be the
right thing to do, given that the company did follow through on what it had committed to
do in the original application -which in effect doubled the company's employment in
Deschutes County. Additionally, we do not believe that the company has plateaued in its
expansion -an award will help secure its retention in Sisters in the face of reported
recruitment pressure from other states and communities outside the region for them to
move operations elsewhere. We believe the company principals are committed to staying
here, but an award would make this position more secure.
The City of Sisters has been working very-closely with the company and is currently fully
engaged in a process to annex the Sisters Airport, which Energyneering owns, into the City
via a popular vote in the November election. As such, this project has attained a very-high
profile in Sisters which will only be elevated as the election draws near.
EDeO Recommendation
In addition to its own employment, Energyneering supports indirect job creation in Sisters
and other parts of Deschutes County via supplier companies. The company has very-well
paying jobs and has, for the most part, hired locally from people already living in the greater
Sisters area. Now at over 30 employees, it is one of the largest engineering and renewable
energy solutions companies in the tri-county area.
EDCO is recommending to Deschutes County an award of $34,000 or $2,000 per job
created since the application was completed and reviewed by the due diligence committee.
Conditions include:
• Company maintains total employment of 34 FTE (2080 hours per year) though the
end of 2013.
• Providing quarterly employment updates and complete financial statements from
award date through termination of the yet-to-be executed agreement with Deschutes
County.
Failure to meet the first provision would result in not being able to access the funding, while
failure on the second two could result in partial or full repayment of the loan, with interest.
DESCHUfES COUNTY / OTY OF BEND
Business Development Forgivable Loan Fund
-APPLICATION
The Deschutes Q)tUlty Business Development Forgivable Loan Fund and Gty of Bend Business
Development Forgivable Loan Fund disburse moneys forthe purpose of increasing employment and
capital investment with each respective jurisdiction. The Fund has been established to offset the
costs of business relocation to and within Deschutes County, including moving of equipment,
pun::hase or construction of facilities, and site improvements such as the extension of public services
and utilities. EDCD has been designated by Deschutes County and Gtyof Bend as the administrator
of this fund. The magnitude of funding is dependent on job creation (typically $1 ,000-$2,000 per
job).
This application may be considered a public record and thus be made available for inspection by the
public upon request. Under Oregon public records law, certain trade secrets and proprietary
financial infonnation may be withheld from disclosure. If the applicant wishes for such information
to be withheld from disclosure, please submit a separate letter containing that request. EDCD,
Deschutes County and the Gty of Bend agree to withhold such infonnation from disclosure to the
extent permitted by law.
Key Requirements Are:
• Grantees must create at least five (5) new primary, permanent family wage jobs and shall
retain those jobs for at least one year. '
• Optional: Documented capital expenditures will increase strength of application. Grantees
are urged to document the investment of taxable investments (new equipment, building
improvements) to demonstrate expansion and growth commitment. Please provide a
quarterly capital investment projection.
Responses to the questioos hJawrml rxJt /;e lirrittd to the spue prodded, but
please krep tdal application mtteriaIs to no tmre than 12 {klg?S.
Section I -General Infonnation
Date: September 29, 2011 (Revised August 14, 2012)
Company Name: ENERGYneering Solutions, Inc.
Location (Gty/Count;?: Sisters, Deschutes
Business Type: Engineering, Construction and Operations
Industry Type: Professional Services (traded-sector)
No. of Employees: current: _~expected new:_13_ (September 29,2011)
Actual FULL TIME qualifying new positions since August 01,2011_17_
HQ Address: 15820 Barclay Drive; Sisters; OR 97759
State & Federal Taxpayer ID: 26-1573315
l
OJmpanyOJntact: Sue Dolezal
Title: Accounting Manager
Phone: 541-549-8766 ext 202
Email: sdolezal@ENERGYneeringsolutions.com
Parent OJmpany:
Website: www.ENERGYneeringsolutions.com
Section II -Company ProfIle
1. Please provide a brief overview of your business.
ENERGYneering Solutions, Inc. is an engineering, construction and operations consulting firm
committed to providing quality renewable energy solutions in today's rapidly changing energy
markets. Headquarters for the company is located in Sisters (Sister's Airport) which includes
management, administrative, engineering, construction management and fabrication
operations.
Section III -Project Activities
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? Explain why public funding is
necessruy for the success of this expansion or relocation. Please be specific. How will
these funds help your company grow and add jobs?
Funding by way of the grant/forgivable loan will assist the company in finding the individuals
locally to provide the employee support to engineer, operate and construct the projects
worldwide. The company started in 2007, finding a niche market in the quickly growing
renewable energy field. Since 2007, the company has grown successfully from three employees
to 20. Nearly all employees are residents of Deschutes County and more specifically of the
Sisters area. This includes engineering and management talent, which ENERGYneering has been
successful in either recruiting from the local labor pool or recruiting into the area from outside
Central Oregon.
Cash flow can be Significantly impacted when hiring new employees. The grant/forgivable loan
monies provided by Deschutes County will assist ENERGYneering in finding qualified individuals,
necessary training of new hires (to be productive team members) and to purchase workstations
(computers, monitors, desks, chairs, etc.) to satisfy the growing needs of the company.
Section IV -Grant T enns and Conditions
1. Total Employment
Grantees must create at least 5 new primary, family wage jobs (at $35,300 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 average
wages for all: A) new jobs to be created and B) for total company employment (i.e. sum of
all wages divided by total employees, new and existing).
In response to successful marketing and a reputation for quality, cost-effective work,
ENERGYneering is expecting considerable employment expansion, over an above steady growth
since its establishment. The company's principals are committed to having as many new
employees as practical based in Sisters. Consequently, the 12 positions expected to be added
the last quarter of 2011 and the calendar year 2012 are only local employees within Deschutes
County. Full time positions include:
Proposed Actual
Senior CAD 1 position
Administrative Assistant 1 position
Laborer 1 position
Power System Specialist 2 positions
Electrical Engineer (3 positions) 3 positions
Mechanical Engineer (2 positions) 3 positions
Superintendent of Fabrication and Construction °position
CAD Operator 2 positions
Facility Operator 3 positions {out of area NOT
counted in new hires
In addition to Proposed September 29,2011
Network Engineer 1 position
Operations Support 1 pOSition
Airport Manager 1 position
Project Accounting 1 position
The average salary/wage for all these positions is $51,307 or $24.67 per hour. This compares to
the average wage for all employers in Deschutes County of $35,214 or $16.93 per hour.
Additionally, the company expects to hire at least one part-time field construction worker that is
not included in the list or average wage/salaries above.
2. Capital Investment (Qpt:iom/)
Although not required, capital investment plans are a helpful indicator of future plans and
viability of expansion or relocation execution. Grantees are asked to document the
investment of taxable investments (equipment, new construction). Please provide a quarterly
capital investment projection.
ENERGYneering is heavily invested in the Sisters community. In September 2011, the company
owners purchased 12.5 acres at the Sister Airport, including approximately 6,000 square feet of
existing office space and shop/production space. Hangar space leased out to private aircraft
owners in the area was also part of the acquisition. The company is planning on expanding
these facilities with the addition of new office space -potentially by the end of 2012.
3. Primary Employer Test
Grantees must be private finns 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?
To date, more than 95% of ENERGYneering projects and clients are outside the Central Oregon region.
Over the past year, the company has completed two local jobs at Knott landfill and Sisters High School.
Roughly 35% of the company's business is currently in the Pacific NW, 50% across other parts of the U.S.
and about 15% international.
ENERGYneering Solutions, Inc.
New Hire List
August 2011 through August 2012
Employee Hire Date Part-Time/Full-Time Job Title Yearly Wage*
FUll-time
Hobbs M. Magaret 08/0812011 Full-time Airport Manager $24,960.00
Brian D Blakelock 09/11/2011 FUll-time Construction Manager $37,440.00
Garrett A. Leffler 09/13/2011 FUll-time Mechanical Engineer $45,780.80
Kenneth A. Goff 09/13/2011 FUll-time Network Engineer $60,320.00
Debra L. Vanderhoef 09/1912011 Full-time Executive Assistant $37,440.00
Richard A. Marek 10/24/2011 Full-time Senior CAD $52,000.00
Richard D Church (Anthony Uribe) 11/01/2011 Full-time Laboroer $27,040.00
Bradley C. Jeffers 12/1212011 Full-time Mechanical Engineer $39,520.00
David C. Ledbetter 12/12/2011 Full-time Mechanical Engineer $39,520.00
Wayne Ashby 12/19/2011 Full-time Electrical Engineer $79,040.00
Peter F T erzo 12/2112011 Full-time Power Systems Specialist $79,996.80
Stephen L. Hills 01/09/2012 Full-time Electrical Engineer $72,800.00
Nicholas M. Fornalski 02/06/2012 Full-time CAD $29,120.00
Don C Cort 03/1912012 Full-lime Power Systems Specialist $59,987.20
Thomas W Scannell 04/1812012 Full-time Operations Support $41,600.00
Paul M. Wilson 06105/2012 Full-time Electrical Engineer $49,982.40
Katherine A. Mangum 08101/2012 FUll-time Project Accounting $33,280.00
$872,227.20
Part-time
Cammi J. Benson 11/01/2011 Part-time File Clerk $10,400.00
Casey S. Vantress (Johnathon Abujen) 12/05/2012 Part-time Welder/F abricator $21,840.00
Brandon D. Bradstreet 07/18/2012 Part-time Intern $12,480.00
William M Cyrus 04/1812012 Part-time CAD Drafter Intern $10,400.00
*2080 hours for Full-time
*1040 hours for Part-time
17 Full-time positions
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