Scott Swanson
Things are good in Linn County, primarily because the economy has improved significantly, County Commission Chairman Roger Nyquist said last Friday, Dec. 1.
“I’m here to report to you that the state of the county is good and well because the economy is good and strong,” Nyquist told about 100 people during a 40-minute “State of Linn County” report presented at a Forum Lunch sponsored by the Lebanon Chamber of Commerce at Samaritan Lebanon Community Hospital.
Nyquist, who has owned the Lakeshore Lanes bowling alley in Albany for 30 years and in his 17th year on the County Commission, covered a wide gamut of topics in describing his view of the county’s economy, as well as addressing challenges he said local communities are facing.
Economy
Nyquist said county officials are closely tracking local economic data, particularly following the Legislature’s decision two years ago to increase the minimum wage in Oregon.
“They did so in the absence of economic data,” he said. “They literally put numbers on a board as they went along.”
He said he complained to Rep. Phil Barnhart of Eugene, whose 11th District includes the southern Linn County Brownsville and Crawfordsville areas, and with whom he has been able to establish a “good working relationship” after Barnhart helped provide funds to build the Veterans Home in Lebanon.
“The chaos at the legislature ended and I went to see Phil and said, ‘Phil, you guys overshot the mark on this thing. At what point will you do a course correction and how do we get you to do that?’
“For a guy that, philosophically, he and I have very little that we agree on, it was a good and simple conversation and a reasonable one. His response was ‘Well, we would need to see the data that we overshot the mark.'”
Nyquist said he and others have been diligently monitoring the numbers and he presented a summary Friday.
The county has recovered well from the recession in total non-farm employment, with “historic lows” in unemployment and good numbers in average wage levels and real estate values. He said private-sector employment, particularly in jobs that aren’t in the service industries, have not recovered to 2007 levels yet.
Also, the total labor force participation rate in the county are not as high as officials would like to see. Participation numbers may be due to “the aging demographic in our area,” he said.
“Those numbers have dipped and they have not come back up, and we’re not sure why. It’s a number that has us not declaring a victory, running a victory lap over the local economy. That number is still lower than labor economists would like to see.”
He said county officials are “extremely concerned about state overreaching, an increase in regulatory activity that would put the brakes on our local economy.”
Of particular concern, he said, is the Cleaner Air Oregon program being “rolled out” by Gov. Kathleen Brown and the state Department of Environmental Quality. A public comment period on the plan runs through Dec. 22, following nine public hearings around the state.
“Our fear is that that becomes the spotted owl of this decade,” Nyquist said. “You see our manufacturing numbers and you see the financial impact of a manufacturing job versus a service job. We need more of those and not less. We need those folks creating those jobs to feel assured and encouraged to invest additional capital to create more of those jobs, not have this sense of impending fear about what the state will be coming for next.
“It’s a scary situation because a lot of times the legislative activity has a Portland-central kind of focus. They don’t care about the jobs. They don’t need the jobs.
“So as a community, as a county, we need to be diligent in engaging that process as those proposed regulations come out.”
He said federal tax reform could help drive the local economy “for a couple of years.”
“I think their goal and intent to put more money in taxpayers’ pockets will continue to stimulate the local economy for a while.”
Pipeline Program
Nyquist was bullish on the development of the Pipeline program, a public-private effort to prepare local young people for work in the trades, in which Lebanon School District/Sweet Home School District has agreed to participate.
“Basically, it’s to re-energize and re-introduce the trades, if you will,” he said.
“I remember being in this room two or three years ago, talking about training for jobs versus jobs available being completely out of synch in the county and in this community. We all agreed we needed a plumber, not another person with a law degree.
“The Pipeline program and school districts have come together to address that. Some great things are happening.”
He said the program is a result of employers “tired of sitting around complaining about the quality of employees we’re getting” who wrote checks to get the program going.
The results will take time to manifest themselves, “because it takes years to bring someone out of a high school and community college setting that’s employable and ready to go,” but Nyquist said teens will be coming out of high school or community college ready to take jobs that pay “50, $60,000 a year” without four years of college debt.
“Many of us, coming out of high school, are not kids who should be going to college, pursuing master’s degrees,” Nyquist said. “We need to go to work. It’ll be great for communities, it’ll be great for kids, it will be great for families and it will be great for employers in our area because we will have a leg up in terms of work force, especially in the metals industry.”
Particular beneficiaries will be firms like Selmet and Pacific Cast Technologies of Albany, which have seen their market share and work forces mushroom with technological advances in the manufacturing of aerospace jet engines, for which they produce components.
“Selmet, five or six years ago, had less than 300 employees,” Nyquist said. “The last projection I saw, they’re going to be like 750 by 2020. They have over 500 now.
“They and other employers can’t find good help. The Pipeline program is helping in that regard.”
Agriculture
Linn County’s farming operations were “a staple” to the county’s economy during the recession, Nyquist said.
“Farmers were making money. They spent it in our communities on cars, on homes, on whatever.”
He said the boom in hazelnut production, from 22,000 to 35,000 acres in the county over the past few years, is creating some concern about whether the pricing for that commodity will hold up.
A bigger problem is blueberries, he said.
“Folks growing blueberries have gotten hit a bit. The big driver for that is the value of the dollar. As the dollar has moved up in value, we’re losing out.”
Nyquist said he knows one producer who usually gets a $3 to $4 million order each year for berries, which she lost out this year to “somebody in Chile.”
“That’s a lot of berries to not sell, particularly when you’ve already grown them.”
Linn County has physical advantages in “great soil” and water and “the right amount of sunshine in the spring and summer,” he said.
“But the strength of that dollar is a concern. The whole issue gets caught up into whether or not we raise interest rates because we’re running deficits. If you’re going to raise an interest rate, it further strengthens the dollar which, for us, will hurt our economy.”
Construction
Home building is “fantastic” right now, but the shortage of multi-family housing and rentals is a problem, Nyquist said.
“They’re building things as fast as they can hire people and they’re selling them before they’re done.”
The lack of rental housing extends across the county, he said.
“We’re watching multi-unit housing very closely. There’s not enough of it.”
Newcomers to the market are paying “Sacramento or Seattle” prices, “$1,000-, $1,200-per-month for a little 400-square-foot apartment, and they’re not making Sacramento or Seattle kinds of wages.”
Solutions are not obvious, he said.
“I don’t know where that ends. If we were in a different time and thought the government ought to control things, we would get more involved and have the county or cities get more aggressive in what we’re doing in that regard.”
The Legislature’s efforts to enact rent controls have done nothing to help the situation, he said.
“All they did was mess things up. If you’ve got money and you’re going to invest that money to get a return, how likely are you to invest that money in a bunch of apartments that you think the Oregon Legislature is going to restrict how much you can charge for that apartment? That’s an open dialogue that we need to keep having – affordable housing.”
Contributing to the problem is Corvallis’ housing situation, he added.
“Oregon State added a lot of students but they didn’t add a lot of housing.
“We are having some conversations about a regional strategy to housing, but I don’t know how you do that when the thoughts, and attitudes and strategies are pretty diverse at the table. Something’s got to give.”
Drugs and Drug Addiction
Nyquist called the problem of drugs in Linn County “tough stuff.”
“I don’t know anybody who doesn’t know somebody, through an extended family member or something, who hasn’t seen the devastation. I know and see people who, 10 years ago, were the toast of town as young high school athletes, who today are living on the street, addicted to heroin.”
He said the county is discussing how to help Samaritan with its efforts to build a residential drug treatment facility.
“The county has been in talks with (SLCH CEO Marty (Cahill) about what we can do to help get the treatment center up and going, which they initially planned on,” Nyquist said. “Providing treatment for somebody who’s addicted to heroin or opioid or methamphetamines or whatever – the important moment is when they say they are willing and ready to get help for that. That we have an empty bed for them to do that.
“If we don’t give them access when they’re willing, if it’s ‘we’ll put your name in and we’ll find you five or six weeks later,’ we know how that works out. Chances are, you can’t find them.
“So we at the county continue to have talks with Samaritan about that.”
He noted that the county has received an “unexpected” $250,000 in marijuana money from the state, which prompted a wave of chuckles from the audience.
“We hadn’t budgeted to receive the revenue, so we hadn’t budgeted to spend the revenue,” he said. “So I suspect a good portion of that, if they need it, will go to Samaritan to help them get those beds and that facility over here.”
Marijuana
After “adamantly” opposing the legalization of marijuana in both the state and the county, Nyquist said he’s been impressed with the Oregon Liquor Control Commission’s efforts in handling the rise of the industry.
He said he sees problems with an over-supply and with land use issues relating to marijuana production.
“The OLCC is not allowed to cap the supply,” he said. “they can’t cut off the number of growers. That’s a problem because, based on federal law, you can’t export the crop.
“Berries or hazelnuts, they don’t care, right? But there’s a whole bunch more marijuana out there than people are consuming.”
He cited the case of an Oregon man arrested in Nebraska while transporting $1.1 million worth of marijuana in a U-haul.
Also, he noted, there are conflicts between state and federal laws, citing the case of a Dayton man who was sentenced last week to 27 months in federal prison for tending a growing operation on a private farm in Yamhill County.
“Federal officials don’t care what state law was,” Nyquist said.
He said another problem is the “very little discretion” the county has in regulating the impacts of marijuana grows on neighbors, particularly in Brownsville, where the county-controlled urban growth boundary butts up to the city limits.
“We’re seeing some things that don’t make any sense,” he said. “If you wouldn’t allow a hog farm on a five-acre property because of impacts to neighbors, why would you allow five acres of what’s referred to as ‘stinkweed?’ It’s a problem and we may have to test that internally.”
County Lawsuits
Linn County’s $1.4 billion breach-of-contract lawsuit, with 14 other counties, against the state Department of Forestry will go to trial in January, but Nyquist said the county is hoping to take the case straight to the Court of Appeals, rather than going to a jury trial, “which would expedite the resolution of the case.”
He said if the case were to go to a jury, he’s optimistic about its chances.
“Other than one bad day, this thing has gone our way the entire way,” he said.
The county’s other big lawsuit, an unfunded mandate case against the state’s requirement that employers provide paid sick leave for workers, has resulted in a court ruling in the county’s favor and is also going to the Court of Appeals. The issue there will be whether the sick leave requirement is a “program,” which, Nyquist predicted, “is going to be a problem for them because 200 times during the legislative history they called it ‘this great new program.'”
He said he supports paid sick leave.
“My problem was, the state didn’t do the math. They continued to increase everybody’s payroll cost without talking about whether or not it is appropriate to do so.”
The county’s legislative efforts are having an effect, he said, “in very critical ways.”
“Last legislative session they attempted to require a paid family leave program and legislative counsel told members (of the Legislature) they were going to have to come up with a way to pay for it and they couldn’t do that, so it died.
“I have no problem with paid family leave, but I believe it’s between an employer and an employee, based on the conditions and what the employer can afford.”
Willamette Country Music Festival
Nyquist said he’s personally not sure about the festival’s announced intent to move from the Brownsville area to Marion County, and its application to approximately double the number of attendees it can accommodate.
“I don’t know how they get through the Marion County process successfully. They want to put 60,000 people on 100 less acres than they were doing with 25,000 people (in Brownsville). They have years left on their Linn County permit, but it’s capped at 25,000 people.
“We have a role and our role is they are the permittee and they hold the license with us and we will carefully watch that and we will do the best we can to accommodate them if they choose to stay here.”