On Monday, May 18th the Josephine County Board of Commissioners hosted a presentation from the Grants Pass & Josephine County Chamber of Commerce about the results of the most recent BR&E Survey (Business Retention & Expansion Survey). A collaborative effort between the Chamber, the City of Grants Pass, and Josephine County, the BR&E Survey has generally been done every three years since the year 1999. A total of 77 local businesses participated in this survey over the last year.
This award-winning program heavily uses volunteers, and they generally go out in pairs of 2 and discuss an extensive questionnaire with businesses. The survey takes 45 minutes to an hour to complete and covers wide-ranging topics like concerns, opportunities, how well are the city and county departments doing in the provision of the various services from each department, actual and expected sales/revenue growth, and much more. The general philosophy behind the survey is that the best way to improve the economic vitality of a community is to help the businesses already in that community to grow and expand and the survey should help identify ways we can do that.
In this year’s survey, three of the four top “concerns” of businesses were things largely out of our control at the local level such as worries about a recession, decreasing consumer confidence, and inflation. Availability of qualified workers was the number three concern, and that is somewhat in our control at the local level.
Only 43 percent of companies surveyed said their industry sales/production levels were increasing as compared to 61 percent when the last survey was done a few years ago. This percentage was as high as 78% back in 2017.
In various questions about innovations and changes made by businesses, “expanded use of technology” saw the highest percentage of businesses doing this or expecting to do this. Local resident Chuck Rund, Consultant with Long Research Consultants, LLC who made the BR&E survey presentation, remarked that technology and AI are the biggest trends affecting businesses nationwide today.
Mr. Rund then remarked about how few of the businesses surveyed have internet sales making up a larger percentage of their business sales. Only 14% of businesses surveyed had over 50% of their sales internet-based and only 9% had 25-50% of their sales from the internet. And 42% of businesses surveyed had zero internet sales. The tone implied local businesses may not be leveraging technology enough compared to our peers across the nation.
The top three workforce issues were problems recruiting employees, availability of childcare, and availability of workforce housing. In the Community Disadvantages category, “Housing/Homelessness” was number one and “Governance/Leadership” made the top four of local community disadvantages.
One standout was how well businesses rated services from the various Grants Pass and Josephine County departments. While not pictured on the slides here, the best ranked county department was the Sheriff, followed by the Fairgrounds and the County Clerk’s office. For the City, Police and Fire services topped the best ranked departments. At the very bottom for the County was the Board of County Commissioners, with only 20% giving good ratings and for the City the City Council only received 12% good ratings.
Budgets and Urban Renewal Agencies
Speaking of economic development, which this survey was all about, budgets and urban renewal agencies (for cities in Oregon) play a big role how well services and infrastructure can be delivered and what incentives can be made at the city level to help with business developments.
The City of Grants Pass budget committee recently reviewed and approved the City’s budget in near record time, with only one notable adjustment related to the City’s urban renewal agency. More money was directed from the urban renewal agency to help pay for bond payments related to the City’s wastewater treatment plant upgrade which was done several years ago. This is good because it follows the plan for what the City’s urban renewal agency was supposed to do when it was created nearly 10 years ago and frees up a little more money for the City’s Wastewater utility to tackle a very long list of needed wastewater infrastructure projects.
Urban renewal agencies (URAs) are allowed to cover no more than 25% of the acreage inside a city, and the basic way they work is all the growth in assessed value on properties within the urban renewal zones go to the URA and then the URA funds projects that over time should help incentivize developments and increase property values even more than if those incentives didn’t exist.
URAs are hard to explain, but here’s one way to look at how they work for cities in Oregon and why EVERY city of any size in Oregon should have one. The growth in assessed values takes a little tax money away from the other taxing districts while the URA is in place. So it does slightly impact the City and all other taxing districts. But the portion of the tax coming from the local school district permanent tax rate doesn’t directly take tax revenue away from the school district.
Allow me to explain as simply as possible. The state has a school funding formula that essentially backfills the local tax amounts so that all districts get the proper amount of funding per student. And due to the unique state constitutional laws about how property taxes work, all school districts have different local tax rates. So anything a city URA would take away from the school district’s property tax revenues essentially gets backfilled from state tax dollars.
From the City’s perspective, a URA is almost the equivalent of free grant money, due to how the state school district property taxes work. And it’s like having local control of some of our state tax dollars with limited strings. The main limitation is the URA funds have to be spent on the type of projects in the approved URA plan.
In the case of the Grants Pass URA, the Wastewater Plant expansion project and the new Water Treatment Plant being built today were both significant projects within the URA plan. The City’s URA boundaries were largely drawn around many of the main commercial corridors of Grants Pass and when formed was intended to benefit mainly economic development and business developments. This was and still is a business-centric URA. But the project list and boundaries of the URA have been adjusted slightly over time to include housing development incentives and a couple new projects.
Grants Pass, during the life of its URA, will receive the equivalent of tens of millions of increment tax revenues, much of which are the nearly “free” grant money from state tax dollars that can be controlled at the local level. Of course, it’s all our tax money so nothing is free, but there is big value to getting local control of some of our state tax dollars.
And on the flipside, if a city chooses not to use an urban renewal agency, it will essentially be allowing some of our tax dollars to be used somewhere else in the state. That is of course the hook with all state and federal grant or tax dollars…if we don’t use them someone else will.
This brings us to Cave Junction, the only other incorporated city in all of Josephine County. I recently learned that the City of Cave Junction was considering forming an urban renewal agency recently and in the end the city council chose not to form it. I highly recommend reconsideration of forming a URA in the City of Cave Junction as it could make a huge positive difference over a 20-30 year lifetime of the average URA.
As for budget matters of Josephine County, while the City of Grants Pass budget process is just about done, Josephine County only had its first budget committee meeting on Tuesday, May 19th. As opposed to some of the false and misleading campaign rhetoric coming from the commissioner candidate John West, according to this year’s budget officer Arthur O’Hare, the operating expense portion of the recommended budget for next fiscal year is over $2 million less than the current fiscal year. And there are about 20 less staff positions in this recommended budget as compared to the approved staffing positions in the current year’s budget. In my opinion, this is pretty much the opposite of John West’s recent accusations that the current commissioners growing government and growing the budget.
So once again, I recommend not believing anything coming from the John West commissioner campaign without doing your own research. In my opinion, the false and misleading statements from John West are just as prevalent as they were before Josephine County voters recalled him from office 18 months ago.