Legal Document For Valley County Idaho Economic Development Council

DRAFT SUBJECT TO REVISION
PRIVILEGED & CONFIDENTIAL ATTORNEY - CLIENT COMMUNICATION ATTORNEY WORK PRODUCT
MEMORANDUM
TO:
Willem Braak; Dick Carter; and David Papiez (Valley County Economic Development Council) University of Idaho College of Law, Economic Development Clinic Prof. Stephen R. Miller Law Students: Marc Bybee, Joan Callahan, Nicholas Morgan April 17, 2013 Considerations for formalizing economic development council activities
FROM:
DATE: SUBJECT:
I.
Overview
This memorandum consists of three sections. The first section details our understanding of the issues facing Valley County as well as responses taken and proposed by the existing economic development council. The second section provides legal guidance and examples from similarly-situated communities related to formalities of incorporating an economic development council. (See Attachments A D, R.) The third section provides legal guidance and examples from similarly-situated communities of strategic visioning documents, which, we would suggest, is the next planning stage necessary for an economic development council in Valley County. (See Attachments E Q, S.) Such a strategic plan may, in fact, inform the incorporation process in both the types of corporations formed, as well as the structures of those entities. This memorandum is also in addition to a data table of Idaho economic development corporations provided to the Council in February, 2013, which for purposes of convenience is provided again here as Attachment T.
DRAFT SUBJECT TO REVISION David Papiez, et al. (Valley County Economic Development Council) April 17, 2013 Page 2
II.
Background
On February 21, 2013, at Tamarack Resort near Cascade, Idaho, the University of Idaho College of Laws Economic Development Clinic (the Clinic) met with David Papiez, Controller and Asset Manager of Tamarack, LLC; Dick Carter, then-mayor of Cascade, Idaho; and Willem Braack, Valley County Extension Coordinator, University of Idaho Extension. The Clinic was represented by Professor Stephen R. Miller, and three third-year law students: Marc Bybee; Joan Callahan; and Nicholas Morgan. The rest of this section details our understanding of facts relevant to formation and operation of an economic development council in Valley County, Idaho. We request clarifications of any errors stated here, as well as any additional facts pertinent to legal analysis necessary to legally formalize such a council. Messrs. Papiez and Carter are among the representatives of the existing, unincorporated Valley County Economic Development Council (the Council) and were selected by the Council as liaisons between the Council and the Clinic. Messrs. Papiez and Carter are among representatives of a sub-committee of the Council which is exploring a formal, non-profit entity structure for the Council. Structure of existing, unincorporated Valley County Economic Development Council. The existing, unincorporated Council consists of nine members, eight of which are voting members and one of which is a non-voting member. The eight voting members are allocated as follows: a city council representative from each of the cities of McCall, Cascade, and Donnelly; a chamber of commerce representative from each of the cities of Cascade and McCall; one county commissioner from Valley County; and two non-governmental, at-large members who are selected at the discretion of the governmental members. The Councils non-voting member, Mr. Braak, provides support to the Council by maintaining a website, taking minutes, and as a general facilitator for the Council. Mr. Papiez is an at-large member while Mr. Carter is a former-governmental representative from the city of Cascade. Focus of unincorporated Council. The current focus of the unincorporated Council is on economic development of the region as a whole and less of a focus on the promotion of individual businesses. The primary goal is to create a sustainable and diverse economy for Valley County. The Council seeks to be both visionary as well as a catalyst. Accordingly, the Council is considering a broad range of projects and wants to be able to access a wide range of funding opportunities. The Council is concentrating on building upon and maximizing the strengths and natural resources that are already present in the community such as recreational opportunities but not necessarily looking toward resource extraction. The Council is interested in supporting projects that will add something new to the local economy and support current businesses and industry rather than duplicating what already exists in the community. Further, development and expansion of industry clusters is a goal of the Council.
DRAFT SUBJECT TO REVISION David Papiez, et al. (Valley County Economic Development Council) April 17, 2013 Page 3 The Council anticipates advancing a wide variety of projects. Categorization of projects include infrastructure development in the community such as an airport, a microloans program, both business recruitment and business retention and expansion such as a business plan competition, regional promotions such as regional branding for Valley County, as well as increasing community capacity and skills building for people and businesses in the community such as coordinating informational workshops. Ultimately, the Council is taking an expansive approach to realizing its vision for the community. The Council is interested in adopting a formal structure and establishing itself as an official non-profit entity. The Council may explore the potential for creating a paid professional position which would provide coordination and administrative support to the entity, though this is still in discussion. Considerations for advancing the Council. First, we suggest that, as a consequence of the diversity of potential projects contemplated, the Council may be assisted by a versatile structure or multiple structures to enable it to advance these very different undertakings. Second, before engaging in incorporation, a strategic planning process could assist the Council in determining the legal formations most relevant to achieving short-term, as well as long-term, development goals. Documents for formalizing the Council entity articles of incorporation and bylaws. Although the Council already has a charter and meeting rules, any incorporation will require the Council to formalize its structure through drafting of articles of incorporation and bylaws. Contemplation of these documents should begin now, as they determine the allocation of power between the various interests, which is of paramount importance to the operation of the Council. Section III of this memorandum provides detailed analysis of these issues. We have enclosed examples of these documents, which the Council can use as a starting point or template to guide its discussions. Documents to plan the Councils future activities action plans. In addition to contemplating incorporation documents, we also suggest that an action plan be drafted as soon as possible and, if possible, prior to legal formation of any entities. As guidance, Section IV of this memorandum provides action plans from other recreational, rural areas and has identified some of the stronger points in those plans. The Clinic has also surveyed the action plans to identify commonalities such as partnerships and sources of revenue of relevance to the County. Teleconference on April 16 at 1:35 p.m. We look forward to speaking with the Council on April 16 at 1:35 p.m. (Mountain) to discuss this research and additional research we may provide the Council within the remaining two weeks of the semester in which the Clinic operates.
DRAFT SUBJECT TO REVISION David Papiez, et al. (Valley County Economic Development Council) April 17, 2013 Page 4 III. Formalizing the Council
Formalizing the Council, independent of the corporate formation status chosen, will require the drafting of two important documentsbylaws and articles of incorporationthat will shape the nature of how the Council will operate and the functions that it can perform. To assist the Council in its long-term efforts toward formalization, the only Idaho guide to incorporating nonprofit corporations, Handbook for Idaho Nonprofit Corporations, Third Edition, is provided as Attachment A. This handbook provides guidance on legal formalities necessary to incorporate a nonprofit corporation in Idaho including samples for both bylaws and articles of incorporation. Although the handbook covers a number of subjects, we suggest that its depth is not sufficient to permit a lay person to draft these documents. As a result, this handbook is provided for informational purposes only, and we suggest you seek legal counsel at such time as you draft the formation documents. a. Bylaws Independent of the 501(c) incorporation status ultimately chosen by the Council, it will also need to contemplate and draft bylaws that provide the overarching governance structure for an incorporated Council entity. To provide guidance on the variety of bylaws that could be used by the Council, attached to the memorandum are bylaws of four similarly situated economic development councils, which are as follows: Bozeman, Montana Economic Development Council (Attachment B); Ida-Lew Economic Development Council (Attachment C); and Morgan County, Colorado Economic Development Corporation (Attachment D); Clearwater Economic Development Association (Attachment R). In addition to the Attachments, the Idaho Nonprofit Corporation Act is in Idaho Code Title 30, Chapter 3, can be accessed at http://legislature.idaho.gov/idstat/Title30/T30CH3.htm. The Council should also consider these statutes while drafting bylaws because they provide default governance principles for nonprofit corporations when the corporations fail to adopt bylaws. Thus, if the nonprofit fails to adopt bylaws, or fails to adopt sufficient bylaws, these statutes provide the governance structure or will fill in the gaps of deficient bylaw provisions. Discussed below are select bylaw provisions and issues the Council should consider in establishing organizational bylaws: Drafting and Adopting the Bylaws. Based on how the Idaho Code is written, the Council could possibly draft its bylaws after incorporation. 1 The bylaws are supposed to be adopted by either the board of directors or members of the corporation; therefore, the section is written in such a way that the bylaws could be written after incorporation because there are only directors and members after incorporation. 2 However, the Clinic recommends that the Council consider and draft bylaws before incorporation, and merely formally adopt the bylaws upon incorporation.
1 2
IDAHO CODE 30-3-21. Id.

DRAFT SUBJECT TO REVISION David Papiez, et al. (Valley County Economic Development Council) April 17, 2013 Page 5 Going through the process of drafting bylaws will help the Council better understand why it is incorporating. Offices. The corporate offices will depend on many of the matters discussed below, but the Council needs somewhere to meet and somewhere for mail to go. This may simply be a public meeting space, and a post office box. However, if the organization is more complicated and busy it may be necessary to establish an actual office space to store files and provide working space for the officers of the Council. Something that could help the Council in deciding what type of office space is needed may be defining the Councils purpose. As can be seen from Attachment C, the office information can be designated in an organizations bylaws, or as shown in Attachment G, the office information can appear in the articles of incorporation. 3 The Idaho Code doesnt dictate where this information is placed, but the office/address should be designated in one of the documents. Board of Directors. The Council also needs to make several decisions regarding a board of directors. First, the Council needs to decide how the board will be composed, including the number of people on the board as well as the identities and roles (such as chairman of the board, board member, etc.) of people on the board. The statute controlling the structure of the board is very vague, and saysinter aliathat a corporation must have a board, and that all corporate powers belong to the board. 4 It even says that one board member can hold or exercise all of the power of the board. 5 The Clinic feels this provision is overly vague, and potentially gives too much power to one person; therefore the Council should strongly consider drafting a bylaw provision that overrides this statute. Clearwater, Ida-Lew, and Morgan County economic development council bylaws all have provisions that specify how many directors there can be, what the boards powers are, and who can exercise these powers. 6 These sample bylaws can provide direction to the Council as they draft bylaws. Along this same line, the Council needs to decide whether government officials can be members of the board, or in the alternative, whether members of the board must also be government officials. A 501(c) organization that has government officials as directors may affect whether the organization can be a (c)(3), (c)(4), or a (c)(6), so it is a matter worth considering. This doesnt mean that government officials cant be part of the board, but the Council should realize that including government officials may affect which form the Council can take. Ida-Lew actually requires its directors to be public officials, employee or agents of a) Idaho or Lewis County, b) municipal corporations or quasi-governmental districts within one or more said counties, or c) owner, employee or agent of a private sector business operating within said counties. 7 Additionally, Ida-Lew is organized as a 501(c)(4). 8 It may be that Ida-Lew selected this status because it has government officials as board members.
3 4
Attachment C, p. 1; Attachment G, p. 1. IDAHO CODE 30-3-63(1), (2). 5 Id. 6 Attachment C, pp. 1-2; Attachment D, pp. 1-2; Attachment R, pp. 6-7. 7 Attachment C, p. 2.
Second, the Council should consider how directors are selected and how long a director can serve in a position. Specifically, the Council should consider whether members are elected or appointed. If elected, the Council must decide whether they will be elected by current directors or are the elected by members, should the Council decide to have members)? If directors are appointed, the Council will need to decide whether a director or combination of directors can make appointments. Idaho Code 30-3-72 lays out default provisions for how a board vacancy may be filled, but it can be modified by more specific bylaw provisions. This provision may be particularly troublesome if the Council does not have members, because this provision anticipates member voting. 9 Contrarily, in the Ida-Lew organization, the board can simply fill a vacancy should one occur. 10 Thus, significant change to this provision can be made. Third, how often will the board of directors meet? If the Council is going to be organized it should have regularly occurring meetings to ensure it continues to operate. Idaho Code sections 30-3-46 30-3-54 provide detailed provisions for how often meetings occur, how notice of the meetings is sent, meeting procedure, and even details who can attend the meetings. However, both Ida-Lew and Clearwater created bylaws to override these meeting provisions. 11 One notable provision in Clearwaters bylaws is that it specifies what months meetings must occur. 12 This is different from the statute because the statute requires only one annual meeting, and essentially suggests that board hold more. 13 Clearwaters provision ensures multiple meetings, which will likely help the organization remain vibrant and relevant. Fourth, in addition to having these meetings, the Councils bylaws should state how many directors must be present for a quorum. A quorum is the minimum amount of directors necessary to hold a binding vote over a matter. A quorum should be less than the total board, but it must be a large enough number that a small group of directors cant secretly meet and make decisions on behalf of the board that the majority of the board disagrees with. The statute governing quorums actually designates members as those needing to be present to establish a quorum, and those having voting. 14 Thus, if the organization has no members, there is no way a quorum can be established. Its not incorrect to place voting power in the members, but if the directors have the voting power, then they need to be the ones capable of establishing a quorum. Fifth, the Council needs to define the nature of its meetings. Specifically, the Council should decide who is invited to the meetings (directors, officers, and/or members); who can vote at the meetings; what procedure will be followed at the meetings; and whether the meetings are public or private. Additionally, there may be occasions when action needs to be taken outside of
8 9
Attachment E. p. 1 IDAHO CODE 30-3-72 (1)(a). 10 Attachment C p. 4. 11 Attachment C pp. 2-3; Attachment R pp. 13-14. 12 Attachment R p. 13. 13 IDAHO CODE 30-3-72 (1)(a). 14 IDAHO CODE 30-3-56.
DRAFT SUBJECT TO REVISION David Papiez, et al. (Valley County Economic Development Council) April 17, 2013 Page 7 a formal meeting, and the Council should define what types of decisions can be made outside of a meeting, and even more important who/whom can make these decisions. This is not an exclusive list of issues to consider with regard to a board, but represents the complexity of issues the Council will need to consider in formalizing itself. Officers. The Council will need to determine how many officers it will have, and what the role of those officers will be. Officers typically provide a staff for the organization, and do day-to-day work necessary for running the organization. According to Idaho statute, [u]nless otherwise provided in the articles or bylaws, a corporation shall have a president, a secretary, [and] a treasurer. 15 One officer can hold all three of these positions. 16 Thus, if the Council fails detail what officers it has, this statute provides the default provision. When the Clinic and Council met, it was apparent the Council was considering having at least one officer, an executive director, and was even considering making this a paid position. Thus, if this position is going to exist, it must be spelled out in bylaws. However, before the Council takes the step of paying an executive director it needs to determine (1) what the Councils purpose is; (2) the role of the executive director; and (3) the amount of time this executive director would work. It is very possible that the executive director may only be a part time position and any salary should reflect this. Additionally, the Council should determine whether officers can or must also be directors. Since directors are generally decision makers, and officers are typically employees, mixing the two roles could have problems. For instance, the officer/director could have more of a stake in any decision the board makes (because he or she is paid by the Council) and the officers judgment could be affected by the officers own personal interests. However, mixing the roles could also have benefits because the officer or director would bring knowledge and information to the board, especially in a small community. Members. Much has already been said of members, but the corporation does not have to members so the Council needs to decide whether to have them. 17 Further, when the Clinic reviewed of similarly-situated organizations, it was not uncommon for the organization to have no members. 18 However, it appeared more common for these organizations to have members. 19 Having members, and having them pay membership dues, could provide stable financial support for the Council that would help the Council survive and remain viable. However, having members would also mean more people had an interest in the Council, and could potentially cause more difficulty in running the Council.
15 16
IDAHO CODE 30-3-83(1). IDAHO CODE 30-3-83(3). 17 IDAHO CODE 30-3-34. 18 Attachment C p. 1. 19 Attachment B p. 6; Attachment D p. 1; and Attachment R pp. 4-5.
DRAFT SUBJECT TO REVISION David Papiez, et al. (Valley County Economic Development Council) April 17, 2013 Page 8 If the Council decides to have members, it then needs to define their role. For example, can the members elect directors or remove directors? If so, how many votes are needed to elect or remove? What must a member do to maintain its membership? A review of Clearwater, Morgan County, and Bozeman show various ways of including members the Council should consider. Finances, contracts, loans checks, and deposits. The Council expressed many different ideas for activities the Council could participate in, and it became immediately apparent that the Council could have a significant amount of financial assets. If this is the case, the Council will need to designate who manages these finances, and who oversees this financial manager. Additionally, who will have the authority to contract, obtain loans, sign checks, and make deposits on behalf of the Council? These are all major parts of running an organization, and they should be defined in the bylaws. Article V of the Ida-Lew bylaws, and section 15 of the Clearwater bylaws provide good examples the Council could reference when drafting these provisions. 20 Final remarks on bylaws. The section provides an introduction to bylaws and their importance in framing the Council. The above information is not exhaustive of everything the council should consider when making its bylaws, but is merely illustrative of the types of issues that the Council must address in formalizing its legal entity. b. Articles of incorporation Similar to the bylaws, the articles of incorporation are something the Council needs to consider before organizing. Attached to this memorandum are sample articles of incorporation from similarly-situated economic development corporations, which are those of the following organizations: Ida-Lew Economic Development Corporation (Attachment E); Clearwater Economic Development Association (Attachment F); and Sustain Blaine (Attachment G). Articles of incorporation simply tell what the organization is by defining the structure it will take. This formalization is largely facilitated by use of forms, as illustrated by the attached sample articles of incorporation. However, though articles of incorporation are relatively simple, there are certain provisions that Idaho Code 30-3-17 requires the articles to include. These provisions include: (1) the corporations name; (2) the corporations purpose; (3) the names and addresses of the initial directors; (4) information required by Idaho Code 30-405(1); (5) [t]he name and address of each incorporator; (6) a statement of whether the corporation will have members; and (7) provisions stating how corporate assets will be distributed in the event of dissolution. 21 A final requirement of the Idaho Code is that each person named as an incorporator in the articles of incorporation must sign the articles. 22 Finally, in addition to the required
20 21
Attachment C p. 5; Attachment R p. 16. IDAHO CODE 30-3-17(1)(a)-(g). 22 IDAHO CODE 30-3-17(3).

DRAFT SUBJECT TO REVISION David Papiez, et al. (Valley County Economic Development Council) April 17, 2013 Page 9 provisions mentioned above, there are several other optional provisions that can be included in that can be included in the Councils articles of incorporation, but arent required. 23 Below is a discussion of information to consider when drafting the required provisions of the Councils articles of incorporation. Corporate Name. The corporate name is relatively straightforward matter, but there is a requirement that the name must comply with Idaho Code 30-2-37. 24 This statute requires that the name of the organization include the word corporation, company, incorporated or limited, or some abbreviation of one of this words, or a combined abbreviation of these words.25 Additionally, these words cant be preceded by the word and or a symbol signifying and, such as an ampersand. 26 Additionally, there are several other provisions in this statute that should reviewed after the Council selects a name to ensure the name will not be rejected by the Idaho Secretary of State. 27 The Corporations Purpose. An important issue to keep in mind is when drafting the Councils purpose is that the purpose must be consistent with the form the corporation takes. More specifically, if the corporation is a 501(c)(3), then the purposes of the corporation must comply with all provisions of section 501(c)(3). 28 In order to ensure consistency with IRS requirements, the Council can choose to very generally define its purpose, or attempt to be more specific. A quick review of the attachments shows that both Ida-Lew Economic Development Corp. and Sustain Blaine took the option to be very general in their purpose. 29 Ida-Lews purpose is slightly more specific than Sustain Blaines, but Ida-Lew was always careful to qualify its purpose by saying as permitted by Internal Revenue Code 501(c)(4), or some similar language. 30 Contrary to what Ida-Lew and Sustain Blaine choose to do, Clearwater Economic Development Association was much more specific with its purpose. 31 While there is nothing wrong with taking Clearwaters approach (at least to the Clinics knowledge, as we have not verified whether Clearwaters purpose statement is consistent with Treas. Reg. 1.501(c)), the Ida-Lew/Sustain Blaine approach is preferable. In order to be as specific as Clearwater is, the Council would need to closely track the IRS section it is organizing under to verify compliance with that section. Further, Clearwater may have tied its hands in the future if it wishes to expand its operations. Thus, the Clinic recommends being more general than specific because Idaho
23 24
See generally, IDAHO CODE 30-3-17. IDAHO CODE 30-3-17(1)(a). 25 IDAHO CODE 30-3-27(1). 26 IDAHO CODE 30-3-27(1). 27 See generally id. 28 See generally Treas. Reg. 1.501(c)(3)-1. 29 See Attachment E p. 1 and Attachment G p. 1. 30 Id. 31 See Attachment F p. 3.
DRAFT SUBJECT TO REVISION David Papiez, et al. (Valley County Economic Development Council) April 17, 2013 Page 10 Code doesnt require great specificity, and being overly specific can limit the Councils future options. Name and Address of Each Incorporator. For this provision, the Clinic recommends the council review Article VII of Ida-Lew articles of incorporation. 32 This provision states how many initial directors there will be, as well as a maximum and minimum number of directors. 33 If finally concludes by listing all the names and addresses of the directors. 34 It is a simple yet effective provision. Information Required by Idaho Code 30-405(1). This section requires the Council to list the name of its commercial registered agent. 35 If the Council isnt going to use a commercial registered agent, then the Council would need to provide the name and street address of the entitys noncommercial registered agent. 36 Finally, if the Council isnt using a commercial or noncommercial registered agent, the Council can name a title or office within the newly formed corporation to be the person designated to receive service of process on behalf of the corporation. 37 More specifically, the Council could designate the Executive Director to be the official designated to receive service of process. If the Council decided to name an officer within the corporation to receive service of process, they would also need to include a business address where the person serving in that position can be served, which would likely be the Councils mailing address. 38 In sum, what all the jargon above means, is that the Council needs to select someone, or some office within the organization, to receive service of process in the event someone sues the organization. The Clinic would recommend designating an office within the organization to receive service because the other registered agent options are typically a paid service used by much larger organizations. Name and Address of Each Incorporator. This provision is relatively straightforward, expect for the meaning of the word incorporator. The meaning of the word incorporators is defined by Idaho Code as [o]ne (1) or more persons may act as the incorporator or incorporators of a corporation by delivering the articles of incorporation to the secretary of state for filing.39 In sum, the incorporator(s) is the person that sends the articles of incorporation to the secretary of state. As can be seen from Ida-Lews articles, one of the name directors can also the incorporator. 40
32 33
Attacment E p. 2. Id. 34 Id. 35 IDAHO CODE 30-405(1)(a). 36 IDAHO CODE 30-405(1)(b)(i). 37 IDAHO CODE 30-405(1)(b)(ii). 38 IDAHO CODE 30-405(1)(b)(ii). 39 IDAHO CODE 30-3-16. 40 Attachment E p. 2.
DRAFT SUBJECT TO REVISION David Papiez, et al. (Valley County Economic Development Council) April 17, 2013 Page 11 Statement of Whether the Corporation will have Members. This provision is simple. The council merely needs to say that it will or will not have members. If the Council is going to have members, it can provide further explanation here as to whether the members will vote, pay dues, etc., but such explanation can also occur in the bylaws. 41 Distribution of Assets upon Dissolution. There are several provisions from the Idaho Code that come into play when a corporation dissolves. Additionally, because the Council is forming a non-profit, 501(c) should also be considered when dissolving the corporation. More specifically, the Council can merely state that dissolution and asset distribution will occur in a manner consistent with Idaho Code and the Internal Revenue Code. Both Sustain Blain and IdaLew have used this general type of language. 42 Similar to the purpose provision discussed above, specificity could create inconsistencies and problems. However, vagueness may also create a need for attorneys to become involved in the event of dissolution to insure that the dissolution and asset distribution does in fact comply with Idaho Code and the Internal Revenue Code. Non-mandatory provisions. Finally, any other provisions included in the articles of incorporation are left to the discretion of the Council. The Clinic advises the Council to review Attachments E, F, and G, as well as Idaho Code Title 30, Chapter 3, and the Handbook for Idaho Nonprofit Corporations if any other provisions are needed. The articles can cover the basic mandatory requirements set out herein, but can also include much more, and it is up to the Council as to what non-mandatory provisions to include. For instance, one suggestion from the Clinic is that the Council includes a provision that the assets of the corporation will in no way inure to the benefit of the directors, as one of the sample economic development articles provides. 43 IV. An Action Plan as a first step for the Council
Given the variety of activities that the Council seeks to pursue, it may benefit by starting its formal activities with drafting of an action plan. An action plan is a document that sets forth the Countys proposed actions to further the economic development of the target region. Successful plans tend to identify current strengths and weaknesses of the target region as it exists today; state goals to augment those natural strengths and overcome those natural weaknesses; identify very specific actions to achieve those goals; identify funding sources; allocate responsibility for achieving the goals; and identify ways to measure the success of the actions. Attached are action plans from similarly-situated economic development councils throughout the Mountain West: Chaffee County, Colorado, which is home to the Salida/Buena Vista area (Attachments H & I); La Plata County, Colorado, which is home to the Durango ski
41 42
Attachment E. p. 2 and Attachment F p. 3. Attachment E p. 2 and Attachment G p. 2. 43 Attachment E p. 1.

DRAFT SUBJECT TO REVISION David Papiez, et al. (Valley County Economic Development Council) April 17, 2013 Page 12 resort area (Attachment J & S); Northwest Oregon Economic Development District, which encompasses similarly remote areas (Attachment K); Red Lodge, Montana, which is home to a ski resort community (Attachment L); San Juan County, Colorado, which is home to the Silverton ski resort area (Attachment M); San Miguel County, Colorado, which is home to the Telluride ski resort area (Attachment N & O); the Ketchum-area Sustain Blaine economic development corporation, which is home to the Sun Valley ski resort (Attachment P); and the Southwest Colorado regional plan, which is home to the Durango ski resort community (Attachment Q). As this list makes clear, Colorado communities are leaders in action plans, which is due in part to extensive statewide economic development planning requirements. Colorados bottom up economic development strategy, entitled Colorado Blueprint, is also worth a look. While its impetus is statewide economic development planning, its mandate is to empower regional economic development strategies of the kind that Valley County is contemplating, and which is recommended, as a next step for the Council. The need or goal that received special focus in many of the action plans reviewed was the creation of sustainable jobs through the development of entrepreneurial efforts within the target region. Because the Valley County council has expressed a desire to work toward becoming a catalyst and an incubator for new business development in Valley County, the Clinic would like to point out a few highlights from the attached action plans concerning this goal. Many economic development efforts are beginning to recognize the narrowness of what many refer to as "smokestack chasing" (the practice of attempting to recruit large industry from outside of the target region). Outside recruiting, of course, should not be excluded completely from most economic development efforts, but its limited place has been recognized as has outside recruiting's tendency to create boom-bust cycles. In light of this realization many communities are recognizing the need to focus on and develop the potential that already exists within the target region, especially through the support of citizen entrepreneurs. Many of the economic development corporations in areas that bear similarity to Valley County, Idaho are employing actions consistent with this "economic gardening" approach. The La Plata Economic Alliance has set private sector job growth as one of its top goals and priorities. 44 La Plata County, home to Durango and the Durango Mountain Resort, has identified that its strengths include its vast public lands, its scenery, and its tourism assets. La Plata's weaknesses, however, include low paying jobs, relatively high housing prices, its distance from the markets it may wish to participate in, and its economic leakage. In an effort to remedy these weaknesses and fulfill its goal to improve private sector job growth it plans to expand support to entrepreneurs and small businesses according to a number of strategic actions. The Economic Alliance will identify preferred companies that represent the county well and have potential to grow, and then provide extra financial and resource-based support for those identified companies. 45 Next, the Alliance will create a "lifestyle recruitment committee" to
44 45
Attachment R, pp. 44-45. Attachment R, p.45.

DRAFT SUBJECT TO REVISION David Papiez, et al. (Valley County Economic Development Council) April 17, 2013 Page 13 provide highly targeted recruitment and solicitation for lifestyle/outdoor companies that match the character of La Plata County. In addition to that, the Alliance intends to create a one-stopshop for businesses inquiring about the area and considering permitting. Augmenting the effectiveness of this one-stop-shop the Alliance plans to work with the county and the municipalities in an attempt to reduce permitting time and will create a flowchart that they can distribute to interested businesses describing the permitting process and anticipated timeline of the process. The Clinic highlights these actions to you because they represent a thoughtful plan to address the existing economic potential by fostering existing businesses and business ideas, address the value of strategic recruitment of select supplementary businesses, and address suitor potential by removing obstacles for businesses that may already be looking to locate in the county. The Northeast Oregon Economic Development District, which includes the towns of Enterprise and Joseph in the Wallowas, has been engaged in some interesting efforts to advance their identified goal of collaborative planning in promotion of local entrepreneurship. 46 The District has created an "Individual Development Account" that provides financial resources to low or moderately low income entrepreneurs. The account is devoted to approved applicants who have gone through the business development training the District offers and functions as a matching program for business asset purchases to help improve proprietor income. The Northeast Oregon Economic Development District also has other programs to encourage local entrepreneurship. For example, the District hosts a number of "pub talks" each year in the counties that represent the district. Pub talks are co-sponsored by a community bank and are marketed to local entrepreneurs and small business owners. The talks provide business training opportunities as well as key opportunities for networking and collaboration. Both the pub talks and the Individual Development Account programs rely upon support from partners including the USDA, HUD's Community Development Block Grant Program, and private business contributors. Other programs of note promoting entrepreneurship include Red Lodge's forum program 47 and Chaffee County's action to identify and support growth businesses and support and train entrepreneurs. 48 The City of Red Lodge, Montana, has undertaken to sponsor a forum for entrepreneurs in order to educate them about the business resources of the area and determine their individual needs. The forums include exhibitors involved in small business opportunities such as financial institutions, suppliers, university Small Business Development Centers, and others. Chaffee County, Colorado has determined to identify key growth businesses in their community (similar to La Plata's action) and provide special resources for these instrumental economic players. Additionally, the county has taken action to support and train entrepreneurs and streamline the permitting processes to make business creation more attractive and feasible.
46 47
Attachment K, p.3. Attachment L, p. 46. 48 Attachment I, p. 31.

An effective marketing campaign may also lead to the creation of sustainable jobs and provide customers for local businesses, especially those businesses that are clearly a part of Valley County's tourism industry. Many of the action plans reviewed, with economies similar to that of Valley County, were committed to the effort of either creating a unified marketing campaign or marketing themselves more effectively. The City of Red Lodge, Montana, for example, sought to develop a strategy to improve the inconsistency of their tourism revenue by marketing off-season packages for business retreats and conferences. 49 These packages would provide financial incentive to event planners and businesses by packaging together Red Lodge meeting spaces, catering, entertainment, and activities. The packaging and promotion are to be a joint effort of the City of Red Lodge, the Red Lodge Chamber of Commerce, the Red Lodge Lodging Association, and the Red Lodge Downtown Association. The Northeast Oregon Economic Development District has been interested in supplementing the activities they can effectively market in their region by taking steps to develop bicycle tourism in the area in conjunction with the Oregon Bikeway Program. 50 Also, San Miguel County, Colorado, which includes Telluride, has created an action point to promote off-season tourism by marketing their area restaurants more effectively as both a destination in-themselves and a part of the vacation experience. 51 Each of these actions represents an effort of an organization like yours to support, sustain, and grow the economy of their community. The Clinic offers these highlighted actions as suggestions. Your expertise and familiarity with Valley County will lead you to the most applicable actions. The "Action Plan" document itself, however, may be very useful for you as a planning tool, a discovery tool, and as an exercise to help determine which corporate structure may best serve your interests.
49 50
Attachment L, p.41. Attachment K, pp. 3, 47. 51 Attachment O.

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS
LES BOCK BOSCH, DAW & BALLARD, CHARTERED
NICOLE SNYDER HOLLAND & HART, LLP CHAPTER 8, EMPLOYMENT LAW OVERVIEW
2005 Business and Corporate Law Section, Idaho State Bar
TABLE OF CONTENTS
1. ORGANIZATIONAL AND OPERATIONAL OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1. General Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1.1 Separate Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1.2 Types of Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1.3 Benefit to Public . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.2. Issues to Consider Before Incorporating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.2.1 Limited Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.2.2 Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.2.3 Continuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.2.4 Need to Monitor Corporate Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.2.5 Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.2.6 Limited Liability Companies Permitted in Limited Situations . . . . . . . . . . . . . . . 3 1.2.7 No Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.2.8 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.3. IRS Technical Requirements - Organizational and Operational Tests . . . . . . . . . . . . . . . . . 3 1.3.1 Organizational Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.3.2 Operational Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 1.4. IRS Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 1.4.1 Approval Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 1.4.2 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 1.4.3 Organizations Exempt from Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 1.4.4 Extension of Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 1.5. Financial Information Necessary for IRS Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
TABLE OF CONTENTS - 1
1.6. Distinguishing Private Foundations from Publicly Supported Charities . . . . . . . . . . . . . . . 6 1.7. Organizations Created Under IRC 501(c)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 1.7.1 Characteristics of IRC 501(c)(4) Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . 7 1.7.2 Comparison of IRC 501(c)(3) and IRC (c)(4) Organizations . . . . . . . . . . . . . . . . 8 1.8. Other IRC 501(c) Tax-Exempt Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 2. FORMATION OF A NONPROFIT CORPORATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 2.1. Determining Corporate Purposes and Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 2.1.1 Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 A. Nontax Legal Effects of the Purposes Clause . . . . . . . . . . . . . . . . . . . . . . . 11 B. Idaho Approach to Purposes - Idaho Code 30-3-23 . . . . . . . . . . . . . . . . . 11 2.1.2 Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 A. The Modern Concept . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 B. Ultra Vires (Beyond The Powers) Acts . . . . . . . . . . . . . . . . . . . . . . . . . . 13 2.1.3 Tax Law Considerations Regarding Corporate Purposes and Powers . . . . . . . . . 13 A. Tax Exempt Status in General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 B. IRC 501 of the Internal Revenue Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 C. IRC 521 of the Internal Revenue Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 D. State and Local Tax Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 2.2. Articles of Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 2.2.1 State Law Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 A. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 B. Corporate Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 C. Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 D. Initial Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
E. Office of Registered Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 F. Incorporators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 G. Choosing Between Membership and Nonmembership Structures . . . . . . . 17 H. Statement of Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 I. Duration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 J. Management of Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 K. Common Optional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 2.2.2 Tax Law Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 A. Exempt Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 B. Private Inurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 C. Political Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 D. Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 E. Private Foundation Prohibitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 2.2.3 Issuance of Certificate of Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 2.3. Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 2.3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 2.3.2 Bylaw Provisions Explicitly Permitted by Statute . . . . . . . . . . . . . . . . . . . . . . . . 21 A. Membership Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 B. Call of Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 C. Notice of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 D. Classes of Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 E. Quorum and Vote . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 F. Number of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 G. Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 H. Conflicts of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
I. Election and Duties of Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 2.3.3 Other Bylaw Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 A. Elaboration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 B. Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 C. Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 D. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 E. Financial Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 F. Corporate Seal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 3. ORGANIZATIONAL MEETING OF THE NONPROFIT CORPORATION . . . . . . . . . . . . . . . . . . 25 3.1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 3.2. The Organizational Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 3.2.1 Basic Requirements of the Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 A. Time and Place of Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 B. Written Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 C. Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 3.2.2 Temporary Chair and Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 3.2.3 Approval of Filing of Articles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 3.2.4 Approval of Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 3.2.5 Authorization to Make Filings with the IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 3.2.6 Adoption of Conflict of Interest Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 3.2.7 Election of Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 3.2.8 Authorization of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 3.2.9 Corporate Seal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 3.2.10 Corporate Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.2.11 Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 3.2.12 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 3.2.13 Bank Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 3.2.14 Specific Activities or Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 3.2.15 Next Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 4. OBTAINING TAX-EXEMPT STATUS UNDER IRC 501(C)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 4.1. Procedure for Obtaining Tax-Exempt Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 4.1.1 Tax Exemption for IRC 501(c)(3) Organizations . . . . . . . . . . . . . . . . . . . . . . . . 30 4.1.2 Organizational Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 4.1.3 Form SS-4, Application for Employer Identification Number . . . . . . . . . . . . . . 30 A. Online Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 B. Telephone Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 C. Mailing the Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 4.1.4 Documents Required for Approval of Exemption . . . . . . . . . . . . . . . . . . . . . . . . 31 A. Form 1023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 B. Conflict of Interest Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 C. Form 2848, Power of Attorney and Declaration of Representative . . . . . . 33 D. Form 8821, Tax Information Authorization . . . . . . . . . . . . . . . . . . . . . . . . 34 E. Articles of Organization and Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 F. Statement of Nondiscrimination Policy on Schedule B . . . . . . . . . . . . . . . . 34 G. IRC 501(h) Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 H. User Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 I. Employee Identification Number (EIN) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 J. All Other Documents Specified in the Form 1023 Checklist . . . . . . . . . . . . 34 K. Form 1023 Checklist and Cover Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.2. General Hints on Preparation of Form 1023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 4.2.1 Application Must Be Complete . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 4.2.2 Employer Identification Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 4.2.3 Narrative Description of Your Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 4.2.4 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 4.2.5 Conformed Copies of Organizing Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 4.2.6 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 4.2.7 Stock Corporations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 4.2.8 Applications Filed by Schools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 4.3. Nonprivate Foundation Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 4.3.1 IRC 509(a)(1) Support Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 4.3.2 IRC 509(a)(2) Support Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 4.3.3 IRC 509(a)(3) Support Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 4.3.4 IRC 509(a)(4) Public Safety Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 4.3.5 Disqualified Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 4.4. Rulings and Determination Letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 4.4.1 Definitive Rulings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 4.4.2 Advance Rulings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 A. Five-Year Advance Ruling Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 B. Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 C. Termination of Advance Ruling Before End of the Reliance Period . . . . . 40 4.4.3 Appeal Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 A. Administrative Appeal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 B. Appeal to Courts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
C. Declaratory Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 4.5. Organizing Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 4.6. Finding an Accountant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 5. MAINTAINING CHARITABLE STATUS UNDER IRC 501(C)(3) . . . . . . . . . . . . . . . . . . . . . . . . . 43 5.1. Information Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 5.1.1 Who Must File Information Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 5.1.2 When Information Returns Are Due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 5.1.3 General Reporting Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 5.1.4 Reporting Revenues Under Form 990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 A. Three Categories of Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 B. Program Service Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 C. Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 D. Sales of Capital Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 E. Special Fundraising Events and Activities . . . . . . . . . . . . . . . . . . . . . . . . . 45 F. Sales of Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 5.1.5 Special Considerations in Reporting Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 45 A. Three Expense Categories Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 B. Payments to Affiliates; Grants and Allocations; Specific Assistance . . . . . 45 C. Reporting Compensation of Officers, Directors and Employees . . . . . . . . 46 5.1.6 Special Balance Sheet Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 A. Distinguishing Various Categories of Receivables . . . . . . . . . . . . . . . . . . . 47 B. Distinguishing Various Categories of Payables . . . . . . . . . . . . . . . . . . . . . 47 C. Reporting Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 5.1.7 Other Information to be Reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 A. Reporting Changes in Scope or Form of Operation . . . . . . . . . . . . . . . . . . 48
B. Reporting Donated Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 C. Special Reporting for Private Schools . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 5.2. Tax Consequences of Amendments to Articles and Bylaws . . . . . . . . . . . . . . . . . . . . . . . . 49 5.2.1 Requirements of IRC 501(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 5.2.2 Loss of Tax-Exempt Status Due to Change in Articles or Bylaws . . . . . . . . . . . 49 5.2.3 Prior Determination Letter Affords No Protection . . . . . . . . . . . . . . . . . . . . . . . 50 5.2.4 Submission of Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 5.3. Rules Regarding Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 5.3.1 Duties of Organization and Use of Contributions . . . . . . . . . . . . . . . . . . . . . . . . 50 5.3.2 Deductibility of Contributions by Donor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 A. Public Charity Versus Private Foundation . . . . . . . . . . . . . . . . . . . . . . . . . 51 B. Substantiation Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 C. Quid Pro Quo Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 D. Gifts of Appreciated Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 E. Gift and Estate Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 5.4. Restrictions on Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 5.4.1 Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 5.4.2 Lobbying Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 A. General Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 B. Exception: IRC 501(h) Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 5.4.3 Campaign Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 5.4.4 Private Inurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 5.4.5 Fostering Private Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 5.4.6 Excess Benefit Transactions: IRC 4958 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.5. Unrelated Business Income Tax (UBIT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 5.5.1 Unrelated Business Income Defined . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 5.5.2 Exemptions from UBIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 A. Types of Income Excluded from UBIT. IRC 512(b) . . . . . . . . . . . . . . . . . 59 B. Types of Activities Exempt from UBIT. IRC 513(a)-(h) . . . . . . . . . . . . . . 59 5.5.3 Unrelated Business Income and Debt-Financed Property . . . . . . . . . . . . . . . . . . 60 5.5.4 Income from Publicly Traded Partnership Interests . . . . . . . . . . . . . . . . . . . . . . . 60 5.5.5 Periodical Advertising Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 5.5.6 Unrelated Business Income Deductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 5.5.7 Reporting Unrelated Business Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 5.5.8 Excessive Unrelated Business Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 6. OPERATION OF A NONPROFIT CORPORATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 6.1. Acting Like a Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 6.1.1 Necessity of Formal Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 6.1.2 No Requirement of Membership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 6.1.3 Member Sovereignty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 A. Ultimate Authority of Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 B. Apportionment of Members Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . 63 6.1.4 Management by the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 A. Election or Appointment of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 B. Authority of the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 C. Terms of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 D. Removal and Resignation of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 E. Election of Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 F. Supervision of Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
G. Authority to Execute Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 H. Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 6.2. Meetings of Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 6.2.1 Annual Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 6.2.2 Regular Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 6.2.3 Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 6.2.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 6.2.5 Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 6.2.6 Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 6.2.7 Parliamentary Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 6.2.8 Conduct of Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 A. General Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 B. Members List for Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 C. Voting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 D. Voting Entitlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 E. Absentee Ballots . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 F. Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 6.2.9 Resolutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 6.2.10 Location of Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 6.3. Meetings of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 6.3.1 Regular and Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 6.3.2 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 6.3.3 Telephonic Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 6.3.4 Action Without Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
6.3.5 Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 6.3.6 Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 6.4. Corporate Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 6.4.1 Statutory Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 6.4.2 Minutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 6.4.3 Membership Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 A. Where Kept . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 B. Transfer of Membership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 6.4.4 Annual Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 6.5. Financial Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 6.6. Amendments to Articles or Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 6.7. Officers and Directors Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 6.7.1 Officers Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 A. Standard of Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 B. Indemnity and Limitations on Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 6.7.2 Directors Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 A. Business Judgment Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 B. Self-Dealing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 C. Director Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 D. Duty of Loyalty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 E. Wrongful Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 6.7.3 Limitation of Liability for Officers, Directors, and Volunteers . . . . . . . . . . . . . . 78 7. OTHER TAX CONSIDERATIONS FOR NONPROFIT CORPORATIONS . . . . . . . . . . . . . . . . . . 79 7.1. Property Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 7.1.1 Religious Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
A. Qualification for Exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 B. Scope of Exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 7.1.2 Charitable Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 A. Qualification for Exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 B. Scope of Exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 7.2. State Sales Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 7.2.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 7.2.2 Nonprofit Exemptions for Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 A. Educational Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 B. Hospitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 C. Health-Related Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 D. Food Banks and Soup Kitchens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 E. Canal Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 F. Forest Protective Associations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 7.2.3 Nonprofit Exemptions From Sales Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 7.3. Unemployment Compensation Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 7.3.1 Federal Unemployment Tax (FUTA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 A. Organizations Subject to FUTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 B. Exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 C. Obligations Under FUTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 7.3.2 State Unemployment Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 A. Organizations Subject to Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 B. Obligations to Withhold Wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 7.4. Federal Insurance Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
7.4.1 Organizations Subject to FICA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 7.4.2 Obligations Under FICA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 7.5. Private Foundation Excise Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 7.5.1 Tax on Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 7.5.2 Self-Dealing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 7.5.3 Failure to Distribute Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 7.5.4 Excess Business Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 7.5.5 Jeopardy Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 7.5.6 Taxable Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 8. EMPLOYMENT LAW OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 8.1. General Overview of Employment Law Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 8.1.1 Potential Liability to the Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 8.1.2 General Personnel Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 8.1.3 Potential Liability to Others for Employees Conduct . . . . . . . . . . . . . . . . . . . . . 87 8.2. General Overview of Wrongful Discharge Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 8.2.1 Contractual Bases for Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 A. Employee Handbooks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 B. Oral Promises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 8.2.2 Common Law Bases for Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 A. Public Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 B. Constructive Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 8.2.3 Statutory Basis for Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90 A. Discrimination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90 B. Retaliatory Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 8.2.4 Prevention of Wrongful Discharge Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
A. The Application/Pre-Employment Process . . . . . . . . . . . . . . . . . . . . . . . . . 94 B. Employee Policies/Handbook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 C. Personnel Record Keeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 D. Discipline Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 E. Performance Appraisals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 F. Grievance Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 8.3. Unemployment Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 8.3.1 Payment Into The Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 8.3.2 Recovery by the Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 A. Grounds for Recovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 B. Process for Recovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 8.4. Workers Compensation Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 8.5. Wage and Hour Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 8.5.1 Minimum Wage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 8.5.2 Overtime . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 A. Hours Worked . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 B. Computing Overtime Pay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 C. Exemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 D. Recordkeeping Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 E. Deductions From Wages and Payment of Wages Upon Separation . . . . . 106 8.6. Special Issues Employers May Face . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 8.6.1 Americans With Disabilities Act and Idaho Human Rights Act . . . . . . . . . . . . 107 8.6.2 Family Medical Leave Act of 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 A. Leave in Progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
B. Serious Health Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 C. Intermittent Leave . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 D. Paid or Unpaid Leave . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 E. One Year Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 F. Notice and Scheduling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 G. Two Employees, Same Family . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 H. Medical Certification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 I. Second and Third Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 J. Notice Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 K. Restoration of Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 L. Effect on Accrued Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 M. Employment Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 N. Highly Compensated Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 O. Continuation of Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 8.6.3 Related Tort Causes of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 A. Intentional Infliction of Emotional Distress . . . . . . . . . . . . . . . . . . . . . . . 112 B. Fraud . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 C. Defamation and Self-Defamation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 D. Invasion of Privacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 E. Tortious Interference with Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 8.7. Relationship Between a Tax-Exempt Organization and Staff . . . . . . . . . . . . . . . . . . . . . 114 8.7.1 Employees, Independent Contractors and Volunteers . . . . . . . . . . . . . . . . . . . . 114 8.7.2 Tort Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 A. Respondeat Superior . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 B. Negligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
8.7.3 Contractual Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 8.8. General Sources of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 8.8.1 Idaho Department of Commerce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 8.8.2 Idaho Department of Commerce and Labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 8.8.3 Idaho industrial Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 8.8.4 Idaho Department of Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 8.8.5 Idaho Human Rights Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 8.8.6 United States Department of Labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 8.8.7 United States Immigration and Naturalization Service . . . . . . . . . . . . . . . . . . . 116 8.8.8 Occupational Safety and Health Administration . . . . . . . . . . . . . . . . . . . . . . . . 116 8.9. Checklists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 8.9.1 Interview Guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 8.9.2 Employee Warnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 8.9.3 Termination Checklist . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118 9. DISSOLUTION OF NONPROFIT CORPORATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 9.1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 9.2. Methods of Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 9.2.1 Pre-Organizational Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 9.2.2 Post-Organizational Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 9.3. Articles of Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122 9.3.1 Contents of Articles of Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122 9.3.2 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 9.4. Effects of Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 9.5. Known Claims Against Dissolved Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
9.6. Unknown Claims Against Dissolved Corporations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
ACKNOWLEDGMENTS
Work on the First Edition of The Handbook for Idaho Nonprofit Corporations (Handbook) began in April 1988 at the organizational meeting of the Business and Corporate Law Section of the Idaho State Bar. Over a period of two years with the help of many individuals, the First Edition was published in June of 1990. That volume was the product of the talents and expertise of more than twenty-five attorneys and other professionals, each of whom freely contributed his or her time. After the 1993 overhaul of Idaho's Nonprofit Corporation Act ("Act"), the Business and Corporate Law Section of the Idaho State Bar recognized that a thorough revision of the of the Handbook would be necessary in order to address the changes in the law. Within a few weeks after the passage of the Act, the original editorial committee reassembled to discuss a strategy for these revisions. Even though the original editorial committee understood the need for substantial changes to the Handbook because of the Act, they also understood that the original format had received a favorable reception from both attorneys and lay people alike. The first decision reached, then, was to retain the original format, that is, a practical and functional approach designed for use by a broad spectrum of individuals. Because of the magnitude of the writing project for the First Edition, the original drafting committee for the Handbook was large. That committee consisted of thirteen writers who developed original material for the eight chapters in the First Edition. The scope of the project for the Second Edition was significantly different, however, and a drafting committee of five was chosen to write new chapters to replace the chapters or portions of chapters that had been superseded by the Act, add a new chapter on employment law, and augment the tax sections of the Handbook for which some augmentations seemed appropriate. We gratefully acknowledge those writers who made the Second edition of the Handbook possible, including Bobbi K. Dominick, Boise; John B. Hinton - Hinton Law Offices, Boise; Nicholas G. Miller - Davis, Wright, Tremaine, Boise; Andrea L. Murray Morrison Knudsen Corporation, Boise; Phoebe Smith - Office of the Attorney General, Boise. Although the statutory and regulatory foundations of the law and taxation of nonprofit organizations have been relatively stable since the publication of the Second Edition in 1994, there have been a number of changes in the tax area that suggest a need for a major revision, and, hence, the publication of this Third Edition of the Handbook. Those changes relate to rules that Congress has enacted to address issues of excess compensation and IRS concerns over director conflicts of interest. Also, the IRS has recently implemented significant changes to Form 1023 that have rendered the Second Edition of the Handbook out-of-date. Accordingly, the time is ripe to publish this Third Edition. We owe many thanks to the Business and Corporate Law Section of the Idaho State Bar and its Governing Council. They have been enthusiastic supporters of this project from the inception of the First Edition and have continued that support throughout the production of the Second and Third Editions.
Linda Montgomery, Legal Secretary at Bosch, Daw & Ballard, Charted, brought this Third Edition into its final form. Her word processing skills, editing and patience are gratefully acknowledged. The response and encouragement of the Idaho State Bar, the community of nonprofit organizations in Idaho and many attorneys across the state have made our work on this project particularly rewarding and worthwhile. Their continued enthusiastic support and frequent comments have also made our work on the Handbook a satisfying experience for all of us who have spent time writing, editing and shepherding this project from start to finish. We greatly appreciate their support and interest. They, more than anyone else, have helped us to recognize the fact that the Handbook has become a useful tool for charitable and other nonprofit ventures. We hope that the Third Edition will fulfill that goal.
Les Bock Bosch, Daw & Ballard, Chartered 225 N. 9th Street, Suite 210 Boise, Idaho 83702 (208) 344-8990
INTRODUCTION
Lawyers and accountants are called upon from time to time, often on a pro bono basis, to assist in the formation of tax-exempt organizations, or to sit on the boards of directors of these organizations. Nonprofit organizations are often confronted with legal issues as they seek to operate in a responsible manner and comply with ever-changing tax laws. To meet the need for guidance in these matters, the Committee on Nonprofit Organizations of the Corporate and Securities Section of the Idaho State Bar first undertook the drafting of The Handbook for Idaho Nonprofit Corporations in 1988. The First Edition of the Handbook was published in June, 1990. Designed for use by attorneys, accountants, and lay people, the Handbook sought to address, with a practical and functional approach, tax and nontax considerations in the formation and operation of a nonprofit corporation with tax-exempt status under IRC 501(c)(3) of the Internal Revenue Code. The former Idaho Nonprofit Corporation Act was replaced with a new statute during the 1993 legislative session, effective July 1, 1993. Because of the sweeping changes that were implemented with the enactment of Idaho's new Nonprofit Corporation Act, the Business and Corporate Law Section of the Idaho State Bar concluded that a major revision of the Handbook was in order. The Second Edition of the Handbook incorporated all changes to Idaho law that were enacted with the 1993 Nonprofit Corporation Act as well as all relevant tax law changes since the publication of the First Edition. This Third Edition has been published to address additional changes, primarily in the tax area, that have occurred since the publication of the Second Edition in 1994. The Handbook is organized "chronologically," that is, beginning with pre-incorporation considerations and concluding with the dissolution of the corporation. To facilitate its use as a reference tool, the Handbook has a detailed Table of Contents and an Appendix containing forms and other supporting materials. Tax and nontax matters are, in most cases, treated in separate chapters. The user, however, should not construe this division to mean that the tax considerations can be ignored in the organization's daily life and left for the tax specialist when it is time to file the organization's annual information return. Maintenance of tax-exempt status is often vital to the corporation's funding, and the tax consequences of each corporate action needs to be reviewed. Although designed for use in part by the lay person, the Handbook is not a "do-it-yourself manual" that can be used without professional assistance to form or to operate a nonprofit tax-exempt corporation. Rather, it is intended to acquaint lay people with important issues affecting tax-exempt organizations so they can work effectively with their professional advisors.
The focus of the Handbook is on corporations with tax-exempt status under IRC 501(c)(3), though a brief discussion of other types of tax-exempt organizations, particularly IRC 501(c)(4) organizations, is included. Other nonprofit organizations, such as homeowners' associations, trade groups, and social clubs will find this work helpful because they are confronted with many of the same legal issues. Nevertheless, such users must use this handbook with caution inasmuch as this volume may not address the issues, especially the tax issues, that are unique to such organizations. There is no plan to supplement this Handbook on a regular schedule. Every attempt has been made to ensure that the text is current as of March, 2005. Comments and suggestions are welcome. They should be addressed to Les Bock, Bosch, Daw & Ballard, Chartered, 225 N. 9th Street, Suite 210, Boise, Idaho 83702.
1. ORGANIZATIONAL AND OPERATIONAL OVERVIEW.

1.1. General Requirements. IRC 501(c) of the Internal Revenue Code grants certain organizations tax-exempt status so they do not have to pay tax on their income. In addition, IRC 170 allows an income tax deduction for donations to some, but not all, of the IRC 501(c) exempt organizations. This Handbook focuses on organizations, primarily corporations, that seek tax-exempt status under IRC 501(c)(3). An organization must strictly comply with the statutory requirements in order to obtain and maintain tax-exempt status under IRC 501(c)(3). Failure to comply can result in the loss of the exemption, the imposition of taxes (including interest and penalties) and excise taxes. 1.1.1 Separate Organization. IRC 501(c)(3) allows a tax exemption for corporations, community chests, funds, or foundations organized and operated exclusively for religious, charitable, scientific, educational and various other purposes. A charitable organization, directed to public charitable activities, must actually exist. Individual worthwhile activities do not receive tax benefits, and no tax deduction is available for "personal ventures," regardless of their beneficial nature. A taxpayer asserting that he was engaged in "the work of the Lord" claimed his income was not taxable and that he was entitled to a deduction for a contribution made to the Grace Gospel Mission, which was created by the taxpayer. The Tax Court concluded: From the scanty evidence presented by the petitioner, it is obvious that the enterprise or work carried on by petitioner and his wife, however praiseworthy in character, was solely an individual activity. There is no evidence of such enterprise being a corporation, community chest, fund, or foundation ....' The Code makes no provisions for the deduction of contributions to the religious undertaking of an individual as a personal venture where there is no formal organization which conforms to the requirements of the statute." Hewitt v. Commissioner, T.C. Memo (1957-112) (emphasis added). 1.1.2 Types of Entities. IRC 501(c)(3) provides an income tax exemption for "corporations, and any community chest, fund or foundation...." While the statute does not expressly include a trust as an entity eligible to be treated as an IRC 501(c)(3) exempt organization, the IRS has recognized that a trust may be included within the scope of IRC 501(c)(3). Hopkins, The Law of Tax-Exempt Organizations 4.1(a) (2003) (citing Rev. Proc. 82-2, 1982-1 C.B. 367). The IRS may treat an association as a corporation even though it is not formally incorporated. IRC 7701(a)(3). While an unincorporated association might meet the requirements of IRC 501(c)(3) for tax purposes, other aspects of the law frequently make an unincorporated association less desirable than a nonprofit corporation. Idaho has adopted the Uniform Unincorporated Association Act with some modifications. Idaho Code 53-701 et seq.
HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 1
1.1.3 Benefit to Public. The law also requires that the charitable activity benefit the general public. A taxpayer who brought suit attempting to modify the selection process for delegates to the Montana State Democratic Convention did not make a gift or provide a service that was to or for the use of the state for exclusively public purposes. "'[N]ot every payment to an organization which qualifies as a charity is a charitable contribution' . . . [and] not every act of service to a segment of the public, regardless of how laudable, is service to the United States or a State, or a political subdivision of either." Doty v. Commissioner, 62 T.C. 587, 593-594 (1974) (quoting from Estate of Willis D. Wood, 39 T.C. 1, 6 (1962).
1.2. Issues to Consider Before Incorporating. 1.2.1 Limited Liability. A nonprofit corporation incorporated under the laws of the State of Idaho will protect its officers, directors, and members against liability to the corporations creditors. Idaho Code 30-3-39 provides that the members of a nonprofit corporation are not personally liable, as such, to third parties for the debts, liabilities, or obligations of the corporation. Likewise, under general principles of corporate law, the corporation's directors would be protected from liability to third parties by the corporate organization. This would include protection against liability for the corporation's contractual obligations and for the tortious conduct of the corporation's agents or employees. Obviously, officers and directors should be careful not to guarantee any corporate loans or other obligations, since such a guarantee will remove the corporate shield for that obligation. Liability issues are more fully discussed in Handbook, 6.7. Idaho Code 6-1605 provides officers or directors of charitable corporations with immunity from civil liability arising from their conduct as officers or directors. This immunity is available regardless of whether the entity is incorporated. Handbook, 6.7.3. Officers, directors, and members will receive the greatest protection from liability if the corporation consistently conducts its affairs in an appropriate corporate manner and keeps adequate records. Proper operation of a corporation is discussed in Handbook, 6.1, 6.2 and 6.3, and important recordkeeping functions are discussed in Handbook, 6.4 and 6.5. 1.2.2 Governance. The corporate structure provides a means of governing a charitable entity that is easily understood by most individuals and one with which attorneys and other advisors are generally familiar. 1.2.3 Continuity. The corporate form permits continuity of organization, whether the corporation is organized as a membership or nonmembership corporation under Idaho law. 1.2.4 Need to Monitor Corporate Status. Idaho law requires an annual meeting of the corporation's shareholders or members. This provides an excellent mechanism for the corporation's advisors to review the status of operations. Regular monitoring of the corporation's activities can be essential to its continued well-being as a charitable organization.
1.2.5 Costs. Persons setting up charitable organizations frequently attempt to minimize costs in creating the entity. While this is understandable, the cost of incorporating should not be significantly different from the cost of creating any other formal entity. The IRS requires the governing instrument to contain specific provisions concerning the entity's organization, authority and operation. Certain limitations on the entity's activities and the use of its funds must be included in the organizational document. The cost of preparing an organizational document for a trust, unincorporated association or foundation should be about the same as the cost of preparing the documents necessary to incorporate. 1.2.6 Limited Liability Companies Permitted in Limited Situations. A limited liability company that files Form 1023 is treated as a corporation rather than a partnership. As a corporation, it may file Form 1023. Note, however, that a limited liability company should not file an exemption application if it wants to be treated as a disregarded entity by its tax-exempt parent. The IRS will only recognize a limited liability company under section 501(c)(3) if all its members are section 501(c)(3) organizations. 1.2.7 No Partnership. The Court of Appeals for the District of Columbia has held that a tax-exempt partnership is not permitted. Emerson Institute v. United States, 356 F.2d 824 (D.C. Cir. 1966). While the Emerson case involved only two taxpayers, there are no definitive criteria that can help determine whether a particular association of two or more persons is a partnership or an association that would be taxable as a corporation. IRC 7701(a)(3) provides a balancing test for determining whether an entity is taxable as a partnership or as a corporation. Incorporating the entity removes any possible doubt about whether it is a partnership and therefore not eligible to be a tax-exempt entity. Reg. 301.7701-3. 1.2.8 Termination. The corporate structure also provides statutory guidelines for terminating the entity. Compliance with Idaho Code 30-3-110 through 30-3-115 assures those who were involved with the corporation that all corporate creditors have been properly paid or otherwise provided for in the dissolution proceedings. No such protection exists for a trustee or for the members of an unincorporated association. Their only protection from potential creditor claims is the statute of limitations.
1.3. IRS Technical Requirements - Organizational and Operational Tests. To be tax-exempt under IRC 501(c)(3), a charity must be organized and operated exclusively for one or more of the tax-exempt purposes specified in that section. An entity failing to meet either the "organizational test" or the "operational test" is not entitled to exemption under IRC 501(c)(3). 1.3.1 Organizational Test. The organizational test requires that an entity's articles of organization set forth certain limitations on the entity's purposes, its activities during its existence, and its distribution of assets upon termination. These restrictions must be found in the creating document, that is, in the articles of incorporation, trust instrument, articles of association, or other written instrument by which the organization was created. The IRS has stated that bylaws cannot remedy a defect in the corporate charter. Similarly, operating rules cannot substitute for provisions that should be included in a trust agreement. In the case of an unincorporated association the test HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 3
must be met by a basic document creating the association. Subsidiary documents are not amendments to the creating document and may not be relied on. The specific provisions required in the articles of incorporation for a nonprofit corporation that intends to seek tax-exempt status under IRC 501(c)(3) are discussed in Handbook, 2.2, and are included in the sample articles as a part of the Appendix of this Handbook. 1.3.2 Operational Test. The operational test requires that the organization be operated exclusively for one or more of the exempt purposes specified in IRC 501(c)(3). If more than an insubstantial part of its activities is not in furtherance of an exempt purpose, it will not qualify. (a) The organization is not operated exclusively for exempt purposes if its net earnings inure in whole or in part to the benefit of private shareholders or individuals. A private shareholder or individual is any person "having a personal and private interest in the activities of the organization." Reg. 1.501(a)-1(c). The organization must serve a public rather than a private interest. It cannot be organized or operated to benefit the private interests of the creator or has family, shareholders of the organization, or persons controlled, directly or indirectly, by such private interests. The term "charitable" is used in IRC 501(c)(3) in a generally accepted legal sense and is not to be construed as limited by the separate enumeration in that section of specific tax-exempt purposes. Among the charitable operations permissible are relief of the poor, distressed, or underprivileged; advancement of religion; advancement of education or science; erection or maintenance of public buildings, monuments, or works; lessening the burdens of government; and promotion of social welfare by organizations designed to accomplish any of the above purposes. It likewise may attempt to lessen neighborhood tensions, eliminate prejudice and discrimination, defend human and civil rights secured by law, or combat community deterioration and juvenile delinquency. Reg. 1.501(c)(3)-1(d)(2). In carrying out its primary purpose, the organization may advocate social or civic changes or present opinions on controversial issues with the intention of molding public opinion or creating public sentiment to accept its views so long as it does not become an "action" organization. The regulations provide three instances in which an organization will be treated as an action organization: Reg. 1.501(c)(3)-1(c)(3). (i) An entity becomes an action organization if a substantial part of its activities is attempting to influence legislation by propaganda or otherwise. Advocating the adoption or rejection of legislation, and
(b)
(c)
(d)
contacting or urging the public to contact members of a legislative body with respect to legislation is regarded as an attempt to influence legislation. An entity may advocate the adoption or rejection of legislation if such advocacy is an insubstantial part of its activities. (ii) Participation or intervention, directly or indirectly, in any political campaign on behalf of or in opposition to any candidate for public office, whether national, state, or local, will make an organization an action organization. An entity is an action organization if its main or primary objective or objectives may be obtained only by legislation or a defeat of proposed legislation and it advocates, or campaigns for, the obtainment of such objective or objectives as distinguished from engaging in nonpartisan analysis, study, or research, and making the results thereof available to the public.
(iii)
1.4. IRS Qualification. 1.4.1 Approval Required. An entity generally may not be treated as a IRC 501(c)(3) exempt organization unless it has received approval from the IRS. 1.4.2 Notice. A newly formed organization must notify the IRS of an intention to claim tax-exempt status within 27 months after the close of the month during which the organization comes into existence. IRC 508; Reg. 301.9100-2; Form 1023, Part VII; General Instructions for Form 1023. If notice is properly given, the exemption relates back to the date the organization was formed. If late notice is given, the exemption will only take effect as of the day the notice is received. Filing the Form 1023 with the IRS meets this notice requirement. 1.4.3 Organizations Exempt from Notice. Organizations that normally have annual gross receipts of not more than $5,000 and churches are not required to give notice of their claims of exemption to the IRS. Note: As a practical matter, however, such organizations will encounter difficulties with third parties and the IRS if they have not formally filed for and received a tax-exempt determination letter from the IRS. It is, therefore, recommended that organizations seek a formal exemption even if they are not technically required to give notice to the IRS. IRC 508(c)(1). 1.4.4 Extension of Time. The IRS will consider requests by an organization for relief from failure to file its notice within the 27-month deadline. IRC 508(c)(2); Reg. 301.9100-3; Form 1023, Schedule E. If a late filer qualifies for exempt status under IRC 501(c)(3) and is granted the requested relief, its exempt status will be recognized retroactively. Otherwise, it may be treated as an IRC 501(c)(4) organization from the date of incorporation until the postmark date of the application. The factors that the IRS will consider in deciding whether to grant relief are set out in Handbook, 4.1.4A. HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 5
1.5. Financial Information Necessary for IRS Notice. Notice to the IRS of tax-exempt status requires that the organization report certain financial information. Form 1023 requires the following: (1) if in existence for more than four years, a statement of revenues and expenses for the most recent four years; if in existence for more than one year but less than four, a statement for each year in existence and projections of future revenues and expenses for a total of three years; for a new organization, projections for the current year and for each of the next two years; a copy of the organization's balance sheet; a list of the organization's unusual grants during the years included in the financial statements; details of the organization's fund-raising program, actual and planned, including the extent to which it intends to use professional fund-raisers; and details regarding compensation and other financial arrangements with officers, directors, employees and independent contractors.
(2)
(3)
(4) (5)
(6)
(7)
The financial data must be current within 60 days of the application. Obtaining tax-exempt status under IRC 501(c)(3), including preparation of Form 1023, is discussed in more detail in Handbook, Chapter 4.
1.6. Distinguishing Private Foundations from Publicly Supported Charities. The Internal Revenue Code creates a presumption that any organization described in IRC 501(c)(3) is a private foundation unless it notifies the IRS of its intention to be treated as a publicly supported charity. IRC 508(b). A private foundation is an IRC 501(c)(3) organization that does not have broad public support or does not actively function in a supporting relationship to such an organization. While a private foundation is recognized as a charitable institution, it is usually controlled and supported by a single source such as the donor or a particular company. Private foundation status imposes more stringent controls on the operation of the charity. Moreover, excise taxes are imposed on the net investment income of private foundations and when the foundation fails to comply with the operating requirements of the Code. A detailed treatment of the operation of private foundations is beyond the scope of this Handbook. However, to properly organize and operate a public charity, it is necessary to understand the distinction between public charities and private foundations and to be aware of the importance HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 6
of maintaining nonprivate foundation status and the consequences of the failure to do so. The tests for distinguishing public charities from private foundations are discussed in Handbook, 4.3 and excise taxes applicable to private foundations are discussed in Handbook, 7.5.
1.7. Organizations Created Under IRC 501(c)(4). Another group of frequently encountered non-profits are described in IRC 501(c)(4). This section exempts from federal taxation: [C]ivic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare, or local associations of employees, the membership of which is limited to the employees of a designated person or persons in a particular municipality, and the net earnings of which are devoted exclusively to charitable, educational, or recreational purposes. Entities organized under this section may be very similar to those created under IRC 501(c)(3), but they are allowed to conduct activities that IRC 501(c)(3) organizations are not permitted to conduct, most notably certain lobbying and legislative activities. 1.7.1 Characteristics of IRC 501(c)(4) Organizations. Entities organized under this section consist of two types, civic leagues or public interest organizations, and local associations of employees. (a) Civic leagues - A group can only qualify as a civic league or similar organization if it is not organized or operated for profit, and is operated exclusively for the promotion of social welfare. (i) Promotion of Social Welfare - An organization is operated for the promotion of social welfare if it is primarily engaged in promoting in some way the common good and general welfare of the people of the community, seeking to bring about civic betterments and social improvements. While this does not include direct or indirect activity in political campaigns for individual candidates, a (c)(4) group can influence legislation and educate the community as to particular issues. Reg. 1.501(c)(4)-1(a)(2). Not Commercial - Social welfare organizations may not be organized or operated for profit. This stricture often causes trouble because many potential (c)(4)s have activities that intrude into the commercial sphere. The IRS has said that the promotion of social welfare does not include activities that constitute "carrying on a business with the general public in a manner similar to organizations which are operated for profit." Reg. 1.501(c)(4)-1(a)(2)(ii). Likewise, the social welfare organization must not be operated primarily for the economic benefit or convenience of its members. Activities allowed to (c)(4)s include operating an airport, city-wide beautification,
(ii)
community crime prevention, running a garden club and operating a junior chamber of commerce. (b) Local Associations of Employees (i) Local Associations - A "local association" is one whose activities are confined to a particular community, place, or district irrespective of political subdivisions. If its activities are limited only by the borders of a state, it will not be considered to be purely local in character. Reg. 1.501(c)(12)-1(b). Employee Groups - IRC 501(c)(4) does allow for local employees' associations that operate for the benefit of their members. If the membership criteria are too exclusive, however, the organization may not qualify as a local employees' association, however, because it may not really be an association of employees. GCM 39357. Eligible employees include retired employees who were members of the association at the time of retirement. Such groups might include an association that operates a gasoline station on property owned by its members' employer, a group that engages only in social and recreational activities that meet the approval of the members' employer, and a health club available only to salaried employees.
(ii)
1.7.2 Comparison of IRC 501(c)(3) and IRC (c)(4) Organizations. (a) There is, perhaps, a misleading overlap between the "charitable purpose" requirements of (c)(3) entities and the "social welfare activities" of (c)(4) organizations. One of the differences between (c)(3)s and (c)(4)s, as has been mentioned above, is that (c)(4)s may engage in political activity that would be severely restricted under IRC 501(c)(3). This does come at some cost, however, as (c)(4) donors do not receive the benefit of the charitable contribution deduction set forth at IRC 170(c). An organization's priorities and focus will determine how it makes this trade-off between a greater scope of legislative activities as opposed to deductible contributions as a source of revenue. If a (c)(3) is found to have engaged in certain political activities, it may lose its (c)(3) status and be forever barred from obtaining a (c)(4) status for which it might otherwise have qualified. IRC 504. A common relationship between (c)(3)s and (c)(4)s is the tandem (c)(3) and (c)(4) relationship. Various (c)(3) organizations that would like to be more politically active, but are not for fear of losing their (c)(3) status, will create a tandem (c)(4) organization through which they carry out their political projects. None of the income or funds from the (c)(3) can go to further the
(b)
(c)
activities of the (c)(4) organization, but the two groups can be closely allied in other respects.
1.8. Other IRC 501(c) Tax-Exempt Organizations. Section 501(c)(3) organizations are the most common IRC 501(c) organizations and will be the focus of this Handbook. There are several other types of IRC 501(c) organizations permitted, however, and those contemplating the creation of a formal non-profit group should be aware of the existence of these options. Non-(c)(3) exempt organizations allowed under IRC 501(c) include: labor, agricultural, or horticultural organizations; business leagues, chambers of commerce and real-estate boards; clubs organized for pleasure and recreation; mutual ditch or irrigation companies and mutual or cooperative phone companies; title holding companies; local teachers' retirement funds; non-profit cemetery companies; fraternal beneficiary societies, orders, or associations; and voluntary employees' beneficiary associations.
2. FORMATION OF A NONPROFIT CORPORATION.

The life of a nonprofit corporation in Idaho begins with the preparation of articles of incorporation and filing them with the Idaho Secretary of State pursuant to Idaho Code 30-3-2 and 30-3-3. After submission of the articles and payment of the fees required under Idaho Code 30-3-4, the Secretary of State is required to file them if the articles satisfy the provisions of Idaho Code 30-3-2. The Secretary of State then sends a copy of the articles of incorporation, along with a filing fee receipt, "to the domestic or foreign corporation or its representative." Idaho Code 303-7(2). A certificate ("Certificate of Incorporation") bearing the seal of the State and the Secretary of State's signature, which is attached to the copy of the articles of incorporation, is proof that the original has been filed with the Secretary of State. Idaho Code 30-3-9. Having created a nonprofit corporation, the principals of the new venture can now complete the organizing process. This chapter deals with those matters that are preliminary to this process. The following sections begin with the fundamental notion that nonprofit corporations are formed for certain purposes and that those purposes are effectuated through the exercise of powers authorized under state law. Those purposes and powers are exercised in accordance with certain legally recognized formalities that are initiated with the filing of articles of incorporation, as described above, and the adoption of bylaws. The corporation can only become a legally functioning entity after these fundamental issues have been resolved and these basic documents have been adopted.
2.1. Determining Corporate Purposes and Powers. Before drafting the articles for filing with the Secretary of State, one must distinguish between corporate purposes and corporate powers. The distinction is significant, because Idaho Code 30-3-17(4) provides that "[t]he articles of incorporation need not set forth any of the corporation powers enumerated in this act." Idaho Code 30-3-17(1)(b) requires that the articles include "[t]he purpose or purposes for which the corporation is organized, which may be, either alone or in combination with other purposes, the transaction of any lawful activity." The distinction between purposes and powers is most readily understood as that between ends (purposes) and means (powers). As a writer on nonprofit corporations has explained: "[P]urpose, or more often, [the] purpose clause, means the clause in a corporation's charter which formally states the object or objects the corporation was organized to accomplish.... In contrast, the term power or powers clause, means the abilities or capacities of the corporation to act as an entity." Oleck, Non-Profit Corporations, Organizations, and Associations, 496 (6th ed. 1994). 2.1.1 Purposes. The importance of the purposes recitals in the articles of incorporation relates to one of the basic structural similarities between nonprofit and general business corporations. General business corporations in Idaho may engage in any lawful business unless a more limited purpose is set forth in the articles of incorporation. Idaho Code 30-1301(1). Under the Act, nonprofit corporations may also be organized for any lawful purpose. Idaho HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 10
Code 30-3-23. The purposes clause in the articles of a nonprofit corporation may affect both its very existence and what is frequently its most important characteristic; namely, its tax-exempt status. Eligibility for tax-exempt treatment will, of course, depend upon (among other factors) the presence or absence of tax-exempt purposes. Handbook, 2.1.2. A. Nontax Legal Effects of the Purposes Clause. i. Approval of Incorporation and Maintenance of Status. Before a nonprofit corporation can come into existence, the Secretary of State's office must be satisfied with respect to both the recital of nonprofit status and the purposes clause. If any of the proposed purposes are not "lawful," as required under Idaho Code 30-3-23, or are otherwise contrary to the public policy of Idaho, the articles cannot lawfully be accepted by the Secretary of State and a certificate of incorporation will not be issued. Once a certificate of incorporation has been issued, approval of the stated purposes by the state is assumed and a strong presumption of lawful purposes arises. This presumption may, however, be overcome by the state where the actual conduct of the alleged nonprofit corporation involves unlawful purposes. ii. The Constructive Notice Function of the Purposes Clause. Another legal effect of the purposes clause for nonprofit corporations is to provide public notice about the nature of their corporate activities. This is significant for several parties - outsiders dealing with the corporation, officers and directors who must keep the corporation to its stated purposes, and members who are not interested in being involved in unrelated and unforeseen activities and potential sources of liability. However, should the purpose be to engage in any lawful activity, this notice function will be of limited use. B. Idaho Approach to Purposes - Idaho Code 30-3-23. Idaho has changed the purposes clause from a rule of a specific purposes declaration to a more general purposes statement of "any lawful activity unless a more limited purpose is set forth in the articles of incorporation." Idaho Code 30-3-23. However, to facilitate obtaining a tax exemption and give the public a better picture of the corporation's exempt function, it is generally, imperative that a specific statement of purposes be included in a nonprofit corporation's articles. Idaho Code 30-3-23 reads in full as follows:
(1)
Every corporation incorporated under this act has the purpose of engaging in any lawful activity unless a more limited purpose is set forth in the articles of incorporation. A corporation engaging in an activity that is subject to regulation under another statute of this state may incorporate under this act only if incorporation under this act is not prohibited by the other statute. The corporation shall be subject to all limitations of the other statute.
(2)
2.1.2 Powers. A. The Modern Concept. Corporate powers are the "means" of achieving a corporation's purposes ("ends"). However, unlike purposes, there is no requirement that a corporation's powers be set forth in the articles of incorporation. Corporate powers are, therefore, generally of less concern to the practitioner than corporate purposes. A nonprofit corporation has all of the powers set forth in Idaho Code 303-22, 30-3-24 and 30-3-25. Idaho Code 30-3-24 specifically enumerates the powers of a nonprofit corporation. These powers include, but are not limited to, the following: 30-3-24(4) To purchase, receive, lease or otherwise acquire, and own, hold, improve, use and otherwise deal with, real or personal property, or any legal or equitable interest in property, wherever located; To sell, convey, mortgage, pledge, lease, exchange and otherwise dispose of all or any part of its property; To purchase, receive, subscribe for or otherwise acquire, own, hold, vote, use, sell, mortgage, lend, pledge, or otherwise dispose of, and deal in with, shares or other interests in or obligations of any entity; To make contracts and guaranties, incur liabilities, borrow money, issue notes, bonds and other obligations, and secure any of its obligations by mortgage or pledge or any of its property, franchises, or income; To lend money, invest and reinvest its funds, and receive and hold real and personal property as security for repayment, except as limited by Idaho Code 30-3-82.
30-3-24(5)
30-3-24(6)
30-3-24(7)
30-3-24(8)
B. Ultra Vires (Beyond The Powers) Acts. Idaho follows the modern statutory approach of sharply limiting the old common law ultra vires doctrine. Under common law, contract liability could be avoided if the contract in question were beyond the powers of a corporation, that is, "ultra vires." Any interested party (such as the other contracting party or a member of the corporation) might be permitted to interpose the rule of ultra vires as a defense against an attempt to enforce such a contract. Idaho Code 30-3-26, however, provides that the power of a corporation can be only challenged by (1) corporate directors or by members; or (2) the corporation itself in an action against its officers or directors. Given the breadth of Idaho's corporate powers statutes as described above, ultra vires problems should generally be easy to avoid. Nevertheless, it is probably true that the ultra vires concept has more application to nonprofit corporations today than to business corporations. This is the case because of the higher degree of fiduciary responsibility of officers of nonprofit organizations. 2.1.3 Tax Law Considerations Regarding Corporate Purposes and Powers. A. Tax Exempt Status in General. It seems fair to say that obtaining tax-exempt status is frequently the sine qua non for the formation of a nonprofit organization. While the tax matters are covered in Chapters 4 and 5, the interrelationship between tax-exempt status, on the one hand, and corporate purposes and powers, on the other, merits a brief discussion. B. IRC 501 of the Internal Revenue Code. IRC 501 lists the various organizations that are exempt from federal income tax. The one common factor among all these organizations is nonprofit purpose and operation. The exemption is, in other words, posited upon an absence of any purpose to profit any individual or shareholder. Most significant among the list of IRC 501 tax-exempt organizations are the so-called IRC 501(c)(3) organizations, which are those organizations organized and operated exclusively for any one or more of the following purposes: religious, charitable, scientific, testing for public safety, literary, educational, to foster national or international amateur sports competition, and the prevention of cruelty to children or animals. IRC 501(c)(3) organizations receive a twofold tax benefit. Not only is their income exempt (like all IRC 501 organizations), but contributions made to them are deductible by the donor. Thus, qualifying for one of the foregoing HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 13
purposes is obviously a key goal when organizing a nonprofit corporation that will be soliciting contributions. C. IRC 521 of the Internal Revenue Code. The exemption for nonprofit farmers' cooperatives found in IRC 521 is of special interest in an agriculture-intensive state. Such cooperatives strengthen farmers' position in the economy by combining the buying and selling powers of the member farmers. Nationwide, about two-thirds of these cooperatives operate on a nonprofit basis and thus are generally granted section 521 exemption from federal income tax. In Idaho, farmers' cooperatives are formed under Idaho Code 22-2608. Chapter 26 (Cooperative Marketing Associations) of Title 22 (Agriculture and Horticulture), Idaho Code, contains certain other provisions dealing with specific aspects of the organization and operation of such cooperatives. Beyond such specific provisions, "[t]he provisions of the general corporation laws of this state as they apply to nonprofit corporations, and all powers and rights thereunder, shall apply to the associations organized hereunder, except where such provisions are in conflict with or inconsistent with the express provisions of this chapter." Idaho Code 22-2626. D. State and Local Tax Status. The exemption scheme for Idaho income taxation largely parallels that described above for federal taxation of nonprofit corporations. Idaho Code 63-3002. IRC 501 organizations are specifically exempted from the Idaho income tax. Idaho Code 63-3026. The property of religious corporations or societies and fraternal, benevolent, or charitable corporations or societies is exempt from any taxation. Idaho Code 63-602B and 63-602C. Further, income tax deductions for contributions are available on the same basis as under federal tax law. Idaho Code 63-3002. A credit against the Idaho income tax may also be taken for up to 50 percent of charitable contributions made to institutions of elementary, secondary, or higher education located in Idaho, to "Idaho education public broadcast system foundations within . . . Idaho, and to public libraries . . . within . . . Idaho." This credit cannot exceed $100 for a noncorporate taxpayer or $1,000 for a corporate taxpayer. Idaho Code 63-3029A.
2.2. Articles of Incorporation. 2.2.1 State Law Considerations. The Idaho Nonprofit Corporation Act ("Act"), located in the Idaho Code at Title 30, Chapter 3, is the primary statute governing nonprofit corporations in Idaho. Where Idaho's former nonprofit corporation statute incorporated a large part of the Idaho Business Corporation Act (Title 30, Chapter 1) by reference, the Act is intended to be a stand alone codification of nonprofit corporation law. The Act contains certain mandatory HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 14
provisions, a number of specified optional provisions, and a broad invitation to add any lawful provisions related to internal governance of the corporation. A. General. Articles of incorporation establish the basic relationships between a corporation and its members and between a corporation and the state. Idaho Code 30-3-17(1) enumerates the items that must be included in the articles before it can become a legally recognized entity, while 30-3-17(2) sets forth those provisions that may be included, but are not required. Once filed, the articles become the fundamental charter from which the nonprofit corporation operates. After filing, the articles can only be changed at the cost of some time and effort. Accordingly, the articles should be prepared thoughtfully and carefully. The articles must conform to the laws of the state, and are invalid to the extent they are inconsistent with state law. In the event of inconsistencies between the corporation's articles and its bylaws or resolutions, the articles are primary and will control. Given the relative difficulty of amending the articles, simplicity becomes a key drafting concern. In the planning stages for the corporation, the incorporators should recognize that the more details they include in the articles, the greater likelihood that it will be necessary to change some of those details as circumstances change. In the interest of flexibility, then, it is generally prudent that the articles be concise and do little more than satisfy the statutory and IRS requirements, relegating the details of corporate governance to the bylaws or corporate resolutions. On the other hand, to the extent that there are provisions that the incorporators feel are essential to the implementation of the corporate purposes and the exercise of the corporate powers, the incorporators will be more likely to ensure their permanence if they are included in the articles rather than in the bylaws or resolutions where they could more easily be changed. B. Corporate Name. The articles must set forth a corporate name for the corporation. Idaho Code 30-3-17(1)(a). A corporation's name should be of vital importance to the incorporators because it is the one unique identifier for the corporation that cuts across all boundaries. The corporation may be issued a taxpayer identification number by the IRS, a sales tax number by the State Tax Commission, and any number of other identifying numbers by a host of federal or state agencies. These numbers, however, are meaningless without the connection to the corporate name. Only the corporate name is consistent in all contexts. The name should, therefore, be chosen carefully and used precisely and consistently in all official transactions on behalf of the corporation.
There are several limitations placed on the choice of a corporate name by Idaho Code 30-3-27. First, the name must not be deceptive in relationship to the purposes for which the corporation was formed. Second, the name must be available; that is, the name must not the same as or deceptively similar to the name of a corporation already on file with the Secretary of State. The standards for making comparisons with existing names are set out in administrative rule IDAPA 34.04.02. It is advisable to check the availability of a proposed name before finalizing a choice. Corporate organizers may reserve a name pending actual submission of articles by filing an application for name reservation under Idaho Code 30-3-28. If the Secretary of State determines the name is available for use, the name can be reserved for up to four months. Finally, a corporate name must include a "word of incorporation." The acceptable words of incorporation are "incorporated," "corporation," "company" (except when preceded by "and" or "&"), "limited," and their customary abbreviations. Acquiring the right to use of a corporate name from the Secretary of State does not affect existing rights of those already entitled to use that name, or a similar name, under the common law of unfair competition or under state and federal trademark statutes. For example, a corporation organized to provide mental health services could acquire the name of "Northwest Passages, Inc." insofar as the Secretary of State may be concerned, but could be restrained under the common law of unfair competition and federal law by Samissa Health Care Corporation (which operates a mental health hospital under the tradename "Northwest Passages") from using that name to identify its services. It is, therefore, advisable to check the area in which the corporation will operate for existing proprietary uses of a particular name. C. Purposes. The articles must set forth the purpose or purposes for which the corporation is organized. Idaho Code 30-3-17(1)(b). The description of the corporation's purposes may be sufficiently informative to convey the principal reason for the corporation's existence (such as, "operation of a church" or "operation of a home for orphans"), or it may provide that the corporation has been formed for "any and all lawful purposes," a description that is now acceptable under the Act. Idaho Code 30-3-17(1)(b) and 30-3-23. Note: Despite the broad latitude that the Act affords the incorporator in describing corporate purposes, one should always keep in mind that the IRS prescriptions for those purposes are far more stringent. For this reason, an incorporator must always describe the purposes with an eye toward the IRS requirements if the incorporator desires to obtain tax-exempt status. D. Initial Directors. The articles must set forth the names and addresses of the individuals who are to serve as the initial directors. Idaho Code 30-3-17(1)(c). Directors HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 16
must be natural persons. The initial board serves only until the first meeting of the members, at which regular directors are elected. E. Office of Registered Agent. The purpose of designating a registered office and registered agent is to identify a place at which a corporation may be served with legal process and a person upon whom such service may be made. The registered office must be a physical location at which a reasonably diligent process server could find the person to be served during business hours. The registered office cannot, for example, be a post office box. The registered agent's normal business hours and address must coincide with those of the registered office, since the registered agent is the person upon whom service is to be made. The registered agent may be an individual or another corporation, provided that the other corporation has an individual registered agent who can be served. The registered office and registered agent can be changed after incorporation by filing a change notice on a form provided by the Secretary of State or by making the change on the annual report form filed with the Secretary of State between July and November of each year. The registered agent need not be an officer or a member of the corporation. The registered office and agent should be chosen for stability in order to reduce the likelihood of turnover and uncertainty. F. Incorporators. The articles must include the names and addresses of the incorporators and be signed by each of them. Incorporators are those persons who are responsible for filing the articles. An incorporator may be either a natural person or another corporation. G. Choosing Between Membership and Nonmembership Structures. Idaho Code 30-3-17(1)(f) provides that the articles must state "[w]hether or not the corporation is to have members." Before the enactment of the current Act, nonprofit corporations were generally not authorized to operate without members. Under the former law, nonmembership corporations were most typically used by (1) certain ecclesiastical organizations (such as Roman Catholic or L.D.S. denominations) as subordinate organizational and property holding entities, and (2) controlling corporations (profit or nonprofit) that used the controlled nonprofit corporation to support a specified charitable cause or causes. Practitioners and many nonprofit corporations, though, found the membership requirement very burdensome in situations where a body of members was not particularly appropriate or desirable. In order to satisfy the formal membership requirement, but avoid any need designate a "membership," the standard practice was to designate the members of the corporation's board of directors as the corporation's only members. Under HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 17
Idaho Code 30-3-36, however, a corporation may now be organized without members, except in the case of a "cooperative corporation" (defined in Idaho Code 30-3-6). These nonmember corporations generally operate through self-perpetuating boards of directors and all powers that would otherwise belong to the members in a membership corporation are vested with the board of directors. Idaho Code 30-3-63(2). H. Statement of Status. Although not expressly required under the Act, the articles must state that the corporation is organized as a nonprofit corporation under the Act. I. Duration. The articles may set forth the duration or term for which the corporation is organized. The duration can be a fixed term or perpetual. In nearly all cases, the preferred option is a perpetual duration, since the organizers can rarely predict when the corporate entity will no longer be needed. A fixed duration may be appropriate where a corporation is organized for the sole purpose of operating a short-term project or a one-time event (such as a centennial celebration). If no duration is stated in the articles, the corporation will be deemed to have a perpetual duration. Idaho Code 30-3-24. J. Management of Corporation. Except when otherwise provided in the Act or articles, responsibility for management of a nonprofit corporation is vested in its board of directors. Idaho Code 30-3-63(2). The articles, however, may authorize a person or persons to exercise some or all of the powers that would otherwise be exercised by the board of directors. Idaho Code 30-3-66(2). K. Common Optional Provisions. A number of provisions specifically permitted by law may be included in the articles at the option of the incorporators. Some of the provisions include: (1) generally, almost any provision not inconsistent with the law regulating the affairs of the corporation, the powers of the corporation and its members, the qualifications and rights of members, including any provision otherwise required to be set forth in the bylaws, Idaho Code 30-3-17(2); authorizing assessments to be levied upon members or classes of membership in differing amounts, Idaho Code 30-3-17(5); designating classes of members with varying rights, Idaho Code 30-3-37;
(2)
(3)
(4)
specifying methods of calling special meetings of the members in addition to those specified in Idaho Code 30-3-47; apportioning voting rights among the members on a basis other than one vote per member, Idaho Code 30-3-55; increasing the quorum requirement for member meetings to some level above the minimum (which is one-tenth of the votes entitled to be cast at the meeting), Idaho Code 30-3-56; providing that a change in the number of directors be made only by amendment to the articles, Idaho Code 30-3-65; "classifying" the directors, that is, staggering the expiration dates of their terms of office, Idaho Code 30-3-68; designating and delegating authority to committees, Idaho Code 303-79; granting the board or directors the authority to amend the bylaws for a nonprofit corporation with members; and limiting the authority of the board to encumber or dispose of corporate assets, Idaho Code 30-3-106 and 30-3-107.
(5)
(6)
(7)
(8)
(9)
(10)
(11)
2.2.2 Tax Law Considerations. In order to qualify for tax-exempt status under IRC 501(c)(3), the articles of incorporation of a nonprofit corporation must contain several specific provisions, which are discussed in the following sections. The person drafting the articles should take special care to ensure that the articles initially filed meet all requirements of IRC 501(c)(3), thus avoiding the necessity of later amending the articles. A. Exempt Purpose. IRC 501(c)(3) provides that an IRC 501(c)(3) corporation shall be organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals. The articles must set forth the nonprofit corporation's purposes so that they fall within one or more of the purposes described above, and they must not authorize the entity to engage in activities that in themselves are not in furtherance of one or more of these exempt purposes, except to an insubstantial degree. Reg. 1.501(c)(3)-1(b)(1)(i). The corporation's purposes must always be defined with reference to IRC 501(c)(3). If the purposes are HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 19
not limited by reference to that section, the proposed activity should be described in sufficient detail to establish that those purposes meet the requirements of the Internal Revenue Code. Reg. 1.501(C)(3)-l(b)(l)(ii). B. Private Inurement. The articles must include language that would prohibit any part of the net earnings of the corporation to inure to the benefit of any private shareholder or individual. IRC 501(c)(3). C. Political Activity. The articles must preclude the activities of the corporation to the extent that they would substantially carry on propaganda or otherwise attempt to influence legislation (except as otherwise provided under IRC 501(h)). The corporation will fail the organizational test if its articles authorize it to devote more than an insubstantial part of its activities to attempts to influence legislation by propaganda or otherwise; to participate or intervene, directly or indirectly, in any political campaign on behalf of or in opposition to any candidate; or to have objectives and to engage in activities that characterize it as an action organization. IRC 501(c)(3); Reg. 1.501(c)(3)-(1)(b)(3). Action organizations are discussed in Handbook, 1.3.2(d). D. Dissolution. The articles must provide that, upon dissolution, the assets of the corporation will be distributed for one or more exempt purposes, or to the federal or a state or local government, for a public purpose, or be distributed by a court to another organization to be used in such manner as in the judgment of the court would best accomplish the general purposes for which the dissolved nonprofit corporation was organized. The corporation will not satisfy the requirements of IRC 501(c)(3) if its assets would, upon dissolution, be distributed to its members or shareholders. Reg. 1.501(c)(3)-1(b)(4). The IRS has approved the following language: Upon the dissolution of this [corporation] its assets shall be distributed for one or more exempt purposes within the meaning of section 501(c)(3) of the Internal Revenue Code, or corresponding section of any future Federal tax code, or shall be distributed to the Federal government, or to a State or local government, for a public purpose. Rev. Proc. 82-2, 1983-1 C.B. 367. E. Private Foundation Prohibitions. The articles of a private foundation, as distinguished from a publicly supported charity, must expressly prohibit the foundation from acting or failing to act in a way that would trigger excise tax under sections 4941 through 4945. Section 4941 relates to acts of self-dealing; section 4942 involves the failure to distribute income; section 4943 involves excess business holdings; section 4944 pertains to investments that jeopardize the corporation's charitable purpose; and section 4945 deals with taxable HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 20
expenditures. A private foundation may satisfy these requirements either by express language in its articles or by the application of a state law that effectively imposes these requirements upon the foundation or treats these requirements as being contained in the articles. Refer to Revenue Ruling 75-38, 1975-1 C.B. 161, for a list of the states that have enacted legislation satisfying the IRC 508(e) requirement relating to governing instruments. Idaho has enacted such a law, which is contained at Idaho Code 30-3-13. 2.2.3 Issuance of Certificate of Incorporation. Duplicate originals of the nonprofit corporation's articles must be submitted together with a check in the amount of $30 (as of March 1, 2005) to the Corporate Division, Secretary of State, State of Idaho. The address of the Corporate Division is Secretary of State, Statehouse Mail, Boise, Idaho 83720.
2.3. Bylaws. 2.3.1 General. The bylaws govern the internal affairs of the corporation within the limits of the law and the articles of incorporation. Idaho Code 30-3-21 describes the provisions that may be included in the corporation's bylaws. Any provision concerning governance, operation, membership, finances, and other permissible subjects may be included in the bylaws, provided it is lawful and not inconsistent with the articles. If any provision of the articles conflicts with the bylaws, the articles will control. The initial bylaws of a nonprofit corporation are generally adopted by the board of directors at the organizational meeting, though Idaho Code 30-3-21(1) also provides that the members may adopt the corporation's initial bylaws. Thereafter, amendments to the bylaws must be adopted by the directors and the members unless the articles specifically provide otherwise. For the sake of administrative convenience, it behooves the incorporators of a nonprofit corporation that will have members to consider granting such amendment authority to the directors. The bylaws may be given the status of a contract that is binding on the membership of an nonprofit corporation. Idaho Code 30-3-21(3) mandates such a contractual relationship as between a cooperative corporation and its patrons. Those who join the organization agree to be bound by the corporation's articles and bylaws. Bylaws should be drafted with the particular circumstances and requirements of the organization in mind. It is not advisable simply to copy another organization's bylaws. Competent legal advice in tailoring and implementing bylaws is extremely valuable to a newly formed organization and any effective use of legal services. 2.3.2 Bylaw Provisions Explicitly Permitted by Statute. The Act gives nonprofit corporations in Idaho considerable latitude regarding the terms that may be included in a corporation's bylaws. The Act periodically states that a particular provision may be included in the bylaws. Generally, such provisions may be included in either the articles or the bylaws or both. If HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 21
included in both the articles and bylaws, which is not recommended, the person drafting the articles and bylaws must be certain that the parallel provisions are consistent with each other. The following discussion outlines some of the bylaw provisions that are specifically referenced in the Act: A. Membership Meetings. If meetings of members are to be held at a location other than the registered office, the bylaws should designate the location for those meetings. Idaho Code 30-3-46. The bylaws should also specify the time for the annual meeting, or alternatively, a manner by which the time for annual and regular meetings can be fixed. Idaho Code 30-3-46. B. Call of Special Meetings. The bylaws may provide methods for calling special meetings of the members in addition to those set out in Idaho Code 30-3-47. C. Notice of Meetings. Notice of meetings must be given in a fair and reasonable manner and consistent with the corporation's bylaws. Any notice that conforms to Idaho Code 30-3-50(3) is considered to be "fair and reasonable," but other means of notice may suffice when all the circumstances are considered. A notice is "fair and reasonable" under Idaho Code 30-3-50(3) if it provides the date, place and time of the meeting no more than 60 and no fewer than 10 days before the meeting (unless the notice is given by other than first class or registered mail, in which case the notice must be mailed no fewer than 30 days nor no more than 60 days prior to the meeting); describes the matters that must be approved at an annual or regular meeting; and describes the matters for which a special meeting was called. Idaho Code 30-3-50(3). D. Classes of Members. The bylaws may create specific classes of membership with specific rights and obligations with respect to voting, dissolution, redemption and transfer, and any other matters. Idaho Code 30-3-37. E. Quorum and Vote. Idaho Code 30-3-56 provides that bylaws may provide for a higher or lower quorum than 10 percent for a membership meeting. Nevertheless, the only matters that may be voted upon at any annual or regular meeting of members are those matters described in the meeting notice, unless one-third of the voting power of the membership is present in person, by proxy, by mailed written ballot or by absentee ballot. Idaho Code 30-3-56(4). The bylaws may require a supermajority vote with respect to certain matters, though any vote to increase or decrease the vote required for member action must be approved by the members. Idaho Code 30-3-57. HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 22
F. Number of Directors. Idaho Code 30-3-65 generally provides that there must be at least three (3) directors on the board, except in the case of a religious corporation, which is only required to have one (1) director. Except for these limitations, the actual number of directors may be increased or decreased by amendment to or in the manner prescribed in the bylaws. Idaho Code 30-3-65(2). G. Committees. The bylaws may prohibit, limit or outline the manner of the creation of committees of the board of directors within the limitations set forth in Idaho Code 30-3-79. H. Conflicts of Interest. Idaho Code 30-3-81 defines director conflicts of interest. Idaho Code 303-81(6) provides that [t]he articles, bylaws or a resolution of the board may impose additional requirements on conflict of interest transactions. Note: In recent years the IRS has taken a keen interest in ensuring that the bylaws of tax-exempt organizations expressly adopt specific conflict of interest provisions. The bylaws included in the Appendix contain conflict of interest provisions that the IRS has required in previous submissions. There is no guarantee, however, that the IRS will not require additional provisions in future filings. I. Election and Duties of Officers. The Act generally requires that a corporation have a president, secretary, treasurer and such other officers as may be appointed by the board, provided that religious organizations are generally not required to have officers. Idaho Code 30-3-83. The bylaws, however, may designate additional officer positions, ex officio appointments to the board, and alternative titles for the officer positions prescribed by law. It should be noted that any two (2) or more offices, except the offices of president and secretary, may be held by the same person. The Act requires that the bylaws or the board of directors delegate to one officer the duty of preparing minutes of the meetings and authenticating such records of the corporation. Idaho Code 30-3-83(2). Otherwise, the duties of the officers shall be set forth in the bylaws or, to the extent consistent with the bylaws, in a resolution of the board or by such officer as is authorized by the board to prescribe such duties. Idaho Code 30-3-84. 2.3.3 Other Bylaw Provisions. In addition to the provisions specifically mentioned in the Act, there are many other bylaw provisions that are permissible under the Act. Some of the more common discretionary provisions are as follows:
A. Elaboration. The bylaws may repeat, explain, or expand upon the Act or the articles. B. Procedure. The bylaws may specify the procedural rules for the conduct of members' or board of directors' meetings. C. Vacancies. The bylaws may specify the method of filling vacancies on the board of directors or among the officers. Idaho Code 30-3-72 outlines the procedures to be followed in the event that the bylaws or articles fail to provide procedures for filling such vacancies. D. Fiscal Year. The bylaws may specify a fiscal year under which the corporation will operate. E. Financial Management. The bylaws may establish measures to ensure fiscal integrity and sound management practices. Such measures could include bookkeeping and financial reporting requirements, audit schedules, check-writing authority and others. F. Corporate Seal. The bylaws may provide for adoption and use of a corporate seal.
3. ORGANIZATIONAL MEETING OF THE NONPROFIT CORPORATION.

3.1. Introduction. Once the articles of incorporation and bylaws have been prepared, the point has been reached where the incorporators can breathe life into the fledgling corporation. This chapter examines the various topics that should be addressed at the initial or organizational meeting of the corporation. Although the organizers of the corporation have likely held numerous meetings, the organizational meeting of the corporation is a formal activity that should take place soon after the certificate of incorporation has been received from the Secretary of State's office. The purposes of the organizational meeting are to formally complete the organization of the corporation by appointing officers, adopting bylaws, approving the incorporators' pre-incorporation activities, and officially beginning the activities for which the corporation was formed. As a general rule, the initial directors are named in the articles of incorporation, and they are responsible for holding the organizational meeting for the newly formed corporation. If the initial directors are not named in the articles, however, the Act provides that the incorporator or incorporators are required to hold the organizational meeting "at the call of the majority of the incorporators." Idaho Code 30-3-20(b). Meetings of the directors of many smaller nonprofit corporations are frequently informal matters. Nevertheless, beginning with the organizational meeting, it is important that both large and small corporations observe corporate formalities during preparations for and conduct of their meetings. Those formalities include giving proper notice of the meeting to all directors and keeping written minutes describing the business conducted at the meeting. In lieu of notice, the corporation may wish to use waivers of notice executed by all directors entitled to notice. Handbook, Chapter 6 for a more detailed discussion of operational issues.
3.2. The Organizational Meeting. 3.2.1 Basic Requirements of the Meeting. A. Time and Place of Meeting. Idaho Code 30-3-74, 30-3-75, 30-3-76, 30-3-77 and 30-3-78 discuss the essentials for regular and special meetings of the board of directors. Under these sections, regular meetings are those for which the time and place of the meeting is fixed in the bylaws. All other meetings are denominated as special meetings. Under these definitions, the organizational meeting of the board would constitute a special meeting. Idaho Code 30-3-20(3) provides that the organizational meeting may be held in or out of the state in accordance with Idaho Code 30-3-75.
B. Written Notice. As a special meeting of the board of directors, the organizational meeting of the board would require "two (2) days' notice to each director of the date, time, and place" of the meeting. Idaho Code 30-3-76(2). C. Waiver of Notice. In lieu of providing written notice of the organizational meeting, the incorporators or the board of directors may forego the need for written notice through waivers of notice executed before or after the organizational in accordance with Idaho Code 30-3-77. The waiver must be in writing signed by the director entitled to notice and filed with the minutes or the corporate records. Idaho Code 30-3-77(2). 3.2.2 Temporary Chair and Secretary. A temporary chair and secretary of the meeting should be chosen upon commencement of the meeting so they can run the meeting and take minutes. Often, the individuals that will later be elected president and secretary of the corporation are chosen to act in these temporary positions. 3.2.3 Approval of Filing of Articles. It is important that the directors ratify by resolution the pre-incorporation activities of the incorporators and the filing of the articles. By doing so, the board formally accepts the articles as filed and may limit the individual liability of promoters and incorporators for their pre-incorporation activities. 3.2.4 Approval of Bylaws. If bylaws have been previously prepared, the board should adopt the bylaws during the organizational meeting. However, if bylaws have not been prepared by the time of the organizational meeting, a committee should be appointed and charged with the task of preparing bylaws for the corporation. In any event, the action undertaken by the corporation should be set forth in the form of a resolution. 3.2.5 Authorization to Make Filings with the IRS. In order to qualify as a taxexempt organization under IRC 501(c)(3), most organizations must file a Form 1023, Application for Recognition of Exemption, and other documents with the IRS. (Other 501(c) tax-exempt organizations must file a Form 1024.) If those documents have been filed prior to the organizational meeting, the board should ratify that action. If the necessary filings have not been made, the board must authorize a corporate officer or other designated agent to file those documents on behalf of the corporation. 3.2.6 Adoption of Conflict of Interest Policy. The IRS substantially revised Form 1023 in October, 2004. Under the revised Form 1023, the applicant is required to answer questions (Part V, Line 5) regarding the adoption of a conflict of interest policy or other procedures to address conflicts of interest. Although the IRS does not require that a conflict of interest policy be adopted, the IRS recommends such a policy and includes a sample conflict of interest policy as part of the Form 1023 packet. The conflict of interest policy included in the Appendix has been adapted from the IRS suggested policy. Note: It is strongly urged that organizations follow the IRS suggestion. HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 26
3.2.7 Election of Officers. During the organizational meeting, the board must elect officers of the corporation who will serve in their elected positions until their successors have been elected and qualified. Unless otherwise provided in the articles or bylaws, the required officers are those of president, secretary and treasurer. Religious corporations, however, are not required to have officers. Idaho Code 30-3-83. Except in the case of religious corporations, any two or more offices may be held by the same person, except the offices of president and secretary. Idaho Code 30-3-83(1). 3.2.8 Authorization of Payment. Before a corporation begins operating, it must obtain certain supplies and incur other expenditures. The sample minutes in the Appendix contain a resolution authorizing the secretary to obtain the necessary supplies and the treasurer to pay for them. 3.2.9 Corporate Seal. The Act does not require that a nonprofit corporation adopt a corporate seal, but the board may desire to do so as a complement to its desire to satisfy standard corporate formalities. 3.2.10 Corporate Records. The corporation is required to maintain certain documents according to Idaho Code 30-3-130. Specifically, 30-3-130 requires that a corporation: (1) keep permanent minutes of all meetings of its members and board of directors, a record of all actions taken by the members or directors without a meeting, and a record of all actions taken by committees of the board of directors as authorized in Idaho Code 30-3-79(4); maintain appropriate accounting records; maintain a record of its members in a form that permits preparation of a list of the name and address of all members, in alphabetical order by class, showing the number of votes each member is entitled to cast; maintain its records in written form or in another form capable of conversion into written form within a reasonable time; keep a copy of the following records at its principal office: (a) its articles or restated articles of incorporation and all amendments to them currently in effect; its bylaws or restated bylaws and all amendments to them currently in effect;
(2) (3)
(4)
(5)
(b)
(c)
resolutions adopted by its board of directors relating to the characteristics, qualifications, rights, limitations and obligations of members or any class or category of members; minutes of all meetings of members and records of all actions approved by the members for the past three years; all written communications to members generally within the past seven years, including the financial statements furnished for the past seven years under Idaho Code 30-3-134; a list of the names and business or home addresses of its current directors and officers; and its most recent annual report delivered to the Secretary of State under Idaho Code 30-3136.
(d)
(e)
(f)
(g)
3.2.11 Committees. Idaho Code 30-3-79 provides that, if authorized by the articles or the bylaws, the board of a nonprofit corporation may create committees to be used in the management and operation of the corporation. Committees that have authority to act on behalf of the board must be created by resolution approved by a majority of the board. Such committees must consist of two or more directors. These committees, however, may not do the following: (1) (2) authorize distributions; approve or recommend to members dissolution, merger or the sale, pledge or transfer of all or substantially all of the corporation's assets; elect, appoint or remove directors or fill vacancies on the board or on any of its committees; or adopt, amend or repeal the articles or bylaws.
(3)
(4)
Idaho Code 30-3-79(5). In addition to those committees authorized to act on behalf of the board, the board may create such other committees as may be authorized by the articles or the bylaws. There is no requirement that the members of these latter committees be directors. During its initial meeting, the board should consider the various committees it intends to create, assuming that such action is HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 28
authorized by either the articles or the bylaws. Among the committees that may be considered are the following: budget, finance, fund-raising, education, insurance, legal matters, corporate matters, membership, program, meetings, public relations, audit, nominating and special projects. The authority to create such committees is contained in the bylaws contained in the Appendix to the Handbook. 3.2.12 Fiscal Year. Absent tax or other business considerations, the fiscal year of a corporation is traditionally a calendar year beginning on January 1 and ending on December 31. If not already specified in the bylaws, the fiscal year should be selected at the organizational meeting and set forth in the minutes. 3.2.13 Bank Accounts. For the corporation to conduct business, certain officers and other agents must have access to the money deposited in the corporation's bank account. The resolution concerning bank accounts should identify those officers and agents who are authorized to sign checks or drafts removing the corporation's funds. Also, the bank, including the specific branch where the corporation's funds are deposited, should be identified in the resolution. The bank itself will usually provide a form resolution, which it will require the board to adopt before allowing the corporation's officers and agents to withdraw money. Care should be taken to ensure that the bank's resolution does not conflict with the articles and bylaws of the corporation. If no conflict exists, the bank's resolution should be adopted and a copy of it attached to the minutes. 3.2.14 Specific Activities or Projects. During the organizational meeting, the board should determine what tasks need to be completed and what activities should be initiated. These may include such things as beginning membership drives, fund-raising activities, or the projects that the corporation was formed to accomplish. The board should adopt a separate resolution reflecting action, if any, taken on each project or other item of business. 3.2.15 Next Meeting. The board should establish a regular schedule for its meetings to ensure that the business of the corporation is conducted in an orderly and regular manner. It is important for directors to realize that authority and responsibility for the appropriate and legal conduct of the corporation's business resides in the board. The meeting schedule is normally set forth in the corporation's bylaws. Customarily, regular meetings of a nonprofit corporation's board are held on a specific day of each month or quarter. If the chosen day happens to fall on a holiday, the meeting is normally held on the next business day. The frequency of the board's regular meetings will depend, in part, upon the committee structure created by the board. If the corporation has numerous committees, and if a sufficient number of those committees are authorized to act on behalf of the board, then the board need not meet as frequently as would be the case if no such committee structure existed.
4. OBTAINING TAX-EXEMPT STATUS UNDER IRC 501(C)(3).

4.1. Procedure for Obtaining Tax-Exempt Status. 4.1.1 Tax Exemption for IRC 501(c)(3) Organizations. IRC 501(a) exempts organizations described in IRC 501(c)(3) from income taxation. This Handbook focuses primarily on IRC 501(c)(3) organizations, which include private foundations. The income tax exemption has certain limitations. For example, tax-exempt organizations are not exempt from taxation on unrelated business income, which is taxed under IRC 511 through 514. Also, private foundations are subject to the excise taxes set forth in IRC 4940 through 4945. And, understandably, tax-exempt organizations are not exempt from the various federal employer and withholding taxes or, necessarily, from various state or local taxes. To qualify as tax-exempt under IRC 501(c)(3), an organization must be both organized and operated exclusively for one or more of the purposes specified in that section. If an organization fails to meet either the organizational test or the operational test, it is not exempt. Reg. 1.501(c)(3)1(a). Refer to Handbook, Chapter 1 for more information. 4.1.2 Organizational Documents. The current Form 1023 allows an IRC 501(c)(3) organization to be organized as a corporation, limited liability company, unincorporated association or trust. Reg. 1.501(c)(3)1(b)(2). While tax-exempt charitable organizations may be organized in a number of different forms, this Handbook focuses primarily on the nonprofit corporation. The tax law requirements for the articles of a would-be IRC 501(c)(3) corporation are discussed in this Handbook, 2.2.2. Upon issuance of the certificate of incorporation by the Secretary of State and adoption of the bylaws, a conformed copy of the articles and bylaws must be submitted to the IRS with the forms required to obtain approval of the corporation's tax-exempt status. 4.1.3 Form SS-4, Application for Employer Identification Number. Every nonprofit organization that desires a tax exemption under IRC 501(c) must apply for an Employer Identification Number (EIN), also frequently referred to as a tax ID Number. An EIN is required on any return, statement, or other document the organization files with the IRS. An EIN can be obtained by completing Form SS-4, Application for Employer Identification Number. A. Online Application. Form SS-4 can be completed from the IRS website located at www.irs.gov. Before an attempt is made to submit Form SS-4 online, however, it is recommended that the user print out the Form and obtain all necessary information before making the attempt, since the internet connection to IRS website will be broken if the user does not complete the SS-4 promptly. After the IRS assigns the EIN, it will also mail the EIN to the taxpayer.
B. Telephone Application. Complete Form SS-4 and call the IRS toll free Business and Specialty Tax Line at 1-800-829-4933. The IRS will ask that the Form SS-4 be faxed to the IRS while the user is on the phone. Once the IRS agent has reviewed the Form, the EIN will be given over the phone. The IRS will also mail the EIN to the taxpayer. C. Mailing the Application. Print Form SS-4 from the IRS website located at www.irs.gov. Mail the Form to the address indicated on the Form . 4.1.4 Documents Required for Approval of Exemption. A. Form 1023. To obtain tax-exempt status under IRC 501(c)(3), an organization must complete Form 1023, Application for Recognition of Exemption Under Section 501(c)(3), and submit it to the IRS for approval. Form 1023 for Idaho nonprofit corporations must be mailed to the following addresses: Via U.S. Mail: Internal Revenue Service P.O. Box 192 Covington, KY 41012-0192 Via Express Mail or a Delivery Service: Internal Revenue Service 201 West Rivercenter Blvd. Attn: Extracting Stop 312 Covington, KY 41011
i. Retroactive Effect of Letter of Determination. If the nonprofit corporation files Form 1023 within 27 months from the date of the issuance of its certificate of incorporation, its tax-exempt status will be recognized retroactively to the date the certificate of incorporation was issued. Otherwise, its tax-exempt status will be recognized only for the period after the Form 1023 is received by the IRS unless the applicant is granted an extension beyond the 27-month period. The date of receipt is generally the U.S. postmark date. ii. Extension of Time to File. An extension of time for filing Form 1023 may be granted by the District Director of the IRS if the request not is submitted before the expiration of the 27-month period and good cause exists for requesting additional time. Factors that will be considered by the IRS in deciding whether to grant relief include the following:
(1)
whether the taxpayer acted with due diligence and sought competent advice; whether the taxpayer took prompt action within a reasonable time after discovering the deadline could not be met or had passed; whether the taxpayer intended to comply with the notice provisions; whether granting the extension would prejudice the interests of the government or cause undue administrative burden; whether granting the extension would be consistent with the objectives of the underlying statute and the regulatory election or application provision.
(2)
(3)
(4)
(5)
Reg. 301.9100-3; Rev. Rul. 90-100. In making application, the taxpayer must specifically submit information responsive to the criteria set forth in Rev. Rul. 90-100. Therefore, before making such a request, Rev. Rul. 90-100 should be carefully reviewed so that the request complies with each technical requirement. iii. Contributions Prior to Receipt of Favorable Determination Letter. Generally, substantial contributions should be discouraged until a favorable ruling on tax-exempt status has been secured. Representatives of the nonprofit corporation should avoid representing to potential donors that contributions will be tax deductible until the IRS has issued a favorable determination letter. If Form 1023 is filed within 27 months after the corporation is organized and a favorable determination is obtained, deductibility of contributions will be retroactive to the date of incorporation. iv. Exceptions to Filing Form 1023. (a) Churches, interchurch organizations of local units of a church, conventions or associations of churches, or integrated auxiliaries of a church such as a men's or women's organization, religious schools, or missionary or youth groups are not required to filed Form 1023. These organizations are exempt automatically if they meet the requirements of IRC 501(c)(3). IRC 508(c). Note: Organizations exempt from filing the Form 1023 should, nevertheless, consider filing a Form 1023 to ensure that neither the IRS nor third parties will refuse to recognize the claim of exemption. HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 32
(b)
A nonprofit corporation (other than a private foundation) normally having annual gross receipts of not more than $5,000 is not required to file Form 1023. For purposes of the gross receipts test, an organization normally does not have more than $5,000 in gross receipts annually if: (1) during its first tax year the organization received gross receipts of $7,500 or less; during its first two years the organization had a total of $12,000 or less in gross receipts; or in the case of an organization that has been in existence for at least three years, the total gross receipts received by the organization during the immediately preceding two years plus the current year are $15,000 or less.
(2)
(3)
Unless otherwise exempted from filing, an organization with gross receipts in excess of the amounts in the gross receipts test must file a Form 1023 within 90 days after the end of the period for which the amounts are exceeded. Even if a nonprofit corporation satisfies one of the above exceptions, it will generally be prudent to file Form 1023 and obtain a ruling or determination letter recognizing its tax-exempt status to assure potential contributors that their contributions will be deductible, to meet the requirements of most, if not all, agencies or foundations that make grants to IRC 501(c)(3) organizations, and to take advantage of reduced postal rates. B. Conflict of Interest Policy. The IRS recommends that organizations adopt specific conflicts of interest policies. See, Handbook, 3.2.6 for more information. C. Form 2848, Power of Attorney and Declaration of Representative. If the nonprofit corporation is represented by an agent, accountant, or attorney and desires its representative to perform certain acts on its behalf, whether in person or by correspondence, a power of attorney must be filed with Form 1023 specifically authorizing the agent, accountant or attorney to represent the nonprofit corporation. IRS Form 2848, Power of Attorney and Declaration of Representative should be used for this purpose. Form 2848 authorizes the designated person to perform any act, except receive refund checks and sign tax returns. Language can be inserted to expand or reduce the powers of the designated representative. HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 33
D. Form 8821, Tax Information Authorization. This Form serves some of the same functions as Form 2848, but it is used in circumstances where the appointee is not going to represent the applicant before the IRS. If a representative is desired, use Form 2848. E. Articles of Organization and Bylaws. These must include articles of incorporation and bylaws, together with all amendments in the order in which the applicant adopted them. These documents should be exact (conformed) copies of the articles and amendments showing signatures and, where appropriate, the stamp of the Secretary of State. F. Statement of Nondiscrimination Policy on Schedule B. Schedule B is required of all applicants desiring to qualify as tax-exempt schools. G. IRC 501(h) Election. This election is made on Form 5768 and allows the applicant to qualify for the objective test regarding lobbying expenditures pursuant to IRC 501(h). It is not recommended that this form be filed unless there is a present intention to engage in lobbying activities. H. User Fee. The IRS no longer requires Form 8718, which was previously used for submission of the user fee. The substance of Form 8718 is now included in the body of Form 1023 at Part XI (page 12). Note: Organizations with annual gross receipts of less than $10,000 may be eligible for the reduced user fee of $150.00. All other applicants must pay a user fee of $500.00. I. Employee Identification Number (EIN). The EIN must now be obtained before Form 1023 is filed. The application for the EIN, Form SS-4, should not be submitted with Form 1023. See the discussion of Form SS-4 in Handbook, 4.1.3. J. All Other Documents Specified in the Form 1023 Checklist. Go through the Form 1023 Checklist very carefully to make sure that your application package is complete. The application will be delayed or rejected if it is not complete. K. Form 1023 Checklist and Cover Letter. The Checklist must be filed with Form 1023. If desired, a cover letter may be used for the entire package.
4.2. General Hints on Preparation of Form 1023. 4.2.1 Application Must Be Complete. All parts of Form 1023 that apply must be completed, including the Form 1023 Checklist. If the application is incomplete, it may be returned without any further action being taken on it. 4.2.2 Employer Identification Number. The applicant must show its Employer Identification Number (EIN) on the first page. Note: It is a good practice to place the EIN on every page of the application and all pages of the attachments. 4.2.3 Narrative Description of Your Activities. The description of activities must be detailed, concrete and complete. Part IV requires a description of past, present and planned activities. Sufficient detail must be provided so that the IRS understands what the applicant has done, is doing, and will do as to a tax-exempt organization. 4.2.4 Financial Statements. A statement of receipts and expenditures and a balance sheet must accompany Form 1023. The financial statements must provide a detailed breakdown of support, revenue, and expenses. Lump sum information is not acceptable. For information regarding the completion of the financial statements, see Handbook, 1.5. 4.2.5 Conformed Copies of Organizing Documents. Form 1023 must be accompanied by a conformed copy of the nonprofit corporation's articles and bylaws. A conformed copy is a copy that agrees with the original and all amendments to it. This copy should either be signed by a principal officer or be accompanied by a written declaration signed by an authorized officer and certifying that the document is a complete and accurate copy of the original. 4.2.6 Miscellaneous. Original documents should not be submitted because they will become a part of the IRS file and cannot be returned. Every attachment should show the name and address of the nonprofit corporation, the EIN, the date, an identifiable heading, and the fact that the page is an attachment to Form 1023. Form 1023 must be signed by an authorized officer of the nonprofit corporation or by a person authorized pursuant to a power of attorney. It is generally recommended that Form 1023 not be signed by an authorized representative. The name and telephone number of someone who can be called during business hours should be attached to Form 1023 in the event that additional information is required before a favorable determination letter is issued. This can best be accomplished with a cover letter. If the nonprofit corporation has filed federal income tax returns or exempt organization information returns, specify the form number of each return, the year covered by the return, and the location where the returns were filed. 4.2.7 Stock Corporations. If the nonprofit corporation issues stock, organizational meeting minutes should be attached that explain the consideration paid for the stock, whether HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 35
dividend payments are authorized on any class of stock, and whether any dividends have been paid. A copy of a specimen stock certificate should be attached. 4.2.8 Applications Filed by Schools. When a school applies for tax-exempt status, the following additional documents should be attached to the Form 1023: (1) a statement of a racially nondiscriminatory policy as to admission of students on Schedule B. proof that the statement was published in a newspaper of general circulation; and proof that the policy has been adopted by the nonprofit corporation.
(2)
(3)
4.3. Nonprivate Foundation Status. Both publicly supported charities and private foundations are tax-exempt organizations under IRC 501(c)(3). Since private foundations are subject to excise taxes, it is very important to determine whether the tax-exempt organization is a publicly supported charity or a private foundation. Handbook, 7.5. Any charitable organization that does not inform the IRS on Form 1023 that it is not a private foundation will be presumed to be a private foundation. IRC 508(b). A key function of Form 1023 is to allow the qualifying tax-exempt organization to satisfy the nonprivate foundation requirements found in IRC 509, thereby escaping the excise tax rules and other strictures that apply to private foundations. Form 1023 was structured to identify tax-exempt organizations qualifying under IRC 501(c)(3) that also satisfy the public support requirements of IRC 509(a)(1), 509(a)(2), 509(a)(3) or 509(a)(4). 4.3.1 IRC 509(a)(1) Support Requirements. Section 509(a)(1) public charities are the organizations described in section 170(b)(1)(A), other than those described in clauses (vii) and (viii) of that section. These include: (l) (2) churches or conventions or associations of churches; educational organizations, such as schools and colleges with a regular faculty, curriculum, and student body in attendance; hospitals, the principal functions of which are the provision of medical or hospital care, or medical research organizations directly engaged in continuous active research in conjunction with a hospital; endowment funds that receive substantial public or governmental support that are operated in connection with state universities or colleges; state, federal, or local government units; and
(3)
(4)
(5)
(6)
publicly supported charities, which are organizations that normally receive a substantial part of their support from a governmental unit or from direct or indirect contributions from the general public and which, by regulation, specifically include organizations that receive: (a) at least l/3 of their support from government units or from direct or indirect contributions from the general public; or at least 10 percent of their support from the general public and governmental units and are organized so as to attract new and additional public support.
(b)
The types of organizations that fall under the "publicly supported" category include publicly or governmentally supported museums, libraries, community organizations that promote the fine arts, the American Red Cross, the United Way, and organizations that provide any direct service to the general public. 4.3.2 IRC 509(a)(2) Support Requirements. An organization that receives a substantial part of its support from the general public may qualify as a public charity if it normally receives: (1) more than one-third of its annual support from any combination of: (a) (b) gifts, grants, contributions, and membership fees; and gross receipts from admissions, sales of merchandise, performance of services, or furnishing of facilities in any activity which is not an unrelated trade or business (subject to certain statutory exclusions).
(2)
not more than one-third of its support from the sum of: (a) gross investment income, such as interest, dividends, rents, and royalties; and the excess of the amounts of the unrelated business income
(b)
4.3.3 IRC 509(a)(3) Support Organizations. An organization that is not publicly supported, but which is responsive to public concerns because of its relationship with other public charities, may qualify as an affiliated or supporting public charity if the organization is: (1) organized and operated exclusively to support one or more specified public charities as defined under section 509(a)(1) or (2);
(2)
operated, supervised, or controlled by or in connection with one or more public charities; and not controlled directly or indirectly by the donor or "disqualified persons."
(3)
Reg. 1.509(a)-4. Section 509(a)(3) organizations are organizations that exist primarily to provide support of one kind or another to a public charity and that are controlled by a public charity. In addition, the organization that a 509(a)(3) organization is operated in conjunction with may be an organization described in IRC 501(c)(4), (5) or (6) (such as a social welfare organization, labor or agricultural organization, business league, or real estate board) if the supporting organization otherwise meets the requirements of IRC 509(a)(3) and the IRC 501(c)(4), (5) or (6) organization meets the test of a publicly supported organization set forth in IRC 509(a)(2). Reg. 1.509(a)- 4(k)(1). The use of qualified supporting organizations as a vehicle for charitable gifts is often favored because they are treated as public charities for income tax purposes and are not subject to the private foundation rules. In a great majority of cases, a section 509(a)(3) organization might otherwise be a private foundation because its contribution base is too narrow, that is, too much of its funding comes from disqualified persons as defined in IRC 4946(a). 4.3.4 IRC 509(a)(4) Public Safety Organizations. An organization that is organized and operated exclusively for testing of public safety qualifies as a public charity. 4.3.5 Disqualified Persons. Certain of the tests for existence of a private foundation and restrictions on its operation measure the involvement of disqualified persons with respect to the operation of, or contributions to, the organization. A disqualified person is generally any person who is a substantial contributor, a foundation manager, an owner of a substantial contributor, or a member of the family of any of the foregoing. A substantial contributor is generally a person who has contributed more than $5,000 to a private foundation if that amount is more than two percent of the total contributions and bequests received by the foundation during that taxable year. IRC 507(d)(2). A foundation manager is an officer, director, or trustee of a foundation (or an individual with similar powers or responsibilities). IRC 4946(b). Attribution rules also apply through which members of partnerships, beneficiaries of trusts, and other entities may have ownership of the entity or contributions imputed to others, thus perhaps disqualifying them. Likewise, family membership may result in attribution of disqualified person status. IRC 4946(b).
4.4. Rulings and Determination Letters. 4.4.1 Definitive Rulings. The nonprofit corporation may seek a definitive ruling under Form 1023 when its seeks classification as a public charity under section 509(a)(1),(2),(3) or (4). Form 1023 is designed to allow the applying nonprofit corporation to establish that its public HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 38
charity, tax-exempt status is governed by the public support tests of sections 170(b)(1)(A)(i) through (vi) and 509(a)(1) through (4). When a nonprofit corporation requests a definitive ruling on tax-exempt status, the IRS determination letter will also constitute a ruling or determination on whether the organization is a private foundation. A newly created organization basing its claim to nonprivate foundation status on either section 509(a)(1) (by reason of section 170(b)(1)(A)(vi)) or section 509(a)(2) cannot obtain a definitive ruling before the close of its first tax year consisting of at least eight months. Until this condition is met, the nonprofit corporation must apply for an advance ruling. Note: In practice, the IRS generally does not issue definitive rulings even if the applicant has been in existence for more than eight months. The IRS will not ordinarily issue rulings or determination letters recognizing tax-exempt status if an issue involving the nonprofit corporation's exempt status is pending in litigation or is under consideration within the Service. 4.4.2 Advance Rulings. Many, if not most, newly created nonprofit organizations cannot meet either the four-year public supported charity provisions or the provisions for newly created organizations to qualify as publicly supported charities because they have not been in existence for a sufficient period of time. A newly created organization, however, may qualify for an advance ruling, which enables it to develop an adequate support history on which to base an initial determination of nonprivate foundation status. Typically, the type of newly created nonprofit corporation that would qualify for an advance ruling is one that can show that its organizational structure, proposed programs and activities, and intended method of operation are such that it would be likely to attract broad-based support from the general public, public charities, and governmental units to the extent necessary to meet the public support requirements discussed in Handbook, 4.3 above. An advance ruling or determination provides that an organization will be treated as a public charity for an advance ruling period of five years. A. Five-Year Advance Ruling Period. A newly created nonprofit corporation may request a ruling or determination letter that it will be treated as a public charity for its first five tax years. This request requires an agreement to an extension of the statute of limitations in Part X of Form 1023. This part of Form 1023 states the organization will be subject to the taxes imposed on private foundations under IRC 4940 (excise tax based on investment income) if it fails to qualify as a public charity during the five-year advance ruling period. The organization's first tax year, regardless of length, will count as the first year in the five-year period. The advance ruling period ends on the last day of the corporation's fifth tax year. B. Reliance. A nonprofit corporation that obtains a favorable advance ruling will be treated as a publicly supported IRC 501(c)(3) corporation for all purposes HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 39
other than IRC 507(d) (relating to total tax benefit resulting from exempt status) and IRC 4940 (relating to tax on net investment income) for the period beginning with its inception and ending 90 days after its advance ruling period expires. The period will be extended until the final determination is made on the corporation's status only if information required to determine whether the corporation met either of the support tests during its advance ruling period is submitted to the IRS within the 90-day period (even if the organization fails to meet either test). This reliance period, however, does not apply to the excise tax imposed on net investment income. If it is later determined that the IRC 501(c)(3) corporation was a private foundation from its inception, the excise tax plus accrued interest will be due without regard to the advance ruling or determination letter. C. Termination of Advance Ruling Before End of the Reliance Period. If an advance ruling or determination letter is terminated by the IRS before the expiration of the reliance period, the status of grants or contributions with respect to grantors or contributors to the organization will not be affected until notice of change of status is made to the public (such as by publication in the Internal Revenue Bulletin). However, if the grantor or contributor was responsible for, or aware of, the act or failure to act that resulted in the organization's loss of classification as a nonprivate foundation, then the contributions will not be given the favorable income tax treatment granted public charities. Before accepting a grant or contribution that might arguably result in the organization's loss of classification as a public charity, a potential grantee may request a ruling on whether the grant or contribution may be made without affecting its nonprivate foundation status. A request for a ruling may be filed by the organization with the IRS District Director. Issuance of the ruling will be at the sole discretion of the IRS. The nonprofit corporation must submit all information necessary to make a determination on the support factors discussed in Handbook, 4.3 above. If a favorable ruling is issued, the ruling may be relied upon by the grantor of the particular contribution in question. The organization may also rely on the ruling for excluding unusual grants in the calculation of its public support. 4.4.3 Appeal Procedures. A. Administrative Appeal. If a nonprofit organization applies for tax-exempt status and receives an adverse determination letter, the organization will be advised of its right to protest the determination by requesting Appeals Office consideration. The protest must be submitted to the IRS EO area manager of the office issuing the letter within 30 days from the date of the adverse determination letter and must state that an Appeals Office conference is desired. Any determination HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 40
letter issued on the basis of technical advice from the National Office, however, may not be appealed to the Appeals Office. If an application is referred to the National Office for issuance of a ruling and an adverse ruling is issued, the nonprofit corporation will be informed of the basis for the conclusion and of its right to file a protest within 30 days and to a conference at the National Office. B. Appeal to Courts. In addition to administrative remedies, the organization may have certain judicial remedies. If the statutory prerequisites are met, a nonprofit corporation may file suit in a federal district court or the Court of Claims for a refund of taxes paid, or the Tax Court for a redetermination of any tax deficiencies. For more information regarding these types of actions, refer to IRS Publication 556. C. Declaratory Judgments. If the nonprofit corporation has exhausted all administrative remedies, then, in certain cases, it may seek a declaratory judgment from the Tax Court, Court of Claims, or District Court for the District of Columbia. This remedy is available for adverse determinations (or failure by the IRS to make a determination) on the initial or continuing qualification or classification of a nonprofit corporation as an exempt organization under IRC 501(c)(3), as an organization for which a contribution deduction is allowed under section 170(c)(2), as a publicly supported charity under section 509, or as a private operating foundation under section 4942(j)(3). The declaratory judgment remedy can be used only after administrative remedies have been exhausted, or, if the IRS has not issued a notice of final determination, after 270 days have elapsed since the nonprofit corporation requested a determination and the organization has taken, in a timely manner, all reasonable steps to secure such determination.
4.5. Organizing Financial Information. Financial information should be organized in a manner to facilitate easy completion of financial statements and income tax returns. The principal purpose of a nonprofit organization's financial statements is to demonstrate the manner in which resources have been or will be used to achieve organizational goals. This purpose requires reporting the type and amount of resources, the uses made of the resources, and the net change in fund balances during the reporting periods. The financial statements should identify the entity's main programs and the associated revenue and expenses. Disclosure is very important in financial statements and nonprofits should disclose the degree of control exercised by donors over the use of their resources. Financial statements should also help the reader determine the organization's ability to accomplish its financial goals. Period statements, prepared in accordance with the AICPA's Audit of Certain Nonprofit Organizations/Statement of Position 78-10 should include a balance sheet, a statement of activity, HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 41
a statement of changes in fund balances, and a statement of changes in financial position. Each organization should develop statements most appropriate to its needs in conformity with the principles discussed in the AICPA publication. If the organization has been in existence for four or more years, the statement of support and expenses must be completed for the most recent four tax years. If the organization has been in existence for more than one year, but less than four years, the statement of support and expenses must be completed for each year in existence together with projections of likely revenues and expenses, based upon a reasonable and good faith estimate of future finances, for a total of three years. If the organization has been in existence for less than one year, the organization must provide projections of likely revenues and expenses for the current year and the two following years, based on a reasonable and good faith estimate of future finances, for a total of three years of financial information.
4.6. Finding an Accountant. Finding a reputable accountant is important to ensure good financial recordkeeping, proper financial statement presentation, and accurate tax filings. The American Institute of Certified Public Accountants will provide a listing of its members as will the Idaho Society of Certified Public Accountants. It may be beneficial to discuss the need for and use of an accountant with similar nonprofit organizations, with the possibility of obtaining referrals.
5. MAINTAINING CHARITABLE STATUS UNDER IRC 501(C)(3).

5.1. Information Returns. 5.1.1 Who Must File Information Returns. In order to maintain tax-exempt status under IRC 501(c)(3), it is necessary for many such organizations to file Form 990, Return of Organization Exempt From Income Tax. Generally, except for churches and affiliates, all IRC 501(c)(3) organizations that normally have annual gross receipts in excess of $25,000 must file Form 990. Gross receipts are defined as the total amount the organization received from all sources without subtracting any costs or expenses. Gross receipts will be considered "normally" in excess of $25,000 if for the immediately preceding three years (including the year for which the return is to be filed) they averaged over $25,000. 5.1.2 When Information Returns Are Due. Form 990 is due on or before the 15th day of the fifth month after the organization's fiscal year ends. For an organization with a calendar fiscal year, the due date for the information return is May 15. If the organization has been dissolved, the return is due by the 15th day of the fifth month after the dissolution. 5.1.3 General Reporting Considerations. When preparing Form 990, one should be aware that the form is available for public inspection at the organization's office and through the IRS. Accordingly, an organization should, in certain circumstances, consider providing optional information to clarify or explain any information that might otherwise be misunderstood. For example, if an organization has received substantial funds during the year that are restricted or nonexpendable, it might be wise to complete optional columns to show the breakdown between restricted and unrestricted funds so that the report better portrays the current need for unrestricted funds. 5.1.4 Reporting Revenues Under Form 990. A. Three Categories of Contributions. At Part I, Line 1 of Form 9901 under the heading "Contributions, gifts, grants, and similar amounts received," lines are provided for three categories of contributions. The first category is "Direct public support" and covers what one would normally categorize as contributions, amounts received from individuals, trusts, corporations, estates, and foundations that are not payments for services or products that benefit the grantor or that benefit the grantor only incidentally.
All references in this Chapter are to the Form 990 or Form 990-T in use for the 2004 tax year, copies of which are included in the Appendix. The IRS will, from time to time, change these forms, so the content of this Handbook must be compared to the forms for the current tax year. HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 43
The second category is "Indirect public support," which includes receipts from fund-raising agencies such as the United Way or receipts from organizations affiliated with the reporting organization. The third category is "Government Contributions," which includes grants from any level of government that are equivalent to contributions. B. Program Service Revenue. "Program service revenue" (Part I, Line 2) is defined as revenue derived from those activities that form the basis of the organization's exemption from tax. Program service revenue is revenue received from recipients of the service that is primary to the organization's exemption. Examples would be tuition received by an exempt educational institution and admissions to a performing arts event received by a performing arts company. Generally, revenue from the sale of inventory should not be included in this category. C. Investment Income. The organization should maintain separate records for the four types of investment income (and related expenses) that must be reported on Form 990 (lines 4-7). Line 4 is provided for interest income on savings accounts and other temporary cash investments. This should be recorded separately from dividends and interest from securities, that is, stocks and bonds (line 5). The third category of investment income is rents received from investment property (lines 6a, b, and c). Finally, a line for other investment income is provided for investment income that does not fall within the previous three categories (line 7). An example of other investment income would be royalty income from mineral interests owned by the organization. D. Sales of Capital Assets. Revenue from the sale of capital assets is reported on lines 8a, b, and c. A schedule should be attached to Form 990 giving specific information about each asset (other than inventory items) sold or exchanged. For each item sold, the schedule should list the date acquired, how acquired, date sold, to whom sold, gross sales price, cost (if purchased) or value at the time acquired (if donated property), expenses of sale, cost of improvements made after acquisition, and if depreciable property, depreciation since acquisition. Since this list is lengthy, it is important to establish a recordkeeping system that collects all required information. Sales of securities are to be reported separately from sales of other assets. Sales of publicly traded securities through a broker may be aggregated and reported as a lump sum. In addition to gross sales proceeds, revenue from capital gains dividends, the organization's share of capital gains and losses from a partnership, and capital gains distributions from trusts must be reported on these lines, and the source of each item must be listed and described on the schedule discussed above. HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 44
E. Special Fundraising Events and Activities. A separate line, at Part I, Line 9, is provided to report revenues from fund-raising events and activities. The primary purpose of these events or activities is to raise funds, but unlike solicitations for contributions, this is done by offering products or services for sale at more than nominal value in return for a payment that is higher than the direct cost of the products or services provided. A special fund-raising event or activity can also generate "contributions" if the buyer pays more than market value for the products or services furnished. F. Sales of Inventory. Revenue from sales of inventory are reported on lines 10a, b, and c. This item covers revenue from the sale of items that the organization makes to sell or purchases for resale other than those sold in special fund-raising events and activities. The revenue from sales and the cost of goods sold should be reported here whether the sale of the merchandise involved is an exempt function or an unrelated trade or business. Hospitals, colleges, and universities are allowed to report exempt function sales of inventory under program service revenues because of their specialized recordkeeping systems. 5.1.5 Special Considerations in Reporting Expenses. A. Three Expense Categories Required. Total expenses for the organization are reported at Part I, Lines 13-17. The figures for these expenses are a compilation of amounts taken from Part II of Form 990, Statement of Functional Expenses. In addition to classification of expenses, such as salaries, interest, and supplies, Form 990 provides three columns for listing the organization's expenses by function - "Program services" (column B), "Management and general" (column C), and "Fundraising" (column D). Program services expenses are defined as those expenses attributable to the activities that form the basis of the organization's exemption from tax. Management and general expenses are expenses for overall management and functioning rather than for program services or directly related to fund-raising activities. Examples of this category would be expenses of the principal officer of the organization and expenses for the organization's board meetings. The fund-raising column is for expenses incurred in soliciting contributions. B. Payments to Affiliates; Grants and Allocations; Specific Assistance. to Individuals; Benefits Paid for Members. The titles to the four expense categories designated on Part I, Line 16 and Part II, Lines 22-24, are somewhat confusing. It is important to understand the differences between them from the inception of the organization so that such expenses may be properly classified. The total for Line 16, "Payments to affiliates," is not HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 45
taken from Part II, Statement of Functional Expenses, but rather is taken from a separate schedule that includes those amounts. This line is provided to report payments required to affiliated an organization (e.g., by a local organization to a national affiliate). These payments would be used at the discretion of the recipient affiliate. On the other hand, if the payments are voluntary and are to be used for a purpose specified by the reporting organization, such payments would then be properly classified as "Grants and allocations" (Part II, Line 22), even if paid to an affiliated organization. Both of these types of payments require a supporting schedule listing the donee's name and address, the amount and purpose of each payment, and, in the case of grants to individuals, the relationship of the donee if related by blood, marriage, adoption, or employment to any person or corporation with an interest in the donor organization. "Specific assistance to individuals" (line 23) is for reporting payments to or for the benefit of particular clients or patients. For example, a payment to a hospital to cover the medical expenses of a particular individual should be included in this category. A payment to a hospital to provide some service to the general public where the hospital makes the determination who will receive the benefit does not fall within this category, but rather under "Grants and allocations." Also, scholarships, fellowships, and research grants to individuals, even though selected by the grantor organization, should also be considered "Grants and allocations," not specific assistance to individuals." The schedule supporting the "Grants and allocations" classification should show total payments for each particular class of activity, but not the identity of individual recipients. "Benefits paid to or for members" (line 24) should not be used by IRC 501(c)(3) organizations. This line is provided for other types of organizations that also use Form 990, such as a Voluntary Employees' Beneficiary Association. C. Reporting Compensation of Officers, Directors and Employees. Due to the many regulations relating to compensation, care must be exercised to properly record and report compensation. Part II, Line 25, of Form 990 is provided for compensation of officers and directors. Information regarding this compensation must therefore be maintained separately from "Other salaries and wages" (line 26). In Part V of Form 990, each officer and director must also be listed, together with the officer's or director's address, title, average hours per week devoted to the officer's or director's position, compensation, contributions to employee benefit plans, and expense account allowances for which the recipient is not required to give an accounting to the organization or expense allowances that exceed the amount the officer or director spent on serving the organization. Finally, on Schedule A to Form 990, Part III, the organization is required to state whether it has paid compensation to any "trustee, director, principal officer, or creator of the organization, or any taxable organization or corporation with which such person is affiliated as an officer, director, trustee, majority owner, or principal beneficiary." If so, a detailed statement explaining the transactions HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 46
is required. If an employee is also an officer or director, even if receiving no compensation in the latter capacity, the circumstances must be explained in a detailed statement. On Schedule A, Part I, a listing of the five highest paid employees other than officers and directors is required. Only those paid in excess of $50,000 annually need be listed.
5.1.6 Special Balance Sheet Considerations. A. Distinguishing Various Categories of Receivables. Form 990, Part IV, "Balance Sheets," provides five lines to report various types of receivables (lines 47 through 51). The first line, "Accounts receivable" (line 47), includes those accounts that arose from the sale of goods and the performance of services, but should exclude all amounts due from officers, directors, and employees. "Pledges receivable" (line 48a) and "Grants receivable" (line 49) are self-explanatory. Line 50 covers receivables (resulting from loans) due from officers, directors, trustees, and key employees. The term "key employee" is defined to mean the chief administrative personnel, such as an executive director, but not heads of separate departments or smaller units. An extensive supporting schedule is required for loans to officers, directors, trustees, and key employees. This schedule must provide the borrower's name and title, original amount, balance due, date of note, maturity date, repayment terms, interest rate, security provided by the borrower, purpose of the loan, and a description of the consideration furnished by the lender and the fair market value of that consideration, if other than cash. Each loan must be listed separately, even if made to the same individual. The final category of receivables is "Other notes and loans receivable" (line 51a). This category also requires a detailed schedule (like the one for loans to officers, etc.), and disclosure of the relationship of the borrower to any officer, director, trustee, or key employee of the organization. B. Distinguishing Various Categories of Payables. Liabilities are categorized in a manner similar to the categorization of receivables in the "Assets" portion of the "Balance Sheets." Lines are provided for "Accounts payable and accrued expenses" (line 60) and "Grants payable" (line 61). Also, loans from officers, directors, trustees, and key employees must be reported in a separate line (line 63) and require a detailed supporting schedule. The next two categories, "Tax-exempt bond liabilities," "Mortgages and other notes payable" (lines 64a and 64b), also require supporting schedules. One rather unusual category is entitled "Deferred Revenue (line 62). This category is similar to unearned revenue accounts, but the determination that the item is for a future period or periods must be HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 47
made by the donor or grantor, not by the filing organization, to fit within this classification. C. Reporting Net Worth. Two methods of reporting net worth are permitted. Those organizations that use fund accounting must report their various fund balances in Part IV, Lines 67-69. Lines 67-69 require that the organization split its net assets into three different funds: an Unrestricted fund (line 67); a Temporarily restricted fund (Line 68); and a Permanently restricted fund (line 69). Organizations that do not use fund accounting are required to report the net worth amounts for "Capital stock or trust principal" (line 70), "Paid-in or capital surplus" (line 71), and "Retained earnings or accumulated income" (line 72). These amounts are totaled at line 73 and combined with total liabilities taken from line 66. 5.1.7 Other Information to be Reported. A. Reporting Changes in Scope or Form of Operation. Three questions in Part VI of Form 990, "Other Information" (lines 76, 77, and 79), relate to the scope and form of the operations of the organization. A "yes" answer to any of these questions requires the organization to submit descriptive information. The first question (line 76) asks if any new activities not previously reported to the IRS have been engaged in by the organization. This question refers to either adding or discontinuing significant activities the organization conducts to further its exempt purpose. The second question (line 77) asks if any changes have been made in the governing documents of the organization. The IRS requires a conformed copy of any amendments to the articles, bylaws, or trust instrument. The third question (line 79) asks if a "liquidation, dissolution, termination, or substantial contraction" occurred during the year. A substantial contraction has occurred if, in a single disposition or a series of related dispositions (even if not in the same fiscal year), 25 percent of the fair market value of the organization's net assets at the beginning of the year are depleted. B. Reporting Donated Services. Line 82a at Part VI, asks if the organization has received any donated services or the use of materials, equipment, or facilities at no charge or for substantially less than fair rental value. If the answer is "yes," a space is provided at 82b to voluntarily report the value of the donation. If the organization decides it would be beneficial to report the value of donated services, a recordkeeping system must be devised to record these estimates. This amount is not to be reported in the revenue or expenses of the organization but may be mentioned in the narrative of Part III of the return, where program services are described. HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 48
C. Special Reporting for Private Schools. Completion of Schedule A, Part V, is only required of private schools. This section deals with a school's nondiscrimination policy with respect to students; how such policy is publicized; and special recordkeeping requirements for private schools. These requirements include maintaining records of the racial composition of the student body, faculty and administrative staff; proof that financial assistance, if any, is granted on a racially nondiscriminatory basis; and a statement that the organization maintains copies of solicitation material and catalogues, brochures, and announcements to the public dealing with student admissions, programs and, scholarships to verify that they properly communicate the school's nondiscriminatory policy. Furthermore, the racially nondiscriminatory policy must be publicized in a way that makes the policy known to all parts of the general community served by the school. Revenue Procedure 75-50, 1975-2 C.B. 587 describes the exact requirements for private schools with regard to racial nondiscrimination.
5.2. Tax Consequences of Amendments to Articles and Bylaws. 5.2.1 Requirements of IRC 501(c)(3). In order to qualify for tax-exempt status under IRC 501(c)(3), an organization must meet two tests. First, it must be organized exclusively for one or more of the purposes stated in IRC 501(c)(3); that is, for religious, charitable, scientific, testing for public safety, literary, or educational purposes, to foster amateur sports competition, or for the prevention of cruelty to children or animals. Second, it must be operated exclusively for one or more such purposes. These two tests are generally referred to as the "organizational" and "operational" tests, respectively. Reg. 1.501(c)(3)-1. Failure to meet either of these two tests will disqualify an organization from tax-exempt treatment under IRC 501(c)(3). Compliance with the organizational test requires that a corporation's articles of incorporation (1) limit the purposes of the corporation to one or more exempt purposes, and (2) do not expressly empower the corporation to engage in activities that are not in furtherance of one or more exempt purposes, other than as an insubstantial part of its activities. Reg. 1.501(c)(3)-1(b). For example, if the articles permit or empower the corporation to engage in prohibited political activity or campaigning, or to improperly benefit shareholders or individuals, the corporation will fail the organizational test. The articles must contain certain compulsory provisions, including a dissolution clause dedicating assets of the corporation to one or more exempt purposes upon its dissolution. Reg. 1.501(c)(3)-1(b)(4). The provisions required in the articles are more fully discussed in Handbook,2.2 and Chapter 4. 5.2.2 Loss of Tax-Exempt Status Due to Change in Articles or Bylaws. Because a tax-exempt organization will cease to qualify if it fails to meet the organizational and operational tests, a corporation must be extremely careful if it amends its articles or bylaws. If the amendments alter the corporation's authorized purposes so there is a material change that fails to satisfy the organizational test requirements, or if the amendment causes a material change in the method of HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 49
operation that is inconsistent with the operational test, the corporation risks loss of its tax-exempt status. 5.2.3 Prior Determination Letter Affords No Protection. If there has been a change in the corporation's articles, it may no longer rely with confidence upon the favorable determination letter from the IRS as to its tax-exempt status even though the IRS has not actually notified the organization that it has lost its tax-exempt status or taken other affirmative steps to revoke that status. A determination letter affords no protection where the facts differ materially from those presented at the time the determination letter was requested. Accordingly, amendment of articles on which such a letter was based renders reliance upon a favorable determination potentially problematic. 5.2.4 Submission of Amendments. While a corporation should be cautious in making any changes to its articles, circumstances may arise that require changes to be adopted nonetheless. If both the organizational and operational tests are satisfied after the amendments, tax-exempt status should not be jeopardized. Any such changes should be submitted in writing to the District Director of the IRS responsible for reviewing applications for recognition of exemption. Also, if the organization is required to file Form 990, a copy of the amendments should be filed with that return if not previously submitted to the District Director.
5.3. Rules Regarding Contributions. Since entities qualifying as tax-exempt organizations under IRC 501(c)(3) generally receive contributions from individuals or other entities, the Internal Revenue Code imposes limitations and duties upon the entities receiving contributions. In addition, the ability of donors to claim tax deductions for their contributions is affected by the type of entity to which a contribution is made. 5.3.1 Duties of Organization and Use of Contributions. An organization that is tax-exempt under IRC 501(c)(3) and is required to file Form 990 must include as a part of that return "the total of the contributions and gifts received by it during the year, and the names and addresses of all substantial contributors." IRC 6033(b)(5). In addition, Form 990 requires the entity to report payment of benefits to or for members, specific assistance given to individuals, political expenditures, lobbying expenditures, and whether the organization received contributions of donated services or the use of materials, equipment, or facilities at no charge or at substantially less than fair rental value, and to respond to other questions regarding expenditures and fund sources. All of these requirements place a substantial responsibility upon the organization to maintain accurate books and records in order to be able to accurately report the nature, source, and value of contributions and to substantiate the use of funds, including contributions. Furthermore, use of funds and contributions in a manner such that the organization is not operated exclusively for one or more exempt purposes under IRC 501(c)(3) and use of funds not in conformity with the purposes stated in its articles will cause the organization to fail the operational test under Reg. 1.501(c)(3)-(c)(1). This will occur if, for example, contributions or other funds are used to benefit private shareholders, members, or individuals. Use of contributions in such a manner HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 50
will jeopardize the organization's tax-exempt status, as will using contributions or other funds and assets for restricted purposes. 5.3.2 Deductibility of Contributions by Donor. Not all donations to tax-exempt organizations will qualify for a charitable deduction. Individual and corporate donors may usually deduct charitable contributions to qualified IRC 501(c)(3) organizations. Deductibility depends in large part on the nature of the organization. Whether or not a contribution is deductible, and the amount of the contribution that can be deducted, is governed by IRC 170 (and by IRC 641 for trusts or estates). Generally, for contributions to "public charities" and to some private foundations, the deduction for individual donors is limited to 50% of adjusted gross income. More restrictive limitations apply if the donee is not a public charity or a qualified private operating foundation. Corporate deductions are generally limited to 10% of a donor corporation's annual taxable income, specially computed. Contributions that are not deductible as charitable contributions may be deductible for some taxpayers as a business expense. IRC 162. Donors with specific questions or concerns about deductions to which they may be entitled should seek independent advice from professional tax advisors. This is not the responsibility of the tax-exempt organization, and such advice should not be given to donors by the tax-exempt organization. A. Public Charity Versus Private Foundation. It may be important for an individual donor to determine whether the recipient is a public charity or private foundation. Generally, an individual donor making contributions to a private foundation may claim a charitable deduction for such contributions to a maximum of 30% of the donor's adjusted gross income IRC 170(b)(1)(B)(i). A deduction for a contribution to a public charity, however, can be claimed to a maximum of 50% of the donor's adjusted gross income IRC 170(b)(1)(A). There is a five-year carryover for contributions in excess of 50% of the donor's adjusted gross income also. IRC 170(d). Section 170(b)(1)(A) lists some organizations, such as churches, schools, and hospitals, that are expressly included as public charities. Entities not specifically listed may be included if they are "publicly supported." Section 170(b)(1)(A)(vi) sets forth two tests, one of which must be met before an organization will be regarded as "publicly supported." Generally, these tests require substantial financial support from a governmental unit or the general public. The tests are more fully discussed in Handbook, 4.3. IRC 501(c)(3) organizations not qualified as public charities will be classified as private foundations. IRC 509. On the other hand, a private foundation that qualifies as a private operating foundation" under IRC 4942(j) is included within Section 170(b)(1)(A). Thus, qualified private HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 51
operating foundations are considered public charities for purposes of the limits on deductibility. To qualify as a private operating foundation, an IRC 501(c)(3) organization each year must: (1) make qualifying distributions directly for the active conduct of charitable activities for which it was organized (and actually operated) equal to substantially all (85 percent) adjusted net income; and meet one of the following: (a) asset test - substantially more than one-half of its assets (65 percent) are devoted directly to such activities; or distribution test - normally makes qualifying distributions directly for the active conduct of charitable activities for which it was organized in an amount not less than two-thirds of its minimum investment return; or support test - substantially all (85 percent) support other than gross investment income is normally received from the general public and five or more uncontrolled exempt organizations, provided not more than 25 percent of the support comes from any one organization and not more than one-half of the support is normally received from gross investment income.
(2)
(b)
(c)
As defined in IRC 4942(g)(1) and (2), a "qualifying distribution" for purposes of the distribution test includes either: (1) any amount, including administration expenses, paid to accomplish the charitable purpose other than contributions to: (a) an organization controlled by a disqualified person; or a private operating foundation that does not distribute the full contribution within one year and keep adequate records; or
(b)
(2)
any amount paid to acquire an asset used directly in carrying out a charitable purpose.
B. Substantiation Requirements. Charitable contributions of $250 or more must be substantiated by a contemporaneous written acknowledgment to be deductible. Charitable organizations are required to give donees who contribute $250 or more a written acknowledgment or alternatively file a return with the IRS including the same information that is required to be included in the written acknowledgment. Written Acknowledgment. An acknowledgment must include the following information: (1) The amount of cash and a description (but not the value) of any property other than cash contributed. Whether the donee organization provided any goods or services in consideration, in whole or in part, for any property contributed. A description and good-faith estimate of the value of any goods or services provided to the donor, or, if the goods and services consist solely of "intangible religious benefits," a statement to that effect.
(2)
(3)
An "intangible religious benefit" is any benefit that is provided by an organization organized exclusively for religious purposes and that generally is not sold in a commercial transaction outside the donative context. For example, admission to a religious ceremony is an intangible religious benefit. Timing of Acknowledgment. The acknowledgment should be given to the taxpayer on or before the earlier of: (1) the date the taxpayer files a return for the taxable year in which the contribution was made; or the due date, including extensions, for filing the taxpayers return.
(2)
Because taxpayers may have different taxable years, the best policy is to deliver the acknowledgment contemporaneously with acceptance of the contribution. C. Quid Pro Quo Contributions. Quid pro quo contributions are payments made partly as a contribution and partly as consideration for goods or services furnished to the donor. For example, donations made to a charitable organization at a banquet may be given partly as a contribution and partly in exchange for a meal. However, a quid pro quo contribution will not include any payment made to an organization organized exclusively for religious purposes, in return for which HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 53
the taxpayer receives solely an intangible religious benefit that generally is not sold in a commercial transaction outside the donative context. Disclosure Requirements. For quid pro quo contributions in excess of $75 made on or after January 1, 1994, charitable organizations are required to inform donors that the contribution is only deductible to the extent that it exceeds the value of goods or services provided by the organization. Written Statement Requirement. Charitable organizations will be required, in connection with the solicitation or receipt of the contribution, to provide a written statement that: (1) informs the donor that the amount of the contribution that is deductible for federal income tax purposes is limited to the excess of the amount of any money, and the value of any property other than money, contributed by the donor over the value of the goods or services provided by the organization, and provides the donor with a good-faith estimate of the value of goods or services furnished to the donor by the organization.
(2)
Penalties. Penalties of $10 per contribution may be imposed upon charities that fail to make the required disclosure, unless the failure is due to reasonable cause. The penalty will be capped at $5,000 per particular fundraising event or mailing. The penalties are to apply if an organization either fails to make any disclosure in connection with a quid pro quo contribution or makes a disclosure that is incomplete or inaccurate. D. Gifts of Appreciated Property. i. Long-Term Capital Gain Property. The current fair market value of appreciated long-term capital gain property donated to a public charity (including a private operating foundation) may be deducted up to a limit of 30% of the donor's adjusted gross income with a five-year carryover for any excess. IRC 170(b)(1)(C). Alternatively, the donor may elect to deduct up to 50 percent of donor's adjusted gross income up to a limit of the donor's cost basis in the property. The allowable deduction is reduced by 100 percent of the gain that would not have been long-term capital gain if the property contributed had been sold at its market value at the time of the contribution. IRC 170(e)(1)(A). Gifts of appreciated property to a private foundation are deductible (at fair market value for publicly traded stock contributed prior to January 1, 1995, and at cost for all other types of appreciated property) up to 20 percent of the donor's adjusted gross income. IRC 170(b)(1)(D). HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 54
ii. Ordinary Income Property. Ordinary income property is deductible only up to the donor's cost basis. IRC 170(e)(1). Ordinary income property includes inventory, short-term capital gain property, and copyrights and works of art if donated by the creator. When depreciated real property and personal property are contributed to a public charity, the donor's deduction is reduced by the amount of depreciation recapture that would have been recognized had the donor sold the property instead of donating it to the charity. iii. Related Use. If tangible personal property is "related" to a charity's exempt purposes, is held long-term, and is expected to be retained by the charity rather than being sold, there is no reduction for appreciation; the value of the property contributed is deductible up to 50 percent of adjusted gross income. For example, works of art donated to an art museum are "related" to a charity's purposes, as is medical equipment donated to a hospital. However, if tangible personal property contributed to a charity is unrelated to the charity's exempt purposes, then the deduction is limited to the donor's cost basis in the property. iv. Alternative Minimum Tax. Prior to January 1, 1993 contributions of appreciated property could subject the owner to the Alternative Minimum Tax (AMT), because the difference between the fair market value and the adjusted basis of contributed property was treated as a tax preference item for AMT purposes. This rule has now has now been repealed. As a result, the difference between the fair market value of donated appreciated property and the adjusted basis of that property is not treated as a tax preference item for AMT purposes. If a taxpayer donates real, intangible, or tangible personal property whose use is related to the donee's tax-exempt purposes, the taxpayer is allowed to claim a deduction for both regular tax and AMT purposes in the amount of the property's fair market value. This rule is subject to present-law percentage limits and does not include donations of inventory or other ordinary income property, short-term capital gain property, or certain gifts to private foundations. E. Gift and Estate Taxes. Generally, gifts to public charities and private foundations qualify for gift and estate tax deductions. IRC 2055(a) and 2522(a).
5.4. Restrictions on Expenditures. 5.4.1 Generally. The express statutory language of IRC 501(c)(3) places restrictions on how organizations qualifying for tax exemption under that provision may make expenditures. IRC 501(c)(3) organizations must be "organized and operated exclusively" for one or more of the HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 55
purposes stated. Material expenditures that do not further the IRC 501(c)(3) purposes set forth in the organization's articles are restricted by implication. In addition, regardless of whether or not such expenditures might arguably assist the organization in achieving its purposes, IRC 501(c)(3) limits expenditures for lobbying ("carrying on propaganda or otherwise attempting to influence legislation") and expressly prohibits expenditures to political campaigns for public office and those that inure to the benefit of shareholders, members, or private individuals. Most tax-exempt organizations are subject to rules that restrict them from engaging in certain political activities or attempting to influence legislation as a substantial part of their total activities. One notable exception is a political organization (such as a political party or political action committee) that is authorized under IRC 527 to engage in political campaign activities. Another exception are social welfare organizations created under IRC 501(c)(4), which may engage in some political and lobbying activity consistent with the organization's primary purpose. Organizations organized under IRC 501(c)(3), however, are subject to the rules described below, which restrict lobbying activities and prohibit campaign expenditures. 5.4.2 Lobbying Expenditures. A. General Rule. Section 501(c)(3) states the general rule regarding lobbying expenses: "no substantial part of the activities ...[of a 501(c)(3) organization may consist of] carrying on propaganda, or otherwise attempting, to influence legislation." Therefore, if a "substantial part" of an organization activities consist of lobbying, it will lose its exemption. Moreover, if an organization does lose its exemption because of lobbying, an excise tax equal to 5 percent of the lobbying expenditures may be imposed on both the organization and its managers. IRC 4912. B. Exception: IRC 501(h) Election. An exception to the general rule of IRC 501(c)(3) is set forth in IRC 501(h). Under this section, an organization may make lobbying expenditures regardless of whether the expenditures constitute a "substantial part" of the organization activities. Expenditures under IRC 501(h) are instead subject to an "expenditure test." i. Election. The only organizations that will benefit from IRC 501(h) are those that elect for it to apply. An election is made by filing IRS Form 5768. Once filed, the election remains in effect for subsequent years until it is revoked. Note: Form 5768 is now included with the Form 1023 packet. Part VIII, line 26, specifically asks applicants whether they intent to make an election under IRC 501(h). ii. Qualification. Those organizations eligible to elect the IRC 501(h) lobbying rules are listed in IRC 501(h)(4). These organizations include certain educational institutions, hospitals and medical research organizations, organizations supporting government HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 56
schools, organizations under IRC 170(b)(1)(A)(vi) that are publicly supported by charitable contributions, organizations publicly supported by admissions or sales, and organizations under IRC 509(a)(3) that support certain types of public charities. Organizations eligible to elect to be covered by IRC 501(h) rules do not include churches or church auxiliaries or members of an affiliated group of organizations. IRC 501(h)(5). iii. Expenditure Test. After an organization makes a qualifying election under 501(h), it may spend up to certain amounts on lobbying without incurring any tax or losing its exemption. The amount an organization may spend on general lobbying is called its "lobbying non-taxable amount." This amount is the lesser of $1,000,000 or the amount determined by a schedule set forth in IRC 4911(c). The schedule compares the amount of an organization's lobbying expenditures with the organization's exempt purpose expenditures to determine the lobbying non-taxable amount. For example an organization with exempt purpose expenditures of less than $500,000 has a lobbying non-taxable amount equal to 20 percent of its exempt purpose expenditures. The amount it may spend on grass roots lobbying is further reduced to 25 percent of its lobbying non-taxable amount. An organization that exceeds its lobbying non-taxable amount is subject to a 25 percent tax on the amount of the excess. IRC 4911. However, an organization does not lose its tax exemption until it spends more than 150 percent of its lobbying non-taxable amount or 150 percent of its grass roots lobbying non-taxable amount. IRC 501(h). 5.4.3 Campaign Expenditures. Campaign expenditures may be made by some 501(c) organizations to the extent such expenditures are consistent with the organizations exempt purpose. Direct campaign expenditures, however, can subject the organization to tax under IRC 527(f) unless the organization establishes a "segregated fund" in accordance with IRC 527(f)(2)3) (that is, a fund that itself qualifies as a political organization. Campaign expenditures also may limit the deductible amount paid by contributors and impose additional reporting requirements on the organization. IRC 162(e) and 6033(e). Unlike other 501(c) organizations, those created under 501(c)(3) are not permitted to make political campaign contributions or otherwise engage in any political campaign. 5.4.4 Private Inurement. An organization does not qualify as tax-exempt if any part of its net income or earnings inures to a private shareholder or individual. Private inurement issues arise where the organization is created to make, or accepts gifts subject to, payments to private individuals. They also may arise if the organization pays excessive compensation or rent to individuals, pays improper or exorbitant purchase prices for assets, makes improper expense HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 57
reimbursements, provides free services or facilities to selected individuals, or through similar actions. Reg. 1.501(c)(3)-1(c)(2). 5.4.5 Fostering Private Interests. An additional restricted class of expenditures is closely related to the restriction on inurement to the benefit of shareholders or individuals. An organization is not considered to have been organized or operated exclusively for IRC 501(c)(3) purposes if the organization serves private rather than public interests. Reg. 1.501(c)(3)-1(d)(1)(ii). 5.4.6 Excess Benefit Transactions: IRC 4958. In response to serious abuses related to the compensation of some highly-paid nonprofit executives, Congress added IRC 4958 to the Internal Revenue Code in 1996. IRC 4958 imposes a tax of 25 percent on excess benefits (for all intents and purposes, excessive compensation) paid to disqualified persons. IRC 4958(a)(1). When such a tax is imposed, a tax of 10 percent of the excess benefit will also be imposed on any organization manager who participated in the payment of the excess benefit unless such participation was not willful and is due to reasonable cause. The term disqualified person is defined to include: any person who was, at any time during the 5-year period ending on the date of the transaction, in a position to exercise substantial influence over the affairs of the organization; a member of the family of such an individual; and an entity with respect to which such people control more than 35 percent of the total combined voting power. IRC 4958(f)(1). If the excess benefit transaction is not corrected within the taxable period, an additional tax is imposed equal to 200 percent of the excess benefit. IRC 4958(b). An excess benefit transaction is defined to include any transaction in which an economic benefit is provided to a disqualified person, family member or entity, if the value of the economic benefit provided exceeds the value of the consideration received for the benefit. IRC 4958(c).
5.5. Unrelated Business Income Tax (UBIT). Nonprofit organizations have a competitive advantage over other businesses. Imagine a restaurant that did not have to pay taxes merely because it was owned by a church or other exempt organizations. For this reason, exempt organizations must pay taxes when they engage in businesses unrelated to their exempt purpose. This tax is called the Unrelated Business Income Tax ("UBIT"), and the tax rate is the same as that imposed on regular for profit corporations. 5.5.1 Unrelated Business Income Defined. "Unrelated trade or business," is defined by the presence of all three of the following factors: (a) The income producing activity is carried on for the production of income from selling goods or performing services. The trade or business is frequent, continuous, and pursued in a manner similar to comparable activities of non-exempt organizations. A sandwich stand operated for two weeks at an annual state fair by a hospital auxiliary would not be "regularly carried on." On the other hand, a commercial parking lot operated once a week, 12 months a year, would be a "regularly carried on" trade or business.
(b)
(c)
The activity is not substantially related to the organization's exempt purposes. If an activity "contributes importantly" to the accomplishment of a group's exempt purposes, then it is not considered "unrelated." An art museum that sells art reproductions on the side does not engage in an unrelated trade or business. If the museum sells scientific books, however, the museum will be engaging in an unrelated trade or business. IRC 512(a)(1) and 513(a); Regulation 1.513-1.
To escape UBIT, the size of the business activity needs to be proportionate to that required to further the exempt purpose of the entity. If the activity is conducted on a larger scale than "is reasonably necessary for the performance of such functions," the income attributable to the excessive activity will be treated as income from an unrelated activity and subject to taxation. Reg. 1.513-1(d)(3). 5.5.2 Exemptions from UBIT. There are two types of exemptions from UBIT, the first class is based on the type of income received from an activity, and the second class is based on the type of activity that produces the income. A. Types of Income Excluded from UBIT. IRC 512(b). (i) All dividends, interest, annuities, and all other substantially similar income from ordinary and routine investment. Royalty payments, including payments for the use of trademarks, trade names, or copyrights. Rents from real property and personal property incidental thereto, such as rent from furnished rooms and offices. (Rent from debtfinanced property is an exception, and is discussed below.) Gains and losses from the sale or exchange of property, except for the sale of inventory or items held primarily for sale in the ordinary course of business. Income from research performed for the United States, state or political subdivision or research carried out by a university or a hospital.
(ii)
(iii)
(iv)
(v)
B. Types of Activities Exempt from UBIT. IRC 513(a)-(h). (i) A trade or business where substantially all of the work is carried out by volunteers, such as a retail store that supports an orphanage and is run by unpaid helpers.
(ii)
A trade or business carried out by a nonprofit organization or a public college or university for the convenience of its members, students, patients, officers, or employees. Examples would include an employees cafeteria, a hospital gift shop or a college bookstore. A business of selling merchandise, substantially all of which is donated. An example would be a thrift shop run by a civic league. Certain trade shows, fairs and conventions carried on by nonprofit groups. A group of miscellaneous activities that include utility pole rentals, bingo games, and certain hospital services.
(iii)
(iv)
(v)
5.5.3 Unrelated Business Income and Debt-Financed Property. While rents from real property are generally excluded from UBIT, income from "debt-financed property" is not. Such property is defined as that which is held to produce income and with respect to which there is "acquisition indebtedness" at any time during the taxable year. IRC 514(b); Reg. 1.514(b)-1(a). This "acquisition indebtedness" includes: a mortgage held by the organization related to buying or improving the property; other indebtedness incurred before spending money on the property, if such debt would not have been incurred but for the property purchase or improvement; and debt incurred after buying or improving the property, if such debt would not have existed but for the money spent on the property. There is an exception to the debt-financed property rule if substantially all the use (85 percent or more) of the property is dedicated to the organization's tax exempt function. In such cases, the property is not treated as debt-financed property, even if it does have "acquisition indebtedness." Even if 85 percent of the building is not used for the organization's exempt purpose, that portion of that building that is used for exempt purposes is not treated as debt-financed. The tax treatment of debt-financed property can be quite elaborate, and an attorney who practices in the area should be consulted when dealing with such issues. 5.5.4 Income from Publicly Traded Partnership Interests. In the past, income from investment in a publicly traded partnership interest was considered unrelated business income, and taxed accordingly under IRC 512(c)(2). The 1993 Revenue Act changed this so that now only partnership organizations that engage in business unrelated to an organization's tax-exempt purposes, or produce income not otherwise excludable from unrelated business income, will be subject to the tax. If the partnership's income is derived from an activity that furthers the tax-exempt purpose of the organization, or if the investment income is disbursed in the form of dividends or royalties, then income from investment by a tax-exempt organization in that partnership will no longer be subject to UBIT. 5.5.5 Periodical Advertising Income. Income received from the sale of advertising in a regular magazine or periodical is generally considered unrelated business income. However, expenses, depreciation, and similar deductions related to the cost of producing and distributing the HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 60
periodical can be deducted from the income produced, but only to the extent that such deductions exceed subscription income. The rules in this area are complex, and an attorney who practices in the area should be consulted if questions arise. 5.5.6 Unrelated Business Income Deductions. Expenses directly connected to the unrelated trade or business can be deducted from the income subject to the unrelated business income tax, much as ordinary business corporations can deduct expenses, depreciation, and similar items from their income. "Directly connected with" means that the expense or other item from the deduction has a "proximate and primary relationship" to the unrelated business. Expenses incurred in connection with both exempt activity and unrelated trade or business activities are allocated between the two uses on a "reasonable" basis. If a tax exempt organization operates more than one unrelated trade or business, all activities are consolidated and the aggregate of the gross income less aggregate deduction yields the net unrelated business income. A standard deduction of $1,000 is allowed, meaning that an organization can have up to $1,000 in income from an unrelated trade or business and not pay any tax on it. An exempt organization may make and deduct charitable contributions of up to 10 percent of its unrelated business income. 5.5.7 Reporting Unrelated Business Income. Any exempt organization that has gross income from an unrelated trade or business of $1,000 or more must report that income on a form 990-T. Gross income in this context means income from the unrelated trade or business less "directly connected" expenses and costs. Form 990-T is due at the same time as Form 990, and to avoid penalties, quarterly payments of estimated tax should be made under the same rules that apply to other corporate income taxes. A copy of Form 990-T has been included in the Appendix to this Handbook. 5.5.8 Excessive Unrelated Business Income. If an organization conducts too much unrelated business activity, its tax exempt status will be jeopardized. If more than an "insubstantial part" of an exempt entity's activities constitute unrelated business activities, the organization will be in danger of losing its tax-exempt status. Reg. 1.501(c)(3)-1(c)(1). On the other hand, the IRS has also ruled that there are no quantitative limits so long as the organization carries on a charitable program "commensurate in scope with its financial resources." Rev. Rul. 64-182 1964-1 (Part 1) C.B. 186.
6. OPERATION OF A NONPROFIT CORPORATION.

6.1. Acting Like a Corporation. 6.1.1 Necessity of Formal Action. Actions intended as corporate activities should be plainly identified as such. A nonprofit corporation that does not observe corporate formalities needlessly exposes individual officers, directors, or members to individual liability instead of allowing them the protection of the corporate shield. When dealing with third parties, officers and directors ought to disclose the existence of the corporation and that they are acting on behalf of the corporation. Signatures on all documents should clearly reflect the signatory's corporate office or capacity. 6.1.2 No Requirement of Membership. Under the Act, a nonprofit corporation is not required to have members. Idaho Code 30-3-36 provides that a nonprofit corporation, except a cooperative corporation (which is defined in Idaho Code 30-3-11), is not required to have members. This provision eliminated the requirement that nonprofit corporations have members. Assuming that the necessary amendments to their articles are made, corporations incorporated under prior laws are not required to maintain a "membership" for the sole purpose of meeting statutory membership requirements. Because a nonprofit corporation is not required to have members, it may operate with delegates in accordance with Idaho Code 30-3-45 or with a self-perpetuating board of directors. All nonprofit corporations may now be formed with self-perpetuating boards of directors and no members. It should be noted, however, that Idaho Code 30-3-17(f) requires that the articles of incorporation state whether or not the corporation will have members. 6.1.3 Member Sovereignty. A. Ultimate Authority of Members. If a nonprofit corporation has members, ultimate authority to make certain fundamental decisions resides in the members. The degree of member sovereignty will vary from corporation to corporation depending on the provisions of the articles of incorporation and the customs and practices of the organization. The following are those actions for which membership approval is required: (1) election of directors (unless the articles provide that the existing directors elect successor directors), Idaho Code 30-3-66; removal of directors, Idaho Code 30-3-70; amendments to the articles of incorporation, Idaho Code 30-3-91;
(2) (3)
(4)
a sale of assets other than in the regular course of activities, Idaho Code 30-3-107; indemnification of officers, directors, employees, and agents, Idaho Code 30-3-88; a merger or consolidation of two corporations, Idaho Code 30-3-101; voluntary dissolution of the corporation, Idaho Code 30-3-111. Dissolutions are discussed in detail in Handbook, Chapter 8.
(5)
(6)
(7)
The procedures for calling and conducting membership meetings are discussed in Handbook, 6.2. B. Apportionment of Members Voting Rights. Idaho Code 30-3-37 states that all members shall have the same rights and obligations with respect to voting, dissolution, and transfer unless the articles or bylaws establish classes of membership with different rights or obligations, or divide voting rights by voting district. This statute authorizes a corporation to apportion voting rights on a basis other than one vote per member. However, if the articles are silent on voting rights, each member is entitled to one vote on each matter submitted to a vote. A member may vote by written proxy. Idaho Code 30-3-58. Majority vote is the general rule, although weighted voting and supermajority provisions may be desirable for certain kinds of issues. Special voting provisions should be authorized in the articles and described with particularity in the bylaws. 6.1.4 Management by the Board of Directors. A. Election or Appointment of Directors. Idaho Code 30-3-63(2) provides that unless the articles vest management of the corporation in its members or in a third person, the affairs of a nonprofit corporation shall be managed by its board of directors. In a membership corporation, the directors may be elected by the members. Alternatively, the articles or bylaws may provide another method of election or provide that some of the directors are appointed by some other person. Idaho Code 30-3-66(1). A corporation may provide in its articles or bylaws for the election of directors on the basis of chapter or other organizational unit, by region or other geographic unit, by preferential voting, or by any other reasonable method. Idaho Code 30-3-60.
If the corporation does not have members, the directors should be elected under the provisions set forth in the articles or the bylaws. If no method of designation is set forth in the articles or bylaws, the existing directors will be required to elect the successor directors. Idaho Code 30-3-66(2). All directors must be individuals. Idaho Code 30-3-64. Except in the case of religious corporations, boards of directors must consist of three or more individuals. The board of directors of a religious corporation must consist of at least one individual. The number of directors must be specified or fixed in accordance with the articles or bylaws. As long as there are at least three directors (or one in the case of a religious corporation), the number of directors can be increased or decreased in accordance with the articles or bylaws. B. Authority of the Board. The board acting as a body, not the individual acts of individual directors, governs the corporation. Directors may not lawfully abdicate their authority or duties in favor of anyone else. However, by resolution of the board, authority in the management of the day-to-day affairs of the corporation may be delegated to officers, agents, and committees in a manner not inconsistent with the bylaws. C. Terms of Directors. The articles or bylaws must specify the terms of directors. Terms of directors may not exceed five years. If the articles or bylaws do not specify the terms of directors, by operation of law, the term of each director will be one year. Directors may be elected for successive terms unless otherwise provided in the articles or bylaws. The articles or bylaws may provide for staggering the terms of directors by dividing the total number of directors into groups. The terms of office of the several groups do not have to be uniform. Idaho Code 30-3-67. D. Removal and Resignation of Directors. A director may resign from the board at any time by delivering written notice to the board of directors, to the presiding officer, or to the president or the secretary. The resignation is effective on the date specified in the notice. The notice may specify that the resignation will be effective at a future date. There is no requirement that the resignation be voted upon in order for it to be effective. A director may be removed, without cause, by either the members of the corporation or by the board of directors. If a corporation has members, the members may remove one or more of the directors by complying with any of the applicable requirements set forth in Idaho Code 30-3-70. The members of the corporation may remove the entire board of directors under HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 64
Idaho Code 30-3-70 (1) through (5). A director may be removed by the board of directors without cause by the vote of two-thirds of the directors then in office or any greater number as specified in the articles or bylaws. A director may also be removed for missing a specified number of meetings. The articles or bylaws must specify the number of meetings that will result in the removal of a director. The article or bylaw permitting the removal of a director who misses a specified number of meetings must be in existence at the beginning of the term of the director who is subject to the removal action. The articles or bylaws of a religious corporation may limit the application of Idaho Code 30-3-70. In cases where a director is designated, the director may be removed by amending the articles or bylaws or by deleting or changing the designation. In cases where a director is appointed, the director may be removed by the person who appointed the director. The person who removes the director must give written notice of the removal to the director and to the presiding officer of the board or to the president or secretary. The removal is effective when the notice is effective unless the notice specifies a future effective date. E. Election of Officers. Idaho Code 30-3-83 provides that the officers of a nonprofit corporation shall consist of a president, a secretary, and a treasurer, and such other officers as are appointed by the board. Except in the case of religious corporations, any two or more offices may be held by the same person except the offices of president and secretary. A religious corporation is not required to have officers. Unless the right to elect officers is reserved to the members, the officers are elected by and serve at the pleasure of the board. The manner of election or appointment must be provided in the bylaws. F. Supervision of Officers. Officers are agents of, and have a fiduciary duty towards, the corporation. As provided by Idaho Code 30-3-84, officers have the authority to perform such duties in the management of the corporation as may be provided in the bylaws or as authorized by resolution of the board not inconsistent with the bylaws. An officer is subject to control by the directors and, through the board, the members of the corporation (if the corporation has members). Under Idaho Code 30-3-86(2), the board has the inherent power to remove an officer at any time, with or without cause. However, principles of employment law may bar removal or suspension without cause even if a bylaw permits such removal. Handbook, Chapter 8. G. Authority to Execute Documents. The signatures of two officers on a contract or other written instrument can bind the corporation. This is true even if the officers did not have the authority to execute the contract or other instrument. No contract or other HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 65
written instrument can be invalidated as to the corporation by virtue of the fact that the signing officers lacked authority to execute the contract if the contract was signed by any two officers in category 1 below or by one officer in category 1 below and one officer in category 2 below. Category 1 - The presiding officer of the board and the president. Category 2 - A vice president, the secretary, treasurer and executive director.
H. Committees. A board may find it convenient to operate through one or more committees. Not all of the committees discussed below will be appropriate for all corporations, nor is the discussion exhaustive of all committees a corporation might form. Each Committee must have two or more directors, who serve at the pleasure of the board. The creation of a committee and the appointment of members to it must be approved by either a majority of a quorum or by a majority of the directors in office when the action is taken. The requirements of Idaho Code 30-3-74 through Idaho Code 30-3-78 (which govern meetings, action without meetings, notice and waiver of notice and quorum and voting requirements of the board) apply to committees of the board and their members as well. In general, committees may exercise the board's authority to the extent specified by the board of directors, or to the extent specified in the articles or the bylaws; however, there is a statutory exception to this rule. As stated in Idaho Code 30-3-79(5), a committee may not take any of the following actions: (1) (2) Authorize distributions. Approve or recommend to members dissolution, merger or the sale, pledge or transfer of all or substantially all of the corporation's assets. Elect, appoint, or remove directors or fill vacancies on the board or on any of its committees. Adopt, amend or repeal the articles or bylaws. i. Special and Standing Committees. Special committees may be formed to address temporary situations or projects such as fund-raising projects. Standing committees may be appointed to aid with budgeting, membership, or other administrative tasks. Examples of common standing committees are the audit committee,
(3)
(4)
the nominating committee, the finance committee, and perhaps most important, the executive committee. ii. Executive Committee. An executive committee will ordinarily have most of the powers of the full board when the full board is not in session. Some executive committees are designed to function only when it is impossible or impractical for the full board to convene and act in a timely fashion. Under Idaho Code 30-3-22, the directors of a corporation may adopt emergency bylaws that set forth special procedures for managing the corporation during an emergency. An emergency exists if a quorum of the corporation's directors cannot be assembled because of some catastrophic event. If consistent with the articles and bylaws, an executive committee may also supervise some aspects of management, particularly sensitive or confidential matters. Subject to the statutory limitations discussed above, the scope and style of an executive committee's function is ultimately for the members or the directors to decide and oversee. iii. Audit Committee. The importance of the audit committee varies directly with the size and complexity of the corporation's financial affairs. Identity with the members and independence from management are two principal characteristics that should be reflected in the composition, appointment, and reporting responsibilities of an audit committee. The subject of audit committee composition and responsibility has received a great deal of attention in the last decade, and the topic cannot be adequately addressed here. A good starting point for the uninitiated is The Audit Committee: A Broader Mandate, by Jeremy Bacon, The Conference Board, Report No. 914, 1988. iv. Nominating Committee. The nominating committee may have an especially important role to play in a corporation whose members are interested in serving as directors or officers of the corporation. In that setting, the nominating committee can be quite powerful, determining the management team and philosophy for a number of years into the future. Some organizations may have the opposite problem, that is, insufficient interest among members to serve as directors or officers. In that context, a nominating committee can have the equally important role of recruiting individuals to perpetuate the operations of the corporation. v. Finance Committee. The finance committee will play a key role in a corporation with significant assets to be invested or sophisticated credit requirements. The credentials and experience of finance HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 67
committee members will have a direct bearing on the successful operation of that committee. vi. Reliance by Directors. While a director is entitled to rely upon committees to perform their tasks, such reliance must be reasonable and will not absolve a director of the duty to kept informed. A director may rely on information, opinions, reports or statements, including financial statements and other financial data, if prepared and presented by a committee of the board of which the director is not a member. In order for the director to be able to rely on this information, the director must reasonably believe that the committee merits confidence, and the information relied upon must be regarding matters which are within the committee's jurisdiction. It should be noted that the creation of, delegation of authority to, or action by a committee does not alone constitute compliance by a director with the standards of conduct set forth in Idaho Code 30-3-80.
6.2. Meetings of Members. Perhaps the most important function of the bylaws is to provide a method of holding and conducting meetings. The bylaws should contain detailed provisions governing meetings of the board, committees, and members of the organization. 6.2.1 Annual Meetings. A corporation with members must hold a membership meeting annually. Idaho Code 30-3-46(1). The annual meeting must be held at a time that is either specifically stated in the bylaws or at a time that is fixed in accordance with the bylaws. The annual meeting can be held in or out of the state. However, as with the time, the place must be stated or fixed in accordance with the bylaws. If no place for the annual meeting is fixed, it must be held at the corporation's principal office. There are statutory requirements governing the topics that must be addressed at the annual meeting. The president and the chief financial officer must report on the activities and the financial condition of the corporation. In addition, if the notice of the annual meeting describes any matter that requires action, specifically those matters listed in Idaho Code 30-3-50(3), the members must consider and act upon that matter. If a corporation fails to hold an annual meeting at a time stated or fixed in accordance with its bylaws, such failure does not affect the validity of any corporate action. Nevertheless, the failure to hold an annual meeting can result in a court-ordered meeting. In the event that a corporation has not held an annual meeting within six months of the close of the fiscal year, or within fifteen (15) months of the last annual meeting (whichever is earlier), any member or other person entitled to participate in the annual meeting may apply to the court and ask that a meeting to be ordered. Idaho Code 30-3-48(1)(a). The person applying to the court must apply to the district court of the county in which the corporation has its principal office. If the principal office is not in this state, the person requesting the court order must apply to the district court in the county where the corporation's registered office is located. The court has broad authority to enter an order specifying the time and HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 68
place of the meeting, the type of notice required, the quorum, the specific matters to be considered at the meeting, and other details. If the court does order a meeting, the court may order the corporation to pay the member's costs incurred in obtaining the action, including reasonable attorney's fees. 6.2.2 Regular Meetings. A corporation with members may hold regular membership meetings at the times an places stated in the bylaws. As is the case with annual meetings, the failure to hold a regular meeting does not affect the validity of any corporate action. The failure to hold an annual meeting, though, can result in a court-ordered meeting, which is discussed above. In addition, if the notice of the regular meeting describes any matter that requires action, specifically those matters listed in Idaho Code 30-3-50(3), the members must consider and act upon that matter. 6.2.3 Special Meetings. For corporations with members, Idaho Code 30-3-47 allows special meetings of members to be called by the board or by any person or persons designated in the bylaws as having the authority to call a special meeting. In addition, except as provided in the articles or bylaws of a religious corporation, a special meeting may be called by holders having at least 10 percent of the votes entitled to be cast at such a meeting. If the notice for a special meeting is not given within thirty days of the request, the person requesting the meeting may set the time and place of the meeting and give notice to the members pursuant to Idaho Code 30-3-47. 6.2.4 Notices. The statutes governing notice requirements are Idaho Code 30-312 and 30-3-50. Notice must be given in a manner consistent with the articles and bylaws. It must also be given in a fair and reasonable manner. Notice may be given in oral or written form. Notice may thus be given by telephone, facsimile machine, or other form of wire or wireless communication. Oral notice is effective when it is communicated, provided that it is comprehensible. Written notice, if comprehensible, is effective when it is received, five days after it was mailed, or on the delivery date shown on a receipt for certified mail. Written notice can be included in a newsletter or other regular publication sent to members of the corporation. As is noted above, notice must be fair and reasonable. Any notice that conforms with the requirements of Idaho Code 30-3-50(3) is fair and reasonable. It is important to note that in order to meet the statutory requirements under Idaho Code 30-3-50(3)(a), notice must be given at least ten days before a meeting, but not more than sixty days before the meeting. It should also be noted that if cumulative voting is to take place, it must be stated in the notice. Idaho Code 30-3-59. 6.2.5 Waiver of Notice. If a member does not receive notice of a meeting, the member may waive the notice requirement. The waiver must be in writing and be delivered to the corporation to be included in the minutes of the meeting. A member may also waive notice of the meeting by attending the meeting.
6.2.6 Quorum. For a meeting of members, Idaho Code 30-3-56 provides that "unless otherwise provided in the articles or in the bylaws, members holding one-tenth (1/10) of the votes entitled to be cast, represented in person or by proxy, shall constitute a quorum." A bylaw amendment to increase or decrease the quorum required for any member action must be approved by the members. 6.2.7 Parliamentary Procedure. Parliamentary procedure should ordinarily be followed during meetings. Courts have recognized the application of common parliamentary law where an organization has not adopted rules of parliamentary procedure or where the bylaws did not provide for adequate parliamentary rules. Common parliamentary law has been defined as the ordinary custom and usage of parliamentary procedure. Writers such as Jefferson, Cushing, Reed, and Robert have been accepted by the courts as authorities on parliamentary procedure. Courts have held that adopted rules of parliamentary procedure are a contract and have taken jurisdiction and given relief accordingly. Rueb v. Rehder, 174 P. 992 (N.M. 1918). It is appropriate for corporations to adopt some authority on parliamentary procedure as a guide for situations not covered by the bylaws. One such book is of course, Robert's Rules of Order. 6.2.8 Conduct of Elections. A. General Considerations. In all votes that are important or may be close, it is prudent to conduct voting by written ballot. The marked ballots should be retained by the secretary with the corporate records for a reasonable time to avoid disputes. Supervisors can be appointed to conduct and oversee important elections. The president or chair may appoint the supervisors for an election. Alternatively, the members may elect the supervisors. A candidate for office or a member who has a conceivable personal interest in the voting should not serve as an election supervisor. The supervisors should be responsible for counting the votes and reporting the tally to the person presiding over the meeting. B. Members List for Meeting. For a corporation with members, after notice of a meeting has been given, the corporation must prepare an alphabetical list of the names of all its members that are entitled to vote at the meeting. The list of members must be made available to any member within two days after notice is given of the meeting. The list must also be available to the members during the meeting. If a corporation does not make the list of members available, a district court may order the corporation to allow the member to inspect the list and may require the corporation to copy the list at the corporation's expense. The district court may also postpone the meeting for which the list was prepared until the inspection or copying is completed. The articles or bylaws of a religious corporation, though, may limit or abolish the rights of a member to inspect the members' list. HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 70
C. Voting Requirements. Generally, if a quorum is present at a meeting, an action may be approved by the affirmative vote of a simple majority of the votes represented. This will not be the case if a statute, the articles, or the bylaws require a greater vote or voting by class. An amendment to the bylaws which would increase or decrease the vote required for any action by the members must be approved by the members. D. Voting Entitlement. Unless the articles or bylaws provide otherwise, each member is entitled to one vote. Where a membership is held in the name of more than one person, if only one person votes, that act binds all. If more than one person votes, the vote will be divided on a pro rata basis. E. Absentee Ballots. The articles or bylaws may provide that the members may vote by mail or by absentee ballot. Unless prohibited by the articles or bylaws, action may be taken without a meeting of the members if the corporation delivers a written ballot to each member entitled to vote on the matter. A written ballot must describe the proposed action and give the voter an opportunity to vote for or against the proposed action. F. Proxies. By signing an appointment form, a member may appoint a proxy to vote or otherwise act on his or her behalf. The appointment of a proxy is effective when received by the secretary of the corporation. The appointment is valid for eleven months unless a different appointment period is specified in the appointment form. No proxy is valid for more than three (3) years. The proxy may be revoked at any time. The revocation can be made either by delivering a written statement to the secretary that the proxy is revoked or by attending any meeting and voting in person. The articles or bylaws may prohibit or limit the appointment of proxies. 6.2.9 Resolutions. A resolution is the formal expression of the will of the board, a committee, or the members. Resolutions are adopted by vote in accordance with regular procedure specified in the bylaws and form the recorded substance of minutes of any meeting. Well-drafted resolutions are crucial to well-run meetings and organizations. 6.2.10 Location of Meeting. Idaho Code 30-3-46 and 30-3-47 provide that meetings may be held either within or without the state at a place that may be prescribed or authorized by the bylaws. If the bylaws do not provide for a place of meeting, all meetings are required to be held at the registered office of the corporation in the state. Idaho Code 30-3-46(3) and 30-3-47(4).
6.3. Meetings of Directors. Idaho Code 30-3-63(2) provides that the affairs of a corporation are to be exercised by or under the authority of its board of directors. Where a corporation has no members, as is authorized under Idaho Code 30-3-36, the board of directors will have the authority to take all actions otherwise reserved to the members. The articles or bylaws generally specify the number of directors and method of their election. The frequency of board meetings is usually determined by the bylaws. 6.3.1 Regular and Special Meetings. When the time and place of a directors' meeting is fixed in the bylaws, the meeting is a regular meeting. All other meetings are special meetings. Special meetings may be called by the presiding officer of the board, the president, or by 20 percent of the directors then in office. 6.3.2 Notice. Regular meetings may be held without notice. Two days' notice must be given for special meetings. In corporation without members, seven days' notice must be given before any action may be taken to remove a director. Directors can sign a written waiver of notice to eliminate the need for advance notice. Attendance of a director at a meeting constitutes a waiver of notice unless the director attends solely to object to the meeting as being unlawfully called. Idaho Code 30-3-77(2). Copies of any written waivers of notice of a meeting should be attached to the minutes of that meeting. 6.3.3 Telephonic Meetings. Unless restricted by the articles or bylaws, the board may meet by means of a conference telephone or similar communications equipment so that all persons participating can hear each other. Idaho Code 30-3-74. 6.3.4 Action Without Meeting. Unless restricted by the articles or bylaws, any action to be taken at a board meeting may be taken without a meeting if the written consent of each board member is obtained and the action is taken by all the board members. Idaho Code 30-3-75. The written consent to the action must be filed with the corporate documents and is effective when the last director signs the consent unless the consent specifies a different effective date. 6.3.5 Quorum. Except as otherwise provided in the articles or bylaws, for a meeting of directors, a quorum consists of a majority of the number of directors in office immediately before a meeting begins. In no event may the bylaws authorize a quorum of fewer than one-third of the number of directors in office or two directors. If a quorum is present when a vote is taken, the affirmative vote of a majority of the directors present binds the entire board, unless the articles or bylaws require the vote of a greater number of directors. 6.3.6 Committees. As authorized by the articles or bylaws, a board of directors may create one or more committees of the board and appoint members of the board to serve on the them. Idaho Code 30-3-79. Each committee must have two or more members who serve at the pleasure of the board. Committee meetings are governed by the same statutory requirements as directors meetings with respect to notice, waiver of notice, quorum and voting requirements, and action without meetings. Idaho Code 30-3-79(3).
6.4. Corporate Recordkeeping. 6.4.1 Statutory Requirements. A corporation must maintain records in written form or in another form that can be readily converted into written form in a reasonable period of time. Idaho Code 30-3-130 requires that a corporation keep the following records: (a) (b) Minutes of all meetings of its members and board of directors. Record of all actions taken by the members or directors without a meeting. Record of all actions taken by committees of the board of directors. Appropriate accounting records. A record of members in a form that permits preparation of a list of the names and addresses of all members, in alphabetical order by class, showing the number of votes each member is entitled to cast.
(c) (d) (e)
In addition to maintaining the records listed above, pursuant to Idaho Code 30-3-130(5), a corporation must keep copies of the following records at its principal office: (a) Its articles or restated articles of incorporation and all amendments to them currently in effect. Its bylaws or restated bylaws and all amendments to them currently in effect. Resolutions adopted by its board of directors relating to the characteristics, qualifications, rights, limitations and obligations of members or any class of members. The minutes of all meetings of members and records of all actions approved by the members for the past three years. All written communications to members generally within the past seven years, including financial statements furnished for the past seven years. A list of the current names and business or home addresses of its current directors and officers. Its most recent annual report delivered to the secretary of state under Idaho Code 30-3-136.
(b)
(c)
(d)
(e)
(f)
(g)
6.4.2 Minutes. Accurate minutes should be kept of all members' and board of directors' meetings. It is the corporate secretary's duty to prepare the minutes and keep them in the minute book. The minute book should also contain the articles, bylaws, and notices or waivers of notice of all meetings. Minutes from each meeting should be signed by the secretary and the presiding officer after they have been read and adopted, subject to corrections, if any, at the next meeting. Minutes should contain, among other things, the time and place of the meeting, a notation of whom called the meeting and the general topics addressed at the meeting. The names of those in attendance and the presence of a quorum should be expressly noted. Resolutions that pass should be accurately recorded, as should the vote. Particular care should be taken to record any dissenting votes, as well as declarations of conflict in the minutes. Generally, minutes should not include information that is potentially damaging to the corporation, its members, officers, or directors, unless there is a sound legal reason to do so. Minutes should be brief and exclude everything that is not essential information. The essential information list is short: notice, quorum, the substance of each resolution adopted, vote (including notations of dissent or conflict, if any), and adjournment. Details of discussions are unnecessary but may be helpful in the future. What to put in minutes is always a judgment call. All books and records of the corporation, including its minutes, may be inspected and copied by any member or agent of a member of the corporation for any purpose at any reasonable time and at any reasonable location specified by the corporation. The member requesting the opportunity to inspect the records must give written notice at least fifteen (15) business days before the date on which the member wishes to inspect and copy the records. Idaho Code 30-3-131(1) and (2). The board of directors may restrict or deny inspection of personnel and employment records, and confidential attorney-client communications if it determines that such restriction or denial of access to the records is in the best interests of the corporation. A religious corporation may limit or abolish the rights of a member to inspect or copy records. 6.4.3 Membership Records. A. Where Kept. Under Idaho Code 30-3-130, the corporation is required to keep a record of the names and addresses of all members entitled to vote at its principal office. See discussion above. B. Transfer of Membership. When the corporation is formed, a system should be established for determining who will be members. How does one become a new member or cease to be a member? Are memberships transferable? Does a member who fails to pay required fees lose the right to vote at membership meetings? The bylaws should address these and other membership issues. The secretary of the corporation is charged with keeping track of the members. Meticulous
recordkeeping is essential so that notices can be properly sent and quorum and voting requirements can be accurately determined. 6.4.4 Annual Report. The corporation is required to file an annual report no later than November 1 of each year on a form provided by the Secretary of State's office. Currently, there is no filing fee due with the form. The information required is basic: the names and addresses of the president, secretary, and members of the board of directors of the corporation; the mailing address of the corporation; the name and address of the corporation's registered agent; the state of incorporation; and the nature of its business.
6.5. Financial Recordkeeping. A corporation must make extensive financial disclosures on IRS Form 1023 in order to obtain tax-exempt status under IRC 501(c)(3). Many new section IRC 501(c)(3) corporations receive five-year advance rulings and must submit detailed information demonstrating that they are publicly supported at the end of the advance ruling period. Those section IRC 501(c)(3) corporations with gross annual receipts in excess of $25,000 must file a tax return on Form 990, which requires that receipts and expenditures be reported by specific categories designed to clearly show the level of public support received and the purpose of all expenditures. For the foregoing reasons, IRC 501(c)(3) corporations must establish and conscientiously maintain detailed financial records that will facilitate providing the information required to obtain and preserve their tax-exempt status. These recordkeeping requirements are discussed in greater detail in Handbook, Chapters 4 and 5. An "Annual Tax Checklist for IRC 501(c)(3) Organizations" is included in the Appendix.
6.6. Amendments to Articles or Bylaws. An Idaho nonprofit corporation may amend its articles or bylaws by following the procedures spelled out in Idaho Code 30-3-89 through 30-399. Duplicate originals of the articles of amendment must be presented to the Secretary of State together with the filing fee specified in Idaho Code 30-1-128 ($30 as of July, 1993). The corporation must be careful that amendments to the articles do not jeopardize its tax-exempt status. Handbook, Chapters 4 and 5. Bylaws can be amended by following the procedures set out in Idaho Code 30-3-96 through 30-3-99. For corporations without members, the board of directors may approve amendments to the bylaws in any meeting where notice is given that a proposed bylaw amendment will be voted on. For corporations with members, the directors may approve an amendment to the bylaws unless the articles or bylaws require a vote of the membership. Where a vote of the membership is authorized, sought, or required, the provisions of Idaho Code 30-3-97 and 30-3-98 govern. If the power to amend the bylaws is reserved to the members, proposed amendments must be approved by a majority vote of the membership, unless a supermajority is specified. The members may delegate the power to amend the bylaws to the board to be exercised in the manner described in the grant of authority. Lodging the power of amendment with the board is convenient, but may give less protection to minority rights and interests than would be the case if the power is reserved to the membership. HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 75
6.7. Officers and Directors Liability. Officers and directors of any corporation, including a nonprofit corporation, are exposed to various kinds of potential liability. Any person acting on behalf of the corporation, including an officer, director, or employee, may commit a tort in carrying out corporate duties. In such a case, the person committing the tort, as well as the corporation, may be liable for any damages caused. Also, because of their special duties and powers, officers and directors may be liable to the corporation or its members for breach of duties. Attorneys and accountants should note that malpractice insurance frequently does not cover their actions as officers or directors. 6.7.1 Officers Liability. A. Standard of Conduct. The standard of conduct for officers of a nonprofit corporation has been codified in Idaho Code 30-3-85. If the officer acts in compliance with this section, the officer will not be liable to the corporation, any member, or any other person for any action taken or not taken as an officer. Under this statute, an officer with discretionary authority must discharge his or her duties under that authority in good faith; with the care an ordinarily prudent person in a like position would exercise under similar circumstances; and in a manner that the officer reasonably believes to be in the best interests of the corporation and its members. In discharging his or her duties, an officer may rely on information, opinions, reports, or statements, including financial statements and other financial data, provided by legal counsel and accountants with regard to matters that the officer reasonably believes to be within the person's professional competence. The officer may also rely on information, opinions and statements of other officers of the corporation and employees of the corporation provided that the officer believes the information presented to be reliable and competent. In religious corporations, the director may also rely on religious authorities and ministers, priests, rabbis and other persons within the religious corporation whom the director believes to be competent. It should be noted that the officer is not acting in good faith, if he or she has knowledge regarding the matter in question that makes the reliance on the information presented unwarranted. B. Indemnity and Limitations on Liability. Idaho Code 30-3-88 provides that a nonprofit corporation may indemnify an officer, director, employee, or other agent of the corporation against any threatened, pending, or completed action. Indemnification can include defense costs and attorney's fees. This provision applies only if the person acted in good faith and in a manner that was reasonably believed to be in the best interests of the corporation. Idaho Code 30-3-88(7) specifically allows the corporation to maintain insurance on behalf of any person who is or was a director, an officer, an employee or an agent of the corporation. If the HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 76
corporation is a charitable one, liability of the officers is limited by Idaho Code 6-1605. There is still liability for intentional acts of fraud, self-dealing, and knowing violations of the law, however. 6.7.2 Directors Liability. A. Business Judgment Rule. The standard of care to which directors of a corporation are held has a long history in the common law. See, McLeod v. Lewis-Clark Hotel Co., 66 Idaho 584, 164 P.2d 195 (1945); Steelman v. Mallory, 110 Idaho 510, 716 P.2d 1282 (1986). Idaho Code 30-3-80 codifies the "business judgment rule" and sets forth the standard of conduct for a director. That section provides that a director must discharge his duties in good faith with the care an ordinarily prudent person in a like position would exercise under similar circumstances and in manner that the director reasonably believes to be in the best interests of the corporation. Under the business judgment rule, a director is entitled to rely on information provided by officers and employees who reasonably appear competent, as well as professionals and committees of other board members. In religious corporations, the director may also rely on religious authorities and ministers, priests, rabbis and other persons within the religious corporation whom the director believes to be competent. A director is not subject to liability if these requirements of good faith and due care are met. B. Self-Dealing. Directors are also subject to a duty of loyalty, and conflicts of interest or selfdealing are prohibited. Under Idaho Code 30-3-81, if a director has a direct or indirect interest in a corporate transaction, the director must fully and fairly disclose the interest and must abstain from voting. The transaction must (1) be approved by the disinterested directors; or (2) be approved by the members. The articles, bylaws, or a resolution of the board may impose additional requirements on conflict of interest transactions. C. Director Loans. Loans to directors and officers are especially suspect transactions, and should generally be avoided. Except with regard to loan or guarantee programs that are made available to all members, a corporation may not lend money or guarantee the obligation of a director or an officer. The fact that a loan or guarantee is made in violation of this section does not affect the borrower's liability on the loan. D. Duty of Loyalty. A fundamental principle under the duty of loyalty is that the powers of the directorship may not be used to personally benefit the director at the corporation's expense. Not only are a director's business transactions with HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 77
the corporation subject to special scrutiny, but a director is prohibited from diverting corporate opportunities to the director's own benefit. Hanny v. Sunnyside Ditch Co., 82 Idaho 271, 353 P.2d 406 (1960). E. Wrongful Distribution. At common law, a director was liable for the wrongful distribution of the corporation's assets. Under Idaho Code 30-3-108, a corporation may not make any distributions except in the case of dissolution or liquidation. Under case law from various jurisdictions, where a wrongful distribution of assets is made, a director who votes for the distribution may be liable to the corporation, its owners (members), and the creditors of the corporation. 6.7.3 Limitation of Liability for Officers, Directors, and Volunteers. Idaho Code 6-1605 limits the liability of officers, directors, employees, and volunteers of a nonprofit corporation or organization. "Nonprofit corporation or organization" is defined in Idaho Code 61601 as any corporation or organization organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international sports, or for the prevention of cruelty to children or animals. No part of the corporation's earnings may benefit any private shareholder or individual, and its purpose may not be to propagandize or otherwise attempt to influence legislation. Idaho Code 6-1601(1). Idaho Code 6-1605 specifies several exceptions to its grant of immunity. Those exceptions include motor vehicle accidents, instances of willful or wanton misconduct, fraud, knowing violation of law, bad faith, intentional breach of fiduciary duty or the duty of loyalty, or improper personal benefit. Similarly, there is no immunity against the statutory liabilities found in Idaho Code 30-382 (loans to directors and officers). In addition, the immunity is inapplicable if there is insurance.
7. OTHER TAX CONSIDERATIONS FOR NONPROFIT CORPORATIONS.

7.1. Property Taxes. 7.1.1 Religious Organizations. A. Qualification for Exemption. Certain Idaho real property belonging to a religious organization is exempt from taxation. To qualify for the exemption, the real property must (1) belong to a religious corporation or society, and (2) be used for any combination of religious worship, educational purposes and recreational purposes and not designed for profit. Idaho Code 63-602B. B. Scope of Exemption. The scope of the property tax exemption for religious organizations extends only to property used for religious worship and educational and recreational activities that are not designed for profit. For example, the operation of a farm by a church does not qualify for the exemption. Malad Second Ward of the Church v. State Tax Commission, 75 Idaho 162, 269 P.2d 1077 (1954). If the religious organization wishes to engage in other charitable activities, it may be entitled to an exemption from property tax under the charitable organization exemption even though the additional charitable activities have nothing to do with religious worship or educational or recreational purposes. North Idaho Jurisdiction of Episcopal Churches Inc. v. Kootenai County, 94 Idaho 644, 496 P.2d 105 (1972) (holding that Idaho Code 63-105B and 63-105C (now codified at Idaho Code 602B and 602C, respectively) are not mutually exclusive). 7.1.2 Charitable Organizations. A. Qualification for Exemption. Idaho Code 63-602C provides that qualifying property belonging to a fraternal, benevolent, or charitable corporation or society is exempt from taxation. To qualify for the exemption, the real property must belong to one of the foregoing organizations and be used exclusively for the purposes for which the corporation or society is organized. Idaho Code 63-602C. Factors considered by Idaho courts in determining whether an organization has a charitable purpose include (1) the stated purposes of its undertaking; (2) whether its functions are charitable; (3) whether it is supported by donations; (4) whether recipients of its services are required to pay for the assistance they receive; (5) whether there is a benefit to the general public; (6) whether the income received produces a profit; (7) how the organization's assets would be distributed upon dissolution; and (8) whether the "charity" provided HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 79
is based upon the need of the recipient. Canyon County v. Sunny Ridge Manor, Inc., 106 Idaho 98, 675 P.2d 813 (1984). For an extensive discussion of property tax exemption issues with respect to St. Lukes Hospital in Boise, see An Idaho County Seeks Property Taxes From an Exempt Hospital, Journal of Taxation of Exempt Organizations, January/February 1998, 164. B. Scope of Exemption. The property tax exemption for charitable organizations extends to all property used exclusively for the purposes for which the organization is organized. If more than 3 percent of the property (determined by value) is leased or used for "commercial purposes," however, the property tax exemption is partially lost. The exemption is lost only to the extent of the portion of the property leased or used for commercial purposes. A special exemption is provided for the lease or use of property for athletic or recreational facilities, residence halls or dormitories, meeting rooms or halls, auditoriums and club rooms. These uses do not jeopardize the property tax exemption even if fees are charged or revenue is derived from the facilities. Idaho Code 602C.
7.2. State Sales Tax. 7.2.1 General. Idaho imposes a sales tax on each retail sale. Idaho Code 63-3619. The term "retail sale" means a sale of tangible personal property for any purpose other than resale of the property to someone else. The term also includes the lease of tangible personal property. Idaho Code 63-3609 and 63-3612. Where a retail sale exists, an excise tax is imposed upon the transaction. Idaho Code 63-3619 (the rate is currently 6 percent). This tax is due and payable to the State Tax Commission monthly on or before the 20th day of the month following the date of the transaction. A sales tax return must also be filed along with the payment. The return provides the total sales subject to the tax and must be signed by the seller or an authorized agent. Idaho Code 63-3623. 7.2.2 Nonprofit Exemptions for Purchases. Idaho law provides exemptions from sales tax for several types of nonprofit organizations. Purchases by these organizations are not subject to sales tax. Idaho Code 63-3622O. If one of these nonprofit organizations wishes to make a tax-free purchase, it must deliver a certificate to the seller of the item setting forth the reason for the exemption (that is, that the entity is one of the five enumerated exempt organizations). The certificate must be signed by the purchaser. Some of the types of nonprofit organizations exempt from sales tax are described below. For additional groups exempt from sales tax see generally, Idaho Code 63-3622(O)(1). A. Educational Institutions. Educational institutions are provided with an exemption from sales tax under Idaho Code 63-3622O(1)(a). Educational institutions include resident HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 80
nonprofit colleges, universities, and primary and secondary schools so long as the income of the these organizations is devoted solely to education and instruction is given in the customary areas of learning. This definition does not include schools that primarily teach business, dancing, dramatics, music, cosmetology, writing, gymnastics, exercise, and other special skills, nor does it include parent-teacher associations, parent groups, alumni, or other similar organizations. B. Hospitals. Hospitals are provided with an exemption from sales tax under Idaho Code 63-3622O(1)(a). To qualify for the exemption, the hospital must be a nonprofit institution and be licensed by the state for the care of ill persons. The exemption for hospitals does not extend to nursing homes or similar institutions. C. Health-Related Entities. Idaho provides an exemption from sales tax for certain health-related organizations. Idaho Code 63-3622O(1)(a). These organizations include only the Idaho Cystic Fibrosis Foundation, Idaho Epilepsy League, Idaho Lung Association, March of Dimes, American Cancer Society, Mental Health Association, Idaho Association of Retarded Citizens, Idaho Heart Association, United Cerebral Palsy, Arthritis Foundation, Muscular Dystrophy Foundation, National Multiple Sclerosis Society, Rocky Mountain Kidney Association, American Diabetes Association, and Easter Seals. D. Food Banks and Soup Kitchens. Idaho Code 63-3622O(1)(b) and (c) provide an exemption for sales to and purchases by food banks or soup kitchens of food or other tangible property used by them in the growing, storage, preparation or service of food, but not including motor vehicles or trailers. E. Canal Companies. There is a special sales tax exemption for "canal companies." The term "canal companies" includes nonprofit corporations organized solely of that operating and maintaining dams, reservoirs, canals, lateral and drainage ditches, pumps and pumping plants. Idaho Code 3622O(1)(a). F. Forest Protective Associations. "Forest protective associations" are also granted an exemption. Idaho Code 63-3622O(1)(a). These organizations include associations whose purpose is the furnishing, operating and maintaining a protective system for the detection, prevention and suppression of forest or range fires. To qualify for the exemption, an association must have contracted with the State of Idaho or become a member pursuant to Chapter 1, Title 38 of the Idaho Code.
7.2.3 Nonprofit Exemptions From Sales Tax. Although a narrow class of exemptions allows certain nonprofit organizations to purchase items free of sales tax, there is no sales tax exemption for nonprofit organizations acting as a seller except for certain sales by religious corporations as explained below. A nonprofit organization may be able to qualify for a sales tax exemption under the occasional sales provision. Occasional sales include sales by an organization that, when aggregated, do not amount to more than two sales during any twelve-month period. Idaho Code 63-3610 and 63-3622K. This exemption generally does not apply to the sale of motor vehicles, aircraft, boats, snowmobiles or motorbikes. Idaho Code 63-3622K(c) and (d).
7.3. Unemployment Compensation Tax. 7.3.1 Federal Unemployment Tax (FUTA). Federal unemployment tax is imposed by the Federal Unemployment Tax Act (FUTA). The provisions of FUTA are codified in Chapter 23 of Subtitle C of the Internal Revenue Code. FUTA provides funds for employees who are temporarily unemployed. A. Organizations Subject to FUTA. As a general rule, an organization is subject to FUTA if (1) during the current year or the previous year, it either paid wages of $1,500 or more in any calendar quarter or had one or more employees at any time in each of any 20 different calendar weeks; (2) it employs agricultural labor and paid cash wages of $20,000 or more for farm labor in any calendar quarter or employed 10 or more farm workers during some part of a day for at least one day during 20 different weeks; or (3) it employs household laborers and during the current or previous year paid wages of $1,000 or more during any calendar quarter for household services in a private home, local college club, or local chapter of a college fraternity or sorority. B. Exemption. Organizations qualified under IRC 501(c)(3) are exempt from FUTA. IRC 3306(c)(8). C. Obligations Under FUTA. Organizations that do not qualify under IRC 501(c)(3) and that are considered employers under IRC 3306(a) must comply with FUTA. This requires paying a tax based upon the total wages paid by the employer during the calendar year. The FUTA tax rate for 2005 is 6.2 percent. This tax must be figured on a quarterly basis and may have to be deposited quarterly, depending upon the amount of total undeposited taxes. Publication 15 (Circulator E), Employer's Tax Guide (available from the IRS). Any undeposited amounts for a given calendar year must be paid by January 31 of the following year. In addition to payment of FUTA taxes, employers are required to file a FUTA tax return (Form 940 or 940-EZ). This return is due on January 31. HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 82
7.3.2 State Unemployment Tax. A. Organizations Subject to Tax. Idaho's unemployment compensation tax generally applies to all employers. Idaho Code 72-1315. Nonprofit organizations are specifically included. Idaho Code 72-1315(10). However, state unemployment taxes do not need to be paid by (1) churches or religious organizations (including seminary schools and similar religious higher education institutions); (2) certain hospitals located in custodial or penal institutions; (3) services performed for a rehabilitation program for individuals whose earning capacity is impaired by age or physical or mental deficiency; and, (4) services performed for certain governmentally financed unemployment work training or relief programs. Idaho Code 72-1316A. Work performed for any other nonprofit organization is subject to Idaho's unemployment tax. B. Obligations to Withhold Wages. Normally employers are required to make payment contributions on taxable wages for each calendar year in an amount determined in accordance with Idaho Code 72-1350(1) (detailing wage base and contribution rate formulas and schedules). Idaho Code 72-1349. An exemption is provided, however, for nonprofit organizations that are exempt under IRC 501(c)(3). IRC 501(c)(3) organizations may elect not to make contributions and instead make reimbursements only for benefits actually paid to employees. Idaho Code 72-1349A. A nonprofit organization may elect to receive this treatment by filing a written notice with the director for the Idaho Unemployment Fund. Idaho Code 72-1349A(3)(A) and (B). Employers are required to keep true and accurate records related to the computation of the unemployment tax. Idaho Code 72-1337.
7.4. Federal Insurance Contributions. Social security tax is imposed by the Federal Insurance Contributions Act (FICA). The provisions of this Act are codified in Chapter 21 of the Internal Revenue Code. 7.4.1 Organizations Subject to FICA. As a general rule, all employers are subject to FICA. Several exemptions, however, may apply to nonprofit organizations. First, remuneration paid by an organization exempt from income tax under IRC 501(e) is not subject to the FICA taxes, provided that the payment to the employee does not exceed $100. IRC 3121(a)(16). Second, social security tax need not be paid for services performed by a minister or a member of certain religious orders. IRC 3121(b)(8). Third, social security tax does not have to be paid for services performed by a student for a school, college, or university. IRC 3121(b)(10). Finally, a special exemption exists for employers and their employees where both the religious faith and the employee oppose participation in Social Security Act programs. IRC 3127.
7.4.2 Obligations Under FICA. An employer that does not qualify for the exemptions discussed above is responsible for collecting social security tax from its employees. IRC 3102. The current FICA tax rate is 6.2 percent, not including the Medicare portion, which is 1.45 percent. In addition, the employer must contribute matching amounts. IRC 3111(a). These amounts are figured on a quarterly basis and normally deposited at that time. In addition to collection and payment of FICA tax, an employer is also responsible for reporting these amounts on Form 941 (or 941E).
7.5. Private Foundation Excise Taxes. Private foundations are subject to excise taxes because of the perception that they are more likely to give rise to tax abuses than other charitable organizations. 7.5.1 Tax on Investment Income. A tax of 2 percent on the net investment income of a private foundation must be estimated and paid quarterly, in advance. Net investment income includes dividends, interest, and capital gains less the foundation's expenses directly related to the production of investment income. A private foundation may reduce the tax to 1 percent if it meets certain requirements. IRC 4940. 7.5.2 Self-Dealing. Transactions between a private foundation and disqualified persons are considered self-dealing transactions. Disqualified persons are defined as donors, foundation managers, trustees, directors, substantial contributors to the foundation, and certain family members of any of these. IRC 4946(a). The tax-exempt private foundation and its disqualified persons are prohibited from engaging in any direct or indirect sale, or exchange or lease of property, regardless of how competitive the price. Section 4946(a) prohibits the private foundation from lending money or extending any other form of credit to a disqualified person. A private foundation may pay a disqualified person for services provided and for expenses incurred in carrying out the exempt purposes of the foundation, as long as the compensation and expense reimbursements are reasonable. The penalty for self-dealing is 5 percent of the amounts involved, and, if the self-dealing has not been corrected within a reasonable period, 200 percent of the amount involved. IRC 4941. 7.5.3 Failure to Distribute Income. A private foundation must distribute for its charitable purpose an amount equal to its minimum investment return. The minimum investment return is defined by law as 5 percent of the average fair market value of the foundation's assets as determined by periodic appraisal. Private foundations failing to make qualified distributions at this level will receive an initial penalty tax of 15 percent of the undistributed income to which the penalty applies. If the income remains undistributed after the permissible period, a 100 percent tax is imposed. IRC 4942. Qualifying distributions include an actual grant of funds to qualified donees plus the expenses that the foundation incurs in making those distributions. Administrative expenses (limited to .65 percent of the foundation's net assets) may be included as a part of the 5 percent payout total. A private foundation may spend more than that for the expenses of making grants, as long as the
expenses are reasonable and necessary, but the excess cannot count toward meeting the payout requirement. 7.5.4 Excess Business Holdings. Private foundations are generally prohibited from holding controlling interests in any business. The general rule is that foundations may not hold more than 20 percent of a business. The percentage held may be higher, up to 35 percent, if the business is actually controlled by persons who are not disqualified. IRC 4943. The ownership of the foundation is defined to include shares in the corporation that are owned by disqualified persons. However, if the foundation owns less than 2 percent of the corporation, disqualified persons are not limited in their ownership. If the foundation is formed with shares in a corporation equaling more than the 20 percent limit, the foundation has five years in which to dispose of enough shares to bring it below that level of ownership. The penalty for failing to divest is initially a tax of 5 percent of the amount held over the 20 percent limit, and an additional tax of 200 percent of the value of such holdings for excess business holdings still held after the initial tax is imposed. 7.5.5 Jeopardy Investments. A private foundation may not invest in a manner that jeopardizes the security of its principal or that jeopardizes the carrying out of any of its exempt purposes. The IRS looks closely at foundation investments in highly speculative securities and futures, although no category of investment is considered a violation per se. The trustees or directors are expected to exercise ordinary care and prudence to avoid jeopardy investments, and most foundations do not have difficulty complying with this requirement. The penalty for jeopardy investments is 5 percent of the amount involved, and 25 percent if the investment is not removed from jeopardy within the permissible period set by the IRS. IRC 4944. 7.5.6 Taxable Expenditures. There are some specific activities named under IRC 4945 that are either entirely prohibited for private foundations or at least require particular treatment to qualify as legal activities. A taxable expenditure is subject to a penalty excise tax of 10 percent of the amount of the expenditure (100 percent of the expenditure if the expenditure is not corrected within the permissible time set by the IRS). Under IRC 4945, prohibited expenditures include the following: (1) (2) (3) lobbying, unless in self-defense or at the request of the legislature; political campaign activities; voter registration drives, unless they are multi-state, ongoing, and nonpartisan; scholarships or other grants to individuals, unless they are made on objective and nondiscriminatory bases in accordance with procedures approved in advance by the IRS;
(4)
(5)
grants to organizations that are not public charities, unless the grantor bears responsibility for the charitable purpose of the grantee's expenditures; and expenditures for noncharitable purposes, including excessive compensation to the foundation's employees.
(6)
8. EMPLOYMENT LAW OVERVIEW.

8.1. General Overview of Employment Law Issues. Any non-profit entity that anticipates employing individuals must deal with a number of different employment law issues. 8.1.1 Potential Liability to the Employee. An employer must be concerned about a number of aspects of potential liability to an employee. During employment, the employer is responsible for the proper payment of wages under various wage and hour laws. In addition, the employer is responsible for paying social security and unemployment taxes for each employee, and for providing for worker's compensation coverage, if appropriate. In addition, the employer has responsibility for maintaining a safe workplace. Each employer must be informed about its various obligations to employees. Following a termination of employment, there is also a potential for liability for wrongful discharge and unemployment compensation. 8.1.2 General Personnel Issues. An employer must also be informed about general personnel issues involving supervision and payment of an employee work force. 8.1.3 Potential Liability to Others for Employees Conduct. An employer must also be aware of the potential bases for liability to third parties based on an employee's conduct.
8.2. General Overview of Wrongful Discharge Issues. Historically, American courts, including Idaho courts, have enforced an "at will" employment rule, and refused to recognize exceptions to the rule. Idaho courts have often said that an employee hired for an indefinite term can be terminated at any time and for any reason without an employer incurring liability. Metcalf v. Intermountain Gas, 116 Idaho 622, 788 P.2d 744 (1980). When employment is at-will, the employment relationship may be terminated at any time for any or no reason which does not violate public policy unless the employment contract limits the reasons for which an employee may be discharged. Ray v. Nampa School District #131, 814 P.2d 17 ( Idaho 1991). Recent Idaho cases have continued to espouse the general "at will" rule, but have increasingly expanded the exceptions to that rule based upon various theories, including public policy, good faith and fair dealing, discrimination, and others that will be discussed more fully below. 8.2.1 Contractual Bases for Liability. Many employers assume that if they have no written contract with their employees, they cannot be held liable for any breach of contractual promises. However, various legal developments have demonstrated many ways a contract between an employer and an employee can be created. Employers must be aware of this to avoid any assertion of wrongful discharge claims based upon contract theories. Contracts can be created by employee handbooks, policy statements, oral representations, or even a specific course or manner of dealing with the employee. Contracts can be created by express promises or implied promises.
A. Employee Handbooks. Idaho courts have held that contractual liability can be based on an employee handbook. Jones v. Micron Technology, Inc. 923 P.2d 486 (1996); Metcalf v. Intermountain Gas, 116 Idaho 622, 788 P.2d 744 (1980). Any language in an employee handbook which could arguably constitute a promise could form the basis for contractual liability. Terms that imply job security or longevity, such as phrases identifying employees as "permanent" or discussing long term "career" opportunities, may be used by employees to argue a promise of lifetime employment. Harkness v. City of Burley, 110 Idaho 353, 715 P.2d 1283 (1986). Language implying that an employee can be terminated only for good cause will be used by employees to argue that they were not "at will." Watson v. Idaho Falls Consolidated Hospitals, 111 Idaho 44, 720 P.2d 632 (1986). Promises of specific benefits could also rise to the level of contractual promises. Johnson v. Allied Stores, Corp., 106 Idaho 363, 679 P.2d 640 (1984) (executive discounts and severance benefits could constitute contractual obligations). Courts have sometimes held that the existence of detailed discipline or grievance procedures can be used as a basis for a claim of wrongful discharge, by implying that good cause is necessary for termination. Renney v. Port Huron Hospital, 398 N.W.2d 327 (Mich. 1986). If a handbook lists an exclusive set of reasons for termination, a good cause contract may exist. Watson v. Idaho Falls Consolidated Hospitals, 111 Idaho 44, 720 P.2d 632 (1986). Because of these legal developments, employers are well advised to include a disclaimer in any employee handbook advising employees that their employment can be terminated at anytime and for any reason. B. Oral Promises. In recent years, Idaho courts have broadened the availability of the breach of contract remedy, particularly regarding oral promises that the employee will be fired only for good cause. In one case, where the employee alleged that he was promised that he could retain his position so long as he "kept his nose clean," such an oral statement was found to constitute a promise of discharge only for good cause. Ray v. Nampa School Dist., 814 P.2d 17 (Idaho 1991). Other promises considered by the Idaho courts have included promises such as: (1) the employee would be employed as long as the company stayed in business, Whitlock v. Haney Seed Co., 110 Idaho 347, 715 P.2d 1017 (Ct.App. 1986); and (2) the employee would be employed until retirement, Burton v. Atomic Workers Federal Credit Union, 119 Idaho 17, 803 P.2d 518 (1990). To avoid contractual liability, an employer must assume that no oral promises are made that could be construed by an employee as a promise of perpetual employment, or that good cause is required for discharge. 8.2.2 Common Law Bases for Liability. The courts have also recognized a common law basis for liability for wrongful discharge where an employee could demonstrate that he or she was terminated in violation of public policy. HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 88
A. Public Policy. In Jackson v. Minidoka Irrigation Dist., 98 Idaho 330, 563 P.2d 54 (1977), the Idaho Supreme Court first recognized a theory of wrongful discharge based upon breach of public policy. Some of the public policy exceptions recognized by the Idaho courts have included the following: (1) Discharge based on the employees compliance with a court-issued subpoena; Discharge of employees who refuse to commit unlawful acts; Discharge of employees who perform important public obligations; and Discharge of employees who exercise certain legal rights or privileges.
(2) (3)
(4)
B. Constructive Discharge. Wrongful termination usually requires that the plaintiff who brings the claim has been involuntarily discharged. As a result, employers often assume that if an employee quits, the employee cannot recover for wrongful discharge. Some jurisdictions, including Idaho, have recognized that extreme behavior on the part of an employer, short of termination, can amount to "constructive discharge." In such cases, an employee who quit employment can nevertheless maintain an action for wrongful discharge. The Idaho Supreme Court recognized constructive discharge in Jackson v. Minidoka Irr. Dist., 98 Idaho 330, 563 P.2d 65 (1977). The Supreme Court held that whether an employee has been discharged does not depend on the use of formal words; rather, it depends on whether a prudent person would believe that he/she had been fired. Id. at 335, 563 P.2d at 59; see also, Johnson v. Idaho Central Credit Union, 127 Idaho 867, 908 P.2d 560 (1995). Accordingly, an employee may be "constructively discharged" if the employer's words or acts "would logically lead a prudent man to believe his tenure had been terminated." Id. In the Jackson case, the plaintiff employee had been asked to resign under threats of criminal prosecution. Id. at 332, 563 P.2d at 56. The court found these actions were sufficient for constructive discharge. Id. at 335, 563 P.2d at 59. In O'Dell v. Basabe, 119 Idaho 796, 810 P.2d 1082 (1991), the court defined constructive discharge as "harassment, intimidation, coercion, or other aggravating conduct that renders working conditions intolerable." The standard is an objective standard, meaning a plaintiff must show that "a reasonable person would terminate the employment relationship under similar circumstances." Id. HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 89
In Knee v. School Dist. 139, 106 Idaho 152, 676 P.2d 727 (Ct.App. 1984), the court held that the plaintiff, in addition to bearing the burden of proof, must present sufficient evidence to show that the resignation was involuntary. In the Knee case, the court established that the mere act of an employer asking for an employee's resignation may not be enough to constitute constructive discharge, where a prudent person would not believe that he/she would be terminated if he/she declined to resign. In the Knee case, a public employee with a 3-year contract was asked to resign, but as the court pointed out, under law he was not required to honor that request. Many other cases recognize a constructive discharge theory, but generally permit a claim only where resignation is the only reasonable alternative. Constructive discharge claims often involve claims of continued discrimination, such as sexual harassment or racial discrimination. Cook v. State of Idaho, Department of Transportation, 133 Idaho 288, 985 P.2d 1150 (1999) (sexual harassment); Valdez v. City of Los Angeles, 282 Cal.Rptr. 726 (Cal.App. 1991) (race discrimination). In cases where the employee was accused of criminal or quasi-criminal conduct, constructive discharge claims have also been allowed. Niles v. Big Sky Eyewear, 771 P.2d 114 (Mont. 1989); Employment Security Commission v. Western Gas, 786 P.2d 866 (Wyo. 1990). 8.2.3 Statutory Basis for Liability. In addition to common law theories noted above, employees can sue for wrongful discharge based on a number of different statutory protections. A. Discrimination. The different "protected classes" of discrimination are identified below. There are different theories of discrimination. One theory of discrimination is referred to as "disparate impact." Disparate impact discrimination involves the implementation of a policy or practice by an employer by which, neutral on its face, has the effect of excluding protected class members from various employment benefits. For example, if an employer has a facially neutral policy of hiring only those who can lift more than 50 pounds, this may have an adverse impact on females with lesser upper body strength. There is no need for a woman discriminated against under this policy to prove that the employer intends to discriminate against women. Instead, the plaintiff must only prove that the policy or practice existed and that the policy or practice has a substantially disproportionate impact on the protected class and resulted in the denial of employment benefits. Another theory of discrimination is called disparate treatment. This is the most common form of discrimination asserted in Idaho. Under a disparate treatment theory, a person in a protected class claims that he or she was intentionally treated differently by an employer because of protected class status. To make out a prima facie case, the plaintiff must establish: (1) that he or she is a member of a protected class; (2) that he or she was qualified to receive the benefit or the employment decision; and (3) that he or she did not receive the benefit of the employment decision. HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 90
Once the plaintiff meets this burden, it is incumbent on the employer to articulate a legitimate, nondiscriminatory reason for the decision or action taken. Once such a reason is articulated, the plaintiff must show that the reason is pretextual, that is, that the reason is merely offered as an excuse for illegal discrimination. Most federal acts related to discrimination apply only to employees with 25 or more employees, although one applies to those with 15 or more. The Idaho Human Rights Act applies to all employers with 5 or more employees. i. Age. The federal Age Discrimination in Employment Act protects all employees over the age of 40 from discrimination on the basis of age. The Idaho Human Rights Act also protects Idaho employees against discrimination on the basis of age. These Acts provide that a person cannot be deprived of any employment benefit on the basis of age. Refusal to hire older workers, a mandatory retirement at a certain age, mandatory demotion at a certain age, reduction of benefits at a certain age, and similar actions, would violate both of these statutes. In addition, the federal act provides for certain notice and revocation periods that apply to severance agreements in situations where the employee is over the age of 40 and makes a waiver of age discrimination claims against the employer. ii. Sex. Discrimination on the basis of sex is prohibited by federal law and the Idaho Human Rights Act. Employers should keep in mind that an action for discrimination on the basis of sex is not limited to females, because males can also assert sex discrimination claims if their status as a male was used in any employment decisions. iii. Pregnancy. One area often overlooked by employers is that of pregnancy discrimination. Pregnancy, childbirth, or related medical conditions are protected under the general definition of sex under Title VII. Pregnancy leave must be granted by employers if they grant medical leave for other medical conditions. The amount of leave granted for pregnancy must be at least as great as the leave granted for other medical conditions. In addition, pregnancy or the possibility of pregnancy cannot be used as grounds for any employment decision. iv. Sexual Harassment. There are two types of sexual harassment: one is "quid pro quo" harassment and the other is "hostile work environment" harassment. Quid pro quo harassment occurs when employment benefits are made contingent upon sexual activity. With quid pro quo harassment, the plaintiff must generally show the loss of a tangible employment benefit. On the other hand, "hostile work HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 91
environment" sexual harassment does not require a showing of tangible job detriment or any economic loss. A "hostile work environment" claim can be made when the harassing activity rises to the level of creating a hostile work environment. Generally, a plaintiff must show that the harassing activity was "unwelcome." Whether or not the activity is welcome may depend on whether a "reasonable person" would consider the activity to be hostile or harassing. v. Disability. Employers are prohibited from discriminating on the basis of disability under several different statutes. The Americans With Disabilities Act prohibits such discrimination. (See discussion later in this chapter.) In addition, employers with government contracts or federal funding are prohibited from discriminating on the basis of disability by the Federal Rehabilitation Act of 1973. The Idaho Human Rights Act also prohibits discrimination on the basis of handicap. All of these statutes contain the reasonable accommodation provisions outlined below in the discussion on the Americans With Disabilities Act. vi. Religion. Title VII of the Civil Rights Act prohibits discrimination on the basis of religion. The Idaho Human Rights Act also prohibits such discrimination. This means that employers must give deference to the religious beliefs of employees, including the possibility of allowing employees time off to observe religious holidays. While an employer must make efforts to accommodate the religious beliefs of its employees, the reasonable accommodation provisions here are de minimis (meaning only a slight accommodation is necessary). vii. Race or National Origin. Federal and state laws protect against race discrimination. These laws also are construed to cover most, though perhaps not all, national origin discrimination claims. Certain "Speak-English-Only" rules in the workplace may run afoul of these national origin discrimination laws. B. Retaliatory Discharge. There are a myriad of different statutes that also provide employees with protection from wrongful discharge. Some of the most common examples are described below. i. Title VII/IHRA. Title VII prohibits employers from discriminating against employees when the employee (1) opposes an unlawful practice (such as reporting sex or race discrimination); (2) makes a charge of unlawful discrimination; or (3) testifies, assists, or HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 92
participates in an investigation, proceeding, or hearing involving claims by any employee of unlawful discrimination. The Idaho Human Rights Act has a similar provision. Retaliation is prohibited regardless of whether discrimination actually occurred. ii. National Labor Relations Act. The National Labor Relations Act prohibits the discharge of employees because they (1) filed charges under the Act; or (2) gave testimony in a case under the Act. The same section also prohibits any conduct interfering with or restraining the rights of employees to organize for their own benefit, regardless of whether actual unionizing activities are involved. iii. Employee Retirement Income Security Act (ERISA). ERISA contains a provision protecting employees from any adverse employment action, when the action is taken in retaliation for an employee (1) exercising any right to which he or she is entitled under the Act; or (2) for the purpose of interfering with rights under any benefit plan. In addition, it is impermissible for an employer to terminate the employment of an employee to avoid payment of pensions or health insurance benefits. iv. Garnishment. Federal law protects employees whose wages have been garnished. Employers are prohibited from discharging a garnished employee where the employee has been subjected to garnishment for any one indebtedness. This means that if the same employee has been garnished more than once, there is no protection. Idaho law also contains a provision protecting against garnishment, but only where the garnishment is for a debt incurred for a consumer purpose, generally defined as a debt for personal or household purposes. v. Occupational Safety and Health Act (OSHA). OSHA prohibits discrimination against any employee who (1) filed a complaint under OSHA, (2) instituted any proceedings under OSHA, (3) testified or is about to testify in any OSHA proceeding, or (4) has exercised any rights for himself or others with regard to an occupational injury. vi. Jury Service. Federal law prohibits employers from retaliating against employees because of jury service or because of an employees attendance or scheduled attendance in connection with jury service in federal courts. Idaho law prohibits employers from penalizing employees for serving on a jury. A violation could result in treble damages.
vii. Polygraphs. By federal law, employers are prohibited from retaliating against employees who refuse to submit to a polygraph test, or employees who submit to such tests. Employers are also prohibited from retaliating against employees who (1) complain about polygraph use, (2) testify against the employer regarding such use, or (3) assert their rights under this protective law. Idaho law prohibits employers from requiring a polygraph as a condition of employment. viii. Whistleblowers. Public employees who work for the federal government are protected when they disclose government waste or abuse. Idaho law has some whistleblower protection, such as a prohibition against employers involved in hazardous waste generation, transportation, treatment, storage, or disposal, preventing them from retaliating against employees who testify, provide information, or otherwise assist in a government investigation. ix. Wage Laws. Idaho law contains two retaliation provisions dealing with wages. The first, located in Idaho's minimum wage law, prohibits employers from discriminating against employees (1) because they complained about not receiving a minimum wage, (2) because they instituted proceedings under the minimum wage law, or (3) because they testified or were about to testify in a minimum wage proceeding. The other section is contained in Idaho's wage claim statute. That law prohibits employers from discharging or retaliating against employees for (1) asserting rights to wages, (2) complaining that they had not been paid appropriate wages, or (3) because the employee has testified or will testify in a proceeding conducted by the state Department of Labor. 8.2.4 Prevention of Wrongful Discharge Claims. There are a numbers of ways employers can protect themselves against wrongful discharge claims. A. The Application/Pre-Employment Process. A contract may be inadvertently created by the use of advertisements. Advertisements should not leave prospective applicants with the impression that they will be receiving more than employers are willing to offer. Consider the following advertisement: Are you tired of just having a job? Do you want a financially rewarding career path with a growing company, where you will have a bright future and job security? We want you to consider becoming a part of our family at Company X. We offer excellent compensation and benefits, a warm and congenial working environment and excellent promotional opportunities. Come join us now to begin a long and rewarding career. You'll never need to look for a job again. HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 94
If the company that placed this ad considers its work force to be "at-will," it may have a hard time convincing a judge or jury of that position. An employee fired after six months because he could not get along with his boss, could argue, with some force, that he was "promised" a lifetime job. Although there is some merit to the employer's desire to "sell" its company to prospective employees, care must be taken not to do it in such a way that promises more than the employer intends to deliver. The same rules apply to marketing brochures. Avoid the use of any term that implies longevity, such as "permanent," "career path," "long term growth" or "job security." These and similar terms may imply something other than at-will employment, and could potentially add fire to a breach of contract action. See Harkness v. City of Burley, 110 Idaho 353, 715 P.2d 1283 (1986); Holmes v. Union Oil Co., 114 Idaho 773, 760 P.2d 1189 (Ct.App. 1988). i. Good Cause. Over the course of many years, the Idaho Supreme Court has broadened the availability of the breach of contract remedy, particularly where it pertains to oral promises that the employee will be fired only for good cause. For example, in Ray v. Nampa School Dist., 814 P.2d 17 (Idaho 1991), the court sent a case back down to the lower court for trial on a contract theory, where the employee alleged that he was promised that he could retain his position, so long as he "kept his nose clean." The court held that such an oral statement could constitute a promise of discharge only for good cause. Consequently, employers should train supervisors to avoid any statements that may imply that an employee will be terminated only for good cause. ii. Longevity. The Idaho Supreme Court has considered cases where the employee alleged that he or she was promised a job (1) for as long as the company stayed in business, Whitlock v. Haney Seed Co., 110 Idaho 347, 715 P.2d 1017 (Ct.App. 1986); and (2) until retirement, Burton v. Atomic Workers Federal Credit Union, 119 Idaho 17, 803 P.2d 518 (1990). Other than a potential statute of frauds problem, the court has shown no reluctance to enforce such oral promises. Because of this case law, employers should avoid any statements that imply that an employee will be retained for a specific period of time. B. Employee Policies/Handbook. The Idaho Supreme Court has determined that a disclaimer in an employee handbook is effective to prevent employees from claiming a contract of employment. Raedlein v. Boise Cascade Corp., 931 P.2d 621 (Idaho 1996). Courts in other jurisdictions have routinely dismissed breach of contract claims based upon disclaimer language in a handbook. McClusky v. Unicare Health Facility, Inc., 484 So.2d 398 (Ala. 1986); Riethmiller v. Blue Cross & HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 95
Blue Shield, 390 N.W.2d 227 (Mich.App. 1986); Berry v. Doctor's Health Facilities, 715 S.W.2d 60 (Tex.App. 1986); and Bailey v. Perkins Restaurants, Inc., 398 N.W.2d 120 (N.D. 1986). The effectiveness of a disclaimer may depend on the method of dissemination. Stone v. Mission Bay Mfg. Co., 672 P.2d 629 (Nev. 1983); Brooks v. Trans World Airlines, 574 F.Supp. 805 (D.Colo. 1983). Given this authority, any employee handbook should contain disclaimer language, in as conspicuous a location as possible, preferably on the first page. The handbook should clearly indicate that it is not intended to confer any rights upon the individual employee, nor to entitle the employee to remain employed by the company. One example of possible language is: Employee is an employee AT-WILL. [The employer] makes no promises to employee of perpetual employment or employment for any specific period of time. This handbook does not constitute a contract, and by receipt of this handbook, the employee understands that he or she can be terminated at any time and for any reason. An important practice for employers developing an employee handbook with an at-will disclaimer is to obtain each employee's written acknowledgment of the applicability of the handbook, and its at-will rules. For this reason, the at-will language provided above should be clearly stated on the acknowledgment page of the handbook. C. Personnel Record Keeping. i. Notices and Reports. There are a number of notices required to be posted in areas where employees have ready access. The following notices should be posted: (1) notices with respect to discrimination; (2) a notice with respect to minimum wage laws; (3) a notice with respect to worker's compensation benefits; (4) a notice with respect to unemployment compensation rights; (5) a notice with respect to occupational safety and health; (6) a notice with respect to the Migrant and Seasonal Agricultural Workers Act; (7) a notice with respect to the hazard communication rule (OSHA); (8) a notice on the Employee Polygraph Protection Act; and (9) a notice on the Family and Medical Leave Act of 1993. All notices should be posted in an area where employees and applicants will see them. These posters and further information is available through the Idaho Department of Labor Job Service Division or online at www.idahoworks.org. In addition, OSHA requires that all employers with 11 or more employees comply with certain record-keeping and posting requirements relating to occupational injuries and illnesses. HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 96
Employers must maintain a log and summary of all occupational injuries and illnesses and report each recordable injury and illness no later than 6 working days after receiving information that the illness or injury occurred. OSHA Form 200 is a form relating to the log and summary of occupational injuries or illnesses. OSHA also provides a form No. 101 which is a supplementary record of occupational injuries and illnesses, however, in most cases the documents prepared for worker's compensation injuries suffice for the supplementary record requirement. There are also worker's compensation recordkeeping requirements. More information about OSHA and these requirements is available online at http://www.osha.gov. ii. IRCA. The Immigration Reform and Control Act of 1986 provides civil and criminal penalties for employers who knowingly hire, refer, or recruit aliens not authorized to work. The Act makes it unlawful for a person or other entity to hire or to recruit or refer for a fee for employment in the United States an alien while knowing the alien is unauthorized to work or an individual without complying with the laws and requirements concerning employment verification. The law defines an unauthorized alien as an alien who at the time of employment is not either an alien lawfully admitted for permanent residence or authorized to be so employed by either IRCA or by the Attorney General. It is also unlawful for a person or other entity to continue to employ an alien in the United States after knowing the alien is or has become unauthorized to work. A person or entity that establishes that it has in good faith complied with the requirements of employment verification with respect to hiring, recruiting, or referral for employment has established an affirmative defense. After hiring an individual, a business must attest, under penalty of perjury and on a particular designated form, often called an I-9 form, that it has verified that the individual employed is not an unauthorized alien by examining a series of documents. The employer must examine documents that evidence both employment authorization and the identity of the individual. Documents that establish both employment authorization and identity include a United States passport, a Certificate of United States Citizenship, a Certificate of Naturalization, or an unexpired foreign passport if the passport has an unexpired endorsement of the Attorney General authorizing employment in the United States or a resident alien card or other alien registration card, if the card contains a photograph and is evidence of authorization of employment in the United States. Documents evidencing employment authorization include a social security card, a birth certificate. Documents establishing identity of the individual include a driver's license or a state identification card. For the majority of new hires, personnel managers expect that the HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 97
documentation submitted will be a driver's license and a social security card. The individual hired must also complete an attestation of employment authorization included on the I-9 form. The form must be retained in the employee's file for three years after the date of recruiting, referral or hiring, except that it need only be retained for one year after the date of the individual's termination of employment, whichever is later. Copies of the documentation provided may be obtained for the protection of the employer and retained in the personnel file when used solely for the purpose of complying with verification requirements. D. Discipline Procedures. Courts have sometimes held that the existence of a detailed discipline procedure can be used as a basis for claim of wrongful discharge, by implying that good cause is necessary for termination. Renny v. Port Huron Hospital, 398 N.W.2d 327 (Mich. 1986); Benoir v. Ethan Alan, Inc., 514 A.2d 716 (Vt. 1986). The Idaho courts have followed this line of reasoning by holding that where the handbook includes an exclusive list of reasons for termination, a "good cause" contract may exist. Watson v. Idaho Falls Consolidated Hospital, 111 Idaho 44, 720 P.2d 632 (1986); Harkness v. City of Burley, 110 Idaho 353, 715 P.2d 1283 (1986). A discipline policy should include many of the most common grounds for discipline or termination, to avoid a claim that a contract was breached, because a stated reason was not included in the list. Ostercamp v. Alcota Manufacturing, Inc., 332 N.W.2d 275 (S.D. 1983) (disloyalty not listed as a basis for termination). Special care should be taken when drafting the discipline policy. A discipline policy should make it clear that any list of infractions is not all inclusive, and that management retains the discretion to determine the severity of a particular infraction and the propriety of a particular form of discipline. If the handbook will contain a progressive discipline system, it should include language making it clear that management can, in its discretion, bypass any step of the progressive system if the offense, in management's judgment, warrants more severe discipline. Sample language could be as follows: The above list of infractions has been compiled for informational purposes only and is not intended to be all inclusive. MANAGEMENT RESERVES THE RIGHT TO TERMINATE AN EMPLOYEE AT ANY TIME FOR ANY REASON, WITHOUT CAUSE. Any step in the disciplinary process may be waived in the sole discretion of management.
Many progressive discipline systems utilize the verbal warning/written warning approach. Issuance of such warnings to employees should be undertaken only with the following principles in mind. In any evaluation of an employee and in any disciplinary warning, avoid the use of any terms or language which could imply reliance upon age or sex as a basis for the concern with performance. Do not imply that an older worker is losing his/her "motivation" or is "slowing down." Do not imply that a female worker is "too passive" or "too aggressive" or any other terms that may imply sexual stereotyping. In addition, care should be taken in any disciplinary warning to avoid creating the promise of certain promotions or employment for a certain period of time. Consider the potential problem that may arise if the following language is used in a warning: If the problem continues, we may be forced to remove this employee from his position and place him in another position. If this employer then chooses to terminate the employee for subsequent conduct of the same nature, the employee could claim that he was promised a transfer rather than termination. Careful use of language should avoid any implied promises that are not intended. Every warning given should indicate the potential consequences of continued behavioral problems. This serves to give the employee adequate notice of the areas that need improvement and to make sure the employee knows which step in the progressive discipline sequence is being utilized. Any subsequent actions should not be undertaken without a review of previous warnings, to be sure that the proposed action is consistent with the cause of action proposed to the employee. On the other hand, each notice should point out that management has the discretion to skip steps in the discipline process. Written warnings should also be placed in the personnel file. If a verbal warning is given, be certain that some record of that appears in the personnel file. This will allow the employer to keep track of incidents that may form a basis for more severe discipline. E. Performance Appraisals. A performance appraisal can be an effective tool in evaluating employees for raises, promotions or other job benefits, and in defending against a wrongful discharge claim. However, the performance appraisal must be used with the employer's specific purpose in mind, and the following principles should be observed. HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 99
If you adopt a performance appraisal system, make sure you are prepared to carry through on the promise. As noted above, statements made in handbooks or policy statements can constitute an implied promise. There are courts in other jurisdictions that have concluded that a performance appraisal system does not create an implied contract of employment. Castiglione v. Johns Hopkins Hospital, 517 A.2d 786 (Md.App. 1986); O'Connor v. Eastman Kodak Co., 481 N.E.2d 549 (N.Y. 1985). However, as a matter of practice, employers should only "promise" regular performance appraisals if they are willing to carry through on such a promise. The employer should strive to establish objective criteria for evaluation. Use of subjective criteria can easily be used to support a discrimination claim is the reviewer is not highly skilled. F. Grievance Procedures. There are several types of systems that can be used to process grievances. Employers should choose the one that best fits their own corporate culture or climate. The grievance policy may place time limits on the exercise of the right to grieve and may limit the categories where grievances are available to prevent minor employee gripes from tying up the system. However, the policy should also make it absolutely clear that the system is purely for the benefit of the employee, that it does not impact managerial decisions in running the business in the way management sees fit, that it does not change the employment status, and does not constitute an enforceable contractual right. A method for dealing with complaints from employees concerning the treatment they receive is often desirable as a form of preventive maintenance. Given the Idaho Supreme Court decision in Metcalf v. Intermountain Gas, 116 Idaho 622, 788 P.2d 744 (1989) where the court applied a covenant of good faith and fair dealing to the employment context, employers would be wise to consider any policy that may ferret out potentially troublesome situations before they become major headaches. A grievance policy has many advantages if properly drafted and implemented and meets the following criteria: (1) It gives the employer the opportunity to correct bad or discriminatory managerial decisions. It encourages communication between employees and supervisors. It serves as evidence in any potential lawsuit of the employer's fairness and good faith. It gives the employee a release for anger and frustration.
(2) (3)
(4)
(5) (6)
It may allow the settlement of disputes at a lower cost than litigation. It promotes creation of a record of reasonable employer actions in dealing with a problem.
While a grievance system may be difficult to administer or time consuming, the benefits often outweigh the disadvantages. Keep in mind, however, that any rights granted pursuant to a grievance system could be asserted as contractual promises, if not worded carefully. Jones v. Micron Technology, Inc., 923 P.2d 486, Idaho (1996); Jackson v. Minidoka Irrigation Dist., 98 Idaho 330, 563 P.2d 54 (1977) (in dicta, supreme court stated that hearing rights in handbook formed part of employment contract); Morris v. Lutheran Medical Center, 340 N.W.2d 388 (Neb. 1983). There are many different possible grievance procedures, such as the following: (1) A policy that employees go first to their supervisor with any problem, with unresolved complaints going up the chain of command as far as practical. An "open door" policy where the employee chooses the supervisor, manager or executive to whom the complaint will be addressed. Involvement of a personnel or human resources department in the complaint resolution process. Involvement of employee groups or unions in the complaint resolution process.
(2)
(3)
(4)
8.3. Unemployment Compensation. Under the Idaho employment security law, a statutory benefit (unemployment compensation) is paid to a claimant who is unemployed and unable to find work, if the employment of the claimant was terminated through no fault of the employee's own. Idaho Code 72-1366. Covered instances of unemployment include (1) layoffs due to lack of work; (2) where the employee is fired but is not guilty of misconduct; and (3) where the employee quits for good cause. Employees who earn wages are covered under the Idaho employment security law. Idaho Code 72-1316. Independent contractors are excluded from coverage. Link's School of Business, Inc. v. Employment Security Agency, 85 Idaho 519, 380 P.2d 506 (1963). Employees of religious organizations are also not covered. Idaho Code 72-1316(A)(g); Nampa Christian Schools Foundation, Inc. v. State ex rel. Department of Employment, 110 Idaho 918, 719 P.2d 1178 (1986).
8.3.1 Payment Into The Fund. Unemployment benefits paid are based on the employee's wage history and are funded by assessments against covered employers. Employers must file reports quarterly and are required to contribute to the employment security fund based upon the number of employees, wages paid, and previous experience of the employer. Idaho Code 72-1349, et seq. The system is administered by the Idaho Department of Employment and the Idaho Industrial Commission. A special system of funding benefits paid to claimants who left nonprofit organizations is provided under Idaho Code 72-1349(A). Should the nonprofit organization elect to do so, it may become a cost-reimbursement employer, which is only required to make payments based on actual benefits paid to its former employees. The usual formula of contributions to the employment security fund is inapplicable to a cost-reimbursement employer. Tendoy Area Council v. State Dept. of Employment, 105 Idaho 517, 670 P.2d 1302 (1983), 108 Idaho 441, 700 P.2d 63 (1985). 8.3.2 Recovery by the Employer. A. Grounds for Recovery. An employee can recover unemployment compensation if certain conditions are met. For a cost-reimbursement employer, the consequences of an employee recovering unemployment compensation is more critical, since payment is made more directly from the employer. Employees can recover if they are discharged from employment, but not for "misconduct." Thus employees can recover unemployment benefits if they are laid off due to lack of work, or if they are discharged simply because the employer is unhappy with their performance, their attitude, or it simply "is not working out." Misconduct is defined in the law to mean: (1) willful, intentional disregard of an employer's interests; (2) substantial disregard of employer's rules and regulations; or (3) conduct falling below a standard of conduct the employer has a right to expect. The last category is the only one that does not require willful or intentional conduct on the part of the employee. An employee can also get unemployment benefits when they quit, if they quit for "good cause." Some examples of "good cause" include quitting because the employer wrongfully withholds pay or because the employee is subjected to unlawful harassment or retaliation. Quitting to go to school, move to another location, or move to accompany a spouse have generally not been found to be good cause. B. Process for Recovery. An employer begins the process of claiming unemployment by filing a "Separation Statement" detailing the reasons for the separation. That statement is sent to the employer who is given seven days to respond. After the employer responds, the employee may reply or offer more information, then an employee in the local Job Service office issues a "Determination." The determination will either find for the employee or the employer, based on the information submitted. If the Determination is in the employee's HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 102
favor, the employee will immediately begin drawing benefits. For a cost reimbursement employer, this is then a critical juncture: if the employee is not entitled to benefits, every effort must be made to convince the initial decision maker that misconduct occurred, or that there was no good cause for quitting. If benefits are awarded, it will be difficult for the cost reimbursement employer to recover back benefits paid if the decision is later reversed. Every effort should thus be made to submit personnel file documentation and employee statements to support the employer's position at the initial stages. After a determination, the losing party has an opportunity to protest the decision within seven days after mailing. A protest can be filed with the local Job Service office, and can be as simple as a letter from the party indicating the claimant's name, social security number, the employer's name, the case number, and the fact that the party "protests" a decision of a particular examiner issued on a particular day. Local Job Service offices will accept fax filings, and will grant extensions by phone. The case can either then go to a "redetermination" or directly to an "appeals hearing." In a redetermination, the local Job Service office simply takes another look at the case. The redetermination will be denied if no new information is provided. Therefore, if a redetermination is desired, any new information should be submitted with the protest. If the employee has been awarded benefits, and the employer is a cost reimbursement employer, a redetermination is usually not in the employer's best interests, since the decision is rarely overturned at the lower level. In that situation, the protest can request a bypass of the redetermination stage, and the case will proceed directly to an "appeals hearing." If a redetermination is made, an examiner will simply consider the additional submissions and issue another decision, which in turn can be "protested." Once an appeal has been filed, an "appeals hearing" will be scheduled as soon as possible. Prior to this hearing, any document the employer believes may become important should be mailed to the Appeals Bureau in Boise. At this hearing, an employer should be prepared to present sworn testimony from every witness who has anything relevant to offer. The hearings are held by telephone, so a witness can testify from any location in the country or world. The employer should simply provide the Appeals Bureau with a list of witnesses and their telephone numbers prior to the hearing. The appeals examiner will get the witnesses on the phone when it is time for them to testify. While the appeals examiner may accept written statements from witnesses, live testimony, under oath, and subject to cross-examination is preferred, and more easily relied upon by the hearing officer. The employer can represent itself in this process, although an attorney can appear on behalf of the employer. If the employer represents itself, one employee should prepare the employee's case. That employee will be responsible for asking questions of all witnesses, including the claimant. All relevant evidence should be submitted, since the appeals hearing could be the last opportunity to present evidence.
8.4. Workers Compensation Issues. Like other employers, a nonprofit corporation may be subject to liability for its employees for on-the-job injuries. At common law, a negligent employer incurred tort liability for the employee's injuries. Tort liability of employers has largely been replaced by the workers' compensation system. Under Idaho law, where an employee suffers an on-the-job injury and there is workers' compensation coverage, a no-fault system prescribes the amount of benefits available to the injured employee; in return, the employee is prohibited from suing the employer in court for negligence. Idaho Code 72-201, 72-209 and 72-211. Under the statutory system of benefits, the employer is liable for all medical bills, temporary loss of wages, and potentially an additional amount according to the extent of disability caused by the accident. Idaho Code, Ch. 4, Title 72. The system is administered by the Industrial Commission of the State of Idaho. The workers' compensation system covers injuries of employees. Idaho Code 72-204(3) expressly provides that an officer of a corporation is a covered employee. Independent contractors are not covered. Whether volunteers are covered employees under the Idaho worker's compensation law is a complex issue that has not been answered by the Industrial Commission or the courts. Covered employers are generally required to obtain workers' compensation insurance. Idaho Code 72-301. There are stringent penalties for failure to carry workers' compensation insurance. Idaho Code 72-210 and 72-319. Nonprofit corporations may be able to argue that they are not subject to the workers' compensation law because employment that is not carried on for the sake of pecuniary gain is exempt under Idaho Code 72-212. No Idaho cases have examined the relationship of this exemption to a nonprofit corporation. Even where the employment is exempt, the employer may still elect coverage by filing a declaration with the Industrial Commission. Idaho Code 72-213. This may be advisable to ensure that the exclusive remedy of worker's compensation replaces the potential tort liability of the employer. 8.5. Wage and Hour Issues. 8.5.1 Minimum Wage. Idaho has a minimum wage law that requires that no employer pay any of his employees any wages computed at a rate of less than $5.15 per hour for employment. Idaho Code 44-1502. This minimum wage law essentially tracks the federal Fair Labor Standards Act. There are a number of exemptions from the provisions of the minimum wage act in Idaho, such as certain types of agricultural labor, employees in domestic service, outside sales people, seasonal employees of a non-profit camping program, and children under the age of 16 working part time or an odd job not exceeding a total of four hours per day with any one employer. The Fair Labor Standards Act and the Idaho Minimum Wage Act provide an exception for employment of certain individuals at a subminimum wage, but only where permitted under certificates issued by the Wage and Hour Division of the Employment Standards Administration of the United States Department of Labor. Also exempt from the minimum wage provisions are executive, administrative, and professional employees, employees of certain seasonal amusement or recreational establishments, and persons employed as companions to the elderly or infirm. 8.5.2 Overtime. Both Idaho and federal law also have requirements with respect to overtime compensation. Under Idaho law, an employee must be paid overtime compensation at HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 104
the rate of one and one-half times the employee's regular rate of pay for any hours worked over 40 hours in a workweek consisting of seven consecutive 24-hour periods. Idaho Code 44-1502. Federal law under the Fair Labor Standards Act also requires payment of overtime compensation at the rate of one and one-half times the regular rate of pay. A. Hours Worked. Covered employees must be paid for all hours worked in a workweek. In general, "hours worked" includes all time an employee must be on duty, or on the employer's premises, or at any other prescribed place of work. Consequently, if you require workers to arrive one-half before their starting time, they must be paid for that time. Also included is any additional time the employee is suffered or permitted to work. Consequently, if a worker regularly works through an unpaid lunch period, and the employer knows and permits that to happen, it may be responsible for paying compensation for that time as well. B. Computing Overtime Pay. Overtime must be paid at a rate of at least one and one-half times the employee's regular rate of pay for each hour worked in a workweek in excess of the maximum allowable. If the employee is paid on an hourly rate, the overtime rate is simply one and one-half times the hourly rate. The one and one-half times rate must be paid for each hour over 40 worked in a particular workweek. Workweeks cannot be averaged together to avoid overtime compensation; each workweek stands alone. If the employee is paid on a salaried basis, and is not exempt, the regular rate for an employee is obtained by dividing the salary by the number of hours for which the salary is intended to compensate. C. Exemptions. Certain employees are exempt from the payment of overtime compensation. Often employers make the mistake of thinking that if an employee is paid a salary, that employee is exempt from overtime compensation. However, a salaried employee must be paid overtime unless that employee's job description and job duties meets the definitions provided in exemptions from both the Idaho act and the Fair Labor Standards Act. The most common exemption is that of "executive, administrative, and professional employees." Thus an executive director of a non-profit corporation may indeed be an executive employee, and not entitled to overtime compensation. However, other employees would qualify for such an exemption only if their job description and job duties meets the requirements of an executive, administrative, or professional employee as defined in Department of Labor regulations. Other exemptions include employees of seasonal amusement or recreational establishments, where those are identified as such in the regulations and persons employed as companions to the elderly or infirmed. Domestic service workers who reside in their employers residences are also HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 105
exempt from the overtime pay provisions. In addition, hospitals and residential care establishments may adopt, by agreement with their employees, a 14-day work period in lieu of the usual 7-day workweek if the employees are paid at least time and one-half their regular rates for hours worked over eight in a day or eighty in a 14-day work period, whichever is the greater number of overtime hours. More information about overtime pay is available on the Department of Labors website at http://www.dol.gov/asp/programs/guide/minwage.htm. D. Recordkeeping Requirements. The Fair Labor Standards Act requires employers to keep records on wages, hours, and other items as specified in certain Department of Labor recordkeeping regulations. This is information that is generally kept by employers in the ordinary course of business and the records are not required to be kept in any particular form. Time clocks are not required. The following information must be kept: (1) personal information including the employee's name, home address, occupation, sex, and birth date if under 19 years of age; (2) hour and day when the workweek begins; (3) total hours worked each work day and each workweek; (4) total daily or weekly straight time earning; (5) regular hourly pay rate for any week when overtime is worked; (6) total overtime pay for the workweek; (7) deductions from or additions to wages; (8) total wages paid each period; and (9) date of payment and pay period covered. Employers must also keep records of employee injuries. E. Deductions From Wages and Payment of Wages Upon Separation. From Employment. Employers are required to pay all wages due to each employee at least once during each calendar month on regular pay days designated in advance by the employer. Idaho Code 45-608. The end of the pay period for which payment is made on a regular pay day cannot be more than 10 days before the regular pay day unless the regular pay day falls on a non-work day, in which case payment must be made on a preceding work day. Idaho Code 45-608(2). Idaho law requires employment records to be maintained for a minimum period of two years from the date of service. Idaho Code 45-610. Employers are required to notify employees at the time of hiring of the rate of pay and the usual day of payment. An employer may not withhold or divert any portion of an employee's wages unless (1) the employer is required to or empowered to do so by state or federal law, such as in the case of deductions for taxes and social security, or (2) the employer has a written authorization by the employee for deductions for a lawful purpose. Idaho Code 45-609. Consequently, if an employer desires to deduct any increments from an employee's pay check, such as for amounts due the employer from the employee for purchases or office equipment or other items, the employer must obtain a written authorization from the employee for the deduction. The employer is required to furnish each employee with a statement of deductions made from his wages for each pay period that HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 106
such deductions are made. Failure to follow these specific requirements constitutes a misdemeanor. Idaho Code 45-609. When an employee separates from employment, whether due to termination, layoff, or voluntary quit, the employer must pay or make available at the usual place of payment all wages then due at the next regularly scheduled payday or within ten (10) days of separation, whichever is sooner. However, if the employer makes a written request upon the employer for earlier payment of wages, all wages then due the employee shall be paid within 48 hours of the receipt of the written request, weekends and holidays excluded. Idaho Code 45-606. Significant penalties, including 30 days' wages or treble damages, are available to an employee if an employer fails to follow the guidelines of Idaho law.
8.6. Special Issues Employers May Face. 8.6.1 Americans With Disabilities Act and Idaho Human Rights Act. Title I of the Americans With Disabilities Act (ADA) prohibits discrimination and requires reasonable accommodation in the employment of Americans with disabilities. It is possible to determine the potential application of the ADA by comparing it with the Idaho Human Rights Act (IHRA). The IHRA was amended in 1988 to cover handicap discrimination and to require reasonable accommodation of handicapped workers. The provisions of Title I and the IHRA are very similar. For example, both require reasonable accommodation of handicapped workers and allow relief from the reasonable accommodation requirement if the employer can demonstrate undue hardship. Also, both acts limit the ability of employers to require physical examinations of their employees and both limit pre-employment inquiries concerning disabilities. Under Title I of the ADA, a handicap or disability is defined as a condition that "substantially limits" a major life activity. The IHRA contains a detailed description of a variety of things which could constitute a disability under the state or federal definition, including: chronic contagious diseases, cosmetic disfigurement, emotional illness, learning disabilities and a wide variety of other physical or mental conditions, including drug or alcohol abuse. Federal and Idaho state laws differ slightly in the treatment of drug and alcohol abusers. Title I specifically excludes current users of illegal drugs from the protection of the Act. The IHRA protects some drug addicts, but it does not require an employer to make accommodations for use of the drugs. The federal act includes alcoholism as a disability, but requires that the alcoholic be held to the same performance standards as the other workers. The IHRA also includes alcoholism, but does not require accommodation if the alcoholism creates a health or safety threat. Under the state act, with respect to both drugs and alcohol, the employer can require completion of a treatment program. Thus, the federal act seems to allow employers more leeway in dealing with drug and alcohol abuse than the state act. The court has not determined which act will control if there is a conflict in interpretation. The two acts also differ slightly in defining reasonable accommodation. Both acts define "reasonable accommodation" to include accessibility, job restructuring, a modified work schedule HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 107
and acquisition or modification of equipment. The federal act also includes modification of examinations or training to accommodate persons with disabilities and specifically requires the provision of readers or interpreters for the disabled person. The last requirement might require the employment of more than one person to do one specific job task, where a disabled person is blind or requires assistance in reading or writing. Under the Idaho Human Rights Act, there is a specific provision in the regulations indicating that an employer is not required to hire two full-time persons for one position. It is unclear whether the federal act would require such an accommodation. Both acts provide relief from the accommodation requirement if there is undue hardship. Undue hardship is determined on a case-by-case basis and is dependent upon a number of factors. Under the federal act, the factors include: the nature and cost of the accommodation, the financial and human resources of the facility, the financial resources of the employer, including the size and number of locations and the type of operation. Similar factors are considered under the state act. Employers should pay particular attention to the physical examination and pre-employment inquiry requirements of the ADA. Under Title I, a physical examination can be required only after a job offer is actually made. In addition, a physical examination must be shown to be job related and constitute a business necessity. It can be given only if all new employees are required to take such a physical examination. However, the ADA specifically allows physical examinations as part of an employee health program. The ADA does not allow pre-employment inquiries concerning handicaps or disabilities unless the inquiry concerns the ability of the potential employee to perform the job. The Idaho Human Rights Act has similar restrictive requirements. 8.6.2 Family Medical Leave Act of 1993. In 1993, Congress passed the "Family and Medical Leave Act." The purpose of the FMLA is to balance the demands of the workplace with the needs of families. An eligible employee is entitled to take reasonable leave for family reasons. "Eligible employee" is defined by the FMLA to include those employed for more than one year, at more than 1250 hours per year. The regulations direct that employers use the Fair Labor Standards Act (FLSA) definition of "hours worked" to determine the 1250 hour threshold. In addition, an employee is "eligible" only if the employer has more than 50 employees working with a 75 mile radius. Thus, for example, an employer with a chain of small stores, a long distance apart, could be covered by the FMLA, but have no "eligible" employees, because there are not 50 employees working within a 75 mile radius. Public entities are covered regardless of their size, but may not have any "eligible" employers if the "public entity" does not have 50 or more employees. The FMLA allows an eligible employee to take a total of twelve workweeks of leave during a one year period for one or more of the following reasons: (1) the birth of a child, in order to care for the child; (2) because of the placement of a child with the employee for adoption or foster care; (3) to care for a spouse, child, or parent of the employee, if the spouse, child, or parent has a serious health condition; or (4) because of a serious health condition which makes the employee unable to perform the functions of his or her position.
A. Leave in Progress. The regulations make it clear that each employee starts with a "clean slate" on the effective date of the FMLA. Thus, theoretically, an employee could have taken substantial leave in 1993, yet still be eligible for another 12 weeks of leave after August 5, 1993. B. Serious Health Conditions. A serious health condition is one that requires either: (1) inpatient care, or (2) continuing treatment by a health care provider. Congress apparently did not intend to cover short term conditions, but otherwise the definition remains vague. Examples provided in legislative history include heart conditions, cancer, back conditions, respiratory conditions, appendicitis, pneumonia, arthritis, accidental injuries, severe morning sickness, and childbirth-related conditions. Generally, the regulations provide that a serious condition is one that requires an incapacity of more than three days. C. Intermittent Leave. For birth, adoption, or foster care, leave cannot be taken on an intermittent basis, unless the employee and employer agree otherwise. Leave taken for serious health conditions can be taken on an intermittent or reduced leave schedule basis when medically necessary. However, when intermittent leave is requested, an employer may require the employee to transfer temporarily to another position for which the employee is qualified, if the position has equivalent pay and benefits, and better accommodates the recurring periods of leave than the regular employment position of the employee. D. Paid or Unpaid Leave. FMLA leave need not be paid unless the employer consents. An eligible employee may elect, or an employer may require, the employee to substitute any accrued vacation leave, personal leave, medical or family leave for any part of the twelve weeks provided. With respect to the serious health condition provisions, the Act does not require that an employer provide more paid sick or medical leave than the employer would normally provide. E. One Year Period. Employers can choose a uniform method of computing the 12-month period, using either a fixed period (such as the calendar year), or a period specific to the employee, such as 12 months measured forward from the first date leave is taken, or 12 months measured backward from the date leave is used. For leave taken for care of a child after birth, adoption, or foster care, FMLA leave must be completed within one year of the birth or placement of the child. Only one 12 week FMLA leave is allowed for birth or placement of a child, that is, employees cannot take leave every year to care for the same child. HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 109
F. Notice and Scheduling. The employee is required to give thirty days notice unless that is not practicable, in which case the employee must provide whatever notice is practicable. Where the leave is for a serious health condition, the employee must make a reasonable effort to schedule treatments so as not to unduly disrupt the employer's operations. G. Two Employees, Same Family. If both spouses are employed by the same employer, and they seek medical leave for birth, adoption, foster care, or to care for a sick parent, they are entitled only to an aggregate of twelve workweeks leave during any twelve month period. H. Medical Certification. Employers may require that a request for leave, because of a serious health condition, be supported by a health care provider's certification. The employee is required to provide, in a timely manner, a copy of such certification. The regulations define "timely manner" to be 15 calendar days. Employers must notify the employee when leave is requested if certification will be required. The statute contains requirements for the certification, which must include: (1) a description of the date on which the health condition commenced; (2) the probable duration of the condition; (3) the appropriate medical facts regarding the condition; (4) a statement that the eligible employee is needed to care for a relative, with an estimate of the amount of time needed; or (5) if the health condition involves the employee, that the employee is unable to perform the functions of the position. A sample form for certification is included in the regulations. An employer may require the employee to provide subsequent recertifications during the course of the leave, not more often than every 30 days unless: (1) the employee requests an extension of leave, (2) changed circumstances occur, or (3) the employer receives information that casts doubt on the continuing validity of the most recent certification. I. Second and Third Opinion. An employer, where there is reason to doubt the validity of the certification, may require, at the employer's expense, that the eligible employee obtain a second opinion. In any case where the second opinion conflicts with the original opinion, the employer may require, at the employer's expense, a third opinion, which will then be considered final and binding on both parties. The employer may also require that the eligible employee obtain subsequent recertifications. J. Notice Requirements. The regulations require employers to post a notice telling employees about this right under FMLA. A form notice is provided in the regulations. HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 110
Employers are also required to provide notices through employee handbooks or by furnishing written guidance on FMLA rights when an employee requests FMLA leave. K. Restoration of Equipment. When the employee returns to work, the employee must be (1) restored to the position held when the leave commenced, or (2) restored to an equivalent position "with equivalent employment benefits, pay, and other terms and conditions of employment." The latter is a stringent requirement, and the regulations make it clear that the issue is not one of comparability or similarity, rather than duties, and conditions, and privileges of the position must be equivalent. L. Effect on Accrued Benefits. The FMLA specifically says that the taking of leave may not result in the loss of any employment benefit which accrued prior to the date on which the leave commenced. However, the employee may not accrue seniority or employment benefits during the period of leave and may not accrue any right, benefit, or position of employment other than one which the employee would have been entitled to had the employee not taken the leave. Thus the employee cannot be placed in any better position because of having taken the leave. M. Employment Policies. An employer may require a medical release to return to work, if the employer has a uniformly applied practice or policy that requires each such employee to obtain a release. In addition, the law does not prohibit an employer from requiring an employee on leave to report periodically on their status, and their intention to return to work. N. Highly Compensated Employees. An employer may decline to rehire an employee after FMLA leave, but only if the employee is highly compensated (among the highest paid 10% of employees) and the denial is necessary to prevent "substantial and grievous economic injury to the operations of the employer." In such a case, the employer must notify the employee of the intent to deny a return to work. O. Continuation of Benefits. The employer must maintain group health coverage for any employee on leave for the duration of the leave "at the level and under the conditions coverage would have been provided if the employee had continued in employment continuously for the duration of such leave." If the employee fails to return to work, the employer may be able to recover the premium paid for maintaining coverage during the leave period.
8.6.3 Related Tort Causes of Action. A. Intentional Infliction of Emotional Distress. A cause of action for intentional infliction of emotional distress is not limited to the employment context, but can often arise in wrongful discharge cases as an additional claim. The claim is most often asserted in harassment cases, specifically sexual harassment cases. To support this cause of action, the general rule requires a showing of intentional or reckless conduct on the part of the employer that is extreme or outrageous and causes severe emotional distress. Edmonson v. Shearer Lumber Products, 139 Idaho 172, 75 P.3d 733 (2003); Holmes v. Union Oil Co. of California, 114 Idaho 773, 760 P.2d 1189 (Ct.App. 1988); Rasmuson v. Walker Bank & Trust Co., 102 Idaho 95, 625 P.2d 1098 (1981); Pottenger v. Potlatch Corp., 329 F.3d 740 (9th Cir. 2003); Rogers v. Loews L'Enfant Plaza Hotel, 526 F.Supp. 523 (D.D.C. 1981). B. Fraud. Some courts have held that if an employee is able to prove that an employer's statements or representations made at the time of hire were made with a then existing intent not to comply with them, the employee can sue for fraud. One example is Lazar v. Superior Court, 909 P.2d 981 (Cal. 1996). In that case, a terminated employee argued he was induced to relocate to California and sever his New York work relationships when his former employer made fraudulent statements regarding his employment. A similar case in Idaho is Verway v. Blincoe Packing Co., 108 Idaho 315, 698 P.2d 377 (Ct.App. 1985). In Verway, the plaintiffs filed an action seeking general and punitive damages in connection with the company's hiring of the plaintiffs after Blincoe's union employees went on strike and set up pickets. Each of the plaintiffs testified that they were hired and promised that they would not be fired in the event the strike was settled. However, once the strike was settled, the plaintiffs were all terminated and the union employees were rehired. The Verway plaintiffs alleged fraud to support their claims for punitive damages. C. Defamation and Self-Defamation. Allegations of defamation including claims for slander and/or libel are potential problems for employers when making terminations decisions and when dealing with prospective employers of former employees following a termination. In Gardner v. Hollifield, 96 Idaho 609, 533 P.2d 730 (1975) and Gardner v. Hollifield, 97 Idaho 607, 549 P.2d 266 (1976), the court discussed the defamation claim. The Idaho courts have also recognized a qualified privilege for employers discussing the performance and related aspects of employees. Arnold v. Diet Center, Inc., 113 Idaho 581, 746 P.2d 1040 (Ct.App. 1987). Some employees have also claimed a cause of action for self defamation saying that when they were terminated for false and defamatory reasons, they were required to truthfully state that reason in applying for HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 112
other jobs, and thus were prevented from obtaining other employment. Olson v. EG&G Idaho, Inc., 134 Idaho 778, 9 P.3d 1244 (2000); Olivieri v. Rodrigquez, 122 F.3d 406 (7th Cir. 1997). D. Invasion of Privacy. Courts have implied that if the reason given for termination relates to the employee's personal conduct outside the work place, a potential claim for invasion of privacy can be asserted. Courts in other jurisdictions have recognized an invasion of privacy claim as a cause of action against employers. Minding Your Business: Employer Liability for Invasion of Privacy, 7 Labor Lawyer 315 (1991). The issue of employee privacy is also relevant when considering the extent to which employers monitor employee use of email and internet use. Defamation, Privacy and Other Common Law Issues in the Computer Age, 680 PLI/Lit 723 (2002). Various ways that an invasion of privacy could occur include: i. Intrusion Upon Seclusion. This could occur by an employer's actions in imposing medical, genetic, or psychological tests, accessing confidential information in medical and insurance records, conducting intrusive and coercive interrogations, obtaining credit or other personal information about employees, electronic monitoring, or conducting searches of employees or their property. An intrusion upon seclusion is actionable only if highly offensive to a reasonable person. A prime example of this potential claim is Phillips v. Smalley Maintenance Services, Inc., 435 So.2d 705 (Ala. 1983). In Phillips, a manager called the plaintiff into his office, locked the door, and questioned her extensively about her sex life. This occurred two to three times a week for three months after which she was terminated. ii. Placing Employee in False Light. The employer may do this by making public false information that creates a false impression about the life or behavior of the employee. iii. Public Disclosure of Truthful but Private Facts. Idaho has recognized an invasion of privacy cause of action against an employer for making private facts public. The Idaho Supreme Court, in Baker v. Burlington Northern, Inc., engaged in an extensive analysis of this cause of action. 99 Idaho 688, 587 P.2d 829 (1978). Making public confidential medical information about an employee could implicate this rule.
E. Tortious Interference with Contract. In Barlow v. International Harvester, 95 Idaho 881, 522 P.2d 1102 (1974), the Idaho Supreme Court recognized a claim for tortious interference with contract where the defendants defamed the plaintiff causing him to lose a source of financing that resulted in forcing himto close his business. Plaintiffs in wrongful discharge cases have often attempted to use this type of a theory to sue supervisors who, for personal reasons, injected themselves into the relationship between a plaintiff and his employer and succeeded in securing plaintiff's discharge. For example, in Eib v. Federal Reserve Bank of Kansas City, 633 S.W.2d 432 (Mo.App. 1982), the plaintiff alleged that a supervisor, asserting personal animus, and using an improper means of discharge, interfered with the plaintiff's employment contract with his employer. The court accepted that theory of wrongful discharge.
8.7. Relationship Between a Tax-Exempt Organization and Staff. 8.7.1 Employees, Independent Contractors and Volunteers. The staff of a nonprofit corporation will often consist of paid employees, independent contractors, and volunteers. A distinction is drawn between employees or "servants" and independent contractors for various legal purposes. For definitional purposes, the distinction is based primarily on the right of the employer or master to control the work. The volunteer status of a person acting on behalf of a corporation should not, in and of itself, affect the liability of the corporation one way or the other. Usually, a volunteer will not be an independent contractor because he or she will be acting under the supervision of the corporation. 8.7.2 Tort Liability. The common law system of tort liability provides compensation to persons who are injured by the wrongful acts of others. Most often, the asserted basis of liability is that the person causing the injury was negligent, although allegations of the tort of fraud are common in modern business litigation. Of course, the staff person who commits the tort will be personally liable to the injured person. A. Respondeat Superior. The corporation may also be subject to tort liability and should protect itself with liability insurance. The corporation may incur tort liability in two ways. First, it may be held vicariously liable for the torts committed by its employees or volunteers acting under its control. In this situation, it is the employee or volunteer who is negligent, not the corporation. Nevertheless, liability is imposed on the corporation under the doctrine of respondeat superior. Vicarious liability is imposed only where the tort is committed by a servant (employee), rather than an independent contractor. Van Vranken v. Fence-Craft, 91 Idaho 742, 430 P.2d 488 (1967). To impose vicarious liability, the employee must have acted within the course and scope of the employee's duties. Smith v. Thompson, 103 Idaho 909, 655 P.2d 116 (Ct.App. 1982). Whether a particular individual performing a task for a HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 114
nonprofit corporation is an employee (whose acts give rise to corporate liability) rather than an independent contractor depends on the extent to which the corporation has the right to control the individual in the performance of the details of the work. Whalen v. Zinn, 60 Idaho 722, 96 P.2d 434 (1939). B. Negligence. As a second basis for liability, the corporation may itself commit torts. For example, the corporation may be negligent by hiring an incompetent person or by failing to adequately supervise its employees or volunteers. If this negligence results in injury, the corporation will be liable, even if vicarious liability would not exist under the circumstances. 8.7.3 Contractual Liability. The staff of the corporation may also create contractual liability for the corporation. Here, the question is whether the person acting on behalf of the corporation (the agent) has the legal power (authority) to bind the corporation (the principal). Gorton v. Doty, 57 Idaho 792, 69 P.2d 136 (1937). Where the agent has authority, the principal will be contractually bound. Clark v. Gneiting, 95 Idaho 10, 501 P.2d 278 (1972). A corporation can act only through its agents. The power to act on behalf of the corporation resides originally in the board, and is delegated to a certain extent to various officers and employees. However, even where there is no actual delegation of authority, the corporation may be bound if the corporate agent is held out to third persons as an authoritative figure. Where such apparent authority exists, any contracts entered into by the would-be authorized agent will be binding. Gore v. Richard Allen Mining Co., 61 Idaho 622, 105 P.2d 735 (1940).
8.8. General Sources of Information. 8.8.1 Idaho Department of Commerce. The Idaho Department of Commerces website provides employment information and links to other resources. The website is located at http://cl.idaho.gov/portal/. The Idaho Department of Commerce publishes a booklet entitled "Starting a Business in Idaho, available online at http://www.idahoworks.com/A2_Pubs.html. While the information in this booklet is generally more relevant to for-profit companies, non-profit business may benefit from the information included. 8.8.2 Idaho Department of Commerce and Labor. Questions on enforcement of Idaho's wage and hour law can be directed to the Idaho Department of Commerce and Labor, (208) 332-3570. Information is also available on the Idaho Department of Commerce and Labor website at www.cl.idaho.gov/laborlaws.htm. 8.8.3 Idaho industrial Commission. The Idaho Industrial Commission also prepared a publication titled "Worker's Compensation: A Guide for Employers, available online at http://www2.state.id.us/iic/employers/foremployers.htm. You can contact the Industrial Commission for help and information on worker's compensation issues at (208) 334-6000. HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 115
8.8.4 Idaho Department of Employment. Questions about Idaho's unemployment tax can be directed to the Unemployment Insurance Division of the Idaho Department of Labor, (208) 332-3577. Also helpful is a booklet, published by Department of Labor, titled "Unemployment Insurance Tax Information, available online at http://cl.idaho.gov/ftp/uiemphandbk.PDF. 8.8.5 Idaho Human Rights Commission. The Idaho Human Rights Commission offers pamphlets and booklets on dealing with Idaho and federal discrimination laws. Contact the Human Rights Commission at (208) 334-2873 or access their website at http://www2.state.id.us/ihrc 8.8.6 United States Department of Labor. Federal law often governs issues relating to wages and payment practices. For information on such issues, contact the United States Department of Labor, Wage and Hour Division, (208) 334-1029, or visit the website at http://www.dol.gov. 8.8.7 United States Immigration and Naturalization Service. Since United States law now requires verification of citizenship, employers may need information or forms from the INS. Contact them at (208) 334-1821. Information about immigration laws is also available on the U.S. Citizenship and Immigration Services website at http://uscis.gov/graphics. 8.8.8 Occupational Safety and Health Administration. For information about workplace safety issues, contact OSHA at (208) 334-1867. Guides to OSHA, reporting forms and recordkeeping forms are also available from OSHAs website at http://www.osha.gov.
8.9. Checklists. Many employers find it helpful to use checklists in monitoring employee relations. Included below are some of the more helpful checklists: 8.9.1 Interview Guidelines. 1. 2. How did you decide on this type of work? What were the circumstances concerning your leaving your last employment? Why are you giving up your job? Of all your jobs, which did you like best and why? Which did you like least and why? Describe the kind of people that annoy you most. What kind of people do you like working with? Why do you think the company should hire you? What strengths do you bring to this job; be specific?
3.
4.
5.
6.
What do you expect from the company that hires you? How can we meet your needs? What are two things you wish to avoid in your next job? What would your last supervisor tell me are your two weakest and strongest areas? What are your job goals for the next two years? How does this job relate to your plan? If you could have made two improvements in your last job what would they have been? Did you suggest these to your former employer? What did you do when your supervisor made a decision with which you strongly disagreed? What are your plans for self-improvement? What specific improvements have you made this year? What makes you tick or what really gets you excited? Do you work better in a group or alone and why? If you were hiring someone for this job, what qualities would you look for? How do you feel about spending 6 to 12 months as a trainee? What is most important to you about your job and why? What kind of working environment do you prefer? Describe the leadership positions that you have held. How often were you absent or late at your last job?
7. 8.
9. 10. 11.
12.
13.
14. 15. 16. 17. 18. 19. 20. 21.
8.9.2 Employee Warnings. 1. List for the employee specific examples of his or her shortcomings or misdeeds. Provide detailed descriptions, dates, production data, and any other facts that will help employees precisely comprehend the problem.
2.
Allow employees an opportunity to present their own case. Give employees a chance to explain their actions and to describe the causes behind the problems, including the performance of supervisors. Listen to the employees and make sure you take into account their version. Respect the employee. In discipline, as in every other aspect of supervision, supervisors should deal with their employees in a mature fashion. Avoid condescension, lecturing, and scolding, and above all do not lose your temper. Give the employee a clear understanding of consequences of additional misbehavior. Make sure employees understand the benefits they can expect as a result of improvement and the risks they run if their performance remains unchanged. Consequences should be clear, specific and tied to measurable criteria. Provide the employee specific recommendations on correcting performance. Employees often need extra coaching and guidance to improve their performance. Be sure to offer this assistance to help employees meet expectations. Remember that employers must work with employees to help them meet expectations. This means that the employer must be as committed to success as the employee is, and sometimes more. Management should always maintain a positive attitude. Remember that positive reinforcement is always more effective than negative. Note all improvements in employee performance and encourage continued efforts to meet expectations. Always give employees a second chance if the conduct is not severe, such as stealing or fraud. One-time performance problems can disappear for good if you deal with them in a positive manner and leave them behind. Be careful not to hold a grudge against an employee simply because he or she has demonstrated a performance problem in the past. As much as possible, start with a clean slate after corrected action has been initiated.
3.
4.
5.
6.
7.
8.9.3 Termination Checklist. 1. 2. 3. How long has the employee been with the company? What is the employee's age, sex, and minority group status? Has the employee recently complained about safety or environmental issues or the integrity of company product?
4.
Has the employee recently exercised a legal right such as filing an OSHA complaint, filing a worker's compensation claim, serving on jury duty, etc.? Are the employee's pension rights due to vest shortly? Could the employee allege any basis for a public policy violation against the company? What reasons for discharge will be stated if litigation occurs? Have the company's disciplinary procedures been followed? Is the employee's improper conduct, which is a failure to respond to corrective suggestions, documented? Can the supervisor identify specific tasks or responsibilities that were not properly carried out? Did the employee have fair, advance notice of the standards by which his or her performance would be judged? Are there extenuating circumstances that justify a lesser penalty? Have other employees who have been engaged in similar conduct been terminated? Do the reasons for discharge adequately match the applicable termination standard? How strong is the evidence of the event which triggered the discharge? How strong is the documentation and other evidence of progressive discipline? Has the reviewer looked at the employee's entire personnel record? Does the employee's prior disciplinary record support termination? Has the reviewer followed the company's own contractual policy and employee handbook procedures regarding discipline and discharge? Has the employee's explanation of the "triggering event" been obtained before making the termination decision? Are both the documentation and the decision to terminate timely?
5. 6.
7. 8. 9.
10.
11.
12. 13.
14.
15. 16.
17. 18. 19.
20.
21.
22.
Would a transfer of the employee to a different job or facility or a medical or personal leave of absence alleviate the problem? Should there be a 60-day or other reasonable probationary or warning period? Should there be a final warning? If the reasons for discharge are related to adverse business conditions, what is the evidence the particular employee was or was not selected for discharge on a pretext? Is the termination decision based on facts, not inference, suspicion, or emotion? Has this decision been discussed with and approved by appropriate levels of higher management? Can the supervisor say that he or she is prepared to handle the dismissal tactfully and objectively?
23.
24. 25.
26.
27.
28.
9. DISSOLUTION OF NONPROFIT CORPORATIONS.

9.1. Introduction. The Act contains several provisions for the dissolution of nonprofit corporations. Nonprofit entities are thus no longer required to consult the Idaho Business Corporation Act when dealing with dissolution issues. The provisions related to dissolution are found at Idaho Code 30-3-110 to 30-3-115.
9.2. Methods of Dissolution. There are two general methods for voluntarily dissolving a corporation. Prior to the organizational meeting of directors, a corporation that has no members may be dissolved by a majority vote of its incorporators or directors. Idaho Code 30-3-110. If a dissolution action is to be taken after the organizational meeting of directors, it must be approved by the board, two-thirds of the members, if there are any, and any person whose approval is required for any amendment of the articles or bylaws pursuant to Idaho Code 30-3-99. Idaho Code 30-3111. 9.2.1 Pre-Organizational Dissolution. (a) Prior to the organizational meeting of directors, Idaho Code 30-3-110 authorizes a majority of incorporators or directors of a corporation that has no members to dissolve the corporation by delivering articles of dissolution to the Secretary of State. The Appendix contains sample articles of dissolution that meet the requirements of the Act. Those approving the dissolution must also adopt a plan of dissolution indicating to whom the assets owned or held by the corporation will be distributed after creditors have been paid. Since dissolution is a fundamental corporate change, Idaho Code 30-3-110 requires that the corporation notify each director or incorporator of the meeting at which a dissolution action will be considered.
(b)
9.2.2 Post-Organizational Dissolution. (a) The board of directors and the members of a corporation may dissolve a corporation pursuant to Idaho Code 30-3-111. The dissolution must be approved by a majority of a quorum of the board and by two-thirds of the votes cast by the members. The board and the members may condition their approval of the dissolution upon a receipt of a higher percentage of affirmative votes or on any other basis. IRC 30-3-111(3). The approval in writing of any person whose approval is required for an amendment to the articles or bylaws is also necessary.
(b)
If the board seeks to have the dissolution approved by the members at a membership meeting, all members must be given notice of that meeting in accordance with 30-3-50 and state that the purpose or one of the purposes of the meeting is to consider dissolution of the corporation. The notice must also contain or be accompanied by a copy of the plan of dissolution. Idaho Code 30-3-111(4). If the corporation does not have members, dissolution must be approved by a vote of the majority of directors in office. Notice of the meeting at which such approval will be requested must be given to all directors, and the notice must be accompanied by a copy or summary of the plan of dissolution. Idaho Code 30-3-111(2).
(c)
9.3. Articles of Dissolution. 9.3.1 Contents of Articles of Dissolution. Once dissolution of a corporation has been authorized, the corporation is formally dissolved by delivering articles of dissolution to the Secretary of State. Idaho Code 30-3-111. The articles of dissolution must set forth: (a) (b) (c) (d) the name of the corporation; the date dissolution was authorized; a statement that dissolution was approved by a sufficient vote of the board; if approval of members was not required, a statement to that effect, and that dissolution was approved by a sufficient vote of the board of directors or incorporators; if approval by members was required, the articles must list the number and type of votes to be cast by each class entitled to vote, and the number of votes of each class that actually voted for dissolution; the articles must also include either the total number of votes cast for and against dissolution by each class entitled to vote separately or the total number of undisputed votes cast for dissolution by each class and a statement that the number of votes cast for dissolution by each class was sufficient for approval by that class; and if the approval of the dissolution is required by a person other than the members, the board of directors or other incorporators, a statement that such approval was obtained.
(e)
(f)
9.3.2 Effective Date. A corporation is dissolved on the effective date of its articles of dissolution. Idaho Code 30-3-112(2). Under Idaho Code 30-3-5(1), the effective date of the articles of dissolution is the date on which they are filed or at a later date specified in the filed document.
9.4. Effects of Dissolution. (1) A corporation is generally regarded as "dissolved" on the date that the articles of dissolution are filed. Nevertheless, it continues its corporate existence, but may only carry on activities relating to the winding up and liquidating of its affairs. Idaho Code 30-3-113. These activities include: (a) (b) (c) (d) protecting assets and minimizing liabilities; discharging its obligations; disposing of properties that will not be distributed in kind; transferring assets as provided in or authorized by its articles of incorporation or bylaws; if the corporation's articles or bylaws do not contain a plan for a distribution of the corporation's assets, the dissolved corporation may transfer the assets to another IRC 501(c)(3) organization, to its members, or to those persons whom the corporation holds itself out as benefitting or serving; and any other act necessary to wind up and liquidate its assets and affairs.
(e)
(f) (2)
Dissolving the corporation does not transfer title to the corporation's property, alter the standards of conduct prescribed for its directors and officers, or change the quorum or voting requirements for its board and members. Idaho Code 30-3113(2).
9.5. Known Claims Against Dissolved Corporation. (1) The directors of a dissolved corporation shall notify its known claimants in writing of the dissolution at any time after it is dissolved. The written notice must set out the elements that make up a valid creditor's claim against the company, must provide a mailing address where claims can be sent, and must set a deadline from the effective date of the written notice by which the dissolved corporation must receive the claim. The deadline may not be fewer than one hundred twenty days from the effective date of the written notice. Idaho Code 30-3-114.
(2)
A claim against a dissolved corporation is barred if a claimant who received written notice does not deliver the claim to the corporation by the deadline, or if a claimant whose claim was rejected by the dissolved corporation does not commence proceedings to enforce the claim within ninety days from the effective date of the rejection notice.
9.6. Unknown Claims Against Dissolved Corporations. (1) Directors of the dissolved corporation may also publish a notice of its dissolution that requests persons with claims against the corporation to present them to the corporation. The notice must be published at least once in a newspaper of general circulation in the county where the dissolved corporation's principal office is located. If that office is not in Idaho, then the notice should be published in the county where its in-state registered office is located. The notice must set out the requisite claim information and provide a mailing address to which claims may be sent. Idaho Code 30-3-115. The notice must also state that any claim against the corporation will be barred unless a proceeding to enforce the claim is commenced within five years after the publication of the notice. Idaho Code 30-3-115(3).
(2)
APPENDIX
Document Title Nonprofit Corporation Incorporation Worksheet Articles of Incorporation Bylaws - Member Corporation Bylaws - Nonmember Corporation Agenda for Organizational Meeting Notice of Organizational Meeting of the Board of Directors Minutes of the Organizational Meeting of the Board of Directors Sample Conflict of Interest Policy Waiver of Notice of Organizational Meeting Sample Letter to Newly Formed Nonprofit Corporation Sample Letter to the IRS Regarding Application for Exemption Notice of Meeting of the Board of Directors Waiver of Notice of Special Meeting of Directors Directors' Resolution Regarding Dissolution/Notice of Membership Meeting Notice of Special Meeting of Members Regarding Dissolution Articles of Dissolution Annual Tax Checklist for Section 501(c)(3) Organizations Personnel Policy Manual Acknowledgment Certification of Receipt of Employee Handbook Personnel Records Policy
Page A-1 A-9 A-13 A-25 A-35 A-36 A-37 A-41 A-44 A-46 A-48 A-49 A-50 A-51 A-52 A-53 A-54 A-55 A-56 A-57
APPENDIX - 1
Sexual Harassment Policy Introduction to Employee Handbook Acknowledgment Employee Evaluation Corrective Action Counseling Record Record of Negative Performance Inquiry to Former Employers Job Description Form Forms 1023, 990 (including Schedules A and B), 990-T
A-58 A-61 A-73 A-75 A-85 A-87 A-88 A-91 A-92
APPENDIX - 2
NONPROFlT CORPORATION INCORPORATION WORKSHEET
Articles of Incorporation
1.
Name of Corporation:
1st Choice _________________________________ 2nd Choice _________________________________
2.
Duration:
Perpetual?
_____ yes;
_____ no;
_____ years
3.
Specific Purposes: ___________________________________________________ ___________________________________________________________________
4.
Members (x-ref. item 10): a. b. Will the corporation have members? _____ yes; Evidence of membership (if any): _____ cards _____ certificates _____ none _____ other _____ no. _____ stock
Explanation: __________________________________________________ _____________________________________________________________ c. May special meetings be called by less than 1/10 of voting members? _____ yes; _____ no. If yes, by what
proportion? ___________________________________________________ d. Voting Rights: Choose one of the following: _____ (i) each member is entitled to one vote; _____ (ii) voting rights shall be apportioned as follows: (e.g., by classes of membership, shares of stock, interest in real property, other): ___________________________________________________________________ __________________________________________________________________ __________________________________________________________________
APPENDIX - A-1
5.
Registered Office (street address, not P.O. Box): ___________________________________________________________________ Registered Agent: ___________________________________________________
6.
Directors (x-ref. item 12): a. Initial directors (at least 3, unless corporation is religious corporation, which may operate with 1 director): Full Name: ___________________________________________________ Address: _____________________________________________________ Full Name: ___________________________________________________ Address: _____________________________________________________ Full Name:____________________________________________________ Address: _____________________________________________________ b. The exact number of directors will be fixed in: _____ (i) the articles; _____ (ii) the bylaws; _____ (iii) in board resolution in accordance with method set forth in bylaws. If in the articles, the number of directors will be _______. [Optional: If in the bylaws, the minimum number of directors is _____ and the maximum number is _____.] c. Directors will be elected by: ______ (i) members; _____ (ii) existing directors; ______ (iii) other person _______________. d. Will the directors be classified? _____ yes; _____ no.
If yes, how many classes? _____; length of term is _____ years. e. Should directors and officers be entitled to indemnification to the full extent permitted under Idaho Code 30-3-88. If not, specify the limitations to be placed on indemnification of directors: _____________________________________________________________ _____________________________________________________________ _____________________________________________________________
APPENDIX - A-2
7.
Incorporator(s): Full Name: _________________________________________________________ Address: ___________________________________________________________ Full Name: _________________________________________________________ Address: ___________________________________________________________ Full Name: _________________________________________________________ Address: ___________________________________________________________
8.
Assessments, Dues and fees (x-ref. item 11): a. Are assessments, dues or fees to be equal on all members or classes of membership? _____ yes; b. _____ no.
If no, explain how assessments, dues or fees will be determined for different members or different classes of membership: ________________ _____________________________________________________________
c.
Choose one of the following: _____ (i) basis of assessments, dues or fees described in b. above to be set forth in the articles; _____ (ii) articles to authorize board to set unequal assessments, dues or fees.
d.
Assessments to be secured by a lien on real property? _____ yes; _____ no.
9.
Dissolution: Upon dissolution the assets of the corporation shall be distributed (choose one): _____ (i) as set forth in articles; _____ (ii) to such qualified 501(c)(3) organizations as the board of directors may select; _____ (iii) to so many of the following organizations as shall then be qualified as tax-exempt under 501(c)(3): ____________________________________________; _____ (iv) as follows: _________________________________________________ ___________________________________________________________________
APPENDIX - A-3
Bylaws 10. Members (x-ref. item 4): a. Memberships: Describe (i) classes of members, if any (e.g., voting, nonvoting, individual, family, junior, honorary, etc.); (ii) qualifications for each class; (iii) rights of each class; (iv) manner of election or appointment for each class (e.g., by financial contribution, sponsorship and approval, etc.): _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ b. Evidence of membership: Provisions in addition to those set forth in articles (see item 4c above): _____________________________________________________________ _____________________________________________________________ c. Meetings: (i) place (if not specified must be at principal office): _____________________________________________________________ _____________________________________________________________ or _____ as specified by board in notice; (ii) date of annual meeting: __________________; time _____ _.m. or _____ time to be specified by board in notice; (iii) provision for regular meetings: _______________________________ (iv) officer or persons (other than president, board or 1/10 members) authorized to call special meetings: ________________________________ (v) notice of meetings? _____ yes, by mail 10-50 days before meeting; _____ yes (religious corporation only) by announcement at service; (vi) voting requirements - always a simple majority of a quorum? _____ yes; _____ no; if no, specify issues requiring larger vote and what proportion: _______________________________________________ _____________________________________________________________
APPENDIX - A-4
11.
Assessments, Dues and Fees (x-ref. item 8): Describe provisions regarding assessments, dues and fees to be set forth in bylaws, including (i) method of determining assessments/dues for different members or different classes of membership; (ii) amount; (iii) method of collection and enforcement. Note: Bylaws and board resolutions may repeat or elaborate on provisions in articles: ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________ ___________________________________________________________________
12.
Board of Directors (x-ref. item 6): a. b. c. Number _____; Term of Office ________________ Directors required to be members? _____ yes; _____ no. Other qualifications, if any: ______________________________________ _____________________________________________________________ d. Limitations on authority of board, if any: ___________________________ _____________________________________________________________ e. Manner of electing or appointing directors (if not specified in articles): _____________________________________________________________ _____________________________________________________________
13.
Officers: Note: Corporations with members requires a president, secretary, treasurer and such other officers as are appointed by the board (may combine offices except president and secretary); articles and bylaws may specify different titles for officers; officers not required for religious corporations. a. (i) Titles of officers: ____________________________________________ _____________________________________________________________ (ii) Alternate authority in lieu of officers: ___________________________ _____________________________________________________________
APPENDIX - A-5
b. c.
Officers elected by: _______ (i) members; _______ (ii) board of directors? Time and manner of elections: ___________________________________ _____________________________________________________________
d.
Special provisions, duties, etc. to be set forth in bylaws (optional): _____________________________________________________________ _____________________________________________________________
14.
Committees of the Board: a. Should bylaws provide that board may delegate some of its authority to committees? _______ yes; ______ no. b. Describe provisions regarding committees to be set forth in bylaws, if any (optional): ____________________________________________________ _____________________________________________________________
15.
Other Committees: Describe provisions regarding committees not having board authority to be set forth in bylaws, if any (optional): _________________________________________________ ______________________________________________________________________
16.
Bylaws: a. b. To be adopted by: _______ (i) board of directors; or _______ (ii) members Should power to amend bylaws be (i) reserved in board; (ii) reserved in members __________; or (iii) reserved in both board and members _______________?
17.
Miscellaneous: a. b. Corporate seal: _____ yes; _____ no.
Fiscal year: ____________________
APPENDIX - A-6
Organizational Meeting
18.
Date and Time: _____________________________________________________
19.
Place: _____________________________________________________________
20.
Notice? ____________________________________________________________ or Waiver of Notice? ________________________________________________
21.
Initial Officers: Name _______________________ _______________________ _______________________ Title _________________________ _________________________ _________________________
22.
Committees: Describe committees to be established including name, how constituted, purpose, duties, and members (if known). Consider the following committee functions: executive, audit, nominating, finance, fund-raising, education, insurance, legal matters, corporate matters, membership, program, meetings, public relations: _____________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________
23.
Bank Accounts: a. Name of bank (including branch): _________________________________
___________________________________________________________________ b. Persons authorized to sign checks or otherwise withdraw funds: ________ _____________________________________________________________ APPENDIX - A-7
c.
______ signatures are required for: _______ (i) all checks/withdrawals; ___________ (ii) checks/withdrawals in excess of $______________
APPENDIX - A-8
ARTICLES OF INCORPORATION OF _________________________
The undersigned, acting as the incorporator of a nonprofit corporation ("Corporation") organized under and pursuant to the Idaho Nonprofit Corporation Act, Chapter 3, Title 30, Idaho Code ("Act"), adopts the following Articles of Incorporation ("Articles").
ARTICLE I NAME OF THE CORPORATION The name of the Corporation is _________________.
ARTICLE II STATUS The Corporation is a nonprofit corporation.
ARTICLE III PERIOD OF DURATION The period of duration of the Corporation is perpetual.
ARTICLE IV REGISTERED OFFICE AND AGENT The location of the Corporation is in the City of ___________, County of ____________, and in the State of __________. The address of the initial registered office is ___________________, _____________, ___________, and the name of the initial registered agent at this address is _________.
ARTICLE V PURPOSES The purposes for which the Corporation is organized and will be operated are as follows: A. [State the principal purposes for which the Corporation is formed.]
APPENDIX - A-9
B. Charitable, religious, educational, or scientific within the meaning of Section 501(c)(3) of the Internal Revenue Code, as amended from time to time, including, for such purposes, the making of distributions to organizations that qualify as exempt under such Section 501(c)(3). C. To exercise all powers granted by law necessary and proper to carry out the foregoing purposes, including, but not limited to, the power to accept donations of money, property, whether real or personal, or any other things of value. Nothing herein contained shall be deemed to authorize or permit the Corporation to carry on any business for profit, to exercise any power, or to do any act that a corporation formed under the Act, or any amendment thereto or substitute therefor, may not at that time lawfully carry on or do.
ARTICLE VI LIMITATIONS No part of the net earnings or the assets of the Corporation shall inure to the benefit of, or be distributable to, its members, directors, officers, or other private persons except that the Corporation shall be authorized and empowered to pay reasonable compensation for services rendered and to make payments and distributions in furtherance of the purposes set forth in Article V hereof. No substantial part of the activities of the Corporation shall be for the carrying on of propaganda, or otherwise attempting to influence legislation, and the Corporation shall not participate in, or intervene in (including the publishing or distribution of statements) any political campaign on behalf of any candidate for public office. Notwithstanding any other provisions of these Articles, the Corporation shall not carry on any other activities not permitted to be carried on by a corporation exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code, as amended from time to time. [First Alternate] ARTICLE VII MEMBERS The Corporation shall have members who shall have such rights as are provided in the Act that are consistent with the management authority that these Articles grant the Board of Directors of the Corporation. Any person may become a member of the Corporation upon payment of the annual dues fixed by the Board of Directors. [Second Alternate] ARTICLE VII NO MEMBERS The corporation shall not have any members. [End of Alternates] APPENDIX - A-10
ARTICLE VIII BOARD OF DIRECTORS The affairs of the Corporation shall be managed by its Board of Directors. The number of Directors serving on the Board of Directors shall be fixed in accordance with the Corporation's Bylaws, which number shall be no less than three. [Each Director of the Corporation shall, at all times, be a member of the Corporation.] Other than the Directors constituting the initial Board of Directors, who are designated in these Articles, the Directors shall be elected by the [members] or [existing Directors] of the Corporation in the manner and for the term provided in the Bylaws of the Corporation. The names and street addresses of the persons constituting the initial Board of Directors are: NAME ADDRESS
[Option if the Corporation is to have members.]
ARTICLE IX MEMBERSHIP DUES Membership dues may be charged to all members or classes of membership in equal amounts or in different amounts or proportions upon different members or classes of membership and some members or classes of membership may be made exempt from such membership dues. The Board of Directors is authorized to fix the amount of membership dues from time to time, and to make them payable at such times or intervals, and upon such notice, and by such methods as the Board of Directors may prescribe. [End of option.]
ARTICLE X DISTRIBUTION ON DISSOLUTION Upon dissolution of the Corporation, the Board of Directors shall, after paying or making provision for the payment of all liabilities of the Corporation, distribute all the assets of the Corporation consistent with the purposes of the Corporation [to such organization or organizations as shall at that time qualify as exempt organizations under Section 501(c)(3) of the Internal Revenue Code, as amended from time to time, in such manner as the Board of Directors shall determine.] or [. In doing so, the Board of Directors shall distribute such assets among so many of the following nonprofit organizations as shall at that time qualify as exempt organizations under Section 501(c)(3) of the Internal Revenue Code, as amended from time to time, in such manner as the Board of Directors shall determine.[list names]] Any such assets not so distributed shall be distributed by APPENDIX - A-11
the district court of the county in which the principal office of the Corporation is then located, exclusively for the purposes or to such organizations, as such court shall determine to be consistent with the purposes of the Corporation. ARTICLE XI INCORPORATOR The name and street address of the incorporator is ______________________.
ARTICLE XII BYLAWS Provisions for the regulation of the internal affairs of the Corporation shall be set forth in the Bylaws. [Option] The Board of Directors of the Corporation shall be authorized to amend the Corporation's Bylaws at a properly noticed special or regular meeting of the Board of Directors. [End of Option.]
DATED this ____ day of __________________, 20__.
_____________________________________
APPENDIX - A-12
[MEMBER] BYLAWS OF ______________________
1. OFFICES. 1.1 Principal Office. The principal office of ____________________, an Idaho corporation ("Corporation"), shall be located at _____________________, _____, Idaho. The Corporation may have such other offices as the Board of Directors may designate or as the business of the Corporation may require from time to time. 1.2 Registered Office. The registered office of the Corporation required by the Idaho Nonprofit Corporation Act, Chapter 3, Title 30, Idaho Code ("Act"), to be maintained in the State of Idaho shall be located at _____________________, _____, Idaho, and may be changed from time to time by the Board of Directors.
2. MEMBERS. 2.1. Admission to Membership. Any person shall be admitted as a member of the Corporation upon payment of the annual dues set by the Board of Directors for the calendar year in which such person applies for membership. Each person's membership shall expire on the first anniversary of such person's admission to membership unless on or before that date such person has paid the annual dues established for the calendar year in which such membership expires. Conditions of membership and procedures for the suspension or termination of a membership by the Corporation may be established from time to time by the Board of Directors and recorded in the minutes of the proceedings of the Board of Directors. 2.2. Annual Meeting. The annual meeting of the members shall be held on such date and at such time as the Board of Directors shall fix each year for the purpose of transacting such business as may come before the meeting. 2.3. Special Meetings. The President or the Board of Directors may call special meetings of the members for any purpose or purposes. The President shall call a special meeting of the members upon the written request of members having at least one-tenth (1/10) of the votes entitled to vote at such meeting. 2.4. Place of Meeting. Meetings of the members shall be held at the principal office of the Corporation; provided, however, that the President or the Board of Directors may designate any other place as the location for any annual or special meeting.
APPENDIX - A-13
2.5. Notice of Meetings. It shall not be necessary for notice of annual meetings to be given to each member entitled to vote at such meetings. The Secretary, the President or members of the Board of Directors shall endeavor to give notice to as many members as reasonably practicable by any one or a combination of the following: (1) United States first class mail; (2) word-of-mouth; (3) posting notice at the principal office and/or one or more public places in the City of _________; or (4) publication in a newspaper of general circulation in the City of ________. If any notice is mailed to members, such notice shall be deemed to be delivered when deposited in the United States mail addressed to the member at the member's address as it appears in the records of the Corporation or such other last known address of which the Corporation may have notice, with postage thereon prepaid. 2.6. Waiver of Notice. Whenever any notice is required to be given to any member under the provisions of the Act or under the provisions of the Articles of Incorporation of the Corporation ("Articles") or these Bylaws, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. 2.7. Officers of the Members' Meetings. The presiding officer at members' meetings shall be the President of the Corporation or, in the absence of the President, the Vice President or, in the absence of both the President and Vice President, a chairperson elected by the members present at the meeting. The Secretary of the Corporation or, in the absence of the Secretary, any person appointed by the presiding officer of the meeting, shall act as secretary of a members' meeting. 2.8. Quorum and Voting Requirements. One-tenth (1/10) of the members entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of members. The members present at a duly organized and convened meeting where a quorum has been present can continue to do business as a quorum until adjournment, notwithstanding the withdrawal of enough members to leave less than a quorum. If a quorum is present, the affirmative vote of the majority of the members represented at the meeting and entitled to vote on the subject matter shall be the act of the members, unless the vote of a greater number is required by the Act, the Articles or these Bylaws. 2.9. Proxies. A member may vote either in person or by proxy executed in writing by the member. No proxy shall be valid after eleven (11) months from the date of its execution. Every proxy shall be revocable at the pleasure of the member who executed it. 2.10. Action by Members Without a Meeting. Any action required or permitted to be taken at a meeting of the members of the Corporation may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the members entitled to vote with respect to the subject matter thereof. Such consent shall have the same effect as a unanimous vote of members and may be stated as such in any articles or documents filed with the Idaho Secretary of State under the Act.
APPENDIX - A-14
3. BOARD OF DIRECTORS. 3.1 General Powers and Standard of Care. All corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be managed under the direction of, the Board of Directors except as may be otherwise provided in the Act or the Articles. If any such provision is made in the Articles, the powers and duties conferred or imposed upon the Board of Directors by the Act shall be exercised or performed to such extent by such person or persons as shall be provided in the Articles. A Director shall perform such Director's duties as a Director, including such Director's duties as a member of any committee of the Board upon which such Director may serve, in good faith, in a manner such Director reasonably believes to be in the best interests of the Corporation, and with such care as an ordinarily prudent person in a like position would use under similar circumstances. In performing such Director's duties, a Director shall be entitled to rely on information, opinions, reports or statements, including financial statements and other financial data, in each case prepared or presented by: (a) one (1) or more officers or employees of the Corporation whom the Director reasonably believes to be reliable and competent in the matters presented; (b) counsel, public accountants or other person as to matters that the Director reasonably believes to be within such person's professional or expert competence; or (c) a committee of the Board upon which such Director does not serve, duly designated in accordance with a provision of these Bylaws, as to matters within its designated authority, which committee the Director reasonably believes to merit confidence; but such Director shall not be considered to be acting in good faith if such Director has knowledge concerning the matter in question that would cause such reliance to be unwarranted. A person who performs such duties shall have no liability by reason of being or having been a Director of the Corporation. 3.2 Presumption of Assent. A Director of the Corporation who is present at a meeting of its Board of Directors at which any action on any corporate matter is taken shall be presumed to have assented to the action unless such Director's dissent shall be entered in the minutes of the meeting or unless such Director shall file such Director's written dissent to such action with the Secretary of the meeting before the adjournment thereof or shall forward such dissent by certified or registered mail to the Secretary of the Corporation within three (3) days after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favor of such action. 3.3 Number, Election and Qualification of Directors. The number of Directors serving on the Board of Directors shall be fixed pursuant to resolutions adopted by the Board of Directors. Each Director shall serve a term of one year. The names and addresses of the members of the first Board of Directors have been stated in the Articles. Such persons shall hold office until the first annual meeting of the Board of Directors, and until their successors shall have been elected and APPENDIX - A-15
qualified. At the first annual meeting of the Board of Directors, the existing Directors shall elect Directors to hold office until the next annual meeting of the Board of Directors, and the Board of Directors shall be elected in a like manner every year thereafter. Each Director shall hold office for the term for which such Director is elected and until such Director's successor shall have been elected and qualified. Directors need not be residents of the State of Idaho. [ALTERNATE FOR STAGGERED TERMS] 3.3 Number, Election and Qualification of Directors. [The Board of Directors of the Corporation shall consist of __________ (__) members who shall each serve for a term of two (2) years.] or [The number of Directors serving on the Board of Directors shall be fixed pursuant to resolutions adopted by the Board of Directors. Each Director shall serve a term of two years.] The names and addresses of the members of the first Board of Directors have been stated in the Articles. Such persons shall hold office until the first annual meeting of Board of Directors and until their successors shall have been elected and qualified. At such time, the positions for which Directors are to be elected shall be divided into two (2) classes, each class to be as nearly equal in number as possible, and Directors shall be elected accordingly by the existing Directors. The Directors elected to the first class shall hold office until the first annual meeting of the Board of Directors following the initial election of Directors and until their successors have been elected and qualified. The Directors elected to the second class shall hold office until the second annual meeting of the Board of Directors following the initial election of Directors and until their successors have been elected and qualified. At each annual meeting of the Board of Directors thereafter, the number of Directors equal to the number in the class whose term expires at the time of such meeting shall be elected to hold office until the second succeeding annual meeting of the Board of Directors. Each Director shall hold office until such Director's successor shall have been elected and qualified. Directors need not be residents of the State of Idaho. [END OF ALTERNATE] 3.4 Vacancies. Any vacancy occurring in the Board of Directors may be filled by the affirmative vote of a majority of the remaining Directors though less than a quorum of the Directors. A Director elected to fill a vacancy shall be elected for the unexpired term of such Director's predecessor in office. Any directorship to be filled by reason of an increase in the number of Directors may be filled by the Board of Directors for a term of office continuing only until the next regular election of Directors. 3.5 Removal of Directors. At a meeting of the Board of Directors called expressly for that purpose, any director may be removed with cause by a vote of a majority of the Directors then in office. Any Director may be removed at such a meeting without cause by a vote of two-thirds of the Directors then in office. 3.6 Committees of Directors. 3.6.1 Membership. The Board of Directors, by resolution adopted by a majority of the Directors then in office, may designate and appoint one or more Director committees, each of which shall consist of two or more Directors. APPENDIX - A-16
3.6.2 Authority. Director committees, to the extent provided in the resolution establishing the committee, shall have and exercise the authority of the Board of Directors in the management of the Corporation; provided, however, that no Director committee shall have the authority of the Board of Directors in reference to (i) authorize distributions, (ii) approve dissolution, merger or the sale, pledge or transfer of all or substantially all of the Corporation's assets, (iii) elect, appoint or remove directors or fill vacancies on the Board of Directors or on any of its committees, or (iv) adopt, amend or repeal the Articles or these Bylaws. The designation and appointment of any such Director committee and the delegation of authority to a Director committee shall not operate to relieve the Board of Directors, or any individual Director, of any responsibility imposed upon the Board of Directors, or any individual Director. 3.6.3 Standing Director Committees. a. Nominating Committee. At least _____ days prior to each annual meeting of the Board of Directors of the Corporation, the President shall submit for ratification and vote by the Board the names of at least ______ Directors of the Corporation to serve as the Nominating Committee. The President shall not serve as a member of the Nominating Committee. [List and define authority of other Standing Committees.] 3.6.4 Tenure. Each member of a committee shall continue as such until the next annual meeting of the Board of Directors of the Corporation and until a successor is appointed unless (i) the committee is sooner terminated, (ii) such member is removed from the committee, or (iii) such member ceases to qualify as a member of the committee. 3.6.5 Chairperson. One member of each committee shall be appointed chairperson by the Board of Directors. 3.6.6 Vacancies. Vacancies in the membership of any committee may be filled by appointments made in the same manner as provided in the case of the original appointments. 3.6.7 Resignation. Any committee member may resign at any time by giving written notice to the Board of Directors, the President, or the Secretary of the Corporation. Unless otherwise specified in the notice of resignation, the resignation shall take effect upon receipt. Acceptance of the resignation shall not be necessary to make the resignation effective. 3.6.8 Removal. Any committee member may be removed by the person or persons authorized to appoint such member with or without cause. 3.6.9 Quorum. Unless otherwise provided in the resolution of the Board of Directors designating a committee, a majority of the whole committee shall constitute a quorum and the act of a majority of the members present at a meeting at which a quorum is present shall be the act of the committee. 3.6.10 Rules of Orde. The rules contained in the then most current edition of Robert's Rules of Order shall govern the meetings of committees where not inconsistent with these Bylaws or with rules adopted by the Board of Directors. 3.7 Directors' and Committee Meetings. Meetings of the Board of Directors, regular or special, or meetings of any committee designated thereby, may be held either within or without the State of Idaho. Unless otherwise specified in this section or in the notice for such meeting, all meetings shall be held at the principal office of the Corporation. APPENDIX - A-17
Except as otherwise provided in this section, regular or special meetings of the Board of Directors or any committee designated thereby may be called by or at the request of the President, any Director or the chair of a committee, as the case may be, upon written or verbal notice thereof given to all other Directors or committee members, as the case may be, at least three (3) days before the meeting. The Board of Directors may provide, by resolution, the time and place for the holding of additional regular meetings without other notice than such resolution. Members of the Board of Directors or any committee designated thereby may participate in a meeting of the Board of Directors or such committee by conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time, and the participation by such means shall constitute presence in person at a meeting. For any meeting held by conference telephone or similar communications equipment, notice of the meeting shall be given at least one (1) hour prior thereto by telephone or other communication directly with the Directors and/or committee members. The attendance at or participation of a Director or committee member in any meeting shall constitute a waiver of notice of such meeting, except where a Director or committee member attends or participates for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors or any committee designated thereby need be specified in the notice or waiver of notice for such meeting. 3.8 Waiver of Notice. Whenever any notice is required to be given to any Director or committee member under the provisions of the Act, the Articles or these Bylaws, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be equivalent to the giving of such notice. 3.9 Quorum and Voting Requirements. A majority of the number of Directors fixed by section 2.3 of these Bylaws shall constitute a quorum for the transaction of business at meetings of the Board of Directors. The act of the majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. A majority of the number of committee members fixed and appointed by the Board of Directors or the President, as the case may be, shall constitute a quorum for the transaction of business at a meeting of such committee. The act of the majority of the committee members present at a meeting at which a quorum is present shall be the act of the committee. 3.10 Action without a Meeting. Any action required by the Act to be taken at a meeting of the Board of Directors of the Corporation, or any action that may be taken at a meeting of the Directors or of a committee, may be taken without a meeting if a consent in writing, setting forth the actions so taken, shall be signed by all of the Directors, or all of the members of the committee, as the case may be. Such consent shall have the same effect as a unanimous vote.
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3.11 Compensation. No Director or committee member shall receive a salary or compensation for services in that capacity but may be reimbursed for actual expenses incurred in the performance of such services. This provision shall not preclude any Director from serving the Corporation in any other capacity and receiving compensation for services rendered. However, no Director shall be related to any salaried staff or to parties providing services to the Corporation. 3.12 Director Conflicts of Interest. Any Director who has an interest in a contract or other transaction presented to the Board or a committee thereof for authorization, approval, or ratification shall make a prompt and full disclosure of their interest to the Board or committee prior to its acting on such contract or transaction. Such disclosure shall include any relevant and material facts known to such a person about the contract or transaction that might reasonably be construed to be adverse to the Corporations interest. No Director shall cast a vote on any matter which has a direct bearing on services to be provided by that Director, or any organization which such Director represents or which such Director has an ownership interest or is otherwise interested or affiliated, which would directly or indirectly financially benefit such Director. All such services will be fully disclosed or known to the Board members present at the meeting at which such contract shall be authorized. Furthermore, we agree that the majority of our Board of Directors will be non-salaried and will not be related to salaried personnel or to parties providing services. In addition, the salaried individuals cannot vote on their own compensation, and compensation decisions will be made by the Board of Directors. Any compensation paid to a Director for services rendered in any capacity will be based on the following factors: (1) the amount and type of compensation received by others in similar positions, (2) the compensation levels paid in our particular geographic community, (3) the amount of time the individual is spending in their position, (4) the expertise and other pertinent background of the individual, (5) the size and complexity of the organization, and (6) the need of the organization for the services of the particular individual. 3.13 Loans to Directors. The Corporation shall not lend money to or use its credit to assist its Directors or officers. 3.14 Liability of Directors for Wrongful Distribution of Assets. In addition to any other liabilities imposed by law upon the Directors of the Corporation, the Directors who vote for or assent to any distribution of assets, other than in payment of its debts, when the Corporation is insolvent or when such distribution would render the Corporation insolvent, or during the liquidation of the Corporation without the payment and discharge of or making adequate provisions for all known debts, obligations and liabilities of the Corporation, shall be jointly and severally liable to the Corporation for the value of such assets which are thus distributed, to the extent that such debts, obligations and liabilities of the Corporation are not thereafter paid and discharged. A Director shall not be liable under this section if, in the exercise of ordinary care, such Director relied and acted in good faith upon written financial statements of the Corporation APPENDIX - A-19
represented to such Director to be correct by the President or by the officer of the Corporation having charge of its books of account, or certified by an independent licensed or certified public accountant or firm of such accountants to reflect fairly the financial condition of the Corporation, nor shall such Director be so liable if, in the exercise of ordinary care and good faith, in determining the amount available for such distribution, such Director considered the assets to be equal to their book value. A Director shall not be liable under this section, if, in the exercise of ordinary care, such Director acted in good faith and in reliance upon the written opinion of an attorney for the Corporation. A Director against whom a claim shall be asserted under this section and who shall be held liable thereon shall be entitled to contribution from persons who accepted or received such distribution knowing such distribution to have been made in violation of this section in proportion to the amounts received by them respectively.
4. OFFICERS. 4.1 Number. The officers of the Corporation shall consist of a President, Vice President, Secretary, and Treasurer, each of whom shall be elected by the Board of Directors. Such other officers and assistant officers as may be deemed necessary may be elected or appointed by the Board of Directors. Any two (2) or more offices may be held by the same person. 4.2 Election and Term of Office. The officers of the Corporation shall be elected annually at the annual meeting of the Board of Directors. If the election of officers shall not be held at such meeting, such election shall be held as soon as practicable thereafter. Each officer shall hold office until a successor shall have been duly elected and shall have qualified, until such officer's death, or until such officer shall resign or shall have been removed in the manner hereinafter provided. 4.3 Removal. Any officer or agent may be removed by the Board of Directors whenever in its judgment the best interests of the Corporation will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights. 4.4 Vacancies. A vacancy in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the Board of Directors for the unexpired portion of the term. 4.5 President. The President shall be the principal executive officer of the Corporation and, subject to the control of the Board of Directors, shall in general supervise and control all of the business and affairs of the Corporation. The President shall, when present, preside at all meetings of the members of the Board of Directors. The President may sign, with the Secretary or any other proper officer of the Corporation thereunto authorized by the Board of Directors, any promissory notes, deeds, mortgages, leases, contracts, or other instruments that the Board of Directors has APPENDIX - A-20
authorized to be executed, except in the cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation, or shall be required by law to be otherwise signed or executed. The President shall co-sign all checks or other deposit account withdrawals in excess of five hundred dollars ($500.00) and, in general, shall perform all duties incident to the office of President and such other duties as may be prescribed by the Board of Directors from time to time. 4.6 Vice President. In the absence of the President or in the event of the President's death, inability or refusal to act, the Vice President shall perform the duties of the President and, when so acting, shall have all the powers of and be subject to all the restrictions upon the President and shall perform such other duties as from time to time may be assigned to the Vice President by the President or by the Board of Directors. 4.7 Secretary. The Secretary shall attend all meetings of the Board of Directors and shall prepare and maintain proper minutes of those meetings. The Secretary shall be the custodian of the official seal of the Corporation, if any, and shall affix that seal on all documents executed on behalf of the Corporation, pursuant to due authorization by the Board of Directors. The Secretary shall have the custody of and properly protect all executed deeds, leases, agreements and other legal documents and records to which the Corporation is a party or by which it is legally affected. The Secretary shall in general perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to the Secretary by the President or the Board of Directors. 4.8 Treasurer. The Treasurer shall be the principal financial officer of the Corporation and shall have charge and custody of and be responsible for all funds of the Corporation. The Treasurer shall sign all checks and promissory notes of the Corporation and shall receive and give receipts for moneys due and payable to the Corporation from any source whatsoever and deposit all such moneys in the name of the Corporation in such banks, trust companies or other depositories as shall be selected in accordance with the provisions of Article 5 of these Bylaws. The Treasurer shall keep or cause to be kept, adequate and correct accounts of the Corporation, including accounts of its assets, liabilities, receipts and disbursements. The Treasurer shall submit to the Board of Directors and the President, when required, statements of the financial affairs of the Corporation. The Treasurer shall in general perform all of the financial duties incident to the office of Treasurer and such other duties as from time to time may be assigned to the Treasurer by the President or the Board of Directors. If required by the Board of Directors, the Treasurer shall give a bond for the faithful discharge of the Treasurer's duties in such sum and with such surety or sureties as the Board of Directors shall determine. 4.9 Salaries. The salaries of the officers, if any, shall be fixed from time to time by the Board of Directors and no officer shall be prevented from receiving such salary by reason of the fact that such officer is also a Director of the Corporation. All compensation paid to an officer shall be reasonable and will be based on the following factors: (1) the amount and type of compensation received by others in similar positions, (2) the compensation levels paid in our particular geographic community, (3) the amount of time the individual is spending in their position, (4) the expertise and other pertinent background of the individual, (5) the size and complexity of the organization, and (6) the need of the organization for the services of the particular individual. APPENDIX - A-21
4.10 Officer Conflict of Interest. Any officer who has an interest in a contract or other transaction presented to the Board or a committee thereof for authorization, approval, or ratification shall make a prompt and full disclosure of their interest to the Board or committee prior to its acting on such contract or transaction. Such disclosure shall include any relevant and material facts known to such person about the contract or transaction that might reasonably be construed to be adverse to the Corporations interest.
5. STAFF. 5.1 Employment. The Board of Directors shall have the authority to employ an Executive Director and such other staff as the Corporation may reasonably require from time to time. 5.2 Terms of Employment. All compensation paid to a staff person shall be approved by the Board of Directors. Compensation for staff personnel shall be reasonable and will be based on the following factors: (1) the amount and type of compensation received by others in similar positions, (2) the compensation levels paid in our particular geographic community, (3) the amount of time the individual is spending in their position, (4) the expertise and other pertinent background of the individual, (5) the size and complexity of the organization, and (6) the need of the organization for the services of the particular individual. The terms and conditions of employment of the staff may be set forth in a written contract approved by the Board of Directors and signed by the Corporation and the staff person. 5.3 Removal. A staff person may be terminated only (i) by the Board of Directors at a special meeting called for such purpose, and (ii) in accordance with the terms of the written employment contract. 5.4 Duties. The powers and duties of the professional staff are as follows: 5.4.1 Executive Manager. The Executive Manager shall: a. b. 5.4.2 . The _________________ shall: a. b. 5.5 Staff Conflict of Interest. Any staff person who has an interest in a contract or other transaction presented to the Board or a committee thereof for authorization, approval, or ratification shall make a prompt and full disclosure of their interest to the Board or committee prior to its acting on such contract or transaction. Such disclosure shall include any relevant and material facts known to such person about the contract or transaction that might reasonably be construed to be adverse to the Corporations interest.
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6. MISCELLANEOUS. 6.1 Indemnification of Officers, Directors, Employees and Agents. The Corporation may indemnify Directors, officers, employees and agents of the Corporation to the extent permitted by, and in accordance with, the Act. The Corporation may purchase and maintain insurance on behalf of any person who is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity or arising out of such person's status as such, whether or not the Corporation would have the power to indemnify such person against such liability. 6.2 Books and Records. At its registered office or principal place of business, the Corporation shall keep: (i) correct and complete books and records of account; (ii) minutes of the proceedings of its members and Board of Directors; and (iii) a record of the names and addresses of all Members. Any books, records and minutes may be in written form or in any other form capable of being converted into written form within a reasonable time. 6.3 Loans. No loans shall be contracted on behalf of the Corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors. Such authority may be general or confined to specific instances. 6.4 Contracts. The Board of Directors may authorize any officer or officers, agent or agents of the Corporation, in addition to the officers so authorized by these Bylaws, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances. 6.5 Checks, Drafts, etc. All checks, drafts, or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation, shall be signed by such officer or officers, agent or agents of the Corporation as provided in these Bylaws or in such manner as shall from time to time be determined by the Board of Directors. 6.6 Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board of Directors may select. 6.7 Gifts. The Board of Directors may accept on behalf of the Corporation any contribution, gift, bequest or devise for the general purposes or for any special purpose of the Corporation. 6.8 Annual Financial Statements. The officers of the Corporation shall cause a balance sheet as of the closing date of the last fiscal year, together with a statement of income and expenditures for the year ending on that date, to be prepared and presented to the Directors at each annual meeting of the Board of Directors.
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6.9 Fiscal Year. The fiscal year of the Corporation shall begin on the first day of January and end on the last day of December in each year, except that the first fiscal year shall begin on the date of incorporation. 6.10 Regulation of Internal Affairs. The internal affairs of the Corporation shall be regulated as set forth in these Bylaws to the extent that these Bylaws are lawful under the Act. With respect to any matter not covered in these Bylaws, the provisions of the Act shall be controlling so long as such provisions of the Act are not inconsistent with the lawful provisions of these Bylaws. [Option] 6.11 Amendments. These Bylaws may be altered, amended or repealed and new Bylaws may be adopted by the Board of Directors of the Corporation at any regular or special meeting. [End of Option] The undersigned, being the Secretary of the Corporation, does hereby certify that the foregoing Bylaws were duly adopted as the official Bylaws of the Corporation by unanimous consent of the Directors of the Corporation on the ____ day of ________________, 200__.
________________________________
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[NO MEMBERS] BYLAWS OF ______________________
1. OFFICE. 1.1 Principal Office. The principal office of ____________________, an Idaho corporation ("Corporation"), shall be located at _____________________, _____, Idaho. The Corporation may have such other offices as the Board of Directors may designate or as the business of the Corporation may require from time to time. 1.2 Registered Office. The registered office of the Corporation required by the Idaho Nonprofit Corporation Act, Chapter 3, Title 30, Idaho Code ("Act"), to be maintained in the State of Idaho shall be located at _____________________, _____, Idaho, and may be changed from time to time by the Board of Directors.
2. BOARD OF DIRECTORS. 2.1 General Powers and Standard of Care. All corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be managed under the direction of, the Board of Directors except as may be otherwise provided in the Act or the Articles. If any such provision is made in the Articles, the powers and duties conferred or imposed upon the Board of Directors by the Act shall be exercised or performed to such extent by such person or persons as shall be provided in the Articles. A Director shall perform such Director's duties as a Director, including such Director's duties as a member of any committee of the Board upon which such Director may serve, in good faith, in a manner such Director reasonably believes to be in the best interests of the Corporation, and with such care as an ordinarily prudent person in a like position would use under similar circumstances. In performing such Director's duties, a Director shall be entitled to rely on information, opinions, reports or statements, including financial statements and other financial data, in each case prepared or presented by: (a) one (1) or more officers or employees of the Corporation whom the Director reasonably believes to be reliable and competent in the matters presented; (b) counsel, public accountants or other person as to matters that the Director reasonably believes to be within such person's professional or expert competence; or
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(c) a committee of the Board upon which such Director does not serve, duly designated in accordance with a provision of these Bylaws, as to matters within its designated authority, which committee the Director reasonably believes to merit confidence; but such Director shall not be considered to be acting in good faith if such Director has knowledge concerning the matter in question that would cause such reliance to be unwarranted. A person who performs such duties shall have no liability by reason of being or having been a Director of the Corporation. 2.2 Presumption of Assent. A Director of the Corporation who is present at a meeting of its Board of Directors at which any action on any corporate matter is taken shall be presumed to have assented to the action unless such Director's dissent shall be entered in the minutes of the meeting or unless such Director shall file such Director's written dissent to such action with the Secretary of the meeting before the adjournment thereof or shall forward such dissent by certified or registered mail to the Secretary of the Corporation within three (3) days after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favor of such action. 2.3 Number, Election and Qualification of Directors. The number of Directors serving on the Board of Directors shall be fixed pursuant to resolutions adopted by the Board of Directors. Each Director shall serve a term of one year. The names and addresses of the members of the first Board of Directors have been stated in the Articles. Such persons shall hold office until the first annual meeting of the Board of Directors, and until their successors shall have been elected and qualified. At the first annual meeting of the Board of Directors, the existing Directors shall elect Directors to hold office until the next annual meeting of the Board of Directors, and the Board of Directors shall be elected in a like manner every year thereafter. Each Director shall hold office for the term for which such Director is elected and until such Director's successor shall have been elected and qualified. Directors need not be residents of the State of Idaho. [ALTERNATE FOR STAGGERED TERMS] 2.3 Number, Election and Qualification of Directors. [The Board of Directors of the Corporation shall consist of __________ (__) members who shall each serve for a term of two (2) years.] or [The number of Directors serving on the Board of Directors shall be fixed pursuant to resolutions adopted by the Board of Directors. Each Director shall serve a term of two years.] The names and addresses of the members of the first Board of Directors have been stated in the Articles. Such persons shall hold office until the first annual meeting of Board of Directors and until their successors shall have been elected and qualified. At such time, the positions for which Directors are to be elected shall be divided into two (2) classes, each class to be as nearly equal in number as possible, and Directors shall be elected accordingly by the existing Directors. The Directors elected to the first class shall hold office until the first annual meeting of the Board of Directors following the initial election of Directors and until their successors have been elected and qualified. The Directors elected to the second class shall hold office until the second annual meeting of the Board of Directors following the initial election of Directors and until their successors have been elected and qualified. At each annual meeting of the Board of Directors thereafter, the number of Directors equal to the number in the class whose term expires at the time of such meeting shall be elected to APPENDIX - A-26
hold office until the second succeeding annual meeting of the Board of Directors. Each Director shall hold office until such Director's successor shall have been elected and qualified. Directors need not be residents of the State of Idaho. [END OF ALTERNATE] 2.4 Vacancies. Any vacancy occurring in the Board of Directors may be filled by the affirmative vote of a majority of the remaining Directors though less than a quorum of the Directors. A Director elected to fill a vacancy shall be elected for the unexpired term of such Director's predecessor in office. Any directorship to be filled by reason of an increase in the number of Directors may be filled by the Board of Directors for a term of office continuing only until the next regular election of Directors. 2.5 Removal of Directors. At a meeting of the Board of Directors called expressly for that purpose, any director may be removed with cause by a vote of a majority of the Directors then in office. Any Director may be removed at such a meeting without cause by a vote of two-thirds of the Directors then in office. 2.6 Committees of Directors. 2.6.1 Membership. The Board of Directors, by resolution adopted by a majority of the Directors then in office, may designate and appoint one or more Director committees, each of which shall consist of two or more Directors. 2.6.2 Authority. Director committees, to the extent provided in the resolution establishing the committee, shall have and exercise the authority of the Board of Directors in the management of the Corporation; provided, however, that no Director committee shall have the authority of the Board of Directors in reference to (i) authorize distributions, (ii) approve dissolution, merger or the sale, pledge or transfer of all or substantially all of the Corporation's assets, (iii) elect, appoint or remove directors or fill vacancies on the Board of Directors or on any of its committees, or (iv) adopt, amend or repeal the Articles or these Bylaws. The designation and appointment of any such Director committee and the delegation of authority to a Director committee shall not operate to relieve the Board of Directors, or any individual Director, of any responsibility imposed upon the Board of Directors, or any individual Director. 2.6.3 Standing Director Committees. a. Nominating Committee. At least _____ days prior to each annual meeting of the Board of Directors of the Corporation, the President shall submit for ratification and vote by the Board the names of at least ______ Directors of the Corporation to serve as the Nominating Committee. The President shall not serve as a member of the Nominating Committee. [List and define authority of other Standing Committees.] 2.6.4 Tenure. Each member of a committee shall continue as such until the next annual meeting of the Board of Directors of the Corporation and until a successor is appointed unless (i) the committee is sooner terminated, (ii) such member is removed from the committee, or (iii) such member ceases to qualify as a member of the committee. 2.6.5 Chairperson. One member of each committee shall be appointed chairperson by the Board of Directors.
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2.6.6 Vacancies. Vacancies in the membership of any committee may be filled by appointments made in the same manner as provided in the case of the original appointments. 2.6.7 Resignation. Any committee member may resign at any time by giving written notice to the Board of Directors, the President, or the Secretary of the Corporation. Unless otherwise specified in the notice of resignation, the resignation shall take effect upon receipt. Acceptance of the resignation shall not be necessary to make the resignation effective. 2.6.8 Removal. Any committee member may be removed by the person or persons authorized to appoint such member with or without cause. 2.6.9 Quorum. Unless otherwise provided in the resolution of the Board of Directors designating a committee, a majority of the whole committee shall constitute a quorum and the act of a majority of the members present at a meeting at which a quorum is present shall be the act of the committee. 2.6.10 Rules of Order. The rules contained in the then most current edition of Robert's Rules of Order shall govern the meetings of committees where not inconsistent with these Bylaws or with rules adopted by the Board of Directors. 2.7 Directors' and Committee Meetings. Meetings of the Board of Directors, regular or special, or meetings of any committee designated thereby, may be held either within or without the State of Idaho. Unless otherwise specified in this section or in the notice for such meeting, all meetings shall be held at the principal office of the Corporation. Except as otherwise provided in this section, regular or special meetings of the Board of Directors or any committee designated thereby may be called by or at the request of the President, any Director or the chair of a committee, as the case may be, upon written or verbal notice thereof given to all other Directors or committee members, as the case may be, at least three (3) days before the meeting. The Board of Directors may provide, by resolution, the time and place for the holding of additional regular meetings without other notice than such resolution. Members of the Board of Directors or any committee designated thereby may participate in a meeting of the Board of Directors or such committee by conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time, and the participation by such means shall constitute presence in person at a meeting. For any meeting held by conference telephone or similar communications equipment, notice of the meeting shall be given at least one (1) hour prior thereto by telephone or other communication directly with the Directors and/or committee members. The attendance at or participation of a Director or committee member in any meeting shall constitute a waiver of notice of such meeting, except where a Director or committee member attends or participates for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors or any committee designated thereby need be specified in the notice or waiver of notice for such meeting. APPENDIX - A-28
2.8 Waiver of Notice. Whenever any notice is required to be given to any Director or committee member under the provisions of the Act, the Articles or these Bylaws, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be equivalent to the giving of such notice. 2.9 Quorum and Voting Requirements. A majority of the number of Directors fixed by section 2.3 of these Bylaws shall constitute a quorum for the transaction of business at meetings of the Board of Directors. The act of the majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. A majority of the number of committee members fixed and appointed by the Board of Directors or the President, as the case may be, shall constitute a quorum for the transaction of business at a meeting of such committee. The act of the majority of the committee members present at a meeting at which a quorum is present shall be the act of the committee. 2.10 Action without a Meeting. Any action required by the Act to be taken at a meeting of the Board of Directors of the Corporation, or any action that may be taken at a meeting of the Directors or of a committee, may be taken without a meeting if a consent in writing, setting forth the actions so taken, shall be signed by all of the Directors, or all of the members of the committee, as the case may be. Such consent shall have the same effect as a unanimous vote. 2.11 Compensation. No Director or committee member shall receive a salary or compensation for services in that capacity but may be reimbursed for actual expenses incurred in the performance of such services. This provision shall not preclude any Director from serving the Corporation in any other capacity and receiving compensation for services rendered. However, no Director shall be related to any salaried staff or to parties providing services to the Corporation. 2.12 Director Conflicts of Interest. Any Director who has an interest in a contract or other transaction presented to the Board or a committee thereof for authorization, approval, or ratification shall make a prompt and full disclosure of their interest to the Board or committee prior to its acting on such contract or transaction. Such disclosure shall include any relevant and material facts known to such a person about the contract or transaction that might reasonably be construed to be adverse to the Corporations interest. No Director shall cast a vote on any matter which has a direct bearing on services to be provided by that Director, or any organization which such Director represents or which such Director has an ownership interest or is otherwise interested or affiliated, which would directly or indirectly financially benefit such Director. All such services will be fully disclosed or known to the Board members present at the meeting at which such contract shall be authorized. Furthermore, we agree that the majority of our Board of Directors will be non-salaried and will not be related to salaried personnel or to parties providing services. In addition, the salaried individuals cannot vote on their own compensation, and compensation decisions will be made by the Board of Directors.
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Any compensation paid to a Director for services rendered in any capacity will be based on the following factors: (1) the amount and type of compensation received by others in similar positions, (2) the compensation levels paid in our particular geographic community, (3) the amount of time the individual is spending in their position, (4) the expertise and other pertinent background of the individual, (5) the size and complexity of the organization, and (6) the need of the organization for the services of the particular individual. 2.13 Loans to Directors. The Corporation shall not lend money to or use its credit to assist its Directors or officers. 2.14 Liability of Directors for Wrongful Distribution of Assets. In addition to any other liabilities imposed by law upon the Directors of the Corporation, the Directors who vote for or assent to any distribution of assets, other than in payment of its debts, when the Corporation is insolvent or when such distribution would render the Corporation insolvent, or during the liquidation of the Corporation without the payment and discharge of or making adequate provisions for all known debts, obligations and liabilities of the Corporation, shall be jointly and severally liable to the Corporation for the value of such assets which are thus distributed, to the extent that such debts, obligations and liabilities of the Corporation are not thereafter paid and discharged. A Director shall not be liable under this section if, in the exercise of ordinary care, such Director relied and acted in good faith upon written financial statements of the Corporation represented to such Director to be correct by the President or by the officer of the Corporation having charge of its books of account, or certified by an independent licensed or certified public accountant or firm of such accountants to reflect fairly the financial condition of the Corporation, nor shall such Director be so liable if, in the exercise of ordinary care and good faith, in determining the amount available for such distribution, such Director considered the assets to be equal to their book value. A Director shall not be liable under this section, if, in the exercise of ordinary care, such Director acted in good faith and in reliance upon the written opinion of an attorney for the Corporation. A Director against whom a claim shall be asserted under this section and who shall be held liable thereon shall be entitled to contribution from persons who accepted or received such distribution knowing such distribution to have been made in violation of this section in proportion to the amounts received by them respectively.
3. OFFICERS. 3.1 Number. The officers of the Corporation shall consist of a President, Vice President, Secretary, and Treasurer, each of whom shall be elected by the Board of Directors. Such other officers and assistant officers as may be deemed necessary may be elected or appointed by the Board of Directors. Any two (2) or more offices may be held by the same person. APPENDIX - A-30
3.2 Election and Term of Office. The officers of the Corporation shall be elected annually at the annual meeting of the Board of Directors. If the election of officers shall not be held at such meeting, such election shall be held as soon as practicable thereafter. Each officer shall hold office until a successor shall have been duly elected and shall have qualified, until such officer's death, or until such officer shall resign or shall have been removed in the manner hereinafter provided. 3.3 Removal. Any officer or agent may be removed by the Board of Directors whenever in its judgment the best interests of the Corporation will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights. 3.4 Vacancies. A vacancy in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the Board of Directors for the unexpired portion of the term. 3.5 President. The President shall be the principal executive officer of the Corporation and, subject to the control of the Board of Directors, shall in general supervise and control all of the business and affairs of the Corporation. The President shall, when present, preside at all meetings of the members of the Board of Directors. The President may sign, with the Secretary or any other proper officer of the Corporation thereunto authorized by the Board of Directors, any promissory notes, deeds, mortgages, leases, contracts, or other instruments that the Board of Directors has authorized to be executed, except in the cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation, or shall be required by law to be otherwise signed or executed. The President shall co-sign all checks or other deposit account withdrawals in excess of five hundred dollars ($500.00) and, in general, shall perform all duties incident to the office of President and such other duties as may be prescribed by the Board of Directors from time to time. 3.6 Vice President. In the absence of the President or in the event of the President's death, inability or refusal to act, the Vice President shall perform the duties of the President and, when so acting, shall have all the powers of and be subject to all the restrictions upon the President and shall perform such other duties as from time to time may be assigned to the Vice President by the President or by the Board of Directors. 3.7 Secretary. The Secretary shall attend all meetings of the Board of Directors and shall prepare and maintain proper minutes of those meetings. The Secretary shall be the custodian of the official seal of the Corporation, if any, and shall affix that seal on all documents executed on behalf of the Corporation, pursuant to due authorization by the Board of Directors. The Secretary shall have the custody of and properly protect all executed deeds, leases, agreements and other legal documents and records to which the Corporation is a party or by which it is legally affected. The Secretary shall in general perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to the Secretary by the President or the Board of Directors. 3.8 Treasurer. The Treasurer shall be the principal financial officer of the Corporation and shall have charge and custody of and be responsible for all funds of the Corporation. The Treasurer APPENDIX - A-31
shall sign all checks and promissory notes of the Corporation and shall receive and give receipts for moneys due and payable to the Corporation from any source whatsoever and deposit all such moneys in the name of the Corporation in such banks, trust companies or other depositories as shall be selected in accordance with the provisions of Article 5 of these Bylaws. The Treasurer shall keep or cause to be kept, adequate and correct accounts of the Corporation, including accounts of its assets, liabilities, receipts and disbursements. The Treasurer shall submit to the Board of Directors and the President, when required, statements of the financial affairs of the Corporation. The Treasurer shall in general perform all of the financial duties incident to the office of Treasurer and such other duties as from time to time may be assigned to the Treasurer by the President or the Board of Directors. If required by the Board of Directors, the Treasurer shall give a bond for the faithful discharge of the Treasurer's duties in such sum and with such surety or sureties as the Board of Directors shall determine. 3.9 Salaries. The salaries of the officers, if any, shall be fixed from time to time by the Board of Directors and no officer shall be prevented from receiving such salary by reason of the fact that such officer is also a Director of the Corporation. All compensation paid to an officer shall be reasonable and will be based on the following factors: (1) the amount and type of compensation received by others in similar positions, (2) the compensation levels paid in our particular geographic community, (3) the amount of time the individual is spending in their position, (4) the expertise and other pertinent background of the individual, (5) the size and complexity of the organization, and (6) the need of the organization for the services of the particular individual. 3.10 Officer Conflict of Interest. Any officer who has an interest in a contract or other transaction presented to the Board or a committee thereof for authorization, approval, or ratification shall make a prompt and full disclosure of their interest to the Board or committee prior to its acting on such contract or transaction. Such disclosure shall include any relevant and material facts known to such person about the contract or transaction that might reasonably be construed to be adverse to the Corporations interest.
4. STAFF. 4.1 Employment. The Board of Directors shall have the authority to employ an Executive Director and such other staff as the Corporation may reasonably require from time to time. 4.2 Terms of Employment. All compensation paid to a staff person shall be approved by the Board of Directors. Compensation for staff personnel shall be reasonable and will be based on the following factors: (1) the amount and type of compensation received by others in similar positions, (2) the compensation levels paid in our particular geographic community, (3) the amount of time the individual is spending in their position, (4) the expertise and other pertinent background of the individual, (5) the size and complexity of the organization, and (6) the need of the organization for the services of the particular individual. The terms and conditions of employment of the staff may be set forth in a written contract approved by the Board of Directors and signed by the Corporation and the staff person. APPENDIX - A-32
4.3 Removal. A staff person may be terminated only (i) by the Board of Directors at a special meeting called for such purpose, and (ii) in accordance with the terms of the written employment contract. 4.4 Duties. The powers and duties of the professional staff are as follows: 4.4.1 Executive Manager. The Executive Manager shall: a. b. 4.4.2 . The _________________ shall: a. b. 4.5 Staff Conflict of Interest. Any staff person who has an interest in a contract or other transaction presented to the Board or a committee thereof for authorization, approval, or ratification shall make a prompt and full disclosure of their interest to the Board or committee prior to its acting on such contract or transaction. Such disclosure shall include any relevant and material facts known to such person about the contract or transaction that might reasonably be construed to be adverse to the Corporations interest.
5. MISCELLANEOUS. 5.1 Indemnification of Officers, Directors, Employees and Agents. The Corporation may indemnify Directors, officers, employees and agents of the Corporation to the extent permitted by, and in accordance with, the Act. The Corporation may purchase and maintain insurance on behalf of any person who is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity or arising out of such person's status as such, whether or not the Corporation would have the power to indemnify such person against such liability. 5.2 Books and Records. At its registered office or principal place of business, the Corporation shall keep: (i) correct and complete books and records of account; (ii) minutes of the proceedings of its members and Board of Directors; and (iii) a record of the names and addresses of all Members. Any books, records and minutes may be in written form or in any other form capable of being converted into written form within a reasonable time. 5.3 Loans. No loans shall be contracted on behalf of the Corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors. Such authority may be general or confined to specific instances. 5.4 Contracts. The Board of Directors may authorize any officer or officers, agent or agents of the Corporation, in addition to the officers so authorized by these Bylaws, to enter into any
APPENDIX - A-33
contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances. 5.5 Checks, Drafts, etc.. All checks, drafts, or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation, shall be signed by such officer or officers, agent or agents of the Corporation as provided in these Bylaws or in such manner as shall from time to time be determined by the Board of Directors. 5.6 Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board of Directors may select. 5.7 Gifts. The Board of Directors may accept on behalf of the Corporation any contribution, gift, bequest or devise for the general purposes or for any special purpose of the Corporation. 5.8 Annual Financial Statements. The officers of the Corporation shall cause a balance sheet as of the closing date of the last fiscal year, together with a statement of income and expenditures for the year ending on that date, to be prepared and presented to the Directors at each annual meeting of the Board of Directors. 5.9 Fiscal Year. The fiscal year of the Corporation shall begin on the first day of January and end on the last day of December in each year, except that the first fiscal year shall begin on the date of incorporation. 5.10 Regulation of Internal Affairs. The internal affairs of the Corporation shall be regulated as set forth in these Bylaws to the extent that these Bylaws are lawful under the Act. With respect to any matter not covered in these Bylaws, the provisions of the Act shall be controlling so long as such provisions of the Act are not inconsistent with the lawful provisions of these Bylaws. [Option] 5.11 Amendments. These Bylaws may be altered, amended or repealed and new Bylaws may be adopted by the Board of Directors of the Corporation at any regular or special meeting. [End of Option.]
The undersigned, being the Secretary of the Corporation, does hereby certify that the foregoing Bylaws were duly adopted as the official Bylaws of the Corporation by unanimous consent of the Directors of the Corporation on the ____ day of ________________, 200__.
________________________________
APPENDIX - A-34
AGENDA Organizational Meeting of the Board of Directors of ______________________ _________, Idaho __:__ __.M., _________, 200_ 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Call meeting to order. Election of temporary officers. Discussion of Articles of Incorporation. Adoption of Bylaws. Election of officers. Approval of filings with the IRS. Adoption of Conflict of Interest Policy. Authorization of payment. Corporate seal. Bank accounts. Next meeting. Adjournment.
APPENDIX - A-35
NOTICE OF ORGANIZATIONAL MEETING OF THE BOARD OF DIRECTORS OF _________________________ _________________________ (Address) __________ ___, 20__
To the Directors of ______________________: You are hereby notified that the organizational meeting of the Board of Directors of _________________ ("Corporation") will be held at ____________________, ___________, Idaho, on __________ __, 20__ at __________ _.m., Mountain __________ Time, for the following purposes: (1) to conduct the organizational meeting of the Corporation, including adoption of Bylaws and corporate seal, election of officers, approval of filings with the Internal Revenue Service, establishment of bank accounts, and authorization of certain persons to remove funds from those accounts; and (2) to transact such other business as may properly come before the meeting or any adjournment thereof. BY ORDER OF A MAJORITY OF THE INITIAL BOARD OF DIRECTORS OF THE CORPORATION.
_________________________ _________________________ Dated _________ __, 20__
APPENDIX - A-36
MINUTES OF ORGANIZATIONAL MEETING OF THE BOARD OF DIRECTORS OF ________________________
I.
TIME AND PLACE OF MEETING.
The organizational meeting of the Board of Directors of ____________________ ("Corporation") was held at __________________________, _________, Idaho, at _:__ _.m. on _____________.
II.
WAIVER OF NOTICE OF MEETING.
Notice of the meeting was waived by the Directors. Executed waivers of notice are attached to these minutes as Exhibit A.
III.
DIRECTORS PRESENT.
Present were ____________________, _____________________, and _______________, being all of the Board of Directors of the Corporation as named in the Corporation's Articles of Incorporation.
IV.
ELECTION OF TEMPORARY OFFICERS. of the meeting;
______________________ was chosen temporary Chair _________________ was chosen as temporary Secretary of the meeting.
V.
ARTICLES OF INCORPORATION.
The Chair reported that the Articles of Incorporation ("Articles") had been filed with the Secretary of State. The Secretary was instructed to cause the originals of the Articles to be filed in the Corporation's books and records.
VI.
ADOPTION OF BYLAWS.
The Secretary presented a form of Bylaws for the Corporation for review by the Board of Directors. The Board reviewed the proposed Bylaws section by section, and upon motion made and seconded, the Bylaws were unanimously adopted. The Secretary was instructed to cause a copy of the Bylaws to be filed in the Corporation's books and records. APPENDIX - A-37
VII.
ELECTION OF OFFICERS.
The following persons were nominated as officers of the Corporation to serve until their successors are elected and qualified: President Vice President Secretary Treasurer ___________________ ___________________ ___________________ ___________________
Votes being duly cast by all the Directors present, the Chair announced that the above officers had been unanimously elected to the offices set next to their names. The President then assumed the position of the Chair of the meeting, and the Secretary assumed the responsibilities of the Secretary.
VIII.
APPROVAL OF FILINGS WITH THE INTERNAL REVENUE SERVICE.
The Chair then stated that the Corporation would be required to file certain documents with the Internal Revenue Service in order to obtain recognition of its tax-exempt status under section 501(c)(3) [alternate: 501(c)4)] of the Internal Revenue Code. After discussion and upon motion duly made and seconded, the following resolution was unanimously adopted: WHEREAS, the Board of Directors of the Corporation has determined that the Corporation will be required to file a Form 1023 [alternate: Form 1024] and certain other documents with the Internal Revenue Service in order to obtain recognition of its tax-exempt status under section 501(c)(3) [alternate: 501(c)(4)] of the Internal Revenue Code; NOW, THEREFORE, BE IT HEREBY RESOLVED, that the President and Secretary of the Corporation, and each of them, are hereby authorized and directed to prepare, execute and file a Form 1023 [alternate: Form 1024] with the Internal Revenue Service and take such further action and prepare and execute such additional documents as may be necessary or appropriate to carry out the purposes of this resolution.
IX.
ADOPTION OF CONFLICT OF INTEREST POLICY
The Chair stated that IRS requires that the Corporation adopt a express conflict of interest policy in connection with the Corporations application for a tax exemption under 501(c)(3) of the Internal Revenue Code. The Chair recommended that the conflict of interest policy attached to these APPENDIX - A-38
minutes be adopted in order to comply with the IRS requirement. After discussion and upon motion duly made and seconded, the following resolution was unanimously adopted: WHEREAS, the Board of Directors of the Corporation has determined that the Corporation is required to adopt a conflict of interest policy in order to obtain recognition of its tax-exempt status under section 501(c)(3) of the Internal Revenue Code; NOW, THEREFORE, BE IT HEREBY RESOLVED, that the Conflict of Interest Policy attached to these minutes is hereby adopted. The proper officers of the Corporation are hereby authorized and directed to take such further action and prepare and execute such additional documents as may be necessary or appropriate to implement this policy.
X.
AUTHORIZATION OF PAYMENT.
The Chair stated that the Secretary should be authorized to procure the necessary books for the Corporation and that the Treasurer, with the approval of the President, should be authorized to pay all of the expenses incurred and reimburse all persons for expenditures made in connection with the organization of the Corporation. Upon motion made and seconded, the following resolutions were then unanimously adopted: NOW, THEREFORE, BE IT HEREBY RESOLVED, that the Secretary of the Corporation is authorized and directed to procure all corporate books, books of account and membership books required by statute or necessary or appropriate in connection with the business of the Corporation; FURTHER RESOLVED, that the Treasurer is authorized, with the approval of the President, to pay all charges and expenses incident to or arising out of the organization of the Corporation and to reimburse any person who has made any disbursements therefor.
XI.
BANK ACCOUNTS.
After discussion and motion made and seconded, the following resolutions concerning bank deposits and disbursements were unanimously adopted: NOW, THEREFORE, BE IT HEREBY RESOLVED, that ___________________ ("Bank") is designated as the bank in which the funds of the Corporation shall be deposited, and that the Treasurer is authorized to open and keep a deposit account with the Bank in the name of the Corporation, and to cause all moneys, checks, notes, drafts, acceptances, or other evidences of indebtedness belonging to the Corporation deposited with the Bank;
APPENDIX - A-39
FURTHER RESOLVED, that the Bank is authorized to make payments from the funds of the Corporation according to check or draft signed by the President and Treasurer of the Corporation, who are hereby authorized to sign, endorse, accept, make and execute such bank resolutions as are necessary for the activities identified herein, and that a copy of all such resolutions shall be attached to these minutes; FURTHER RESOLVED, that the President and the Secretary, and each of them, are hereby authorized to take such further action and execute such additional documents as may be necessary or appropriate to carry out the purposes of these resolutions.
XII.
NEXT MEETING.
The Chair then stated that the time and place of the next regular meeting of the Board of Directors should be decided. After discussion, it was determined by the Board of Directors that the next meeting should be held on ______________ ___, 20__ at the office of the Corporation and that membership on the various committees should be considered in addition to such other regular business as may come before the meeting. XIII. ADJOURNMENT.
There being no further business to come before the meeting, upon motion made, seconded and unanimously adopted, the meeting was adjourned.
DATED this _____ day of __________________, 20__.
_______________________ Secretary APPROVED:
______________________ President
APPENDIX - A-40
CONFLICT OF INTEREST POLICY
1.
PURPOSE
The purpose of the Conflict of Interest Policy is to protect this tax-exempt organizations (Organization) interest when it is contemplating entering into a transaction or arrangement that might benefit the private interest of an officer or director of the Organization or might result in a possible excess benefit transaction. This Policy is intended to supplement, but not replace, any applicable state and federal laws governing conflict of interest applicable to nonprofit and charitable organizations.
2.
DEFINITIONS
2.1 Interested Person. Any director, principal officer, or member of a committee with governing board delegated powers, who has a direct or indirect financial interest, as defined below, is an interested person. 2.2 Financial Interest. A person has a financial interest if the person has, directly or indirectly, through business, investment, or family: (a) an ownership or investment interest in any entity with which the Organization has a transaction or arrangement; (b) a compensation arrangement with the Organization or with any entity or individual with which the Organization has a transaction or arrangement; or (c) a potential ownership or investment interest in, or compensation arrangement with, any entity or individual with which the Organization is negotiating a transaction or arrangement. Compensation includes direct and indirect remuneration as well as gifts or favors that are not insubstantial. A financial interest is not necessarily a conflict of interest. Under Section 3.2 below, a person who has a financial interest may have a conflict of interest only if the appropriate governing board or committee decides that a conflict of interest exists.
3.
PROCEDURES
3.1 Duty to Disclose. In connection with any actual or possible conflict of interest, an interested person must disclose the existence of the financial interest and be given the opportunity to disclose all material facts to the directors and members of committees with governing board delegated powers considering the proposed transaction or arrangement. 3.2 Determining Whether a Conflict of Interest Exists. After disclosure of the financial interest and all material facts, and after any discussion with the interested person, he/she shall leave the governing board or committee meeting while the determination of a conflict of interest is APPENDIX - A-41
discussed and voted upon. The remaining board or committee members shall decide if a conflict of interest exists. 3.3 Procedures for Addressing the Conflict of Interest. (a) an interested person may make a presentation at the governing board or committee meeting, but after the presentation, he/she shall leave the meeting during the discussion of, and the vote on, the transaction or arrangement involving the possible conflict of interest; (b) the chairperson of the governing board or committee shall, if appropriate, appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement; (c) after exercising due diligence, the governing board or committee shall determine whether the Organization can obtain with reasonable efforts a more advantageous transaction or arrangement from a person or entity that would not give rise to a conflict of interest; (d) if a more advantageous transaction or arrangement is not reasonably possible under circumstances not producing a conflict of interest, the governing board or committee shall determine by a majority vote of the disinterested directors whether the transaction or arrangement is in the Organizations best interest, for its own benefit, and whether it is fair and reasonable. In conformity with the above determination, it shall make its decision as to whether to enter into the transaction or arrangement. 3.4 Violations of the Conflicts of Interest Policy. (a) if the governing board or committee has reasonable cause to believe a member has failed to disclose actual or possible conflicts of interest, it shall inform the member of the basis for such belief and afford the member an opportunity to explain the alleged failure to disclose; and (b) if, after hearing the members response and after making further investigation as warranted by the circumstances, the governing board or committee determines the member has failed to disclose an actual or possible conflict of interest, it shall take appropriate disciplinary and corrective action.
4.
RECORDS OF PROCEEDINGS
The minutes of the governing board and all committees with board delegated powers shall contain: (a) the names of the persons who disclosed or otherwise were found to have a financial interest in connection with an actual or possible conflict of interest, the nature of the financial interest, any action taken to determine whether a conflict of interest was present, and the governing boards or committees decision as to whether a conflict of interest in fact existed; and (b) the names of the persons who were present for discussions and votes relating to the transaction or arrangement, the content of the discussion, including any alternatives to the proposed transaction or arrangement, and a record of any votes taken in connection with the proceedings.
5.
COMPENSATION
(a) a voting member of the governing board who receives compensation, directly or indirectly, from the Organization for services is precluded from voting on matters pertaining to that members compensation; (b) a voting member of any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the Organization APPENDIX - A-42
for services is precluded from voting on matters pertaining to that members compensation; and (c) no voting member of the governing board or any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the Organization, either individually or collectively, is prohibited from providing information to any committee regarding compensation. 6. ANNUAL STATEMENTS
Each director, principal officer and member of a committee with governing board delegated powers shall annually sign a statement which affirms such person: (a) has received a copy of the Conflicts of Interest Policy; (b) has read and understands the Policy; (c) has agreed to comply with the Policy; and (d) understands the Organization is charitable and in order to maintain its federal tax exemption it must engage primarily in activities which accomplish one or more of its tax-exempt purposes.
7.
PERIODIC REVIEWS
To ensure the Organization operates in a manner consistent with charitable purposes and does not engage in activities that could jeopardize its tax-exempt status, periodic reviews shall be conducted. The periodic reviews shall, at a minimum, include the following subjects: (a) whether compensation arrangements and benefits are reasonable, based on competent survey information, and the result of arms length bargaining; (b) whether partnerships, joint ventures, and arrangements with management organizations conform to the Organizations written policies are properly recorded, reflect reasonable investment or payments for goods and services, further charitable purposes, and do not result in inurement, impermissible private benefit or in an excess benefit transaction.
8.
USE OF OUTSIDE EXPERTS
When conducting the periodic reviews as provided for in Section 7, the Organization may, but need not, use outside advisors. If outside experts are used, their use shall not relieve the governing board of its responsibility for ensuring periodic reviews are conducted.
APPENDIX - A-43
WAIVER OF NOTICE OF MEETING OF DIRECTORS OF ______________________________________
I.
WAIVER OF NOTICE.
We, the undersigned, constituting all of the Directors of __________________________ ("Corporation"), a nonprofit corporation organized under the laws of the State of Idaho, do waive notice of time, place and purpose of the meeting of the Directors of the Corporation and consent that the meeting be held at ________ o'clock, _.m., ____________, 20__ at _________________, Boise, Idaho, and we do further consent to the transaction of any and all business that may come before the meeting.
II.
EFFECTIVE DATE. The effective date of this action is _______________________, 20__. DIRECTORS ____________________________ ____________________________ ____________________________
APPENDIX - A-44
WAIVER OF NOTICE OF MEETING OF MEMBERS OF ______________________________
I.
WAIVER OF NOTICE.
We, the undersigned, constituting all of the Members of _____________ ("Corporation"), a nonprofit corporation organized under the laws of the State of Idaho, do waive notice of time, place and purpose of the meeting of the Members of the Corporation and consent that the meeting be held at _____ __.m., _________, 20___ at _____________________________, and we do further consent to the transaction of any and all business that may come before the meeting.
II.
EFFECTIVE DATE. The effective date of this action is ______________, 20___.
MEMBERS
_________________________________ _________________________________ _________________________________
APPENDIX - A-45
[LETTERHEAD]
________ __, 20__
____________________ ____________________ ____________________ ____________________ Re: Dear _________: Since there are a multitude of laws that can affect the basic operations of a nonprofit corporation and the liabilities of its directors, officers and members, I feel that it is extremely important to provide you with a number of fundamental guidelines to assist you in managing your nonprofit organization. These guidelines are as follows: 1. Corporate Action and Execution of Documents. Actions intended as corporate actions should be clearly identified as such. Make certain that your letterhead and other corporate stationary bear the corporate name and/or logo. Whenever any document is executed on behalf of your corporation ("Corporation"), the corporate name should appear directly above the signature of the person signing for the Corporation. 2. Necessity of Formal Meetings. Significant corporate actions should only be taken pursuant to resolutions of the Corporation's Board of Directors at a properly scheduled meeting. Written notice of such meetings should always be given except where it can be assumed that a written waiver of notice can be obtained at the Board meeting or if the action to be taken is appropriate for adoption by written consent. A quorum, as defined in the Corporation's Bylaws, must be present at the meeting before any action may be approved. 3. Minutes and Corporate Record Keeping. Accurate minutes should be kept of all members' and Board of Directors' meetings. These minutes should contain the resolutions pursuant to which actions were taken at the meeting. It is the Secretary's duty to prepare the minutes and keep them in the corporate minute book. The minute book should also contain the Articles of Incorporation, Bylaws, and notices or waivers of notices of all meetings. Minutes from each meeting should be signed by the Secretary after they have been read and adopted, subject to corrections, if any, at the next meeting. The Corporation's records should always be kept separate from any individual director's or member's records.
APPENDIX - A-46
4. Committees. The Board of Directors may find it convenient or expedient to operate through one or more committees. If a committee has the authority to act on behalf of the Board of Directors, all of the committee's members must be members of the Corporation's Board of Directors. [OPTION IF CORPORATION HAS MEMBERS] 5. Certain Authority Rests With Members. Authority to make certain fundamental decisions regarding the Corporation may, in some circumstances, lie with the Corporation's members. The extent of such authority will depend upon the type of matter involved, statutes, the Corporation's Articles of Incorporation and the customs and practices of the Corporation that have developed over time. [END OF OPTION] 6. Insurance. A nonprofit corporation faces many of the same exposures to loss and liability as for-profit corporations. Your Corporation may at some point own buildings and equipment, operate motor vehicles, conduct business with the general public, have employees and/or volunteers perform various tasks, and be governed by its Board of Directors. In order to protect against the risks associated with your activities, you should obtain casualty and public liability coverage commensurate with the magnitude of those risks and the value of your corporate assets. Please bear in mind that the above list is not intended to be comprehensive, but rather it is meant to provide a very general overview regarding the operation of your Corporation. If you have any questions regarding any of the above or any matter not covered by this letter, please feel free to call me at (208) __________. Very truly yours,
_______________
APPENDIX - A-47
March 11, 2005
BY CERTIFIED MAIL RETURN RECEIPT REQUESTED # (Choose appropriate address depending on type of delivery) Via U.S. Mail: Internal Revenue Service P.O. Box 192 Covington, KY 41012-0192 Via Express Mail or a Delivery Service: Internal Revenue Service 201 West Rivercenter Blvd. Attn: Extracting Stop 312 Covington, KY 41011
Re:
___________________ EIN ______________ File No. _________
Dear Sir or Madam: Enclosed please find the (i) Form 1023, Application for Recognition of Exemption, of ______________________ ("Applicant"), and the required supporting documents, pursuant to which the Applicant requests recognition as a tax exempt organization under section 501(c)(3) of the Internal Revenue Code; (ii) the Applicants check in the amount of $_________; and (iii) Form 2848, Power of Attorney and Declaration of Representative, with respect to this matter, naming the undersigned as representative for the Applicant. If you have any questions regarding any of the above, do not hesitate to call me at (208) 3448990, Ext. 108. Sincerely,
By: Encl. cc: ___________________ (w/enclosures)
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NOTICE OF [REGULAR OR SPECIAL] MEETING OF THE BOARD OF DIRECTORS OF _________________________ _________________________ (Address) __________ ___, 20__
To the Directors of ______________________: You are hereby notified that a [regular or special] meeting of the Board of Directors of _________________ ("Corporation") will be held at ____________________, ___________, Idaho, on __________ __, 20__, at __________ _.m., Mountain __________ Time, for the following purposes: (1) __________________________________________; and
(2) to transact such other business as may properly come before the meeting or any adjournment thereof.
_________________________ _____________, Secretary
Dated: _________ __, 20__
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WAIVER OF NOTICE OF SPECIAL MEETING OF DIRECTORS OF _________________________
The undersigned, being all of the Directors of _____________________ ("Corporation"), do hereby severally waive notice of time, place and purpose of a Special Meeting of Board of Directors of the Corporation, and consent that the meeting be held at ________, _______, Idaho, at ____ _.m. on _______ __, 20__, and we do further consent to the transaction of any and all business that may properly come before such meeting.
___________________________ Director ___________________________ Director ___________________________ Director
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RESOLUTION OF THE BOARD OF DIRECTORS OF ____________________________________
REGARDING DISSOLUTION OF THE CORPORATION
RESOLVED, that the Board of Directors of the Corporation, has determined that it is advisable to dissolve _________________________ ("Corporation"). RESOLVED FURTHER, that a meeting of the members of the Corporation having voting power has hereby called, which meeting shall take action upon the foregoing resolution, to dissolve the Corporations, to be held at the principal office of the Corporation, at __________________________, in the City of _________________, County of _________________, State of Idaho, on __________, 20__, at ______ __.m., and that the Secretary of the Corporation is hereby authorized and directed to cause notice of the adoption of this resolution to be mailed to each member of the Corporation; RESOLVED FURTHER, that the proper officers of the Corporation are hereby authorized and directed to take such further action as may be necessary or appropriate to carry out the intent of the foregoing resolutions.
_____________________________________ Secretary
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NOTICE OF A SPECIAL MEETING OF THE MEMBERS OF ____________________________ TO ACT ON THE PROPOSED DISSOLUTION OF THE CORPORATION
NOTICE is hereby given that, at a meeting of the Board of Directors of ________________________ ("Corporation") duly held on __________ ____, 20__, a resolution to dissolve the Corporation was adopted, calling a special meeting of the members of the Corporation to consider and act upon such resolution. Pursuant to the resolution of the Board of Directors described above, notice is hereby given that a special meeting of the members of the Corporation will be held at the principal office of the Corporation, at ___________________, on _____________, 20__, at ________ __.m., for the purpose of acting upon the resolution for the dissolution of the Corporation, and for the purpose of transacting such other business as may properly come before the meeting.
________________________________ Secretary
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ARTICLES OF DISSOLUTION OF _______________________________________ Pursuant to the provisions of section 30-3-110 et seq. of the Idaho Nonprofit Corporation Act ("Act"), the undersigned being the President and Secretary of _____________ ("Corporation"), the Corporation hereby adopts the following Articles of Dissolution: FIRST: SECOND: THIRD: [FIRST ALTERNATE] The approval of members was not required, and the dissolution was approved by a sufficient vote of the Board of Directors or [ the Incorporators]. [SECOND ALTERNATE] The approval of the members was required for dissolution and such approval was obtained. [OPTION TO BE USED IF APPROVAL OF THIRD PERSON IS REQUIRED] The approval of dissolution by person other than the members, the board or the directors is required under the corporate articles and was obtained. [END OF OPTION] [OPTION TO BE USED IF CORPORATION HAS MORE THAN ONE CLASS OF MEMBERSHIP AND APPROVAL OF MEMBERS IS REQUIRED] The classes of membership, number of each class, number of votes entitled to be cast by each class, and the number of votes of each class that indisputably voting for dissolution were as follows: The number of votes cast for and against dissolution by each class or [The total number of undisputed votes cast for dissolution] was sufficient for approval by that class. The total number of votes cast by each class was sufficient for approval by that class. ____________________ (Date) _________________________________ (Signature) _________________________________ (Print Name and Title of Officer) The name of the corporation is ______________________. The dissolution was authorized on ________________________.
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ANNUAL TAX CHECKLIST FOR SECTION 501(c)(3) ORGANIZATIONS
1. If the section 501(c)(3) organization is a public charity, does it have more than $25,000 in annual gross receipts? If so, it is required to file Form 990 or 990EZ. 2. If the organization is a private foundation, it may be required to file Form 990-PF. Further, if it has investment income, it may be required to make estimated income payments. IRC 4940 and 6653(a) and (g)(30). 3. Does the organization have $1,000 or more if income from an unrelated trade or business? If so, it may be required to file Form 990-T. It may also be required to make estimated income tax payments. 4. Does the organization engage in lobbying? If so, it may be subject to certain taxes or penalties or its tax-exempt status may be lost. IRC 501(h). If the organization is engaged in lobbying activities, it should consider filing Form 5768 in order to make a 501(h) election. 5. Does the organization have unrelated debt-financed income? If so, it may be required to file Form 990-T. IRC 514. 6. Does the organization have employees? If so, it may be required to file Forms 940, 941, 941E, 8274 and/or W-2. 7. Does the organization pay dividends, interest, rents, independent contractors, retirement plan distributions, or pension benefits? If so, it may be required to file Form 1099 and/or W-2P. 8. Did the organization receive gifts of appreciated property valued at $500 or more that it sold, exchanged, consumed, or otherwise disposed of (with or without consideration) within two years after the date it received the property? If so, it may be required to file Form 8282. 9. Has the organization made any changes in its articles, of incorporation or bylaws or any significant changes in its operations during the year? If so, the organization might be required to notify the Internal Revenue Service in order to be able to rely on a prior determination from the Internal Revenue Service that it was a section 501(c)(3) organization. Reg. 1.501(c)-1(a)(2). Note: This can be done by filing all amendments with the organizations Form 990. 10. If the organization is a private foundation, it may be subject to excise taxes for its investment income, self-dealing, failure to distribute income, excess business holdings, investments that jeopardize its charitable purpose, and taxable expenditures. IRC 4940 through 4948.
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PERSONNEL POLICY MANUAL ACKNOWLEDGMENT
I have received a complete copy of the Personnel Policy Manual including all updates through ________________ [date]. I understand that no contract is intended and __________ [name of organization] retains the right to modify the manual without permission of the employees.
_________________________ Date
____________________________________ Employee Signature
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CERTIFICATION OF RECEIPT OF EMPLOYEE HANDBOOK
I hereby acknowledge receiving a copy of the Employee Handbook. I understand that I am responsible for familiarizing myself with the information contained in this handbook. I further understand that the previously issued Employee Handbook has been revised and that any prior policies, procedures or benefits, if different from this handbook, are hereinafter null and void. I further understand that the matters discussed in the Employee Handbook are subject to change and do not create any contractual commitments by the Organization.
_________________________ Date
____________________________________ Employee Name ____________________________________ Employee Signature
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PERSONNEL RECORDS POLICY
The organization maintains personnel files for all employees in a central location. The file is the property of the organization and will not be reproduced in its entirety unless the organization is required by law to do so. Employees may have access to their personnel file to review its contents, upon request to their supervisor or the personnel department. An employee's personnel file is considered confidential information and every reasonable effort will be made to protect such confidentiality. Personnel files will be reviewed periodically and outdated, irrelevant actions, or unnecessary information may be removed.
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SEXUAL HARASSMENT POLICY
A.
Policy.
It is [the Organization's] policy that there shall be no harassment of any employee on account of an employee's sex. In furtherance of this policy, [the Organization] does not condone and will not permit sexual harassment of any employee. All employees are expected to abide by this policy. Anyone who violates this policy will be subject to disciplinary action up to and including discharge. B. Definition of Sexual Harassment.
Sexual harassment refers to behavior of a sexual nature which is unwelcome and personally offensive to its recipients. Sexual harassment is a form of employee misconduct which is demeaning to another person and undermines the integrity of the employment relationship. Unwelcome sexual advances, requests for sexual favors and other verbal or physical conduct of a sexual nature constitute "sexual harassment" when: 1. Submission to such conduct is made explicitly or implicitly a condition of an individual's employment; Submission to or rejection of such conduct is used as a basis for an employment decision affecting the employee; or The harassment has the purpose or effect of unreasonably interfering with the employee's work performance or creating an environment which is intimidating, hostile, or offensive to the employee.
2.
3.
For example, unwanted physical contact foul language, sexually oriented propositions, jokes or remarks, obscene gestures or the display of sexually explicit pictures, cartoons or other materials may be considered offensive to another employee and, thus, should not occur. C. Complaint Procedure.
Any employee who feels that he or she has been sexually harassed should immediately report the matter to his or her supervisor. If that person is unavailable or the employee believes that it would be inappropriate to contact his or her supervisor, the employee should immediately contact [the Organization's] Director of Human Resources. Any supervisor or manager who becomes aware of any possible sexual harassment should immediately advise the Director of Human Resources, who will handle such matters in a lawful manner to ensure that such conduct does not continue. All complaints of sexual harassment will be investigated in as discreet and confidential a fashion as possible. No person will be adversely APPENDIX - A-58
affected in employment with [the Organization] as a result of bringing complaints of sexual harassment. SEXUAL HARASSMENT I. PURPOSE
A. It Is Corporate Policy That Sexual Harassment of Employees in the Workplace Is Unacceptable and Will Not Be Tolerated. Sexual harassment includes unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature when: 1. 2. Submission to such conduct is made a term or condition of employment; Submission to such conduct is used as a basis for employment decisions affecting employees; or Such conduct unreasonably interferes with an employee's work performance or creates an intimidating, hostile, or offensive working environment.
3.
Sexual harassment may, therefore, include more than granting promotions or salary increases only in exchange for sexual favors. It can also include offensive sexual flirtation; subtle pressure to engage in sex; unwelcome physical contact such as touching, patting, or pinching; unwelcome display of posters, pictures, or drawings with sexual content; and other similar activities which might be thought of as mere "kidding" or "teasing." B. Prompt Corrective Action Will Be Taken by Managers and Supervisors Who Become Aware of Sexual Harassment. The action taken will vary with the nature and severity of the sexual harassment. The action may include appropriate discipline, up to and including dismissal, of the offending employee. C. Any [Organization] Employee Who Feels That She or He Has Been the Victim of Sexual Harassment Should Bring Such Harassment to Management's Attention by Reporting It to One of the Following: Vice president, personnel and affirmative action officers; assistant vice president and assistant personnel directors; manager, equal employment opportunity programs; or, health services administrator organization nurse. A member of the personnel department staff will conduct an investigation of the complaint. If the complaint is justified, [the Organization] will take appropriate action. The organization will
APPENDIX - A-59
notify the employee filing the complaint and the employee against whom the complaint is filed of the results of the investigation. Because sexual harassment is normally a personal matter and subtle in nature, its existence may not be obvious to employees who are not its victims. To insure prompt elimination of such conduct, it is essential that [the Organization's] management be informed whenever sexual harassment occurs. Complaints of sexual harassment will be kept confidential and anonymous, except to the extent that some disclosure may be necessary for purposes of investigation and corrective action. Because of the serious nature of a sexual harassment complaint, and the consequences of a false accusation against innocent men and women, [the Organization] will exercise great care in investigating such complaints. Employees should, likewise, exercise care to assure that any allegations of sexual harassment are based in fact and are not frivolous in nature. Any questions regarding this policy should be directed to the vice president, personnel, or manager, equal employment opportunity programs.
ETHNIC, RELIGIOUS, AGE OR HANDICAP HARASSMENT I. It is [the Organization's] responsibility to create a work environment free of problems and tensions involving matters that do not relate to company business. In particular, an atmosphere of tension or animosity created by remarks based on ethnicity, religion, age, or handicap does not belong in the workplace. II. Where such conduct unreasonably interferes with any individual's work performance or creates an intimidating, hostile, or offensive work environment, an investigation will be conducted so that the problem can be addressed. An offended employee is encouraged to discuss the issue with his/her management, and/or may bring the matter to the attention of the Personnel Department head, or Manager of EEO Program.
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EMPLOYEE HANDBOOK INTRODUCTION TO EMPLOYEE HANDBOOK
This employee handbook is intended to provide you with information on [NAME OF ORGANIZATION]'s (the Organizations) guidelines and operating procedures. While it is not possible to put everything into writing, we anticipate that this handbook will provide you with general information concerning your employment with the Organization, the benefits which affect you personally, and the services which are available to assist you in the performance of your duties and responsibilities. We urge you to consult the handbook whenever you have a question regarding your employment. If you do not find the answer here, please contact your supervisor. Of course, we welcome your comments and suggestions for improving all aspects of our operation. It must be understood that the guidelines and procedures discussed in this handbook are set forth to assist you in your day-to-day work activities, but no statements set forth in this handbook are intended or set forth as contractual commitments or obligations of the Organization to any individual employee or group of employees. Circumstances may arise in which the Organization determines that changes are required in these guidelines and procedures. For this reason, the Organization reserves the right at any time to modify, rescind, or supplement any or all of the guidelines or procedures contained herein and to take actions which may be contrary to a guideline or procedure set forth in this handbook. All employees need to be aware that the Organization is an employment-at-will employer and that no contractual obligation, either express or implied, is recognized by the Organization. No supervisor has any authority to make promises of perpetual employment or good cause discharge and, thus, cannot change the nature of your at-will employment. Basically, this means that an employee can quit his or her employment at the Organization if the employee does not wish to accept the Organization's employment policies or for any other reason. It also means that the Organization can terminate each employee's employment with or without cause and with or without notice at any time.
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EMPLOYMENT AT-WILL Employment with the Organization is voluntary and at-will. This means that the employee has the right to resign his or her employment, at any time. This also means that the Organization has the right to discharge the employee at any time for any reason whatsoever, with or without cause, and with or without notice. Changes in compensation, location, job duties, level of employment or other changes do not modify the right of employees or the Organization to terminate the employment relationship at any time, with or without notice or cause. An employee's status as an at-will employee may not be modified: (1) by any oral representation to the contrary, (2) by any practice or procedure of the Organization or the industry, or (3) by any document or agreement except by a written employment contract executed by the employee and the President of the Organization that specifically revokes the employment at-will relationship. No department head, supervisor, or other employee of the Organization has the power or authority, either verbally or in writing, to alter an employee's at-will employment status.
EQUAL EMPLOYMENT OPPORTUNITY The Organization provides equal employment opportunities to all employees and applicants for employment without regard to race, color, religion, sex, national origin, age, disability, military status or any other status protected by federal, state or local law . This policy applies to all terms and conditions of employment, including but not limited to, hiring, placement, promotion, termination, layoff, recall, transfer, leaves of absence, compensation, and training. All employees throughout the Organization have the responsibility to adhere to this policy.
DISCRIMINATION AND NON-HARASSMENT POLICY The Organization believes that each individual employed by us has the right to be free from illegal discrimination and harassment. Therefore, the Organization expressly prohibits any form of unlawful employee discrimination or harassment based on race, color, religion, sex, national origin, age, disability, military status or any other status protected by federal, state or local law. Improper interference with the ability of the Organization's employees to perform their expected job duties is not tolerated. Examples of unlawful harassment include: Making ethnic, racial, sexual, or religious jokes or slurs. Posting, displaying, or transmitting by electronic means jokes, pictures, cartoons, messages or other communications of an offensive racial, sexual, religious, or ethnic nature. Engaging in offensive conduct relating to another person's race, sex, color, religion, disability, age or inclusion in other groups protected by applicable federal, state or local law.
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Sexual harassment refers to behavior of a sexual nature or is directed to an individual because of his or her sex which is unwelcome and personally offensive to its recipient. Sexual harassment is a form of employee misconduct which is demeaning to another person and undermines the integrity of the employment relationship. Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature constitutes sexual harassment when: Submission to such conduct is made either explicitly or implicitly a term or condition of employment; Submission to or rejection of such conduct is used as a basis for employment decisions affecting an individual; or Such conduct has the purpose or effect of unreasonably interfering with an individual's work performance or creating an intimidating, hostile or offensive working environment.
Unwanted physical contact; foul language; sexually oriented propositions, jokes, or remarks; obscene gestures or the display of sexually explicit pictures, cartoons or other materials may be considered offensive to another employee and should therefore not occur.
DISCRIMINATION OR HARASSMENT COMPLAINT PROCEDURE All employees are responsible for respecting the rights of their coworkers. If you experience or witness any job-related harassment based on your sex, race, national origin, disability, or another factor, or believe that you have been treated in an unlawful, discriminatory manner, promptly report the incident to your manager or supervisor, or to any officer or director of the Organization. An employee's failure to fulfill this obligation could affect his or her rights in pursuing a legal remedy. All complaints will be investigated promptly. Your complaint will be kept confidential to the extent possible. If the Organization determines that an employee has engaged in harassing or unlawful discriminatory conduct, disciplinary action may be taken against the offending employee, up to and including termination of employment. The Organization prohibits any form of retaliation against any employee for filing a complaint under this policy or for assisting in a complaint investigation.
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ACCOMMODATIONS OF INDIVIDUALS WITH DISABILITIES If you are a qualified individual with a disability, you may make a request for reasonable accommodation to your manager or supervisor. On receipt of an accommodation request, your manager or supervisor will discuss with you the precise limitations resulting from the disability and explore whether reasonable accommodation exists that would allow you to perform the essential functions of your job with the Organization. So that the Organization has the best available medical information to make its decision, you may be required to submit medical information in support of your request for accommodation or undergo a medical examination. The Organization will pay any such medical examination. Your manager or supervisor, in conjunction with appropriate management representatives identified as having a need to know, will determine the feasibility of the requested accommodation. Your manager or supervisor will inform you of the Organization's decision on the accommodation request or on how to make a reasonable accommodation.
PAY DAYS AND PAY PRACTICES PAY PERIODS: The Organization will establish standard pay periods and pay days and will communicate the appropriate dates to all employees. If a payday falls on a weekend or holiday, the payday will be changed to the last workday immediately preceding the weekend or holiday. Employees are paid on a weekly or bi-weekly basis, depending upon their classification, as shown below. Exempt Employees An exempt employee's paycheck is an employee's annual salary divided by twenty-four (24). Exempt employees are paid bi-weekly. Non-Exempt Employees A non-exempt employee's paycheck includes all hours worked by the employee during the previous workweek. Non-exempt employees are paid weekly. TIME CARDS: The Organization's policy and practice is to fully comply with all applicable state and federal wage and hour laws. In order to meet those obligations, employees are responsible for accurately recording all hours worked.
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Employees who are classified as a non-exempt employee must maintain a record of the total hours they work each day. These hours must be accurately recorded through the use of a time card that will be provided to employees by their supervisors. Each time card must accurately reflect all regular and overtime hours worked, any absences, late arrivals, early departures, meal breaks and leave time. Unless authorized by his or her supervisor, employees should not work any hours beyond their scheduled shifts. Employees should not start work early, finish work late, work during a meal break or perform any other extra hours of work unless (1) they are authorized to do so by their supervisors, and (2) that work time is recorded on their time cards. Employees are prohibited from performing any "off-the-clock" work. "Off-the-clock" work means work employees perform but fail to report on their time card. Any employee who fails to report or inaccurately reports any hours worked will be subject to discipline, up to and including termination. Each employee must verify that the reported hours worked are complete and accurate. By submitting these records to the Organization, employees certify that the information recorded is accurate and fairly represents the number of hours worked. It is a violation of the Organization's policy for any employee to falsify a time card, or to alter another employee's time card. It is also a violation of Organization policy for any employee or manager to instruct another employee to incorrectly or falsely report hours worked or alter another employee's time card to under- or overreport hours worked.
HOLIDAY PAY AND PAID TIME OFF

[NOTE: Idaho law does not requires employers to provide holiday payor time off. Below is a sample policy that an employer may elect and/or revise, depending on whether it provides such benefits. The policy should explain which types of employees are eligible for these benefits (e.g., part-time employees, full-time employees, temporary employees, etc.]
HOLIDAYS: The Organization provides paid time off on the following holidays: Memorial Day Independence Day Labor Day Thanksgiving Day PAID TIME OFF (PTO): Christmas Day New Years Day Presidents Day
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In addition to holiday pay, the Organization has adopted a Personal Time Off Program ("PTO"). The amount of PTO an employee has depends on his or her years of services. The accrual rate ofPTO is as follows: Years of Active Service Years 1 through 5: Years 5 through 15: Years 16 and beyond: 15 days of PTO 20 days of PTO 25 days of PTO
PTO which is earned in a calendar year but unused may be carried over to the next calendar year; however, no more than two years' of eamed but unused PTO may be accumulated without the express written authorization of the Organization. The Organization does not allow employees to "sell back" earned but unused PTO. If, however, an employee separates from employment before using all earned PTO time for that year, the employee will be paid for any accrued but unused PTO time as required by Idaho law. PTO time may be used to handle family matters, absences because of illness, or for personal business that cannot be taken care of outside regular business hours. PTO must be taken in no less than one day increments. Compensation for PTO will be at the employee's then current rate of regular rate of pay. PTO accrues from the original date of employment; however, an employee may not use his PTO during the initial 90 days of employment. Except in emergency situations, employees must give their immediate supervisor notice of their intent to use PTO time at least one week before taking the time off. Supervisors will consider the timeliness of such request, workload priorities and the Organization's staffing needs in determining whether to approve such requests.
LEAVES OF ABSENCE UNDER THE FAMILY AND MEDICAL LEAVE ACT [NOTE: THE FMLA ONLY APPLIES TO EMPLOYERS WITH 50 OR MORE EMPLOYEES] Employees who have been employed for one year or more and who have worked at least 1,250 hours in the preceding year may qualify for a maximum of 12 weeks of unpaid leave per year under the Family and Medical Leave Act of 1993 (FMLA) for one or more of the following reasons: for the birth or adoption of a child, or placement of a foster child; for the care of a spouse, parent or child with a serious health condition; or for the employee's own health care if the employee has a serious health condition that makes the employee unable to perform the functions of his or her job.
In such circumstances, the employee may take up to 12 weeks of unpaid leave and return to the same (or equivalent) position as when the employee left, as long as the position (or an equivalent APPENDIX - A-66
one) still exists. In addition, the employee will not lose any benefit that he or she earned or was entitled to before using FMLA leave. Specifics of the Organization Policy: 1. A "year" for FMLA purposes begins on the first day of leave requested under the Act and ends 12 months thereafter. A "serious health condition" includes an illness, impairment, or physical or mental condition involving (1) absence from work, school or other normal activities for more than three calendar days that also involves continuing treatment by (or supervision of) a health care provider; (2) a period of incapacity or treatment connected with in-patient care at a hospital, hospice, or residential medical care facility; or (3) continuing care by a licensed health care provider for a long-term or chronic health condition that is incurable or so serious that, if not treated, would result in a period of incapacity of more than three calendar days; or (4) for prenatal care. Leave for birth or placement for adoption or foster care must conclude within 12 months of the birth or placement. Some limitations apply where the Organization employs both husband and wife. If the employee leaves to care for a seriously ill spouse, child or parent, or takes leave because of the employee's own serious health condition, the employee must supply medical certification (for each period of leave) documenting the necessity for such leave. Second opinions and periodic re-certifications (at the Organization's expense) may be required. Failure to provide required certifications may delay approval or justify denial of leave. If the purpose of the leave is to care for a seriously ill family member or for the employee's own care, leave may be taken on an intermittent basis, which means taking leave in blocks of time, or by reducing the employee's normal weekly or daily work schedule; however, if leave is taken on an intermittent or reduced basis, the employee must provide medical certification showing the need for such leave, including the expected dates of medical treatments and the planned duration of the treatments. In addition, the Organization may transfer the employee temporarily to an available equivalent position. Intermittent leave and reduced leave schedules are not allowed for birth and adoption of children. FMLA leave shall be without pay. The Organization may require, or the employee may elect, to use any accrued, unused PTO time during the leave period. Once such benefits are exhausted, the balance of the employee's FMLA leave will be without pay. Except for unforeseen medical emergencies, the employee must provide at least 30 days written notice of the need for FMLA leave. For unforeseen circumstances, the employee must provide as much notice as is practicable. The employee must keep the Organization informed in writing of his or her expected return date and make any requests for extensions of leave in writing. Approval of any extensions of leave, likewise, must be in writing.
2.
3.
4.
5.
6.
7.
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8.
When leave is needed to care for a seriously ill family member or for the employee's own serious illness, and is for planned medical treatment, the Organization requests that the employee schedule treatment so as not to unduly disrupt the Organization's operations. Employees may be required to make periodic reports during FMLA leave regarding their health status and intent to return to work. Subject to the terms, conditions and limitations of the applicable plans, the Organization will continue to provide health insurance benefits for the full period of the approved FMLA leave to the same extent as it was paying prior to the leave. Employees should contact the Human Resources Department before going on leave to make arrangements to pay the employees' share of any premiums due while on leave. If you fail to return to work at the end of your leave period, the Organization may recover from you all amounts it paid to continue your insurance coverage during your leave period unless your continued absence is the result of the continuation, recurrence, or onset of a serious health condition or of other circumstances beyond your control. If leave is taken for the employee's own serious health condition, the employee must provide written medical certification that the employee is fit to return for work before returning to work. Failure to provide certification may delay the employee's reinstatement. If an employee does not return to work from FMLA leave when scheduled, the employee will be considered to have voluntarily resigned his or her job. Upon return from FMLA leave, the employee will be restored to his or her original job, or to an equivalent job with equivalent pay, benefits and terms and conditions, assuming the position or an equivalent position exists. In addition, the employee will not lose any benefit that he or she earned or was entitled to before using FMLA leave. Reinstatement following FMLA leave may be denied if leave was fraudulently obtained, if the employee's position was eliminated or a lay-off occurs during the leave period, if the employee fails to return to work after using his or her 12 weeks of leave during the leave year, or for any other reason permitted by the law. Accrual of benefits, such as PTO time, will cease during FMLA leave.
9.
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12.
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15.
The terms of this policy will be governed by the Family and Medical Leave Act and any related regulations. Where the terms of this policy conflict with or suggest greater benefits and protections than the law provides, the FMLA statute and applicable regulations shall control. The Organization prohibits retaliation against any individual who exercises their right to FMLA leave. Please contact a Human Resources representative with any questions.
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ELECTRONIC INFORMATION The Organization's electronic information resources, including all information systems, computer, word processing and communications facilities, e-mail and voice mail systems, accounts with on-line services and access mechanisms to those services and for the Internet as a whole, are the property of the Organization and are to be used for Organization business only. There should be no expectation of personal privacy on the part of employees with respect to their use of these resources. The Organization reserves the right to monitor the use of its electronic information resources, including the right to override individual passwords or other security techniques. All passwords and codes must be disclosed to the Organization in order to facilitate the Organization's access to these resources. The same level of care and professionalism should be used in preparing and transmitting email or voice mail communications as in other writings. It must be remembered that e-mail and voice mail messages may be subject to disclosure in any legal proceedings. Confidential or proprietary information should not be transmitted using e-mail or voice mail without taking reasonable measures to protect its confidentiality and integrity. E-mail, voice mail, the Internet and any other electronic information resource may not be used for illegal activities or in any way which would be considered disruptive or offensive to others, or otherwise harmful to the working environment or in contradiction to the Organization's policy of any type. Such communications include, for example, sexually explicit or implicit or obscene images, jokes, cartoons, and messages, or anything that may be construed as harassment or disparagement based on race, color, national origin, religion, sex, age, disability, status as a Vietnam-era veteran or other basis prohibited by law. E-mail, voice mail, Internet access and any other electronic resource must not be used to advocate, further, or otherwise support any non-Organization business activities. Employees are prohibited from accessing or attempting to access the e-mail, voice mail, Internet mail, or other electronic file of other employees without prior authorization from a manager. Use of the Organization's e-mail, voice mail, Internet access, and other electronic information resources constitutes the employee's acknowledgment of and consent to this policy and the Organization's right to monitor as described above.
CONFIDENTIALITY In your job, you may have access to or be exposed to information of the Organization which is confidential. Each employee is prohibited from disclosing, directly or indirectly, to any unauthorized person, business or other entity, or use for their own purposes, any confidential APPENDIX - A-69
information. Confidential information includes proprietary and financial information, client information, methods of doing business and other private matters. Violation of this policy may result in disciplinary action, up to and including discharge.
EMPLOYEE COMPLAINT PROCEDURE General Differences of opinion occasionally arise between individuals in an organization. It is in the best interests of the Organization that such conflicts be resolved. Open discussion is encouraged so that employee grievances and complaints may be resolved to the satisfaction of all concerned. Employees who submit a complaint or grievance under this procedure will not be harassed nor will any reprisals be taken. However, in exercising the right to complain, employees must not disrupt or, in any manner, interfere with the work of any other employee.
Procedure 1. Any employee having a grievance or complaint relating to his/her status or conditions of employment with the Organization should first discuss the problem with that employee's immediate supervisor. (If the employee believes discussion with his/her supervisor would be embarrassing, any other member of management can be contacted to discuss the problem in confidence.) If, after preliminary discussion, the employee feels that nothing has been resolved, the employee is encouraged to discuss the situation with a member of the Human Resources Department. This individual will consider the complaint and will inform the employee of his /her conclusions without delay.
2.
DRUG AND ALCOHOL ABUSE The Organization has a strong commitment to its employees to provide a safe workplace and promote employee health. Consistent with the spirit and intent of this commitment, the Organization has established this policy regarding drug and alcohol abuse. Quite simply, our goal is to maintain a work environment that is free from the effects of alcohol and drug abuse. While the Organization has no intention of intruding into the private lives of its employees, the Organization does expect employees to report for work in condition to perform their duties. The Organization recognizes that employee off-the-job, as well as on-the-job, involvement with alcohol and drugs can have an impact on the workplace and on our ability to accomplish our goal of an alcohol and drug-free work environment. APPENDIX - A-70
The following is the Organization's policy: 1. The illegal use, sale, or possession of narcotics, drugs, or controlled substances while on the job or on Organization property is a dischargeable offense. Any illegal substances will be turned over to the appropriate law enforcement agency and may result in criminal prosecution. Employees who are under the influence of alcohol, or who possess or consume alcohol on the job, have the potential for interfering with their own, as well as their co-workers', safe and efficient job performance. Consistent with existing Organization practices, such conditions will be proper cause for administrative action up to and including termination of employment. Off-the-job illegal drug use which could adversely affect an employee's job performance or which could jeopardize the safety of other employees, the public, or Organization equipment is proper cause for administrative or disciplinary action up to and including termination of employment. Employees who are arrested for off-the-job drug activity may be considered to be in violation of this policy. In deciding what action to take, management will take into consideration the nature of the charges, the employee's present job assignment, the employee's record with the Organization and other factors relative to the impact of the employee's arrest upon the conduct of Organization business. Some of the drugs which are illegal under federal, state, or local laws include, among others, marijuana, heroin, hashish, cocaine, hallucinogens, and depressants and stimulants not prescribed for current personal treatment by an accredited physician.
2.
3.
4.
5.
EMPLOYEE STANDARDS OF CONDUCT Employees are required to abide by certain standards of conduct. The following general categories of conduct are not allowed at the Organization and may result in discipline up to and including termination: 1. 2. 3. 4. 5. 6. 7. Insubordination, willful disobedience of orders or excessive delay in carrying out work; Concealing or making false statements about work or other employees; Falsifying employment records, work records, or attendance records; Immoral or indecent conduct; Performing private or personal work without approval; Soliciting for or selling any kind of merchandise or distributing any kind of literature for any cause during working time without permission; Misuse of Organization equipment, waste of materials or supplies, and intentional destruction of Organization property;
APPENDIX - A-71
8. 9. 10. 11. 12. 13. 14. 15. 16. 17.
Stealing in any form from the Organization, fellow employees, or clients; Consistently excessive lunch periods; Consistent tardiness; Excessive absences; Purposely issuing or spreading false information about the Organization, fellow employees, or clients; Continued below-standard work performance and poor quality of service or work; Drinking alcoholic beverages or taking other controlled chemical substances during working hours or when the use of the above is evident during working hours; Failure to follow employee safety rules; Misusing Organization property, including telephones, the internet, or Organization e-mail; and Any other conduct determined by management to be contrary to the best interests of the Organization or in conflict with any policy set forth in this Handbook.
The above list of infractions is not intended to be all inclusive and is compiled for informational purposes only.
APPENDIX - A-72
ACKNOWLEDGMENT FORM (Organization Copy)
I hereby acknowledge that I have received a copy of the [NAME OF Organization] (the Organization) Employee Handbook. I agree to comply with the policies set forth in the Handbook. I understand that if I have any questions about the matters contained in the Handbook, I should ask my supervisor or any officer of the Organization. I understand that the Handbook is informational in nature only, and that it is not intended to, and does not, create or constitute a contract of employment. I understand that my employment is at will, meaning that it may be terminated by Organization or me at any time, with or without notice and with or without cause. I understand that any promises, representations, or statements concerning "fair" treatment or the like, whether in this Handbook or otherwise, are in the nature of a goal only, and are not enforceable as a contract or promise. I understand that no supervisor, manager, or other representative of the Organization has the authority to enter into any contract of employment or make any promises, representations, or statements contrary to the foregoing, including any contract of employment for any specified period of time. Any contract of employment entered into by the Organization is not valid and enforceable, unless it is in writing and signed by the President of the Organization and by me. I understand that the provisions of the Handbook are the most current at this time and supersede all previous Handbooks by the Organization. Further, I understand that the provisions of the Handbook are subject to modification at any time, at the sole discretion of the Organization, with or without notice to me. I agree to comply with any such modification upon publication.
Signature: _____________________________ Name: ________________________________ (Printed)
Date: _________________________________
APPENDIX - A-73
ACKNOWLEDGMENT FORM (Employee Copy)
I hereby acknowledge that I have received a copy of the [NAME OF Organization] (the Organization) Employee Handbook. I agree to comply with the policies set forth in the Handbook. I understand that if I have any questions about the matters contained in the Handbook, I should ask my supervisor or any officer of the Organization. I understand that the Handbook is informational in nature only, and that it is not intended to, and does not, create or constitute a contract of employment. I understand that my employment is at will, meaning that it may be terminated by Organization or me at any time, with or without notice and with or without cause. I understand that any promises, representations, or statements concerning fair treatment or the like, whether in this Handbook or otherwise, are in the nature of a goal only, and are not enforceable as a contract or promise. I understand that no supervisor, manager, or other representative of the Organization has the authority to enter into any contract of employment or make any promises, representations, or statements contrary to the foregoing, including any contract of employment for any specified period of time. Any contract of employment entered into by the Organization is not valid and enforceable, unless it is in writing and signed by the President of the Organization and by me. I understand that the provisions of the Handbook are the most current at this time and supersede all previous Handbooks by the Organization. Further, I understand that the provisions of the Handbook are subject to modification at any time, at the sole discretion ofthe Organization, with or without notice to me. I agree to comply with any such modification upon publication.
Signature: _____________________________ Name: ________________________________ (Printed)
Date: _________________________________
APPENDIX - A-74
EMPLOYEE EVALUATION HOW TO USE THE FORMS TO CONDUCT A GOOD EVALUATION
PURPOSE: These forms are your tools for the periodic evaluation of your employees. In order to make the most of the experience, evaluations should be well thought out and follow the steps below. Please read these instructions all the way through before you begin. If you have any questions about the form or follow-up, ask your supervisor or call the Human Resources Department, [phone no.]. 1. Do a Little Review.
Review the employee's current job description: Are any changes needed? Review the last evaluation report for the employee and any memos or notes about work assignments, commitments by the employee, etc. relating to the employee's work; has the employee's work been consistent with the goals you set in previous meetings with the employee? Do you have enough information to complete an evaluation of the employee's performance? 2. Think.
Read the evaluation form and think about the employee's overall performance on the job: What are the most important things you want to tell the employee in this evaluation? Forget personality and other things not job related and focus on the employee's actual work. 3. Fill Out the Form.
Fill out Part I (Job Performance) and Part II (Summary of Employee's Strengths and Accomplishments). a) Job Performance. Mark the statements which most nearly describe the employee's work behavior. You are encouraged to give explanations by relating to specific examples in the comments, especially to ratings that are well below or far above job standard. Remember the purpose is to assess the employee's work and to discuss the job standards by which you judge the employee's work, and expectations for the future. Summary of Employee's Strengths and Accomplishments. List the things most praiseworthy and put the evaluation in perspective: On balance, how does the employee's work stack up?
b)
APPENDIX - A-75
4.
Plan the Meeting With the Employee.
Draft a list of agreements and commitments or assignments for discussion in the evaluation meeting with the employee. Remember you may wish to add or subtract items as a result of the employee's comments. 5. Talk It Over With the Employee.
Meet with the employee and go over your ratings, comments, and evaluations in Parts I and II. In the meeting, give the employee full opportunity to discuss your comments or assignments. Tell the employee, he/she will have some time to think it over and comment on your evaluation. 6. Employee Fills Out Part III (Employee Comments).
Give the employee a copy of the filled out form and a copy of Part III. Give the employee time (not more than a day or two) to fill out Part III. Make an appointment to meet again and go over the employee's comments before you end the evaluation meeting. 7. Finish Up.
Meet again and go over the employee's comments. Tell the employee what you will do with the comments and review all commitments and agreements. Have the employee sign the form (employee's signature acknowledges she/he read the form: NOT THAT SHE/HE NECESSARILY AGREES). Sign the form and send all papers to your supervisor. Keep a copy for your use in follow-up. The Department Head is responsible for reviewing all evaluations in the department.
APPENDIX - A-76
EMPLOYEE EVALUATION NAME: __________________________ DEPARTMENT/DIVISION: _________________
JOB TITLE: ____________________________________________ PERIOD COVERED BY REVIEW: __________________________ TO: ________________ DATE OF LAST EVALUATION: ___________________________ DATE OF LAST POSITION DESCRIPTION UPDATE: _______________________________ DOES THE POSITION DESCRIPTION NEED REVISION? Yes ___ No ___
PART I: JOB PERFORMANCE (You are encouraged to provide specific examples). 1. QUANTITY OF WORK: _____ Amount of work performed consistently fails to meet minimum standards. _____ Amount of work is occasionally below standard. _____ Expected amount of work normally done. _____ Above expected quantity is usually produced. _____ Work output always well above standard.
COMMENTS:
2.
QUALITY OF WORK: _____ Work performed is consistently below standard. _____ Work occasionally below acceptable standard. _____ Work acceptable. _____ Most assignments completed above standard. _____ All assignments completed well above standards set.
COMMENTS:
3.
COMPREHENSION--JOB KNOWLEDGE: _____ Has many problems understanding nature of the work.
APPENDIX - A-77
_____ Has been able to perform portions of the job, but unable to completely handle from from beginning to end. _____ Understands routine duties, needs infrequent help. _____ Able to perform most aspects of position with little or no additional direction. _____ Understands all phases of required duties; able to take on special projects with no assistance. COMMENTS:
4.
PUBLIC RELATIONS: _____ _____ _____ _____ Abusive and/or non-responsive to public. Needs improvement in responding to public. Courteous and responsive to public. Expends extra effort to assist the public.
COMMENTS:
5.
COOPERATION WITH CO-WORKERS: _____ Failure to get along with co-workers frequently hampers progress of work. _____ Needs improvement in getting along with co-workers. _____ Cooperation consistent with needs of job. _____ Goes the extra distance to maintain harmony.
COMMENTS:
6.
INITIATIVE: _____ Does not anticipate/respond to new duties or needs. _____ Needs improvement in anticipating and/or responding to the needs of the job. _____ Generally anticipates and/or responds to needs of job. _____ With little direction, consistently anticipates and responds to problems or the needs of the job. _____ Goes beyond anticipating problems to develop improvements in the way work is done.
APPENDIX - A-78
COMMENTS:
7.
JUDGMENT: _____ Fails to make sound/logical conclusions, resulting in wasted time, damage to equipment, bad public image. _____ Needs improvement in reaching sound and logical conclusions. _____ Generally makes sound conclusions or seeks further direction from supervisor. _____ When confronted with new situations, makes careful, thoughtful decisions anticipating problems/needs.
COMMENTS:
8.
FLEXIBILITY: _____ Does not adapt to changing needs of job. _____ Difficulty in adjusting to changes in job routine. _____ Reacts to change with little or no disruption of output. _____ Adapts well to change and uses change to increase output.
COMMENTS:
9.
USE OF TIME: _____ Unsatisfactory use of time; assignments not completed when due; doesn't seek work to fill slack time. _____ Needs improvement in use of time; easily sidetracked. _____ Uses time well. _____ Able to perform above standard output by effectively organizing tasks.
COMMENTS:
10.
ACCEPTS DIRECTION: _____ Refuses or fails to follow instructions, direction, or supervision. _____ Needs improvement in following instructions, direction, or supervision. _____ Accepts and follows direction, supervision, instruction.
APPENDIX - A-79
COMMENTS:
11.
DEPENDABILITY: _____ Needs constant follow-up or close supervision, often doesn't keep commitments. _____ Needs improvement in completing tasks and keeping commitments. _____ Can be relied upon to keep commitments; completes routine tasks well; responds to new situations well.
COMMENTS:
12.
MOTIVATION AND DRIVE: _____ _____ _____ _____ Acts without purpose; puts forth little effort in achieving goals of the job. Makes little progress in achieving job related goals. Usually acts to achieve goals for the job. Consistently strives hard to achieve goals for the job.
COMMENTS:
13.
COMPLIANCE TO DEPARTMENT POLICIES: (List areas rated and ratings such as observation of work hours, safety, care of equipment, housekeeping, or others you feel important.) _________________________________ rating: ______________________________ COMMENTS: ___________________________________________________________ _________________________________ rating: ______________________________ COMMENTS: ___________________________________________________________ _________________________________ rating: ______________________________ COMMENTS: ___________________________________________________________ _________________________________ rating: ______________________________ COMMENTS: ___________________________________________________________
a. b. c. d.
APPENDIX - A-80
PART II: SUPERVISOR'S SUMMARY OF EMPLOYEE'S STRENGTHS AND ACCOMPLISHMENTS DURING EVALUATION PERIOD (please use additional paper if necessary).
EMPLOYEE SIGNATURE: __________________________
DATE: _________________
The employee signature only acknowledges that the form has been reviewed - NOT THAT HE/SHE AGREES. SUPERVISOR/RATER SIGNATURE: _______________________ REVIEWER SIGNATURE: ________________________________ DATE: ____________ DATE: ____________
PART III: EMPLOYEE'S COMMENTS (please use additional paper if necessary). A. Do you disagree with your supervisor's ratings on job performance (PART I)? If you indicate NO on any criteria, please explain. Be as specific as possible.
B.
Does your job description differ from the work you actually do? If you feel there are differences, please describe them as specifically as possible.
C.
What improvement could be made to enhance your ability to do a better job?
APPENDIX - A-81
D.
Does your present job match your interests and goals? What action would aid you in achieving your career goals? (Explain).
APPENDIX - A-82
EMPLOYEE EVALUATION Date: _________________________ EMPLOYEE'S NAME: _____________________________ SUPERVISOR'S NAME: ___________________________ DATE OF EMPLOYMENT: ______________ CURRENT SALARY: ___________________ EFFECTIVE: __________________________ Employee and supervisor are each to complete a copy of this form. A joint review will then be held and a mutual copy completed with joint comments. All three copies will be forwarded to the Executive Director for review and then to the Personnel Department for filing in the employee records. The rating scale does not allow a rating that is precisely in the middle. The reason being that there is a tendency when evaluating difficult or controversial characteristics to avoid or skirt the issue by assigning the characteristic a middle ground rating. List comments on each question. They will be most helpful if they reflect your thoughts on the actual conversation between the two of you. In any event, be sure to comment on any characteristic on which you disagree as to the rating. Do not spend excessive time on the numerical ratingyour comments are far more important. TITLE: _________________ TITLE: _________________
DATE OF LAST EVALUATION: _________ RECOMMENDED INCREASE: ___________
Use the following 4 point scale to rate each item. Place the number in the block at the right beside the appropriate category. 1. 2. 3. 4. 1. Consistently above average. Average to slightly above average performance. Average to slightly below average performance. Consistently below average. (__) Self-Rating (__) Supervisor (__) Joint
QUALITY OF WORK: Neatness, accuracy, completeness, dependability, amount of supervision needed to accomplish standard tasks.
APPENDIX - A-83
2.
QUANTITY OF WORK: Use of time in connection with work volume. Amount of work turned out.
(__) Self-Rating (__) Supervisor (__) Joint (__) Self-Rating (__) Supervisor (__) Joint (__) Self-Rating (__) Supervisor (__) Joint (__) Self-Rating (__) Supervisor (__) Joint (__) Self-Rating (__) Supervisor (__) Joint
3.
WORK HABITS: Organization and planning, care of equipment, initiative, conscientiousness, resourcefulness.
4.
ATTITUDE: Enthusiasm for job, confidentiality, ability to work well with others, dependability, desire to improve.
5.
ATTENDANCE: Punctuality, use of sick leave.
6.
SUPERVISION: (If applicable.) Leadership, ability to communicate, delegation of authority, disciplinary control, subordinate evaluation, approachability, training skills, decision making. OVERALL: General rating taking all things relating to the position into consideration.
7.
(__) Self-Rating (__) Supervisor (__) Joint (__) Self-Rating (__) Supervisor (__) Joint
8.
IMPROVEMENT: List specific items that you feel need improvement or areas where you feel change would help improve rating. Any item that received a 4 rating must be addressed under this question.
EMPLOYEE'S SIGNATURE: ____________________________________________________ SUPERVISOR'S SIGNATURE: __________________________________________________ REVIEWED BY: _____________________________ DATE: ______________________
APPENDIX - A-84
CORRECTIVE ACTION COUNSELING RECORD ______________________________________________________________________________ EMPLOYEE DEPARTMENT IMMEDIATE SUPERVISOR ______________________________________________________________________________ JOB TITLE DATE OF EMPLOYMENT TODA Y'S DATE ______________________________________________________________________________ PERSONS PRESENT AT DISCUSSION OF THIS CORRECTIVE ACTION: __________________________________ __________________________________ SUPERVISOR'S STATEMENT __________________________________ __________________________________
GUIDELINES FOR IMPROVEMENT
APPENDIX - A-85
IMMEDIATE SATISFACTORY IMPROVEMENT MUST BE SHOWN AND MAINTAINED OR FURTHER DISCIPLINARY ACTION MAY BE TAKEN ______________________________________________________________________________ ACTION TAKEN: STEP I STEP II STEP IIIA STEP IIIB STEP IV STEP V WRITTEN DOCUMENTATION OF VERBAL WARNING WRITTEN WARNING WRITTEN WARNING WITH SUSPENSION OF _____ DAYS FINAL WRITTEN WARNING SUSPENSION PENDING DISCHARGE DISCHARGE
EMPLOYEE'S COMMENTS:
SUPERVISOR'S SIGNATURE ______________________________
DATE _____________
I HAVE READ AND UNDERSTAND THIS CORRECTIVE ACTION COUNSELING RECORD. EMPLOYEE'S SIGNATURE ________________________________ DATE_____________
IF A STEP III, IV, OR V IS GIVEN, CONCURRENCE OF THE CORPORATE HUMAN RESOURCES DEPARTMENT OR DIVISION MANAGER IS NECESSARY. ______________________________________________________________________________ SIGNATURE DATE ______________________________________________________________________________ EMPLOYEE REFUSES TO SIGN REPORT: ____________________________________ SUPERVISOR'S SIGNATURE DATE
APPENDIX - A-86
RECORD OF NEGATIVE PERFORMANCE NAME _______________________________________________ TITLE _______________________________________________ DATE OF ____________________________________________ DATE OF DISCUSSION ________________________________ NATURE OF PROBLEM (Be specific, include dates, number of occurrences, witnesses)
PRIOR WARNINGS GIVEN VERBAL __________________________ DATE __________________ WRITTEN _________________________ DATE __________________ CORRECTIVE MEASURES TO BE UNDERTAKEN BY EMPLOYEE
CONSEQUENCES (Next form of discipline to be imposed if problem is not corrected, time frame required for correction)
EMPLOYEE COMMENTS
EMPLOYEE SIGNATURE __________________________________________________ SUPERVISOR SIGNATURE ________________________________________________ DATE _____________________________
APPENDIX - A-87
INQUIRY TO FORMER EMPLOYERS [Date] [Name and Address] TO WHOM IT MAY CONCERN: __________________________ has applied for a position at our Organization. In setting forth the applicant's employment history, the applicant has stated he/she was employer at your company for a period of time in the position(s) and during the dates listed below. The reason given for leaving your company is also listed below: Position(s) Held: ____________________________________________________ Dates of Employment: ________________________________________________ Reason for Leaving: _________________________________________________ As indicated below, our Organization has received written authorization from the applicant to inquire into the applicant's work history at your Organization, and, as shown by the attached Written Authorization of Applicant, the applicant has agreed to hold your Organization and its agents harmless with respect to any information provided in response to this inquiry. Please reply to the inquiry herein. For your convenience, we have enclosed a self-addressed, stamped return envelope. A response at your earliest convenience will be appreciated. Very truly yours,
___________________________________
APPENDIX - A-88
1. Did the applicant accurately set forth his/her position title(s) and the dates of employment during his/her employment at your company? Yes ____ No ____ Comments: 2. Yes ____ Comments: 3. Yes ____ Comments: 4. Comments: 5. Any additional comments with regard to questions l-4? Did the applicant accurately set forth the reason for leaving your employ? No ____
Did the applicant accurately set forth his/her attendance record? No ____
How was the applicant's overall job performance rated? Excellent ____ Competent ____ Above Average ____ Marginal ____ Unsatisfactory ____ Not Rated ____
Average ____
For: _________________________________ (Name of Company) By: _________________________________ Person supplying information
Date _______________________________ ____________________________________ Position/Title
WRITTEN AUTHORIZATION OF APPLICANT I have read the above Inquiry to Former Employers; I hereby authorize my former employers to release the requested information and comment on my work record; and I agree to hold my former employers, their agents, and employees harmless from any liability with respect to any information that may be provided in response to these inquiries.
APPENDIX - A-89
My former employers may release information and comment on my work record, concerning the following: Yes ___ ___ ___ ___ No ___ ___ ___ ___ Initials ______ ______ ______ ______ 1) 2) 3) 4) Position(s) held and dates of employment; Reason for leaving employment; Attendance record; Overall job performance
Date ______________________
______________________________________________ Signature
APPENDIX - A-90
JOB DESCRIPTION ORGANIZATION: _____________________________________________________________ DATE OF LAST REVISION: _____________________________________________________ TITLE: _______________________________________________________________________ RANGE/GRADE: ______________________________________________________________ REPORTING RELATIONSHIP: __________________________________________________ SUPERVISORY RESPONSIBILITIES: _____________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ PURPOSE OF POSITION: _______________________________________________________ PRINCIPLE FUNCTIONS: _______________________________________________________ POSITION REQUIREMENTS AND QUALIFICATIONS: ______________________________ ______________________________________________________________________________ POSITION SKILLS REQUIRED: __________________________________________________ ______________________________________________________________________________ WORKING CONDITIONS: ______________________________________________________
APPENDIX - A-91
CityofBozeman
EconomicDevelopmentCouncil
Bylaws
ApprovedbytheEconomicDevelopmentCouncil
March18, 2010
ApprovedbytheBozemanCityCommission
April26, 2010
cononirel) l_ linientCouncil131Jan1 cvd(
EconomicDevelopmentCouncil
Bylaws
Article1
Organization
Section1. 1Creation
Objectives
TheEconomicDevelopmentCouncilEDC), ( hereinafterreferredtoasCouncilorEDCwascreatedon May26, 2010, byCityofBozemanOrdinanceNo. 1784.

Section1. 2Objectives
TheobjectiveoftheEDCistoadvisetheCityCommissiononeconomicdevelopmentissuesandreview theimplementationoftheCityofBozemanEconomicDevelopmentPlan.
Section1. 3Duties, ResponsibilitiesandAuthority
TheBoardshallhavethefollowingdutiesandresponsibilities:
1.
AdvisetheCityCommissiononeconomicdevelopmentissues.
2.
ReviewtheimplementationoftheCityofBozemanEconomicDevelopmentPlan, andproviderelatedrecommendations.
ThecouncilmayhavesuchotherdutiesandresponsibilitiesastheCity Commission, fromtimetotime, maydirect.
4.
Theactionsofthecouncilshallbeadvisoryonlyandshallnotconstitutepolicyof theCityandshallnotbebindingupontheCityCommissionorupontheCity. TheCitymayadoptalloranypartofanyrecommendationofthecouncil, withor withoutanychangesmadebytheCityCommissionasCitypolicy.

ArticleII
OfficeofAgency
Section2. 1CityStaffLiaison
TheCouncilshallmaintainitsofficesintheofficeoftheCitystaffpersondesignatedtoassistthe Councilasstaffliaison. ThestaffpersonsodesignatedshallattendmostmeetingsoftheCounciland willberesponsibletoassisttheCouncilintheschedulingofmeetings, preparationanddistributionof agendasandminutes, andprovidingnotificationofBoardactivitiestointerestedparties. Thestaff
personshallserveastheliaisonbetweentheCouncil, theCityManagerandtheCityCommission.
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LontunicDoeloinutunCouncilBylcn%
Section2. 2ReportingRequirements
TheCouncilorstaffliaisonshallprovidetotheofficeoftheCityClerk, anagendaatleastthree3) ( workingdayspriortoameetingoftheboard. TheboardshallprovidetotheofficeoftheCityClerk, minutesofeveryboardmeetingwithinsixty60) ( daysofthecloseofthemeeting. Exceptforproperly calledexecutivesessionsaspermittedbystatelaw, allboardmeetingsshallbeopentothepublicand anycitizenshallhaveaccesstotheagenda, minutesandrecordsthereofatreasonabletimesthroughthe
officeoftheCityClerk.
Article3
Members, TermsandQualifications
Section3. 1Members
1.
AllappointmentstotheEDCshallbemadebytheBozemanCityCommission.
2.
ThemajorityofCouncilmembersshallbebusinessleadersandeconomicdevelopmentleaders.
3.
Thereshallbeseven7) ( membersoftheEconomicDevelopmentCouncilandthereshallalways
beatleastfive5) ( butnotmorethanseven7) ( membersoftheEDC, amendablefromtimeto timebydulyapprovedresolutionoftheBozemanCityCommission. Thetermsoftheinitial
sevenmembersshallbeasfollo
One1) ( membertoserveforone1) ( year, two2) ( memberstoservefortwo2) ( years, two2) ( memberstoserveforthree3) ( yearsandtwo2) ( toservefortermsoffour4) (
yearsfromthedateoftheirappointment. Afterinitialterms, councilmembersshallserve
three3) ( yearstaggeredterms. Eachmembermaybereappointedwithoutanylimitation

onthenumberofreappointments. Vacanciesshallbefilledinthesamemanneras
originalappointmentsforthebalanceofthetermremaining.
4.
TheCityCommissionshallaffirmoneCityCommissionertoactasliaisonbetweentheCouncil
andCommission.
5.
Acouncilmembershallreceivenocompensationforhisorherservice. Boardmembersshallbe
entitledtopreviouslyauthorizedexpenses, includingtravelexpenses, incurredduringthe

dischargeofduties.
6.
PersonsoflegalagemaybeappointedtotheCouncil. Amajorityofthecouncilshallbe
residentsoftheCity. NonresidentmembersoftheCouncilshallhavesomeinterestintheCity byvirtueofworkinginthecityorowningpropertyinthecity.
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Section3. 2ResignationsandVacancies
ResignationsfromtheBoardshallbesubmittedinwritingtotheCityClerk, withacopytotheChairand StaffLiaison. Vacanciesshallbefilledinthesamemannerasoriginalappointmentsforthebalanceof thetermremaining.

Section3. 3RemovalfromOffice
AcouncilmembermayberemovedbyamajorityvoteoftheCityCommissionforanyreason.
2,
Three3) ( unauthorizedconsecutiveabsencesfromregularlyscheduledCouncilmeetingsshallbe
groundsforremovalasamemberoftheCouncil. AbsencesshallbeauthorizedbytheCouncil
ChairpersonorViceChairperson.
Article4
OfficersandTheirDuties
Section4. 1
TheCouncilshallelectfromitsvotingmembersaChair, ViceChairandRecordingSecretaryat itsfirstregularmeetingofeachcalendaryear.

2.
TheChairshallpresideatallmeetingsoftheCouncilandshallexercisethedutiesnormally conferredbyparliamentaryprocedureonsuchofficers. TheChairmaycallspecialmeetings, andgenerallyperformotherdutiesasmaybeprescribedbytheBoardorCityCommission. The Chairshallinitiateitemsfordiscussionandrecognizeallmattersbroughtupfordiscussion

beforetheBoard.
3. 4.
5.
TheChair, ViceChairandRecordingSecretaryshallvoteasmembersoftheCouncil.
TheViceChairshallhavetheauthoritytoactasChairintheabsenceordisabilityoftheChair.
IntheeventoftheabsenceoftheChairandViceChair, themembersoftheCouncilshallselect
anActingChair.
6.
TheRecordingSecretaryshallberesponsiblefortakingattendanceat, andtaking, preparingand distributingminutesof, allmeetings. IntheabsenceoftheRecordingSecretary, theChairshall
appointanymemberpresenttoactinthecapacityofRecordingSecretary. AfterCouncil approvaloftheminutes, thesignedoriginalshallbesenttotheofficeoftheCityClerkasthe

officialrecordofthemeeting.
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Article5
Meetings
Section5. 1Schedule
1.
TheCouncilshallholdregularlyscheduledmeetingsasfrequentlyasnecessarytofulfillits
objectivesandnotlessoftenthanquarterly. AregularmeetingplacefortheCouncilshallbe
established.
2.
SpecialMeetingsmaybecalledasneededbytheChair, theStaffLiaison, oranythree3) (

membersoftheCouncil.
3,
ExecutiveSessionsmaybecalledasneededbytheChair, theStaffLiaison, oranythree3) ( membersoftheCouncilsolelyforconsiderationofmatterswhichwillbediscussedpursuantto 2. 203ofSection3and4ofMontanaCodeAnnotated. 3. Thepublicwillbeexcludedfromthese

ExecutiveSessiondiscussions.
4.
SpecialCommitteesmaybeappointedbytheChairforpurposesandtermswhichtheCouncil
approves. ExofficiomembersmaybenominatedbytheCouncilforselectionbytheCity
Commission.
Section5. 2Quorum
AmajorityoftheappointedCouncilshallconstituteaquorum.
Section5. 3PublicMeetingandEthicalRequirements
1.
AmemberoftheCouncilwhohasafinancialinterestinanitemunderconsiderationbythe
CouncilshalldeclareaconflictofinterestandshallnotparticipateintheCouncildiscussionand votetakenontheitem. Insucheventofdisqualificationfromaconflictofinterest, suchfact
shallbeenteredintotheminutesofthemeeting. Allcouncilactivitiesandmembersaresubject
toallprovisionsoftheBozemanMunicipalCode, includingChpt. 2. 01, CodeofEthics.
2.
AllmeetingsoftheCouncilshallbesubjecttoMontanaopenmeetinglawsandmaynotbeheld
withlessthan48hoursnotice. Allwrittenandelectronicinformationshallbeconsideredapublic
recordandsubjecttodisclosurepursuanttoMontanalaw.
OrdinanceNo. 1784, providingforthecreationoftheEconomicDevelopmentCouncilshall prevailifdiscrepanciesoccurbetweenOrdinanceNo. 1784andthesebylaws.
Section5. 4RulesofOrder
MeetingsoftheCouncilshallbeconductedaccordingtothemostcurrenteditionofRobert' sRulesof Order, unlessotherwisespecifiedinthesebylaws. AmemberoftheCouncilortheCityStaffLiaison

maybedesignatedbytheCouncilChairtoserveasparliamentarian. NoactionoftheCouncil, is
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LcoitonzicOerclopmeatEvuncriiIwoA ('
official, however, unlessauthorizedbyamajorityofmemberspresentataproperlycalledmeetingin whichaquorumispresent.

Section6
BylawAmendments
BylawamendmentsmaybeintroducedinwritingbyanymemberoftheCouncilataregularmeeting. ActionbyamajorityoftheCouncilontheamendmentsmaybetakenonasecondreadingatafuture regularmeeting. BylawsshallnotbeamendedinconflictwithCityofBozemanpoliciesorOrdinances andtheCityCommissionshallbeprovidedwithcopiesofbylawamendments. TheCityCommission mayinvalidateamendmentsbyamajorityvote.
ThesebylawsapprovedbytheEconomicDevelopmentCouncilthis18dayofMarch,
2010.
ThesebylawsapprovedbytheCityCommissionthe26dayofApri, 2010.
APPROVEDASTOFORM:
reSullivan
CityAttorney
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BYLAWS OF IDA-LEW ECONOMIC DEVELOPMENT COUNCIL, INC. ARTICLE I OFFICES The principal office of the corporation in the State of Idaho shall be located in Grangeville, Idaho County, Idaho. The corporation may have such other offices, either within or without the State of Idaho, as the Board of Directors may designate or as the business of the corporation may require from time to time. The registered office of the corporation required by the Idaho Nonprofit Corporation Act to be maintained in the State of Idaho may be, but need not be, identical with the principal office in the State of Idaho, and the address of the registered office may be changed from time to time by the Board of Directors. ARTICLE II MEMBERS The Corporation shall have no members. The Corporation shall be governed by its Board of Directors as hereafter provided. ARTICLE III BOARD OF DIRECTORS Section 1. General Powers. The business and affairs of the corporation shall be managed by its Board of Directors. Unless otherwise stated herein, the Board of Directors shall have all powers and obligations allocated to the Board of Directors by the Idaho Nonprofit Corporation Act, Title 30, Chapter 3, Idaho Code, as amended. Section 2. Number, Tenure and Qualifications. The number of directors of the corporation shall be a minimum of three (3) and not more than thirty (30). The number of initial directors shall be eight (8). The number of directors following the expiration of initial directors terms shall be eight (8) until otherwise fixed from time to time by resolution of the Board of Directors within the specified range. Directors shall be appointed and vacancies shall be filled by resolution of a majority the Board of Directors. The Agenda for the meeting at which said resolution is adopted shall specifically indicate that such action will take place and shall name the individuals being considered for appointment. Directors may be removed with or without cause by the vote of two-thirds (2/3) of the directors then in office. Each director shall hold office until the earlier of a) 3 years from the date of their appointment, or b) when such director no longer meets the qualification as a director or is
removed as provided by these bylaws, or c) resignation of the director. successive terms if reappointed by the Board.
Directors may serve
Directors shall at all times during their appointment and at all times during the term of their directorship be public officials, employee or agents of a) Idaho or Lewis County, b) municipal corporations or quasigovernmental districts within one or more said counties, or c) owner, employee or agent of a private sector business operating within said counties. Prior to appointment, written evidence of an entitys designation of their representative shall have been provided to the Ida-Lew Board of Directors. No entity shall have more than one (1) individual representing them on the Board of Directors at one time. The Board of Directors may, by resolution, establish additional uniform qualifications and requirements for directors not inconsistent herein. Section 3. Regular Meetings. A regular meeting of the Board of Directors shall be held without other notice than this bylaw. The Board of Directors may provide, by resolution, the time and place, either within or without the State of Idaho, for the holding of additional regular meetings without other notice than such resolution. Section 4. Special Meetings. Special meetings of the Board of Directors may be called by or at the request of the President or twenty percent (20%) of the directors then in office. The person or persons authorized to call special meetings of the Board of Directors may fix any place, either within the State of Idaho, as the place for holding any special meeting of the Board of Directors called by them. Section 5. Notice for Special Meetings/Removal of Directors or Other Matters Requiring Special Notice. Notice of any special meeting shall be given at least two (2) days prior thereto by written notice delivered personally or mailed to each director at his business address, or by e-mail. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, so addressed, with postage thereon prepaid. If notice be given by telegram, such notice shall be deemed to be delivered when the telegram is delivered to the telegraph company. Any director may waive notice of any meeting. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need by specified in the notice or waiver of notice of such meeting. Provided, however, that in the event the Board shall take any action to remove a director or to approve a matter that would be required to be approved by members if the Corporation had members, unless notice is waived by all directors, written notice of the meeting where such action will be taken shall be given in the manner set forth above, excepting that said notice shall be served no less than seven (7) days prior to the meeting where the action will be voted upon, including a statement in said notice that the matter will be voted upon at the meeting.
BYLAWS: Ida-Lew Economic Development Council, Inc. Amended October 26, 2012
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Section 6. Quorum. A majority of the number of directors then in office shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, but if less than such majority is present at a meeting, a majority of the directors present may adjourn the meeting from time to time without further notice. Section 7. Manner of Acting. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. Section 8. Action Without a Meeting. Any action required or permitted to be taken by the Board of Directors at a meeting may be taken without a meeting when each member is given notice of the proposed action and the opportunity to vote and written consent setting forth the action so taken, is provided by a number of directors constituting a quorum as defined in Section 6 above. Said written consent may include printed email messages with the directors identification electronically embedded in the message. Evidence of said votes shall be retained and filed with the minutes of the organization. Section 9. Reimbursement for Expenses - No Compensation or Distributions. By resolution of the Board of Directors, each director may be paid his expenses, if any, of attendance at each meeting of the Board of Directors or such further actual expenses incurred and approved by the Board of Directors while carrying out the business of the Corporation. Directors shall not be paid any compensation for service as a director, and may not receive any distribution from the Corporation before or after dissolution. Section 10. Presumption of Assent. A director of the corporation who is present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent to such action with the person acting as the Secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the Secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action. ARTICLE IV OFFICERS Section 1. Number. The officers of the corporation shall be a president, vice president and a secretary, each of whom shall be elected by the Board of Directors. Such other officers and assistant officers as may be deemed necessary may be elected or appointed by the Board of Directors. Any two or more offices may be held by the same person, except the offices of president and secretary. Section 2. Election and Term of Office. The officers of the corporation to be elected by the Board of Directors shall be elected annually by the Board of Directors at the first meeting of the Board of Directors. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently may be. Each officer shall hold office
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until his successor shall have been duly elected and shall have qualified or until his death or until he shall resign or shall have been removed in the manner hereinafter provided. Section 3. Removal. Any officer or agent may be removed with or without cause by the Board of Directors whenever, in its judgment, the best interests of the corporation will be served thereby. Election or appointment of an officer or agent shall not of itself create contract rights, but the corporation shall comply with the terms and conditions of any employment contract entered into between the corporation and an officer or agent. Section 4. Vacancies. A vacancy in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the Board of Directors for the unexpired portion of the term. Section 5. President. The President shall be the principal executive officer of the corporation and, subject to the control of the Board of Directors, shall in general supervise and control all of the business and affairs of the corporation. He shall when present, preside at all meetings of the Board of Directors. He may sign, with the Secretary or any other proper officer of the corporation thereunto authorized by the Board of Directors, any deeds, mortgages, bonds, contracts, or other instruments which the Board of Directors has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the corporation, or shall be required by law to be otherwise signed or executed; and in general shall perform all duties incident to the office of President and such other duties as may be prescribed by the Board of Directors from time to time. Section 6. Secretary. The Secretary shall: A. Keep the minutes of the meeting of the Board of Directors in one or more books provided for that purpose; B. See that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; C. Be custodian of the corporate records and of the seal of the corporation and see that the seal of the corporation is fixed to all documents, the execution of which on behalf of the corporation under its seal is duly authorized; D. In general, perform all duties incident to the office of the Secretary, and such other duties as from time to time may be assigned to him or her by the Board of Directors. Section 6a. Other officers: Any other officers appointed by the Board of Directors, shall have those duties and obligations assigned or delegated to them by the Board of Directors not otherwise inconsistent with the law and these bylaws.
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Section 7. Salaries. The salaries of the officers may be fixed from time to time by the Board of Directors and no officer shall be prevented from receiving such salary by reason of the fact that he or she is also a director of the corporation, provided, however that no officer shall receive any distribution from the corporation before or after dissolution. ARTICLE V CONTRACTS, LOANS, CHECKS AND DEPOSITS Section 1. Contracts. The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. Section 2. Loans. No loans shall be contracted on behalf of the corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors. Such authority may be general or confined to specific instances. Section 3. Checks, Drafts, etc. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the corporation, shall be signed by such officer or officers, agent or agents of the corporation, and in such manner as shall from time to time be determined by resolution of the Board of Directors. Section 4. Deposits. All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies or other depositories as the Board of Directors may select. ARTICLE VI FISCAL YEAR The fiscal year of the corporation shall begin on January 1 and end on December 31st in each year, unless otherwise fixed by resolution of the Board of Directors. ARTICLE VII NO DIVIDENDS OR DISTRIBUTIONS-DISSOLUTION No individual, private shareholder, director, officer, employee or agent of the Corporation shall pay or receive any dividend, distribution or net earnings, or part thereof, from the Corporation. Upon dissolution, and after payment of all creditors as provided by Idaho law, the Corporation shall distribute the remaining assets of the Corporation to as provided by the Idaho Nonprofit Corporation Act, as amended and as permitted by the Internal Revenue Code, but only in such manner that does not impair any tax exempt status of the Corporation under Internal Revenue Code 501(c). ARTICLE VIII CORPORATE SEAL
BYLAWS: Ida-Lew Economic Development Council, Inc. Amended October 26, 2012 -5
The Board of Directors may, but is not required to, provide a corporate seal which shall be circular in form and shall have inscribed thereon the name of the corporation and the state of incorporation and the words "Corporate Seal." ARTICLE IX WAIVER OF NOTICE Whenever any notice is required to be given to any director of the corporation under the provisions of these Bylaws or under the provisions of the Articles of Incorporation or under the provisions of the Idaho Nonprofit Corporation Act, as amended, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. ARTICLE X AMENDMENTS These Bylaws may be altered, amended or repealed and new Bylaws may be adopted as provided by the Idaho Nonprofit Corporation Act, as amended. ARTICLE XI INDEMNIFICATION The Corporation shall have the power and authority to indemnify its directors, officers, employees and agents as provided by the Idaho Nonprofit Corporation Act, as amended. The Corporation may purchase insurance to insure any liability of the Corporation and its directors, offices, employees and agents for which the Corporation shall have the power to indemnify against as provided by these bylaws and the Idaho Nonprofit Corporation Act, as amended. CERTIFICATION KNOW ALL MEN BY THESE PRESENTS: We, the undersigned, the duly elected Officers of IDA-LEW ECONOMIC DEVELOPMENT COUNCIL, INC., an Idaho non-profit corporation, do hereby certify: That the within and foregoing Bylaws were Amended by Resolution of the Board of Directors of said corporation on the 26th day of October, 2012, and the same do now constitute Bylaws of said corporation.
Gunther Williams
10-26-12
Jeff Kutner
10-26-12
Gunther Williams, Chair Date Ida-Lew Economic Development Council, Inc.
Jeff Kutner, Vice-Chair Date Ida-Lew Economic Development Council, Inc.
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By-Laws of the Morgan County Economic Development Corporation

Article I Name The organization is incorporated under the laws of the State of Colorado and known as the Morgan County Economic Development Corporation 501(C)(6). Article II Terms of Existence The period of existence of this Corporation shall be perpetual. Article III Objects and Purposes The nature of this corporation and purpose for which it was organized is not for profit but for the purpose of furthering the economic development in Morgan County, Colorado, and the various cities and towns located therein and promoting and assisting the business concerns in Morgan County, Colorado. The primary objective of this corporation shall be to benefit the county as measured by increased employment, payroll, business, volume, and corresponding factors rather than monetary profit to the corporation or its members. The net earnings of the corporation if any, shall be used exclusively to further promote, foster, develop, and encourage the growth and development of such business concerns in Morgan County, its communities, and environs. Article IV Members Section 1. Eligibiity for Membership. Membership in the Corporation shall be open to all interested persons who are residents of Morgan County or who work or otherwise have a business presence in Morgan County and to all businesses and other organizations or entities (Including governmental bodies and entites) that have offices or places of business in Morgan County. All member other than natural persons shall designate a single representative authorized to vote on behalf of such member. Section 2. Classes of Membership. There shall be three (3) classes of members in the corporation, namely A, B and C. A. Class A membership shall consist of the County of Morgan, Colorado, acting by and through its Board of County Commissioners. B. Class B membership shall consist of the City of Brush, Colorado, the City of Fort Morgan, Colorado, and the Town of Wiggins, Colorado, acting by and through the City Councils. Class B membership shall always be made up of the three (3) largest municipalities in Morgan County, Colorado. C. Class C membership shall consist of any individual firm, partnership, association, corporation, or estate having interest in doing business in Morgan County, Colorado. The Board of Directors may establish as many membership classifications as it may deem appropriate, and revise such classifications from time to time so long as no such change reduces the membership benefits of any class during a year for which fees have already been collected. Section 3. Rules and Payment of Investment. All members of the Corporation shall be required to agree to abide by these bylaws and such membership rules as may be adopted by the Board of Directors from time to time and to pay such annual dues as are established for their classification of membership by the Board of Directors. Investments shall be payable within thirty days of the mailing of the statement. The Board of Directors may, but shall not be required to, grant a grace period during which renewing members may pay their investment without lapse in their membership. Members shall not be considered to be in good standing during any period of time during which they are delinquent in payment of dues or in violation of these bylaws or the membership rules. Each member shall have one vote per established investment in such matters as are to be decided by a vote of the membership only upon the payment of the established investment. Article V Board of Directors Section 1. In General The affairs of the Corporation shall be managed, controlled and conducted by, and under the supervision of the Board of Directors, subject to the provisions of the Articles and these bylaws. The Board of Directors shall have thirteen (13)
members. One director shall be appointed by the Class A member. One director shall be appointed from each of the Class B members. Nine directors shall be elected pursuant to the provisions of Sections 2 and 3 of this Article V, and shall be elected from Class C members. These nine directors will come from the following areas: Three (3) from the City of Brush Three (3) from the City of Fort Morgan One (1) from the Town of Wiggins Two (2) from Morgan County at Large The nominees shall either live, work, or own a business in the area where they are nominated. If one area does not get enough nominations to meet the alloted number of directors the balance will come from the county at large. The Board of Directors shall have the right to increase or decrease the number of Directors from time to time so long as the number of Directors is no fewer than nine and no more than thirteen. Each Director shall have one (1) vote on the Board. Directors, as such, shall not receive any salaries/compensation for their services. Section 2. Terms of Service. The director appointed by the Classification A member shall serve a one-year term and can be re-appointed for up to 6 years. The directors appointed by the Classification B members shall serve a one-year term and can be re-appointed for up to 6 years. The directors elected from the Classification C members shall serve three-year terms. No director from any Class shall serve more than 6 consecutive years on the board. If a member is appointed to fill a vacancy in the Board of Directors, that time shall not count against the maximum six year term. Section 3. Confidentiality Agreement. Each director shall execute and be bound by a confidentiality agreement. All meetings of the Board of Directors are confidential and shall not constitute public meetings. Guests or resource persons may be invited only with prior approval of the Board of Directors or Executive Director. All meeting minutes and notes are to be distributed to the Board of Directors members only and are not for public distribution. Section 4. Nominating Committee. A nominating committee of not less than three board members, which includes the President or Vice President, shall be appointed by the President, whose duty it shall be to nominate from the Class C Members in good standing candidates to fill vacancies on the board. Said committee shall be appointed no later than the December board meeting and shall present a list of nominees recommended to the Board of Directors meeting for their approval. Upon approval of the nominee list the nominees will be asked for a short letter regarding their qualifications and reason for running for the Board of Directors. Upon approval of the nominees by the Board of Directors and receipt of the nominees letter, the Executive Director shall mail or email to all members of the Corporation an official ballot containing the names of the nominees and their letters. The members shall have at least 10 days to mail their completed ballots to MCEDC. Section 5. Election Election of membership classification C Directors may be voted on by eligible members from that classification by one of two options as determined by the Board of Directors: (1) Email or Mail-in-ballots prior to the annual meeting or (2) ballots cast in person at the annual meeting. Directors will be elected by a majority of the ballots cast for each term of office representing an incorporated entity or county at large. In the case of a tie, a majority vote of the Board of Directors will break the tie. The ballots shall be counted by the MCEDC staff and confirmed by panel of three judges, appointed by the President, who are not members of the Board of Directors or Candidates for election as such to have supervision of the election and the counting of the ballots.
Section 6. Absence Any director who shall have two (2) unexcused absences from regular meetings of the Board of Directors during a single administrative year shall automatically vacate the seat on the Board of Directors, and the vacancy shall be filled as provided by these Bylaws; provided, however, the Board of Directors may consider each absence of an elected officer or director as a separate circumstance and may expressly waive such absence by affirmative vote of a majority of its members. Section 7. Removal A member of the Board of Directors may be removed from the board upon recommendation for just cause as determined by two-thirds majority vote of the Board of Directors. Section 8. Vacancies In the case of any vacancy on the Board of Directors through death, resignation, disqualification, or any other cause except by expiration of their term, a successor shall be appointed or elected by the MCEDC Board of Directors to hold office for the un-expired portion of the term. The successor, if possible, shall be selected from the incorporated entity which has been vacated. Article VI Ex-offcio Directors Ex-officio Directors, who are non-voting members of the Board, may be appointed/nominated by any Executive Board member and approved by a majority vote of the Board of Directors. Ex-officio Directors are appointed in recognition of their service to the MCEDC and community, and act as counselors to the organization. Article VII Officers Only membership classification C members can hold an officer position on the board. The officers of this corporation shall be chosen by the Directors and shall be President, Vice President, and Treasurer and such other officers as the Board of Directors may from time to time deem advisable. All Officers must be Directors. The Board of Directors may fix the powers and duties of any officers not specifically provided herein. The officers of this corporation shall be elected and hold their respective offices until the next succeeding annual meeting of the membership of the corporation and thereafter until their successors have been elected and shall have qualified, unless sooner replaced. Any officer may be removed at any time by the Board with or without cause. In case of the death, disqualification, absence or inability to act of any officer of the corporation or for any other reason the Board may deem sufficient, the Board may delegate for the time being the powers, duties or any of them, of any such officer or to any Director. The Board of Directors may fill all vacancies in any office of this corporation, the person so elected to fill any such vacancy to hold office for the un-expired term in respect to which such vacancy occurs. The President shall be the Chief Executive Officer of the corporation and shall preside at all meetings of the Board of Directors. He shall see that all orders and resolutions of the Board of Directors are carried into effect. He shall execute all contacts or instruments requiring the seal of the corporation and shall have the general powers and duties usually vested in the Office of the President of a corporation and shall have such other powers and perform other such duties as the Board of Directors may from time to time prescribe. In case of death, disqualification, absence or incapacity of the president, the Vice-President shall have all the powers and perform all the duties of the President, and at other times have such of the powers and perform such of the duties of the President as the Board of Directors may from time to time determine. The Treasurer shall review the books and records, receipts, and disbursements of the Corporation as maintained by the MCEDC Executive Director and/or staff; and shall cause the MCEDC Executive Director to provide a monthly financial report the Board of Directors. The Treasurer shall report the financial condition, total yearly receipts, and disbursements to the full membership at the regularly scheduled annual meeting. The Treasurer shall perform other such duties as may be requested by the Board of Directors.
Article VIII Executive Director The Board of Directors may appoint an Executive Director who shall be the Chief Operating Officer of the Corporation. The Executive Director shall have management of the property, business, and affairs of the corporation and shall perform such functions and duties as may be delegated to him/her by the Board of Directors. The Board shall fix the compensation for his/her services. He/She shall be an ex-officio member of all committees of the corporation. Article IX Powers The corporation is authorized and empowered to do all things necessary to carry on and accomplish the purpose for which it is organized, including the authority and power to: 1. Enter into, make, and perform contracts for every kind and description. 2. Borrow and raise monies for any of the purposes of the corporation from time to time without limit as to amount, to draw, make, accept, execute and issue promissory notes, drafts, bills of exchange, warrants, bonds, debentures, and other negotiable or non-negotiable instruments and evidence of indebtedness, and to secure the payment of any thereof and of the interest thereon by mortgage upon or pledge, conveyance, or assignment in trust of the whole or any part of the property of the corporation, whether at the time owned or thereafter acquired, and to sell, pledge, or otherwise dispose of such bonds or other obligations of the corporation for its corporate purposes. 3. Lend to any person, firm, or corporation any of its funds either with or without security. 4. Purchase, hold, sell and transfer, construct, convert, or expand plant facilities, building and property and improvements of any kind or nature, for lease or for sale. 5. Promote and assist the growth and development of the small business concerns and others. 6. Have one or more officers to carry on all or any of its operations and business, and without restrictions or limit as to amount, to purchase or otherwise acquire, hold, own, mortgage, sell, convey or otherwise dispose of real and personal property of every class and description. 7. Have and exercise all or any of the rights, powers, and perogatives granted to corporations by the laws of the State of Colorado and to do everything necessary, proper, or advisable for the accomplishment of any of the above purposes or the attainment of any of the objects, or the furtherance of any of the powers herein set forth, either alone or associated with others, and incidental or pertaining to, or growing out of, or connected with its business or powers, provided the same not be inconsistent with the laws of the State of Colorado. Article X Principal Office The principal office of the corporation shall be located in Morgan County, Colorado and part or all of the business of the corporation may be carried on beyond the limits of Morgan County, Colorado of the State of Colorado. The corporation may have other offices in other cities in Morgan County, Colorado. Article XI Meetings The Board of Directors shall meet at least monthly. Written Notice of the time and place of meeting shall be given at least five days prior to the meeting, but failure to send such notice shall not invalidate such meeting. Special meetings may be called by the President, or any directors, at any time. Written notice of special meetings should be provided to Board Members in a timely fashion. At the meetings of the Board of Directors, a quorum sufficient for the transaction of business shall consist of a majority of the Directors. Director or Directors thereat shall have the power to adjourn the meeting from day to day without notice, other than the announcement at the meeting, until a quorum shall be present. The proceedings of all meetings of MCEDC shall be conducted in accordance with the latest edition of Roberts Rules of Order revised, except where those rules are in conflict with the By-laws.
Annual Membership Meeting An Annual Meeting for the Board of Directors and members of the MCEDC shall be held within the first quarter of the following year. Members and Directors meetings may be held beyond the limits of this state at such time and at such places as the Board of Directors shall by resolution designate. Article XII Corporate Seal The Corporate Seal of this Corporation shall have engraved thereon: Morgan County Economic Development Corporation Article XIII The fiscal year shall be from January first to December thirty-first. Article XIV These By-Laws may be amended by two-thirds majority vote of the Board of Directors. Article XV Advisory Council The MCEDC Advisory Council shall act as a public/private sector support group within Morgan County for the elected Board of Directors providing assistance with: marketing the MCEDC; prospect identification; provision of resources and assistance in attracting new or retaining existing business, the identification and mobilization of private sector financial and volunteer support services for benefit of MCEDC, identifying existing business which may need assistance, to help gather data and pertinent information on Morgan County; and to share pertinent information about their town or city which relates to economic development and such other duties or tasks of an advisory or support nature as may be requested by the MCEDC Board of Directors. The Advisory Council shall consist of one individual from the participating municipalities which will be appointed by their own local Board of Trustees (Councilmen). The MCEDC Board may adjust the number of Advisory Council members in order to better provide support services for the MCEDC organization. Appointments to the Advisory Council shall be for one year terms. The Advisory Council shall meet as scheduled by the MCEDC Board of Directors. Quorums. At a duly called Advisory Council meeting, the presence of a simple majority of Council members shall constitute a quorum. Resignations. Any Advisory Committee Member may resign upon giving written notice to the President of the MCEDC. The Advisory Council shall acknowledge and support the principles, action plans, goals, mission, structure, and confidentiality restrictions contained in the MCEDC By-Laws.
Chaffee County CAP: Community Action Plan DRAFT Report

Community Assessment: April 5-7, 2006 CAP Assessment: June 28, 2006
BV Business Development:
Community Assessment TEAM Facilitator: Darlene Scott & Pete Roskop
Leaders: Judy Hassell
# 1: Develop a model for a Chaffee County Integrated Business Development Resource Center (IBDRC) # Action Plan Parties Responsible Timeline Resources/Comments: Technical, Funding, etc.
1 2 Conduct a inventory of all the resources for business development resource center Develop a vision for the IBDRC to identify resources for new and existing business and partner with CMC for location Research integrating technology into the IBDRC Present findings to Vision 2020 (compliment what they are already doing) Angie Tingle & Keith Baker Judy Hassell, Joy Duprey 1 month 3 months CMC, SBDC, DOLA, OEDIT, SECED, etc.
3 4
Dave Strosnider, Keith Baker Judy Hassell & Joy Duprey
1 month Aug 23
Use technology as the connector of all the resources/incentives/programs, etc.
# 2: Develop and support a community image investment plan # Action Plan Parties Responsible
1 Continue and Expand Shop Local BV Chamber
Timeline
Aug 30
Resources/Comments: Technical, Funding, etc.

Utilize the findings as a benchmark to promote the success of this
Campaign Identify measurables of the program Promote the findings Expand the survey for business retention efforts Involve the community in the BV Master Plan at all stages Create youth mentoring workforce for community projects and identify projects (mentoring and volunteer cleanup, etc.) Work on the community image/pride and market/promote the assets
program and further expansion development (such as sales tax, etc.) THANK the businesses owner for their business. Let them know they are appreciated. Joy Duprey, Judy Hassell, Keith Baker, Jerry LEstrange, David Strosnider, Angela Tingle, Chris Montera, Susanna Huza Angela Tingle & Joy Duprey Sept 06 and on going Ongoing Consultant should be identified by end of August. Include the BV area, not just city limits. Make personal phone calls and use data from the Shop Local Campaign to get them involved Engage the youth in low cost beautification projects. Use existing organizations for mentoring & projects (i.e., Pink Ladies, Build a Generation, etc.) CCRA Downtown Revitalization Assessment & OEDIT branding assessment Local Leader: Jennifer Tynan
Angela Tingle & Downtown revitalization committee
Ongoing
Salida Business Development:
Community Assessment TEAM Facilitator: John Galusha
# 1: Implement Business retention and Expansion Program # Action Plan Parties Responsible
1 2 Develop Vision / Goals for Program Roll-out BRE Program Nancy McAninch / Vision 2020 Christine deChristopher, Tim Glenn, Jennifer Tynan, Vision 2020
Timeline
Aug. 30 Jan. 1, 2007

SCEDD, brei.org, Xcel Energy, Sangre de Cristo Elec., SBDC, Qwest, Bresnan, UAACOG Vision 2020, same as above
# 2: Develop Downtown Development Support Strategy # Action Plan Parties Responsible

1 2 3 Improvement Roll-out meeting Maintenance (dis) incentives program Tax and Other Incentive Program Leslie Walter, Hugh Young Christine DeChristopher, County Staff Ellen Olson
Timeline
Sept/ Oct 2006 July, 2007 On-going

Previous Surveys, Guidance from Main St, SBA, HIS, Inventory of space CML, Main St. USA, Other Communities, Inventory of Space, Maintenance Codes, HIS, HPC Cities, Counties, Internet Research
# 3: Schools # Action Plan

1 Research Alternative Funding Sources
Parties Responsible
2
Timeline
2 3 4
Build Pride / Celebrate Positive Coalition and/or Communication Plan Develop Program utilizing Business resources/ Industry groups / Intellectual Resources Develop Partnerships Program
School Board
On-going
Pat Alderton, Patti Arthur
Sept 1, 2006
Use existing model of cooperative from Douglas County, Existing Explorer programs
County Business Development:

# 1: Integrated Business Services # Action Plan
1 2 3 4 5 6 7 Identify Scope, Purpose & Model Locate at CMC Compare Different models Adopt Program Model Apply for funding Collect resource information Develop web presence
TEAM Facilitators:
J Galusha & D Scott Local Leader: J Tynan & J Hassell
Parties Responsible
Expand on BV #1 recommendation
Timeline

Look at existing models around the state (i.e.; Alamosa, Otero Junior College)
Jeff Ollinger, David Strosnider
6 months
COG has funds available to expand websites to include the networking. Identify a point person (Ellen Olson?)
# 2: Incentive Program # Action Plan

1 2 3 Identify local, regional, state and federal incentives Develop local and county incentives and promote to the businesses countywide Utilize Colorado First and Existing Training dollars
Parties Responsible
IBDRC Group Ellen Olson
Timeline
6 months

Make sure incentives are performance based incentives (both for existing and new businesses) Work with local city and county officials OEDIT
BV Family Support & Quality of Life:
Community Assessment TEAM Facilitator: Stephanie Steffens & Christy Culp
# 1: Support efforts to expand child care and youth activities in BV. # Action Plan Parties Responsible Timeline
3
Support Boys & Girls Club Find Facility Find Funding Media Involvement Research of existing county funding and use of it for youth services Support Efforts to Expand Day Care Research Potential to increase SS rates paid to daycare providers If State support is needed speak to Tom Massey for potential action. Research what help is available to expand daycare. Finding to be reported at Family Forum in September. Support Efforts to Expand Day Care Research Potential to increase SS rates paid to daycare providers If State support is needed speak to Tom Massey for potential action. Research what help is available to expand daycare. Finding to be reported at Family Forum in September. Support existing youth programs
BV Steering Committee & Board of Directors of the Boys & Girls Club of Chaffee County Karen Dills will call Dan Short
9-1-06 12-1-06 Ongoing 6-30-06 Town of BV is eliminating fee for residential day care facilities
Susan Bristol Susan Bristol Susan Bristol Susan Bristol Susan Bristol Susan Bristol Susan Bristol Susan Bristol
8-1-06 10-1-06 8-1-06 9-06 8-1-06 10-1-06 8-1-06 9-06 Build a Generation to take lead on action of research. School, Scouting, DPCA, Sports, BV Rec Dept., 4-H, Build a Generation to take lead on action of research. Town of BV is eliminating fee for residential day care facilities
# 2: Continued Expansion of Multi-use Trail System and address safety issues. # Action Plan Parties Responsible Timeline Resources/Comments: Technical, Funding, etc.
1 2 3 4 5 6 Implementation of Trail Plan Funding Acquisition of Properties Maintenance Work with CDOT on safety issues Obtain a graduate student through the CSU / DOLA program to complete an inventory of all ingress and egress to Hwy 24. Ryan Mahoney & Lois Walton Town Staff & Council Trails Committee Town Council & Staff Cara Russell Student Immediate 9-1-06 Ongoing Ongoing 6-30-06 12-1-06 Research Grants such as Safe Routes to School, CO State Parks Budget request to Town Council New Development & existing property owners Recruit Volunteers, Adopted a Trail Contact Diana Laughlin to initiate request Completion of Inventory
3: Use the upcoming Housing needs assessment to define affordable/workforce housing. # Action Plan Parties Responsible Timeline Resources/Comments: Technical, Funding, etc.
1 2 Use assessment to identify basic definitions. Educate Community on options. Town of BV - Ryan UAACOG Jeff Chaffee County Social Services UAACOG Susan Bristol 9-1-06 10-1-6 Discussion at Family Forum in September Potential for County wide organization such as Housing Authority or Advisory Committee, see county notes. Leader: Nancy Mallett
Salida Family Support & Quality of Life:
Community Assessment TEAM Facilitator: Clarke Becker
Vision: Quality of Life is about meeting the needs of the people. Some of the needs that were identified included: Housing, Senior and Assisted Living; Access to Medical Care; Transit; Schools; Childcare; Outdoor Recreation; Pace of Life, Clean Environment and a Sense of Place/Community.
# 1: Strengthen Salida Public Schools # Action Plan Parties Responsible

1 Organize a new group of stakeholders to plan an education/communication program to the public. Newly formed group will work to Communicate the positive aspects, challenges and needs of the school system to the community. Implementation of funding options as identified by the new committee and community stakeholders Educate the community on the impacts of the Gallagher Amendment and Tabor on the business community to support the needs of the schools and community. The group should include: City Council, County Commission, Parents/teachers, District Accountability Team, School Staff, LPA, youth/students and School Board Group as developed in Step # 1.
Timeline
30 days to convene the first meeting / strategy session. TBD

School board should convene and expand the group as needed. Committee chair should be someone from outside of the school system. Penny Wilken will approach School Board and the PR Committee for participation and support Focus Groups, PR Committee and other research already in place. Opportunities for funding the schools needs will be identified and communicated to the residents of the district. Subject to results of the groups efforts.
TBD
TBD
TBD
TBD
This is an issue of state-wide significance that has a major local impact on Chaffee County and the local Schools.
Additional note: A Key deliverable for this item will be to develop an increased sense of pride in the schools resulting in stronger financial support and programming with increased community attendance at school events.
# 2: Strengthen Local Day Care and After School Care opportunities. # Action Plan Parties Responsible Timeline
1 Change the residential daycare (8 or less children) regulations from a conditional use to a permitted use to encourage business opportunities and expansion of services. Expanded facility for the Boys and Girls Club, identify collaborators for shared resources. See County-wide issues. Salida Councilman Hugh Young. 60 days

Councilman Young will introduce to Town Council and Planning and Zoning Commission for consideration of the business use change. Parents of club members, school staff, Superintendent, city council representative, Southern Chaffee County Build-a-Generation, Family Youth Initiatives.
2 3
Bob Christiansen,
90 days
#3: Expand Public Transportation opportunities and services in Chaffee County. (see county wide issues) # 4: Involve and educate the public on the importance of land use as it relates to quality of life, economic development and the future of the Chaffee County community. # Action Plan Parties Responsible Timeline Resources/Comments: Technical, Funding, etc.
1 This is an issue of importance that needs to have future attention. TBD TBD
County Family Support & Quality of Life:
TEAM Facilitators: Stephanie Steffens & Clark Becker Local Leaders: Christy Culp & Nancy Mallott
# 1: Develop a county wide shared vision for future growth and ultimate build-out including open lands, preserving history, water rights for future development. # Action Plan Parties Responsible Timeline Resources/Comments: Technical, Funding, etc.
1 Build Collaboration Ranchlands Project Municipalities and County WCSF (Western Community Stewardship Forum) Upper Arkansas Land Trust Upper Arkansas Conservancy District Developers / Realtors Chaffee County Heritage Area (all Heritage Groups) Chambers and Visitors Bureau State Land Boards, Public Lands (BLM. FS)
2 3 4
Finish IGAs Finish Zoning & Land Use Plan Review visions, comprehensive plans, and other assessments of all groups, identify commonalities, and summarize into one. Also identify groups without a vision and help them identify one. Bring all groups together to discuss the summary and accept a total vision. CELEBRATE! Hold a party to celebrate this success!
5 6
Elected Officials & Staff Elected Officials & Staff Outside entity needs to do this. College student through CSU/DOLA program. Cara Russell, Don Riemer and the WCSF Committee will take the lead for follow through Cara Russell, Don Riemer, working with WCSF & Vision 2020 Cara Russell with Vision 2020
1-1-07 7-1-07
6-30-06 12-1-06 1-1-07
Call Diana Laughlin to initiate. Complete Report
Jan. 07
# 2: Development or expand additional daycare capacity, county wide. # Action Plan Parties Responsible Timeline
1 Form a partnership with CMC to conduct a capacity and needs inventory, as well as profitability study. Host workshops to encourage more daycare providers to open, dispel myths, and help them through the process of implementation and accreditation. Bob Christianson 9-1-06 September Winter 06

Initial Contact Report at Family Forum in BV also through Build a Generation and Headstart.
Bob Christianson with CMC
# 3: Sustainability of Colorado Mountain College, Chaffee County Campus. # Action Plan Parties Responsible Timeline
1 Approach the CMC Foundation to determine how to build community support. Karen Dills with call Susanna Spalding to arrange a meeting. Karen & Jim Wilson to sit down with foundation committee. 6-30-06

Economic Benefits of CMC to Chaffee County. Development of specific workforce programs such as building trades and technology.
# 4: Develop an organization to facilitate use of resources for affordable/workforce housing, based on the upcoming assessment. # Action Plan Parties Responsible Timeline Resources/Comments: Technical, Funding, etc.
7
Research need for such organization and options, how to form, operate, either County Housing Authority or a County Housing Advisory Committee that would work with UAACOG as the Regional Housing Authority.
Ryan Mahoney & Jeff Ollinger
9-30-06
Dept. of Housing, DOLA, Jim Hutchinsons son-in-law.
# 5: Develop and Expand Public Transportation Services within Chaffee County # Action Plan Parties Responsible Timeline Resources/Comments: Technical, Funding, etc.
1 2 Identify need and validate the expansion of services and its cost. Develop a marketing / PR campaign to educate the community on service need and availability. Neighbor to Neighbor and County Transportation Committee Same as above 1-07 County, City Councils, Community Members, Seniors and others that provide services.
Chaffee County
2010 CEDS
Prepared by Southern Colorado Economic Development District 1104 North Main Street Pueblo, CO 81003 719-545-8680
Table of Contents
Chaffee County ...................................................................................................................................................... 3 Transportation ....................................................................................................................................................... 4 Population Trends ................................................................................................................................................. 5 Population by Race ............................................................................................................................................ 5 Chaffee County Prison Population ..................................................................................................................... 6 Population by Age ............................................................................................................................................. 6 Population by Community ................................................................................................................................. 6 Poverty .................................................................................................................................................................. 7 Personal Transfer Receipts ................................................................................................................................ 7 Housing.................................................................................................................................................................. 8 Housing Statistics............................................................................................................................................... 8 Foreclosure ........................................................................................................................................................ 8 Education............................................................................................................................................................... 9 Agriculture ........................................................................................................................................................... 10 Travel Impact ....................................................................................................................................................... 11 County Government ............................................................................................................................................ 12 Retail Sales ...................................................................................................................................................... 12 General Revenue and Expenses ....................................................................................................................... 12 Revenue by Source .......................................................................................................................................... 13 Local Economy ..................................................................................................................................................... 14 Labor Force ...................................................................................................................................................... 14 Employment by Sector..................................................................................................................................... 14 Wages .............................................................................................................................................................. 15 Median Household Income .............................................................................................................................. 16 Per Capita Personal Income ............................................................................................................................. 16 Proprietors ...................................................................................................................................................... 17 Strategic Planning ................................................................................................................................................ 18 Community Assessment .................................................................................................................................. 18 Community Survey .......................................................................................................................................... 20 County Development Strategy ......................................................................................................................... 25 Bottom Up Economic Development Strategy ................................................................................................... 31
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Chaffee County
Chaffee County is centrally located in Colorado on the eastern slope of the Rocky Mountains. The county is 1,014 square miles with a population density of 16.9 per square mile. The average elevation is 7,500 feet. Established in 1879, the county was named after the first Colorado U.S. Senator, Jerome Chaffee. Chaffee County is sometimes referred to as one of the Fourteener Regions because it features fifteen peaks reaching 14,000 feet. Nearly 80% of the County is in public ownership, with the Pike National Forest on the east and the San Isabel National Forest on the west. The huge tracts of public land in the form of long established national forests and the Arkansas Headwaters Recreation Area have resulted in an economy with a strong focus on outdoor recreation, retail sales and services.
County Commissioners: Dennis Giese Dave Potts Frank Holman County Seat: Salida
Legislative Districts: Congressional District: Senate District: House District:
5 5 60
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Transportation
CDOT State Travel Map
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Population Trends
The Department of Local Affairs (DOLA) estimates the 2011 population of Chaffee County at 17,829, which is approximately .34% of the States population. DOLA estimates, from 2007 to 2011, the population for Chaffee County will increase by approximately 5% and the State by 7%.
Chaffee County Population

20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000
0
1990 1991 1993 1995 1996 1998 2000 2001 2003 2006 2008 2011
1992 1994 1997 1999 2002 2004 2005 2007 2009 2010
Data retrieved from State Demography Office-DOLA http://www.dola.state.co.us/demog_webapps/profile_county 5/18/2011
The 2010 Census reports Chaffee Countys population has steady growth, with very little out migration. Chaffee County currently shows its highest population in 2010 at 17,809 residents.
1880 6,512 1890 6,612 1900 7,085 1910 7,622 1920 7,753 1930 8,126 1940 8,109 1950 7,168 1960 8,298 1970 10,162 1980 13,227 1990 12,684 2000 16,242 2010 17,809
Population by Race The 2010 Census reports 93.2% of Chaffee Countys population is White, 1.5% African American, 1.1% American Indian and 4.2% reporting other or two or more races.
2006 White Alone or in Combination Black or African American Alone or in Combination American Indian & Alaska Native Alone or in Combination Asian Alone or in Combination Native Hawaiian & Other Pacific Islander Alone or in Combination Some Other Race Alone or in combination with one or more races Two or More Races 16,137 273 210 83 8 207 N/A 2007 15,975 283 208 93 8 214 N/A 2008 16,144 300 222 98 8 223 N/A 2009 16,355 292 214 81 8 206 N/A 2010 16,598 275 192 106 9 345 284
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Chaffee County Prison Population As we review population statistics, it is important to remember that prison populations are included in the data. The prison census can distort the assessment because prisoners rarely require the same community services as residents. In 2010, approximately 6.62% of the population was incarcerated.
Private Prisons Buena Vista Correctional Facility Buena Vista Minimum Center Total
Colorado Dept. of Corrections http://www.doc.state.co.us 8/4/2010
Dec-01 811 288 1,099
Dec-02 825 286 1,111
Dec-03 825 288 1,113
Dec-04 822 288 1,110
Jan-05 814 284 1,098
Jan-06 823 288 1,111
Jan-07 815 286 1,101
Jan-08 917 286 1,203
Jan-09 947 291 1,238
Jan-10 872 290 1,162
Population by Age DOLA estimates the median age for Chaffee County at 45.1, with an average life expectancy at age 80.1. The chart below represents the age distribution as reported by the Census. Chaffee Countys population reflects an aging population. The 2010 Census shows the largest increase in the age group between 50 and 69 compared to 2000 where the largest age group was between the ages of 35 and 54.
http://www.factfinder.census.gov 6/29/2011
Population by Community The 2010 Census reports the largest portion of the population lives in the unincorporated areas. The second most populated area is Salida, the County seat.
2000 Buena Vista Poncha Springs Salida Unincorporated Area Total 2,195 466 5,504 8,077 16,242 2001 2,254 514 5,478 8,164 16,410 2002 2,317 512 5,428 8,389 16,646 2003 2,352 606 5,315 8,521 16,794 2004 2,393 627 5,263 8,663 16,946 2005 2,431 642 5,225 8,724 17,022 2006 2,441 640 5,138 8,765 16,984 2007 2,491 666 5,151 8,930 17,238 2008 2,535 728 5,175 8,965 17,403 2009 2,573 736 5,194 9,101 17,604 2010 2,617 737 5,236 9,219 17,809
2000 & 2010 Data from Census Bureau http://factfinder.census.gov 2001 - 2009 DOLA Estimates http://dola.state.co.us 8/17/2011
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Poverty
In 2009, Kids Count reported 35.4% of school age children qualified for free/reduced lunch compared to 38.4% in the State and 17.6% of children under 18 years of age were living in poverty compared to 16.6% in the State. Chaffee County poverty levels have been above the State, but below the Nation for most of the last two decades. Chaffee County has the lowest level of poverty in the District.
Percent of Chaffee Population in Poverty

16.0% 14.0% 12.0% 10.0% 8.0%
6.0%
4.0% 2.0% 0.0% 1989 1993 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 United States Chaffee Colorado
The US Census Small Area Income and Poverty Estimates report 12% of Chaffee Countys population lives in poverty compared to 12.6% in the State and 14.3% in the Nation.
US Census-Data for 1996 is not available 5/16/2011
Personal Transfer Receipts Federal programs attempt to alleviate poverty and are tracked as transfer payments. In 2009, federal transfer payments were slightly over $7,000 for every man, woman and child in Chaffee County. Approximately 90% of the total transfer payments are from retirement programs like Social Security. Income maintenance (TANF) accounts for almost 7% of total payments.
Per Capita Personal Transfer Payments

$8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0
1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Total Per Capita Current Transfer Receipts Per capita unemployment insurance benefits
Per capita income maintenance Per capita retirement and other
Bureau of Economic Analysis www.bea.gov 8/18/2011
Additional reports affecting poverty reveal: Food assistance program participation in 2010 is just under 6% In 2007, 21% of the population was uninsured, compared to the State at 18%
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Housing
The average household size is 2.26 compared to an average family size of 2.77.
Household Type Household Population (July) Housing Vacancy Rate Total Households Total Housing Units Vacant Housing Units
http://www.dola.state.co.us 11/9/2010 2010 data from - http://factfinder2.census.gov 7/21/2011
2005 15,529 28.77 6,854 9,623 2,769
2006 15,463 30.33 6,822 9,792 2,970
2007 15,614 31.02 6,887 9,984 3,097
2008 15,817 31.69 6,975 10,211 3,236
2009 15,956 32.03 7,034 10,348 3,314
2010 16,373 24.1 7,601 10,020 2,419
Housing Statistics The 2000 housing affordability index as reported by Headwaters states, in order to purchase the average house a person in Chaffee County needed to earn a little over $43,000; the median household income was approximately $34,000. Over 80% of housing is valued between $100,000 and $500,000; approximately 90% of rental housing costs between $330 and $1,500. Approximately 65% of housing is less than 40 years old.
Year Structure Built 2005 or Later 2000 to 2004 1990 to 1999 1980 to 1989 1970 to 1979 1960 to 1969 1950 to 1959 1940 to 1949 1939 or earlier
2005-2009 American Community Survey http://factfinder.census.gov 8/12/2011
Total 223 575 2015 1,259 2,209 978 599 224 1,739
Percent 2.3 5.9 20.5 12.8 22.5 10.0 6.1 2.3 17.7
Building permit requests have increased from 2009. However, they are less than reported in previous years. There were 101 requests reported by the US Census in 2010.
According to the National Low Income Housing Coalition, affordable rent represents the generally accepted standard of not spending more than 30% of gross income on gross housing costs. The fair market rent in 2011 for Chaffee County is $683 for a two bedroom home. In order to afford rent at this amount, a household in Chaffee County must earn $13.13 per hour or $27,320 annually; at minimum wage, it would take 1.8 wage earners in the household. Foreclosure
2006 Foreclosure Filings Sales
http://www.dola.state.co.us 7/19/2011
2007 62 27
2008 45 9
2009 78 41
2010 78 33
60 30
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Education
K-12 education is provided by two districts in Chaffee County. Higher education is available locally at Colorado Mountain College (Junior College) and four year and post graduate universities are available outside of Chaffee County in Pueblo, Gunnison and Colorado Springs.
Chaffee County School Enrollment

2,300 2,250 2,200 2,150 2,100 2,050 2,000 1,950 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
School enrollments have decreased 10% in the last decade. However, total enrollments are steady and showing a slight increase in the last three years.
A noticeable trend seen throughout many counties in the SCEDD region is the decline in school enrollments, compared to the number of school age children living in the County. The 2010 Census reports there are 2,527 school age children (5-19 years of age) living in the county and the Department of Education reports there are 2,056 students enrolled in Chaffee County schools. County residents believe one reason for the decline is because there are fewer families with school age children.
Enrollment 2000 Buena Vista R-31 Salida R-32 Total 1,047 1,223 2,270 2001 1,043 1,176 2,219 2002 993 1,120 2,113 2003 980 1,171 2,151 2004 968 1,184 2,152 2005 986 1,116 2,102 2006 988 1,124 2,112 2007 1,012 1,051 2,063 2008 992 1,030 2,022 2009 969 1,085 2,054 2010 985 1,071 2,056
The 2005-2009 Census American Community Survey estimates 90.9% of the total population 25 years of age and older has attained a high school diploma or higher; 29.5% have attained a Bachelors Degree or higher.
Graduation Rate 2000 Buena Vista R-31 Salida R-32 Drop Out Rate 2000 Buena Vista R-31 Salida R-32
www.cde.state.co.us 5/26/2011
2001 94.70 90.40
2002 96.10 94.60
2003 91.70 93.80
2004 86.20 95.50
2005 94.10 93.90
2006 75.00 89.50
2007 71.10 89.00
2008 80.70 89.30
2009 80.00 82.90
2010 77.1 85.2
88.90 95.60
2001 0.9 1.7
2002 1.1 1.4
2003 0.7 0.4
2004 1.5 1.0
2005 1.9 1.4
2006 0.5 0.8
2007 0.0 1.6
2008 0.0 2.2
2009 0.2 1.4
2010 4.2 0.3
0.0 1.0
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Agriculture
In 2007, Chaffee County had 79,405 acres of agricultural land. There are 223 farms, with an average of 356 acres. According to the 2007 Agricultural Census, Chaffee Countys largest crop harvested is forage and top livestock is cattle and calves.
Top Crops Harvested in Acres

Apples Forage Hay Nursery Stock Short-rotation woody crops
4
2007
12,179
2002 7,680
1997
10
16,148
Top Livestock Inventory-Quantity

Goats Layers 259 2007 362 Llamas Horses and Ponies Colonies of Bees Cattle and Calves Sheep and Lambs
963
7,928
2002
150 181 549 784
6,590
1997
83 182 231
1,101
11,141
Out of sixty four counties in Colorado, Chaffee County ranked tenth in Elk. The number of elk is not available.
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Travel Impact
Travel and tourism is a $13 billion industry in the State of Colorado.
Travel Spending ($M)

$60.0 $50.0 $40.0 $30.0
$20.0
$10.0
$0.0
1996 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 (P)
The Office of Economic Development and International Trade and Dean Runyon Associates report fifty three million dollars was spent by visitors to Chaffee County in 2009.
Not only does travel affect the revenues to a community, but jobs must be created to maintain services to visitors. Approximately 930 full and part time jobs were attributed to travel and tourism in Chaffee County in 2009.
Travel Impact (Jobs)

1,050
1,000 950
900 850 800
750
1996 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 (P)
1996 Travel Spending ($M) Earnings ($M) Employment (Jobs) Local Taxes ($M) State Taxes ($M)
Dean Runyan Associates http://www.deanrunyan.com 8/10/2010
1998 41.0 13.5 1,020 1.3 1.3
1999 41.8 13.6 980 1.4 1.3
2000 45.0 14.5 980 1.5 1.4
2001 47.4 15.4 990 1.6 1.4
2002 47.1 15.4 990 1.6 1.4
2003 48.3 15.8 980 1.6 1.4
2004 50.7 16.4 1,000 1.6 1.5
2005 45.2 14.7 860 1.5 1.4
2006 48.8 15.5 870 1.6 1.5
2007 54.2 17.3 910 1.8 1.6
2008 55.2 17.9 890 1.8 1.6
2009 (P) 53.4 18.6 930 1.8 1.8
39.0 12.6 1,030 1.3 1.2
P= Preliminary
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County Government
Chaffee County has a 2% sales tax and a 1.9% lodging tax; Colorado has a 2.9% sales and use tax. Retail Sales As illustrated below, gross sales and retail sales remained fairly steady, with a peak in 2008. Although sales have decreased in the last two years, it is important to note sales are above the 2002 figures.
In thousands of dollars
Chaffee County Retail Sales

$500,000 $450,000 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 2002
Dept. of Revenue http://www.colorado.gov 7/12/2011
Gross Sales Retail Sales Taxable Sales
2003
2004
2005
2006
2007
2008
2009
2010
General Revenue and Expenses The financial trend for Chaffee County steadily increased over the last decade. Generally revenues exceeded expenses, until 2008. This may be due to the recession which began in 2007.
Chaffee County Financial Information

$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Revenues
General Operating Expenses
Other Debt
Colorado Division of Local Government http://www.dola.state.co.us/cedis.html 10/19/2010
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Revenue by Source Chaffee County maintains a fair balance of revenues between sales and use and property taxes, with a steady increase in both. Keep in mind that both revenue sources are impacted by tourists and ownership of property by those who have a primary home outside Chaffee County.
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Local Economy
Labor Force Chaffee County has experienced an unstable unemployment rate for over twenty years, ranging between three and six percent. Colorados 2010 unemployment rate was 8.9%, while Chaffee County was 7.9%; the highest unemployment rate in over two decades.
Chaffee County Unemployment Rate Compared to State
10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%
1990
1991
1995
1996
1997
1998
2002
2003
2004
2005
2009
Chaffee County
Colorado
Colorado Workforce/LMI Gateway http://Imigateway.coworkforce.com 8/23/2011
Employment by Sector
Industry Agriculture Mining Utilities Construction Manufacturing Wholesale trade Retail Trade Transportation and warehousing Information Finance activities Real estate Professional and business services Management of companies and enterprise Admin and waste Education Health Services Arts Accommodation and food Other services, except public administration Government 2001 297 12 42 992 166 181 N/A 83 N/A 275 341 435 3 N/A N/A 401 463 1,196 467 1,683 2002 288 9 40 996 246 188 N/A 80 100 291 364 429 3 N/A 59 436 415 1,149 500 1,670 2003 298 11 38 1,008 215 193 1,187 91 N/A N/A 370 422 N/A 152 53 446 438 1,163 N/A 1,632 2004 269 12 39 995 206 202 N/A N/A N/A 317 384 459 N/A 164 N/A 517 468 1,127 515 1,631 2005 258 23 41 972 155 197 N/A N/A N/A 328 424 478 N/A 162 93 519 521 1,144 525 1,675 2006 246 24 42 998 161 N/A 1,233 112 113 335 378 510 2 167 74 546 524 1,186 544 1,672 2007 211 22 43 1,060 179 216 1,247 99 112 301 373 546 N/A 160 76 559 538 1,174 600 1,706 2008 220 20 46 1,068 183 223 1,268 121 119 289 383 549 N/A 196 96 556 573 1,196 583 1,729 2009 209 N/A 53 951 206 192 1,235 101 111 291 371 513 N/A 187 104 N/A 534 1,141 569 1,756
Department of Local Affairs http://www.dola.state.co.us/demog_webapps/jobs_sector_naics 1/7/2011
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2010
1992
1993
1994
1999
2000
2001
2006
2007
2008
Wages Wages in Chaffee County are lower that the State average. In 2010, weekly wages, as reported by the Colorado Workforce, for Chaffee County were 37% below the State; with Chaffee County at $630 and the State at $1,001. The Bureau of Economic Analysis reports average annual wages for Chaffee County in 2009 were 37% below the State; with Chaffee County at $30,048 and the State at $47,622.
Average Annual Wages
Industry Natural Resources & Mining Construction Manufacturing Trade, Transportation & Utilities Information Financial Activities Professional & Business Services Education & Health Services Leisure & Hospitality Other Services Public Administration
Bureau of Labor Statistics www.bls.gov 1/7/2011
2005 $17,710 $32,693 $23,411 $24,248 $30,466 $32,276 $30,518 $27,487 $11,587 $16,840 $25,377
2006 $1,819 $36,331 $22,421 $25,055 $31,611 $32,263 $37,735 $29,113 $12,174 $17,080 $25,828
2007 $18,571 $36,158 $23,468 $26,554 $34,027 $33,362 $34,870 $30,531 $13,179 $17,920 $27,082
2008 $20,468 $35,186 $25,763 $27,808 $33,247 $34,825 $33,730 $30,785 $14,240 $19,168 $30,244
2009 $19,775 $38,199 $25,976 $27,255 $32,183 $36,467 $31,890 $30,229 $13,659 $19,603 $31,139
*ND= Non Disclosable-Data does not meet BLS or State Agency disclosure standards.
Average Weekly Wages

Industry Agriculture, Forestry, Fishing & Hunting Mining Utilities Construction Manufacturing Wholesale Trade Retail Trade Transportation and Warehousing Information Finance & Insurance Real Estate and Rental and Leasing Professional & Technical Services Administrative and Waste Services Educational Services Health Care and Social Assistance Arts, Entertainment, and Recreation Accommodation and Food Services Other Services, Ex. Public Admin Public Administration
Colorado Work Force/ LMI Gateway http://Imigateway.coworkforce.com 1/7/2011
2005 $280 $554 $1,105 $634 $450 $555 $421 $694 $545 $699 $494 $600 $481 $450 $578 $249 $213 $323 $733
2006 $248 $655 $1,168 $701 $430 $593 $433 $689 $575 $669 $533 $786 $471 $458 $603 $262 $224 $329 $747
2007 $257 $674 $1,157 $697 $450 $600 $462 $760 $615 $706 $529 $686 $575 $464 $635 $282 $243 $344 $735
2008 $300 $0 $1,207 $686 $496 $720 $471 $732 $600 $754 $535 $677 $569 $479 $642 $324 $255 $368 $807
2009 $294 $0 $1,245 $740 $499 $710 $457 $774 $583 $788 $568 $647 $528 $502 $669 $273 $259 $378 $805
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Median Household Income

2000 Chaffee County Colorado $35,706 $47,505 2001 $34,930 $48,483 2002 $35,366 $48,060 2003 $35,719 $49,248 2004 $37,226 $50,105 2005 $40,120 $50,841 2006 $39,263 $52,265 2007 $42,464 $55,517 2008 $45,916 $57,184 2009 $42,602 $55,735
http://www.census.gov-SAIPE 1/11/2011
Per Capita Personal Income The per capita income for Chaffee County is 22% below the State average. Per capita income for Chaffee County in 2009 was $32,766 compared to the State average of $41,895.
Per Capita Personal Income

$50,000 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0
1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
United States
Bureau of Economic Analysis www.bea.gov 8/17/2011
Chaffee County
Colorado
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Proprietors In the last two decades, Chaffee County has seen an increase of nonfarm proprietors and proprietors income. The number of nonfarm proprietors has increased almost 60% since 1990.
Bureau of Economic Analysis 8/17/2011
Farm income has remained in the negative over the last two decades. Nonfarm income peaked in 2006 and started showing a decrease at the beginning of the recession.
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Strategic Planning
The 2010 CEDS has been created to provide a road map for coordinating economic activities, monitoring and evaluating long and short term economic goals and encouraging economic growth in Chaffee County over the next five years and beyond. The plan is based on the data and analysis of the countys economy, community needs and input, local government input and the Colorado State Governors Bottom Up Plan. The overall goal is to diversify the economy while supporting local businesses, stabilize the population and create a foundation for future growth and prosperity in the County. Community Assessment The first step in creating the plan is to assess the communitys strengths and weaknesses. Information gathered from town hall meetings, local leaders and the Bottom Up Plan were utilized to create the list below. Two town hall meetings were held in Chaffee County; results from the meetings have been combined for the purpose of this CEDS. Strengths Central location Mild climate Friendly/safe community Highway access Excellent health care system Local economic development groups Airport College Strong education system Strong volunteerism Beauty Water supply Educated population Strong retirement community Diverse community/resources Recreation Steam Plant History Art community
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Weaknesses High cost of living Low wages Limited financial resources Isolated community Lack of telecommunications High housing costs for value received Lack of business diversification Lack of support for entrepreneurs Seasonal employment/businesses Shrinking middle class Declining school enrollments Local regulation process Second home residents Economy dependent on tourism Opportunities Improve the financial viability and operations at both airports Indentify clusters and build on them Market railroad accessibility Create a sports facility Bent Tree Golf Course/Friends Ranch Improve infrastructure at industrial parks throughout the County Use rodeo grounds for tourism Create incentives to attract business Improve Highway 24 corridor Improve telecommunications/broadband Create multiuse facility for youth Streamline the process for local regulations Utilize the rivers/parks to enhance quality of life and promote tourism throughout the County Threats Beetle kill spreads to Chaffee County Limiting access to public lands Increased interest rates Closure of major employers Retirement of ranchers Sale of water rights Decline in PILT funding School/College closures Increase of second homes Closure of trails/increased fees for recreation Single interest to create a low bar amendment promoting construction changes Transmission capacity
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Community Survey SCEDD solicited community participation during the town hall meetings utilizing the Audience Response System. A Power Point presentation provided demographic data and analysis, with questions to poll the audience on various issues. Two meetings were held in Chaffee County, in Salida and Buena Vista. Results from each of the town hall meetings have been combined and presented in the aggregate below.
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The following question was only asked in Buena Vista during a discussion on increasing economic development. After explaining the success of another community by utilizing a dedicated sales tax for economic devleopment the audience was polled. The result was astonishing, considering the current economy and the perception of no new taxes. The community wants growth and they are willing to dedicate a tax to do just that!
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County Development Strategy It is no surprise Chaffee Countys economy relies heavily on tourism dollars. Located in the Upper Arkansas Valley, Chaffee County is bordered by several mountain ranges and the Arkansas River flows southeast between the Sawatch and Mosquito Ranges. Local leaders continue to focus on researching opportunities to maintain a steady economy utilizing available resources and creating jobs. Resources include recreational opportunities utilizing the mountains and river, historical sites, strong transportation system, health care system, available land and energy development. As the headquarters for the Arkansas Headwaters Recreation Area, Chaffee County is well positioned for tourist attractions and recreational opportunities. The high mountain peaks and Arkansas River in Chaffee County provide recreational opportunities for hikers, fishermen, mountain climbers and river rafters. Three hot springs provide a relaxing atmosphere in the Rocky Mountains. In addition, the proposed Over the River project will provide a temporary new attraction in the community. The Chaffee County Heritage Area provides a glimpse into the history and culture of Chaffee County. Chaffee County is a crossroads for three highways (US Highways 24, 50 and 285) providing sufficient access both in and out of the County. There are two well developed airports; one in Salida and one in Buena Vista. Shuttle buses provide transportation to cities within the county, Alamosa, Gunnison, Pueblo and Denver. Chaffee County has recognized the need to be competitive in todays market. The evolution of businesses dependent on technology has prompted Chaffee County to take an aggressive approach to increasing broadband services. The Chaffee County Economic Development is working with the Upper Arkansas Counties and the COG to create a regional broadband system within the Upper Arkansas COG. Participation and support for this program have been phenomenal. Once the system is in place, Chaffee and the surrounding counties will be well positioned to compete for technology based businesses. Chaffee County is exploring opportunities in renewable energy. Geothermal energy is a significant opportunity for Chaffee County to pursue. In addition, projects are underway to utilize renewable energy in community and government facilities. Chaffee Countys goal is to become the first self sufficient area in Colorado. A notable accomplishment is the first LEED Certified building in Salida, the Salida Head Start building. Chaffee County has maintained a fairly stable economy, as demonstrated throughout the CEDS. This has afforded the County the opportunity to continue growing. Projects completed since the 2002 CEDS include: Increased marketing of the area through the Visitors and Convention Bureau Expanded sanitary services to the Buena Vista Department of Corrections Completed a study of geothermal energy, which indicated the water is among the hottest in the State. Both Salida and Poncha Springs are exploring options and opportunities. Work has begun to improve infrastructure at the Buena Vista Industrial Park A study is beginning to enhance the effectiveness of fire services. A light has been placed at the intersection of highways 24 and 285 to control traffic and improve safety The multipurpose slab has been completed in Buena Vista Downtown Building Rehabilitation Plan established and Visitors Center upgrade completed (Poncha Springs) A business incubator is now located in the historic Touber Building in Salida and is operated by the Small Business Development Center. The Chaffee County Housing Trust was established to provide affordable housing - 25 -
Creation of the Salida Mountain Trails System which provides access to recreation directly from the town Implementation of the Property Maintenance Code which will improve Salidas historic downtown business district Completion of Highway 50 corridor improvements through Salidas business district Phase I of CR 120 Trail was completed between Salida and Poncha Springs. Funding has been secured for Phase II with construction anticipated in 2012 Through and Intergovernmental Agreement (IGA), Salida and Poncha Springs have agreed that Salida is the regional wastewater provider. Salida has taken over the collection system in Poncha Springs assuring future growth potential for Poncha Springs Leaders in the community will continue to expand on the available resources to create new job opportunities for residents and draw in tourists. The County will support local businesses and agriculture to maintain diversity of the economy. Specific projects have been listed in this CEDS to provide a guide to community leaders as they move forward with their economic goals.
Goal:
Economic Development-Expanding on current resources and creating new jobs is a primary focus for county leaders. Infrastructure, downtown and industrial park improvements will increase the viability of current businesses and put Chaffee County in a position to compete for large employers. Increase broadband availability and connectivity
Project 1:
Chaffee County Economic Development Corporation is taking the lead on implementing a strategy to increase Internet connectivity throughout the County by establishing partnerships with appropriate entities, and conducting outreach and education to the business community, public anchor institutions, and the community. Project 2: Improve Buena Vista industrial park
The Town was not successful in obtaining a Tiger II grant for paving Gregg Drive; however, it will continue to pursue matching funds for development of connecting infrastructure (water and roads) along this important transportation connection and focal point of industrial economic development. This may also provide an opportunity for public private partnerships. Additional improvements are expected as new developments arise. Project 3: Downtown building rehabilitation in Poncha Springs and Buena Vista
Poncha Springs is creating a core commercial area for the community and Buena Vista is working on rehabilitation of the downtown as part of the master plan. The downtown is an important economic driver for communities. Rehabilitation of the downtown will draw in business and increase job opportunities in the communities. Project 4: Natural Resource Center
This is an immediate need for the community. The resource center has been a project in the works for over eight years. The City of Salida has approved the transfer of the land to the Natural Resource Center and they are ready to move forward with development plans. As the project progresses, infrastructure will be extended to the site, opening up an additional 176 acres of the Vandaveer Ranch for potential development.
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Project 5:
Business retention and expansion
The Small Business Development Center was incorporated into the remodel of the Touber City/County Building in Salida. The SBDC and CCEDC are working in partnership to implement a business retention and expansion program. Project 6: Economic gardening
The Small Business Development Center was incorporated into the remodel of the Touber City/County Building in Salida. The SBDC and CCEDC are working in partnership to implement economic gardening program in connection with the business retention program.
Goal:
Improve Community Facilities and Services-Improvements to the community facilities and services will increase the quality of life for residents and entice new developments. Water and wastewater facilities improvements
Project 1:
The District, City of Salida and Town of Buena Vista are anticipating additional state mandated standards and nutrient regulations that will require compliance. The City of Salida began construction in the fall of 2011 on a new $17 million wastewater treatment plant serving both Salida and Poncha Springs. Project 2: Fire protection improvements
The County, as the lead agency, is currently completing an assessment of emergency services to look at ways to improve the effectiveness of the services that are currently being provided. All providers in the County are participating and helping fund the assessment. Project 3: Buena Vista Municipal building restoration
The Colorado Department of Local Affairs (DOLA) recently funded an assessment of the Police Department and City Hall, which concluded the existing facilities are inadequate. Restoration of funding support for development of municipal facilities is important going forward. A new municipal building will also increase the need for better Internet connectivity. Project 4: Upper Arkansas multi-use project and water storage coalition
The District is in the process of developing an Upper Arkansas multi-use project and water storage coalition to undertake needed water development in the Arkansas Basin. The multi-use project and storage coalition resulted from a needs assessment initiated by the State and undertaken by water roundtables to determine the water demand gap. Project 5: County fairgrounds upgrades
Work needs to continue on the upgrade of the existing grounds and infrastructure, and completion of work on the second exhibit building. In order to attract more events, Buena Vista is interested in improving its equestrian facility on the large park parcel known as the Buena Vista Rodeo Grounds.
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Goal: Project 1:
Energy and Natural Resource Development Geothermal development
Geothermal development remains under study and is part of the County Energy Now Project. The potential exists for electrical power generation through geothermal development. The City of Salida is continuing with geothermal exploration at their hot springs site. Project 2: Agricultural geothermal development
The Town of Poncha Springs has open agricultural land for development. Project 3: Preservation of open space & trail development
The Arkansas Headwaters Recreation Area (AHRA) is collaborating with governmental agencies and private land owners. The goal is to develop a planning document and secure funding sources that will help preserve open space and the construction of a trail system that would connect residents and visitors to Chaffee County with BLM, Forest Service and AHRA recreation sites and trail systems. The Town of Buena Vista is interested in further development of the River Park, possibly utilizing a public private partnership. Project 4: Hotel/Motel geothermal recreation facility at Poncha Springs
Currently, studies are underway to look at possible energy production. The Town would be interested in any residual opportunities for development.
Goal: Project 1:
Improve Transportation Buena Vista and Salida Airports
Discussion regarding governance of the airports and strengths, weaknesses, opportunities, threats (SWOT) analysis has been conducted. The Town of Buena Vista is considering a number of opportunities to develop the airport. They include hangar development, high altitude testing, serving as a hub for regional operations, and emergency services. Natural resources management, tourism, and further business development are also under consideration. Any curtailment of federal funding will have a drastic impact on one or both airports. Project 2: Multi-modal transportation
A Transportation Advisory Board contracted to have a Transit Expansion Advisory Study for public transportation service in Chaffee County. The results of the study are being discussed. The City of Salida is supportive of a commuter shuttle from Highway 50 to downtown. Bike routes and pedestrian access, in addition to public transit are an important consideration. The daily inter-city bus route between Gunnison and Chaffee County on its way to Denver is dependent on the availability of grant subsidies. Service has been expanded to include routes from Salida to Alamosa and Pueblo. Public transportation between Buena Vista and Salida is also an important consideration. Project 3: Highway Upgrading (Highway 24/Highway 50)
Although improvements have been made, highway upgrading is part of an ongoing highway corridor plan that includes a highway diet in Poncha Springs and consideration of creating a core commercial area for those working in the community. The intersection remains on the State intersection improvement list. Poncha Springs is also discussing an Intergovernmental Agreement with the State for a temporary stop - 28 -
light if the Over the River (OTR) project is approved (Poncha Springs). The Town of Buena Vista is also working the State for possible funding to enhance Highway 24 with an emphasis on crosswalks. In Buena Vista, improvements to Highway 24 remain a top priority. The community is actively engaged in development of a Highway 24 Corridor Plan. Salida will implement Phase II of the Highway 50 Corridor Improvement Plan in 2012 and continues to work with CDOT for funding assistance to extend the improvements along the Corridor.
Goal:
Housing-The average value of a home is between $100,000 and $500,000. Providing adequate and affordable housing is vital to the community. Buena Vista housing
Project 1:
There is a general reference in the Town of Buena Vista Comprehensive Plan regarding affordable housing but no affordable housing policy. Habitat for Humanity is helping address the need for and adding to the mix of affordable housing for seasonal workers in conjunction with the Chaffee County Housing Trust. Also, the Department of Corrections from time to time hears about the lack of affordable housing. The issue is not just about affordable housing for buyers, but also for affordable rental housing. Project 2: Poncha Springs housing
Adequate inventories of affordable housing exist in Poncha Springs. The need is for affordable housing in certain locations near the business park. Project 3: Salida housing
Salida is working with the Housing Trust regarding affordable housing units.
Goal:
Increase Tourism and Recreational Opportunities-Tourism and recreation go hand in hand in Chaffee County. Recreational activities enjoyed by residents tend to be a draw for tourist. Therefore, it is no surprise tourism remains a centerpiece of the Chaffee Countys economy.
Tourism Developments: The County has opened a new visitors center at the junction of Highways 285 and 50, and the County Master Plan calls for the visitors center to become more of a destination center. Communities also continue to support development of the Collegiate Peaks Scenic and Historic Byway along US Highway(s) 24 and 285. Opportunities to create a shoulder season in order to have a year round tourist economy are also being pursued. The use of social media to promote the area is being utilized and will be part of the Broadband Project. Project 1: Poncha Springs Park for the physically challenged
A small park area is possible in the Little River Ranch development. Project 2: Buena Vista River improvements
Significant progress has been made and will continue in providing a mix of recreational facilities. Buena Vista continues to match private volunteer initiatives to improve and maintain whitewater features in the river. Buena Vistas River Park with its mix of recreational facilities is an important community asset that enhances the river experience for tourists and citizens alike. - 29 -
Project 3:
Salida River improvements
The City of Salida continues to expand the trail system in and around the City to serve visitors and the local community. Several new events have begun in the last few years including two marathons and multiple bike races that take advantage of the new and expanding trail system. Salida continues to work with the Union Pacific Railroad to improve river and trail access adjacent to downtown. Project 4: Salida Hot Springs Pool improvements
Salida Hot Springs pool has seen many upgrades and improvements in the last few years which have resulted in higher attendance by both the local community and visitors to the community. The City plans to continue with significant investment in both pool and facilities, and Centennial Park. Project 4: Buena Vista Recreation Facility Master Plan
Master planning for development of recreational facilities is a high priority for the community and a short term goal. Park amenities, connections to a regional trail system, a community and or recreation center and a performing arts facility are among important elements of the master plan.
Strategic planning in Chaffee County will be an ongoing process. Projects identified in the CEDS are long term, unless otherwise noted, and contingent on available funds. As projects are under taken and available funds are identified, adjustments may be necessary. Local leaders will work with their local economic development organizations as well as SCEDD, State and Federal sources to implement the plan and make adjustments as needed. Funding sources will be identified and pursued for individual projects. While some projects may not be eligible for EDA funds, USDA, DOLA, SBA, HUD, Private Foundations and Grants through the Governors office will be researched. In some cases, a regional approach may be more feasible. Most counties in Southeastern Colorado lack the funds for matching grants; therefore, a collaborative effort could be beneficial. In those instances, Chaffee County will work with other counties and regional planners to ensure continuity between all organizations. Chaffee County will report its progress to SCEDD to be included in the annual CEDS updates. As new opportunities arise, projects or adjustments will also be included in the updated CEDS. The State Bottom Up Economic Development Strategy is included as a supplement to the CEDS. Chaffee County will continue to work on the Bottom Up Strategy at the State level, while working on CEDS projects at a federal level. In any case, both strategies are vital to the economic growth of Chaffee County and should be considered complimentary to each other.
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Bottom Up Economic Development Strategy
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inventory what is already in the county!
La Plata County Comprehensive Plan Working Group, August 17, 2009 - Economic Vitality
Introduction
The August 17, 2009 working group meeting is focused on setting goals for the economic vitality comprehensive plan element. In order to minimize presentations by consultants, we have written the background materials for this meeting into this report to be read in advance, so that we can focus on charting goals instead of reviewing information. The economic vitality element of the comprehensive plan contains sub-topics for which we hope to have draft goals established by the end of our August 17 meeting: Economic development/small business development Workforce development Tourism Revenues/tax base On the one hand, economic vitality addresses the vitality of our economy, and on the other hand, it relates to the fiscal health of the La Plata County government and the municipalities, districts, and other entities providing public services and facilities. To inform our working group meeting, we have provided some background information on each of these two dimensions of economic vitality: Part One Economic Development and Tourism Part Two - County Government Fiscal Trends and Revenues Parts one and two provide background information and questions that we will use to initiate and guide our discussion. Please read the information and be ready to brainstorm some goals.
Part One - Economic Development and Tourism

The state of economic development today The field of economic development has evolved greatly in the past twenty or thirty years. For economic development professionals in rural areas today, smokestack chasing is considered a narrow approach and most advocate the support and fostering of existing businesses. Relying on recruitment of large industry from outside the region has shown great success in some places, but in many others, the increasing mobility of large industry and the web of outsourcing have contributed to tremendous boom-bust cycles. This has led to an increasing trend towards looking within rather than looking outside of the region for growth opportunities. For example, the now famous economic gardening program in Longmont, CO has evolved into a support system designed to create a favorable environment and provide competitive advantage to local entrepreneurs. The program director admits that they are far from understanding what makes economies tick, but are confident that they are on the right path. Locally, Region 9, the Fort Lewis College School of Business Administration, the Small Business Development Center at Fort Lewis College, and county-level economic development groups are partnering to provide targeted support programs in the Growth Company Initiative. This program is aimed at establishing regional cooperation among firms and providing support and information for specific
businesses that are making new jobs. The Durango Chamber of Commerce has been considering an investment into marketing software and information that would provide insights for local businesses usually only available to corporate-scale businesses. In short, economic development professionals in our area have been focusing on helping businesses help themselves. If a new business wants to locate here, the strategy is still to help them succeed in the transition given what the region has to offer. Who is working on economic development? There are several entities working to enhance economic vitality in La Plata County, see Attachment 1 for a catalogue of these entities and a brief recitation of their main philosophy and goals. What economically-oriented planning is in place today? Many communities and organizations have charted out visions and goals that relate to economic development. See Attachment 2 for a catalogue of the vision, core philosophy and goals of the various entities. This catalogue includes a summary of economically-related content in the La Plata County district plans and comprehensive plan. Also, see Attachment 3 for the policy portions of the Region 9 La Plata County Comprehensive Economic Development Strategy. Questions for our discussion: Given the array of entities actively working on economic development and the focus of the profession on helping existing businesses and entrepreneurs succeed, what is the role for county government in economic development? Are any of the goals stated in existing economic development plans suitable for the county comprehensive plan or can any of them be adapted to the county context? Are the vision, goals, philosophies expressed in the economic development plans and the mission of the organizations working on economic development aligned with the goals in the currently adopted district and comp plans? -andDoes the comparison provide guidance for setting economic vitality goals for a comp plan for county government?
Attachment 1 - Catalogue of Local Economic Development Entities Fort Lewis College Small Business Development Center Mission: Provide small business assistance, training, information, and leadership in activities which foster the successful growth and development of small businesses. Services: Provides complimentary one-on-one counseling, consulting and training for small businesses throughout Southwest Colorado. Business plans and cash flow projections, identifying financing options, business health 'checkups', marketing advice, and business management training. Ignacio Chamber of Commerce Mission: The Ignacio Chamber of Commerce supports the economic health of local businesses by working together for community success, advancing economic development and networking with citizens, governments, business and education organizations to achieve common goals. Services: Intergovernmental coordination, Visitor information, Networking and information for businesses, Economic development planning Market local events. Durango Chamber of Commerce Services: Networking, Personal & Professional Development, Advertising/Publicity; Buy-local support Customer/vendor referrals, Logistical assistance for businesses considering locating in La Plata County. Logistical assistance for businesses struggling to stay in La Plata County. Next steps: Buy a corporate-level marketing software/database for helping local businesses find vendors and analyze market opportunities and beat competition. Durango Tourism Office Services Tourism marketing Central reservations Events promotion Networking for tourist businesses Leadership for tourism economic development efforts
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Bayfield Chamber of Commerce Services: Tourism promotion, Visitor information, Networking and information for businesses, Market local events. Region 9 Economic Development Services: Financing and grants to assist small business retention, expansion and job creation. Administers the Colorado Enterprise Zone tax credit program. Provides economic development and transportation planning for local governments and communities. Provides technical assistance and information for businesses. LEAD Mission: The Mission of La Plata Economic Development Action Partnership (LEAD) is to set the direction and oversee the implementation of ongoing economic development in La Plata County that achieves the community vision for sustainable quality of life and the overall prosperity for the greatest number of citizens. Goals: Diversify the economy and further expand the economic base of La Plata County. Retain and create quality jobs with livable wages for the citizens of La Plata County. Ensure availability of adequate infrastructure and services necessary to accommodate desired economic growth. Enhance the quality of life and build wealth Durango Business Improvement District Mission: To help all types of businesses in the District by assisting with marketing special events, providing research on topics of concern to the District (facilities, special events, best practices), planning & development of new facilities and providing capital budget for equipment that helps support business in the district. Services: Downtown planning Downtown marketing Event promotion Capital improvements Visitor information
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Attachment 2 - Catalogue of Vision and Goals in Existing Economic Plans Region 9: La Plata County Comprehensive Economic Development Strategy, 2006 Vision: A healthy community that invests in sustainable systems while pursuing local economic development and environmental stewardship for the benefit of future generations who will call this place home. Goals: 1. Achieve a diversified, sustainable and growing economy in La Plata County that is compatible with the local environment and small town atmosphere. 2. La Plata County contains a vibrant, growing, and sustainable tourism industry. 3. Business mentoring and support will be available to expand and sustain local businesses. 4. A well-trained, skilled workforce will be available to support business employment needs. 5. The necessary facilities and programs are available to meet the socio-cultural needs of the community. 6. Adequate infrastructure, such as roads, water, electric, gas, Internet, telecom, etc; is ready and available for commercial use. 7. Support the completion of all projects listed in the La Plata County Community Development Action Plan. La Plata County Compass: Economic Vitality, 2008 Over-arching statement: La Plata County optimized partnerships with other governments and stakeholders to foster a diverse and stable economy. Goals: 1. Mitigate economic leakage / support local buying 2. Business attraction, enhancement and retention 3. Workforce development at all levels 4. Enhanced cultural, tourism and environmental attractions 5. Improved technological connectivity 6. Monitor and prioritize tax funding mechanisms Colorado Workforce Center Workforce Centers provide a variety of free services to assist employers and job seekers alike. These include: job listings, computer & internet access, career counseling & training for job seekers; and recruitment of workers, pre-screening & referral services, tax credits, and training reimbursement for employers.
Ignacio: Community Revitalization Partnership, 2009 Vision: Diversity inspires and challenges you to improve Partnerships with all kinds of people/ organizations A clean and safe place to live and work A beautiful town that honors southwest traditions Recommendations 1. Lead the way to development 2. Understand Ignacio as a product you are promoting 3. Infiltrate your message into the community 4. Evolve and review downtown design guidelines 5. Improve signage 6. Place-making: There is a need for downtown to serve as a community center. 7. Be a part of your region. 8. Resource Management and Planning: The Downtown Committee should actively engage in fundraising to support downtown initiatives. 9. Partnerships: Develop a plan for communications amongst stakeholders in and around Ignacio and with diverse audiences. La Plata County District Plans Ft Lewis Mesa Guiding Principles We believe that our livelihoods are centered around our rural culture. We wish to encourage appropriate development in Kline, Marvel, Breen, and Hesperus. Vision for the future: Business development emphasizes our rural and agricultural focus with small value-added processing facilities, markets, and retail food outlets all locally controlled and sustained. Junction Creek An objective to restrict commercial development and signage states that only certain commercial uses are allowed in the Junction Creek District: bed-andbreakfasts, daycare homes, and home occupations. The plan contains no commercial or industrial land-use classifications. Bayfield Vision states that one strength of the district is lack of commercial development. One objective states the intent to restrict commercial development outside of Bayfield and Gem Village to that which is in keeping with the rural characteristics of the area." Florida Mesa To preserve agriculture and other rural open lands, the plan encourages future commercial, light industrial, and mixed-use development to be channeled to several
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growth centers in the district, naming Grandview, Elmore's Store and Sunnyside as possible commercial growth areas and the areas around the airports and portions of Koshak Mesa as industrial areas, all of which already contain "some degree of such use". Vallecito Vision calls for a ..broad range of socio-economic diversity. The introductory narrative cites a general concern about commercial use proliferating in residential areas and voices a preference for locating commercial uses as designated on the map (near existing commercial uses). The plan contains a goal to preserve the rural residential character of the valley with compatible resort, commercial and recreational uses for confining compatible commercial development to areas designated on the Vallecito District Map", implying that applications for map amendments and commercial uses outside of the currently designated commercial areas will not be looked upon favorably. North County Vision: The plan envisions "future growth that occurs in a compact pattern with a mix of residential, commercial and retail to enhance the surrounding community" and provides clear direction to "limit new commercial development to existing commercial centers." Plan narrative emphasizes a regional perspective of the North County district with the rest of the county, especially Durango and what is now the Glacier Club. One policy encourages small businesses that will benefit the community: countrytourist land uses and cottage industries that provide services and jobs for local residents. West Durango Vision: Preserve the beautiful natural setting and resources while maintaining a sound economic base; manage growth in a way that ensures the character of the area, residents safety, and equity for citizens. Commercial development objectives seek to keep commercial development near other commercial development and in designated areas only, with proposed future development "clustered near population centers".
Part Two - County Government Fiscal Trends and Revenues

To inform our discussion we have provided some information that reveals a set of circumstances that have raised concern in the community over declining property tax revenues in the future and what it will mean for county levels of service and mill levies. Each of these factors is summarized in bullets below, followed by descriptive statistics supporting each of the points. A recipe for concern? Property tax holds an increasing share of total county revenues Property tax collected from the natural gas industry accounts for over half of total property tax revenues. Natural gas production is projected to decline, and so is the property tax revenue it generates The fiscal planning in place today fall short of addressing these trends A wise response in 2000, but was it enough? In 2000, County Commissioners recognized that gas revenues were a temporary revenue source and vowed to freeze the dollar amount of gas industry property taxes that could be spent on day-to-day operations and maintenance. Since then, all revenues above the 2000 freeze-line have been spent on capital investments. By 1999, property taxes already made-up 52% of the tax base, meaning that there is still a substantial dependence on property tax for operations and maintenance despite the wise move to redirect funds into capital improvements in 2000. The share of total county expenditures held by operations and maintenance is holding steady/increasing and is now around 2/3 of the expenditures, despite the 2000 response by commissioners. Question for our discussion: Given our clear dependence on natural gas industry property tax revenues, do we need to set some planning-level goals to address the decline in revenue sources for county operations, maintenance, and capital investment?
Property tax holds an increasing share of total county revenues

1999
Other 39% Taxes 61%
2008 Revenues
Other 35%
Taxes 65%
1999 Tax Sources
Other 1%
Sales Tax 47%
Property Tax 52%
2008 Tax Sources
Sales Tax 33%
Other 0%
Property Tax 67%
Source: Adapted from La Plata County Comprehensive Annual Financial Report
Property tax collected from the natural gas industry accounts for over half of total property tax revenues
Source: Clipped from the La Plata County Comprehensive Annual Financial Report: Principal Property Taxpayers
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Natural gas production is projected to decline, and so is the property tax revenue it generates. Nicely written and accurate Herald article from summer of '08: Report foresees natural-gas decline Production at county wells falling an average of 12 percent a year June 29, 2008 By Katie Burford | Herald Staff Writer In a decade, revenue from gas companies' operations in La Plata County will be nearly half what it is today, even with the addition of hundreds of new wells. Coal-bed methane production began in earnest here in the early '90s and peaked in 2003. Companies hoped to forestall a decline by drilling more wells but still saw a drop of more than 5 percent in 2007, according to data from the state . Company revenue from gas production is forecast to fall 46 percent, from $1.6 billion in 2008 to $864 million in 2018. By 2021, revenue is forecast to shrink to $571 million. The forecast report, produced by Fort Worth, Texas-based Cawley, Gillespie & Associates, predicts that companies will see their does not take into account fluctuations in market price, technological advances or changes in regulations. According to the report, gas production from the county's coal-bed methane wells are declining at an average rate of 12 percent per year. Conventional gas well production, which accounts for a far smaller portion of gas production, are declining about 7 percent a year. The report says there are 1,022 proved undeveloped locations to be drilled in the Fruitland coal reservoir in La Plata County based on current spacing requirements. Today, there are about 1,700 coal-bed methane wells in the county. Even with new wells, the report foresees gross gas production declining 65 percent from 2008 to 2021, from about 403 billion cubic feet to 140 billion cubic feet. County officials say the news could be worse. "It looks to me like we're in a slow decline," County Assessor Craig Larson said. "You don't want to have a precipitous drop." Data for the report was supplied by the assessor's office. Revenue predictions assume a price of $6 per thousand MBtu, which is about the average index price for 2007. The county commissioned a similar report from the same firm in 2003. Neither report released data on individual well production, which is considered proprietary information. Commissioners will receive a presentation about the report's findings July 8. Commissioners requested the presentation as they begin working on the budget for 2009. The 2003 report forecast gas production in 2007 would be 386 billion cubic feet, but actual production that year was higher, about 393 billion cubic feet not including conventional gas production.
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"He's not too far off," Larson said, referring to the report's author. "We're doing a little bit better than what he had estimated." Larson attributed this to more new wells coming online than anticipated and improvements in technology that allow companies to extract gas more efficiently. The role of price The price of natural gas is a significant unknown in the equation. The county's netback price - which is the price of gas minus certain expenses producers are allowed to subtract, such as processing and transportation - in recent years has varied from $1.88 per MCF in 2003 to $4.66 in 2006. This year, the average netback price is $4.01. The price is influenced by a wide array of factors, including weather and supply. "If you don't have a cold year, you don't need gas," Larson said. A new pipeline that heads east out of northern Colorado also is expected to play a part. "The San Juan (Basin) will more become its own supplier," Larson said. "We won't have to worry about it coming in from the Piceance Basin to our southern markets." The cheap price of gas earlier in the decade made it attractive for electricity generation. But when various new plants in Texas started using it, the price quickly escalated, discouraging more plants and easing demand. In 2008, natural-gas prices are on the rise again. In June, Atmos Energy, which secures its supplies of natural gas from producers months in advance, increased the price it charges customers by 25 percent. Kevin Kerrigan, a spokesman for the company, said that normally the price it pays for gas declines after winter, but this year has been an exception. The market price of natural gas in June was 72 percent higher than the same month a year before, he said. This winter could be worse. "It is not forecasted to come down," he said. Atmos shops around for its gas, which may or may not come from the San Juan Basin. High natural-gas prices may drive up residents' energy bills, but it helps keep their property taxes low. In 2006, gas and oil represented 66 percent of the county's property-tax revenue. In 2007, that dropped to 56 percent and it is predicted to be about the same in 2008. Property taxes are based on the previous year's production. The eventual decline in revenue will not affect all county residents equally, because the mill levy varies depending on the tax districts residents fall in. Larson said Ignacio property owners pay just 19 mills, while in Bayfield they pay 34 mills, and in Durango they pay 25 mills.
12
The share of total county expenditures held by operations and maintenance is holding steady/increasing
1999 Expenditures
Capital Outlay 29%
Debt 3%
Operations 68%
2008 Expenditures
Capital Outlay 30%
Debt 1%
Operations 69%
Expenditures 1999-2008
50,000,000 45,000,000 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0
19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08
Operations and Maintenance Capital Investment
13
The fiscal planning in place today falls short of addressing these trends District Plans The Florida Road, West Durango, and North County plans all express the need to obtain or require improvements made necessary by future development before or as that development is approved/implemented. The West Durango, Bayfield, and Florida Mesa plans all suggest that development impact fees be implemented to offset costs of future development. Most references to impact fees are general (not tied to a specific type of capital facility), but the Florida Mesa plan mentions both fire protection and parkland as possible facilities for impact fees. 2001 Comp Plan The plan contains a goal stating that emergency preparedness planning and provision of emergency services continues to meet the growing demands of residents and visitors but does not offer clear direction on how to pay for it. The plan also seeks to ensure that recreational program and facility needs of county residents are met as the county grows and offers a list of funding options including sales tax, impact fees, property tax increase, a use tax, or a recreation district.
14
long!
Northeast Oregon Economic Development District Comprehensive Economic Development Strategy
Annual Report June 30, 2012 Pages 2 - 7 followed by Investment and Results Pages 1 - 2
2007-2013 Comprehensive Economic Development Strategy Pages 1 46
followed by 2012 Project Lists Baker County Union County Wallowa County Energy Projects 2012-2013 Scope of Work
Page 1 of 6
CEDS Annual Report
Changes in Economic Conditions According to the Oregon Employment Department Regional Economist, unemployment rates in the region have tended to remain stable following the significant effects of the recession in 2009. Annual average unemployment rates in Baker County increased from 10.2% in 2009 to 10.4% in 2011. Annual unemployment rates in Wallowa County decreased from 11.8% in 2009 to 11.2% in 2011. Union County's jobless rate subsided from 11.4% in 2009 to 9.0% in 2011. In Baker County, the government sector suffered the worst full-year job loss in 2011 (-80), down for the third straight year. The manufacturing sector lost another 20 jobs, the fifth straight year of manufacturing sector declines. The trade, transportation and utilities sector provided the best fullyear job gain in 2011 (+20). In Union County, the government sector also suffered the worst full-year job losses in 2011 (50). Union County's manufacturing sector lost 20 of the jobs it gained in 2010. Like Baker County, Union countys trade, transportation and utilities sector provided the best full-year job gain in 2011 (+50). Like the rest of the District, Wallowa County saw the sharpest employment decline in the government sector during 2011 (-40). Wallowa Countys largest gain in 2011 was in the manufacturing sector (+30). The regions tourism sector showed additional signs of recovery in 2011. Direct travel spending in 2011 was up across the region compared to 2009 and 2010, but needs to see significant improvements to return to 2006/2007 levels. At $41.9 million, Baker County 2011 travel spending was up 2.5% over 2009. At $30.1 million, Union County 2011 travel spending showed a 3% increase from 2009. In Wallowa County, 2011 travel spending at $25.9 million was up 1.6% compared to 2009. The All-American Road Hells Canyon Scenic Byway, reopened in 2011 after a flood disaster washed out this important summer tourist route during the 2010 summer season. The regions agriculture sector showed the strongest sales in at least five years. Sales of both crops and animal products increased in all counties from 2010 to 2011. Baker County experienced a 31% increase in gross farm and ranch product sales from 2010 to 2011. Union County had a 40.1% increase while Wallowa County saw a 27.7% increase. Changes in Goals/Objectives/Action Plans/Priorities/Projects There have not been any changes to the Districts goals and action plan. However, the District conducted a call for projects this spring and recently held county-level project prioritization meetings. The NEOEDD board adopted the county-level project priorities as the District-wide project priorities. If any project develops to the point that it meets EDA funding criteria, the NEOEDD board will revisit
Page 2 of 6
the adoption of new District-wide priorities. The list of 2012 projects included in this annual report replaces the list of projects that were included in the original 2007-2013 CEDS and associated updates. Progress in Implementing the CEDS The District made significant progress in implementing the CEDS. A summary of the Districts goals, and the activities undertaken to reach them in the past year, is listed below. Goal 1 - Collaborative Planning, Partnerships and Plan of Action Participate in region-wide collaboration, facilitation and cooperation to plan and implement community growth and sustainability. Action 1 - NEOEDD solicited requests for project updates from regional partners and held countylevel project prioritization meetings in May. Project information will be used for the CEDS and for accessing federal and other funding resources. Action 2 - NEOEDD staff participated in a variety of information-sharing activities for economic development. Staff participated in and helped facilitate planning meetings for the Union County Business Recruitment Steering Committee. Staff also hosted public information sessions regarding the Individual Development Account program which provides financial resources to low/moderate income entrepreneurs. Staff met with Oregon Rural Action, Oregon Health Sciences University, Oregon State University Extension and other partners to collaborate on food system and valueadded agriculture development activities in the region. Staff also worked on promoting economic and community development-related activities in our District through periodic postings on our social media channels Facebook and Twitter and via our electronic newsletter. Action 3 - Staff continued to provide resources for local volunteers taking on leadership roles for a community endowment fund. Staff met with local non-profit and community leaders and Rural Development Initiatives and The Ford Family Foundation staff to discuss a new leadership and community development program available through The Ford Family Foundation. Action 4 - Staff continued to participate in a regional collaborative approach to removing barriers and accessing markets for agriculture businesses seeking to develop a supply chain for meat and other value-added products. Action 5 Staff explored the potential for further bicycle tourism promotion through the Oregon scenic bikeway program and via trail/path development. Goal 2 - Adequate Funding and Other Resources Enhance access to and effective utilization of financial and other resources to strategically and opportunistically advance community development. Actions 1 & 2 - NEOEDD helped raise and administer foundation grants for the Wallowa County Museum expansion project. In 2011, NEOEDD completed applications for $153,390 of match funding for Individual Development Accounts through the VIDA collaborative of CASA of Oregon. For
Page 3 of 6
2012 we have received a commitment of $200,000 of match funding for Individual Development Accounts and can increase that amount to provide assistance to very low income entrepreneurs. Staff received a commitment of $19,000 in cash match from the Oregon Food Bank to host an AmeriCorps Volunteer through the University of Oregon Resource Assistance for Rural Economies ($32,000 value). NEOEDD assisted with regional funding applications to Meyer Memorial Trust and Oregon Department of Agriculture for Regional Food System Development. NEOEDD also participated in discussions with Financial Stewardship Services to plan customization and delivery of a highly recommended comprehensive grant readiness and budgeting training course in the District. Staff also participated in discussions with Meyer Memorial Trust staff regarding the potential development of a new loan fund to serve small and mid-sized food and farm businesses. NEOEDD assisted residents of Lostine with planning, publicity and facilitation of efforts to retain the only grocery store in town. Staff also assisted public and private organizations in Wallowa County with assessment of their kitchens for potential use by commercial food businesses and food access programs. The CEDS project update process provides an opportunity for funders to learn about infrastructure, community facility, technical assistance and energy projects. This can lead to an invitation to apply for funding or an opportunity to network with another community on a similar project. NEOEDD purchased a subscription to GrantStation in order to be able to provide online searches for foundation grant resources. The district provided grant searches for several organizations based on targeted criteria, such as project area, geographic location, activity, etc. Action 3 - Staff serves on the National Association of Development Organizations board of directors. This organization informs federal partners about the results and benefits of funding programs and agencies that support rural and small metropolitan communities. Staff also participates with the Oregon Economic Development Districts to inform state and federal partners about the role of the districts in delivering economic development services throughout the state. Staff participates on the Oregon Microenterprise Board which provides an opportunity to focus on the needs of rural practitioners in a statewide organization. Staff gave presentations on rural funding and project resources at the Oregon Asset Builders Conference. NEOEDD staff participated in five events (Portland, Baker City and Enterprise) to share information about the regions needs and projects with private foundation funders, Oregon public arts, cultural and historic funders, as well as the statewide Main Street and Non Profit Association of Oregon organizations which provide resources for nonprofit and public development. Action 4 - Staff worked with the Wallowa Fund Advisory Committee to develop printed and online information and a powerpoint presentation about the Wallowa County Fund of the Oregon Community Foundation. Staff helped committee members practice and present information about the fund to community groups and developed a fundraising strategy to obtain the first $50,000 of donations. Goal 3 - Economic Opportunity Increase per capita income to achieve statewide equity.
Page 4 of 6
Action 1 - The District continues to make loans to businesses that have the potential to pay aboveaverage wages. EDA RLF funds are very limited, so most new District loans were made with USDA RBEG funding. Action 2 - Staff fielded numerous inquiries from business owners and individuals looking for information and resources to expand or start their business. NEOEDD continues to provide business development training and matched savings for business asset purchase to help improve proprietor income. NEOEDD helped improve the technical knowledge and financial management of 35 entrepreneurs who took the 21-hour business planning Foundations course and the Money Smart financial literacy course. Over 150 people attended PubTalks in Union and Wallowa counties to take advantage of business training and networking opportunities. Goal 4 - Infrastructure, Transportation and Technology Build on and utilize existing infrastructure in transportation and telecommunications, railroads, airports, fiber/telecom and the connectivity of local, state and federal highways. Action 1 - Staff continues to receive and review business recruitment leads from Oregon Business Development Department and respond with information as appropriate. Action 4 Staff met with a regional representative of DriveLessConnect to provide referrals and learn about new online resources and incentives for employers and individuals to use public transit, private carpools and van pools, telecommuting, flex scheduling and bicycle commuting. Action 6 - NEOEDD helped local entities administer energy conservation projects funded with federal stimulus funding. Several energy production projects have been identified through the CEDS update process. Staff have begun research of potential funding sources for these projects. Goal 5 - Quality of Life, Environments As economic development occurs, the preservation and development of quality of life must be a major consideration, including enhancing and protecting the environment. Action 1 - Staff continues provide assistance to the Wallowa County Museum in working to improve the Museum. Staff also provided grant writing assistance to the literary arts organization, Fishtrap, Inc. and to Maxville Heritage Interpretive Center. Action 2 -. Staff shared information about the Vital Wallowa Indicators developed to track the outcomes of economic and community development efforts in Wallowa County. Action 3 - NEOEDD funded retail and service businesses located in downtowns and communities. Staff participated in the Oregon Main Street conference in Baker City to learn about efforts and resources for downtown development. Goal 6 - Education and Workforce Develop a diversified educational system that meets the needs of the emerging high tech world as well as providing an opportunity for everyone to participate to their fullest in our economy.
Page 5 of 6
Actions 3 & 4 - After a hiatus of two years, NEOEDD reinstated Individual Development Accounts to students who are seeking post secondary education opportunities. These funds support advanced education at any accredited school. Goal 7 - Youth Involvement and Opportunities Retain and attract youth Action 1 - Staff provided assistance to high school and young adult representatives serving on the Wallowa County endowment advisory committee. NEOEDD also provides ongoing referrals and networking in support of the Mentor Match Youth Entrepreneur Program in Wallowa County. Goal 8 - Entrepreneurship Provide a strong business environment through entrepreneurship and business opportunity Action 1, 2 & 3 - NEOEDD continues to be extensively involved in supporting entrepreneurs through a variety of business development assistance, training and financing for existing and new businesses. Community Bank co-sponsored bi-monthly PubTalks in Union County and two PubTalks in Wallowa County. These events encourage networking among entrepreneurs and include informative presentations. Staff continue to work with a group of agriculture businesses to develop a supply chain for value-added meat. We are also part of a regional collaborative working to remove barriers to access to local food and to support market development. Staff assisted with proposal development for an Oregon Department of Agriculture funding request to support business development workshops for agriculture businesses and youth interested in agricultural businesses. We hosted an AmeriCorps volunteer who researched the current status of Wallowa Countys food system, including living-wage agricultural businesses, processing and distribution, and rural retail. Staff provides ongoing referrals and technical assistance to individual entrepreneurs. NEOEDDs collaboration with the Valley Individual Development Account program continues. We are offering business finance IDAs. These matched savings programs provide an incentive to save and invest in assets that will improve future earning opportunities. Thirty three people are currently saving $94,150 for their businesses which will be matched by $282,450. During the year, matching funds in the amount of $90,695 were disbursed to 11 clients who graduated from the program, a 25% increase over last year. Staff provided numerous referrals to businesses seeking financing and marketing information. Non-CEDS Activity Staff provided technical assistance to five different non-profit organizations to help them access and manage financial resources and discuss strategic planning issues.
Page 6 of 6
2011-2012 Investments and Results

Initiative EDA Funding If no, identify fed, state or local agency Est. Amount of private sector investment Est. amount of public sector investment Jobs created or retained
Enterprise Library Handicapped Access Elgin Wastewater System Improvements Elgin Water System Improvements Wallowa Lake County Service District Distribution System North Powder Wastewater System Design Wallowa Water System Improvements - Design Entrepreneurial Development
No
Private Foundations and individuals, City of Enterprise City of Elgin
$7,000
$2,500
No
$300,000
12
No
City of Elgin
$1,200,000
No
Wallowa Lake County Service District CDBG
$25,000
No
$44,255
No
CDBG
$330,000
No
NEOEDD, CDBG, USDA, Northeast Oregon Business Development, Private Business Oregon
$388,801
$329,534
29
Huntington Wastewater Plan
No
$45,000
Page 1 of 2
Richland Wastewater Improvements Baker County Events Center La Grande Revitalization Program Integrated Biomass Energy Campus
No
Oregon
$110,000
No No
Leo Adler Foundation, private rentals La Grande Urban Renewal District Wallowa County, Community Solutions, Inc; Oregon Dept. of Energy (ARRA); Energy Trust of Oregon; Integrated Biomass; other private
Private Foundations, Individuals, Odd Fellows loan City of Cove
$25,000 $1,000,000
No
$1,375,000
$525,000
36
Odd Fellows Hall Roof & Maintenance Cove Wastewater System Improvements Wallowa County Business Facilitation
No
$40,000
No
$17,065
No
Cities and County, individuals, local businesses, foundations
$20,785
$14,500
27
Wallowa County Health Care District Medical Office Building

Wallowa Resources: Conversion of Old Hospital to Business Office Park/Education Facility Totals
No
Northwest Farm Credit WCHCD reserve funds

Private corporate
$3,025,000
$2,475,000
34
No
$60,000
26
$4,918,651
Page 2 of 2
$6,440,789
168
Baker County Projects

Project Name Project Description Job Creation Budget Funding Sources Timeframe Sponsor and County Priority
Baker County Infrastructure Resort Street Improvement Project
Chryptosporidium Solutions
Elkhorn Industrial Park
Halfway Waste Water Collection System Improvements
Bicycle and pedestrian path, off-street downtown parking & streetscape improvements. Streetscape improvements include sidewalks, lighting, trees, benches and placement of utilities underground. Funded except for the utilities part. Address chryptosproridium problems in the water supply with UV treatment. Install utility hook-ups, design and potentially construct a spec building. Master plan complete, need to implement inflow/infiltration improvements and correct algae growth in treatment ponds. Improvements include a new reservoir, new well, distribution system improvements and system meters. Develop solution for disposal of wastewater. This project addresses compliance and capacity issues. Increase capacity of lagoon and purchase area to discharge effluent. Land purchase complete. Need engineering.
50 indirect
$3,000,000 $2,300,000 Received
ODOT - Jobs Transportation Act
20112013
Baker City High Priority
$2,500,000
Safe Drinking Water
20142016
Baker City High priority
Baker County High Priority
$2,900,000 $4,300,000
20102012
Halfway High Priority
Huntington Water System Improvements
$1,681,000
Huntington High Priority
Baker City Wetland Application or Land Application Sumpter Lagoon and Effluent Discharge
$4,500,000
2016
$6,000,000
2013
Sumpter High Priority
Project Name
Project Description
Job Creation
Budget
Funding Sources Baker City funds and completes a portion of this project each year
Timeframe 20102020
Baker Water Delivery System Mountain Line
Replace 100 year old concrete water delivery pipes. Aquifer storage and compliance issues. Complete NEPA analysis. Replace leaking and unstable redwood municipal water tank with metal tank, could collapse this year. Increase USFS management of land/forest to maintain watershed heath and reduce risk of catastrophic fire on private lands & USFS lands. The Blue Mountain Heritage Trail Network is being designed as a long-distance, multi-user route through the Blue Mountain region. The base trail forms an 870 mile loop. Activities to clean up brownfields in District. Improve water storage, water mains and service lines. Construct high capacity fiber optics to connect Baker Co. and Union Co. ATT fiber POP. Purchase land and construct a downtown parking lot for parking and snow storage.
$8,300,000
Sponsor and County Priority Baker City High Priority
Sumpter City replacement of contact water tank Baker City Watershed Enhancement
$300,000
2013
Sumpter High Priority
$50,000
OWEB & prison crews
Baker City
Blue Mountain Heritage Trail
BMHT Assoc.
Brownfields Clean-Up Haines Water System Improvements Baker County Fiber Optics
NEOEDD $2,000,000 $50,000 City Haines
$375,000
$50,000 Inland Dev. Corp.
Inland Dev. Corp.
Halfway Parking Lot
$300,000 $400,000
Halfway
BMCC Fiber Optic Project Richland Wastewater System Improvements Abandoned Windmill Redevelopment
BMCC Address I&I problems in the sewer lines $1,400,000 CDBG 2013 Richland
Redevelop property
DEQ Orphan Fund
Project Name Baker County Community Facilities Richland Elementary School Project
Project Description
Job Creation
Budget
Funding Sources
Timeframe
Sponsor and County Priority
Convert school to low income senior housing, community center and maintain library
$1,060,000
NE Oregon Housing Authority, Oregon Community Foundation, Ford Family Foundation, Adler, 45,000 pending from Meyer Memorial Trust
20102013
Pine Eagle Econ. Dev. Corporation High Priority
Forest Products Processing & Sorting Center
Construction of a 30,000 square foot building to house a processing center which would include biomass to energy, wood for energy, small diameter sawmill, pellets and compressed fire logs.
30 Construc -tion 30 Direct
$4,100,000
Baker City Baker County High Priority
HBC Faade Improvement
Historic district building revitalization project seven buildings on Main St., four buildings on First St.
$300,000
Foundations
Historic Baker City High Priority
Baker Higher Education Center
Expand the campus with additional buildings.
$5,000,000 First Stage $17,000,000 Total
Baker County High Priority
Central School Building
Restore building for diverse public and private uses including BMCC classrooms.
Collaborative High Priority
Project Name
Project Description
Job Creation
Budget
Funding Sources
Timeframe 2012
Sumpter DayUse Park and Restrooms
Remove old buildings from two acre site in Sumpter and construct year-round public restrooms.
$60,000$70,000
Sponsor and County Priority Sumpter High priority
Steam Engine #19
Overhaul steam engine #19 - running gear and frame work to be deferred for 2013.
2-3 shortterm
$200,000
Private donations ($50,000 additional $10,000 in donations in 2012)
2012 to get back in service before the end of the season, then work on deferred projects after season ends
SVRR High Priority
Steam Engine #3
Form four overhaul and running gear. Gathering area, pedestrian connection to Leo Adler Pathway.
2-3 short term
$50,000
Downtown Court Plaza
$800,000
Private donations and foundations) ODOT Bike Ped/ Transportation Enhancement Funds
SVRR High Priority 20132014 Baker City High Priority
Leo Adler Memorial Parkway Extension Baker County Events Center
Complete LEO Adler Memorial Parkway along the Powder River in Baker City. Renovate existing facility for conventions and meetings. Complete SVRR back shop insulation and heating system for the building, flooring, tools and machinery. 7-10 construction $150,000 6-12 months
Baker County
SVRR Back Shop
Sumpter Valley RR
Baker County Public Health Building
Purchase or construct building for county health department.
$2,000,000
CDBG
2014
Baker County
Project Name
Project Description
Job Creation
Budget
Funding Sources
Timeframe
Huntington Fire Station
Replace existing building, consolidate storage of department vehicles to one building.
$485,000
Sponsor and County Priority Huntington
Pondosa Fire Station Sumpter Fire Station Construct a new fire station with enough capacity to store the citys firefighting equipment. Construct replicate depot in Huntington to house museum. Construction of bandstand pavillion in Baker City. Repair grandstands at Halfway fairgrounds. Construct restrooms at McEwen station. Addition to Baker County Jail to house Probation & Parole office. 4 $2,000,000 2015 $250,000 $35,000 donations Individuals, foundations 2012
Medical Springs Fire District Sumpter
Maritime Railroad Museum Geiser Pollman Park Band Shell Halfway Grandstands Restrooms at McEwen Station Probation and Parole Office
$90,000
Halfway Fair Association Baker County and SVRR Baker County
Project Name
Project Description
Job Creation
Budget
Funding Sources
Timeframe
Baker County Technical Assistance Regional Food Supply Chain Collaborate with agricultural producers, processors & advocates to identify existing and needed equipment facilities and services to enhance regional food systems and access to markets; share information; identify potential funding mechanisms for purchase of equipment/investment in facilities July 2013Sept 2013: NEOEDD to conduct supply chain, product transportation assessment. Establish an environment that inspires individuals to create and grow successful businesses. Adult and youth entrepreneurial education, training, technical assistance, access to capital, networks, culture and environment that supports entrepreneurs. 20+ 15 $30,000 20122014 NEOEDD Baker City High Priority
Entrepreneurial Development
$127,500
OECDD CDBG $37,500 VIDA $200,000 Unknown $10,000
20122013
NEOEDD High Priority
Community Endowment
Outreach, planning and creation of a Baker County community endowment - local advisory board with funds managed by Oregon Community Foundation
1 parttime
$20,000
20122014
Project Name
Project Description
Job Creation
Budget
Funding Sources
Timeframe
Industrial Land Surveys
Conduct industrial land surveys, targeted industry analysis, strategic marketing plan for county and cities within the county interested in industrial development. Highlight comparative advantages. Incorporate brownfield redevelopment options. Assure there is an adequate supply of marketable industrial land. Provide professional assistance for community and economic development projects board organization and/or development, fundraising, grantwriting, project development, project implementation, grant management, etc. Facilitated collaboration between local elected officials, environmental community and federal partners on land management Numerous organizations, businesses, communities and projects within the District are considering biofuels projects. NEOEDD supports the development of feasible projects throughout the District. 20122013
Sponsor and County Priority Baker County High Priority
Technical Assistance to Communities
Collaborative Planning
Regional Solutions Team High Priority
Biofuels Project Development
Project Name
Project Description
Job Creation Retain 3 jobs
Budget
Funding Sources Federal Grant $81,000, Member contributions $94,080, GOBHI $40,000, Unidentified $47,040
Timeframe 20122013
NEON MultiShare Local Health Coverage Program
Provide locally based wellness/prevention based health care coverage to eligible small business owners and their employees. This is a non-insurance community investment project that services businesses under 50 employees, whose workers median income is 300% of federal poverty level or less, who have been uninsured for 12 months. The current cost to employees and employers is $70/month Provide training to Community Health Workers (CHW), a newer job sector in health care.CHW are trained to work with high risk or seriously ill patients to assist them in making behavior changes that will help reduce their risk or manage their illness. The goal is to reduce health care visits, particularly ER and hospital visits. The training takes 80 hours. Revolving loan fund for property owners renovations to bring historical properties up to code. Create more viable commercial space. Signing and way finding plan to entice visitors to explore Baker County and Hells Canyon.
$262,120
Sponsor and County Priority Northeast Oregon Network High Priority
NEON Community Health Worker Training
$52,920
Newly recognized Community Care Organizations are likely funders
20122013
Northeast Oregon Network High Priority
Baker City Historic Preservation & Renovation
20
$300,000
Private Foundations
20132015
Interpretive Plan for Baker County and Hells Canyon
5 Construc -tion Jobs
$305,550
EOVA High Priority
Project Name
Project Description
Job Creation 4 Const. jobs
Budget
Funding Sources
Timeframe
Baker County Business Incubator Water and Stream Health Initiative
Research feasibility of construction and operation of a business incubator facility. Construct water studies and environmental reviews in preparation for construction of reservoirs for flood mitigation, irrigation, recreation and power generation. Assure adequate supply of workforce housing Establish a guaranteed fund to subsidize scheduled air service between Baker City and Portland. Develop and obtain funding for projects prioritized at the vision and action rallies in March 2007 in Halfway. Baker, Union and Wallowa counties quite likely are going to need to retain an Economist to prepare an independent Economic Impact Analysis on the impacts to the counties from the Wallowa Whitman Travel Management Plan. Research, draft and adopt land use plan updates to reflect needs of large-scale mining operations.
$2,000,000
Sponsor and County Priority Baker City
Baker County
Workforce Housing Baker Air Service
Regional Solutions Team $350,000 per year 20122015 Baker City
United Community Partners
$50,000+
20122015
UCP
Travel Management Plan Economic Analysis
Baker County
Land Use Plan Update
Baker County
Union County Projects

Job Creation Funding Sources Sponsor & County Priority
Project Name Union County Infrastructure La Grande Stormwater
Project Description
Budget
Time-frame
Implement Surface Water Management Plan Determine what is needed to serve industrial property in the city. Potentially purchase industrial land, extend rail spur, partition industrial land, extend water/sewer services to each lot, develop roads and sidewalks. Achieve industrial site certification from Business Oregon. Roads, water, sewer and a rail spur are needed to expand the industrial park. Out of compliance on pH. Testing now to determine a solution. Prepare wastewater facilities plan. Extend infrastructure to lands newly incorporated into the Urban Growth Boundary after they have been rezoned. New water meters, some new distribution main lines, treatment for their current wells to help with iron and other quality issues. Additional storage also needed.
15
$5,000,00 0
$5,000,000 Federal request
La Grande High Priority
Establish Industrial Park in Union Baum Industrial Park Infrastructure North Powder Wastewater System Union Wastewater Facilities Plan
$2,000,000 Union County (if wind farm is approved)
5-10 years
Union High Priority
2013
Union County High Priority North Powder High Priority
$180,000 $200,000 Unknown amount for infrastructure costs
2013-2015
City of Union High Priority
La Grande Infrastructure Extension
DLCD, EDA, ODOT, OBDD
2012-13
La Grande High Priority
North Powder Water System Improvements
$1,500,00 0
N. Powder High Priority
Project Name
Project Description Creation of a wetland facility and irrigation system for disposal of treated wastewater. Creation of additional storage ponds and irrigation system for disposal of treated wastewater. Implement Downtown Design Plan for La Grandes Central Business District. Develop public spaces and amenities. Promote commercial redevelopment. Street reconstruction, sidewalk improvements. Streetscape improvements such as lighting, planters, benches and bike racks. Improve railroad crossings in La Grande so that train whistles are unnecessary. Research and retain railroad spur into Union Financing and upgrades of effluent dispersal system for city of Union on the Buffalo Peaks Golf Course. Extend the sewer system from La Grande to the Union County Fairgrounds in north La Grande. Extend services at the fair grounds to include RV Park and Little League baseball field.
Job Creation
Budget
Funding Sources
Time-frame
Sponsor & County Priority
Cove Wastewater System Improvements
$1,650,00 0
USDA Rural Development
2012
Cove High Priority
La Grande Revitalization Program
$6,000,00 0 Construction $1,750,00 0
2013-2020
La Grande Medium Priority
La Grande RR Quiet Zone Union Railroad Spur
30
$1,750,000 Federal Request
2015 2011-2012
La Grande Union County City of Union
Union Co. Effluent Distribution System
$4,700,00 0
$2,150,000 Federal request
2012
Union County
Sewer System Extension to Union Co. Fairgrounds
$427,500
UC Fair Board
Project Name Wastewater Facilities Plan Brownfields Clean-Up Elgin Wastewater System Improvements
Project Description Create and adopt a wastewater facilities plan Activities to clean up brownfields.
Job Creation
Budget
Funding Sources
Time-frame
City of Union NEOEDD
Sludge removal Individual septic systems in the city may be contaminating the groundwater. Imbler would like to establish a waste water system. Distribution system improvements to upgrade undersized main lines, improve distribution system circulation and water quality, as well as fire flow capacities. Construct sidewalks throughout North Powder. Construct high capacity fiber optics to connect La Grande to Union. Pave trail/path between Foothill Road and Highway 203. Accommodate fish passage on Beaver Creek.
$500,000
$150,000 City
2012
Elgin
Imbler Waste Water System Improvements
$877,800
When mandated
Imbler
Union Water System Major Upgrades North Powder Safe Routes to School Fiber Optic Extension Foothill Rd to Union Bikeway Beaver Creek Fish Passage
14,005,00 0
$225,000 City ($118,000 spent so far)
2012-2014
Union
$428,000
ODOT
2012 not scheduled
North Powder Inland Development Corporation
unknown
Union County
La Grande
Union County Community Facilities Justice Center Assisted Living Facility/Retirement Center Construction of a justice center. Construction of an Assisted Living Facility/Retirement Center in Union. $6,900,000 Union County High Priority
CUP High Priority
Project Name
Project Description Construction of a community center and club house at the Buffalo Peaks Golf Course. Establish Elgin Railroad Depot with gift shop and natural history museum. Construct biking and walking path along the Grande Ronde river between La Grande and Island City.
Job Creation
Budget
Funding Sources
Time-frame
Community Center/Club House
Union County High Priority Elgin WallowaUnion Railroad
Elgin Depot Construction
$1,250,000
ODOT ConnectOR 3
2011-2012
Greenway Project
La Grande, Island City, Union County Ford Foundation 175,000 and other foundations, hit the $1 million mark in funds
Elgin Opera House Restoration
Need to update ADA ramp and replace beam to support balcony, remove tree that is causing problems Construct facility for senior services, city hall, city library and community use. Restore theater and operate it as a performing arts center. Construct and lease forensic lab to Oregon State Police.
$1,000,000
2012
Elgin
North Powder Community Center
On Hold
North Powder
Liberty Theater Restoration
$5,000,000
2012-2017
La Grande Main Street
Forensic Lab
$1,600,000
Union County
Project Name
Project Description
Job Creation
Budget
Funding Sources
Timeframe
Union County Technical Assistance Establish an environment that inspires individuals to create and grow successful businesses. Adult and youth entrepreneurial education, training, technical assistance, access to capital including IDAs, networks, culture and environment that supports entrepreneurs. Prepare economic opportunities analysis, zone more land as industrial in the county and within urban growth boundaries Offer year round vocational skill training not offered at EOU Conduct industrial land surveys, targeted industry analysis, strategic marketing plan for county and cities within the county interested in industrial development. Highlight comparative advantages. Incorporate brownfield redevelopment options. Assure there is an adequate supply of marketable industrial land.
20+
$127,500 OECDD CDBG $37,500 VIDA $200,000 Unknown $10,000
20122013
Industrial Land Supply Trade & Technical Education
Union County High Priority Union County High Priority
UCEDC, Union County, La Grande, Elgin, Union, North Powder High Priority
Project Name
Project Description
Job Creation
Budget
Funding Sources
Timeframe
Facilitated collaboration between local elected officials, environmental community and federal partners on land management Explore creation of a business incubator in collaboration with Eastern Oregon University and other partners Prepare Master Plan for Union County Fairgrounds
Union County High Priority
Business Incubator Union County Fairgrounds Master Plan
EOU, UCEDC High Priority Union County, La Grande High Priority Local Interest, LLC, Oregon Rural Action, City of La Grande High Priority
$75,000
20122014
Local Investment Funding/ Angel Funding
Facilitate investment in local business projects Provide locally based wellness/prevention based health care coverage to eligible small business owners and their employees. This is a non-insurance community investment project that services businesses under 50 employees, whose workers median income is 300% of federal poverty level or less, who have been uninsured for 12 months. The current cost to employees and employers is $70/month.
Retain 3 jobs
$262,120
Federal Grant $81,000, Member contributions $94,080, GOBHI $40,000, Unidentified $47,040
20122013
Project Name
Project Description
Job Creation
Budget
Funding Sources
Timeframe
Provide professional assistance for community and economic development projects board organization and/or development, fundraising, grantwriting, project development, project implementation, grant management, etc. Organize and begin grass-roots fund-raising activities to establish a community endowment in Union County to support local priority projects. Collaborate with producers, processors & advocates to identify existing and needed equipment and facilities to enhance local agricultural systems; share information; identify potential funding mechanisms for purchase of equipment/investment in facilities July 2013Sept 2013: NEOEDD conducts supply chain, product transportation assessment.
20122013
Community Endowment
$25,000
20122014
NEOEDD
Regional Food Supply Chain
15
$30,000
NEOEDD
Project Name
Project Description
Job Creation
Budget
Funding Sources
Timeframe
NEON Community Health Worker Training Workforce Housing
Provide training to Community Health Workers (CHW), a newer job sector in health care.CHW are trained to work with high risk or seriously ill patients to assist them in making behavior changes that will help reduce their risk or manage their illness. The goal is to reduce health care visits, particularly ER and hospital visits. The training takes 80 hours. Assess supply of workforce housing Complete a competitive analysis of northeast Oregon compared to competitors for select industries that may be recruited to the region. Preliminary feasibility and engineering study to collocate a trail alongside the railroad tracks from Elgin to Joseph, or on parts of this route. Develop a small creekside park with trail on available property along Hwy 237 in Cove. Improve riparian area on Mill Creek. Consider growth and development opportunities associated with EOU. Reinstate Amtrak rail service to La Grande. Remodel train station providing interesting spaces for shops, offices and cafes.
$52,920
20122013
Northeast Oregon Network Regional Solutions Team
Competitive Comparative Analysis
UCEDC
Rails with Trails
$10,000
20112012
WURA
Ascension Park
$30,000
Ascension School
1 year
Cove Community Association
EOU Master Plan
EOU
Rail Service to La Grande
Cove Comm. Association La Grande EOU
Local Food Cluster Development
A full life cycle environment for local food sustainability that includes warehousing big enough for food storage, stalls for indoor farmers' market vendors during the winter, perhaps kitchen stalls for local vendors to sell hot food and/or bakery items, and possibly a commercial kitchen. This model encompasses producers, distributors, users of local agriculture, and merchants to keep food produced locally in the local economy, rather than shipping it out of the area.
Oregon Rural Action
Wallowa County Projects

Project Description Wallowa County - Infrastructure Wallowa Lake Dam Retrofit Reconstruction of Wallowa Lake Dam Construction of bike/ped. path from Joseph along Wallowa Lake to the head of Wallowa Lake. Extend water/sewer service along Russell Lane to industrial zoned property within the city limits. 20 Construction Bureau of Reclamation Assoc. Ditch Co. High Priority Job Creation Funding Sources Sponsor & County Priority
Budget
Timeframe
$12 million
Bike Path from Joseph to Wallowa Lake
$5,800,000
ODOT
2013-2018
ODOT, Wallowa County High Priority
Water/Sewer Extension to Joseph Industrial Land
45 New Jobs
$250,000
Unknown
2013-2014
Joseph High Priority
Joseph Hillock Property Development
Enterprise Water Reservoir
Wallowa Water System Improvements
WLCSD Distribution System WLCSD Water Meters
Project Description Sewer lines need to be extended to the site and more roadwork is needed to this privately-owned industrial site in Joseph. Replace750,000 gallon reservoir with 1 million gallon reservoir. Solve water pressure problems in parts of the city. Improvements needed include a new well, constructing a new reservoir and completing distribution system improvements. Improve firefighting capacity and water delivery to businesses and residences. Install water meters. Add 1 million gallons of water storage capacity at Wallowa Lake.
Job Creation
Budget
Funding Sources
Timeframe
$28,500
Business Oregon
2013-2015
Joseph High Priority
$4-5 million
$100,000 City
2013-2014
Enterprise Medium Priority
$3,800,000
$3,792,500 CDBG $7,500 City
2011-2013
Wallowa Medium Priority
$498,000 $350500,000
Invested about 300,000 from District funds to date
WLCSD WLCSD Wallowa Lake County Service District
WLCSD Water Storage
$996,000
Wallowa County Community Facilities Replace nursing home with new 20,000 square foot building for aging in place senior care with 8 beds RCF for Alzheimer, 18 beds ALF
Residential Care Facility
Construction then 25 Jobs retained
$4-5 million
Voter approved tax levy used to guarantee revenue bonds of $3.5m, district reserves for balance
site worked completed, anticipated opening 1/1/13
WCHCD High Priority
Project Description Construct office spaces for nonprofit and government use. Replace HVAC system with more energy-efficient system. Restoration and historic preservation of main Museum. Building which is on the national register. Construction of a public restroom for general public and visitors. To be constructed in conjunction with city park expansion plan. Phase 1 Roof covering in 2011 Phase 2 Roof structural supports in 2012 Improve safety of playground equipment, upgrade restrooms. Construction of a new fire hall and city hall. Current building has been repaired and funds are being saved for a new building. Purchase or construct a building for theater and performances. Assure adequate supply of workforce housing.
Job Creation
Budget
Funding Sources
Timeframe
Old Hospital Conversion to Office Park and Education Facility
$180,000 HVAC Remodel not estimated
2012-2013
Wallowa Resources High Priority
Museum Expansion and Restoration
Retain 2 part-time jobs
$105,000
2012-2014
Wallowa County Museum High Priority
Enterprise Public Restroom and Info Center
$75,000
State Parks
2012-2013
Enterprise High Priority
Oddfellows Hall Roof & Maintenance
Construction
$40,000 $80,000
20,000 Loans Phase 1 20,000 Oddfellows
2011-2012
Oddfellows High Priority
Joseph City Park Improvements
$50,000
10,000 City
Joseph
Enterprise Fire Hall and City Hall
$2,500,000
2016-2017
Enterprise
Mid-Valley Theater
Mid-Valley Theater Regional Solutions Team
Workforce Housing
Project Description Phase 2 of this project will result in handicapped parking and a ramp to the basement. Warming table & dishwasher replacement, potential other kitchen improvements, microphone and speaker system improvements.
Job Creation
Budget
Funding Sources
Timeframe
Enterprise Library Handicap Access
$42,000
2012-2013
Enterprise
Community Center Kitchen and Other Upgrades
2013-2015
Joseph
Wallowa County Technical Assistance Fund Wallowa County Business Facilitations business coach to ensure quality counseling and coaching services for start-up and established businesses. Establish an environment that inspires individuals to create and grow successful businesses. Adult and youth entrepreneurial education, training, technical assistance, access to capital, networks, culture and environment that supports entrepreneurs.
Business Coaching
$45,000
WCBF High Priority
20+
$267,500
OECDD CDBG $37,500 VIDA $ 200,000 Unknown $10,000
2012-2013
Community Endowment Enterprise Strategic Plan and Downtown Revitalization
Project Description Begin fund-raising activities & support new boards efforts to establish a community endowment in Wallowa County. Strategic planning, community development and downtown revitalization. Collaborate with producers, processors & advocates to identify existing and needed equipment and facilities to enhance local food systems; share information; improve farm operations and access to markets; identify potential funding mechanisms for purchase of equipment/ investment in facilities.
Job Creation
Budget
Funding Sources
Timeframe
$5,000
2012-2013
RCDI
2012-2015
Enterprise High Priority
Regional Food Processing
15
$30,000
2012-2014
Project Description Provide locally based wellness/ prevention based health care coverage to eligible small business owners and their employees. This is a non-insurance community investment project that services businesses under 50 employees, whose workers median income is 300% of federal poverty level or less, who have been uninsured for 12 months. The current cost to employees and employers is $70/month. Preliminary feasibility and engineering study to collocate a trail alongside the railroad tracks from Elgin to Joseph, or on parts of this route.
Job Creation
Budget
Funding Sources
Timeframe
Retain 3 jobs
$309,000
Federal Grant $81,000, Member contributions $94,080, GOBHI $40,000, Unidentified $94,000
2012-2013
Rails with Trails
$10,000
2013-2016
WURA
Project Description Conduct industrial land surveys, targeted industry analysis, strategic marketing plan for county and cities within the county interested in industrial development. Highlight comparative advantages. Incorporate brownfield redevelopment options. Assure there is an adequate supply of marketable industrial land. Facilitated collaboration between local elected officials, environmental community and federal partners on land management. Provide professional assistance for community and economic development projects board organization and/or development, fundraising, grantwriting, project development, project implementation, grant management, etc.
Job Creation
Budget
Funding Sources
Timeframe
Regional Solutions Team, NEOEDD
Regional Solutions Team
2012-2013
NEOEDD
Project Description Provide training to Community Health Workers (CHW), a newer job sector in health care.CHW are trained to work with high risk or seriously ill patients to assist them in making behavior changes that will help reduce their risk or manage their illness. The goal is to reduce health care visits, particularly ER and hospital visits. The training takes 80 hours.
Job Creation
Budget
Funding Sources
Timeframe
NEON Community Health Worker Training
10-100
$52,920
2012-2013
NEON
District-Wide Energy Projects

Project Name Project Description Installation of two small turbines at the base of Mason Dam to generate 3.4 MW. Renewable energy would be sold to Idaho Power. County in the midst of the Integrated Licensing Process with FERC and others. Baker City, the City of Union and the City of Joseph have identified an opportunity to generate electricity by installing miniturbines on their city water lines rather than utilizing pressurereducing valves. This may be an opportunity for other communities as well. Cities are interested in energy conservation and energy generation opportunities but need technical assistance to get started. Construction of a densified thermal products facility & co-located wood products businesses in Wallowa County. 10 direct creation 16 direct retention 10+ indirect $1,800,000 Job Creation 1 direct Budget Funding Sources State loan, tax credits for 3,000,000 Timeframe Sponsor & County Priority Baker County High Priority
Mason Dam Hydroelectric Project
$4,500,000
2010-2013
Micro-hydro Projects & Energy Conservation Technical Assistance
ODOE,OTEC and Bonneville Power Administration have been identified as potential funders
Baker City, City of Union, City of Joseph High Priority
Integrated Biomass Resource Project
Tax credits, investors, owners
2011-2012
Renewable Energy Solutions High Priority
Baker City Window Replacement
$800,000
Oregon Dept. of Energy
2010
Baker City
Project Name
Project Description Research potential for multi-building biomass heating or other energy efficient heating and weatherization options. Numerous organizations, businesses, communities and projects within the District are considering biofuels projects. NEOEDD supports the development of feasible projects throughout the District. Provide information, help and funding for home weatherization and alternative energy projects in the greater Cove area. Conduct a thorough professional analysis of the geo-thermal capacity in and around La Grande and Union to determine sources, capacity, potential uses, costs associated with transmission & utilization and likely sources of funding for project deployment. Implement energyefficiency measures in school buildings.
Job Creation
Budget
Funding Sources Oregon Department of Energy?
Timeframe
Enterprise Public Building Heating Project
Sponsor & County Priority W.C. Fair Board
Biofuels Project Development
NEOEDD
Cove Area Home Weatherization
Serves up to 580 homes
$300,000
Cove Community Association
Geo-thermal feasibility
Unknown
$200,000
Unknown
Unknown
La Grande, EOU, Union County, UCEDC others
Union Cool School
Unknown
Unknown
ODOE Loan
Unknown
Union School District
Project Name
Project Description Install LED lights along First Street to reduce electrical consumption and trees to provide summer shade. Replace Cobra lights with LED lights. Create mechanism for local investors to fund small-scale private energy projects.
Job Creation
Budget
Funding Sources
Timeframe
Baker City - First Street Historic Lights & Trees
Baker City Lights
Local Funding for Energy Projects
Oregon Rural Action
NEOEDD Scope of Work 2012-2013 Goal 1 Collaborative Planning, Partnerships, Leadership Participate in region-wide collaboration, facilitation and cooperation to plan and implement community growth & sustainability A. Engage community partners such as Wallowa Resources, Union County Economic Development Corporation, Governors Regional Solutions Team, Eastern Oregon University, Baker County Community Development staff, Oregon Rural Action, private sector representatives, local government and non-profit representatives in discussions about regional opportunities, projects and priorities for inclusion in the new Comprehensive Economic Adjustment Strategy and seek resources and partners for regional target industry/competitive comparison analysis. B. Present information about community/economic resources, activities, lessons learned and indicators to public/private groups and through social media and other electronic channels, including NEOEDDs new website. C. Support tourism development partnerships including bicycle tourism activities throughout the region. D. Support leadership development activities throughout the region and specifically partner and participate in Ford Institute for Leadership Program workshops and planning. E. Engage in the formation of collaborative networks and working groups to increase the local economic value of agriculture as it relates to food access issues with a focus on improving the potential for food production, processing and sales from local growers and entrepreneurs. Collaborators in this effort include: Oregon Rural Action, Oregon Food Bank, Food Hub, OSU Extension, Community Connection of Northeast Oregon, private businesses and others. F. Plan for agritourism project that may be funded with the Oregon Travel Philanthropy Fund to support development of new agritourism experiences and sales of local food products. Goal 2 Adequate Funding and Other Resources Enhance access to and effective utilization of financial and other resources to strategically and opportunistically enhance community development A. Provide grant writing and grant administration services to local government and non-profit organizations for project implementation and/or organizational support. Services to be provided to Friends of the Wallowa County Museum for a capital improvement project, Junes Local Market for a Farmers Market Promotion project, and the City of Wallowa for a water system improvement project and for other organizations as appropriate.
1|Page
B. Research potential grant sources for energy-assessment and/or renewable energy projects for municipalities and private companies. Three projects included in the CEDS are related to micro-hydro projects in Baker City, Cove and Joseph. Share information on the availability of resources with these communities and others that may be interested. C. Provide access to Grant Station grant search database results for community and economic development activities. D. Participate in Oregon Economic Development District and National Association of Development Organizations meetings and information sharing opportunities to enhance our knowledge of potential funding sources and to communicate how existing funding sources benefit regional projects. E. Explore the feasibility of delivering grant-writing workshops and potentially deliver workshops to community and project leaders in the region. F. Deliver community endowment workshops at the Eastern Oregon Nonprofit Conference and in Union or Baker counties if we identify local advocates to help host the workshops. Work with the Wallowa Fund Advisory Committee to capture a portion of the wealth transfer in the next ten years with a goal of creating a $5.25 million endowment for Wallowa County projects. Partners include the Oregon Community Foundation. G. Explore feasibility of creating a 501(c)(3) organization to access funding that is not available to NEOEDD as a unit of local government. Goal 3 Economic Opportunity Increase per capita income to achieve statewide equity A. Provide loans to businesses that have the potential to pay above-average wages. Explore ways to increase the amount of capital available for business start-up and expansion. Provide technical assistance to entrepreneurs seeking growth capital. Research demand for capital among food products producers and processors. Develop new targeted loan fund for this potential market if there is adequate demand. Goal 4 Infrastructure, Transportation and Technology Build on and utilize existing infrastructure in transportation and telecommunications, railroads, airports, fiber/telecom and the connectivity of local, state and federal highways A. Assist in the development and marketing of industrial/commercial sites as requested. B. Provide grant administration assistance for Oregon Department of Energy municipal projects in Joseph.
2|Page
C. Provide assistance to the Wallowa Union Railroad Authority and their contractor to access funding and plan for a rails-with-trails project or other railroad infrastructure projects as requested. Goal 5 Quality of Life, Environments As economic development occurs the preservation and development of the quality of life must be a major consideration, including enhancing and protecting the environment A. Partner with local groups, including Main Street programs in Baker City, La Grande and Enterprise to support vibrant downtowns through organizing, faade improvement, business training, marketing and other measures. B. Provide technical assistance, grant-writing, project implementation, evaluation and reporting to non-profit organizations and social enterprises which impact the quality of life in the region. Services may be offered to: Fishtrap, Friends of the Wallowa County Museum, Libraries of Eastern Oregon, Oregon Rural Action, Quail Ridge Golf Course, Maxville Heritage Interpretive Center and La Grande Public Library among others. C. Develop a cooperative agreement with the Environmental Protection Agency to offer environmental assessments of publicly and privately-owned properties. Increase awareness of the benefits of completed environmental assessments, encourage land-owners to request assessments, help connect land-owners to funding sources for remediation services. Goal 6 Education and Workforce Develop a diversified educational system that meets the needs of the emerging high tech world as well as providing an opportunity for everyone to participate to their fullest in our economy. A. Encourage the utilization of local resources, such as community endowments, for scholarships that will result in the return of highly capable individuals to the region. B. Explore opportunities for new or enhanced community college or technical education within the region. Goal 7 Youth Involvement & Opportunities Retain and attract youth A. Recruit young people to participate in planning activities and leadership development activities organized by NEOEDD. B. Recruit young people to participate in the Individual Development Account program. C. Utilize social media to connect to younger residents. Goal 8 Entrepreneurship 3|Page
Provide a strong business environment through entrepreneurship and business opportunity. A. Provide classes, consulting, marketing assistance, networking opportunities and access to capital to existing and potential business owners. B. Make connections between entrepreneurs and other regional, state or national resources as needed. C. Bring value-added agriculture focus to collaborative work with food security advocates. D. Support low-income, limited-asset entrepreneurs with access to Individual Development Account funds, business training and counseling services. E. Research value-chain and distribution channels for local food products. Share results with producers and those that may be interested in providing new distribution services both within the region and externally.
4|Page
Red Lodge
Comprehensive Economic Development Strategy (CEDS)
August 2004
Prepared by The Hingston Roach Group, Inc. David Kolzow & Associates Applied Communications CTA Group, Inc.
TABLE OF CONTENTS
Acknowledgements...........................................................................................iii Executive Summary ......................................................................................ES-1 1. Background & Planning Process ....................................................................1 2. Situation Assessment: .................................................................................... 2 Red Lodge History & Assets................................................................................... 3 Socio-Economic Trends.......................................................................................... 4 Population .................................................................................................... 4 Growth & Development............................................................................ 5 Age Composition ........................................................................................ 5 Education & Enrollment ........................................................................... 6 Income.......................................................................................................... 6 Employment & Wages ............................................................................... 7 Business Inventory...................................................................................... 9 Industry Sales Trends ............................................................................... 11 Agriculture Trends.................................................................................... 11 Retail & Resort Tax Trends..................................................................... 12 Recreation & Tourism Trends ................................................................ 15 Strengths & Weaknesses ....................................................................................... 18 Overall Quality of Life ............................................................................. 19 Real Estate & Public Facilities ................................................................ 22 Business Climate ....................................................................................... 24 Market Access & Marketing .................................................................... 26 Workforce & Training.............................................................................. 28 Transportation........................................................................................... 30 Utilities & Communications.................................................................... 32 Summary of Key Trends, Strengths & Weaknesses .......................................... 33 3. Red Lodge Vision, Priorities & Goals.......................................................... 34 A Vision for the Future of Red Lodge................................................................ 34 Economic Development Priorities ...................................................................... 36 Economic Development Goals............................................................................ 37 4. Strategic Actions to Achieve Goals .............................................................. 38 Economic Development Strategy ........................................................................ 38 Goals and Actions .................................................................................................. 39 5. Organization & Implementation ..................................................................51 CEDS Action Table: Actions, Priorities, Timeline, Responsibilities .............. 53 Next Steps................................................................................................................ 55 Appendices....................................................................................................... 56 A. Summary of Red Lodge Growth Policy.......................................................A-1 B. Airport Business Park Concept Plan Report ............................................... B-1 C. Online Leadership Survey Report................................................................. C-1
RED LODGE CEDS ii
ACKNOWLEDGEMENTS
The planning team wishes to express sincere gratitude for the advice and assistance of the following individuals and organizations:
Red Lodge Economic Development Committee
Estelle Tafoya (Chair), Beartooth Front Community Forum Susan Hovde (Co-Chair), Architect Neil Bratton, Red Lodge Surveying Ruth Brown, Beartooth Nature Center Rich Bruner, First Interstate Bank Pete Critelli, Planning Board Debbra Crolff, Red Lodge Weddings and Events Tom Egenes, Flash's Photography/Red Raven Mary Fitzgerald, Beartooth Insurance Richard Gessling, DDS, Mayor, City of Red Lodge Mick Hawman, H Bar S Real Estate Aaron Kampfe, Out West Global Adventures Don Kinney, Community Builders James Klessens, Beartooth RC&D Tom Kohley, Beartooth Mapping Company Darrell Lowe, Beartooth Flight Center Dorothea Lowe, Sky Lodge Properties, Inc. Kelly Mahana, Beartooth Hospital Foundation Goldie Mandella, Wells Fargo Bank Marcella Manuel, Coldwell Banker Brenda Martin, Red Lodge Spas & Recreation Marge McCarty, The Village Shoppe Greg Mohl, G.B. Mohl Oil & Gas New Ventures Denise Parsons, Red Lodge Chamber of Commerce Gary Robson, Red Lodge Books Betsy Scanlin, Scanlin Law Office Dave Stauffer, City of Red Lodge Beth Steen, The Village Shoppe
Red Lodge City Council & Staff

Mayor Richard Gessling Doug Carpenter Mary Fitzgerald Glory Mahan Tara Reynolds Ann Rood Betsy Scanlin Debbie Tomicich, City Clerk Dave Stauffer, City Planner Val Smith, Assistant Planner
Special Resource & Information Assistance
County Commissioners & Staff
Albert Brown, Commissioner David Davidson, Commissioner John Prinnki, Commissioner Greg McCann, Carbon County Planner Linda Mann, Administrative Assistant
Denise Parsons, Red Lodge Chamber Tim Weamer, redlodge.com Tom Kohley, Beartooth Mapping Company James Klessens, Beartooth RC&D Mary Fitzgerald, Beartooth Insurance Kelly Mahana, Beartooth Hospital Foundation Greg McCann, Carbon County Planner Linda Mann, Carbon County Commissioners Office Darrell Lowe, Red Lodge Airport Board Shelly Beaumont, Carbon County News L. Brent Oliphant, KMXE-FM Vicki Westrick, Red Lodge Rodeo Association Rand Herzberg, USFS Beartooth Ranger District Valerie Sharbono, Montana Department of Revenue Montana Department of Transportation Al Jones, Montana Department of Commerce-Billings Victor Bjornberg, Montana Department of Commerce Marlee Iverson, Montana Department of Commerce Dave Martin, Montana Census Information Center Bob Carr, MSU Billings Ronald Sexton, MSU Billings Randy Rhine, MSU Billings Cindi Fargo, Livingston, MEDA Resource Team Mary Randolph, WRDC, MEDA Resource Team Rod Profitt, Washakie County, MEDA Resource Team
Accommodations & Meals
Jeff Wilson, Best Western Lupine Inn Sharon Nix, The Pollard Hotel Peter Christ, Bridge Creek Restaurant Martha Young, Caf Regis Judy Christensen, Bogarts Restaurant Rob Ringer, Red Lodge Mountain Resort
The Planning Team

Lorraine Roach, President, The Hingston Roach Group Ruth Mohr, Research Analyst PO Box 400, Grangeville, ID 83530 (208)983-2175, lroach@thrgroup.com Dave Kolzow, Principal, David Kolzow & Associates 112 Crystal Creek, Hattiesburg, MS 39402 (601)466-0338, drkolzow@c-gate.net Kate McMahan, Principal, Applied Communications 847 Fern Ct., Walla Walla, WA 99362 (509)527-8455, kmcmahon@initco.net Ron Slade, Land Planner, CTA Group 10180 Cottonwood Road, Bozeman, MT 59718 (406)556-710, rons@ctagroup.com
iii
Funding
The Red Lodge CEDS was produced with funding from Montana Community Development Block Grant (CDBG) Program, USFS Rural Community Assistance (RCA), and City of Red Lodge. In-kind support was provided by Red Lodge Area Economic Development Corporation, Red Lodge Chamber of Commerce, Beartooth RC&D and Beartooth Front Community Forum.
RED LODGE CEDS
Red L o dge C o mpre he nsi v e E cono mi c D ev el opme nt Stra teg y

EXECUTIVE SUMMARY
The community of Red Lodge has extraordinary natural, cultural, recreational and human assets, and a rich history marked by change. It also faces significant challenges caused by changing economic conditions, a lack of living wage jobs, dramatic seasonality in tourism, and growth pressures. This Comprehensive Economic Development Strategy (CEDS) was undertaken as a cooperative effort between the City of Red Lodge, the Economic Development Committee (now the Red Lodge Area Economic Development Corporation, or RLAEDC), the Beartooth Resource Conservation & Development District and the Montana Department of Commerce. Its purpose is to clarify a vision for the future of Red Lodge, to establish priorities and goals, define an action plan to achieve the goals, and identify ways to measure the results of successful implementation of the Strategy. This Executive Summary outlines the key highlights of the CEDS document. Planning Process and Timeline The planning process began in January 2004 and was completed in July 2004. The process involved extensive community outreach, including an online survey of 104 community leaders, interviews, and community meetings. The planning team conducted an in-depth analysis of recent socio-economic and business trends, and assessed the communitys key strengths and weaknesses related to business and economic development. Findings were reported to the community for feedback, and then a Leadership Workshop was conducted to develop a vision and priorities. Finally, the goals, actions and measures of results were developed and refined, followed by an organizational structure, responsibilities and budget to implement the Strategy. The draft CEDS was presented to the RLAEDC and City Council in late June, comments were received through late July, and the final Strategy was delivered in early August 2004. Socio-Economic Trends The population of Red Lodge peaked at 5,000 in 1911, then dropped steadily over the next six decades to 1,644 in 1960 before beginning to recover and grow to its present level of about 2,200. Over the past decade, the population of Carbon County has grown faster than that of Red Lodge, to its current level of about 9,700. The declines were caused by job losses in mining and agriculture, and recent growth is primarily related to an influx of retirees, lone eagles (knowledge-based professionals) and new construction. The average age of citizens in Red Lodge and Carbon County is older than the state average, but school enrollment increased 22% from 2000 to 2003. The median household income in Red Lodge is lower than that of Carbon County or Montana. In real terms, average earnings per job in Carbon County dropped from $23,083 in 1970 to $14,972 in 2000, well below statewide earnings of $23,653 in 2000. More than one-third (38%) of households in Red Lodge earn less than $25,000 per year, and 21% of students enrolled in Red Lodge schools qualified for free or reduced lunches. The percentage of employment in services increased, while employment in manufacturing, agriculture and mining decreased. Nearly half of the people employed in Carbon County are self-employed, which has implications for wage levels as well as health insurance coverage. However, a number of successful specialty manufacturing and professional services businesses are growing, and retirees and second homeowners provide new income to the community. Agriculture has been a primary industry in Carbon County, and while the amount of acres in farms actually increased from 1987 to 1997, the acres of crops harvested and numbers of livestock declined. This indicates a consolidation of farms and more land in the Conservation Reserve Program, creating
RED LODGE CEDS EXECUTIVE SUMMARY ES-1
fewer jobs and farm operation-related revenues to local businesses. Retail sales in Red Lodge declined from 1998 to 2003, reflecting less spending by the agricultural community and greater competition from chain and big box stores in Billings. Meanwhile, tourism-related business sales in lodging and restaurants grew about 9% from 1998 to 2003, based on resort tax collections in Red Lodge. The number of lodging properties has increased; however, Red Lodges tourism assets are severely underutilized much of the year, creating instability in business revenues and jobs. An increase from 40% occupancy to 60% occupancy in local hotels would generate more than $3.5 million in additional spending in Red Lodge, including an additional $100,000+ collected annually in resort taxes to enhance City infrastructure to benefit local citizens and businesses (the resort tax revenues are used to pay for City improvements such as water, sewer, streets and sidewalks). The designation of the Beartooth Highway as an All-American Road, and improvements to Red Lodge Mountain and other tourism attractions, is expected to draw more visitors. Strengths & Weaknesses Red Lodge has tremendous assets related to quality of life, business and economic development, including a breathtaking setting in the Beartooth Mountains, outstanding four-season recreation; an historic downtown district; a variety of arts and cultural activities; and local facilities and services. Some key strengths and weaknesses, which are discussed in detail in Chapter 2, are the following: Strengths
Strong sense of place, overall quality of life, attractive community Dedicated volunteers Mild climate, level of air quality, scenic natural environment Opportunities for outdoor recreation and cultural activities Quality and availability of health care and medical services Land available for development Well-educated professional and technical workforce Competitive wage index for locating manufacturing businesses Presence of strong intellectual capital base Impact of existing tourism industry, and potential as a source of new business development Retail center for local, regional, and tourist markets Proximity to Interstate 90 and Billings airport Lack of sustainable, living wage jobs Shortage of affordable housing Deficient funding/tax base for basic services Shortage of available commercial/business park sites; buildings/office space for businesses No indoor multi-use facility for recreation and meeting opportunities Ineffective/inconsistent planning, support, and building code enforcement from local government City and county often do not collaborate/cooperate effectively Tax system and rates are considered by some as a locational and competitive disadvantage Tourism is extremely seasonal Lack of unified, local marketing effort for tourism and business targets Seasonal closures and reconstruction of Beartooth Highway affect travel/access Distance and accessibility to/from markets (retail, industry, tourism) Costs of commercial airline service, and lack of capacity at Red Lodge airport Aging workforce; lack of semi-skilled/skilled employees; transient workers Insufficient availability of post-secondary education and training Inadequate telecommunications infrastructure Crime rate and substance abuse Divergent viewpoints of appropriate growth/development
EXECUTIVE SUMMARY ES-2
Weaknesses
RED LODGE CEDS
Priority Issues During the Leadership Workshop, community leaders identified priority issues to be addressed, which were then developed into nine goals by the planning team. The issues (in order) were as follows:
PRIORITY ISSUES FOR RED LODGE
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.
Lack of adequate infrastructure and funding for it in the city. (64 participant votes) Lack of sustainable jobs and business environment/ Lack of living wage jobs. (60 votes) Unified vision for development, e.g., create business park and maintain aesthetic appeal of City. (42) Inconsistency/indecision within government, need more responsiveness/accountability. (38) Lack of unified/cooperative and adequate marketing effort. (36) Maximize/make better use of existing community resources (facilities and people). (35) Need to expand health care capability/services; Create a model rural hospital system. (34) Have to address intergovernmental communication/cooperation - see the bigger picture; community beyond the city limits - planning with greater community in mind. (33) Need for affordable housing. (31) Cooperation among civic groups/ Unwillingness to compromise. (22) Revising development codes; simple and user-friendly. (21) Create a model K-12 school system. (19) How do we merge our traditional economy with the New Economy. (17) Infrastructure for developed business park. (16) Improve airport facility. (14) High level of citizen involvement. (13) Get rid of us vs. them attitude of city council and community. (10) Maintain and improve our natural environment. (3) Need for extra/continuing education for City Council. (2)
Vision At the Leadership Workshop, participants also identified elements of a vision for the community an ideal and unique image of the future a description of what citizens want (or do not want) Red Lodge to become. The elements were used to create a vision statement for Red Lodge in 2014:
In the year 2014, Red Lodge has a healthy and diversified economy with an outstanding quality of life. The leaders and local government officials in both the city and county collaborate effectively, which has led to a united pursuit of development priorities and a shared vision. A concern exists locally for the appropriate development of the county as well as the city. Volunteerism continues at a high level. The community is business-friendly, with a new business park that has attracted new small manufacturers and technology-based businesses. These firms provide high wage employment for the workforce in the community, and a sustainable tax base. Small businesses, including homebased businesses and lone eagles, flourish locally, enhancing Red Lodges reputation as a desirable environment for entrepreneurial activity. Skilled and well-educated workers are attracted to the expanding professional and technical job base in the community. Economic development efforts effectively offer business assistance to local firms. Stable year-round tourism provides additional jobs and retail income that meet the needs of local businesses and residents. An indoor multi-use facility provides recreational and meeting opportunities for young and old, as well as for meetings and special events. Outdoor recreation facilities (parks, bike/pedestrian trails, etc.) have been expanded and upgraded in the Red Lodge area, serving both local residents and visitors. A unified and cooperative local marketing effort promotes the community effectively for both tourism and business, with a clear and appropriate Red Lodge brand. RED LODGE CEDS EXECUTIVE SUMMARY ES-3
The Red Lodge school system is a model for the state, expanding the curriculum of K-12 education beyond the basics, with stronger arts and music programs, college prep, vocational-technical offerings, and increased challenges for students. Graduates possess competitive skills that meet the needs of technology-savvy employers. The City has overseen the development of infrastructure to keep pace with new development, including improved streets, curb and gutters, sidewalks, and enhanced sewage treatment capacity. Telecommunications infrastructure across the community meets the technology demands of local businesses and residents. The airport meets growing general aviation needs. Public facilities and institutions serve as a reflection of local pride in the community, with no dilapidated buildings. City government is viewed as responsive, receptive, proactive, consistent, and customer-friendly. Red Lodge continues to have a strong sense of place, maintaining its desirable quality of life. It is a welcoming community, from its attractive entrances to its genuine hospitality and friendliness toward visitors and newcomers. Diversity of population and ideas are accepted. Ongoing efforts have succeeded in preserving and developing the quiet and quaint historic character of the town, with a particular focus on the downtown. Local housing meets the growing needs of the community, particularly for retirees and moderate income families*, and is found in well-planned and attractive neighborhoods. Excellent medical services with a variety of medical specialties are available to all community residents in modern medical facilities. A range of services, including assisted living, are available for elder care. A wide variety of recreational and cultural activities meet the needs and expectations of both young and mature residents, as well as those of visitors. The high quality of the natural environment is recognized throughout the West.
* Moderate income is defined as 80%-120% of median family income in the community.
Goals and Actions The vision and priority issues, along with extensive community input, were used to create an overall strategic framework, ten goals, and actions to achieve the goals. The goals are grouped into four main categories, or strategic areas: 1) Cooperation/ Red Lodge Economic Development Strategy Communication/Collaboration, 2) Workforce Support, 3) Marketing & Business Technical Cooperation, Workforce Assistance, and 4) Infrastructure Improvements. The Communication, Support: four areas are depicted as inter-related pieces of the Housing, Collaboration: Education whole strategy in the figure at right. In the center is City, County, Businesses the Red Lodge Area Economic Development Corporation (RLAEDC), an organization that Red Lodge represents the key partners who will be responsible Area Economic for implementing and monitoring the progress of the Devt Corp. Strategic Plan. The ten goals, and actions that will be taken to accomplish the goals and implement the Strategy successfully are outlined below. Chapter 4 provides details, along with a list of organizations that will lead and/or assist with implementation, and performance measures.
Marketing & Technical Assistance:
Tourism, Business Devt
Infrastructure Improvements:
Municipal, Business Park, Hospital, Airport
Goal 1: The governments of the City of Red Lodge and Carbon County work cooperatively and collaboratively in planning for and resolving the development problems associated with growth.
Action 1.1: Action 1.2: Action 1.3: Action 1.4:
RED LODGE CEDS
Identify and sponsor a leadership development program. Conduct quarterly meetings of key selected leadership. Conduct Newly Elected Officials orientations and workshops. Develop a joint City-County plan and new development regulations.
EXECUTIVE SUMMARY ES-4
Goal 2: City government is responsive to the needs of the business and residential community, it has a consistent and clear set of well-enforced development codes, and it has a highly accountable and efficient system of governance in place.
Action 2.1: Action 2.2: Action 2.3: Action 2.4: Action 2.5: Action 2.6: Action 2.7: Action 2.8: Action 2.9: Hire a full-time City Administrator/Manager. Initiate a comprehensive update of the Citys Growth Policy Plan (see Appendix A). Streamline the City permitting process. Conduct periodic workshop meetings for City Council and Planning Board. Form an advisory subcommittee of the RLAEDC. Strengthen communication between the City and the private sector. Create more effective education/informational tools for businesses and developers. Use the latest and most appropriate computer technology. Incorporate into the Citys development codes buffer zones.
Goal 3: A cooperative and highly targeted marketing program has created stable year-round tourism revenues (and increased resort tax collections for local infrastructure).
Action 3.1: Action 3.2: Action 3.3: Action 3.4: Action 3.5: Action 3.6: Action 3.7: Action 3.8: Action 3.9: Develop a strategy to market Red Lodge aggressively in the off-peak season. Encourage and support local festivals or events. Develop and use a new brand for Red Lodge. Create a Red Lodge Ambassadors Volunteer Corps. Enhance the Chambers media relations program. Conduct a feasibility analysis of converting the rodeo arena into a multi-purpose facility. Partner with the RC&D, Yellowstone Country and regional Scenic Byway Committee. Encourage visitors and vacation homeowners to extend their stays. Continue the effort to initiate a Main Street program.
Goal 4: The City of Red Lodge has adequate municipal infrastructure to meet the needs of the growing business and resident community.
Action 4.1: Action 4.2: Action 4.3: Action 4.4: Update the five year Capital Improvement Plan (CIP). Identify a range of potential funding sources for infrastructure improvements. Adopt a policy to partially repay costs to developers for extending water and sewer. Encourage infill through redevelopment of vacant buildings and upper story spaces.
Goal 5: An effective business development program has promoted a diversified economy (light manufacturing, small businesses) with a growing number of higher wage jobs.
Action 5.1: Formalize the Red Lodge Area Economic Development Corporation (RLAEDC). Action 5.2: Use the RLAEDC scope of work to secure private and public sector investments. Action 5.3: Identify specific high-growth and high-potential businesses. Action 5.4: Develop information materials and web site to use for business prospect response. Action 5.5: Create and distribute a quarterly online and hard copy newsletter. Action 5.6: Sponsor a forum for entrepreneurs to educate them about the business resources. Action 5.7: Schedule speaking engagements at local meetings of civic organizations. Action 5.8: Conduct a site visit in Red Lodge for state and utility economic development officials. Action 5.9: Pursue additional sources of funding. Action 5.10: Initiate a local public relations campaign.
Goal 6: The presence of a fully-developed business park with advanced telecommunications provides an attractive setting for new technology-based operations (see concept drawing, next page, and Appendix B).
Action 6.1: Guide the planning and development of a new business park. Action 6.2: Investigate and pursue potential sources of property development grants and loans. Action 6.3: Work with local telecom carriers and ISPs to fill gaps in coverage.
RED LODGE CEDS
EXECUTIVE SUMMARY
ES-5
Red Lodge Airport Business Park Concept
Goal 7: City and county development codes and plans facilitate the construction of affordable housing in attractive neighborhoods/subdivisions.
Action 7.1: Action 7.2: Action 7.3: Action 7.4: Action 7.5: Action 7.6: Action 7.7: Update the previous housing study. Identify development incentives and regulatory techniques that encourage diversity. Examine and revise land use approval processes. Develop and implement a program to educate the public and elected officials re. housing. Identify existing housing financing tools and develop new tools. Work with non-profit agencies and private employers to construct employee housing. Establish and enforce uniform property maintenance codes.
Goal 8: The Beartooth Hospital and Health Center has become a model rural hospital system, providing expanded health care capability and services.
Action 8.1: Work closely with the administration/Board of the Beartooth Hospital.
Goal 9: The School District has become a model system, providing quality K-12 education. Postsecondary education opportunities are available locally.
Action 9.1: Work closely with the administration and board of the school district. Action 9.2: Work with MSU-Billings to identify an outreach site and programming.
Goal 10: The City and County have resolved the issue of the location and enhancement of the Red Lodge airport.
Action 10.1: Create an Airport Study Committee. Action 10.2: Identify costs for maintenance and development options.
Organization and Implementation The key to implementation of the CEDS is leadership and cooperation. The City Council and the Red Lodge Area Economic Development Corporation (RLAEDC) each play a critical role in the success of the Plan. However, the County and many other local, regional and state organizations are needed as partners with the City and RLAEDC in order for the Plan to succeed in achieving its goals. The CEDS recommends that the Red Lodge Area Economic Development Corporation (RLAEDC) be formalized as a regional partnership, encompassing not just Red Lodge. It is the lead entity for monitoring the implementation of the CEDS. Funding for the RLAEDC would come from private sector partners/investors (businesses, utility companies, developers, etc.), with some additional
cash/inkind contributions from the public sector (City, County, RC&D) and other organizations. An annual budget of $80,000-$100,000 is typical for small full-time economic development organizations, including professional staff, programming, supplies, travel, administration and marketing. A sample budget is included in Chapter 5, along with suggested sources of funding. The organization chart below depicts a suggested structure for the RLAEDC.
Support Involvemt Strategy Policy Budget Personnel Oversight Budget Coordn/PR Tasks Commn Meetings Outreach Reporting (to ED) Recruitmt
RLAEDC Investors Board of Directors

Exec. Director (CEO)
Opns/Admin, Coordn, PR/Comm
Exec Cmte

Admin Oversight
Admin Staff
Education
Forums Outreach Info-sharing

Investors
Benefits/Fees Retention Recruitment
Biz Devt
I.D. needs Address w/ assistance Entrepr. Programs Location assistance
Marketing/PR
Advtsg/Media Website/dbase Brochures

Forum SubCmte Logistics Program
Funding

Grants Other
Next Steps The next steps in the CEDS process are the following: 1. Approval and adoption of final CEDS document by RLAEDC (following review/comments and refinements). 2. Approval and adoption of the CEDS by the City Council; send copies of the CEDS to the U.S. Economic Development Administration (state office in Helena, regional office in Denver). 3. Endorsement of the CEDS by the County Commission. 4. Endorsement and/or adoption of the CEDS by the Chamber of Commerce, RC&D Board, Montana Department of Commerce and other community organizations. 5. Formalize structure/membership/partnerships of RLAEDC. 6. Obtain commitments from partners to implement and report quarterly on progress. 7. Secure investment funding for RLAEDC. 8. Begin implementation of CEDS. 9. Hire full-time City Administrator. 10. Contract a director for RLAEDC. 11. RLAEDC monitor/oversee implementation of CEDS, meet to discuss/report progress twice a year. If the City of Red Lodge, RLAEDC and their partner organizations use the CEDS as a guideline for strategic action over the next five years and beyond, Red Lodge will have an improved economy while retaining the quality of life values and amenities that citizens cherish.
1. BACKGROUND & PLANNING PROCESS

Background Red Lodge is a community with extraordinary assets its people, natural surroundings, quality of life, business community, and civic organizations. Recent growth pressures and changing economic conditions prompted community leaders, the Red Lodge Economic Development Committee and the Beartooth Resource Conservation & Development district (RC&D) to initiate a planning process for a Comprehensive Economic Development Strategy (CEDS). The RC&D assisted the City in obtaining a Community Development Block Grant from the Montana Department of Commerce to help pay for the planning process. Planning Process A planning team led by The Hingston Roach Group, Inc. was contracted to assist the City and Economic Development Committee with the planning process, which began in January 2004. A Resource Team Assessment sponsored by the Montana Economic Developers Association was scheduled in Red Lodge in early February, 2004, so the CEDS planning team scheduled their first trip to coincide with the Assessment process. The CEDS team and the Resource Team worked together to maximize their contacts with the community, and afterward shared information so the reports from both teams would inform each other (the Resource Team report is available online at www.medamembers.org/resourceteams). The CEDS planning process involved four main steps: 1. Information-gathering and assessment: review of all previous planning documents, Red Lodge Growth Policy (see summary, Appendix A), socio-economic trends, tourism trends, analysis of survey results and community input (see step 2, below), situation assessment by consulting team, based on information/input gathered. 2. Community outreach: online survey of community leaders to gather opinions about community strengths and weaknesses (see survey results, Appendix C), community interviews and public outreach for input, including meetings with the Economic Development Committee, business and community leaders, and public forums. 3. Vision and goals for economic development: leadership workshop to develop elements of vision, and identify/prioritize key community issues in order to establish goals; draft vision and goals for ED Committee review and input. 4. Strategic plan for economic development: draft strategic actions and implementation recommendations for ED Committee and City Council review/input; refinements based on input; final Comprehensive Economic Development Strategy (CEDS) plan. The draft CEDS document was presented at an Economic Development Committee meeting, and to the public at a City Council meeting, on June 22, 2004. The final CEDS document will guide future economic and business improvements in Red Lodge. Participants at a Community Meeting In addition to the CEDS document, the planning team also was asked to develop a Concept Plan for the Red Lodge airport business park. The Concept Plan is included as Appendix B of this document. Throughout the project, results of outreach efforts, meeting announcements, and elements of the proposed Strategy were available for review online at www.redlodge.com/ceds.
RED LODGE CEDS 1. INTRODUCTION & PLANNING PROCESS 1
2. SITUATION ASSESSMENT
The Red Lodge economic development strategic planning process involved an assessment of the communitys strengths, weaknesses and opportunities related to economic development, based on the findings of the consulting team. The objectives of this assessment were to: Identify key strengths to emphasize in economic development efforts; Identify key weaknesses that may limit business investment in the City of Red Lodge so that remediation of these local challenges can occur; and, Build the foundation for the identification of appropriate strategies for the focus of economic development activity by the City. The sources of information for this assessment were varied. They included a survey of, and interviews with, community and business leaders, government officials, utility representatives, property owners, real estate professionals, educators, citizens, volunteers, etc. The consulting team also gathered statistical information, and reviewed previous studies and available local data. All of this input was combined with the teams economic, business, and community development experience. The information and knowledge gained from these sources was incorporated into the strategic planning process to further the economic development effort locally. The assessment involved all of the issues that businesses typically consider when evaluating whether and where to expand or locate their business. Among these factors are the following: Market access Business climate Quality of Life Workforce and education Transportation Utilities Real Estate Successful economic development planning involves knowing clearly what assets the area has to promote and what it needs to improve so that the economy can prosper. The following is a summary of socio-economic trends, and aspects that the consulting team believes to be the major strengths (assets) and weaknesses (liabilities and limitations) of Red Lodge from an economic development perspective.
Carbon County & Surrounding Area
RED LODGE CEDS
RED LODGE HISTORY AND ASSETS Carbon County, situated in south central Montana, was established in March, 1895. The northern boundary is marked by the Yellowstone River, while the southwestern corner of the county encompasses part of the Custer National Forest and the Beartooth Mountain Range. Red Lodge lies at the foot of the Beartooth Range, 70 miles southwest of Billings on Highway 212, and 59 miles from the northeast entrance of Yellowstone National Park. Red Lodge, the county seat of Carbon County, is a resort and ranching community with a colorful past. Red Lodge was a booming coal mining town with a population of 1,180 in 1892, expanding to 5,000 by 1911. During those years, European immigrant miners settled the town, leaving their stamp on the community. Today, agriculture, ranching, and tourism are major industries in Red Lodge and surrounding Carbon County. Key attractions in Red Lodge and the surrounding area include:
Historic downtown Red Lodge, featuring buildings constructed in the 1880s to 1915 and a variety of specialty retail and service businesses, restaurants and civic facilities (City Hall, County Courthouse, Post Office, etc.). Beartooth Highway, an All American Road leading to Yellowstone National Park and Cody, Wyoming. Absaroka/Beartooth Wilderness, Cooney Reservoir State Recreation Area, and Beartooth Mountains, for hiking, fishing, boating and camping. Red Lodge Mountain, one of Montanas four destination ski resorts, with an average annual snowfall of 250 inches. The Nordic Center, a complex of cross-country ski trails, two miles west of Red Lodge on Highway 78. Red Lodge golf course, with 18 holes and a clubhouse that seats 150. Beartooth Nature Center, the only facility in Montana for housing wild animals that cannot be returned to the wild, including elk, deer, pronghorn, bear, mountain lions, wolves, bobcats, and foxes. The facility also includes a childrens petting zoo, and attracts 10,000+ visitors annually. Peaks to Plains Museum, highlighting historic Red Lodge and the areas pioneer and mining heritage. Carbon County Arts Guild regional art center in the Red Lodge Depot, with a permanent visual art collection as well as special shows and monthly workshops. Annual events: MARCH: Winter Carnival, National Finals Ski-Joring, St. Patricks Day Parade; APRIL: Peaks to Prairie Triathlon, Hospital Gala; JUNE: Red Lodge Music Festival, Beartooth Run; JULY: Home of Champions Rodeo, Artful Event in the Rockies, Beartooth Rally, Mountain Music Fest, Old Time Fiddlers Contest, Mountain Man Rendezvous; AUGUST: Festival of Nations, Fat Tire Frenzy, BMW Rally, Bluegrass Festival; SEPTEMBER: Labor Day Arts Fair, Coal Dust Ball; OCTOBER: Halloween Festivities; NOVEMBER: Taste of Red Lodge; DECEMBER: Christmas Stroll. Beartooth Hospital, clinics, home health, long-term care and assisted living facilities. Red Lodge public schools, serving pre-school through high school. Red Lodge Airport, offering general aviation, visitor information, charter flights, emergency services/search and rescue staging, aircraft fuel and leased hangar space. Chamber of Commerce, with a full-time Executive Director and 250+ members. Civic Center for indoor sports events and public gatherings. Boys & Girls Club, with daily activities for teens and tweens. Senior Citizens Center and organizations. County fairgrounds and rodeo grounds, adjacent facilities for indoor events of up to 350 people, and outdoor events seating 5,000. Local media: weekly newspaper, local radio station, redlodge.com web site.
2. SITUATION ASSESSMENT 3
Key community facilities and services include the following:

RED LODGE CEDS
SOCIO-ECONOMIC TRENDS The consulting team conducted a review and analysis of socio-economic trends, which provide an important framework for evaluating the conditions and opportunities affecting business and economic development in Red Lodge. Population Trends The population of Red Lodge and Carbon County has fluctuated throughout its history based primarily on the boom and bust cycles of the mining industry. The County population peaked around the year 1920 at 15,279 citizens, then dropped to a low of about 7,000 in 1970, and has grown gradually since then to about 9,675 citizens (see Figure 1 below). Similarly, Red Lodge population peaked in about 1911 at 5,000 residents, then fell to just 1,844 in 1970, and has grown slowly since then to 2,177 residents in 2000 (Figure 2 below). Since 1990, the population of Red Lodge has grown more slowly than Carbon County or the State of Montana (see box at right). However, while Red Lodge has not grown significantly in total population since 1980, there has been substantial turnover in the residents: Only 50% of current Red Lodge residents were born in Montana 31% of residents have moved to Red Lodge since 1995
Population Growth, 1990-2000 Red Lodge 11% Carbon County 18% Montana 13%
In 1990, the population of the Red Lodge County Census Division (Red Source: Census Bureau Lodge and the surrounding area) was 3,252, and the population increased to 3,769 by 2000. In the 1995 City of Red Lodge Master Plan, projected growth within the Census Division by 2010 is 4,453, and by 2015 is 4,889.
Figure 1: Carbon County Population
18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 19 00
Source: Census Bureau
13,962
15,279 11,865 12,571 8,317 10,241 7,080 8,099 9,552 9,675
7,533
8,080
19 10
19 20
Figure 2: Red Lodge Population

Source: Census Bureau
6000 5000 4000 3000 2000 1000 0

18 90
4860
19 30
4515 3026 2950
19 40
19 50
19 60
19 70
19 80
19 90
2152 624
19 20 19 30 19 00 19 40
2730 2278
1644
20 00
1958 1896 2177
19 50
19 60
19 70
19 10
RED LODGE CEDS
19 80
19 90
20 00
20 02
Growth & Development The population trends and projections on the previous page are supported by recent data regarding real estate sales. In 2003, there were 292 real estate sales in Carbon County totaling $43 million a 68% increase over 2002. In spring 2004, realtors reported that they were very low on inventory in all categories (commercial, residential and residential with acreage), although several large parcels were proposed for residential subdivision development, both within and outside of Red Lodge. The number of housing units in Carbon County grew from 4,828 in 1990 to 5,494 in 2000 a 14% increase. Of the approximately 5,500 housing units, 18.5% are vacation homes (Seasonal/Recreation/Occasional Use). Within the City of Red Lodge, there were 1,415 housing units in 2000, and 254 of them (18%) were vacation/seasonal use homes. Of the 9,000 property taxpayers of all types in Carbon County, 1,779 do not reside in Montana (2003 data).
Growth in Carbon County
Subdivision Lots Created Total Lots Created Septic Permits*
* New Construction only
2002 39 42 82
2003 22 28 88
The Red Lodge Master Plan completed in 1995, and the 2001 Growth Policy (a minor update of the Master Plan) provide guidance for current and future land use and development, based on projected population growth. Several parcels are recommended in both documents for commercial and residential development (see Summary of 2001 Red Lodge Growth Policy, Appendix A). Age Composition From 1990 to 2000, the number of children and youth (under age 20) in Red Lodge declined slightly. Meanwhile, the number of young adults (age 20-34), adults age 35-54, and junior matures (age 5564) increased (see Table 1 below). The number of senior matures (over age 65) declined. The median age of Red Lodge citizens is slightly younger than that of Carbon County, but older than the State of Montana and the U.S. (Table 2). Note that the percentage of residents over age 75 is higher in Red Lodge than in Carbon County (likely due to the availability of long term care facilities), and twice the percentage of Montana. As the population grows older, and the Baby Boomers reach retirement age, there are implications for health care, housing, retail goods and services, workforce, transportation and infrastructure, as well as for the pool of volunteers available in the community.
Table 1: Population by Age (Source: US Census Bureau)
Age Profile Under 5 yrs 5 to 9 10-19 20-34 35-54 55-64 65 -74 75 & older Total Popn Median Age 1990 99 156 235 316 489 156 242 265 1,958 39.4 Red Lodge % 2000 5 96 8 125 12 258 16 387 25 691 8 198 12 165 14 257 2,177 41.7 % 4 6 12 18 31 9 8 12 1990 472 629 519 1224 2128 82 873 717 8,080 38.5 Carbon Co % 2000 6 494 8 623 6 1371 15 1233 26 3220 10 1003 11 830 9 778 9,552 41.9 % 5 7 14 13 34 11 9 8 1990 59,257 65,377 119,712 180,839 209,062 68,321 60,884 45,513 799,065 33.8 Montana % 2000 7 54,869 8 61,963 15 140,608 23 161,658 26 277,029 9 85,119 8 62,519 6 58,430 902,195 37.5 % 6 7 16 18 31 9 7 6
Table 2: Median Age (Source: US Census Bureau)

1990 2000 Red Lodge 39.4 41.7 Carbon Co. 38.5 41.9 Montana 33.8 37.5 U.S. 32.9 35.4
RED LODGE CEDS
Education & Enrollment Educational attainment, and the quality and availability of education, is a key component of business and economic development. A well-educated workforce attracts higher-paying jobs to a community. According to the 2000 Census, more Red Lodge residents are high school graduates than the state average, and about the same percentage are college graduates (see box below). More than half of Red Lodge residents age 25 or older have some college education: 24% have a college degree (associates or bachelors), 6% have an advanced degree, and another 21% have some college, but have not completed a degree. Slightly more than one-third (37%) have only a high school diploma, and 11% did not complete high school. There are four public schools in Red Lodge: Mountain View (pre-school to 3rd grade), Roosevelt School (grades 4-6), Red Lodge Middle School (grades 7-8), and Red Lodge High School (9-12). There are six high schools in Carbon County, some graduating only a few seniors annually. Enrollment in Red Lodge schools increased 22% from 2000 to 2003, from 408 students to 522 students.
Educational Attainment: Red Lodge vs. State
(Source: 2000 Census)
Figure 3: Red Lodge School Enrollment, 2003

RL High School, 186, 35% Mountain View, 145, 28%
Population age 25+ Did not complete high school High school graduate Some college, no degree Associate or Bachelors degree Graduate or professional degree
Montana 578,471 14% 30% 25% 23% 7%
Red Lodge 1,633 11% 37% 21% 24% 6%
RL Middle School, 73, 14%
Roosevelt School, 118, 23%
Income More than one-third (38%) of the households in Red Lodge have a total gross income of less than $25,000 per year (Table 3 below). Another 37% earn $25-$50,000, so three-quarters of the households earn less than $50,000 per year. About 26% earn more than $50,000 annually, and 13%, or 133 households, earn more than $75,000 per year.
Table 3: Red Lodge Household Income by Category
Income Category Total Households Less than $15,000 $15,000 - $24,999 $25,000 - $49,999 $50,000 - $74,999 $75,000 - $99,999 $100,000 - $149,999 $150,000 or more Households 1,046 218 178 385 132 102 18 13 % of Total 100% 21% 17% 37% 13% 10% 2% 1%
(Source: 2000 Census, percents are rounded.)
The high percentage of households in lower income brackets is reflected by other income indicators: In 2003, one in five students (21%) enrolled in Red Lodge public schools qualified for free or reduced lunches, based on the income levels of their families. 65% of hospital admissions at Beartooth Hospital are Medicare and Medicaid patients. Most of the income (72%) was from labor earnings (wages and self-employed income), while about one-quarter (26%) was from retirement, social security, or investments (common for older segments of the population).
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The per capita income of citizens in Red Lodge was 10% higher than those in Carbon County or Montana, but the median household income of Red Lodge residents was lower (see Table 4 below). Both income indicators were well below the U.S. average.
Table 4: Income in 1999 (Source: 2000 Census)
Per Capita $ Median Household $ Red Lodge $19,090 $31,750 Carbon County $17,204 $32,139 Montana $17,151 $33,024 U.S. $29,469 $41,994
Figure 4 shows the sources of income in Red Lodge in 2000. Nearly two-thirds (61%) of total income is generated by wages or salaries, and another 11% from self-employment income, for a total of 72% from labor earnings. About 18% was from retirement or investment income, 9% from Social Security and SSI, for a total of 27% from transfer payments. About 1% came from other sources.
Figure 4: Sources of Income in Red Lodge, 2000

(Source: Sonoran Institute, 2000 Census)
Self-Employment Income
Interest, Dividends, Or Net Rental Income Social Security Income Supplemental Security Income Public Assistance Income Retirement Income Other Types Of Income
Wage Or Salary Income
Employment & Wages In 1970, the largest employment sectors in Carbon County were Services and Professional (41% of total employment) and Farm and Agricultural Services (35% of employment, see Figure 5 below). In 2000, the Services and Professional sector had increased to 55% of total employment, and the Farm and Agricultural Services sector had dropped to 22%. The Construction sector had grown from 2.6% in 1970 to 7.6% in 2000, while Government and Manufacturing had declined slightly.
Figure 5: Carbon County Employment by Sector as Percent of Total Employment

1970
Construction 2.6%
(Source: Sonoran Institute)

Government 16.2%
2000
Construction 7.6%
Government 12.3%
Services and Professional 41.1%
Manufacturing (incl. forest products) 3.6% Mining 1.3%
Farm and Agricultural Services 35.2%
Services and Professional 54.7%
Farm and Agricultural Services 21.6% Mining 1.1% Manufacturing (incl. forest products) 2.8%
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Table 5 below shows that the hospitality, entertainment and retail sectors comprise 42% of Red Lodge jobs. Only 3% of jobs are in manufacturing.
Table 5: Jobs by Sector in Red Lodge (2000)
(Source: Sonoran Institute, 2000 Census)
Business Sector Lodging, Food & Beverage, Arts, Entertainment, Recreation Health Care, Education, Social Services Retail Agriculture, Forestry, Fishing/Hunting, Mining Transportation, Warehousing, Utilities Professional, Scientific, Management, Administration, Waste Mgmt Construction Finance, Insurance, Real Estate, Rental/Leasing Government Manufacturing Other Services Wholesale Trade
% 28% 16% 14% 7% 7% 6% 6% 5% 4% 3% 3% 2%
Table 6 below shows that nearly half (45%) of people employed in Carbon County are selfemployed. This includes farmers and ranchers, retail and service business owners, professional services and lone eagles (knowledge-based professionals who are sole proprietors or part of a small group). More than half of the employment is in services, 22% is agriculture-related, and 12% is government. Only 3% of County employment is in manufacturing (141 of 5,006 jobs).
Table 6: Carbon County Employment by Industry
(Source: 2000 Census)
Industry Sector
Total Employment Wage and Salary Employment Proprietors' Employment Farm and Agricultural Services Farm Ag. Services Mining Manufacturing (incl. forest products) Services and Professional Transportation & Public Utilities Wholesale Trade Retail Trade Finance, Insurance & Real Estate Services (Health, Legal, Biz, Others) Construction Government
# Jobs 5,006 2,749 2,257 1,079 901 178 53 141 2,737 119 101 853 329 1,335 379 617
% of Total 100% 55% 45% 22% 18% 4% 1% 3% 55% 2% 2% 17% 7% 27% 8% 12%
The business sectors with the most jobs in Red Lodge tend to pay the lowest wages. Table 7 (next page) shows the average annual wage paid in Carbon County by industry sector in 2002 (excluding government/railroad employees, and self-employed persons). In real terms, average earnings per job in Carbon County dropped from $23,083 in 1970 to $14,972 in 2000. The fastest growing segment of personal income was non-labor sources (retirement, investments), followed by professional and services income, then government and construction. Total net farm and ranch income, in real terms, dropped from $23 million in 1970 to -$0.6 million in 2000.
Table 7: Carbon County Average Annual 2002 Wage

(Source: MT Dept. of Labor Research & Analysis Bureau)
Industry Utilities Transportation & Warehousing Mining Finance & Insurance Professional/Technical Services Information/Communications Wholesale Trade Manufacturing Ag, Forestry, Fishing, Hunting Health Care/Social Assistance All Industries Private Retail Trade Other Services Arts, Entertainment & Recreation Accommodations & Food Services Real Estate, Rental, Leasing Administrative Services
Amount $54,149 $42,538 $32,016 $30,770 $26,460 $25,527 $23,634 $23,078 $20,636 $19,866 $18,737 $17,510 $13,834 $12,913 $10,497 $10,497 $10,479 $ 8,800
In real terms, average earnings per job in Carbon County dropped from $23,083 in 1970 to $14,972 in 2000; well below statewide earnings per job of $23,653 in 2000.
(Source: U.S. Department of Labor)
Business Inventory Red Lodge has a surprising number of businesses for its population base. This is due in part to the influx of tourist dollars, and in part to the number of entrepreneurs and lone eagles who choose to live in Red Lodge because of its quality of life. Table 8 (next page) summarizes the known businesses in Red Lodge by business category. The sectors with the largest number of businesses are tourism-related (lodging, food & beverage, recreation), construction-related, and professional services.
Downtown Red Lodge
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Table 8: Red Lodge Business Inventory

(Source: City of Red Lodge, Red Lodge Chamber of Commerce)
Retail Goods & Services: 11 Gift/Novelty 5 Furniture/Furnishing 6 Bakery/Candy 6 Apparel/Accessories 5 Garden/Nursery 4 Sporting Goods 4 Antique/Used Merchandise 3 Specialty Foods 3 Art Galleries 3 Jewelry 3 Quilt/Fabric/Sewing 2 Hardware 2 Farm Supplies 2 Building Supplies 2 Book/Periodical/Music 1 Drug/Pharmacy 1 Toy Store 1 Florist 1 Grocery Store Auto Sales/Services/Supplies: 6 Auto Body/Parts 4 Automobile/Motorcycle Dealers 1 Gas Station 1 Tire Shop Lodging Accommodations: 24 Hotel/Motel/Resort/Condo 3 Bed & Breakfast 2 RV Park/Campground Dining/Beverage: 14 Restaurants/Coffee Shops 4 Drinking Establishments 1 Catering Service Entertainment: 1 Movie Theater 1 Casino 1 Mobile Music Service Recreation/Transportation: 11 Outfitters and Guides 4 Travel Agent/Reservations Service 2 Golf courses (1 mini-golf) 2 Air Service (airport/instruction) 1 Ski Area
Medical & Other Related Services: 5 Dentist/Chiropractor/Acupuncture 5 Health Service/Massage 2 Clinics 1 Hospital 1 Nursing Home Professional/Business Services: 19 Insurance/Real Estate/Title 11 Consulting 8 Law Office 6 Finance/Bank 5 Janitorial 3 Computer Systems/Design 3 Media (newspaper/radio/cable TV) 3 Architecture 3 Accounting 1 Mapping 1 Graphic Art 1 Surveying Personal Services: 7 Beauty/Barber/Tanning/Tattoo 4 Artists/Writers/Performers 3 Photography/Studio 3 Landscaping/Lawn Care 2 Wedding Consultant 2 Schools (martial art, dance) 2 Laundry 2 Interior Design 2 Funeral Services 1 Day Care Center 1 Musical Instrument Repair Construction & Related Special Trades: 24 Contractor/Builder/Developer 6 HVAC/Paint 5 Flooring 5 Electrical 4 Roofing 4 Steel/Glass/Excavation 2 Concrete Manufacturing/Distribution: 5 Apparel 3 Furniture 1 Meat Processor 1 Commercial Brewery 1 Beverage
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Industry Sales Trends Table 9 below shows total business sales by category for Carbon County, based on the 1997 economic census. Retail trade generated the most revenue, followed by wholesale trade. However, this data does not include agriculture-related sales, or manufacturing companies with less than 100 employees.
Table 9: Business Sales by Category
(Source: 1997 US Economic Census)
Carbon County Retail Trade Motor Vehicle/Parts Dealers Furniture/Home Furnishings Building Materials/Garden Grocery/Food/Beverage Health/Personal Care Gasoline Stations Apparel/Accessories Sporting Goods/Hobby/Book Misc. Retailers Wholesale Trade Food/Beverage Service Arts/Entertaint/Recn Health Care Accommodations Professional/Technical Real Estate
# of Estab. 45 3 2 8 7 2 5 5 3 10 21 41 15 17 11 14 28
Sales $32,775,000 n/a n/a n/a n/a n/a n/a n/a n/a n/a $14,747,000 $10,380,000 $6,718, 000 $4,154,000 $3,875,000 $2,119,000 $1,507,000
Agriculture Trends Historically, mining and agriculture Table 10: Carbon County Farms (Source: USDA Statistics) have been primary industries in 1987 1992 1997 % Chg Carbon County. More recently, Number of Farms 635 599 623 -2% Land in Farms (Acres) 536,553 598,694 735,910 27% agriculture has been in decline in Avg. Farm Size (Acres) 845 999 1,181 29% the county. According to census Total Acres in County 1,310,763 1,310,763 1,310,763 0% data from the U.S. Department of Agriculture, the number of farms in Carbon County decreased 2% between 1987 and 1997, while farm acreage and average farm size increased. These changes indicate a consolidation of farms and farmland. However, the number of crop acres planted and harvested in Carbon County has decreased since 1987 (Figure 6 below). Numbers of livestock (cattle, sheep, lambs) have been cyclical, while showing an overall decline of 4% from 1994 to 2002 (Figure 7 below).
Figure 6: Acres of Carbon County Crops
Wheat, Barley, Oats, Corn, Sugar Beets, Beans, Hay
(Source: USDA Statistics)
104,510 88,080 96,950 94,140 74,780 77,300 71,630 43,670 46,200 37,730 28,670 35,480 1994 1997 1998 1999 32,630 2000 2001 2002 29,030
Figure 7: Numbers of Livestock in Carbon County

75,800
70,300 69,100 68,800 69,900 67,500 1994 1997 1998 1999 2000 2001 2002 66,500
Crops Acres Planted
Crops Acres Harvested
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Carbon County agricultural sales (cash receipts for crops and livestock) declined 14% from 1993 to 2001, while overall statewide agriculture sales declined 9%. But there are signs of recovery: Carbon County agricultural sales improved from a statewide rank of 19th in 1995, to 10th in 2001 (as of this writing, results of the 2002 Agriculture Census were not available at the county level).
Table 11: Statewide Rank of Total Agriculture Income for Carbon County
1993 9th (Source: USDA Statistics) 1995 1997 2000 19th 15th 15th 2001 10th
Figure 8: Carbon County Agriculture Sales ($000)

$53,533 $48,240 $46,980 $44,245
$41,792 1993 1995 1997 2000 2001
Retail & Resort Tax Trends As the Red Lodge business inventory summarized (Table 8, page 10), there are a wide variety of retail businesses in Red Lodge. Many are specialty retailers catering primarily to tourists, such as art galleries, specialty apparel and gift shops, while others are general retailers targeting primarily local residents (hardware, groceries, florist). While the specialty retailers tend to target a higher-priced market, the general retailers are competitive with similar businesses in Laurel or Billings (True Value, IGA, Albertsons, etc.). These locally-owned businesses support the community through their taxes, employment, and donations to local organizations and projects. Some local retailers have developed branded products that are exported from the community to regional and national markets. Examples are Red Lodge Ales, Moosely Tees, and Sylvan Peak Clothing. While the variety of goods and services available in Red Lodge is a tremendous benefit to residents, and an attraction for visitors, many of the businesses struggle with profitability due to the small population base in their trade area and the short length of the peak tourist season. Table 12 on the next page shows the average trade area population typically required for different types of retail businesses. These figures are national averages, and vary depending on location, accessibility and other economic factors. Therefore, the numbers are not intended as a definitive measure of trade area requirements. However, the table does highlight how fortunate Red Lodge residents are to have the variety of businesses that they do. It also demonstrates the difficulty of business survival in areas with a small population base and/or seasonal tourism such as Red Lodge. Consequently, Red Lodge has a high business turnover rate in the retail sector.
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Table 12: Average Trade Area Population Required to Support Retail Stores
Retail Category Food Bakery products stores Candy, nut, confectionery stores Dairy products stores Fish markets Fruit stores, vegetable markets Grocery stores/delicatessens Meat markets Eating and Drinking Drinking places (bars) Eating places (restaurants) General Merchandise Department stores Dry goods stores General merchandise stores Variety stores Apparel and Accessories Childrens/infants apparel Mens and boys apparel Shoe stores Womens apparel Furniture, Furnishings, Appliances Furniture, home furnishings stores Household appliances, radio, TV Music stores, records, instruments Drug Stores Popn Required 10,126 12,594 29,728 51,971 21,259 770 11,463 1,705 842 44,379 34,152 6,899 8,430 33,057 8,403 7,679 4,247 3,437 6,148 23,363 3,749 Automotive Aircraft, boat, motorcycle dealers Household trailer dealers Passenger car dealers Tire, battery, accessory dealers 30,497 46,456 5,657 7,284
Lumber, Hardware, Bldg Matls, Farm Equipt Farm equipment 11,530 Hardware stores 6,374 Heating, plumbing equip. dealers 40,859 Lumber, building materials 6,510 Paint, glass, wallpaper stores 16,239 Miscellaneous Retail Antique/second-hand stores Bicycle shops Book stores Camera, photographic supply stores Cigar, tobacco stands Farm and garden supply stores Florists Fuel, ice dealers Gift, novelty, souvenir stores Hobby and toy stores Jewelry stores Luggage, leather goods stores Newsstands Optical stores Pet shops Sporting goods stores Stationary stores 7,313 100,083 59,815 57,030 38,509 16,774 9,527 7,559 14,965 44,099 9,011 140,684 29,533 14,792 82,455 17,270 33,290
Source: Bureau of the Census, U.S. Dept .of Commerce
Red Lodge is one of several resort communities in Montana that has a local sales (resort) tax, which is levied on sales of lodging, food and beverage, and selected (tourism-related) retail items. The 3% sales tax was approved by voters in 1998, and overall tax collections grew by about 9% ($42,700) through 2003. Figure 9 shows the growth trend (with a dip in 2001), along with the difference in collections by quarter. Not surprisingly, Quarter 3 (July September) has the largest collections, followed by Quarter 2, with Quarters 1 and 4 about equal.
Figure 9: Total Resort Tax Collections, 1998-2003
$600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $1998 1999 2000 2001 2002 2003
Q4 Q3 Q2 Q1
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Figure 10 below shows resort tax collections by sector and by quarter from 1998 to 2003. It is easy to see how the seasonality of tourism in Red Lodge affects business sales, with the exception of liquor sales, which do not fluctuate as drastically as the restaurant, retail and lodging sales. These dramatic fluctuations in sales are difficult for business stability in every sense: cash flow, profitability, workforce availability, employee training costs, and relationships with suppliers.
Figure 10: Resort Tax Trends by Category, 1998-2003 $100,000 $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1998 1999 Restaurant 2000 Retail 2001 Lodging 2002 Liquor 2003
Note that while lodging and restaurant sales have increased overall from 1998 to 2002, retail sales have declined. Figure 11 below shows this trend more clearly. Quarter 2 (April-June) appears to have more stable retail sales than the other three quarters. This stability could reflect a similar trend in lodging sales, but it also could reflect differences in the number of retail businesses reporting, or in business tax reporting times. The resort tax revenues are used to benefit the citizens of Red Lodge by paying for improvements to the water and sewer system, streets and sidewalks, and parks. Increases in local business sales translate to higher collections of resort tax, and hence more funding for local infrastructure and services.
Figure 11: Retail Sales Tax Collections, 1998-2002
$80,000 $70,000
Tax Line Q1 Q2 Q3 Q4
$60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1998 1999 2000 2001 2002
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Recreation & Tourism Trends Red Lodge, nestled in the foothills of the magnificent Beartooth/Absaroka Mountain Range, is surrounded by twenty-eight peaks rising over 12,000 feet and the Custer National Forest; and is considered by many to be the most beautiful gateway to Yellowstone National Park. - Carbon County Profiles Tourism is a major component of the economy of Red Lodge and Carbon County, and the Citys second largest employer behind health care. As noted above, the area has extraordinary natural beauty and recreational assets, along with a variety of businesses to host visitors: 400 lodging guest rooms in motels, B&Bs, ranches, resorts and vacation homes/condominiums 23 dining and beverage establishments 11 outfitting and guiding businesses 4 booking and reservations services, and a Chamber of Commerce visitor center, which greets more than 10,000 visitors annually at the facility Ski resort and golf course, galleries, meeting and conference facilities, etc. The Beartooth Highway, itself a destination as a designated All-American Road, passes through Red Lodge and continues south to Yellowstone National Park. En route, it features dramatic switchbacks overlooking snow-capped peaks, glaciers, alpine lakes and plateaus, and has been called the most beautiful drive in America. Outdoor recreation opportunities in the Red Lodge area include golf, fishing, hunting, skiing, snowboarding, bowling, hiking, mountain biking, camping, white water rafting, and numerous other recreational and sports activities. Analyses of both state and local lodging taxes, as well as skier visits and traffic counts, provide some insights into recent tourism trends. Figure 12 shows the overall trend in collections of state lodging taxes from 1987 to 2002 in Carbon County. There was steady growth through 1999, then a slight decline from 1999 to 2002. In ten years, from 1992 to 2002, the tax revenue grew 76%. The growth is attributed to overall increases in tourism visitation to Montana, as well as increases in the number of lodging properties in the County, and increases in room rates.
$200,000 $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Figure 12: State Lodging Tax in Carbon County, 1987-2002
As Figure 10 on the previous page demonstrates, lodging revenue in Red Lodge is extremely seasonal. During peak tourist season, the population of Red Lodge rises by approximately 1,000 people, including guests of hotels, B&Bs, lodges and vacations homes/condominiums. However, peak summer season is only two months long, from July 4th through Labor Day. The rest of the
year, the hotels generally fill only at Christmas, Presidents Day weekend, and three weekends in March. As a result, the overall average hotel occupancy on a year-round basis is less than 40%, which is below break-even level for most lodging properties. At that level, property owners find it difficult to afford investments in maintenance and upgrades to their facilities. Figure 13 represents skier visits to the four destination ski resorts in Montana. Visitation to ski resorts is affected by snowfall, and substantially accounts for the decrease/increase in visits at Red Lodge Mountain during the 1998-2003 seasons. The proximity of The Mountain to Red Lodge presents economic opportunities for shops, restaurants, hotels, and other tourism related businesses. Red Lodge Mountain completed a Master Plan in 1995, and began a $6 million upgrade and expansion that doubled their uphill lift capacity. The Mountain averages about 120,000 skier visits annually, and 30% of those are snowboarders. Because of its proximity to Billings, Red Lodge sees about the same volume of skiers as Bridger near Bozeman during good snow years. However, Red Lodge tends to be more severely impacted in drought years, when Bridger captures many of the Billings skiers.
Figure 13: Destination Ski Area Visits (by season)
(Source: MT Institute for Tourism & Recreation Research)
350,000 300,000 250,000 200,000 150,000 100,000 50,000 90 -9 1 91 -9 2 92 -9 3 93 -9 4 94 -9 5 95 -9 6 96 -9 7 97 -9 8 98 -9 9 99 -0 0 00 -0 1 01 -0 2 02 -0 3
Big Mtn Big Sky Bridger Red Lodge
The Montana Department of Transportation regularly captures traffic count data on major highways and gateways around the state. Table 13 below shows the increase in traffic volume over the past decade, with a notable spike in 1995. Figure 14 below shows traffic volume and seasonal patterns by month in 2003. Note the large drop in traffic volume when the Beartooth Highway is closed.
Table 13: Average Daily Traffic (ADT)
U.S. 212, 1.8 miles North of Red Lodge (Source: MDT)
Year ADT
1993 2,375
1994 2,587
1995 3,070
1996 2,697
1997 2,721
1998 2,736
1999 2,784
2000 2,772
2001 n/a
2002 2,863
2003 2,870
% Change +21%
Figure 14: 2003 Average Daily Traffic Hwy 212, 1.8 Miles North of Red Lodge
(Source: MDT)
4800 4400 4000 3600 3200 2800 2400 2000 2366 2219 2383 2499 2861 3618
4438 3984
2990 2326 2401 2163

A ug Ju n ct N ov D ec Ju l Se p O
A pr
Fe b
Ja
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Impact and Sources of Visitors Tourism has tremendous economic impact on Red Lodge and Carbon County. A study conducted by the Montana Institute for Tourism and Recreation Research (ITRR) at the University of Montana reported the following economic impact figures for visitors to Red Lodge and Carbon County in 1999: Groups of Tourists to Carbon County/Red Lodge in 1999: 311,490 Groups Staying at Least One Night: 76,440 People per Group: 2.65* Days Spent in Montana: 3.4* Group-days (in MT): 1,059,066 $ Spending per Group per Day (spent in MT): $70.10* Population of County: 9,248 Tourist Dollars per Capita: $580
* Groups who spent the night.
A key year-round source of visitors to Red Lodge is Billings, whose residents come to Red Lodge for skiing, day trips, weekend getaways, golf, dinner, use of vacation homes, and special events. Another key market is Montanans from other parts of the state, who are exploring their own backyard, or passing through to visit Yellowstone, Cody or points further south. The Chamber of Commerce reports that most nonresident visitor inquiries come from people living in Minnesota, the Dakotas, Colorado, Wyoming, Idaho and Washington. These data are consistent with State findings. In winter, about 70% of the skiers come from the local market (within a 60 mile radius), and about 30% from the Dakotas. Significant improvements could be realized for the economy and business profitability in Red Lodge by increasing the amount of off-peak season visitation.
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RED LODGE STRENGTHS AND WEAKNESSES The previous section (Socio-Economic Trends) focused on the facts about Red Lodge, its people, economy and business trends. The next section is an assessment of the areas strengths and weaknesses from the perspective of a business investor, whether the investor is an existing business owner seeking to expand, a start-up entrepreneur, or a business considering relocation to Red Lodge. This assessment is based on the information provided in the previous section, on the survey of Red Lodge business and community leaders conducted by the consulting team, on interviews with businesses and citizens, and on the consulting teams experience in the field of business and economic development.
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OVERALL QUALITY OF LIFE
SIGNIFICANCE Quality of life means different things to different people, but certain factors are widely valued, including a reasonable cost of living, low crime rate, cultural/recreational activities, and overall community ambiance. Entrepreneurs and business owners seeking to expand or relocate a business consider community attributes like housing availability, community attractiveness, cultural-recreational assets and the general cost of living. While cost is a major factor in location decisions of companies, quality of life plays an increasingly important role. Business owners and lone eagles want to live in pleasant communities, and a high quality of life makes it easier to attract and retain the best employees. The quality of life, medical care, crime rate, moderate living costs, and attractive environment must be factored when companies consider new projects and development. The quality and availability of health care also is an increasingly important quality of life factor for potential residents and retirees. Todays information and service-based businesses seek locations where they can find, attract and retain talented, creative professionals. Talented people seek communities with a high quality of life and appealing sense of place, including a vibrant Downtown. Arts, entertainment, diversity, outdoor recreation, events, and places to gather and worship are important to knowledge workers and to the companies who hire them. Attractive development and redevelopment is a critical factor in the communitys sense of place. The success of commercial retail areas is enhanced by pedestrian-friendly customer comforts such as public gathering and green space, shade, benches, bicycle racks, childrens play areas and public/interactive art. Unique businesses in commercial areas add to the communitys character and sense of place, while sprawl detracts from the communitys appeal.
STRENGTHS Sense of Place: Small Town Authenticity, Unique History, Setting Red Lodge has considerable curb appeal as a community. On the Red Lodge leadership survey, more respondents cited the general appearance of the community as a strength than as a weakness. 51% indicated that the appearance of downtown is a strength, and 60% cited the availability of quality restaurants and adequate hotels and motels as a strength. Vibrant Downtowns have something happening 18 or more hours a day, from early morning bakeries and coffee shops to late night social and music spots. 40% of the leadership survey respondents identified the level of cultural activity and facilities in Red Lodge as a strength. Tourism has clearly helped Red Lodge with a range of nightlife and entertainment. A number of local citizens and leaders interviewed were of the opinion that the entrances to the community could be made more attractive, and that attention should be paid to its overall appearance. Participants in the Red Lodge Leadership Survey cited extraordinary scenic beauty, nearby attractions and abundant outdoor recreation as key strengths in the Red Lodge area. Not only do they contribute to quality of life for residents, but are an attraction to visitors.
Volunteerism Red Lodge is an active community, with many dedicated volunteers in a variety of community service organizations and youth programs. Retirees are a tremendous volunteer resource in the community.
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Climate and Air Quality The dry climate (less than 14 inches of precipitation annually) and moderate temperatures provide an attractive environment for outdoor activity. The combination of higher elevation (5,555 feet above sea level), location at the base of a mountain (providing good air drainage), and lack of sources of local air pollution provide excellent air quality. 92% of local leaders surveyed perceive that the level of air quality is a strength, and 62% feel that the quality of the climate is also a strength.
Arts and Cultural Activities Red Lodge has a thriving artist culture for a community its size, including painters, furnituremakers, wood carvers, authors, photographers and musicians. The Carbon County Arts Guild has 400+ members, and maintains a regional art center based in the old Red Lodge Depot. The art center is open year-round with a permanent visual art collection as well as special shows, and several other galleries in Red Lodge offer contemporary art exhibits. The Peaks to Plains Museum showcases the areas heritage. The Beartooth Nature Center attracts 10,000+ visitors annually to view wild animals that cannot be returned to the wild after being injured or orphaned. Local festivals and events celebrate Red Lodges rich ethnic and western heritage. Local media provide event information to residents and visitors alike.
Health Care Quality and Availability Beartooth Hospital and Health Center is a Rural Frontier Critical Access Hospital with facilities for obstetrics, emergency services, and stabilization, as well as 30 long-term care beds and a day care center. Six family practice doctors are in residence. The hospital is a major component of the regional infrastructure, contributing to the health and well being of citizens, and providing a focal point for community health programs. It serves patients from throughout Carbon County and is an important bridge for patient care with the two major hospitals in Billings. Beartooth Hospital also is one of the largest employers in the Red Lodge area, and its relatively high paying jobs provide a significant positive impact on the community. Local leaders emphasize that availability of the hospital and clinics is a significant strength of the community. The hospital is currently considering an expansion and relocation. Issues related to asbestos, ADA accessibility and space limitations in the existing facility (built in 1950) create challenges for renovation (the hospital currently operates under 19 ADA waivers due to noncompliance of the existing facility). WEAKNESSES Availability of Housing for Low- and Moderate-Income Families In 2000, the housing vacancy rate in Red Lodge was 4% for owner-occupied units, and 13% for rental units (59 units available). Realtors report that since 2000, vacancy rates have dropped in all categories of housing. The cost of housing in the Red Lodge area continues to rise (consistent with state and national trends), which reduces the availability for low- and moderate-income households. It
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is difficult for first-time homebuyers to find a home in the $60,000 to $80,000 price range. The average new home price in the community is $150,000 to $170,000. Some of the cost increases are due to development requirements and restrictions that raise the cost of home construction. In the survey of community leaders, 59% responded that low-income families did not have an adequate supply of housing in the Red Lodge area. The 1995 Master Plan and 2001 Growth Policy both cited affordable housing as a priority issue. Lack of housing adds to the cost and time of commuting for people working in low wage jobs in the community.
Crime Rate & Substance Abuse While 59% of the local leaders surveyed perceived that the lack of crime was a strength, Red Lodge actually had a crime index in 2001 of 4,583, which is more than double the 2,040 index for rural Montana, the 3,513 index for the state as a whole, and the 4,163 rate for the nation as a whole. The crime index is based on a rate per 100,000 population by the Federal Bureau of Investigation (as reported by local law enforcement). Local social services and law enforcement organizations report that drug and alcohol abuse problems have been rising in Red Lodge. Methamphetamine was cited as a particular concern. Seasonal employment and low-paying jobs tend to exacerbate these issues. Substance abuse problems are likely a factor in the crime rate cited above, and tear at the social fabric of the community. During 2001, 76% of reported crimes and arrests in Red Lodge were larceny-theft; 13% burglary, 5% aggravated assault; 4% motor vehicle theft, and 2% robbery. (Source: FBI, City of Red Lodge)
Lack of Funding for Basic Services Several community leaders expressed concerns about funding for basic services, particularly services/amenities for the older citizens of Red Lodge. Examples are shoveling snow on downtown crosswalks, removing berms of snow so seniors can access sidewalks, ADA accessibility to public facilities, and transportation for seniors. 25% of survey respondents said that physical accommodations for persons with disabilities are a weakness in the community. Basic services affect all segments of the population, as well as tourists. Increases in resort tax collections through growth in off-peak season tourism could help enhance funding for these basic services.
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REAL ESTATE & PUBLIC FACILITIES

SIGNIFICANCE Constructing and operating a commercial building is a major cost factor for businesses. Companies evaluate office and commercial lease costs and availability when selecting locations for facilities and offices since the costs can vary substantially from area to area. The consulting teams experience in business site selection reveals that 60-80% of new business locations are seeking an existing building. Available buildings are very important to the success of manufacturing, distribution, and technologyrelated projects. Companies also need convenient access to meeting facilities for sales and marketing meetings, strategy sessions, off-site training and occasional gatherings of customers or suppliers. Meeting and event activities attract visitors from outside the area. Other groups gather for association meetings, social events and competitions.
STRENGTHS Land Available for Development The 1995 Red Lodge Master Plan and 2001 Growth Policy projected that an additional 690 housing units would be needed in the Red Lodge area by 2015 to meet population growth demands. Within the City limits, a few lots are available, with more proposed east of Rock Creek, and the Country Club Estates development is only at 40% build-out, with lots selling for $30,000 to $32,000. A high percentage (perhaps 1/3) of homes sold in the Red Lodge area are second homes, with a high number of these sold to out-of-state buyers. The increased demand has led to rising prices. Several large parcels of land in the County are available (and some have been platted) for residential and commercial development.
Public Facilities Red Lodge has a variety of public facilities (parks, pool, ballfields, Civic Center, etc.), although funding has been insufficient to keep up with maintenance and operation of the facilities. Priority public works projects have been completion of upgrades to water and sewer systems. WEAKNESSES Commercial & Business Park Sites Red Lodge does not have enough developed commercial/business park capacity with fully served sites (water, sewer, highway access, high speed telecom) to meet its economic development needs now and into the future. The Beartooth Business Park, located just off of Highway 78 behind the cemetery, consists of 40 acres that are privately owned; including one platted 20-acre site. This Park is located near the airport and is accessed from Highway 78, but it does not have natural gas service, municipal sewer service, and broad-band internet connections, and the number of available sites are limited to two additional facilities. The Business Park provides an attractive setting, with good access to Highway 78 and proximity to an attractive golf course residential community.
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Supply of Available Buildings Specialty manufacturers in Red Lodge who are expanding operations have found it difficult to locate available industrial space in the community, requiring them to build new facilities. Respondents to the community leader survey reported that the supply of professional office space in Red Lodge is limited, although the new Hawkeye Center and former post office buildings provide additional space. In general, limited available space exists for entrepreneurial startups and small businesses. There are some opportunities for redevelopment of buildings that could be used for commercial and professional uses, such as the Theatorium, the pea cannery, the former hotel space above the movie theater, former post office, etc.
Meeting & Event Facilities Some businesses in Red Lodge report a lack of adequate conference and meeting space. This was also viewed as a weakness in the Leadership Survey. Hotel occupancy rates in the Red Lodge area vary greatly by season. Convention and meeting business can enhance occupancy rates in the off-peak months. The size and location of Red Lodge make it unlikely that a free-standing convention center would be financially viable without large amounts of public subsidies. Nationally, the average meeting group size is 50 people. There are a number of existing facilities in Red Lodge that can accommodate groups of 30 to 100+ people, including Rock Creek Resort (400), Bridge Creek Restaurant (100-120), the Bull and Bear, the Elks Club, the Country Club (150), the Labor Temple 3rd floor (following renovation), the Civic Center (for certain types of groups), and the newly-upgraded fairgrounds (350+). These facilities are not packaged or marketed systematically as a unique resource in Red Lodge. The lack of an indoor multi-purpose event facility impairs the Citys ability to attract business during off-peak seasons. Such a facility also could incorporate uses for hosting of sports events, tournaments, trade shows and local recreation (ice rink, basketball, meetings, etc.).
Public Facilities & Services The 1995 Master Plan and 2001 Growth Policy both recommended that a Public Facilities Plan be completed for Red Lodge to address facility needs, including a budget and schedule for addressing them. Resources have not yet become available to complete the Plan. Planning and code enforcement were cited by community leaders as priorities for the City.
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BUSINESS CLIMATE
SIGNIFICANCE Business climate is one of the most important factors in business location decisions, and creation of higher paying jobs. It is a combination of local government effectiveness and attitude, the permitting and regulatory situation, taxes, etc. As the differential in costs for labor and traditional inputs becomes smaller around the country, intangible factors, such as whether business sees local government as helpful, indifferent, or hostile, become even more important as factors in location decisions. How business is treated on a day-by-day basis is the essence of business climate. Business and industry have many locational alternatives when deciding where to make their investment. Time is money. If a community places impediments to the development process, those investment dollars will be placed elsewhere. In addition, the community will gain a reputation as a difficult place to do business, further impeding other business opportunities. Businesses depend on government to provide infrastructure, education, and equitable tax rates. Government regulations such as planning and zoning affect business investment decisions and profitability, which in turn affects jobs. Businesses need cooperation and coordination from all public sector entities when they expand or locate new facilities. Businesses eliminate communities at the final stage of evaluation if they sense that governments dont work together. Power, personality, and politics often create conflicts between jurisdictions that complicate the operations of local businesses. States and communities often tax assets, inventories, sales, net income and purchases. Business tax policies vary greatly between communities, and state taxes and incentives increasingly determine business location decisions. A growing share of new jobs in the U.S. economy stems from the formation of new companies. A business climate that supports and rewards entrepreneurs, and that understands their needs, is an important component of thriving economies throughout the U.S.A.
STRENGTHS Entrepreneurial Climate The presence of a strong intellectual capital base in Red Lodge provides significant potential for the creation of a number of new startup businesses. The high proportion of Red Lodge residents with college degrees offers a strong resource for launching and growing entrepreneurial businesses. A number of lone eagles (knowledge-based professionals who are sole proprietors or part of a small group) already are located in the community. Approximately 30 lone eagles typically attend networking gatherings, and it is estimated that there may be as many as 50 in the community. The Red Lodge Chamber of Commerce has a membership of 250+. Member benefits include business and community promotion, representation of business issues to public officials and the media, networking, and the availability of lower-cost group business insurance. Tourism is a potential source of new business development. Guests in motels and visitors who stop at the Chamber visitor center often inquire about business location opportunities, and the types of businesses available/needed in Red Lodge.
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WEAKNESSES Development Impediments Builders and business owners interviewed by the consulting team mentioned that a lack of consistent and clear interpretation/application of building codes and their enforcement make Red Lodge less attractive for developers. Builders and developers opine that how the City and its planning department administer building programs has been too arbitrary and discouraging for businesses. The zoning code is outdated and needs to be revised, according to developers. Most projects involve a variance, PUD, or rezoning. Standard subdivisions should not require a PUD. Business leaders interviewed perceived that city employees often were not responsive and cooperative, particularly with local businesses. A number of those interviewed indicated that the City could benefit from hiring a full-time city planner and/or administrator/manager. A majority of the leadership survey respondents indicated that local government needs to provide more and better information online, such as codes and permit applications. A difficulty faced by local entrepreneurs is the lack of technical support available in the community and the shortage of available space. Local Economic Development Coordination It was noted in a number of interviews that City and County government do not work well together, which is an impediment for rational economic development. It also was noted in interviews that Chamber of Commerce efforts could be enhanced and more focused in response to needs of the business community. There appears to be a strong polarity in the community between those who want to see sustained growth (on a reasonable level) and those who do not want change. There is lack of agreement on the communitys identity. This produces a significant negative impact on the communitys economic development program. A strong desire exists among the business community for a full-time economic development professional working with an independent Board of Directors to create an active and sustainable economic development program for the Red Lodge area, including a business retention strategy. It is currently difficult to obtain information for business development purposes in Red Lodge. There is no single place to go for readily accessible information, and no welcome committee to address the questions and information needs of business prospects. Roles of public, private and non-profit entities in economic development are not clearly defined. Better linkages to the resources of Montanas university system need to be established (research, tech transfer, engineering, tourism data, Huntley Research Station, Extension). Agriculture is an important part of the economy of Carbon County and Red Lodge, yet the agriculture community does not feel that its contributions are appreciated by many Red Lodge businesses. Tax System and Rates The passage of a 3% resort sales tax in Red Lodge has provided critical funds for infrastructure improvements and marketing, but it is not universally recognized in the community as a source of revenue. Some of the local residents and businesses believe that it puts the community at a competitive disadvantage for consumer shopping. Red Lodge manufacturers consider the local property tax, and the state income tax, a locational disadvantage.
MARKET ACCESS & MARKETING
SIGNIFICANCE Market access, logistics, and marketing costs are an important component of operating costs for all companies. Retailers consider logistics to access their target customer groups. Industrial and manufacturing operations are often located in the geographic center of their markets because of transportation logistics considerations for national, regional, and multi-state territories. Market access also is important to the tourism industry, regional retailers and other consumer service companies, since access to customers is the primary consideration in the success of consumer-oriented business.
STRENGTHS Retail Location As a retail center, Red Lodge serves local, regional and tourist markets. Retail development programming should focus on strategically addressing retail leakage in areas where there is realistic potential for recapturing some of those dollars in Red Lodge. Tourism-Related Promotion The impact of the tourism industry on the community of Red Lodge is considered a strength by 76% of survey respondents. The Chamber of Commerce, Lodging Association, Downtown Merchants and Yellowstone Country regional organization all are engaged in promotion efforts targeting tourists. Strategies include the Red Lodge Guide, billboard ads on Interstate 90, advertising, Internet and direct mail campaigns, and partnerships with state agencies and trade associations. The Beartooth Nature Center is a resource whose potential has not been fully tapped. Higher visibility and additional space for expansion could increase the number of visitors who travel to Red Lodge or extend their stays to see this unique facility. Markets with direct flights into Billings, such as Minneapolis, Denver and Seattle, are logical targets for tourism promotion. Strategic alliances with the Billings CVB and other regional tourism organizations are important to the success of Red Lodge tourism efforts. WEAKNESSES Tourism Marketing The dramatic seasonality of tourism in Red Lodge causes businesses to lack a sufficient volume of customers on a year-round basis. During off-peak times, Red Lodge must find ways to attract visitors for indoor events and activities. National tourism trends reveal that packaging is critical to successful marketing of tourism destinations. The new currency for Americans is time, so the less time that people must spend researching, planning and booking a vacation, the more likely they are to buy. Montana (and other western states) are notorious for their a la carte (ruggedly independent) approach to tourism marketing, making it difficult for potential customers to buy their vacation destinations. Many visitors prefer authentic destinations over Disney, cruises and beach resorts; however, the authentic destinations like Red Lodge need to continue enhancing their packaging of one call buys it all vacation promotion.
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Red Lodge is perceived as being weak in activities for children (who can take only so much scenic beauty). Kids activities such as horseback riding, mini-golf, video games, luge rides, etc. would increase Red Lodges appeal to families. There are more than 40 businesses and organizations promoting Red Lodge to tourists; however, there is no cohesive image or message being projected in a systematic way there are 40 different messages going to 40 different targets in myriad media, which creates information clutter and confusion for potential visitors. All tourism marketing investments could be more effective by pooling some resources for a strategic, cohesive marketing plan and message. The Chamber of Commerce has limited funding and staff resources, which means that the Director is torn between the need to staff the office, answer phones and greet visitors, the need to visit Chamber members at their businesses, and the need to spend time on strategic marketing and business retention activities.
Infrastructure The Beartooth Highway reconstruction between 2004 and 2010 will create delays for visitors, and may cause decreases in visitor numbers. Ski Hill Road is a liability for Red Lodge Mountain Resort. The condition and maintenance of the road detracts from the image and desirability of a destination ski resort. The road also lacks a connection to Highway 78 (as proposed in the 1995 Master Plan and 2001 Growth Policy). National Market Access According to Montana Department of Transportation, the greatest barrier for economic development in much of Montana is distance to markets rather than a lack of infrastructure. Companies that require cost-efficient access to national markets are at a competitive disadvantage throughout Montana, including the City of Red Lodge (see map, below). Lone Eagles are not location-dependent to operate their businesses, so attraction of this business sector is a viable strategy for Red Lodge.
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WORKFORCE AND TRAINING
SIGNIFICANCE The sophistication level of workers in the U.S. has increased over the past decade, as employees utilize more information technology to accomplish their tasks. Workers need good basic skills in math and language as well. Businesses need employees with computer and administrative skills. Low turnover and absenteeism also are important factors as most businesses operate without a redundancy of workers trained in specific operations such as purchasing and accounting. Labor costs are among the most critical cost factors in business location decision. Labor typically accounts for 35% or more of operating costs. As a result, labor costs are closely scrutinized in business development decisions.
STRENGTHS Labor Force Skills Based on local discussions and interviews, it would appear that a number of people with professional and technical skills have moved to Red Lodge to take advantage of its quality of life. Wages The wage index for manufacturing in Carbon County was approximately $9.11 in 2001, based on County Business Pattern data. This compares to $14.97 for the State as a whole and $18.62 for the nation. This indicates a competitive advantage for locating a small manufacturing operation in the Red Lodge area. The other side of the lower wage issue is that it reflects the lack of higher paying jobs in the community, which results in lower household incomes. Median household income in Red Lodge in 2000 was $31,750, which was lower than that of the State ($33,024) or the nation ($41,994). WEAKNESSES Available Labor Supply Carbon County had a 4.2% unemployment rate in December 2003, which was below the 5% for Montana as a whole and the 5.4% for the U.S. This translated to only 190 people unemployed out of a county labor force of 4,512. Red Lodge and Carbon County had median ages of 41.7 and 41.9 respectively, which is significantly older than the 37.5 median age for Montana and 35.3 median age for the U.S. This reflects an influx of retirees and a loss of younger age groups. The implication is a reduction in the size of the workforce, meaning that Red Lodge businesses will need to recruit employees from a larger geographic area, unless more young workers are retained in the community, or more young families move to the area. Local manufacturers indicated a lack of qualified workers in the area. It has been particularly difficult to find semi-skilled to skilled workers. Other employers surveyed by the consulting team indicated it is difficult to find good employees locally, and many of the available workers tend to be transient without a good work ethic. Turnover rates were high at a number of the businesses interviewed.
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Workforce Training The leadership survey demonstrated a significant concern in the community for the availability of post-secondary education and training. 81% of those surveyed expressed the opinion that there is a lack of vocational training opportunities, and a high percentage also believe that the availability and quality of post-secondary education and training is lacking generally. Availability of Quality Jobs The highest rated weakness in the Leadership Survey was the availability of quality jobs in the community for the local workforce. Many of the existing jobs are part-time and/or low wage. Average earnings per job in Carbon County, in real terms, have fallen from $23,083 in 1970 to $14,972 in 2000. In 1999, average earnings per job in Carbon County are lower than the state and the nation. (Source: Sonoran Institute) Several business leaders noted that Red Lodge has a lack of middle wage jobs those in middle management and skilled trades with benefits (see tables below). Manufacturing and other sectors tend to have these types of jobs, while tourism generally does not.
Table 14: Manufacturing Benchmark Position Wages Source: US Dept of Labor, Bureau of Labor Statistics 2002 Mean Hourly Wage 2002 Mean Annual Wage Major Manufacturing Employment Groups Montana Billings Great Falls Montana Billings Great Falls Industrial Production Managers $28.15 $33.40 $58,540 $69,470 none none Electricians $20.72 $21.43 $19.97 $43,100 $44,580 $41,530 Industrial Machinery Mechanics $17.83 $22.54 $37,090 $46,880 none none Supervisors/Managers of Helpers, Laborers, Material Movers $16.10 $15.55 $33,490 $32,350 none none Machinists $15.72 $16.50 $32,690 $34,330 none none Truck Drivers, Heavy $14.60 $12.75 $14.71 $30,370 $26,530 $30,600 Industrial Truck and Tractor Operators $12.61 $11.98 $11.83 $26,240 $24,910 $24,620 Truck Drivers, Light Or Delivery Services $11.38 $12.75 $12.00 $23,670 $26,530 $24,960 Laborers and Freight, Stock, and Material Movers, Hand $9.77 $8.54 $10.45 $20,320 $17,760 $21,740 Packaging and Filling Machine Operators and Tenders $9.65 $10.26 $11.49 $20,080 $21,340 $23,890 Helpers--Production Workers $9.54 $9.66 $19,840 $20,090 none none Packers and Packagers, Hand $8.60 $8.06 $7.84 $17,890 $16,760 $16,320 Table 15: As a Percent of Statewide Wages Source: US Dept of Labor, Bureau of Labor Statistics 2002 Mean Hourly Wage Major Manufacturing Employment Groups Montana Billings Great Falls Industrial Production Managers 100% 119% n/a Electricians 100% 103% 96% Industrial Machinery Mechanics 100% 126% n/a Supervisors/Managers of Helpers, Laborers, Material Movers 100% 97% n/a Machinists 100% 105% n/a Truck Drivers, Heavy 100% 87% 101% Industrial Truck and Tractor Operators 100% 95% 94% Truck Drivers, Light Or Delivery Services 100% 112% 105% Laborers and Freight, Stock, and Material Movers 100% 87% 107% Packaging and Filling Machine Operators and Tenders 100% 106% 119% Helpers--Production Workers 100% 101% n/a Packers and Packagers, Hand 100% 94% 91%
2002 Mean Annual Wage Montana Billings Great Falls 100% 119% n/a 100% 103% 96% 100% 126% n/a 100% 97% n/a 100% 105% n/a 100% 87% 101% 100% 95% 94% 100% 112% 105% 100% 87% 107% 100% 106% 119% 100% 101% n/a 100% 94% 91%
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TRANSPORTATION
SIGNIFICANCE Transportation access is important to economic development for several reasons. It impacts a companys ability to ship and receive goods in a timely and cost-effective manner. It can influence a companys ability to attract and retain employees, since ease of commuting is directly related to highway access and air service. Location consultants find that many companies desire to be immediately adjacent to an interstate highway or a good four-lane highway. Air service is necessary for corporate, client and employee travel. Moreover, tourism is dependent on adequate highway access and available air access. A high cost location from an air service perspective can become a negative factor in business site selection, and visitor trip destination planning. Local general aviation airports serve an important function in providing direct air access to a community by private aircraft. This is important for businesses as well as for tourists.
STRENGTHS Trucking Montana is a net import state, so inexpensive back-hauls are available from Billings to markets around the country. Local manufacturers considered trucking availability to generally range from excellent to good. Interstate 90 is a primary cross-country transportation highway, and Billings is a major crossroads and transportation hub on I-90, which benefits all types of business in the surrounding area. Red Lodge has the ability to attract east-west travelers on I-90, as well as north-south travelers between Montana, Canada and Wyoming/points south.
Proximity to Interstate 90, Billings
Availability of Commercial Airline Service The Billings Airport is served by daily flights from Denver, Boise, Minneapolis, Phoenix, Portland, Salt Lake City and Seattle/Tacoma. WEAKNESSES Rail Access Red Lodge is not served by any rail lines.
Cost of Commercial Airline Service The cost of airfare was cited by a number of businesses as a major detriment to travel for the Red Lodge and Billings area. High cost of airfare also has been shown to be a factor in Montanas ability to attract conventions and destination tourists.
Local Airport Capacity The Red Lodge airport currently is not in compliance with FAA regulations due to runway length and encroachments on the approach. The FAA will not supply funds at this time, and county funds are providing only minimum maintenance. The City-owned hanger is dilapidated.
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The current airport is favorably located for providing direct access to Red Lodge and to the skiing at Red Lodge Mountain due to its proximity to the community. There may be an increase in maintenance needs and costs if hangers are built to accommodate the potential for 80-90 aircraft as stated in the Airport Master Plan.
Highway Access & Road Conditions Red Lodge is served by a two-lane highway that connects it to Interstate 90. Access to and from Yellowstone to the south is not available during the winter months. Generally, Red Lodge is at the end of the line for trucking, resulting in lack of daily service. From a tourist and visitor perspective, the Beartooth Highway is considered to be one of the most scenic in the U.S., connecting Red Lodge to Yellowstone National Park. However, as one business owner stated, For seven months a year when Beartooth Highway is closed, Red Lodge is on a dead end road. Leadership Survey respondents rated the condition and maintenance of local streets and roads as a weakness in the community. A number of those interviewed expressed a desire for more paved streets and better maintenance.
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UTILITIES & TELECOMMUNICATIONS

SIGNIFICANCE High-speed, broadband telecommunications capacity is the infrastructure of the New Economy. Most businesses and industries must have this capacity in order to be competitive and operationally effective. For some companies, especially those with a process that uses heat or water, utility rates can be the deciding factor in their ultimate locations. Commercial and industrial power costs vary significantly from area to area because of differences in fuel selection and regulatory policies. Lack of available water and sewer capacity can be immediate knock out factors for many companies during the site selection process. Sewer capacity is important to all types of industries and businesses. Availability of excess sewer capacity also is an indicator of a communitys readiness for economic development.
STRENGTHS Utility Upgrades The Red Lodge sewer and water systems recently were upgraded, and the City has been using resort tax revenues to pay off the bonds and conduct additional repairs and upgrades. In terms of telecommunication service, cable-modem is a high-speed option for users within the Red Lodge City limits. Business service is available through cable. Wireless service also is available. WEAKNESSES Telecommunications In the past there has been a shortage of available T-1 circuits to, and in, Red Lodge. Businesses were placed on long waiting lists. Qwest, the Local Exchange Carrier for Red Lodge, reported in March 2004 that they are updating the central office equipment to provide OC-12 service between Red Lodge and Billings, which will resolve capacity issues regarding T-1 service. The typical cost of a T-1 line is approximately $1,000/month, so only large business/institutional users are likely to be requesting this service. Only one fiber optic line serves the city, which means a lack of redundancy. This is a drawback for uses such as catalogue sales, call centers and data-intensive users. Cable Montana plans to install a secondary fiber route from Red Lodge to Laurel in 2007/2008. Qwest does not offer DSL service. Billings is a local call so there is an adequate selection of dial-up Internet providers. Another option for low-cost, high-speed Internet is Visionary Internet, which offers wireless service through unlicensed spectrum. Service is available both inside and outside of city limits. Due to the topography, line-of-sight is an issue, and some businesses are unable to use this service. Visionary leases a T-1 line through Qwest to connect to the Internet, so redundancy also is an issue. There are several providers for cellular phone service. Wastewater Service The Red Lodge industrial and airport area currently does not have City sewer service. Red Lodge wastewater treatment is an aerated lagoon type facility which discharges treated wastewater into Rock Creek. The City eventually will be required to upgrade the system.
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SUMMARY OF KEY TRENDS, STRENGTHS & WEAKNESSES Strategic Trends Red Lodge and Carbon County have a low population density; growth is projected to continue. Most population and employment growth in Montana will be concentrated in urban areas. The aging population has major implications for health care, housing, retail goods and services, workforce, transportation and infrastructure in the Red Lodge area. Currently, employment is declining in higher wage manufacturing and resource-based industries (forest products, farming, mining); while service sector employment continues as a growth sector, but with lower scale wages. The tourism and visitor industry is forecast to remain strong throughout Montana. Business and industry in Montana are heavily dependent on the transportation systems due to distance to markets. Businesses wishing to expand or relocate prefer communities with infrastructure/buildings already in place, a business-friendly atmosphere, and a desirable quality of life. Strengths Strong sense of place, overall quality of life, attractive community Dedicated volunteers Mild climate, level of air quality, scenic natural environment Opportunities for outdoor recreation and cultural activities Quality and availability of health care and medical services Land available for development Well-educated professional and technical workforce Competitive wage index for locating manufacturing businesses Presence of strong intellectual capital base Impact of existing tourism industry, and potential as a source of new business development Retail center for local, regional, and tourist markets Proximity to Interstate 90 and Billings airport Weaknesses Lack of sustainable, living wage jobs Shortage of affordable housing Deficient funding/tax base for basic services Shortage of available commercial/business park sites; buildings/office space for businesses No indoor multi-use facility for recreation and meeting opportunities Ineffective/inconsistent planning, support, and building code enforcement from local government City and county often do not collaborate/cooperate effectively Tax system and rates are considered by some as a locational and competitive disadvantage Tourism is extremely seasonal Lack of unified, local marketing effort for tourism and business targets Seasonal closures and reconstruction of Beartooth Highway affect travel/access Distance and accessibility to/from markets (retail, industry, tourism) Costs of commercial airline service, and lack of capacity at Red Lodge airport Aging workforce; lack of semi-skilled/skilled employees; transient workers Insufficient availability of post-secondary education and training Inadequate telecommunications infrastructure Crime rate and substance abuse Divergent viewpoints of appropriate growth/development
3. RED LODGE VISION, PRIORITIES & GOALS

A Vision for the Future of Red Lodge A community vision is an ideal and unique image of the future a description of what citizens want (or dont want) their community to become. It describes a future condition that would be better, in important ways, than what now exists. It is a dream rooted in reality. A clearly articulated vision provides the guidance necessary for people to see changes that must be made to realize their dream. The process of developing a clear vision is predicated on a belief that people can influence their community's destiny by what they do now and into the future. Local leaders and citizens become actively involved in programs to improve their community because of a sense of pride in the community a belief that conditions can and should improve through both individual and mutual effort. This motivation comes from a "shared vision" of the communitys potential. Without vision, leadership tends to be ineffective, and residents lack a strong sense of direction for their future. In March 2004, business and community leaders in Red Lodge attended a workshop to develop a vision for their community, and to identify priority issues that must be addressed to realize the vision. Following a brief presentation about economic development trends and the visioning process, workshop participants described their vision of the community as it would exist in the year 2014. Small group discussion was used to achieve consensus on the priority components of the vision. The following vision statement is a compilation of these consensus components: Vision for Red Lodge in 2014
In the year 2014, Red Lodge has a healthy and diversified economy with an outstanding quality of life. The leaders and local government officials in both the city and county collaborate effectively, which has led to a united pursuit of development priorities and a shared vision. A concern exists locally for the appropriate development of the county as well as the city. Volunteerism continues at a high level. The community is business-friendly, with a new business park that has attracted new small manufacturers and technology-based businesses. These firms provide high wage employment for the workforce in the community, and a sustainable tax base. Small businesses, including home-based businesses and lone eagles, flourish locally, enhancing Red Lodges reputation as a desirable environment for entrepreneurial activity. Skilled and well-educated workers are attracted to the expanding professional and technical job base in the community. Economic development efforts effectively offer business assistance to local firms. Stable year-round tourism provides additional jobs and retail income that meet the needs of local businesses and residents. An indoor multi-use facility provides recreational and meeting opportunities for young and old, as well as for meetings and special events. Outdoor recreation facilities (parks, bike/pedestrian trails, etc.) have been expanded and upgraded in the Red Lodge area, serving both local residents and visitors. A unified and cooperative local marketing effort promotes the community effectively for both tourism and business, with a clear and appropriate Red Lodge brand. The Red Lodge school system is a model for the state, expanding the curriculum of K-12 education beyond the basics, with stronger arts and music programs, college prep, vocational-technical offerings, and increased challenges for students. Graduates possess competitive skills that meet the needs of technology-savvy employers.
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The City has overseen the development of infrastructure to keep pace with new development, including improved streets, curb and gutters, sidewalks, and enhanced sewage treatment capacity. Telecommunications infrastructure across the community meets the technology demands of local businesses and residents. The airport meets growing general aviation needs. Public facilities and institutions serve as a reflection of local pride in the community, with no dilapidated buildings. City government is viewed as responsive, receptive, proactive, consistent, and customer-friendly. Red Lodge continues to have a strong sense of place, maintaining its desirable quality of life. It is a welcoming community, from its attractive entrances to its genuine hospitality and friendliness toward visitors and newcomers. Diversity of population and ideas are accepted. Ongoing efforts have succeeded in preserving and developing the quiet and quaint historic character of the town, with a particular focus on the downtown. Local housing meets the growing needs of the community, particularly for retirees and moderate income families*, and is found in well-planned and attractive neighborhoods. Excellent medical services with a variety of medical specialties are available to all community residents in modern medical facilities. A range of services, including assisted living, are available for elder care. A wide variety of recreational and cultural activities meet the needs and expectations of both young and mature residents, as well as those of visitors. The high quality of the natural environment is recognized throughout the West.
* Moderate income is defined as 80%-120% of median family income in the community.
This vision statement is a synthesis of priorities expressed by community leaders at the workshop, but it is not written in stone. Ongoing input from citizens and leaders of Red Lodge will refine the statement in the short term. And, as the area and circumstances change, the statement will need to be reviewed and modified to reflect community views. It is from this vision statement that the goals and priorities for action will emanate for the economic development strategic plan. The vision supplies general guidance for the community; the goals and strategic actions provide the specifics on how to get there.
View of Red Lodge from West Bench
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Economic Development Priorities The foundation of an effective strategic planning process is a clear understanding of the most important issues confronting the community. Economic development issues are expressed as problems to be solved, concerns or needs to be addressed, or opportunities to be pursued. For issues to be meaningful, they must be stated clearly as problems, concerns, needs, or opportunities. In the March 2004 workshop, Red Lodge leaders identified and prioritized key economic development issues facing the community. Small groups identified and ranked their list of issues, and the lists were then combined into one list, so the group as a whole could rank their economic development priorities. This Nominal Group Technique process resulted in the following list of economic development issues in order of priority (numbers in parentheses are number of votes):
PRIORITY ISSUES FOR RED LODGE
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.
Lack of adequate infrastructure and funding for it in the city. (64) Lack of sustainable jobs and business environment/ Lack of living wage jobs. (60) Unified vision for development, e.g., create business park and maintain aesthetic appeal of City. (42) Inconsistency/indecision within government, need more responsiveness/accountability. (38) Lack of unified/cooperative and adequate marketing effort. (36) Maximize/make better use of existing community resources (facilities and people). (35) Need to expand health care capability/services; Create a model rural hospital system. (34) Have to address intergovernmental communication/cooperation - see the bigger picture; community beyond the city limits - planning with greater community in mind. (33) Need for affordable housing. (31) Cooperation among civic groups/ Unwillingness to compromise. (22) Revising development codes; simple and user-friendly. (21) Create a model K-12 school system. (19) How do we merge our traditional economy with the New Economy? (17) Infrastructure for developed business park. (16) Improve airport facility. (14) High level of citizen involvement. (13) Get rid of us vs. them attitude of city council and community. (10) Maintain and improve our natural environment. (3) Need for extra/continuing education for City Council. (2)
This list is not completely inclusive of all development problems or issues facing the community. Because no organization or local government can tackle all local issues equally well given the limitations of funding, resources, and staffing, it is vitally important for the community to focus on those issues that are most critical to its future. The local economic development effort should target its activities on those elements that are directly related to the successful improvement of the local economy, while maintaining the outstanding quality of life in Red Lodge. The future of Red Lodge from this point forward depends how involved and how proactive local leaders become. The priority issues do not encompass everything that needs to be done in the community to make it a better place to live, work, and play. However, local leaders have decided that these are the most important problems that must be overcome if the city is to move forward in raising local incomes, creating more jobs, and generating more tax revenues. The March leadership workshop was just the beginning. The process must continue. The community is in a race with no finish line. Now it is time for key leaders to step forward and facilitate the steps necessary to bring about needed changes.
Economic Development Goals for Red Lodge How are those changes brought about? First, the preceding highest priority issues were converted into a series of economic development goals for Red Lodge to be accomplished by the appropriate local organizations. Although some of the goals and their consequent actions are not directly related to the creation of jobs or attraction of firms, economic development professionals realize that the economic future of communities rests on the foundation of such issues as quality of life, local education, infrastructure, roads and highways, municipal services, etc. Companies will not be attracted to or expand in communities that cant meet the basic requirements of satisfactory livability as well as a good business environment. The leadership of Red Lodge recognizes the importance of developing a strategic plan that will address key economic development issues, create an environment for successful business investment, and ultimately, increase the communitys standard of living. The plans main theme is to facilitate efforts community-wide among private and public partners to accomplish important goals for securing the economic future of the community. These goals reflect the priorities identified by the leaders of the community in its March 2004 workshop. The priority order has been changed to reflect the necessary staging or sequence of activity. In other words, some things need to be done first, even though they are not necessarily the most important in the larger picture.
Goal 1: The governments of the City of Red Lodge and Carbon County work cooperatively and collaboratively in planning for and resolving the development problems associated with growth. Goal 2: City government is responsive to the needs of the business and residential community, it has a revised growth policy, a consistent and clear set of well-enforced development codes, and it has a highly accountable and efficient system of governance in place. Goal 3: A cooperative and highly targeted marketing program has created stable year-round tourism revenues (and increased resort tax collections for local infrastructure and services). Goal 4: The City of Red Lodge has adequate municipal infrastructure to meet the needs of the growing business and resident community. Goal 5: An effective business development program has promoted a diversified economy (light manufacturing, small businesses) with a growing number of higher wage jobs. Goal 6: The presence of a fully-developed business park with advanced telecommunications provides an attractive setting for new technology-based operations. Goal 7: City and county policies, plans, codes and partnerships with other organizations encourage the construction of affordable housing in attractive neighborhoods/subdivisions. Goal 8: The Beartooth Hospital and Health Center has become a model rural hospital system, providing expanded health care capability and services. Goal 9: The School District has become a model system, providing quality K-12 education. Post-secondary education opportunities are available locally.
The following goal reflects an economic development issue for the community, from the perspective of the consulting team, that needs to be addressed in the near future.
Goal 10: The city and county have resolved the issue of the location and enhancement of the Red Lodge airport.
4. STRATEGIC ACTIONS TO ACHIEVE GOALS

The economic development process involves three key steps: first, identify a common vision and plan throughout the Community so all efforts are cohesive, consistent, and strategic. Second, develop the product (the community). Third, promote the product so citizens recognize its strengths and take pride in them, and businesses and business prospects know what the community has to offer. A well-designed formal plan that guides the actions and resource allocations of local government and various development organizations offers the following benefits to the community:

Coordination of activities so that actions of organizations and agencies are inter-related. Setting of a realistic timetable for getting things done. Better communication about what organizations and agencies are trying to achieve and why. Identification of expected outcomes. Preparation to meet changes when they occur. Management, not avoidance, of risk. Focusing of efforts generally there are more problems and opportunities than resources available. Basis of a control system the ability to see when activities are deviating from the plan as well as to evaluate the results so that they meet stated goals and community values. Maintenance of organizational integrity strategic plans, by clearly specifying the strategies the organization will pursue and rooting those choices in a thorough understanding of the organization's goals, help prevent a series of ad hoc decisions that carry it farther and farther away from its true concern.
The Red Lodge Economic Development Strategy The economic development goals for Red Lodge listed on the previous page can be grouped into four main categories, or strategic areas: 1) Cooperation/Communication/Collaboration, 2) Workforce Support, 3) Marketing & Business Technical Assistance, and 4) Infrastructure Improvements. The four areas are depicted as inter-related pieces of the whole strategy in the figure at right. In the center is the Red Lodge Area Economic Development Corporation (RLAEDC), an organization that represents the key partners who will be responsible for implementing and monitoring the progress of the Strategic Plan. The actions that will be taken to accomplish the goals and implement the Strategy successfully are detailed on the following pages, along with a list of organizations that will lead and/or assist with implementation.
Red Lodge Economic Development Strategy
Cooperation, Communication, Collaboration:

City, County, Businesses
Workforce Support:
Housing, Education
Red Lodge Area Economic Devt Corp. Marketing & Technical Assistance:
Tourism, Business Devt
Infrastructure Improvements:
Municipal, Business Park, Hospital, Airport
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Goal 1: The governments of the City of Red Lodge and Carbon County work cooperatively and collaboratively in planning for and resolving the development problems associated with growth. Red Lodge and Carbon County will continue to experience increasing pressure from new growth and development. To some extent, growth is inevitable, but it can be guided, and policies can be established to ensure that new growth pays for itself and does not happen at the expense of existing citizens and businesses. This type of growth requires collaboration and communication between the City, County and property owners, so that reasonable development is allowed to benefit, rather than degrade, the quality of life in Red Lodge and the surrounding areas of the county. Cooperation and communication between the City, County and business/property owners was the most frequently mentioned issue during the Resource Team Assessment of Red Lodge in February 2004 (see Section 1, Introduction & Planning Process, for more information). Action 1.1: Identify and sponsor a leadership development program for business and political leaders to provide training about the critical need for collective action to resolve community problems, the array of options and tools available, and about effective collaborative leadership skills. An example is the Stephen Covey leadership development program, or Leadership Montana offered by MSU-Billings. (Note: this action does not refer to leadership programs offered by many chambers of commerce across the U.S., which tend to focus on creating more informed leaders rather than more skilled leaders.) Responsibility: Red Lodge Area Economic Development Corporation, Chamber of Commerce, City of Red Lodge, Carbon County Board of Commissioners, Beartooth RC&D, Montana League of Cities & Towns, Montana Association of Counties. Conduct quarterly meetings of key selected leadership to work toward a higher level of collaboration, focusing on addressing more effectively the priority development issues of the community. Responsibility: Chamber of Commerce. Conduct Newly Elected Officials orientations and workshops for the newly elected officials of Red Lodge and Carbon County. The workshops are intended to educate the new officials about a variety of topics related to efficient government, budgeting, legal issues, media relations, and the priority development issues facing the community. Responsibility: Red Lodge Area Economic Development Corporation (RLAEDC), Chamber of Commerce, MLCT, MACo, City Manager, County, MSU Local Government Center. Develop a joint City-County plan and new development regulations for the unincorporated areas surrounding Red Lodge (a Special Study Area), creating a developer-friendly planning process for subdivision development that is consistent with the Growth Policy and with good planning principles. Resources available to fund this process include CDBG planning funds and the USFS RCA program. Responsibility: City Planning Department, County Planning Department.
Action 1.2:
Action 1.3:
Action 1.4:
Measures of Results: Results of actions listed under Goal 1 will be monitored and evaluated as follows: Participation among business and elected leaders in leadership development program. Participation in, and tangible outcomes from, quarterly meetings of leadership. Quality of, and participation in, Newly Elected Officials workshops. Survey completed by leaders to evaluate orientations, workshops and training, and to indicate areas for additional information desired. Completion of joint City-County plan for unincorporated areas surrounding Red Lodge.
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Goal 2: City government is responsive to the needs of the business and residential community, it has a consistent and clear set of well-enforced development codes, and it has a highly accountable and efficient system of governance in place. The current Growth Policy for the City of Red Lodge does not meet Montana standards, and current codes create unnecessary processes and delays in the development and permitting process. Limited resources make it difficult for the City to respond effectively to citizen and business needs at current staffing levels. Moreover, the issues related to growth, code interpretation/enforcement, permitting processes, etc. have continued to grow in size and complexity. Action 2.1: Hire a full-time City Administrator/Manager who also is a certified Planner or has significant municipal planning experience. Responsibility: City of Red Lodge Mayor/Council. Initiate a comprehensive update of the Citys Growth Policy Plan to comply with state requirements and provide a framework for code revision. The Plan will include sections on intergovernmental coordination, housing, public participation, etc. The process also will help identify areas of conflict between City codes, ordinances and standards, which can be addressed subsequent to the update of the Growth Policy. Responsibility: City Planning Department. Streamline the City permitting process by eliminating and combining steps, reducing unnecessary planning board review, and creating an effective one-stop capability. An example is to review requirements for a PUD versus review for standard subdivisions. Restructure some processes to provide for communication among parties earlier in the development process. Responsibility: City Planning Department. Conduct periodic workshop meetings for City Council and Planning Board members about the need and procedures for sound planning and permitting. Responsibility: City Planning staff and Planning Commission. Form an advisory subcommittee of the RLAEDC, consisting of representatives from the City, Planning Commission, County, Chamber, business, development, real estate and finance communities. Schedule quarterly meetings to review and discuss updates and input regarding specific proposals for changes, improvements, etc., to processes, standards and ordinances, and provide to feedback to the City Council and the Red Lodge Area Economic Development Corporation Board. Responsibility: RLAEDC, City Planning Dept. Strengthen communication between the City and the private sector through such means as Development Forums, annual reports and customer satisfaction surveys for citizens/businesses who have utilized the Citys permitting process. Responsibility: City Planning Department, RLAEDC. Create more effective education/informational tools (checklists, guides, etc.) for businesses and developers in Red Lodge, including a user-friendly City web site. Responsibility: City Planning Department. Use the latest and most appropriate computer technology where practical to improve the development process for both local government and business, inclusive of placing a searchable development code on an enhanced City web site. Responsibility: City Planning Department.
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Action 2.2:
Action 2.3:
Action 2.4:
Action 2.5:
Action 2.6:
Action 2.7:
Action 2.8:
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Action 2.9:
Incorporate into the Citys development codes buffer zones with appropriate development standards (e.g., low densities, maintenance of public access, appropriate street lighting, landscaping, signage, and street standards) where urban development meets permanent open space or natural areas. Responsibility: The City Planning Department.
Measures of Results: Results of actions listed under Goal 2 will be monitored and evaluated as follows: Presence and effectiveness of City Administrator. Improvements to City permitting processes, codes and ordinances. Provision of online information tools for businesses and developers. Results of customer satisfaction surveys (and improvements over time) demonstrating improvements in the relationship and process between citizens/businesses and the City. Reduction in the average time of review and approval for permits.
Red Lodge City Hall
Goal 3: A cooperative and highly targeted marketing program has created stable yearround tourism revenues (and increased resort tax collections for local infrastructure). Red Lodge has tremendous tourism assets, but they are severely underutilized much of the year, creating instability in business revenues and jobs. There are many possibilities for meetings, retreats and competitions (state spelling bee, state quilting show, music events, air shows/fly-ins, etc.), that could be recruited to Red Lodge. An increase from 40% occupancy to 60% occupancy in local hotels would generate more than $3.5 million in additional spending in Red Lodge, including an additional $100,000+ collected annually in resort taxes to enhance City infrastructure to benefit local citizens and businesses. The Chamber of Commerce plays a key role in tourism development and promotion, and needs to focus strategically on ways to increase off-peak season tourism revenues. Action 3.1: Develop a strategy to market Red Lodge aggressively in the off-peak season to state/regional conferences, meetings, events, competitions, charity events, golf tournaments, travel publications, corporate incentive market, and group gatherings. a) Package local meeting spaces, catering, entertainment and activities to assist meeting/event planners. b) Coordinate with Montana Dept. of Commerce Promotion Division and Yellowstone Country on group promotions, targeted group leads and media relations. c) Contact local businesses and citizens to obtain meeting/event leads for organizations with whom they are affiliated. d) Initiate a Local Host program to encourage/train Red Lodge area citizens to assist in recruitment of meetings and events. Obtain meeting/event leads from local citizens/businesses via a brief survey, and follow up with direct sales effort. e) Consider providing an incentive (commission) program for the Chamber Director for all new group meetings/events booked in Red Lodge as a result of marketing efforts. Responsibility: Chamber of Commerce, Lodging Assn., Downtown Assn.
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Action 3.2:
Encourage and support local festivals or events that attract visitors and attention to the community, particularly in off-peak seasons (workshops, arts events, film festival, shows/competitions, music institute, charity fundraising events that attract invited benefactors, etc.). Partner with local arts and event organizations to promote targeted events, and to identify opportunities to enhance local performance facilities. Package the events with lodging and meals for weekend getaways. Responsibility: Chamber of Commerce, RLAEDC, Arts Guild, Carbon County Historical Society, Fair Board, Rodeo Board, event organizations. Develop and use a new brand for Red Lodge, including a promotional theme and logo for the community. The brand should highlight the unique assets of the Red Lodge area for both tourism and business, and should be used consistently in promotional materials, letters, web site, business cards, etc. (see box, next page). Responsibility: Chamber of Commerce, RLAEDC. Create a Red Lodge Ambassadors Volunteer Corps of 20-50 people to manage and staff the Chamber visitor center, including answering phones; responding to mail/email inquiries; greeting visitors; stocking/ordering visitor information materials; tracking visitors/inquiries; etc. Provide a system for coordinating and rewarding volunteers (volunteer contracts, training, lead volunteer coordinator, tshirts, annual appreciation banquet, etc.). Responsibility: Chamber of Commerce. Enhance the Chambers media relations program, targeting specialty and niche magazines/publications with media articles, invitations to travel writers, mailing of media kits, etc. Additionally, send press releases and public service announcements to selected radio/television/Internet media about Red Lodge events, weather reports, fundraising activities, etc. Focus on media that will promote off-peak season activities or events. Coordinate with Yellowstone Country and the Montana Department of Commerce to acquire lists of writers/editors and conduct mailings. Track results of campaign (placements of articles/announcements, total column inches/air time, value of publicity if purchased, etc.). Responsibility: Chamber of Commerce, Lodging Association, Dept. of Commerce. Conduct a feasibility analysis of converting the rodeo arena into a multipurpose indoor/outdoor facility for accommodating the rodeo, indoor sporting events, large meetings, trade shows, concerts, etc. Responsibility: Red Lodge Rodeo Board, Red Lodge Area Economic Development Corporation, Chamber of Commerce. Partner with the Beartooth RC&D, Yellowstone Country and the regional Scenic Byway Committee to develop additional visitor enhancements and yearround attractions along the Beartooth All-American Road. Consider additional designation of U.S. Highway 78 (the Bozeman Trail) as a State Scenic Byway to attract visitor traffic during times of the year when the Beartooth Pass is closed (tiein as a loop to U.S. 212 or 308/72). Create loop tours of the area, using Red Lodge as the hub, and partner with other regional communities for larger loop tours. Responsibility: Chamber of Commerce, RC&D. Encourage visitors and vacation homeowners to extend their stays in Red Lodge through event and activity promotions, such as kids activities (mini-golf, video, luge, etc.), historic walking tour brochure, creation of newsletter for nonresident homeowners to inform them about City news and local events, etc. Responsibility: Chamber of Commerce, City, Carbon County Historical Society.
Action 3.3:
Action 3.4:
Action 3.5:
Action 3.6:
Action 3.7:
Action 3.8:
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Action 3.9:
Continue the effort to initiate a Main Street program in Downtown Red Lodge, using the four-point approach of the National Main Street Center (www.mainstreet.org). Identify opportunities to recapture retail spending leakage from the community by filling gaps in product offerings for local residents (e.g., general merchandise, locally-owned dollar store, farmers market, etc.). Initiate retail events and promotions to encourage residents to shop locally. Install signs at junction of Highways 212 and 78 directing travelers (southbound on 212, eastbound on 78) to Red Lodges Historic Shopping District. Responsibility: Downtown Association, Chamber of Commerce.
Building A Brand
What is a brand? It is the relationship between a customer and a product (a product can be a retail good or service, a downtown district, a community, or a tourist destination). A logo or tagline is not a brand the brand is the relationship that customers express when they see the logo or tagline. The brand is the sum total of what the customer (or potential customer) thinks and feels and how s/he interacts with the brand. It is incumbent upon the marketer to try to influence this behavior. Brands held in high esteem by the customer get used more frequently and therefore capture a greater share of the customers spending. In a retail context, brand is developed by a strong commitment to customer service, depth of merchandise, sense of style, comfortable shopping atmosphere. The brand is created at every customer interaction, from advertising to full shelves to educated and friendly sales professionals on the floor. The company manages its brand by managing every experience the customer may have with the company. The same principles apply to branding a downtown district, a community and a tourist destination. To develop a positive brand, it is important to convey a strategic and consistent marketing message to the customer, and to follow through on that message with outstanding quality and customer service at every level. Initial contact (the hook) generally is made via a media article or ad, web site, direct mail piece, phone call, word of mouth, or highway sign. Professional follow-up continues with phone/email contact, arrival in a district/community (welcome signs, sense of arrival, convenient and clearly marked parking, information kiosks, appearance of area, etc.), and customer service received at the local visitor center, businesses, events, etc. Brand loyalty is built through follow up after the sale or visit (thank you cards, customer satisfaction surveys, mailings/emailings with information tailored to customer interests and needs, etc.). The marketing message consists of three main components: a product name, a graphic image, or logo, which depicts the product in a visual way, and a marketing position statement or tagline. The name of a product (a company, a downtown district or a community) is important to its success. The product name should be used consistently in order to develop name recognition. The logo is a graphic representation of the product, and should be constructed with a clean and simple design for maximum flexibility in its use. Together, the product name and logo answer the question WHAT? Designing the logo includes selection of colors, shapes and images that speak most effectively to specific target markets. Various design styles, shapes, colors and text fonts convey different messages to consumers through subliminal nuances, so design decisions should be made based on desired target customer groups. The tagline is a catchy and concise expression (2-5 words) of the products unique position in the marketplace. It promotes the products benefits to the target consumers. The tagline answers the question WHY? There are five steps to building a brand: 1. Develop the brand team: representatives from key organizations, and a professional marketing consultant. 2. Assess the current situation: how is the product currently perceived and used by core customer segments? Conduct informal research by talking with key businesses, media, customers. Also, determine what the product is not. Identify the key customer segments, how they interact with the product, and the key competitors. 3. Develop the brand promise: identify and reach consensus about what the brand stands for and what it offers your target customers (What business are we really in? What do we provide? What differentiates our product from the competition? What do we do better than anyone else? 4. Create the brand communications plan: develop the logo and identity program in order to bring your brand personality to life. Then develop your graphic standards manual, color palette, ad campaign and collateral materials (including web site) and encourage your partners to use them for consistent image-building. 5. Build the brand for stakeholders: communicate with local partners/businesses/citizens so they understand everything that is being done on their behalf to build and promote the brand. Internal marketing is as important as external marketing. Measure and report the brands performance through surveys, sales reports, etc.
Source: Jeff Cohn & Jane Jenkins, Main Street News No. 181; The Hingston Roach Group, Inc.
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Measures of Results: Results of actions listed under Goal 3 will be monitored and evaluated as follows: Increases in hotel occupancy in off-peak months. Increases in retail and food/beverage sales. Increases in resort tax collections to the City. Increases in the number of jobs and higher incomes for service employees. Longer average length of stays of visitors and vacation homeowners. Implementation of a Main Street program. Goal 4: The City of Red Lodge has adequate municipal infrastructure to meet the needs of the growing business and resident community. Improvements to streets, water, sewer and telecommunications are a high priority for both businesses and citizens in Red Lodge. Funding has been a challenge in the past, although the resort tax has helped provide funding for infrastructure improvements. The Citys concern in the next ten years is to improve existing infrastructure, while also keeping up with growth that is projected in the community, so that infrastructure does not become a barrier to business and economic development. Growth in resort tax collections (via increased year-round tourism) will increase the funds available for infrastructure improvements. Action 4.1: Update the five year Capital Improvement Plan (CIP) that documents community needs and sources of likely funding. Work cooperatively with the County on infrastructure improvements as appropriate. Continue to update the CIP annually. Responsibility: City of Red Lodge. Identify a range of potential funding sources for infrastructure improvements, such as USDA Rural Development, the Montana Treasure State Endowment Program, the Community Development Block Grant (CDBG) program, Red Lodge resort tax, Montana Public Infrastructure Investment Program (PIIP) and Tourism Infrastructure Investment Program (TIIP). Responsibility: City, Beartooth RC&D, RLAEDC, Carbon County, State. Adopt a policy to partially repay costs to developers for extending water and sewer service from the City as other users are connected to those lines. Responsibility: City of Red Lodge. Encourage infill through redevelopment of vacant buildings and upper story spaces in downtown Red Lodge for use by lone eagles and other businesses, with flexibility in codes to make historic structures commercially viable. Educate property owners about tax credits and loans available for redevelopment of historic structures. Responsibility: City of Red Lodge, Downtown Association, RLAEDC, Chamber of Commerce, Carbon County Historical Society.
Action 4.2:
Action 4.3:
Action 4.4:
Measures of Results: Results of actions listed under Goal 4 will be monitored and evaluated as follows: Update and implementation of Capital Improvement Plan. Acquisition of local and outside funding for infrastructure improvements. Mutually beneficial policy for City and developers that provides cost reimbursement to developers who invest in utility extensions. Redevelopment of downtown buildings, and infill in upper stories. Red Lodge Civic Center
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Goal 5: An effective business development program has promoted a diversified economy (light manufacturing, small businesses) with a growing number of higher wage jobs. Business development is critical to a stable economy and increases in citizens standard of living. Most business growth comes from existing businesses that seek and take advantage of new market opportunities. Business retention and expansion are key first steps in a business development program, along with entrepreneurship development and a system to welcome new businesses to the community. Action 5.1: Formalize the Red Lodge Area Economic Development Corporation (RLAEDC) as a regional partnership to address business and economic development issues. Include as partners the City of Red Lodge, Carbon County, the Beartooth RC&D, private business and property owners, other communities in Carbon County (as members or affiliates, if they desire) and other organizations. The purpose of the RLAEDC is to monitor implementation of this Strategic Plan, to provide economic development perspectives to policy makers, to support retention and expansion of local businesses, to portray a positive image of the community, and to assist new businesses with location needs. Responsibility: Red Lodge Area Economic Development Corporation, City, County, RC&D, businesses/Chamber of Commerce. Use the RLAEDC scope of work outlined in this Strategic Plan to secure private and public sector investments to provide annual funding and staff/ technical assistance to the Red Lodge Area Economic Development Corporation. Examples are major sponsor memberships that include a seat on the EDC board, inkind staff assistance from City and County Planning staff, project grants, etc. Responsibility: Red Lodge Economic Development Corporation. Identify specific high-growth and high-potential light manufacturing, service, and telecommunications businesses that have the potential to expand, or to be recruited to develop in Red Lodge. Examples of target sectors include value-added agriculture/specialty food & beverage products, recreation-related products, agribusiness technology, business support/networking products and services, etc. Conduct a survey of the local Lone Eagle businesses, to identify opportunities for expansion, and for feasibility of a multi-tenant office facility with shared administrative and support services (conference room, high-speed Internet access, copy machine, etc.). The survey should determine interest levels of Lone Eagles in expanding, sharing space and/or services, amount of space desired, and acceptable amount of rent/lease for different types of services. Responsibility: Red Lodge Area Economic Development Corporation. Develop information materials and web site to use for business prospect response that will feature the advantages of living and operating in Red Lodge. Link marketing efforts to Montana Department of Commerce, Come Home Montana program, Montana Associated Technology Roundtables (MATR), etc. 5a. Create a brief fact sheet featuring current data and information about the community to convey how it offers facilities and advantages for targeted businesses, which can be used by the RLAEDC for mailings, and placed in local lodging facilities to inform visitors about business opportunities in Red Lodge. 5b. Develop a general purpose brochure that includes demographics, photos of buildings and sites, transportation access, and other assets of the community that would be of interest to businesses and site selectors.
Action 5.2:
Action 5.3:
Action 5.4:
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5c. Create a dynamic web site to reflect the new strategic agenda of the communitys economic development effort. Create an economic development-focused site to facilitate the access of relevant information on an as-needed basis by outside prospects as well as internal customers (link to City info, news, maps, local and state incentives, contact us, buildings and sites, small business development with links to state and local offices, business resource links, links to regional allies, strategic action plan, etc.). Keep the site updated with news and information, online forms, etc. Responsibility: Red Lodge Area Economic Development Corporation, Chamber of Commerce. Action 5.5: Create and distribute a quarterly online and hard copy newsletter to inform local stakeholders, media, regional/state agencies and others about economic development efforts in Red Lodge, including new/expanded businesses, etc. Responsibility: RLAEDC. Sponsor a forum for entrepreneurs to educate them about the business resources of the area and determine their needs. Include exhibitors involved in small business opportunities such as financial institutions, suppliers, university Small Business Development Centers (SBDCs) and others. Responsibility: Red Lodge Area Economic Development Corporation, Chamber, RC&D, MSU-Billings. Schedule speaking engagements at local meetings of civic organizations to educate their members about the local economic development and marketing program, its progress and results. Responsibility: Red Lodge Area Economic Development Corporation. Conduct a site visit in Red Lodge for state and utility economic development officials in order to educate them about Red Lodge. Responsibility: Red Lodge Area Economic Development Corporation. Pursue additional sources of funding, such as USDA Rural Community Assistance funds, Economic Development Administration, and private foundations, for specific local economic development projects. Responsibility: RLAEDC, RC&D, City, County. Initiate a local public relations campaign to inform local residents about the progress of the Strategic Plan implementation, using local media, RLAEDC/ Chamber web sites, public meetings, newsletter mailed with City utility billings, etc. Responsibility: Red Lodge Area Economic Development Corporation, Chamber of Commerce, City of Red Lodge, and Carbon County Board of Commissioners.
Action 5.6:
Action 5.7:
Action 5.8:
Action 5.9:
Action 5.10:
Measures of Results: Results of actions listed under Goal 5 will be monitored and evaluated as follows: Successful formation and funding of Red Lodge Area EDC. Successful business expansions and new business locations. Effectiveness of marketing materials in helping to close the deal. Participation in RLAEDC efforts through memberships and forum attendance. Level of support for the RLAEDC among local citizens and elected officials.
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Goal 6: The presence of a fully-developed business park with advanced telecommunications provides an attractive setting for new technology-based operations. Business owners in the Red Lodge area indicated that the lack of fully developed business park sites was a barrier to business expansion/location. To attract desirable businesses, the park should be attractively designed and served by City water/sewer services, paved streets and high-speed telecommunications. It also needs adequate access, parking, open space and lighting. Action 6.1: Guide the planning and development of a new business park adjacent to the airport as a means to attract new light manufacturing operations, technology-based businesses, offices and other employers (see Airport Business Park Concept Plan, Appendix B). The property should be appropriately zoned for these uses. Determine the Citys role as developer (vs. selling property to a developer, or joint venture). Focus on basic infrastructure availability to the park (water, sewer, power, phone, high-speed Internet), entrance signs, zoning/codes and basic entrance landscaping to make the site appealing to businesses. Responsibility: Red Lodge Area Economic Development Corporation, Beartooth RC&D, City of Red Lodge. Investigate and pursue potential sources of property development grants and loans, which could include the EDA, HUD, USDA Rural Development, USDA Forest Service, State funds, etc. Responsibility: Red Lodge Area Economic Development Corporation, RC&D, City. Work with local telecom carriers and ISPs to fill gaps in coverage of high speed Internet access to firms and homes in the Red Lodge area, and promote this capacity, along with broadband applications, to existing and potential businesses. Responsibility: Red Lodge Area Economic Development Corporation, City, County, local ISPs and telecom providers.
Action 6.2:
Action 6.3:
Measures of Results: Results of actions listed under Goal 6 will be monitored and evaluated as follows: Completion of design, engineering and installation of utilities for the business park. Acquisition of outside sources of funding to help finance business park development. Completion of telecommunications upgrades to fill gaps in coverage. Sale of business park property to desirable businesses for creation of higher wage jobs and increases in new tax revenue to the City.
Red Lodge Airport Business Park Concept
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Goal 7: City and county development codes and plans facilitate the construction of affordable housing in attractive neighborhoods/subdivisions. Housing prices are rising nationally due to increasing demand (U.S. residential construction hit an all-time high in Spring 2004). In high amenity communities like Red Lodge, housing prices are rising at a higher rate as people migrate from more populated areas seeking a better quality of life or nice location to retire. The prominence of tourism as a primary sector of the Red Lodge economy brings with it a significant number of low-wage jobs, which means that affordable housing is an issue. As housing demand and prices increase, moderate income residents will be stretched unless a strategy to encourage affordable housing is implemented. Housing development is driven by markets and availability of financing, and developers logically seek to maximize return on their investment in housing development. Therefore, affordable housing development is facilitated through codes and regulations that allow higher densities, and by efficiencies in the permitting process that minimize costs to developers (e.g., make the development of affordable housing more affordable). Housing for seasonal and lower income residents often is spearheaded by nonprofit organizations. Red Lodge has been successful in the past at addressing this issue during times of tight housing markets, and now that housing again is an issue, the effort should be re-initiated. Action 7.1: Update the previous housing study to identify and catalog existing housing resources, demand for housing in various price ranges and types, and opportunities for development of desired housing. Reinvigorate a Housing Task Force/Authority to address issues identified in the study. Responsibility: City Planning Department, Beartooth RC&D, State, HUD. Through the Growth Policy planning process, identify development incentives and regulatory techniques that encourage diversity in design and construction for all housing types and price ranges, particularly those that will increase the stock of moderate income housing (e.g., duplexes, manufactured home park, etc.). Examples are density bonuses, expedited permitting, relaxed development requirements, and financial assistance for participating developers. Responsibility: City Planning Department. Examine and revise land use approval processes to make them more predictable and less costly wherever possible. Responsibility: City Planning Department. Develop and implement a program to educate the public and elected officials on the critical need for affordable housing. Responsibility: City Planning Department. Identify existing financing tools and develop new tools as appropriate for expanding the availability of affordable housing. Responsibility: Housing Task Force, Montana Home Network/Montana Dept. of Commerce HOME and Board of Housing Single Family Programs, RC&D, HUD. Work with non-profit agencies and private employers to construct employee housing for service workers in the area. When Beartooth Hospital and/or school are relocated to new facilities, consider purchase and redevelopment of those facilities by a Housing Authority for service employee and/or senior housing. Responsibility: Housing Task Force, Montana Home Network, Montana Board of Housing, Community Development Block Grant, RC&D. Establish and enforce uniform property maintenance codes. Responsibility: City Planning Department.
Action 7.2:
Action 7.3:
Action 7.4:
Action 7.5:
Action 7.6:
Action 7.7:
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Measures of Results: Results of actions listed under Goal 7 will be monitored and evaluated as follows: Completion of housing study. Increase in number of housing units classified as affordable. Increase in number of developers willing to construct affordable housing. Improved enforcement of property maintenance codes. Goal 8: The Beartooth Hospital and Health Center has become a model rural hospital system, providing expanded health care capability and services. Health care facilities and services are critical to the long-term viability of communities and quality of life. The Beartooth Hospital is a tremendous community asset, but has significant challenges in its current building and location. Expansion to new facilities is needed. Action 8.1: Work closely with the administration/Board of the Beartooth Hospital and Health Center, as well as other health care providers, to identify the most appropriate and cost-effective property for the future construction of a new hospital facility. Responsibility: Red Lodge Area Economic Development Corporation (RLAEDC), Beartooth Hospital, Chamber of Commerce, City of Red Lodge, Carbon County, RC&D.
Measures of Results: Results of actions listed under Goal 8 will be monitored and evaluated as follows: Selection and acquisition of a site for future hospital expansion. Completion of hospital construction. Successful operation of hospital with high quality expanded services and facilities. Goal 9: The School District has become a model system, providing quality K-12 education. Post-secondary education opportunities are available locally. The availability of quality life-long education opportunities is a primary factor in community success and economic development. Workforce skills needed by employers continue to change and become more sophisticated. The school district and MSU-Billings are key partners in economic development efforts in Red Lodge. Action 9.1: Work closely with the administration and board of the school district to identify strategies to enhance the K-12 system, and to more closely link the business community with the schools. Support the school district goal to upgrade the Civic Center for use by state tournaments, etc. Responsibility: RLAEDC, School District. Work with MSU-Billings to identify an outreach site and programming in Red Lodge to meet the needs of Red Lodge area citizens, workers and businesses. Responsibility: RLAEDC, MSU-Billings.
Action 9.2:
Measures of Results: Results of actions listed under Goal 9 will be monitored and evaluated as follows: Improved working relationships between the school district and business community. Enhanced skills of students in K-12 system. Increased opportunities for post-secondary education in Red Lodge through MSU-B.
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The following goal reflects an economic development issue for the community, from the perspective of the consulting team, that needs to be addressed in the near future. Goal 10: The City and County have resolved the issue of the location and enhancement of the Red Lodge airport. The Red Lodge airport is a significant asset and economic contributor to the community, as well as provider of services for medical airlifts, search & rescue, scenic flights, etc. The property surrounding the airport is prime real estate for business development due to the airport access, and proximity to town and Highway 78. Residential development west of the airport area eventually may result in conflicts because of noise, traffic, etc. The airport currently does not receive FAA funding due to encroachments on the runway approach. Therefore, it is important that the Airport Board, City and County continue discussions about long-term plans for the airport. Action 10.1: Create an Airport Study Committee to review and discuss long-term growth in demand for use and development of the airport, projected residential development in areas surrounding the airport, and potential issues resulting from conflicting uses. Task the Committee with developing a list of issues, criteria for evaluating options, and recommendations for the Airport Board, City and County. Responsibility: Airport Board, City, County. Identify costs for maintenance and development options for the airport, both with and without FAA funding. Identify potential long-term funding sources. Responsibility: Airport Board, City, County.
Action 10.2:
Measures of Results: Results of actions listed under Goal 10 will be monitored and evaluated as follows: Consensus on key issues, decision criteria and recommendations for the airport. Development and funding of long-term strategy for maintenance and enhancement of the airport.
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5. ORGANIZATION & IMPLEMENTATION

The key to implementation of this Strategic Plan is leadership and cooperation. The City Council and the Red Lodge Area Economic Development Corporation (RLAEDC) each play a critical role in the success of the Plan. However, there are many other local, regional and state organizations involved in community and economic development that are needed as partners with the City and RLAEDC in order for the Plan to succeed in achieving its goals: Organization
Red Lodge Area Economic Devt Corp. City of Red Lodge Carbon County Chamber of Commerce Downtown Association Lodging Association Yellowstone Country Tourism Region City Planning Commission City Parks Board Beartooth RC&D Beartooth Front Community Forum Community Builders Multiple Listing Realtors Association Rotary Club, Lions, Kiwanis Carbon County Arts Guild Beartooth Nature Center Carbon County Historical Society Boys & Girls Club Red Lodge School District Beartooth Hospital Montana Department of Commerce Billings Chamber/EDC
Roles
Coordination, communication, implement Strategic Plan actions, voice of economic development Policy, planning, permitting, infrastructure Policy, planning, permitting, tax assessments Business advocacy, retention/expansion, tourism Retail/service support, technical assistance, marketing Marketing, advocacy re. policy Regional tourism development and marketing Planning, permitting, review Planning, oversight, identification of opportunities Community assistance, grant writing/administration, Coordination, economic development Coordination, advocacy, training, community support Project planning/implementation, business support Project support, funding contributions, data-gathering Community leadership and service, project support Coordination, marketing, networking, advocacy Tourism development, project advocacy Historic preservation, advocacy, community support Youth programs, support/assistance, events K-12 education, community support Health services and facilities Business and community support, funding, tourism Regional economic development/business recruitment
This Strategic Plan recommends that the Red Lodge Area Economic Development Corporation (RLAEDC) be formalized as a regional partnership, encompassing not just Red Lodge, but also the County, RC&D, and even other communities. It is the lead entity for monitoring the implementation of this Support Strategic Plan. The Board of Involvemt RLAEDC Investors the RLAEDC is elected by Strategy the membership of the Policy Exec Cmte Board of Directors corporation, which currently Budget Admin Personnel Oversight is comprised of Exec. Director (CEO) representatives from the Oversight Opns/Admin, Coordn, PR/Comm Admin Staff Budget Chamber, the business and Coordn/PR financial community, the Beartooth Front Community Tasks Education Investors Biz Devt Commn Forums Benefits/Fees I.D. needs Forum, the City of Red Meetings Outreach Retention Address w/ Outreach Lodge, Carbon County, the assistance Info-sharing Recruitment Reporting Marketing/PR Entrepr. medical community and the (to ED) Advtsg/Media Programs Forum SubCmte Funding Recruitmt Website/dbase educational community (see Logistics Location Grants Program Brochures assistance Other organization chart at right).

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Below is a sample annual budget for an organization such as the RLAEDC. Funding generally comes primarily from private sector partners/investors (businesses, utility companies, developers, etc.), with some additional cash/inkind contributions from the public sector (City, County, RC&D) and other organizations. Sample Economic Development Corporation Budget INCOME: Major business investors: 10 @ $5,000 per year Other business/individual/organization investors: 40 @ $250/year average Project funding (grants, foundations, etc.) Public sector partners (City, County, RC&D), cash/inkind of $5,000 ea. Miscellaneous (forum registrations, other fees/donations, etc.) TOTAL INCOME (CASH/INKIND): EXPENSE: Director (contract position) Office expense (space, furniture, equip., etc.) Technical/grant writing assistance, printing Project expenses Marketing expense Travel Organization admin (insurance, corporate reports, etc.) Cell phone, miscellaneous supplies Miscellaneous expense (forums, speakers, meeting costs, etc.) TOTAL EXPENSE (CASH/INKIND):
* Inkind contributions of staff support, office space, furniture, equipment, printing, etc.
$50,000 10,000 20,000 15,000* 2,500 $97,500 $50,000 7,500* 7,500* 15,000 6,000 5,000 2,500 1,000 3,000 $97,500
Action Table: Summary of Actions, Priorities, Timeline & Responsibilities The next two pages contain an Action Table that summarizes the actions listed in the previous section, along with priorities, a timeline and responsibilities for implementation. Note: the darker shading of the squares in the timeline indicates a more intensive level of activity.
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Red Lodge CEDS Action Table

Goal Goal 1. 1.1 1.2 1.3 1.4 Goal 2. 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 Goal 3. 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 Goal 4. 4.1 4.2 4.3 4.4 Goal 5. 5.1 5.2 5.3 Action City & County governments work cooperatively together. Sponsor leadership development program Conduct quarterly meetings of leaders re. priority issues Conduct Newly Elected Officials orientatns/workshops Develop City-County plan & development regulations Prio -rity Estd Cost 2004 2005 06 Q Q Q Q Q Q 3 4 1 2 3 4 07 08 09 Responsibility
1 1 2 2
EDC, CC, City, Co, etc. City, Co CC, City, EDC, MLCT City, Co
City government is responsive to needs of businesses & residents. Hire full-time certified City Administrator 1 60,000/yr Initiate update of City Growth Policy Plan 1 30,000 Streamline City permitting process, restructure process 1 Conduct training for City Council/Planning Board 1 Form advisory subcmte of EDC to review City changes 1 Strengthen communication b/ City & biz (forum, surveys) 1 Create effective education/info tools for biz, developers 1 10,000 Use computer technology to improve devt process 1 Incorporate buffer zones into City devt code 1 Highly targeted marketing has increased year-round tourism revenues. Market Red Lodge as meeting/group destination 1 Plan/support off-peak season festivals & events 1 Develop & use a new brand for Red Lodge 1 5,000 Create Ambassadors Volunteer Corps to manage VIC 1 500/yr Enhance Chambers media relations campaign 1 Develop scenic byway enhancements, Hwy 78 designatn 2 Conduct analysis re. rodeo arena as multi-purpose ctr 3 30,000 Encourage visitor/vacation homeowner extended stays 2 Initiate Main Street program; recapture retail leakage 2 Adequate municipal infrastructure for business, residents. Update 5-year Capital Improvement Plan 1 Identify funding sources for infrastructure improvements 1 Adopt policy to partially repay developers for services 1 Encourage redevelopment of vacant bldgs/upper stories 2 Effective business development program has promoted diversified economy and higher wage jobs. Formalize RLAEDC as regional partnership 1 Secure private/public investments in RLAEDC; hire Dir. 1 97,000/yr Identify businesses w/ potential to expand, locate to RL 2
City City City, Planning Commis. City EDC, City City, EDC City City City
CC, Lodging Assn., DA CC, EDC, AG, CCHS, FB, RB CC, EDC CC CC, Lodging Assn. RC&D, CC, MDOC RB, EDC, CC CC, MS, CCHS, City Biz, CC
City City, RC&D City City, CC, CCHS
EDC, City, Co EDC, Biz, City, CC, Co, RC&D EDC
Codes: AB=Airport Board, AG=Arts Guild, Biz=Businesses, CC=Chamber of Commerce, CCHS=Carbon County Historical Society, City=City, Co=County, DA=Downtown Assn., EDC=Red Lodge Area Economic Development Corporation, FB=Fair Board, HTF=Housing Task Force, HUD=U.S. Housing & Urban Development, MDOC=Montana Dept. of Commerce, MLCT=Montana League of Cities & Towns, MSUB=Montana State University Billings, RB=Rodeo Board, RC&D=Beartooth RC&D
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Goal 5.4
Action Develop marketing materials & web site for econ devt: a. Create brochure/fact sheet for mailings, regl distn b. General purpose brochure w/ detailed info c. Create web site for econ devt info, resources Distribute quarterly newsletter re. EDC efforts Sponsor forum for entrepreneurs re. resources/needs Schedule speaking at local civic clubs re. updates Conduct site visit for MDOC, utility officials, etc. Pursue funding for econ development efforts Initiate local PR campaign re. Strategic Plan implementn Fully-developed business park with advanced telecom. Guide planning/devt of business park at airport Pursue funding for business park devt Fill gaps in broadband coverage, promote capacity
Prio -rity 2
Estd Cost 10,000
2004 2005 06 Q Q Q Q Q Q 3 4 1 2 3 4
07
08
09 Responsibility EDC, CC, Biz EDC, CC EDC, CC, Co EDC, Biz EDC EDC, CC, RC&D, MSUB EDC EDC, City, CC EDC, RC&D EDC, CC, City, Co
5.5 5.6 5.7 5.8 5.9 5.10 Goal 6. 6.1 6.2 6.3 Goal 7. 7.1 7.2 7.3 7.4 7.5 7.6 7.7
2 2 1 2 1 1
2,000/yr 1,000/yr 0 200 200/yr
2 2 2
EDC, RC&D, City EDC, RC&D, City EDC, ISPs/telecom City, RC&D, State, HUD City, Planning Commis., HTF City City City HTF, etc. City EDC, CC, City, Co, RC&D
City & County codes/plans encourage affordable housing construction. Update housing study; reinvigorate Housing Task Force 2 10,000 Provide development incentives for housing diversity 2 Revise land use approval process to reduce costs 1 Educate public & elected officials about housing needs 2 Identify financing tools to expand affordable housing 2 Work with nonprofits/employers for employee housing 2 Establish/enforce uniform property maintenance codes 1
Goal 8. Beartooth Hospital has become a model, with expanded services. 8.1 Identify most appropriate property for future expansion 2 Goal 9. School district has become model for K-12 education. Post-secondary opportunities are available. 9.1 Work with school to enhance K-12, link to businesses 2 9.2 Work with MSU-B to identify site, programming for RL 2 Goal 10. City & County have resolved airport location/expansion issue. 10.1 Create Airport Study Committee, review issues, etc. 3 10.2 Identify costs for maint/devt options at airport 3
EDC, School District EC, MSUB AB, City, Co, EDC AB, City, Co, EDC
Total Codes: AB=Airport Board, AG=Arts Guild, Biz=Businesses, CC=Chamber of Commerce, CCHS=Carbon County Historical Society, City=City, Co=County, DA=Downtown Assn., EDC=Red Lodge Area Economic Development Corporation, FB=Fair Board, HTF=Housing Task Force, HUD=U.S. Housing & Urban Development, MDOC=Montana Dept. of Commerce, MLCT=Montana League of Cities & Towns, MSUB=Montana State University Billings, RB=Rodeo Board, RC&D=Beartooth RC&D
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NEXT STEPS
The suggested next steps in implementation of the Comprehensive Economic Development Strategy (CEDS) are as follows: 1. Approval and adoption of final CEDS document by RLAEDC (following review/comments and refinements). 2. Approval and adoption of the CEDS by the City Council; send copies of the CEDS to the U.S. Economic Development Administration (state office in Helena, regional office in Denver). 3. Endorsement of the CEDS by the County Commission. 4. Endorsement and/or adoption of the CEDS by the Chamber of Commerce, RC&D Board, Montana Department of Commerce and other community organizations. 5. Formalize structure/membership/partnerships of RLAEDC. 6. Obtain commitments from partners to implement and report quarterly on progress. 7. Secure investment funding for RLAEDC. 8. Begin implementation of CEDS. 9. Hire full-time City Administrator. 10. Contract a director for RLAEDC. 11. RLAEDC monitor/oversee implementation of CEDS, meet to discuss/report progress twice a year. If the City of Red Lodge, RLAEDC and their partner organizations use the CEDS as a guideline for strategic action over the next five years and beyond, Red Lodge will have an improved economy while retaining the quality of life values that citizens cherish.
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APPENDICES
A. Summary of Red Lodge Growth Policy B. Airport Business Park Concept Plan Report C. Online Leadership Survey Report
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APPENDICES
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APPENDIX A
Red Lodge 1995 Master Plan & 2001 Growth Policy Summary
The following is a summary of the sections, goals and strategies contained in the Red Lodge 1995 Master Plan and the 2001 Growth Policy update of the Master Plan.
1 The Planning Process

(Information only no goals or strategies.)
2 Introducing the Policies

(Information only no goals or strategies.)
3 Jurisdiction of This Plan

Planning Goal: Guide development and serve as basis for review of proposed development. City will encourage planning board and commissioners to rely on plan when making decisions. Strategies: A. Actively work to build cooperative relationship with county counterpart. B. Provide adequate funding for administration of Growth Policy, including training for Planning Board members and staff. C. Include specific provisions in the adoption of, or changes in, the code for existing development and projects already under way.
4 Citizen Participation in the Planning Process

Citizen Participation Goal: Continue to encourage public involvement in the planning process. Strategies: A. Actively encourage public involvement in annual plan reviews. Seek public involvement in preparing additional studies, including design review standards and capital improvements program. B. Solicit involvement of youth in the planning process. C. Incorporate all legal requirements for citizen participation in the planning process. D. Incorporate a written hearing procedure.
5 Maintaining This Growth Policy

Plan Maintenance Goal: This Growth Policy will be reviewed every 5 years, and revised if necessary. Strategies: A. Devote one Planning Board meeting each year to review of the Growth Policy. B. Prepare an annual report and distribute to board, elected officials, and public showing the progress made in implementing each policy goal and strategy. C. Provide for practical minor adjustments in the Policy or Code, not major policy changes. Any changes must be preceded by a thorough public discussion. D. Provide adequate funding to support administration of Plan including training for Planning Board members and staff. E. Create permanent ongoing committees to deal with the greatest concerns of the public as solicited in outreach efforts (e.g., enforcement, liaison, interpretation). F. Provide specific provisions in the Red Lodge Development Code protecting existing development and projects. G. Review the Development Code to ensure consistent and fair enforcement.
6 Central Business District

CBD Goal: The CBD will continue to be the retail, service, government, social and cultural heart of the community. Strategies: A. Public offices and meeting places should remain in central business district.
Appendix A: Red Lodge 1995 Master Plan & 2001 Growth Policy Summary A-1
B. Encourage off street parking and beautify City lots on Oakes. Provide more visitor information about parking, install signs and landscaping. C. Prepare a streetscape plan addressing side streets, utility lines, alleys, lighting, landscaping and pedestrian amenities. D. Work with the Historic Society, Chamber, and others to find funding for video tape presentation on character of downtown Red Lodge, for use by the Design Review Commission. E. Change zoning ordinance to facilitate replacement /redevelopment of historic buildings, and upperstory residential uses. F. Follow a design review process to maintain the historic character of the CBD. The Design Review Commission will be appointed by the City Council, and guided by design review standards. G. Integrate the administration of the sign code into the development code. (PARTIALLY COMPLETE) H. Allow conversion of existing residential structures to commercial use in the Central Business Zoning District. Ensure that expansion of the District will not generate nuisances or conflicting uses affecting adjacent residential neighborhoods. I. Allow expansion of Central Business Zoning District where previously zoned Commercial Transition.
7 Community Entrances
Community Entrances Goal: Commercial development at the entrances must present Red Lodge as a unique and welcoming community. Typical strip development will be discouraged (residential zoning will be used where there are existing homes). Strategies: A. Maintain efficient functioning of highways by ensuring that points of access meet safety standards. B. Work with Montana Department of Transportation to improve intersection of Montana 78 and U.S. 212. C. Encourage MDT to construct an overlook on Montana 308. D. Place Welcome to Red Lodge signs at all four entrances to the city. E. Seek funding to construct a pedestrian and bicycle trail that will parallel U.S. 212 on the north edge of town. F. Work cooperatively with the County for mutually agreeable zoning around all four entrances. G. Work with MDT to help provide safe pedestrian crossing access to the new trail and Coal Miners Park. H. Landscape any City-owned land near the entrances (row of trees, etc.). I. Coordinate design of trails and landscaping with the streetscaping plan for the CBD. J. Work with the County to develop an industrial park at the airport. Provide infrastructure, and landscape buffers to shield Highway 78. K. Ensure through the development code that development does not destroy the visual dominance of vegetation along Rock Creek, scar slopes overlooking the city, or create nuisances. L. Require that new developments have safe access to public streets and roads, provide off-street parking. M. Require a traffic impact study as part of applications for permits for major developments (major is defined as 600 ADT, 60 homes or 10,000 sq. ft. commercial/industrial space). N. Prohibit through the development code access to commercial development via residential streets; establish performance standards to mitigate other conflicts. (COMPLETED) O. Require through the development code extensive landscaped buffers for commercial uses in the community entrance areas. P. Require through the development code that commercial, industrial, and high density residential developments submit a runoff management plan. Q. Protect pedestrians and cyclists by requiring all developments to provide sidewalks or trails; encourage bike racks. R. Require the use of reverse frontage, deep lots, landscaped buffers, etc. when a new residential development borders a highway to ensure that growing traffic volumes do not result in deteriorating neighborhoods. S. Ensure that appearances of new commercial or industrial developments along entrances are consistent with Red Lodges historic image.
8 Residential Neighborhoods
Residential Neighborhoods Goal: Zoning should protect residential neighborhoods from conflicting land uses, but regulations should not make it more difficult to renovate older homes or build affordable new dwellings. Development code
provisions that require minimum lot sizes, minimum setbacks, and maximum lot occupancy should be reexamined. Consider incentives or waivers to encourage infill development. Invest in infrastructure (sidewalks, housing rehab, etc.). Strategies: A. Fund regular statistical updates to help maintain the citys competitiveness for housing grants. B. Continue City rehabilitation program and encourage building of rental homes for the elderly. C. Retain sufficient staff to enforce building and development codes; require City staff to enforce codes evenhandedly and consistently. D. Provide modest assistance to neighborhoods for sidewalk development. Inventory and assess the conditions of all sidewalks and needed sidewalks throughout the city. E. Ensure that the zoning regulations eliminate obstacles to the improvement and replacement of existing homes in older neighborhoods. F. Provide three zoning districts for neighborhoods of single family dwellings: one older areas of small lots, one for large lots served by central sewerage, and one for subdivisions served by on-site sewage disposal systems. G. Consider permitting limited office use of historic homes in Hi-Bug district. H. Protect residential uses from potential nuisances, like noise, light and high volume traffic. I. Establish performance standards for accessory apartments, home businesses, outdoor storage and keeping of livestock on residential properties. J. Provide a zoning district for higher-density residential developments like apartments, condominiums and mobile home parks. The code should set standards for these uses, such as parking and landscaped buffers. K. Require unoccupied homes and land to be maintained by owners and kept secure from unsafe uses.
9 Open Space
Open Space Goals: Support Custer National Forest efforts to protect views from the City and the Beartooth Highway. Support Forest plan to manage the West Fork of Rock Creek- the municipal watershed. Maintain and improve existing parks; ensure that new large-scale developments provide useful open space. Begin to develop a trail system that links parks, open spaces and neighborhoods. The City will protect water quality for Rock Creek from erosion and runoff generated by new development. As feasible, acquire and protect remaining undeveloped riparian lands along Rock Creek. Ensure that building on East and West benches above the city does not accelerate erosion or result in landslides. Protect views while allowing owners reasonable use of their land. Ensure consistency in open space goals, open space implementation, and identification of areas important to wildlife, agriculture, views and recreation. Strategies: A. Form a Parks and Open Space Board to oversee maintenance and operation of existing parks, new acquisitions, and funding for parks and open space. B. Use available tools to achieve open space goals: enforce existing Montana statutes requiring subdivisions to dedicate parks and open spaces; form a local land trust; voluntary conservation easements; use of City property as trading stock; and grants for land purchase. C. Invest time and attention in supporting Custer National Forest efforts to protect water quality and visual resources. D. Investigate ways to obtain more funding to maintain and improve parks; including implementation of the plan for Coal Miners Park. E. Acquire the wide riparian zone along Rock Creek west of the sewage plant to buffer lagoons, protect wildlife habitat and provide low impact recreation. Attempt to acquire riparian lands south of the city. F. Construct the pedestrian and bicycle trail system; develop a map showing existing and planned trail system. A. F2. Continue to participate in the National Flood Insurance Program (NFIP) so homes can be insured. Update City floodplain management ordinances; consolidate permit requirements with Development Code. Encourage developers to leave floodplain open by permitting developers to transfer development rights to upland sites. G. Require developments that could affect water quality in Rock Creek and its tributaries to prepare and implement a runoff and erosion control plan. H. Minimize the potential for slope failure by requiring new construction to comply with Chapter 33 of the Uniform Building Code. I. Minimize the impact of crestline development on views with deeper setbacks and lower heights.
J. Require all new developments to provide sidewalks and/or pedestrian trails. K. Require subdivisions to fulfill the state requirement for parks dedication with riparian lands or trail rights-of way, neighborhood parks large enough to be genuinely useful (approximately 6 acres), or cash. Cash must be earmarked for development of existing parks or acquisition of new park land.
10 Future Land Uses

Goals: Infill development must be compatible with neighboring uses, as provided by the other sections of this Growth Policy. Development code setback requirements should be reviewed to facilitate and encourage infill development. Substantial flexibility should be permitted in the mix of uses and densities in planned developments on larger parcels (within or outside city limits), with the quality of the proposed project evaluated using performance standards that reflect community expectations. Strategies: A. Ensure that the capital facilities planning process accommodates anticipated growth of Red Lodge and the surrounding area, and is reflected in the infrastructure policy statement. B. Annex all contiguous lands owned by the City. C. Provide adequate access west of Red Lodge to accommodate future land use pattern west of Red Lodge. Use City and County subdivision review and, if necessary, acquisition, to ensure that a collector road can be developed to link Ski Hill Road and Montana 78. D. Require through the Development Code that infill development complies with the policies of this Plan. E. Prohibit piecemeal development of growth areas. Require that development be preceded by review and approval of a conceptual site plan for the entire property. F. Establish a process for review of planned developments, including a checklist of performance standards by which that process will be guided.
11 Infrastructure and City Services

Goals: The City of Red Lodge and other service providers should provide facilities and services adequate to serve the present population and anticipated growth. Work toward implementing the projects outlined in the capital improvement program, and update the 1997 CIP document annually to reflect ongoing infrastructure development in the City (functioning of existing facilities, deficiencies, maintenance and provisions of facilities). Adopt a pay as you grow policy so not to pass the cost on to future generations. Strategies: A. Develop an annual assessment and review of Capital Improvements Plan. B. Develop a Capital Improvements Plan Awareness Program to facilitate communication between the city and the public. C. Assure adequate lighting is provided throughout the city for general safety; be sensitive to light pollution. D. Pursue all additional sources of funding that can help implement these strategies. E. Work with the school district to ensure that the school district facilities can provide positive impact to students, and public. Look cooperatively at ways to provide multi-use space for the community. F. Adopt and enforce airport safety zoning regulations recommended by FAA. G. Conduct a wellhead protection study for the Grant Street well, and add any regulations recommended to protect groundwater. Work with Custer National Forest to protect West Fork Rock Creek watershed. H. Work with Carbon County to ensure that proposed development will not conflict with operations of the sewage treatment plant. I. Ensure that development along state highways will be compatible with higher volumes of traffic. J. Require that all subdivision dedicate park space or provide cash-in-lieu dedications. K. Rewrite Title 4 of water and sewer administration ordinance so that connection fees cover full cost of system capacity consumed. L. Require developers to install all necessary on-site facilities to city specifications. M. Require developers to participate in the cost of providing off-site facilities necessitated by their activities.
Appendix A: Red Lodge 1995 Master Plan & 2001 Growth Policy Summary
A-4
12 Municipal Lands
Goal: The City of Red Lodge should retain those lands needed for public use, including future facilities. If the City is unsure of future need for a parcel, the city should lease it at a fair market value. The city could sell or trade its other properties, using adequate public hearings and encouraging public input. Strategies: A. Determine which of Citys parcels are needed for municipal functions and future needs. When leases expire, conduct an economic analysis to decide whether to continue the lease at market value or sell at market value. B. Lead by example by meeting or exceeding every provision of this Growth Policy and Development Code on City property.
Table 3 Potential Development Areas

1. This parcel is east of Rock Creek, three blocks from the Central Business District. Proximity to the center of the city makes it suitable for high density residential development or mixed-use development, including housing, offices, and limited commercial space. A health club or restaurant would be examples of appropriate commercial uses. Lower intensity residential development should be used as a buffer on the south and east edges. This parcel is a critical linkage in the Rock Creek Greenway, and the required park dedication should be along the creek. 2. This site is east of Rock Creek and extends approximately 1000 feet south from Montana Highway 308. It has potential for commercial or high density residential development that could be annexed by the City of Red Lodge. The required park dedication should be along the creek. 3. This pasture land east of Rock Creek is suitable for large lot residential development, if the density is limited to minimize the potential for groundwater contamination from on-site sewage disposal systems. The present access to US 212 the Meteetse Trail - should be supplemented by a road north to Montana 308. That road would also serve potential development area 2. 4. The East Bench is remote from utilities and access is limited. A collector road would have to be extended from Montana 308 along the ridge to serve any intense development. This area is suitable for very large lot residential development with on-site sewage disposal systems. There is also a small existing industrial area on the East Bench. 5. Much of the land along Ski Hill Road is already subdivided. The remainder is generally suitable for development in a similar pattern, but densities must be kept low to minimize the groundwater contamination hazard. Only very low density development should be permitted on the slopes. Proposals for more intensive residential or commercial development along US Highway 212 (and possibly along Rock Creek) should be anticipated. 6. Given sound site planning, this area west of the airport is suitable for a range of uses and densities. Development issues include access; conflict with airport operations; the costs of extending streets, utilities, and other infrastructure; the provision of open space; and the compatibility of the uses proposed. Development of this area should be served by a collector road that connects Ski Hill Road with Montana 78. The Future Land Use Map, page 43 does not show an alignment for this road because its route could vary depending on the pattern of development. The need for this access should be kept in mind in subdivision reviews in the area. It will also be necessary to obtain, by dedication or purchase, a site for a water reservoir (tank) somewhere in or above this area. 7. This is the Red Lodge Airport. Recent proposals regarding the airport would not change the concept of using the site for both general aviation and light industrial development. The area south of 78 and east of Remington Ranch and west of White Avenue needs a plan for development. 8. This area includes Country Club Estates and adjoining lands that would be suitable for a similar type of residential development. Commercial development north of the curve in Montana 78 should be limited to accessory uses for the golf course. 9. The vacant lands at the north entrance to Red Lodge are suitable for high way-oriented retail and service commercial uses. Such uses must comply with the Community Entrances policy of this Growth Policy and be harmonious with the municipal entryway landscaping and trail projects described in strategies 7.D. and 7.F. 10. This area consists primarily of Rock Creek flood plain. Although the City of Red Lodge has purchased a portion of the lands in this area northeast of the sewer ponds this Growth Policy recommends that more of this area be acquired as a buffer for the citys sewage treatment plant and for wildlife habitat, and limited recreational use. 11. These infill areas have potential for high density residential development, but only if water and sewer mains are extended and sensitive design is used to minimize compatibility issues. The area immediately west of Coal Miners Park also has potential as a school site.
Appendix A: Red Lodge 1995 Master Plan & 2001 Growth Policy Summary
A-5
Red Lodge Airport Business Park Concept Plan Report
July 2004
Prepared by The Hingston Roach Group, Inc. David Kolzow & Associates Applied Communications CTA Group, Inc.
CONTENTS
Executive Summary ................................................................................3 Planning Process.....................................................................................4 Study Area Background Information......................................................5 Growth Policy Plan & Planning Principles ............................................7 Public Input ............................................................................................9 Recommendations ................................................................................ 10 Concept Plan Drawing ....................................................................................11 Attachments .......................................................................................... 15 1. Land Use Considerations ............................................................................12 2. Past Planning Efforts...................................................................................13
Executive Summary
Introduction In February 2004, the City of Red Lodge contracted The Hingston-Roach Group to develop a concept plan for City-owned land surrounding the airport. Due to the strategic importance of this area, the planning approach used a design workshop to solicit public input about the airport property and how such development would relate to surrounding properties. Marketing and design of the property will rely on the designated land uses; therefore, it is important to coordinate the airport planning process with the demand and market niche data being developed as part of the Red Lodge Comprehensive Economic Development Strategy (CEDS). Guidelines for Development The following guidelines for development of the property reflect input from interviews with stakeholders during February and March. Participants in the workshop discussed and confirmed these guidelines. Attract low impact business and industry to an industrial/business park. Design the park for small employers (5 to 50 employees). This is a high visibility area, so development should pay attention to aesthetics and amenities. Business development should attract jobs that diversify the economy. Target uses that reflect the appropriate business mix identified in the CEDS. Phase the development to meet demand. Consider the impact on surrounding land uses. Create a sense of place. Assume the airport will remain at its current location for the near term and plan around it.
Planning Process & General Themes On March 25, 2004, the consulting team conducted a design workshop to develop concepts for the development of the airport property. Approximately 20 participants representing a cross-section of interests in the community and sketched development proposals, which then were presented to the larger group. The following common themes emerged: Open space should be a key aspect of development (parks, trails, water features). Maintain the parking for the rodeo grounds. Consider developing recreational vehicle parking in this area. Create a landscaped entry area (preferred location northeast corner of the site). Suggested land uses include light industrial, construction trade, hospital, aviation residential, technical college facilities, and city/county shops. The CEDS will help determine the demand for these uses. Incorporate the airport site plan adopted by the Airport Board into the Concept Plan. The crosswind runway area could be included in the developable area.
Concept Plan The conceptual drawing included in this report reflects these principles. The existing runway and airport facilities are maintained with room for proposed expansion. There are amenities such as parks, open space, trails and a water entry way included throughout the development. The concept drawing can accommodate both light industrial and business land uses. The specific types of businesses to be targeted for these areas are identified in the Comprehensive Economic Development Strategy.
Planning Process
In 2004, the City of Red Lodge received a Community Development Block Grant (CBDG) for planning to conduct the CEDS and do preliminary planning for a Planned Unit Development (PUD) Business Park at the airport. The City and consulting team developed the following phases for this process: PUD Timeline Phase 1 Preliminary Planning: per input from the design workshop, produce a concept plan for developable land at airport including guidelines for future development. Phase 2 Prepare planning and engineering documents for approval per development regulations. Phase 3 Submittal to Planning Board & City Council, public hearings. Phase 4 Final Planned Unit Development approval. Scope of Work for Phase 1 - Preliminary Planning

Initial analysis: review previous studies, Growth Policy Plan, Development Regulations; contact key informants for background information; site reconnaissance. Prepare materials for design workshop: aerial photos, base map, handouts, etc. Conduct design workshop: coordinate with leadership workshop; involve key stakeholders to review assumptions, design principles, general area plan indicating conceptual development for entire airport site and phases; define parameters to develop concept plan for phase 1 of the development. Recommendations & report: summarize process, outline development principles and include composite drawings from the design workshop.
Design Workshop On March 25, 2004, the consulting team conducted a design workshop to develop concepts for the development of the airport property. The team reviewed past development proposals, basic site data, airport site plan, and planning principles. Approximately 20 participants representing a cross-section of interests in the community divided into three teams and sketched development proposals. Each proposal was presented to the larger group and common themes were identified. Report & Recommendations This report presents the background information that was presented at the design workshop. It provides the underlying assumptions and reviews the planning principles that should guide future development. The drawings and recommendations represent general concepts, and the final outcomes may have several variations. Future plans, however, should reflect the public input and the common themes that have been identified in this report.
Study Area Background Information

The study area is located on the west bench overlooking the City of Red Lodge (Figure 1 below). It includes the existing airport and surrounding City-owned land, as well as the county fairgrounds and rodeo grounds. The study area extended beyond the airport boundaries in order to account for planning issues of adjacent land uses. The City of Red Lodge owns the airport land and surrounding vacant land. The total land area owned by the City amounts to 158 acres, including the airport, crosswind runway, overflow parking for the rodeo grounds, reservoir, and vacant land.
Figure 1: Airport Business Park Study Area
The following information summarizes key attributes of the study area: Zoning

Airport Industrial Zoning District Any parcel over two acres must be developed as a Planned Unit Development (PUD) Permitted Uses specified in 15.2.5 Development Code Revisions may affect PUD process
Current Land Uses

Size: 158 acres Runways: main runway and crosswind runway Hangars Overflow parking for rodeo grounds Water reservoir
Surrounding Land Use

East: Red Lodge City Center (below bench where airport lies) North: Highway 78, residential development, golf course South: Rodeo grounds, open land to southwest West: Residential development (subdivision has not reached build-out)
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Ownership

City owns airport land, operated by City-County Airport Board Rodeo grounds owned by Rodeo Association, partially in City limits County fairgrounds owned by County, located in City limits
Utilities

Water: 16 inch water main leading from storage tank south of the airport and located under the airport road; booster pump required to service airport Sewer: Brewery Hill sanitary sewer extension has been stubbed under the airport road
Environmental

Drainage: Two irrigation canals cross the northwest corner of the development Subsidence Areas: Evidence of coal bed mining underlying the Red Lodge Airport does exist and is defined in the 1987 Chen-Northern Inc. Potential Subsidence Study. The areas are limited and considered to have low to moderate potential. Future site developments should take this into account in their building and foundation design. Soils & Geology: Gravel is prevalent under the top four to eight inches of soil throughout the site. Steep slopes along bench, soils allow for a natural plant community over the site.
Telecommunications

T-1 leased lines available over copper Wireless Internet serves area Broadband cable services could be expanded as part of subdivision improvements
Airport Statistics

Primary Runway: Asphalt surface, 4,000 feet length, 75 feet width; load capacity 6,000 dual wheel load; visual approach Crosswind Runway: Turf surface, 1,850 feet long Airspace Obstructions: o 10+ penetration by a road and fence 288 feet from the threshold o Steep terrain drop-off to 400 feet approximately 127 ft. right of the runway Based Aircraft: 15 in 1999, projected growth to 22 aircraft, 6-19 landings per day by 2019 Proposed layout for new hangars would add about 20 structures and 80-90 aircraft, must have sewer and water for build-out
Other Site Considerations

Topography: Relatively flat, northeast corner has some drop-off Hydrology: No surface water on site, irrigation ditch along north border of site Micro-Climate: Prevailing winds Vegetation: Scrub and native plants Habitat: Wildlife habitat does not appear to be a concern
Growth Policy Plan & Planning Principles

The Red Lodge Growth Policy Plan was originally adopted in 1995 and revised in 2001. There were essentially no changes to the policies regarding the airport in the update. While the policies in the Plan should be referenced to provide guidance for planning at the airport, these policies should be reviewed to determine if they still reflect current market conditions and other planning considerations that have emerged since the policies were adopted in 1995. Since adoption of the Growth Policy Plan, relocating the airport has become an issue, the Internet has become a major economic force, and there has been development of an industrial park in the vicinity of the airport. Additionally, public input indicates a desire to attract development at the airport to diversify the economy and attract higher paying jobs. The Comprehensive Economic Development Strategy (CEDS) will help identify specific industries to be targeted. Land uses at the park should reflect these conditions. The Growth Policy has a number of policies that deal with aesthetics and open space in new developments. The policies reflect the desire to maintain community character and protect the views through controls on crest line development. These policies were reaffirmed through the public input portion of the CEDS process. Following are excerpts from the City of Red Lodge Growth Policy relating to development issues at the airport area. Central Business District Policy A Public offices and meeting places should remain in the Central Business District.
Community Entrances Policy J The City of Red Lodge should work with Carbon County to develop an industrial park at the airport. This project must be shielded from Highway 78 with landscaped buffers and provided with adequate infrastructure. An airport industrial park would provide sites for uses like contractor's shops that need extensive parking and materials storage areas. The City could help such businesses relocate from highway frontages and grant funds may be available to install infrastructure, if a small new industry that would create several jobs can be found. A properly designed industrial park will not interfere with the safe continued operation of the airport. Policy S The appearance of new commercial or industrial development along the community entrances should be consistent with Red Lodge's historic image. The development code will establish a design review process for use in a Community Entrances Zoning District" and the proposed airport industrial park. The standards guiding that process will not be the same as those used in the central business district, but should encourage developers to adapt some of the themes found in the City's historic commercial architecture for use along the community entrances.
Open Space Background The strong horizontal line and sense of enclosure created by the East and West Benches rising above the city are important elements in the visual character of the community.
The City of Red Lodge will ensure that building on the East and West benches above the city does accelerate erosion or result in the landslides. It should also protect views, while allowing the owners of visually sensitive properties a reasonable use of their land. Policy I The Red Lodge Development Code will minimize the impact crest line development has on views. Current Red Lodge Development Code must be revised to reflect the public desire for deeper set backs and lower heights. This can be accomplished with a combination of building height limitations and setbacks from the crest line. Given recent development along the West Bench, the building height and setbacks from the crest line requirements in the current Red Lodge Development Code must be reviewed to determine if they are adequate for minimizing impacts to bench line views.
Potential Development Areas Area 7 Red Lodge Airport. Recent proposals regarding the airport would not change the concept of using the site for both general aviation and light industrial development. The area south of Highway 78 and east of Remington Ranch and west of White Avenue needs a plan for development.
Infrastructure Policy F Red Lodge and Carbon County will adopt and enforce the airport safety zoning regulations recommended by the Federal Aviation Administration.
Planning Principles Other planning principles that were presented at the design workshop include:

Utilize buffering between incompatible land uses. Create an entry identity to the business park. Incorporate amenities such as parks, trails and open space into the site planning. Use storm water retention facilities as a water amenity. Create a sense of place that reflects community character. Identify specific potential land uses and create lot sizes and design standards to reflect the function of these uses (see Appendix A).
Public Input
In February 2004, the consulting team interviewed approximately 100 key stakeholders regarding the Comprehensive Economic Development Strategy. Although the interviews were focused on obtaining input for economic development planning, the interviews yielded numerous comments on the strategic importance of development at the airport and opinions regarding the nature of that development. Following are general principles for development of the airport area that were expressed during interviews in February and during the design workshop in March. General Development Goals

Only permit low-impact businesses and industry. Industries should be non-polluting with minimal off-site impacts such as noise, dust, traffic, and glare. Attract small employers (suggested sizes range from 10 to 50). This is a high visibility area and development needs to be sensitive to aesthetics. Use the business park to diversify the economy with non-tourist related industries and higher paying jobs. Consider public involvement in infrastructure development costs to offset high costs for extending sewer and water service. There is a need for vacant, ready-to-build lots with infrastructure in place for business and industry.
Other Planning Considerations

Reflect the supply and demand for various types of office, warehousing, and light industrial uses that are identified in the CEDS. Identify near and long-term phases for development. Define sub-areas to differentiate phases and development approaches. Development should incorporate site constraints due to environmental, geologic, or airport safety concerns. Consider the relationship to the surrounding land uses.
Common Themes from the Design Workshop

Open space should be a key aspect of development (parks, trails, water features). Maintain the parking for the rodeo grounds. Consider developing recreational vehicle parking in this area. Create a landscaped entry area (preferred location northeast corner of the site). Suggested land uses include light industrial, construction trade, hospital, aviation, and residential, technical college & city/county shops. The CEDS will help determine the demand for these uses. The crosswind runway area could be included in the developable area.
Recommendations
Based on the consulting teams assessment of the airport site attributes, market demand, public input from the design workshop, analyses of prior airport studies and assessments, and discussions with local leaders, the following parameters for development of the site are recommended. Figure 2 on the next page is a composite drawing of the recommendations.
The site should include a small public park at the northwest corner entry from Highway 78 (at the entrance road to the Rodeo Grounds). The site should retain overflow parking for the rodeo grounds, and also should include an recreational vehicle (RV) parking area that can be used for overflow parking during large events. Many RVers now park at the rodeo and fairgrounds for events and recreational use, but no services are available. The RV parking area would provide enhanced services such as electrical hookups and picnic tables for event participants, spectators and visitors. Note that the ratio of overflow parking to RV area depicted in Figure 2 is flexible and could vary in the final site plan. The commercial area bordering Highway 78 should be designated for office, showroom, multitenant business space, technology campus or similar uses. It should not be used for retail, tourist services or auto-oriented businesses. Small offices, such as professional services or lone eagles should be encouraged to locate in the central business district (downtown generally is a more desirable location for these types of businesses). The lots in this area could be aggregated for a larger facility, such as an MSU-B technical college facility combined with a multi-tenant facility for business uses. If combining lots is a possibility, then a smaller user should be located on one of the two outer lots, rather than one of the two middle lots. Areas to the south and north of the existing airport hangar facilities should be designated for light industrial use. Both areas should include open space features. The lot sizes should vary in the business park to accommodate different product types. High intensity uses, such as city and county shops, should be located in the interior of the light industrial area out of view of the main roadway. The consulting team does not recommend the airport business park as a desirable location for the hospital. Entry features should be located at the northeast corner of the site as part of the commercial development area, and include a small water feature. A trail system should connect the open space features around the site. Landscaping along rights-of-way should be a key aspect of the development. The Planned Unit Development documents, as well as Conditions, Covenants and Restrictions, should include design standards to ensure high quality development with appropriate architectural controls to reflect community character, landscaping treatments and screening standards. Directional signs should be installed on Highway 78 at least mile east and west of the airport/business park entrance to alert visitors about the upcoming entrance to the airport.
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Figure 2: Concept Drawing for Airport Business Park
Summary of Key Concept Drawing Components (from left to right, top to bottom): Blue area (upper left): Existing Fairgrounds. Yellow area & adjacent pink area (upper middle): Existing Rodeo Grounds & Overflow Parking. Dark green area with landscaping (upper right): overflow parking area, with RV parking, public park and entrance to Rodeo Grounds (access road to Rodeo Grounds has been relocated slightly east to align with east border of overflow parking and Rodeo Grounds). Light green area (middle of drawing from south to north, and extending east to border of site): existing airport facility, with runway, taxiway, hangars and other outbuildings; with proposed facilities expansion (hangars, etc.) in areas north and south of the taxiway, and access roads to new facilities, as designated on airport site plan adopted by Airport Board. Dark green area (lower left of site along crest line): Overlook Park with small water feature and bike/pedestrian trails. Salmon-colored area (lower left): nine lots for light industrial use (small manufacturing, technology, etc.). Salmon-colored area (lower right): nineteen lots of varying sizes for light industrial use, with a park feature and trails in the middle. Red area (middle right along Highway 78): four lots for commercial use (office, showroom, technology, college facilities, etc.), with park amenity in center of circular access road. Dark green area (lower right corner): main entrance to airport and business park, with landscaping, small water feature, sign, park amenities.
Red Lodge Airport Business Park Concept Plan Report 11
Attachment 1: Land Use Considerations

The table below lists different types of land uses that have been proposed for the airport business park site, along with examples of each use, site planning considerations if the use type were allowed, and issues raised with some types of land uses.
Land-Use Office Examples Professional Services High-Tech Office or Light Industrial Business Incubator Research & Development Trucking Wholesale Contractor Showrooms Heavy Equipment Storage Assembly Packaging Storage Research Secondary Manufacturing Printing Hospital School Technical College Site Planning Considerations Requires reliable high-speed Internet Open space for campus like environment Not location for warehouses, outdoor storage Large lots to accommodate large buildings, truck bays, loading areas Need good transportation infrastructure Outside storage of heavy equipment & materials is common. Possible office-showrooms or officewarehouse combinations Larger lots for office, warehouse, plant operations Some outdoor storage Truck bays, loading areas Provide for impacts thru proper waste disposal, screening, etc. Large space required for campus environment (i.e. hospital requires 12 acres) Hospital would attract professional offices but incompatible with higher impact uses Possible synergy between technical college, business incubator, R& D, high tech space Institutional uses are tax exempt. Would not contribute to TIF unless agreement in place Located adjacent to airport Issues Will it compete with office space elsewhere in town?
Warehouse & Distribution Construction Trade Light Industrial
May compete with Beartooth Business Park near cemetery
Institutional
Noise & safety concerns for hospital being located adjacent to airport
Aviation
Hangars Flight School & Charter Flights Aviation Services Package Services
Need to resolve airport issues
Events & Recreation
Convention/Events Center Outdoor Events
Requires significant parking Ancillary uses such as RV Park
Rodeo grounds & fairgrounds in vicinity
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Attachment 2: Past Planning Efforts

Since the Growth Policy Plan was adopted in 1995 there have been a number of development proposals for the airport. None of these have been approved, but they do provide certain development concepts that can be a referenced for future developments. The proposals are listed below by source, and key highlights of each are outlined. Red Lodge Improvement Corporation Submitted to the City in 1996, this proposal included two separate business parks with provisions for water and sewer services to be extended to future residential development west of the site. The development anticipated relocation of contractor shops from the highway to this location, and provided for screening along the roadways in the design standards. The airport would remain at its existing location, with no changes to the main and crosswind runways. The rodeo grounds, overflow parking, and fairgrounds would not be affected by this proposal. Key features included: North Park: 16 acres; 12 lots, lot size ranges from 1 to 2.8 acres South Park: 15 acres; 10 lots, lot size 1 to 2 acres Extend utilities for Aviation Residential use west of airport Engineering, Inc. This planning study examined alternatives for development at the airport, and was funded by a U.S. Economic Development Administration grant. Completed in 2001, the alternatives included two options: relocating the airport and redeveloping the entire site, or retaining the airport at its present location. The preferred alternative was based on the option of relocating the airport and included five phases. Infrastructure costs were estimated for each stage. The preferred alternatives were essentially a grid pattern with uniform lot sizes that did not provide for different product types. There was no open space or screening as part of the proposal. The overflow parking for the rodeo grounds would be eliminated. Key features included: 115 acres (net), 75 lots, average lot size: 1.5 acres Phase 1: 15 lots Phase 2: 12 lots, does not affect main runway Phase 3: Does not affect crosswind runway, extension of sewer is more costly Phase 4 & 5: Remove hangars & runways Realign Bench Road Community Builders Community Builders is a local group of volunteers, including planners and engineers who donated services to prepare a preliminary PUD for the northeast portion of the site. This proposal did not involve relocating the airport but would eliminate the crosswind runway. The main feature of the plan was to provide a site to relocate the hospital to this area. The remaining site would be developed as office/light industrial. The site plan included a mix of product types, and accompanying design standards provided for screening of light industrial uses. Some park land was included in the proposal. A Tax Increment Financing District was proposed to pay for infrastructure improvements.
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Key features included: Hospital Campus: 7 acres TIF District for improvements Park area: 2.5 acres 17 Lots, lot size: 1.5 to 7 acres Kadramas, Lee & Jackson Airport Master Plan As part of a plan to consider options for relocating the airport, this study included a conceptual drawing to redevelop the airport in the event it was relocated. The concepts were very similar to the preferred alternative in the Engineering, Inc. study and did not include much detail. Airport Board Site Facility Plan The Airport Board, which oversees operations at the airport, recently approved a conceptual drawing that designated future locations for hangar and other airport facilities. Most of the hangars are privately owned. The City leases the land and the structure is owned by the lessee. There is no water and sewer service, but leases do specify that when City utilities are extended, these structures are required to connect to city services. The Site Facility Plan would increase capacity for aircraft storage from 20 to 80. Currently, the Airport Board members are appointed by the County Commission and the Red Lodge City Council.
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City of Red Lodge
Community Leader Survey Final Report

March 2004
Prepared for The City of Red Lodge Economic Development Committee by The Hingston Roach Group, Inc.
Red Lodge Community Leader Survey Results
March 2004
Red Lodge Community Leader Survey

Final Results as of March 2, 2004 The Red Lodge Economic Development Strategy consulting team conducted an online survey of Red Lodge business and community leaders in order to obtain their opinions about economic development issues. From January 22 to 28, 2004, 244 leaders were contacted via email, and 104 surveys were completed, for a 42% response rate. Respondents were asked to rate various characteristics of the community as a Strength, Weakness, or as Average (Normal), according to their perspectives. The top twelve strengths and weaknesses are listed below. The answers to all questions are detailed on the following pages. Top 12 Strengths Level of air quality Attractiveness of the physical environment Availability of recreational opportunities Impact of the tourism industry on the community Adequate local clinics and health care professionals for basic health care Quality of the climate Level of crime Availability of a range of quality restaurants in the community Availability of adequate hotels/motels Availability of adequate local hospital facilities General appearance of the community Appearance of the downtown for attracting business activity 91% 89% 82% 76% 63% 62% 61% 59% 59% 54% 51% 51%
Local recreational opportunities and quality of the environment are key strengths in the Red Lodge area. Not only do they contribute to quality of life for residents, but are an attraction to visitors. The impact of visitors to the community is viewed as an asset, supporting the presence of tourism-related businesses such as restaurants and retail shops in Red Lodge. Other key strengths relate to quality of life issues, i.e., safety, availability of health care services; and appearance of the community. Top 12 Weaknesses Availability of quality jobs in the community for resident workforce Availability of public transportation Availability of post-secondary vocational training Level of wages and salaries paid locally Involvement in the community by colleges & universities Availability of adult/continuing education at a post-secondary level Quality of post-secondary education in the community Availability of apprenticeship programs Availability of community/local government information online, i.e. e-government Level of funding for local economic development programs Adequacy of local marketing programs to attract new retail and commercial business to the community Availability of upgrade training for existing employees 89% 84% 81% 80% 77% 76% 68% 67% 66% 66% 65% 64%
Living wage jobs, workforce training/continuing education and public transportation issues are perceived as the area's greatest challenges. Moreover, funding and marketing programs focused on local economic development, and availability of government information online, need to be improved.
Red Lodge Community Leader Survey Results March 2004 2
Quality of Life
Most quality of life issues in Red Lodge are rated as strengths or normal, with a few exceptions. Low cost housing is a key weakness (59% of responses). Executivelevel housing is viewed as normal, except by respondents in the education and financial sectors, 57% of whom who rated it as a weakness. One-in-four respondents noted that accommodations for people with disabilities are a weakness. (Note: Highlighting indicates highest rating for each question.) Q1. Quality of Life a. Availability of executive-level housing b. Availability of moderate cost housing c. Availability of housing for low-income families d. Availability of rental housing/apartments e. Cost of housing overall f. Level of crime g. Level of cultural activity and facilities h. Availability of recreational opportunities i. Presence of major sporting events j. Level of air quality k. Quality of the climate l. Attractiveness of the physical environment m. General appearance of the community n. Availability of adequate local hospital facilities o. Adequate local clinics and health care professionals for basic health care p. Cost of health care relative to other areas q. Adequate social services (day care/counseling/poverty assistance) r. Services and programs for senior citizens s. Physical accommodations for persons with disabilities t. The rate of population growth in the community Total Respondents Strength 26 5 5 5 9 63 42 84 12 95 64 93 53 56 66 20 11 14 4 11 104 % Normal % Weakness % 25% 53 51% 18 17% 5% 49 47% 46 44% 5% 31 30% 61 59% 5% 61 60% 32 31% 9% 44 42% 49 47% 61% 39 38% 1 1% 40% 38 37% 24 23% 82% 15 15% 3 3% 12% 30 29% 52 50% 91% 9 9% 0 0% 62% 33 32% 7 7% 89% 6 6% 5 5% 51% 40 39% 10 10% 54% 39 38% 8 8% 63% 35 34% 2 2% 19% 70 67% 6 6% 11% 57 55% 21 20% 13% 63 61% 8 8% 4% 52 50% 26 25% 11% 77 75% 12 12% No Opinion 7 4 7 4 2 1 0 0 10 0 0 0 0 1 1 8 15 19 21 2 % Total 7% 104 4% 104 7% 104 4% 102 2% 104 1% 104 0% 104 0% 102 10% 104 0% 104 0% 104 0% 104 0% 103 1% 104 1% 104 8% 104 14% 104 18% 104 20% 103 2% 102
Local Education
Local education is viewed as average by about half of the respondents. Elementary education rated higher than secondary, with vocational education viewed as a weakness by 59% of respondents. Secondary education is rated as a weakness by 44% of respondents in the Restaurant/Beverage sector, by 43% of those in the Retail sector, and 36% of those representng Non-profits. Post-secondary education is overwhelmingly viewed as a weakness. Q2. Local Education Situation a. Quality of local elementary (K-8) education b. Quality of local secondary (9-12) education c. Quality of post-secondary education in the community d. Involvement in the community by colleges & universities e. Involvement of local residents and parents in the school districts f. Availability of vocational programs at the secondary level (job skills, computer) Total Respondents (skipped this question)
Red Lodge Community Leader Survey Results March 2004
No Strength % Normal Weakness % Opinion % Total 23 23% 20 20% 102 48 47% 11 11% 17 17% 21 21% 102 41 40% 23 23% 2 2% 17 17% 101 13 13% 69 68% 3 3% 7 7% 102 13 13% 79 77% 14 14% 22 22% 102 51 50% 15 15% 3 3% 15 15% 102 24 24% 60 59% 102 2
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Local Government
The presence of a local resort tax is viewed as a strength by 45% of respondents, and as a weakness by only 10%, with no significant differences by sector. Public safety, waste removal, property taxes and buildings codes are viewed as normal. Local planning and zoning, permitting, and regulation processes for businesses are rated as a weaknesses by 38-42% of respondents overall, but by 82% of respondents in Real Estate, 80% in Agriculture/Ranching and Financial Services, and 56% in Recreation/Entertainment and Restaurant/Beverage. Local fire protection is rated as a strength by 80% of respondents in Contracting/Construction, 75% of those representing Non-profits, 60% of those in Health/Medical/Veterinary, and 57% of respondents in Education. Q3. Local Government Situation a. Adequacy of local police protection and public safety b. Adequacy of local fire protection c. Adequacy of trash pickup and waste disposal d. Adequacy of local planning and zoning e. State and local permitting and regulation process for businesses f. Annexation policy g. Adequacy of local building codes h. Level of local property taxes i. Presence of local sales (resort) taxes j. Adequacy of local tax base to cover cost of local government k. Cooperation of local government with business l. Cooperation of local government entities with each other m. Long-range planning for municipal improvements and capital budgeting n. Availability of community/local government information online i.e. e-gov't Total Respondents (skipped this question) Strength 16 36 21 14 0 0 3 6 45 6 4 2 5 1 101 3 No % Normal Weakness % Opinion % Total 16% 0 0% 101 71 70% 14 14% 36% 1 1% 101 62 61% 2 2% 21% 2 2% 100 66 66% 11 11% 14% 5 5% 101 44 44% 38 38% 0% 16 16% 101 43 43% 42 42% 0% 42 42% 101 37 37% 22 22% 3% 16 16% 101 56 55% 26 26% 6% 6 6% 101 57 56% 32 32% 45% 3 3% 100 42 42% 10 10% 6% 10 10% 100 42 42% 42 42% 4% 5 5% 101 39 39% 53 52% 2% 10 10% 101 37 37% 52 51% 5% 11 11% 101 26 26% 59 58% 1% 13 13% 101 20 20% 67 66%
Local Leadership
Several aspects of local leadership are viewed as weak. Two-thirds of respondents viewed the level of funding for local economic development programs as a weakness, and more than half rated the level of communication and cooperation between community organizations involved in development as weak. Only 13% feel that community leadership is committed to economic improvement of the community. Q4. Local Leadership Situation a. Adequate level of professional staff in gov't offices and development organizations b. Involvement of public and private sectors in development programs of community c. Level of communication and cooperation between various organizations involved in the development of the community d. Level of citizen awareness regarding the local development programs e. Level of leadership commitment to economic development in the community f. Level of funding for local economic development programs g. Level of cooperation with other development org'ns serving this area of the State Total Respondents (skipped this question)
Strength 4 12 6 8 13 1 8 99 5
% 4% 12% 6% 8% 13% 1% 8%
Normal 44 42 36 34 38 25 34 44% 42% 36% 34% 38% 25% 35%
Weakness 44 41 54 55 43 65 34
% 44% 41% 55% 56% 43% 66% 35%
No Opinion 7 4 3 2 5 8 21
% 7% 4% 3% 2% 5% 8% 22%
Total 101 101 101 101 101 101 99
Workforce
Survey respondents overwhelmingly rate quality (living wage) jobs and the level of wages and salaries paid locally as weaknesses, which they may link to a perceived lack of commitment and cooperation in strategic economic improvement efforts, as indicated in the previous question. The majority of respondents indicated that the availability of various types of workers is normal, although more than one-third of respondents expressed that the availability of industrial, technical, professional and managerial workers is more problematic. The availability of workforce training and continuing education is a weakness, which may affect the ability to attract higher-paying jobs to the community. Q5. Workforce Situation a. Availability of unskilled and semi-skilled workers b. Availability of skilled industrial workers c. Availability of retail and office workers d. Availability of technicians and professionals e. Availability of managerial personnel f. Availability of quality jobs in the community for the workforce residing in the community g. Level of wages and salaries paid locally h. Quality of worker-management relations i. Availability of post-secondary vocational training j. Availability of on-the-job training assistance k. Availability of adult/continuing education at a post-secondary level l. Availability of upgrade training for existing employees m. Availability of apprenticeship programs Total Respondents (skipped this question) No Strength % Normal % Weakness % Opinion % Total 13 13% 4 4% 97 63 65% 17 18% 1 1% 12 12% 97 47 48% 37 38% 12 12% 4 4% 98 64 65% 18 19% 12 12% 4 4% 97 43 44% 38 39% 7 7% 5 5% 97 52 54% 33 34% 0 1 8 2 3 2 1 0 97 7 0% 1% 8% 2% 3% 2% 1% 0% 9 16 63 8 19 13 18 14 8% 16% 65% 8% 20% 13% 19% 14% 86 78 11 78 57 74 62 65 89% 80% 11% 81% 59% 76% 64% 67% 3 2 15 8 17 8 16 18 3% 2% 15% 8% 18% 8% 16% 19% 98 97 97 96 96 97 97 97
Transportation
Traffic issues are rated as normal, and about equal numbers of respondents indicate that road/street maintenance is normal or a weakness. Air service at Billings is rated a strength by one-in-four respondents, and normal by more than half. The majority of respondents believe that public parking in commercial areas needs improvement. Key weaknesses are a lack of public transportation and rail service. Q6. Transportation Situation a. Adequate local major highways b. Movement of traffic in the community c. Condition and maintenance of local streets and roads d. Level of traffic-carrying capacity of local streets e. Availability of public parking in the local commercial areas f. Availability of public transportation g. Adequacy of commercial air passenger service at Billings h. Availability of rail service for industrial sites Total Respondents (skipped this question)
No Strength % Normal % Weakness % Opinion 15 15% 0 64 66% 18 19% 14 14% 0 74 76% 9 9% 7 7% 0 44 45% 46 47% 6 6% 3 69 71% 19 20% 5 5% 0 39 40% 53 55% 1 1% 7 7 7% 82 85% 24 25% 1 55 57% 17 18% 1 1% 29 12 12% 55 57% 96 8
Total 97 97 97 97 97 97 97 97
Utilities
Most utility services are rated as normal, with drinking water viewed as a strength by 42% of respondents. Some weaknesses cited are high speed Internet service, water/sewer service to commercial/industrial sites, and cost of electricity (a statewide issue). High speed Internet was rated as a weakness by 82% of Real Estate sector respondents, by 67% of those in Personal/Business Services, 62% in Financial Services, 60% in Agriculture/Ranching, and 58% in Recreation/Entertainment -- a finding worth noting, as these are key businesses in Red Lodge. Q7. Utility Situation a. Local telephone companys quality of service & responsiveness b. Connection of local telephone company to national long distance network c. Availability of cellular service d. Availability of high-speed Internet service e. Availability of high quality electric service f. Cost of electricity g. Availability of potable (drinking quality) water h. Availability of adequate wastewater treatment capacity i. Availability of adequate water and sewer lines to industrial/commercial sites j. Cost of water and sewer services Total Respondents (skipped this question) No Strength % Normal % Weakness % Opinion % Total 6 6% 5 5% 96 61 64% 24 25% 5 5% 7 7% 96 73 76% 11 11% 7 7% 6 6% 96 51 53% 32 33% 12 13% 6 6% 96 40 42% 38 40% 9 9% 6 6% 96 71 74% 10 10% 3 3% 5 5% 95 49 52% 38 40% 40 42% 2 2% 95 50 43% 3 3% 17 18% 9 9% 96 53 55% 17 18% 3 3% 21 22% 94 32 34% 38 40% 4 4% 12 12% 96 56 58% 24 25% 96 8
Real Estate
While the availability of existing space for offices and retail businesses appears normal to two-thirds of respondents, there is a problem related to availability of suitable industrial building space and fully-served sites. This weakness, cited by nearly half of respondents, could be a key barrier to higher-paying jobs. Cost of land/sites for new development is viewed as normal by 44% of respondents, and as a weakness by 39%. However, the cost of land/sites was rated as a weakness by 60% of Contractor/Construction sector respondents, by 57% of those in Education, and 47% in the Professional/Legal/Scientific sector. Q8. Real Estate Situation a. Availability of fully served and attractive land/sites for industrial buildings b. Availability of fully served and attractive land/sites for office buildings c. Availability of attractive and well located commercial/retail sites d. Cost of land/sites to new users e. Availability of suitable industrial building space f. Availability of suitable office space g. Availability of suitable commercial/retail space h. Availability of subdivided sites for new homes Total Respondents (skipped this question) Strength 5 4 11 4 4 12 11 22 95 9 % Normal % Weakness % 5% 37 39% 44 46% 4% 43 46% 38 40% 12% 51 54% 26 28% 4% 41 44% 37 39% 4% 36 38% 45 48% 13% 61 66% 13 14% 12% 66 70% 13 14% 24% 55 59% 10 11% No Opinion % Total 9 9% 95 9 10% 94 6 6% 94 12 13% 94 9 10% 94 7 8% 93 4 4% 94 6 6% 93
March 2004
Financial Capital
Nearly one-third of respondents rated investment in the community by local financial institutions as a strength - a very positive sign that is counter to national trends. Business financing is perceived to be a weakness by at least one-third of respondents, particularly in the areas of low-interest loans (such as SBA loans) for new construction or business start-ups. Q9. Capital Situation a. Availability of low interest or tax-exempt financing for new commercial facilities b. Availability of low interest loans for small business c. Availability of venture capital from local sources for business startups d. Availability of home mortgage financing e. Investment in the community by local financial institutions Total Respondents (skipped this question) No Strength % Normal % Weakness % Opinion % Total 2 2% 39 41% 94 19 20% 34 36% 4 4% 26 28% 93 35 38% 28 30% 0 0% 24 26% 93 21 23% 48 52% 24 26% 9 10% 94 58 62% 3 3% 28 30% 13 14% 94 38 40% 15 16% 94 10
Marketing and Services in the Community

The appearance of Red Lodge, and its attractions and services for tourists, are viewed as strengths, as is the impact of tourism on the community. However, a significant number of respondents feel that marketing programs to attract tourists and new businesses, and funding to support tourism development, are weaknesses. Other weaknesses are Red Lodge's location in relation to Western/national markets, and the availability of conference/meeting space. More than onethird of respondents view the availability of business and professional services as a weakness. Q10. Marketing Situation a. Location of the community for serving markets in the Western U.S. b. Proximity to other major national markets c. Appearance of the downtown for attracting business activity d. Appearance of the highway-oriented retail/commercial areas for attracting business activity e. Availability of a range of retail stores and goods in the community f. Availability of a range of quality restaurants in the community g. Availability of a range of personal services (legal/professional/dry cleaning/repairs) h. Availability of business/professional services that support business and industry i. Availability of adequate hotels/motels j. Availability of adequate conference and meeting facilities k. Adequacy of local newspaper for promotion of local business activity l. Adequacy of Billings media in local community issues/activities m. Adequacy of local marketing programs to attract new retail and commercial business to the community n. Adequacy of the tourism marketing program to attract visitors o. Impact of the tourism industry on the community p. The range of attractions for expanded tourism q. Availability of funding to support tourism development Total Respondents (skipped this question)
No Strength % Normal % Weakness % Opinion 17 18% 7 31 33% 38 41% 9 10% 7 22 24% 55 59% 47 51% 0 38 41% 7 8% 19 18 55 11 5 55 13 20 10 2 13 71 42 4 93 11 21% 19% 59% 12% 5% 59% 14% 22% 11% 2% 14% 76% 46% 4% 41 37 23 54 50 35 33 51 52 26 41 19 33 26 45% 40% 25% 58% 54% 38% 35% 55% 56% 28% 44% 20% 36% 28% 31 38 15 28 34 3 47 21 27 60 38 3 16 53 34% 41% 16% 30% 37% 3% 51% 23% 29% 65% 41% 3% 17% 58% 1 0 0 0 4 0 0 1 4 5 1 0 1 9
% Total 8% 95 8% 95 0% 94 1% 0% 0% 0% 4% 0% 0% 1% 4% 5% 1% 0% 1% 10% 94 95 95 95 95 95 95 95 95 95 95 95 94 94
Most Important Problem or Challenge

Seventy-six respondents answered this question about the single most important problem or challenge facing Red Lodge, many of them listing several problems or challenges. The key themes are summarized below. Q11. In your opinion, what is the single MOST important problem or challenge facing Red Lodge? Total Respondents (skipped this question) Key Themes: All need to work together to make Red Lodge a great place to live Better communication Expand year round tourism High cost of living Keeping diversity between tourism and other business, agriculture Large scale growth creates change in enjoyment of land use Low pay, high housing costs-makes budgeting difficult for families More educational and recreational opportunities for young people Need funding for new projects to attract more new businesses Need incentives to attract high paying/skilled labor businesses Problems of increasing population of motorcyclists Recognize need for economic development for tax base & services Support local businesses instead of those in Billings Total 76 28 % 70%
Affordable housing Attracting new business with living wage jobs Development of infrastructure to attract industry Good vision for the future Keep small town atmosphere with the benefit of growth Keeping youth in Red Lodge Long term comprehensive growth planning Need for conference center to attract off-season visitors Need non-retail business park Power struggles between groups and committees Promote Red Lodge as a wonderful place to live Strong diversity between retired people and working families Work on image to attract new businesses
Other Comments
When asked for general comments/insights, fifty-nine respondents provided further information or opinions. Examples of comments representing key themes and perspectives are summarized below. Q12. Do you have other comments/insights for the consulting team regarding business and economic development in Red Lodge? Total Respondents (skipped this question) Total 59 45 % 55%
Key Themes: Advertise all aspects of tourism Be more self sufficient and not totally reliant on tourism Be realistic and cooperative Be sensitive to environmental quality Begin a systematic approach to identify and accomplish the steps needed to build the future of Red Lodge Build on a sense of unity - everyone working together City needs to help establish small business & light industry Community has excellent potential for retirement Cooperation of those living in and out of town
Red Lodge Community Leader Survey Results March 2004 8
Cooperative city/county/council planning Create a formal structure to assist with coordination and planning Develop tourism in spring and fall seasons Development of business park to attract new/existing businesses Economic development must be for everyone, not just industry Economic development needs to be planned Encourage trained/professional workers by providing better wages Expand new airport facility Focus on big picture Get national exposure for Beartooth All American Road Good place to raise children Hire full time city administrator Incredible natural resources with recreation opportunities Keep the small town atmosphere Maintain and upgrade highways into Red Lodge Make it easier to open and establish new businesses Make Red Lodge a more attractive place to visit year round Make sure proper funding is available to City More artistic enterprises More marketing to attract visitors Need a comprehensive development plan supported by the whole community Need regulations on where and what people can build Preserve high quality of life Problems need to be addressed before seeking new possibilities Protect quality of life and environment Provide adequate updated medical facility Provide sustainable jobs Pursue a new airport site to bring in commercial airlines Remembering everyone is important Start now, keep going Support local events Use 20% of resort tax to fund events Work together to attract new business by marketing the community and its assets
March 2004
Respondents' Organizational Affiliation

Survey respondents represented a broad cross-section of the community, with no one sector dominating the survey responses, as indicated below. Q13. What type of organization do you represent? Agriculture/Ranching Auto Related (sales service repair) Communications/Media Contractor/Construction Education (private public) Financial Services/Banking/Insurance Government (local state federal) Health/Medical/Veterinary Lodging (hotel/motel B&B RV) Manufacturing/Wholesale/Distribution Mining/Forestry/Fishing (commercial) Non-Profit (arts youth history etc.) Personal or Business Services Professional/Legal/Scientific Real Estate/Title/Escrow Recreation/Entertainment Services Restaurant & Beverage Retail Store/Goods Social Services/Religion Transportation/Utilities Other: tourism (unspecified); service (unspecified); concerned resident Total Respondents (some are in multiple categories) (skipped this question) Total 5 3 12 5 7 8 15 5 6 2 3 11 15 15 11 12 9 14 3 2 9 90 14 % 6% 3% 13% 6% 8% 9% 17% 6% 7% 2% 3% 12% 17% 17% 12% 13% 10% 16% 3% 2% 10%
Respondent Organization Type

Other Transp'n/Util Social Services Retail Restaurant/Bar Recreation Real Estate Professional Services Non-Profit Mining/Forestry Mfr'g/Dist'n Lodging Health Care Government Financial Svcs Education Construction Communications Auto Related Ag/Ranching
9 3 9 11 11 6 8 12 15 12 15 15 14
3 2 5
7 5 3 5
Location of Respondents' Organizations

Q14. Where is your organization located? (Check all that apply.) Within Red Lodge city limits In Carbon County (outside Red Lodge city limits) Outside of Carbon County Not Applicable Total Respondents (skipped this question) Total 70 19 10 2 89 15 % 79% 21% 11% 2%
Location of Respondent Organization
Red Lodge City Limits, 79%
More than three-quarters of respondents' organizations are located within the City of Red Lodge, and another 21% in Carbon County (outside the City). In some cases, the organization is outside of the area, but does business in Red Lodge (such as media or wholesale distributors).
Carbon County , 21% Not Applicable, 2% Out of Carbon County, 11%
March 2004
10
y,
Customer Origins of Respondents

Less than half of respondents indicated that most of their customers come from the local area - an indication of the impact of tourism on local businesses, as well as companies who export products from the area. Nearly half of businesses (42%) in the Recreation/Entertainment sector noted that most of their customers originate from national/international markets. Origin of Customers Q15. Where are MOST of your clients/customers located? Total % City of Red Lodge/Carbon County State of Montana Multi-State (Intermountain region) National/International Not Applicable Total Respondents (skipped this question) 39 24 20 26 2 89 15 44% 27% 23% 29% 2%
State of Montana
Red Lodge/ Carbon Co.
National/ International Not Applicable
Multi-State (Intermtn region)
Respondent Contact Information

Q16. Optional: Contact Information Total Respondents (skipped this question) Total 55 49 %
Respondents were given the option of providing their contact information (name, address, email, etc.) to the consulting team. Fifty-five respondents did.
Respondent Interest in Contact from Consulting Team

Twenty-nine respondents requested personal follow-up from the consulting team. In most cases, respondents were interviewed February 2-6. Follow-up with others is ongoing. Q17. Would you like a member of the Red Lodge economic development consulting team to contact you for further follow-up? Yes No Total Respondents (skipped this question) Total 29 54 83 21 % 35% 65%
Respondent Interest in Red Lodge Economic Development Committee

Twenty respondents indicated that they would like to join the Red Lodge Economic Development Committee - a positive sign of community interest in the strategic planning effort. Q18. Would you like to become a member of the Red Lodge Economic Development Committee? Yes No Total Respondents (skipped this question)
Total 20 58 78 26
% 26% 74%
11
MAP OF SAN JUAN COUNTY
7 San Juan County CEDS Update 2011
7. SAN JUAN COUNTY

TABLE OF CONTENTS
INTRODUCTION ....................................................................................................................... 1 EXECUTIVE SUMMARY............................................................................................................ 1 BACKGROUND ......................................................................................................................... 2 LOCAL ISSUES ......................................................................................................................... 3 Education ............................................................................................................................... 3 Environment ........................................................................................................................... 3 Health Care ............................................................................................................................ 4 Housing .................................................................................................................................. 5 Livable Wages ........................................................................................................................ 6 Telecommunications ............................................................................................................... 7 Transportation ........................................................................................................................ 7 SAN JUAN COUNTY PROFILE ................................................................................................. 9 San Juan County Government ................................................................................................ 9 Infrastructure and Services ................................................................................................... 10 Demographics ...................................................................................................................... 11 The Local Economy .............................................................................................................. 12 Unemployment Rates ........................................................................................................ 12 Commuting ....................................................................................................................... 12 Employment and Income 2009 .......................................................................................... 13 Economic Clusters ............................................................................................................ 14 Per Capita Income ............................................................................................................ 14 Total Personal Income ...................................................................................................... 14 Total Personal Income Trends........................................................................................... 15 STRATEGIC PLANNING ......................................................................................................... 25 San Juan County Vision Statement ....................................................................................... 25 SWOT (Strengths, Weaknesses, Opportunities, Threats) Analysis ........................................ 25 Key Economic Development Directions................................................................................. 26 Goals, Actions & Implementation .......................................................................................... 26 BOTTOM UP ECONOMIC DEVELOPMENT STRATEGY...................................................... 30
7 San Juan County CEDS Update 2011
INTRODUCTION
The purpose of the Comprehensive Economic Deveopment Strategy (CEDS) is to create a plan for retaining and creating better paying jobs, fostering stable and more diversified economies, as well as maintaining and improving the quality of life in southwest Colorado and San Juan County.
EXECUTIVE SUMMARY
The population of San Juan County peaked at about 5,000 in 1910. Since that time the population has followed the boom and bust cycles that are characteristic of mining communities, fluctuating between 750 and 1,000 people from 1960 until the last working mine closed in 1991. The population has stabilized at about 699 year-round residents, primarily within the Town of Silverton (the only town in the county). There has also been an influx of seasonal/summer residents, who purchase 2nd homes in the area in order to enjoy the rural amenities of life in the high country. This phenomenon, known as "amenity migration" has produced wide-ranging economic impacts on the community. At the present time, San Juan County has become almost entirely dependent upon tourism, primarily during the summer months when the Durango & Silverton Narrow Gauge Railroad is running. However, the opening of the Silverton Mountain Ski Area has expanded economic opportunities during the winter months. Train ridership to Silverton was 142,663 in 2010, slightly down from 2009. Visitors by train are supplemented by people who come to Silverton via Highway 550, which is part of the "San Juan Skyway," one of the premier scenic byways in the United States. Key issues in San Juan County addressed in this section include education, environment, healthcare, housing, livable wages, telecommunications and transportation. In 2010, county unemployment rates (10.8%) are higher than the state (8.9%) and nation (9.6%). Most San Juan County residents (79%) work in the county, and 21% commute elsewhere for their paychecks, with the highest percentage (13.5%) going to La Plata County. Wages and employment are highly dependant on generally low paying service sector jobs (56% of employment and 41% of employment income). Government jobs provide 21% of employment and 28% of employment income. The retail trade sector accounts for 12% of jobs and 14% of employment income. Proprietors (owners) make up 35% of total employment, while wage and salary jobs account for 65%. In 2009 San Juan had a Per Capita Personal Income (PCPI) of $38,705. This PCPI ranked 23rd in the state and was 92% of the state average ($41,895) and 98% of the national average ($39,635). In 2009, Total Personal Income (TPI) in San Juan County was $21,481,000. This TPI ranked 64th in the state and accounted for less than 0.1% of the state total. The largest proportion of TPI is generated through employment.
San Juan County CEDS Update 2011
7 -1
BACKGROUND
San Juan County is located high in the San Juan Mountains in Southwest Colorado. The county boasts 12 of the 54 mountain peaks over 14,000 feet in Colorado, and has the highest mean elevation of any county in the United States. In 1861, Captain Charles Baker led a group of prospectors into the upper reaches of the Animas River Basin and thereafter the park-like area became known as "Baker's Park." His discovery of gold was followed by a late-breaking gold rush in the 1870s. More than 1500 mining claims had been staked by 1873. After the signing of the Brunot Treaty with the Ute Indians in 1874, the Town of Silverton was established in the center of Baker's Park. Silverton became incorporated in 1876. At that time Howardsville, four miles to the northeast, was the county seat. Legend has it that Silverton became the county seat after county records disappeared during an all-night blowout in Howardsville and turned up in Silverton. Today Howardsville is a ghost town with only a few buildings left standing. Silverton remains the county seat as well as the only incorporated town in San Juan County. In the early days, one of the greatest difficulties was to get supplies across the high mountains into Silverton. The Stony Pass wagon road became a toll road in 1879 and supplies came in over the Continental Divide from Del Norte. The Denver and Rio Grand Railroad reached Silverton from Durango in 1882, allowing for the movement of large quantities of supplies and the transport of ore to the smelter in Durango. The population of San Juan County peaked at about 5,000 in 1910. Since that time the population has followed the boom and bust cycles that are characteristic of mining communities, fluctuating between 750 and 1,000 people from 1960 until the last working mine closed in 1991. With the dedication of the "Million Dollar Highway" in July of 1924 the transportation of gold, silver, lead, copper and zinc moved from the narrow gauge train to Highway 550 which connects Silverton to Montrose (60 miles to the north) and to Durango (50 miles to the south). Beginning in the late 1950s the rail line that had carried ore down to Durango began, instead, to carry tourists up from Durango to enjoy the spectacular scenery and the heritage that has made Silverton a National Historic Landmark. Train ridership to Silverton was 142,663 in 2010, slightly down from 2009. Visitors by train are supplemented by people who come to Silverton via Highway 550, which is part of the "San Juan Skyway," one of the premier scenic by-ways in the United States. At the present time, San Juan County has become almost entirely dependent upon tourism, primarily during the summer months when the train is running. However, the opening of the Silverton Mountain Ski Area has expanded economic opportunities during the winter months.
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LOCAL ISSUES
San Juan County has some definite areas of strength and weakness as compared to the region. The following information takes a closer look at some of the key issues for the county.
Education
Since the last CEDS report, there have been significant changes in the way Colorado schools are rated, as well as in the State Standards and Assessments. A landmark education reform initiative, known as Colorados Achievement Plan for Kids, or CAP4K, was signed into law in 2008 to align the state public education system from preschool through postsecondary. The Education Accountability Act of 2009 aligns the accountability system to focus on the CAP4K goals: holding the state, districts and schools accountable on a set of consistent, objective measures and report performance. (See Regional Overview on Education for more detail on these reforms.) District and school Unified Improvement Plans (UIPs) are based on four performance indicators: academic achievement; academic growth; gaps in growth levels for a variety of historically disadvantaged subgroups; and success in preparing students for postsecondary and workforce readiness (based on dropout rates, graduation rates and scores on the ACT college entrance exam). Based on these indicators, the Colorado Department of Education (CDE) determines if each district (and in turn, their schools) exceeds, meets, approaches or does not meet the indicators. According to the 2010 one-year performance reports (first time the UIP format was required), Silverton is Accredited. (View full report at http://www.schoolview.org/performance.asp.) CSAP (Colorado Student Assessment Program) data was not available for Silverton High School, as fewer than 16 students were tested. Silverton is currently in process of rehabilitating its school facilities. The Rehabilitation Project for Silverton School is a comprehensive project, using design and construction to promote energy efficiency, green building, and healthy facilities that reduce operations and maintenance efforts, relieve operational costs, and extend the service life of the Districts capital assets. While the buildings are structurally sound, a planning process revealed aging electrical and plumbing systems, hazardous conditions (asbestos), non-compliance with Federal and State Codes (fire and emergency safety and ADA accessibility), non-compliance with security/monitoring for a safe school, deterioration of historic structures, and inadequate educational and technological facility elements for a 21st Century School. The School campus site presents numerous safety issues in circulation, student/vehicular traffic conflicts, site lighting, and disrepair of equipment. The School in its existing condition is energy, water and resource consumptive, expensive to maintain, and unable to provide a healthy indoor learning environment. The Comprehensive Rehabilitation Project is designed to mitigate these deficiencies, in conformance with the Colorado Department of Education Construction Guidelines and high performance standards with Leadership in Energy and Environmental Design-LEED certification (targeted Gold rating.)
Environment
San Juan County is home to some of the most stunning mountain vistas in the United States. Only 11 percent of this countys land is in private ownership, while the rest is owned by the United States Forest Service USFS), Bureau of Land Management (BLM), and State of Colorado. The San Juan National Forest and Bureau of Land Management Forest Plan Revision is currently underway and will outline the types of uses that can occur such as: identifying where commercial timber will be harvested, where grazing will occur, and to what levels, and locations where motorized recreation is allowed. In public meetings, the following key issues were identified as concerns in San Juan County: abandoned mine reclamation, recreation, water quality, mining history preservation, recreational residences on patented mine lands, and fens (extremely rare wetland plant
San Juan County CEDS Update 2011 7 -3
communities). The San Juan Public Lands Center received over 18,000 comments on the Draft Land Management Plan and Draft Environmental Impact Statement (DEIS) that was published in December of 2007. Significant information surfaced during review of public comments and industry feedback, and it was determined that the emerging potential for oil and gas exploration had not been adequately addressed, and the USFS and BLM decided it was necessary to publish a Supplement to the DEIS. It is anticipated that the Final Environmental Impact Statement and Land Management Plan will be published in the summer of 2012. Portions of upper Cement Creek that feed into the Animas River in San Juan County are being considered for listing as a Superfund site. The creek has long been considered one of the worst sources of metals contamination in the upper Animas River basin, because heavy metals from abandoned mines (and from natural sources) in the Gladstone area, some which operated in the late 1800s to early 1900s, are believed to be polluting the creek. Water quality in the creek appears to be getting worse, according to a site assessment manager for the EPA in Denver. This degradation was not what the EPA expected in the 1990s when they backed away from a possible Superfund listing of the watershed. Prior EPA management had agreed to forego listing as long as progress was being made in the watershed. The EPA is conducting a site reassessment to determine if the complex of mines near Gladstone could qualify for the National Priorities List, which would make it eligible for the so-called Superfund. The Animas River Stakeholders Group was formed in 1994 as a collaborative approach to water-quality issues in the region and to develop an alternative to a Superfund designation in the area. Many in the Silverton community felt that the stigma of such a Superfund designation would negatively affect the areas tourism and potential mining industry (Durango Herald 11/20/10). A regional effort called the River Protection Workgroup (RPW) launched a workgroup in June of 2011 for the upper Animas River above Baker's Bridge. The purpose of this new group, the River Protection Workgroup for the Animas River, is to involve all interested stakeholders in recommending how to protect important values in this area - ecological, human and economic while allowing suitable water development to continue A detailed Information Sheet on the upper Animas River can be found at the project Web site, including meeting minutes, maps, handouts and the schedule: http://ocs.fortlewis.edu/riverprotection/animas/. While San Juan County is small in population, growth is occurring, particularly on the southern border near Durango Mountain Resort a ski area that has approved expansion plans for residential and commercial development. Mountain Studies Institute (MSI) was established in 2002 as a long-envisioned research and education center bringing classes, conferences, and research initiatives to San Juan County. MSI develops Science People Can Use to bring attention to and pursue solutions for natural resource issues in San Juan County and throughout the San Juan Mountain range. MSI connects scientists and stakeholders across the region to go beyond scientific inquiry to the meaningful application of knowledge that makes a difference for communities and the quality of their environment. Their focus ranges from biology and geology, to snow sciences, climate and forestry. MSI is an economic development asset in the county and is supported through federal and state grants, local governments, contributions, memberships and fees (www.mountainstudies.org).
Health Care
San Juan County is home to less than 700 residents, and health care delivery in this small community is very challenging, due to its isolation. The all-ages poverty rate in San Juan County is estimated at 14%, and the percentage of uninsured is estimated at 30%. Nearly three-quarters of the children in the county qualify for free and reduced lunches. San Juan County qualifies as a federal HPSA (Health Professional Shortage Area) as defined by the U.S. Department of Health and Human Services, which can make this county eligible for higher Medicare and Medicaid reimbursements for medical providers.
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A physician from Glenwood Medical visits Silverton one day a week to offer primary care services. San Juan County Nursing Service offers emergency planning, parenting programs, substance abuse prevention programs, immunizations, the San Juan County Eye and Ear Program, referrals to WIC (Women, Infants, and Children) Program, and Medicaid Childrens Screening and Development Program. Mental health services are available on a weekly (Fall-Spring) or biweekly (Summer) basis, or residents can travel to Durango to utilize Axis Health System. Southwest Smilemakers, a program of San Juan Basin Health Department, brings preventative dental care services to schoolchildren in San Juan County. The Silverton/San Juan County Ambulance provides 24 hour/7 days a week emergency and advanced life support services with paid and volunteer staff consisting of a paramedic, EMTintermediates, EMT-basics, and a registered nurse; the service operates two ambulances. All other health care services, hospital services, hospice, and nursing home care, must be obtained by traveling to Durango, Montrose, Delta, Grand Junction and points beyond. Currently, there is no pharmacy available in San Juan County. Sources: United States Census http://www.census.gov/popest/eval-estimates/eval-est2010.html Small Area Health Insurance Estimates 2007 http://www.census.gov/did/www/sahie/index.html Small Area Income and Poverty Estimates 2009 http://www.census.gov/cgibin/saipe/saipe.cgi Colorado Rural Health Center, San Juan County Profile. 2008. http://www.coruralhealth.org/resources/documents/sanjuan2008.pdf Colorado Department of Education http://www.cde.state.co.us/cdereval/rv2010pmlinks.htm
Housing
In the 4 quarter of 2010, San Juan County had a foreclosure rate of 37% of occupied housing units. Foreclosures in rural resort counties also often reflect 2nd homes or time shares. In 2010, in San Juan County the median price for a single family residence was $170,000, based on only five sales. The provision of adequate housing continues to be a concern in San Juan County. The following information was drawn from a recent report prepared for the Southwest Colorado Housing Collaborative, in an effort to create a regional housing strategy (Southwest Colorado Housing Plan. Report prepared by Economic & Planning Systems. Draft January 21, 2010. p7). San Juan County and the Town of Silverton had a housing needs assessment completed in 2008. There were two major housing needs identified in that report. First there was a lack of housing units available for purchase to households earning below 100 percent of AMI. The second major finding was an overall lack of housing in the County for residents. Compounding this issue is a large stock of old homes that are not desirable to purchasers due to their age, condition, and the corresponding heating costs (which can equal or exceed monthly rents). There is a demand for housing rehab and weatherization services but it is unclear to what level this demand is being met by existing providers of these services or if programs that exist match with the income levels that desire these services. Potential homebuyers in the County choose to rent because of the very limited supply of available ownership housing units that are desirable and the fact that newer units are too expensive to purchase. Construction of new housing stock for the County workforce is needed and was a San Juan County CEDS Update 2011 7 -5
th
recommendation from the housing needs assessment. There have been recent attempts to develop workforce housing in the Anvil Mountain project, but the project is still under development. The County currently does not have an agency capable of providing housing services to the County and has to rely on agencies from outside the County to provide them. Some specific findings and recommendations from the needs assessment are below. There is a need for new for-sale housing for buyers at or below 120 percent of AMI. The housing needs assessment found that from 2003 to 2006 no homes sold at a price that was affordable for buyers earning less than 100 percent of AMI. The needs assessment estimated that 20 units were needed to fill the for-sale affordability gap in 2006, and that additional production was needed to meet future need. The County needs a housing champion. This continues to be a problem for the County and it does not have the resources to fund a housing-oriented position. The County needs to form a Community Housing Development Organization (CHDO) or have this function performed by an agency outside the County. A CHDO is a private nonprofit, community-based organization tasked with developing affordable housing for the community it serves. Also a down payment assistance program is needed in the County, which again could be provided by an agency outside the County.
Livable Wages
What level of income is necessary to support a given size and type of household? A livable wage addresses the essential financial requirements for basic living needs, such as shelter, healthcare, childcare, and nutrition. When one earns less than a livable wage, he or she is forced to make undesirable choices such as working two or more jobs, working longer hours, making longer commutes, sharing a residence, or giving up basic items, such as a telephone or insurance. Within our region, Pagosa Springs (Archuleta County) and Silverton (San Juan County) are the least expensive places for a family to live, while Rico (Dolores County) and Durango (La Plata County) are the most expensive places to live. Since 2007, the cost of living has actually decreased in many of the communities in southwest Colorado, including Silverton (-17%). This is due primarily to decreasing rents and declines in prices of some consumer goods and services. The complete report can be seen at www.scan.org. The following tables illustrate the expenses for households in San Juan County in relation to livable wages. The one bedroom rent at $613 is an estimate provided by HUD as these types of units are not readily available in the area.
San Juan County Silverton Basic Expenditures (excluding rent) 2010 Rent Expense Travel Expense (35 trips x 100 miles x .50) 2 Child Care ($2.00 x 2080 per child) Total Living Expense 3 Livable wage per hour # of jobs at minimum wage ($7.24) Single Person renting 1 bdrm $613* per month $ 16,270 $ 7,356 $ 1,750 $ $ 25,376 12.20 1.7 Single Parent, 1 child renting 2 bdrm $500 per month $ 30,873 $ 6,000 $ 1,750 $ 4,160 $ 42,783 $ 20.57 2.8 Family of 4 renting 3 bdrm $700 per month 39,024 8,400 1,750 8,320 57,494 27.64 4.0
$ $ $ $ $ $
Notes: The minimum wage for Colorado is currently at $7.24 per hour, effective January 1, 2010. 2 Source: Tricounty Headstart Early Childhood Programs. 3 Total Living Expenses/2080 hour work year.
* Local rent estimates not available. Fair Market Rent provided by HUD. Family of four assumes two children requiring full-time day care.
Telecommunications
Due to its geographic isolation, the Town of Silverton has severely limited telecommunications connectivity to the rest of the region. The town is currently connected by microwave radio to Missionary Ridge, a hop of about 42 miles. Within the town, Qwest uses DSL in Silverton through twisted copper (phone line). Brainstorm Internet also provides some wireless services. The town was unsuccessful in a recent Public Utilities Commission challenge of Qwest s failure to bring fiber optics to the town and county as part of the Beanpole I and Multi-Use Network (MNT) projects implemented more than a decade ago. The PUC only ruled on Qwest's compliance to their regulations in Silverton, which they deemed as sufficient. San Juan County and the Town of Silverton still contend that Qwest did not complete the 2000 MNT contract with the state. Further legal action may be taken against Qwest (now CenturyLink) in this matter. Other private providers are reluctant to invest in fiber connectivity into Silverton from the north and south because of the high cost of construction through the mountains. The Town of Silverton and San Juan County are both participants in the Southwest Colorado Council of Governments (SWCCOG) and the SWCCOG telecommunications infrastructure development project, the Southwest Colorado Access Network (SCAN). The SCAN project has identified 13 community anchor institutions in the Town of Silverton as potential participants in an intra-community government network. These and other institutions in the area are also potential purchasing consortium members for the SCAN project. County and municipal governments and community anchor institutions will have input into which type of infrastructure and services are appropriate for the communitys broadband needs.
Transportation
The town of Silverton is totally dependent upon US 550 for access beyond the mountain valley. The town has the highest potential for isolation due to avalanche-related road closure of any populated community in the lower 48 United States. Transportation is thus high on San Juan Countys priority list. With U.S. Highway 550 (US 550) allowing the countys only paved access to the rest of the region, weather during severe winters regularly closes the highway down in one or both directions, thereby delaying the delivery of mail, goods and services, while keeping residents isolated to the area. There is no intercity bus service and no fixed-route transit service between Durango and Silverton. Moreover, in 2010, the Greyhound passenger line that previously provided passenger service from Montrose to Durango via US 550 was redirected over Lizard Head pass via Colorado Highway 145. According to data provided by the CDOT Region 5 Pavement Manager, 100 percent of the state highway miles (corresponding to 30.58 miles of US 550) in San Juan County were rated good in 2010. Maintaining the existing transportation system is a high priority for the Transportation Commission, and a large percentage of state and federal transportation dollars are spent on reconstruction and resurfacing projects. CDOT recently completed the Mineral Creek Bridge project on U.S. Highway 550, just south of Silverton. The structure was considered to be functionally-obsolete, due to its narrow width. A new concrete bridge was constructed adjacent to the existing structure. The project cost was $4.4 million, including design, right-of-way acquisition, and construction. Wetland mitigation was required. In 2003, San Juan County completed the Silverton Area Trails Plan, as a master plan for a countywide trails network. The Town of Silverton endorsed the plan in 2008. Both governments are in the process of implementing this plan. The most recent segment was completed by a Southwest
Conservation Corps troupe in the summer of 2011. The governments plan to apply for local, state, federal and foundation funding for future trail construction.
The Colorado Avalanche Information Center (CAIC) is a cash-funded program of the Colorado Geological Survey, under the state geologist. The purpose of the CAIC is to minimize the impact of snow avalanches on recreation, tourism, commerce, industry, and the citizens of Colorado. The CAIC has four offices, including one located in Silverton, that issue backcountry avalanche forecasts. In 1992, CDOT contracted the CAIC to provide avalanche condition evaluations, forecasts and recommendations for avalanche control and road closure for avalanche-prone US 550 in the San Juan Mountains. Two CAIC forecasters are based in the town of Silverton from November 1st through May 1st. The forecasters develop and disseminate daily avalanche potential evaluation information and forecast advisories for three highway segments. Avalanche forecasts are based on quantitative weather forecasts provided by the CAIC Forecast Office in Denver and real-time stability evaluations. Avalanche release potential is characterized as low, moderate, high, and extreme in terms of very unlikely to certain. Travel and maintenance restrictions vary from none to total road closure. The advisories are distributed to CDOT personnel, law enforcement officials and other interests. Road closure recommendations may be made prior to control efforts when potential for natural release renders highway unsafe for travel. The highway is then cleared of traffic and the gates closed until safe travel can resume. CDOT then responds with explosive control methods that may include helicopter bombing and avalauncher delivery of high explosives. The avalanche forecasters accompany control teams to help direct the efforts.
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SAN JUAN COUNTY PROFILE San Juan County Government

San Juan County is one of 64 counties created by the State of Colorado. Eight elected officials, share the responsibilities of implementing state law and managing county business. These include; the Assessor, Clerk and Recorder, Sheriff, Treasurer and Coroner. An elected three member Board of County Commissioners is the chief legislative and executive body of the county. Their duties include overseeing the county budget, land use policy, social services, road maintenance, buildings and public health programs. The county employed a staff of 15 people in 2011. Expenditures San Juan County provides many different services to its citizens, including roads and bridges, public safety, and health and welfare. Expenditures for San Juan County totaled $2,827,167 in 2010, with $3,705,977estimated for 2011. Revenues The County received $2,918,587 in revenues in 2010 and estimates $3,709,300 from 2011 revenues. Revenues are produced from a variety of sources, including non-local tax sources such as federal and state funding for social services programs, highway user taxes and sales taxes generated by visitors to the county or user fees and service charges. There is a 6.9% sales tax in San Juan County. Of this 2.9% goes to the state and 4% is split between the county and the Town of Silverton. Taxes collected within the town are disbursed to the town; taxes collected elsewhere in the county are disbursed to the county. Sales tax generated $70,076 in 2010, and $80,000 is estimated for 2011. The property tax base for San Juan County is impacted by the high percentage of public lands within the county. San Juan County's location high in the San Juan Mountains, its extensive mining history, and a very limited land base suitable for residential development have resulted in a skewed land ownership pattern. There are 28,000 acres of private land (11%); 172,000 acres of Forest Service (San Juan National Forest) land (69%); and 49,000 acres of BLM land (19%) out of a total land base of 251,000 acres (392 sq. miles). It is important to note that most of the land in private ownership is in patented mining claims. In spite of the limited land tax base, property taxes accounted for almost 39% ($1,067,885) of the county's general operating revenue in 2011, on real properties assessed at $57,605,250. Property tax is based on the appraised value of the property times the assessment ratio times the mill levy. Mill levies are the rates of taxation set by each taxing district.
Property tax revenues are distributed among municipalities and school districts. The mill levy for San Juan County is 19.641.
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Infrastructure and Services

Electric - The County is served by San Miguel Power Association, Inc. Natural Gas - There is no natural gas in Silverton/San Juan County Silverton LP Gas Co. distributes propane to many of the newer homes that rely on gas for heating and other energy needs. But numerous government offices, commercial spaces and residential dwellings still rely upon coal as their primary heating source. Wood and biomass pellet stoves are also commonly used for heat in the winter and cooler months. Water - Within the Town of Silverton, water is provided by the town. Outside of Silverton, people use wells or get water from lakes and streams/springs. Wastewater - Within the Town of Silverton, wastewater is handled by the town; septic tanks are used outside of town. Solid Waste - In 2011, local waste services provider, Silverton Trash, folded up its operations in Silverton and the Town subsequently contracted with Bruin Waste Management, of Naturita, to provide for the communitys solid waste services, which include commercial collections and operation of the Town-administrated transfer station. Police & Fire Departments - Police services in both the Town and County are provided by the San Juan County Sheriffs Department. Fire services are provided by the local volunteer fire department. Telephone CenturyLink Communications, formerly Qwest, provides local calling services. Medical Facilities The Silverton Clinic offers one doctors services, and a part-time county nurse provides limited medical care and vaccinations. Emergency medical services are provided by the Silverton-San Juan Ambulance Association, which has two paid EMTs and numerous EMT volunteers. A local non-profit Search and Rescue team also provides some emergency medical services. Educational Facilities - San Juan County School District #1 (includes the K-12 Silverton School). Business Parks - The Powerhouse Industrial Park, which includes nine sites developed by the Historical Society, houses a cross country ski manufacturer and a woodworking shop, a snow board manufacturer and a printing supply business. There is also a concrete batch plant and a small lumber sawmill. Three sites are occupied by building contractors, and two sites are currently vacant. Major Employers - [2010] Top 10 Employers: Silverton Outdoor Learning Center (Silverton Mountain)(42), San Juan County (26), Handlebars (20), Silverton School District #1 (17), Town of Silverton (15), Natalias of Silverton (15), Bent Elbow Restaurant & Hotel (10), Tri angle Service Station (9), Silverton Brewery (9), Grand Imperial Hotel (8). Recreation Facilities - One baseball field; one gymnasium (at the school); Kendall Mt Ski Area (downhill skiing, ice-skating and ice hockey), and trails for cross-country and snow-shoeing. In Silverton, the Memorial Park has a track, tennis courts, volleyball, soccer and horseshoes. Facilities at Molas Lake include fishing, camping and picnicking. The Silverton Mountain Ski area offers world class back country ski terrain. The surrounding mountains offer many recreational opportunities 86% of the county is public land! Housing - Median sales price of a single family residence in San Juan County for 2010 is $170,000, based on 5 sales.
Childcare Availability - (2011) 30 Total Slots (Ages 0-5). No Providers offer 24 hour or weekend care. [Childcare Resource and Referral] Long Term Care for Seniors - (2010) None. [San Juan Basin Area Agency on the Aging] Estimated number of persons without health insurance (2007) 159 [US Census Bureau]
Demographics
In 2000 the county's resident population was 558, though it has grown by 25% over the last decade. There has also been an influx of seasonal/summer residents, many of whom have purchased 2nd homes in the area in order to enjoy the rural amenities of life in the high country. Census Census % Change This phenomenon, known as "amenity 2000 2010 2000-2010 migration", has produced wide ranging economic impacts on the community. San Juan 558 699 25.3% Seasonal residents are not included in Silverton 531 637 20.0% population figures. Unincorporated 27 62 129.6% Source: Colorado State Demography Office 3-2011 The annual average rate of growth is expected to decrease, and then over the next 20 years, based on local and national trends. A population of about 595 is forecast by 2015.
Population Forecasts San Juan 2010 2015 2020 2025 Population 699 595 619 641 Avg. Ann. % Change -3.2% 0.8% 0.7%
2030 648 0.20%
The American Community Survey (ACS) is a large, continuous demographic survey conducted by the Census Bureau that will eventually provide accurate and up-to-date profiles of America's communities every year. Questionnaires are mailed to a sample of addresses to obtain information about households -- that is, about each person and the housing unit itself. The survey produces annual and multi-year estimates of population and housing characteristics and produces data for small areas, including tracts and population subgroups. The following topics are drawn from the ACS, but do not include all available information. For a more comprehensive look at the demographics of San Juan County go to http://www.census.gov/acs/www/. Population: In 2005-2009, San Juan County had a total population of about 690, 30 percent females and 70 percent males. The median age was 45.5 years. Five percent of the population was under 18 years and 10 percent was 65 years and older. Households and Families: In 2005-2009 there were 360 households in San Juan County. The average household size was 1.9 people. Families made up 40 percent of the households. This figure includes both married-couple families (27 percent) and other families (13 percent). Nonfamily households made up 60 percent of all households in the county. Most of the non-family households were people living alone, but some were composed of people living in households in which no one was related to the householder. Education: In 2005-2009, 96 percent of people 25 years and over had at least graduated from high school and 45 percent had a bachelor's degree or higher. Four percent were dropouts; they were not enrolled in school and had not graduated from high school. Poverty and Participation in Government Programs: In 2005-2009, 9 percent of people lived in poverty. Less than 0.5 percent of related children under 18 were below the poverty level, compared with 9 percent of people 65 years old and over. Less than 0.5 percent of all families and less than 0.5 percent of families with a female householder and no husband present had incomes below the poverty level.
The Local Economy

Unemployment Rates In 2010, county rates (10.8%) are higher than the state (8.9%) and nation (9.6%). The seasonally adjusted labor force was 329 in 2010. For a look at how San Juan County compares with the rest of the region from 1999 to 2010 please refer to the Regional Overview. Commuting People commute to where the jobs are, but take their paychecks home. This has an effect on how we evaluate employment, whether by place of work or by residence. Most San Juan County residents (79%) work in the county, and 21% commute elsewhere for their paychecks, with the highest percentage (13.5%) going to La Plata County.
Out Commuters In Commuters
Live, work in San Juan Who works in San Juan? Place San Juan County, CO La Plata County, CO Montrose County, CO Montezuma County, CO Alamosa County, CO Conejos County, CO Costilla County, CO Custer County, CO Delta County, CO Dolores County, CO All Other Locations Where do San Juan residents work? Share Place 47.9% San Juan County, CO 13.5% La Plata County, CO 10.0% San Juan County, NM 6.6% Mesa County, CO 3.9% Montrose County, CO 2.7% Montezuma County, CO 1.5% Arapahoe County, CO 1.5% San Miguel County, CO 1.2% El Paso County, CO 1.2% Gunnison County, CO 10.0% All Other Locations
Share 78.5% 8.9% 2.5% 1.3% 0.6% 0.6% 0.6% 0.6% 0.6% 0.6% 5.1%
Source: US Census Bureau LEHD
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Employment and Income 2009 The following table includes wage earners as well as proprietors (owners). Total employment refers to the numbers and types of jobs reported by place of work which may be outside of the county, or even the state. This data is provided by the Bureau of Economic Analysis then is adjusted and reported by the Colorado State Demographer. It lags two years behind the current year, thus 2009 is the latest available data. Some sectors have income figures that can not be disclosed. The rule by state statute is that employment can't be disclosed if there are three or fewer firms in a sector or one firm comprises more than 80% of sector employment. San Juan County # of % of Income % of Avg ann. 2009 Total Employment Jobs Jobs ($000) Inc. wage
Agriculture 1 Mining & Utilities 3 Construction 23 Manufacturing 3 Transportation & Warehousing 0 Wholesale & Retail Trade 39 Information 0 Finance,Insurance & Real Estate 10 Services 186 Government 69 Total 334 Source:Colorado State Demography Office 3-11 D - wages can not be disclosed 0% 1% 7% 1% 0% 12% 0% 3% 56% 21% 100% $ 0% 17% $ 0% 14% $ D 78,087 D 38,179 D D 23,747 43,841 D $ 1,796 D $ 25 $ 1,489 D D $ 4,417 $ 3,025 $ 10,752
41% $ 28% $
From this table we see that proprietors (owners) form a substantial part of the total number of jobs, especially in Trade and Construction sectors.
San Juan County 2009 Total Employment Agriculture Mining & Utilities Construction Manufacturing Transportation & Warehousing Wholesale & Retail Trade Information Finance,Insurance & Real Estate Services Government Total
% of Wage/ % of Salary Jobs Proprietors 0% 100% 63% 37% 39% 61% 62% 38% 0% 0% 33% 67% 0% 0% 81% 19% 73% 27% 100% 0% 45% 35%
The service sector employs about 56% of workers in the county, and represents 38% of the earnings. The service sector is composed of many types of jobs, and very different wage scales. These include highly paid professionals, as well as entry level wage earners. Many of the service jobs in San Juan County support tourism, in recreation, accommodations (lodging) and food services. San Juan County # of % of Income % of Avg. ann. 2009 Service Sectors Jobs Jobs ($000) Inc. wage Professional,Scientific,Technical 19 10% $ 581 13% $ 30,579 Education,Health,Social Assistance 18 10% $ 596 13% $ 33,111 Recreation,Accomodation,Food Services 141 76% $ 2,757 62% $ 19,553 Other Services 8 4% $ 483 11% $ 60,375 Total 186 100% $ 4,417 100% $ 23,747
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Economic Clusters In recent years, cluster strategies have become a popular economic development approach among state and local policymakers and economic development practitioners. An industry cluster is a group of firms, and related economic actors and institutions that are located near one another and that draw productive advantage from their mutual proximity and connections. Cluster analysis can help diagnose a regions economic strengths and challenges and identify realistic ways to shape the regions economic future. www.brookings.edu/metro/pubs/20060313_clusters.pdf For example, there are several manufacturing firms that specialize in producing skis, sleds and snowboards. These industries feed the winter recreation industry that has a growing presence in the county. Per Capita Income
Per Capita Income 2009 PCI 2009 % of USA USA $ 39,635 100% Colorado $ 41,895 106% Archuleta $ 29,344 74% Dolores $ 31,385 79% La Plata $ 39,769 100% Montezuma $ 32,502 82% San Juan $ 38,705 98% Source: Bureau of Economic Analysis
In 2009 San Juan had a Per Capita Personal Income (PCPI) of $38,705. This PCPI ranked 23rd in the state and was 92 percent of the state average, $41,895, and 98 percent of the national average, $39,635.
Total Personal Income

San Juan 2009 Total Personal Income ($000) Employment Earnings $ 10,048 Residency Adjustment $ 2,435 Dividends, Interest & Rent $ 5,243 Transfer Payments $ 3,755 Estimated TPI $ 21,481 Source: Bureau of Economic Analysis % of Total 47% 11% 24% 17% 100%
In 2009, Total Personal Income (TPI) in San Juan County was $21,481,000. This TPI ranked 64th in the state and accounted for less than 0.1% of the state total. The largest proportion of TPI is generated through employment.
Estimated payments to retirees accounted for almost 15% of the estimated TPI in San Juan County in 2009. That was $3,222,150!
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Total Personal Income Trends In addition to employment income, money enters the local economy from other sources. Total Personal Income (TPI) is the sum of all personal income that flows into the county. The following chart examines the components of TPI and how the proportions of this income have changed over time. Transfer payments consist primarily of retirement and disability benefit payments, medical payments (i.e. Medicare and Medicaid), income maintenance benefits, unemployment insurance, veterans benefits and payments to nonprofit institutions. Dividend income is income that is paid in cash or other assets to stockholders by corporations in the U.S. or abroad. Interest income consists of monies received from money market mutual funds and interest from other sources. Rental income consists of income from the rental of real property, the net income of owner - occupants of non-farm dwellings, and the royalties received from patents, copyrights, and from the rights to natural resources. Residency adjustments are made when a person receives income for work performed and paid for from outside their place of residency, (i.e. commuters). Negative numbers mean that more people were coming into the county for work than were commuting out. Earnings are derived by place of work, including farm and non-farm earnings. Generally, from 1970 to 2009, we see a trend of decreasing employment income, and increasing income from dividends, interest and rent, and transfer payments. Residency adjustments illustrate how the economy of each county is tied to others as people commute to where the jobs are, but take their paychecks home. http://www.bea.gov/regional/reis/ (Table CA04)
San Juan County - Total Personal Income Trends 1970 - 2009

100% 80% 60% 40% 20% 0%
1970
-20% -40%
1980
1990
2000
2009
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Employment Sector Trends 1980 - 2009 An employment sector groups jobs into categories that are alike and allows us to measure the relative strength of that industry in the local economy. Using trend analysis we can see how those industries have grown or declined within a specific timeframe. The trends presented here reflect the Standard Industrial Code (SIC) job classifications used from 1980 to 2000. In 2001, the North American Industry Classification System (NAICS) replaced the (SIC) system. NAICS groups the economy into 20 broad sectors, instead of the 10 divisions of the SIC system. NAICS was developed jointly by the U.S., Canada, and Mexico to compare business activity across North America. The primary differences between the two classification systems is that the mining sector now includes utilities; eating and drinking (food services) have been moved from retail trade to the service sector; and the service sector includes new categories
San Juan County - Employment by Sector 1980-2009 700 SIC 1980 - 2000 600
Manufacturing
NAICS 2001-2009
500
# of Jobs
400
Transportation & Warehousing
Construction Government
300
200
Services Finance,Insurance & Real Estate
100
Trade Mining
0 1980
1985
1990
1995
2000
2005
2009
In this decade there was a peak in the number of jobs in 2007 (451), and subsequent declines associated with the current U.S. recession. The dip in 2001 probably reflects repercussions of the widespread drought, local wildfires and impacts to the national economy from the terrorist attacks of 9/11/01.
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When we compare job growth from 2001 to 2009 using the NAICS system, we see that the most growth has been in the service sector. Other sectors have seen declines.
# of Jobs % change 2001 2009 01 - 09 1 1 0% 4 3 -25% 26 23 -12% 0 3 0 0 64 39 -39% 0 0 50 10 -80% 113 186 65% 76 69 -9% 334 334 0.0%
San Juan County Agriculture Mining & Utilities Construction Manufacturing Transportation & Warehousing Trade Information Finance, Insurance & Real Estate Services Government Total Employment
To fully understand the ups and downs of each sector, we need to look at them in greater detail. In the following pages each of these sectors is broken into subgroups for further definition of job type. Some sub sectors have been grouped into other categories in order to abide by non-disclosure rules. The rule by state statute is that employment can't be disclosed if there are three or fewer firms in a sector or one firm comprises more than 80% of sector employment. Remember that the closure of even one business may appear to create dramatic "ups and downs" within sectors in the following charts. Be sure to notice the scale of the numbers of jobs. Differences can also arise from reclassification of jobs within a business over time.
To provide detail for the intervening years, the following table tracks changes in each sector from 2005 to 2009.
San Juan County Agriculture Mining & Utilities Construction Manufacturing Transport. & Warehousing Wholesale & Retail Trade Information F,I & R E Services Government Total % Change 06-07 07-08 -100% 0% 0% 100% 209% -46% -50% 200% 100% 0% -8% 13% 0% 0% -7% 23% -7% 5% -3% 0% 11% -5%
05-06 0% -67% -21% -73% 0% -24% 0% -48% 64% 1% 9%
08-09 0% 50% -60% -67% -100% -25% 0% -38% -15% -4% -22%
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San Juan County - Mining & Utilities Employment 1980-2009 400 SIC 1980-2000 350
Oil and Gas Extraction
NAICS 2001-2009
300
250
# of Jobs
200
150
100
Metals Mining
50
Mining (other)
0 1980
1985
1990
1995
2000
2005
2009
Boom and bust accurately describe the mining industry in San Juan County employment. The last mine closed in 1991. Utilities have been moved from the transportation sector to the mining sector in the NAICS system, although the utility sector is not present in San Juan County
San Juan County- Transportation & Warehousing 1980-2009 20 18 16 14 12
Local & Suburban Transit
SIC 1980-2001
NAICS 2001-2009
# of Jobs
Motor Freight and Warehousing
10
All Utilities
8 6 4 2
Communications Truck transportation
0 1980
1985
1990
1995
2000
2005
2009
Utilities were moved to the mining sector under the NAICS system in 2000, and many other jobs were reclassified into new categories. The communications segment of this industry is now included in information, in the service sector. Thus the rapid decline of this sector in 2000 probably does not necessarily reflect job losses in the local economy.
San Juan County - Construction Employment 1980-2009 120
100
80
# of Jobs
60
40
Maintenance & Special Trades
20
Heavy Const. Building Construction
1980 1985 1990 1995 2000 2005 2009
The construction industry was flat during the mid 1980s and early '90s, corresponding to population declines and mine closures. There was modest growth in the sector in the '90s, particularly in the specialized trades. This may be due to renovations of public buildings, and home modifications made by seasonal / summer homeowners. A study conducted by Region 9 found that 83% of property in San Juan County was owned by non- locals in 2005, although 60% of these are patented mining claims. A substantial number (22) of construction jobs, and $288,000 in employment income are attributed to the building of 2nd homes in 2005, according to a base analysis provided by the state. Average annual income in this sector was $78,087 in 2009. About 61% of those employed in this sector are proprietors (owners).
Construction Sectors Construction of buildings Heavy Equipment and civil engineering construction Special trade contractors Total
# of Jobs 2001 2009 12 0 14 26
% change 01 - 09 0 -100% 0 23 64% 23 -12%
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San Juan County - Manufacturing Employment 1980-2009 40
35
Machinery Manuf
30
Paper Printing
25
# of Jobs
20
15
10 Food and beverage 5

Lumber and Wood Products incl. Furniture
Other Manufacturing 0 1980 1985 1990 1995 2000 2005 2009
This chart illustrates the ups and downs of manufacturing employment in the county. The closure of one company accounts for the drop in wood products manufacturing. Many jobs in the printing industry (i.e. publishing) have been moved into the Information segment of the service sector in NAICS.
Manufacturing Sectors Food and Kindred Products Lumber and Wood Products incl. Furniture All Paper Printing Rubber, Plastics and Leather Other manufacturing Primary and Fabricated Metals Nonmetallic mineral product manufacturing Motor vehicle and transportation manufacturing Other Manufacturing Total
# of Jobs 2001 2009 0 0 0 0 1 0 0 0 0 1
% change 01 - 09 0 0 0 0 3 0 0 0 0 3
200%
200%
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NAICS redefines the boundaries between Retail and Wholesale Trade. The new NAICS definition emphasizes what the establishment does, rather than to whom it sells. The SIC system defined retailers as those establishments that sold primarily to consumers while wholesalers were those establishments that sold primarily to business customers.
San Juan County - Wholesale & Retail Trade Employment 1980-2009 180
SIC 1980-2000 NAICS 2001-2009
160 140 120
Food Stores
# of Jobs
100 80
Eating and Drinking Places
All Wholesale Trade
60 40
All Other Retail
20
Gasoline stations
1980 1985 1990
General Merchandise
1995
2000
2005
2009
The trade sector changed dramatically under the NAICS system. The primary difference is the removal of restaurants from retail trade. Restaurants are now combined with accommodations to form a new sector in NAICS, Accommodation and Food Services. In addition, many of the general groups have been split into finer detail, so it is difficult to compare trends in the various retail sectors. Average annual income in retail trade was $38,179 in 2009. About 67% of those employed in retail trade are proprietors (owners). # of Jobs % change Wholesale & Retail Trade Sectors 2001 2009 01 - 09 Wholesale 7 0 -100% Clothing and clothing accessories stores 1 0 -100% Other Retail 14 20 43% Miscellaneous store retailers 38 19 -50% Total 60 39 -35%
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San Juan County - Finance, Insurance & Real Estate Employment 1980-2009 90 80 70 60
# of Jobs
50 40 30 20
Insurance Real Estate
10 0 1980
Finance
1985
1990
1995
2000
2005
2009
In the 1990s there was substantial growth in the real estate sector, supporting housing for 2nd homeowners who are buying land, building new homes, and taking advantage of the quality of life found in SW Colorado, also known as "amenity migration. A study conducted by Region 9 found that 83% of all property (and 53% of single family homes) in San Juan County was owned by non- locals in 2005, although 60% of these are in patented mining claims. A substantial number (18) of jobs, and $278,000 in employment income are attributed to the building of 2nd homes in 2005, according to a base analysis provided by the state. Since 1998 Cascade Village employees are classified in the Real Estate sector by ES202. They were not included in this sector in previous years.
Finance, Insurance & Real Estate Sectors Finance and Insurance Real estate inc rental and leasing services Total
# of Jobs % change 2001 2009 01 - 09 4 4 0% 46 6 -87% 10 50 -80%
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The service sector has undergone a transformation under the NAICS system. The primary difference is that food services (previously included in SIC Retail Trade - eating and also see new types of services emerging in 2001 although it is difficult to fully evaluate them over the long term due to the SIC NAICS shift.
San Juan County - Service Sector Employment 1980-2009 250 SIC 1980-2000 NAICS 2001-2009
200
Food services and drinking places
150
# of jobs
Other Services
100
Business
50
Membership Organizations
Recreation
Accomodation
Other Services 1985 1990 1995 2000 2005 2009
0 1980
The service sector is the largest single segment of all sectors in the local economy, accounting for 56% of total employment and 38% of employment income. The service sector is composed of many types of jobs, and very different wage scales. These include highly paid professionals, as well as entry level wage earners. Combined, the average yearly income for this sector was $23,747.
# of Jobs % change 2001 2009 01 - 09 16 19 19% 3 18 500% 82 141 72% 12 8 -33% 113 186 65%
Service Sectors Professional, Scientific and Technical Services Education, Health and Social Assistance Services Accomodation, Food & Entertainment Services Other Services Total
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San Juan County - Government Employment 1980-2009 90 80 70 60
# of Jobs
50 40 30 20 10
Military All Local Govt
All State Govt All Federal Govt
0 1980
1985
1990
1995
2000
2005
2009
Government employment, particularly local government, increases in response to growing population and management needs. The average yearly income in 2005 was $43,841.
# of Jobs 2001 2009 3 2 71 76 % change 01 - 09 33% -50% -10% -9% .
Government Sectors Federal government, civilian Military State and local government Total
4 1 64 69
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STRATEGIC PLANNING San Juan County Vision Statement

The economic vision from the Silverton/San Juan County Master Plan is: "We work from our strengths as a mountain community to build a year-round, diverse, and prosperous economy."
SWOT (Strengths, Weaknesses, Opportunities, Threats) Analysis

The starting point for a credible economic development strategic plan is an assessment of the strengths and weaknesses of the county. This is the baseline by which a community begins to understand where they are in relation to their mission. Once the SWOT analysis is completed, strategies for solutions can be identified. By working with the San Juan County community, and Governor Hickenloopers Bottom Up Economic Development strategy, the following was identified: Strengths Physical Attributes of land Raw materials and natural resources Attractive, livable community Tourism assets Quality education systems Strong volunteerism within community Weaknesses Isolation from major markets, interstates and rail lines Geographic proximity from state and federal agencies Limits on infrastructure and resources for infrastructure Tax revenues reliant on population Lack of up-to-date telecommunications infrastructure/fiber optic technology Affordable/workforce housing is in short supply Need to diversify the economy and focus on building year-round jobs that pay family wages Access to local capital Opportunities Strong community involvement and success in accomplishing community initiatives Natural beauty, surrounding Public Lands, resources and recreation Historic structures and cultural amenities that further foster a heritage tourism economy Expanding the visitor season to include shoulder season and the winter months Utilization of the school to promote community vitality and population growth Revitalization of mining industries Threats Improper, non-sustainable Natural Resource Management Over-reliance on the tourism industry as an economic base Funding cuts in transportation, public heath and human service programs, and the state Energy & Mineral Impact Assistance Fund (EIAF) Infrastructure capacity Excessive permitting requirements, a one-size fits all regulatory scheme that works to the detriment of small communities, and a hostile regulatory environment at the state and federal levels Volatility of business cycle
Key Economic Development Directions

1. Continued support of San Juan Development Association, including expanding access to capital. 2. Increased marketing of local festivals and businesses through the Internet. 3. Continued development and preservation of the cultural and historical resources in the community including buildings, mining sites, A Theatre Group, the San Juan County. Historical Societys endeavors and the trails plan, all of which combine to impact economic development objectives. 4. Diversify the economy and create jobs. 5. Create a more business friendly and strong entrepreneurial climate. 6. Expand and improve fiber optics infrastructure to Silverton /San Juan County and increase redundancy throughout the region. 7. Increase the supply of affordable housing through the completion of the Anvil Mountain redevelopment project. 8. Programs that assist the aging population to remain in the community. 9. Continuation of Animas River Stakeholders and like groups that work to restore water quality .. 10. Support the visual enhancement of the gateway into Silverton. 11. Continued support and implementation of the Town of Silvertons infrastructure and community beautification projects. 12. Expand tourism in the areas of recreation, cultural heritage, winter and shoulder seasons. 13. Promote San Juan County as a recreation destination. 14. Support the revitalization of the mining economy.
Goals, Actions & Implementation

A goal is a specific statement of what the community would like to be or achieve. Goals should be focused on the priority issues impacting the development of the community. The actions should then reflect the steps needed to accomplish the goal. Through utilizing the work done by the community, the following goals and actions have been established for San Juan County: Goal 1: Achieve a diversified, sustainable and growing economy in San Juan County that is compatible with the local environment and small town atmosphere. Actions: 1. Work with partners in the community to review economic indicators, and meet annually to review and develop strategy plans for the countys economic development direction. 2. Grow area economy through the recruitment of new business and support of existing business in the county.
3. Work with federal, state and regional economic development agencies to provide incentives to businesses that are direct based in nature, support the local environment, provide higher, livable wages, and fill needed niche markets in San Juan County. 4. Support improved telecommunications that would allow for the recruitment and success of home-based businesses or home occupations that allow people to live and work from home. 5. Support county initiatives that target and promote green industry. Attract industries that preserve and enhance the countys natural and environmental features, whose processes require minimal water consumption and generate nominal ambient air or water degradation, and where applicable, recycle waste products.
6. Develop a non-adversarial relationship with State and Federal Agencies to create a regulatory climate that welcomes (encourages) mining while minimizing impacts on natural resources. Goal 2: San Juan County contains a vibrant, growing, and sustainable tourism and recreation industry. Actions: 1. Encourage and support development of a strategic plan for the long-term sustainability of the tourism industry. 2. Support the arts and cultural organizations of San Juan County by providing mentoring and technical assistance to ensure their success. 3. Expand and sustain the tourism industry including heritage tourism by ensuring tourism-related land uses, and attracting, creating, or expanding tourismrelated businesses, events and marketing. 4. Implement master trails plan. 5. Develop plan to improve winter and shoulder seasons.
6. Develop plan to increase the number of hotel/motel beds in Silverton. Goal 3: Sustain coordinated Economic Development efforts in the County.
Actions: 1. Provide funded position to focus on economic development and economic development sustainability. 2. Continue to work with the Small Business Development Center at Fort Lewis College to mentor local business owners, and offer opportunities for business trainings. 3. Increase loan program to provide financial help and technical assistance to local businesses. 4. Continue to work with Regional, State and Federal Agencies to increase access to capital.
Goal 4: The necessary facilities and programs are available to meet the sociocultural needs of the community. Actions:
1. Support improved emergency services, facilities and equipment to ensure that proper health care services are available. 2. Support activities & programs for youth where needed. Support programs that assist the aging population to remain in the community. Support the development of historic projects including the expansion of the narrow gauge railroad Goal 5: Expand infrastructure, such as roads, water, internet, electric, gas and broadband. Rationale Without adequate and available infrastructure, businesses cannot function. It is the responsibility of every community to make sure that adequate infrastructure is available and ready for use in order to provide the foundation for a growing economy. Actions: 1. Support the town and county in their efforts to target infrastructure improvements that increase the desirability of downtown as a tourist and shopping destination. 2. Identify potential grants for the purpose of improving, expanding and upgrading needed infrastructure. 3. Support the expansion and sustainability of locally-based transportation services. 4. Support local businesses in their infrastructure needs by being a conduit with the utility companies, CDOT and other agencies to improve process time. 5. Provide support in the expansion of telecommunications, including closing the fiber optic gap between Silverton and adjacent counties (37 miles), so that the capacity exists for future business developments. 6. Expand winter recreation parking along Hwy 550. Goal 6: Support the completion of all projects listed in the San Juan County Community Development Action Plan. Rationale The Community Development Action Plan (CDAP) is a list of short-term projects that may need assistance from Region 9 EDD or other community and economic development agencies. Maintaining a current Community Development Action Plan (CDAP) for each community is a process to assist communities with strategic planning. Actions: 1. Work with Region 9 EDD, town and county to find the resources, technical assistance, and political will to complete CDAP projects.
Goal 7: Support, retain and expand existing education programs and organizations. Actions: 1. Support implementation of telecommunications for real time, interactive educational opportunities. 2. Support the Silverton Public School System. 3. Secure a permanent facility for the Mountain Studies Institute. 4. Sustain the following education programs in the community: Silverton Avalanche School, Center for Snow & Avalanche Studies, Silverton Learning Center, Silverton Summer Youth Program, Silverton School, and Mountain Studies Institute. Implementation Plan Strategic planning is an on-going process and modifications and adjustments are necessary. The ultimate success of any strategic plan depends on how well the partners manage the implementation of the various strategic actions. The plan by itself is worthless. It is critical, therefore that a solid implementation plan is created to ensure the proper priorities are given to each task, and the suitable owners for each task are assigned. Only then will the vision begin to come to life. County leadership along with community residents and the Region 9 Economic Development District will oversee the process. This will be done by coordinating, participating and/or overseeing the various committees and organizations working in each of the key areas.
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BOTTOM UP ECONOMIC DEVELOPMENT STRATEGY
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Bottom-Up 2011 County Economic Development Summary Top Five Economic Development Goals & Strategies For San Miguel County, Colorado
As part of Governor Hickenloopers Bottom Up Economic Development strategy, we are requesting that each county develop or update its economic development plan based on current input from local citizens, businesses and other interested stakeholders. The objective of the county plan is to identify up to five economic development goals and strategies of the county, utilizing information gathered from the online public survey, the public county meetings and comments, and the most current economic development plans in the county (town, city, or county). These county plans will be rolled up and incorporated into fourteen regional plans that together will assist in developing an overall statewide economic development plan. Diversify Economic base, encourage the growth and expansion of existing businesses and create jobs Renewable energy development Support entrepreneurs Develop natural resources (oil and gas) Tourism (Develop both skiing and non-Ski-related opportunities and resources) Increase visitor numbers during nonpeak periods in summer and winter Promote restaurants as a part of the vacation experience Create and Economic Development and Diversification Office for the County
Goal(s)i
Transportation
Brand San Miguel County
Strategy(ies)ii
Parking Increase free parking Treat employee/worker parking different from tourist parking Air transportation Improve commercial air service to Telluride Improve commercial air service to Montrose
Action(s)iii
Implement Buy Local Campaign Improve Broadband Access
Expected Outcome(s), i.e., Measurable Resultsiv
Primary Partnersv
Available Resourcesvi
Needed Resources & identified issues or barriersvii Timelineviii
A few more questions. When completing this template, please provide a written response to these questions, as applicable 1. What current federal, state and local programs or initiatives hinder your local economic development efforts?
2. What resources/actions do you need from the State of Colorado to assist your effort in implementing a county economic development plan?
3. Identify innovative economic development programs and partners in the county or region that can be replicated across the state?
Goals are expressions of the desires of the community; a future condition or state that its aiming for a concise statement that articulates the desired future. For example: Update and expand marketing efforts for economic development in _________County ii Strategies provide direction and framework for how to go about achieving the goal. For example, Craft and finance strong, ongoing major marketing promotions.
iii
Actions or implementation steps will carry out the strategy in a systematic way. For example, Brand _______County and its communities through the use of an agreed-upon economic development logo and slogan or Develop a focused marketing program which consists of email, social networks, and blogs to promote the county. iv Expected outcomes and measurable results should reflect a realistic feedback of how well the strategy is working. How do we know were making progress? This includes building results into the action plans relating back to the goal. For example, for marketing efforts, Number of inquiries stating they saw our ad/website/news release/story, etc. etc. v Identify partners with something to contribute/gain from involvement in this effort e.g. Chambers, trade associations, non-profits, etc. etc vi Available resources can, and should, include more than funding. Students, volunteers, business sponsorships, strategic grants, can all be considered. Also, ways to leverage resources. vii Needed resources should be based on gaps existing after all available resources have been considered. The more innovative, creative use of resources without requiring additional funding will be the most expeditious in the short run. Issues or barriers are items that need to be addressed in order to realize goal. viii Timeline-some goals may be long-term. Thse may be broken down into intermediate steps with identified timelines for each action step. Short-term goals or specific projects may yhave a definite timeline. This is a way of keeping the process on track and reinvigorating efforts if a timeline slips, so that it doesnt get forgotten.
This County Plan was submitted on by the county team (please list the county team members below): This County Plan was submitted on April 15th by the county team (please list the county team members below):
The State provided "template" was filled out recognizing that some of these "Goals" were incorporated into strategies or actions. It was determined that the width of the template columns made it unreadable to participants, so the Document format was substituted. A Ouray County Bottom-Up web page has been created at http://www.ouraycountycolorado.org/bottomup.html to have all of the meeting materials, summaries, presentations, and other relevant information discussed organized in one place. The core group has indicated they wish to meet monthly to continue pursuing the top-5 goals and other goals identified in this process. The next meeting is being planned for May 9 and will focus on EDO/EDCs with several speakers invited. The entire Ouray City Council, Ridgway Town Council, Board of County Commissioners, local school boards and local chamber boards will be encouraged to attend. 1. 2. 3.
APPROVED JANUARY 16, 2013
2013 ACTION PLAN For SustainBlaine

Serving the communities of Bellevue, Carey, Hailey, Ketchum, Sun Valley and Blaine County, ID The vision of SustainBlaine (SB) is to achieve sustainable economic growth throughout the Sun Valley Region while its mission is to preserve and advance the Sun Valley Regions economic vitality, diversity and values of its citizens. Priority areas of strategic focus will be business retention/ expansion/attraction, economic analysis, community education, advocacy and incubator projects. SB was formed as a 501(c) 6 in January 2010 as the countywide entity with the legal authority to implement the GoBlaine! Strategy of 2009 prepared by TIPs Strategies.
Sustain Blaine Advisory Group (SBAG) Sustain Blaine, Inc. (SB) Sustain Blaine Board (BOD)
Executive Director Projects & Admin
Outreach Director (part time)
Volunteer Teams Project working groups (reporting relationship depends on team specifics)
Contracted Services Specific task functions
The 15 member Board (BOD) includes nine representatives from the private sector and six representatives from the public sector, with one from each of the Blaine County municipal bodies. The BOD is nominated, selected and supported by the Sustain Blaine Advisory Group (SBAG) which is composed of more than 40 individuals representing approximately 20 business sectors across Blaine County. The BOD relies on the SBAG for advice, community input and support in accomplishing each specific project. Full implementation of the strategy will be a multi-year effort, and SB has established an annual Action Plan to guide delivery of this strategy. The following Action Plan identifies short-term Projects and longer-term Programs which SB will pursue to achieve its objectives.
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SUSTAIN BLAINE PROJECTS 2013
Project 1: Secure Improved Air Service Debate about the future of air services in the Wood River Valley continues to take place without solid economic facts and risk evaluations. SB will seek to shape community opinions within a framework of the economic benefits of air services by organizing forums and conducting economic analyses. SBs will position its approach by providing factual economic data to local marketing organizations/businesses/ organization, city governments, and the Friedman Memorial Airport Authority. Deliverables: Conduct periodic economic analysis and polling on critical issues. Prepare periodic media articles or convene public forums on such analyses and polling. Provide ongoing technical analysis on economics of air service to community as required. Support LOT ballot initiative(s). Project 2: Establish Sun Valley Culinary Institute A culinary institute in the Wood River Valley could build on the existing resources of world-class local chefs and food events, great local restaurants, a budding foodie culture, and local educational program management expertise to create a unique enterprise in the Inter-mountain West. SB will leverage the 2012 draft business plan to build a robust business partnership between the College of Southern Idaho and the local community for development of the Sun Valley Culinary Institute. Deliverables: Fine-tune draft business plan based on feedback from experts and potential investors. Establish community-sponsored legal entity for partnership with CSI and secure required 1st phase venture capital funding. Negotiate and execute required partnership agreements. Hand over project to new operating consortium. Secure financial support for SB incubator efforts by way of development/management fees as appropriate. Project 3: Develop Nordic Olympic & Paralympic Training Site Potential The Sun Valley Region was designated as the 15th U.S. Olympic Committee Training Site (OTS) in October 2012. SB will support the Sun Valley Ski Educational Foundation (as Local Operator) together with its partners (the Wood River Ability Program, Blaine County Recreation District, and Sun Valley Company) by seeking new business attraction and/or expansion opportunities related to TS operations and activities Deliverables: Work with the SVSEF and partners to identify and progress local business opportunities in focus areas such as sports medicine,
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athlete dormitories, and facility/other asset expansions. Help identify and secure relationships with potential new partners and financial sponsors.
Project 4: Organize Sun Valley Region Ready Team and Process Blaine County lacks an organized Ready Team process to field business attraction and relocation leads. SB will plan and establish this organizational capacity for potential future needs. Deliverables: Identify required skills and potential members, and solicit membership. Establish rules of engagement via bi-lateral Memorandums of Understanding. Build tools and mechanisms to streamline team engagement. Conduct training and/or dry run based on case study or noreality lead. Convene team and respond to leads as required. Educate community on the existence of Ready Team and process. Project 5: Prepare Community Economic & Statistical Profiles Blaine County municipalities require reliable, timely, and relevant economic statistics to support economic development activities. SB will prepare an updated and standard set of economic statistics and indicators to allow for annual comparisons between municipalities, as well as provide benchmarks to help measure economic trends. Deliverables: Prepare 2012 economic profiles for each municipality. Distribute and publicize updated profiles. Provide city staff with training for future data collection and production of profiles. Project 6: Organize and Deliver 2nd Annual Economic Summit SBs 1st annual economic summit created a unique forum for community stakeholders to objectively assess our economic climate and trends, how they compare with other resorts/nationally, and to discuss challenges and opportunities. SB will build on last years summit by attracting national thought leaders and key local businesses to discuss a variety of critical topics and share ideas regarding our economic development trajectory. Deliverables: Develop summit theme(s) and procure relevant speakers. Cultivate and attract required sponsorship. Plan and manage the delivery of a successful summit. Project 7: Foster Innovation via (tbd) Innovation and entrepreneurial activity have been identified as a potential means to grow the local economy while diversifying the business and demographic base. SB will evaluate specific opportunities to support ongoing and prospective innovation efforts and select one or more for project implementation Deliverables: tbd
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SUSTAIN BLAINE PROGRAMS 2013 Program A: Pursue Business Attraction Leads Attraction of new businesses to the Sun Valley Region is important to create economic diversity and vitality. SB will create a Ready Team to field leads for business relocations into Blaine County as an on-going Program. Potential sectors for business attraction as identified in the GoBlaine strategy include diversified tourism, clean-tech, rec-tech, health & wellness and agriculture. SB will focus on unique opportunities to pursue high potential/low cost attraction strategies. Deliverables: As required, field inquiries from businesses interested in relocating to the County and facilitate their evaluation, planning and (if appropriate) move to the Region. In conjunction with the Cities, initiate selective high value recruitment activities Program B: Conduct Business Outreach Understanding the real-time business environment is critical to for business expansion and retention. SB will periodically meet with local businesses as part of an on-going program to monitor economic health. Businesses across a mix of sectors and geographies will be visited to discover challenges confronting local businesses as well as opportunities for growth. This information will be used to guide SBs strategy and provide discrete opportunities to develop Projects and Programs which can benefit the local business community. Deliverables: Plan and organize visits of select local businesses. Conduct field interviews with senior management. Track highlighted problems and/or opportunities. Use visit data to identify possible Projects and Programs. Report findings to Board and municipalities as appropriate. Program C: Conduct Economic Impact Analyses Accurate, relevant and timely economic analysis of specific community events, activities and programs can provide useful insights on opportunities to improve the local economy. SB has already conducted a series of economic impact analyses on various events and recreational sectors and plans to continue this work in the future. Future economic impact analyses will seek to better understand major contributors to both tourism and non-tourism economic sectors, and be used to develop recommendations to businesses and organizations. Deliverables: Prepare direct, indirect and induced economic impact analyses. Develop benchmarks based on participants and economic values. Periodically present analytical findings to community and media to inform and educate. Continue to transfer responsibility for subsequent year economic analyses to key stakeholders.
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Program D: Educate Community on Economic Issues Limited informative, accurate and up-to-date information is available in our community on a wide variety of economic issues. SB will periodically provide economic information to the community via meetings, forums, media articles and social media/web postings. The educational focus will be on a wide variety of local economic topics including business activity, employment, housing, tourism, education, government efficiency and other issues of interest to the community. Relevant comparisons with national, regional and resort community trends will be highlighted. Deliverables: Develop planning calendar detailing communications dates and methods. Organize periodic educational events. Initiate community newsletter series for mailing list. Program E: Advocate on Critical Community Issues Periodically, important community issues will arise which could benefit from rational advocacy in favor of business interests. SB will work with local governments, economic development, and other organizations to ensure economic issues and interests are fully considered and appropriately addressed. It is anticipated that topics of significance in the near term will include air service, utility enhancements, comprehensive plan preparation and land-use planning. Deliverables: Support FMAA and FSVA efforts to improve, expand and educate on air service options. Support City and County efforts to update comprehensive plans. Evaluate options and proposals with regard to utility enhancements and land-use planning. Support Cities on hotel development and other tourism/recreational initiatives. Maintain awareness on other emerging community topics of significance. Use economic analysis and polling devices to inform and elicit community perspectives. Program F: Support Infrastructure Improvements for Businesses. Communications, utility and transportation networks are important infrastructure components that can support expansion and retention of existing businesses as well as potential attraction of new businesses. SB will work with local governments, economic development and other organizations to periodically evaluate current telecommunications, internet, utility, and other business infrastructure services to identify opportunities for enhancing service levels to world-class standards at market prices. Deliverables: Participate in committees engaged in the evaluation of infrastructure improvements as appropriate. Support community negotiations with infrastructure providers as required.
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Program G: Increase SBs Impact on Economic Development Initiatives SB will seek to improve its organizational capabilities, governance processes, public credibility and fundraising capabilities as part of an on-going Program. It will also seek to increase its impact and credibility with both public and private sector leadership. A priority for this year will be to evaluate opportunities to collaborate and cooperate with other economic development entities and streamline the community dialogue on economic development issues. Deliverables: Maintain an active and viable BOD, along with a representative and inclusive Advisory Group to provide critical linkages with the professional, public, social and cultural institutions of Blaine County. Open regular dialogue with other local economic development organizations about combining/sharing resources and cooperating on projects/programs. Evaluate opportunities for integration with WREP and /or other economic development organizations. Develop long-term fundraising strategy and program.
Sustain Blaine Strategic Priority & Focus 2013 In order to ensure an appropriate strategic balance in the Action Plan, each Project and Program has been allocated to no more than two of the following strategic focus areas.
# 1 2 3 4 5 6 7 A B C D E F G Name Air Culinary OTS Ready Stats Summit Innovate Leads Outreach Analyze Educate Advocate Infrastuct Impact Attract X X X Expand X XX X XX X X XX X X XX XX XX XX X X X X X XX XX X Retain X Analyze X Educate X Advocate XX Incubate XX X
Based on this assessment, the 2013 Action Plan is reasonably balanced across the seven key strategic focus areas identified by the SB Board of Directors.
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MAP OF REGION 9
2. REGION 9 OVERVIEW
TABLE OF CONTENTS EXECUTIVE SUMMARY............................................................................................................ 1 REGIONAL ISSUES .................................................................................................................. 2 Sustainability as a Framework ................................................................................................ 2 Affordable Housing ................................................................................................................. 4 Disaster Preparedness ........................................................................................................... 5 Education ............................................................................................................................... 5 Energy Assessment ................................................................................................................ 6 Energy Impacts....................................................................................................................... 7 Environment ........................................................................................................................... 9 Climate ............................................................................................................................. 10 Air Quality ......................................................................................................................... 10 Cultural Resources............................................................................................................ 12 Environmental Justice ....................................................................................................... 13 Farmland Protection .......................................................................................................... 13 Floodplains ....................................................................................................................... 13 Hazardous Waste Sites ..................................................................................................... 13 Noise ................................................................................................................................ 14 Open Space ...................................................................................................................... 14 Paleontology ..................................................................................................................... 14 Parklands.......................................................................................................................... 15 Public Lands ..................................................................................................................... 15 Threatened and Endangered Species ............................................................................... 15 Wildlife .............................................................................................................................. 16 Water Quality .................................................................................................................... 17 Wetlands........................................................................................................................... 18 Livable Wages ...................................................................................................................... 19 Health Care .......................................................................................................................... 20 Population Trends ............................................................................................................. 23 Telecommunications ............................................................................................................. 23 Transportation ...................................................................................................................... 26 Workforce Development ....................................................................................................... 32 Regional Economic Profile .................................................................................................... 35 National/International Economic Context ........................................................................... 35 Economic Drivers .............................................................................................................. 36 Economic Clusters ............................................................................................................ 37 Unemployment Rates ........................................................................................................ 37 Employment and Income 2009 .......................................................................................... 38 Total Personal Income ...................................................................................................... 38 Per Capita Income ............................................................................................................ 39 TRIBAL POPULATIONS .......................................................................................................... 39 Ute Mountain Ute Indian Tribe .............................................................................................. 40 Southern Ute Indian Tribe ..................................................................................................... 41 STRATEGIC PLANNING ......................................................................................................... 42 Community Values ............................................................................................................... 42 Key Economic Development Directions................................................................................. 43 Vision Statement .................................................................................................................. 43 SWOT Analysis .................................................................................................................... 43 Strengths .......................................................................................................................... 43 Weaknesses ..................................................................................................................... 43 Opportunities .................................................................................................................... 44 Threats ............................................................................................................................. 44 Regional Goals, Actions & Implementation............................................................................ 44 BOTTOM UP - ECONOMIC DEVELOPMENT STRATEGY ...................................................... 53
Regional Overview CEDS Update 2011
EXECUTIVE SUMMARY
This section summarizes the social, environmental and economic issues that are common to the counties. Posed in a framework of sustainability, these include: affordable housing, disaster preparedness, education, energy assessment, energy impacts, environmental variables, health care, population trends, telecommunications, transportation and workforce development. The overview includes a comparison of each countys unemployment rates, employment sectors, personal income characteristics, and other factors that affect economic performance. Information on the tribal populations within the region is also provided.
Census Census 2000 2010 9,898 12,084 1,844 2,064 Avg. Annual % Change 2.2% 1.3%
Archuleta Dolores
La Plata 43,941 51,334 1.7% Montezuma 23,830 25,535 0.8% San Juan 558 699 2.5% Region 9 80,071 91,716 1.5% Colorado 4,339,019 5,029,196 1.5% Source: Colorado State Demography Office 3-2011
From 2000 to 2010 the growth rate slowed down in most counties (as compared to 1990 2000), except San Juan County, which saw the fastest growth of any county and exceeded the statewide growth rate as well.
When unemployment rates are compared, we see that La Plata County was below state and national levels in 2010. Historically Dolores and San Juan Counties have higher unemployment rates than the rest of the region. This is probably due in part to their low populations.
Region 9 2009 Total Employment Agriculture Mining & Utilities Construction Manufacturing Transportation & Warehousing Wholesale & Retail Trade Information Finance,Insurance & Real Estate Services Government Total # of % of Income % of Jobs Jobs ($000) Inc. 1,782 3% 19,654 1% 1,311 3% 136,864 6% 5,096 10% 271,766 12% 1,135 2% 43,315 2% 1,068 2% 57,270 3% 6,844 13% 256,599 12% 570 1% 32,671 1% 3,371 7% 164,550 8% 19,877 39% 713,117 33% 10,048 20% 485,996 22% 51,102 100% $ 2,181,802 100%
Unemployment Rates 2010 Archuleta 10.2% Dolores 17.5% La Plata 7.2% Montezuma 9.2% San Juan 10.8% Colorado 8.9% National 9.6%
In 2009 the service sector provided 39% of jobs and 33% of job income in the region. These jobs include highly paid professionals as well as lower paying unskilled labor. Trade is also important in the regional economy, providing 13% of jobs and 12% of job income.
2009 Total Personal Income Estimates As this table illustrates, the Employment Residency Div., Int Transfer Total 60+ five counties in southwest Income Adjustment & Rent Payments ($000) Share Colorado vary in their Archuleta 53% 3% 33% 11% $ 358,774 21% composition of Total Personal Dolores 49% 18% 20% 13% $ 55,369 16% Income (TPI). Most income is La Plata 71% -1% 24% 5% $ 2,114,441 14% Montezuma 55% 12% 22% 10% $ 802,919 16% job based (employment), San Juan 56% 12% 24% 8% $ 20,690 15% though significant amounts of Region 9 65% 3% 24% 7% $ 3,352,193 15% income enter our economy Source: Estimates provided by the Colo.State Demographer from other sources, such as transfer payments and dividends, interest and rents. Payments to retirees accounted for almost 15% of the estimated TPI in the region in 2009. That was $502,828,950!
Total personal income divided by the total number of residents in the county gives us an estimate of per capita income (PCI). This table highlights how the counties in our region measure up against the rest of the state and the nation. This data lags by about 2 years.
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REGIONAL ISSUES
The purpose of the Comprehensive Economic Development Strategy (CEDS) is to create a plan for retaining and creating better paying jobs, fostering stable and more diversified economies, as well as maintaining and improving the quality of life in southwest Colorado. This section looks at the issues that should be considered from a regional rather than countywide perspective, and includes comparisons of each countys population trends, unemployment rates, employment sectors, personal income characteristics, and other factors that affect economic performance. Information on the tribal populations within the region is also provided. Finally, we will look at strategic planning from a regional perspective.
Sustainability as a Framework
A sustainable community is one that preserves and restores the integrity of its natural environment, nurtures healthy human and other living systems, and maintains a vital self-reliant economy, generation after generation. A sustainable community meets the basic needs of all people. These include: air, water, food, shelter, health, safety, autonomy, connectedness, meaning and purpose. Meeting these needs in a sustainable way also entails meeting the needs of all life in the local environment. These principles were examined by focus groups during the construction of The Draft La Plata County Comprehensive Community Plan (2011). However, we believe they reflect an emerging regional philosophy, which is why they have been included here. The Principles - Economics, society, and environment exist as a related ecosystem. The businesses we attract to our community and the ways in which people participate in our economy have financial, societal, and environmental benefits and costs associated with them. This may include impacts on our local and regional air and water quality as well as contribution to the greenhouse gas emissions from this region. The way we build and support our economy affects the way we use energy, the location and design of our buildings and homes, our transportation choices and options, our waste generation and our food consumption, to name a few. If we make economic decisions without considering the impact of those decisions on the other systems in which we operate (our environment and our society), then we undermine our efforts to improve the quality of life in this region. Furthermore, were recognizing more and more the ways in which unexpected events ripple through these systems and change our communities. Our economic development choices can determine how we respond to those ripples (or waves as the case may be). Events such as a housing bubble or a recession, or changes to our water quality and availability, or epidemic scale health concerns can move our region into unfamiliar and potentially costly scenarios. As such, strategies meant to encourage economic development in this region must be flexible and resilient so as to be able to respond to the unexpected and open our eyes to emerging opportunities.
Regional Overview CEDS Update 2011 2-2
What does sustainability look like when it is successful? Our region develops on principles that respect and protect our private property rights, and our natural, cultural, and heritage assets while providing opportunities for our diverse population to thrive in southwest Colorado. We take a big picture view in planning and employ effective principles to achieve our desired development patterns. To protect our rural lifestyle, we grow around designated centers integrating new and old neighborhoods while supporting agricultural lands. These centers are serviced by a well-planned infrastructure and multimodal transportation system. Groups work together to maximize scarce resources. Local governments guide development in a way that is symbiotic with local municipalities, sovereign nations, neighborhood communities and property owners. Our local businesses are prosperous, our economy is diverse, and our counties are fiscally healthy. We approach economic development with a long term view and seek cooperative, integrated, and creative solutions to foster regional economic growth. Businesses support a work environment that values productive employees, innovative personnel practices, and continuous workforce development to ensure services are delivered in an efficient, ethical and responsible manner. Our agricultural industry is thriving as a result of increased local markets and innovative programs that ensure agricultural viability without regulations that diminish land value. Our agricultural system is an important provider of food to our community and to the world. We recognize water is a finite resource and plan based upon that understanding. We are proactive in addressing impacts of drought and potential water shortages. Our planning takes into account the unique characteristics and needs of each watershed and ensures a reliable water supply for all users. We are a national leader in conventional and renewable energy industries. As a region we invest in efficient, safe and healthy resource technologies. Thus, we are renowned for our energy independence and as an exporter of conventional/traditional and renewable energy. Locally we reduced energy demand through efficiency, conservation, and design. Within each county, and throughout the region, we ensure efficient multi-modal transportation systems that complement our land use strategies. Walking, cycling and equestrian routes connect our neighborhoods, towns, and employment. Roads and public transportation networks are well planned to enable people of all ages and abilities to get around safely, efficiently, and conveniently through the county. Our airports connect us to the rest of the world, contributing to our economic vitality. Our region is a vibrant and exciting destination that shows off our natural assets, rich heritage, and diverse cultures. Diversity in our community is valued and celebrated. People from different age groups, cultures, backgrounds, and interest frequently come together to participate in local activities, events, and projects. The local economy provides opportunities for all people, young and old, to grow their families, advance their careers and be productive members of the community. Our communities provide opportunities such as life long learning programs, quality recreational facilities, available childcare, and equal access to affordable health care and housing. Our communities support the protection and enhancement of a healthy natural environment on a local, regional and global scale. We are a leader in environmental stewardship for our proactive and balanced approach to conserving natural resources. We enjoy a healthy environment with clean air and water, and dark night skies. Wildlife corridors connect natural areas throughout the region, creating ecosystem linkages and improving wildlife vitality. Damage from invasive weeds has been reduced and our native species are thriving. As extractive industries develop and decline, disturbed lands are successfully reclaimed and utilized.
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Measuring Progress This vision of sustainability helps to capture regional and community preferences, but measurements must include social, ecological and economic considerations to enable us make informed and well guided decisions. The traditional mechanisms for measuring prosperity, and presuming a correlation to quality of life, do not actually measure how well we are protecting the things we value. For example the Gross Domestic Product (GDP), which refers to the market value of all final goods and services produced within a country in a given period, is often used as a proxy for standard of living. However, it only takes into account a material standard of living and only for those things on which our market places a quantifiable value. This means that such things as the state of environmental health, equity and wealth distribution, and cultural resources are not accounted for, so our ability to measure our progress has been limited. Though other regional indicator reports, notably Pathways to Healthier Communities (five editions produced from 1996 2006) and the Southwest Colorado Index (2008), http://www.scan.org track a number of social, economic and environmental variables to try to capture our progress toward an improved quality of life, they could be expanded and put into a sustainability framework. A model supported by the Sustainability Alliance of Southwest Colorado (SASCO) is called the Genuine Progress Indicator (GPI), which is currently being used in Maryland, Utah, Vermont, Minnesota, and Ohio. The premise is to have a way to capture costs and benefits that the current models do not address. The table below shows some indicators that are used in the GPI model.
Economic Indicators Net Capital Investment Cost of Underemployment Income Inequality Personal Consumption Expenditures Adjusted Personal Consumption Cost of Consumer Durables Value of Higher Education Social Costs Cost of Crime Value of Housework Cost of Family Changes Cost of Personal Pollution Abatement Value of Volunteer Work Cost of Lost Leisure Time Environmental Costs Water, Air and Noise pollution Ozone Depletion Services of Highways and Streets Commuting Motor Vehicle Crashes Non-Renewable Energy Resource Depletion Net Farmland and Forest Cover Change Water Shortages for Municipal Supply and Agriculture Flooding, Wildfire, Invasive Species
Other communities are also employing a view of sustainability throughout their economic development plans and deploying different strategies to measure their successes. For example, the City of Fort Collins Utility has implemented what they call the Triple Bottom Line Analysis Map in which they evaluate projects and decisions based on the impacts to social, environmental and economic components of their community. And La Plata County is in the process of finalizing a Climate and Energy Action Plan that is structured around the triple bottom line. Also in process is the development of a regional Resource and Energy Action Plan. Through processes such as the CEDS we will continue to develop strategies that move us towards sustainability.
Affordable Housing
Affordable housing continues to be of concern throughout the region, and has been identified as a significant barrier to economic development. A healthy community is one in which families and individuals of all income levels live in adequate and affordable housing. At present, this is not the case for portions of our region. High rents and home prices, coupled with relatively low wages, make affordable housing a prime concern in most of our towns and rural areas. In order to obtain affordable housing many people are forced to commute long distances to their workplaces, which increases transportation costs, adds to traffic congestion and air pollution, and takes more time away from their families.
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While the current economic climate has created some favorable conditions for home ownership, such as lower home prices and historically low interest rates, there are still many obstacles to providing affordable housing in southwest Colorado. These include lack of developable land and infrastructure or funds to provide infrastructure. In reality, affordable/attainable housing cannot really be addressed on a broad scale until overall wages are aligned with housing costs. At the local level, multiple efforts are underway to build affordable housing by groups such as Housing Solutions for the Southwest, Habitat for Humanity, and Colorado Housing Inc. Local governments are also seeking ways to partner with private development to provide housing opportunities. Housing authorities are in place in Archuleta, Montezuma and Dolores Counties. In La Plata County an inter-governmental agreement created the La Plata County Regional Housing Authority to serve the Durango, Bayfield, Ignacio, and rural county areas. These separate entities are currently looking at ways to collaborate and are committed to working together to address housing issues and create a regional environment that shares resources, expands services, and increases opportunity. Their first steps have resulted in a Southwest Colorado Regional Housing Plan prepared by Economic & Planning Systems (EPS #20829) draft January 21, 2010. Their findings and recommendations have been included in this CEDS document in each of the county profiles. Future efforts in providing housing will need to reflect the population shift of aging baby boomers needing different housing stock than is currently the focus.
Disaster Preparedness
This is a new requirement by the EDA, and they are in process of establishing guidelines for what the section should include. When the guidelines are received they will be included in subsequent CEDS documents.
Education
A quality public education system plays an important role in sustaining a communitys economic health by providing an educated workforce, involved citizens, and increased earning power that has a direct effect on business profits and tax revenues. An effective educational program also improves success rates for students across all socio-economic strata. There have been significant changes in the way Colorado schools are rated, as well as in the State Standards and Assessments, since the last CEDS report. A landmark education reform initiative known as Colorados Achievement Plan for Kids, or CAP4K, was signed into law in May 2008 (SB 08-212) to align the state public education system from preschool through postsecondary. The Education Accountability Act of 2009 (SB 09-163) aligns the accountability system to focus on the CAP4K goals: holding the state, districts and schools accountable on a set of consistent, objective measures and report performance. The Colorado Department of District 2010 Accreditation Category Education (CDE) will annually review Archuleta County 50 JT Accredited each Districts performance but Bayfield 10 JT-R Accredited Districts are required to accredit their Dolores County RE No. 2 Accredited with Improvement Plan own individual schools on four Dolores RE-4a Accredited Durango 9R Accredited performance indicators, and can Ignacio 11 JT Accredited with Priority Improvement Plan include additional measures adopted Mancos RE-6 Accredited by their local school boards. Montezuma-Cortez RE-1 Accredited with Priority Improvement Plan District and school Unified Silverton Accredited Improvement Plans (UIP) are based Source: Colorado Department of Education on four performance indicators: http://www.schoolview.org/performance.asp academic achievement; academic growth; gaps in growth levels for a variety of historically disadvantaged subgroups; and success in preparing students for postsecondary and workforce readiness (based on dropout rates, graduation rates and scores on the ACT college entrance exam).
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Based on these indicators, the CDE determines if each district (and the district in turn, their schools) exceeds, meets, approaches or does not meet the indicators. According to the 2010 oneyear performance reports (first time the UIP format was required), all nine districts in the region were accredited, although three districts need improvement, as shown in the following table. Five districts (Archuleta, Bayfield, Durango, Dolores County RE4a [Dolores High School], and Mancos), met the states goal in its Academic Achievement Performance Indicator, which includes CSAP results in reading, writing, math and science. Silverton scores were not used as a metric because fewer than 16 students were tested. This new rating system, as well as the overhaul in the Colorado State Standards, suggests a paradigm shift about the role schools play in educating our workforce. CAP4Ks goal is to ensure all students graduate high school ready for work and to succeed in todays competitive global economy. New standards and new assessments were also established to teach and measure 21st Century Skill and Readiness Competencies, which are summarized at http://www.cde.state.co.us/cdegen/downloads/PWRdescription.pdf in the Postsecondary and Workforce Readiness Description. The new measurements place more emphasis on critical thinking, problem solving, creativity and innovation, and utilizing information technology. Additionally, as of fall 2011, all Colorado students in grades 9 to 12 will be required to complete an Individual Career and Academic Plan (ICAP). An ICAP is designed to assist a student and their parent/legal guardian in exploring the postsecondary career interests and educational opportunities available to the student, aligning course work and curriculum, applying to postsecondary education institutions, securing financial aid and ultimately entering the workforce. The ICAP should also identify Contextual and Service Learning Opportunities, defined as activities performed by the student that establish connections between school-based instruction and the world of work, careers, and learning that occurs beyond the school itself.
Energy Assessment
An Energy Assessment for Southwest Colorado was recently prepared (December 2010) by the Four Corners Office for Resource Efficiency (4CORE). The purpose of that document was to provide an overall understanding of the energy use for five southwest Colorado counties (Archuleta, Dolores, La Plata, Montezuma and San Juan) to inform the future creation of the Resource and Energy Action Plan (REAP). This energy assessment specifies the electricity, natural gas, and other heating fuels used in the residential, commercial, industrial, and agricultural sectors, where available. In the case where this sector breakdown was not available, information on largest users was provided. The following discussion is drawn directly from the report. More information regarding 4CORE programs is available at http://www.fourcore.org/. This report consists of research on energy use and costs in southwest Colorado primarily for the year 2009. When the 2009 data was unavailable, other annual data was used. Energy industries researched include electricity, natural gas, propane, coal, geothermal, biomass and various renewable sources. Electricity use in 2009 for the five-county region was estimated at 1.68 Billion kilowatt hours (kWh), costing $146 Million. This data was gathered from the electric co-op utilities serving the region, all members of Tri-State Generation and Transmission Association, including Empire Electric Association, La Plata Electric Association, and San Miguel Power Association. Renewable electricity production in 2009 was estimated at 124 Million kWh, with 26,153,000 kWh purchased from non-local sources. Sources of renewables include solar, ranging from grid-tied residential to large commercial arrays, micro hydro, small wind, wind purchased from other regions, waste heat recovery, and wastewater methane capture.
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This data was gathered where available, primarily from Empire Electric Association and La Plata Electric Association. Natural gas use for the region was estimated at 2,126,707 thousand cubic feet (MCF), costing $12.3 Million. This data was gathered from Atmos Energy and Source Gas, the two natural gas companies serving the southwest Colorado region. Propane use for the region was estimated at 12.8 Million, costing $23 Million. This data was gathered from individual propane companies serving the region. Some companies gave no data, and others used ball park estimates of the quantities sold in 2009. In addition, a $1.80/gallon average price was used to calculate cost for all companies. For this reason, this data should be used with the knowledge that it is not comprehensive, nor exact in price. Much of the electrical power used locally is generated from non-local companies and locations. Tri-State's owned and contracted portfolio of electric energy is derived from coal, natural gas and oil-fired and combustion turbine generation facilities located throughout its four-state member service territory (more recently - solar and hydro are also used). TriState owns and operates plants in Colorado and New Mexico, and it receives a share of power from plants in Arizona, New Mexico and Wyoming. Some of the natural gas used locally may be produced locally, but (most of) the companies who generate the majority of this gas are not locally-owned. Finally, even the renewable energy in the Green Block and Power programs ultimately comes from out-of-state and non-local sources. Decreasing energy use and demand will ultimately decrease the money leaving this region. Next steps: Where to focus energy efforts Energy goals for southwest Colorado will be determined by the REAP Advisory Board in early 2011. Some projects coordinated by Community Energy Coordinators in other parts of Colorado have goals as high as a 20% decrease in energy by 2020. Proposed objectives for energy goals included in the REAP document could include: Increase the number of energy audits (commercial, industrial, agricultural and residential) Increase the number of energy efficiency retrofits for homes and buildings Increase the number of energy-educated homeowners and building managers Increase the number of renewable small-scale installations and large-scale projects Increase the number of educated businesses and employees.
Energy Impacts
The extraction of resources such as carbon dioxide (CO2), natural gas/coalbed methane, and oil play a major role in the region, both in terms of fiscal impacts as well as impacts on the physical environment, individuals and communities. While the extraction of these resources is mainly regulated by the Colorado Oil and Gas Conservation Commission (COGCC), counties also play a regulatory role, as do federal agencies and tribal governments. The COGCC website is: http://cogcc.state.co.us/ This table provides totals from 1990 to 2009 by county with grant totals associated with production of minerals. In addition to augmenting services through tax revenues the natural gas industry also provides assistance to local governments in the form of Energy and Mineral Impact Grants which are used for construction of buildings, road maintenance and improvements, and services (recreation, fire departments and libraries).
Energy Impact Grants by County County Total Archuleta $3,696,249 Dolores $4,768,957 La Plata $55,848,938 Montezuma $11,200,960 San Juan $2,750,178
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Oil and gas development allows local governments, through increased revenues, to provide substantially higher levels of service than they could provide absent the industrys tax base. The natural gas industry contributed the majority of the total tax revenue generated by La Plata County and a smaller portion in Archuleta County. The industry pays property taxes on the production value of the natural gas produced and property tax on the physical property it owns. According to the county tax abstracts and audits, the percentage of taxes paid by the oil and gas industry is shown here for FY 2007 2010. Producers of natural gas, CO2 and oil all pay royalties based on the value of the production and in La Plata County alone there are approximately 4,000 local mineral owners. The federal government is also a mineral owner and the royalties paid on federal minerals or leasing is the second largest source of federal income behind federal income taxes. Conflicts do arise between developers of natural resources and landowners. None of the counties track complaints or compliments. According to the COGCC website, since 2000 in Archuleta County there have been 14 complaints or requests on issues from noise, spacing, pits or road damage. There are 110 active wells in Archuleta County. Since 1997, there have been 4 total complaints from residents in Dolores County. There are 43 active wells in Dolores County. The requests were for information regarding royalty payments and the complaints were regarding pits, fencing and noise. Since 1995, in La Plata County there have been 354 reported complaints or requests for information from the COGCC. These are all resolved and they consist of inspections, requests for water well testing, reclamation, noise, or reports of smell. There are currently 3,308 active wells in La Plata County. Since 1996, in Montezuma County there have been 8 reported complaints that consisted of water well testing, soil sampling or tampering. There are currently 114 wells in Montezuma County. When coal bed methane (CBM) development began in La Plata County in the late 1970s, the spacing order (used to determine how many wells are allowed per section) for CBM wells was 320 acres (two wells per section). In April 2000 the COGCC approved an application to allow an additional 636 natural gas wells to be drilled in the region over the next 5-10 years. This infill well application allowed one gas well every 160 acres instead of one every 320 acres. Since 2004, there have been 18 requests for infill wells in specific locations within La Plata County where there is now 80 acre spacing. Memorandums of Understanding (MOU) were entered into with La Plata County providing for road impact fees, electrification of wells to mitigate sound and other provisions to address concerns raised about the possible impacts these additional wells might create. All MOUs can be found at: http://www.co.laplata.co.us/departments_elected_officials/planning/natural_resources_oil_gas/mou
COGCC Oil and Gas Permitting 2007 2008 2009 26 47 11 10 12 21 251 328 298 12 22 39 0 0 0 Oil and Gas as % of Total Tax Revenue Archuleta La Plata Assessment Fiscal Year County County Year 65.9% 2006 2007 3.8% 55.3% 2007 2008 4.4% 54.3% 2008 2009 5.4% 54.6% 2009 2010 5.1%
County Archuleta Dolores La Plata Montezuma San Juan
2010 18 8 191 19 0
Although the permits are declining, this does not mean that production will continue to decline. The current trend is a result of natural gas prices, access to operating capital and pipeline capacity.
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These charts provide the production history from the last 4 years according to the production information contained within the database of the Colorado Oil and Gas Conservation Commission.
Production (mcf) of conventional gas and coalbed methane County 2007 2008 2009 2010* incomplete Archuleta 4,770,997 6,959,370 9,832,291 9,563,892 Dolores 890,471 724,322 814,867 599,715 La Plata 418,990,433 425,079,981 425,079,005 419,881,741 Montezuma 654,696 592,095 872,696 639,886
There are only eight counties Production (mcf) of coalbed methane in the state that produce County 2007 2008 2009 2010* CBM. In the Region 9 incomplete locations, only Archuleta and Archuleta 4,291,871 6,323,994 8,443,183 8,433,696 La Plata Counties have 370,187,958 378,111,679 378,543,862 374,661,332 production of CBM. La Plata La Plata County ranks number 1 and Archuleta County ranks number 3 in the State for total CBM production. These two counties combined produce seventy-seven percent of the States CBM production. Montezuma County is the top producing county for C02. In 2009, Montezuma/Dolores Counties production of CO2 is responsible for extra production of 250,000 barrels of oil per day in west Texas.
Production of CO2 (mcf) 2007 2008 2009
County Dolores Montezuma
2010* incomplete 0 37,538,320 41,128,524 40,765,314 354,923,186 313,869,391 346,813,287 211,794,057
San Juan County has no production but benefits solely as a recipient of mineral impact grants, primarily as a result of their historic mining production. Archuleta County is experiencing a slight increase in permit and drilling activity; and Montezuma and Dolores Counties are decreasing in permit activity as a result of a few exploratory (wildcat) wells that have been drilled in the Gothic Shale. Mineral development in all counties will continue and have historically existed since the 1940s. There is no question that energy development will continue regionally and is a sustainable business. Local governments, landowners, members of the oil and gas industry, environmental groups, and the COGCC are seeking ways to prevent and mitigate adverse impacts to public health, safety, and the environment. These measures include new technologies to deal with adverse environmental impacts, continued water well testing, and the provision of incentives for well operators to engage in projects and activities that benefit the public interest.
Environment
Environmental considerations play a key role in southwest Colorados economic development activities. Residents of our communities value the high quality of life provided here, including clean air and water and scenic views. A healthy environment can be a selling point for a region's economic development efforts. Businesses - and their employees - like to live in a safe and healthy environment. This is increasingly true in the information technology era when businesses and jobs can relocate almost anywhere they wish. Increasingly, areas that offer the best environmental resources are often the most attractive to business interests that have the ability to move. A healthy environment can also be a draw to tourists and outdoor enthusiasts of all kinds, from fishermen and hunters to hikers or bird watchers. Unfettered or unplanned development, by contrast, can fragment natural areas and/or deplete them of their wildlife, their pollution mitigating qualities, or their natural beauty.
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Federal agencies are required to integrate environmental values into their decision-making processes by considering the environmental alternatives for their proposed actions, and reasonable alternatives to those actions pursuant to the National Environmental Policy Act (NEPA). NEPA requires agencies to first avoid and minimize negative environmental impacts and to provide compensation only after all avoidance and/or minimization efforts have been attempted. Some of the environmental factors addressed by NEPA are described in sections below. Climate Region 9 is located at the juncture of four states (Colorado, Arizona, New Mexico and Utah the Four Corners); and three distinct physiographic regions; the Rocky Mountains, the Colorado Plateau and the San Juan Basin. The topography includes high mountain peaks and valleys, towering mesas, deep canyons and deserts. Southwest Colorado is intensely seasonal. Snow begins falling in the high country in late September or early October, and by Halloween, seasonal closures turn many unpaved roads into routes for snowmobiles. The San Juan Mountains are the snowiest region of the Colorado Rockies, with average annual snowfalls approaching 400 inches in some spots. Skiers and snowboarders treasure this abundance of white gold. Winter lingers well into the season that is called spring on the calendar. In fact, the greatest snowfalls generally occur in March and April. Winter sports usually wind down in early to mid-April. At about the same time skiers are packing up their poles, the snow in the higher elevations begins to melt. Cresting streams offer thrilling, if chilling, white-water rafting and kayaking. Summer in the mountains, is brilliant sunshine in cobalt blue skies, although even in the warmer valleys the growing season is marginal in length. Spring's last frost often occurs in June; the first frosts of fall might begin in late August. Late summer brings brief and often intense showers on many August afternoons, sometimes accompanied by dramatic thunder and lightning. In the harsh, dry climate of the mesaand-canyon country around the Four Corners, summers are hot, winters can be windy and cold, and spring and fall are mild. Air Quality Air quality is important from an economic standpoint, not only because of the human health implications, but also because it affects the view sheds in a five-county area where attracting businesses and tourists is contingent on a high quality of life. Pollution sources within the Four Corners include coal-fired power plants, motorized vehicles, oil and gas operations, wildfires and intentional burning, road dust, and other sources. There are 16 existing power plants in the vicinity of the Four Corners (within a 200 mile radius) and another one is proposed http://www.mountainstudies.org/sites/default/files/pdf/education/Air_Quality_Book_2009.pdf. In addition, there are currently 3,575 active wells in southwest Colorado and 13,281 active wells in northwest New Mexico (La Plata County Energy Council personal communication). Under the Clean Air Act, the US Environmental Protection Agency (EPA) sets limits on certain air pollutants, using science-based standards to protect human health and the environment. A geographic area that does not meet a primary standard is called a non-attainment area. States and tribes develop State Implementation Plans that outline how they will control air pollution. Some of the air pollutants that are presenting challenges in the Four Corners area are ozone, mercury, nitrogen and sulfur oxides, and particulate matter. Ozone is normally considered a big city issue, but it is of growing concern in the Four Corners area. In this region, ozone is mainly caused by power plants and oil and gas development (CIRA). Groundlevel ozone can cause chest pain, coughing, throat irritation, and congestion and can worsen bronchitis, emphysema, and asthma. Many plant species, including crops, such as soybeans, and Ponderosa pines and Aspen trees are extremely sensitive to ozone exposure. Air monitoring results from 2006-2008 at Navajo Dam in northwest New Mexico indicated high ozone levels in violation of a primary standard. However, these results were reviewed by the EPA and found to be invalid. One of the instruments used to detect ozone was malfunctioning and produced incorrect readings (http://www.epa.gov/airtrends/values.html). The EPA is reconsidering the current ground-level ozone standards. The standards may become more restrictive. A final standard is expected to be set in mid-2011.
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Mercury is a naturally-occurring element found in air, water, and soil. It can also be a toxic air pollutant. Coal-fired power plants are the largest man-made source of mercury to the air in the United States. Mercury in the air eventually settles to the ground, where it can be washed into aquatic ecosystems, such as lakes, streams, and wetlands. Bacteria in wetlands and lake bottoms can change mercury into a highly-toxic form, called methyl mercury, which affects functioning of nerve cells. The methyl mercury bio-accumulates, increasing in concentrations up the food chain. Fish consumption advisories for mercury contamination are in effect for five lakes and reservoirs within Region 9 in Archuleta, La Plata, and Montezuma counties. Mesa Verde National Park has recorded some of the highest mercury concentrations in the nation. There is currently no human health or environmental standard for mercury in air, rain, or snow. However, the EPA is developing new rules to regulate mercury from coal-fired power plants. Dry deposition is the accumulation of gases or particulate matter in dry weather, in contrast to wet deposition, which is rain or snow-borne. A two-year mercury-monitoring project by the EPA will conclude in August of 2011 and will establish baselines for dry-mercury deposition and look at the effectiveness of the collection devices and the variability of annual accumulations. Early findings indicate that significant amounts of the toxic element are deposited at Mesa Verde and at Molas Pass in the mountains of San Juan County under dry conditions by wind (Durango Herald 2/10/11). Regional haze is caused by a collection of fine particles, smoke, dust, and moisture, suspended in the air. Emissions from power plants, burning of fossil fuels, soot from natural and manmade fires, and airborne dust from disturbed soils all contribute to this pollution, which respects no borders and can travel great distances. Haze affects wide geographical areas, often far away from the original emission point, and is therefore called regional haze. The EPA has established a visibility protection program to protect Class 1 areas of great scenic importance, including Mesa Verde National Park and the Weeminuche Wilderness Area, from impairment due to manmade air pollution. Visibility at both Mesa Verde National Park and the Weeminuche Wilderness Area are impaired due to haze. When the air is clean, natural visibility conditions in most of the western United States are in the range of approximately 110 to 140 miles. However, when regional haze is present, visibility is reduced to about 33-90 miles. Poor visibility is often an indicator that there are other impacts that we cannot directly observe, such as human health affects. http://vista.cira.colostate.edu/improve/Overvoew/hazeRegsOverview_files/frame.htm Colorado adopted a Regional Haze Plan in 2010 and 2011 that specifies long-term strategies to restore visibility in Class I areas to natural conditions. The plan includes reduction of emissions and new controls for oxides of nitrogen at power and cement plants. These nitrogen oxide controls will also benefit ozone reduction efforts (http://www.cdphe.state.co.us/ap/ozone.htm). Particles in the air less than ten microns in diameter (PM10) can become lodged deep in the lungs and are not easily expelled. This can cause negative health effects, particularly for people with heart or lung disease, respiratory problems, the elderly, and children whose lungs are still developing and who are more likely to have asthma and are more active outdoors. The Pagosa Springs area was classified in 1987 as non-attainment for PM10. Strategies in the State Implementation Plan for reducing PM10 included paving unpaved roads, street sanding with a reduced amount of fine sand, and motor vehicle emission control. The area was re-designated as maintenance, rather than non-attainment, in 2001. Pagosa Springs receives $200,000 federal Congestion Mitigation and Air Quality funding per year for activities such as paving dirt streets and purchasing street sweepers to reduce air emissions of particulate matter. The air shed will be monitored for PM10 until at least 2021. Another source of air pollution is nitrogen and sulfur oxides from burning fossil fuels in power plants, vehicles, and other types of engines, such as those associated with oil and gas wells. Both sulfur and nitrogen oxides form acid rain. Mountain and desert ecosystems are more vulnerable than other types of ecosystems to nitrogen deposition. In addition, hydrogen sulfide occurs in natural gas and can be emitted at harmful levels from some seeps and natural gas drilling operations in the San Juan Basin. The EPA released a proposal to reduce smog-producing nitrogen oxides at the Four Corners Power Plant in Farmington, New Mexico from 45,000 tons per
Regional Overview CEDS Update 2011 2 - 11
year to 5,800 tons per year, an 87% reduction of emissions. The plant is the nations largest source of nitrogen oxides. The agency is seeking public comment through May 2, 2011. (Durango Herald 2/12/11). (http://cogcc.state.co.us/Library/sanjuanbasin/blm/NaturalResource/MFCOcropSJB.htm); (http://octane.nmt.edu/gotech/Main.aspx) During the last update of this report, many Coloradoans were concerned about future air quality from a potential new coal-fired power plant in northern New Mexico called the Desert Rock Energy Project. If built, it would be the third power plant in the San Juan Basin, along with the Four Corners Power Plant and San Juan Generating Station. The Desert Rock Energy Project was permitted by the EPA, pursuant to provisions of the Clean Air Act in July of 2008. Several environmental groups appealed the permit, and the EPA appeals board essentially voided the permit, returning it to the EPAs regional office for reconsideration, based on five environmental issues, including air quality. The EPA informed the permit applicant of the need for additional information, but to date has not received a complete record. The applicant has not officially canceled the application, but it is not being actively processed. In La Plata County, concerns about the Durango and Silverton Narrow Gauge Railroads coal emissions, resulted in an Air Quality Advisory Council, formed in 1998. This group is working collaboratively on finding solutions to this air quality threat and others such as oil and gas wells and rapid development. They published A Comprehensive Summary of Air Quality in La Plata County in August 2005 complete with data, studies, results from a citizen survey and recommendations for improvement. For details on this issue please refer to the La Plata County profile in this document. Colorado operates its own air quality program, and the Southern Ute Indian Tribe/State of Colorado Environmental Commission has been formed to oversee the development and implementation of a comprehensive program to protect air quality on the reservation. This is being accomplished through ambient monitoring, permitting of pollution sources, emissions inventories and continued research of air pollution and its sources. The program is currently growing to include a permitting section that will regulate all air pollution sources within the exterior boundaries of the reservation. Cultural Resources The discovery of the Ancestral Puebloan (formerly known as Anasazi) ruins at Mesa Verde National Park strongly influenced the passage of the Federal Antiquities Act in 1906. The region contains thousands of important archaeological resources that are now protected, and which have become a valuable economic resource as visitors from across the globe visit the region to learn more about our prehistoric and historic past. Various federal land management agencies, such as the United States Forest Service and the Bureau of Land Management (BLM), have implemented a permit system for archaeological studies on their jurisdictional properties (including historic and prehistoric sites). Specific guidelines have also been developed to direct the treatment of human remains found at archaeological sites. Both State and Federal legislation protects Colorado's cultural resources. The Colorado Historical Society (CHS) recognizes thousands of cultural resources in Region 9 as being eligible to the Register of Historic Places, though they are not yet listed. Region 9 also has various cultural resources that are included on the State and/or Federal Register of Historic Places, which is maintained by the National Park Service (established in 1966). In 2000, the Canyon of the Ancients National Monument was established. It is administered by the Bureau of Land Management and covers over 164,000 acres with over 6,000 archeological resources recorded. A management plan for the Monument provides strategies for allowing some historic extractive uses to continue, including grazing and gas development while also managing cultural resources and recreational visits (which are increasing in great numbers each year). More than 40 Native American tribes have a historic interest in various parts of Colorado, including two resident tribes in portions of Archuleta, La Plata and Montezuma Counties (the Southern Ute Indian Tribe and Ute Mountain Ute Indian Tribe). The National Historic Preservation Act (NHPA)
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mandates that governmental agencies consult with Native American tribes during the planning of federal-aid projects both on and off Indian reservations. Environmental Justice Environmental justice is the fair treatment and meaningful involvement of all people, regardless of race, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies. In response to allegations by the Congressional Black Caucus in 1990 that environmental risk was higher for minority and low income populations and a subsequent study that supported the allegations, a 1994 presidential executive order directed every federal agency to make environmental justice part of its mission. There are three fundamental environmental justice principles: 1) to avoid, minimize, or mitigate disproportionately high and adverse human health and environmental effects, including social and economic effects, in minority and low-income populations; 2) to ensure full and fair participation by all potentially-affected communities in the project decision-making process; and 3) to prevent denial of, reduction in, or significant delay in the receipt of benefits by minority and low-income populations. Region 9 is fully-aware of and in agreement with the need to address environmental justice requirements in all federally-funded projects. An example of recent compliance with environmental justice principles is the US Highway 160 interchange and four-laning project from Durango to Bayfield, for which a record of decision was issued in October of 2006. The Colorado Department of Transportation identified low-income and minority populations within the corridor and developed an outreach program for minority and low-income residents during project scoping and development of alternatives to ensure they had opportunities to participate in the public process. Mobile home park owners and owners of small businesses, including minority-owned businesses, were surveyed about how the project could affect them. Bilingual flyers announcing the EIS scoping meeting were distributed at the mobile home parks, and there was a Spanish language interpreter at the scoping meeting. A subsequent meeting was held pursuant to a request made by a resident of a mobile home park. In response to the input of residents from two of the mobile home parks, sections along the alignment were re-designed to reduce impacts to these mobile home parks and improve their access. A recent project within the corridor added a westbound auxiliary lane. A noise wall was constructed adjacent to the Mountain Vista Mobile Home Park to mitigate the noise impact from the project. Farmland Protection The National Agricultural Land Study of 1980 -81 found that millions of acres of farmland were being converted each year due to sprawling development. Much of the sprawl was the result of programs funded by the federal government. With this in mind, Congress passed the Farmland Protection Policy Act (FPPA) in 1981. A project for which farmland is acquired, such as State highway construction projects and airport expansions, or those which will indirectly lead to the conversion of farmland, are subject to the provisions of the FPPA (http://www.nrcs.usda.gov/programs/fppa/) Floodplains Floodplains are another critical environmental feature that can have significant impacts on land development. Floodplains are the margins of land adjacent to streams and rivers that accommodate excess water during periods of flooding. Streams and rivers are subject to periodic flooding that can damage or destroy whatever is contained in the floodplain. The presence of a floodplain in a development corridor is important as it may affect the alignment, design, construction and long-term maintenance aspects of the project. Floodplain information is readily available from local, state, and federal government agencies along with guidelines pertaining to the development or modifications of floodplain. Hazardous Waste Sites Identifying a communitys potential for hazardous waste early in the development planning process can help avoid unexpected time delays, increased costs, and potential danger to both employees and public health and safety. Construction typically involves subsurface activities that may disturb
contaminated soils, groundwater, parcels of land and businesses that are sometimes contaminated by hazardous waste. An evaluation will help reduce the possibility of encountering hazardous waste, purchasing contaminated property, and minimize liability. The evaluation should include a review of current and historic land use activities, a review of regulatory agency lists, an inventory of documented hazardous waste generators, and a field survey to assess various physical features on the property that may indicate presence of hazardous waste. In addition to evaluating the property to be acquired, adjacent properties and the surrounding area should be surveyed because contamination can come from off site. An investigation should include the identification of nearby businesses that store or use potentially hazardous materials. Noise Development-related noise is regulated by federal agencies in response to the Noise Control Act of 1972 (86 U.S.C. 1234-1250). Both the US Department of Transportation and the EPA are involved in noise regulation. All federal projects must assess highway-generated noise in compliance with Federal Highway Administration (FWHA) noise abatement criteria. In most cases, the noise from vehicles is not be an issue if the speed limits are less than 30 mph or less, unless large truck traffic is extremely heavy or steep grades are associated with the roadway. Rural highways, roads, nonurban and small urban municipal streets usually have a maximum noise influence area that does not exceed 200 feet on either side of the roadway centerline. Rural Interstate highways usually have a noise influence limit of 300 feet or less on either side of the centerline. In general, noise increases from completed transportation projects are due to capacity increases or alignment changes. For these types of projects, a noise analysis study is required if noise sensitive receivers (examples are residences, hotels, and schools) are present within a 500-foot radius from the proposed edge of traveled way throughout the extents of the project. Mitigation, such as noise barriers, might be required. Each military or joint-use airfield is required by military regulations to have an Air Installation Compatibility Use Zone study which shows the noise footprint associated with its operations. Airports with regularly scheduled commercial airline service have a similar study required by the Federal Aviation Administration. These studies can be used by planners to assess airport noise impacts on the surrounding community. Open Space The environmental issue that has received the greatest public input was about the impact of growth on open space. Population increases are driving development particularly in the unincorporated areas of each county. Four non-profit conservancy organizations are active in the region and are members of the Colorado Coalition of Land Trusts (CCLT). These conservancy organizations have assisted land owners in voluntarily preserving land in Region 9 via conservation easements. Though it is difficult to pin down the exact number of acres within these easements, a consortium of organizations called COMap have tabulated 70,795 acres within the region as private protected lands (http://www.nrel.colostate.edu/projects/comap/samples.html). While this protected open space represents only 2% of all land in the region, the effort is important because parcels are placed under easement based on values such as view sheds, public lands access points, wildlife corridors, and farm land preservation. The practice of conservation easements was made more attractive by the State of Colorados tax credits granted in the early 2000s that allows the landowner to sell the value of the easement for cash rather than a tax write off. Each county government in the region has locally-defined land use policies, comprehensive plans and codes and thus, this wide-ranging topic is also covered in each countys CEDS section. Paleontology The State Antiquities Act (24-80-401) seeks to protect all fossils on state-owned lands and lands controlled by any subdivision of state government. Protection is provided by requiring a permit to collect, damage or destroy fossils on state-owned lands. Similar laws and regulations protect fossils on federally owned lands. The majority of Colorado remains un-surveyed for fossil remains. Areas not requiring examination for fossils of scientific importance are those areas where the rocks
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are older than 600 million years or younger than 7,000 - 8,000 years. The remaining areas could potentially contain fossils of scientific significance. Parklands Parks and recreational resources play an important role in southwest Colorado. They provide opportunities for physical exercise and mental relaxation, gathering sites for community activities and events, and they draw tourists and recreationists to the area. Parks and recreational resources may be operated by local governments, state and federal agencies, and tribal governments. Federal regulations protect publicly owned parks and recreation areas from federal actions, such as transportation or other infrastructure projects, wherever prudent and feasible alternatives exist. If publicly owned parklands or recreation areas will be impacted by a transportation improvement, a mitigation plan is required. These lands should be identified early in the planning process. Public Lands Public lands play a decisive role in southwest Colorados economies. For example, the San Juan National Forest averages 1.7 million visitor days per year, significantly contributing to the tourism industry in the Four Corners. The region is characterized by vast public lands including the following acres: 1,584,592 - United States Forest Service; 342,901 - Bureau of Land Management; 61,069 - State of Colorado; and 53,720 - National Park Service. The breakdown of public land acreage per county can be found in the county sections of this report. The prosperity of rural western communities is directly tied to designated wilderness areas, national parks and other public lands. A report, Prosperity in the 21st Century West, published by the Sonoran Institute, analyzed economic statistics from 400 western counties and found that new businesses, investments and residents tend to locate near public lands. The better managed and protected those lands are, the more they contribute to the economic well-being of local families, communities and businesses. The San Juan National Forest and Bureau of Land Managements (working together as the San Juan Public Lands Center) Resource Management Plan Revision is underway. The plan will outline the types of uses that will occur, locations, and other land management decisions such as: identifying where commercial timber will be harvested, where grazing will occur, and locations where motorized recreation will be allowed. A unique aspect of this planning process is that it combines the BLM and USFS into one document. In public meetings, key issues were identified as concerns and are presented in each countys CEDS section. The San Juan Public Lands Center received over 18,000 comments on the Draft Land Management Plan and Draft Environmental Impact Statement that was published in December of 2007. Significant information surfaced during review of public comments and industry feedback, and it was determined that the emerging potential for oil and gas exploration had not been adequately addressed, and the USFS and BLM decided it was necessary to publish a Supplement to the DEIS. The Supplement should be available for public review in April of 2011. It is anticipated that the Final Environmental Impact Statement and Land Management Plan will be published in the summer of 2012. With the traditional land uses such as mining, grazing and logging declining in the region, the stewardship, management, and protection of our public lands is a complex topic deserving of ongoing public, community and governmental involvement and action. Threatened and Endangered Species Development can be harmful to plant and animal species. Impacts can result from destruction of habitat, animal mortality (including vehicle-wildlife collisions and construction activity), fragmentation of habitat, or changes in species behavior such as altering foraging or denning patterns. Extinction of a species represents an irretrievable loss of a biological resource and biodiversity. In addition to its other inherent value, this resource may have yielded powerful medicines, new genetic stock for agriculture, or provided new scientific insights. The loss of a species reduces the resilience of the environment to respond to climatic or environmental crises. Consequently, the protection of threatened or endangered species is an essential component in any long range planning effort, and a review should be made prior to the undertaking of any
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economic development project to identify these species. A list of endangered species in Colorado can be found at www.wildlife.state.co.us. To comply with the federal Endangered Species Act, agencies that might impact threatened and endangered species evaluate all possible adverse impacts and take necessary measures to avoid harming proposed, candidate and listed species before, during and after construction and maintenance activities. Appropriate compensation is utilized after all reasonable avoidance and minimization techniques have been exhausted. Senate Bill 40 (SB40) (33-5-101-107, CRS 1973 as amended) was created primarily for the protection of fishing waters, but it does acknowledge the need to protect and preserve fish and wildlife resources associated with streams, banks and riparian areas in Colorado. This is accomplished through erosion control, water contaminate control, discharge conditions, construction procedures, vegetation manipulation and noxious weed control. These measures, when properly used, can ensure that Colorado waters remain conducive to healthy and stable fish and wildlife populations which depend on the states rivers and streams. Wildlife Animal/vehicle collisions are the number one cause of crashes in southwest Colorado, and the Colorado Department of Transportation (CDOT) estimates that approximately 70 percent of all accidents are due to collisions with wildlife. In comparison, the statewide average for Colorado is nine percent of all accidents. In 2009, the Western Transportation Institute calculated the average per vehicle cost associated with an animal/vehicle collision to be $6,617 for deer and $17,483 for elk (http://www.ecologyandsociety.org/vol14/iss2/art15/). In September of 2008, as a pilot project, CDOT installed a $1.2 million electromagnetic wildlife detection system along a one-mile stretch of US 160, in an important deer and elk migration corridor east of Durango. The system operates on changes in the earths magnetic field. Cables are buried nine feet deep, 30 feet from both sides of the highway. The cables record movement of animals having the same electromagnetic signature as deer and elk, and when animals of this size are detected in the highway right-of-way, a sign lights up that alerts motorists to the presence of animals. The system has displayed some false positive results, and CDOT is researching the flaws. The system is the first of its kind to detect large animal movements near the edge of a highway, and the bugs are being worked out of this research project. However, anecdotal evidence indicates that there are fewer carcasses found in the detection area than in adjacent areas. If the project is successful, the technology could potentially have widespread use in highway corridors with high animal-vehicle collisions. Of note, the automobile insurance industry has expressed an interest in the results of the study, with a possible review of insurance rates. In 2008, the Western Governors Association established the Western Wildlife Habitat Council (WWHC) to coordinate and manage implementation of the WGA Wildlife Corridors Initiative Report. The mission of the WWHC is to identify key wildlife corridors and crucial wildlife habitats in the western United States and coordinate implementation of needed policy options and tools for preserving those landscapes. Colorado Division of Wildlife personnel are working with the state of New Mexico to map deer and elk migration corridors that cross the state line and to develop collaborative management strategies and combine resources. On July 1, 2007, a Colorado law took effect that minimizes the impacts of oil and gas development on our fish and wildlife resources. The law, labeled the Colorado Wildlife Habitat Stewardship Act, directs the Colorado Oil and Gas Conservation Commission (COGCC) to "plan and manage oil and gas operations in a manner that balances development with wildlife conservation in recognition of the state's obligation to protect wildlife resources and the hunting, fishing, and recreation tradition they support" (http://www.ourpubliclands.org/colorado/housebills) . The Colorado Division of Wildlife, Southwest Region plans to begin a five-year study in the summer of 2011 regarding
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bear/human conflicts, a growing concern in urban interface areas. The study will focus on the city of Durango, and it is expected that the study results will be applicable statewide. Water Quality The Federal Clean Water Act established programs aimed to control non-point sources of pollution, and to supplement programs addressing pollution from discharge at specific identified sites (point sources). The quality of water in primary rivers and streams are tested for point source pollutants such as metals, bacteria, sediments, nutrients, and salinity. There are several categories of non-point source activities, including: agriculture, forestry, construction runoff, urban runoff, resource extraction, land disposal and hydrologic modification. Region 9 is contained within the San Juan River Basin, which includes the San Juan River and its principal tributaries, the Piedra, Los Pinos, Animas, La Plata, and Mancos Rivers. The San Juan and Dolores rivers ultimately reach the Colorado River, but they are considered to be within the San Juan River Basin for water quality management purposes. Although the population in the San Juan River Basin is sparse compared to other parts of the United States, increased growth and tourism are placing demands on several communities to provide adequate wastewater treatment. Several year-round resorts are proposed in the upper San Juan River region, which could significantly impact future water quality. In southwest Colorado, drought, wildfires, mining activities, agriculture, and population growth have altered the landscape from its natural condition. These changes have potentially degraded the water-quality of streams, rivers, reservoirs, and groundwater by introducing or increasing levels of metals, nutrients, synthetic organic chemicals, and sediment. There are several drainages in the region with water quality issues. In 2010, southwest Colorado reported 17 impaired river sections totaling 346 miles on the following rivers: mainstream and tributaries (mercury); Los Pinos River (mercury); La Plata River, Mancos River, McElmo Creek, and San Juan River (iron, copper, and mercury); Dolores River (mercury); and the Lower Dolores River (iron). The U.S. Environmental Protection Agency requires states to develop Total Maximum Daily Loads (TMDLs) for impaired river segments. A TMDL is the maximum amount of a pollutant that a waterbody can receive and still maintain water quality standards (http://www.cdphe.state.co.us/op/wqcc/). The State of Colorado conducts an on-going project aimed at investigating the presence of certain contaminants in fish that can potentially be consumed by the human population. The results of these studies are analyzed and, if warranted, is the basis for issuing fish consumption advisories. Other governmental agencies, such as counties and cities may also issue advisories. Fish consumption advisories for mercury are in effect at five reservoirs in the region: McPhee, Narraguinnep, Navajo, Toten, and Vallecito. These elevated levels may be occurring due to emissions from northern New Mexicos coal fired power pl ants. In the upper reaches of the Animas River, a relatively extensive mine remediation project has been ongoing since the early 1990s, involving the plugging of mine tunnels and the relocation of mine waste. The Animas River Stakeholders Group is comprised of mining interests, local citizens, and government interests are helping to direct and oversee the activities. Lower in the Animas drainage, the long-proposed Animas/La Plata water diversion and storage project (A-LP) southwest of Durango has been constructed. Pumping of water into the 120,000 acre-foot Lake Nighthorse is expected to begin in the spring of 2011 and may take up to three years to fill, depending on La Plata River flows. Authorized by Congress in 1968, A-LP has been through various delays, including cost overruns, which are being negotiated by the federal Bureau of Reclamation and the state of Colorado. The A-LP settles Native American water-right claims and provides water for household and industrial uses to three tribes and four non-tribal entities: the Southern Ute Indian Tribe, the Ute Mountain Ute Indian Tribe, the Navajo Nation in New Mexico, the state of Colorado, the Colorado Water Resources and Power Development Authority, the San Juan Water Commission, and the La Plata Conservancy District.
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When the A-LP facility is open to the public, the lake is expected to draw 163,000 visitors per year, who will spend an estimated $8 million per year on food, lodging, gas, and other supplies, according to a recent feasibility report by RPI Consulting. By 2025, the report estimates, Lake Nighthorse could bring 230 jobs and $10.8 million per year in revenue to the area. Some activities at the lake could include close-to-town camping, swimming, boating, trails, and riding options. The National Park Service is in the process of developing a recreation plan for Lake Nighthorse. They have made public participation in the process available through open houses, public forums, design workshops, and a website where people can post their comments and view others' input. A concern of many residents is the likelihood of motorized sports on the lake. People who prefer a more tranquil, natural setting are averse to the idea of speedboats and ATVs at the lake. In an effort to resolve this issue, the National Park Service has been addressing individual components of the motorized complaints, which include noise, pollution, and wakes. Some of the options suggested are designing separate areas for motorized sports, restricting engine decibels, banning fueling stations, and inspecting boats for invasive mussels. It appears likely that a boat ramp will be constructed at Lake Nighthorse, as the State of Colorado has provided a $3 million grant for a boat ramp with the contingency that gas-powered boats be allowed on the lake within three years of completion. The original A-LP bill included $20 million for the recreation component, but that was removed in 2001. Some funding possibilities include Great Outdoors Colorado grants, federal assistance, concessionaires, a recreation district, or some kind of public/private partnership. The reservoirs opening to recreation is subject to Bureau of Reclamation approval and a qualified, non-federal entity to manage it. A water rights issue that has emerged in the region involves legal challenges by property owners who sue to protect their water rights from natural gas drilling. Two local ranching families took the State Engineers Office to court for not protecting their water rights from gas wells and won in the Colorado Supreme Court in 2009. The gas industry was concerned that all gas wells in the state would need to be permitted, and the state engineers office drew maps showing where gas wells interact with surface water. The reasoning is that water used in the drilling process does not need to be replaced for gas wells outside these zones, because the water is assumed to be so deep underground that it will have no effect on surface water. Several lawsuits are active at the writing of this report. Another facet of water quality is stormwater discharge and regulation under the EPAs National Pollutant Discharge Elimination System (NPDES). The purpose of an NPDES permit is to maintain water quality by controlling the discharge of pollutants into the waters of the state. The Colorado Department of Public Health and Environment is responsible for the implementation and enforcement of these regulations. Wetlands Wetlands are a critical natural resource, and as such, have come under federal protection. Wetlands can vary greatly in appearance. They include riparian wetlands that are dominated by cottonwoods and willows that are adjacent to rivers and streams and montane wetlands such as beaver ponds, wet meadows, and other boggy areas. There are several types of wetlands in the region depending on the elevation, topography, and water source. Wetlands provide many important ecological functions, including water quality improvement, stream bank stabilization, fish and wildlife habitat, and aquatic food chain support. Wetlands also provide several functions important to communities, including flood attenuation and storm water detention, groundwater recharge and discharge, and recreational opportunities. Every practical effort should be made to avoid, minimize or mitigate for impacts to this resource.
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Livable Wages
What level of income is necessary to support a given size and type of household? A livable wage addresses the essential financial needs for basic living tools such as shelter, healthcare, childcare, and nutrition. When one earns less than a livable wage, he or she is forced to make undesirable choices such as working two or more jobs, working longer hours, making longer commutes, sharing a residence, or giving up basic items such as a telephone or insurance. A healthy community has a diverse and sustainable economy that pays livable wages and offers meaningful work. The Region 9 Economic Development District of Southwest Colorado (Region 9 EDD) has estimated livable wages since 1999, using a consistent method in order to compare costs and wages each year. Using that same method, we have prepared a basic expenditures budget, using costs drawn from the Bureau of Labor Statistics Consumer Expenditures - for the nation as a whole - for 2009 (the latest available) and adjusted those costs for inflation, using the Denver/Boulder Consumer Price Index for 2010. We then added expenditures for rent and childcare that are specific to our towns and counties. A mileage allowance was added for the communities of Silverton, Rico, and Dove Creek to recognize the extra distance that people in those towns must travel for many basic goods and services. We did not include the two Tribes in our region as many of their costs are subsidized. In the report (http://www.scan.org/Livable%20Wages%2010.pdf) the livable wage per hour for each community is summarized, as well as how many jobs an individual would need (at minimum wage) to sustain just the basic needs of a household. The detailed results for each community can be seen in the County Profiles. Within our region, Silverton (San Juan County) and Pagosa Springs (Archuleta County) are the least expensive places for a family to live, while Rico (Dolores County) and Durango (La Plata County) are the most expensive places to live.
Livable Hourly Wages by Area Southwest Colorado Archuleta - Pagosa Springs Dolores - Dove Creek Dolores - Rico La Plata - Bayfield La Plata - Durango La Plata - Ignacio Montezuma - Cortez Montezuma - Dolores Montezuma - Mancos San Juan - Silverton 2007 *Family of 4 renting 3 bdrm $ 32.58 $ 32.54 $ 38.92 $ 34.31 $ 33.60 $ 33.16 $ 32.01 $ 33.02 $ 34.37 $ 33.34 2010 *Family of 4 renting 3 bdrm $ 27.66 $ 33.10 $ 35.51 $ 31.37 $ 35.12 $ 33.53 $ 29.48 $ 30.63 $ 30.34 $ 27.64 % Change 2007 - 2010 -15% 2% -9% -9% 5% 1% -8% -7% -12% -17%
Since 2007 the cost of living has actually gone down in many of the communities in SW Colorado. This is due primarily to decreasing rents and declines in prices of some consumer goods and services.
* assumes 2 children requiring full time day care
To further refine our understanding of the local economy Fort Lewis College and Region 9 EDD have combined resources to construct and maintain a consumer price index for Southwest Colorado the Southwest Colorado Price Index (SCPI). In general, a consumer price index measures the rate at which the prices of consumer goods and services are changing over time. It is a key statistic for purposes of economic and social policy-making, and has substantial and wideranging implications for governments, businesses and workers and households. The SCPI, as well as other key economic data, is available through the Four Corners Economic Quarterly at http://soba.fortlewis.edu/FCEQ/dpi.html.
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Since December 2008 through June of 2010, the SCPI indicates the cost of living in the region has dropped 3.6%. Grocery costs have dropped 7%, monthly mortgage costs on a median priced home have dropped 0.4%, utility expenses are down 28%, and transportation expenses have dropped 18%. However, health care costs have increased 6%, and miscellaneous goods & services have increased 4%. Nationally, inflation was about 5% from 2007 to 2010 according to the Bureau of Labor Statistics.
Health Care
Health care is just as important and vital to a communitys infrastructure as roadways, water , and telecommunications. The impact of increasing health insurance costs for small businesses, as well as continued high levels of uninsured residents, affects all of Southwest Colorado. Many in this region work in small firms or are self-employed. One out of every five working-age adults under the age of 65 is uninsured in Colorado. The cost of health insurance has risen faster in Colorado than the U.S. average, which is why an increasing number of small employers are either dropping coverage altogether or passing the cost increase on to their employees. These growing costs make it challenging if not impossible for local businesses to purchase health insurance plans, thus, they cannot offer health care incentives to attract and retain employees. In the 10-year period between 1996 and 2006, employers cost to provide individual health insurance coverage to their employees in Colorado rose by 112%, while employees cost rose by 105%. For family coverage, the increase was 161% for employers and 87% for employees. Such increases are unsustainable for obvious reasons. Also, a number of specific health care challenges exist in the Southwest region: The costs to deliver care to southwest Colorado are higher than in urban areas. The population is increasing and aging in southwest Colorado, which creates new demands on the health care network. The high cost of living is a prohibiting factor in attracting new health care providers. The number of providers taking Medicaid and Medicare is limited due to inadequate reimbursements in relation to costs. The percentage of the population who are uninsured in each county in Region 9 is higher than the state percentage.
Estimated Percentage of Uninsured 2007

Estimated State Percentage (2007) 18% Archuleta 24% Dolores 26% La Plata Montezuma 25% 24% San Juan 30%
Source: Source: U.S. Census Bureau, Small Area Health Insurance Estimates (SAHIE)
http://www.census.gov/did/www/sahie/data/2007/tables.html
With national solutions and options through the 2010 Patient Protection and Affordable Care Act (the Act) being fully implemented in 2014, it is more important than ever that local solutions be implemented, and that local health care organizations position themselves for national reform. While some controversy continues to exist around the Act, if fully funded and implemented, small businesses will be able to shop for competitive and lower employee insurance packages through an insurance exchange. The law requires states to establish the exchanges by 2014 (http://www.colorado.gov/healthreform) .
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Alternative solutions such as worksite-wellness programs should also be explored by businesses. These programs can reduce employers costs and the well-being and productivity of employees. Fortunately, there is evidence in the region that communities are working together and trying different approaches. For example: Through collaborative efforts in Archuleta County between the Upper San Juan Health Service District, the Dr. Mary Fisher Medical Foundation, and voters who passed a special mill bond levy, Pagosa Springs Medical Center came to fruition, opening its doors in 2008. The new facility has been a significant factor in attracting providers to the area. Before the facility opened, there were two in the community; now there are 18 physicians working at PSMC, with more being actively recruited. Southwest Mental Health started doing business as Axis Health System in April 2010, as a reflection of its changing role from exclusively mental health and substance use services, to an integrated, regional health system merging traditional behavioral health services with primary care, wellness and health lifestyle services. Since its merger with San Juan Basin Technical College in 2009, Southwest Colorado Community College increased its offerings in health-care-related certifications, which could help fill the regional health care workforce shortage. Since 2009, at least 8 new healthrelated certifications were added, including Radiologic Technology, Nurse Aide, Medical Assisting, Phlebotomy and various certification levels of EMS. In La Plata County, the Health Care Alliance of La Plata County is bringing together highlevel decision-makers from key health-related organizations to catalyze and share resources and guide projects through implementation. Current efforts include the creation of a Health Information Exchange (to increase electronic communication of health records); increasing the number or providers who accept Medicaid; and implementing a fully integrated health care system. A community-based group, the Citizens Health Advisory Council, is working to implement in partnership with the Alliance projects that were identified in the 2010 La Plata County Health Care Capacity Projects Strategic Plan San Juan Basin Health Department continues to offer a wide range of regional services including child and family health, reproductive health services, home care, skilled home health, long-term-care options, and a caregiver support program.
There are gaps in health-related services in the region to take note of and track in the future, including: Access to adult dental care for the uninsured and underinsured is limited, as few dentists accept Medicaid or other public coverage. Southwest Smilemakers, a program of the San Juan Basin Health Department, and another childrens clinic in Durango that opened in 2009, Smiles 4 Kids, are helping to serve lower-income children. Yet Smilemakers can only treat adult Medicaid patients who have dental emergencies. Lack of regular dental hygiene only leads to more serious issues later such as periodontal disease and tooth infections. Community Connections, Inc. (CCI), a regional organization that works with children and adults with disabilities, served 246 people including 147 children in 2010. As of March 2011, Community Connections had a waiting list of over 70 adults and families of children with disabilities. Since 2009, CCI received over $500,000 in cuts, including a 50% cut to the Family Support program which is intended to prevent out-of-home placement for children with disabilities who are living with their families. Many of the adults served by CCI require support 24 hours/day and cuts to their programs impact wages for staff who have already been traditionally underpaid. Adults in the Supported Living Services
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Program have seen drastic reductions in the services available to support them living independently or in their familys home. Serving the regions seniors with aging in place care, which allows seniors to remain in their homes without having to go to a nursing home. Due to the rural isolation of some older residents, this can be a challenging issue, but solutions lie in increasing resources for home care, skilled home health, outreach nurses, and transportation. Model programs that bring skilled nursing services to seniors at home are also operating in the region. These programs should be sustained and expanded.
There is some level of health services being offered in most communities in the region. For more details regarding specific services see the county profiles. Sources: Health Insurance Affordability in Rural Colorado http://www.coruralhealth.org/resources/documents/insurance2009.pdf Pagosa Springs Medical Center http://www.pagosamountainhospital.org/ United States Census Data http://www.census.gov/popest/eval-estimates/evalest2010.html Axis Health System http://www.axishealthsystem.org/ Community Connections, Inc. (970) 385-3458 Mercy Home Health & Hospice (970) 382-2000 San Juan Basin Health Department http://sjbhd.org/ Southwest Colorado Community College (970) 247-2929
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Population Trends
Census 2000 9,898 1,844 Census 2010 12,084 2,064
Archuleta Dolores La Plata Montezuma San Juan Region 9 Colorado
The numbers show that our region is growing, particularly Archuleta and La Plata Counties. From 1990 to 2000, our region's population grew 37 percent. Some people move here for economic reasons, such as the availability of jobs. Others cite quality of life issues, such as clean air and water, and outdoor recreation opportunities.
43,941 51,334 23,830 25,535 558 699 80,071 91,716 4,339,019 5,029,196
From 2000 to 2010 the growth rate slowed down in most counties, except San Juan County, which welcomed slow growth rather than the declines seen in the prior decades.
Archuleta Dolores La Plata Montezuma San Juan Region 9
Average Annual % Change 1970-1980 1980-1990 1990-2000 2000-2010 3.4% 4.6% 8.5% 2.2% 0.1% -0.9% 2.3% 1.3% 4.2% 1.9% 3.6% 1.7% 2.7% 1.4% 2.7% 0.8% 0.0% -1.1% -2.5% 2.5% 3.3% 1.8% 3.7% 1.5%
Source: Colorado State Demography Office 3-2011
Region 9 Population Avg. Ann. % Change
Population Forecasts 2010 2015 2020 2025 2030 91,716 104,998 118,743 132,488 145,802 2.7% 2.5% 2.2% 1.9%
Growth isnt going to stop in the coming decades, although predictions are that it will eventually slow down.
Source: Colorado State Demography Office 3-2011
As a region we must find ways to plan for and manage growth. The challenge is to align economic growth and development in ways that will enhance the quality of our lives and protect our natural environment and rural lifestyles.
Telecommunications
Background: Need for Broadband Infrastructure Investment Broadband is a foundation for economic growth, job creation, global competitiveness and is changing how we educate children, deliver health care manage energy, and access, organize and disseminate knowledge. Southwest Colorado communities exist at the endpoint of the nations telecommunications network and are not fully integrated into the larger digital world. Not having access to broadband applications limits institutions, individuals and businesses from participating st fully in 21 century technology. Government services and democratic participation are also shifting to digital platforms. To date, the Digital Divide has not been bridged between communities within the region, or between southwest Colorado and the urban areas in Colorado. The socio-economic status of the region, low population densities, low median household incomes, geographic distance from interregional Internet hubs (in Denver and Albuquerque), and extraction-based economies have not been attractive to service providers. Cell phone coverage, broadband Internet connectivity, and the variety of other services offered by telephone, telecommunications, and cable television companies are all important, but the methods through which these services are reaching end users are changing in ways that demand new
wireless and wired technologies. Further investment from both the private and governmental sectors is necessary if these new technologies are to be implemented. Regional Telecommunication Goals Region 9 has made the development of the regions telecommunications infrastructure a priority for almost two decades. Citizens, local governments, businesses, and regional community development groups have spent many collective hours discussing the problems and potential solutions of the regions telecommunication services and infrastructure needs. For the next several years, improvements will be made to the regional telecommunications infrastructure through two public investment projects. The Southwest Colorado Access Network (SCAN), part of which is now in place in Cortez and Durango, and the statewide Educational Access Gateway Learning Environment Network (EAGLE-Net) will invest in middle and last mile telecommunications infrastructure to link Region 9s incorporated cities and towns to regional hubs (in Durango and Cortez) and to the national telecommunications backbone via local and regional network structures. This regions telecommunications goals are: To construct and leverage infrastructure to provide redundant, high bandwidth telecommunications capacity and connectivity to public agencies, private enterprise, and the general public of southwest Colorado and the Four Corners Area To encourage cooperation between public and private organizations to establish a regional telecommunications network that minimizes market inefficiencies To promote universal access within the region, and for the regions communities to have the same level of services as urban areas at comparable costs To establish local, regional, and inter-regional partnerships that work for the common good of the region by acknowledging that providing services to rural communities will benefit larger communities To build a service-oriented regional telecommunications network that is compatible with the Colorado State Network ((CSN) and EAGLE-Net, as well as private telecommunication providers. To increase competition among private telecommunication services providers in the region by leveling the playing field for access to infrastructure To give communities control over the destiny of telecommunications services in their areas To invest in fiber and wireless infrastructure solutions that can be efficiently upgraded to newer technologies, including Ethernet To create multi-service networks that allow governments, community institutions, businesses and residences to choose from among multiple service providers for different services and solutions To provide the private sector with adequate telecommunications capacity and services to create and attract new high paying jobs To provide the public with access to Distance Learning and video conferencing through the schools and library systems To improve health care delivery by providing Tele-Medicine and access to specialists available in the larger cities. Regional Infrastructure Investment: Beanpole I The Beanpole I project of the Southwest Telecommunications Consortium produced mixed results that left the rural communities in southwest Colorado without the means to sustain participation in the State Multi-Use Network (MNT), which is now the Colorado State Network (CSN). The regions rural communities could not support investment in telecommunications infrastructure, particularly after tax revenues and state and federal funding decreased with the economic downturn in 2008. After the Beanpole I funds were expended, the communities of Durango, Cortez, Bayfield and Ignacio were left with partially completed networks, including a limited amount of infrastructure owned by the governments. With the exception of Cortez and Durango, investments in telecommunications infrastructure have been carried out by private telecommunications companies. Those investments have largely been limited to upgrading existing electronics and
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equipment, rather than extending new services into rural communities. Contrary to the plan of Beanpole I, the smaller communities were not able to connect to Cortez and Durango after the grant funds were expended. Interim Local Efforts to Improve Telecommunications Infrastructure The regions rural communities have largely discontinued use of the CSN, where not mandated by executive order, because of concerns over high costs. Local and higher education institutions in southwest Colorado do not anticipate participating in the CSN moving forward, despite a new fiveyear contract with Qwest for services. Local and regional private service providers are providing fiber and wireless solutions to rural communities because of community dissatisfaction with the performance and costs of national service providers. These communities also lack the budget and level of use to justify hiring full-time IT support staff and purchasing certain software and applications. There is momentum among the regions smaller communities to share IT support staff and collectively purchase software and applications to reduce costs. The Town of Silverton is awaiting judgment from the Public Utilities Commission concerning Qwests failure to bring a fiber solution to the town as part of the original MNT contract. More information on the individual communities can be viewed in the county plans. The cities of Cortez and Durango are currently constructing fiber and wireless infrastructure to implement private, intra-community networks. Cortez will operate a multi-service, open network that will bring fiber to homes and businesses and provide transport services for private service providers to reach locations throughout the city. Durango does not plan to operate a comprehensive, citywide network. Instead, Durango will invest in and provide dark fiber to private service providers, who will offer transport and end-user services on the citys physical infrastructure. Cortez and Durango are supplementing their funding with SCAN project funding to move forward with outside plant construction and purchase necessary electronics. Regional Infrastructure Investment: Southwest Colorado Access Network The Southwest Colorado Council of Governments (SWCCOG) was officially formed in December 2009, and intergovernmental agreements are currently in effect between fourteen governmental jurisdictions across the region. In response to the inability of the Beanpole I project to bring telecommunications infrastructure investment to the regions rural communities, the SWCCOG contracted Manweiler Telecomm Consulting (MTC) to assess the regions telecommunications infrastructure. MTC completed the Telecommunications Infrastructure Assessment Report January 26, 2010 and presented the report to the SWCCOG Board. The SWCCOG used the Manweiler Report to apply to the Colorado Department of Local Affairs (DoLA) for Energy and Mineral Impact Assistance Funds to invest in regional telecommunications infrastructure. The SWCCOG was awarded a $3M grant, with $1M in local match, to expand a regional telecommunications network, the Southwest Colorado Access Network (SCAN). The project must be completed by December 31, 2013. In July 2010, the SWCCOG contracted with Region 9 to provide grant administration services, and in September 2010, the SWCCOG contracted Mid-State Consultants, Inc., as Project Manager. The vision for the Southwest Colorado Access Network (SCAN) is to build a state-of-the-art private telecommunications network that is supported by publicly owned or leased infrastructure. This network will provide secure connections between community public offices, including government, education, law enforcement, search and rescue, and medical facilities. SCAN will offer high speed transmission, greater bandwidth and the ability to deliver data transfer, telephony and internet services in an efficient and cost-effective manner. The SCAN project will also enable these communities to purchase telecommunications services in an efficient and cost-effective manner. By providing interconnect on a local and regional basis, the SCAN project will allow governments to aggregate demand for services and share support for those services. In addition, SCAN will enable private Internet Service Providers (ISPs) to lease bandwidth in order to deliver similar services to currently under-served residential and business customers throughout the region.
The specific objectives of the SCAN project are: To offer SWCCOG members and interested community anchor institutions access to greater and more reliable bandwidth than is currently available at or below current monthly recurring costs. To improve government (and other community anchor institution) efficiencies by improving staff efficiencies, expanding potential public access to regional online and virtual services, and offering an environment for potential application and service sharing. To support economic development by investing in telecommunications infrastructure throughout the region, the excess capacity of which can be used by private sector service providers to improve and extend their service offering reach making more competitive and better telecommunications services available.
The SWCCOG is collaborating with the regions public K-12 schools, emergency services, fire districts, libraries, higher education institutions, and other community anchor institutions such as local government agencies (city and county offices) to aggregate demand in the form of a purchasing consortium. In the fall of 2010, SWCCOG consultants conducted an online survey of local, tax supported agencies in southwest Colorado. The objective of this study was to identify and quantify current and future telecommunications usage and demand of the identified anchor institutions. The study identified 259 agencies as potential consortium members. Of these, 185 agencies responded to the survey, including 59 government agencies, 46 public safety agencies, 55 schools, 15 health facilities and 10 libraries. The SWCCOG hopes to partner with the statewide EAGLE-Net project to invest concurrently in last and middle telecommunications infrastructure. The EAGLE-Net Alliance is a not-for-profit organization formed through inter-governmental agreements with network participants throughout the state. EAGLE-Net received a $100M grant from the National Telecommunications and Information Administration (NTIA), with $40M in private match. The purpose of the EAGLE-Net project is to bring a broadband connection into every school and library district in the state. EAGLE-Net will identify one community aggregation point in each school and library district to which their services will be delivered, in line with their charge to provide middle mile services. The school and library districts, and their communities, will bear the costs of getting those services to the other schools and libraries in their districts. There is great potential for collaboration between the SCAN and EAGLE-Net projects, but there also is uncertainty about the level of the EAGLE-Net investment in southwest Colorado. Telecommunications will remain a high priority economic development goal in this region until all communities have excellent services at affordable prices.
Transportation
In southwest Colorado, highways are generally recognized as the most significant element of the regional transportation system. However, transit, aviation and other modes of transportation are playing a more important role in the planning and implementation of an integrated transportation system. Because of the impact that transportation decisions have on development decisions (and vice versa), questions about the kind of transportation projects planned, and where they are constructed, have become intertwined with growing concerns about land use, development patterns, traffic congestion, expensive and time consuming commutes, the level of exhaust emissions from vehicles, and, most recently, the effects all of this may be having on global climate change. Regional transportation efforts are coordinated by the Southwest Regional Planning Commission (SWRPC), formed by intergovernmental agreement and which includes appointed representatives from all seventeen governmental jurisdictions, including the Ute Mountain Ute and Southern Ute Indian Tribes, the counties of Archuleta, Dolores, La Plata, Montezuma, and San Juan, and the
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municipalities within those counties. This geographic area comprises the Southwest Transportation Planning Region (SWTPR) and the SWRPC provides input into transportation issues, including the planning and implementation of the southwest Colorado long-range transportation plan. The current long-range plan, the Southwest Transportation Planning Region 2035 Regional Transportation Plan, was adopted in January of 2008. The Southwest TPR receives administrative support from the Region 9 Economic Development District. During the planning process of the Southwest Transportation Planning Region 2035 Regional Transportation Plan, key issues and emerging trends were identified that influenced the direction of the plan. They were the basis of discussion at public meetings and with the SWRPC. Some of the primary issues are as follows: Safety issues, including vehicle/wildlife crashes throughout the Transportation Planning Region Congestion in regional corridors especially on US 160 and US 550 in and around Durango, due to increased population and tourism Deterioration of highway infrastructure throughout the SWTPR due to increasing traffic volumes, including truck traffic Coal Bed Methane (CBM) development in La Plata and Archuleta Counties has led to increased truck traffic and the potential for safety conflicts. [Since 2008 there has been a decrease in development and all wells in La Plata and most wells in Archuleta county have telemetry resulting in less truck traffic -- La Plata Energy Council personal communication] Public transportation and bicycle and pedestrian transportation given more consideration as economically- and environmentally-viable alternatives.
Transportation System Inventory Highways - There are no interstate highways within the SWTPR. The Colorado Department of Transportation (CDOT) rates the condition of highway surfaces with its Pavement Management System, providing a range of years of Remaining Service Life (RSL) of the pavement for each highway segment. The RSL calculation is based on roughness, cracking, patching, rutting and other indicators of smoothness and structure. A good surface condition corresponds to a remaining surface life of 11 years or more. A fair surface condition corresponds to a remaining surface life of 6 to 10 years, while a poor evaluation represents a remaining surface life of less than 6 years. The surface condition of the 509-mile regional state highway system has generally improved since the previous CEDS report, with 35 percent of the system rated good, 18 percent fair (compared to 25 percent good and 16 percent fair previously) and 47 percent poor (compared to 60 percent previously). RSL 0 specifies sections of state highway that have deteriorated to the point that there are zero years of remaining service life. CDOT does not normally use Surface Treatment funds to resurface these roads, because they require major reconstruction, with replacement of the road base. The Colorado Transportation Commissions (which directs policy for the state highway system) goal for surface treatment is 60 percent good and fair. Pavement condition of state highways is currently 53 percent good/fair in Region 9 and 48 percent statewide. To achieve a 60 percent good/fair rating statewide by 2030, a budget of $690 million per year would be needed for surface treatment. From fiscal year 2012 through 2015, the state will spend approximately $200 million per year on surface treatment, and at this rate, the percentage of good and fair roads is projected to be approximately 22 percent by 2030.
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Scenic Byways - The Colorado Scenic and Historic Byways program is a statewide partnership for the purpose of providing recreational, educational, and economic benefits to Coloradans and visitors. This system of touring routes in Colorado offers travelers identification of key points of interest and services while providing for the protection of significant resources. Scenic and Historic Byways are nominated by local partnership groups and designated by the Colorado Scenic and Historic Byways Commission for their exceptional scenic, historic, cultural, recreational, and natural features. There are two scenic and historic byways within Region 9 the San Juan Skyway and the Trail of the Ancients. The picturesque San Juan Skyway makes a 236-mile loop from Cortez through Durango, Silverton, Ouray, Ridgway, Telluride, Rico, and Dolores. Some of the attractions along the route are Mesa Verde National Park, 14,000-foot-high mountains, including Mt. Wilson, El Diente, Wilson Peak, and Mt. Sneffels, music festivals, hot springs, skiing, hiking, and jeeping. The San Juan Skyway was designated by the U.S. Secretary of Transportation as an All-American Road, the highest level of designation, in 1996. The Trail of the Ancients is a 114-mile byway located within Montezuma County, Colorado, northeast Arizona, and southeast Utah. The route connects some of the nations richest archaeological sites, including Mesa Verde National Park, Hovenweep National Monument, and the Ute Mountain Ute Indian Reservation. The byway also accesses the Anasazi Heritage Center in Dolores and the Four Corners Monument. Transit - The Safe, Accountable, Flexible, and Efficient Transportation Equity Act A Legacy for Users (SAFETEA) was signed into law in 2005. The bill included a 46% increase in transit funding over the previous bill. The legislation also increased the share of the total federal transit program that is invested in rural areas. Even so, transit services are recognized by the public as a large gap in the regions transportation infrastructure. The growing population is findi ng affordable homes predominately in the rural areas, and therefore residents are commuting longer distances between these communities for work. There are currently no designated park-n-ride facilities (although a park-n-ride is planned for U.S. Highway 160 at County Roads 222 and 223 in La Plata County),
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and two of the five counties offer no public transit. Transit providers generally serve special populations, i.e. elderly or disabled persons, within limited service areas, though there is new service between Ignacio, Bayfield and Durango in La Plata County. Transit is now part of the 2035 Transportation Plan, rather than being produced as a separate document. The Southwest Region Transit and Human Services Transportation Coordination Plan was adopted in January of 2008. The report serves as the planning document that meets state and federal requirements and guidelines for funding eligibility for eligible transit providers. One of the requirements of the plan was to analyze the mobility gap providing equal mobility to persons in households without vehicles as those with a vehicle. The study also looked at transit ridership for specific social service programs, demand for service by the elderly, persons with disabilities, the general public, and resort need. The analysis showed that nearly 96 percent of the transit need is not being met, though in the economic climate transportation providers are doing everything they can to provide the highest levels of service possible. However, given the constraints of funding and other factors, it is difficult to meet all the needs that could possibly exist in any area. The Southwest Region Transit and Human Services Transportation Coordination Plan process included several opportunities for public input. The following list is a summary of input: Need better transit connections within communities, weekend service and more regional transportation services for the general public and for medical services. Lack of intercity bus service in the region. The need for job access to Mercy Medical Center (in La Plata County) during the weekends. More reliable and frequent public transportation would change behavior about using public transportation. Public transportation opportunities should be looked at to support the growing tourism and second-home market throughout the southwest region. Alternative modes such as pedestrian, bicycle and transit were given a high priority for addressing transportation demand. Lack of commuter choices and coordination of car/vanpool programs. Need for greater coordination between transit agencies, such as a common centralized dispatch system. Lack of regional connectivity from Alamosa to Pagosa Springs; Pagosa Springs to Durango; Cortez to Durango to Pagosa Springs; Cortez to Farmington and Ignacio to Bayfield. Need for a Regional Transit Authority (RTA) in La Plata County area with collaborative efforts from communities and the county. Many human service agencies and employment-related agencies expressed a transportation need for their clients.
Several transit providers expressed capital needs for buses, bus shelters, and garages. The City of Durango needed a transit center, which was constructed in 2009. Details regarding the transit center are provided in the individual County profiles. Bicycle and Pedestrian Facilities - Multi-model solutions to transportation are important to residents in the region. According to the 2000 U.S. Census, 4.1% of Durango residents over the age of 16 ride or bicycle to work, over ten times the national average. Many of the communities within the SWTPR are developing trail corridors for pedestrians and bicyclists that will link open spaces and provide safe access to schools, shopping, and recreation areas. Unfortunately, more current data is not yet available. Intercity Bus Service - Intercity bus service in the region is provided by Greyhound/TNM&O. The bus, which originates in Albuquerque, stops at the Durango Transit Center twice per day and also makes stops in Cortez, Telluride, Grand Junction, and Denver.
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Freight - Noticeably absent from the SWTPR are freight and passenger railroads, though the Durango & Silverton Narrow Gauge Railroad (D&SNGRR) is a nationally noted historic asset to the SWTPR. This 45-mile scenic railroad runs between Durango (La Plata County) and Silverton (San Juan County), roughly paralleling U.S. 550. The D&SNGRR is not considered part of rail freight service for the SWTPR. There are currently no freight distribution centers in the region. Freight movement is limited by mountainous terrain and seasonal road hazards that create safety hazards. The cost of importing materials by truck is very high, which limits export of locally-manufactured products. Freight distribution by air is also limited. Airports - Aviation facilities within the region include five airports. The airports contribute to mobility in the region and support the local economy. Of the five airports, two provide commercial service in and out of the region, while the other three are classified as general aviation facilities. Commercial service is available at the Durango-La Plata County Airport and the Cortez Municipal Airport. There is no public transit service provided to either airport, although private service is available. Southwest Transportation Planning Region 2012-2017 Statewide Transportation Improvement Program (STIP) Federal and state transportation funds for southwest Colorado are administered through the Colorado Department of Transportations (CDOT) Region 5, headquartered in Durango. Region 5 is responsible for state highways in 141/2 counties in the south-central and southwest portions of the state. Funding for projects within CDOT programs, such as maintenance, bridge replacements, highway resurfacing, and signing and striping, are determined by performance measures. For example, the lowest-rated bridges are in most need of being replaced, and these bridges will generally be replaced in order of ranking in the region. However, projects funded by a discretionary pot of money, called Regional Priority Program funding, are programmed in collaboration between CDOT and the regional planning commissions (RPCs) within CDOT Region 5, including the SWRPC. The six-year plan, called the Statewide Transportation Improvement Program (STIP), is updated every four years. The FY 2012 through 2017 STIP for the Southwest Transportation Planning Region (SWTPR) is shown in the following table. Projects must be included in the long-range plan, the Southwest Transportation Planning Region 2035 Regional Transportation Plan, before being programmed in the STIP. Modifications to the STIP may be requested by the SWRPC to support changes in priorities as a result of emerging or unforeseen issues. Amendment requests are discussed with CDOT and approved by the SWRPC for amendment of the long-range plan, prior to new or substantially-changed projects being added to the STIP.
SWTPR 2012-2017 Statewide Transportation Improvement Program (STIP) DESCRIPTION PROJECT TYPE REGIONAL PRIORITY PROGRAM POOL (includes FASTER) th 160 Intersection improvements US 160 at 8 Street in Pagosa Springs 160 US 160 at Vista Blvd./Meadows Drive in Archuleta County Intersection improvements 172 SH 172 at La Plata County Roads (CR) 311 and 513 Intersection improvements 145 SH 145 at Montezuma CR P Intersection improvements 491 US 491 at Montezuma CR 25 (Lebanon Rd.) Intersection improvements th 550 Intersection improvements US 550 at 9 Street in Durango 491 US 491 at Dolores CR J Intersection improvements 491 US 491 at Dolores CR M Intersection improvements 160 Safety improvements west of Pagosa Springs near Hurt Drive Highway safety improvements 550 Intersection improvements and pedestrian bridge at Sunnyside S. of Durango Intersection and pedestrian safety improvements 141 Reconstruct a segment of highway with 0 years of remaining service life Reconstruction 160 Passing lane between Durango and Bayfield Design 160 ROW acquisition for 4-laning between Durango and Bayfield ROW acquisition 160/491 Safety improvements/ passing lane south of Cortez Design ROUTE COST $2,770,000 $2,130,000 $1,750,000 $520,000 $440,000 $1,120,000 $520,000 $1,690,000 $6,365,000 $9,900,000 $1,120,000 $300,000 $2,540,000 $300,000
State and local transportation budgets have not kept up with the needs of aging roads and bridges, as well as the need for public transit, and bicycle and pedestrian paths. Legislation passed since
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the previous CEDS report has provided much-needed transportation funding to southwest Colorado. Colorado FASTER - Legislation passed in early 2009, known as FASTER (Funding Advancement for Surface Transportation and Economic Recovery), has provided revenue for transportation projects in the region that would not otherwise have been constructed. The purpose of the bill is to provide a long-term revenue source to repair deficient bridges and deteriorating roads around the state. FASTER is funded by an average increase of $41 per vehicle registration, tolling on sections of highway in some parts of the state, and a $2.00 per day on car rentals and is expected to generate approximately $252 million annually for bridge replacement, highway safety, and transit projects. Specific FASTER highway safety projects within Region 9 are shown in the individual county profiles. FASTER funding is also available for regional and statewide transit projects in the amounts of $5 million and $10 million per year, respectively. CDOT Region 5 is allocated approximately $521,000 per year for regional transit projects, and they collaborate with the three regional planning commissions to develop three-year plans. ARRA - Under the American Recovery and Reinvestment Act (ARRA) of 2009, CDOT Region 5 received $31 million for highway projects and $1.078 million for transportation enhancement projects, such as construction of multi-use trails. All of the ARRA projects within Region 9 were located in La Plata County. Specific ARRA projects are shown in the La Plata County profile.. The San Juan National Forest averages 1.7 million visitor days per year, which significantly contributes to the tourism industry in the Four Corners. The 1,800-mile trail system within forest lands includes major segments of the Continental Divide and the Colorado Trail. Some of the projects constructed in public lands using ARRA funding include: repair of 169 miles of backcountry trails and reconstruction of 17 bridges; installation of 38 new toilets at campgrounds and trailheads; controlling the spread of Tamarisk and other invasive species at Canyons of the Ancients National Monument and along the Dolores River; employment of 48 veterans for hand-thinning and brushpiling; energy upgrades at the Anasazi Heritage Center; remediation of the historic Eveline Mine; restoration of old ranger stations, fire lookout stations, and archaeological sites; and completion of $4.9 million deferred maintenance. Safe Routes to School Program - In 1969, about half of all students walked or bicycled to school. By 2001, however, fewer than 15 percent of all school trips were made by walking or bicycling, with a corresponding increase in the number of children arriving at school in private automobiles. Some communities throughout the United States have documented that parents driving their children to schools can constitute 20 to 30 percent of the morning rush hour traffic. This decline in walking and bicycling has had an adverse effect on traffic congestion and air quality around schools, as well as pedestrian and bicycle safety. In addition, a growing body of evidence has shown that children who lead sedentary lifestyles are at risk for a variety of health problems such as obesity, diabetes, and cardiovascular disease (http://www.rwjf.org/files/research/20090320srtsfinalpolicy.pdf). Safety issues are a big concern for parents, who consistently cite traffic danger as a reason why their children are unable to bicycle or walk to school. For these reasons, the federal Safe Routes to School Program was established in 2006 to assist communities in enabling and encouraging children to safely walk and bike to school. Local agencies work with the Colorado Department of Transportation to apply for funding. Avalanche Control - Snow avalanches can result in economic impacts on recreation, tourism, commerce, and industry, as well as safety hazards for the citizens of southwest Colorado. Since 1950, avalanches have killed more people in Colorado than any other natural hazard, and in the United States, Colorado accounts for one-third of all avalanche deaths (Real Vail 11/23/10). Two high-mountain passes, Coal Bank and Molas, are located in San Juan County along U.S. Highway 550, a major north-south transportation and freight route in the region. In addition, Red Mountain
Pass is situated just north of San Juan County on U.S. Highway 550, and Wolf Creek Pass, a segment of U.S. Highway 160, is located east of Archuleta County (the Wolf Creek Pass Ski Area is renowned as having the most snow of any ski area in Colorado). Each of these mountain passes have avalanche paths that reach the highway, including 100 on Red Mountain Pass (the highest number in Colorado), 61 on Wolf Creek Pass, 11 on Molas Pass, and four on Coal Bank Pass. Avalanche hazard and control result in road closures several times each winter. As these highways are the main (or sole) routes through several towns and communities in the region, road closures can result in several-hour detours to some destinations. For the winter seasons from 2007 through 2010, the Colorado Department of Transportation spent an average of $3,500,000 on avalanche control, 150 hours on ice control, and an average of 6,000 hours on special snow removal (requiring snow-blowers and motor-graders) each winter.
Workforce Development
Workforce development in the Southwest region of Colorado is addressed through a partnership of education, economic development, chambers of commerce, small business development, businesses and the public workforce development system (CO Dept. of Labor & Employment CDLE) operated through the Colorado Workforce Centers located in Cortez (Montezuma County), Durango (La Plata County) and Pagosa Springs (Archuleta County). The formal collaboration of these entities occurs in the context of the Southwest Workforce Region (same boundaries as the Region 9 Economic Development District) Workforce Board. An informal collaboration and information exchange occurs among a variety of partners at the recently formed Workforce Development Network (WDN). The Southwest Colorado Workforce Board (SCWB), made up of greater than 50% private business members, along with economic development entities, education and other workforce system partners, convenes regularly to conduct the regions workforce system business. In 2010, the SCWB developed its own work plan to achieve the goals of the state-wide workforce development strategic plan. Elements of the SCWB work plan include the following: Increase the value and relevance of SCWB meetings Form a smaller, more manageable Board with specific, targeted representation Identify three (3) to five (5) key ongoing activities/tasks that the SCWB wants to accomplish Document what the SCWBs partnering agencies do and how they can help achieve SCWB goals Utilize networking opportunities/methods to reach out to other potential partners who are not formal members of the SCWB. (This element has been met by the subsequent formation of the WDN.)
The purpose of the Workforce Development Network (WDN), which meets following the SCWB meetings, is to extend the efforts and outreach of the Workforce Board to include business and citizens who have an interest in economic development, addressing workforce development needs and perspectives of businesses throughout the region. Recent reports at the WDN sessions have included a Listening to Business survey, STEM Business Scholarship Program, and the launching of the Southwest Connect web portal. Educations role begins with K-12 schools in the nine (9) school districts in the region, all of which are also assisted by the San Juan Board of Cooperative Educational Services (SJBOCES) and its Career and Technical Education (CTE) programs. SJBOCES has taken the lead in organizing the Southwest Colorado CTE Consortium, made up of seven of the nine school districts to date, to further the effectiveness of CTE in the region and student transition to post-secondary education and workforce training opportunities.
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Four adult education entities operate in the region, in Cortez, Durango, Ignacio/Bayfield and Pagosa Springs. They provide basic General Education Development (GED) preparation, as well as several special programs, such as Bridges to Success, which provide adult learners with a focus on financial management, computer/internet functions, professional culture and college connections, all of which gives lower income workers opportunities to increase their workforce competitiveness for living-wage employment. Two of these sites include video conferencing technology and internet-supported instruction that broaden the ability of local workers to access post-secondary academic and vocational training from distant sites. One community college serves the region, that being the Southwest Colorado Community College (SCCC), a branch of Pueblo Community College. Following a recent merger of the community college with the San Juan Basin Area Technical College, its east (La Plata County) and west (Montezuma County) campuses now bring a full range of industry-recognized credentialed vocational training to a much larger percentage of the regions population, in such sectors as health care, trucking, welding, wildfire technology and business applications. An Industry Training Center at the west campus has housed energy-sector training in the recent past and will engage in solarrelated training in 2011. Many workers in the region also attend San Juan College (SJC) in Farmington, NM, to access their vocational and associate degree training through the School of Health Sciences and the School of Energy. Fort Lewis College, located in La Plata County, offers the full range of bachelor level degree programs found at liberal arts colleges. Many of its graduates remain and work in the region, in part as a result of an aggressive internship focus at the college that exposes students to the regions business, government and non-profit sectors. As a sub-region of the Colorado Rural Workforce Consortium (CRWC), the Southwest Workforce Region workforce centers offer the full range of employment and training workforce services supported by CDLE. These fall into either Employment Services (implemented by CRWC/CDLE staff) or Workforce Investment Act (WIA) programs (implemented by The Training Advantage TTA, a division of the Southern Ute Community Action Programs, Inc. SUCAP). Workers and job seekers can access a variety of services, such as: skills inventory and assessment career exploration referrals to job openings assistance with job search and work readiness skills assistance with vocational training for locally in-demand occupations supportive services and case management to assist with personal needs, such as work clothing, work tools, transportation, child care and housing. Employers are assisted with a database for job listings and skill screening and referral of qualified applicants. The federal WIA programs require demonstration that funds invested locally in training and supportive services for individuals will result in their employment in in-demand occupations in the region. In conjunction with the Western Workforce Region, the Southwest Workforce Region workforce system and partners have been awarded two grants over the past three years intended for specific industry workforce training. In the spring of 2008, a U.S. Dept. of Labor (DOL) energy grant supported three-year partnerships with SCCC and the Delta-Montrose Technical College to train job seekers and incumbent workers in heavy equipment operations, commercial driving, mine safety, welding and computer-aided design (CAD). Beginning in the fall of 2009, a SECTRS (Strategies to Enhance Colorados Talent Through Regional Solutions) Initiative grant supported both a planning and implementation phase for workforce development improvements in the health care sector, including retention in the entry level positions, improvement of the health care career ladder and workforce pipeline, regional training for incumbent workers, and enhancement of RN training in lieu of experience in specialty areas. The planning phase of this grant conducted extensive data analysis of both Southwest and Western regions on growing industries in these areas concluding that the health care industry offered the greatest benefit to each region. Other
industries that were ranked high are Professional/Technical Services (Accountants/Bookkeepers, Lawyers, Civil Engineers, Management Analysts, Photographers), Specialty Trade Contractors (Carpenters, Laborers, Supervisors, Managers, Painters, Electricians, Plumbers), Construction of Buildings (Contractors, Builders, Remodelers) and Oil and Gas Extraction/Mining (Mgrs., Well Head Operators, Pump Operators, Property/Real Estate, Engineers, Construction Equip. Operators, Machine Operators, Heavy Equip. Mechanics, Truck Drivers). New publicly-funded workforce and job development efforts have included: HIRE Colorado, which paid wages for a work experience/on-the-job training period, following which many employers retained the employee the Veteran Work Incentive Program (VWIP), which provides tuition for eligible veterans the Colorado Enhanced Approved Training Program (CEATP) to assist those receiving unemployment with increased benefits while attending vocational training for an indemand occupation Elevate America, a public-private venturing assisting workers with Microsoft Certification.
On-going publicly funded programs at the county level include Colorado Works and Employment First, employment programs for recipients of Temporary Aid to Needy Families (TANF) and food stamps. In the private sector, workforce development challenges exist in situations where limited and specialized technical workforce training is needed, as for small manufacturing operations or when a small number of health care practitioners need a specific re-certification and must travel distances for the required training. Growth of regional training opportunities is within the plan and auspices of the regions Workforce Board and Network. Interest in green industry regionally includes assessment of that sectors impact on job growth and associated workforce development needs. Longer-term and stable job creation may be seen where there is growth in demand, such as with residential and commercial solar installation, for which workforce training needs are met on the job or through programs such as offered through the SJC School of Energy and SCCC. The likelihood of both public and private expansion of geothermal use in Pagosa Springs in the near future brings into light the rural workforce dilemma when special projects require a few highly skilled workers for a finite period of time, making it difficult to quickly prepare local workers to take those jobs, though this effort will be supported by another energy-focused grant from CDLE. From a somewhat different direction, the Four Corners Office for Resource Efficiency (4CORE) has worked with SCCC to recently attain funding to train workers to perform residential and commercial energy audits. The energy-focused grant from CDLE will provide scholarships for the commercial energy audits. In this case, the training is now available, but the demand for the service needs growth. Finally, a higher percentage of livable wage jobs would create more opportunities for expanding training and other workforce development offerings. The size of the tourism-related portion of the regional economy, along with much retail, correlates with the size of the low paid and low skilled workforce. Workforce development efforts tend to help unskilled job seekers compete for those jobs and help those employed attain additional skills needed in higher wage positions for which there are fewer opportunities. Finding ways to provide one-time skilled training regionally for small groups of people in one industry sector will fill one gap in the current workforce development continuum.
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Regional Economic Profile

National/International Economic Context Region 9 is affected, both adversely and positively, by the national and international economies in a variety of sectors, according to Dr. Robert Sonora (Associate Professor of Economics at Fort Lewis College in Durango). The most obvious is in the energy sector, where natural gas prices have been relatively volatile over the past five years. The price of gas follows oil prices and while world gas prices rose upwards of 80% in 2008, they fell close to 80% by mid-2009. Falling prices create declines in the local county tax base and a subsequent fall in county services. It may also pressure local governments to increase residential property taxes in the future. Despite continued historically low national mortgage rates, kept in check by increasing national mortgage competition and low bond rates, mean and median in-town residential housing prices have fallen -15.61% and -13.71% respectively, from 2006-2010. This is attributed to what we are calling the Great Recession. Rising unemployment and falling per capita incomes have resulted in higher than normal foreclosures in the region. In the 4th quarter of 2010, Archuleta County had a foreclosure rate of 68% of occupied housing units, followed by San Juan (37%), Dolores (36%), Montezuma (21%), and La Plata (21%). It is important to note, however, that counties with small populations are prone to very volatile foreclosure rates as a small rise or fall in the total number of foreclosures can significantly change the foreclosure rate in terms of a percentage. Foreclosures in rural resort counties also often reflect 2nd homes or time shares. The financial crisis led world investors to flee to dollar assets, primarily US Treasuries and bonds, causing a temporary strengthening of the dollar against our twelve largest trading partners. Also, nationwide exports of travel and passenger fares - a measure of foreign visitors - fell about 20% during the Great Recession, but have been recovering over the past year or so. Given Region 9s natural beauty; popular tourism attractions such as Mesa Verde National Park, Durango Mountain Resort, and the Durango & Silverton Narrow Gauge Railroad, the area is able to attract tourists from around the nation and world. However, while enplanements were up consistently each year since 2007, visits to Mesa Verde and the Railroad were down, implying either fewer visitors to the region or tourists are not visiting these attractions as they have less disposable income. The majority of regional employment is not nationally and/or internationally competitive, resulting in relatively low incomes for Region 9 residents, which consists primarily of service jobs that are dependant on the tourism sector. Higher wages are seen in education, natural gas, health and government sectors, though in some cases wages and salaries are still below the national average. Finally, over the past year or so, increased weather and political uncertainty has led to a decline in global food supplies which has been pushing agricultural prices upwards. Though agriculture and animal husbandry play a relatively small role in Region 9s total income (less than 3%), the regional economy is susceptible to volatile global market forces. We should see global demand for agricultural goods rise and with it a commensurate rise in prices, particularly in developing countries. One effect this could have is strengthening the regional agricultural complex.
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Economic Drivers The Economic Drivers study grew out of a desire to estimate how many jobs are associated with the building, sales and maintenance of second homes. In Archuleta County 16% of jobs were nd attributed to 2 homes; in Dolores and La Plata this number is 7%; and in Montezuma it was 4%. San Juan County was not included in the study. To put this information in context the study also examined each county economy as a whole and all of its main economic drivers. This discussion is drawn from a report prepared by Lloyd Levy Consulting for Region 9 in October 2010, using 2007 data. Although the numbers of jobs are down 12% from 2007 to 2009, the proportions of jobs in each economic sector are very similar, thus we believe the drivers identified here are still pertinent. A breakdown of the economic drivers/sectors for Archuleta, Dolores, La Plata and Montezuma Counties are included in the county sections of this document. The full report, including multipliers specific to each county, can be found at http://www.scan.org/regional_data.html. What is an economic driver? Economic drivers are related groups of activities that bring outside money into the local (i.e., county) economy. A traditional example of an economic driver is a base industry, like agriculture, mining or manufacturing, which sells most or all of its products into markets that are located outside of the county. These sales support the direct basic jobs in each industry sector (the farmer, miner or assembly worker). In turn, additional supporting jobs are generated as basic industries buy goods and services and as local residentswho work for the basic industries or the basic industries vendorsspend their income. The additional jobs are known as the multiplier or ripple effect. The m ultiplier effect occurs as income is spent and respent within the local economy, minus the leakage to outside economies that occurs with every round of spending. The sum of the basic jobs plus the supporting jobs comprises an economic regions total em ployment. However, sales of traditional commodities and services into outside markets arent the only economic drivers. Basic jobs also occur in services industries if the industry targets outside markets. Tourism is a prime example because it generates jobs in a range of industries. The areas natural and built amenities attract visitors from outside the county that spend money on accommodations, food services, admissions, transportation and shopping. Visitor spending, using money that comes from outside the county creates the basic jobs and, through the multiplier effect, contributes to total employment. For our purposes, tourism can be broken down into two categories: "traditional tourism" which consists of day and destination (overnight) visitors, and "second homes". In this study we have not included timeshares or fractional ownership of residential units as second homes because we believe the spending patterns of these visitors most closely resemble traditional tourism. On the other hand, second homeowners also make purchases related to construction when they build or renovate homes, and when they purchase goods to furnish these homes. Finally, there is an economic driver that is often important in a small economy consisting of direct additions to personal income from employers, governments and institutions located outside of the county. For example, social security payments to retired residents of the county and certain public assistance payments given to distressed households generate basic jobs in industries that supply household goods and services. Todays county economies usually have more than one economic driver, but counties vary in their diversity. Sometimes one economic driver clearly dominates. Elsewhere, several economic drivers may be more balanced. A more balanced economy may mitigate employment ups and downs, sometimes even in the face of national economic trends. The driver study is a tool for measuring and evaluating a response to growth and change and for strategizing for economic development. Region 9 hopes that these studies will provide the starting point for public discussions to review the results and consider the implications for the future for each county and the region of the strengths and weaknesses, opportunities and problems accompanying each economic driver.
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Economic Clusters The identification of these drivers also allows us to refine our understanding of regional economic clusters. In recent years, cluster strategies have become a popular economic devel opment approach among state and local policymakers and economic development practitioners. An industry cluster is a group of firms, and related economic actors and institutions that are located near one another and that draw productive advantage from their mutual proximity and connections. Cluster analysis can help diagnose a regions economic strengths and challenges and identify realistic ways to shape the regions economic future. www.brookings.edu/metro/pubs/20060313_clusters.pdf For example, to provide a more accurate picture of the agricultural sector we can expand agricultural industry analysis by linking production to other segments of the economy that directly and indirectly support agriculture. These industries are known as agribusiness, and include services such as processing food products, trucking, storage, sales of farm equipment and supplies; as well as impacts on credit institutions and commodity brokers. Similarly, the oil and gas industry employs heavy construction and excavation firms to clear sites, trucking and pipeline companies to transport products, chemists, electricians, welders and a complex supply chain to support that industry. It is hoped that the same labor force and supply chains will feed the new energy economy of solar, wind and hydroelectric power. Creative Industries are another example of an important economic cluster. Creative Industries are the fifth largest employment sector in the state of Colorado. There are 186,251 jobs in the Creative Cluster and this accounts for 3.9% of the states estimated 3.2 million jobs. This sector is as large as biotechnology/biomedical and IT and Telecommunications, and is larger than defense and security, agribusiness, food processing and technology. While over half of the creative industry employees are located in the Denver Metro Area, Creative Industries are a significant portion of rural Colorado employment. The rural parts of the state account for 13.3% of total employment and 8.4% of creative industry employment in Colorado. In Region 9 the program priorities for this cluster are similar to those adopted by the Office of Economic Development and International Trade (OEDIT).
Unemployment Rates
Unemployment Rates 2010 Archuleta 10.2% Dolores 17.5% La Plata 7.2% Montezuma 9.2% San Juan 10.8% Colorado 8.9% National 9.6%
When unemployment rates are compared, we see that only La Plata County was below state and national levels in 2010. Historically Dolores and San Juan Counties have higher unemployment rates than the rest of the region. This is probably due in part to their low populations. These rates are seasonally adjusted because unemployment rates are generally much higher during the winter months.
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Employment and Income 2009 Historically, industry sectors such as mining, agriculture and forestry supported the southwest Colorado economy. Currently these industries provide less than 7% of employment earnings in the regional economy. These base industries have been replaced over time by tourism.
Region 9 # of % of Income % of 2009 Total Employment Jobs Jobs ($000) Inc. Agriculture 1,782 3% 19,654 1% Mining & Utilities 1,311 3% 136,864 6% Construction 5,096 10% 271,766 12% Manufacturing 1,135 2% 43,315 2% Transportation & Warehousing 1,068 2% 57,270 3% Wholesale & Retail Trade 6,844 13% 256,599 12% Information 570 1% 32,671 1% Finance,Insurance & Real Estate 3,371 7% 164,550 8% Services 19,877 39% 713,117 33% Government 10,048 20% 485,996 22% Total 51,102 100% $ 2,181,802 100% Source:Colorado State Demography Office 3-11
In 2009 the service sector provided 39% of jobs and 33% of job income in the region. These services jobs include highly paid professionals as well as lower paying unskilled labor. Trade is also important in the regional economy, providing 25% of jobs and 18% of job income.
Specifics regarding the number of jobs in each sector are also included with each countys profile.

Region 9 - 2008 TPI Earned Income1 Residency Adjustment Dividends,Interest & Rent Transfer Payments Total Personal Income
1
$ $ $ $ $
($000) 1,972,707 108,269 815,952 434,573 3,331,501
When all sources of income in the local economy are combined, we can estimate Total Personal Income (TPI).
Earnings by Place of Work minus SSI Contributions Source: Bureau of Economic Analysis
The Colorado Demographers Office also provides estimates for TPI in 2009. As this table illustrates, the five counties in southwest Colorado vary in their composition. Most income is job based (employment), though significant amounts of income enter our economy from other sources, such as transfer payments and dividends, interest and rents. Payments to retirees accounted for almost 15% of the estimated TPI in the region in 2009. That was $502,828,950!
2009 Total Personal Income Estimates Employment Residency Div., Int Transfer Income Adjustment & Rent Payments Archuleta 53% 3% 33% 11% Dolores 49% 18% 20% 13% La Plata 71% -1% 24% 5% Montezuma 55% 12% 22% 10% San Juan 56% 12% 24% 8% Region 9 65% 3% 24% 7% Source: Estimates provided by the Colo.State Demographer Total 60+ ($000) Share $ 358,774 21% $ 55,369 16% $ 2,114,441 14% $ 802,919 16% $ 20,690 15% $ 3,352,193 15%
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Total Personal Income Trends These charts allow us to see how the components of Total Personal Income have changed over the long term in each of the counties. Generally, we see a trend of decreasing employment income, and increasing income from dividends, interest and rent, and transfer payments. Residency adjustments illustrate how the economy of each county is tied to the others as people commute to where the jobs are, but take their paychecks home. For more information regarding commuter patterns go to http:dola.colorado.gov/demog/WorkerFlow.cfm. Transfer payments consist primarily of retirement and disability benefit payments, medical payments (i.e. Medicare and Medicaid), income maintenance benefits, unemployment insurance, veterans benefits and payments to nonprofit institutions. Dividend income is income that is paid in cash or other assets to stockholders by corporations in the U.S. or abroad. Interest income consists of monies received from money market mutual funds and interest from other sources. Rental income consists of income from the rental of real property, the net income of owner - occupants of non-farm dwellings, and the royalties received from patents, copyrights, and from the rights to natural resources. Residency adjustments are made when a person receives income for work performed and paid for from outside their place of residency, (i.e. commuters). Negative numbers mean that more people were coming into the county for work than were commuting out. Earnings are derived by place of work, including farm and non-farm earnings.
Region 9 - Total Personal Income Trends 1970 - 2008 Generally, from 1970 100% to 2008, we see a 90% trend of decreasing 80% employment income, 70% and increasing income 60% from dividends, 50% interest and rent, and 40% transfer payments. 30% Residency 20% adjustments illustrate 10% how the economy of 0% 1970 1980 1990 2000 2008 each county is tied to others as people commute to where the jobs are, but take their paychecks home. http://www.bea.gov/regional/reis/ (Table CA04)
Per Capita Income

Total personal income divided by the total number of residents in the county gives us an estimate of per capita income (PCI). This table highlights how the counties in our region measure up against the rest of the state and the nation. Unfortunately 2008 is the latest year available.
TRIBAL POPULATIONS
The planning and management area of Region 9 includes two Indian reservations, including the Southern Ute and the Ute Mountain Ute Indian Tribes. Historically, the Utes roamed throughout the Four Corners and Western Colorado in several distinct hunter-gatherer bands. The Southern
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Ute divisions were the Muache, Capote, and Weeminuche. As a result of the Dawes Act in 1887, and the subsequent Act of 1895, the previously defined Southern Ute reservation lands were broken into two distinct units. Most of the Muache and Capote Utes accepted farming allotments in the eastern portion, which became known as the Southern Ute Indian Reservation with agency headquarters at Ignacio, in La Plata County. The Weeminuche Utes, led by Chief Ignacio, refused to accept allotments and moved to the western portion, which became known as the Ute Mountain Ute Indian Reservation with agency headquarters at Towaoc, in Montezuma County.
Ute Mountain Ute Indian Tribe

The Ute Mountain Ute Tribes land is located in southwest Colorado and eastern Utah, and covers 910 square miles. The land is held in trust by the United States government. The Tribal enrollment in 2011 was 2,095, with the majority of the members living on the reservation in Towaoc, Colorado (Montezuma County), and in White Mesa, Utah. The Tribal census shows the largest percentage of the members are in their early twenties and younger. The Ute Mountain Ute Tribe is a major contributor to the regional economy. In 2011, the Tribe was one of the largest employers in Montezuma County with 1,578 jobs in all aspects of tribal government and operations, and at their Ute Mountain Casino and RV Park. The Tribe has just updated a Ute Mountain Ute Tribe Comprehensive Economic Development Strategy (2010). In the 1950s, the Bureau of Reclamation completed a project that diverted water from the reservation to non-Indian ranches. A dispute followed, and settlement of those water rights issues in 1988 led to the Federal mandate and creation of the Ute Mountain Farm and Ranch Enterprise. The Ute Mountain Ute Tribe's Farm and Ranch Enterprise is an irrigated agricultural project designed for 7,634 acres of Ute Mountain Reservation land. The purpose of the project is to operate a market-oriented agricultural enterprise that maximizes successful commercial ventures in addition to providing skilled, year-round employment. When completed, the state-of-the-art farm will feature 109 center-pivot sprinkler plots, ranging in size from 40 to 140 acres each. The Enterprise continues to experiment. The land provides opportunities for valuable research and training of staff and tribal members. The Enterprise uses the latest technological advancements, including computerized links, radio-controlled irrigation systems, and weather station equipment. These peripherals are integrated into an information centralized network at the Farm and Ranch headquarters. Enterprise staff tests many varieties of crops to determine which are best for the climate and soil types or the area. Test plots include alfalfa, corn, and wheat, and a wide variety of other crops are under consideration. The Farm and Ranch Enterprise offers special training and summer youth programs for tribal members. Ute Mountain Ute apprentices work with professional and technical staff, gaining hands-on experience, as well as learning the duties and responsibilities of all positions. The Tribal cattle herd is a part of this successful tribal enterprise. The U.S. Bureau of Reclamation Dolores Irrigation Project is a water storage and delivery system for irrigation in Southwest Colorado. Water is stored in the McPhee Reservoir, located ten miles north of Cortez. The Towaoc Canal links the reservoir to the Ute Mountain Ute Indian Reservation about 41 miles away. The canal delivers an average of 22,900 acre-feet of water annually to the reservation for agricultural uses. The project is an outstanding opportunity for the Ute Mountain Ute Tribe, bringing technologically-advanced agricultural capabilities to the reservation and allowing the tribe to compete as a viable producer in today's marketplace. The Weeminuche Construction Authority is a commercial construction enterprise owned and operated by the Ute Mountain Ute Indian Tribe. Since 1985, the Weeminuche Construction Authority has provided comprehensive construction services to a wide range of clients including federal, state, and local municipalities, agriculture concerns, and building and heavy construction. Projects include oil and gas field construction, residential and commercial buildings, heavy construction, road building, canals and water systems, sand and gravel, and municipal improvements. Projects are performed with maximum use of Indian laborers and craftsmen.
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Additional skilled craftsmen from the local work force complement the staff, allowing them to handle projects over a wide range of size and scope. The Ute Mountain Casino opened in September of 1992, creating hundreds of new jobs for the tribe and others in the Four Corners area. Approximately 78 percent of the employees at the casino are Native Americans. The Ute Mountain Gaming Commission, mandated by the Tribal Gaming ordinance of November 1991, is responsible for the regulation and control of gaming on Ute Mountain Ute Tribe reservation lands. After expenses, casino revenues are allotted to the Tribal Programs and Operations, Education, Economic Development, and Social and Family programs. The Sleeping Ute RV Park opened in April of 1994 and is located within a short walking distance of the casino. The 84-site park hosts full-service recreation vehicle sites, as well as tent and teepee areas. This tribal enterprise was funded in part by a Bureau of Indian Affairs business development grant and partially by economic development funds. Travelers from all over the world visit the Ute Mountain Tribal Park, including the visitors center and tours. The Tribal Director and staff describe the Pueblo culture and Ute Mountain Ute history to visitors. The tribal park has a non-profit foundation for ruins stabilization, with support of the Ute Mountain Ute Tribe and the Colorado Commission of Indian Affairs. The Park Director and staff believe that a low-impact type of tourism will protect the natural resources, preserve the ruins and environment, and provide visitors with a quality experience on the lands of the Ute Mountain Ute Tribe. Source: http://www.utemountain.com
Southern Ute Indian Tribe

The Southern Ute Indian Tribe is a sovereign entity and governs its own people, resources, and lands through a seven-member council. The tribal council includes a chairman and six council members elected by the tribes membership. The Tribe has its own constitution, code of laws, and a tribal court system. Exercising powers of self-government is critical to maintenance of the Tribes identity as a sovereign entity that pre-dates the federal and state governments. The powers exercised by the Tribe and the rights enjoyed by its members are the result of the Tribes sovereign status and the unique trust relationship between Indian tribes and the federal government. In many cases, the rights of tribal members that are recognized by the federal and state governments arise from treaties entered into between the Tribe and federal government. The Tribe regularly collaborates on a government-to--government basis with federal, state, and local agencies in areas of mutual interest, such as transportation, natural resources development, and environmental protection, The Southern Ute Tribal enrollment is 1,400, with the majority of the members living on the reservation. The reservation land base includes 750,000 acres, seven major rivers, and the Navajo State Park. Tribal headquarters are located adjacent to the Town of Ignacio, in La Plata County. Over the past 25 years, the Southern Ute Indian Tribe has become a major player in the local, state, and national economy. The Tribe is aggressively creating and operating new businesses both on and on-Reservation in the areas of oil and gas production, natural gas gathering, real estate development, housing construction, sand and gravel products, media, and gaming. The Tribe currently is the largest employer in La Plata County. The Sky Ute Lodge and Casino opened in 2008. Through contributions of a percentage of its annual gaming revenue, the Tribe is a supporter of many area non-profit organizations. The Southern Ute Growth Fund was started in 1999 and has investments spanning America and Canada. The Growth Fund reports a portfolio of over $1 billion. In summary, Tribal activity, including gaming, generates millions of dollars per year in La Plata County, in direct and indirect economic activity.
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The Tribal Employment Rights Ordinance (TERO) is a Tribally-adopted law that aims to promote the employment of Indians on or near the Reservation, to provide a preference in contracting for businesses owned by Indians, and to prevent discrimination against Indians in the employment practices of employers conducting business within the jurisdiction of the Tribe, in a manner consistent with federal law. The TERO extends to all businesses, including those owned by nonIndians, in certain commercial dealings, contracts, leases, or other arrangements or activities affecting the Tribe. Source: Living in La Plata County - The Southern Ute Indian Tribe brochure.
STRATEGIC PLANNING Community Values

During the CEDS process we continue to discover how each county is at a different place in terms of their goals and objectives around economic development. However, throughout the region, many of the same community values continue to surface including: Appreciation for the heritage and landscape upon which the communities of southwest Colorado have been built Diverse and sustainable economies that pay livable wages, offer meaningful work, and create diverse, well-balanced economies Building the capacities of the local economic development groups Housing and health care that are affordable, accessible and efficient Effective telecommunications infrastructure and technology training services that will make our region competitive and a participant in the global marketplace Business parks that attract new businesses, help existing businesses, and are in keeping with local land use policies and community values Balancing ecological and economic needs, encouraging problem-solving, constructive dialogue and solution finding between all sectors Adequate infrastructure that is fairly paid for by communities, developers, and business entities A strong agriculture sector so that our open lands and small-town living can be preserved Transportation systems that allow us to travel in a safe, efficient and cost-effective manner Effective education systems that are preparing students to meet the academic and technological challenges of tomorrow. Appreciation for community enhancements such as the arts, cultural attractions, recreation opportunities, and recognition that these enhancements are tied to economic development success An accessible and adequate supply of community services including human service resources and law enforcement.
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Colorados Bottom Up Economic Development Initiative asked for residents across the State, county by county, to share their stories, challenges, and strengths by developing a strategic economic development plan for each county. These county plans were developed and then representatives from each county team and the two Tribes developed a comprehensive regional plan. The top five economic development priorities are listed below. Each countys economic development priorities are also included individually in the CEDS. 1) 2) 3) 4) 5) Expand and maintain broadband/fiber optics infrastructure to support and anticipate the needs of future growth. Improve community amenities necessary to attract, retain and grow business; including healthcare, education & housing. Be business friendly and make the region an effective and efficient place to do business. Encourage the retention and growth of existing businesses. Diversify the economy and improve access to markets.
Vision Statement
An examination of these shared values led to the creation of an economic development vision statement that could be applied region-wide. A vision statement must encompass a shared vision one that is a broad but concise description of what we as a community want to be in the future in regards to economic development. The following vision statement describes the assets and values and focuses on moving the region toward achieving our goals for the future. We strive to encourage economic development that preserves our small-town and traditional heritage, takes care of our natural resources, and provides opportunities for our children to stay in southwest Colorado.
SWOT Analysis
The starting point for a credible economic development strategic plan is an assessment of the strengths and weaknesses of the region in regards to economic development. This is the baseline by which the region begins to understand where they are in relation to the vision. Once the SWOT analysis is completed, strategies for the solutions can begin to be identified. By working with the communities in the region the following SWOT analysis and strategies were identified: Strengths Entrepreneurial spirit Diversity of landscape Scenic beauty (agricultural and public lands) Local cultural, historical assets Small-town living and lifestyle Recreational opportunities Fort Lewis College & other institutions of higher learning Climate Retirees with skills Weaknesses Not many opportunities for jobs, higher wages Economies that are highly dependent on one or two sectors or seasons Loss of open space and a decline in the agriculture sector (related issues) Lack of telecommunications infrastructure in the outlying areas
Lack of available, trained workforce, housing, health care and childcare could challenge existing businesses and new business relocation Inadequate public infrastructure in some areas Lack of resources to deal with the most challenging issues (e.g. housing and transportation)
Opportunities Tourist destination with major attractions Availability of air service Value-added marketing, strategies for enhancing agriculture Development of business incubators Healthy Lifestyles of residents Amenity migration ~ people want to live and work here Development of telecommuter businesses Widely diverse, well-educated population Networking among companies for mutual support and benefit. Threats Growth could ruin or compromise the qualities that make the region where people want to live Transportation & public infrastructures capacity unable to meet demands of growth Natural resource management Funding cuts at all State agencies Regulatory barriers
Regional Goals, Actions & Implementation

Ideally, the goals of a region should reflect its vision statement. A goal is a specific statement of what the region would like to be or achieve. Goals should be focused on the priority issues impacting the development of the region. The actions should then reflect the steps needed to accomplish the goal. By applying goals and actions, we can begin taking the steps towards the vision. The regional goals and actions cover 17 areas required by the Economic Development Administration. Economic and Community Technical Assistance Goal: Build the capacities of county-level economic development groups that are working to accomplish prioritized, locally defined economic development projects. Actions: 1. Build the capacity (ies) of the county-level economic development groups by providing organizational, technical and financial assistance, where possible and needed. 2. Assist county-level economic development groups in accomplishing priority listed in the Community Development Action Plans (CDAPs). Work Force Issues Goal: Better understand southwest Colorados workforce so as to match employers needs with qualified employees. Improve retention, promote employees skills, and provide "new economy" training opportunities. Address work force impacts such as child care, affordable housing and transportation.
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Actions: 1. Be an active participant of the Southwest Workforce Center Board and assist in identifying workforce issues, needs and action steps. 2. Analyze opportunities and partnership networks, and utilize state employment programs to develop and improve technology training facilities and programs. 3. Promote and support training for employers and employees on better understanding the needs of the current workforce and available programs for assistance. 4. Increase knowledge and utilization of workforce centers, and state programs by area employers. Infrastructure (sewer, water, roads, fire and emergency services, electricity and telecom) Goal: Ensure that southwest Colorado has the adequate physical infrastructure needed to plan for and meet its future economic development and workforce needs. Actions: 1. Ensure that infrastructure systems that are at capacity are identified in the CDAPs and plans are made to address future expansion issues in a timely manner. 2. Ensure that community needs are considered in decision-making involving infrastructure planning done by any relevant state agencies such as the Colorado Department of Transportation (CDOT). Telecommunications Goal: Ensure that southwest Colorado has the telecommunications infrastructure and information technology training needed to meet the demands of a competitive global marketplace. Actions: 1. Implement the SCAN (southwest Colorado Open Access Network) and continue to work developing improved telecommunications infrastructure including: redundant fiber connectivity to the national "backbone", adequate bandwidth for new technologies, affordable rates, and services in rural areas. 2. Ensure that once the necessary telecommunications infrastructure is in place, adequate training and other services are available that will help businesses use the new technologies.
3. Improve 911 services with fiber as appropriate.
4. Meet national Broadband Plan goals by 2015.
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Recruiting New Jobs & Businesses Goal: Strengthen and diversify the regional economy by recruiting diverse businesses that strengthen the job market(s), and are compatible with community goals. Actions: 1. Continue to support technology, adequate infrastructure and services needed for businesses (see telecommunications and infrastructure). 2. Increase technical assistance services for businesses locating to southwest Colorado through economic gardening services, collaborations between economic development groups, the Small Business Development Center and Region 9 EDD.
3. Facilitate access to capital, and expand Business Loan Fund. 4. Partner with the State Enterprise Zone program, the Office of Economic Development and local economic development groups on, prospecting trips and statewide marketing/advertising campaigns to attract businesses to the region. 5. Work in partnership with the southwest Colorado Travel Region, tourism offices, and chambers to create marketing programs that inform tourists of business opportunities in the region. 6. Capitalize on the amenities of the region in retaining and creating new jobs. 7. Support the development of facilities (business incubators, convention centers) in communities that desire to support such infrastructure. 8. Continue to assist communities in expanding, starting or "filling up" their business parks by providing development, marketing and capital assistance. 9. Reduce regulatory and legislative barriers that inhibit desirable businesses from relocating to the area.
Strengthening Existing Jobs & Businesses Goal: Improve, diversify and strengthen the regional economies by helping existing businesses to be more effective, to expand, and to attract and retain a viable, competitive workforce. Actions: 1. Include actions from Recruiting New businesses above. 2. Establish business incubators working with county and regional partners that can grow and provide training for existing businesses. 3. Increase business technical assistance through the Small Business Development Center at Fort Lewis College. This includes expanding the Business Advisor Group, business networks, and economic gardening services, to assist businesses with trade leads, new market(s) identification and other specialized businesses opportunities.
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4. Develop a collaborative business retention program
5. Develop improved technology training, education facilities and programs that can train or re-train workers and employers in the region for emerging technology jobs (a.k.a. the training of "knowledge workers"). 6. Develop and implement specific strategies to reduce "retail leakage".
7. Identify and monitor policies that might negatively impact businesses. 8. Implement projects that strengthen Main Streets/downtowns. Goal: Identify and foster creative industries. Actions: 1. Increase access to direct financial support by persuading traditional funders and lenders of the value of investment in creative industries, by exploring growth in public/private partnerships, exploring expansion of existing funding programs to include creative industries and reaching out to marginalized individuals and businesses. 2. Create and expand professional development and networking opportunities by encouraging Chambers of Commerce to enlist more creative businesses as members, focus on SBDC training for creative industries, identify and empower creative leadership to carry the message, and create policy partnerships. 3. Promote the regions creative industries including art and cultural events, craft, food, film, publishing and technology by developing awareness of the regions creativity and creative products; encouraging tourism agencies to highlight local creative assets; and by identifying and supporting programs that celebrate creative accomplishments and cultural heritage. 4. Increase access to arts and creativity skills in all levels of education by helping creative businesses connect with education opportunities; supporting schools that use the arts as a strategy for student success and workforce readiness; and by expanding the knowledge base of legislators, education leaders and other stakeholders about the role of arts learning.
5. Stimulate increased support by presenting to and educating local government officials and community leaders about the impact of creative industries; developing resources for communities to utilize the arts and creative assets as a strategy for economic and community development; encourage the creation of creative districts; encourage front line community tourism and visitors bureaus to be familiar with creative assets; and compile data on the regions creative communities.
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Enterprise Zone Program Goal: Continue to operate the Enterprise Zone program as a tool for improving the economies of qualified areas. 1. Operate and promote the program as per the States guidelines. 2. Advocate policy changes when appropriate. 3. Measure program progress and increase participation annually throughout the region. Tourism Goal: Maintain, develop and diversify the tourism industry in the region. Actions: 1. Develop innovative, participatory and educational tourism initiatives that involve: heritage tourism projects, agri-tourism, and cultural tourism. 2. Support and enhance tourism efforts initiated by the Native American cultures and tribes in the region. 3. Continue to work in partnership with the southwest Colorado Travel Region and the State to carry out marketing programs that promote the attractions and cultural amenities of the region. Including those that expand the marketing of special events; that ensure the development of adequate infrastructure for cultural activities; and that assist communities in developing "shoulder season" tourism attractions. 4. Maintain the quality of life features that attract tourists to the region such as open space, public access to trails, a clean environment, and ample recreational opportunities. 5. Utilize direct base economic analysis to better understand the components of tourism based employment and target marketing efforts to areas of tourism that are more sustainable.
6. Assist the Four Corners Film Office to bring productions to the region increasing area promotion, and resulting in an expanded film-based tourism market. 7. Build close working relationships with public land offices. Agriculture Goal: Support and assist the agriculture sector to become more viable. Actions: 1. Develop data gathering strategies that will accurately portray the agriculture sector. Work with farmers and ranchers, and other interested parties, to identify, gather and disseminate agriculture economic data that is complete and can accurately measure the value of the sector in our region. 2. Keep the agriculture resources viable so farmers and ranchers can earn a living in the industry by:
a. b. c. d. e.
supporting the eradication of noxious weeds ensuring an adequate agricultural water supply promoting stewarding initiatives encouraging land use practices that keep the resource viable working in concert with the DOW and ranchers to manage wildlife concerns
3. Provide farmers and ranchers tools for estate planning and reducing their taxes including implementation of such tools as conservation easements and incentives for agricultural lands preservation (e.g. the transfer of development rights). 4. Increase awareness of and utilization of value-added agricultural marketing and production strategies. 5. Support the development of local markets for locally grown products, including Farmers Markets. 6. Support the businesses that can "dovetail" with crops grown by local farmers and ranchers. 7. Encourage stronger leadership in the sector as well as increased cooperation and communication. Affordable Housing Goal: Meet the diverse Housing needs in southwest Colorado. Actions: 1. Encourage collaborative efforts between housing providers to provide comprehensive, region-wide services. 2. Identify and monitor policies, regulations and local land use plans that might impede homeownership.
3. Encourage and support the development of private/public partnerships to provide affordable housing units to the region.
4. Prepare for the aging demographic shift in the region and the resulting changes in desired housing stock. 5. Encourage programs/education to increase homeownership success such as: a. Pre-purchase /post purchase counseling and education b. Down payment assistance c. Weatherization/rehab services d. Foreclosure counseling e. Renter/homeowner advocacy. Land Use Issues Goal: Keep our public and private lands viable and economically and ecologically healthy so as to foster improved economies in each county, and adequately plan for the future. Actions:
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1. Finalize the San Juan National Forest - Forest Plan with a focus on balancing the economic, ecological and social needs of the region. 2. Develop or continue to implement locally-created and defined land use policies and comprehensive plans that help manage growth, and plan for transportation, services (fire, water, sewer), infrastructure, housing, recreation and economic development needs and priorities. 3. Support the development of projects that meld economic and ecological goals together so that land-based jobs are maintained and the environment is improved.
4. Improve coordination and collaboration with federal land management agencies. Health Care Goal: Ensure adequate health care services are available and accessible. Actions: 1. Work with existing groups to find solutions to the funding crises that the health care industry faces. 2. Ensure tax credits and loans are available. 3. Ensure that the current level of services can continue to be provided for our growing region. 4. Encourage regional solutions in health care strategic planning and resource distribution, including addressing the issue from a Four Corners perspective. 5. Assist each community in meeting the facility needs of its primary health care facilities.
6. Increase collaboration between healthcare professionals, facilities, boards and stakeholders across communities. Education Goal: Support a successful continuum of education, from preschool through higher education. 1. Identify education/training needs in the region and provide a variety of educational opportunities. 2. Develop strategies for tele-technology training to meet the future telecommunications industrys workforce needs and provide opportunities for young people to stay in the region after high school and/or college. 3. Work to increase collaboration and service enhancement between education institutions.
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Child Care Goal: Expand the availability, affordability, and quality of childcare. Actions: 1. Provide information on tax credits, loans and other potential funding resources for eligible applicants who are expanding or staring child care centers. 2. Support on-site childcare centers in businesses where such centers can be feasible. 3. Support the provision of training programs, services and policies that increase the quality of childcare in the region. 4. Assist in the development of non-traditional-hour child care (e.g. 24-hour care, 12hour care, weekend care). 5. Assist with administering grants for childcare projects. Community Enhancements Goal: Facilitate the creation, enhancement or expansion of community amenities or essentials which make southwest Colorado an attractive place to live for current and future residents. Action: 1. Ensure that community amenities are identified and prioritized in the CDAPs . 2. Assist communities in implementing historical, recreational, artistic and/or cultural preservation projects through: a. providing technical assistance b. assisting with grant support c. providing loans to implement projects d. offering information and referral resources Networking Goal: Improve the regions effectiveness and collaboration through expanded networking with other organizations. Actions: 1. Convene regional groups with Region 9 EDD to address focused economic development issues, monitor implementation of the CEDS and tackle issues that can be better addressed through regional collaboration. 2. Work with the Small Business Development Center and county economic development groups to collaborate resources and expertise to form a one-stopshop to meet needs and priorities of the regions communities.
3. Provide opportunities for county-level economic development groups to meet and build their support network.
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4. Work with the southwest Colorado Council of Governments to strengthen regional leadership by defining regional issues, advocating for mutual goals, and administering regional programs. Evaluation and Measurement Goal: Expand the regions ability to monitor economic vitality and the attainment of goals and strategies outlined in the CEDS. Actions: 6. Continue to work with the State Demographer to refine and use the Base Analysis methodology. Establish targets utilizing direct base analysis. 7. Support the continued development and distribution of community indicators and regional statistical documents, and track their data trends. 8. Utilize professional expertise for regional research projects. 9. Expand CEDS economic development measurements.
10. Provide IMPLAN modeling in region as evaluation and measurement resource for businesses.
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BOTTOM UP - ECONOMIC DEVELOPMENT STRATEGY
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MAP OF LA PLATA COUNTY
5. LA PLATA COUNTY
TABLE OF CONTENTS
INTRODUCTION.............................................................................................................................1 EXECUTIVE SUMMARY.................................................................................................................1 BACKGROUND...............................................................................................................................2 Southern Ute Tribe...................................................................................................................2 Durango ...................................................................................................................................2 Bayfield ....................................................................................................................................2 Ignacio......................................................................................................................................3 LOCAL ISSUES ..............................................................................................................................3 Agriculture....................................................................................................................................3 Education.....................................................................................................................................4 Environment and Land Use .........................................................................................................5 Health Care..................................................................................................................................8 Housing........................................................................................................................................9 Livable Wages ...........................................................................................................................10 Sustainability..............................................................................................................................11 Telecommunications..................................................................................................................12 Transportation............................................................................................................................13 LA PLATA COUNTY PROFILE .....................................................................................................18 La Plata County Government ....................................................................................................18 Infrastructure and Services........................................................................................................19 Demographics............................................................................................................................21 The Local Economy ...................................................................................................................22 Unemployment Rates.............................................................................................................22 Commuting.............................................................................................................................22 Employment and Income 2009 ..............................................................................................23 Economic Drivers ...................................................................................................................24 Economic Clusters .................................................................................................................25 Per Capita Income .................................................................................................................25 Total Personal Income ...........................................................................................................25 Total Personal Income Trends...............................................................................................26 Employment Sector Trends 1980 - 2009 ...............................................................................27 STRATEGIC PLANNING ..............................................................................................................43 La Plata County Vision and Mission Statements.......................................................................43 SWOT (Strengths, Weaknesses, Opportunities, Threats) Analysis ..........................................43 Key Economic Development Directions ....................................................................................45 Goals, Action & Implementation.............................................................................................45 BOTTOM UP ECONOMIC DEVELOPMENT STRATEGY ........................................................49
La Plata County CEDS Update 2011
INTRODUCTION
The purpose of the Comprehensive Economic Deveopment Strategy (CEDS) is to create a plan for retaining and creating better paying jobs, fostering stable and more diversified economies, as well as maintaining and improving the quality of life in southwest Colorado and La Plata County.
EXECUTIVE SUMMARY
Historically, La Plata County developed as a result of "traditional west" commodities such as minerals, cattle and timber. Since the 1970s La Plata County has been in transition from a traditional rural county to a more urban environment in which tourism is the number one industry. People moving in for quality of life issues or "amenity migration" drove population growth in the 1990s, a trend still seen today. Because of its location within the larger region, Durango has developed as a tourist crossroads and regional trade center, as well as being the county seat. Bayfield has served as a supply town and social center for area farmers and ranchers, and more recently as a bedroom community for Durango. Ignacio is a crossroads for the oil and gas industry, and serves as a supply center for the surrounding Southern Ute Indian reservation. The Southern Ute Tribal headquarters is located just north of Ignacio and provides administration and services to tribal members. Key issues in La Plata County addressed in this section include agriculture, education, environment, healthcare, housing, livable wages, sustainability, telecommunications and transportation. Between 2000 and 2010, La Plata County grew from 43,941 to 51,335 people (17%) with most of the growth occurring in Bayfield (50%) and Durango (21%). Ignacio saw slower growth (4%), as did unincorporated areas of the county (13%). The annual average rate of growth is expected to increase, and then slowly decline over the next 20 years, based on local and national trends. A population of about 59,000 is forecast by 2015. Although there is a relatively low unemployment rate (7.2% in 2010), wages and employment are highly dependent on service sector jobs driven primarily by the tourist and resort industry. The Service sector provides 41% of jobs and 34% of employment income. The Trade sector accounts for 13% of jobs and 11% of employment income. Government is also an important sector, providing 19% of employment and 21% of employment income in 2009. Most La Plata county residents (79%) work in the county, and 21% commute elsewhere for their paychecks, with the highest percentage (4%) going to San Juan County, New Mexico. In 2009, Total Personal Income (TPI) in La Plata County was $2,046,678,000. This TPI ranked th 15 in the state and accounted for 1% of the state total. The largest proportion of TPI is generated through employment. In 2009 La Plata had a Per Capita Personal Income (PCPI) of $39,769. This PCPI ranked 21st in the state and was 95 percent of the state average, $41,895, and 100 percent of the national average, $39,635.
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BACKGROUND
Southern Ute Tribe The planning and management area of Region 9 includes two Indian reservations, including the Southern Ute and the Ute Mountain Ute Indian Tribes. Historically, the Utes roamed throughout the Four Corners and Western Colorado in several distinct hunter-gatherer bands. The Southern Ute divisions were the Muache, Capote, and Weeminuche. As a result of the Dawes Act in 1887, and the subsequent Act of 1895, the previously defined Southern Ute reservation lands were broken into two distinct units. Most of the Muache and Capote Utes accepted farming allotments in the eastern portion, which became known as the Southern Ute Indian Reservation with agency headquarters at Ignacio, in La Plata County. The Weeminuche Utes, led by Chief Ignacio, refused to accept allotments and moved to the western portion, which became known as the Ute Mountain Ute Indian Reservation with agency headquarters at Towaoc, in Montezuma County. The Southern Ute Tribal enrollment is 1,400, with the majority of the members living on the reservation. The reservation land base includes 750,000 acres, seven major rivers, and the Navajo State Park. Tribal headquarters are located adjacent to the Town of Ignacio, in La Plata County. Over the past 25 years, the Southern Ute Indian Tribe has become a major player in the local, state, and national economy. The Tribe is aggressively creating and operating new businesses both on and off-Reservation in the areas of oil and gas production, natural gas gathering, real estate development, housing construction, sand and gravel products, media, and gaming. The Tribe currently is the largest employer in La Plata County. The Sky Ute Lodge and Casino opened in 2008. Through contributions of a percentage of its annual gaming revenue, the Tribe is a supporter of many area non-profit organizations. The Southern Ute Growth Fund was started in 1999 and has investments spanning America and Canada. The Growth Fund reports a portfolio of over $1 billion. In summary, Tribal activity, including gaming, generates millions of dollars per year in La Plata County, in direct and indirect economic activity. Durango The county seat of Durango was established in 1881. The historic district of downtown Durango was platted by the railroad that established the narrow gauge Denver and Rio Grande Railroad. Durango became a rail hub because it had the combination of the Animas River and nearby coal sources needed to fuel a smelter and coal driven steam engines to process ore from the mines in San Juan County. With the dedication of the "Million Dollar Highway" in July of 1924, the transportation of gold, silver, lead, copper and zinc moved from the narrow gauge train to Highway 550 which connects Durango to Silverton. Beginning in the late 1950s, the rail line that had carried ore down from Silverton began, instead, to carry tourists up from Durango to enjoy the spectacular scenery. Train ridership to Silverton was 142,663 in 2010, slightly down from 2009. Durango also developed as a hub for other modes of transportation. Durango is at the intersection of Highway 160, the major east-west arterial in Southwest Colorado and Highway 550 a major north-south arterial in southwest Colorado. Durango / La Plata County also developed the most extensive air hub in southwest Colorado with 165,947 enplanements in 2010, up 12% from 2009. Because of its location within the larger region, Durango has become a tourist crossroads and regional trade center Bayfield The early residents of the Pine River Valley were the Ute Indians. Their descendants are still in the area, primarily on the Southern Ute Reservation and in the Ignacio area at the south end of the valley. The Pine River Valley was settled by non-Native Americans in the late 1800s. The first cattle were brought into the valley in 1875. The area gradually opened up as ranchers discovered the fertile valley. Much of the land was homesteaded by squatters rights.
La Plata County CEDS Update 2011 5-2
The Town of Bayfield was incorporated in 1906. The town has experienced the tragedies of fire (1902, 1905, 1920, and 1946) and floods (1911, two in 1927, and 1957). After the floods of 1927, a proposal was written for a dam on the Pine River for flood control and irrigation. Vallecito Dam was built in 1939 and its lake now provides recreation as well as flood control and irrigation. Bayfield has since served as a supply town and social center for area farmers and ranchers, and more recently as a bedroom community for Durango. It has remained a quiet town, riding the booms and busts that are typical of Colorado's economy. In recent years, it has experienced rapid growth and has become the fastest growing municipality in southwestern Colorado. Ignacio The early residents of the Ignacio area were the Ute Indians, primarily the Weminuche band. Their traditional territory extended west of the continental divide to the Blue Mountains and canyon lands of southeast Utah, and north of the San Juan River, which generally marked their boundary with the Navajos. Although the boundaries of the Ute Reservation have changed with the passing of various treaties, the original Ignacio Agency for the Southern Ute Tribe was founded in 1877 amidst a permanent population of Spanish Americans (Hispanics), Navajos, Paiutes, Anglos and Jicarilla Apaches living in the area. Within a few months of the founding of the Ignacio Agency a greater influx of Spanish American settlers arrived from communities in northern New Mexico and the San Luis Valley to the east. In 1913, Ignacio was incorporated. At present Ignacio remains a tri-ethnic community, composed of Southern Utes, Hispanics and Anglos. Today the town serves as a supply center for the surrounding reservation and ranches and is a crossroads for the gas and oil industry. The Southern Ute Tribal headquarters is located just north of the town limits and provides administration and services to tribal members. Services and facilities provided by the Tribe are, for the most part, separate from those provided by the Town of Ignacio and are not specifically addressed in this profile.
LOCAL ISSUES
La Plata County has some definite areas of strength and weakness as compared to the region. Key issues include agriculture, education, environment, healthcare, housing, livable wages, sustainability, telecommunications and transportation.
Agriculture
La Plata County is adapting to the changing faces of agriculture. Over the past 60 years, production of certain crops or commodities hay, cattle/calf operations has remained relatively consistent. Though as with most sectors of the economy, there are peaks and valleys as well as shifts in emphasis depending on demand, environmental conditions, regulations, or other parameters. According to the UDSA Census of Agriculture, in 2007 La Plata County reported 1,076 farms and ranches, an increase of 17% from 2002. These numbers can be somewhat misleading, however, as the USDA has a relatively wide parameter of what a farm actually is: The census definition of a farm is any place from which $1,000 or more of agricultural products were produced and sold, or normally would have been sold, during the census year. This broad definition is reflected in the relatively low percentage of farm operators that consider their primary occupation farming (approximately 393 out of 1,076 or 37%). This trend of primary income being derived from off-farm sources is not particular to La Plata County many farming operations across the country rely on other income to help support the farm.
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Ninety-eight percent of the farms in La Plata County are classified as family farms, while the average age of farmers is 58 years old. Eighty-one percent of those that responded as farm operators in the Census of Agriculture were male. http://www.agcensus.usda.gov/Publications/2007/Online_Highlights/County_Profiles/Colorado/cp0 8033.pdf. Most farms in La Plata County are less than 179 acres in size, and are primarily pasture land. These statistics, combined with the low percentage of operators that consider their primary occupation of farming, tends to lend itself to an ongoing trend of some agricultural lands being parceled off, or subdivided. Some current challenges facing the agricultural sector in La Plata include: elevated land costs, limited irrigation, an increase in the cost of crop inputs, global competition, a decrease in successional farming, a challenging climate, and large distances to destination hubs. There are also a number of folks within the agricultural community that take note of the lack of diversity within a farming operation. To put this in perspective, in 1945, of the 936 farms, 730 had milk cows, 757 had chickens, 684 grew vegetables for home use, 336 had apple tree(s), and 778 had cattle. This indicates that within one farm there were multiple income sources. We typically do not see that in the present day, as most farming operations tend to focus on one or two crops/animals. However, CSU Extension Agent Darrin Parmenter is encouraged by the renewed interest in local food production. Many reasons, such as educational awareness on topics of food security, food accessibility, and food quality, have led to this interest, and they should not be discounted. Even though their economic impact globally may be limited, their impact within the community be it the multiplier effect, agricultural and open space land preservation, job creation, and crop diversity is impressive.
Education
Since the last CEDS report, there have been significant changes in the way Colorado schools are rated, as well as in the State Standards and Assessments. A landmark education reform initiative known as Colorados Achievement Plan for Kids, or CAP4K, was signed into law in 2008 to align the state public education system from preschool through post-secondary. The Education Accountability Act of 2009 aligns the accountability system to focus on the CAP4K goals: holding the state, districts and schools accountable on a set of consistent, objective measures and report performance. (See Regional Overview on Education for more detail on these reforms.) District and school Unified Improvement Plans (UIP) are based on four performance indicators: academic achievement; academic growth; gaps in growth levels for a variety of historically disadvantaged subgroups; and success in preparing students for postsecondary and workforce readiness (based on dropout rates, graduation rates and scores on the ACT college entrance exam). Based on these indicators, the Colorado Department of Education (CDE) determines if each district (and in turn, their schools) exceeds, meets, approaches or does not meet the indicators. According to the 2010 one-year performance reports (first time the UIP format was required), Bayfield 10 JT- R and Durango 9R are Accredited, and Ignacio 11 JT is Accredited with Priority Improvement Plan. (View full reports on all three districts at http://www.schoolview.org/performance.asp.) Of all high schools in La Plata County, ninth-graders at the new charter school, Animas High School, showed the highest percentage scoring Proficient or Advanced in the CSAP (Colorado Student Assessment Program) subjects of Reading, Math, and Writing. Animas High School utilizes a project-based learning approach and is modeled after High Tech High, a charter school launched in 2000 by a coalition of San Diego business leaders and educators.
All ninth graders in La Plata County, with the exception of Ignacio High School, scored better than the state averages in the 2010 CSAPs.
% 9th Grade Students Scoring Proficient or Advanced on CSAP
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
89% 76% 77% 68% 59% 57% 44% 39% 39% 39% 54% 49% 71%
24% 13%
Reading
Math
Writing
Animas HS
Bayfield HS
Durango HS
Ignacio HS
Colorado
Environment and Land Use

La Plata County sits on the second largest field of coal bed methane gas in the country. Called the San Juan Basin, this field covers five Colorado and New Mexico counties and includes the Fruitland, Mesa Verde, Dakota, Pictured Cliffs and Paradox geological formations. In Colorado, mineral rights are generally separate from the surface owners property rights. This presents a challenge in mitigating the impacts of drilling above ground while balancing the companies rights to earn profits from their mineral estates. La Plata County government is a state leader in regulating oil and gas company activities on non-Tribal lands, having instituted rules regarding permitting, setbacks, performance standards, buffering, weeds, noise, health, and safety. In 2009, 3,130 active oil and gas wells in La Plata County produced an assessed value of over $956 million in oil and gas. Oil and gas production paid 40.58% of the countys property tax bill in 2010. This figure has decreased from 61% in the previous CEDS update. The reason for this was a reduction in gas prices production was approximately the same. The Southern Ute Indian Tribe is also a major leader in oil and gas development, but their drilling is not regulated by either La Plata County or the State of Colorado. The mining and utilities sector offers the highest average annual wage in La Plata County, paying $111,804 in 2009. This accounts for three percent of the jobs and seven percent of the job income in the county. The impacts of rapid growth and development are evident throughout the county. The population grew 16.82% from 2000 to 2010. La Plata County is in the process of developing a comprehensive plan that provides a policy framework and direction for the county, taking into account local trends, such as inadequate affordable housing, congested roads, future reductions in oil and gas revenues, and loss of agriculture. The planning process has included extensive public involvement and community visioning. Following adoption of the plan in 2011, the County will prepare a draft Sustainable Development Code that will implement the Future Land Use Plan through a regulatory
framework based on incentives and performance measures. This Sustainable Development Code will focus on best management practices related to livable neighborhoods, green building, greenhouse gas emissions, food planning systems, renewable energy production and water conservation. With 39% of the lands in this county categorized as public lands, the manner in which these lands are managed ties closely to the local economy. The San Juan National Forest and Bureau of Land Managements management plan revision will outline the types of uses that will occur, and other strategic land management decisions such as: identifying where commercial timber will be harvested, where grazing will occur and at what levels, and locations where motorized recreation is allowed. In public meetings, the following issues were identified as concerns in La Plata County: oil and gas development, wildfire hazards, Durango Mountain Resorts expansion, water rights, winter recreation access around the City of Durango, and wildlife corridors. The San Juan Public Lands Center received over 18,000 comments on the Draft Land Management Plan and Draft Environmental Impact Statement that was published in December of 2007. Significant information surfaced during review of public comments and industry feedback, and it was determined that the emerging potential for oil and gas exploration had not been adequately addressed, and the USFS and BLM decided it was necessary to publish a Supplement to the DEIS. The Supplement should be available for public review and it is anticipated that the Final Environmental Impact Statement and Land Management Plan will be published in the summer of 2012. The long-proposed Animas/La Plata water diversion and storage project (A-LP) southwest of Durango has been constructed. Pumping of water into the 120,000 acre-foot Lake Nighthorse is began in the spring of 2011 and may take up to three years to fill, depending on La Plata River flows. Authorized by Congress in 1968, A-LP has been through various delays, including cost overruns, which are being negotiated by the federal Bureau of Reclamation and the State of Colorado. The A-LP settles Native American water-right claims and provides water for household and industrial uses to three tribes and four non-tribal entities: the Southern Ute Indian Tribe, the Ute Mountain Ute Indian Tribe, the Navajo Nation in New Mexico, the state of Colorado, the Colorado Water Resources and Power Development Authority, the San Juan Water Commission, and the La Plata Conservancy District. When the A-LP facility is open to the public, the lake is expected to draw 163,000 visitors per year, who will spend an estimated $8 million per year on food, lodging, gas, and other supplies, according to a recent feasibility report by RPI Consulting. By 2025, the report estimates, Lake Nighthorse could bring 230 jobs and $10.8 million per year in revenue to the area. Some activities at the lake could include close-to-town camping, swimming, boating, trails, and riding options. The National Park Service is in the process of developing a recreation plan for Lake Nighthorse. They have made public participation in the process available through open houses, public forums, design workshops, and a website where people can post their comments and view others' input. A concern of many residents is the likelihood of motorized sports on the lake. People who prefer a more tranquil, natural setting are averse to the idea of speedboats and ATVs at the lake. In an effort to resolve this issue, the National Park Service has been addressing individual components of the motorized complaints, which include noise, pollution, and wakes. Some of the options suggested are designing separate areas for motorized sports, restricting engine decibels, banning fueling stations, and inspecting boats for invasive mussels. It appears likely that a boat ramp will be constructed at Lake Nighthorse, as the State of Colorado has provided a $3 million grant for a boat ramp with the contingency that gas-powered boats be allowed on the lake within three years of completion.
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The original A-LP bill included $20 million for the recreation component, but that was removed in 2001. The reservoirs opening to recreation is subject to Bureau of Reclamation approval and a qualified, non-federal entity to manage it. In La Plata County, concerns about the Durango and Silverton Narrow Gauge Railroads coal emissions resulted in an Air Quality Advisory Council, formed in 1998. This group is working collaboratively on finding solutions to this air quality threat and others such as oil and gas wells and rapid development. They published A Comprehensive Summary of Air Quality in La Plata County in August 2005 complete with data, studies, results from a citizen survey and recommendations for improvement. In 2006, the Durango & Silverton Narrow Gauge Railroad Smoke Mitigation Task Force was formed and received funding to look at alternatives to coal. In 2007, the railroad owner pledged to spend $1 million over five years to reduce smoke emissions. One of those improvements was to burn wood pellets in locomotives parked overnight, which has reduced smoke. While the owner is committed to decreasing smoke emissions at the roundhouse where the trains are stored overnight, he is also very committed to preserving the historic nature of the locomotives, and he has resisted making changes to the historic coal-fired locomotives that travel between Durango and Silverton. The railroad company has taken steps to offset environmental impacts, such as planting thousands of trees and buying green power from La Plata Electric. In September of 2010, the railroad announced preliminary plans to install an enhanced filtration (scrubber) system to reduce smoke emissions from locomotives idling overnight in the roundhouse. The new scrubber would have twice as much capacity as the existing filtration system and would also collect smoke and ash from areas not currently being served. Fundraising efforts of the Task Force are underway to help cover the estimated $1.2 million dollar project. Animal/vehicle collisions are the number one cause of crashes in southwest Colorado, and the Colorado Department of Transportation (CDOT) estimates that approximately 70 percent of all accidents are due to collisions with wildlife. In comparison, the statewide average for Colorado is nine percent of all accidents. In 2009, the Western Transportation Institute calculated the average per vehicle cost associated with an animal/vehicle collision to be $6,617 for deer and $17,483 for elk (http://www.ecologyandsociety.org/vol14/iss2/art15/). In September of 2008, as a pilot project, CDOT installed a $1.2 million electromagnetic wildlife detection system along a one-mile stretch of US 160, in an important deer and elk migration corridor east of Durango. The system operates on changes in the earths magnetic field. Cables are buried nine feet deep, 30 feet from both sides of the highway. The cables record movement of animals having the same electromagnetic signature as deer and elk, and when animals of this size are detected in the highway right-of-way, a sign lights up that alerts motorists to the presence of animals. The system has displayed some false positive results, and CDOT is researching the flaws. The system is the first of its kind to detect large animal movements near the edge of a highway, and the bugs are being worked out of this research project. However, anecdotal evidence indicates that there are fewer carcasses found in the detection area than in adjacent areas. If the project is successful, the technology could potentially have widespread use in highway corridors with high animal-vehicle collisions. During the past decade, public interest concerning environmental sustainability has been increasing in La Plata County, and several groups of local citizens and businesses are promoting sustainability practices and advocating for greater energy efficiency and renewable energy efforts across the Four Corners area.
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La Plata County and the City of Durango developed the La Plata Climate & Energy Action Plan in 2010 after pledging to reduce greenhouse gas emissions from their local government operations and throughout their communities. The recommended emission reduction targets are to reduce emissions by 80% below 2005 levels by 2050. Some of the recommended government and community actions are vehicle emission testing, transit-oriented development, and using green energy.
Health Care
Like much of the state and region, notable health care challenges exist in La Plata County. An estimated 25% of residents are uninsured. As the Baby Boomer population ages, it will create additional demand on Medicare providers. The rising cost of health insurance is making it increasingly challenging for businesses to offer coverage; health insurance coverage helps attract and retain employees. However, concerted, collaborative efforts are under way in La Plata County to find solutions. The Community Health Care Capacity Project (CHCCP), a project of the Citizens Health Advisory Council (an open coalition of interested citizens and organizations that serves as a central point for healthcare collaboration and communication), released a series of recommendations in 2010 that came from a year-long process of interviewing stakeholders and health care providers. From those recommendations the following actions have occurred: The formation of a county-wide Health Care Alliance with high level decision-makers from key organizations to implement projects and reduce duplicative efforts to fill gaps. The planning of a Federally-Qualified Health Center (FQHC) which will provide a full range of services to patients regardless of insurance coverage. If approved by Health Resources and Services Administration in August 2011, the facility will open in Durango as early as November 2011. Funding for the continuation and expansion of Community Health Care Teams, which provide navigators and home visits for patient-centered care. Such teams, in place currently for small children and seniors, helps connect patients with providers and address imminent issues that could potentially turn into more expensive, long-term problems. Researching formalized Donated Medical Care Programs to create one in La Plata County that would keep track of providers who donate care and create incentive for more to join (via tax credits and recognition). Initial stages of recruitment for medical and dental providers to participate in the CARES program (Community Access and Referral Enrollment System). A streamlined eligibility process will be developed, and if people learn they are not eligible for Medicaid or CHP+, they will know where to go for reduced-cost care. Individuals and families at 251% to 400% of poverty receive a CARES card and can see providers within the network, who offer a sliding-fee scale.
Several assets in regards to health care service have been added to La Plata County in the last decade: Animas Surgical Hospital opened in 2004, and Mercy Medical Center became Mercy Regional Medical Center with the opening of a new 212,000-square-foot facility in 2006. Mercy also operates a Health Services Clinic for adults, accepting all forms of insurance including Medicare and Medicaid. The clinic served 1,647 patients in 2010. Healthy Lifestyle La Plata is working to educate businesses on worksite wellness programs, which have been shown to elevate employee productivity, reduce absenteeism and significantly reduce health care costs. The Durango Chamber of Commerce offers a basic group health plan for Chamber members aimed at business owners priced out of the market.
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Another safety-net clinic available in La Plata County is the School-Based Health Center (SBHC) at Durango High School, which offers preventive and integrated health care services to students during school hours. In the 2009-2010 school year, the SBHC at DHS saw 806 patients and had 1,720 total visits. Another SBHC is scheduled to open at the Florida Mesa Elementary School in 2011. Although the focus is to provide care for underserved kids, the SBHCs are open to all 9R students. The Student Health Center at Fort Lewis College serves enrolled students for nominal fees, providing general medical care, minor surgical procedures, nursing, first aid, and emergency care for most illnesses and injuries. The Health Center at FLC has approximately 6,500 office visits per school year. Axis Health System also opened the Crossroads Acute Treatment Unit (ATU) in 2006 to serve the mental health needs of the region. Based in Durango, Crossroads operates an Assessment Unit, an Acute Treatment Unit, and a Detox Facility. The program offers short term stabilization and placement with a goal to avoid financially costly and emotionally challenging trips for consumers to long-term inpatient facilities elsewhere. In FY 2009, the number of patient bed days for the ATU and Detox was close to 3,000. Finally, the Southern Ute Indian Tribe offers health services to its members, including in-home monitoring of clients, non-emergency transportation, medication delivery, patient advocacy, case management, and health education Sources: Community Health Care Capacity Project http://www.chaclaplata.org/ Durango Chamber of Commerce (970) 247-0312 Small Area Health Insurance Estimates 2007 http://www.census.gov/did/www/sahie/index.html Health Lifestyle La Plata http://www.healthylifestylelaplata.org/worksite-wellness/ Southern Ute Indian Tribe http://www.southern-ute.nsn.us/tribal-health/health-services Axis Health System http://www.axishealthsystem.org/ DHS School Based Health Center http://dhs.durangoschools.org/hs-school-based-healthcenter Fort Lewis College http://www2.fortlewis.edu/healthcenter/home.aspx
Housing
In the 4 quarter of 2010, La Plata County had a foreclosure rate of 21% of occupied housing units. nd Foreclosures in rural resort counties also often reflect 2 homes or time shares. In 2010, in La Plata County the median price for a single family residence was $300,000; for Durango the median was $325,000; in Bayfield the median was $230,000; and in Ignacio the median was $193,000. Although the median sales price was down for Durango and Bayfield, the number of sales countywide is up 1% from 2009. Data Source: The Real Estate Watch Annual Summary The provision of adequate housing continues to be a concern in La Plata County. The following information was drawn from a recent report prepared for the Southwest Colorado Housing Collaborative, in an effort to create a regional housing strategy (Southwest Colorado Housing Plan. Report prepared by Economic & Planning Systems. Draft January 21, 2010. p6). The Regional Housing Alliance (RHA) with Enterprise Community Partners completed a detailed Housing Needs Analysis for La Plata County in June of 2007. The major finding of the analysis was that many residents in La Plata County were being priced out of housing in the County. The median income in the County at the time ($59,200) correlated to a purchase price of $220,000. However, the median home price in the County at that time
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was $325,000. One of the drivers of this price escalation is non-local buyers. The study found that 26 percent of homes purchased in the County were bought by non-locals. *Note A study performed by Region 9 in 2006, using 2005 assessors data, found that 17% of single family residences (and 29% of all properties) in the county were owned by non-locals. http://www.scan.org/2nd%20home%20typology%20summary.pdf. The major efforts identified by the study focused on fair-share housing policies (a form of inclusionary zoning), determining possible tools to create more affordable homes, and providing financing options for homebuyers in need. The RHA assisted the City of Durango in adopting a fair-share ordinance which requires all new developments to provide resources for affordable housing. Specifically, this program helps to create homes that can be sold at affordable and attainable prices. The regulation requires that 16 percent of the homes planned will be priced at attainable (less than 125 percent of AMI) or affordable (less than 80 percent of AMI). So far the program has produced four homes and other projects have paid a fee in-lieu of homes. Rental housing needs in the County are growing. There is a limited supply of rental units, especially units geared towards families and locals. Affordable rental units in La Plata County managed by Mercy Housing have waiting lists that are fairly lengthy, especially for units that are for renters earning less than 50 percent of AMI.
Livable Wages
What level of income is necessary to support a given size and type of household? A livable wage addresses the essential financial requirements for basic living needs, such as shelter, healthcare, childcare, and nutrition. When one earns less than a livable wage, he or she is forced to make undesirable choices such as working two or more jobs, working longer hours, making longer commutes, sharing a residence, or giving up basic items such as a telephone or insurance. Within our region, Pagosa Springs (Archuleta County) and Silverton (San Juan County) are the least expensive places for a family to live, while Rico (Dolores County) and Durango (La Plata County) are the most expensive places to live. Since 2007, the cost of living in Bayfield has decreased by 9%; this is due primarily to decreasing rents and declines in prices of some consumer goods and services. The cost of living has increased 5% in Durango and 1% in Ignacio. The complete report can be seen at www.scan.org. The following tables illustrate the expenses for households in La Plata County in relation to livable wages. Livable wages vary by community. A recent study by Region 9 estimates that in Bayfield a family of four renting a three bedroom unit would need $31.37 per hour to sustain just the basic needs of a household including childcare costs. In Durango this hourly wage is estimated at $35.12, and in Ignacio it is $33.12.
La Plata County Bayfield Basic Expenditures (excluding rent) 2010 Rent Expense 2 Child Care ($4.14 x 2080 per child) Total Living Expense 3 Livable wage per hour # of jobs at minimum wage ($7.24) Single Person renting 1 bdrm $490 per month $ 16,270 $ 5,880 $ $ 22,150 10.65 1.5 Single Parent, 1 child renting 2 bdrm $625 per month $ 30,873 $ 7,500 $ 8,611 $ 46,984 $ 22.59 3.1 Family of 4 renting 3 bdrm $750 per month 39,024 9,000 17,222 65,246 31.37 4.6
$ $ $ $ $
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La Plata County Durango Basic Expenditures (excluding rent) 2010 Rent Expense 2 Child Care ($4.14 x 2080 per child) Total Living Expense 3 Livable wage per hour # of jobs at minimum wage ($7.24) La Plata County Ignacio Basic Expenditures (excluding rent) 2010 Rent Expense 2 Child Care ($4.14 x 2080 per child) Total Living Expense 3 Livable wage per hour # of jobs at minimum wage ($7.24)
Single Person renting 1 bdrm $650 per month $ 16,270 $ 7,800 $ $ 24,070 11.57 1.6
Single Parent, 1 child renting 2 bdrm $1050 per month $ 30,873 $ 12,600 $ 8,611 $ 52,084 $ 25.04 3.5 Single Parent, 1 child renting 2 bdrm $802* per month $ 30,873 $ 9,624 $ 8,611 $ 49,108 $ 23.61 3.3
Family of 4 renting 3 bdrm $1,400 per month $ 39,024 $ 16,800 $ 17,222 $ 73,046 $ 35.12 5.1 Family of 4 renting 3 bdrm $1,125 per month $ 39,024 $ 13,500 $ 17,222 $ 69,746 $ 33.53 4.9
Single Person renting 1 bdrm $701* per month $ 16,270 $ 8,412 $ $ 24,682 11.87 1.6
Notes: The minimum wage for Colorado is currently at $7.24 per hour, effective January 1, 2010. 2 Source: Tricounty Headstart Early Childhood Programs. 3 Total Living Expenses/2080 hour work year. * Local rent estimates not available. Fair Market Rent provided by HUD. Family of four assumes two children requiring full-time day care.
Sustainability
Sustainability is a new section in the CEDS and something several communities feel strongly about. There are several groups and initiatives working towards defining their vision. The following text was provided by La Plata County. A more expanded, regional version can be seen in the Regional Overview of this document. Sustainable communities within La Plata County consider sustainability aspects relating to development, water, transportation, energy, and waste and materials. Because these communities are diverse sustainable development does not focus solely on environmental issues, but rather they consider the broad ramifications of human interests in, and impacts on, the environment that we live in. Sustainability as it relates to development assures that our agricultural communities including farm operations are economically viable. We recognize that sustainable does not mean that we can grow everything we need. Our food supply varies and feeding all residents is dependent on importing from other growing locations. While supporting agricultural lands, our communities grow around designated parcels of land that integrate new and old neighborhoods. Sustainability as it relates to water is easier when we focus on urban areas. Most urban areas enjoy municipal water supplies which insure both water quality and quantity. Our more rural areas serve a significant share of the population, and rely on a mix of private and public infrastructure, including small central water systems and water wells. Sustainability as it relates to transportation includes multi-modal transportation systems. In urban areas, walking and cycling are methods that work well when the seasons allow. In the more rural areas, there are equestrian routes and adequate road and highway systems that connect our neighborhoods, towns, and provide access to employment areas.
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Public transportation is limited, however the systems that are available enable people of all ages and abilities to get around safely, efficiently, and conveniently throughout the counties. All airports connect residents to the rest of the world, contributing to economic vitality. Our region is a vibrant and exciting destination that shows off our natural assets, rich heritage, diverse cultures and excellent recreational opportunities. Sustainability as it relates to energy waste and materials are used to describe infrastructure that facilitates a place or regions progress towards the goal of sustainable living. While this is a worthwhile goal, there are seasonal constraints. In La Plata County, attention is paid to technological and government policy which enables urban planning for initiatives that promote all locally generated energy sources, including traditional fossil fuels and renewable energy, as well as educational components to reuse and recycle within all communities.
Telecommunications
The fiber optic telecommunications infrastructure and demand for broadband services in La Plata County are concentrated in county offices and community anchor institutions located in the municipalities. The County maintains partnerships with the Towns of Bayfield and Ignacio and the City of Durango to provide many government services. The County retains Information Technology (IT) personnel while working closely with City of Durango to improve the broadband services in the county by investing in infrastructure. The Southern Ute Tribe has its own IT Department. The City of Durango is constructing fiber and wireless infrastructure to implement a private, intracommunity network. Durango does not plan to operate a comprehensive, citywide network, but will invest in and provide dark fiber to private service providers, who will offer transport and end-user services on the citys physical infrastructure. FastTrack Telecommunications, a private service provider owned by the regions two electric cooperatives, also owns extensive fiber optic infrastructure throughout Durango and La Plata County. The City of Durango, La Plata County, Durango School District 9-R, and Mercy Regional Medical Center formed a consortium during the original Beanpole project that contracted with FastTrack for services. These entities hope the implementation of city-owned dark fiber on open access principles will allow additional private service providers to enter the market and make telecommunications services more competitive in the area. FastTrack also owns fiber optic infrastructure between Durango and the Town of Bayfield. The majority of government facilities, community anchor institutions, businesses and residents in the town receive services via wireless facilities. In the Town of Ignacio, community fiber optic infrastructure is owned by the school district and connects the majority of community anchor institutions. The network does not provide intra-community redundancy, but a small investment would provide that capacity. The remaining institutions are within several hundred feet of existing conduit, and a small fiber project was completed in spring 2011 to connect the Ignacio Library to this infrastructure. The Southern Ute Tribe also owns fiber and wireless infrastructure within the town. FastTrack-owned fiber provides the only connectivity out of the town on fiber that run to Durango. The City of Durango, the Towns of Ignacio and Bayfield, and La Plata County are participants in the Southwest Colorado Council of Governments (SWCCOG), and the SWCCOG telecommunications infrastructure development project, the Southwest Colorado Access Network (SCAN). The SCAN project has identified 63 community anchor institutions in the City of Durango, 18 in the Town of Bayfield, and 10 in the Town of Ignacio as potential participants in intracommunity private government networks.
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These and other institutions in the area are also potential purchasing consortium members for the SCAN project. The County, municipal governments, and community anchor institutions will have input into the type of infrastructure and services that are appropriate for the communities broadband needs as the development of the network progresses.
Transportation
Highways - Traffic congestion continues to increase in La Plata County, due to steady population and employment expansion. The countys area of greatest growth is expected to be in the Three Springs/Grandview area, increasing traffic between Durango and the new Mercy Regional Medical Center/Three Springs development along U.S. Highway 160. The 2030 Transportation Integrated Plan developed by La Plata County and the City of Durango and CDOTs US 160 Environmental Impact Statement, Durango to Bayfield, were both completed in 2006. La Plata County may update their transportation plan following adoption of the Countys comprehensive plan, which was in process at the writing of this report. Pavement Condition - The Colorado Department of Transportation (CDOT) rates the condition of highway surfaces with its Pavement Management System, providing a range of years of Remaining Service Life (RSL) of the pavement for specific highway segments. The RSL calculation is based on roughness, cracking, patching, rutting and other indicators of smoothness and structure. A good surface condition corresponds to a remaining surface life of 11 years or more. A fair surface condition corresponds to a remaining surface life of 6 to 10 years, while a poor evaluation represents a remaining surface life of less than 6 years. According to data provided by the CDOT Region 5 Pavement Manager, 23.4 percent of the state highway miles in La Plata County were rated poor in 2010. This compares to 74.2 percent poor in 2001, an improvement of over 50 percent state highways in good and fair condition in the county. Maintaining the existing transportation system is a high priority for the State Transportation Commission, and a large percentage of state and federal transportation dollars are spent on reconstruction and resurfacing projects. Intersections - In 1998, the regional CDOT office first conducted an analysis of intersections needing improvement and has updated the study two times since then. CDOT requests potential study locations from the counties in the region and hires a consultant to perform an objective study, based on parameters such as accident rate, congestion, truck usage, cost/benefit, and local funding participation. A ranking of priorities is made, and projects are basically funded in order of ranking in the study. CDOT has programmed funding for two intersection improvement projects in La Plata County in the next six years: 1) State Highway (SH) 172 at County Roads 311 and 513 in th the amount of $1.75 million in 2014; and 2) US Highway 550 (US 550) at 9 Street in the amount of $1,120,000 in 2015 and 2016. US 160 and US 550 Environmental Documents - Environmental documents for two major transportation projects in La Plata County have been completed by the Colorado Department of Transportation since the last CEDS update. The US 160 Environmental Impact Statement, Durango to Bayfield, was based on the projected increase in travel demands on highway capacity and efficiency and the substandard design that contributes to accidents associated with highway deficiencies, including poor sight distance, steep roadway grades, lack of shoulders, insufficient area for out-of-control vehicles to recover, uncontrolled access, lack of wildlife crossings, and lack of turn lanes. The study proposed extending the existing four-lane highway from the Grandview area, east to Bayfield and constructing three interchanges.
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Since the Record of Decision was issued in October of 2006, the following work has been completed in the corridor: US 160 at County Road 233. A traffic signal was installed at this intersection that was improved to accommodate development of the new Mercy Medical Center and proposed development north of U.S. Highway 160. US 160 at SH 172. A double left-turn lane was added to facilitate turning movements from northbound SH 172 onto westbound US 160. US 160, 4th Lane and Interchange. An interchange was constructed on US 160 that may connect to US 550 in the future, pending the outcome of required re-evaluations of various federal environmental statutes. The completed interchange accommodates future projected traffic volumes of 87,000 vehicles a day, facilitates east-west travel and provides safe and direct access to current and future development north and south of US 160. The project cost was $34.3 million and was mainly funded with Senate Bill 1 money, which was used for 28 large-scale projects around the state. The Fourth Lane project added a fourth lane to an existing three-lane section of highway between two four-lane sections, west of Mercy Medical Center, where traffic bottlenecks occurred. US 160, Ramp B of the Grandview Interchange described above used $4.0 million of ARRA funding. The work included construction of a south access to the interchange, as well as retaining walls. US 160, Phase 3: This project was in process at the time of the writing of this report. The scope of the project is to complete the Grandview Interchange to a functional level with the construction of a roundabout, south access road, and connecting ramps. The estimated project cost is $14.2 million.
The US 550 corridor south of Durango provides an interstate travel route between Colorado and New Mexico that enables the transport of goods and services across the western portion of Colorado. US 550 is the only contiguous north/south route in western Colorado, and is a designated truck route, with truck traffic comprising approximately 13 percent of overall traffic. The US 550 Environmental Assessment was initiated to address both local and regional transportation needs, including safe and efficient travel to and from Durango and Aztec, New Mexico, and transport of goods and services. The preferred alternative was to four-lane US 550 from the existing four-lane section at Milepost 1.0 to Milepost 15.4, provide four wildlife crossing structures, and install deer fencing. Public involvement was an integral part of the planning process for each of the studies, including numerous meetings, workshops, presentations and publications with the public, local agencies, and special interest groups. Since the Finding of No Significant Impact was issued in December of 2005, the following work has been completed or is in process in the corridor: US 550, State Line North Phase II. This project added two lanes to the highway, extending the four-lane section from Mileposts 0.5 to 2.75. The project included two new bridges, extensive drainage work, wildlife fencing, and deer ramps. The cost was $11 million. US 550 at County Road 302. This project was in process at the time of the writing of this report. This location was ranked No. 5 on the CDOT Region 5 Intersection Study described above. The scope of work includes turn lanes and a passing lane. The alignment will be constructed to match the final four-lane configuration. The work also includes irrigation and drainage improvements, lighting, deer fence, and a wildlife detection system. The budget is $6.3 million FASTER funds.
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Statewide Transportation Improvement Program (STIP) - The fiscal years 2012-2017 STIP, CDOTs six-year plan for the region that is developed in collaboration with the Southwest Regional Planning Commission, includes three projects in La Plata County (in addition to the intersection projects described above): 1) intersection improvements and a pedestrian bridge over US 550 at Sunnyside Elementary School, south of Durango, in the amount of $9.9 million in fiscal years 2013 2016; 2) design of a passing lane between Durango and Bayfield in the amount of $300,000 in fiscal year 2017; and 3) right-of-way acquisition for future four-laning of US 160, between Durango and Bayfield, in the amount of $2.54 million in fiscal year 2017. The projects are included in the US 550 Environmental Assessment and US 160 Environmental Impact Statement corridors described above. Partnerships - State and local transportation budgets have not kept up with the needs of aging roads and bridges, as well as the need for public transit and bicycle and pedestrian paths. In this time of limited funding for transportation in Colorado, partnerships between agencies are encouraged. Following are some examples of such arrangements. The Colorado Department of Transportation constructed a $9 million safety improvement project to relocate the intersection of US 160 and La Plata County Roads 222 and 223, located at the top of a hill with poor sight distance, to a location approximately one mile to the east. The project will improve the configuration and sight distance, increasing safety for motorists on both US y 160 and the county roads. La Plata County contributed $500,000 to the project. An access control plan is underway for State Highway 172, State Highway 151, and County Road 517, in the vicinity of Ignacio. The Southern Ute Indian Tribe is leading the study, partnering with the Town of Ignacio, La Plata County, and the Colorado Department of Transportation. Each partner has agreed to contribute $75,000 toward the plan, which will identify long-term corridor access and mobility needs and solutions, including specific future access points. La Plata County was awarded $1.8 million in federal Hazard Elimination Program funds for intersection safety improvements at State Highway 172 and County Roads 311 and 513 where numerous accidents have occurred in the past few years. The project will include pedestrian safety and motorist safety and mobility improvements. A 20 percent match is required, and CDOT provided the matching funds. Camino del Rio is a section of US 550 in Durango that was constructed several decades ago as a bypass to downtown. The City of Durango and CDOT are pairing up to provide much-needed pedestrian improvements on this four-lane highway. An access to a fire th station is located near 12 Street, and a traffic signal to facilitate movement of emergency vehicles is in place. The City will contribute sidewalks, ADA ramps, and an upgrade of the signal, and CDOT will provide new signal heads and wiring and maintenance.
ARRA - Under the American Recovery and Reinvestment Act (ARRA) of 2009, CDOT Region 5 (15 counties in southwest Colorado, including La Plata County) received $31 million for highway projects and $1.078 million for transportation enhancement projects, such as construction of multi-use trails. Transportation projects constructed with ARRA funds in La Plata County include: 1) US 160, Ramp B of the Grandview Interchange described above in the amount of $4.0 million; 2) funding of $4.0 million toward the relocation of the intersection of US 160 at County Roads 222 and 223; 3) Bayfield US 160 Business Route sidewalks in the amount of $250,000; and 4) La Plata County Road 501 bike path in the amount of $216,000. Colorado FASTER - Legislation passed in early 2009, known as FASTER (Funding Advancement for Surface Transportation and Economic Recovery), has provided revenue for transportation projects in the region that would not otherwise have been constructed. The purpose of the bill is to provide a long-term revenue source to repair deficient bridges and deteriorating roads around the state. FASTER is funded by an increase on vehicle registration fees, tolling on sections of highway in some parts of the state, and a $2.00 daily fee on car rentals. The regions four-year FASTER
highway safety plan includes two projects in La Plata County: 1) shoulder-widening for safety on SH 140, south of Breen, in the amount of $1.65 million in fiscal year 2010, and 2) construction of intersection safety improvements at US 550 at County Road 302, south of Durango, in the amount of $6.3 million in fiscal year 2011 (this location was included in the intersection study described above). FASTER funding is also available for regional and statewide transit projects. The Southwest Regional Planning Commission collaborated with CDOT to develop a three-year plan for regional FASTER transit funds. The City of Durango was awarded $80,900 in fiscal year 2011 and $135,105 in fiscal year 2012 for capital purchases, including six buses, bus shelters, installation of th a pedestrian bridge at 24 Street, a snow blade, and electronic communications for buses. La Plata County was awarded $96,000 in fiscal year 2012 for construction of a park-and-ride at US 160 and County Roads 222 and 223. Southern Ute Community Action Programs (SUCAP) was awarded $29,345 for a bus in fiscal year 2012 and a tentative $100,000 fiscal year 2013 award, pending funding availability, for construction of a bus barn. CDOT Region 5 received $1.7 million of FASTER statewide transit funding for a project to construct a portion of the SMART 160 Trail connecting two existing sections of bike path that will provide for a continuous, alternative transportation route between the developing Three Springs mixed-use community/Mercy Medical Center and downtown Durango and the Durango Transit Center. Construction is expected to begin in the summer of 2012. The SMART 160 Trail has been a priority of the community for many years. Existing sections of this multi-use trail have been constructed by Three Springs, Rancho Vedado development, and CDOT. Specialized Transit Transit continues to be a prominent La Plata County issue. Residents, the county, and area municipalities, all recognize that increasing numbers of people are commuting longer and longer distances to work. The City of Durango is the central point for work and shopping, with the majority of commuters traveling in from Bayfield and Mancos. Many of the countys roads, including US 160 and US 550, are reaching capacity. Durango Transit Center - The Colorado Transportation Commission approved state funding in the amount of $5.1 million for design and construction of the Durango Intermodal Transfer Center (known as the Durango Transit Center) in 2006, and the 7,945-square-foot facility was completed in August of 2009. The building provides offices for 15 full-time and three part-time transit, parking, and code enforcement employees. Fifty parking spaces for bicycles are provided, including 25 covered, secure spaces. Each fixed route and trolley bus is equipped with a rack to carry two bicycles. The Durango Transit Center is certified gold by Leadership in Energy and Environmental Design, an organization that promotes sustainable building practices. The Durango T provides year-round fixed route transportation using buses, trolleys and ADAcompliant para-transit service minibuses. The fixed route buses and trolleys run within the city limits of Durango, and provide the most comprehensive bus service in the region. Trolleys operate on 20-minute headways on Main Avenue, and there is no charge for service. Fixed-route loops offer service within Durango, including Fort Lewis College, US 160 West, Mercy Medical Center/Wal-Mart, Crestview subdivision, and Saturday citywide service, with 30-minute headways. The fare for the general public on fixed-route loops is $1.00. The Opportunity Bus is for those with ADA-specified disabilities and for seniors aged 60 and over. The Opportunity Bus runs six days a week in the winter and seven days a week in the summer, and arrangements for service must be made 24 hours in advance. La Plata County Senior Services provides on-call door-to-door demand-response transportation services to seniors and persons with disabilities throughout La Plata County. The primary service is for medical appointments and to meal sites.
The Southern Ute Community Action Programs (SUCAP) offers fixed route and demandresponsive transportation services to the Southern Ute Tribal community and residents of Ignacio. This program, Roadrunner Transit, operates a fixed-route service four times daily between Ignacio and Durango and between Durango and Bayfield. Two runs operate during commuter hours and are designed to link with the Durango T. The two mid-day runs allow two hours in Durango for medical appointments and shopping. Demand/response service operates in the Ignacio area for one and one-half hours in the morning and two hours in the afternoon. The Roadrunner is considering expanding the hours of demand/response service. Durango Transportation is a private company that also provides on-demand services to locations in La Plata County, seven days a week. Durango Mountain Resort offers winter transit service for employees and the public between the ski area and the Durango Transit Center. They are also considering service during the summer. Intercity Bus Service - As mentioned in the regional transportation section, intercity bus service in the region is provided by Greyhound/TNM&O. The buses, which originate in Albuquerque, stop at the Durango Transit Center twice per day and also make stops in Cortez, Telluride, Grand Junction, and Denver. Bicycle and Pedestrian - As mentioned in the regional transportation report, multi-model solutions to transportation are important to residents in the region. According to the 2000 U.S. Census, 4.1% of Durango residents over the age of 16 ride or bicycle to work, over ten times the national average. Many of the communities within the Southwest Regional Transportation Planning Region are developing trail corridors for pedestrians and bicyclists that will link open spaces and provide safe access to schools, shopping, and recreation areas. There are numerous opportunities for mountain and road bicyclists from the Overend Mountain Park, Horse Gulch and Dry Folk trails to Durango Mountain Resort (DMR). Bikers can ride the chairlift (that transports skiers in the winter) to the top of the mountain where they can ride on 50 miles of trails. According to the DMR public relations office, approximately 1,300 bicycle riders purchased uplift (one trip) tickets to use Durango Mountain Resort trails during the summer of 2010. The Iron Horse Bicycle Classic is a 47-mile race that has run from Durango to Silverton on Memorial Day weekend since 1972. The route includes two mountain passes almost 11,000 feet above sea level. The first year of the race, 36 bicyclists participated. In 2010, the number of racers had increased to over 2,500. According to the director of the Iron Horse Bicycle Classic, research conducted in 2004 indicated that approximately $175 to $200 was spent per rider per day on lodging, meals, and other costs. CDOT closes US Hwy 160 between Durango Mountain Resort and Silverton during the event for rider safety. Airports - Animas Airpark is located in La Plata County, four miles south of the City of Durango, at an elevation of 6,690 feet. Access to the airport is from County Road 213. It is a privately owned general aviation airport open to the public and operated by Animas Airpark, Inc. The facility has a 5,000-foot-long runway and no terminal building. Durango/La Plata County Airport - This facility is located in La Plata County, 14 miles southeast of the City of Durango. Access to the airport is from State Highway 172. It is a publicly-owned, commercial service facility operated jointly by the City of Durango and La Plata County. The airport is overseen by the Airport Board of Commissioners, and meetings are open to the public. The airport also supports private aviation facilities, air freight operations and an interagency wildfire air tanker base. The primary runway is over 9,200 feet long, and is equipped with lights and navigational aids. The 36,000 square-foot terminal houses five rental car agencies, a deli, and a gift shop. Daily service includes flights to Denver and Phoenix. The number of passengers reached a total of 142,663 in 2010.
LA PLATA COUNTY PROFILE La Plata County Government

La Plata County is one of 64 counties created by the State of Colorado. The responsibilities of implementing state law and managing county business are shared by elected officials, including: Assessor, Clerk and Recorder, District Attorney, Sheriff, Treasurer, Coroner and Surveyor. An elected three member Board of County Commissioners is the chief legislative and executive body of the County. Their duties include overseeing county budget, land use policy, social services, and road maintenance and construction, and public health programs. In addition to these 10 elected officials the county employed a staff of 412 in 2010. Expenditures La Plata County provides many different services to its citizens, including public safety, roads and bridges, and health and welfare. Estimated expenditures for La Plata County total $67.8 million for 2011. Revenues The County expects to receive revenues of about $63 million in 2011. Approximately $20.2 million, or 43%, will come from non-local tax sources such as federal and state funding for social service programs, highway users taxes, grants and sales taxes generated by visitors to the county. The balance of $21.0 million will come from sales and property taxes paid by local citizens. Property tax revenues are distributed among municipalities, school districts and special districts (i.e. fire protection and sanitation). Special Districts set additional tax levies. The La Plata County property tax levy rate is 8.50.
La Plata County's total revenue was $63 million, where did it come from?
Property Tax Collections 31.0% Insurance Deposits 6.0% Sales Tax Collections 18.9%
Other Tax Collections 3.0%
Sale of Capital Assets 0.1%
Permits, Fines and Fees 1.0% Intergovernmental 29.5%
Investment Earnings 0.6% Charges for Services 8.9% Miscellaneous Revenue 1.0%
Source: La Plata County 2011 Budget.
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Infrastructure and Services

Electric - The entire county is served by the La Plata Electric Association. Natural Gas - Most of the area is served by Atmos Energy and various propane distributors. The Town of Ignacio owns and operates its own natural gas distribution system. Water- Durango and Bayfield have municipal water systems. Ignacio contracts water through the Southern Ute Tribe. Other residents are served by Rural Water Districts or have their own wells. The proposed Vallecito Water District will cover much of the southeastern portion of the county, including the Florida Mesa and Bayfield areas. Wastewater - Durango and Bayfield have municipal wastewater systems. Ignacio contracts wastewater treatment through the Southern Ute Tribe. Others are served by rural water districts or have their own septic systems. Solid Waste - Most of the area is served by Waste Management and Phoenix Recycling. There are also a variety of private waste haulers. The City of Durango also provides trash pick up and curbside recycling services Police & Fire Departments - Durango, Bayfield and Ignacio each have police and fire personnel. The balance of the county depends on the Sheriff's Department and rural fire departments. The Durango Fire and Rescue Authority (DFRA) also serves Hermosa and Hesperus areas. Telephone - Most of the area is served by Qwest (local service area was just purchased by Century Link). The southeast portion of the county, i.e. Ignacio, is served by CenturyTel. Medical Facilities - Mercy Medical Center provides ICU/critical care/cardiology services that are available 24 hrs. a day, 7days a week, as well as 135 physicians providing 34-35 other medical specialties. Mercy is a Level III trauma center and is licensed for 82 private beds. The privately owned Animas Surgical Center provides facilities for elective surgeries and outpatient care, and operates an emergency room. There is also an emergency clinic in Durango and numerous family practices in the various municipalities. Business Parks - Durango (Bodo Industrial Park, the Durango Tech Center, and Rancho Vedado Phase I & II {Grandview}). The Airport Business Park is in preliminary approval status; the conceptual plan has been approved, but no development agreement has been made. La Plata County, the City of Durango and property owners on CR 213 are studying economic benefits of creating a Business Park on CR 213, east of Animas Air Park. Bayfield (54 acres under development): Ignacio (No business parks). Major Employers - 2010 Top 10 Employers: Southern Ute Indian Tribe (1,500), Mercy Medical (625), Durango School District 9R (544), Fort Lewis College (535), City of Durango (500), Mercury Payment Systems Inc. (442), La Plata County (412), Durango Mountain Resort (380 - 408), WalMart Stores Inc (353), San Juan Basin Health (226) Data Source: Region 9 called employers. Recreation Facilities (2011) Durango community facilities include 7 soccer fields, 9 baseball and 3 softball fields. Facilities at Chapman Hill include a refrigerated ice- rink and a 5000 sq. ft. pavilion, as well as a ski hill. Durango has a 71,560 square foot community recreation center. A skate park and whitewater park. There are 8 access points to the Animas River and 7 miles of hard surfaced river trails with another 2.5 in development stages. Durango has over 80 miles of soft surface trails. Durango has 32 parks comprising 86 acres and 1,575 acres of open space. There are surrounding public lands as well as several school athletic fields including Fort Lewis College. La Plata County CEDS Update 2011 5 - 19
Bayfield community facilities include a community gymnasium and a senior center. There are two new lighted baseball/softball fields. Athletic fields (football, baseball) at the High School. Recent additions include a skate park and trail system. There is also an all purpose field for soccer and football. Bayfield is considering adding some white water rafting features. Ignacio community facilities include access to the Southern Ute Tribal Recreation Center, and the Town Park. Ignacio has 2 parks, used for Baseball leagues in the summer and the Youth Football League in the fall. There are picnic tables and grills, a tennis court (being re-built) with a basketball hoop at one end for half court play, a short River Trail, and children's play equipment. Ben Nighthorse Community Park has a large playing field for running, ball throwing, etc, and children's play equipment. There is a stand alone basketball court at the south end of downtown. There are school facilities that include a track, football field, garden & play equipment. Surrounding public lands. Housing (2010) In La Plata County the median price for a single family residence was $300,000; for Durango the median was $325,000; in Bayfield the median was $230,000; and in Ignacio the median was $193,000. Data Source: The Real Estate Watch Annual Summary Child Care Availability (2011) In La Plata County there are 1,224 Total Slots (Ages 0-5). One provider offers 24 hour care and 3 providers offer weekend care. Data Source: Childcare Resource and Referral. Long term care facilities for seniors - (2010) There are 3 facilities with a total of 228 beds. Data Source: San Juan Basin Area Agency on Aging Estimated number of persons without health insurance (2007) 10,942. Data Source: U.S. Census Bureau
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Demographics
Between 2000 and 2010, La Plata County grew from 43,941 to 51,335 people (17%) with most of the growth occurring in Bayfield and Durango. Ignacio saw slower growth, as did unincorporated areas of the county. These population figures, however, do not Census Census % Change reflect the large number of seasonal 2000 2010 2000-2010 the area. A 2006 local La Plata 43,941 51,334 16.8% residents in nd study on 2 homes indicated that in Bayfield 1,549 2,333 50.6% 2005 about 17% of single family Durango 13,922 16,887 21.3% residences (and 29% of all Ignacio 669 697 4.2% properties) were owned by people Unincorporated 27,801 31,417 13.0% that live outside of the county. Source: Colorado State Demography Office 3-2011
The annual average rate of Population Forecasts growth is expected to La Plata 2010 2015 2020 2025 2030 increase, and then slowly Population 51,334 58,921 66,720 73,983 80,772 decline over the next 20 Avg. Ann. % Change 2.8% 2.5% 2.1% 1.8% years, based on local and Source: Colorado State Demography Office 3-2011 national trends. A population of about 59,000 is forecast by 2015. The American Community Survey (ACS) is a large, continuous demographic survey conducted by the Census Bureau that will eventually provide accurate and up-to-date profiles of America's communities every year. Questionnaires are mailed to a sample of addresses to obtain information about households -- that is, about each person and the housing unit itself. The survey produces annual and multi-year estimates of population and housing characteristics and produces data for small areas, including tracts and population subgroups. The following topics are drawn from the ACS, but do not include all available information. For a more comprehensive look at the demographics of La Plata County go to http://www.census.gov/acs/www/. Population: In 2005-2009, La Plata County had a population of about 50,000 (49 percent) females and (51 percent) males. The median age was 37.3 years. Twenty percent of the population was under 18 years and 11 percent was 65 years and older. Households and Families: In 2005-2009 there were 21,000 households in La Plata County. The average household size was 2.3 people. Families made up 63 percent of the households in La Plata County. This figure includes both married-couple families (51 percent) and other families (12 percent). Nonfamily households made up 37 percent of all households in La Plata County. Most of the nonfamily households were people living alone, but some were composed of people living in households in which no one was related to the householder. Education: In 2005-2009, 94 percent of people 25 years and over had at least graduated from high school and 42 percent had a bachelor's degree or higher. Seven percent were dropouts; they were not enrolled in school and had not graduated from high school. Poverty and Participation in Government Programs: In 2005-2009, 10 percent of people lived in poverty. Ten percent of related children under 18 were below the poverty level, compared with 6 percent of people 65 years old and over. Five percent of all families and 26 percent of families with a female householder and no husband present had incomes below the poverty level.
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The Local Economy

Unemployment Rates La Plata County generally follows statewide and national trends with regard to unemployment rates. In 2010, county rates (7.2%) are lower than the state (8.9%) and nation (9.6%). The seasonally adjusted labor force was 32,447 in 2010. For a look at how La Plata County compares with the rest of the region from 1999 to 2010 please refer to the Regional Overview. Commuting People commute to where the jobs are, but take their paychecks home. This has an effect on how we evaluate employment, whether by place of work or by residence. Most La Plata County residents (79%) work in the county, and 21% commute elsewhere for their paychecks, with the highest percentage (4%) going to San Juan County, New Mexico.
In Commuters
Out Commuters
Live, work in La Plata
Who works in La Plata? Place Share La Plata County, CO 74.9% San Juan County, NM 4.3% Montezuma County, CO 4.3% Archuleta County, CO 2.1% Denver County, CO 1.8% Mesa County, CO 1.3% Arapahoe County, CO 1.3% Montrose County, CO 1.0% Larimer County, CO 0.9% El Paso County, CO 0.8% All Other Locations 7.4% Source: US Census Bureau LEHD
Where do La Plata residents work? Place Share La Plata County, CO 78.4% San Juan County, NM 4.4% Mesa County, CO 2.5% Montezuma County, CO 2.3% Denver County, CO 1.4% El Paso County, CO 1.2% Archuleta County, CO 0.9% Garfield County, CO 0.9% Montrose County, CO 0.8% Jefferson County, CO 0.7% All Other Locations 6.4%
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Employment and Income 2009 The following table includes wage earners as well as proprietors (owners). Total employment refers to the numbers and types of jobs reported by place of work which may be outside of the county, or even the state. This data is provided by the Bureau of Economic Analysis then is adjusted and reported by the Colorado State Demographer. It lags two years behind the current year, thus 2009 is the latest available data. La Plata County # of % of Income % of Avg ann. 2009 Total Employment Jobs Jobs ($000) Inc. wage Agriculture 738 2% $ 4,852 0% * Mining & Utilities 924 3% $ 103,307 7% $ 111,804 Construction 3,227 10% $ 195,677 13% $ 60,637 Manufacturing 621 2% $ 23,482 2% $ 37,813 Transportation & Warehousing 812 3% $ 45,134 3% $ 55,584 Wholesale & Retail Trade 4,236 13% $ 164,034 11% $ 38,724 Information 514 2% $ 26,294 2% $ 58,823 Finance,Insurance & Real Estate 2,178 7% $ 116,026 8% $ 53,272 Services 13,136 40% $ 518,497 34% $ 39,471 Government 6,060 19% $ 311,747 21% $ 51,443 Total 32,446 100% $ 1,509,050 100%
From this table we see that proprietors (owners) form a substantial part of the total number of jobs, especially in agriculture, and finance, insurance and real estate, sectors.
La Plata County 2009 Total Employment Agriculture Mining & Utilities Construction Manufacturing Transportation & Warehousing Wholesale & Retail Trade Information Finance,Insurance & Real Estate Services Government Total
% of Wage/ % of Salary Jobs Proprietors 34% 66% 82% 18% 67% 33% 84% 16% 87% 13% 88% 12% 87% 13% 60% 40% 76% 24% 100% 0% 77% 24%
The service sector employs about 41% of workers in the county, and represents 34% of the earnings. The service sector is composed of many types of jobs, and very different wage scales. These include highly paid professionals, as well as entry level wage earners. Many of the service jobs in La Plata County support tourism, in recreation, accommodations (lodging) and food services.
La Plata County 2009 Service Sectors Professional, Scientific, Technical Education, Health, Social Assistance Arts, Entertainment, Recreation Accomodation, Food Service Other Services Total # of % of Income % of Avg. annual Jobs Jobs ($000) Inc. wage 3,614 28% $ 179,494 35% $ 49,666 3,615 28% $ 167,028 32% $ 46,204 1,008 8% $ 23,738 5% $ 23,550 3,132 24% $ 75,484 15% $ 24,100 1,767 13% $ 72,753 14% $ 41,173 13,136 100% $ 518,497 100% $ 31,994
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Economic Drivers The following narrative is drawn from a report prepared by Lloyd Levy Consulting for Region 9. An explanation of economic drivers and how they function in a local economy is provided in the Regional Overview section of this document. The full report, including multipliers specific to La Plata County, can be found at http://www.scan.org/regional_data.html. Although the numbers of jobs are down 2% from 2006 to 2009, the proportions of jobs in each sector are very similar, thus we believe the drivers identified here are still pertinent. (La Plata County results were based on an analysis of 2006 data because the study was conducted separately and completed in 2008). A 2005 study by Region 9 estimated that about 17% of single family homes (and 29% of all properties) in La Plata County were owned by someone whose primary residence was outside of the county (this figure does not include time shares). The analysis applied a common-sense rule: If the County Assessor mails the tax bill to an owner of a residential unit at a non-county address, the unit is counted as a second home. The Economic Drivers study grew out of a desire to estimate how many jobs are associated with the building, sales and maintenance of these homes. To put this information in context we must also examine the other important parts, or drivers of the county economy. This research is designed to give numerical answers to three key questions about a county economy:
What share of total employment is generated by each economic driver? How important is each driver, compared to all the other drivers, in terms of its total employment effect? How much total employment is generated in response to one basic job within a given economic driver, or in other words what is the ratio of total to direct employment for each economic driver?
This figure depicts the size, relative importance and total employment ratio for La Plata Countys economic drivers in 2006.
La Plata County - Contribution to Total Employment by Economic Driver in 2006 Total Emplyment = 33,125
Second Homes New Construction, Sales Commissions on Existing Homes & Owner Spending 7% Federal, State & Tribal Government 10%
Fort Lewis College 5% New Construction - except for Second Homes 19%
1.82*
1.81 1.87
1.69
Agriculture, Mining, Utilities & Manufacturing 9%
2.37
1.76 1.86
Household Non-Labor & Commuter Income 19%
1.54
Other Outside Demand for Trade & Services 13% Tourism - Overnight Visitors 18% *The number in each pie slice is the ratio of direct base jobs to supporting jobs.
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Economic Clusters The identification of these drivers also allows us to refine our understanding of regional economic clusters. In recent years, cluster strategies have become a popular economic development approach among state and local policymakers and economic development practitioners. An industry cluster is a group of firms, and related economic actors and institutions that are located near one another and that draw productive advantage from their mutual proximity and connections. Cluster analysis can help diagnose a regions economic strengths and challenges and identify realistic ways to shape the regions economic future. www.brookings.edu/metro/pubs/20060313_clusters.pdf For example, to provide a more accurate picture of the agricultural sector we can expand agricultural industry analysis by linking production to other segments of the economy that directly and indirectly support agriculture. These industries are known as agribusiness, and include services such as processing food products, trucking, storage, sales of farm equipment and supplies; as well as impacts on credit institutions and commodity brokers. Similarly, the oil and gas industry employs heavy construction and excavation firms to clear sites, trucking and pipeline companies to transport products, chemists, electricians, welders and a complex supply chain to support that industry. It is hoped that the same labor force and supply chains will feed the new energy economy of solar, wind and hydroelectric power.
Per Capita Income
In 2009 La Plata had a Per Capita Personal Income (PCPI) of $39,769. This PCPI ranked 21st in the state and was 95 percent of the state average, $41,895, and 100 percent of the national average, $39,635.
La Plata 2009 Total Personal Income ($000) Employment Earnings $ 1,315,750 Residency Adjustment $ (11,754) Dividends, Interest & Rent $ 496,027 Transfer Payments $ 246,655 Estimated TPI $ 2,046,678 Source: Bureau of Economic Analysis http://www.bea.gov/regional/reis/.
% of Total 64% -1% 24% 12% 100%
In 2009, Total Personal Income (TPI) in La Plata County was $2,046,678,000. This TPI ranked th 15 in the state and accounted for 1% of the state total. The largest proportion of TPI is generated through employment.
Estimated payments to retirees accounted for almost 14% of the estimated TPI in La Plata County in 2009. That was $286,534,920!
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Total Personal Income Trends In addition to employment income, money enters the local economy from other sources. Total Personal Income (TPI) is the sum of all personal income that flows into the county. The following chart examines the components of TPI and how the proportions of this income have changed over time. Transfer payments consist primarily of retirement and disability benefit payments, medical payments (i.e. Medicare and Medicaid), income maintenance benefits, unemployment insurance, veterans benefits and payments to nonprofit institutions. Dividend income is income that is paid in cash or other assets to stockholders by corporations in the U.S. or abroad. Interest income consists of monies received from money market mutual funds and interest from other sources. Rental income consists of income from the rental of real property, the net income of owner - occupants of non-farm dwellings, and the royalties received from patents, copyrights, and from the rights to natural resources. Residency adjustments are made when a person receives income for work performed and paid for from outside their place of residency, (i.e. commuters). Negative numbers mean that more people were coming into the county for work than were commuting out. Earnings are derived by place of work, including farm and non-farm earnings. Generally, from 1970 to 2009, we see a trend of decreasing employment income, and increasing income from dividends, interest and rent, and transfer payments. Residency adjustments illustrate how the economy of each county is tied to others as people commute to where the jobs are, but take their paychecks home. http://www.bea.gov/regional/reis/ (Table CA04)
La Plata County - Total Personal Income Trends 1970 - 2009

100%
80%
60%
40%
20%
0%
1970
-20%
1980
1990
2000
2009
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Employment Sector Trends 1980 - 2009 An employment sector groups jobs into categories that are alike and allows us to measure the relative strength of that industry in the local economy. Using trend analysis we can see how those industries have grown or declined within a specific timeframe. The trends presented here reflect the Standard Industrial Code (SIC) job classifications used from 1980 to 2000. In 2001, the North American Industry Classification System (NAICS) replaced the (SIC) system. NAICS groups the economy into 20 broad sectors, instead of the 10 divisions of the SIC system. NAICS was developed jointly by the U.S., Canada, and Mexico to compare business activity across North America. The primary differences between the two classification systems is that the mining sector now includes utilities; eating and drinking (food services) have been moved from retail trade to the service sector; and the service sector includes new categories
La Plata County - Employment by Sector 1980-2009
40,000
SIC 1980 - 2000 NAICS 2001 - 2009
35,000
30,000
Government Information Services
25,000 # of Jobs
20,000
15,000
Finance,Insurance & Real Estate Wholesale & Retail Trade
10,000
5,000
Transport. & Warehousing Mining & Utilities
Manufacturing Construction Agriculture
1980 1985 1990 1995
2000
2005
2009
There was a peak in the number of jobs in 2007 (34,337), and subsequent declines associated with the current U.S. recession. The dip in 2002 probably reflects repercussions of the widespread drought, local wildfires and impacts to the national economy from the terrorist attacks of 9/11/01.
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When we compare job growth from 2001 to 2009 using the NAICS system, we see that the most growth has been in mining and utilities; and finance, insurance and real estate sectors. There have also been declines in some job sectors since 2001, namely in manufacturing and information.
La Plata County Agriculture Mining & Utilities Construction Manufacturing Transportation & Warehousing Trade Information Finance, Insurance & Real Estate Services Government Total Employment
# of Jobs % change 2001 2009 01 - 09 652 738 13% 440 924 110% 2,732 3,227 18% 925 621 -33% 735 812 11% 4,478 4,236 -5% 604 514 -15% 1,691 2,178 29% 11,521 13,136 14% 4,758 6,060 27% 28,535 32,446 14%
To fully understand the ups and downs of each sector, we need to look at them in greater detail. In the following pages each of these sectors is broken into subgroups for further definition of job type. Some sub sectors have been grouped into other categories in order to abide by non-disclosure rules. The rule by state statute is that employment can't be disclosed if there are three or fewer firms in a sector or one firm comprises more than 80% of sector employment. Remember that the closure of even one business may appear to create dramatic "ups and downs" within sectors in the following charts. Be sure to notice the scale of the numbers of jobs. Differences can also arise from reclassification of jobs within a business over time. To provide detail for the intervening years, the following table tracks changes in each sector from 2005 to 2009. La Plata County Agriculture Mining & Utilities Construction Manufacturing Transport. & Warehousing Wholesale & Retail Trade Information F,I & R E Services Government Total % Change 06-07 07-08 -2.7% -20.1% 12.6% 4.3% 1.0% -3.7% -3.4% -3.0% 5.2% 2.6% 3.0% 0.9% 0.7% 1.3% 14.1% -16.3% 3.0% 0.2% 3.9% 2.4% 3.7% -1.4%
05-06 7.9% 39.6% 16.9% -6.8% 0.9% -1.3% -5.4% 14.0% 6.2% 3.0% 6.3%
08-09 33.7% -5.7% -20.2% -8.9% -1.3% -7.9% -6.4% 0.0% -3.4% 3.3% -4.2%
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While employment and earnings are traditionally used to measure 1,400 the strength of an industry, SIC 1980 - 2000 NAICS 2001 - 2009 there are some drawbacks with 1,200 using employment data to measure the agricultural sector. Farm Services 1,000 Employment and earnings in non-agricultural sectors are 800 derived from unemployment compensation reports of 600 average wages and Farm Employment employment, which is 400 supplemented by the sampling 200 of tax returns to estimate proprietor employment and income. Family operated farms 2009 1980 1985 1990 1995 2000 2005 and ranches are not required to file unemployment compensation reports, and it is very difficult to accurately estimate earnings from limited sampling of income tax returns. In light of the shortcomings described above, we see that the agricultural sector had fairly steady growth till about 2000, with sharp declines in 2001. This may be due, in part, to job reclassifications.
La Plata County - Agricultural Employment 1980-2009
Components of Agribusiness Number Job Income Agribusiness is a cluster of La Plata County 2009 of Jobs $(000) industries, and includes services Agriculture-Crops & Livestock 591 $ 1,482 such as processing food products, Agriculture-Farm Services 147 $ 3,370 trucking, storage, sales of farm Agribusiness Transportation 47 $ 2,332 equipment and supplies; as well Ag related Warehousing and Storage 2 $ 141 as impacts on credit institutions Manufacturing-Food & Beverage Products 259 $ 8,872 Wholesale Trade-Agricultural Inputs 99 $ 5,471 and commodity brokers. Ag Wholesale Trade-Agricultural Processing 131 $ 6,006 inputs and processing are Total 1,276 $ 27,674 businesses (wholesale trade) that provide products and services to farmers, i.e. chemicals, seed, fertilizer, feed, fuel, machinery and crop processing or marketing.
# of Jobs
Indicator/Measure # of Farms Lands in Farms (acres) Avg. size of farm (acres) Avg. age of Farmer Source: Census of Agriculture
La Plata County % Change 1997 2002 2007 1997-2007 38% 781 923 1,076 -2% 580,135 562,664 570,189 -29% 743 610 530 7% 54.2 54.9 57.8
http://www.agcensus.usda.gov/Publications/2007/Online_Highlights/County_Profiles/Colorado/cp08033.pdf
One of the most important sources of agricultural data is the Census of Agriculture, which takes place every 5 years (most recently 2007). Overall, a comparison of selected characteristics from 1997 to 2007 shows an increase in the numbers of farms, and a decrease in the size of farms. This may be the result of County subdivision rules in which 35 acres were the smallest portion allowable. Many of these 35 acre tracts remain classified as agricultural lands since land owners report some agricultural activities (agricultural lands are taxed at a lower rate than residential properties). It may also be more economically viable to focus resources on smaller, more productive acreages depending on the crop. The age of farmers in our area remained fairly constant during this time period.
La Plata County - Mining Employment 1980-2009 1200

SIC 1980 - 2000 NAICS 2001 -2009
1000
Utilities
800
# of Jobs Support Activities
Mining (except oil and gas)
600
Mining (except oil and gas)
Mining (other)
400
Oil & Gas Support
200
Oil & Gas Extraction
0 1980
Metals Mining
Coal Mining
1985
1990
1995
2000
2005
2009
Utilities have been moved from the transportation sector to the mining sector in the NAICS system and have been declining since 2001. Coal mining, once an important source of employment, pretty much vanished by 2001 (or has been moved to the other mining category). Oil and gas extraction sees periodic booms and busts, dependant upon the national and global economy. Oil & gas extraction support is also a new category in NAICS. Other types of mining, such as gravels and other non-metallic minerals, became an important source of employment as La Plata County rode the development boom of the 1990s and beyond.
Mining & Utilities Sectors Oil and gas extraction Mining (other) Oil and gas extraction support Other utilities, except water supply and irrigation Total
# of Jobs % change 2001 2009 01 - 09 446 176 154% 118 97% 60 249 73 242% 111 131 -15% 440 924 110%
Although the numbers of jobs in the mining sector are relatively low, average annual income in the mining sector was $111,804 in 2009, the highest wages of all sectors in the local economy. About 18% of employment in the industry is through proprietors (owners).
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La Plata County - Construction Employment 1980-2009

4,500 4,000 3,500 3,000
# of Jobs
2,500 2,000 1,500 1,000 500 1980 1985 1990 1995 2000 2005 2009
Heavy Construction Maintenance & Special Trades
Building Construction
In the 1990s there was substantial growth in the construction sector, supporting rapid population nd growth, and providing housing for 2 homeowners who were buying land, building new homes, and taking advantage of the quality of life found in SW Colorado, also known as "amenity migration. A study conducted by Region 9 found that 29% of property in La Plata County was owned by nonnd locals in 2005. A substantial number (270) of construction jobs are attributed to the building of 2 homes in 2005, according to the driver analysis performed by Lloyd Levy. This sector continues to see strong employment growth from 2001 to 2007, but has declined as the housing industry bubble burst. Average annual income in this sector was $60,637 in 2009. About 33% of those employed in this sector are proprietors (owners # of Jobs % change Construction Sectors 2001 2009 01 - 09 Construction of buildings 718 747 4% 485 Heavy Equipment and civil engineering construction 188 158% 1,995 Special trade contractors 1,826 9% Total 2,732 3,228 18%
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La Plata County - Manufacturing Employment 1980-2009

1,200
1,000
800
# of Jobs
Misc. Manufacturing
600
Primary & Fabricated Metals Lumber & Wood Products incl. Furniture
400
Glass, Stone Paper & Printing
Textile Mill Products and Apparel
200
Food & Kindred Products
1980 1985 1990 1995 2000 2005 2009
Many jobs in the printing industry (i.e. publishing) have been moved into the Information sector in NAICS. Lumber and wood products has fluctuated, and diminished -81% since 2001, probably as a result of the decline in homebuilding. Stone, clay and glass emerged as a strong segment in the mid 90s, but dropped out of the local economy in recent years. Growth industries include machinery manufacturing and nonmetallic mineral production. Overall, there has been about a 33% decline since 2001. # of Jobs % change 2001 2009 01 - 09 266 51 -81% 44 48 9% 28 50 79% 25 67 168% 34 3 -91% 5 0 -100% 100 85 -15% 236 259 10% 134 13 -90% 52 44 -15% 924 620 -33%
Manufacturing Sectors Wood product and furniture Nonmetallic mineral products Primary and fabricated metal Machinery Transportation Equipment Computer and electrical equipment Miscellaneous Food and beverage product Textile mills and product, apparel, and leather Paper and printing Total
Average annual income in this sector was $37,813 in 2009. About 16% of those employed in this sector are proprietors (owners).
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La Plata County- -Transportation & Warehousing Employment 1980-2009

1,200
SIC 1980 - 2000 NAICS 2001 - 2009
1,000
Warehousing & Storage
800
All Utilities # of Jobs Transportation Support Couriers,messengers & postal service assistance Sightseeing & water transportation
600
Communications Transportation Services
400
Air Transportation
Pipelines
200
Motor Freight & Warehousing Railroad Transportation Local & Suburban Transit
Truck transportation
0 1980
1985
1990
1995
2000
2005
2009
Utilities were moved to the mining sector under the NAICS system in 2000, and many other jobs were reclassified into new categories. The communications segment of this industry is now included in the Information sector. Thus the rapid decline of this sector in 2000 probably does not necessarily reflect job losses. Overall, we see 11% growth in the sector from 2001 to 2009.
Transportation & Warehousing Sectors Air transportation Rail transportation Agribusiness transportation Truck transportation except ag Support for transportation Transit and ground passenger transportation Pipeline transportation Scenic, sightseeing, and water transportation Couriers and messengers and postal service assistance Ag Related Warehousing and storage Warehousing and storage Total
# of Jobs % change 2001 2009 01 - 09 51 53 -5% 2 -39% 3 47 0 125 125 0% 120 50 -58% 11 27 145% 132 197 49% 150 171 14% 132 132 0% 0 2 9 9 0% 735 812 11%
Average annual income in this sector was $55,584 in 2009. About 13% of those employed in this sector are proprietors (owners).
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NAICS redefined the boundaries between Retail and Wholesale Trade. The new NAICS definition emphasizes what the establishment does, rather than to whom it sells. The SIC system defined retailers as those establishments that sold primarily to consumers while wholesalers were those establishments that sold primarily to business customers.
La Plata County - Wholesale & Retail Trade Employment 1980-2009
8,000
SIC 1980-2000 NAICS 2001-2009
7,000
6,000
All Other Retail
5,000
# of Jobs
4,000
All other retail
3,000
Eating & Drinking Places
Automotive Dealers, Service Stations
2,000
Building Materials, Hardware, Garden
Furniture, Apparel & General Merchandise Food Stores
1,000
All Wholesale Trade
1980 1985 1990 1995 2000 2005
2009
The trade sector changed dramatically under the NAICS system. The primary difference is the removal of restaurants from retail trade. Restaurants are now combined with accommodations to form a new sector in NAICS, Accommodation and Food Services. In addition, many of the general groups have been split into finer detail, so it is difficult to compare trends in the various retail sectors. When we consider the newly defined sectors, however, we see a -5% decrease from 2001 to 2009.
Wholesale & Retail Trade Sectors Wholesale Motor vehicle and parts dealers Furniture, electronics, appliances, and building materials Food and beverage stores Health and personal care stores Gasoline stations Clothing and clothing accessories stores Sporting goods, hobby, book and music stores Other merchandise stores Miscellaneous store retailers Nonstore retailers Total # of Jobs % change 2001 2009 01 - 09 689 665 4% 352 399 -12% 597 634 -6% 656 761 -14% 193 162 19% 189 185 2% 244 229 6% 304 291 4% 494 610 -19% 276 335 -18% 240 207 16% 4,478 4,235 -5%
Average annual income in trade was $38,724, in 2009. About 12% of those employed in trade are proprietors (owners).
La Plata County - Finance, Insurance & Real Estate Employment 1980-2009

2,500
2,000
Monetary authorities and credit intermediation
1,500 # of Jobs
Finance
Securities, commodity contracts and investments
1,000
Real Estate
500
Insurance
1980 1985 1990 1995 2000 2005 2009
The large numbers employed in the real estate sector may reflect the way jobs are reported, (i.e. all employees of a resort area). In the 1990s there was substantial growth in the real estate sector, supporting rapid population nd growth, and providing housing for 2 homeowners who are buying land, building new homes, and taking advantage of the quality of life found in SW Colorado, also known as "amenity migration. A study conducted by Region 9 found that 17% of single family homes in La Plata County were owned by non- locals in 2005. This sector continues to see strong employment growth from 2001 to 2007, especially in the finance sectors. # of Jobs % change Finance, Insurance & Real Estate Sectors 2001 2009 01 - 09 650 Monetary authorities and credit intermediation 354 83% 127 28% Securities, commodity contracts and investments 100 234 Insurance carriers, funds, trusts, and other 200 17% 1,168 Real estate inc rental and leasing services 1,037 13% Total 1,691 2,179 29% Average annual income in this sector was $53,272 in 2009. About 40% of those employed in this sector are proprietors (owners).
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The service sector is the largest single segment of all sectors in the local economy, accounting for 41% of total employment. For historical perspective we have included the SIC system showing trends from 1980 to 2000. The appearance of engineering and management services reflects a new element in the local economy. Membership organizations include members of the Southern Ute Tribe. The new categories of services under the NAICS system are grouped into separate charts for 2001 to 2005.
La Plata County - Service Sector Employment 1980-2000 SIC
12,000
Other Services
10,000
Private Household Engineering & Mgt
8,000
Membership Orgs Social Services
6,000
Health Services
4,000
Recreation Services All Auto Services Business Services
2,000
Personal Services
Lodging Places
1980 1985 1990 1995 2000
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La Plata County Accomodation, Food and Entertainment Services 2001 - 2009 NAICS
5,000 4,500 4,000 3,500
# of Jobs
3,000 2,500 2,000 1,500 1,000 500 0

2001 2002 2003 2004
Food services and drinking places
Accommodation Arts, entertainment, and recreation

2005 2006 2007 2008 2009
The service sector has undergone a transformation under the NAICS system. The primary difference is that food services (previously included in SIC Retail Trade - eating and drinking), is now in the service sector, and linked with accommodations and entertainment. Average annual income in the accommodation and food services sector was $24,100 in 2009. For recreation it was $23,550.
Accomodation, Food & Entertainment Services Arts, entertainment, and recreation Accommodation Food services and drinking places Total
# of Jobs % change 2001 2009 01 - 09 1,008 1,044 -3% 837 1,170 -28% 2,295 2,221 3% 4,435 4,140 -7%
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La Plata County - Professional, Scientific and Technical Services 2001-2009 NAICS

4,000 3,500 3,000 2,500
# of Jobs
Waste management & remediation services Administrative & support services
2,000 1,500 1,000 500 0

2001 2002 2003 2004 2005
Management of companies & enterprises
Professional & technical services
2006
2007
2008
2009
This sector has seen a 43% increase since 2001, and seems to be weathering the recession. Average annual income in this sector was $49,666 in 2009.
Professional, Scientific and Technical Services Professional and technical services Management of companies and enterprises Administrative and support services Waste management and remediation services Total
# of Jobs % change 2001 2009 01 - 09 1,644 2,082 27% 30 45 49% 829 1,387 67% 20 101 405% 2,523 3,614 43%
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La Plata County - Education, Health Care and Social Assistance Services 2001-2009 NAICS
4,000 3,500 3,000 2,500
# of Jobs
Social assistance Nursing & residential care facilities
2,000 1,500 1,000 500 0

2001
Hospitals
Ambulatory health care services Private Educational services

2002 2003 2004 2005 2006 2007 2008 2009
Average annual income in this sector was $46,204 in 2009. This sector has seen steady, consistent growth since 2001.
Education, Health and Social Assistance Services Private educational services Ambulatory health care services Hospitals Nursing and residential care facilities Social assistance Total
# of Jobs % change 2001 2009 01 - 09 410 298 38% 1,480 38% 1,071 714 728 -2% 312 327 -5% 700 650 8% 3,074 3,616 18%
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La Plata County - Other Services 2001-2009 NAICS

2,000 1,800 1,600 1,400 1,200
# of Jobs
Private households
Membership associations and organizations
1,000 800 600 400 200 0

2001 2002 2003 2004 2005 2006 2007 2008 2009
Personal and laundry services
Automotive and other repair and maintenance
This is a growing service sector, showing 7% growth from 2001 to 2005. Membership organizations include unions, chambers of commerce, business and fraternal organizations, humane societies, and in La Plata County, the Southern Ute Tribe. Average annual income in this sector was $41,173 in 2009.
Other Services Automotive and other repair and maintenance Personal and laundry services Membership associations and organizations Private households Total
# of Jobs % change 2001 2009 01 - 09 443 470 -6% 656 521 26% 589 404 46% 79 70 13% 1,464 1,767 21%
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La Plata County - Information Services 2001-2009 NAICS

700
600
500
Publishing industries
# of Jobs
400
300
ISPs, search portals, & data processing Telecommunications
Internet publishing
200
100
Motion picture and broadcasting, except internet
0 2001
2002
2003
2004
2005
2006
2007
2008
2009
Perhaps the most important change in NAICS is the recognition of a new Information sector. This sector includes establishments that create, disseminate, or provide the means to distribute information, and establishments that provide data processing services. Average annual income in this sector was $53,272 in 2009.
Information Sectors Publishing industries Motion picture and broadcasting, except internet Software publishing Other telecommunications Total
# of Jobs % change 2001 2009 01 - 09 148 286 -48% 160 167 -4% 94 74 27% 111 77 44% 604 513 -15%
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La Plata County - Government Employment 1980-2009

7,000
6,000
5,000
# of jobs
4,000
3,000
Local Govt
2,000
1,000
State Govt Military All Federal Govt

1995 2000 2005 2009
1980 1985 1990
Government employment, particularly local government, increases in response to growing population and management needs. # of Jobs % change Government Sectors 2001 2009 01 - 09 408 Federal government, civilian 364 12% 127 2% Military 125 1,387 State government 1,272 9% 4,139 Local government 2,997 38% Total 4,758 6,061 27% The average yearly income in 2009 was $51,443.
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STRATEGIC PLANNING La Plata County Vision and Mission Statements

Vision Statement A vision statement must encompass a shared vision - one that is a broad but concise description of what we as a community want to be in the future in regards to economic development. The vision statement describes the assets and values and focuses on moving the community toward achieving our goals for the future. Through La Plata Countys recent activity on the creation of a Comprehensive Plan, Governor Hickenloopers Bottom Up Economic Development strategy, and previous community input, the following vision was created for La Plata County: A healthy community that builds upon its natural beauty and civic amenities to create a strong economic environment that will benefit current residents and future generations who will call this place home. Mission Statement If the vision sets the direction for our community and its organizations, then the mission statement should clarify the purpose and function for our community and its organizations in relation to economic development. It is the filter that we use to ensure everything we do is focused on achieving the vision. The economic development mission for the La Plata Economic Development Alliance is the following: Our mission is to create jobs through the retention, expansion, and recruitment of quality businesses.
SWOT (Strengths, Weaknesses, Opportunities, Threats) Analysis

The starting point for a credible economic development strategic plan is an assessment of the strengths and weaknesses of the county. This is the baseline by which a community begins to understand where they are in relation to their vision. Once the SWOT analysis is completed, strategies for solutions can be identified. By working with the La Plata County community, and including input from Governor Hickenloopers Bottom-Up Economic Development strategy, the following was identified: Strengths La Plata Countys quality of life (e.g. abundance of recreation, scenic beauty, educational system, Fort Lewis College, Southwest Colorado Community College, small-town living) Relatively low property taxes Scenic and vast public lands and resources Lifestyle - climate/weather, natural resources, sense of community, healthy and active lifestyle, livable communities, high degree of civic engagement Highly educated workforce Regional center - health facilities and hospital, strong base of goods/services, banking, arts/entertainment/culture Tourism assets Infrastructure- airport, water, transportation hub
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Weaknesses Reliance on oil and gas revenues Low paying jobs High housing costs Government inefficiencies- too many special districts and poor county planning processes Lack of telecommunications and broadband infrastructure in the outlying areas Identification of and cost of land for commercial, and business recruitment and/or expansion Improvement of workforce to meet business and community needs Proximity to markets and transportation of goods and services Economic leakage Opportunities Geographic proximity that serves as a regional hub Airport: 90% of market share, ease of access and affordability of access to other markets Broadband- extend throughout County Development of telecommuter businesses Widely diverse, well-educated population contributing to sustainability and growth of anchor businesses and institutions in the community (in areas such as education, health care, higher education, agriculture, etc.) Educational System- MA/MBA programs, continuing education Continuous stream of college graduates who would like to stay in the area Lifestyle- outdoors, availability of local wealth, entrepreneurial orientation, new Lake Nighthorse Abundant water supply for additional growth Health care - Mercy/Axis, abundance of alternative choices, regional medical industries, medical tourism, assisted living Southern Ute Indian Tribe/Growth Fund Economic Development Alliance- focus on pro-business environment and job creation Vital downtown in Durango Growing population Threats Decline of oil and gas development Funding cuts in higher education, transportation, public heath and human service programs Aging population Natural Resource Management Drought and wildfires Hostile regulatory environment Volatility of business cycle Potential for urban sprawl to impact the natural environment and tourism Real estate market- second homes, continued high prices, etc Erosion of local control/state regulation Return to top-down state relationship Potential for lack of collaboration locally High energy costs making it more difficult to get products to market Ability to retain local businesses Loss of severance tax
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Goals, Action & Implementation Ideally, the goals of a community should reflect its vision statement. A goal is a specific statement of what the community would like to be or achieve. Goals should be focused on the priority issues impacting the development of the community. The actions should then reflect the steps needed to accomplish the goal. Through utilizing the work done by the La Plata County Economic Development Action Partnership, and the new La Plata Economic Development Alliance, the following goals and actions have been established for La Plata County: Goal 1: Private sector job growth across a diversity of industries and job types.
Rationale Having an adequate number of jobs for the residents of La Plata County is imperative to ensuring a high quality of life. Healthy job growth can also make it easier for people to relocate as it is more likely that they can find another job in the community if necessary, and that both spouses can obtain employment.
Strategies: 1. Develop a business retention program. 2. Identify new locations for expansions. 3. Expand support to entrepreneurs and small businesses. 4. Develop a marketing campaign to define the County and promote the Countys strengths. Actions: 1. Create a retention team that can visit with local businesses regularly, using feedback to identify gaps and improve public and private business services. 2. Identify preferred companies for expansion and recruitment and provide extra resources toward those companies. 3. Develop data that will support retention, expansion, and recruitment efforts. 4. Continue and enhance support of local entrepreneurs, small businesses, and the selfemployed. 5. Work with local governments and other organizations to identify and prepare new employment centers. 6. Re-establish rapid response team to respond to retention, relocation, and expansion opportunities. 7. Establish a lifestyle recruitment committee that will develop an active targeted solicitation effort aimed at business segments of the size, geographic location and type of business (lifestyle/outdoors) that has high potential for success, given the Countys strengths and weaknesses. Goal 2: Increase wages to make the County a more attractive place to work.
Rationale Higher real wages for employees are important as this makes living in the community more affordable. Higher wages are driven by business productivity and La Plata County CEDS Update 2011 5 - 45
profitability. Therefore, wages rise as workforce skills and technological innovation increase.
Strategies: 1. Develop the talent pool that will demand and command higher wages. Actions: 1. Develop a committee that reaches out to schools in order to increase business involvement with schools. 2. Establish a central point for all the resources and survey data for workforce development needs. 3. Identify the gaps between future jobs and emerging technologies and the types of companies that are being recruited or expanding, and the current workforce skills. Communicate this to the training and educational programs. 4. Develop a talent identification, recruitment and retention program that gets and keeps talented workers here in La Plata County. Goal 3: Make La Plata County an effective and efficient place to do business.
Rationale One key to a healthy business environment is a reasonable regulatory process. This provides certainties in outcomes during the permit process and helps make it less costly to do business here.
Strategies: 1. Reduce permitting time for commercial and industrial applications. 2. Expand information available to businesses. 3. Create a one-stop shop for business inquiries and permitting processes. Actions: 1. Make the Economic Development Alliance the one-stop-shop to help businesses with expansion and relocation needs. 2. Develop a flow chart of the agencies and timeline required to permit a project in City, Townships, and County. 3. Investigate regular meetings with regulatory agencies to address questions that businesses might have. 4. Work with County and municipalities to reduce permitting time. 5. Provide more information on Alliance website regarding sites available and workforce characteristics. 6. Strengthen the collaborative and networking opportunities for local businesses. 7. Develop customized information packets that include site-specific information for businesses looking to expand or relocate.
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Goal 4: Expand public infrastructure, including broadband, to support and anticipate the needs of future growth.
Rationale Businesses cannot grow without access to markets. Access to markets occurs through the internet and transportation such as the regional airport and highways. Just as importantly, businesses need locations in which they can grow, or else a lack of expansion space will force growing businesses to relocate elsewhere.
Strategies: 1. Expand bandwidth available throughout County. 2. Increase access to high speed telecommunication capacity. 3. Enhance reliability of broadband service. 4. Improve airport for passenger air service. 5. Identify new locations for expansions. Actions: 1. Develop partnership that will work to: a. Provide fiber-based high bandwidth access in all communities in County and areas targeted for employment growth; b. Provide high speed coverage in all rural areas; 2. Work to develop an east-west fiber network to complement the existing north-south network. 3. Establish a regional data center for cloud-based users and disaster recovery efforts. 4. Support airport efforts to attract new service and lower fares for passengers. 5. Work with local governments and other organizations to identify and prepare new employment centers. 6. Work with CDOT to upgrade roads, improve responsiveness to business expansion. 7. Create a more consistent and timely access planning and approval process. Goal 5: Reduce leakage of sales outside the County.
Rationale Sales leakage are symptomatic of services sought either by residents or businesses that cannot be provided in the local community. This reduces sales taxes that could be collected in retail, and can also reduce the business services in a region that are needed for a healthy climate for economic growth.
Strategies: 1. Work to bring retail and professional service firms that are typically sought outside the County. 2. Promote local purchases.
Actions: 1. Quantify amount of sales leakage that is occurring. 2. Identify the reasons that sales and business service leakage is occurring. 3. Support Chamber in its efforts to bolster buy local campaign. 4. Ensure adequate land is available for retail expansion. Implementation Plan Strategic planning is an on-going process. As the local economic development organization begins to work with other organizations, towns and county, it is clear that modifications and adjustments are necessary. The ultimate success of any strategic plan depends on how well the organizations implement the various strategic actions. It is critical, therefore that a solid implementation plan be created to ensure the proper priorities are given to each task, and the suitable owners for each task are assigned. Only then will the vision begin to come to life. For La Plata County, the La Plata Economic Development Alliance along with Region 9 is charged with ensuring the completion of the plan. This will be done by coordinating, participating and/or overseeing the various committees and organizations working in each of the key areas.
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BOTTOM UP ECONOMIC DEVELOPMENT STRATEGY
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Name of ED organization Sample Economic Development Organization
Website
ArcoButte Business Incubation Center, In. Silver Valley Economic Development Corp. Madison Economic Partners Inc.
NA silvervalleyedc.com N/A
Moscow-Latah Economic Development Council Inc.
latahedc.org
Bingham Economic Development Corporation Lost Rivers Economic Development Inc.
N/A N/A
Clearwater Economic Development Assoc
clearwater-eda.org
Southeast Idaho Council of Governments
NA
Bonner County Economic Development Corp.
bonnercountyedc.com
Caldwell Economic Development Council, Inc.
caldwellonline.org
BANNOCK DEVELOPMENT CORPORATION
NA
BANNOCK DEVELOPMENT CORPORATION
NA
Lemhi County Economic Development Association, Inc.
N/A
Capital Matrix, Inc. Idaho Associaiton for the Education of Young Children
www.capitalmatrix.com www.idahoaeyc.org
Ida-Ore Planning & Development Association Inc
www.sageidaho.com
Shadow Butte Development Company Small Business Success Center, Inc.
shadowbutte.com None
Snake River Basin Business Association, Inc.
srbba.com
North Central Idaho Travel Assoc. Inc.
visitnorthcentralidaho.org
BEAR LAKE VALLEY HEALTH CARE FOUNDATION EAST-CENTRAL IDAHO PLANNING & DEVELOPMENT ASSOCIATION NA mercy housing northwest - Idaho inC www.mercyhousing.org
Eastern Idaho Development Corporation Custer Economic Development Assn
www.isu.edu/departments/sbdc/ei dc N/A
Eastern Idaho Ecnomic Development Council Foundation Inc. N/A
Region IV Development Association, Inc.
www.rivda.org
Grow Idaho Falls, Inc. Idaho Economic development Association
www.growidahofalls.org ieda.biz
Blueprint for Good Growthm Inc.
www.blueprintforgoodgrowth.com
Business Plus Inc Hagerman I.D.E.A. Inc
www.business-plus.org n/a
Hailey Chamber of Commerce Idaho Innovation Center Inc
n/a n/a
Idaho Techconnect Mini-Cassia Community Chest
n/a n/a
Sustain Blaine Inc Greater St Joe Development Foundation Thrrive, Inc
n/a n/a n/a
Number of Last year of 990 / paid employees 501 status (c)(3), etc. 990 - EZ available (Positions) 2 (Executive Director; 501(c)(3) program director)
Salaries $30,000; $4,000
501(c)(4) 501(c)(6) 501(c)(4)
2011 - EZ 2011-EZ 2010-EZ
1 (Employee) 1 (executive director) 1 (member)
$12,625 $15,000 $15,280
501(c)(6)
2010-EZ
1 (executive director)
$35,375
501(c)(3) 501(c)(6)
2009-EZ 2011-EZ
1 (Excutive Director) 1 (registered agent)
$38,100 $47,240
501(c)(4)
2010
$54,883
501(c)(3)
2010
1 (Executive Director)
$60,278
501(c)(6)
2011-EZ
$62,292
501(c)(6)
2010-EZ
$80,000
501(c)(6)
2011
$104,389
501(c)(6)
2011
$104,389
501(c)(3)
2011
$33,699 (listed as "other compensation," so ED corp may not be paying this salaray.
501(c)(4) 501(c)(3)
2010 2010
2 (President, Vice President) 2 (Executive Director; Program Director)
127917; 91,257 60455; 59,827
501(c)(3)
2010
3 (Executive Director; finance directors)
89,858; 72,605; 44301
501(c)(3) 501(c)(3)
2007 2010
None None
N/A N/A
501(c)(3)
2009
None
N/A
501(c)(3)
2010
None
N/A
501(c)(3)
2010
None listed
NA
501(c)(3) 501(c)(3)
2010 2011
None listed None listed
501(c)(3) 501(c)(3)
2010 2010-EZ
None listed 0
501(c)(3)
2010
501(c)(3)(
2011
None listed
501(c)(6) 501(c)(6)
2010 2011
None listed 0
501(c)(3)
2008
501(c)(3) 501(c)(3)
2011 2009
0 0
501(c)(3) 501(c)(4)
2010 2011
2 1
43333, 24000 $69,804
501(c)(4) 501(c)(3)
2006 2011
0 undetermined
501(c)(6) 501(c)(3) 501(c)(3)PF
2009 2010 2010
0 1 0 $36,928
Benefits $3,000; $7,000
Weekly hours worked (if applicable) 40;12
Donor base
None $0 $0
None marked 12 15
$2,400
40
N/A $0
45 40
$2,744 (not listed as benefits. Instead it is in teh "other compensation" category)
45
$3,014 $3,012 (not listed as benefits. Instead it is in the "other compensation" category)
40
40
$200
40
40
$0
40
$3,600
40
4640; 3281 5387; 14,177
40;40 40; 40
5,391; 4,356; 2658
40;40;40 unspecified, but listed under "gifts, grants, and contributions" unspecified
N/A N/A
N/A N/A
N/A
N/A
unspecified
N/A
N/A
unspecified
NA
NA
$0
40, 40 50
concentrated
Program accomplishments (Part III)
Total revenue (990 Line 12; 990 EZ Line 9)
ASSIST BUSINESS AND GOVERNMENT TO CREATE JOBS AND ECONOMIC DEVELOPMENT ASSIST BUSINESSES AND INDIVIDUALS WITH BUSINESS PLANNING "Economic Development in North Idaho counties." "The organization promotes development in Madison County by directing efforst to bring businesses and employers to the area." "LEDC performed its mission of business and community development by creating and implementing plans and projects, builing strategic partnerships and working with partners to acccomplish defeined goals, supporting and assisting programs and projects of other entities, advocating actions that support EDC goals, providing resources for business growth and development, participating in economic development modeling and planning, educating the community about and facilitating discussion of economic development issues." "Economic Development programs, general and other: Efforts resulted in retention, expansion, or recruitment of jobs to Bingham County." "LRED is implementing new programs to help busineses and promoting economic development in the Lost Rivers area." "CEDA provided communnity planning adn development services for 50 organizational members and passed through $107,000 of state and government grants and contract to agencis in the region for the same economic purpose in order to promote diversification and alleviate unemployment in the north central Idaho and southestern Washington regions, CEDA granted 15 new loans during the fiscal year valued at $712,142 to small business customers. These new loans increased CEDA's small business program total to 62 outstanding loans valued at $2.4 million." PROVIDED ECONOMIC DEVELOPMENT, JOB DEVELOPMENT AND SENIOR SERVICE PROGRAMS TO THE COUNTIES AND CITIES IN SOUTHEAST IDAHO.
$50,141 $61,729 $36,898
$49,865
$40,697 $132,628
$927,968
$3,516,526
"Convened meetins and projects serving over 100 clients in 2011 with a focus on entrepreneurial development. Facilitated a public and pried partnership for fiber to the home network." "Developed and distributed demographic and specific business relocation and expansion materials for both Caldwell and the greater Canyon County area. Number of clients served > 500. Met with business owners and relocatoin agents regarding locating or expanding current business in the Canyon Count area. Number of clients served > 100. PROMOTED ECONOMIC DEVELOPMENT FOR BANNOCK COUNTY AND PROVIDED INFORMATION TO NEW BUSINESSES TO ENTICE THEM TO LOCATE IN BANNOCK Co0unty
$86,782
$193,052
$258,860
PROMOTED ECONOMIC DEVELOPMENT FOR BANNOCK COUNTY AND PROVIDED INFORMATION TO NEW BUSINESSES TO ENTICE THEM TO LOCATE IN BANNOCK COUNTY "Economic Development--(65 entrepreneurs/businesses) To provide support, technical assistance and resources necessary to build a diverse and sustainable ecnomy through busines development." "Provide education--(85 participants) Provide higher education opportunities thereby increasing earning capacities through partnering with NIC, DCC & EITC to deliver Long Distance Learning; carreer expos, computer/financial workshops to public." "Community Development (Co. Population 7,936) Administering projects & programs that pursue development of tourism, sustainable forestry & renewable energy resources utilizing woody biomass." CAPITAL MATRIX, INC HELPS VARIOUS BUSINESSES WITHIN IDAHO AND SOUTHEASTERN OREGON OBTAIN SMALL BUSINESS LOANS CAPITAL MATRIX HAS CLOSED AND FUNDED MANY LOANS FOR VARIOUS LOCAL SMALL BUSINESSES THESE LOANS HAVE CREATED AND SUSTAINED MULTIPLE JOBS FOR THE LOCAL COMMUNITY Improve quality of child care & learning by providing 1788 scholarships Older American Programs provide services, meals, education, training, ombudsman, respite care, adult protection, and employment to elderly In order to maintain senior citizens as a Viable force In the community. EconomiC development administration provides planning and technical assistance services for economic development, Including establishment or expansion of commercial faCilities & employment continuity. The IdaOre Loan Program acts as a lender to small bUSinesses In Southwest Idaho and Eastern Oregon that meet speCifiC gUidelines set by funding sources such as the Department of Commerce & FHA. "Purchase and remodel of a 14,000 SF building for lease to Liberty Canyons Boys Ranch for use as a Rehabilitation Center for high risk youth." ($35,325) None listed "Education-Small Business/Business Plan Courses (2) out-reach and advocacy to various departments and governments pertaining to "BUY INDIAN," Small Business Community Meetings. Manage Micro-loan Program for Native American Small Businesses." ($26,054). "Community Development-Financial Literarcy Classes throughout the community (5), attend community economic development meetings to share information. Work with local government and small businesses in effort to place small businesses, incubate of 2 small businessesmentoring-assisting." ($13,422).
$258,860
$193,289
$881,593 $3,023,198
$6,211,596
-$24,182 $1,544
$33,992
Seeks to "promote and develop tourism in North Central Idaho." Promotes region through pitching stories to media. Hired professional public relations firm. Subscribes to a banner ad on Go-Idaho.com, which is successful. Used Twitter and Facebook. Brochure rack in vistors area (unstated location). Ad in annual Idaho State Travel Guide. 25,000 copies of annual regional visitor guide distributed free of charge throughout Idaho and eastern Washington in response to direct consumer inquiries. A Top 10 Destinations drive promotion with audio CD tracing Lewis & Clark expedition route along Clearwater and Lochsa Rivers. Participates in funding stand-alone byway website. THE FOUNDATION ARRANGED FOR FINANCING AND CONTRIBUTIONS TO OBTAIN COMPUTER HARDWARE AND SOFTWARE THAT WOULD BE USED BY HOSPITAL PERSONELL TO TRACK INDIDUAL CLIENT RECORDS. THIS PROGRAM IS ALMOST COMPLETED AT 9-30-11. UPON COMPLETION, THE OWNERSHIP OF THE SYSTEM WILL BE DONATED TO THE BEAR LAKE MEMORIAL HOSPITAL. THE AUXILIARY OPERATES A THRIFT STORE WITH ALL PROCEEDS TO BE DONATED TO THE HOSPITAL. DONATIONS OF USED CLOTHING AND OTHER ITEMS ARE RECIEVED FROM THE PUBLIC, PROCESSED AND SOLD THROUGH THE THRIFT STORE. ALL LABOR IS DONATED BY AUXILIARY MEMBERS AND VOLUNTEERS. THE FOUNDATION SPONSORS HEALTH FAIRS AND OTHER PROGRAMS AND SERVICES TO THE PUBLIC AND INDIVIDULES. The Associaiton helps Government agencies procure grants, fund bond issues, and procure federal loans to expand economic development. Housing development programs and services Include acqulnng STIMULATING ECONOMIC DEVELOPMENT IN THE CITY OF POCATELLO AND EASTERN IDAHO BY GRANTING LOANS FROM A CDBG REVOLVING LOAN FUND, INTERMEDIARY RELENDING PROGRAM FUND(USDA), RBEG GRANT FUND AND BY ASSISTING TO SECURE SBA LOANS "Support for area events." "Promotion and fund raising activities for the renovation of the Mcdermott Field facilities. The facilities serve as home for a minor league baseball team, two American Legion baseball teams, and for local high school baseball teams. The organization has chosen the project in conjunction with the continued renovation and revitalizatoin of the downtown region of Idaho Falls."
$109,415
$368,717
$1,934,497 $852,257
$317,774 $12,855
$14,038
THIS FUND ACCOUNTS FOR RESOURCES RECEIVED FROM THE U.S. DEPARTMENT OF COMMERCE ECONOMIC DEVELOPMENT ADMINISTRATION. THESE RESOURCES ARE DESIGNATED FOR IMPLEMENTATION OF THE GOALS AND OBJECTIVES OF REGION IV DEVELOPMENT ASSOCIATION'S COMPREHENSIVE ECONOMIC DEVELOPMENT STRATEGY. THIS FUND ACCOUNTS FOR $800,000 IN GRANTS FROM THE U.S. DEPARTMENT OF COMMERCE ECONOMIC DEVELOPMENT ADMINISTRATION AND $302,000 OF CONTRIBUTIONS FROM CASSIA, CAMAS, JEROME COUNTIES AND REGION IV DEVELOPMENT ASSOCIATION, INC. THIS MONEY CAPITALIZES A REVOLVING LOAN FUND FOR ECONOMICALLY DISTRESSED COUNTIES. UNDER THE TERMS OF THE GRANTS, THE ASSOCIATION WILL LEND MONEY TO QUALIFYING BUSINESS AND INDUSTRY. THIS IS A $5 MILLION DOLLAR GRANT FROM THE U.S. DEPARTMENT OF LABOR EMPLOYMENT AND TRAINING ADMINISTRATION. THE FUNDS WILL BE DISBURSED OVER A THREE YEAR PERIOD. REGION IV IS A SUB-RECIPIENT AND THE LOCAL ADMINISTRATOR FOR THE PROJECT. THE GRANT FOCUSES ON IMPLEMENTING CHANGES IN THE WORKFORCE DEVELOPMENT SYSTEM AS A PART OF TRANSFORMING THE REGIONAL ECONOMY. WHEN BUSINESS LOANS ARE REPAID, REGION IV DOES NOT HAVE TO RETURN THE MONEY TO THE GOVERNMENT. INSTEAD, IT MUST RE-LOAN THE MONEY TO OTHER QUALIFIED ECONOMIC PROJECTS. TO PROMOTE DIVERSIFICATION OF THE ECONOMY AND ENHANCEMENT OF THE QUAlITY OF UFE FOR THE RESIDENTS OF THE GREATER CITY OF IDAHO FALLS AND BONNEVILLE COUNTY COMMUNITIES PROMOTE PROGRAMS BY COORDINATING, SUPPORTING AND ACTING AS A CATALYST FOR COMMUNITY AND ECONOMIC DEVELOPMENT ACTIVITIES REGION-WIDE "Spring and fall IEDA educational conferences." "Gem state prospector website launch." To create a plant that establishes and overall framwork for growth management in Ada county, Idaho that includes policies and strategies that will be incorporated into the plans and practices of Ada County, its cities, Ada COunty Highway District, and the ITD. BUSINESS PLUS PROVIDES AN ASSESSMENT TO THE MAGIC VALLEY'S REGIONAL MARKETING ORGANIZATION TO FACILITATE MARKETING OUR AREA TO NEW BUSINESSES WISHING TO RELOCATE AND CREATE JOBS Improve quality of life of our citizens, develop our area resources, educate our citizens, and appreciate our area;s assets and values. The Hailey Chamber of Commerce served its nearly 400 members and the community as a whole by promoting economic development activities such as relocation services, tourism and new business information and by supporting local events designed to benefit the local economy. ECONOMIC DEVELOPMENT
$1,016,742
$275,849 $47,697
$1,570
$70,785 $21,482
$140,853 $317,836
a TO PROMOTE SCIENCE 8c TECHNOLOGY BUSINESS DEVELOPMENT undetermined TO PROMOTE AN IMPROVED ECONOMIC AND SOCIETAL FUTURE FOR BLAINE COUNTY, IDAHO THROUGH INITIATION, IMPLEMENTATION, AND MANAGEMENT OF STRATEGIES, PROGRAMS, AND POLICIES THAT PRESERVE AND ADVANCE THE BLAINE COUNTY IDAHO REGION'S QUALITY OF LIFE AND ECONOMIC WELL-BEING Economlc development actlvltles forthe Benewah County, Idaho objectlve |s to recult new buslnesses to the county not available
$378,387 $8,201
$4,100 $48,747 $257,704
Total expenses (990 Line 17; 990 EZ Line 17)
Net assets (990 Line 21; 990 EZ Line 21)
$48,474 $73,542 $37,066
$73,446 $45,482 $25,289
$54,146
$34,146
$53,982 $123,446
$73,951 $58,891
$488,254
$2,648,036
$3,550,286
$1,731,521
$92,635
$26,241
$237,534
$251,294
$76,379
$17,500
$239,442
$355,147
$168,196
$151,009
$769,746 $2,940,419
$1,330,543 $264,724
$6,184,200
$1,307,745
$43,925 $0
$309,955 $0
-$17,999
$35,054
$109,075
$14,364
$9,536
$1,304,950
$1,946,404 $1,067,694
$15,860,172 $889,095
$326,956 $12,344
$1,254,803 $44,163
$31,796
$10,138
$410,739
$2,226,098
$278,618 $37,755
$615,945 $158,936
$63,868
$36
$228,908 $35,100
$143,761 $23,590
$181,836 $296,048
$11,465 $911,392
$300,700 $10,754
$210,881 $99,099
$10 $48,145 $223,592
$4,090 $37,213 $34,112

Legal Document For Valley County Idaho Economic Development Council

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Legal Document For Valley County Idaho Economic Development Council

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DRAFT SUBJECT TO REVISION

PRIVILEGED & CONFIDENTIAL ATTORNEY - CLIENT COMMUNICATION ATTORNEY WORK PRODUCT

PRIVILEGED & CONFIDENTIAL ATTORNEY - CLIENT COMMUNICATION ATTORNEY WORK PRODUCT

PRIVILEGED & CONFIDENTIAL ATTORNEY - CLIENT COMMUNICATION ATTORNEY WORK PRODUCT

IDAHO CODE 30-3-21. Id.

Attachment C p. 5; Attachment R p. 16. IDAHO CODE 30-3-17(1)(a)-(g). 22 IDAHO CODE 30-3-17(3).

Attachment E. p. 2 and Attachment F p. 3. Attachment E p. 2 and Attachment G p. 2. 43 Attachment E p. 1.

Attachment R, pp. 44-45. Attachment R, p.45.

Attachment K, p.3. Attachment L, p. 46. 48 Attachment I, p. 31.

Attachment L, p.41. Attachment K, pp. 3, 47. 51 Attachment O.

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS

LES BOCK BOSCH, DAW & BALLARD, CHARTERED

2005 Business and Corporate Law Section, Idaho State Bar

9.6. Unknown Claims Against Dissolved Corporations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

1. ORGANIZATIONAL AND OPERATIONAL OVERVIEW.

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 1

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 2

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 4

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 7

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 8

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 9

2. FORMATION OF A NONPROFIT CORPORATION.

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 11

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 12

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 15

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 18

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 23

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 24

3. ORGANIZATIONAL MEETING OF THE NONPROFIT CORPORATION.

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 25

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 27

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 29

4. OBTAINING TAX-EXEMPT STATUS UNDER IRC 501(C)(3).

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 30

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 31

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 34

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 36

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 37

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 42

5. MAINTAINING CHARITABLE STATUS UNDER IRC 501(C)(3).

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 52

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 58

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 59

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 61

6. OPERATION OF A NONPROFIT CORPORATION.

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 62

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 63

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 66

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 69

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 71

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 72

(c) (d) (e)

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 73

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 74

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 78

7. OTHER TAX CONSIDERATIONS FOR NONPROFIT CORPORATIONS.

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 81

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 83

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 84

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 85

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 86

8. EMPLOYMENT LAW OVERVIEW.

HANDBOOK FOR IDAHO NONPROFIT CORPORATIONS - 87

1st Choice _ 2nd Choice _

Specific Purposes: _ _________________

Assessments to be secured by a lien on real property? _ yes; _ no.

Miscellaneous: a. b. Corporate seal: _ yes; _ no.

Notice? ____________ or Waiver of Notice?

DATED this day of ____________, 20.

_____ _ Dated _ , 20

DATED this _ day of ____________, 20.

EFFECTIVE DATE. The effective date of this action is ____________, 20_.

_________________ _ _________________

____ , 20

_________ EIN File No. _

_____________ _, Secretary

Dated: _____ , 20

_____________ Director _ Director _______________ Director

Employee Name Employee Signature