DISTRIBUTION CENTER LABOR ANALYSIS, 2015 for theMESQUITE, NV AREA PREPARED BY: July, 2015

TABLE OF CONTENTS Page # Introduction4 Mesquite Area Employer Analysis5 Labor Costs6 Labor Availability7 The Wage Threshold8 Labor Quality9 Cost of Living 11 Quality of Life12 Quality of Service13 Recommendations14 Appendix Companies interviewed17 Interview form18 INTRODUCTION The Mesquite Regional Business, Inc. contracted with Foote Consulting Group, LLC (FCG) to undertake a labor analysis for one of their targets, Distribution Centers (DCs). The study is designed to help the reader to better understand regional workforce issues in the Mesquite Area from site selection, relocation, business retention/expansion and workforce training perspectives. FCG is a site selection and economic development consulting company from the Phoenix area with global experience. According to our site selection work with DCs the most important site selection criteria (in order of priority) are: 1.Labor costs2.Freight/logistics costs 3.Electric power costs 4.Skills availability. It is quite clear from our recent site selection work that labor force issues, particularly availability of skilled labor, training of the work force and relocation of key employees, are very important. We designed this study so that it provides the most important labor force site selection information possible.In essence, we are providing you with information that you can give directly to a company seeking a location in the Mesquite Area. It is also clear from our recent site selection work that workers are choosing to commute shorter distances if jobs are available. This may be due again to rising gas prices and a desire to enjoy more family and recreational time.Generally, workers may commute over 60 miles or more for higher paying jobs, however, they will not do this for long. They will choose to change jobs for one closer to home once it becomes available or move closer to their existing job. The wage paid will directly dictate the commuting distance, and employers will seek to find the best skills at the lowest wage possible. A real life site selection and business retention-oriented labor analysis must go far beyond a demographic review. Statistical information is helpful, but barely scratches the surface of the workforce issues that companies are really facing today.Therefore, we incorporated a proven methodology that we use for our site selection projects.It relies on expert opinions of area employers. From these we have developed detailed recommendations designed to help you develop successful workforce and economic development solutions. DISTRIBUTION CENTER LABOR ANALYSIS, 2015 Foote Consulting Group, LLC,Page 4 of 22 MESQUITE AREA EMPLOYER ANALYSIS Introduction One objective of the study is to understand needs of employers in and around Mesquite, Nevada as they relate to the workforce. FCG conducted 14 face-to-face and telephone interviews with employers and employment type services in June-July, 2015 in order to determine these needs (see Appendix for list). The objective of these interviews was to determine current salary/wages for select positions; wage thresholds; hiring trends; labor availability and quality; and training needs. A copy of the interview instrument is found in the Appendix. We compared Mesquite against two primary competitors, St. George, Utah and North Las Vegas, Nevada. Both could be key competitors for a distribution center (DC) type project, which would serve the Western U.S. In determining labor availability and quality, we used the identical methodology that we use in our site selection work. It is through one-on-one interviews with local employers that we are able to determine the labor situation in the area, now.From these interview results, we created the FCG Index, which measures labor availability and quality on a one to ten point scale (1=poor; 5=average; and 10=excellent). We use the same index in all our labor market analysis nation-wide and this gives a true apples-to-apples comparison of different communities. Generally, scores of 1 to 2 are poor; 3 to 4 are below average, 5 to 6 are average; 6 to 7 above average; 7 to 8 are good, 8 to 9 are very good and 9 to 10 are excellent. The index measures: Availability tied closely to the level of skills needed and wages offered.Labor quality characteristics include: oTurnover oAbsenteeism oAttitudes on-the-joboTrainability employees response to training oBasic skills math, English, grammar, blue print reading, etc. of applicants oCommunications Employer/employee and employee/employee on-the-job oAlcohol/drugs Perceived situation oProductivity Employers measure. Next, we identified existing salary/wages from our national wage resource1 for select distribution center (DC) positions. We selected median wages with one-year experience.

1 Economics Research Institute (ERI), April 1, 2015 DISTRIBUTION CENTER LABOR ANALYSIS, 2015 Foote Consulting Group, LLC,Page 5 of 22 Labor CostsWages and salaries are the most important labor factors in a DC site selection; both affecting the availability of good quality workers in a marketplace and affecting a companys competitive position. Up to 60% of the annual operating costs of a project can be labor.FCG benchmarked the Mesquite market wages against St. George, Utah and North Las Vegas, Nevada (see below). Salary data comes from Economics Research Institute (ERI; 1st Quarter, 2015). All salaries (without fringe benefits) listed are median level with one-year experience. We have found this to be the most reliable source of comparative wage/salary data and we use this in all of our site selection projects. We assessed current salaries for a Distribution Center (DC) project: Mesquite DC wages/salaries are higher than St. George (by 14.7%) and are only slightly higher than North Las Vegas (by 0.3%). Conclusion: Higher wages in Mesquite could make a negative difference in the bottom line of a new DC project, but even higher wages may be needed to offset poor availability. DISTRIBUTION CENTER LABOR ANALYSIS, 2015 Foote Consulting Group, LLC,Page 6 of 22 Labor Availability The ability to attract the right skills is critical to the success of any project. Unskilled warehouse/distribution center workers (laborers, fork lift operations and pickers) are essential for an effective operation. Labor availability for unskilled distribution center workers in the Mesquite market is currently rated below average (4.4). oThese are well below the availability in North Las Vegas (good 7.3) and in St. George (good 7) Employer quotes regarding availability (in random order): Mesquite 93 positions open; was 30 in Feb-March; has been as high as 215 All unskilled come from Mesquite area. Farthest is Beaver Dam 10 miles Challenge in hiring; we wont look at people that have been let go from here in the past Difficult to find 10 good unskilled (Hispanic) workers now; but should improve later in year, probably due to the housing boom Find plenty to interviewhire 10 of 30 DISTRIBUTION CENTER LABOR ANALYSIS, 2015 Foote Consulting Group, LLC,Page 7 of 22 Hiring 300-400 unskilled workers would be a problem in 3 monthsmight take 3 years to hire that many! It takes 100 application to find 5-10 jobs; strict math testing; hire hard, fire easy! Problem finding unskilled labor Skilled/semi-skilled will commute from Vegas and St. Georgenot unskilled Some applicants with construction background might work in a DC; too skilled for us. Some commute from St George (5 car pools on 2nd shift; 4 on 1st shift). Use retirees for part-time! North Las Vegas 15-mile maximum commute Encourage a new company to carefully monitor their applicant tracking system since this will help them to get a good response to hiring. Great help is here! Some will commute 30 miles.Trouble finding drivers until we raised wages from $18 to $21now better! Unskilled availability is excellent! St. George 90% come from within 10 miles of plant; higher pay will go further (one mechanic from Mesquite) Good people herepay increase has helped! Had all the people we needed in 2009-2013that has all change nowtough! Hiring is difficult nowa number of tough competitors like Wal-Mart No problem finding workers; use Craigs List, radio, and newspaper We may have to raise our wages good for our folks. Conclusion: Poorer availability will hurt prospect activity in Mesquite; they may have to pay more in a market that has the highest wages already or come up with other alternatives. The Wage Threshold The wage threshold is important to understand so that prospecting distribution center companies will know the best wage to strive for. The wage threshold is the ideal wage for attracting and retaining employees. Offering below the threshold will result in poorer recruiting and loss of employment to better paying local companies. Offering above the threshold will result in excellent recruiting (including pirating from other local companies) and retention, but will be too costly to the company. DISTRIBUTION CENTER LABOR ANALYSIS, 2015 Foote Consulting Group, LLC,Page 8 of 22 Conclusion: According to our research and interviews, a prospect must offer an unskilled warehouse worker (with one-year experience) between $26,500 and $32,000 per year in order to recruit successfully and stay competitive. Labor Quality The ability to find quality workers is critical. Expanding and locating companies generally seek communities with above average to good quality workers. The Mesquite area market labor quality is rated good (7.46 overall). oBut it is below North Las Vegas (very good 8.63) and St. George (very good 8.41) oAll factors were rated good or very good, accept basic skills (5.5; average). Here is what employers told us about quality (listed randomly: Mesquite Committed, caring people Fun group; we do monthly celebrations Literacy, reading and writing is goodbetter than Vegas Lose some to Las Vegas as economy improves DISTRIBUTION CENTER LABOR ANALYSIS, 2015 Foote Consulting Group, LLC,Page 9 of 22 Morale is higher now. Our productivity is 25% better than Vegas. Reliability and work ethic is high Spanish language is a problem; they arent interested in learning, we tried! Strong family ties (Mormon) help productivity. They show up for work. Treat them right! Treat them well and good things happen. Turnover is high Turnover is only 16%/year; was very high 5 years ago. We offer the top fringe package in area including a pension and profit sharing payments. North Las Vegas Community college offers good degree training from our tuition reimbursement program. Get involved with co-worker engagement to reduce turnover! Turnover for warehouse is low (excellent); higher for drivers (48%/year). We would encourage them to locate. St. George I can think of no other town that you could do better in. Lost only one worker to our random drug screen; our Oklahoma operation loses 5-6 per quarter Our productivity is very good (9.5); At or Above on all scales of the Engineering Labor Standard (ELS). Conclusion: Labor quality is good in Mesquite, once you find the workers and we see no issues that would discourage any prospect. Basic skills improvements are worth exploring. DISTRIBUTION CENTER LABOR ANALYSIS, 2015 Foote Consulting Group, LLC,Page 10 of 22 Cost of Living Cost of living2 is important for attracting investment and in hiring, relocating, and retaining employees. Here are the 2015 cost of living numbers: The Mesquite cost of living is slightly above the national average and the highest of the comparison areas. Executive home prices are higher than the comparison locations. This may be due to a greater influx of retirees and the related home building in recent years. Conclusion: The higher cost of living in Mesquite could be a minor factor in selecting a site since managers would prefer a lower cost of living/housing.

2 All data comes from our ERI Relocation Assessor database 2015. Cost of living items include: consumables; transportation; health services; housing/utilities/property taxes; and miscellaneous items. DISTRIBUTION CENTER LABOR ANALYSIS, 2015 Foote Consulting Group, LLC,Page 11 of 22 Quality of Life During our interviews we asked employers their opinions regarding select quality of life factors. The scores are below: All three communities showed good to very good scores (Mesquite 7.99; N. Las Vegas 7.53; and St. George 8.46) oThere are some concerns regarding North Las Vegas schools. DISTRIBUTION CENTER LABOR ANALYSIS, 2015 Foote Consulting Group, LLC,Page 12 of 22 Quality of Service During our interviews we asked employers their opinions regarding select quality of service factors. The scores are below: All three communities showed good to very good scores (Mesquite 7.56; N. Las Vegas 8.53; and St. George 9.00) oThere are some permitting issues in North Las Vegas. Conclusions: Quality of life and quality of service issues will present no problems to a distribution company looking at Mesquite. DISTRIBUTION CENTER LABOR ANALYSIS, 2015 Foote Consulting Group, LLC,Page 13 of 22 RECOMMENDATIONS The following recommendations are designed to help the Mesquite Regional Business, Inc. and its partners to improve economic development and workforce goals for the future. Workforce Education Develop a Workforce/ Education/Business Roundtable which includes the Mesquite Regional Business, Inc.; area school superintendents; college officials; staffing agencies; and significant business leaders to address the many issues of the education and workforce system. Present this report to the Roundtable and other key committees and explore how this information can be incorporated into future workforce and marketing efforts. Join and attend meetings of the local Society of Human Resource Management (SHRM) Chapter (in Las Vegas) so you can become informed about regional HR concerns and issues.All workforce agencies and educational programs should jointly utilize ACT Work Keys as a uniform assessment tool. Work Keys needs to become an integral part of your strategic plan. Skill/Training NeedsDevelop solutions for finding more unskilled workers with the Nevada Career Center (in Las Vegas with Byron Goynes; 702-636-2320). Good ideas include: oUse the On-The-Job (OJT) Program hire with a subsidized wage ($10/hour) and set-up a training program for 120 days to 6 months (depends on what employer needs). This will change the talent pool and improve the work. oUse ACT Work Keys Assessment helped identify the best worker skills (may include a math test) oConduct Job Fairs may include a prescreening process that identifies good candidates for participants oExplore a Commuter Service to Mesquite from Las Vegas (look at Silver Shuttle) Encourage the training of unskilled warehouse workers possibly at the College of Southern Nevada. This could also be tied to basic skills training (appearance; interview techniques; basic math; English improvements, etc.) Help local employers and prospects to attract unskilled workers.oMany employees will change jobs for the right opportunities. DISTRIBUTION CENTER LABOR ANALYSIS, 2015 Foote Consulting Group, LLC,Page 14 of 22 oMany residents, including a large number of retirees, are ready to re-enter the workforce. Help get training/retraining program information to the many area workers looking to change jobs or re-enter the work place. Conduct future analysis into the skill needs of your target industries and plan for this training. Research/Marketing Get important data from this report into the hands of local companies and prospects.Develop a cost comparison report for Distribution Centers (DC). It would take a hypothetical project and compare costs and conditions in your area versus select competitors, including logistics/freight costs. Labor force/skills data from this report will be a valuable addition.Develop new marketing pieces that sells your positive labor quality and outstanding quality of life.Update this report annually. FCG is available to assist with any or all of these recommendations. DISTRIBUTION CENTER LABOR ANALYSIS, 2015 Foote Consulting Group, LLC,Page 15 of 22 For More I nformation Regarding This Report, Please Contact: Mr. Deane C. FootePresident & CEO (480) 399-4854 deane@footeconsulting.com DISTRIBUTION CENTER LABOR ANALYSIS, 2015 Foote Consulting Group, LLC,Page 16 of 22 Appendix Companies Interviewed: Boulevard Furniture CDW Deep Roots Do It Best Eureka Casinos Family Dollar Kokopelli Landscape Loadtec Mesquite Gaming Nevada Career Center Nicholas & Co. Primex Simplot Silica Sunroc DISTRIBUTION CENTER LABOR ANALYSIS, 2015 Foote Consulting Group, LLC,Page 17 of 22 Mesquite Region - Employer Questionnaire Company: Cluster: Interviewee:Title:

Location: Phone:Interview Date: Function of Company: Facility: Date Established Locally: This Site: Present Size (sq ft). plant:office: Last Expansion: Date: sq.ft. Growth Plans: (Markets? Expansion locally? Relocation?): Employment: Current Total:% male% female% part-time % Exempt (salaried):% Nonexempt (hourly): Peak employment? Year? # on layoff?Length of layoff? Labor-Management Relationships Present Union: Contract Date: Year organized or organizing attempts (union, year, vote): Strikes (date, length, cause): Grievances (#/month):Arbitrations (#/yr.) Hours of Work Number of Shifts:Shift Premiums: Willingness to work overtime: DISTRIBUTION CENTER LABOR ANALYSIS, 2015: Employer QuestionnaireFoote Consulting Group, LLC,Page 18 of 22 Wages/Availability (Rate 1-10) Plant-wide average earnings:$ per hour Most Prominent Positions (and #)Availability Rating Skilled: _______________$per hour _______________$per hour _______________$per hour _______________$per hour Semi-skilled _______________$per hour _______________$per hour _______________$per hour _______________$per hour Unskilled _______________$per hour _______________$per hour _______________$per hour _______________$per hour Clerical/Customer Service _______________$per hour _______________$per hour _______________$per hour Other _______________$per hour _______________$per hour _______________$per hour Last general increase (date):Amount: Next general increase (date):Amount: How difficult is it to relocate management or engineering to the Scottsbluff area? How difficult is it to recruit highly skilled or technical personnel to the Scottsbluff area? DISTRIBUTION CENTER LABOR ANALYSIS, 2015: Employer QuestionnaireFoote Consulting Group, LLC,Page 19 of 22 Labor Quality (rate 1 to 10) Overall Labor Quality of Workers (poor = 1, average = 5, excellent = 10): Turnover: Absenteeism: Attitudes: Trainability: Basic Skills: Communications: Alcohol/Drugs: Productivity: Other Comments: Fringe Benefits As percentage of total wage package:% Fringe benefit details - list (* if new or unique to market) Recruiting Experience Toughest jobs to fill?: Most sought after skills now?

In 2 years? DISTRIBUTION CENTER LABOR ANALYSIS, 2015: Employer QuestionnaireFoote Consulting Group, LLC,Page 20 of 22 Training Capabilities and Programs Outside training assistance utilized and who? Do you use the Community College? If so, how do they do they perform: (rate 1 to 10) a.)Responsiveness to needs: b.)Quality of students: c.)Quality of programs that align with skills you need: Suppliers/Customers Type of new industry that you would like to see in the area compatible to your operations (Linkages)? Other of Life factors: Overall Rating?(poor = 1, average = 5, excellent = 10) Elementary Schools: Secondary Schools: Medical Services: Housing Availability and Affordability: Day Care: Air service: Recreation: Cultural Facilities: Other of Business Services factors: Overall Rating? (poor = 1, average = 5, excellent = 10) Roads: Electric Power: Water: Sewer: Planning/Zoning: Permitting: Police and Fire: Responsiveness of city/county government: Other utilities: DISTRIBUTION CENTER LABOR ANALYSIS, 2015: Employer QuestionnaireFoote Consulting Group, LLC,Page 21 of 22 Overall, what are the positive aspects of hiring here? Overall, what are the negative aspects of hiring here? What advice would you give to another company in your line of business considering a location in this area? DISTRIBUTION CENTER LABOR ANALYSIS, 2015: Employer QuestionnaireFoote Consulting Group, LLC,Page 22 of 22