STORYTELLER
Sarah Hill Draws Inspiration From A Passionate Cause
STARTUP STRATEGY
Bill Turpin Takes Over At The MU Life Science Business Incubator
WINTER 2017
www.ColumbiaCEO.com
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Sponsored Content
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CONTENTS
Inside Columbia’s CEO • www.ColumbiaCEO.com • Volume 8, Issue 2
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Opening Bell: The Buzz On CoMo Biz
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Up & Coming: The Ladder Report
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Regional Roundup
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Data Bank: Boone County Election Results
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Business Basics: How To Unlock The Value Of Your Customers
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In It For The Long Haul: I-70 Towing And Recovery
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The Reading List: 5 Business Books To Read This Winter
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Entrepreneurial Spirit: Oxenhandler Law Brings Father And Son Together
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Market Outlook: What You Need To Know As The Tax Season Nears
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CEO Roundtable: Columbia’s Leaders Speak Out
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CEO At Play: 3 Questions
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Shopping: The Gift Of Cigars A Tasteful Alternative
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Networking
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Publisher’s Note
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Closing Quotes
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on the cover: John Berghager has completely remodeled the Oakland Plaza Lanes building at 2116 Vandiver Drive. The office space now houses the offices and workspace of I-70 Towing & Recovery.
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STAFF Publisher Fred Parry fred@insidecolumbia.net Associate Publisher Melody Parry melody@insidecolumbia.net Chief Executive Officer Cathy Atkins catkins@insidecolumbia.net Copy Editor Brett Duffer brett@insidecolumbia.net Editorial Assistant Peg Gill peg@insidecolumbia.net Contributing Writers Sherri Elsasser, Max Parry, Rebecca French Smith, Kevin Sinclair, Jack Wax Photo Editor L.G. Patterson lg@insidecolumbia.net Graphic Designers Trever Griswold trever@insidecolumbia.net Shelby Finch shelby@insidecolumbia.net Joe Waner joewaner@insidecolumbia.net Operations Manager Adam Brietzke adam@insidecolumbia.net Marketing Representatives Joshua Huber Josh@insidecolumbia.net Matt Melton matt@insidecolumbia.net Finance Manager Chad Morrow chad@insidecolumbia.net Distribution Associate Darren Dawson darren@insidecolumbia.net
Inside Columbia’s CEO magazine 1900 N. Providence Road, Suite 324 Columbia, MO 65202 573-442-1430 www.ColumbiaCEO.com
Inside Columbia’s CEO is published quarterly by OutFront Communications LLC, 1900 N. Providence Road, Suite 324, MO 65202, 573442-1430. Copyright OutFront Communications, 2016. All rights reserved. Reproduction or use of any editorial or graphic content without the express written permission of the publisher is prohibited. Postage paid at Columbia, Mo. Annual subscription rate is $19.95 for four issues.
Please Recycle This Magazine.
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THE BUZZ ON COMO BIZ
PHOTO COURTESY OF UNIVERSITY OF MISSOURI SYSTEM
OPENING BELL
Dr. Mun Choi with his mother Cathleen (center) and his wife Suzanne.
PRESIDENT CHOI GETS START IN FAMILY BUSINESS Following a nearly year-long national search, the University of Missouri Board of Curators appointed Dr. Mun Y. Choi as the 24th president in the history of the University of Missouri System. The current provost and executive vice president of the University of Connecticut, Choi will succeed Interim President Michael Middleton on March 1. Born in South Korea, Choi came to the U.S. when he was 9 years old. Upon entering the U.S., Choi’s family established a company, Choi Brothers, which makes martial arts uniforms. As a young man, Choi worked in his family’s successful
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business in Chicago. This company is located on Division Street and maintains a 150,000-square-foot manufacturing facility. Choi Brothers offers a full line of martial arts accessories and sparring gear. It is still run by three of Choi’s sisters. Choi, 52, is married to Suzanne Choi and together they have three children including Alex (first year doctoral student at Cal Tech), Christopher (freshman engineering and history student at UConn) and Cosette (high school student in Storrs, Conn.).
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OPENING BELL
THE BUZZ ON COMO BIZ
Boone County Art Show’s People’s Choice Award Winner Announced The winners of the 57th Annual Boone County Art Show, co-sponsored by Central Bank of Boone County and the Columbia Art League, were announced following the judging by Mario Carlos. The sought-after People’s Choice Award was awarded to artist Ken Nichols for “Hay Bales in the Sunset,” after 800 votes were received for this oil on canvas. This award is voted on by anyone who visits the art show. The Bank Purchase Award is presented to the artist whose work is chosen for Central Bank’s permanent collection. Rebecca Douglas won this award for her work “The Ridge,” which is an art quilt.
Smart Business Products Merges With Midwest Office Smart Business Products is now operating under the name Midwest Office following the merger of the two independent companies. Bill Schuette, owner of Smart Business Products, has been in business since 1984 in the Columbia market. He will continue as branch manager for the Columbia location and will oversee the new company’s expansion plans. The Columbia office will continue to focus on both office furniture and office supplies and will be introducing additional products. Midwest Office is an independent office products company headquartered in Springfield, Ill., with branch locations in three Midwestern states.
Columbia Chamber Of Commerce To Host Legislative Reception
MFA Oil Co. Acquires Ozark County LP Gas Co., Inc.
MFA Oil Company has acquired Ozark County LP Gas Company, Inc., a propane retailer serving residential customers in south-central Missouri and north-central Arkansas. This was MFA Oil’s first acquisition of its fiscal year, which began Sept. 1. MFA Oil has acquired a total of 34 companies since the beginning of its 2012 fiscal year, and will continue to evaluate strategic acquisition opportunities in its existing market area and other states where it can expand its footprint. MFA Oil is the seventh largest propane retailer in the United States.
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The Columbia Chamber of Commerce’s Government Affairs Committee will unveil the 2017 Legislative Agenda at its annual Legislative Reception on Jan. 5 from 4-5:30 p.m. at First State Community Bank. Columbia’s local delegation will talk about the upcoming legislative session. For more information, contact the Columbia Chamber of Commerce at (573)874-1132.
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OPENING BELL
THE BUZZ ON COMO BIZ
Columbia College Community Dedicates New Quadrangle The dedication of Columbia College’s new campus quadrangle kicked off the college’s Homecoming festivities. The project was estimated to cost $1.9 million and was dedicated on Oct. 7. Columbia College President Dr. Scott Dalrymple highlighted the quadrangle’s student-centric environment and design. The quadrangle includes a pavilion with comfortable outdoor seating for students who want to unwind, a campus safety office, an amphitheater for performances, a garden and an alumni fountain. Reinhardt Construction was the general contractor and Simon Oswald was the architectural firm on the project.
Boone Central Title Wins National Award
Boone Central Title was recognized at the American Land Title annual convention in Scottsdale, Ariz., for winning the Homebuyer Outreach Program Award. The American Land Title Association created the contest to award a member that best incorporated the program message within their company and effectively put the message to use in educating their clients. Boone Central Title employees incorporated the message into the Columbia Chamber of Commerce Small Business week by transforming into superheroes called “The Protectables,” saving the world one policy at a time.
Epoch Men’s Health Clinics Expanding Nationwide
Anthem-Epoch, Inc., the parent company of Epoch Health, has secured $5 million in new financing from Kayne NewRoad Ventures Fund II, L.P., to expand their clinical model nationwide. Epoch Health is a primarycare clinic focused specifically on comprehensive men’s health, with a
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Columbia location at 2900 Trimble Road. The company offers a malefriendly clinical environment with a no-appointment necessary or walk-in dynamic. The Epoch Health business model centers on preventive care by educating men and their families about general wellness while matching their symptoms with appropriate medical treatments, education and lifestyle modifications. Kayne NewRoad Ventures Fund II, L.P., is a joint venture between NewRoad Capital Partners, LLC and Kayne Anderson Capital Advisors, L.P. The $5 million fund will allow the company to expand from seven clinics to impact more cities throughout the United States.
Looking For Statewide Business Leaders
The Missouri Chamber of Commerce and Industry is now accepting applications for its 2017 Leadership Missouri class. Leadership Missouri assembles current and emerging leaders across Missouri to participate in a series of sessions to enhance leadership skills and deepen knowledge of Missouri’s opportunities and challenges. The program consists of seven
monthly, two-day sessions held in different regions of the state. While travelling to different Missouri communities, participants gain a better understanding of the diverse industries and people that make up the state’s economy. They network with the state’s top business, government and non-profit leaders. Since its inception more than 25 years ago, Leadership Missouri has helped nearly 900 Missourians become better leaders. The cost of the program is $2,000. To apply, contact the Missouri Chamber of Commerce.
Commission Joins Initiative To Assist LowLevel Offenders With Mental Illness
The Boone County Commission announced Boone County has joined the White House’s Data-Driven Justice Initiative. This initiative supports city, county and state government efforts to use data-driven strategies to divert low-level offenders with mental illness out of the criminal system and to change approaches to pre-trial incarceration so that low risk offenders no longer stay in jail simply because they cannot afford bond.
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OPENING BELL
UP & COMING
THE LADDER REPORT Look Who’s Moving Up In Business
STEVE SOWERS has been named president of COMMERCE BANK, Central Missouri region. In this role, Sowers will continue to serve as the commercial division manager of Commerce Bank’s Central Missouri region, which includes California, Columbia, Hannibal, Mexico, Moberly and Tipton. Sowers succeeds TERESA MALEDY who was recently promoted to chairman and will continue as chief executive officer of the region. The changes are in anticipation of JIM SCHATZ‘S retirement at the end of 2016 after 31 years with the company. Sowers is a long-time Commerce Bank executive with 19 years of banking experience. He is a graduate of the University of Missouri, receiving a Bachelor of Science in business administration with an emphasis in finance, banking and real estate. JAY BRYANT-WIMP, RPH, has received the 2016 MISSOURI PHARMACY ASSOCIATION’S PHARMACIST “MAKING A DIFFERENCE” AWARD. This honor is presented to a pharmacist who makes a difference in the quality of life in his patients by going beyond the call of duty to provide excellent pharmacy care. He was presented the award at the Missouri Pharmacy Association’s annual conference. Bryant-Wimp is CEO and co-owner of Accurate Rx Pharmacy. He is a graduate from the St. Louis College of Pharmacy in 1991, has worked in various pharmacy settings over the past 25 years. SANDRA FREESE, CPA, has joined ACCURATE RX PHARMACY as the director of operations/Chief Financial Officer to assist in developing and growing its nationally accredited pharmacy. Freese has experience in audit and financial services. She has a bachelor’s degree in 18
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accounting from the University of Illinois and is an adjunct professor of accounting at the University of Missouri. The CENTRAL BANK OF BOONE COUNTY Board of Directors has named BROOKE BERKEY assistant vice president of business banking. Berkey manages large commercial relationships including both deposit, cash management and treasury services as well as lending needs. Berkey has worked in financial services for more than four years and has focused heavily on assisting business clients. She graduated from Missouri State University with a Bachelor of Science degree. Her community involvement includes chairwoman of the 2017 American Heart Association Heart and Stroke Ball and member of the board of directors of First Chance for Children. THE NATIONAL ASSOCIATION OF WOMEN IN CONSTRUCTION (NAWIC) installed CONNIE LEIPARD, CIT, as its 62nd national president during its annual meeting and conference in San Antonio, Texas. Leipard is the owner of Quality Drywall Construction and has been a member of NAWIC’s Central Missouri Chapter since 1995. NAWIC is an international association serving approximately 124 chapters across the United States. It was founded in 1953 to enhance the success of women in the construction industry. LAUREN KARR, the director of communications for VETERANS UNITED HOME LOANS, has been named the “2016 Communicator of the Year” by the Mid-Missouri Chapter of Public Relations Society of America. The award was presented to Karr at
the chapter’s fall conference in October. The honor is given to a communications professional who demonstrates superior professional character, exhibits exemplary professional achievement, has earned the respect of peers and clients and creates a positive impact on the communications profession. In her role as director of communications, Karr leads internal and external communications efforts at Veterans United Home Loans, which has more than 2,100 employees. WILLIAMS-KEEPERS added four full-time associates and a content development intern to the firm’s Columbia office. PETE STANSBERRY is a full-time tax associate. He graduated from the University of Missouri with a master’s degree in Accountancy and is a Columbia native. Also a full-time tax associate, PAUL TRENHAILE graduated from Truman State University in May. Previously from Hannibal, he served as an audit intern for the firm in the summer of 2015. STEPHANIE CONTI joined the firm in July as an accounting services associate. She is a graduate of Miami University with a bachelor’s degree in Accountancy. She began her career as an accounting associate at a Chicago-based finance company and most recently held a position as a staff accountant at Fresenius Medical Care. HEATHER DEMPSEY, CPA, is an accounting services associate. She earned her master’s degree in Accountancy from the University of Missouri in 2011. Previously Dempsey worked as a senior accountant in the cost analysis department at the University of Missouri, as well as two local accounting firms. KODY FERRIN is a content development intern. He will be graduating in May
from the University of Missouri with a bachelor’s degree in Journalism. He is a native of Excelsior Springs. The CENTRAL BANK OF BOONE COUNTY Board of Directors has named BILL COSTELLO assistant vice president of relationship banking. Costello works individually with clients to assist them with financial services needs from mortgages and investments to business services and traditional banking. He has worked in financial services for more than six years after a career in marketing and advertising. He graduated from the University of Missouri with a bachelor’s degree in Journalism. Active in the community, Costello is currently president of Columbia Crimestoppers, president-elect of the University Club, a board member of Friends of Music at the MU School of Music and a member of The Crossing Newcomer Support Team. KATIE MOELLER has joined KRCG 13 as a new morning co-anchor with Dick Preston at the Live at Sunrise newscasts. She is a University of Missouri graduate and St. Louis-area native. STEPHANIE HIRATA has been named the KRCG Live at Sunrise morning team as a reporter and will be conducting live in-studio interview segments with members of the community. KEEGAN THOMPSON recently joined SIMON OSWALD ARCHITECTURE as an intern architect. Keegan earned his master of Architecture at the College of Architecture Planning & Design at Kansas State University. Keegan brings four years of experience in a variety of markets including commercial, government, residential and design-build. JERI THOMAS joined Simon Oswald Architecture as an administrative assistant. She has spent the last four years working for MFA Oil in the Petro Card Operations Department offering support and technical assistance to employees in the field. Share your business news with Inside Columbia’s CEO. Email the editor at CEOeditor@insidecolumbia.net. WINTER 2017 I INSIDE COLUMBIA’S CEO
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OPENING BELL
Casino Proposal In Southwest Missouri Unlikely To Gain Community Support
After years of trying to bring a casino to southwest Missouri, officials in Rockaway Beach, Mo, are not optimistic about the casino’s prospects. According to the Springfield News Leader, the mayor of the southwest Missouri resort town now believes they may get into a legal battle by Missouri’s existing casinos if they proceed. Missouri’s constitution only allows gambling on the Missouri and Mississippi rivers, and the number of casino licenses issued by the state is capped at 13 — which all are currently being used. A group of investors has studied the casino’s viability, even bringing the issue to Missouri voters in 2004, but it failed by 55.9 percent. 20
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REGIONAL ROUNDUP
Many of the investors own businesses in the Branson area, but are hitting roadblocks as some Branson officials believe a casino would threaten its family-friendly atmosphere. The investors are now studying the feasibility of bringing a non-casino attraction to the area that would not need voter or legal approval.
St. Louis Group Unveils $200 Million Soccer Stadium Proposal
Major League Soccer may be fielding a team in St. Louis by 2020 or 2021. But first a $200 million downtown stadium is being examined, with voters possibly being asked to put $80 million in public money toward the 20,000seat stadium. Private investors would cover approximately 60 percent of the stadium costs, with the facility being
owned by the city of St. Louis. The proposed site for the open-air stadium is next to St. Louis Union Station. The ownership group is known as SC STL, and includes the former AnheuserBusch president. While public officials are hesitant after the Rams moved the football team to Los Angeles, voters may see the issue on the April 4 ballot. Major League Soccer is said to be actively supportive of the effort.
Jefferson City Considers A Bond Issue For A Second High School The Jefferson City Public Schools Board of Education is considering how to move forward with a bond issue to fund a second high school. The timeframe is short and board members have expressed concern it’s not enough time to draw up a plan and share it with the community.
According to the Jefferson City News Tribune, Superintendent Larry Linthacum recommended the board move forward with a plan to build a second high school and make major renovations to the current campus — which would cost roughly $120 million to $130 million. He also suggested the district address the elementary and middle schools in 2020 and 2021. The board has not decided whether to put the issue on the April ballot, but construction plans are being drawn. Some residents are concerned that waiting another year before putting the issue to voters will further compound overcrowding at the high school. Even though a second high school is being proposed, some believe building another elementary school is also a priority.
Hallmark Vows To Add Wedding Rings
Kansas City-based Hallmark Cards, Inc. is entering a new market. Since 1910 couples have given each other romantic cards from Hallmark, now they might be giving each other Hallmark rings as well. Hallmark has entered the diamond engagement and wedding ring market with a partnership with The JC Penney Co. In November the company started test marketing the new Heart of Hallmark Collection, which includes engagement rings, bridal sets and wedding bands. The new collection is priced between $1,700 and $6,000 and is available online at JC Penney’s website and in 30 stores around the country.
City Council Passes Bill To Allow Uber To Service Springfield
After working with Uber representatives for months, the Springfield City Council unanimously voted 8-0 to approve the “Uber bill.” City council and Uber representatives worked together for months before agreeing on the bill language, which shifted enforcement of driver background checks from the city to the company, the Springfield News Leader reported. Uber has already started recruiting drivers in the Springfield area but hasn’t announced when it will add Springfield in its market mix. To use the transportation network company, customers use an app on their smartphones to hail rides from the nearest available driver. Drivers use their personal cars, rather than a traditional taxi, to provide service. WINTER 2017 I INSIDE COLUMBIA’S CEO
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OPENING BELL
DATA BANK
BOONE COUNT Y ELECTION RESULTS Votes have been tabulated and the election is over. But to whom did Boone County voters give the nod? With an amazing 78 percent turnout rate in the county, residents voted in large numbers with early morning voters waiting for longer period at the polls. Here’s how Boone Countians voted in its 86 precincts in the presidential, governor and state senate races. In Boone County, there were 85,012 votes cast out of 108,578 total registered voters. Note that county residents did not choose the final winner of the office in any of the three races below.
7%
President 49%
43%
Hillary Rodham Clinton (D) 41,125 Donald J. Trump (R) 36,200 Other candidates 6,101
49.30% 43.39% 7.31%
3%
Governor State of Missouri
54%
41%
50%
49%
Chris Koster (D) Eric Greitens (R) Other candidates
45,396 34,051 3,112
54.97% 41.26% 3.77%
State Senator District 19 Stephen Webber (D) Caleb Rowden (R)
40,858 39,795
50.66% 49.34%
Source: Boone County Clerk’s office
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BUSINESS BASICS
CUSTOMER SERVICE
Unlocking The Value Of Your Customers by KEVIN SINCLAIR
O
ne of the greatest thrills in business is acquiring a new customer. Many businesses are too caught up in the excitement of acquiring new customers that they do not spend enough time or money on unlocking the value of their existing customer base. It surprises me how often businesses fail to regard their existing customers as one of their most valued assets. There may not be the same excitement in getting orders from existing customers, BUT this is 24
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where the real profits are made. It is generally accepted amongst most marketing experts that it costs at least five times more to acquire a new customer than it does to get an order from an existing customer. There are many ways that you can unlock the value of your existing customer base and in this article, I will explore some of those ways with you. The first thing a business needs to do is develop the mindset that their customer base is their most valuable asset. Customers need to be treated like gold because that is what they are
to your business. Responding to the needs of your existing customers must take priority over prospecting for new customers. To unlock the value of your customers requires that you have a range of products that will fulfill their needs. Products should be carefully chosen to ensure they are of the right quality and will meet customer needs. Your customers will often tell you what they need if you listen to them carefully and with respect. This can save you a lot of time and cost in market testing of new products.
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Retaining Customers Are you ready to make real profits in your business? Then stop overlooking your existing customer base. Responding to existing customers takes priority over prospecting for new customers. Develop your existing customer base by: • Choosing Products Carefully • Communicating With Existing Customers • Closely Monitoring Buying Habits • Personalizing Customer Responses • Building Credibility
Stay in contact with your customers. There are a variety of ways to do this and the internet provides a cost effective means to do so. A regular newsletter for customers providing them with useful information is the most common way. However, you need to know what your customers want to make this truly effective. Gather the preferences of your customers and monitor their buying habits. This can provide you with very valuable information. To get valuable ideas, look at some of the things Amazon does. For example, Amazon allows people to subscribe to updates on various different types of books and products. That way, they are able to provide information on a regular basis that the customer is interested in. Amazon also has an author update service. You tell them who your favorite authors are and whenever there is anything new by that author, you receive an email notification. They also have a facility that suggests other titles or products you may be interested in. This is based on what you are considering purchasing and what others who purchased the same item also purchased. Do these features generate more sales from their existing customers? You bet they do! How can you use these concepts to unlock the value of your customers? 26
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Consider ways that you can make it easy for your customers to re-order. Simple things such as not having to fill in all their details again on the order form help. That way, customers only need to advise you of changes to their details and the order process is a lot quicker. Regularly review your customers’ buying habits. This can reveal information on offers that you can make that meet their needs. Providing them with a solution to their problem will lead not only to further sales but also strong goodwill. Customer service can be one of your strongest weapons in the battle to retain your customers. Make every effort to personalize responses to customer inquiries. Do not send standard form emails if you can avoid it. While this will take more time, the rewards will be far greater. Be quick to honor guarantees. This will show that you mean what you say and will build strong credibility. Too
often, tardiness and slow responses lead to lost credibility and lost future value of a customer. When you are treating your customers as the most important people to your business, they will find the experience rewarding and will return often. Each business is different and has its own specific ways that can generate greater value from its existing customer base. Through this article, I hope I have helped you to start thinking more about how you can unlock the value of your customers. Remember, the more you put into looking after your business’s major asset, the more profit you will make. A side benefit is that your customers may even refer their friends and associates to your business, resulting in a steady flow of new customers with a very small customer acquisition cost Kevin Sinclair is a CPA with Personal & Business Success Resources. Visit his website at www.ksinclair.com.
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IN IT FOR THE LONG HAUL I-70 TOWING AND RECOVERY by Jack Wax • photos by L.G. Patterson
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ohn Berghager runs his I-70 Towing and Recovery business out of a remodeled bowling alley at 2116 Vandiver Drive. It’s a building with a history in Columbia; and it’s a building that will certainly have a role in Columbia’s future. “I think Columbia is a land of opportunity — if you want to work,” Berghager says. He has taken his share of those opportunities, transforming a long-vacant property into an impressive office and workspace. In addition to his towing company, he has also created several other businesses that play an important role in Columbia’s economy. Those who remember when the building housed Oakland Plaza Lanes might expect to see the remnants of wooden bowling lanes and beer-stained carpeting left over from the days of league play. There’s not a whiff of stale beer or cigarette smoke in the recently refinished offices. Any evidence of its former existence as a bowling alley has been obliterated, and in its place is a sophisticated office and efficient work area for Berghager’s towing business. He also plans to offer 15,000 square feet of currently empty space to other businesses wanting retail or office space.
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Berghager designed much of his office space and shop himself.
If you think the phrase “sophisticated office” doesn’t belong in the description of a towing business, you haven’t met John Berghager or toured I-70 Towing and Recovery’s offices and shop. Viewed from Vandiver, the massive concrete building features three yellow stucco towers rising above windowless concrete and brick walls. Walk through the front doors and one might think they are entering the lobby of a prestigious law firm, with subdued lighting, 16-foot ceilings, stained concrete floors and a spacious reception area complete with a three-panel original painting on the wall. The scene depicted in the painting breaks that illusion. The three canvases, covering an area about 20 feet by 8 feet, portray a dramatic highway scene — a truck has run off the road, but the situation is well in-hand because an I-70 Towing and Recovery truck and workers are on the scene. Berghager commissioned Bradford Stearman to create the painting and although it does not depict an actual incident, it’s a scene he has seen countless times. “The thing about John,” says his wife Kelley, “is that he is very hands on. If there’s
a big accident and not enough people to help out, he’ll get out there on the road and help.” Berghager has the sturdy build and nononsense bearing of a man who is equally at home yanking a truck tire off an 18-wheeler or driving a flatbed tow truck on an icy road. His wife Kelley owns Girl Boutique, and they have been married 19 years and have a 14 year-old daughter. Although he is able and willing to do the gritty, strenuous work of towing, physical stamina is only a small part of Berghager’s skill set. Most of the time, he can be found in his office, managing his businesses, looking for new opportunities and evaluating ideas for growth. I-70 Towing and Recovery, a business that employees 10 people, has a lot of moving parts that he keeps track of himself. In addition to towing cars, trucks, RVs, semis and motorcycles, his company does an equal amount of hauling, transporting heavy equipment for building contractors and commercial clients. I-70 Towing and Recovery may be the most visible of Berghager’s businesses, but it is only the tip of his revenue iceberg.
I-70 Towing and Recovery may be the most visible of Berghager’s businesses, but it is only the tip of his revenue iceberg.
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Working hard and a desire to get ahead is why Berghager believes he has been successful in business.
His Spring Creek Properties not only owns the Vandiver office site and six surrounding acres, but also has invested in a variety of properties scattered throughout Columbia and Boone County. On the east end of his Vandiver acreage, he displays a selection of metal shipping containers, some of them 40-feet long, which are part of another of his business ventures. These are rented to contractors who need a safe place to store equipment on-site or to homeowners who prefer storing furniture during a home remodel. Several of the metal containers have been sold to farmers who use them to store farm vehicles. A small part of the acreage facing Route B has been rented to a company that sells prefabricated sheds. But a major focus of Berghager’s attention is off-site. He owns 26 semitrailers that comprise his trucking business. His fleet of trucks and drivers carry all the ground freight for FedEx Ground that comes into and out of Columbia to Kansas City and St. Louis. That component of his enterprise employs another 40 people.
Most people find it challenging enough running one business. But at age 51, Berghager somehow has found the time and energy to keep expanding all his businesses, in addition to helping design his office space and shop. (Ed Rohlfing of Putnam Interiors gave him some assistance.) Berghager attributes his success to two things: his habit of working hard, instilled by his father, and his desire to get ahead. “I grew up on a farm in Center, Mo., and my dad made sure I had a shovel and work to do in the summer,” he explains. As for getting ahead, Berghager didn’t have much more than a shovel to his name when he moved to Columbia in 1991. Needing a place to stay, he rented a small apartment, despite not yet having a job. When the first month’s rent was due, he had to use a credit card to come up with the cash. Those early days in Columbia convinced him that if he wanted anything he’d have to work hard. “I didn’t want to live on my credit card,” he says. The road from that tiny apartment to his
Any evidence of its former existence as a bowling alley has been obliterated, and in its place is a sophisticated office and efficient work area for Berghager’s towing business.
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Transportation themed artwork hangs throughout the remodled office.
Special attention has been given to the bathrooms, where drivers have a comfortable place to clean up after a tiring day. 32
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newly remodeled 4,500-square-foot office space has taken 25 years to travel. After moving into his Columbia apartment, Berghager says he “hounded UPS until they gave me a part-time job for their Christmas season.” When that work ended, he became an independent owner/ operator with Roadway Package System, where he had three delivery routes and supervised several employees. Then, in his spare time, he and a partner bought a towing service that consisted of one beat-up towing truck. Five years later, he bought his partner out and that’s when the towing business took off. In 2000, he saw an opportunity to get into the freight hauling business and cemented a deal with FedEx Ground to carry all their freight into and out of Columbia. As demand for his services grew, so did his fleet of trucks, reaching its current level of 26 semi trucks. He has been using the cavernous garage space at Vandiver since 2010, and only moved into the office area in August of 2016. In the meantime, he worked out of an office he owns on Grand Avenue. Now that the garage and office are in the same building, supervising his towing and recovery operation is a lot easier, Berghager says. The contrast between the garage and office space is dramatic — beautiful paintings and chandeliers on one side of the wall; bare concrete floors and shop lights on the other. Trucks, forklifts and other heavy machinery move in and out of the garage all day and even at night. Berghager explains that if a semi has been towed to the garage, its cargo might need to be transferred to another truck to be delivered on time. His docks and cargo-moving equipment are necessary tools of the trade. The concrete exterior walls of his office building are 12 inches thick with re-bar throughout. Even the flowerbed near the entrance is made of the same sturdy concrete. “We call it the compound,” Berghager says, referring to the building, “because it’s built like a fort.” A fort never held such a striking array of artwork. A rich variety of paintings are arranged throughout the office. Some artwork along the wall
Berghager remodeled the building that housed Oakland Plaza Lanes to include a stunning 4,500-square-foot office space.
between the garage and finished office are transportation themed, with representations of antique gas pumps and vintage cars. A large painting behind his desk shows the National Library of France. And others, such as those in the conference room, are abstract. The conference room is adjacent to the drivers’ lounge, featuring a cooktop built into a black island counter and set off by orange cabinets. Because towing can be grimy work, Berghager has given special attention to the office’s two bathrooms — one off his private office and one off the drivers’ lounge. Both feature concrete sinks, muted tiles and custom-built showers. The unstated message that the luxury drivers is that they are important and deserve a comfortable place to relax and clean up. Berghager’s relationship with his employees is anything but understated. During their first
interview, he sets a clear expectation. “I tell them they’ll have to earn it here. I’ll not give it to them. I also tell them we’re going to do what we say we’ll do,” he says. He has translated his expectations into a solid reputation. Brad Fraizer, assistant fire chief for the Columbia Fire Department, has known John professionally and as a friend for 12 years. “John has worked at building relationships in the community and works with others to make Columbia a better place to live,“ Fraizer says. A beautiful office, thriving businesses, an exciting future full of new opportunities… with so much success, some might develop an attitude about their place in the world. Not John. He doesn’t talk much about his accomplishments. “He started from the ground level, up,” Kelley says. “He got where he is by being honest and working hard. He won’t ever change.”
As demand for his services grew, so did his fleet of trucks, reaching its current level of 26 semi trucks.
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THE READING LIST
5 Business Books To Read This Winter
Thank You for Being Late: An Optimist’s Guide To Thriving In The Age Of Accelerations
By Thomas L. Friedman (Farrar, Straus and Giroux, 2016)
This book is a work of contemporary history that serves as a field manual for how to think about this era of accelerations. It’s also an argument for being late by pausing to appreciate this amazing, historical epoch this generation is passing through and its consequences. To amplify this point, the author revisits his Minnesota hometown where he explores how communities can create trust to anchor their increasingly diverse and digital populations. Friedman shows that we can overcome the stresses of an age of accelerations if we slow down, if we dare to be late. 34
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The Gig Economy: The Complete Guide to Getting Better Work, Taking More Time Off, And Financing The Life You Want By Diane Mulcahy (AMACOM, 2016)
From Uber to the presidential debates, the gig economy has been dominating the headlines ... and for good reason. Today, more than a third of Americans are working in the gig economy -- mixing together short-term jobs, contract work and freelance assignments. For those who’ve figured out the formula, life has never been better. This is the guide to this uncertain but ultimately rewarding world. Succeeding in it starts with recognizing that only you control your future and leveraging your skills, knowledge and networks. Packed with research, exercises and anecdotes, this book supplies strategies to help you.
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To Pixar And Beyond: My Unlikely Journey With Steve Jobs To Make Entertainment History
By Lawrence Levy (Houghton Mifflin, 2016)
This book explains the never-before-told story of Pixar’s improbable success. After Steve Jobs was unceremoniously dismissed from Apple, he turned his attention to a little-known graphics art company that he owned called Pixar. One day, out of the blue, Jobs called Lawrence Levy, a Harvard-trained lawyer and Silicon Valley executive to whom he had never spoken before, in the hope of persuading Levy to help him get Pixar on the right track. What Levy found was a company on the verge of failure. This is the extraordinary story of what happened next: How Levy produced a roadmap that transformed the graphics art studio into one of Hollywood’s greatest success stories.
Ray and Joan: The Man Who Made the McDonald’s Fortune And The Woman Who Gave It All Away By Lisa Napoli (Dutton Books, 2016)
This fall, the movie “The Founder,” starring Michael Keaton, will focus the spotlight on Ray Kroc, who amassed a fortune as the chairman of McDonalds. But what about his wife, Joan, the woman who became famous for giving away his fortune? Ray & Joan is a quintessentially American tale of corporate intrigue and private passion: a struggling salesman with a vision for a fastfood franchise that would become one of the world’s most enduring brands, and a beautiful woman willing to risk her marriage and her reputation to promote controversial causes.
The Man Who Knew: The Life And Times Of Alan Greenspan By Sebastian Mallaby (Penguin Press, 2016)
This is the definitive biography of the most important economic statesman of our time: Alan Greenspan. This book is the product of five years of research based on untrammeled access to him, and brings into focus the mysterious point where the government and the economy meet. To understand Greenspan’s story is to see the economic and political landscape of the last 30 years -- and the presidency from Reagan to George W. Bush. Greenspan spent a lifetime grappling with a momentous shift: the transformation of finance from the regulated system of the post-war era to the free-for-all of the past quarter century.
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ENTREPRENEURIAL SPIRIT
FAMILY BUSINESS
Oxenhandler Law Brings Father And Son Together by MELODY PARRY
Josh (left) and Gary Oxenhandler have dreamed about starting their family buisness since 2002.
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etired Judge Gary Oxenhandler will be joining his son, Josh, in forming the new law firm Oxenhandler Law. Working together has been a dream of theirs since Gary took the bench in 2002. The pair soon will open their firm at 1001 E. Walnut, Suite 300. With a new partnership on the horizon, Josh shared his perspective of working together with his father.
Why did you decide to go into business together at this time in life?
It made perfect sense. I grew up listening to stories about the trials and tribulations of starting your own firm and had always had it in my mind that I wanted that to be a part of my career. Dad had just retired from the bench and was on to his next adventure, so ...
What are the different focuses each of you bring to the business? I will continue to focus on the dayto-day practice of law and Gary will 36
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focus on mediation, arbitration, master appointments and what he calls “special problem solving.”
What will be the most challenging part of working together? We both bring so much to the table in terms of community involvement and different hobbies, we have to be careful not to distract each other from the primary purpose of the partnership.
The Oxenhandlers are banding together to form their own law firm.
What is (or will be) the best part of working together?
Dad and I both share the same philosophy: Take care of your family, work hard for your clients, live a righteous life and have a good time doing it.
Do you have any advice for others who may be considering working with a family member?
Remember the reason you do business with your family. And leave your ego at the door.
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MARKET OUTLOOK
TAX SEASON NEARS What You Need To Know For 2017 by SHERRI ELSASSER, CPA
A
s we look forward to a new year, the last thing we want to think about is taxes, but guess what? Filing season is right around the corner and there are a few important things you need to know for the upcoming year.
Deadlines are changing. In prior years, W-2 and 1099 forms were required to be distributed to the recipients by Jan. 31, but not required to be sent to the IRS or Social Security until Feb. 28. The deadline to the recipients hasn’t changed, it’s still Jan. 31. Most individuals won’t notice the change. However, the deadline to send the forms to the IRS and Social Security has been moved up to Jan. 31. On one hand, this makes sense because you had to get them done and to the recipients by that date anyway, but on the other hand, it does not give employers time to make corrections to forms prior to filing them with the IRS. This deadline was moved in an effort to combat the overwhelming problem of identity theft. The IRS will now more easily be able to compare the W-2 or 1099 filed by an employer to the tax return filed by an individual to make sure they match. For the individual taxpayer, it means they may have to wait a little longer for their refund. Especially people who file early (in January) and expect a quick refund. The IRS will likely not be issuing any refunds until Feb. 15. The deadlines for C Corporations and Partnerships have been swapped. In previous years, Partnership returns weren’t due until April 15; however, next year that deadline has been moved up a month. Both Partnerships and S Corporations will be due March 15. Hopefully, this will help business owners file their tax returns timely 38
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since they may have their Schedule K-1s a little earlier. The deadline for C Corporations was March 15; however it has been moved to April 15. (Note: In 2017, April 15 falls on Emancipation Day, so the deadline is actually April 17.) FinCEN Form 114 Report of Foreign Bank and Financial Accounts previously
was due June 30, had to be filed electronically and had no extension available. It is still required to be filed electronically; however, they’ve moved the deadlines to be more in line with individual income tax deadlines. They are now due April 15 (or next year on April 17) and can be extended to October just like the individual income tax return.
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appreciated property. Making this provision permanent allows S Corporations to more appropriately plan their charitable giving of property. The lookback period for the BuiltIn Gains Tax has been reduced to five years and made permanent. Previously, the lookback period was 10 years. This provision applies to conversions from C Corporations to S Corporations and whether or not the shareholder has to pay tax on the conversion. Dropping the lookback period to five years allows for later succession planning.
Many great deductions set to expire were made permanent or extended. Depreciation changes The 15-year recovery period for qualified leasehold improvement property, qualified retail improvement property and qualified restaurant property was made permanent. This means for qualified property you can recover the cost in half the time it previously took to get a full deduction. The 50 percent additional first-year deprecation deduction is extended and modified through 2019. You will continue to be able to deduct 50 percent of the cost of new business property through 2017. For 2018, the percentage drops to 40 percent. For 2019, the percentage drops to 30 percent. The bonus depreciation goes away entirely after 2019. The Section 179 depreciation deduction ceiling was reinstated and indexed. The expensing limit remains at $500,000 for 2016 but will index up to $510,000 in 2017. The PATH Act also
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removed the language that excluded air conditioning and heating units from being able to utilize the Section 179 expense deduction, so you can now use it for air conditioning and heating units. Business credits The work opportunity credit is reinstated through 2019. This credit is available for employers hiring members of targeted groups (including veterans and long-term unemployment recipients.) The credit can be up to $2,400 per employee. The differential wage payment credit was modified and made permanent. This credit is for employers who compensate reservists called to active duty for all or part of the difference between their private-sector wages and their earnings from the U.S. Military. S Corporations A provision was made permanent allowing an S Corporation to adjust the shareholder’s basis by the fair market value of a charitable contribution of
Partnerships Effective 2018 (while this seems like a long time away, you can elect into early treatment), there are new rules to streamline partnership audits to impose entity-level liability for payment of taxes. Small partnerships (less than 100 partners) can elect out of this process or elect to have the new audit rules apply to them before 2018. Under the new rules, any audit adjustments will be assessed and taxed at the partnership level and will not be assessed against the individuals owning the partnership. Corporations Proposed regulations have been set forth which could be finalized in 2017. They would characterize some related debt transactions as equity. Specifically, notes to a related shareholder, notes issued to acquire equity in a related entity and notes distributed to a related entity in an asset reorganization. The above information is not meant to be a comprehensive list, as there are many more tax changes and modifications taking effect in 2017. As always, you should consult your tax advisor if you have any questions on any of these new, modified or extended provisions.
Sherri Elsasser, CPA, is a partner with Gerding, Korte & Chitwood, CPAs, which provides accounting and financial services to individuals and businesses.
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CEO ROUNDTABLE
CEO Roundtable
CONSISTENCY AND RESILIENCY
The Road Ahead For Columbia’s Economy
by Rebecca French Smith • photos by LG Patterson
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ROUNDTABLE ROLL CALL
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DAN ATWILL Presiding Commissioner Boone County
JODI BALES Shareholder/CPA Miller, Bales & Cunningham
STACEY BUTTON President REDI
JEFF ECHELMEIER CEO Williams Keepers
STEVE ERDEL President Central Bank of Boone County
MIKE MATTHES City Manager City of Columbia
MATT McCORMICK President Columbia Chamber of Commerce
GARY MEYERPETER President, Boone County Market The Callaway Bank
DENISE NELSON Owner/CPA Accounting Plus
MATT WILLIAMS Regional President Landmark Bank
CATHY ATKINS CEO CEO magazine
ith the new year coming fast, area business and government leaders sat down to lunch in early November at The Roof at an economic roundtable to discuss where we have been, where we are and what might be ahead. Hosted by Fred Parry, publisher of Inside Columbia and Southern Boone County Commissioner-Elect, the discussion centered on Columbia’s strengths and opportunities. Named Restauranteur of the Year by the Missouri Restaurant Association, Broadway Hotel’s Food and Beverage Director and Executive Chef Jeff Guinn prepared a savory blend of traditional fall flavors for the meal. Those around the table blended a range of experience from within the Columbia economy. City and county officials, accountants, bankers and economic development officers brought together some 240 years of combined insight into Columbia’s economic outlook.
JUMPING RIGHT IN
Parry wasted no time kicking off the conversation on where the economy has been for the last 12 months and calling on Jeff Echelmeier, accountant and CEO at Williams-Keepers, LLC. “It’s been pretty consistent,” Echelmeier says. “Our community held in there stronger in 2007, ’08, ’09 in a rougher time nationally because of the university, healthcare and other components to our economy.” Gary Meyerpeter, president of the Boone County Market for The Callaway Bank, agrees. “I’ve been here since 1984. I think we are fairly well insulated as an economy because of the drivers that [Echelmeier] referenced: the insurance companies, the medical community, the University of Missouri, which have proven to be quite resilient. We have things that affect us but not too immensely other than the Great Recession of 2007—09, which affected
MODERATOR FRED PARRY Publisher CEO magazine
everyone. But, most of us fared that pretty well. “In 2014, we felt as if there might be some pent up demand where people might be a little more aggressive in borrowing habits,” he adds. “For 2015 we projected additional growth compared to the prior year. Fortunately I think a lot of us succeeded. In preparing for 2016, not ’17, we felt as if the growth from the borrowing base would not be as immense and that was because people who had taken on additional leverage, or debt, in 2015 wanted to see what the return on their investment might be before they leveraged themselves further.” Revenue projections at the county level were reduced in November, according to Presiding Boone County Commissioner Dan Atwill, who indicated that County Auditor June Pitchford had revised those numbers downward from 3 percent growth in revenue to 1 percent. “A lot of that is due to internet sales,” WINTER 2017 I INSIDE COLUMBIA’S CEO
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CEO ROUNDTABLE Atwill says. “We all, probably all — I’d like to see, is there somebody here who hasn’t ordered something off the internet? It’s attractive, and at the same time, it is depriving our local vendors and business people of a lot of revenue. In order for there to be sales tax on ordinary consumer items sold on the internet, it’s going to take federal action (legislation) to start with and then local action.” The county’s general fund is funded at approximately 72 percent from sales tax revenue, Atwill states. Columbia City Manager Mike Matthes shares the city’s general fund is similar, right at 70 percent funded by sales tax revenues. “So any movement in that number at all is felt significantly,” Parry says. “As a point, we’ve calculated per person how much less is coming in,” Matthes says, “and it’s more than 15 percent less than it was 10 years ago, per person.” Matthes isn’t surprised to hear the county has adjusted its projection. “It’s exactly the same spot we’re in,” he says. “We’ve done the same, and because
we look at a lot of financial indicators frequently, including the sales tax revenue, we’re a little behind, of course. We’re about three months behind reality in that regard. But we saw it coming, and we changed our habits early. So we’ll survive the year, but it’ll be painful.” Matthes contends it’s not a loss, but a slow down in growth. “We ended up cutting the budget because we had anticipated 3 percent growth. In our case, this is historic. The city government and the county as well — we’re pretty much attached at the hip, same customer base. We’ve never in our history, except for the great recession two years, had less than 3 percent growth. So this is historic for us, the first year it’s dipped below that.” Looking forward to 2017, Atwill indicates the new budget is being developed but expects it to be flat. “Everything has to be calculated on the basis of no significant increase in revenue.” The county will monitor construction permits not inclusive of the city’s construction permits, due to the
The CEO Roundtable was hosted at The Roof in the Broadway Hotel. 44
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tandem nature of home improvements and construction, and the sales tax revenue those endeavors bring in. He notes, however, that some Columbia housing projects do not pay sales tax because they bring in construction materials from outside of Missouri. “That’s hurting. It’s one of the things that is a side effect of growth and development that is overlooked,” he says, “with no solutions but looking for an answer for this loss of revenue.” Denise Nelson, accountant and owner of Accounting Plus, inquires if incentives to builders in the permitting process could encourage them to purchase materials locally. Atwill says that should be a part of any incentive that’s granted. “We’re seeing it in a downturn in tax revenue, and I’m afraid that’s going to continue.”
2016 SECTOR STAND-OUTS
“Commercial real estate activity in our community is high and it’s been high,” says Steve Erdel, chairman and CEO of Central Bank of Boone County. “It stood out because
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(Left to right) Jeff Echelmeier and Matt Williams
I thought it would be slowing by now. At least in our organization, it has not.” However, Central Bank of Boone County’s recent examination with the Federal Reserve System revealed a concern on the Reserve’s part with local commercial real estate exposure, via spec homes, he says. “A lot of the banks in our area, by virtue of the fact that Columbia is a green town — we don’t have a lot of smoke stacks, so we do a lot of real estate loans — they would pressure us to better monitor how many percent of our deposits are loans against commercial real estate. In other words, they’re going to have a chilling effect, and that concerns me a little bit because Columbia continues to grow in population.” “We will monitor,” he adds. “We’ve had some nice growth in commercial real estate type credits over the past five or 10 years. That will slow either by demand or will slow by regulation. A lot of concern on the part of our friends in Washington is that there is a bubble in real estate, in commercial real estate, and so they’re following the dictate from the Federal Reserve Board of Directors in Washington to start asking. So, they’re not saying ‘don’t.’ They’re saying, ‘We’re watching.’ ” Parry brings up commercial Class A office space and the lack thereof in Columbia and how the scrutiny of the federal regulators might coincide with that.
(Left to right) Matt McCormick and Dan Atwill
Regulators are concerned about the national level, Erdel points out. “Columbia is growing, and it grows, the county grows 1 — 1.5 percent a year, year in year out. Our community is growing in that same fashion, and we have a need for the space.” Regulator scrutiny is really not uncommon, according to Matt McCormick, Columbia Chamber of Commerce president. “That’s part of the tug of war we have with the regulators we have all of the time. They see things on a global perspective, and there’s nothing more local than real estate.” While Columbia’s vacancy rates are low in this area, the city still needs to be able to fulfill demand and support its customers. Parry notes that Veterans United is a company that has filled a significant amount of available, move-in-ready office space around the city and turns to Matt Williams, regional president for Landmark Bank, to inquire about potential new businesses to Columbia and their attitudes toward the perceived shortfall of space. “Veterans United has taken up so much of it throughout the community, which is a blessing,” Williams says. “They’ve made such an investment into the community. But yeah, that’s what we hear the most. It’s finding that move-in ready Class A office space that doesn’t take a great deal of time to get into. Seems to be one of the struggles.”
MOVING FORWARD TO 2017 “In a lot of ways, I think it starts with the university,” Echelmeier says. “Having the university get that momentum back is a big part of how well we’re going to do.” While it seems to have stabilized, the momentum takes time — more than a year to achieve. The ripple effect of the drop in enrollment is still being felt, from housing to restaurants to haircuts, all of the services students use. “It’s also a labor issue that we’re seeing,” McCormick says. “You don’t have as many students that are going into the workforce or during seasonal labor times for our business in town that hire those kids while they’re in school.” Nelson shifts the focus to the strength of the small businesses she worked with in 2016, her surprise in that outcome and what she sees coming. “I see construction slowing down. Some of that’s always seasonal, but labor is an issue, particularly blue collar as always. Even some of our employers that just need office help, they have trouble with that so I think the university slow down does have an effect.” A year ago, the unrest on the MU campus started this trickle-down effect that has impacted a spectrum of Columbia businesses, Parry says, as Williams begins to describe further dynamics at play. “Student housing is an area that we’re watching closely,” Williams says. “We’ve built so much of it, and we have increasing supply and decreasing enrollment. WINTER 2017 I INSIDE COLUMBIA’S CEO
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CEO ROUNDTABLE
Mike Matthes
(Left to right) Denise Nelson and Stacey Button
That’s not a good dynamic.” He sees the downtown market continuing to do well due to campus proximity, but expects weak points might start showing up. Even so, Williams cites the number of strong years Columbia has experienced in residential housing growth and that a current balancing effect between labor challenges and demand tempers the housing market.
WHAT THE BUDGETS ARE SAYING With much of the county budget dedicated to specific projects, concerns with keeping the general fund flush are at the forefront of Atwill’s mind. With a reduction in sales tax revenue and an expected increase in services demanded, Atwill is concerned. “The general revenue fund is relied upon for a lot of the day-to-day things that are needed in the operation of the county’s offices and the costs keep going up,” he says. “Inflationary costs are troubling. If we have a fixed amount similar to this year for next year, things are going to get tighter.” “We have exactly the same concern,” Matthes says of the city. “Even though we see 1 percent growth, we’re losing ground on things like salt, asphalt, pensions. That’s a huge thing for us because we won’t be able to keep up with salaries.” At the end of the day, he adds, the city doesn’t 46
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choose its customers, doesn’t market and doesn’t have much control over the revenue it receives. All it can do is control how much it spends, and it’s going to have a personnel impact. Stacey Button, president of Regional Economic Development; Inc. (REDI), offers her viewpoint on the local economy. “Looking at the type of projects we had in the pipeline for 2016 and those that we’re anticipating going into 2017, it’s been very consistent year-over-year.” The increase in number of projects and their potential impact are significant, and Button is pleased with the results so far. Potential 2017 projects give her a fair amount of optimism from a workforce perspective and a capital investment perspective; however, the labor pool is cause for concern. “It’s very, very tight,” Button says. “It’s a good thing we have a low unemployment rate, and when we look at significant projects like we are right now, we have to look to other communities, other regions, other counties for a workforce that can help assist with that.”
ASSETS AND LIABILITIES Speaking on Columbia’s assets and liabilities for new businesses looking to relocate to the area was a challenging topic. “On recruitment and businesses moving here, it’s been kind of an interesting
conversation because I think some of what has been our strength is also some of our problematic part, which is some of the issues with the university right now,” McCormick says. “University brings a ton of strength with it and is something we are able to tout very much, and people look upon that extremely favorably. Not just the university, but the higher education that we do have here is phenomenal.” However, because of what happened last year, he says, recruiters at the university and businesses trying to hire people from outside Missouri to work here are still concerned that those event’s effects are still lingering. On the flip side, there is strength in the skilled labor force coming out of the university and the quality of our community also has a reputation for retaining that talent. Parry asks if it’s a stability issue or a perceived level of racism in the community. McCormick sits on a couple of national associations in the chamber industry and shares that it’s almost a perception issue. Many do not have firsthand connections and wonder how the community is faring. “There’s a perception challenge that we definitely have,” McCormick says, “and I don’t want to call it media bias, hurt us during everything — it was what it was ... As the university and the system moves forward with starting to get positions that don’t have the ‘interim’ name in front of it, will go a long ways to start solving that conversation.”
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With a reduction in sales tax revenue and an expected increase in services demanded, Atwill is concerned. “The general revenue fund is relied upon for a lot of the day-to-day things that are needed in the operation of the county’s offices and the costs keep going up,” he says. “Inflationary costs are troubling. If we have a fixed amount similar to this year for next year, things are going to get tighter.” Fred Parry
“One of the biggest assets that we have is the creative class,” Button says. “That is the students and faculty coming out of not only the university but multiple educational institutions that we have here, and that has done a lot to foster business startups. It has also done a lot to assist our workforce. As long as we can retain that creative class and the graduates, the level of interest and the type of projects that we’re seeing at REDI reflect that labor pool. So definitely an asset that we can tout when we’re talking to companies.” Button also mentions two recent success stories, Kraft Heinz and Dana Light Axle, in retaining not only the companies but expansion of both and adding to the work force and job opportunities using local incentives like Chapter 100 bonds. “So when you asked about challenges,” Button says, “perhaps, the number one question that we’re asked right out of the gate is: What types of incentives are available on a state, regional, local level? So in order for us to compete, that’s something that we always have to keep top of mind and make sure that we’re able to utilize that in the most valuable way for a return on investment.” While Atwill agrees that Chapter 100 bonds can be an asset in attracting
businesses, he suggests caution in their use. “This is a very complex area, and you get into the TIF business and all of that, you’ve got to be very careful that you don’t find yourself in a situation where you’ve gone so far to attract business that you have impacted your own community in a negative way,” Atwill says. “It takes study and public transparency.”
AREAS OF PROMISE OR PURGATORY Parry pitches the conversation to other promising areas, and McCormick quickly notes the growth in entrepreneurism, which is becoming a large part of what Columbia does well. Parry wonders if we can keep those start-ups here. McCormick thinks so, especially as we start addressing the office space issues and places to locate the businesses as they grow. Purgatory enters the discussion as it shifts to new Department of Labor (DOL) regulations coming down on December 1. According to the DOL, the Overtime Final Rule “updates the regulations for determining whether white collar salaried employees are exempt from the Fair Labor Standards Act’s minimum wage and overtime pay protections.” “Wrapping up 2017, we’ve started talking about are what are some of
the specific issues we’re going to see businesses dealing with, good or bad,” McCormick says, specifically the DOL rule and insurance. “For the DOL rule, pluses include the work week being limited to 40 hours. Minuses include challenges in the nonprofit industry and how the rule will affect company volunteerism. On the insurance side, with the recent election results nationally, we’re all wondering what 2017 will look like and how we’ll be affected.” The entire group was in consensus on that last item. Button sees a bright spot, though. “What I see for 2017, and it certainly has been very welcoming this year, is collaboration. I see incredible strength not only with the folks that are here at this table but across the community between public and private sectors as well as nonprofits. There’s a lot of community conversation, and it’s very intentional to collaborate to ensure that the dialogue is happening.” With that, Parry asks if there are any other signs of hope the group sees. Jodi Bales, partner at Miller, Bales and Cunningham accounting firm, feels that with the election decided, companies will be investing money in their businesses that they have been sitting on while waiting for the outcome of the election. She projects consumer spending will rise as well. Revisiting the DOL rule, Parry asks about the advice the accountants in the room are giving their clients. “We’ve had a lot of conversations with small business owners that were applying the rule incorrectly in the first place,” Nelson says. “They didn’t have exempt salaried employees. There’s a huge misconception that if your employee is paid on a salary they’re automatically exempt from overtime, which is just wrong. So beyond educating, we’re doing a lot to try to educate our customers and to give them sound advice. So there’s a lot of raises happening, and there’s going to be a lot of unhappy employers. If this hurts, this hurts small employers in Boone County — $47,000 is a lot of money. Not every industry can support that.” “You know, in New York City that works,” Nelson adds. “In Columbia, Mo., it’s pretty strong.” It’s a factor at the county and the city, too, Atwill says. They are reevaluating all positions. WINTER 2017 I INSIDE COLUMBIA’S CEO
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(From left to right) Steve Erdel, Jodi Bales, Greg Meyerpeter and Denise Nelson
Echelmeier doesn’t have any answers. “We’re seeing the results and trying to help them work through the rules, but it could have an impact on those unemployment numbers that we talked about earlier.” Businesses will be less inclined to hire, he adds. Average salaries will increase, but it will probably mean fewer people are employed. The rule will have effects beyond salaries for area businesses involved in volunteer activities such as the Chamber of Commerce, United Way, Boys and Girls Club and Big Brothers Big Sisters, among others, or other business events and situations beyond that 40-hour work week. For example, the city has 43 boards or commissions right now, Matthes says. “Every staff member that makes all that work possible fits in this category. All of them are going to be hit by this rule but we can’t stop doing the boards and commissions, right? Now, I have to basically give them a day off a week so they can go do that. So there’s going to be a significant drop in our productivity.” McCormick says many companies are locking employees in at 40 hours, even if it means you’ve got to get more done within that 40 hours. When it becomes mandatory to subsidize volunteer or extra event hours from regular work hours, he agrees, productivity and stress levels will suffer. Confusion on the employees’ part might also be a factor, Bales says. When they’ve been treated as a salaried employee in the past, making the conscious shift to hourly may leave them feeling like they’ve been demoted, even though they’re likely getting a raise. It could have an impact on employee morale. 48
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McCormick adds that even though they might fit the criteria to be salaried and get the raise, they might also have anxiety about new job expectations and getting abused for their time. Meyerpeter says the change might also have a retro-type effect. When they went to increase certain employees’ salaries, some were somewhat dumbfounded. Why this significant increase for the same job they had been doing for the last several years? Why now? As to whether there was any chance the rule might not go into effect on December 1, the group felt it was unlikely given the nearness of the effective date. (Update: On November 22 in Texas, U.S. District Judge Amos Mazzant granted a nationwide injunction on behalf of 21 states and business groups citing that the Obama administration rule was unlawful.)
WORKFORCE READINESS In looking at the workforce and the availability of skilled labor, Button says there are some gaps in skill sets. IT is one, but “it’s varied quite honestly,” she adds, “depending upon the company and what their needs are. But I do think that there’s gaps. That said, I think we have all the resources in place locally to address the gaps and to be able to close them and provide the skill sets that are needed through certification programs and workforce training workshops.” “What’s the downside of having an overeducated workforce?” Parry asks. Several around the table offer that fewer seem to want to do the lower level jobs, the service jobs.
“We need to have a balance,” Button says. “Any good economy has a balance of all levels.” Parry asks for feedback on labor supply. While skilled labor is preferred, McCormick says, he is aware of a number of companies that are hiring unskilled employees and adjusting their training to fit the needs of their company. While not ideal, there is an opportunity to make a difference in someone’s life, help them get the skill set they need and better themselves. “About 50 percent of our students complete college, about 47 percent of adults 18-plus in Boone County have a college degree,” Parry says. “So is there a need for more vocational training in this community, like a Linn Tech?” “Stacey mentioned community collaboration and I think that’s one thing,” Echelmeier says. “We’ve seen Columbia College get creative with identifying needs and specifically training people. So some of the smaller schools and the public schools seem to be buying into that and listening to the community and trying to develop those types of services.” Nelson mentions the strength of the Columbia Area Career Center as a possible expansion idea, and McCormick mentions MACC is expanding into Columbia now. “That seems to be the key,” Button says. “If high school graduates are not choosing the pathway to go on to secondary education as long as they’re career ready, and MACC and CACC provides vocational ed, they have the skills they need to immediately go into a well-paying job after high school graduation.”
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(From left to right) Cathy Atkins, Matt McCormick, Dan Atwill, Jeff Echelmeier and Matt Williams
“I think there’s a sense of shame,” Parry says. “In a college town like we are, there is almost some pressure associated with kids not getting a college degree, which is crazy especially when you see how well some tradesmen are doing.”
EMPLOYEE BENEFITS Most have received notifications for 2017. On average there’s a 34 percent insurance premium increase in costs for medical benefits plans, but some as low as 15 percent. It’s all over the board, Parry says. Nelson says her clients are getting renewals through Marketplace or individual health plans that even though they’re going to hit the peak on the penalty, they’re throwing their plans out the window and they’re going to go without insurance because the rates are ridiculous. So she encourages clients to explore a group plan, but if they’re a small employer, an ACA client plan these days is not affordable.
THE IMPACT OF INTERNET SALES While the county and city weighed in earlier, Williams and McCormick speak in terms of the impact of internet sales on mom-andpop retailers. “The mom-and-pop retailers have to be very creative to compete,” Williams says. “It really forces them to find niches that people will not shop on the internet to buy product and have to be so service-oriented with that to make themselves viable because it doesn’t look like it’s changing anytime soon.” McCormick agrees. “Your small momand-pop stores are really having to take a look at ‘How do I diversify myself? What
is my niche?’ They’re starting to sell on the Internet. They’re diversifying where they’re selling at because that’s were everybody’s shopping at.” These small businesses see the growth potential and feel they need to be in that mix to compete with the larger, Big Box retailers. “When you come to the realization, finally, that sales tax is not going to be our future answer to meet the public revenue, you’ve got to come up with a new plan,” Atwill says. “I don’t know what that is, but we better start thinking about that because if we don’t have some revenue source that’s reliable, we’re never going to have an improved Highway 70, and a lot of things that we deliver in the way of services are going to have to be limited.” The system is frustrating to Matthes, as he compares it to the dinosaur. “You set up this whole system based on the way the world was,” he says, “and the world changed and this horse isn’t getting us there anymore.”
ZONING CHANGES “Our builders are concerned,” Erdel says. “We have, as all banks in Columbia, we have a certain concentration of our loans in the downtown vicinity. People have bought buildings to rent them and then hopefully later on they may build a new building to change the use. All of that’s up in the air right now. Loan values that we can use, collateral values of those properties, are in question right now ... if all goes through as it’s currently set. We will not be able to lend the money to make these improvements. Loans that we’ve got now will be what we
call underwater, which means the collateral value has dropped below the value, the dollar amount, of the loan, and so it’s going to put a lot of pressure on what’s going on downtown.”
MOVEMENT IN HEALTHCARE, MANUFACTURING AND INSURANCE With Obamacare’s future unclear as a result of the November election, questions on how it will affect the economy remain. There’s a lot of movement in Columbia, nationwide and in the healthcare system because of Obamacare, Bales says. Button also believes the healthcare industry and options are robust in Boone County. “Looking at the University of Missouri Research Reactor and the opportunities for growth and what’s happening within the medical industry, it bodes really well. “Manufacturing?” she continues. “We’re holding our own. You look at the intended expansion at Dana Light Axle and the addition of 135 jobs there, that’s a real good thing for our economy as we go into this next year.” With the footprint of Central Bank across Missouri, Kansas and Oklahoma, Erdel says, “there’s not a one of our bankers that wouldn’t kill to be in Columbia, Mo. Our problems are huge tasks, but they’re nothing comparatively speaking to folks that are worried about whether their town is going to shrink in population, businesses are closing up and moving away. We are very fortunate to be where we are, and we really shouldn’t forget that.” WINTER 2017 I INSIDE COLUMBIA’S CEO
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Three Questions It’s the holiday season and shoppers are visiting local retailers to find their perfect presents. These savvy retail and development experts share their own holiday experiences.
LOOK WHO’S TALKING
What was the best Christmas gift you have ever received? ESSING: A 4 foot-high dollhouse, built by my dad when I was five, which seemed taller than me at the time. The time that he spent crafting the detail of each room made this a priceless gift and I’ll never forget the hours that my sister and I spent playing together. LINDNER: My brother and I received a Pop-a-Shot jointly one year. It became the hit of the neighborhood and fits with my basketball obsession!
KATIE ESSING Executive Director Downtown CID
STRODTMAN: Since college, I’ve had only one job that allowed me to take time off from Christmas Day to New Year’s Day. For those five years of my working career, I really looked forward to Christmas and spending time off with my family. Not having to work and relaxing with family for several days in a row was the best Christmas gift ever! What’s your favorite holiday tradition? ESSING: Every year, each member of our family receives a special holiday ornament. We save these ornaments to put up last on the tree, celebrating with some eggnog and remembering each year before. My teenage boys now have their own ornament collections that will go with them as they grow up, hopefully continuing this holiday tradition.
JAY LINDNER President Forum Development Group
LINDNER: The Mizzou-Illinois basketball game has always been a must attend game for us in the holiday season, but a recent favorite is the Borgmeyer family sing-a-long, which is another must attend event! STRODTMAN: Stockings by far! Finding all the different items in my stocking is always one of the highlights of Christmas morning. What’s your favorite holiday show to watch or holiday music to listen to? ESSING A holiday season is not complete without watching “Rudolph the Red Nosed Reindeer” (1964 version)! LINDNER: “Die Hard” and “Die Hard 2” are the two movies I always have to watch during the holidays. The combination of action and Christmas is hard to pass up!
RUSTY STRODTMAN General Manager Columbia Mall/General Growth Properties
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STRODTMAN: My favorite Christmas show is the first “Home Alone.” Many people will argue that this is not a true Christmas movie, but to me I always enjoy watching “Home Alone” during the holidays.
Promotional Content
People You Should
Know SC O TT MA C K EY
SENIOR VICE PRESIDENT / CHIEF UNDERWRITING OFFICER C O LUM BIA IN S URANC E GRO UP How long have you been in Columbia and how do you like it? About two and a half years. Great college town, really like all the dining and entertainment options. Perfect location. We are close enough to family in Illinois and Ohio that we can see each often and yet everyone has to call first.
What’s the best thing about working for your company?
Columbia Insurance Group provides so much opportunity to learn more while applying my knowledge and skills to help propel us forward. We have an incredible history, solid financial footing and a growth-oriented marketplace to work in. The company has a broad footprint writing in 14 states that brings many challenges from a jurisdictional, geographical and regulatory aspect; you have to be able to lean on others and their knowledge and skill sets to get the job done.
What did you want to be when you were growing up?
I was pretty much clueless, but I knew I had to go to school. I loved science, nature and was pretty good at math. My first major was Energy Management, but during my freshman year they abandoned the major. I liked it because there was science, math and management. I had worked at local park districts, and had some friends in the Parks and Recreation management program. I thought I would like to manage a large Parks and Recreation department in suburban Chicago. I graduated just as Reagan took office, and the budget cuts came. Sorry, no public sector job for you! I had seen that coming, so supplemented my degree with a business management minor.
What advice would you give to someone just getting started in their career?
Be open to what comes along. You probably don’t know what you want, even though you think you do. Look at your strengths, but not too closely so that you lose focus on all the possibilities out there. In my case, the reason I wanted to manage a Parks and Rec department was similar to the initial Energy Management selection. It was about the variety and diversity of the challenge. It was about complexity. All of those things are in my current position, though I would not have thought of it at age 21.
Columbia Insurance Group
2102 Whitegate Dr. 573-474-6193 • http://www.colinsgrp.com WINTER 2017 I INSIDE COLUMBIA’S CEO
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SHOPPING
EXECUTIVE GIFTS
THE GIFT OF CIGARS
A Tasteful Alternative To Power Tools And Neckties by MAX PARRY
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s the holidays sneak up on us once again, you may find yourself searching for lastminute gifts that don’t seem like last-minute gifts. If there’s a man on your list who enjoys an occasional cigar, you’ll be pleased with the options you have, both in price range and selection. Good cigars can range from $5 to $25, making them an ideal gift for either a professional colleague or personal acquaintance. This article will raise your cigar IQ while also helping you find a memorable gift for that discriminating man.
Size Matters
Cigars come in many shapes and sizes and are commonly classified by their length and their diameter. When looking to find the right size of cigar, you must know that, in general, the larger the cigar, the longer the smoke. The most common sizes are Corona, Robusto, Toro and Churchhill. When gifting cigars, bigger does not always mean better. When gifting to an occasional smoker, a Churchill, which is usually around 7 inches in length, may not be the right choice.
Coat Of Many Colors
Once you find the size of cigar you want, you must now consider the flavor. The wrapper is responsible for at least 60 percent of the cigar’s flavor but you should remember that just as you can’t judge a book by its cover, you can’t judge a cigar by its wrapper. Generally, lighter wrappers will have a more mild and sweeter taste. The most common cigar colors from lightest to darkest are Double Claro, Claro, Natural, Colorado, Colorado Maduro, Maduro and Oscuro. Also keep in mind that just because the wrapper is light does not mean the cigar will also be light -- this is a common misconception. The filler of a cigar is much more rich in flavor and taste, often causing cigars with light wrappers to sometimes have an overall bold taste in the end. When 52
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in doubt, it’s probably best to stay in the mild and medium range, especially for a novice smoker. It’s always best to seek the recommendations of other cigar smokers or the tobacconist in a respected cigar store. Cigars purchased in gas stations and grocery stores are rarely of a quality worth smoking.
A Cigar For Every Occasion
When selecting the right cigar, it’s a good idea to look at when the recipient typically enjoys smoking cigars. Whether walking a dog or celebrating a business deal, there are cigars to match
every occasion. One cigar maker even created a cigar nicknamed the “Dog Walker” because he wanted a mild, short cigar that he could smoke in the amount of time that it would take to walk his dog. Conversely, for an after-dinner smoke, a bolder, longer cigar may be the right choice to aid digestion. For special occasions, some smokers prefer a longer cigar. Some men will also choose to pair their cigar with a cognac, scotch or apertif. Pairing certain flavors and sizes is not a prerequisite for smoking cigars but worth considering when picking your gift.
The Elusive “Cuban” Cigar
When searching for a cigar, don’t be fooled by cigars that claim to be Cuban. Although the embargo on Cuban cigars has recently been lifted, U.S. restrictions do not allow Cuban cigars to be sold in the states. The only way you will find a genuine Cuban cigar is if it is from someone who recently visited Cuba and brought them back in their carry-on baggage. With this embargo lifted, a rise in fake Cuban cigars sold in Cuba has also increased. With this being said, many people claim to have Cuban cigars but they are very likely misguided -- so if you hear Cuban, it might be best to steer clear.
INSTITUTIONAL
There are many accessories available that can elevate the cigar smoking experience. For the occasional smoker, I highly recommend including a basic cutter. If you are unsure whether the recipient already has a cutter, get one just in case. It’s always nice to have an extra cutter in your car, travel kit or near your outdoor living spaces. You can find cigar cutters in most places that sell cigars and a basic cutter is relatively cheap. There are three types of cutters you may consider: the guillotine, the v-cut and the punch cut. The most popular of these is the guillotine. Although a razor blade, knife or scissors can cut a cigar, it’s hard to achieve a clean cut, which is essential in order to avoid your wrapper falling off mid-smoke. Another accessory I recommend is a torch-style lighter or just a box of wooden matches. You have to be careful when buying lighters because some use fluids that may affect the taste of the cigar. Torch lighters are ideal because they are wind resistant and are available for as little as $10. Whether smoking on a golf course, back patio or on a walk, cigars are a great gift. For $5 to $25 dollars a stick, you’ll avoid the awkwardness of giving another cordless drill or necktie and give him something you know he will enjoy. You don’t need to be an aficionado to enjoy a cigar, and that’s why it’s the perfect gift for the discriminating man on your list. Now that you have some basic knowledge about cigars, you’re ready to go out and find the right gift.
Classic Hall, Central Methodist University
Cigar Accessories
INT E GR IT Y | QUALIT Y | D E P E NDAB ILITY
Building a Better Community
CoilConstruction.com Max Parry is studying Integrated Marketing Communications at the University of Mississippi in Oxford, Miss. He enjoys southern cooking, Rebel football and the camaraderie that comes with sharing a good cigar. He is a native of Columbia, MO. WINTER 2017 I INSIDE COLUMBIA’S CEO
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Boone Hospital Foundation Honors Charlie and Jean Gibbens
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The Boone Hospital Foundation held its annual gala Nov. 5 at the Holiday Inn Executive Center in Columbia. The event raised money for the Building on Excellence fund, which provides enhancements and expansions to Boone Hospital Center’s inpatient and outreach programs in the 26 counties it serves. The gala honored longtime Boone Hospital supporters Charlie and Jean Gibbens. 1. Charlie and Jean Gibbens 2. Wilson and Jan Beckett 3. Andrew and Kim Getzoff 4. Nancy Badger, Herb Willbrand and Charmaine Boyle 5. Colin, Chandler, Charlie, Christian and Kevin Gibbens 6. Charlie Sr. and Kathy Digges 7. Virgina and Norm Stewart 8. Joni See with Charlie, Jean, Kim and Kevin Gibbens.
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PHOTOS BY MADISON BURKE
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Wine, Women & Song 2016
A lip-sync battle was in full force on Oct. 13 to raise money for the Head Start program. Six local sponsors competed in a karaoke battle in front of three judges. The evening included a wine toss, jewelry raffle, singing competition and dancing. Guest speaker Dr. Roger Drake stressed the importance of CMCA to the community. 1. Jan Turner and Jamie Palmer 2. Renee Hulshof and Lindsey Lopez 3. Dorian Brownlee and William Ellison 4. Julia, Jessica and Lauren Young 5. Jason and Barbra Ramsey 6. Michele and Rick Cropp 7. Linda and Sara Durbin
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A Celebration of Founders, Friendship and the Future The good folks at the Columbia Independent School celebrated the amazing volunteer service of three founding trustees: Sara Harper, Otto Maly and John Thompson. The school also recognized the hundreds of friends who contributed to this progress while showing off the nearly completed addition to the school’s campus. 1. Otto and Stella Maly 2. Beth Dube and Chris Sayers 3. Kelly and Corey Wiemann 4. Charles and Carolyn Allen 5. Jack Miller with Amy and Danny Burks 6. Dennis, Sara and Paige Harper 7. Brenda Potterfield and Marjo Price
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PHOTOS BY NANCY TOALSON AND WALLY PFEFFER, MIZZOUWALLY@COMPUSERVE.COM
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Inside Columbia’s Battle of the Burger Celebration
On Nov. 1, scores of fans of Just Jeff’s burgers, winner of Inside Columbia magazine’s Battle of the Burgers contest, enjoyed these delicious burgers and the boisterous sounds of Norm Ruebling and his band at the Missouri Auto Auction. 1. Kenneth and Tiffany Schneller 2. Doug and Cassie Walker 3. Jeff and Nicole Spencer 4. Mary Ann and Donnie Short 5. Craig Simon, Chris and Heiddi Davis with Kathleen Brown 6. Justin Brown, Liz Cherrington, Megan Harris and Randy Gray 7. Danielle, Oliver and Charley Farris
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PHOTOS BY NANCY TOALSON AND WALLY PFEFFER, MIZZOUWALLY@COMPUSERVE.COM
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ADVERTISING INDEX Accounting Plus..................................................15 Achieve Balance.................................................19 Aria Luxury Apartments.................................. 23 Atkins, Inc. ...........................................................17 Automated Services......................................... 23 Brain Balance...................................................... 39 BMW of Columbia............................................ 59 Caledon Virtual...................................................41 Central Bank of Boone County....................... 25 Central Trust.........................................................11 Century Link...........................................................3 Cevet Tree Care...................................................19 City of Columbia Water & Light.................... 39 Columbia Insurance Group.............................. 51 Coil Construction.............................................. 53 Columbia Landcare............................................21 Commerce Bank...................................................2 Downtown Appliance......................................... 4 Focus On Health..................................................11 Hawthorne Bank................................................68 Hub & Spoke...................................................... 6,7 Image Technologies........................................... 13 Inside Columbia’s Instagram.............................10 Inside Columbia’s Subscriptions......................62 K & S Concrete....................................................10 LammTech........................................................... 27 Missouri Cancer Associates........................... 57 Moresource........................................................... 8 Mutual of Omaha...............................................61 Postal Signs Express..........................................10 Pulse Medical Staffing..................................... 35 Shryocks.............................................................. 63 Tech Electronics..................................................21 The Broadway, A Doubletree by Hilton....... 67 The Callaway Bank............................................ 55 The Trust Company..........................................65 UMB Bank........................................................... 63 University of Missouri Health Care.............. 37 University Subaru.................................................5 Wiese USA........................................................... 13 Williams Keepers...............................................15
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PUBLISHER’S NOTE
Our Healthcare Crisis
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any of our readers will remember Walter Johnson, the infamous Economics professor at the University of Missouri who reached legendary status on campus as a tough and spirited educator. Students feared Johnson, and for good reason. Beyond just campus lore, Johnson was well known for his marksmanship, often launching a piece of chalk toward a sleeping student from the stage of his auditorium in Middlebush Hall. Outside the classroom, Johnson often talked about Columbia’s recessionproof economy as being similar to a threelegged stool that was sturdily supported by education, healthcare and insurance. Johnson reasoned that these three industries were insulated from the factors that normally toppled economies. Unfortunately, Johnson didn’t live long enough to see how his beloved university could be ravaged by a state legislature or to see how a plethora of natural disasters along with oppressive governmental regulations could wreak havoc on the insurance industry. And not even one of Johnson’s high-minded Econ 51 lectures could have ever predicted how the Affordable Care Act would change healthcare forever. For a town that prides itself on having the second highest number of hospital beds per capita in the USA, we are, unfortunately, highly susceptible to the “perfect storm” that seems to be radically changing the healthcare industry in Missouri with every passing day. What started out as an attempt to make healthcare affordable and accessible to all, has had nearly the exact opposite effect. With recent news that United
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Healthcare and Aetna are abandoning Missouri’s marketplace exchanges, the future of the Affordable Care Act in Missouri is grim. Private insurance companies have discovered that it is nearly impossible to provide low cost plans to low income households. In an effort to recover their losses, these same companies have passed along double digit increases, as high as 34 percent, to their private sector customers to offset the costs associated with offering insurance to lower income individuals through the federallyinitiated marketplace exchange. At the same time, seismic shifts indirectly associated with healthcare reform have taken their toll on rural hospitals in Missouri. With as many as three more rural hospitals expected to close by the end of 2016, the healthcare crisis in the Show Me State deepens. The widely reported struggles of hospitals in Cooper and Audrain Counties illustrate the harshness of the healthcare industry’s new realities. Columbia is not insulated from these troubles, however, higher volumes at local hospitals and our standing as a regional healthcare hub have softened some of the impact. Columbia’s hospitals are dealing with shrinking reimbursements and more red tape from Medicare, which accounts for almost 70 percent of total volumes at both Boone Hospital and MU Healthcare. On top of that, these hospitals are battling increased labor costs associated with the national nursing shortage. The bad news and the challenges far outweigh any positive developments. Hospitals are responding to a revenue crisis by doing what they can to control the costs of delivering
healthcare. With more scrutiny on labor and supply costs, hospital administrators are forced to adjust staffing levels often erring on the side of caution. Surgeons are being told they can no longer have control over the devices they are using and are being asked to limit the breadth of their suppliers. At the same time, hospitals are putting the squeeze on device and implant companies insisting that they lower prices. It’s a high stakes poker game that, at times, requires both sides to blink. To add to the evolving chaos, high insurance deductibles are causing consumers to postpone treatments and surgeries, often to their own demise. By the time that consumers decide to proceed, their medical issues are far worse and require more extensive and expensive treatment. Revenues lag in July and August only to have demand exceed capacity in November in December. Pundits will kick around Missouri’s failure to expand Medicaid as a root cause of these problems. But even the most objective, non-partisan bystanders will tell you that Medicaid expansion is, at best, a band-aid for a modern healthcare system that desperately needs to be overhauled. There are no easy answers in spite of what politicians may tell you. The most rational among us will likely reach the same conclusion: it’s time to go back to the drawing board and take another stab at fixing America’s healthcare system. It would be interesting to hear Walter Johnson’s take on the matter.
Fred Parry
Publisher • fred@insidecolumbia.net
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CLOSING QUOTES
What Columbia’s Business People And Community Leaders Are Saying “In a college town like we are, “You know, in New there is almost York City that works. some shame In Columbia, Mo., it’s “I think Columbia associated pretty strong.” is a land of — Accounting Plus Owner Denise Nelson with kids not about the $47,000 a full-time salaried employee must earn to be exempt under the opportunity — if getting a college Department of Labor Rule you want to work.” degree, which is — John Berghager, owner of I-70 Towing and “...if we don’t have crazy especially Recovery some revenue source when you see that’s reliable, we’re “Jobs are social equity. Nothing how well some never going to have an else can get you social equity tradesmen are improved Highway 70.” — Boone County Presiding Commissioner Dan other than a job.” doing.” Atwill on finding an additional public revenue — Columbia City Manager Mike Matthes on the source besides sales tax to meet future infrastructure needs
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outlook of the local economy in 2017
— Publisher Fred Parry on vocational training in the community
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INSIDE COLUMBIA’S CEO OutFront Communications, LLC 1900 N. Providence Road, Suite 324 Columbia, MO 65202
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