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KERN Journal Business

Vol. 7, No. 3

A MEMBER O F T HE

Cover story

Bland Company expands solar services for commercial businesses

TB C M E DIA FAM ILY

June/ July 2018

75¢

BC’s first industrial automation class graduates. Page 16

Energy & Technology Issue

By Jennifer Olague

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land Company offers its customers more than just solar energy. With a wide variety of services, such as A/C and heating and roofing, Bland Company hopes to expand all its services –– especially solar –– to more commercial businesses. The Bland Solar division has been serving the community and the valley for 33 years. When solar (PV) first became mainstream, it was a slow start because the cost was a big barrier of entry into the market. However, Bland Solar soon found its footing in the ’90s with government incentives being available for people to go solar. Through tough times, the multiple lines of business that the company offers is what kept it going through the slow solar adoption rate with consumers. Around 2001 is when solar energy picked up and the company responded to that booming interest accordingly. Now, they serve what Ty Simpson, business development Turn to BLAND SOLAR on Page 20

Kern Business Journal P.O. Bin 440 Bakersfield, CA 93302

One of Bland Solar’s main regions is located in Paso Robles, where they installed solar panels at Croad Vineyards.

Presorted Standard U.S. Postage PAID Bakersfield, CA Permit No. 838

INSIDE

Growing the local talent pipeline: Reasons to do business (and live) in Kern County. Page 10

What’s California’s largest solar energy project? Page 5


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KERN BUSINESS JOURNAL

June / July 2018

he level of service we provide is the same level we look for in our financial institution — our bank has set their level to soaring heights.”

Steve & Patricia Loyd Bakersfield Jet Center by Loyd’s Aviation Loyd’s Aviation offers services ranging from aircraft hangaring and maintenance to aircraft management, refueling and chartering from Bakersfield Meadows Field. Steve Loyd is the second-generation owner, his father, Byron Loyd, started the company in 1958. Loyd attributes the steady growth of his company to a very simple philosophy: “If you take very good care of your customers, they don’t let you stay the same size.” Loyd banks with Valley Republic Bank because he knows he receives the same standard of care.

Local. Responsive. Reliable. 5000 California Avenue, Suite 110 | 4300 Coffee Road, Suite A6 11330 Ming Avenue, Suite 400 510 Woollomes Avenue, Suite 106, Delano

www.valleyrepublicbank.com valleyrepublicbank.com | 661.371.2000 Valley Republic Bank B (VLLX (VLLX)


June / July 2018

Journal KERN Business Showcasing Kern County business and industry June / July 2018 Vol. 7, No. 3 Kern Business Journal is a bimonthly publication of TBC Media. Copies are available from The Bakersfield Californian, Kern Economic Development Corp. and Greater Bakersfield Chamber of Commerce. Associate Publisher Virginia Cowenhoven President/CEO Michelle Chantry Editor Jim Lawitz Assistant Managing Editor Mark Nessia Art Director Glenn Hammett Art & Marketing Manager Holly Bikakis To advertise Cliff Chandler cchandler@bakersfield.com 661-395-7521 To subscribe 661-392-5777 To submit a story kbj@bakersfield.com

KERN BUSINESS JOURNAL

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Editor’s Note

Straight from the source

S

ince 2012, the Kern Business Journal has documented the happenings in the various industries throughout the county, spanning energy, agriculture, health care, real estate and more. But what makes the publication truly special is where the information comes from. This one-of-a-kind product’s content is written by men and women working in the industries highlighted in each issue. Who is better qualified to discuss the developments taking place than those who currently working in the field? This is businessrelated content written by working professionals for working professionals. Mix in a few traditional articles written by experienced journalists and you have yourself a product that is unrivaled in its mission and focus on what makes Kern County run. There is no question that the Kern Business Journal’s biggest strength is its Mark Nessia contributors who take time out of their busy schedules to share their knowledge and insight with readers, sometimes taking on tough topics and issues relevant to the local workplace. Bolstering the KBJ roster is the addition of TBC Media Business Editor John Cox, who returns to The Bakersfield Californian after a stint with the San Diego Business Journal where he covered technology, energy, health care and the economy. John previously worked for TBC Media as a staff writer covering business news for over 10 years and brings immense passion and knowledge of local business across a wide range of industries. It’s safe to say that few individuals are as well-informed about local industry as him — if at all. You can find John’s article on how oil supply companies survived the downturn on Page 6. And make sure to keep an eye out for his byline in future editions of the Kern Business Journal

Solar ground breaking for Indian Wells Valley Water District. Story on Page 19.

and, of course, The Bakersfield Californian. This edition focuses on the ever-changing face of energy in Kern County. As technology improves, the businesses must evolve or find themselves behind the curve. Some find success by incorporating “rival” technologies to improve production, detailed in writer Dianne Hardisty’s article highlighting the construction of the state’s largest solar project — a partnership between Aera Energy, one of the largest oil and gas producers in California, and GlassPoint Solar, the leading supplier of solar energy for the oil and gas industry (Page 5). The solar energy project will be the first of its kind to use solar steam and solar electricity to power oil field operations. To save money, some organizations will rely on third-party vendors to executive nonprimary business functions. Jim Damian, founder and CEO of Stria, talks about business process outsourcing, both domestic and offshore, and poses five questions to ask for those considering its use (Page 28). But companies mustn’t lose sight of their most important asset: their employees. Attracting and retaining top talent is a constant task for businesses as the demand for quality employees will always remain high. Tracy Leach of Providence Strategic Consulting Inc. says 2018 is the “Year of the Employee” (Page 35). She offers some tips to help keep employees engaged and, like the theme of this issue, energized.

Business Briefs People In Business

planning events and assisting in marketing efforts to promote KEDC to the local community as well as promoting Kern County to businesses considering expansion or relocation.

Congratulations

BC hires community relations program manager Saba Agency adds creative associate Creative associate Duncan Hanon joined Saba Agency in May, bringing over 27 years of experience in the print industry to the team. From graphic design to managing and overseeing all stages of job production workflow, Hanon has worked with clients, designing and managing projects for every type of print and digital media.

Bakersfield College hired Tamara Baker as community relations program manager. Baker will coordinate the release of project information and outreach activities to familiarize the community on campus improvement projects related to Measure J, the $503 million bond passed in November 2016. Baker served as the manager of research and marketing at Kern Economic Development Corporation for three years,

Safe 1 rated in top 200 healthiest U.S. credit unions Safe 1 Credit Union received an A-plus designation for the fourth consecutive year from DepositAccounts.com as one of the top 200 healthiest credit unions in the U.S. Headquartered in Bakersfield, Safe 1 Credit Union has more than $625 million in assets and over 66,000 members with branches in Bakersfield, Delano, Porterville, Taft, Tehachapi and Visalia. Only 11 percent of all 5,573 NCUA insured credit unions nationwide receive an A-plus rating. Safe 1 is the only credit union in Kern County to receive the highest designation.

Announcement We want to hear from you!

Beginning with the next issue, “Business Briefs” will be an open community forum to announce what’s new with local businesses. Use it to announce: • New Hires • Promotions • Awards • Grand Openings/Ribbon Cuttings • New Board Appointments • Retirements • Business Celebrations and more

E-mail your announcements and/or questions to kbj@bakersfield.com. Send photos, if applicable, and copy of no more than 100 words. Free business announcement.


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June / July 2018

Chamber roundup June / July 2018 events

Greater Bakersfield Chamber of Commerce June 14 — Labor Law and HR Forum; check-in/networking, 7:30 a.m.; program, 8-10 a.m.; $25 members; $50 nonmembers; Greater Bakersfield Chamber of Commerce, 1725 Eye St. Presenting sponsor: Young Wooldridge LLP; co-sponsor: LeBeau-Thelen LLP. June 15 and 22 — Government Review Council; 7:30-8:30 a.m.; Greater Bakersfield Chamber of Commerce, 1725 Eye St. June 18 — Report from the Capitol; check-in, 7:30 a.m.; program, 8-9:30 a.m.; featured speaker Rep. David Valadao; chamber members only; $45 per person, $400 for table of eight; Petroleum Club of Bakersfield, 5060 California Ave., Suite 1200. June 20 — Deadline to submit an application to become a part of the 2019 Leadership Bakersfield class. Applications can be accessed at www.bakersfieldchamber.org. June 21 — BYP Pub Club, 5:30-7:30 p.m.; $5 at the door; Nuestro Mexico Lounge, 9919 Hageman Road, Suite A-100. June 28 — Chamber After Hours Mixer; 5:307:30 p.m.; $5 members; $10 nonmembers; Empire Eye & Laser Center; 4105 Empire Drive. July 4 — Chamber Closed — Independence Day.

July 10 — Philanthropy on Tap; featured nonprofit, Wounded Heroes Fund; 5:30-7 p.m.; Temblor Brewing Company, 3200 Buck Owens Blvd. Free to attend. July 11 — State of the City Luncheon Forum; $55 members, $65 nonmembers, $650 for table of 10; Bakersfield Marriott at the Convention Center, 801 Truxtun Ave. July 13, 20 and 27 — Government Review Council; 7:30-8:30 a.m.; Greater Bakersfield Chamber of Commerce, 1725 Eye St. July 26 — Chamber After Hours Mixer; 5:307:30 p.m.; $5 members; $10 nonmembers; Bakersfield Hyundai, 5300 Wible Road. Aug. 3 and 10 — Government Review Council; 7:308:30 a.m.; Greater Bakersfield Chamber of Commerce, 1725 Eye St. Aug. 7 — Philanthropy on Tap; featured nonprofit, Bakersfield Homeless Center; 5:30 to 7 p.m.; Imbibe Wine, 4140 Truxtun Ave., Free to attend. August 9 — Pancakes & Partnerships; check-in/networking, 7:30 a.m.; program, 8-10 a.m.; $25 members; $50 nonmembers; Greater Bakersfield Chamber of Commerce, 1725 Eye St.

PHOTO BY FELIX ADAMO

A capacity crowd filled the ballroom at the Seven Oaks Country Club for the Bakersfield Chamber of Commerce's 2018 Board Installation & Awards Luncheon.

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Kern County’s premier business publication Written by business leaders Kern Business Journal is a bi-monthly publication, that comes out on the second Monday. Contains topics on Finance, Legal & Human Resources, Community Business, Marketing, Agriculture, Health and Real Estate.

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June / July 2018

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Energy & Technology

PHOTO COURTESY OF PEGGY PERALTA

Left: Belridge solar farm Above: GlassPoint’s enclosed-trough solar technology

Aera, GlassPoint to build state’s largest solar project By Dianne Hardisty

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ern County produces more renewable energy than any other county in California. In 2011, the Kern County Board of Supervisors established a goal to have 10,000 megawatts of renewable energy permitted by 2015. According to the county’s reporting last year, the county had exceeded that goal by permitting more than 11,000 megawatts of all types and sizes of renewable energy resources. More than $28 billion has been invested in the county by companies that are developing renewable energy projects. The California Energy Commission reported in December 2016 that both incorporated and unincorporated areas of Kern County had 142 wholesale renewable projects online, with a total generating capacity of 5,293 megawatts. In addition, there are more than 24,000 distributed Dianne Hardisty generation systems, such as rooftop solar systems that are capable of providing up to 305 megawatts of capacity, installed at homes and buildings in the county. Also, there are 25 solar PV projects, with a combined capacity of 1,540 megawatts, and 12 wind energy projects, with a combined capacity of 1,519 megawatts, with environmental permits in the county that could become operational in the future. Just a few years ago, solar was barely a blip on the screen when it came to computing California’s energy production. In 2010, only about 15 percent of the state’s power plants generated electricity from renewable sources. And those sources were mostly wind and geothermal. Solar generated less than one-half of 1 percent. Today, renewable energy sources generate about 27

percent, with solar accounting for 10 percent. The solar figure does not include the hundreds of thousands of rooftop solar systems that produce an additional 4 percent. The contribution of solar continues to grow mainly because its production costs are plummeting as the result of the declining cost of solar panels. The efficiency of converting sunlight into electricity also is increasing. According to the U.S. Energy Information Administration, the average cost of using solar to power residential, commercial and utility-scale projects declined 73 percent between 2010 and 2016. The cost today is about 5 to 6 cents per kilowatt-hour, which is the amount needed to light a 100-watt bulb for 10 hours. In the midst of the state’s solar energy boom comes word that Bakersfield-based Aera Energy, one of California’s largest oil and gas producers, and GlassPoint Solar, the leading supplier of solar energy for the oil and gas industry, are combining forces to build California’s largest solar energy project. Located in the Belridge oilfield, about 35 miles west of Bakersfield, the integrated solar project will be the first of its kind in the world to use solar steam and solar electricity to power oil field operations, while reducing the field’s air polluting carbon emissions. Ground will be broken on the 770-acre project in 2019, with production of steam and energy expected to begin in 2020. According to the project’s proponents, the Belridge Solar project will deliver the largest peak energy output of any solar plant in California. “Aera is committed to safe, responsible operations and is thrilled to extend our environmental leadership by using solar to power our production. Adding solar energy at Belridge allows us to continue to lead the way in the safest, most environmentally responsible energy extraction there is,” said Aera Energy President and CEO Christina Sistrunk in a news release last fall. Belridge Solar will consist of an 850-megawatt solar

thermal facility, producing 12 million barrels of steam per year, and a 26.5-megawatt photovoltaic facility that will generate electricity. The solar-generated steam and electricity will reduce the use of natural gas in the oilfield’s operations. The facility is projected to save more than 376,000 metric tons of carbon dioxide emissions per year, offsetting the equivalent of 80,000 cars, or more than one-third of the cars on the road in Bakersfield today. The project is also expected to create hundreds of direct and indirect jobs in California’s oil and gas supply chain and supporting industries. An estimated 500 jobs alone are expected to be created during the plant’s construction. “GlassPoint is thrilled to partner with Aera to scale our solar oilfield technology in California and deliver meaningful carbon reductions. By harnessing the power of the sun to produce oil, oil operators can efficiently reduce emissions using advanced technology, creating long-term benefits for the local economy and environment,” said Sanjeev Kumar, GlassPoint senior vice president, Americas. “Our partnership with Aera demonstrates the growing energy convergence where renewables and traditional energy leaders are working together to address some of the biggest challenges of our time.” GlassPoint’s enclosed-trough solar technology provides low-cost renewable energy for extracting heavy oil, which accounts for half of California’s crude oil production. Heavy oil is produced by injecting steam into the reservoir to heat the oil so it can be pumped to the surface. The process, known as thermal-enhanced oil recovery, typically generates steam using natural gas. By harnessing the sun’s thermal energy to replace the combustion of natural gas, GlassPoint is enabling Aera to reduce its energy consumption and carbon footprint at Belridge, according to a company news release. In 2011, GlassPoint unveiled its first commercial project with Berry Petroleum in Kern County. Following the success of the pilot project, GlassPoint built a project in Oman and currently is building Miraah, a project with Petroleum Development Oman that will produce more than 1 gigawatt of peak thermal energy. It is expected to be one of the world’s largest solar plants of any kind. The World Economic Forum recently recognized GlassPoint as a 2016 Technology Pioneer for its role in enabling more economical and sustainable oil production.


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Energy & Technology

Improvise, adapt, overcome: Oil supply companies survive downturn by focusing on customer needs By John Cox

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e’ve heard a lot about how Kern’s big oil producers fared through the 2014-17 downturn. The mass layoffs, the restructuring, the recent uptick in activity as prices finally justify substantial investment. Now let’s hear how it went down for the suppliers, the little guys who saw orders dry up during the worst decline in recent memory. In a word: white-knuckle time. With due respect, if you’re a supplier and you were smart when a barrel was going for $100 and up, you weren’t carrying a lot of debt when it fell below $30. You tried to hold onto your best people, serve that trickle of business at the highest level possible and hope to gosh things turn around quick. Potential customers in other industries started to look pretty good. But how far should you go to win what was basically incremental business?

It was much the same during the downturn when the company had to reach outside oil. He made sure not to be overbearing but be persistent. He strove to keep customers abreast of the latest innovations Now, as oil picks back up, food processing customers are coming in four, five a year. Bakersfield’s Pacific Coast Instruments, a temperature measurement and gas regulator specialist doing business since 1987 as Central California Instruments, turned its attention to food processors and companies dealing in water and wastewater. Pacific Coast Instruments used to have customers in those other industries, but that was years ago. Most of its former contacts had moved on or retired. “They remember me, remember our company, our products,” Vice President Tom O’Leary said. But “it’s a whole new ballgame. Old personnel were gone,” he said. Cold calls didn’t work. Now it was about being persistent, being a good listener, understanding the customer’s needs. “That’s the best thing you can do, is really listen to what they’re saying,” O’Leary said. “That will reveal what they’re interested in.” He recalled a situation maybe seven years ago, before the downturn, when he stopped by a plant 50

Tom O’Leary

miles outside Bakersfield (he’d rather not say where). He was talking with the instrument guy when suddenly the plant manager walks through the door. There were introductions, and the manager handed O’Leary some weird fuse and asked if he could find a new one. “I said, ‘Yes, I think so.’” That same afternoon, back in Bakersfield, O’Leary asked his guy if he could get one. He could. It was going to cost 45 cents. The customer is now a six-figurea-year client. “They said: ‘Hmm. This guy can do things,’” O’Leary said. It was much the same during the downturn when the company had to reach outside oil. He made sure not to be overbearing but be persistent. He strove to keep customers abreast of the latest innovations. Now, as oil picks back up, food processing customers are coming in four, five a year. “It’s just being human and good,” he said. “It all comes down to people.” Survival was different for Bakersfield automated valve company Process Instruments & Controls. It didn’t diversify during the downturn. That was going

to mean a valve here and there, not the big, projectbased orders it was used to delivering to Kern’s biggest local oil producers. Instead, “we basically hunkered down,” founder Paul Wade said. The company had “taken care of the golden goose” during the good times, as opposed to taking the money and “putting it back in our pockets,” Wade said. Still, things got tough. A decision was made to “entrench into the oil companies,” he said. That meant working as a partner in process improvement. Process Instruments & Controls forged new solutions to drive down its customers’ costs and create new efficiencies. He likens it to sowing seeds when times are slow so as to harvest when conditions improve. “We’ve just weathered the storm and, you know, stayed true to what we’re good at,” he said, “and developed deeper relations within the oil industry.” Listening, in other words. Focusing on the customer’s needs. Survival of the most responsive. John Cox is the business editor of TBC Media.


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Energy & Technology

Zero and near-zero emissions technology Innovative concepts from people right here in the valley By Cassandra Melching

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hen it comes to innovative ideas and technology, the San Joaquin Valley Air Pollution Control District is at the forefront. Achieving attainment of EPA’s increasingly stringent ambient air quality standards will require significant additional emissions reductions in the valley and the development and deployment of transformative zero and near-zero emissions technology over the coming decades, particularly in the mobile source sector. Through the Technology Advancement Program, the district has been actively working with technology providers, other agencies and valley stakeholders to identify and support the next generation of transformative technologies necessary to achieve the district’s clean air goals. Cassandra Melching Since its inception, TAP has opened four rounds of funding and received over 137 proposals for clean-technology projects. The district has selected 35 of these projects for funding, totaling $12.6 million. Funding provided through TAP has allowed innovative companies to put into operation many new demonstration projects, including California’s first zero-emission

transport refrigeration unit this past year. TRUs are refrigeration units mounted on trucks — that are traditionally powered by high-polluting small diesel engines — to provide the needed cooling to transport chilled products. This project involved the development, testing and demonstration of a zero-emission solar- and electric-powered TRU to replace conventional diesel-driven TRUs. Testing from the new Challenge Dairy Products delivery truck indicated a dramatic decrease in harmful emissions of nitrogen oxides, particulate matter and carbon dioxide compared to the typical diesel-powered TRU. This innovative TRU system is also expected to reduce operation and maintenance cost by 90 percent. The district also leveraged $1 million in district-match funding toward a $16 million project to demonstrate the first-of-its-kind high-efficiency opposed-piston diesel engine technology capable of meeting the near-zero 0.02 g/bhp-hr NOx emissions standard. This will be the first demonstration in the U.S. of a high efficiency and lowNOx engine powertrain vehicle in Class 8 applications. If successfully commercialized, this near-zero diesel engine technology will provide significant fuel savings while taking advantage of existing diesel fueling infrastructure, which has been a significant challenge in the broad deployment of other zero and near-zero technologies in long-haul applications that make up a large portion of the valley’s emissions.

TAP project successes have also led to new industry projects, including a demonstration project with Philip Verwey Farms, a dairy in Hanford that converted several elements of its feeding operation from diesel power to electricity. The project was successful in demonstrating that diesel emissions could be significantly reduced at dairies and other animal feeding operations throughout the district in a cost-effective manner and subsequently throughout the valley. As a result, the district worked closely with the agricultural industry and technology providers, to develop the Dairy Feed Mixing Electrification Program and allocated $4 million to expand the installation of electric feed mixing equipment and further reduce diesel emissions from mobile equipment at valley dairies and other confined animal feeding operations. This year, the district will be conducting a request for proposal to solicit and support additional clean technology projects suited to the valley’s needs. If you have an innovative clean technology idea, please visit www.valleyair.org/grants/technologyadvancement.htm or contact the nearest district office (Bakersfield, 661-392-5500; Fresno, 559-230-5800; Modesto, 209-557-6400). Cassandra Melching is an outreach and communications representative for the San Joaquin Valley Air Pollution District.

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June / July 2018

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Energy & Technology

Data and decisions: Quality vs. quantity By Tarang Lal

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echnology aims to add value. The internet revolutionized information access, and the processor has revolutionized data processing. We now have more computing power in our pocket than generations before had in their office. As shared by Deloitte, this has led to some of the major technological advances today: the “internet of things,” Tarang Lal big data, machine learning, artificial intelligence, and data analytics. Kern County, a leader in energy production, is leveraging these technologies to improve decision-making. According to The Bakersfield Californian, our county is currently the wind turbine capital of the world and has the largest solar energy project in California. The Kern County Economic Development Corporation shows our county is one of the top-oil producing counties in the United States. The intermittent energy sources (solar and wind) also lead to challenges with the existing grid infrastructure according to OEP, a nonpartisan, nonprofit organization focusing on energy discussions. With such a high level of energy production and challenges in distribution, there are plenty of opportunities to improve and optimize processes to add significant value. Some examples include IBM Smarter planet, which predicts weather patterns to improve wind and solar installation locations. Work done by T. H. Kim, D. J. Crane and E. F. Grijalva has shown methods of predicting remaining oil reserves to optimize drilling programs and work by LNS Research predicts safety risks based on job type and location. The Deloitte center for energy solutions highlights how some of the challenges with the grid can be addressed by distributed energy resources, or DERs. There is an abundance of data. Sensor costs have significantly decreased, computational power has significantly increased and most companies have terabytes upon terabytes of data. There is also a potential advantage of using an algorithm or predictive software to make decisions. “Decisions made with better data

PHOTO BY CARA JACKSON

Kern County is the wind turbine capital of the world.

analytics tend to routinely lower risk by reducing the impact of the human experience and emotional tendencies,” wrote Iraj Ershaghi, Milad A. Ershaghi and Andrei Popa in an article on data ethics in oil and gas operations. However, there is the challenge of data quality when making good business decisions. There’s an adage: “Garbage in, garbage out.” If the data being used to make decisions is compromised, the results will be as well. That is where the human element is key. It is important to have people who understand the data, know the variables that have the most impact and can quality control the data to improve the predictability of the algorithm. There is no doubt that technology has the potential to be of great value. Transitioning it from potential to reality will require data accuracy. Sometimes, it’s about the quality of the data in making better decisions, not just the quantity. Tarang Lal works in the energy industry and has a blog focused on energy education, Tuesday’s with Tarang. You can follow him on LinkedIn.

msdcdc.org


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June / July 2018

Energy & Technology

Growing Kern County’s talent pipeline: An economic development priority By Richard Chapman

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n the economic development world, workforce quality continues to be the leading site selection factor for companies considering relocating to or expanding in Kern County. The Bakersfield metropolitan statistical area has a significant competitive advantage in that the area provides an extremely favorable cost of living for all generations of the workforce and an advantageous cost-ofdoing business that is lower than the U.S average.

Cost-of-Living Factors as a Catalyst Interestingly enough, the regions that have been highly successful in attracting a skilled workforce — two- and four-year degree graduates — are also facRichard Chapman ing significant issues in retaining talent as the cost of living has skyrocketed in conjunction with the influx of new residents. Unlike Kern County, a majority of these metro areas have not embraced policies that have expanded housing supplies, while protecting industrial-zoned land, to meet the demands of first-time homebuyers. In 2018, the Brookings Institution cited our region as a top performer in terms of in-migration population trends. These demographic shifts are in line with Kern County’s recent No. 1 ranking for housing affordability in California and No. 3 position in the U.S. for millennial home ownership. The most striking evidence came in the form of a Trulia survey that found that 77 percent of teachers were able to purchase a home in Kern County versus only 0.4 percent in the Bay Area. (Currently, $105,000 a year qualifies as “low income” for a family of four in San Francisco.)

Best Practices in Talent Attraction and Retention The Fox Cities (Wisconsin) Regional Partnership’s award-winning “Talent Upload” program seeks to recruit upcoming bachelor candidates from Midwestern universities with degrees in computer science, engineering, finance, and logistics or supply chain management. The organization sponsors an annual competitive application process that pairs 200 upcoming graduates with local employers that are seeking new employees. The most striking observation about this innovative program is the young professionals’ fundamental positive shift in their perceptions of the Fox Cities region. On average, the students were more than 50 percent likely to pursue an internship/career in the region after visiting the area. Furthermore, their positive perceptions of the community increased by a similar factor. The St. Clair Community Foundation’s “reverse scholarship” program addresses the brain drain crisis from the rural Michigan county, by providing financial

incentives for former natives to return home to pursue a STEM-related opportunity. The organization invests “back-end” funding to assist in paying off collegerelated student loans. This program is designed to provide the return on investment for the foundation’s monies and community as a whole in that it encourages the retention of up-and-coming talent.

Kern County Rises to the Challenge In Kern County, myriad innovative career and technical education programs have emerged to enhance the region’s talent pipeline. Examples include workforce development curriculum offered at Bakersfield College (BA in industrial automation), Taft College (energy tech), Cerro Coso College (cybersecurity) and CSUB (engineering sciences). In April, the Kern County STEMposium attracted

over 2,500 students from throughout the county. The overarching goal of the event was to showcase the abundance of local STEM-related opportunities for students and for businesses to get a sense of the incredible potential of the region’s upcoming talent pool. Local educators are a critical part of the coalition that presents the annual event. Finally, the recently adopted Advance Kern incentive policy will also help attract business investment opportunities and create additional jobs in the region. Indeed, Kern County is well-positioned to win the talent “war.” Our region’s economic vitality and diversity will serve as a strong magnet to attract and retain the workforce of the future. Richard Chapman is president and CEO of Kern Economic Development Corporation.


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June / July 2018

Energy & Technology

Exploring factors that affect employment in the energy sector

PHOTO BY FELIX ADAMO

Pumping units churn away in Chevron's Kern River lease near Gordon's Ferry.

By Richard Gearhart

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here has been tremendous research that talks about the impact of natural resource, or energy production, abundance on undesirable economic outcomes at the county, state or country level. In economics, this is known as the “resource” curse. However, the impact of resource abundance on decisions at the individual level has been less studied. Here in Kern County, we know that people respond to oil prices; when oil prices are high, many individuals look to the oil and gas sector for employment, knowing that extraction activities will increase, providing highpaying jobs not commensurate with traditional education levels. But this movement between sectors can also create “externalities,” unintended benefits (or consequences) of interindustry movement by workers. Education and workforce demand are also tied to one another. For instance, high oil prices can actually lead to a more segmented, and more unequal, labor force. A small select group of individuals may take advantage of the math-heavy engineering majors available to them at colleges. Many, however, may choose to take advantage of their lack of responsibilities to others (children or spouses) to move straight from high school to the oil and gas sector, taking advantage of high pay. Let’s take a look at the important dynamics that come into play. In a paper published in the journal Energy Policy titled “Oil price fluctuations and employment in Kern County: A Vector Error Correction approach,” Dr. Nyakundi Michieka and I found that, in Kern County, lowered oil prices impact unemployment only in the longer-run. This means that energy production in Kern County is largely immune to short-run fluctuations in oil prices and is (in fact) a relatively stable sector in the longrun to provide economic benefits to Kern County. Though the sector did experience an impact recently, with the collapsing of oil prices, it was only sustained low

oil prices that significantly impacted the economy. Likewise, though oil prices have remained stable, employment growth in the oil and gas sector has been cautious. Michieka and I have been exploring this impact on various other employable sectors in Kern County (a paper that has been conditionally accepted at a journal). We find that a 10 percent increase in oil prices does lead individuals to leave other sectors, leading to a 1.4, 0.6 and 1.0 percent decline in the construction, manufacturing and service sectors, respectively. This indicates that movement between oil and gas and other employable sectors leads to opportunities for employment by others in the county. This is an important dynamic; if the gaps in employment are potentially filled by those out of work, increases in oil prices not only spur economic production, they are able to reduce unemployment in other sectors of our local economy, further increasing economic spending, providing yet another indirect benefit of the energy production here in Kern County. However, in another paper in Energy Economics titled “Do changes in oil prices affect welfare programs? Evidence from Kern County,” Michieka finds that the stable employment situation of the oil and gas sector actually provides even further benefits to Kern County. He finds that a 10 percent reduction in unemployment leads to a 3.3 percent decrease in CalFRESH participation, the state-level version of food stamps. This again highlights the important economic contributions of the oil and gas sector the economy here in Kern County. But there is an important dynamic that is also coming into play: energy technology disrupting the labor market and alternative energies coming into the fore. Most talk about labor-replacing technology has focused on the service or fast-food sectors of the economy. However, if oil hovers around $60 to $70 in the long term, it may incentivize the use of newer technologies that may replace some of the traditional, more labor-intensive jobs in the oil and gas sector. Though this may be years (or decades) into the future, it can have long-term economic impacts on Kern County.

We have already found that the rest of the economy (service, construction and manufacturing sectors) can (and are able to) absorb people fleeing the oil and gas sector in the long term, which mitigates some of the welfare impacts of these job losses.

Michieka finds that the stable employment situation of the oil and gas sector actually provides even further benefits to Kern County. He finds that a 10 percent reduction in unemployment leads to a 3.3 percent decrease in CalFRESH participation, the state-level version of food stamps. Intriguingly, we can expand this research to see the impacts on future energy technology. According to the U.S. Geological Survey, Kern County has 4,581 wind turbines, which is the highest absolute number (and highest density) of any county in the United States, with capacity and generation being able to power between 1.2 million and 2.9 million homes annually. These employment impacts can be seen in alternative energy production and generation. For instance, storage of excess power generated is an issue of utmost importance, as well as degradation of the storage units. This provides an alternative vehicle for those in the oil and gas sector to “escape to” in the event of another negative oil shock. Richard Gearhart is an assistant professor of economics at California State University, Bakersfield, and managing editor of the Kern Economic Journal, a publication that tracks and analyzes local economic trends and data.


June / July 2018

KERN BUSINESS JOURNAL

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June / July 2018

Energy & Technology

Energy-efficient buildings for 2020 (and beyond) By Ian Journey

S

ince 1974, the California Energy Commission has led the world with its building-efficiency standards, also known as Title 24, Part 6. The requirements, mandates and executive orders laid out in Title 24 influence energy policy worldwide by driving manufacturers of HVAC and lighting equipment to comply with California’s strict efficiency requirements. The “California effect” is well-documented within the design and construction industries. That is, to supply Title 24-compliIan Journey ant products and be competitive within California’s $2.6 trillion economy, manufacturers will change the design of all their products. It does not make fiscal sense to have one product for California and one product for the other 49 states. The policies put forth by the state of California often influence the energy-efficiency standards around the world. With recent state mandates, engineering and technological advancements, and “internet of things” connectivity, the building design and construction industries have changed more in the last five years than the past 35 years. California has been vocal about this advancing trend through 2030. Since the 2013 Building Energy Efficiency Standards for Residential and Nonresidential Buildings was enacted, the building design and construction community has struggled with balancing the economics of energy-efficiency design while minimizing the added costs to owners and developers. Buildings that, pre-2013, would pass energy compliance with ease now require a variety of energy-saving strategies to be incorporated into the HVAC and lighting design. Many of these strategies make good practical sense, such as robust economizers that allow air-conditioning units to provide “free” cooling to a building when it is cool outside or occupancy sensors for mechanical, electrical and plumbing equipment. Although these strategies do have associated first costs, the payback is typically reasonable, especially with rising

electricity prices. Other requirements that look to be expanded upon in future updates to Title 24 include building commissioning, carbon dioxide monitoring in buildings, HVAC and lighting building

The most significant technological advancement in the HVAC industry over the past decade has been the introduction of variable refrigerant flow heat pump technology to western North America. automation systems and 25-plus percent higher-efficiency HVAC equipment through utilizing a variety of technologies, including heat recovery, thermal energy storage and indirect evaporative cooling, just to name a few. The most significant technological advancement in the HVAC industry over the past decade has been the introduction of variable refrigerant flow heat pump technology to western North America. Although established in Asian and European markets for nearly 40 years, VRF is relatively new stateside. The technology allows occupants to heat and cool different

zones in the building simultaneously from one single air-cooled system. By using variable frequency drives on fans and compressors, combined with the ability to transfer heat around a building from where you do not want it (think southfacing conference room) to where you do want it (think north-facing enclosed office), VRF systems can save building owners upward of 30 percent on utility bills while maintaining a more comfortable environment when compared to other traditional constant-speed packaged equipment. As the VRF technology becomes more accepted throughout the industry and more competitors enter the manufacturing market, installation and equipment costs will continue to decline. Just like in every other technological aspect of our society, the controls systems in buildings today are more advanced than ever. And like all other technology in the world today, the costs for interconnected HVAC, lighting and security systems have decreased significantly while expanding user capabilities. Companies many of you are familiar with, such as Johnson Controls, Honeywell and Siemens, have off-the-shelf products that any licensed contractor can purchase and do not require long-term service agreements with any particular dealer/contractor. With minimal coordination between design trades, building systems can be connected for the owner’s

ultimate convenience. Nowadays, many service calls can even be performed via building automation systems, potentially saving the owner thousands of dollars on a technician’s trips to site. With the continued advancement and use of wireless controls systems, costs of advanced controls systems will also continue to decline over time. The ultimate goal of Title 24 is to achieve net-zero energy for new commercial construction by 2030. Although this ambitious plan will pose significant challenges to owners, developers and building design professionals, the ultimate goal is one that results in long-term cost savings for the building owner, which will ultimately impact the greater economy. These impacts, both with costs and energy, will be noticed by the rest of the world. If proven successful, other states and beyond will follow California’s lead in efficiency, occupant well-being and costsavings measures. The plans for net-zero energy for residential construction by 2020 has already been approved by the California Energy Commission and is on the books for the 2019 updates to Title 24. Ian Journey is a local professional mechanical engineer with 3C Engineering Inc. in Bakersfield. His areas of specialty include HVAC and plumbing consulting, energy analysis, building commissioning and low-voltage controls systems.


June / July 2018

KERN BUSINESS JOURNAL

Thank you for voting for humankindness. Human connection is at the core of everything we do. Whether it was welcoming your little one into the world, tending to your injuries in an emergency, or all the other things in between; we thank you for choosing Dignity Health.

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June / July 2018

Energy & Technology

BC pilot program provides students with knowledge, skills to excel in careers after graduation By Erin Auerbach

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efore accepting a full-time job in the Wonderful Leadership Program, Miguel Ceja gained practical experience interning with Aera Energy LLC and completing his senior project with the Nestle Ice Cream Facility in Bakersfield. “What will help me the most in my new position is the leadership classes, project management classes, quality control classes, and the background into the technical instrumentation and equipment classes I took at Bakersfield College,” he said. Ceja is one of seven students who were the first to graduate with a Bachelor of Science degree in industrial automation from Bakersfield College on May 11. This pilot program distinguishes BC as one of only 15 community colleges in California (out of 114 in the state) to offer a bachelor’s degree. More than half of the first class of graduating students from BC’s baccalaureate program already has a job in their chosen field. Manny Fernandez has been teaching at Bakersfield College for 10 years and is the lead faculty member for the industrial automation program.

“We’ve always had a part of automation in our curriculum at BC, but never offered courses in robotics until the bachelor’s program gave us that opportunity.” – Manny Fernandez

“We’ve always had a part of automation in our curriculum at BC, but never offered courses in robotics until the bachelor’s program gave us that opportunity,” said Fernandez, who also teaches courses in engineering, decision-making and operations management. “The whole reason I’m a teacher is that I enjoy seeing the fruits of my labor,” he said. “Four of the seven graduat-

ing students already have jobs, either in management or in engineering/automation positions. A fifth is about to receive a job offer.” This is because, in addition to the comprehensive curriculum, the program focuses on connecting students with industry partners and getting those businesses to open up their doors to BC students. Richard Van Horne, another graduate of the bachelor’s program at BC, has joined the engineering department for JG Boswell Tomato Co.’s processing division. “My actual title will be electrical engineer trainee but my job duties are closely aligned with industrial automation engineering,” Van Horne said. “I actually heard about JG Boswell because of BC. … After working a summer internship in the utilities department in Corcoran for them, they moved me to interning in the engineering department last August.” For Van Horne, the best part about completing his degree at BC is that the school supplied him with every resource he needed to succeed, including scholarship and internship information. “The most helpful skill I have learned, and the one that separates this degree from its lower-division counterpart, is the high-level theories of management that equipped me to not only be the one to fix a technical issue in the field but lead others in the same pursuit,” Van Horne said. “I think that these management classes, as well as my senior project, which had me working with industry partner Tasteful Selections to implement change at their factory, are the difference-makers when it comes to my impact at my new engineering position.” All students who partake in the bachelor’s program at BC have to complete a senior project. At the Nestle Ice Cream Facility, Ceja worked on modernizing equipment, taking an old human-machine interface program and upgrading it to work on a new PanelView Plus 1000 touch screen. He also credits his summer internship with Aera Energy for building his qualifications. There, the most important skill he learned was to take on a project from start to finish and make sure every step along the way was properly completed. “Working for Aera taught me a lot, a new level of professionalism,” Ceja said.

PHOTOS COURTESY OF SUYEN TORRES

He advises those considering a career in the industrial automation “to love what you do, study hard, and work with your professors. And in the end, to develop the confidence to step out of this program, with the skills and knowledge you have learned, to become leaders in the field of industrial automation.” At this point, the pilot programs that offer a bachelor’s degree at California community colleges are set to “sunset” (end), in July 2023, but program evaluations in 2018 and 2022 may result in extension of the program, according to the Legislative Analyst’s Office.

Liz Rozell, a former engineer and professor who assumed the position of interim vice president of instruction at BC in March, was heavily involved with the team effort to implement the baccalaureate degree pilot program for industrial automation. She expressed the importance of having skilled professionals in automation that can collaborate productively with engineers at every level. “I love teamwork,” she said. “I am all about collaboration and teamwork, and that’s what the baccalaureate degree at BC is all about.”


June / July 2018

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June / July 2018

Energy & Technology

Cybercriminals, state sponsors target energy industry

By Alphonso Rivera

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cyberattack in April on a shared data network forced four U.S. naturalgas pipeline operators to temporarily shut down computer communications with customers. It was one of the latest displays of the vulnerability of America’s power grid and energy industry to criminal hackers and rogue states. Probably the loudest international wake-up call came in 2015, with Russia testing its cyberattacking capabilities on the Ukrainian capital of Kiev. Using new cyberweapons, such as CrashOverride and BlackEnergy 3, Russian hackers were able to disrupt the electric power grid and black out the homes and businesses of 225,000 people in the Ukraine. U.S. federal agencies earlier this year issued a report blamAlphonso Rivera ing Russian government-supported hackers for targeting U.S. energy and other industries in a new wave of attacks launched since 2016. Last year, Federal Bureau of Investigation and Department of Homeland Security officials reported that Russian hackers were behind cyberintrusions into the U.S. energy power grid. The intrusion further demonstrated the threat hackers pose to the nation’s critical industries — energy, finance, health care, manufacturing and transportation. There is a wide range of motivations behind these cyberattacks. Holding companies hostage with ransomware and the opportunities for outright theft are profitable endeavors for criminal hackers and their state sponsors. The attack on natural-gas pipeline operators may have been in retaliation for the expulsion of 60 Russians from the U.S., an effort to intimidate and reveal U.S. vulnerabilities or a means to gather competitive information. The House Committee on Science, Space and Technology released a staff report in April concluding Russian-backed cyberattacks were efforts to influence American energy markets and energy policy in response to the increased exports of U.S. liquefied natural gas, which challenges Russian dominance in European markets. Increasingly, cyberattacks are becoming so effective that an office within the U.S. Department of Energy is being established to shore up cybersecurity for such critical facilities as nuclear power plants, refineries and pipelines. But companies big and small cannot wait for “the government” to save them from these attacks. Understanding the attacks, identifying company vulnerabilities and maintaining vigilance to defend against new threats are critical steps companies must take.

No doubt, increasing cyberattacks are intended to gain access and test responses. Hackers and their state sponsors are playing a long-game — setting up strategies that include extortion, the shutdown of systems, explosions, spills, and fires that result in the loss of human life and property, and degradation of the environment. Nearly 2.5 million miles of oil, gas and chemical pipelines crisscross the U.S. Many hundreds of miles are in Kern County, alone. Hackers are using a big bag of tricks to gain entry into the U.S. energy system. Most common, they fall into two categories: “spear phishing,” where customized emails trick recipients into opening malware that is embedded into a system, and “water-hole attacks,” where familiar and trusted websites are infiltrated or cloned to include malicious code. And while hackers’ main targets are large energy companies and facilities, the strategy is to start small. By targeting vendors, service companies, suppliers, trade publications and industry websites, hackers can worm their way into the main targets. Often, smaller companies along the “supply chain” are not as focused on cybersecurity as are the larger companies. It is important that any company doing business in today’s energy industry must be vigilant, regardless of its size.

Some steps that can be taken: • Form industry coalitions. Work together to share threat information. • Constantly audit company security measures. Identify intrusions and attempted intrusions. Insure that company security measures are updated and enforced. • Train and retrain staff to identify and combat evolving threats. • Limit regular user computer access. Develop a need-to-know and use system. • Require complex passwords for all users and require passwords to be regularly changed. • Adopt multifactor authentication to prevent stolen logins and passwords from being used. • Dedicate staff to cybersecurity or hire competent, trusted cybersecurity consultants. Alphonso Rivera is the founder and CEO of Advanced Micro Resource Digital Forensics, a Bakersfield-based company that specializes in digital audits involving cell phone and computer evidence for attorneys, private investigators, human resources consultants and companies.


June / July 2018

KERN BUSINESS JOURNAL

19

Energy & Technology

Left: Solar groundbreaking Above: Ridgecrest solar panels

Desert district looks to the sun for energy savings By Maureen Buscher-Dang

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hen the sprawling Indian Wells Valley Water District in eastern Kern County needed to control customer water rates and its energy costs, it looked to the sun and partnered with OpTerra Energy Services, a California-based company and subsidiary of energy service corporation ENGIE. With its mission to “deliver the highest-quality water at the best possible price while continuing to serve as respectful stewards of the environment,” the high desert district was struggling to take swift action to hedge against rising customer Maureen Buscher-Dang costs and insure sustainable resources in the face of California’s historic drought. Formed in 1955, the district encompasses an area of approximately 37 square miles and serves about 30,000 residential and commercial customers in the region that includes the city of Ridgecrest, as well as small portions of San Bernardino County. In a news release, General Manager Don Zdeba said the Indian Wells Valley Water District had been exploring the feasibility of using solar energy to meet its goals and turned to OpTerra to help develop and implement a plan, which also included a comprehensive energy-efficiency component. The district also used Bakersfield-based Mission Bank, which has a business banking center in Ridgecrest, to finance the project.

“We already maintain accounts at Mission Bank, so when it came time to finance our $8 million solar project, we were pleased Mission Bank contacted us,” Zdeba said. “When possible, my board of directors has made it clear they prefer to support local businesses. So as long as the financing from Mission Bank was competitive, it was our desire to work with local individuals that we know and have a working relationship with.”

Indian Wells Valley Water District had been exploring the feasibility of using solar energy to meet its goals and turned to OpTerra to help develop and implement a plan, which also included a comprehensive energy-efficiency component. Ground was broken in October 2016 on the solar and energy conservation program, which is expected to achieve $9.38 million in net savings over the 30year program life. The solar system is expected to reduce carbon emissions equivalent to removing 574 cars from highways annually. The program includes the installation of a series of 2.08-megawatt solar photovoltaic projects across five water-well sites and the district administrative

office in Ridgecrest. The solar systems at the water well sites are ground-mounted, fixed-tilt solar PV systems to allow for optimal energy capturing. At the administrative office, OpTerra constructed a solar carport system, which generates energy, while providing much-needed shade for cars parked in the hot desert sun. To enhance building efficiency and occupant comfort inside of district facilities, LED lighting was installed and aging HVAC units were replaced. In addition to improving temperature control and the quality of lighting in facilities, these upgrades contribute to hedging against rising energy costs from year to year. To offset upfront costs of the ambitious program, the Indian Wells Valley Water District is taking advantage of the Renewable Energy Self-Generation Bill Credit Transfer Program, which allows local government entities with eligible renewable generating facilities to send energy to the grid and receive generation credits for other benefiting accounts within the district. According to OpTerra, this program will give the district greater control and flexibility over the amount of credit to be allocated each year to each site, which is useful because of fluctuating energy demands from site to site. Other sites throughout the district will utilize net energy metering, which allows the district to receive full compensation from Southern California Edison for all the electricity generated by the solar projects at any time. Maureen Buscher-Dang is a Bakersfield public relations consultant.


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KERN BUSINESS JOURNAL

Energy & Technology

Bland Solar Continued from Page 1

manager for Bland Solar, calls “the diamond of California,” which consists of a territory as far south as Tehachapi as far north as Merced, east to Springville/Porterville and west to the Central Coast. Bland Solar’s three main regions, however, are Bakersfield, Fresno and Paso Robles.

The biggest thing about commercial solar are the incentives. Just like homeowners, businesses get a federal investment tax credit, which right now in 2018 is 30 percent of the total cost of the system. With all the places that Bland Solar services, about 80 percent of its business is residential. But the company hopes to push for a 50-50 split between residential and commercial solar system installments in the coming years. “We are currently expanding our commercial scope and getting into public works projects and public schools,” said Simpson. Bland Solar offers a unique experience for businesses and residents that are thinking about going solar. “The niche we created are our showrooms,” Simpson said. “We have three of them, one in each territory. People are able to come into our showrooms to touch and feel solar panels and see how a system works. They have the ability to look at how we install on the roof and how we anchor the systems to different roof types. We can pull up customers’ homes, or businesses, and do 3D modeling, so we can see where panels

can fit. We can also do a full shade analysis so we can tell somebody at any point of the year, and at any hour of the day, what kind of shade is casted on their rooftop. This allows us the ability to precisely determine how much solar production a customer can look to achieve.” The showroom provides an experience for its potential customers and for business owners. Simpson further explains the benefits of what switching to solar can do for businesses. Lowering the cost of utility bills after getting solar is one of those benefits. Although it may not completely eliminate the bills, it will greatly reduce the cost of them. “Utility rates are constantly going up. In fact, they have consistently increased over the past 20 years on average, about 5 to 9 percent annually. Our goal is to offer a company a solar option that is going to be less expensive than paying the utility company,” Simpson said. “We can get you financing for that solar system and have your annual payment for financing be less than what you’re paying for utility bills annually. The biggest thing about commercial solar are the incentives. Just like homeowners, businesses get a federal investment tax credit, which right now in 2018 is 30 percent of the total cost of the system. Additionally, businesses can receive federal and state depreciation if they own the solar system.” Incentives are the main reason Simpson suggests businesses consider solar. The payback for the solar system can be achieved in as little as 3 ½ to 5 ½ years for businesses thanks to the company’s pricing and incentives. Bland Solar seeks to educate its customers on what solar energy is all about and to help them understand exactly what they are buying.

June / July 2018


June / July 2018

Why Solar?

KERN BUSINESS JOURNAL

Cheaper than utility bills 30% Federal Tax Credit Federal Deprecation ROI > 20% Payback as quick as 4 years Increases your bottom line

Why Bland?

Employee Owned Precision quoting tools Zero Sub Contractors 100% Financing available Continued O&M Solar / Roofing / HVAC

In 2013 our Church was trying to lower our monthly costs. One idea was to reduce or eliminate our electrical costs with solar. We have a small congregation without huge contributions. We were between a rock and a hard spot. How do we reduce our monthly expenses and still afford to go solar? We interviewed two companies, and we ended up going with Bland Solar. Glenn Bland worked very closely with the leadership of our church. He was able to offer quality panels for a very competitive price. He did everything possible to help us afford solar at our church. The performance of the solar system has been a life saver for our congregation. Today we have NO ELECTRIC BILL. In fact, we get a little money back from PG&E. The system will pay for itself in 9 years. Our small congregation can now meet its financial budget, as well as afford to open our facility to outside organizations that support kids and our community even during the hot summer months. Thank you Glenn and Bland Solar for your efforts in helping us. ~ Gary Powers

www.BlandSolar.com 8200 Stockdale Hwy, C-2B, Bakersfield, CA 93311 • (661) 836-3880

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June / July 2018

Legal & Human Resources

What are your implicit biases?

By Robin Paggi

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cannot tolerate intolerant people. There, now you know whom I’m biased against. Actually, I’m probably biased against other people as well; I’m just not aware of it. That’s something called implicit, or unconscious, bias and by the time you read this article, all the employees at the 8,000-plus Starbucks in America will have learned something about it. You’re probably aware that Starbucks CEO Kevin Johnson decided to require all employees in the U.S. Robin Paggi to receive training about implicit

bias after a Philadelphia store manager called the police because two black men sat in her store for two minutes without making a purchase. The men were arrested for trespassing, public outrage ensued and training was scheduled for May 29 with former Attorney General Eric Holder and Sherrilyn Ifill, president of the NAACP Legal Defense and Education Fund, named as the trainers. I’m writing this article on May 16, so the training is still in the future on this side of the time spectrum. You’re reading this article after May 29, so you know how it went. Regardless of whether the training was successful or not, I feel confident in stating that all employers and those who make decisions about other people’s employment should know about implicit bias. “Implicit bias is our brains’ automatic processing of negative stereotypes that have become embedded in

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our brains over time about particular groups of people, oftentimes without our conscious awareness,” said Alexis McGill Johnson in the article “A Lesson in How to Overcome Implicit Bias.” Johnson is the executive director of the Perception Institute, a group of social psychologists and strategists who study how our brains respond to physical differences such as race and sex.

If we’re not aware of these biases, how do we know they exist? Because of lots of studies conducted by social psychologists that revealed things like: • Faculty members responding to emails more and faster when a stereotypically white name was used in the email (“What Happens Before? A Field Experiment


Exploring How Pay and Representation Differentially Shape Bias on the Pathway into Organizations”). • Doctors who were less likely to recommend a helpful procedure to black patients even when their medical files were identical to white patients (“The Effect of Race and Sex on Physicians’ Recommendations for Cardiac Catheterization”). • Black and female car buyers being quoted higher prices than white males by car salespersons (“Race and Gender Discrimination in Bargaining for a New Car”).

“Our brain is constantly bombarded with data, so it notices patterns and makes generalizations trying to put order to the data. However, sometimes it overgeneralizes without us knowing about it, which could lead us to discriminate even when we think we’re treating people equally.” • Employers inviting applicants to interviews more frequently when their resumes were sent from a person with a stereotypically white name like Greg rather than from a person with a stereotypically black name like Jamal (“Are Emily and Greg More Employable Than Lakisha and Jamal? A Field Experiment on Labor Market Discrimination”). I could go on and on, but you get the point. Even though it looks like the people involved in these studies were consciously biased, Sendhil Mullainathan, co-author of the last study mentioned above, said that many of the human resources managers involved in his study were stunned by its results. “They prized creating diversity in their companies, yet here was evidence that they were doing anything but,” Mullainathan said in his article “Racial Bias, Even When We Have Good Intentions.” How is it possible to have unconscious biases? The authors of the article “How to Think about ‘Implicit Bias’” explained it this way: “Our brain is constantly bombarded with data, so it notices patterns and makes generalizations trying to put order to the data. However, sometimes it overgeneralizes without us knowing about it, which could lead us to discriminate even when we think we’re treating people equally.” In other words, we tend to make a lot

KERN BUSINESS JOURNAL

of snap judgments about people and things because of all the data rapidly coming at us. “Our snap judgments rely on all the associations we have — from fictional television shows to news reports. They use stereotypes, both the accurate and the inaccurate, both those we would want to use and ones we find repulsive,” said Mullainathan. For example, quickly assuming that someone has a gun in their hand because of the color of their skin when they’re actually holding a cell phone. Are implicit biases that bad? They are when your emails aren’t answered, you’re not prescribed a medical treatment, you have to pay more for a car or you aren’t invited to an interview because of them.

What can we do about implicit biases? Patricia Devine and her colleagues at the Prejudice and Intergroup Relations Lab at the University of Wisconsin at Madison developed implicit bias training years ago that is considered to be effective in addressing the issue. The training presents bias as a bad habit that can be broken by becoming aware of it, being motivated to do something about it and creating strategies to replace it like: • Observing your own stereotypes and replacing them. • Looking for situational reasons for a person’s behavior, rather than stereotypes about that person’s group. • Seeking out people who belong to groups unlike your own. Additionally, creating policies for how to handle various situations — such as when people are sitting in your store without making a purchase — can prevent individual snap judgments from causing chaos to the entire organization. Creating a diverse workforce makes the biggest impact. “We know that what works best is for workers to be put side by side with people from other groups and have them work together collaboratively as equals,” said Harvard sociology professor Frank Dobbin. Getting to know people as individuals helps to reduce biases. The notion of implicit bias, testing to determine its existence and training to correct it certainly has its detractors. I’m not one of them. Although I’m not a psychologist, I know that our brains are incredibly complex and all sorts of things happen at the unconscious level that drive our behavior, sometimes to our and other people’s detriment. Hopefully, employers and those who make decisions about other people’s employment know that, too, and take steps to let their conscience be their guide. Robin Paggi is training and development specialist with Worklogic HR.

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June / July 2018

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KERN BUSINESS JOURNAL

June / July 2018

Legal & Human Resources

California law now guards ‘salary privacy’ By Karen Bonanno

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new California law says you can’t ask, but it doesn’t say job applicants can’t tell. Beginning in January, California employers are prohibited from asking applicants what they made in the past and using that information to determine a salary offer. Sponsored by Assemblywoman Susan Eggman, D-Stockton, Assembly Bill 168 passed the Legislature last year and was signed into law by Karen Bonanno Gov. Jerry Brown. The law is an attempt to close a “wage gap,” which leaves women often earning substantially less than men. According to the U.S. Census Bureau, women made 80.5 cents for every $1 men made in the U.S. in 2016 — the most recent year for available data. The concept behind Eggman’s “salary privacy bill” is that job applicants who are forced to reveal their past salaries will have wage disparities perpetuated into

their new jobs. Opponents of the salary privacy bill, which includes many companies and professional associations, such as the Western States Trucking Association, unsuccessfully argued that prohibiting employers from asking about salaries hinders recruiting qualified employees. Without knowing where to begin in the salary negotiations, employers are unable to determine if a proposed pay is a reasonable offer or an “insulting lowball” figure.

In a nutshell, the new California law means: • Employers may not ask a job applicant, or otherwise seek information, about an applicant’s salary history, including compensation and benefits. • Post-job offer, an employer can contact an applicant’s previous employer to verify past salary. • Employers must provide an applicant with a “pay scale” for a position upon a reasonable request. Employers should be prepared to disclose company-approved pay ranges for a position and explain that actual pay is dependent on such factors as experience and qualifications. In this new

“salary privacy” environment, employers may wish to include “salary ranges” in recruiting ads. • Although nothing in the law prohibits applicants from voluntarily disclosing salary histories, the information cannot be solely relied upon to determine an employment or compensation offer. Document an applicant’s willingness to disclose past salary information. Despite the prohibitions, the new law does not leave employers completely in the dark. There are ways for employers to obtain information that will help structure appropriate and competitive salary offers. Employers still can ask applicants about their “salary expectations” or what they hope to earn in the new position. They may ask if an applicant has a concern about losing a particular benefit in a transition to a new job. For both employers and applicants, online job websites, such as Glassdoor. com, offer gold mines of pay scale information that is listed by city, county or region. There should be little mystery around what would be a competitive salary offered by an employer and expected by a job applicant.

As with any new law, compliance will be the biggest challenge for employers. Some compliance tips include: • Train hiring staff on the new laws. • Remove salary questions from job applications. • Remove salary questions from reference-checking procedures. • Document the changes made to company procedures to comply with the new law. Also document the nature and responses to questions during the interview process. • Be cautious when using an outside recruiter. The new law applies to recruiters. Review a recruiter’s procedures. Enter into a written agreement requiring compliance with the new law. Consider obtaining indemnification from any acts taken by external recruiters that may violate the new law. Karen Bonanno is president of the Bakersfield-based human resources consulting firm P.A.S. Associates and P.A.S. Investigations. She can be contacted through her website www.PASassociates.com and through the P.A.S. Facebook page.


June / July 2018

KERN BUSINESS JOURNAL

1-800-922-8742 | TriCountiesBank.com

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June / July 2018

Community Business

Increases in hotel tax revenue, visitor spending reflect vibrant local tourism sector By David Lyman

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akersfield’s hotel tax revenues are on track to reach their highest level ever, according to the city’s finance department. That is just one of several recent positive indicators about the local travel and tourism sector. The hotel tax is officially known at the transient occupancy tax, or TOT. To show how much TOT David Lyman has increased in Bakersfield over recent years, in fiscal year 2005-06, this 12 percent surcharge on Bakersfield hotel rates generated $7.4 million. For the current fiscal year, that number is estimated to be $9.8 million, a 31.4 percent increase over the 2005-06 level. But TOT revenues only reflect people staying in hotels. They do not show nonlodging spending by visitors or those visitors staying in RV parks, campgrounds or vacation homes. Visit Bakersfield facilitates a number of groups and events that bring visitors to Bakersfield. The impact of those events can provide a glimpse into the larger effect that travel and tourism has throughout our economy. For example, the estimated economic impact of groups and events facilitated by Visit Bakersfield this year, to be realized in this or future years, is $23.9 million. In addition, those events are expected to attract 89,100 delegates. Those positive indicators are not just restricted to Bakersfield. According to data released in May, visitor spending in 2017 was up throughout Kern County. That rise in spending also helped spur increases in local industry earnings, employment and tax revenues. According to a report prepared for Visit California and the Governor’s

Office of Business and Economic Development, visitors to Kern County spent $1.338 billion in 2017, an increase of almost six percent from 2016. The report, prepared by Dean Runyan Associates Inc., found about 28 percent of direct visitor spending in Kern County was for food service, with an additional 20 percent spent on local transportation and gas, and 18 percent spent on accommodations (see graphic). Those three categories accounted for two-thirds of visitor spending. That visitor spending also directly supports Kern County employment. In 2017, visitor spending supported 16,900 jobs, up more than eight percent from 2016. The majority of those jobs — 60 percent — were in accommodations and food service, with an additional 25 percent in arts, entertainment and recreation. Helping to drive these increases in spending are large groups and events that chose Bakersfield. The city’s largest convention, the Jehovah’s Witnesses Watchtower Convention, will be returning to Rabobank Arena

for another six weekends this summer beginning June 22. On average, each weekend convention attracts about 6,000 delegates. The following month, the National Onion Association will hold its summer convention July 18-21 at the Marriott at the Convention Center. This is the first time this organization has held a convention in Bakersfield.

Early next year, CIF wrestling returns to Rabobank Arena with several exciting changes. The event will combine both boys and girls wrestling. While Bakersfield has hosted the boys championships since 2004, the girls wrestling had previously been held in Visalia. Combining both boys and girls wrestling means the event will expand from two days to three. That extra day will have more visitors buying more hotel rooms and spending more money in Bakersfield restaurants. The CIF wrestling event will also be held one week earlier, moving from the first weekend in March to the last weekend in February. That is welcome news because CIF and March Meet at Auto Club Famoso Raceway will no longer be competing for limited hotel rooms on the same weekend. With those two large events being held on separate weekends, each will have room to grow. David Lyman, Ph.D., is manager of Visit Bakersfield. He and other members of Team More to Explore help visitors from throughout the world spend their money in California’s ninth-largest city. They are available toll-free 866-425-7353 or at Info@VisitBakersfield.com.


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June / July 2018

Community Business

Business process outsourcing: 5 questions to ask By Jim Damian

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he business process outsourcing service model refers to strategic relationships in which organizations rely on third-party vendors to execute certain nonprimary business functions. Common services delivered via a BPO model include, but are not limited to, records and information management, technical support, facilities management and call center support. The benefits of this approach are as significant as they are popular. The global BPO market, during its 2014 peak, surpassed $100 billion. Companies rely on BPO services to take advantage of Jim Damian specialized skills, reduced risks, cost efficiencies and labor flexibility. Additionally, recent data suggests that 57 percent of companies outsource services so that they can maximize their focus on core competencies, such as producing energy, selling automobiles, providing health care services or harvesting agriculture. Historically, the BPO model relied largely on offshore labor. This method was often criticized because it transferred jobs and money out of the local economy and into other countries. This criticism of offshore services diminished enthusiasm for the BPO model starting in 2015. Recently, the affordability of advanced technology and a dramatic increase in minimum wage has led to a new type of offering called onshore BPO. Onshore BPO, also called “domestic outsourcing,” is when a company obtains outsourced services from a third-party vendor that is within the same country. The availability of onshore services is fueling a BPO resurgence. However, companies should proceed with caution when considering a BPO partner.

Here are five fundamental questions to consider: 1. Is the BPO provider local or offshore? Reliance on offshore BPO vendors has fallen out of favor. For example, sending data entry jobs overseas to simply cut costs is loaded with both perceived and actual risks. Companies should explore the long-term value that is created by choosing a local BPO partner. 2. Is the vendor offering a BPO service or a temporary staffing service? Desirable BPO vendors leverage the right blend of people, processes and technology to drive specific outcomes. A true BPO service is based on quan-

tifiable results (X documents scanned per month) as opposed to quantifiable activity (X hours worked per month). BPO solutions typically include all the oversight, methods, tools and labor required to achieve a desired result. A temporary staffing solution is different. This brand of service includes labor only and is based on activity, not results. It is important for companies to understand the difference between a results-oriented BPO service and an activity-centric temporary staffing service.

BPO efforts because it can reduce costs and increase efficiency. However, data is typically subject to the laws of the jurisdiction in which it is stored. For example, if a cloud-based server is physically located in a foreign country, that country’s data privacy laws may govern what can (and cannot) be done with the data. Companies should be aware of where data is stored and under what jurisdiction the data is governed.

3. What is the BPO payment structure? Fees for BPO services are often based on specific service level agreements and key performance indicators. There is usually financial reward (or penalty) for exceeding (or missing) SLA targets. Payment structures should be well-understood by companies in advance of utilizing a BPO service.

5. What value does the BPO offering deliver? Noncore administrative activities (document management) can leach time and money away from a company’s core competency (producing oil). High-performing companies carefully examine the overall value that an experienced BPO partner can deliver.

4. In what jurisdiction is our data stored? Technology is an integral component of most

Jim Damian is the founder and CEO of Stria.


June / July 2018

KERN BUSINESS JOURNAL

www.youngwooldridge.com

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June / July 2018

Community Business

Living in an IoT world By Kayleena Speakman

“I

nternet of things” devices have completely taken over every corner of life. Almost everything is controlled by an outside internet source, changing the way we do things

forever. IoT products give us greater control over our home/ office security, door locks, garage openers, lights, appliances and so on. IoT devices connect wirelessly to a network and have the ability to transmit data. IoT involves extending internet connectivity beyond standard devices to noninternetenabled physical devices and everyday objects. Embedded with technology, these devices can now communicate and interact over the internet and can be monitored and controlled remotely via a computer or your smartphone.

If a business owner connects their IoT device to the network, the network can be left vulnerable to a breach. This can be smart lights that connect through the business’s internet or Wi-Fi, alarm systems, and so on. With more and more devices and appliances hitting the market with internet capabilities, protecting them from hackers becomes critical. Unfortunately, when these noncomputer/nonsmartphone devices (refrigerators, garage door openers, alarm systems, etc.) were built, security wasn’t a top priority.

According to Gartner, there will be an estimated 20.4 billion connected IoT devices in use, with 12.8 billion of those installed for consumers and an estimated 11.1 billion devices in 2018. Connecting everyday devices to the internet is a great idea, but users need to be mindful of the risks. Leaving your network open is the equivalent to leaving your front door unlocked. You need to use this mindset when securing the IoT devices on your network. If you are one of the millions of IoT users, it’s best to proactively secure your network so that hacking one device, such as the TV, doesn’t become a backdoor into your home. Not only do everyday consumers need to worry, but businesses as well. Small businesses or bigger corporations may implement IoT devices in their stores or offices via security cameras, alarm systems, lights, personal assistants and so on. Not only do stores implement these IoT devices, but their employees may accidently compromise the network. If the employee’s personal home network was compromised by a virus or a hacker and the employee synced his IoT device, such as a smartwatch, phone, tablet or industry-specific device, to their personal computer, once they bring that device to work and sync it to the business’s computer, the hacker would be able to gain access to the business’s sensitive information. The reason for this possibly happening is because IoT devices are unsecure and come without antivirus protection. This is why businesses need to have regulations in place and rules for their employees, so this type of compromise is less likely to happen. Not only can an employee unwillingly expose the business’s network to a hack, but business owners can unwillingly do the same. If a business owner connects their IoT device to the network, the network can be left vulnerable to a breach. This can be smart lights that

connect through the business’s internet or Wi-Fi, alarm systems, and so on. Hacking into a company is more valuable for the hacker than a single-family residence, as they are able to gain access to more valuable information they can easily sell. While it’s hard to protect the IoT device itself, it’s not impossible. If the device manufacturer allows it, push certificates to your devices, download security updates and protect with a long, alphanumeric password. You should also focus on your perimeter and secure your business or home network. Splitting up the channels on your Wi-Fi network can lessen the chance that everything connected will be hacked. If your IoT devices are connected to one channel and your PC or phone is on another, if the channel the IoT device was on was hacked, your other channel could be spared, saving your PC from a hack. Businesses can consult with their IT department, or third-party network consultants to manage IoT devices and disable any unnecessary features that are programed by default. They should also contact security experts that have experience securing businesses from cyberattacks for advice on what to do. Before you purchase an IoT device, shop with a vendor that provides IoT devices with security in mind. Purchase products that release regular updates, have password protection and have abilities to encrypt network communications. Lastly, businesses should set a clear cybersecurity policy and continuously revise it every time a new IoT device is implemented into your strategy. While nothing is ever 100 percent foolproof, using these techniques can help to minimize your risk. Kayleena Speakman is a communications specialist for Better Business Bureau Serving Central California & Inland Empire Counties.


June / July 2018

KERN BUSINESS JOURNAL

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Community Business

Fledgling home-based business is ‘Rising Star’ By Kelly Bearden

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ith years of experience and a commitment to providing improved IT service to Bakersfield businesses, Josh and Stephanie Lowrey launched TRIS Technology Solutions (www.trisbak.com) as a home-based business in 2014. After two years of rapid growth, state economic development officials had recognized the company as a “Rising Star Kelly Bearden in the IT Industry” and a “Business to Watch.” The company also was named a “Small Business of the Year.” TRIS Technology Solutions went from a two-person company run out of the Lowreys’ Bakersfield home to having full-time and part-time employees and moving twice within the last four years. In fact, the demand for the company’s services is so strong, that TRIS Technology Solutions recently expanded into a large commercial office with attached shop at 2810 Mosasco St. Stephanie is the president and Josh is the “converged infrastructure engineer” for a company that supports comprehensive-managed IT services, including 24/7 on-demand services; business continuity planning; security, including email and spam protection; cloud services; phone systems; virtualization; hosted solutions; application and database development; home theater and automation; surveillance systems; lowvoltage and data cabling; servers and work stations; Wi-Fi and routers; time clocks; and ISP integration. Nominating TRIS for the “Rising Star” award, small business development consultant Jay Thompson noted that the couple’s “greatest entrepreneurial achievement, besides surviving the first year, would be achieving a 100 percent customer satisfaction rating. This has translated into major growth in their business.” Small-business owners often use personal and family savings to finance startups and expansions. The one-year survival rate for small businesses was about 80 percent in 2016. Half survive five years or longer and only one-third

survive 10 years or more. The goal of the Small Business Development Center at California State University, Bakersfield, is to help new businesses, such as TRIS Technology Solutions, not only survive, but to prosper. The SBDC is a program sponsored by the U.S. Small Business Administration. Deploying an “army” of experienced business consultants, centers, such as the one at CSUB, provide free advisory services to local entrepreneurs. With Josh formerly working in IT for a large corporation, the couple relied on their personal finances to found and grow their new company. They are in the process of restructuring their debt through conventional loans. And SBDC consultants are helping fine-tune the company’s business and marketing plans. “It’s hard to find an extremely smart network engineer who has amazing people skills,” noted Thompson.

Nominating TRIS for the “Rising Star” award, small business development consultant Jay Thompson noted that the couple’s “greatest entrepreneurial achievement, besides surviving the first year, would be achieving a 100 percent customer satisfaction rating. This has translated into major growth in their business.”

equipment. Stephanie is the “face” of the business and handles promotions and the back office, while Josh is the technical guru. The Small Business Development Center at CSUB is one of five service centers within the University of California, Central California SBDC Regional Network, which is a partnership between the university and the U.S. Small Business Administration. The center at CSUB assists entrepreneurs and small-business owners in Kern, Inyo and Mono counties by providing free consulting, small business training and research. For more information, go to www.csub. edu/sbdc.

Josh and Stephanie Lowrey of TRIS Technology Solutions.

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“Josh is truly a one-in-a-million type of guy who bends over backward for his clients by doing what is right, while taking the time to educate each client on current trends in the industry without speaking in ‘nerd talk.’” The Lowreys worked with their SBDC consultant to make the big step from a home-based business to a storefront. With their consultants’ help and proper planning, the move has been a huge success. TRIS Technology Solutions plans to add more employees and obtain a loan to purchase new

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June / July 2018

Community Business

Give Big Kern: Synching generous hearts and clicks for the greater good By Louis Medina

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hilanthropy and technology. You can’t separate them. And you wouldn’t want to. Whether it’s a phone call, text or Outlook calendar invite to set up a meeting for an “ask,” an e-blast appeal for donations, a “Give Now” button on a website or a Facebook birthday fundraiser (“Instead of buying me presLouis Medina ents, donate to…”), the information age has given us lots of options that make fundraising and giving easy — and fun. Give Big Kern, our county’s big day of giving that took place May 1 is yet another highly visible example of the wedding of technology and philanthropy. In a record-breaking year, this online crowd funding campaign, sponsored by Kern Community Foundation, yielded the following results as generous hearts and clicks synched up passionately for the greater good: • Upward of $231,000 raised (a 56 percent increase over 2017’s $148,000) • Close to 1,800 donors who gave to 119 participating nonprofits (compare to 1,500 donors

PHOTO BY HENRY A. BARRIOS

The Girls Scouts Council staff is out in force on Brundage Lane to draw people for their fundraiser as part of the Kern Community Foundation Give Big Kern event. The Girls Scouts have a matching donor up to $50,000.

and 90 agencies in 2017) • 52,000 volunteer hours pledged by community volunteers (3.5 times as many as in 2017). The third annual “one day to celebrate the giving spirit of Kern County” exploded as it did thanks in great part to the effective application of communication technology, including responsive web design and the use of multimedia and social media to appeal to donors. The responsive www.givebigkern.org platform, developed

Tagboard function of the Give Big Kern website.

by technology partner GiveGab, which assists more than 70 communities across the country with their giving days, allows donors to give conveniently from their desktop, laptop, smartphone or tablet. According to Ithaca, New York-based Project Coordinator Laryssa Hebert, approximately two-thirds of Give Big Kern 2018 donors gave from a mobile device or tablet and one-third gave from a computer. The platform is easy to use for fundraising agencies as well. Hebert said one of GiveGab’s strengths is the coupling of a constant feedback loop from giving day platform users and thoughtful development from GiveGab’s engineering team. “We aim to have productive, real and open-ended conversations with everyone on board, and take the time to learn what their goals and needs are,” she said, “especially if there is something our platform isn’t accomplishing for them.” This translates into a “fun and easy-to-use platform.” Combined with support from Kern Community Foundation,

the Give Big Kern experience becomes an exercise in nonprofit strengthening whereby time-andresource-strapped local charities learn to fundraise the 21st century way: online. “This is the first year that Writers of Kern participated in Give Big Kern, but it won’t be the last,” said Martha Warriner Jarrett, who managed WOK’s page on givebigkern.org. “The whole thing was so easy. It was all online and all the work was done for us. In other words, we didn’t have to set up our own website, credit card account, links, etc., or create our own events or publicity.” Indeed, trainings and online tools provided by GiveGab and Kern Community Foundation through live workshops, webinars, prerecorded videos, prepackaged templates or downloadable aids and graphics helped participating nonprofits set up eye-popping profile pages with videos, photos and suggested donation levels that moved donors to give to them. Donations were electronically transferred to nonprofits’ checking accounts within 24 to 48 hours of being made online.

And the events page timeline on givebigkern.org became a quick-reference tool that encouraged agencies to increase their visibility by just showing up to events or participating in promotions arranged by Kern Community Foundation. Givebigkern.org also features the Tagboard app, which bucketizes social media posts using the hashtag #givebigkern. A visit to the home page reveals how creative and prolific local nonprofits were in their use of social media (Facebook/Instagram/Twitter/YouTube) to promote their respective Give Big Kern campaigns, from making appeals to donors and volunteers to publicizing special Give Big Kern-themed events to highlighting client testimonials to, once Giving Day was over, thanking their donors profusely for their support. So, what’s next for Give Big Kern? This summer, Kern Community Foundation plans to participate in GiveGab’s Giving Day Leaders Forum, a two-day gathering of giving day organizers from across the country. “The Leaders Forum provides partners the opportunity to connect with others who do what they do, while acting as the voices of their local nonprofits,” Hebert said. “GiveGab facilitates a variety of strategy and product discussions” at this forum, she said, which allows it to look at client goals, challenges that can be solved through the giving day platform, “how to prioritize potential development in our product roadmap and, ultimately, how to implement enhancements for diverse sets of users.” Kern translation: Local participating nonprofits and donors can look forward to an even more fun, user-friendly and engaging Give Big Kern experience in 2019.

Louis Medina is the manager of community impact at Kern Community Foundation.


June / July 2018

KERN BUSINESS JOURNAL

www.kerncountyenergysummit.com

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June / July 2018

Marketing

Public relations crises: Facebook vs. Starbucks By Maureen Buscher-Dang

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ver a three-week period this spring, two iconic American companies found themselves embroiled in significant public relations crises. These are the kind of crises that quickly grow legs, all while providing teachable moments for the rest of us.

Facebook News broke on Friday, March 16, that Cambridge Analytica improperly accessed data on 50 million Facebook users through an app offering personality quizzes called “This is your digital life.” Facebook admitted Maureen Buscher-Dang they had known of the situation since 2015, but only confirmed a miniscule 270,000 people had downloaded the app. The following Monday, Facebook stock took a nosedive and lost an overwhelming $37 million in market value. Tensions rose on Tuesday with news reports that the Federal Trade Commission had launched an investigation into the potential breach of a consent decree. Lawmakers were calling for CEO Mark Zuckerberg to testify before Congress. Five days after the story broke, Zuckerberg finally made his first public statement. On April 4, Facebook revealed that the data of as many as 87 million people could have been accessed by Cambridge Analytica, far more than the initial two estimates. Missteps: Transparency was obviously lacking. Facebook should have come clean with users in 2015 when they learned of the data breach. And they should have outlined a plan to prevent future occurrences. Fudging the numbers or accuracy of just how many people were affected was also an issue. It speaks to credibility. How does a company go from 270,000 to 50 million and then “as many as” 87 million victims? Timeliness and accountability were also factors. As CEO, Zuckerberg should have responded and taken responsibility within 24 hours when the news first broke in March, not five days later. That amount of time allows speculation to drag on and grow legs, not to mention foment a lack of

control over your message. What they did right: Once Zuckerberg finally jumped on the bandwagon, Facebook ceased being in the daily news cycle — a challenging place where no company wants to be after a crisis. He took responsibility for the data breach and repeatedly apologized. He was respectful and performed well when testifying before Congress, plus he did not lose his cool.

Starbucks On Thursday, April 12, two black men, Rashon Nelson and Donte Robinson, were arrested for trespassing at a Philadelphia Starbucks. When they initially entered the store, Nelson asked to use the bathroom. The manager told him it was only for paying customers. He initially brushed it off and found a table. Like many of us who use Starbucks as a “satellite” work office (full disclosure, I use The Marketplace), Nelson and Robinson were there on business. The young entrepreneurs were scheduled to meet Andrew Yaffe, a white local businessman whom they had previously met several times before at the same Starbucks. While they waited, the Starbucks manager came over and asked if they planned to order anything. The 23-yearold men declined and explained they were early and just waiting for a business meeting. The manager immediately phoned the police who arrived shortly afterwards. The men were arrested, but no

charges were filed. Much of the incident was recorded on a customer’s cell phone. The video went viral overnight and helped garner national attention. Missteps: There was a lack of timeliness and accountability. On Saturday, two days after the arrest, Starbucks issued a tone-deaf one-size-fits-all apology that was soundly panned. It wasn’t until the third day after the incident that CEO Kevin Johnson issued an apology. At this point, #BoycottStarbucks had been trending over the entire weekend and protests were being held outside the Starbucks where the incident occurred. What they did right: Johnson personally apologized and said the arrest “should not have happened.” He noted the brand’s culture does not condone profiling and condemns racial discrimination. On the Monday after the rocky weekend, Johnson was set to meet with Nelson and Robinson to discuss what had happened and to extend a face-to-face apology. And Starbucks reclaimed the narrative. Johnson ordered 8,000 stores closed on May 29 for mandatory training to tackle unconscious bias. Both companies are still navigating these crises. It will be interesting to see how each evolves in the court of public opinion moving forward. Maureen Buscher-Dang is a Bakersfield public relations and marketing consultant. She can be contacted through her website www.buschermarketing.com.

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June / July 2018

KERN BUSINESS JOURNAL

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Marketing

2018: ‘The Year of the Employee’ By Tracy Leach

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s a small-business owner in Kern County, I understand firsthand the battle for attracting and retaining local talent. The pool of potential (quality) employees seems to be dwindling with each passing year. Unfortunately, many of those who make up the sparse talent that does exist today are often unaware of the differences between Kern County and say, Los Angeles or San Francisco. No, I cannot personally fund the lease on your first house with marble-top counters. No, I cannot personally fund your fourth car in the last five years. And no, I cannot afford to pay you an entry-level salary that rivals that of my seasoned employees. But I digress. It’s not news to us business owners that high-performing employees are a vital ingredient for the overall success of our organizations — so what is the trick? What is the key to attracting the right personnel, at the right price, and keeping them around long enough to pay off the time and resources invested during those precious weeks of training?

Our company has been fortunate enough to glean from businesses and organizations all over the world who live and breathe in the same communications space that we do. We’ve enjoyed many partners throughout the years who have helped us get to the place we are, serving the fantastic clients that we have. One of our most recent partnerships has been with the Worldcom Public Relations Group, the third-oldest PR organization in the world that bundles the knowledge and expertise of 110 international PR agency partners operating in over 95 cities on six continents. Worldcom gives firms like ours, all over the world, the opportunity to join together as one to serve clients with international communications and marketing needs. Worldcom PR recently engaged in an international study and produced a report on the issues that CEOs and chief marketing officers think will most influence success in 2018. The top-rated issue? You guessed it: The ability to attract the best talent. Leaders are finally beginning to see their employees as a direct connection to the success of their endeavors. Because of this, they’re increasing their focus on

employees, deeming 2018 “The Year of the Employee.” In 2017, 14 percent of leaders gave employees the most attention — one-third the level of customers and only 1 percent above shareholders. In 2018, this metric will leap to 20 percent! So what are the recommendations for facing these challenges head-on and coming out the other end alive and with a thriving business? Because 2018 is the “Year of the Employee,” most of the recommendations will have to do with energizing and engaging your employees. The full Worldcom Report offers 11 recommendations that your business or organization can implement immediately to increase your probability for success this year and for the years to come. I’d like to share a couple of the recommendations that I was drawn to but I urge you to take some time to review the full report, as it is sure to benefit you as a business owner, employer or employee. • “Enhance your employer brand by defining your culture and values in a more compelling way.” We at Providence consider this an exercise in marketing our own

company, internally and externally. One would think that a PR/marketing company would have this down to a science, but it’s something that we’ve had to consciously and proactively engage in. All employees at Providence know that we place the highest value on integrity, hard work and excellent service. And we also have a lot of fun doing it. • “Address the upskilling, reskilling challenge by giving managers the skills to coach.” Continually upskilling and reskilling employees needs to be on the management agenda! All managers should be regularly engaging in training to help them operate as a “coach” for their team. If you aren’t prioritizing people in your business or organization, you may be at a disadvantage, as the competition for the best talent is heating up. Give current and potential employees reasons to come to work beyond the paycheck and the paycheck is sure to be worth it. What changes do you need to make in your company? Tracy Leach is the president and CEO of Providence Strategic Consulting Inc.

www.crossroadsbusinesspark.com


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June / July 2018

Finance

Why a safety culture is so critical in every organization By John Pryor

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hen we read about “economy airlines” not focused on safety — experiencing repeated engine failures — we can only wonder what kind of safety culture each has within their organizations. Airline expert Jim Brauchle recently characterized one such airline as “an accident waiting to happen!” Michael Belcher, while national president of the American Society of Safety Engineers commented: John Pryor “One of the most infamous workplace disasters was the space shuttle Challenger explosion, which killed seven crew members in 1986. While the reasons initially attributed to the disaster were technical in nature, NASA’s flawed safety culture contributed to the explosion.” Locally, we see oil and gas companies and other local operations with workers’ compensation experience modifications in the 200s, therefore paying more than double the standard premium for this statutory insurance. We need to ask:

Why are some local organizations “accidents waiting to happen”? Experience modifications emphasize frequency of injuries more so than severity. So a chronic safety problem is in place with these local high “x-mod” companies. At the same time, we see example upon example of local companies that rarely, if ever, experience losses and have an “x-mod” well under the norm of 100 — even at 60 percent where their workers’ compensation rates are discounted 40 percent because of their outstanding safety records! In addition, they experience little or no costly lawsuits because of their positive safety performance, nor any property losses, as others have experienced when accidents happen.

Elements of Corporate Culture

Why such divergence? I’m convinced the difference is found in the safety culture within a company’s overall organizational culture. The definition of a sound safety culture is not rocket science, yet to be effective, it needs to be part of an organization’s overall culture. This is as it should be. The critical point here is that safety should not be in its own silo, separate and apart from an organization’s overall culture. All elements of a corporate culture must demonstrate collaborative, cross-functional engagement throughout the organization — not in individual, separate silos.

So what’s a corporate culture? It has been defined in many ways. For example: • The way it conducts business, treats employees, customers and the wider community; • The extent to which freedom is allowed in decision-making, developing new ideas and personal expression; • How power and information flow through its hierarchy; and • How committed employees respond to organization’s overall goals and objectives. Most agree that organizational culture is unique to every organization — and difficult to change. Yet, especially with accident-prone organizations not committed to safety, change should be a high priority until the desired culture is achieved.

The steps usually suggested to change culture in an effective manner are:

culture will be ineffective. A leadership tool that can bring all these elements together is the “balanced scorecard.” On a single 1. Fully understand the current page, it includes an organization’s culture; mission, vision and values, plus its 2. Consider accepting outside long-term strategic goals and annual counsel; and operational objectives. The opera3. Consider both top-down and tional objectives are structured and bottom-up participation. balanced under these headings: • Customer focus Revision of both mission and • Continuous process improvevision statements — and especially ment values statements — can be helpful • Professional development to formalize and reinforce cultural • Financial targets change. Yet it requires long-term Setting your mission, vision, valstrategic goals and shorter-term ues and strategic goals first and then operational objectives followed by following through with specific, and action plans that convert such words measurable, objectives is an effective into positive actions. way to assure that your organizaWhen focus is on the safety tional and safety cultures are what you want each to be. dimension of your organizaFor more information on the tion’s overall culture, these balanced scorecard, simply Google elements need to be included: its name and/or its creators’ names, • Both top-down and bottom-up Kaplan and Norton, two Harvard “buy-in” to safety; Business School professors who • Safety costs considered an have employed this leadership tool investment, not an expense; • Application of the quality man- all over the world in organizations of all types and sizes. (For a sample agement principle of “continuous of the BSC, email me at johnpryprocess improvement”; orqrm@gmail.com.) • Professional development Finally, enjoy the benefits of a (training and education) at all levels; sound safety culture, viz., a quiet • An on-going system of risk night’s sleep! control (prevention, mitigation and/ or elimination (avoidance) of risk). John Pryor is a management consultant with CSU Bakersfield’s It’s critical that middle management safety professionals make these Small Business Development Center and author of “Quality Risk Mangood things happen operationally. agement Fieldbook” published by Top-down leadership and vision are International Risk Management essential. Without safety professionInstitute in Dallas. als at all operational levels, a safety


June / July 2018

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Finance

Energy-related ‘tax extenders’ included in Bipartisan Budget Act of 2018 By Joel Bock

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he Tax Cuts and Jobs Act, which was signed into law on Dec. 22, 2017, was hailed by many as the most sweeping tax legislation in the United States since the Tax Reform Act of 1986. While the TCJA certainly did yield many changes to the U.S. tax system, it did not include several tax provisions (commonly referred to as “tax extenders”), which had previously expired on Dec. 31, 2016. A couple months after the passage of the TCJA, the passage of the Bipartisan Budget Act of 2018 not only provided for an increase to Joel A. Bock the debt ceiling, additional domestic and military spending and disaster relief, but also retroactively reinstated through

Dec. 31, 2017, (except as otherwise noted below) many of the previously expired tax extenders. While the nature of these tax extenders is varied, several of the provisions are energy-related. The following is a summary of the energy related tax extenders included in the BBA: • IRC Section 25C, which provides a 10 percent credit for qualified nonbusiness energy-efficient improvements (including insulation, energy-efficient windows and doors, certain roofs, certain high-efficiency heating and air-conditioning systems, high-efficiency water heaters and stoves that burn biomass fuel); • IRC Section 25D, which provides credits for residential energy property, qualified fuel cell property, small wind energy property, geothermal heat pump property, qualified solar electric property and solar water heating property. These provisions were extended through 2021; • IRC Section 30B, which provides a credit for qualified fuel cell motor vehicles;

• IRC Section 30C, which provides a 30 percent credit for the cost of alternative fuel vehicle refueling property; • IRC Section 40(b)(6), which provides a credit for the production of qualified second-generation biofuel; • IRC Section 40A, which provides a credit for biodiesel and renewable diesel used as fuel; • IRC Section 45, which provides credits for facilities producing electricity from certain renewable resources; • IRC Section 45L, which provides up to $2,000 per dwelling unit credit for each qualified new energy-efficient home (including apartment buildings) constructed by an eligible contractor and acquired by a person from the eligible contractor for use as a residence during the tax year. Note that both substantial reconstruction and rehabilitation can also qualify for this credit; • IRC Section 48, which provides credits for geothermal heat pump property, combined heat and power system property,

qualified small wind energy property, qualified fuel cell property and qualified micro-turbine property. These provisions were extended through 2021; • IRC Section 168(l), which provides a special depreciation allowance equal to 50 percent of the adjusted basis of qualified second-generation biofuel plant property; and • IRC Section 179D, which allows a deduction of up to $1.80 per square foot for an energy-efficient commercial building. This deduction is not only available to the owners of privately held commercial buildings, but also to eligible designers and builders (including architects, engineers, contractors, etc.) of government buildings. Please consult your tax adviser to determine how these energy-related tax extenders impact your specific situation. Joel A. Bock, CPA, MST is a partner in Daniells Phillips Vaughan & Bock, a Bakersfield accounting firm.

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KERN BUSINESS JOURNAL

June / July 2018

Finance

Health savings plans also help save for retirement By Steven Van Metre

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ealth savings accounts are a much overlooked and misunderstood financial tool that can help many Americans save for retirement. Created in 2004 to help Americans pay for their health care, health savings accounts also can be smart investment and savings tools. Health savings accounts, or HSAs, are tax-advantaged savings accounts designed to help people with high-deductible health plans, or HDHPs, pay for out-ofpocket medical expenses. An HDHP is a plan that provides very limited coverage for routine medical expenses, such as a visit to a physician Steven Van Metre for the common cold. The coverage is primarily for major expenses, such as costly surgeries and hospitalizations. While the criteria for this program can change, generally, a HDHP deductible can be no less than $1,300 for individual plan and $2,600 for an individual plus family plan. Out-of-pocket limits are $6,550 for individual and $13,100 for individual and family. To offset the out-of-pocket costs resulting from a HDHP plan, participants contribute to an HSA account. The amount varies, depending on the type of plan and participant’s age. However, as an example, an individual under 55 can contribute up to $3,350 a year, with family coverage increasing to $6,750. Participants 55 years of age and older can contribute as extra $1,000 — $4,350 for individual and $7,750 for family — in a “catch-up provision.” Contribution limits include any contribution made to an HSA by an employer. Contributions to HSA are “pretax,” meaning they will reduce participants’ tax liability. But HSAs actually have

a triple benefit — participants get a tax-saving benefit going into them, tax-free growth on earnings and penaltyfree withdrawals on qualified medical expenses. Although HSAs have been around for more than a decade, relatively few Americans take advantage of them. Likely, that is because HSAs often are confused with flexible spending accounts, or FSAs, which is a different program used for out-of-pocket expenses such as copayments and deductibles.

Take this example: An individual contributes $3,450 per year for 20 years. If contributions earn a 2 percent return, the HSA account could accumulate an amount of about $72,000 and save the participant over the years about $21,000 in taxes. Unlike FSAs, contributions to HSAs do not have to be spent within the year. They can roll over year after year and “travel” from job to job. The balance in HSA accounts can accumulate and grow tax-free. This makes HSAs a lucrative retirement savings scheme for relatively healthy people who can afford to pay the high deductibles and leave their tax-free money to grow. According to the Washington-based Employee Benefits Research Institute, only about 20 percent of Americans who are eligible to participate in HSAs are taking advantage of this financial benefit.

Likely, some of these people have chronic illnesses and require lower-deductible insurance plans to meet their costs. But many others do not understand HSA benefits. Take this example: An individual contributes $3,450 per year for 20 years. If contributions earn a 2 percent return, the HSA account could accumulate an amount of about $72,000 and save the participant over the years about $21,000 in taxes. The accumulated savings figure assumes the individual spends only $500 for out-of-pocket medical costs. Here’s a nifty online calculator that can help you customize your figures: www.healthequity.com/calculator/ future-balance. The idea behind HSAs is to help participants pay for medical expenses not covered by high-deductible health plans. To defer needed medical treatment so as not to spend money in an HSA account defeats the purpose of the program and could jeopardize the health of a participant. But for healthy people who have few out-of-pocket medical expenses, HSAs are a wise and generous supplemental retirement savings tools. They can help accumulate a pool of money that can be used to pay for medical expenses in retirement years. Check with your company’s human resources department or your financial planner to determine if participating in an HSA is the right retirement savings strategy for you. To qualify for an HSA, a participant cannot already be: enrolled in Medicare, a dependent or covered by other health insurance plans. Steven Van Metre is a Bakersfield certified financial planner who specializes in retirement income strategies and teaches a course on retirement planning for the Levan Institute for Lifelong Learning at Bakersfield College. His website is www.stevenvanmetre.com.


June / July 2018

KERN BUSINESS JOURNAL

www.motorcitygmc.com

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June / July 2018

A diverse team helps power

Great todays Better tomorrows

An inclusive and diverse workplace is fundamental to our company. Aera provides an enriching environment that celebrates different identities and approaches while pursuing our common purpose. It’s simply the way we do business. www.aeraenergy.com aeraenergy.com

Kern Business Journal June/July 2018  

Energy & Technology issue

Kern Business Journal June/July 2018  

Energy & Technology issue

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