Page 1


JUNE 2013

Vol. 4 No. 4


Premiere Source for Business News in the H.D.

Court Closure Conundrum

Standing in lines for upwards of two hours only to wait in a hall for another two before seeing the court official for 10 minutes has left business owners like Holly Pratt “beyond frustrated.” “I am trying to run two businesses. I don’t have five hours to waste at the courthouse for something that literally takes 10 minutes to accomplish. As a tax payer and business owner, I am angry and once agin let down by my government,” said Pratt. In a country that is borrowing and spending 4 billion dollars a day or 1.4 trillion a year to maintain its obligations, 22 million per year does not sound like much in the scheme of things. However, that much less


funding for operation of the San Bernardino County Courts system has caused the closure of courts in Chino, Redlands, and Twin Peaks since January of 2013. That shortfall is also the reason the litigating public now has a reduction in business hours for access to court-related filings and other paper-work. To save money, the system shuts down an hour earlier Monday through Friday. This has already left many local business owners with a sense of frustration. COURTS Con’t Page 2

Dial Precision Inc.

Employees: 28 Year Founded in Hesperia: 1990 Top Executive: Darryl Tarullo, CEO

STAFF PHOTO: Machinist Mark McKinley at Dial Precision Inc. in Hesperia.


Local Company Heads to Space Recession Pushes Company to Shoot for the Stars By EDITOR IN CHIEF, GRETCHEN LOSI

Over the past five years, 2 million

STAFF PHOTO: Crowding, longer wait times and longer drives to courts all add to the frustration of local businesses.

something they are proud of – manufacturing jobs have vanished. Still, and others have taken notice. The company’s top shelf quality has the United States is the world's largest earned them a trip into space. manufacturing economy, producing The company is manufacturing $1.6 trillion of goods each year, or parts for Spacex, the world's 21 percent of global production and provides over 11 million jobs, according fastest-growing provider of launch services. With nearly 50 launches to The High Desert is home to several of on its manifest, representing these, ‘Made in the USA’ manufacturing more than $4 billion in contracts, SpaceX will be using parts made in plants. Dial Precision Inc. in Hesperia Hesperia to push the boundaries is one of them. Established in 1966, of space technology through its the company moved to the High Desert in 1990. The company produces spacecraft. Finding their way into space precision components from a multitude was no simple feat – and had of material stocks including plastics, outsourcing and the recession not ceramics, and various common and forced the company to broaden its exotic metals, primarily for turbo manufacturing branches, it may not chargers in the diesel market like have happened at all. Caterpillar and Honeywell. MADE IN USA Con’t PAGE 3 Dial Precision’s attention to detail and high quality manufacturing is

FROM THE COVER “A litigant now has to travel two hours one way to have

Business Expo July 10, 2013

Starting a new company? Launching a new product? Introducing new or improved services? The Business Showcase Expo promotes buying goods and services locally. Join over 50 Victor Valley businesses in a tradeshow environment and promote your business! Call (760) 245-6506 today to join. 3:00 - 6:00 pm Victorville Conference Center 12603 Mariposa Rd. Victorville Contact DeAnna Gorgei-Martindale at the Victor Valley Chamber of Commerce 14174 Green Tree Blvd., Victorville

(760) 245-6506

his or her day in court. That means she has to have: A, transportation; B, a job that permits her to be free for the day; C, child care; and D, the ability to hope that the court -- with the other pressing business, will be able to resolve her case in one day.” California Supreme Court Chief Justice Tani Cantil-Sakauye COURTS from PAGE 1 “Politicians are choking the economy with taxes, regulations and give-away spending. It isn’t right for the heartland to suffer by closing the courts in Barstow. We could be selfsustaining with the taxes the state gets from the railroads, mines, and other sources of taxes, said Harry Hooper, owner of HS Eviction and Process in Barstow. “We should be able to keep our courts open full time, not part-time.” Hooper, whose eviction service takes him to courts as far away as Hemet, Banning, Laguna Hills, and Vista said he has attended San Bernardino County meetings and questioned those things but he has not been satisfied with the answers. Then there is job loss. Even with the Barstow Court remaining open part-time, there will still be a net loss of 22 to 34 jobs. A total number of jobs lossed across the board was not available at press time, but sources say it will be well over 100 -- including support staff, court reporters and others. Included in the cut-backs, are plans to maintain one courtroom in Barstow three days per week. This action will allow traffic, landlord-tenant, small claims and domestic violence cases to continue to be heard in Barstow. Civil, family law, and criminal cases will still be transferred to other locations, consistent with current plans. The Court intends to keep this courtroom operational through June 21, 2014, barring any unforeseen additional reductions. Because

the court projects a significant deficit after that date, though, it will not be able to continue to operate in Barstow after that time without identifying additional funding solutions. During the next 15 months court leaders will continue to partner with city and county officials, as well as work with state judicial, legislative, and executive branch leaders to identify funding solutions sufficient to maintain appropriate levels of operations throughout all of our communities. “The Court is receiving tremendous support from California’s Chief Justice, local legislative members, members of the County Board of Supervisors, and local mayors, regarding this issue, and we are hopeful that permanent solutions will be identified,” said Marsha Slough, Presiding Judge of the San Bernardino County Superior Court. “We must do all in our power to prevent whole communities from being effectively disenfranchised from participation in the court system. The Court has an opportunity to keep some doors open and we’re doing it.” Bob Isbill is a Better Business Bureau Arbitrator, freelance writer, and Publicist for the High Desert Resource Network

Stay in the “Know.” High Desert Business Journal


Vol. 4 No. 4 PUBLISHER Western Star Financial, Inc.



Made in USA

Local company thanks recession for putting them into space.

Court Closures

The frustration and hope of local court closures Page 4

Executive Q&A Joe Eifert Beck Oil Page 6

E-Mail Marketing

The Do’s and the Don’ts Page 8

One of the components manufactured at Dial Precision Inc. in Hesperia. Photo courtesy of City of Hesperia.

MADE IN USA from PAGE 1 Just like the rest of the U.S., Dial Precision Inc. has had to get creative in finding ways to keep the doors open. Honeywell decided to outsource products once made by the local company to China. That outsourcing, coupled with the nation’s struggling economy, has hurt them. Today, the 35,000 square foot warehouse, which once provided jobs for 130 residents, is now employing 28.

manufacturing renaissance within the next five years, predicts the Boston Consulting Group. Tarullo said that increases in Chinese wages and shipping costs, as well as subpar manufacturing quality overseas will help lead the way. Already many companies are considering "on-shoring" or "re-shoring" their production efforts back to the United States.

“I have no problem competing in a world economy if we were all playing by the same rules, but we in the U.S. have to do so much more..” Darryl Tarullo, CEO, Dial Precision Inc.

“12 People” Profile Jason Lamoreaux Page 9

21st Century Workforce

What is needed and how we get it. Page 11

SCLA Impact in HD Where it is - was- and where it is headed. Page 13

Killing with Kindness

Part II in a series of Marketing tips Page 16

Residential Realty

Investors and other trends Page 18

Labor Participation Still low despite job gains Page 19

The Sinking of Ca. Why Texas is the new California

“We became the back-up, even though the parts from China are inferior in quality,” said Darryl Tarullo, CEO. “I have no problem competing in a world economy if we were all playing by the same rules, but we in the U.S. have to do so much more.” Tarullo is speaking about the greater costs of doing business for U.S. American manufacturers contend with a great deal of EPA restrictions, liability and workers compensation insurance expenses, and high taxes -- many of which either do not exist, or are much cheaper, in other countries. “The key to American business doing well is getting American politicians off our back,” said Tarullo. The U.S. will experience a

U.S.-based industrial giants such as General Electric and Caterpillar have already begun making the switch, because like Dial Precision, thousands of smaller companies continue to churn out best-in-class products across the country – at a far greater cost. Still, aside from all the challenges, companies like Dial Precision still believe in the American Dream. They believe in providing jobs for local families and creating a top shelf product they are proud to put their name on. And it is in this spirit that Tarullo believes manufacturing will grow in this country once again.

Ask a Lawyer

Question: My husband and I have not filed our income tax returns in 3 years. My guess is that we owe about $30,000--not counting penalties and interest. Are taxes dischargeable in bankruptcy? Answer: Technically, yes. But in your case, no. When an individual files a chapter 7 bankruptcy he or she gets a discharge of all “dischargeable” debt. Yes, contrary to popular belief, taxes are often dischargeable. The law in this area is complicated, however. As to your income tax question, Title 11 of United States Code Section 523(a), indicates that a chapter 7 discharge does not discharge an individual debtor from taxes for which the return was due to be filed in the last three years, and was not actually filed in the last two years; nor were they assessed in the last 240 days. The purpose of these time passage requirements seems to be to give the IRS a “fair shot” at collecting the taxes owed before the liability is discharged in bankruptcy. In your case, since you have not filed your returns in over two years, the IRS does not have any knowledge that you owe any money. They have not had their shot at collecting the debt. So you will not be able to discharge your tax liability in bankruptcy...yet. Todd Turoci has been practicing bankruptcy law in the High Desert for over 20 years and can be reached at

MARKETING DIRECTOR Lisa Kiplinger Kennedy STAFF WRITERS Dan Harley Jason Lamoreaux Ryan Orr Alyssa Penman Steve Sipe Sam Thatte Caroll Yule CONTRIBUTING WRITERS Nicole Aragon Gwen Bedics Sandy Harmsen Robert Isbill James Johnson Kari Martinez Keith Metzler Mike Nutter Todd Turoci Kevin Yang EDITORIAL BOARD Teri Ortega President Adelanto Chamber of Commerce Janice Moore President Apple Valley Chamber of Commerce Yvonne Woytovich President Hesperia Chamber of Commerce Eric Camarena President High Desert Hispanic Chamber of Commerce Michelle Spears President Victor Valley Chamber of Commerce DISTRIBUTION ASSISTANT Phoenix Turoci OFFICE MANAGER Sherry Madan HDBJ is published monthly with an additional two Special Features, 40 Under 40 published in October and our Annual Book of Lists. You can also find us on the Web at HDBJ.Biz. All material is copyright by HDBJ with all rights reserved. To obtain permission to reprint or recreate content, contact us at Mail@HDBJ.Biz. For advertising inquiries call 760-244-8596. To subscribe send a $20 check to: Western Star Financial, 14895 Bear Valley Rd., Hesperia, Ca. 92345. Or to pay by credit card, Call 760-244-8596 For editorial inquiries, including story ideas, promoting a business event, or to be considered as part of our writing team, call Editor Gretchen Losi at 760-244-8596 or e-mail, Mail@HDBJ.Biz



Executive Q&A With Joe Eifert of Beck Oil What areas does Beck Oil service? Beck Oil, with two distribution locations in the High Desert and Coachella Valley, proudly serves a huge area of Southern California ranging from parts of Inyo and Kern Counties, Los Angeles County, Imperial and San Diego Counties with the biggest majority being Riverside and San Bernardino Counties. We also network with other companies in our business to cover areas such as Orange and Ventura Counties, Northern California and throughout the United States. How has your business changed over the past 10 years? We expanded into the lower desert by purchasing a fellow distributor in the Coachella Valley a few years back. At the time of the purchase we also faced a recession which had an effect on everyone, including Beck Oil. We had tough choices to make. We had to re-think and re-organize the way we did business and that was no easy task. In today’s world we have to be proactive and continue to look into and seek out ways to improve on everything we do because of the uncertainty of the economy. Where do you see this type of business headed in the future? Companies like Beck Oil make on average a 1 to 2% profit. The competition is very tough because we are all doing basically the same thing. EPA rules have caused our customer’s to work extremely hard at reducing usage which ultimately results in us selling less--even when the economy is doing well. Significant factors, such as technology, economics and politics, will always affect our business, so we are forced to either grow or become too small to compete. We continually face a never ending flow of new rules, regulations and laws. As more burdensome state and federal regulations come it brings with it a growing barrier to success that affects not just companies like Beck Oil but those that we do business with. At some point state and federal governments need to restore sensibility, transparency, and balance to the system. But we remain optimistic about the future even

though there are those hurdles to jump or mountains to climb that make it difficult. How has Beck Oil met the challenges our poor economy has gone through? We have reduced our work force, sold off excessive equipment and property and stayed focused on our sales efforts. We have also worked on improving the atmosphere of our work place, work environment and Beck Oil team spirit; not just a building or a “place,” but rather a positive environment where people work together. There is a saying that “it takes months to get a good customer. But it only takes a few minutes to lose them.” So much of what we do relies on having good people at Beck Oil; such as the sales team, drivers, dispatchers, yardmen, clerical, as well as management personel. CEO and founder, Glenn Beck, has said over and again that Beck Oil’s success depends on not just a select few but on all Beck Oil employees. They are very important and key to our future success. When one fails we all fail. If one succeeds we all succeed. Tell us about your other endeavors. Well, outside of Beck Oil I am an accomplished guitar player. I have been having fun playing and recording music many years. I get calls periodically to record on this project or that project. I am in the final stages of recording an instrumental album which will be a mix of Jazz, Rock, Country and Blues. It’s something I wanted to do for family and friends as well as for myself. And I still can be found playing guitar with Southern Spirit now and then around the High Desert. As an Apple Valley High School Alumni Class of 84’ I recently started toying with the idea of recording a CD with the Jazz Band just for the fun of it. It seems like it would be a lot of fun. And they are really good, too! And since school funding for the arts has been hit so hard the last few years it may be a neat way to raise money for their performing arts department.


Name: Joe Eiffert Company: Beck Oil Inc. Founded Locally: Victorville in 1967 Position: Territory Sales Consultant Time in Position: 2 years (8 with company). My number one job is husband and dad! And with 2 teenage daughters you would think that is enough to keep me busy. Beck Oil has given me the flexibility to be involved with the HD communities. I’m the Treasurer for the Adelanto Chamber of Commerce and perform guitar with local band, Southern Spirit, for over 20 years now. I also promote and do what I can for groups and organizations I believe in; such as the Boy’s & Girls’ Club of the High Desert.

For more information about Beck Oil Inc. check them out at or find them on Facebook, Twitter or LinkedIn. Ask about walk-in discounts, upcoming programs, or one of their many services. Beck Oil - Serving the High Desert since 1967.

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Ethnic Economics



With San Bernardino County’s Hispanic

residents now making up aproximately 50 percent of the population, High Desert business owners must learn how to cater to the Latino culture — a market that no successful business can afford to ignore. There are several things to take into account when developing a strategy to capture a portion of the large High Desert Hispanic market. Immigration and the increase in the High Desert Hispanic population is also a large factor in why we’re seeing more multigenerational homes, according to Dino Bozonelos, Professor of Political Science at Victor Valley College, and director of the school’s award winning Model United Nations Program. Too many businesses are still marketing to the typical “nuclear” family, which consists of a mother, father and two kids, said Bozonelos. In reality, a home occupied by three or four generations of the same family is becoming more and more common. “A lot of businesses don’t understand how much buying power is just within one house because of the number of people living in the homes,” Bozonelos added. From 2000 to 2012 multi-generational households in San Bernardino County have increased from 3.7 to 4.4 occupants per household. A common mistake among many businesses is to simply translate their marketing into Spanish and send them out, but studies show that “bilingual” materials make a far greater impact in multi-generational households. First generation immigrants are eager to learn English, their children learn English and Spanish from the start and the third generation learns English and is eager to learn better Spanish. Only true bilingual marketing will reach every potential customer in the typical Hispanic multi-generational household. Capturing this growing market is an investment that is bound to pay off according to Eric Camarena, the Chairman of the Board for the High Desert Hispanic Chamber of Commerce. “Once you’ve built a relationship, Hispanic customers and clients tend to be very loyal,” Camarena said. With the county’s Hispanics making up around 50 percent of the total population, Camarena says businesses can always do more. “It helps to have Spanish speakers on staff, but if you don’t - it’s not a deal breaker. Often times they’ll have a family member translate for them,” added Camarena. He cited Vallarta Supermarket as one of the businesses that is really hitting a home run in terms of capturing the local Hispanic market. “They’re a one-stop shop. They have insurance agents, home mortgage, and other shops in their store,” he said. Camarena also noted that the new Stater Brother’s store in Hesperia has a large in-store Mexican restaurant. “I think you’ll see more business move to a similar format,” Camarena said. Given the fact that San Bernardino County remains one of the last inland counties with room to grow, boasting a lower cost of living than its neighbors, it’s safe to say that as the economy picks up speed, population growth and the multi-cultural diversity of the region will likely follow suit. If businesses want to thrive in this changing environment, they will have to adjust their models and their marketing to meet the multi-cultural needs of the region.

Staff Photo: The steady stream of shoppers at Vallarta Supermarket in Victorville is a testimony to how more targeted ethnic marketing can work for business.

Effects of New Demographics in Government and Beyond By RYAN ORR

Statewide, Hispanics make up 38 percent of the population. Locally, Adelanto currently boasts the highest local Hispanic population at 58 percent followed by Hesperia and Victorville with 48.9 percent and 47.8 percent respectively. Hispanics are not the only group of folks changing the cultural landscape. Victorville is the only city in the Victor Valley that has actually shown a decrease in the Hispanic population, while the number of African American residents has been on the rise, according to Dino Bozonelos, Professor of Political Science at Victor Valley College. While businesses work to broaden their reach to growing groups in the High Desert, business models are not the only things that will change as a result of the influx of Hispanics. Such a large population in one county will no doubt change the political

landscape, and the very nature of what types of new businesses open in the area. The growing influence of Latinos has already rekindled a nationwide debate on immigration reform. In Texas, a republican stronghold since 1976, groups like Battleground Texas are targeting Hispanics, and recruiting them to vote democrat. Hispanics now account for 65 percent of the Lonestar state’s population increase. Bozonelos is quick to point out that “demography isn’t destiny,” and just because we’ve seen a growth in the population does not mean it will continue. According to Bozonelos immigration has really slowed down; so has the birthrate of Latinos both in the United States and those residing in Mexico, which coincides with an alarming drop in birthrates among all demographics in America.

Summer Is Here!

Time to Get Your ROCK STAR On!

Exclusively By Esther Castanon

Voted By Readers of DAILY PRESS Ryan Orr has been published in several magazines and was a reporter and political columnist for the Daily Press. He continues writing by contributing to local publications within the water and wastewater industry.

BEST IN THE DESERT 2013 Esther can be found at HAIR & NAIL PRECINCT - 12170 Spring Valley Parkway, Victorville CALL FOR AN APPOINTMENT 714-476-5631



Email Marketing still an area of growth for SMBs


Recent studies have shown that email marketing is

still an area of development for small and medium businesses (SMBs), offering opportunities for smart marketers. Of particular interest is the growth of mobile email reading, reaching over 50% mobile open rates in some industries. When compared to the hard costs of direct “What new mail, email marketing developments seems like an easy choice. will affect your With many free options email marketing to manage professionalprogram in the looking campaigns, even a next 12 months?” solopreneur can whip out regular emails to their list. This convenience has a flip side, however. It is also easier to turn potential customers off by sending out poorly-thought-out emails that turn mobile readers off. MarketingSherpa’s 2013 Email Marketing Benchmark Survey asked SMB marketing professionals, “What new developments will affect your email marketing program in the next 12 months?” 58% responded that the pervasiveness of mobile will affect them. This tracks with the study released by Knotice, Inc., demonstrating that 41% of emails are now opened on a mobile device. Those numbers are from the thousands of emails they process for SMB

marketing campaigns in Q3/Q4 2012. Compare that to the first half of 2012, where 36% of emails were read on a phone or tablet. When broken down by industry, some segments have reached “the tipping point”, where more than 50% of emails are read on the go. What does this mean for High Desert small businesses? First impressions are everything. Whether opening on a desktop or smartphone, users are only going to open marketing emails that have subject lines they find compelling. Copyblogger ( has excellent resources

HDBJ NEWSMAKERS Lisa Kiplinger Kennedy has joined the High Desert Business Journal team as the publication’s Marketing Director. A native of Apple Valley, Lisa has dedicated her life to making the High Desert a better place. With a Master’s Degree in Business she has taught at Victor Valley College. She is active in several local non-profit groups including The High Desert Phoenix Foundation. She and her husband John have run successful locally based companies for several years. She is eager to help local businesses find an advertising package that works for them in the HDBJ. “Welcome Lisa. We are proud to have you.” HomeSource Real Estate has expanded their Property Management division with the addition of Dawn Leach, a professional property manager who brings over twenty years of property management experience to HomeSource’s real estate team. Dawn is an experienced manager of a diverse portfolio of properties including single family residential and multi-family properties. Her skills include lease negotiations, rental rate assessments, tenant relations, asset management, budgeting and allocation, and capital improvements. Dawn’s services include lease-ready preparation, tenant screening, credit reports, lease contracts, rent collection, tenant issues, vendor contracts and management, financial records, maintenance needs, capital improvements, property inspections and emergencies including flood and fire. HomeSource is excited to have her join their team.

Lena Quiñonez was chosen as this year’s Town of Apple Valley

Employee of the Year. The announcement was made at the Town’s annual employee awards and recognition dinner held in the Apple Valley Conference Center. The annual award is the result of peer voting among the employees.

for writing headlines and subject lines that get readers to engage. The Retail Email Blog,, has a handy “daily inbox” email that reviews marketing pieces sent from a wide range of retailers, evaluating them on points including subject lines. These are great sources for ideas that are free. Mind your mobile. Screen space is limited on most mobile phones, and even on many tablets. Make sure you create your emails with the needs of mobile readers in mind. Keep emails short and sweet. Make calls-to-action clear and easy to access. Make sure that images included in the email have “alt” descriptions so that readers with images turned off can still get the gist of what you’re talking about. And select a template that is “responsive”, which means that the layout automatically changes to the optimal format based on the device it is being viewed on. Do something different. Many businesses send out a newsletter. Others send out coupons or deals. Fewer businesses send out follow-up emails after a purchase, offer a free gift on a customer’s birthday, or send an email when someone abandons an e-shopping cart. Consider what you can do to stand out where others are content to just skate by. Alyssa Penman is a local business advocate and marketer who champions the independents of the Victor Valley through, and serves independent businesses nationally at She can be reached at

IN BRIEF Gov. Jerry Brown is working to eliminate a state

$700-million tax break for "enterprise zones" aimed at creating jobs in economically strapped localities. The governor failed in his efforts in 2011 to eliminate these politically popular quarter-century-old zones, located in the legislative districts of about three out of every four lawmakers. According to the Los Angeles Times, in his revised May budget, Brown proposed that 40 enterprise zones be replaced by a sales tax credit for companies that purchase manufacturing or biotech research and development equipment. Currently, employers in enterprise zones can get tax credits of up to $37,000 per hired person in an area identified as blighted. Some of the existing zones include portions of Los Feliz, Silver Lake and Venice in Los Angeles, suburban Santa Clarita and the SOMA district of San Francisco — neighborhoods that are far from economically depressed. HDBJ is watching this closely and will be interviewing High Desert Economic Development directors to see what type of impact this will have on our region if it is passed. To stay in the conversation -

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9:20:52 AM



12 People You Need To Know June’s Featured Guest

JASON LAMOREAUX By HDBJ Editor In Chief, Gretchen Losi

in land and commercial development -- along with home building. In 2008 Jason and Chris purchased Coldwell Banker in Victorville. About that same time they started HomeSource Real Estate which specializes in residential real estate and land. He said it’s the fastest growing residential realty company in the Victor Valley. “We looked at starting in three different He’s the King Midas of business. Everything locations, Fresno, San he’s touched has turned to Diego and the High “Ten years from now our local population gold. But unlike Midas, his Desert,” said Jason. “From will be well over 600,000. I anticipate retail success came from sweat, and office will grow exponentially at 50 an opportunity stand long hours and a savvy percent or more.” Jason Lamoreaux, point it was a no brainer. business mind. President Coldwell Banker Commercial. This is the largest growing Jason Lamoreaux has community in the State worked hard at turning of California. We are now every business venture he’s taken part in into a a metropolis and we will continue to grow as top grossing and high performing company. such. ” He started his first company, ‘Inland Cellular,’ Once again, their business savvy paid off. in 1990. Within a year he and his wife Chris also “We based our company here from the start purchased their first “Rent-A-Wreck” car rental. and today we are the No. 1 Commercial Real Within five years the dynamic duo were the Estate company in the High Desert,” said Jason. largest franchise system in the company with five While it’s no secret this region has been hit locations, including Palm Springs, Oceanside, hard over the past few years, Jason said it was Escondido, El Cajon and San Diego. expected and is already changing for the better. Not happy just being at the top – they broke He anticipates nothing but heavy growth for the through the ceiling and purchased a “Thrifty future. Car Rental” in San Diego and converted all “The market here is typical. Look back in the the stores over to their new brand. later they 50s and talk to people who have been here that bought two additional locations, Las Vegas and long. It’s just a cycle,” said Jason. “We’re already Orange County. In just a few years they went seeing a transition. Last quarter was very busy. from buying one little rental car facility in Palm Later this year we will see more expansion in Springs, to owning 12 locations, 2,400 cars, office, retail and industrial.” and employing 260 people; with $35 million in He said residential is going back up and annual revenue. commercial investors are buying land because As successful as they had become, the two they know the area is set to build again soon. couldn’t escape from their one true love – real And that’s just the beginning. estate. Both were raised in Barstow with families “Ten years from now our local population who have been well known in the real estate field will be well over 600,000. I anticipate retail and for decades. It’s in their DNA and they wanted to office will grow exponentially at 50 percent or dive in head first. more,” said Jason. “We will retain more dollars Dispite selling their auto rental business in going out of the area because fewer residents will 2000 with the intent of going into real estate spend their money elsewhere. This goes for retail on another oportunity interupted thier plans. and local professional services like accountants According to Jason, Budget Car Rental called and attorneys.” and said they had an operation in the Central When not thriving in business, Jason and Valley, “We purchased it with intent of quickly Chris focus on their second passion – travel. turning it around.” The two recently returned from a trip to Peru Three years later that one location became and Argentina. They also frequent Ecuador and several which delayed their real estate dreams for travel often to Europe where they visit with their four more years. good friends in Florence and Brussels. Finally, in 2004 they sold that business and While most 43 year-olds aren’t planning started a development company specializing out their retirement quite yet, Jason doesn’t

Name: Jason Lamoreaux Company: Coldwell Banker Commercial and HomeSource Real Estate Title: President Age: 43

have it on any radar. Conventional retirement isn’t a concept either of them seem to understand. “We love working. The thought of being idle..., well, it’s probably a disease... but I just can’t do it. Some people can retire. I don’t think I can. I enjoy working,” said Jason. Instead, they hope to find several weeks at a time they can travel in-between maintaining a thriving business. And they plan to do it here in the High Desert. “Why would we go anywhere else?”

Business Philosophy of Jason Lamoreaux

It’s a simple philosophy, “Take care of your employees and associates.” First and foremost create an environment where they can thrive. In doing-so they will build your business and take care of your clients, providing them the best service. That’s always been the most important thing to us, taking care of our staff and associates.

Join us as we feature


during a special Executive Breakfast and LIVE interview. Get to know him better during a fun and lighthearted fireside interview followed by Q&A from those in attendance. WHEN: June 12th from 7:00 - 8:30 a.m. WHERE: Green Tree’s Fireside Lounge

$20 per ticket if you RSVP by June 7th. $25 at the door. Executive Breakfast included.

RSVP as space is limited!

E-mail us at or 760.244.8596 Invites also on Facebook


According to a recent Eriss survey, workforce

development efforts will need to be focused on providing skilled and unskilled jobs that are critical to the developing career path opportunities for clients. Basically, workforce development professionals, particularly those at the community college level, should invest in learning what skill sets are important to public and private agencies that will employ the next generation of workers. The same analysis described what employers value when it comes to skills and specialized training. Twenty-two percent of those surveyed responded that industry specific or technical skills were most important, followed by 16% wanting general industry knowledge from their future hires. According to labor market data supplied by EDD; total employment is estimated to grow 17% through 2020 in the RiversideSan BernardinoOntario Metropolitan Statistical Area. The job sectors that will see the most growth are logistics,solid waste management and recycling, business services, and healthcare. This information is more or less confirmed by the WIBVictor Valley College students. There are several ways commissioned survey that the college is meeting these employer driven skill completed in 2012. It sets: degree-track programs, credit bearing certification, is important to note or not-for-credit certification training. that there are certain industry sectors that may overlap. A good example of this is aviation. Aircraft maintenance and related services can be classified in both logistics and/or transportation. Healthcare on the other hand, can be fragmented into three distinct areas including hospital, ambulatory care, and nursing facilities. The largest gains, nearly 30% growth, will be seen in logistics, particularly in warehousing, while business services will grow by roughly 28% and healthcare weighs in at 26%. By comparison, construction in the MSA ticks up by less than ten percent with most of those gains attributed to commercial build-outs. Residential construction in the High Desert will likely remain low for the next 12-24 months, although there are some encouraging indications in the construction industry. A steadily declining inventory of available homes will help increase prices adding to homeowner equity. As of now however, High Desert residential new construction remains largely unprofitable for builders. The economy is changing on a global scale and San Bernardino County is no exception. At a time when labor force participation is at a 34 year low, alignment of curriculum with employer needs is at a crucial crossroads. Community college educators statewide are exploring ways to meet the challenges of a modern economy. Victor Valley College in particular is an example of how the higher education system is responding to the needs of a changing market, by more closely aligning its curriculum to what is really needed in today’s evolving labor market. James is the contract & community education manager for the Victor Valley College Foundation.







Fireside Chat With Editor Gretchen Losi & Town of Apple Valley Council Woman Barb Stanton

Bring Clients. Bring Staff. JUNE 12th

7:00 - 8:30 a.m.

Jason Lamoreaux President Coldwell Banker Commercial President of Coldwell Banker Commercial, Jason Lamoreaux is a native of the High Desert and has been an integral part of the regions growth. Come learn more about Jason while gaining some insight as to where our region is heading and how we are getting there.

Bring Clients. Bring Staff. Green Tree’s Fireside Restaurant 14144 Green Tree Blvd. Victorville $20 per person - $25 at the door. RSVP early - space is limited.

RSVP Space is limited:

Mail@HDBJ.Biz call 760.244.8596 Like us on Facebook!

Great Wine Exceptional Atmosphere

Join us for these great events and market you business to THOUSANDS!

• Wine, Beer Micro Brews Panini Appetizers Desserts • Drink Specials every weekday 4-7pm

Thursday July 4th, 2013

• 25% off all bottles every Tuesday

Active Adult Expo

• $2 off all Wine Flights every Wednesday

Saturday August10th, 2013


• Live Music every Friday & Saturday

Classic Car Show & Trick or Treating

• Special Wine Tasting Events HOURS M-Th Noon - 10pm Fri Noon - 11pm Sat 2pm - 11pm Sun 1pm - 7pm

Saturday October 26th, 2013 14845 Monarch Boulevard next to Victor Bowl (760) 843-3888 Text DVINE to 37398 for special offers! Follow us on Facebook & Twitter for event info.

Reserve your booth or sponsorship today! Call (760) 241-1313



SCLA’s Impact Felt Across the High Desert By KEITH METZLER

Some SCLA History The 5,000 acre industrial park now known as Southern California Logistics Airport is the site of the former George Air Force Base, which operated from 1941 until December 1992. During its existence, George Air Force Base helped transformed the High Desert from a small rest stop along Interstate 15 into the significant economic region it is today. However, as the largest employer in the community, the closure of George Air Force Base in 1992 helped decimate the local economy, eliminating over 7,500 local jobs.

M&Ms Mars, a 495,000 square feet in a building at Southern California Logistics Centre

Contributing an estimated $600 million

to the local economy, Southern California Logistics Airport (SCLA) has had a significant impact on the region over the past decade. Redevelopment efforts ranging from building retrofits, infrastructure improvements and even large scale new construction have all contributed to the most active development project in San Bernardino County. Because of its location, SCLA was the perfect setting to create a logistics center that combined aviation services with large scale industrial development sites for manufacturing and distribution. Aviation activity in the next year is expected to increase for many SCLA tenants including the largest aircraft painting company in the world, Leading Edge. The company recently signed an agreement for fleet painting services with the world’s largest airline, the recently merged American Airlines. Industrial development at SCLA includes over 3 million square feet of new development since 2004, with over 60 million square feet of industrial space planned upon full build out. Just last year, Newell Rubbermaid expanded its facility by 176,000 square feet, adding over 65 new employees to its operations. SCLA’s multi-pronged approach has been extremely successful in bringing Fortune 500 companies to the High Desert. SCLA is home to aviation giants such as Boeing, Pratt Whitney, Leading Edge, Pacific Aerospace Resources & Technologies, Southern California Aviation and GE Aviation. Aviation services continue to expand, with tenant partnerships such as Boeing and Pacific Aerospace Resources & Technologies 10 year agreement for maintenance services at SCLA. In addition, SCLA has attracted major industrial users such as Dr Pepper Snapple Group, Newell Rubbermaid, M&M Mars and United Furniture Industries.

Dr. Pepper Snapple on 54-acres of land housing an 850,000 squre foot manufacturing and distribution facility at SCLA

SCLA currently includes over forty companies across various industries, employing an estimated 3,500 people in the region. SCLA is anticipated to bring upwards of 20,000 jobs to the region upon full build out. As the largest employer in the High Desert, SCLA’s continued success will have a dramatic impact on the local economy for years to come.

Newell Rubbermaid, 584,412 squre foot facility at SCLA

Once known as George Air Force Base, currently known as Southern California Logisitics Airport

Future of SCLA’s FAA Tower Uncertain

In March, the Federal Aviation Administration

(FAA) announced cuts to 149 airport towers as a part of Washington D.C.’s sequestration spending reductions. The cuts include approximately $750,000 annually to operate the tower at SCLA. While the long term effects on SCLA operations and local tenants is not yet known, several prominent SCLA supporters have petitioned the FAA to reconsider cuts to SCLA. Congressman Paul Cook and San Bernardino County First District Supervisor Robert Lovingood urged the FAA to maintain funding for tower operations at SCLA, citing the significant impact SCLA has on the local High Desert economy and its vital logistical hub for the military. Over 40,000 troops travel through SCLA annually and hundreds more operate at the airport on a daily basis with various flight testing and logistical operations.



APPLE VALLEY GOLF COURSE RESTAURANT - A group of partners led by Chet Hitt and Kan Loi have entered an interim agreement to operate the Apple Valley Golf Course restaurant for up to 12 months, while a long-term lease is negotiated. Hitt is the owner of Wild Willie’s Smokehouse, a barbecue restaurant that served the Apple Valley Airport until recently. Loi owns the China Palace restaurant in Hesperia. The partnership was the only group to respond to the Request for Proposal the Town sent out earlier this year for a new food and beverage operator. "Breakfast and lunch will be served seven days a week, with a high quality, upscale dinner service to be added soon,” said Dennis Cron, Assistant Town Manager. "The food will include favorites from the Wild Willie’s menu, but be expanded to include new creations and daily special menu selections." The announcement is good news for service clubs and other groups that meet at the clubhouse. Rancherias Road, Apple Valley FIVE GUYS BURGERS - Five Guys has been a Washington, DC area favorite since 1986 when Jerry and Janie Murrell offered sage advice to the four young Murrell brothers: “Start a business or go to college.” Now their burgers, fries and free topping, to the delight of many local’s taste buds, have found their way to the High Desert. With over 250,000 different ways to order your burger, owner, Greg Anderson is anxious to see what the High Desert favorite becomes. 12719 Main Street, Hesperia DENNY’S RESTAURANT – Residents of Apple Valley can now get their ‘Moon’s over My Hammy’ at their very own Denny’s restaurant. Owner, Maher Ismail, and his family opened the doors for hungry customers in May serving up hot tasty food for customers and over 90 jobs for local residents. 18989 Bear Valley Road, Apple Valley

New ownership at the A.V. Golf Course.

Buy One Entree & Two Beverages Receive One Entree


Excludes all holidays, not to be combined with any other discount or offer. Must be presented to server before ordering. Offer expires July 31, 2013

High Desert Breast Cancer Survivor Celebration Breakfast We are expecting nearly 100 breast cancer survivors, co-survivors, family and friends! Space is limited!

Saturday, July 20, 2013


8:30 am to 10:30 am $20.00 per person

(Space is limited to one guest per survivor)

Raffle Prizes

Survivor Gift Pink Hats on Parade Contest

Location: Spring Valley Lake Country Club 13229 Spring Valley Parkway, Victorville

Register online today at The Running Ribbon is a registered trademark of Susan G. Komen®.

Proud Supporter of Survivor Breakfast



Reciprocation-AKA “Killing you with Kindness”


Editors Note: This is the second article in the series on Weapons Of Business Influence based on the book "Influence - The Psychology of Persuasion" by Robert B. Cialdini, Ph.D

A 14 year old boy is sitting outside a store with

a box of candy. “Sir, would you like to help our church and buy a candy bar?" “What kind of candy is this? I have never seen this brand." It was some generic candy bar I had never heard of, that was presumably made for fundraisers. I asked him how much it was. He replied, “Four dollars sir." Expecting to pay $1 or $2, I was a bit taken aback. "No, that is too expensive," I replied as I put the bar back intending to walk inside the store. "Sir, would you like to donate a dollar to our church, then?" I was happy to do that for him. I reached into my wallet and gave him a dollar. "Thank you sir, God bless you," he said as I entered the store. Then it hit me. This 14 year-old was using a sales and persuasion tactic that has been used by masters of persuasion for centuries. It is a simple technique called the rejection-then-retreat technique. Suppose you want me to agree to a certain request. One way to increase the chances that I will comply

is first to make a larger request of me, one that I will most likely turn down. Then, after I have refused, you make the smaller request that you were really interested in all along. Provided that you structured your requests skillfully, I should view your second request as a concession to me and should feel inclined to respond with a concession of my own—which would be complying with your second request. So when I was asked to buy the expensive candy bar, the kid knew that there was a good chance that I would say no. Thus he made his second request, which made me feel bad for not buying the candy bar and thankful that I could help him in a different way that would still make sense to me, thereby falling into the trap that was set for me. In retail business, reciprocity rears its clever head in the form of free samples. In most instances, a small amount of the product is given to potential customers to see if they like it. The beauty of the free sample however, is that it is also a gift and as such, can engage the reciprocity rule. A common sight at grocery stores and membership warehouses is the "free samples" tables spread

out all over the grocery area. A lot of shoppers find it difficult to accept samples from the sweet smiling attendants and walk away. So they buy the product, even if they did not particularly enjoy it. Savvy marketers have been abiding by the rule of reciprocity to generate business for years. People struggling to sell always say that “I know my products can sell itself ”. If you strongly believe that your product will wow people then get them to try it for FREE. What can you give people today that will cost you nothing except time to set up? Even gifts that cost tend to pay for themselves several times over based on the sales they can generate. To get the most out of this rule, you have to act first. Be the first to give. Secondly, don’t expect anything back. Then watch the magic happen.

Sam Thatte is a consultant, blogger and trainer featured on popular websites and blogs like and He produces helpful content on presentations and marketing on his own website at

There’s a Name for

High-Quality Care in the High Desert.

Heritage Victor Valley Medical Group is pleased to announce the addition of a new Business Development Department. This department is being added to work with Local Businesses to assist in the access to healthcare related issues in the work place. Whether it be an employee health fair during open enrollment or you need a physician to do a presentation at your workplace, Heritage is here to help! We are here to help: • Establish relationships with local businesses • Assist with health related issues in the work place • Provides access to medical personnel for informational talks • Participation in employee health fairs during open enrollment period • Conduct health care screenings at regular intervals • Improve employee health • Increase production and decrease lost days • Form better relationships between medical providers and the working population • Promote a healthier lifestyle • Develop an employee fitness program

For more information, contact Steve Orr at Business Development:

760-245-4747 ext. 498

For more information about our Primary Care Physicians or to join Heritage, call 760.245.4747 or visit

thank you

For Joining Us In Celebrating


Victor Valley Chamber of Commerce

1913 - 2013

of Victorville/Adelanto/Victor Valley

Media Partners

Chamber members circa 1913 Photo courtesy of Victor Valley College Library/Mohahve Historical Society





Name, Address, Telephone, Fax, Website

Local EITs/ Architects

Local Employees


Notable Projects

Top Executive/Title phone and e-mail

Year Founded Locally


Frick, Frick and Jette Architects Inc 19153 Town Center Dr. Ste 101 Apple Valley Ca. 92308 760-240-6211



Architectural planning and design serving industrial, civic and commercial.

Schools, office buildings, institutional and civic.

Gino Bastianon President



Robert A. Martinez AIA Architect & Associates 15487 Seneca Road Suite 203 760.241.7858 760.241.7854



Architectural Design and Planning Services as well as Certified Access Specialist Consulting. Revit Design Systems

Entitlement Architect for New St. Joseph Health, St. Mary Medical Campus in Victorville and various other commercial and medical buildings.

Robert A. Martinez AIA, CASp, CASI



Steeno Design Studio 11774 Hesperia Road. Ste B-1 Hesperia, Ca. 92345 760-244-5001 fax 760-244-1948



Architectural land planning, project design, construction documents and engineering for residential, commercial and industrial.

Mobil Gas Station Escondido and Ranchero Road, Thomas Steeno Burger King Main and G Ave Hesperia, Toys 4 Trucks Hesperia Road Hesperia



Firm ranked by number of architects and local employees. A questionaire was sent to all local firms, the above information was received by institutions who responded by the deadline. To be considered for future lists send e-mail to MAIL@HDBJ.Biz. Upcoming lists include residential and commercial real estate brokers, real estate appraisers, local banks and credit unions.


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*Credit decisions subject to credit qualification. Offer only valid for vehicles financed with new Equipment Express® loans approved and booked from 4/16/13 through 6/30/13. To qualify, customers must complete loan documentation requirements and deposit the loan check within 30 days of loan approval date. This offer is not valid for businesses located in the state of Connecticut. Gift card mailed within 60 days of loan check issue date. Gift card is subject to terms and conditions of the issuer. The value of the gift card will be reported as income to the IRS, state, and local tax authorities if required by applicable law, and the recipient is responsible for any federal, state, or local taxes due on this gift card. © 2013 Wells Fargo Bank, N.A. All rights reserved. SBS60-0087 (882037_08050)


Investors and Other Trends


One of the questions raised on the web these days

… Are investors good for our housing market? If you ask a young family looking for their first home they may be quick to tell you that they are very frustrated with these investors. They have written offer after offer only to learn that the seller accepted a cash offer instead. In fact last year in the Victor Valley approximately 40% of the residential sales were closed with all cash. According to the California Association of Realtors, the share of cash buyers has been on the rise since 2006. Currently, statewide the percentage of cash buyers is about 30%. Nationwide this percentage was 31% at the beginning of 2012 and is currently 28%. There are basically two types of investors in our area presently: Investors who buy to flip and investors who buy to rent and hold. The California Association of Realtors shows that the majority of investors are buying to hold and rent – in fact there figures show 83% of investors in this category. In our area there are many large investment companies that are buying single family homes instead of apartment buildings for residential rental investments. Generally the investor is getting a good return on investment with current rental income and BY THE NUMBERS: will hold these properties for 5-10 Percentage of Residential years hoping that home prices will Home Cash Buyers continue to rise. 30% - California There continues to be a demand for houses to rent. One of the 31% - Nationwide 2012 factors in our market is the large 28% - Nationwide 2013 YTD percentage of past homeowners that lost their homes to foreclosure or choose to short sale their homes. Of the sellers in California who sold their homes in 2012, 53% became renters – they did not buy another home. This is however, an improvement from 88 percent of sellers who became renters in 2011 and 58% who became renters in 2010. There are also many well-known “flippers” in our market that over the last few years have been purchasing foreclosures, properties at Trust Deed Sales (courthouse steps) and other houses that are in poor condition. These investors buy properties that will not qualify for a home loans because they are missing appliances, have broken plumbing, and other conditions that are not permitted by lenders. These investors buy the properties for cash and have the cash available to make necessary repairs. These repaired homes are then relisted and offer a great opportunity for first-time homebuyers needing FHA financing. Last year home prices rose approximately 15% in our area and the California Association of Realtors economists are predicting a 5-7% increase in California median home prices in 2013. As our economy continues to improve and home prices continue upward the market will evolve and there will be opportunities for all.

NOMINATE TODAY! The High Desert Business Journal aims to recognize those building the High Desert’s future by making significant contributions to their industries, their companies and our community - and are under 40. HDBJ will honor our “40 Under 40” at an awards dinner in November and again in our Special ‘40 Under 40’ Issue. To be eligible, candidates must be 40 years old or younger as of Dec. 31, 2013, and their job must be based in in the H.D. NOMINATION DEADLINE JULY 1, 2013 Nominate as many as you would like friends, co-workers, employees, or those who are simply deserving.


To nominate send their name, contact info. including phone and e-mail, along with their company name. Caroll Yule is President/Broker/Owner of Shear Realty, the highest selling residential real estate company in the High Desert.

Robert A. Martinez, Architect and Associates

R.A.M. Architecture have provided a wide range of Medical, Commercial and Residential Architectural and Engineering Services for clients since 1994. Most currently R.A.M. Architecture has been commissioned to Master Plan the 98-acre St. Mary Medical Center Oasis Commercial Development in Victorville. Member of the American Institute of Architects (AIA) and Certified Access Specialist (CASp). CASp: Promoting the field of disabled access rights and constructing an accessible environment. R.A.M. Architecture has received Top 25 Inland Empire awards since 2000.

Robert A. Martinez, AIA, CASp R.A.M. Architecture


WATER COOLER Researchers at Georgia State have found that one in four Americans use “alternative financing” options such as payday loans, pawn shops, auto title loans and tax refund anticipation loans. – The Washington Post Nearly half of all working class Americans skipped necessary medical care last year because it was too expensive. Most of those 80 million were uninsured, but 28 percent said with good insurance they still did not go for treatment due to costs. – More than 30 percent of the world’s 200 richest people – with a collective net worth of $2.8 trillion – control their fortunes through offshore holding companies that hide assets from tax authorities and lawsuits. – Bloomberg Sixty-nine percent of Internet buyers do research online before purchasing a product, and almost 80 percent of them say they change their purchasing decisions based on negative product reviews. Even more of them – 87 percent – say they make up their minds based on positive reviews. – Wall Street Journal

Tel. 760-241-7858 Fax. 760-241-7854 email:

Fifty-nine percent of Americans who consider themselves solidly middle class, “are concerned about falling out of their economic class,” according to a new poll. – Carbon emissions from U.S. power plants were 12 percent lower in 2012 than at their peak in 2007, even though the economy is now larger. Emissions last year were about the same as they were in 1995, largely because cheaper domestic natural gas has supplanted dirtier coal power plants. – College textbooks have risen in price by 812 percent since 1978, far outpacing even the 559 percent increase in tuition and fees over the same time period. The average student at a four-year college pays $655 per year on textbooks and supplies. – Huffington Post Under the agreement that avoided the fiscal cliff, the top 1 percent of U.S. taxpayers – those with annual income of roughly $500,000 – will pay an effective federal tax rate of just over 36 percent, more than at any time since 1979. – The Atlantic full_page_ad_martinezarch092412_hdj.indd 1

9/26/2012 3:51:37 PM


Labor Participation Remains Low Despite Job Gains By Keith Hall

This year the economy is adding more jobs per month

than it did in 2012, according to new data from the Bureau of Labor Statistics. However, Mercatus Center senior research fellow Keith Hall—a former BLS commissioner— said that the labor participation rate is still quite low and the economy is not yet adding enough jobs to stimulate a robust recovery.

Be sure to join us the 2nd Wednesday of each month for

HDBJ’s “People You Need to Know” Breakfast and LIVE interview. SCOTT KUBICEK

CAROLL YULE President Shear Realty

General Manager Wal-Mart Distribution Center




Owners Golden Corral Restaurant

St. Joseph Health, St. Mary



Executive Director Family Assistance Program

President Coldwell Banker Commercial & HomeSource Real Estate

ROBERT MARTINEZ Owner, Robert A. Martinez AIA Architect & Associates


Owner American Housing Group

DEBBIE CANNON Vice President, C.O.O., Academy for Grassroots Organizations

June’s Featured Guest ALAN GARRET C.E.O. St. Joseph Health, St. Mary


Your sponsorship gets your business radio & print advertising, with mass marketing through all of HDBJ’s event promotional material. Call HDBJ Marketing Director Lisa Kiplinger Kennedy to learn more! 760-954-5334


The number of multiple jobholders rose by 340,000 this month, to 7.26 million — a rise larger than the headline rise in payrolls. Which means that one way of looking at this report is to say that all of the new jobs created were second or third jobs, going to people who were already employed elsewhere. Meanwhile, the number of people unemployed for six months or longer went up by 89,000 people this month, to 4.8 million, and the average duration of unemployment also rose, to 36.9 weeks from 35.3 weeks. Source: Marginal Revolution

“For 2013 so far, we’ve averaged a gain of 196,000 jobs per month, a faster pace than the 183,000 rate in 2012. However, the labor force held constant as the participation rate remained at 63.3 percent, the lowest level since 1979. While the unemployment rate has dropped by 0.4 percentage points since January, this was primarily due to declining labor force participation, as the employment rate held constant over this period.” Although the unemployment rate has dropped to 7.5 percent from a peak of 10 percent in October 2009, the current employment rate of 58.6 percent is nearly the same as the October 2009 rate (58.5 percent), according to Hall. “Average monthly job gains since the end of the recession have only been enough to keep up with population growth. So most all of the decline in the unemployment rate is the result of people dropping out of the labor force.” Reprinted with permission by: MERCATUS CENTER AT GEORGE MASON UNIVERSITY



State Finances - The Good the Bad and the Ugly April was another positive month for

by $113.4 million, or 26.6%, after falling short in March. Housing and jobs market, along with voterapproved income and sales tax increases, are clearly seen in the resurgence of revenues from a year ago. Driven by rising incomes and consumer spending, total revenues in April were $5.4 billion above, or 55.9%, their level of a year ago. Looking at the entire fiscal year to date, beginning last July 1, total General Fund receipts are running $5 billion above, or 6.5%, estimates included in the Governor’s Budget. Despite April’s pickup, retail sales tax receipts are still below estimates but have been offset by better corporate tax figures and a strong performance in personal income taxes. Total disbursements or spending for the first 10 months of the fiscal year are tracking almost precisely to Budget projections. For the fiscal year-

California’s economy and fiscal picture. According to the state controller’s May report on April’s state finances, revenues came in close to expectations, although a cautious stance remains warranted going forward. Relative to estimates provided in January as part of the Governor’s 2013-14 Budget, total revenues were down $119.9 million, or 0.8%, shy of estimates. Because of its dominance as a driver of State revenues, a miss in personal income tax receipts relative to projections was the major culprit. These receipts were $275 million below, or 2.2%, estimates. Final returns filed in April were somewhat lower than estimated, while tax refunds issued during the month were higher. In contrast, corporate taxes continued to improve and beat projections. Median Home Prices (Single family) Retail sales Single Family Home Sales (Condo and Houses) were the New Monthly Mortgage Payment primary boost as Payroll Employment they bested Newly Permitted Reidential (single and multi-family) projections


to-date, they were just $140.8 million above, or 0.2%, estimates and remained well below the yearago comparable figures. However, it should be noted that for April alone, total spending did run well ahead of estimates, implying that this situation will need to be closely monitored. On balance, California’s fiscal health has improved materially and the state is beginning to turn the corner. At the beginning of the current fiscal year, the state had a carry-over deficit of $9.6 billion. For the first 10 months of the current fiscal year, revenues have exceed-ed disbursements by $3.8 billion. As a result, the General Fund deficit has shrunk to $5.8 billion. This is still a sizable burden, but it is a start. Source: California State Controller’s Office

March 2012

March 2013

$251,000 37,481 $901 14,306,200 6,181

$313,000 37,764 $1,134 14,592,000 4,840

CA anti-sprawl laws fail, TX low-zoning works By Wayne Lusvardi

Californians are fleeing the center of their big cities while suburbs are suffering from slow growth. If it were not for international inmigration, California’s older big cities would be suffering from population decline the same as Detroit. Texas has become the “New California” by figuring out the formula to sustain the population of its older city centers while its suburbs are booming at the same time. The U.S. Census Bureau recently released its Census of California metropolitan areas from 2010 to 2012. Every older large city in California is experiencing flight of its long-time residents, who are being replaced by international migrants. If it were not for international migration, the older core of California’s big cities would be in a sudden, massive population decline. Property values and the property tax base would likely also fall. In Riverside-San Bernardino, 4,421 residents

moved out, but 6,649 international migrants took their place. The older core of Los Angeles lost 122,534 of its older residents from 2010 to 2012. In their place a wave of 118,961 net international migrants moved in. In San Jose, 7,029 older residents moved out but were replaced by 30,315 international migrants. In Sacramento’s old city core, 2,086 residents moved out and 11,150 international migrants moved in. California suburbs have experienced roughly

“In Riverside-San Bernardino, 4,421 residents moved out, but 6,649 international migrants took their place.” balanced migration. But unlike Texas suburbs, Golden State suburbs are suffering from slow population growth. The new Metropolitan Area Census shows 135,545 new migrants to California suburbs, reflecting only a 0.3 percent increase per year from 2010 to 2012. Of this, 69,744, or 51 percent, were international migrants. California is not experiencing a “return to the city” or a “suburban growth boom.” This is the opposite of what is happening in the metropolitan areas of Texas, where older cities are experiencing more balanced in-migration and its suburbs are booming from high levels of domestic in-migration. Reprinted with permission by Cal-Watchdog




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