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KERN Journal Business

Vol. 3, No. 1

February/March 2014

Paramount launches Halos ads Page 7

Agriculture issue

Cover story

Kern’s diverse agriculture fuels economy

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rom cows to carrots, Kern County agriculture products are feeding people around the globe and strengthening the local, state and national economies. Kern’s agriculture enterprises generate a fifth of the county’s gross domestic product and employ up to 20 percent of the workforce. In 2012, the county’s agriculture economy produced $6.2 billion in total value, nearly tripling the 2000 total value of $2.2 billion, according to the Kern County Department of Agriculture and Measurement Standards Crop Report. In an article on page 22 of this issue, the Agricultural Issues Center at UC Davis notes, “For every 100 jobs linked directly to the San Joaquin Valley agricultural industry, an additional 106 jobs were created in the local economy. In addition, for every dollar of income paid to agricultural employees, an additional $1.05 of non-agriculture labor income is generated in the San Joaquin Valley economy. Overall, every dollar of value generated by the region’s agriculture industry leads to an additional $1.27 generated by the region’s non-agricultural economy.” — Kern Business Journal

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

Photo courtesy of Grimmway Farms

They say a picture is worth a thousand words. How true that is with this spectacular photograph contributed to the Kern Business Journal by Grimmway Farms. The rich, dark soil and lush green lettuce plants growning in a field near Bakersfield demonstrate why Kern County is California’s agricultural giant. Stories presented in the journal’s special agricultural issue provide a sampling of the industry’s diversity.

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INSIDE

Nut Festival – Building on the success of last year’s inaugural Kern County Nut Festival held at the Kern County Museum, organizers are inviting individuals and companies to participate as sponsors and vendors at this June’s festival. Page 20

Farmers Market – Old-fashion glass

jugs of milk are among the many products that can be bought at the weekly Haggin Oaks Farmers Market presented by Kaiser Permanente. The market promotes healthy eating. Page 8

Livestock – In a 2012 ranking, cattle and calves are ranked as the sixth highest valued commodity in Kern County. Eggs and egg products come in at number 16. Kern was ranked as California’s number one sheep and wool producing county in 2011. Page 12

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“W

e understand your needs are unique

and know that the success of your farm,

ranch, dairy, vineyard, orchard or other agricultural business depends on sound advice from trusted professionals.�

J OHN E TCHISON Senior Vice President, Agribusiness With a family farming background and 30 years of experience in agricultural lending and banking services, John leads the team of agribusiness lending professionals at Valley Republic Bank. The department is full-service, offering Farmer Mac loans, agribusiness loans for equipment, lines of credit for crops and livestock and farm commodities, real estate financing for facilities expansion, and more.

Local. Responsive. Reliable. 5000 California Avenue, Suite 110 661.371.2000

11330 Ming Avenue, Suite 400 661.617.2130

valleyrepublicbank.com Valley Republic Bank (VLLX)

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Dianne Hardisty

Journal KERN Business Showcasing Kern County business and industry Vol. 3, No. 1 Feb./Mar. 2014 Kern Business Journal is published by The Bakersfield Californian. Copies of the bi-monthly journal are available from The Bakersfield Californian, Kern Economic Development Corp. and Greater Bakersfield Chamber of Commerce. Publisher Ginger Moorhouse President/CEO Richard Beene Senior Vice President Revenue and Marketing John Wells Editor Dianne Hardisty Art Director Glenn Hammett To submit a story kernbusinessjournal@gmail.com To advertise mpatel@bakersfield.com Mira Patel 395-7586 To subscribe 392-5777

Kern County agriculture a global powerhouse

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griculture is a powerful engine for Kern County’s economy. It generates a fifth of the county’s gross domestic product and employs up to 20 percent of the workforce. The impact of the crops grown in Kern’s fertile soil is felt around the globe. The Brookings Institution reported recently that the Bakersfield metropolitan area, which includes all of Kern County, is the nation’s top metro area for which trade with Canada and Mexico accounts for the largest share of total traded goods. North American trade accounts for 44 percent Dianne Hardisty of Kern’s total trade. The accompanying chart gives Kern’s top rating perspective. Familiar products grown in Kern County, such as almonds and pistachios, can be found on tables throughout the world. For example, California produces 82 percent of the world’s almonds, with about 800,000 acres of the tree nut planted in the Central Valley. The same is true for pistachios. About 99 percent of the world’s pistachios are grown in the state. The February issue of the Kern Business Journal presents many stories told from the

growers’ perspectives that provide insights into the opportunities and challenges facing Kern’s booming agricultural industry. Drought emergency declared Last month, Gov. Jerry Brown declared a drought emergency after three years of little rain in California. The driest year on record has left some reservoirs and rivers at critically low levels. Water is one of the biggest cost factors – and concerns – for Kern County’s farmers. In this issue of the Kern Business Journal, such groups as the Water Association of Kern County showcase how local farmers are using sophisticated conservation measures to grow

Business at-a-glance

Forbes publisher is Kerrn County Economic Summit’s keynote speaker

Photo courtesy of Potsdam

Bakersfield-based Rain for Rent has teamed up with Portadam, a leading U.S. provider of portable dams. The two companies are reconstructing the Huguenot Memorial Bridge in Richmond, Va. Rain for Rent, Portadam develop construction partnership Completing construction projects that require isolation of a workspace from water presents a variety of challenges. Bakersfield-based Rain for Rent has helped clients deal with these types of water issues since its beginnings in 1934. As decades have passed, Rain for Rent has evolved and expanded. Most recently, the company struck up an exclusive partnership with Portadam, a leading U.S. provider of portable dams. Portadam utilizes temporary cofferdam equipment, which enables contractors to perform in-water

work in an environmentally friendly and dry condition. Then equipment, such as pumps, tanks, filtrations, spill guards and hoses is needed to handle the liquids. Rain for Rent offers these services to contractors. With 65 combined locations across the U.S. and Canada, the partnership between Portadam and Rain for Rent allows its clients easier access to integrated cofferdam and dewatering systems. These systems are used in construction, remediation, flood protection, rehabilitation, and inspection projects in rivers, streams, lakes, reservoirs and other retaining areas. — Portadam Inc.

Forbes magazine publisher Rich Karlgaard will be the keynote speaker at the 14th annual Kern County Economic Summit on March 26. The summit will be held at the DoubleTree by Hilton in Bakersfield from 7 a.m. to 12:30 p.m. The summit is presented by the Kern Economic Development Corp., the Greater Bakersfield Chamber of Rich Karigaard Commerce and California State University, Bakersfield. Read by 5.5 million people, Forbes is one of the world’s most popular business and financial magazines. In each issue, Karlgaard writes “Innovation Rules,” a column covering economic and technology trends, business transformation and conversations with leading CEOs. The Kern County Economic Summit is designed to educate and broaden participants’ perspectives of international, national and regional economies, and how each influences the growth and future of Kern County. Sponsorship opportunities for the event are available by calling Laura

more crops with less water. Subscribe to Kern Business Journal An increasing number of people have been calling or emailing asking how to subscribe to the Kern Business Journal. The free bi-monthly publication is available at The Bakersfield Californian, Kern Economic Development Corp., the Greater Bakersfield Chamber of Commerce and in a few newspaper racks in metropolitan Bakersfield. To have a copy mailed to your home or business, call (661) 392-5777. Dianne Hardisty is the editor of the Kern Business Journal.

Wiener at (661) 319-8823 or Mira Patel at (661) 301-2081 or by visiting www.kedc.com. Registration for the summit will open in February. — Kern Business Journal Tejon executive elected to board Eileen Reynolds, vice president of government affairs at the Tejon Ranch Co., has been elected vice-chairwoman of the California Building Industry Association. She will serve with a new slate of 2014 officers headed by Chairman Dan Kelly, senior vice president of governmental relations Ellen Reynolds and corporate communications for Rancho Mission Viejo. Chris Austin, managing partner at Development Planning and Financial Group, will serve as chief financial officer and secretary. Former Stanislaus County Assessor Dave Cogdill, who previously served as a state senator and assemblyman, is the CBIA’s chief executive officer and president. The California Building Industry Association is a statewide trade association based in Sacramento that represents thousands of member companies, including homebuilders, trade contractors, architects, engineers, designers, suppliers and other industry professionals. — California Building Industry Association

The Outlets retailers named Twenty-three of the expected 70 retailers coming to The Outlets at Tejon Ranch have been identified. The first phase of the 320,000-square-foot, $90 million shopping center opens Aug. 7. The tenants, whom officials said had signed lease agreements with Tejon Ranch Co., are: Banana Republic Factory Store, Famous Footwear, Gap Outlet, Aeropostale, A’gaci, Auntie Anne’s, Carlisle, Chico’s, Coach, Hot Topic, Lids, O’Shoes, Perfumes 4U, Puma, Rack Room, Skechers, Tilly’s, White House Black Market, H&M, Wilsons, Calvin Klein, Tommy Hilfiger and Van Heusen. --Kern Business Journal

Tehachapi firm develops powerful light A Tehachapi company announced it has developed a pocket-size black light flashlight that, with 51 ultraviolet 395 nanometer LEDs, is 30 percent brighter than the competition. A company news release reports the product helps detect bed bugs, pet urine in carpet, valuable minerals, leaks, counterfeit currency and forensics evidence. Power Tek’s 51 LED ultraviolet flashlight sells on Amazon for $15.75. — Power Tek

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Kern targeted with Healthy Choices programs

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he Kern County Department of Human Services’ Healthy Choices Program was established in 2012 with a Supplemental Nutrition Assistance Program Education (SNAP Ed) grant from the U.S. Department of Agriculture Food Nutrition Services. In partnership with the Kern County Department of Public Health Services, the Kern County Aging and Adult Services and Pacific Health Education Center, Healthy Choices educators provide nutrition and physical activity education services throughout Kern County. The goal of Healthy Choices is to educate CalFresh participants about making healthier choices by increasing fruit and vegetable consumption, increasing physical activity and reducing sugary drink intake. Healthy Choices consists of a 30-minute individual or group workshop that educates participants about the importance of eating healthy using the USDA’s MyPlate as a guide. All participants receive a nutrition packet that is customized to meet their needs and a cookbook. In addition to the nutrition and physical activity education workshops, hour-long food demonstrations that take place at Human Services’ offices and senior centers give participants an opportunity to taste healthy snacks. Healthy Choices may be the only source of nutrition/physical activity education that CalFresh participants can receive at no cost. To date, more than 7,000 seniors, adults and children have been educated by Healthy Choices health educators. More than 70 percent of these individuals report making healthier choices since receiving this education. In 2013, Kern was selected to participate in the California Department of Social Services’ Get Fresh project. The purpose of the two-year grant for fiscal years 2014 and 2015 is to coordinate efforts and implement focused nutrition education interventions geared toward the needs of low-income residents. It is essentially an extension of the Healthy Choices project. This was a highly competitive grant. Twenty-five California counties competed and 19 were awarded the new Get Fresh grant. While the grant amount is not finalized, Kern is expected to receive $590,544 for the two-year period. — Kern County Department of Human Services

Bakersfield Californian file photo

The kitchen at the Buena Vista Edible Schoolyar assists a curriculum that relates garden care to academic subjects.

Edible Schoolyards give students taste of good food By Raquel Jacques

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n an effort to lower diabetes and obesity rates in Kern County, the Grimm Family Education Foundation’s Edible Schoolyard Programs aim to change the food behaviors of elementary school students. If you visit Buena Vista Elementary School in Bakersfield, you will see kindergarten through sixth grade students in the program making connections with their food in a 1.5-acre garden and kitchen classroom. Textbook concepts come alive in the garden as students learn about environmental processes, agro-ecology, food literacy, composting, harvesting, propagation and cultivation. After tending to the soil and growing seasonal, fresh vegetables, students participate in kitchen class – a space where everyone has a seat at the table. In the kitchen, students prepare delicious dishes using garden produce and seasonal foods. It takes everyone to complete the recipe. This winter, students are learning to dice root vegetables, prepare stock and layer flavors in a soup. Teachers at the Edible Schoolyard emphasize the importance of articulating preferences and completing tasks in a collaborative manner. When students are finished preparing, they set the table and sit together to enjoy the fruits of their labor. By engaging students in the entire process, from seed to table, they are more likely to try new foods. They have created an experience and attached meaning to a particular food.

Photo courtesy of the Grimm Family Education Foundation

Students at Buena Vista Elementary School in Bakersfield use their garden forks to cultivate the soil before planting spinach.

The garden and kitchen classrooms are natural places for academic curriculum to be woven into hands-on learning. The Buena Vista Edible Schoolyard serves approximately 890 students every year from Buena Vista Elementary School. In the fall 2012, the Grimm Family Education Foundation opened another Edible Schoolyard at Grimmway Academy Charter School in Arvin. The foundation’s initiative is an effort to teach children the value of eating seasonally and locally. Both Edible Schoolyard programs collaborate on curriculum design to provide students with the highest quality experience. Every lesson is designed to teach students the pleasure of growing and preparing fresh, local foods in a simple

and delicious way. In addition, Edible Schoolyard teachers weave math, science, social science and English language arts courses into the program whenever possible. Providing students with these handson experiences is just one of the ways the Grimm Family Education Foundation is changing the educational landscape in Kern County. Other initiatives include creating charter schools to provide parents with an alternative educational option and providing training for food service personnel in partnership with Cook for America. For more information about the Grimm Family Education Foundation, go to grimmeducation.org. Raquel Jacques is the administrator of Edible Schoolyard Programs.

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Citrus marketing war

Paramount goes head-to-head with its own success

Dianne Hardisty / Kern Business Journal

Fruit is sorted at the Paramount Citrus packing house in Delano. By John Cox

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t’s a tall order even for the branding geniuses who made Cuties a household name: top their own phenomenal success. Delano-based Paramount Citrus last fall kicked off a five-year, $100 million marketing campaign to persuade consumers to switch from Cuties to “Halos” -- as in, “pure goodness,” according to the new advertising tagline. The catch: There’s no physical difference between the two products. Grown mostly in the Central Valley, they’re a type of mandarin known as clementines or, depending on the time of year, murcotts. There is, however, a very real financial distinction. Paramount’s Los Angeles parent company, Roll Global, no longer has rights to the Cuties name -- even though its in-house marketing agency did the product branding work that industry people credit with changing the way produce is marketed. Paramount agreed to give up the Cuties brand this past spring as part of a corporate divorce from Pasadena-based Sun Pacific Marketing Cooperative Inc., which now owns exclusive rights to the product name. Both companies kept about 13,000 mandarin acres each in Kern and other parts of the southern Valley. Halos hit store shelves across the country in November. Some retailers sell them alongside Cuties -- and five-pound bags of each sell for the same $6.99. Paramount’s strategy is not only to recapture the children’s market Cuties has come to be associated with, but also expand it to everyone else, said Paramount Citrus’ vice president of sales and marketing, Scott Owens. “It’s appealing to a much broader audience,” he said. With that in mind, Paramount has produced three 30-second commercials for broadcast on cable and network television. The company plans to reinforce its message with a social media campaign, a smartphone game app for kids and merchandise give-

Dianne Hardisty / Kern Business Journal

A Paramount Citrus worker sorts fruit at the company’s packing house in Delano.

aways. The TV commercials focus on children who go from nice to ornery when adults try to take one of their Halos. “They’re angels, unless you mess with their Halos!” reads a company news release on the campaign. Industry expectations are high. Roll Global, after all, is the company behind POM Wonderful, which introduced Americans to pomegranates, a fruit many people east of the West Coast had never even heard of. Roll also owns Wonderful Pistachios, whose domestic sales have been supported by a series of hip, celebrity-laden TV ads. Then there’s the campaign’s price tag. Wisconsin produce marketing executive Melinda Goodman said $100 million may be the most money ever set aside for a produce marketing campaign. “I think it’s a number we’ve never seen before,” she said. The Halos campaign represents a relatively new idea in produce marketing, she said. In years past, fruit was fruit. Growers and grocers did little or nothing to distinguish one brand from another. Paramount’s work with Cuties helped change that, she said. “They’ve done a great job of creating brands” that are relevant in popular culture, she said. At the same time, conventional wisdom holds that even the best produce branding can achieve no more than 40 percent to 50 percent marketshare, she said. What Paramount has going for it is consumer demand for mandarins already established by Cuties, said Goodman, managing director of FullTilt Marketing, which also has offices in Florida and Minnesota. “Now all they have to do is get consumers to recognize that (Halos) brand,” she said. If it succeeds, Paramount has a shot at stealing marketshare from Sun Pacific, said Julie Lucido, a marketing professional at Fresno-based Marketing Plus. John Cox is a Bakersfield Californian staff writer. A longer version of this article appeared in The Californian in November 2013.

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Photo courtesy of Paramount Farms

Emmy awardwinning television host Stephen Colbert introduced Wonderful Pistachios’ new “Get Crackin’, America” ads during the 2014 Super Bowl.

Photo courtesy of Paramount Farms

Paramount Citrus has launched a multi-million dollar advertising campaign to introduce its Halo mandarin oranges.

Paramount Citrus launches campaign to promote Halos By David Krause

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aramount Citrus has announced the arrival of its new mandarin brand, Wonderful Halos, which is now available in produce aisles nationwide. In season November through April, the palm-sized fruits are sure to be a hit with kids of all ages for their sweet taste, easy peel exterior and seedless interior. “We’ve seen the popularity of California mandarins explode among families over the last few years,” said Marc Seguin, vice president of Wonderful Halos’ global marketing. “Halos are super sweet, nonGMO and the perfect snack for parents and their little angels.” To support the launch, the company is slated to spend a record $100 million over the next five years as part of an integrated campaign to market the “pure goodness” and uniquely delicious taste of the sweet, seedless and easy to peel fruit. The campaign includes national network and cable television spots with more than 2,000 airings of three different commercials. The commercials capture kids’ humorous reactions when they discover their parents are attempting to take their coveted Halos.

“Halos are super sweet, non-GMO and the perfect snack for parents and their little angels.” — Marc Seguin, VP of global marketing, Wonderful Halos They’re angels, unless you mess with their Halos! Kids and families can also enjoy Wonderful Halos in the palm of their hands outside of snack time by downloading Halos Fun, a new mobile game app. In the

game, three rascally raccoons steal all the halos from a graduating class of mandarins. The determined mandarins are forced to win back and collect their golden halos by being fired out of a slingshot and pingponging through a series of more than 100 fun, colorful levels. In-game stickers are available throughout multiple stages and unlock hidden levels, powers and secrets. To add to the Halos fun, users can also look for 15 special edition sticker codes on Wonderful Halos product and the Halos Facebook Page at Facebook.com/Halos to unlock exclusive levels and other valuable surprises. With each level set in iconic California places, the free Halos Fun App will provide hours of exciting gaming for the whole family. Wonderful Halos are available in 3and 5-pound bags and 5-pound boxes in produce aisles of grocery, mass and club stores nationwide. For more information, visit halosfun.com or Facebook/Halos. “The Wonderful brands team excels at taking commodity products, like pistachios and mandarins, and transforming them into household names that people recognize and trust,” Seguin said. David Krause is the president of Paramount Citrus.

Colbert makes Super Bowl debut with Wonderful Pistachios

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aramount Farms and its Wonderful Pistachios returned to this month’s Super Bowl with two new commercials starring Stephen Colbert, Emmy-award winning host and executive producer of Comedy Central’s “The Colbert Report.” Wonderful Pistachios’ second consecutive Super Bowl appearance, the advertisement kicked off a full-year agreement with Colbert under the campaign theme, “Get Crackin’, America.” As part of the agreement, Colbert and Wonderful Pistachios’ in-house creative agency, FireStation, will team up to create a series of spots that will air throughout 2014 highlighting the “Get Crackin’, America” rallying cry. Directed by Emmyaward winning director Tom Kuntz, the commercials will be supported by in-store point of sale (POS), public relations, digital and social media. “Last year’s Super Bowl spot featuring PSY drove significant brand awareness and incredible buzz among consumers,” said Marc Seguin, vice president of marketing, Paramount Farms, maker of Wonderful Pistachios. “This year, we wanted to extend and deepen that enthusiasm beyond Super Bowl with talent that excites and resonates with our core consumer target over the full year.” — Paramount Farms

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Kaiser Permanente’s farmers market showcases ‘eating healthy’ By Kristin Weber

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he Haggin Oaks Farmers Market presented by Kaiser Permanente is one of Kern County’s most thriving farmers market. Held on Sundays in the parking lot of Kaiser’s Ming Avenue medical complex, the market features fresh, local produce and gourmet food sold in a fun and relaxing environment. A partnership between Kaiser Permanente and The Hen’s Roost, the organization that manages the market, began in the spring of 2012. The market had gone through several managers and vendors, without reaching its full potential. With creativity, partnership and a shared desire to improve the lives of individuals through local food offerings, the Haggin Oaks Farmers Market presented by Kaiser Permanente is now a successful yearround activity. According to Jaclyn Allen, owner of The Hen’s Roost and manager of the Haggin Oaks Farmers Market, “We have a really strong core group of vendors and customers who make up our market family. The partnership with Kaiser Permanente has really helped the market to grow. Kaiser Permanente is focused on helping to create a healthier community. Without us working together as partners, the market would not have become so successful.” Hosting farmers markets at Kaiser’s medical office buildings and hospitals throughout California is the brainchild of Dr. Preston Maring, a physician in Kaiser Permanente’s Oakland Medical Center. Maring envisioned an environment where he could speak with his patients about the importance of includ-

Photo courtesy of Kaiser Permanente

The Haggin Oaks Farmers Market presented by Kaiser Permanente is held on Sundays in the parking lot of Kaiser’s Ming Avenue medical complex.

Photo courtesy of Kaiser Permanente

Old-fashion glass jugs of milk are among the many products that can be bought at the weekly Haggin Oaks Farmers Market presented by Kaiser Permanente.

ing more fruits and vegetables in their diet; then they could walk out of the medical office and be offered fresh and delicious produce to purchase before heading home. “Eating local seasonal produce at the peak of ripeness is not only delicious, but it is also so much healthier for our bodies,” notes the Haggin Oaks Farmers Market manager. “In the winter and through the early spring our bodies need more vitamin C to fight off illness, which is why you will see so many citrus offerings at the market during the winter months. They are at their peak of freshness; they are delicious; and they will help you and your family to stay healthy and productive at school and at work.” Market customers call it being a “localvore,” a person who eats food grown locally as often as possible. The variety of produce that you will find at the market ranges from classic potatoes, onions and garlic to the exotic bitter melon and fresh, young ginger. The market even is a bit of a blast from the past because customers can buy milk the old fashioned way -- in a glass jar from the milkman. The market has an average of 30 vendors who offer customers samples, healthy recipes, live music and the opportunity to get to know where their food comes from. The Haggin Oaks Farmers Market presented by Kaiser Permanente operates from 9 a.m. to 2 p.m. on Sundays at 8800 Ming Ave. in Bakersfield. For more information, follow the market on Facebook at www.facebook. com / Kaiser Permanente Farmers Market and on Twitter @KP_Market. Kristin Weber is a senior community benefit specialist with Kaiser Permanente Kern County.

Photo courtesy of Kaiser Permanente

In addition to a wide range of seasonal produce, the Haggin Oaks Farmers Market offers products for pets.

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Focus on improving Kern’s ‘health outcomes’

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ern County ranks poorly in most health outcomes areas. This is no surprise to public health officials and those in the healthcare industry. Of California counties, Kern ranks 57 out of 58 in the number of deaths per capita due to coronary heart disease and diabetes. In 2012, the total cost of diagnosed diabetes was $245 million, with $176 billion in direct medical cost and $69 billion in reduced productivity, according to the American Diabetes Association. We know that 8.3 percent of the U.S. adult population has diabetes and in Kern County it is 9.2 percent of the adult population. The top three contributing factors to Type 2 Diabetes are obesity, sedentary lifestyle and unhealthy eating habits. Additionally, we know that 70 percent of adults are considered overweight or obese in Kern County. This is roughly 10 percent higher than in 2001, according to the UCLA Center for Health Policy Research. So how do we fix this problem? As members of this community, each of us has the opportunity to change the health outcomes in Kern County. Each of us can make small changes in our own lives, in our own families, in our places of work and worship. Take a walk during your lunch hour, shop

Year

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2003

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Age adjusted hospitalization rate due to Congestive heart failure by age/ethnicity (20092011)

Photo courtesy of Kaiser Permanente

Seasonal produce is featured at the Haggin Oaks Farmers Market

at a local farmers market for your weekly fruit and vegetables; pack a lunch for you and your kids each day; swap that soda for a big glass of water and sit down each night with a healthy meal that you have prepared instead of a bag of food from a fast food restaurant. ­ — Kaiser Permanente, Kern County

Age adjusted White,hospitaliza non hispanic tion rate due to Congestiv Hispanic, any race e heart failure by age/ethni city (2009Black or African American Ethnicity 2011) Asian or Pa 14.9 Black or Afr 82.9 Hispanic, 33.5 Asian oranPacific Islander White, non 34.4

34.4

33.5

82.9

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Bakersfield Californian file photo

A farmworker drives his tractor past rows of newly planted crops along Highway 178 and Rancheria Road. Agriculture generates 20 percent of Kern County’s gross domestic product.

Kern agriculture’s ‘total value’ shows dramatic increase By Jose Granados

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ew industries are as well documented as the agriculture industry. Agriculture production is tracked by a number of federal, state and local agencies. These agencies generate a wealth of data and most of the data is available to the public. In this issue of the Kern Business Journal, we explore data relating to the “total value” of Kern County’s agricultural sector versus farm labor trends. Since agriculture is one of the cornerstones of Kern County’s economy, this sector is closely tracked and analyzed with crop reports available for the past 80 years. Kern County’s agriculture enterprises generate a fifth of the county’s gross domestic product (GDP) and employ up to 20 percent of the workforce. In 2012, the county’s agriculture economy produced $6.2 billion in total value, nearly tripling the 2000 total value of $2.2 billion, according to the Department of Agriculture and Measurement Standards, Crop Report. Graph 1 represents the growth of Kern County’s agriculture total value from 2000 to 2012. Given this tremendous growth in agriculture total value, one would expect significant growth in farm employment, as well. However, farm labor statistics show a more subdued growth pattern, especially compared to non-farm employment. From 2000 to 2012, the number of farm jobs increased

only 14 percent, compared to 24 percent growth in non-farm employment. The total value for agriculture, on the other hand, grew 181 percent over the same period. Graph 2 shows the average number of farm jobs in Kern County for 2000 to 2012. Wages for farm labor improved over the past decade, rising from $6.28 per hour to $9.12. This growth rate of 45 percent mirrors the growth rate for total wages in Kern County; however, farm wages still remain among the lowest in the county. Graph 3 shows Kern County’s average hourly farm labor wage for the given years. Future articles will provide more in-depth analysis of this complex economic sector to explore key drivers of growth and

their impact on farm labor. Sources for this article include the Kern County Department of Agriculture and Measurement Standards, California Employment Development Department and The Bakersfield Californian Market Research Department.

Jose Granados is the strategic market analyst for The Bakersfield Californian.

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Wells Fargo has ‘strong outlook’ for agriculture By Scott Rhodes

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ells Fargo continues to have a favorable overall outlook for California agriculture, and the San Joaquin Valley is no exception. Our long term outlook is strong, based on the fundamentals of growing demand in an increasingly connected world with a finite supply of prime farm land. And while we believe the long-term trend line looks good, there will be down cycles. The questions we are all asking are: When will they happen? How long will they last? And how deep will the impact be? Crop yields will see some year-to-year variability, driven by a number of factors, including extreme temperatures. California commodity prices, in general, remain strong, driving up farm gate revenues. With world demand a major contributing factor, we need to keep a cautious eye on economic policies. For example, a change in the value of the U.S. dollar versus Asian currencies could impact the current strong foreign demand for nut crops. Since 2005, the Chinese yuan has strengthened 30 percent versus the dollar, and U.S. tree nut exports to China have gone from $100 million to $1.7 billion. The large 2013 corn crop, combined with lower demand for fuel ethanol and resulting lower corn prices, is providing some needed cost relief to the dairy sector. The two big issues in agriculture are water and labor. Most of California is in the third year of a drought. Allocations by state and federal water districts have been cut deeply. Although dialog at the state level and among counties is increasing, we still have a long way to go to get to a sustainable, predictable water supply. In the near term, it’s possible that we will see regulation on drilling and plantings, because several areas of the state have experienced significant over-drafting of ground water. Land price volatility is expected as available water is recognized as the most critical driver of value. California agriculture is faced with labor shortages and higher costs. These higher costs are likely to remain. We expect farmers to look increasingly at investments in labor reducing technology. Rob Yraceburu, head of Wells Fargo’s National Food and Agribusiness Division and a valley native, pointed out the benefits of using technology to increase production versus increasing

Bakersfield Californian file photo

Since 2005, U.S. tree nut exports to China have gone from $100 million to $1.7 billion.

acreage. From micronutrients to irrigation to trellis systems, we believe that many farmers will see the economic advantage of investing in yield optimization technologies. In the world in general, and agriculture is no exception, volatility has increased. Commodity prices, from land to inputs to crops, likely will see bigger swings in the future than they have in the past. The industry must build the financial and operating flexibility to deal with these swings at every point in the food value chain. Wells Fargo food and agribusiness experts discuss critical issues in Food for Thought, a free monthly newsletter, available at http://bit.ly/18qtXAH. Scott Rhodes is the senior vice president of Wells Fargo’s regional commercial banking office.

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KERN BUSINESS JOURNAL

Februar y/March 2014

Kern Livestock

Kern state’s top sheep, wool producing county By Julie Finzel

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attle and calves are ranked as the sixth highest valued commodity in Kern County, according to the 2012 rankings published by the Kern County Agriculture Commissioner’s Office. Eggs and egg products come in at number 16 and the remaining livestock commodity groups don’t make the cut for the top 20 agricultural commodities in 2012. Nonetheless, in 2011, Kern County was ranked as the number one sheep and wool producing county in California, with a total value of $14 million. Cattle and calves make up over 95 percent of the total value of the livestock industry in Kern County. And while cattle prices remain around $1,340 for an 800-pound steer and beef prices in the grocery store hit record levels in 2013, the cattle business is still a tough business with a high-risk margin. Cattle producers everywhere face many challenges, including weather variability and market price fluctuations. The recent drought experienced in many parts of the U.S. had a significant impact on Kern County rangelands, where forage production was about 30 percent of normal during the 2013 growing

season. The drought forced many local producers to cut their herd numbers significantly. The Western Stockman’s Market, located at the intersection of Highways 46 and 99, reports that cull cow sales were up at least 30 percent in 2013, with especially high numbers recorded during the spring. While the 2014 Farmer’s Almanac is predicting near-normal rainfall this winter, as of Dec. 20, rainfall levels were below normal for the year, and the National Weather Service was predicting below average rainfall through March. Meanwhile, a number of other factors,

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including high gas prices, high feed prices for hay (and until the last quarter of 2013, corn), a burdensome regulatory system, and the loss of support for the Williamson Act at the state level are just some of the issues livestock producers in Kern County face. Local livestock producers and other agriculture producers are thankful for the support Kern County officials have shown for renewing Williamson Act contracts. But without support at the state level, producers remain unsure of future Williamson Act renewals. Even with all of these challenges, cattle producers are a tough bunch, and they have

proven they know how to be successful in Kern County. The county boasts a range of herd sizes -- from as few as 30 to more than 1,000 cows on some operations, with an average operation running 300 to 500 cows. Many producers follow the traditional path of maintaining a cow-calf operation, where mother cows are kept year round and calves are sold each year at market. Others have expanded to include stockers, along with a cow herd, as a way to diversify their operations. Some producers have grass-fed beef operations, where either a finished grass-fed animal is sold for slaughter, or a grass-fed steer or heifer is sold to another party, who finishes the animals and then sells them for slaughter. There are even purebred operations in Kern County, where producers raise purebred animals to be sold as breeding stock. One thing is clear. The ranchers and ranching families of Kern County exemplify the hard work and devotion needed to produce a high quality, wholesome food product and maintain the lifestyle they love. And they are proud of what they do.

Julie Finzel is the UC Cooperative Extension’s livestock and natural resources advisor. She serves Kern, Tulare, and Kings counties.

Februar y/March 2014

KERN BUSINESS JOURNAL

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Centuries-old tradition helps Kern ranchers track herds By Dianne Hardisty

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he air is crisp. The fields are green. Wildflowers push their way through the blades of grass. It’s springtime in Twin Oaks. And as Sylvia Cattani sits in the saddle of her horse, life couldn’t get any better. At the Cattani Ranch in the mountains east of Bakersfield, Cattani oversees her family’s cow and calf operation. It’s a tough job that she has done for two decades. It requires her to battle the quickly changing demands of the market place, Mother Nature and government regulators. The wife of Arnold Cattani and daughter of Jack Thomson, both long-time Kern County agriculture leaders, Sylvia Cattani has spent a lifetime around livestock and farming. While her professional career, which she put on hold to raise three daughters, began as a teacher, she moved into more active involvement in the family’s ranch when her daughters grew into adults. “Someone in the family was needed to keep an eye on the cow and calf operation,” she recalls. “I always enjoyed horses. I thought it would be exciting. And I had a couple of good cowboys to teach me.” And to watch the small woman today as she deftly maneuvers around a corral filled with bellowing calves that are being rounded up for branding, there is no doubt Sylvia Cattani is up for the task. Like most ranchers, Cattani is closed-mouth about the details of her cattle operation. But she Sylvia Cattani allows that it includes several hundred mother cows and calves that are rotated through pastures on the family’s sprawling mountain ranch that climbs to the 6,000-foot elevation. Most of the calves are sold in the fall, when they are nine months to a year old. Depending on the animal’s productivity and grazing conditions, some of the mother cows may be sold off, as well. As the persistent drought continues to grip the state, limiting grazing land and requiring ranchers to haul in feed, Cattani and others have been forced to sell off more animals to reduce herd sizes and cut costs. Each spring, with the help of neighboring ranchers and her own ranch hands, Cattani rounds up the young calves born between December and April, and brings them into the ranch’s Indian Creek Road corrals for branding. The herder first ropes the calf by the neck and a second roper snares the heels, Cattani explains. The calf is pulled over to the ground crew, where it is tipped over on its side. A sharp pocket knife is used to quickly castrate the bull calves and a half-circle snip is cut into each of their ears. A top snip on the right ear indicates a steer and on the left ear a heifer. “That way, we can easily tell whether a calf is branded and its sex, even from a distance,” says Cattani, who does all the branding using an iron heated in an open fire. The Cattani ranch brands its calves at a young age, hoping

Dianne Hardisty / Kern Business Journal

Young calves are wrestled to the ground and held in place as Sylvia Cattani burns the Cattani Ranch brand into its hide. Cattani oversees her family’s cow and calf operation.

to head off the ever present threat of rustlers and to be able to retrieve calves that wander off their property. With a cow selling easily for $1,000 and the cost of raising animals increasing, the Cattanis do not want to lose even one calf. While branding has long attracted criticism from animal rights activists, a 2003 outbreak of mad cow disease threatened to make obsolete this mostly Western states’ tradition. To better track animals sold across state lines, the Bush administration proposed a national identification system that would use ear tags, rather than brands, as the officially recognized marker of a cow’s identity. This would help track disease outbreaks to the producers. But ranchers pushed back, worrying that the new regulation would eventually replace branding. In addition to fighting for a system that embraces centuries of tradition, ranchers

opposed the added cost and argued that the ear tags could be easily torn from the animal. Facing significant opposition, particularly from ranchers in California and the West, the Obama administration scrapped the plan, replacing it last year with a more flexible one that gives states and Native American tribes some flexibility to use brands to track the interstate movement of livestock. “Out here, where the pastures are in rugged and remote places, and there are no permanent fences, you won’t hold onto your cattle if you don’t mark them,” Cattani explains. “If all goes well, the whole process should only take three to four minutes and the calf stands up, shakes his head and rejoins the herd.”

Dianne Hardisty is editor of the Kern Business Journal.

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KERN BUSINESS JOURNAL

Februar y/March 2014

Grapes listed as Kern County’s top commodity By Jeff Klitz

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ern County is in the heart of the most productive table grape region in the U.S. California’s table grape industry is made up of around 475 farmers who produce 99 percent of the table grapes grown commercially in the U.S. The major table grape growing areas in California include the 200-mile-long San Joaquin Valley and the state’s southernmost growing region, the Coachella Valley. California produces over 70 table grape varieties grouped into three color classifications: green, red and black. The numerous varieties enable consumers to have California table grapes from May through January. A record-breaking 101.3 million box units, valued at $1.71 billion, were produced in California in 2012. It marked the first time in history that the California table grape industry shipped more than 100 million box units. A majority of the table grapes in California are produced within the San Joaquin Valley, including Kern County. According to the 2012 Kern County Agricultural Crop Report, the total agricultural crop value in Kern County was $6.2 billion in 2012. Grapes (wine, table and raisin) were ranked as the top commodity in 2012. Table grapes represent over half of the

Kern County is in the heart of the most productive table grape region in the U.S.

total grape acreage in Kern County. In 2012, Kern County had 58,610 total acres of table grapes with a crop value of approximately $1.1 billion.

In the U.S., more than 2.5 billion pounds of table grapes were consumed in 2012, with a per capita consumption of more than eight pounds. Between May and December of

2012, 75 percent of the table grapes consumed in the U.S. were from California. The main competitive origins for California table grapes in the U.S. are Chile, Mexico, Peru and Brazil. Consumer research conducted in 2012 shows that 74 percent of primary grocery shoppers in the U.S. purchase grapes, significantly more than those who are not the primary grocery shopper of their household. Almost half buy grapes about once per month, while a third buy grapes at least weekly. Research over the years has consistently shown that shoppers in the U.S. prefer California grapes over imports when the price is the same. Grapes from California are also a popular fruit outside the U.S. Approximately 40 percent of the California table grape crop is exported to more than 60 countries around the world. The top five export markets in 2012 were Canada, China Region (including Hong Kong), Mexico, Indonesia and the Central America Region. From 2008 to 2012, exports of California table grapes to Mexico and offshore markets (excluding Canada) increased by over 30 percent in value. The 2013 season estimate is 105.7 million 19-pound box equivalents. Jeff Klitz is the communications coordinator and research analyst for the California Table Grape Commission.

Februar y/March 2014

KERN BUSINESS JOURNAL

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KERN BUSINESS JOURNAL

Februar y/March 2014

Pistachio demand grows; state, Kern supplies world By Rebecca Hall

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he 2013 U.S. pistachio crop was anticipated to be the second largest crop on record, nearly equaling the 2012 production record of 555 million pounds. But by the time harvest began, a trend emerged that downgraded the crop size significantly. With the hot summer -- and several severely hot periods -- the nut size was smaller than average. In addition, several orchards had a higher than normal number of “blanks,� or nuts that do not contain any nut meat. These two events caused the industry to believe the 2013 crop production will end up somewhere between 475 million and 480 million pounds, a 15 percent reduction. Despite the smaller crop size, reports have been generally positive from pistachio growers and processors regarding crop deliveries. The crop has been relatively clean and insect damage is in check, despite late season pest concerns. The individual size of the nuts, however,

appears to be smaller than in previous years. Whether this is due to the hot summer conditions and/or a combination of hot weather and lack of adequate watering during the nut-fill period will be a topic for discussion within the industry. The 2013 crop year was about 7-10 days early, caused by warm spring temperatures experienced this year. There are now over 275,000 pistachio acres planted in California, which represents 99 percent of the total U.S. production. Of the total acres in California, more than 177,000 acres are now considered bearing (six years or older), indicating that 35 percent of the acres are still non-bearing. The majority of these new acres will come into production in the next four to eight years. The industry is still on target to reach 1 billion pounds of production somewhere between the years 2018 to 2020. There are approximately 4,000 acres of pistachios grown in the states of Arizona and New Mexico. Domestic and export shipments for the U.S. pistachio industry crop year (Sept. 1,

Photo courtesy of American Pistachio Growers

Pistachios are shown being harvested. The 2013 U.S. pistachio crop was anticipated to be the second largest crop on record, nearly equaling the 2012 production record of 555 million pounds.

2012 to Aug. 31, 2013) has shown a 3 percent increase over previous year shipments. This represents record-breaking movement for the U.S. pistachio industry, which had seen its largest shipments just last year. Export shipments alone saw a 7 percent increase over the same time period last year. Export gains have been experienced in both Eastern and Western Europe, and Asia. China exports (including Hong Kong) continue to outpace shipments last year.

China’s rise in its middle class population and income levels are the biggest factor in pistachio consumption increase. Sales over the last nine years have risen from just over $1 million annually to $247 million annually. We believe that this positive shipment trend will continue into the foreseeable future.

Rebecca Hall is the marketing project manager for the American Pistachio Growers.

Februar y/March 2014

KERN BUSINESS JOURNAL

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Focus on consumer needs helps Grimmway Farms grow By Bob Borda

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t all began in 1968 when brothers Rod and Bob Grimm set up a roadside produce stand in Southern California and planted the seed that would blossom into today’s Grimmway Farms. Today Grimmway Farms is North America’s leading producer of carrots and organic vegetables. Thanks to Kern County’s fertile soils and one of the best climates for vegetable production, Grimmway Farms supplies North America, South America, Europe and Asia with premium quality vegetables. Its longstanding passion to farm and do the right thing for its customers has led to the success of Grimmway Farms. The dedication to understanding customers’ needs and consumers’ wants is the ingredient that drives the company, which continually evaluates the marketplace to ensure that it is planting and cultivating the right vegetables at the right time to meet demands. This can be challenging at times as the organic vegetable demand continues to grow at a rate in excess of 20 percent. Grimmway was well ahead of this explosive growth. Recognizing the value of organic farming, Grimmway acquired Cal Organic Farms in 2001. Although Cal Organic was well established at the time, organic vegetables were primarily grown on a limited acreage basis. The quality of the product was less than its conventional counterpart, while commanding a hefty premium. Today, Grimmway Farms is the largest family-owned and operated organic farm with over 30,000 certified organic acres. This commitment to organic farming is helping to support the growth of organic vegetables, while revolutionizing their availability from the farmers markets to mainstream supermarkets. While growing in excess of 75 different

Photo courtesy of Grimmway Farms

The Asian carrot is one of the specialty items produced by Grimmway Farms.

Photo courtesy of Grimmway Farms

Grimmway Farms is promoting its healthy produce through “The Biggest Loser” television show.

Photo courtesy of Grimmway Farms

The colors of a rainbow can be seen in this display of Grimmway chards.

Photo courtesy of Grimmway Farmss

As part of its “green” initiative, Grimmway Farms has installed solar energy generating panels at its plants.

vegetables under its Cal-Organic brand, carrots still remain Grimmway Farms’ mainstay. From the advent of the baby carrot during the early 1990s, Grimmway Farms has been full steam ahead with all things carrots. The baby carrot revolutionized the carrot industry through its unique shape and ready-to-eat features, making it a great option for those looking for healthier snack alternatives. Today, as the baby carrot market matures, Grimmway Farms has been innovative in slicing carrots into many different functional ways. In fact, much of the growth that the company experienced this past year is being driven by consumers who are incorporating carrots into non-traditional eating occasions. Who would think that carrots could be mixed into your morning bowl of oatmeal? While consumers become more interested in fresh vegetables, Grimmway Farms’ focus is to connect with its consumers to support their healthy lifestyle interests. This past year the company partnered with “The Biggest Loser” to help convey its lifestyle messaging. Since the start of this promotion, Grimmway has built a strong community of individuals who turn to the company as a resource for recipes and lifestyle tips. Grimmway Farms also continues to grow green. The company strives to implement sustainable practices. The addition of a 1.1-megawatt solar farm at its Mountain View facility completes the construction of a twoyear project totaling 4.5 megawatts of clean solar energy. This solar project provides over 50 percent of the energy used to power four of our production facilities. Through its innovative growing techniques, understanding of its consumers, and stewardship of its rich farmland, Grimmway Farms will continue to focus on providing premium fresh vegetables. Bob Borda is vice president of marketing for Grimmway Farms.

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KERN BUSINESS JOURNAL

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Photo courtesy of the Kern Community College District

Neal Hudson, facility coordinator, and Bakersfield College intern Frederick Cacal conduct research at the Shafter Research Station.

Shafter station expanding agriculture research By Michele Bresso

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he Shafter Research Station is expanding services and upgrading facilities to provide greater research opportunities to benefit Kern County. Formerly the USDA Shafter Cotton Research Station, the facility incorporates green houses, experimental plot fields, laboratories and office space for companies wanting to conduct agriculture research. The station, located at 17053 Shafter Ave., operates under the collaboration of managing partner San Joaquin Valley Quality Cotton Growers Association, Kern County and the Kern Community College District. Greg Palla, executive vice president and general manager of the cotton growers association, said the facility is seeing strong use. Public and private researchers are using all of the plot space and 40 percent of the greenhouse and lab space. But research contracts end at varying times so space opens up regularly. “Research is being conducted by University of California, Davis, Department of Entomology. Also, the UC state cotton specialist is working in our labs and field plots. University of Florida, in collaboration with University of Minnesota and University of Maryland, will be using the facility to enhance their honey

Photo courtesy of the Kern Community College Districts

Bakersfield College agriculture intern Eric Morales conducts research at the Shafter Research Station.

bee health research in California,” Palla said. “We have private companies researching vineyard rootstock and doing pistachio, biological control and seed research. It’s going very well.”

Palla is negotiating to bring more research projects to the station. To accommodate expanded clientele, upgrades to greenhouses are planned in early 2014. Improvements will include installation of energy-efficient lighting,

better cooling systems and a higher capacity back-up electrical generation network. Research clientele are also benefiting from the availability of Bakersfield College student interns to assist with research, according to Tom Burke, chief financial officer for the Kern Community College District. “Kern Community College District students are pre-trained, pre-screened and fully insured,” Burke said. “They come to each research project with a passion for agriculture and a desire for hands-on experience. It’s a great opportunity for students and a boon for businesses looking for cost-effective ways to carry out research and development.” A description of services and facilities available at the Shafter Research Station can be found online at www.shafter-research. com. Researchers can also access on-site equipment, such as a cotton gin owned by the University of California, plus storage and specific-use buildings. Businesses interested in conducting research at the Shafter Research Station should contact Greg Palla at (661) 237-0900 or send an email through the “Contact Us” page on the Shafter Research Station’s website.

Michele Bresso is the associate vice chancellor of governmental and external relations for the Kern Community College District.

Februar y/March 2014

KERN BUSINESS JOURNAL

Photo courtesy of the City of Bakersfield

Filtration and disinfection occurs in this station before recycled water enters a storage tank at the City of Bakersfield’s waste water treatment plant.

Bakersfield invests in cost-saving water recycling By Ralph Braboy

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wo wastewater treatment plants, with a combined permitted capacity to process 57 million gallons per day, serve the City of Bakersfield’s 360,000 residents and businesses. Both plants average about 50 percent of their capacity. The processed wastewater from Plants 2 and 3 has gone through secondary treatment that produces an effluent, which meets or exceeds federal and state guidelines mandated by the Clean Water Act. This secondary effluent is used to irrigate farmland owned by the city. The city receives payment from a lessee who operates its farmland. Strict controls are placed on what can be grown on land irrigated by water produced by the treatment plants. Secondary effluent also is sent to percolation ponds operated by the city. These ponds allow the effluent to percolate naturally through the soil and into the water table. Again, there are strict rules and regulations for effluent quality that must be monitored, adhered to, and reported on to insure that there is no detriment to the quality of the existing water table. Using wastewater that is reclaimed to this secondary level of treatment has been beneficial to the city’s fiscal bottom line. It also has contributed to our local environment. In 2007, the city began an upgrade of

Plant 3 that raised the bar for treatment of secondary effluent. When construction was completed in 2010, the city added tertiary (third-level) processes that increased the potential for more uses of the wastewater. The tertiary processes added to the plant include: • Filtration – a process that uses cloth media filter to further reduce water turbidity (cloudiness) to meet the more stringent levels required by the state Department of Health Services. • Disinfection – a process that further lowers bacterial concentrations in the recycled water to meet other stringent guidelines set by DOHS regarding the recycled water product. Plant 3 now has the capacity to produce 2 million gallons a day of recycled water that can be used in the following ways: • Non-potable uses at Plant 3, such as seal water for a multitude of pumps, water used to run plant processes, and water used for cleaning around the plant. • Landscape irrigation at Plant 3. • Irrigation of the Bakersfield State Farm Sports Village, a 170-acre regional sports complex in southwest Bakersfield. Every day, recycled water produces savings for the citizens of Bakersfield. These savings are used to keep the cost of sewer services low, while keeping the quality of treatment high. The city will continue looking for ways to further increase use of its recycled water. Ralph Braboy is the manager of the City of Bakersfield’s Wastewater Division.

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KERN BUSINESS JOURNAL

Februar y/March 2014

Export Tech University comes to Kern County

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By Glen Roberts

alifornia exports are booming, with volumes reaching pre-recession levels. California produce, such as Kern County’s bumper crops of almonds and pistachios, are capturing world markets. But doing business overseas can be complex and challenging. The California Manufacturing and Technology Center, along with the Bakersfield Export Assistance Center, Fed EX, banks and other service providers are pulling their resources together to offer Kern County firms a chance to learn and to do business overseas. ExporTech provides executives and business owners strategic focus and a structured process through which they create and implement export growth plans for achieving accelerated export sales growth. It takes tremendous competitive advantage and considerable resources to stay ahead in today’s domestic marketplace. While it’s a good market, it’s worthwhile to consider expanding across global markets. Demand for U.S. products is positive and the competition can be less daunting. In fact, 95 percent of the world’s market exists beyond the United States. The “Made in USA” label and U.S. quality are highly regarded throughout much the world. And, more often than not, the “Made in California” label garners even more interest. Consider the case of Louroe Electronics, the leading U.S. manufacturer of audio monitoring systems, microphones and base stations. A long-standing business in the San Fernando Valley, Louroe recently lifted to another level of performance with the help of the California Manufacturing and Technology Center. Louroe CEO Richard Brent noted that “CMTC and its program of teaching an innovative technology development methodology has propelled Louroe to faster time to market with new products that exceed the customers’ expectations.” Already exporting to 22 countries, Louroe took advantage of CMTC’s ExporTech program, which is a series of three one-day sessions over 12 weeks. Through the program, Brent developed a strategic plan to increase sales through exporting. The export assistance program “gave Louroe the package of information and training that allowed us to develop a sure-footed international trade strategy for export. We are poised and focused for growth, where we are convinced that new jobs and stability in financial performance will flourish,” said Brent. Since completing ExporTech, Louroe sales have increased 46 percent. Export sales account for nearly 25 percent of its total sales. For information about CMTC and the ExporTech program, contact CMTC’s Elizabeth Glynn at (310) 984-0728, eglynn@cmtc.com; or Glen Roberts at the U.S. Department of Commerce’s Bakersfield Export Assistance Center at (661) 637-0136 or glen.roberts@trade.gov.

Glen Roberts is the director of global markets for the Fresno and Bakersfield offices of the U.S. Department of Commerce, International Trade Administration.

Bakersfield Californian file photo

A child eats ice cream during last summer’s inaugural Kern County Nut Festival, which was held at the Kern County Museum.

2014 Nut Festival will build on its first year’s success

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he first Kern County Nut Festival in June 2013 drew almost 10,000 people from in and outside of Kern County. They came to enjoy wonderful nutty food, lots of music and entertainment, cooking demonstrations, games, agricultural exhibits and even a “running of the nuts” to kick off the festival. The stars of the festival were almonds, pistachios and walnuts – all products grown in Kern County. And festival organizers are doing it all over again on June 7, 2014. Sponsored by the Kern County Museum Foundation and a host of top notch corporate, non-profit and individual sponsors and participants, the 2013 festival earned $165,000 for educational programs and historical exhibits at the Kern County Museum. Sponsorships for the 2014 festival are now being recruited. Already many of the 2013 sponsors are jumping back on board. “The response from the community was so overwhelmingly positive and the event was so successful. People had a really great time and enjoyed the fun, foodfocused atmosphere, plus they learned some things about our amazing agricultural industry,” said Beth Pandol, one of the “head nuts” for the 2014 event. Other head nuts include Sheryl Barbich, Linda Hartman and Tracy Walker Kiser. Roger Perez, the museum’s executive director, is the “top nut” in charge of the festival. Organizers are hoping to beat the 2013 attendance

and earnings figures with the goal of enabling many organizations and businesses to earn dollars at this regional festival. The 2014 festival marketing team plans to advertise out of county to draw attendees, much like the Gilroy Garlic Festival does each year. The festival is currently looking for vendors and exhibitors. Local restaurants, caterers, non-profit groups, merchants and crafts vendors are invited to submit an application. Since the focus is on locally grown nuts, food vendors are required to serve foods made with nuts. Pecans have been added to the mix for 2014, since pecans are also grown in Kern. Exhibitors must also have some nut connection – either through healthy eating/living, agriculture, or other related industry. In 2013, there were 46 exhibitors, 25 merchandise vendors and 32 food vendors. Some 51 non-profit organizations participated in the festival. This year, a new area will be created called the “Nut Mercantile.” Vendors of packaged nuts, nut candies, cookies or other nut products can sell in this central area. Nut Mercantile applications are available with the general festival applications. Also new in the 2014 will be food tents featuring vendors of nutty foods. Last year, food booths were scattered throughout the museum grounds. By placing all food booths in one or two main areas this year, attendees can easily browse and sample products. Applications for sponsorship or vending can be found at the Kern County Museum website or at kcnutfest.com. — Kern County Museum Foundation

Februar y/March 2014

KERN BUSINESS JOURNAL

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KERN BUSINESS JOURNAL

Februar y/March 2014

UC Davis’ issues center tracks valley’s agriculture impact

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stablished in 1985, the Agricultural Issues Center at UC Davis researches and analyzes crucial trends and policy issues affecting agriculture and interlinked natural and human resources in California and the West. The center studies topics such as international markets, invasive pests and diseases, the value of agricultural research and development, agricultural policy and the rural environment. While the issues are often global, researchers emphasize implications for agriculture and natural resources in California. The center’s research, which can be found online at www.aic.ucdavis.edu is available to the general public, as well as to state and national policy makers. A sampling of findings by the center’s researchers regarding agriculture in Kern County and the southern San Joaquin Valley is presented below.

over 31 percent of regional employment in 2009 — almost 30 percent of regional labor income — and 30 percent of regional total value added was attributed to agriculture. The economic impact of farm production alone accounts for 12.7 percent of employment. For every 100 jobs linked directly to the San Joaquin Valley agricultural industry, an additional 106 jobs were created in the local economy. In addition, for every dollar of income paid to agricultural employees, an additional $1.05 of non-agriculture labor income is generated in the San Joaquin Valley economy. Overall, every dollar of value generated by the region’s agriculture industry leads to an additional $1.27 generated by the region’s non-agricultural economy.

Almonds, grapes of all types, pistachios, dairy products and citrus products are among the most valuable export commodities produced in California. They are also the most valuable crops produced in Kern County. In 2012, these commodities accounted for close to $8 billion in export value. The export market is especially important to the almond and pistachio growers of the county, as close to 70 percent of the 2012 harvested volume of these two California crops were sold internationally. The biggest buyers of California almonds and pistachios are the European Union and China. These two destinations combined purchased half of California almond exports

and over 70 percent of pistachio exports. The demand for California’s tree nuts, including walnuts, has grown around the world in recent years. Since 2005, the annual export value of California almonds has grown by over $1.5 billion and continues to rise. Pistachio export values have also grown at a tremendous rate. In 1999, California pistachio exports earned less than $150 million. In 2012, pistachio exports topped $1 billion for the first time. Exports of grapefruit, oranges, lemons and tangerines account for about 30 percent of harvested volume in 2012. The largest share of California citrus product exports go to Japan, Korea, China and other parts of Asia.

Valley wine industry

Southern San Joaquin Valley contribution to 2012 California Wine Grape Production and Value1

Agriculture’s contribution The San Joaquin Valley is a major agricultural production area in California, directly accounting for 36.6 percent of California’s total agricultural production and processing value in 2009. The production of fruits, nuts, vegetables and dairy products in the San Joaquin Valley were the top contributors to the region’s total economy. The San Joaquin Valley produced $229 billion in total economic output in 2009. Of this total, agriculture accounted for a direct value added of $15.9 billion in 2009. The total economic impact, including the indirect and induced effects, of the agricultural industry in the San Joaquin Valley was

Exports are big for Kern

Wine grape production (in tons) Share of California wine grape production Average price received Value of 2012 wine grape crop Share of California wine grape value 1 2

Southern San Joaquin Valley1 production 318,520 9.5% value $415 per ton $132 million 5.1%

Includes the Southern half of Kings and Tulare Counties and all of Kern County. Source: USDA NASS 2012 California Grape Crush Report

Agricultural gross production by county Southern San Joaquin Valley 2009

The Southern San Joaquin Valley Crush District 14 is an important contributor to the California wine industry. Growers produce both red and white wine grape varieties. Major white wine varieties include Chardonnay and French Colombard. These two combined for about half of the white wine grape crop in 2012. Rubi Red and Zinfandel comprise over half of the 2012 crop of red wine grapes in the region. In 2012, this region produced 315,520 tons of wine variety grapes. This represents almost 10 percent of volume and 5 percent of value of grapes crushed for wine in California. The southern San Joaquin Valley supplies low-cost wine grape varieties of consistent quality for use in everyday wines. This advantage allows southern San Joaquin Valley growers to provide a large volume of product to the bulk wine market at a low price.

Februar y/March 2014

KERN BUSINESS JOURNAL

Photo courtesy of Cal State Bakersfield

Dr. S. Aaron Hegde lectures CSUB students participating in the agricultural business concentration, which is part of the bachelor’s of science degree program in business administration.

CSUB, BC collaborate to expand ag program By S. Aaron Hegde

C

alifornia State University, Bakersfield began offering a concentration in agricultural business as part of its bachelor of science degree in business administration in January 2012. Students in this concentration take courses in areas, such as agricultural law, agricultural economics, agricultural marketing, agricultural management, agricultural finance, agricultural trade and agricultural accounting. In addition to these classes, students take core courses in business. While the concentration started off small, with less than 10 students during its first academic year, it has grown to a little over 45 majors, as of the fall 2013. During CSUB’s 2013 spring commencement in June, the nascent program had its first two graduates. The program expects to graduate about a half-dozen students during the upcoming 2014 spring commencement. One measure of the success of this program has been student placements with local and regional agribusiness companies. Approximately 10 students have already found internships and permanent employment in the agribusiness industry. These are jobs ranging from marketing to market research. One of the reasons for this early success has been the involvement of the local agribusiness industry. Adjunct faculty, who are industry experts, teach the majority of the agricultural courses. Academically trained agriculture faculty experts offer the remainder. This type of collaborative education model between CSUB and the industry is not new to the university. Already the university is successfully offering a similar program in Occupational Safety and Health Management. From putting on a produce trade show,

which is featured in Grimmway’s Jennifer Hayslett’s marketing class, to touring production facilities, which is featured in Paramount’s Abe Padilla’s management class, agribusiness majors are exposed to various aspects of the agriculture industry. This has contributed to the early success of this unique program. The university now seeks to build on the program. The university’s mission is to collaborate “with partners in the community to increase the region’s overall educational level.” To this end, CSUB is working on offering another pathway to careers in the agriculture industry. Over the past 18 months, the university has had meetings with various stakeholders from the agribusiness industry to ascertain current and future workforce needs. Based on this input, the university is in the process of proposing a second pathway to agricultural careers for students in Kern County. This proposed program is a 2+2 collaborative degree between CSUB and Bakersfield College, leading to a four-year bachelor of science degree in agricultural business. With program approval expected in the fall 2014, students will complete two years of lower-division agribusiness classes at BC and the final two years of upper-division work at CSUB. A required internship, offered in collaboration with local agribusiness companies, is also proposed as part of this degree. This innovative new degree would offer students better training in agriculture through their exposure to such courses as soil science, animal science and crop science at BC. A steering committee for the proposed program, chaired by Jeff Green of Grimmway, has been formed to maintain alignment with industry needs. Aaron Hegde is an associate professor of economics and director of the ERM Program and Agribusiness Concentration.

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KERN BUSINESS JOURNAL

Februar y/March 2014

Commercial real estate snapped up

Kern County seen as ‘gem of Central Valley’ By John Cox

A

fter a tough few years, business space has become a prized commodity in and around Bakersfield, with demand for some property exceeding pre-recession levels. Led by warehouse work and other industrial activity, the area’s commercial real estate market is posting across-the-board improvement in vacancy rates. Some developers have responded by building, or proposing to build, new industrial space, offices and retail space. Bakersfield’s 4.1 percent warehouse vacancy rate at the end of September was the nation’s third-lowest, behind only Honolulu and Los Angeles, according to Colliers International. “Bakersfield is proving to be the gem of the Central Valley,” Bakersfield industrial real estate broker Wayne Kress noted in an email highlighting local strength in energy, logistics and agriculture. “In the short term, very low (industrial) vacancy rates like we are now experiencing are a harbinger of large-scale construction projects that will bring jobs, wages and (economic spillover) effects,” Cal State Bakersfield economics professor Mark Evans noted. “In the long run, these new properties provide the infrastructure that is essential to attracting new companies that further build our economic base in areas, such as logistics and energy-

related support services.” Even retail, the weakest category of Bakersfield’s commercial real estate market, is posting substantial gains from the depths of 2010 and 2011. Properties left vacant by the recession are beginning to fill up, and chains, such as Wal-Mart, are poised to expand locally. This sort of staggered progress is to be expected, said Bakersfield commercial broker Anthony Olivieri. Jobs generated by industrial and office activity tend to feed the home market, which he said is what outside retailers study when making decisions about where to grow. Here is a look at how each segment is faring.

Bakersfield Californian file photo

Roll Global is developing the 1,400-acre Paramount Logistics Park in Shafter. Distribution facilities for Ross for Less and American Tire Distributors will soon join the existing Target distribution center.

Industrial surge

Photo courtesy of Tejon Ranch

Aerial photo of the Tejon Ranch Commercial Center shows warehouse facilities and distribution centers located along Interstate 5 at the foot of the Grapevine.

Industrial property in the area spanning Bakersfield, Shafter and Tejon Ranch reached a vacancy rate below 3 percent at the end of 2013 — a huge improvement from the 11 percent recorded just three years before, according to data provided by Cushman & Wakefield | Pacific Commercial Realty Advisors. Oil service companies account for much of the activity. But national retail chains have also contribBakersfield-area industrial uted by filling up huge so-called “fulfillment centers” vacancy rates* and other warehouse space in Shafter’s 1,400-acre By far the strongest segment of local commercial space is industrial Paramount Logistics Park. property, a category that includes In March, Ross for Less bought a 158-acre warehouses and distribution centers. Demand from oil and retail tenants in property inside the development served by the BNSF the Bakersfield, Shafter and Tejon Railway’s main line. The retailer has begun construcRanch areas has pushed down the local vacancy rate from 11.2 percent tion on a 1.7-million-square-foot distribution center to 2.8 percent in just three years. expected to create 1,500 new jobs. Vacancy rates Also in 2013, American Tire Distributors began 15% building a 350,000-square-foot distribution center 12 11.2 at the same logistics park, which is owned by Los 10.3 Angeles-based Roll Real Estate Development LLC. 8.1 9 An 85,000-square-foot speculative development 6 near Meadows Field airport has attracted three new Figures in 3.3 tenants — Pactiv Corp., Safelite AutoGlass and graphic 2.8 3 have been Midwest Hose & Specialty — next to the U.S. Postal rounded off Annex along Pegasus Drive. Kress noted it is the first 0 2009 2010 2011 2012 2013 “spec” project in the airport area in five years. *These figures cover Bakersfield, Roll Global also is moving forward with an 80Shafter and Tejon Ranch Source: Cushman & Wakefield / Pacific acre development called the CrossRoads Business Commercial Realty Advisors Park, between Harris Road and Panama Lane, west THE CALIFORNIAN of Gosford Road, in southwest Bakersfield. Office, retail and light industrial uses are planned. Tejon Ranch Commerce Center, near the foot of the Grapevine, is home to distribution centers for such companies as Ikea, Famous Footwear and Caterpillar Logistics Inc.

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KERN BUSINESS JOURNAL

25

Artist rendering courtesy of Gregory D. Bynum and Associates

Gregory D. Bynum and Associates Inc. is planning to build an office complex on the campus of California State University, Bakersfield.

Back at the office Nothing speaks to optimism for the local economy like new office construction. That has begun to happen in Bakersfield. It isn’t happening everywhere in the city, however. Local commercial real estate people say the sweet spot is the southwest part of town, around Cal State Bakersfield. A two-story office building recently opened at 11200 River Run Blvd., not far from the university, and brokers at Newmark Grubb ASU & Associates say there’s talk of work beginning at other lots soon, depending on the success of preleasing marketing campaigns that began in 2013. One such effort is Stockdale Centre, a project that ultimately could consist of 270,000 Bakersfield office square feet of ofvacancy rates fice space, across Bakersfield's office market has stabilized since the peak of the Coffee Road recession. It's nowhere near the from the Town & heyday of 2007, when a proliferation of mortgage and real estate offices Country Village brought vacancy rates to as low as shopping center, 4.35 percent. But rates have held below 10 percent for three years now along Stockdale — and they're down to 1.6 percent in Highway. the area around Cal State Bakersfield, the city's lowest. Brokers at Pacific CommerVacancy rates 15% cial Realty Advisors, representing 12 11 10.5 9.7 property owner GC 8.8 8.6 9 Investments, say construction will 6 Figures in begin in phases graphic 3 when each of four have been rounded off proposed three0 2009 2010 2011 2012 2013 story buildings Source: Newmark Grubb ASU & Associates become 60 percent leased. THE CALIFORNIAN Another office project in the planning stages is Gregory D. Bynum and Associates Inc.’s proposal for up to four buildings comprising 283,000 square feet on Cal State Bakersfield land at the north-

Artist rendering courtesy of Cushman & Wakefield Pacific Realty

An artist rendering shows the design of an office complex proposed for construction at the intersection of Stockdale Highway and Coffee Road.

west corner of Camino Media and Scarlet Oak Boulevard. It, too, would be built in phases, starting with a three-story structure expected to begin construction this year. Judging only by the numbers, the local market is tightening up, with five consecutive quarters of office vacancy rates

below 9 percent, according to Newmark Grubb data. By comparison, Newmark Grubb reported that Fresno’s office market was 15 percent vacant at the end of September, which was the latest figure available. Continued on PAGE 26

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KERN BUSINESS JOURNAL

Februar y/March 2014

Bakersfield Californian file photo

The new Winco Foods store is shown under construction at the corner of Panama Lane and Ashe Road in southwest Bakersfield.

Continued from PAGE 25

Retail upswing It may not be obvious from looking at the numbers, but people who deal in local store and restaurant space are optimistic about Bakersfield’s retail market. The area got a much-needed jolt over the last few years as dollar stores moved in when Bakersfield retail the recession was vacancy rates at its worst. These, Even with a number of stubborn combined with the vacancies on the market, Bakersfield's retail properties are gradually progress Wal-Mart filling up. It could be quite some time has made securing before the citywide vacancy rate returns to the 2006 level of about 4 approval to build percent. Getting the rate below 10 new stores in the percent may depend more on new home construction than on other greater Bakersfield kinds of economic improvement. area, kept the retail Vacancy rates market in growth 15% 14.1 13.7 mode. 12.6 11.6 12 At the same 10.1 time, many other 9 shopping centers, 6 including upscale Figures in retailers, are doing graphic 3 have been well in certain parts rounded off of town. A prime 0 2009 2010 2011 2012 2013 example is The preliminary Source: Cushman & Wakefield / Marketplace along Pacific Commercial Realty Advisors Ming Avenue. THE CALIFORNIAN Although it has lost tenants recently, the shopping center has had no trouble finding high-caliber replacements. “We basically have all that space committed,” said Olivieri, the broker who specializes in retail property. East Hills Mall, another high-profile shopping center, hasn’t done as well. With gaping vacancies going back five

Bakersfield Californian file photo

When Hobby Lobby opened a 50,000-square-foot store on California Avenue in October, the debut went so well that the chain soon leased additional space next door.

years and more, the property has long been a drag on the city’s vacancy rates. But local investor Clyde Barbeau, working with Modesto-based Save Mart Supermarkets, has pieced together all but one of the mall’s parcels. “In the meantime, we’re trying to market it, obviously,” Barbeau said. Although negotiations with possible buyers are ongoing, he said it remains unclear what will ultimately become of the mall. Across town, Winco is opening a new, 90,000-square-foot

store at Panama Lane and Ashe Road. It’s expected to provide 200 new jobs. And Hobby Lobby opened a 50,000-squarefoot store at the former Mervyns space along California Avenue in October. The debut went so well that the Oklahomabased chain soon agreed to lease an additional 25,000 square feet of space next door. John Cox is a Bakersfield Californian staff writer. A longer version of this article appeared in The Californian in January.

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KERN BUSINESS JOURNAL

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The same commitment that started our farming operations in 1915 remains today as we help shape the future of the Kern County landscape with purpose, master planning and solid community partnerships.

BOLTHOUSE COMMERCE CENTER

While our calling has evolved, our values remain. The Bolthouse family’s commitment to hard work, integrity, and innovation seeks to enrich our community for generations to come.

Located on East Brundage Lane at Highway 58 and 184, the property is one of Bakersfield’s newest retail/industrial business centers. Anchored by Hampton Inn, Starbucks and other services, parcels available range from .75 to 5 acres.

As it was a century ago, it is today.

GRAND ISLAND VILLAGE Located in the heart of Seven Oaks at Ming Avenue and Buena Vista Road, Grand Island Village is a perfect addition to the sophisticated neighborhood atmosphere. New retail space is currently under construction.

W llia Wi am Bo Bolt lttho h usse, e Sr. r.,, Ci Circ r a 19 1935 3

SEVEN OAKS BUSINESS PARK Perfectly situated in the growing southwest, the 276 acre Business Park at Buena Vista Road

C0..&3$*"-tI/%6453*"-tRESIDENTIAL 2000 Oak Street, Suite 250 | Bakersfield, California 93301

661.323.4005 | www.bolthouseproperties.com

and Bolthouse Drive will accommodate retail and office users of all sizes. Businesses within the Park include Kern Schools Federal Credit Union, Houchin Community Blood Bank, Hoffmann Hospice, and others. Parcels from 1 to 50 acres are available for sale or build-to-suit.

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KERN BUSINESS JOURNAL

Februar y/March 2014

Importance of water plant, district recognized By David Beard

A

Photo courtesy of the Kern County Water Agency

The “flash mix pipeline” for water treatment is shown at the Henry C. Garnett Water Purification Plant in Bakersfield.

Water transported to ID4 is delivered to the Henry C. Garnett Water Purification Plant, where it is treated and then delivered to water purveyors within ID4 boundaries or it is used to replenish the underlying groundwater aquifer. The ID4 purveyors are the California Water Service Company, the City of Bakersfield, East Niles Community Services District, and North of the River Municipal Water District, which also wholesales water to Oildale Mutual Water Company. In 2005, in response to declining groundwater quality and to meet additional demands in the growing Bakersfield area, the agency, in consultation with ID4 water purveyors,

developed the Treated Water Capacity Expansion Project (TWCEP) for the expansion of existing and construction of a new purification plant, pump stations and pipelines to deliver treated water to the north, northwest and east portions of metropolitan Bakersfield. The TWCEP also included construction of a large-scale solar power project and electrical service entrance upgrade project. The upgrades have resulted in a lower energy rate by going from primary- to transmission-level electrical service. The savings will increase as treated water production increases. A further advantage of the agency operating its own electrical substation

David Beard is the manager of Improvement District No. 4.

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mong the most important municipal and industrial accomplishments of the Kern County Water Agency and local water purveyors was the formation of Improvement District No. 4, and construction and recent expansion of the Henry C. Garnett Water Purification Plant. “Nearly 40 years ago, the agency worked collaboratively with local water purveyors to address an immediate need and plan for the future by building the infrastructure to serve generations to come,” said Agency Board of Directors President Ted Page. “Today, ID4 and the Henry C. Garnett Water Purification Plant are models of efficiency and reliability, providing a safe and affordable water supply to tens of thousands of homes and businesses in the metropolitan Bakersfield area.” In 1971, the agency board formed ID4 to provide a supplemental water supply for portions of the metropolitan Bakersfield area through the importation of water from the State Water Project to ensure that future generations would have a reliable source of drinking water. Shortly after its formation, residents within ID4 boundaries voted to authorize $17.5 million in general obligation bonds for the construction of water purification facilities and its share of the Cross Valley Canal.

and solar project is that it provides flexibility to manage energy use, increases reliability by insulating the agency against increases in future electricity prices and reduces carbon dioxide emissions. “The Treated Water Capacity Expansion Project was the result of nearly eight years of water supply planning and part of the largest capital improvement project phase in the agency’s history,” Page continued. “In addition to expanding service capacity, it incorporates the use of renewable energy and illustrates the agency’s and purveyors’ commitment to long-term, cost-effective and efficient solutions.” The TWCEP was honored by the Kern Council of Governments in 2009 with the Ken Volpe Regional Award of Merit for Environmental Resources and Conservation, in 2010 with the Regional Award of Merit for Local Government, and by the American Society of Civil Engineers with the Excellence Award for Outstanding Water Project. The TWCEP was also selected in 2011 as a nominee for the Beautiful Bakersfield Award in the Public/Private Partnership category, and was chosen in 2011 as a finalist for the Clair A. Hill Water Agency Award for Excellence from the Association of California Water Agencies.

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Februar y/March 2014

KERN BUSINESS JOURNAL

29

Raising the standards

with vast and valuable expertise. Photo courtesy of Water Association of Kern County

Water is a major expense for Kern County farmers, who use advanced irrigation and monitoring systems to conserve their supplies.

Kern farmers conserving to get more crops per drops By Beth Pandol

K

ern County agriculture uses about 2.6 million acre-feet of water per year – an amount that has stayed about the same for years. So local farmers work hard to save on water costs and boost yields, using innovation, technology and determination to get more “crop per drop.” Water is the most costly input on a farm. Drought, environmental regulations and rising power costs all contribute to a constant effort by local farmers to irrigate efficiently. Water costs in some Kern water districts may be as high as $250 per acre-foot. (An acre of almonds uses about 3.5 acre-feet of water per year.) As a result, many have learned to maximize water through drip irrigation systems, fan jets, computer-controlled irrigation scheduling and other technological advances. “Farmers spend a lot of time trying to reduce costs on a farm and that includes water,” said Jason Gianquinto, general manager of Semitropic Water Storage District in Wasco, which provides State Water Project water to about 222,000 acres of farmland. “They have put in significant investments on things like drip tape on crops, such as tomatoes, which were previously flood irrigated.” “We take annual pump tests of all our wells and booster pumps to make sure they are running at peak efficiency for energy savings and to make sure our drip systems are running at 93 percent efficiency or higher,” said Buttonwillow grower Greg Wegis. “We also have real time moisture sensors on every set of irrigation…from zero inches to 60 inches of soil depth so we can see exactly how much water is in our profile at the various depths. This allows us to time our irrigations to maximize our water-to-air ratios. It also aids in knowing when to shut water off to minimize losing water past our root zone. We don’t want water leaving our root zone if possible, as that is expensive water that we paid for, that is no longer benefiting the crop we are trying to grow. “ Gianquinto said Kern County farmers

have had the same amount of water to work with for decades, yet have maximized yields. This is important because in most years, many farmers did not receive their contracted supplies of state water, although they had to pay for the full supply. They had to resort to costly groundwater pumping. “They are having to pay the same costs every year for their water supply, but are getting a lot less because of environmental issues in the Delta. So their costs have gone way up. It drives them to conserve,” he said. At M. Caratan in Delano, Paul Gibony uses soil probes and monitors, aerial photography and California Department of Water Resources guidelines, which provide data for scheduling irrigations. “These help us predict what the crop water use will be, so we can schedule irrigations applying exactly what the crop needs, when it needs it,” he said. “So we’re not under irrigating or over irrigating.” One way local farmers evaluate the efficiency of their irrigation systems is through the North West Kern Resource Conservation District’s mobile lab program. Brian Hockett, district manager, performs evaluations on irrigation systems, monitoring distribution uniformity (DU), which demonstrates how efficiently a crop is being irrigated. In 2012, the mobile lab conducted 100 evaluations on 15,936 acres in Kern, examining micro drip, micro sprinkler and permanent under-tree sprinkler systems. The results show that Kern growers are, in general, doing a superb job of irrigating efficiently. But both Gianquinto and Gibony say farmers cannot “conserve their way out” of California’s water shortage. “Growers have been utilizing technology and tools much more efficiently the last number of years in order to maintain their profitability,” said Gibony. “At this point, if a grower is trying to conserve more, it’s going to be at an economic cost to him and at an economic cost to the community.”

Beth Pandol is the executive director of the Water Association of Kern County.

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30

Petroleum association plans to open local office The California Independent Petroleum Association plans to open a Bakersfield regional office that would be the oil trade group’s only location outside Sacramento. While CIPA has not yet identified where the office will be located, it has selected Blair Knox, CIPA’S director of public affairs, to run the operation. Knox is no stranger to Kern County. Before joining the CIPA staff, he worked for then 4th District Kern County Supervisor Ray Watson. In 2002, he unsuccessfully ran for state Senate. Before his career in the political world, Knox ran his parents’ agricultural trucking company, Golden Empire Trucking, from 1994 to 1999. He continues to serve on the board for H.M. Holloway, Inc., an agricultural gypsum mining company that has been family-owned since 1932. Rock Zierman, CIPA’s chief executive officer, said the Bakersfield office will serve California’s leading oil producing areas of Kern County, Southern California and the Central Coast. — Kern Business Journal

KERN BUSINESS JOURNAL

Februar y/March 2014

Dollars and Sense

Federal tax-saving device may benefit growers By Joel Bock

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ith federal income tax rates recently increasing, Kern County growers of agricultural products are likely looking for opportunities to substantially reduce their tax liability. Since there are several types of crops from Kern County that are exported to foreign countries, a tax-saving opportunity that some growers have already implemented is the “Interest Charge Domestic International Sales Corporation,” or IC-DISC. While there are many exporters who could be taking advantage of this tax opportunity, the most recent information released Joel Bock from the IRS indicates that many eligible taxpayers have not yet implemented the IC-DISC. And this opportunity is not limited to agricultural products. An IC-DISC allows a grower to reduce his or her tax rate on 50 percent of their export profit to the qualified dividend rate (i.e., 15 percent to 20 percent). With current federal tax rates as high as 39.6 percent, the reduction

related to the IC-DISC can result in significant tax savings. Growers can sell their crops through an unrelated party, such as a broker, and still receive the tax benefits of the IC-DISC, as long as growers are able to document the foreign destination of their crops. For example, if a grower had $1 million of profit from the sale of a crop and 90 percent of the profit, or $900,000, was attributable to export sales, then the grower would be allowed to pay a $450,000 commission to the IC-DISC. The commission is calculated by multiplying the export profit of $900,000 by 50 percent. The commission expense generates an ordinary deduction and offsets tax at a marginal rate of 39.6 percent. The IC-DISC would then pay a $450,000 qualified dividend back to the grower, who may be taxed at 20 percent. The net tax savings from this transaction would be $88,200. How this is calculated: 39.6 percent the ordinary tax rate, less 20 percent qualified dividend tax rate, is a 19.6 percent tax rate reduction; multiplying the 19.6 percent tax rate reduction by the commission expense/qualified dividend amount of $450,000 is $88,200.) IC-DISC benefits are not only available to the growers of the crop. For example, if a broker takes title to the crop and then ships

the crop to a foreign destination, the broker can take advantage of IC-DISC benefits, as well. However, since the profit margin for a broker would likely be less than 8 percent, the broker would calculate the IC-DISC commission using the 4 percent of gross export sales method, instead of the 50 percent of export profit method previously illustrated. Mechanically, the process of creating the IC-DISC is as follows: 1) The IC-DISC corporation is formed. 2) The franchise agreement between the IC-DISC and the related supplier (i.e., grower) is created. 3) Form 4876-A (“Election to be Treated as an Interest Charge DISC”) is filed with the IRS. 4) The IC-DISC must be funded with a minimum of $2,500. The information above is provided for illustration purposes only and does not attempt to address every specific tax situation. While there is certainly the potential for substantial tax savings from the IC-DISC, we recommend that you seek guidance from an experienced tax advisor before attempting to implement this tax strategy. Joel A. Bock is a partner in Daniells, Phillips, Vaughan & Bock, a Bakersfield accounting firm.

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Is an approximately 12,000 square foot office building in SW Bakersfield. The building is fully built-out with offices, open bullpen area, conference room, and shipping/ receiving area. The building is also extensively upgraded for technology and data/R&D. The building sits on a 1.45 acre industrial lot with a fully asphalted and fenced yard.

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Cross Valley Canal: One of state’s most important By Trent Taylor

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Photo courtesy of Martin Varga

The Cross Valley Canal was constructed in 1975 to move State Water Project water supplies from the California Aqueduct to urban Bakersfield and to meet agricultural demands.

Friant-Kern Canal. In the 1990s, in an effort to increase flexibility of water deliveries to residents, farmers and the newly constructed groundwater banking projects, the existing CVC pumping plant infrastructure was improved to allow for water to be moved in both forward and reverse flow within the canal, and the forward flow pumping capacity increased to 922 cubic feet per second. This allowed the agency and CVC participants the ability to transfer water among local water districts, and provided groundwater banking projects the ability to not only receive increased supplies for recharge purposes, but also deliver recovered

groundwater to the aqueduct to meet local and statewide needs. Around 2004, the agency and the participants recognized the need to expand the CVC to increase supply reliability and to be able to receive excess surface water supplies from Millerton Lake above Fresno, FriantKern flood water and Article 21 excess water from the SWP. In 2005, the CVC Expansion Project began and was completed in 2012. The Expansion Project increased the CVC’s capacity to 1,422 cfs (or by approximately 54 percent). It also included the construction of new canal facilities and improvements to existing facilities, including:

Trent Taylor is a water resources planner with the Kern County Water Agency.

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ater leaders in Kern County have shown commitment to advanced and efficient infrastructure over the years, which has evolved into making local water operations a switching yard for water—moving, transferring and delivering water in the most cost-effective and efficient manner possible. “Early on, the Kern County Water Agency and its Cross Valley Canal participants made a strategic commitment to invest significant resources in the development of local infrastructure to support water movement and delivery,” said Kern County Water Agency (Agency) Board of Directors President Ted Page. “They understood the importance of long-term flexibility and knew it would have a positive impact on transporting water.” The Cross Valley Canal was constructed in 1975 to move State Water Project water supplies from the California Aqueduct to urban Bakersfield and to meet agricultural demands. The CVC spans a total of 21.5 miles. The first 17 miles are concrete lined to minimize water losses, while the remaining section is unlined to facilitate ongoing recharge. This represented incredible infrastructure, with the CVC connecting the aqueduct, local banking projects, and water districts, the agency’s Henry C. Garnett Water Purification Plant, Arvin-Edison Intake Canal and the

• Greater Bakersfield Turnout No. 2 – A bidirectional 500-cfs turnout that connects the aqueduct and the CVC. • The Cross Valley Canal / Friant-Kern Canal Intertie – A bidirectional 500-cfs facility that connects the CVC to the Central Valley Project’s Friant-Kern Canal and the Arvin-Edison Intake Canal. • Six new pumping plant facilities – Each pumping plant facility lifts water approximately 20 feet into the subsequent CVC pool. • Raising of canal levee and liner – The existing CVC levee and concrete liner was raised by approximately two feet throughout the lined portion of the CVC to accommodate the increased 500-cfs capacity. Over the past 38 years, the CVC has evolved into one of the most important water conveyance facilities in California. Initially designed as a forward flow facility for the movement of SWP supplies from the aqueduct into urban Bakersfield, the CVC now has the operational capability to move SWP water, CVP water, groundwater and Kern River supplies in both forward and reverse flow. Through the use of the expanded canal facilities and turnouts, the CVC has also been able to more strategically facilitate water transfers of surface and groundwater, and deliveries between local water districts and their purveyors.

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Februar y/March 2014

‘Valley’s Gold’ showcases local agriculture By Katie Rodgers

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econd-generation farmer Curt Holmes of Holmes Ag was interviewed in his Delano orchard during the citrus episode of a television series that presents a behind-thescenes look at agriculture, the economic engine that drives this region. Holmes, who farms citrus throughout the valley, from Fresno to Kern counties, shared with viewers the history of his family’s operation and what it takes to grow the perfect piece of fruit. He discussed the cultural practices and harvest processes utilized in the citrus industry, as well as many of the risks, challenges and provisions that are taken to protect the fruit from weather and pest dangers. In 2013, ValleyPBS and Fresno County Farm Bureau partnered to debut “Valley’s Gold,” a weekly series that focuses on agriculture. The 13-episode series premiered in mid-September on ValleyPBS. Topics in the first season included grapes, peaches, tomatoes, the Fresno State College of Agriculture, figs, nuts, dairy, olives, cotton, pomegranates/persimmons, poultry, citrus and holiday traditions. Focused on an area from Merced through Kern counties, the show allows viewers to experience a close-up look at every aspect of the journey crops take from the field to the fork in the San Joaquin Valley. Fresno County Farm Bureau CEO Ryan Jacobsen is the host of the show. Each episode is comprised of several segments, including harvest, processing or packing, and many tips for home growers, as well as recipes utilizing the featured commodity. A historical component is also incorporated in many of the shows. “Our region offers a diversity of agriculture seen nowhere else on the planet. Yet, many don’t know how these crops are produced and processed,” said Jacobsen. The show “provides a behind-the-scenes look, while empowering local residents with knowledge of our important agricultural industry and the role it plays in the worldwide diet.” “Valley’s Gold” shows viewers the diverse agricultural production that takes place right in their backyards. “As more of the general population becomes disconnected from agriculture, this provides them the opportunity to learn how the food they consume is produced,” said Jacobsen. “For the agricultural community, it provides a venue for them to tell their story, as well as learn about crops outside their own.”

Photo courtesy of Martin Vargay

Fresno County Farm Bureau CEO Ryan Jacobsen interviews farmer Kyle Sawatzky during the filming of the PBS agriculture series “Valley’s Gold.” Delano area farmer Curt Holmes is featured in one of the episodes.

Season two of “Valley’s Gold” is planned to begin airing in mid-2014 on ValleyPBS. “Valley’s Gold” airs on ValleyPBS on Wednesdays at 7 p.m. Episodes are rebroadcast on Saturdays at 6:30 p.m. and Sundays at 10:30 a.m. Previously aired episodes, more information and featured recipes are available online at www.valleysgold.org.

Katie Rodgers is the Fresno County Farm Bureau’s public relations manager.

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Februar y/March 2014

KERN BUSINESS JOURNAL

Should your company provide WiFi access? By Paul Trent

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ost travelers these days take for granted that there will be in-room WiFi Internet connection when they check into a hotel. A service that was once unique, is now commonplace. The same goes for the business environment. We have come to expect some type of WiFi-based Internet connectivity when we attend an out-of-area meeting. We are surprised and disappointed when it does not exist. When my customers and vendors come to my office, they have also come to expect WiFibased Internet access. Several of my business clients are struggling with their decisions to provide WiFi service to their customers and vendors. Some clients are struggling with how to Paul Trent offer WiFi-based Internet access, while maintaining network security and not negatively impacting their employees’ ability to work effectively. Consider one of my business clients. The company was regularly experiencing a midday slowdown in its Internet access. On some workdays, the slowdown was so bad that the system could barely be used. After some investigation, we discovered that a nearby Internet user had obtained the company’s “guest” WiFi key and was accessing the company’s network. The unauthorized user was consuming all of the company’s Internet bandwidth. When my clients ask if they should make WiFi access available to customers and vendors, I pose some questions and advise: Does it make sense? Evaluate your needs. Will WiFi help you build customer loyalty and /or realize an increase in business? Will it make your meet-

ings with vendors more effective? How many people will be accessing your Internet service? Are the numbers sufficient to justify the investment? What impact will this have on your business’ use of the Internet, or on your local network? What are the security issues? What will it take? Make sure that you understand the capabilities of the WiFi network that you are installing as far as range, speed and impact on other technologies in the same or adjacent bandwidth. Identify what physical barriers exist that may impede or block the WiFi signal. There are many standards for WiFi access, ranging from the early 802.11a to today’s most common standard of 802.11n. These standards relate to the bandwidths and other features the systems will support. A new standard, the IEEE 802.11ac, is coming to the market and has the potential to change the way we use WiFi technology. You should consider what access to your business network you want the WiFi network to have. What days and hours do you want the WiFi access to be available? To offer WiFi service, a business needs a good-quality firewall/router and Internet service. For security, isolate the WiFi guest service from your company’s business systems, change the access key frequently, and control the bandwidth the guest WiFi network can consume. Include WiFi protected access technologies (WPA at a minimum and WPA2 is recommended) to help protect your network from hackers. There is no absolute protection. But there are things that you can do that will help. With the proper strategies and equipment, including security systems, providing WiFi access can benefit both businesses and their customers or vendors. Paul Trent is president of Bakersfieldbased Trent Systems, an information technology consulting firm. He can be contacted through his website www.trentsystems.net

Blue Shield of California to buy GEMCare Health Plan Health insurance giant Blue Shield of California has announced plans to buy Bakersfield-based GEMCare Health Plan. An executive for the local insurance company said plan members probably won’t notice any changes until next year. “We expect little to no impact on employees and operations here in Bakersfield at least through December 2014,” said Mike Myers, GEMCare Health Plan’s president and CEO. He said the price Blue Shield will pay is confidential and the provider networks for members will stay the same. The acquisition must be approved by the California Department of Managed Health Care. Myers said the state has 30 to 60 days to review the plan, and he expects approval on or about March 1. — The Bakersfield Californian

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Marketing tips

‘Crisis’ can strike any day; be prepared By Maureen Buscher-Dang

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ike it or not, crisis response is a 24/7 reality. When disaster hits, an organization should be front and center in its communications. It also needs to show genuine concern and empathy. The golden raspberry for how not to handle public relations during a disaster goes to Tony Hayward, former CEO of British Petroleum. After the explosion on the Deepwater Horizon drilling rig in 2010 that killed 11 people and spewed oil into the Gulf for 86 days, Hayward initially downplayed the spill, calling it “relatively tiny” in comparison to the size of the ocean. A month and a half later, Hayward stood before cameras and issued an apology to Gulf Coast residents: “We’re sorry for the massive disruption it’s caused to their lives. There’s no one who wants this thing over more than I do; I’d like my life back.” Odds are pretty good every organization will sustain at least one crisis during its existence. How it plans for and manages that crisis can set a great organization apart from a mediocre one. Here are some tips: Plan ahead — The time to plan for a crisis is before it happens. Make a realistic list of potential threats to your organization. Identify a team to manage the crisis and make quick decisions. Designate an accessible and knowledgeable spokesperson. Outline what should be done and when. Know your target audience — Chances are your organization has more than one audience or stakeholder. Include them in your communications planning. Maintain continuity of message across all groups.

Key messages — ­ Create key messages to control your communications. Be brief and to the point. Use a three-pronged approach to designing key messages: an opening statement that lays the foundation; support that statement with evidence; end by driving home the conclusion you want people to reach. • Statement: “Hogwash Sewage Treatment Co. wants to build its latest plant in Bakersfield because it will expand our business, plus create jobs and taxes for the local economy.” • Evidence: “The demand for sewage treatment in California has tripled Maureen in the past five years. Kern County is a transportation hub, ideal for our Buscher-Dang shipping purposes. We expect to hire 200 new employees from this area and add about $5 million a year to the local tax base.” • Ending: “The new Hogwash Sewage Treatment Plant is a win-win for our company and the local economy.” Practice — Test your crisis plan. Gather management and staff and simulate their responses in real time. Evaluate what worked well and what didn’t. Make adjustments. Review the plan annually to update personnel and contact information. Monitor — Track what is being said about your organization. Set up a Google alert which will send notices of stories and comments to your email account. This will allow you to address incorrect or unflattering information in a timely fashion. A company’s reputation is its greatest asset. Integrity, honesty and responsibility comprise the key elements of building and maintaining a solid reputation. An organization can look its best when it is prepared for the worst. Maureen Buscher-Dang is a Bakersfield public relations consultant

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Good business plans are road maps to success By Kelly Bearden

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he need for a company to have a good business plan has long been recognized. When the Kauffman Center for Entrepreneurial Leadership recently surveyed the winners of its Entrepreneur of the Year Award, it found companies with written business plans had 50 percent greater sales growth and 12 percent higher gross profit margins than companies without plans. Consultants with the Small Business Development Center at California State University, Bakersfield help local entrepreneurs with a variety of business needs, ranging from marketing to finance. Guiding these business activities is the development of good business plans. Consider Dress for Success Bakersfield, a relatively new SBDC client. The non-profit organization helps low-income women dress appropriately to compete for jobs in today’s workplace. The women are referred to DFSB from local organizations and government agencies, such as the Department of Human Services, Clinica Sierra Vista and Kaplan College. Executive Director Elaine McNearney, a local sales and marketing veteran, explains funding for her organization comes through corporate and individual donations, foundation grants and fundraisers. Other than a Kelly Bearden minor annual licensing fee paid to Dress for Success Worldwide, all money raised remains local. When McNearney began operation in 2012, she wanted to bring fresh eyes and ideas to the Dress for Success mission. She turned to the SBDC for help. A top priority was placed on developing a business plan that would establish measurable goals, as well as mechanisms for regularly reviewing goals and progress. The plan also needed to identify and help develop strategic partnerships and funding sources, and create a path for growth. One challenge is the growing need for volunteers. When a client is referred to DFSB, they are paired with a volunteer who helps “suit” them in clothing appropriate for their prospective job. The volunteer also provides resume review and job interview tips. McNearney already has formed partnerships with several companies that provide funding, volunteers and clothing donations. Chief among DFSB supporters are Chevron and Walmart, whose $30,000 donation enabled a computerized career development center to be built. The CSUB-based Small Business Development Center, which is providing DFSB business guidance, is one of five service centers that make up the UC Merced SBDC Network in Cali-

Photo courtesy of Dress for Success Bakersfield

Dress for Success Bakersfield outfitted four students referred by the John Muir Charter School/ FIELD program for upcoming job interviews. They are (left to right) front row, Rosa Gonzalez and Maria Aguirre; back row: Ana Aguilar and Vanessa Saldivar.

fornia. Funded by the U.S. Small Business Administration, the program’s goal is to create economic growth in communities by providing free consulting services and educational programs. The center’s consultants place importance on developing business plans, which are key to a company obtaining financing. They are also key to a company becoming successful. Business plans are dynamic. They must be regularly reviewed and adjusted to meet changing market conditions and company goals. Posted on the Small Business Administration’s website [www.sba.gov] are numerous articles that contain tips for developing business plans. Combined with the advice given by local SBDC consultants, entrepreneurs can develop their own road maps to success. The center at CSUB assists entrepreneurs and small business owners in Kern, Mono and Inyo counties. For more information and to arrange a free consultation, go to www.csub.edu/sbdc.

Kelly Bearden is the director of the Small Business Development Center at California State University, Bakersfield.

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Valley Air District cleaning up agriculture pumps By Janelle Schneider

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hen valley raisin grower and vineyard manager Randy Kazarian wanted to replace older, polluting agricultural pumps, he looked to the Valley Air District’s Ag Pump Program for financial assistance. Along the way, he has saved hundreds of thousands of dollars. “The program has been a critical factor in being able to upgrade pumps, and also keeps me aware of the cleanest and most efficient technology,” said Kazarian, whose Kazarian Vineyard Development manages 14,000 acres of vineyard throughout Kern, Fresno and Madera counties. The district has funded 70 to 80 projects for Kazarian, including replacing diesel pumps, purchasing new electric pumps and mobile pumps, for both his own acreage and the vineyards he manages for other growers. In fact, he’s such a believer in the program that he has convinced skeptical clients of its value. “I’ve gotten about 95 percent of my growers involved in the program,” Kazarian estimates. “I’ve done a huge amount of engines and electric conversions.” Since it debuted in 2000, the Ag Pump Program has funded more than 6,500 projects valley-wide and removed more than 52,000 tons of lifetime emissions from the air basin. The program funds three types of pump projects: diesel-to-diesel repower; diesel-to-electric conversions; and new electric motors on new wells. And at upwards of $44,000 per unit, the district’s funding of what can be up to 50 percent of a project often makes the difference between the ability to repower or replace a pump, or not. “Exhaust treatments have gotten much more expensive,” Kazarian says, but they’re also more fuel efficient, which pays economic dividends for growers and, in the big picture, cleanair dividends for the valley. In fact, he’s working on a new project that will convert natural-gas engines to electric in Kern County, pumping close to 12,000 gallons per minute. He says that besides pleasantly surprising his clients with significant financial benefits, the Ag Pump Program also busts some stereotypes that many growers have about the ease and efficiency of obtaining grants through what can be perceived as a cumbersome governmental agency. “One thing I can tell you, the people I’ve dealt with at the district have all been super, and my clients have great experiences,” he says, which brings positive repercussions that extend beyond merely replacing pumps. “After you realize how the program works, you understand that we’re all working toward the same goal: cleaning the air and being as efficient as possible. It’s not ‘you’ versus ‘me.’ We’re all working together to achieve the same goal,” Kazarian says. For information and applications for the Ag Pump Program, visit www.valleyair.org/grants or call the District’s grants department at 1-855-99 GRANT.

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Janelle Schneider is the public information representative for the San Joaquin Valley Air Pollution Control District.

Estimated $100 million freeze loss to citrus The December freeze’s damage to Kern County’s citrus crop has been estimated at more than $100 million. Official loss figures won’t be available until April. Kern County Agricultural Commissioner Ruben Arroyo reported that growers of lemons, tangerines and mandarins have lost as much as half their crop to freeze damage. He estimated 15 percent of the county’s Valencia orange crop and 35 percent of other large orange varieties are gone. Lemons may have taken the biggest hit as growers and packers estimated 50 percent of the total is unmarketable. Tangerines and mandarins appear to have suffered nearly as much, with losses estimated at between 40 percent and 50 percent. According to the most recent Kern County Crop Report, the total citrus crop in Kern County was worth more than $620 million in 2012, up from $540 million the previous year. The next crop report will be released in April. — The Bakersfield Californian

WEB TV RADIO PRINT

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Greater Bakersfield Chamber of Commerce

February/March events Beautiful Bakersfield nominations are now being accepted. Visit www.bakersfieldchamber.org to find the nomination form. Feb. 3, 10, 17, 24, March 3, 10, 17, 24, 31 -- Strictly Business â&#x20AC;&#x201C; Chamberâ&#x20AC;&#x2122;s live business broadcast, 10 to 11 a.m. on Bakersfield.com Feb. 7, 14, 21, 28, March 7, 14, 21, 28 -- Government Review Council; 7:30 to 8:30 a.m.; Greater Bakersfield Chamber of Commerce, 1725 Eye St. Feb. 11 â&#x20AC;&#x201C; Seminar --â&#x20AC;&#x153;Financial Resources and Access to Capital;â&#x20AC;? registration 11:30 a.m.; program and lunch, noon to 1 p.m.; $30 for members, $60 for nonmembers; Greater Bakersfield Chamber of Commerce. Feb. 18 -- PG&E Office Hours; 8:30 a.m. to noon; Greater Bakersfield Chamber of Commerce. Feb. 22 -- E-Waste Recycling Event; Recycle your computers, TVs, printers, etc.; 9 a.m. to 1 p.m.; Greater Bakersfield Chamber of Commerce. Feb. 24 â&#x20AC;&#x201C; Good Morning Bakersfield; registration 6:45 a.m.; program and breakfast, 7 to 8:30 a.m.; $45 for members, $75 for nonmembers, $550 for a table of 10; DoubleTree by Hilton, 3100 Camino Del Rio Ct. Program sponsorships are available. March 13 -- Small Business Networking Breakfast; check-in and networking 7:30 a.m., program and continental breakfast, 8 to 10 a.m.; $25 for members, $50 for nonmembers; Greater Bakersfield Chamber of Commerce. This event opens the door for small businesses to find out how to do business with large companies. March 17 -- Beautiful Bakersfield nominations end. March 18 -- PG&E Office Hours; 8:30 a.m. to noon; Greater Bakersfield Chamber of Commerce. March 26 â&#x20AC;&#x201C; Social Media Therapy; registration 11:30 a.m.; program and lunch, noon to 1 p.m.; $30 for members, $60 for nonmembers; Greater Bakersfield Chamber of Commerce. Program sponsorships are available. Please visit www.bakersfieldchamber.org or call (661) 3274421 for more information, or to register for any of these events.

Februar y/March 2014

Companies, workers: Keep close eyes on 401(k) plans By Paul Anderson

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s the new year is getting started, likely you are setting business goals for 20014 and beyond. Donâ&#x20AC;&#x2122;t forget to review a key area that may help you reach your important business and personal investment goals. Reviewing the cost of your defined contribution plan, an all too common area that is overlooked, can have an impact on your bottom line, both for your business and your personal retirement. Recent regulation changes For years, the Department of Labor has talked about passing fee disclosure regulations. In 2012, it finally happened. Gone are the days when your 401(k) plan provider could distract you with pages of Paul Anderson confusing text to hide the fee you were being charged for things, such as record-keeping, accounting and administration. In some cases, the confusion led many businesses and their employees to believe that they werenâ&#x20AC;&#x2122;t being charged any fees at all. The new federal rules require companies that administer 401(k) plans to show client-companies and their individual employees exactly what fees are being taken from their investment returns to pay for administration

and other operating costs. You should now be getting a one-sheet summary of plan fees that clearly explain the costs you are paying. Review your 401(k) fee disclosure This provides you with a great opportunity to review these fees and compare them to what you may be able to get with another plan. When comparing fees, be sure to compare apples to apples. The fee will vary depending on the size of your business. Generally, small plans can expect to pay a little more in fees than larger plans. Not surprisingly, the industry-defined contribution plan fees have decreased somewhat since the new transparency laws have taken place. Now is a perfect time to review your fee and discuss it with your plan advisor to make sure you arenâ&#x20AC;&#x2122;t paying more than is necessary. If your fee is out of line with the competition, it may be time to consider shopping around for a more competitive plan. These fees have an impact on your business costs, as well as your personal costs. Do your business, yourself and your employees a favor and review these fees. Your employees and your bottom line will thank you for it.

Paul Anderson is an investment advisor and partner at Moneywise Wealth Management. He is also a host of the Moneywise Guys radio program on KERN 1180 weekdays 10 a.m. to noon.

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Bakersfield Californian file photo

The Lopez-Hill House at the Kern County Museum is decorated with lights as part of the museum’s month long Christmas event.

Roger Perez: Kern County Museum’s future Roger Perez was named executive director of the Kern County Museum by the museum foundation board in October 2012. Before assuming the post, Perez was the marketing and creative services director for the North of the River Recreation and Park District. Perez has extensive experience in media, web design, marketing plans, television production, social media, print production and community relaRoger Perez tions. He recently answered the Kern Business Journal’s questions about the future of the county’s museum, which includes Pioneer Village on Chester Avenue.

used to raise money to support preservation and education efforts.

Why has the museum been focusing on “entertainment events?” I don’t know that I would say we have “focused” on entertainment events as of late. We have always used events as a fundraising tool at the museum, and we have been making improvements to the current events roster to maximize return on investment and visibility. I feel strongly that education and entertainment go very well together. In order to succeed as a museum, we need to add “entertainment” to the historical and educational components we offer. A trip to the museum should not only be fun, but it should be a great time for the whole family. Perhaps by offering “entertainment” at a multitude of different events on the grounds, we can attract people to the museum who never would have come without those events.

What can visitors expect in the future? You can expect to see more educational events, more improvements to our current line-up of events, and deeper partnerships with local business and non-profit organizations. We are looking to improve some of our exhibits with interactive content and sound, and possibly open some new exhibits in the future.

What events have been held at the museum and what has been their success? We only hold a handful of annual events at the museum. They include the Nut Festival, which was a huge success, with more than $160,000 raised to support museum education programs and preservation efforts; Safe Halloween, which continues to be a strong fundraiser, raising nearly $80,000 this year; and our Holiday Lamplight Tours, which typically raise between $15,000 and $20,000 per year. We also offer regular education events from time to time that tie closely to the school tours we offer at the museum. These are more historically focused, such as Wild West Days and California History Day.

Bakersfield Californian file photo

The entry to the Kern County Museum.

How can a balance be struck between preserving artifacts and entertaining? We take great care in our preservation efforts at the museum. The best way to strike a balance between the two is to keep separate departments working on them. It is, for the most part, the goal of the Curatorial Department to preserve, protect and collect history for the museum. The Education and Events departments, however, can focus more on providing fun ways to highlight and celebrate that history. Of course, they do go hand-in-hand. “Entertainment events” are

Is the museum an economic development tool? I believe it can be. One of the things local museum directors have been working on is a more collaborative approach to getting the word out about the wonderful museums we have here in town. Museums of any type add value to an economic landscape, because they add quality of life, culture and education to the things offered by a community.

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Bakersfield company launches ‘green’ products MTS Stimulation Services and MTS Environmental Solutions have announced a new, effective line of environmentallyand people-friendly synthetic products that replace traditional acids and caustics. MTS Stimulation Services Inc., which has been in business for 30 years, provides a variety of oil field services for production, disposal and injection wells; well maintenance; and hydrogen sulfide removal. “To be on the cutting edge of technology and being able to offer these ‘green’ alternatives is truly exciting,” said Monda Byrd, company vice-president. “Both oil and agriculture use virtually the same chemicals and operate on each others’ lands. So this is a great opportunity to serve them both.” These new products are not only effective, but are biodegradable, carry triple zero WHMIS scores, and are not regulated by any agency. Most of them carry the EPA’s “Designed for the Environment” approval. “Given the choice between a viable, cost-effective safe product and harsh chemicals, it is an easy choice for any operator to make,” said MTS Safety Manager Doug Patrick. --MTS Stimulation Services

Februar y/March 2014

Navy base eyes $500,000 savings in water conservation By Peggy Shoaf

C

ontinuing efforts to reduce water consumption and save money at the Naval Air Weapons Station, China Lake have moved into the next phase of the basewide Turf Reduction Project. The goal is to further eliminate about a quarter of the grass at 28 base locations. Twenty-three sites will receive a combination of organic and inorganic xeriscape to replace the turf, much like what is being used at the Headquarters Building parade grounds. Irrigation updates, combined with the use of desert friendly landscaping, will result in a 30 percent reduction, or 175 million gallons of water per year. Previous efforts have cut 230 million gallons of water usage from the 2007 baseline of 800 million gallons. In 2012, the Naval Weapons Station earned a federal Green Challenge Achievement Award in recognition of efforts to reduce its environmental footprint by going above and beyond Executive Order 13514 requirements, or Federal Leadership in Environmental, Energy, and Economic Performance. Because water conservation is the lifeblood of community living in the desert, its importance makes it essential to devise ways to conserve. The earlier redesign of the Headquarters Building’s parade ground, which consumed 20.3 million gallons of water a year, resulted in an estimated annual consumption of only about 2.8

million gallons. The parade grounds reportedly had the worst irrigation system on base. “Actual returns from the new landscaping at the Headquarters Building are difficult to measure, because it previously did not have an individual meter,” explained Naval Facilities Construction Manager Lt. (j.g.) Benjamin Bernhardt. Three of the 28 locations — Davidove Park, the soccer field at the corner of Monterey Street and Knox Avenue; Reardon Athletic Field; and a large unused grass area along Nimitz Avenue, north of the Branch Health Clinic — will be left unwatered and unsown. By shutting water down at these sites, nearly $100,000 savings per year in maintenance costs alone will be seen. Other lawn sites earmarked for the project include: Lauritsen Lab, Michelson Lab, the traffic circle and a strip of grass on Lexington Avenue, in front of the Bachelor’s and Officer’s Quarters. Reardon Field will continue to be watered through the upcoming softball season. While watering grass that is regularly used is not considered “wasting water,” xeriscape is being designed to create a beautiful atmosphere consistent with the desert environment. Solar Park will receive a minimal amount of xeriscape only on its borders. Irrigation line replacement and herbicide is being applied to the turf reduction areas.

Peggy Shoaf is the public affairs officer for the Naval Air Weapons Station at China Lake.

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Company HR tips

Customer service gives companies competitive edge By Holly Culhane

G

ood customer service can yield incredible rewards – even sometimes beyond the grave. Most successful local small businesses recognize the need to provide good customer service. The “extra touches” they offer can give local businesses an edge when competing with national retailers and manufacturers. But a recent story I was told was both stunning and eye-opening when it came to the rewards a company can realize for providing good customer service. A veteran husband-and-wife real estate team has made giving good customer service an everyday habit. Their clients become life-long friends and in some cases family. Relationships do not end with a “sold” sign and the payment of a commission. Often clients become return customers. And when help is needed, the Realtor couple is always willing to oblige. Old clients call when they need to find a new gardener or housekeeper. If a crisis, such as flood or fire, occurs they are there with recommendations for temporary housing and contractors. They do not expect payment for their customer service; rather, they Holly Culhane hope they will get return business and referrals. Plus, they actually like their clients and enjoy helping them. But a few months ago, even they were stunned by the returns they started receiving from some of their aging clients. One by one -- for a total of five clients, so far – clients have left instructions for their heirs to sell their property upon their deaths and give the real estate listings to their long-time friends. “I had never heard of this happening before this,” the Realtor wife said, adding that she’s honored to be recognized. “I guess we have been doing something right all these years.” Likely most local small businesses will not be mentioned in their customers’ wills. But they can strive for a lifetime of customer loyalty in return for good customer service. No doubt it takes more than personal service to attract customers. Even independent small businesses must offer competitive prices and quality products to compete. But customers will patronize a small, locally-owned hardware store, for example, if they can find odd-ball nuts and bolts and the expert advice on how to attach them. Big-box stores often cannot provide this level of personal service. Good customer service doesn’t “just happen.” It takes: • A commitment and example from the top. Customers and staff will recognize when a business owner is committed to providing good service to customers. • Careful staffing. Hire employees who understand the need to provide good customer service and who will share the commitment. Establish written policies that emphasize company goals, making good customer service a top priority. • Listening to customers. Good customer service is a conversation. Understand what customers need and want. Provide it. • Consistency. Provide good service in good times and in bad times; to agreeable customers and disagreeable ones. Be open to both praise and complaints. Build on what you are doing right and correct problems when they occur. Good customer service is not just a slogan on the wall or a line in a company’s advertising. To be a reality, it must become a company’s culture. Holly Culhane 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.

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Managing Business Risks

Water brings both benefits and risks to businesses By John Pryor

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ormally, water is our “friend.” However, if it reaches us in an unexpected, out-of-control form, the result can be catastrophic! The frequency of water damage claims are: Wear and tear, 45 percent; human error, 17 percent; rain and flood, 14 percent; clogged drains, 11 percent; and frozen lines, 3 percent. Wear and tear occurs when a sprinkler head — say, in the second-story of a Bakersfield office building — simply discharge in the middle of the night, when no one was around. Damage on the second and main floors are extensive. Water lines inside walls are more insidious, with problems usually discovered after it is too late. Both water and mold damage can be sustained. Mold mediation is very costly. Human error occurs locally when a janitor accidently strikes a ceiling John Pryor sprinkler with a broom handle in an office building, causing it to discharge with heavy damage. Heavy rains and flooding are out of any individual’s control, despite flood control systems in place. Capacity can be exceeded. The same is true for the failure of Isabella Dam when the lake is full, or nearly so. This scenario places downtown Bakersfield under 30 feet of water. Our only choice is to evacuate to higher ground. Clogging example was evident when I was flying slowly

Water leaks, if not caught early, can cause major damage.

over CSUB in a hot air balloon and saw lots of water backed up on the flat roof of a multi-story building. I called the university and the clogged drain was promptly cleared! Frozen line is not a major risk here, except at higher elevations. The infrequent, yet most severe, water risk occurs when

earthquake shaking causes sprinkler system leakage. In the 1994 Northridge earthquake, insurers paid more for sprinkler leakage losses than shaking losses! It is important to avoid — or at least mitigate — each risk. Interior plumbing systems need to be inspected annually – including ceiling drains and HVAC systems. Exterior gutters, downspouts, and eaves need to be cleared of debris. Cracks in walls, loose caulking and eroded mortar joints need repair. The key is to catch problems at an early stage. Either assume or transfer risks. An all-inclusive indemnification (or hold-harmless) clause should be included (in your favor) in leases and other agreements. Risks can be transferred to an insurance carrier, with some policies including flood and water damage automatically. These include policies covering automobiles, fire arts floaters, and scheduled equipment floaters for construction and agribusiness firms. Other policies can include “water damage,” as long as it’s not from a flood (too catastrophic) and as long as it’s “sudden and accidental,” rather than a leak that occurs over an extended period of time before its discovery. The flood risk for fixed location property can be insured by the federal government (FEMA) through your broker, who also can identify the benefits of a DIC (Difference in Conditions) policy that can cost-effectively cover both earthquake and flood risks. John Pryor, a risk management consultant, can be contacted through the Small Business Development Center at California State University, Bakersfield.

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Februar y/March 2014

KERN BUSINESS JOURNAL

Legal Briefs

Landlords maneuvering through legal battlefields By Steve Karcher

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hether they want to be or not, landlords increasingly are becoming the foot soldiers in law enforcement’s war on crime. Fearing government agencies will seize their commercial and residential-income properties if they do not cooperate, and at the urging of law enforcement agencies, landlords are adopting “zero tolerance” policies and evicting controversial tenants. With the number of federal and state property forfeiture cases increasing, landlords have reason to be fearful. But they must take care in reacting to their fears. The U.S. Attorney in Los Angeles last fall dropped several controversial forfeiture cases against marijuana dispensary landlords in Orange and Los Angeles counties. One closely watched case involved property owner Tony Jalali. Jalali owns an Anaheim office complex valued at $1.5 million. He rented space to an insurance agent, a dental practice, an auto parts dealer and two medical marijuana dispensaries. California voters’ passage of Proposition 215 in 1996 decriminalized marijuana for medicinal purposes. Jalali believed renting space to the dispensaries was legal. However, city officials considered them to be a nuisance. Side-stepping state law, which permits dispensaries, city officials turned to federal prosecutors to enforce federal laws that prohibit dispensaries. Instead of accusing landlord Jalali of violating federal drug laws, however, the federal government filed a forfeiture case against him claiming illegal activity was taking place on the premises. Steve Karcher California’s civil forfeiture law requires a criminal conviction before property can be seized. However, federal law, which applies a looser standard that would allow the city to keep 80 percent of the value of Jalali’s property, provides a big incentive to move forward against private citizens, such as Jalali. After being notified of the action, Jalali evicted the one remaining dispensary in his building. But the landlord balked at the government’s demand that he promise to never rent to a dispensary again and to agree to surprise inspections. Instead, Jalali fought back in court. Surprisingly, the federal prosecutor has dropped the case against Jalali, with prejudice – meaning the case cannot be filed again. In exchange, Jalali has agreed to pay his own attorneys’ fees. Similar cases against three other Southern California landlords also have been dropped. But this does not settle the matter. About two dozen of the approximately 30 cases filed in the seven-county Central District of California, which stretches from San Luis Obispo to Riverside, have been settled with landlords agreeing to the terms Jalali rejected. And other federal prosecutors are vowing to continue to take a hard line. Landlords also are being pressured by local law enforcement to adopt “zero tolerance” policies, leaving them stuck between a legal rock and a very hard place. Consider a recent report in The Los Angeles Times’ “Rent Watch” column about a landlord who was “strongly encouraged” by police to establish a “zero tolerance” policy: If a police call to the landlord’s property results in a police report naming a resident, or if it results in a resident being arrested, the action constitutes the “one and final strike.” The resident and all others living in the unit will be immediately evicted. A sweeping “zero tolerance” policy might expose a landlord to discrimination charges, particularly if the policy is seen to single out a group protected by fair housing law. For example, members of some ethnic groups are more likely to be stopped by police and arrested. And some states, including California, have specific laws prohibiting the eviction of domestic abuse victims because of the behavior of an abuser. A “zero tolerance” policy should be narrowly focused, require a conviction and be based on criminal behavior occurring on the premises. The legal battlefields California landlords have been thrown onto are filled with booby traps. Property owners should seek advice from state fair housing agencies and attorneys before advancing. Steve Karcher is a Bakersfield attorney who specializes in real estate, business and personal injury law.

A sweeping “zero tolerance” policy might expose a landlord to discrimination charges, particularly if the policy is seen to single out a group protected by fair housing law.

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Books document area’s rich agricultural past By Katherine Ross

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olonel Thomas Baker, who lent his name to the town of Bakersfield, is an important part of Kern County’s agricultural history. His story, which actually began in Ohio in 1810, is the subject of a new book, “Colonel Baker’s Field: An American Pioneer Story,” by Judy Salamacha, Sandy Mittelsteadt and Chris Brewer. Colonel Baker moved his family to the future site of Bakersfield in 1863. Back then it was known as Kern Island, an inhospitable swamp associated more with illness than with agriculture. But Colonel Baker was about to change all that, as Brewer, who is Baker’s great-great-grandson, Salamacha and Mittelsteadt explain in their book. By the time Kern Island was renamed Bakersfield in 1869, it was well on the way to becoming a place suitable for alfalfa, cotton, sheep and much more. Also see “Historic Chronology of Kern County,” by Richard Bailey, for details about Bakersfield’s rich agricultural history. The story of Kern County agriculture is a saga of harsh realities and triumphs, hard-working men and courageous pioneer women. Learn more about this in “Colonel Baker’s Field: An American Pioneer Story.” We’ve come a long way since the days of the 19th century

pioneers. For an overview of 21st century agriculture in the San Joaquin Valley, as well as the rest of the state, read “Field Guide to California Agriculture,” by Paul F. Starrs and Peter Goin. The book is conveniently divided into chapters describing the categories of agricultural products, crops and commodities, as well as California’s major regions. Starrs and Goin characterize California agriculture as “bold in amColonel Thomas Baker bition and vast in extent.” Read about this multi-million-dollar industry. For even more information, visit the Jack Maguire Local History Room at the Beale Memorial Library, for a look at historical files tracking agriculture decade by decade and books on other movers and shakers in Kern County’s agricultural drama, such as “Industrial Cowboys: Miller & Lux and the Transformation of the Far West, 1850-1920. ” The Local History room in the library’s downtown Bakersfield headquarters branch is now open Monday through Saturday, from 1 p.m. to 6 pm. The library’s digital historical photo archive is available 24/7 through the website www.kerncountylibrary.org. Katherine Ross is a librarian at the Kern County Beale Memorial Library on Truxtun Avenue.

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Kern County: Year in review Kern County: Year in Review President’s Report

Largest Economies in the Valley (GDP)

Year Over Year Employment Change

40,000 35,000

By Richard Chapman

Millions ($)

20,000

15,000

In 2013, Kern County's economy grew at a moderate rate compared with 2012. Most estimates put the just-ended year's growth around 3.0%. (In 2012, the region's GDP expanded at a blistering annual rate of 6.0%.) Over the last few quarters the non-farm sector has added approximately 5,000 jobs (year-over-year), while the farm sector has stabilized from mid-year losses. The top three industry sectors in 2013 were wholesale trade (7.1%), oil and gas extraction (6.5%), and construction (5.4%). Government and the leisure and hospitality sectors contracted within the last year. 10,000

Kern Fresno

20,000

San Joaquin Stanislaus

15,000

Tulare

10,000

5,000

Number of Jobs

30,000 25,000

Farm

0

Non-Farm

-5,000

5,000 0

2008

2009

2010

2011

2012

Year

Source: U.S. Sbureau of Economic Analysis

-10,000

-15,000

% Change in Real GDP by Metro

-20,000

Source: CA Employment Development Department

In December, the Milken Institute ranked the Bakersfield-Delano region as the 19th best-performing metro (out of 200 areas) in the U.S. Kern County performed exceedingly well in two important measures: five-year high-tech output (7th) and one-year job growth (12th). By contrast, the rest of the Valley’s economies finished significantly behind Kern County. A majority of the metros ended up in the bottom quartile of the annual competitive rankings.

economies. Based on forecasted commodity prices in the region's dominant industries (energy and agriculture), Kern County will continue to perform well. Most industry experts predict 2014 oil prices to fluctuate in the $90-$100/Bbl range, while nut and milk prices are projected to increase in the coming year. (The negative effects of the recent freeze on citrus and other crops have yet to be determined.) In addition, economic activity in the healthcare services and transportation/logistics sectors should grow as Kern becomes a leading center for healthcare and distribution operations.

In 2014, most economists forecast sustained moderate growth for both the U.S. and Kern County

- Richard Chapman is CEO and President of Kern Economic Development Corporation

Metro Area Kern Fresno San Joaquin Stanislaus Tulare

2008

2009

2010

2011

2012

30,100 29,800 19,700 15,100 11,400

28,824 29,849 19,370 14,913 10,698

30,914 30,469 19,485 15,226 11,335

32,264 31,202 19,725 15,456 12,030

34,268 31,890 20,390 15,998 12,005

Source: U.S. Sbureau of Economic Analysis

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Februar y/March 2014

KERN BUSINESS JOURNAL

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BUSINESS PROFILE: Great American Cleanup; Greater Bakersfield Green Expo

Sponsors, volunteers make cleanup event one of nation’s largest American Cleanup or Greater Bakersfield Green Expo. Go to www.keepbakersfieldbeautiful.us or www.gbgreenexpo.org; or call Jessica Felix at Keep Bakersfield Beautiful, (661) 326-3539 or Ray Scott at Price Disposal, (661) 831-2321. Businesses sponsoring the Great American Clean Up and Greater Bakersfield Green Expo will receive event participation recognition and will be given opportunities to have vendor booths. Greater Bakersfield Green Expo vendor fees help create the more than $7,000 fund used to award the winners in the Recycled Material Arts Competition.

Ray Scott is the administrator for Price Disposal and the chairman of the Greater Bakersfield Green Expo. Scott also serves on the board of Keep Bakersfield Beautiful. He recently answered the Kern Business Journal’s questions regarding the two nonprofit organizations and the 2014 Green Expo, Ray Scott which will be held on April 12 at Yokuts Park from 8 a.m. to 1 p.m. What is the Keep America Beautiful Great American Cleanup? It is one of the largest community service events in the nation. Locally, GAC takes place year-round through the efforts of the City of Bakersfield’s Solid Waste Division and the non-profit Keep Bakersfield Beautiful organization. It is driven by volunteers, whose mission is “to engage individuals to take greater responsibility for improving their community.” Keep Bakersfield Beautiful has received numerous local, state and national awards. Its success is attributed to its dedicated volunteers and supportive sponsors. Bakersfield’s Great American Cleanup has evolved from a one-day event with more than 7,000 volunteers to a year-round campaign that enables volunteers to conveniently participate in numerous activities. Among its newest activities is the Bakersfield Solid Waste Division’s Freeway Litter Removal Program, which is being operated in collaboration with the Bakersfield Homeless Shelter. This program will be receiving a 2014 national award from Keep America Beautiful. Sal Moretti of the city’s Solid Waste Division will accept the award and make a presentation during the National Keep America Beautiful Conference in Charlotte, N.C., this month. What is the Greater Bakersfield Green Expo? In 2010, the Greater Bakersfield Green Expo joined forces with the Bakersfield Great American Cleanup to create one of the state’s largest green expos. In addition to vendor booths and activities, it features a high school “Recycled Material Art Competition.” This is a collaborative effort involving local government entities and non-profits organizations. It is underwritten by the Metropolitan Recycling Corp., an organization comprised of local refuse and recycling haulers to provide student and public environmental education. In 2012, this collaborative effort earned five awards from local, state and national entities, with one international nomination for “sustainability” from the Edie Awards in London,

Bakersfield Californian file photo

Volunteers JR Wesley, left, and Atticus Burns, work together cleaning up the Kern River bottom during the 2013 Great American Cleanup project.

Why are these events important to Bakersfield and Kern County? Their true importance results from local businesses and residents engaging in such beautification efforts as litter and graffiti removal; tree and flower planting; community gardens; and the painting of electrical box murals. Other activities include Make a Difference Day, Mayor Hall’s Freeway Clean Up, McDonald’s E-Waste, Relay for Life, America Recycles Day, the “Litter It’s Beneath Us” media campaign, and the Beautiful Yard Recognition Program. These are just some of the programs businesses and individuals can participate in and sponsor.

An art project submitted during the Greater Bakersfield Green Expo fashioned an owl from beverage cans.

England. The Greater Bakersfield Green Expo is featured during the state’s Earth Day Press Conference in April in Sacramento. During the event, recycled material artwork projects completed by Kern County students are displayed. In addition, a Facebook contest is held, with the top 50 student projects competing for Apple iPads. Winners are selected by the number of “likes” they receive.

How can a business get involved? Local businesses can become sponsors of either the Keep Bakersfield Beautiful Great

What advances are on the horizon for the Metropolitan Recycling Corp.? Metropolitan Recycling Corp. has been receiving and processing recyclable material since 1999 from construction and demolition, and co-mingled commercial and residential recyclables. Metropolitan Recycling Corp. continues to collaborate with the City of Bakersfield and Kern County to achieve compliance with the state’s recycling mandates, such as the 50 percent diversion rate required by AB939; California’s global warming initiative, or AB32; and, most recently, mandated commercial recycling, or AB341. In April, along with the other area 2014 Earth Day events, the Metropolitan Recycling Corp. will host a grand opening of the newest material recovery facility, or MRF in Kern County. The 50,000-square-foot building will have the capacity of processing metropolitan Bakersfield’s city and county curbside blue cart recyclables and commercial recyclable material. This processing includes separating out items for further recycling. The new facility will be able to process up to 20,000 tons, or 40 million pounds, of material annually. To better understand the requirements of AB341’s mandated commercial recycling, contact the City of Bakersfield Solid Waste Division at (661) 326-3114, the Kern County Waste Management Department at (661) 862-8900 or the refuse hauler that services your location.

In April, along with the other area 2014 “Earth Day” events, the Metropolitan Recycling Corp. will host a grand opening of the newest material recovery facility.

Februar y/March 2014

KERN BUSINESS JOURNAL

Wells Fargo gives helping hand to small businesses By Yahaira Garcia-Perea

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ecognizing small businesses are critical to a community’s economic development, Wells Fargo & Co. recently presented the Dolores Huerta Foundation with a $20,000 grant for its Empezando classes – a 10-week technical assistance course that teaches leadership, business plan writing, and other aspects of operating a successful business to current and prospective small business owners. The course will be taught in Spanish in Bakersfield, Lamont and Arvin. The grant gives Dolores Huerta Foundation the opportunity to reach 50 current or aspiring small business owners and provide them with the tools they need to operate a successful business. Last year, Wells Fargo invested close to $800,000 in South Valley schools and nonprofit agencies that strengthen the community, provide vital services and resources, and address pressing issues. “Kern County is my community,” said Ernie Pineda, South Valley area market president for Wells Fargo. “This is where my

fellow team members and I live, work and play; this is where we choose to raise our families. And that is why it is crucial for us to give back and help all Kern County residents and businesses prosper. As those companies grow, Wells Fargo and our business banking group are here, ready to help those businesses and business owners succeed financially. ” For those who aren’t quite ready or passionate about starting a business, but want to benefit from the financial literacy training, Wells Fargo offers its “Hands on Banking” curriculum. The program can be accessed by visiting www.handsonbanking.com. This free, online program for adults, teens and children teaches the basics of responsible money management. It is also available in Spanish. Financial literacy and start-up training is an ongoing project of the Dolores Huerta Foundation, which has provided workshops in Arvin, Lamont and Lost Hills. The foundation recently graduated 76 students. To learn more about Empezando, contact Dolores Huerta Foundation at (661) 322-3033 Yahaira Garcia-Perea is a communications consultant for Wells Fargo & Co.

Kern farmers recognized for stewardship

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hree farming operations in Kern County were among 45 recognized statewide by the American Farmland Trust in a recent report called Profiles in Stewardship. The Washington, D.C.-based group highlighted efforts by farmers and ranchers to protect the environment and livestock. Those recognized from Kern County include:

Andrews Ag, Irrigation Drainage Water Management — After buying 1,200 acres of cotton and alfalfa in 1998, Michael Andrews has transformed the farm into a diverse fruit and vegetable operation using an Integrated On-Farm Drainage Management program to improve the water and soil quality. Hafenfeld Ranch, Land Conservation and Biodiversity — Bruce Hafenfield — under threat of losing his ranch through an eminent domain lawsuit — saved his century-old farm by using two innovative conservation easements that linked well-managed farmland with the preservation of wildlife habitat. Tezozomoc, Organic Farming and Social Justice — Losing their Los Angeles urban farm to development in 2006 provided the opportunity for the South Central Farmers Health and Education Fund to establish an 80-acre farming cooperative, producing organic food and training new farmers. “The conservation practices highlighted in the Profiles conserve water, reduce greenhouse gases, improve air and water quality, restore wildlife habitat, generate renewable energy and achieve other environmental benefits,” said Edward Thompson Jr., state director for the group. The report can be found at www.farmland.org.

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Photo courtesy of John Harrer

A large crowd gathers for an event at Rancho Rio Stables, south of the Kern River, east of Manor Street.

Horsing around is good business in Kern County

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By John Harrer

akersfield is known as the West Coast home of country music, so it’s no surprise to say it is country through and through. Being labeled country, however, means more than just music. It’s a lifestyle that often includes horses. It’s difficult to say exactly how many horses are in Kern County, but they definitely make a positive fiscal impact. Horses not only helped win the west, they are now helping the local economy. Much of the money spent on horses stays right here in Kern County. Anyone who owns a horse knows it is no casual undertaking. From head to toe, horses need upkeep. First, they need a place to stay. Gary Watt owns Rancho Rio Stables which boards and feeds over 250 horses on the 29.9-acre complex next to the Kern River. A lifelong horseman, Watt has helped organize the Glenville Rodeo for the last 30 years and says the hurdles of operating a boarding stable are many. One of his biggest challenges is a fixed cost – alfalfa. The stables go through two tons of quality alfalfa every day. Watt has to contract early in the year to avoid paying premium prices for winter hay. The Kern County Department of Agriculture reports the county produces over a million tons of alfalfa a year at a value of over $200 million. Manager Helen McKee deals with the daily operations of the barn. McKee says Rancho Rio is operating near full capacity and she sees the number of people owning horses is increasing. There are a lot of family activities for horse owners. Riders can participate in everything from trail riding along the Kern River to team sorting, reining, showing and team roping. The stable has three full-size arenas, several round pens and even sports a dressage ring to accommodate the various interests. A recent sorting event drew well over 150 entries. If a horse wears shoes, as many do, every five to eight weeks they must be replaced. Rosedale Farrier supply carries thousands of shoes in various sizes and shapes for every breed and discipline of horse. Even if a horse does not wear shoes, a farrier is usually required every six to eight weeks to trim and shape their feet. One local farrier, Sean McRoberts, stays busy shoeing or trimming five to nine horses a day. His mobile operation does everything from a simple trim to putting on a set of “sliders”

Photo courtesy of John Harrer

Horse ownership is big business in Kern County. Veterinarian Dr. John Tolley of Bakersfield uses a motorized tool to work on a horse’s mouth.

for the reining horses. Basic medical care is needed, as well. Most horses are vaccinated twice a year for a range of diseases including West Nile virus. They are also wormed and, because their teeth grow their entire life, they need regular dental work. Dr. John Tolley of Bakersfield Veterinary Hospital says, “Since the implementation of motorized tools, working in a horse’s mouth is much more quick and efficient, and obvi-

ously easier on the horse”. With all there is to basic horse-keeping you might wonder why the horse has such a strong attraction. Team roping trainer Dusty Watkins says every one of his students tells him, “I love the sport and I love my horse.” John Harrer is a Bakersfield freelance photojournalist specializing in high action horse sports. Visit www.johnharrer.com

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STROKE

WHEN A OR HEART STRIKES

Februar y/March 2014

ATTACK

WHAT’S YOUR PLAN? When seconds count, nationally-recognized emergency care is standing by.

As an Accredited Heart Attack Receiving Center and Certified Primary Stroke Center, the Emergency Center at San Joaquin Community Hospital is equipped with life-saving technology delivered by an experienced medical team. When it comes to heart attack and stroke, having a plan is vital. But having the right plan is even more important. Before a heart attack or stroke strikes, make a plan to come to San Joaquin Community Hospital – the hospital chosen by more people in Kern County to provide emergency care in critical situations.

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Kern Business Journal February/March 2014