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December 2011 Vol. 24 No. 12

The Voice of Kitsap Business since 1988

Gateway Project A Success Bremerton’s Charleston District merchants unite for improvements By Rodika Tollefson Those familiar with Bremerton’s Charleston District may have noticed some changes in recent months. The area, dubbed the gateway to downtown, has been spruced up and beautified. Gone is some of the graffiti and old paint; parking lots have been lit up; and new events have been welcoming neighbors and community members. “We’re rejuvenated. We’ve got a lot of energy and have 100% participat ion from businesses and in the past four months achieved more than we have in eight years,” said Sally Glivar, owner of Great American Furniture located on 6th Street and president of the Charleston Business Association. The association has been in existence since 2004 but the business owners are newly banded together, Glivar said. They originally united to oppose the proposal to bring a methadone clinic to the area, and then decided to use their collective energy for making improvements to their district. L to R Todd Best, Developer; Carl & Sally Glivar, Great American Furniture; Beth Shea, Echo Artworks; Carol Arends, City Council

Cover Story , page 4

$1.50 Display until January 1st

Technology, pg 16

Automotive, pp 34, 35

Special Reports:

Human Resources, pg 18

Editorial, pp 36-38

Executive Gift Gving, pp 8-15

Real Estate, pp 23-25

Home Builders Newsletter, pp 19-22

Inside Tax Planning, pp 26-29

Environment, pg 33

Prowse & Co. presents donation to Christian school Brenda Prowse, broker and owner of Prowse and Company Real Estate in Poulsbo, presented a check for $3,240 to Gateway Christian Schools (formerly Christ the King Academy) of Poulsbo. As in the past, Prowse has contributed a portion of a commission earned to a client’s favorite charity. This most donation comes from the sale of the home of Conrad and Judy Green. Accepting the check on behalf of Gateway Christian Schools was the head of school, Michael Forney.

New SVP/COO named at Kitsap Credit Union Kitsap Credit Union announced Kellie LeTexier’s promotion to SVP/COO. Having previously served as SVP of Human Resources, she now oversees several departments, including branch operations, training, marketing and human resources. CEO Elliot Gregg, expressed his enthusiasm for this promotion stating, “Along with working side-by-side with the leadership of branch operations and marketing for years, Kellie has directed our human resources and training functions for the past ten years and is well poised to direct those areas with considerable insight.” Contributing to the overall management and direction of the Credit Union, LeTexier believes member satisfaction, as well as employee satisfaction, play an important role in a successful and sound financial institution. With this in mind, her current plans include a continued focus on meeting members’ financial needs through exceptional service.

Local digital artist hosts international webinar Winifred Whitfield, digital artist, hosted a live one-hour internet webinar before a capacity national audience of about 1000 registered attendees on Nov. 16. This webinar was sponsored by international corporations, X-Rite Corporation who develops color management, products and software, and Nik software, which develops image enhancement products. Event sponsors indicated that they had to turn over-capacity registrants away. Whitfield discussed the manner in which she uses X-Rite color management products and Nik software in her workflow. Currently she has a display of wall portraits and fine art at the Bay club in Port Ludlow. For more information about color management, contact Whitfield at (360)779-1375 or on the website

Eremic Employee of the Quarter at Kitsap Bank Kitsap Bank announced that Bruce Eremic has been named Employee of the third Quarter. Eremic is a financial service representative at the Bank’s Bainbridge Island Branch. He joined Kitsap Bank in 2010 whereby he quickly earned a promotion to his current position. “Bruce is quick to take on more duties, has a positive attitude, and can be counted on for achieving results,” notes John Barmuta, senior vice president/retail banking, “He is a tremendous asset to our team, and we congratulate him on this welldeserved honor.”

2 Kitsap Peninsula Business Journal• December 2011

Fine Solutions promotes Colson to vice president Scott Colson has been promoted to vice president of Professional Services at Fine Solutions. Colson joined the Fine team earlier this year when Autonomix, the company he co-founded with his wife Erika Colson, merged with Fine Solutions.

Hadlock Veterinary Clinic announces new staff Dr. Cindy Alexander has joined the veterinary practice at Hadlock Veterinary Clinic in Port Hadlock. Dr Alexander has experience and interest in the medical and surgical care of dogs and cats, as well as exotics such as birds, rodents and rabbits. She also has experience in caring for large animals. She graduated from Washington State University school of Veterinary Medicine in 1998, and worked for 14 years at Apple Tree Cove Animal Hospital in Kingston, while cofounding the Companion Animal Wellness Center in Poulsbo. After doing relief veterinary work for various clinics in the Kitsap Peninsula and the Olympic Peninsula, she is returning to full-time small animal practice with Hadlock Veterinary Clinic. Reach Dr. Alexander at (360) 385-2020.

Sugardaddy’s rated second in Best of Western Washington poll

Sande presents second edition release of “Fish, Frogs & Frolic”

Port Orchard mainstay, Sugardaddy’s Salon, which is located downtown on Bay Street, was honored as runner up in an online poll by KING5 TV’s Evening Magazine, looking to choose the best salon in Western Washington. “There were 670 salons nominated,” James Harris, one of the salon’s co-owners said, “and for us to get number two, right under Gene Juarez — and there are seven of them — we’re kind of proud of that.” According to Harris, the salon was named after an Arizona bar he visited with a client who lives in Scottsdale. Harris took not only the name, but also the idea of including local musicians in the business. The salon offers quarterly concerts with that feature local talent such as Hell’s Belles, Jamie Nova, the lead singer for Hell’s Belles, and James Hunnicutt. Harris’ partner Tim Waibel, formerly owned Simon August Fine Catering in Bremerton and Augustino’s Restaurant. The duo teamed up five years ago when Sugardaddy’s was at its former location, a two-seat shop at the current location of Essence of Thymes Catering. The business is now a 10-station salon located in a landmark building across the street, and staffed by 13 artists that range in skill level and cost. Each hair stylists’s skill levels are ranked ranging from 1 to 6, and the price for their services — based on their rank — ranges from $20 to $85. Sugardaddy’s commissions nine stylists, and leases space to four more. Ironically, Harris formerly worked as an instructor at Gene Juarez Salons and Spas. He trains the Sugardaddy’s employees in a one-year program, similar to the program at Gene Juarez. The program is currently full, with a waiting list. Sugardaddy’s also includes handmade jewelry and a revolving selection of art for sale. Both owners believe in supporting local artists and to that end, the salon doesn’t charge commission on the artwork when it sells. Waibel says the art aspect of the business is one of the things that drew him to it. “I came along five years ago, having come from restaurants and the service industry. I love managing those kinds of people and doing that kind of business.” “We really try to support the local artists,” Harris said. “If it wasn’t for local art, life would suck.”

This month will see the celebration of a second edition of local author Earl Sande’s book, “Fish, Frogs & Frolic,” with a book signing party Dec. 2, from 5 - 8 p.m. at Amy Burnett Gallery in Bremerton. This is also a special First Friday gallery walk where Santa comes to town. The 200-page book is signed and numbered, with the cover design created by Sande’s wife, renowned local artist Amy Burnett. The book has received excellent reviews since its initial release in 2010, and Sande has been invited to be guest speaker for various organizations, most recently North Kitsap Puget Sound Anglers. “Fish, Frogs & Frolic” will be on special during the book signing/gallery walk, for $25 and will include gift wrapping and a small signed art print by Burnett. Orders can be made prior to the event, and shipping can be arranged. For more information, contact Burnett at (360) 373-3187.

Humanitarian awardee names KMHS as grant recipient

Join us in thanking these public and private sector Kitsap Economic Development Alliance investors for supporting The Washington State Aerospace Partnership Competitiveness Study:

“Pegasus Project” ...Boeing’s 737 MAX To retain and expand the aerospace manufacturing industry in our region and throughout Washington State. Kitsap Regional Coordinating Council...........................$25,000 KRCC Partners: Kitsap County, City of Bainbridge Island, City of Bremerton, City of Port Orchard, City of Poulsbo, Port Gamble S’Klallam and Suquamish Tribes

Port of Bremerton .............................................................$10,000 Kitsap Economic Development Alliance........................$10,500 Investors: Harrison Medical Center, Overton & Associates, Port Madison Enterprises, Rice Fergus Miller, Kingston Stakeholders, Kitsap Bank, Kitsap Credit Union, Martha & Mary Services, West Sound Workforce, KEDA

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December 2011 Kitsap Peninsula Business Journal• 3

Kitsap Mental Health Services (KMHS) President Bruce Harlow honored C. Keith Birkenfeld Humanitarian Award recipient Marge Thorne at the KMHS Board of Directors meeting for selection of KMHS as her charity of choice to receive a $25,000 grant associated with the award. The C. Keith Birkenfeld Humanitarian Award is given by the Bainbridge Community Foundation to a Kitsap County resident who exemplifies the best in volunteer service, leadership, and commitment to the community. Thorne has held leadership roles with multiple human service agencies, including being among the first to champion provision of crisis clinic services for Kitsap County community members. Four decades later, Thorne continues to volunteer weekly for the Crisis Clinic she helped start. KMHS Board Members expressed their gratitude to her for choosing Kitsap Mental Health Service for the $25,000 grant, which will be used to further the provision of mental health services.

Kitsap Aerospace Alliance Takes Off!

CHARLESTON DISTRICT from page 1 Some of the projects they’ve achieved include cleanups, exterior building painting, and installation of lights/cameras in parking lots, all funded by the businesses. “Every business owner has been chipping in for it,” Glivar said. The merchants made a splash at Halloween, organizing an event that attracted about 300 people. Another is planned for Dec. 10, called Tin Soldier Lane in tribute to the military. The allday festival will include vendors, Santa visiting on a fire truck, tree lighting and Bremerton High School’s jazz band and cheerleader performances. “There was a need for these kinds of events in the community — we saw that on Halloween night,” Glivar said. The district encompasses about fivedozen businesses as well as residential areas. Todd Best, who owns residential property in Charleston as well as commercial property downtown, said

one of his goals is to organize a neighborhood coalition of sorts as well as do fundraisers for bigger projects. “We want to do our own fundraisers so we don’t have to rely on the city for all our needs,” he said. One long-term goal for the association is to implement the Charleston Community Plan, which was created in 1997. The plan includes the addition of pocket parks, which would be among the needs fundraisers can help support. Short-term plans include the installation of bicycle racks, welcome signs and banners. To help those outside of the business district support the area, the association is in the process of creating a membership package for the general public. Business members already pay fees but the membership package would extend that further and be offered to anyone, and in exchange patrons will

receive incentives (yet to be determined). “The money will go back into the community,” Best said. Glivar said there are many great business in the Charleston District, all locally owned, from car repair shops to chocolate shops, but they are frequently forgotten as commuters zoom by to get downtown. She said the businesses already have several events planned together for next year. “(The business owners) live in the area and care about the community,” said Glivar, whose business has been in the district for 22 years and on Wheaton Way six years prior to that. “We really regard our patrons as our friends and go above and beyond so when they come to this area, they are happy and thrilled. We want to do more for the community, something fun for them.”

4 Kitsap Peninsula Business Journal• December 2011

Kitsap’s newest bakery brings the goodies to a corner new you By Rodika Tollefson When Mayyasa Roach started her baking business last year in June, her goal was to extend her hobby into a small side business. Roach, a stay-at-home Navy wife and mother of three children, loved the idea of doing something around her kids’ schedule. She started renting commercial kitchen space and was off to bake goodies for farmers markets and special orders — content that she had turned her “very expensive hobby” of baking daily into a small business called The Kooky Baker ( This past July, a year after being in business, Roach took one more step, converting part of her garage into a fullscale commercial kitchen to make the bakery more cost-efficient. And in November, Roach took the next leap. Together with her neighbor, Candice Hayden, also a Navy wife and mother, she started a sister company called The Piccadilly Bakery. The two partners are taking their bakery on the road, in an oldstyle Chevy P-10 step van decorated in retro black and red colors. The van will stop at various locations around the county at prescheduled times (to be posted online at, selling fresh-baked sweets like cookies and cupcakes.

“We can make it really convenient for people to get what they want and bring the business to them,” she said. When she first launched The Kooky Baker, Roach baked everything from breads and tarts to biscuits (she grew up in the United Kingdom) but when she realized the sweets were flying off the shelf — including her signature cake ball and cake pops — she stopped offering breads. The Kooky Baker will continue to fill custom cake and other orders but The Piccadilly Bakery will take over to provide

Coming Next Issue...

the regular menu of the baked goods. The plan so far is to “set up shop” for an hour or two, several times a week, rotating the locations. Port Orchard, Bremerton and Silverdale are starting points (the business needs to get separate licenses from each jurisdiction) but Roach said there has already been interest from Poulsbo and Gig Harbor as well. In the summer, she expects things to get busy as they plan more stops at parks and other public places. She said she has considered the idea of a storefront but since she has financed everything herself so far, including the commercial kitchen, she didn’t want to go into debt. The mobile bakery not only gives the two partners a low starting overhead but also the continued flexibility to be moms first and businesswomen second. “This is on my schedule and it works,”

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Roach said. “…Kids are my priority. I’m not an advocate of day care.” Launching the mobile bakery is going to be trial and error, Roach said, but the partnership with Hayden is working out well: Roach was ready to expand and Hayden was looking for an income opportunity. The two had been friends since Hayden moved to Roach’s Port Orchard neighborhood at the beginning of the year and the two realized how much they have in common. The Piccadilly Bakery will eventually become a larger family business if all goes well. Roach’s husband has four more years in the Navy and after “retirement” he wants to be involved, she said. Hayden’s husband is in a similar situation. And then, there’s Roach’s father, who always dreamed of owning a restaurant. “At this point in our lives, it’s perfect… I feel blessed,” Roach said. As a startup business owner, Roach has had some bumps in the road, especially with permitting, but she credits the community with helping her learn and move along. “The local community really helped us get where we are, otherwise I wouldn’t have known what to do,” she said. “If you have a goal, don’t let people knock you back, keep going.”

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Aerospace Report: Kitsap County part of regional strength The Washington Aerospace Partnership’s commissioned report on the state’s aerospace competitive study was released in mid-November. The report outlined the state’s strengths and weakness pertaining to the decision by Boeing Co. on where it would build its next generation of 737 planes. The plant would create 20,000 jobs. Kitsap County was mentioned in the report, produced by the consulting firm Accenture, as one of the regional strengths thanks to its available industrial zoning, a large contingent of retired military workforce, training programs at Olympic College and the shipyard, and its long history of manufacturing at the shipyard. An alliance of Kitsap business and civic

leaders, led by the Port of Bremerton, have been working on making sure Kitsap gets on the Boeing radar through the study, in the event Boeing decided to build its MAX 747 in Washington state but at a location other than Renton. The Kitsap contingent contributed $45,000 toward the funding of the study. Kitsap Economic Development Alliance focused on Boeing and regional cooperation at its November Decision Makers summit, which had Tayloe Washburn of the Washington Aerospace Alliance as the keynote speaker. The alliance also had a panel of four local

business and elected leaders. “If not successful, it will be a major negative tipping point for the state,” Washburn told the audience, referring to the state’s bid to retain the manufacturing facility. “…The 737 is ours to lose.” He said Washington’s competition against other states will be tough, especially because of its weak education program in support of aerospace. He said other contending states have invested heavily into STEM — science, technology, engineering and math — programs and other infrastructure. The report, released on Nov.

16, mirrored that concern, among others. Kitsap leaders said they believe this area is already ahead of the game. John Powers, hired recently as the KEDA executive director, noted at the summit that Kitsap had the highest concentration of engineers and architects per capita than anywhere else in the state, and 10th-highest in the country. The Kitsap Aerospace Alliance leaders said they will be ready to make a case for Kitsap County but will not take it ahead full-steam until Boeing announces its decision regarding Renton. The announcement is expected next year.

Washington CASH graduates four business owners

Chiropractic Lifestyle Center hires new front office assistant Chiropractic Lifestyle Center recently welcomed Jackie Lax to its front office administrative team. She holds a certification in medical assisting and is looking forward to expanding her knowledge of natural health care. Reach the center at (360) 373-2225

December 2011 Kitsap Peninsula Business Journal• 5

The Washington Community for Self Help (CASH) program in Kitsap announces the graduation of four business owners from its business development program. Graduating are Jill Paull, owner of Island Green Clean on Bainbridge Island; Alan Smith, Mr. Honey Do Now Repair Service, Silverdale; Augie Lujan, Rush Security, Bremerton; Bob Delaney, Black Water Metal Design, South Kitsap. All four completed the CASH business development training program and participated in the program’s business development meetings. “We are proud of these latest graduates who have started their businesses from scratch and are now self-sustaining,” said Stuart Walton, director of the microenterprise program in Kitsap. “In addition to launching her cleaning business and introducing a new line of products, Paull has helped twenty others get into a business of their own; Smith has given back to the program in many ways and recently received the annual Spirit of CASH award, voted by his peers. Lujan has fifteen employees in his security firm. Delaney reached his business goals in his first year and sold products at over 60 gift fairs and markets,” Walton said. Washington C.A.S.H. has provided eight weeks of business training to more than 850 entrepreneurs in Kitsap since it was founded here in 2000. Twenty-one graduated from this month from the latest class. More than 60 graduates of the business training classes are actively involved in business support groups that meet every two weeks in Bremerton.

Unique design turns Bainbridge Island Subway into hangout By Rodika Tollefson It’s no secret why fast-food restaurants have small tables and hard seats — they want people to eat their food and get out. Subway diners usually follow the same idea, and are not usually designed for people to linger. But for Richard Larvia, having people hang out at his Subway shop was important. When Larvia and his wife, Kimberly, bought the island’s Winslow Subway in 2008, they knew they would not only want to move it to a better location but also provide a more welcoming atmosphere. For more than a year, the Subway’s new location, on High School Road, has attracted not just those hungry for healthier food but also those who want to hangout someplace with a friend or with their laptop. The shop not only has WiFi and extra plug-ins, but also flat-screen televisions, it has soft seating, overstuffed comfy chairs, bar seating, a fireplace and in general a classy atmosphere one wouldn’t expect at a Subway. One wall is used as a gallery to display rotating art by local artists. Other nonstandard décor includes a stamped tin ceiling — left over from the previous tenant, a coffee shop — and an artsy LED light fixture above the deli. “Most Subways don’t want you to stay. I want you to stay,” Larvia said. After the coffee shop closed, Larvia said he wanted to fill that gap for a place where people can visit for a while. He even wanted to add an espresso machine but realized there was no space for it. He says comments

such as “This is the nicest Subway I’ve ever seen” are common. “But you have to have good customer service above just having a nice atmosphere,” he said. Larvia and his wife are both full-time civilian contractors at the Keyport base. He said his goal was to own a business five years before he retires. He has a head start — retirement is still about 10 years away. He bought the Subway when it became available for sale because his brother-in-law, Ken Playter, had been manag ing it for several years (and continues to do it). Larvia hopes to expand his reach in the community

6 Kitsap Peninsula Business Journal• December 2011

— Calling for Entries —

Doctors Making a Difference Do you know a doctor on the Kitsap Peninsula (Bainbridge Island to Gig Harbor) who is making a difference in the lives of their patients? WestSound Home & Garden magazine is looking for doctors who are making a statement with new technology, or providing unique solutions — doctors with a special talent for children, or providing compassionate care for the elderly, etc. In the 2012 issues of WestSound Home & Garden magazine, we will publish profiles of "Doctors Making A Difference!"

Go Online and Nominate! Click on “Doctors Making a Difference”

and add delivery service in the future. The business is also involved with various community groups and organizations as a sponsor, including sports teams. Once the business settles some more, Larvia said he’ll be ready for another. His plan is now to have two businesses before retirement, and already has an idea for a nonfranchise, food-related company.

Navy Federal relocates Silverdale Branch Navy Federal Credit Union is relocating its branch from Bucklin Hill Road, N.W. to 3340 NW Randall Way in Silverdale — approximately 1.5 miles away from its current location. Located near Kitsap Mall, the full-service branch opened Nov. 21. “The bright and spacious interior accommodates more members,” said Patrick Miller, vice president, Branch Operations. “The plasma screens provide information about new products and services, including current mortgage and car loans, in a setting that’s comfortable and convenient to members who live and work in Kitsap County.” The branch will offer space for business partners, including mortgage counselors and personal finance officers. Hours of operation at the relocated branch Hours of operation at the relocated Silverdale branch are as follows: Lobby Hours • Monday through Friday, 9 a.m. to 5:30 p.m. • Saturday, 9 a.m. to 1 p.m. Drive-Up Hours • Monday through Friday, 8:30 a.m. to 6 p.m. • Saturday, 9 a.m. to 1 p.m. ATMs • The branch has two walk-up ATMs.

Castle named executive Director at BIAW The Building Industry Association of Washington (BIAW) board of directors approved and installed Art Castle as its permanent executive vice president at its fall board of directors meeting on Nov. 11. Castle, who headed the Kitsap County Homebuilder’s Association for almost two decades, has been serving the BIAW as the interim executive vice president since April. “I’m ecstatic Art is the executive vice president of the BIAW,” said Patrick McBride, president of the BIAW board of directors. “He is well suited for the job with 24 years of experience. He has hit the ground running and I’m pleased with what he’s done so far. Our expectations of his success for the future are through the roof.” Castle’s 24 years of experience include 17 years as executive vice president of the Home Builders Association of Kitsap County and six years as executive vice president at the Building Industry Association of Whatcom County. Instrumental in building the membership and fiscal strength of two local associations, Castle brings his experience and talent to serve Washington State homebuilders. In addition to his years of experience, Castle has been recognized for numerous contributions to the building industry. He received 18 Association Excellence Awards (AEA) from the National Association of Home Builders Executive Officers Council for noteworthy and successful programs and services. He served two terms on the

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Board of Directors of the National Association of Home Builders Executive Officers Council and two terms as the BIAW Executive Officers Council Chair. “I am excited for the opportunity and for the organization and, excited to, with the existing and new staff, see how effective we’re going to be in the coming years,” said Castle. As interim executive vice president, Castle has already begun to apply his management and industry experience to help create a stronger, more effective and cohesive BIAW. Castle said he looks forward to “assisting in providing an atmosphere within BIAW that allows and encourages members with diverse ideas and opinions to find common ground and goals through principled and strategic leadership that supports our members and affiliated local associations.” Castle’s goals to provide strong support for the housing industry that works effectively to face its challenges and to explore opportunities with non-traditional partners to find workable solutions are already beginning to take shape and build momentum. “I see the BIAW as a conservative voice for our industry that actively supports solutions to the challenges facing our industry,” said Castle. “I look forward to helping public officials and the general public to understand how important housing is to a healthy economy for Washington.”

Black Press, Ltd. significantly expands its local presence Canadian-based company acquires Peninsula Daily News and Olympic View Publishing Sequim Gazette,” said Black. “We have been publishing community newspapers for 22 years in Washington State and see this as an opportunity to expand our operations to the North Olympic Peninsula which is a good geographical fit with our other newspapers and website titles. The Gazette is one of the best newspapers the state in terms of quality. We are proud to be the new stewards of the business.” Maloney commented, “It is with mixed emotions that I reflect upon selling my company, but there is a sense of pride in what

my staff has achieved over the past two decades. I am pleased to see Olympic View Publishing pass into the hands of Sound Publishing who are as passionate about newspapers and as committed to community journalism as I have been since 1988.” The new owners have announced that publisher Sue Ellen Riesau will remain in her role overseeing the operations of the company. “I have been with Brown for almost his entire 23 years here, and of course, I am sad to see the end of an era”, said Riesau. “At the

same time however, I have known and worked with Sound Publishing almost as long. They are a solid newspaper company with a great track record and passion for community newspapers. I look forward to the future.” Maloney also owns ABC affiliate KONP, an AM/FM Radio station in Port Angeles. KONP Radio is a separate company and is not part of this transaction. Maloney will continue to own and operate the station with Todd Ortloff, who is a minority partner in that business.

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An agreement has been reached for the sale of the Peninsula Daily News, Sequim This Week and its related web sites by Horvitz Newspapers, LLC, to Black Press, Ltd. of Victoria, British Columbia. The firm also acquired Sequim-based Olympic View Publishing Company, which with the exception for the Port Townsend Leader, gives it control of all the printed news media on the Olympic Peninsula. Black Press, Ltd. owns Poulsbo-based Sound Publishing, Inc., which is the largest community newspaper group in the Pacific Northwest. Its 46 titles include the Bainbridge Island Review, the North Kitsap Herald, the Central Kitsap Reporter, the Bremerton Patriot, the Kitsap Navy News, the Port Orchard Independent, the Vashon-Maury Island Beachcomber, The Journal of the San Juan Islands, the Islands’ Sounder, the Whidbey News-Times, the South Whidbey Record, Kitsap Navy News and the Whidbey Crosswind, for a combined circulation of 732,700 in the Pacific Northwest. Sound also publishes community newspapers in east and south King County, and Portland, Ore., and has a major printing facility located in Everett. The announcement was made personally to Peninsula Daily News employees by Peter Horvitz, president of Horvitz Newspapers, LLC, and Mark Warner of Black Press, Ltd. Privately held Black Press, Ltd. owns about 150 publications, including three daily newspapers, the Akron (Ohio) Beacon Journal, the (Honolulu) Star Advertiser and the Advocate (Red Deer, Alberta). The other publications are in suburban or rural markets throughout the Canadian provinces of British Columbia, Alberta, Saskatchewan and Manitoba. David Black, president of Black Press, Ltd., said, “We have purchased other titles from Horvitz Newspapers in the past and look forward to adding the Peninsula Daily News and its related titles to our Sound group. As publishers of other titles in the area, this acquisition is a natural extension to our marketplace footprint. We are pleased to be doing business in Clallam and Jefferson counties.” The family-owned Horvitz Newspapers, based in Bellevue, purchased the Peninsula Daily News from Persis Corporation in 1994. “Our family has enjoyed owning the Peninsula Daily News for 17 years, and we’re very proud of its employees and their commitment to serving the news and information needs of the Clallam and Jefferson County communities and the quality journalism they provide,” said Horvitz. Olympic View Publishing (OVP) has been owned and operated by Sequim resident Brown M. Maloney for over 23 years. The company produces two Clallam County newspapers, the Sequim Gazette and the Forks Forum. In addition, they also produce two real estate magazines, Olympic Peninsula Homes-Land Magazine based on the North Olympic Peninsula and Islander Homes-Land Magazine with distribution on Island and San Juan counties. “We are thrilled with the purchase of the

Shop locally to find unique gifts, support local economy

8 Kitsap Peninsula Business Journal• December 2011

By Rodika Tollefson Local merchants were gearing up in midNovember for this year's biggest shopping season, and many said they were optimistic. Some are seeing a slight uptick in traffic over last year, which could be a positive sign, considering the economic recovery is lagging. If you want to feel good about your holiday shopping, supporting the locally based merchants is the way to go — and it’s easy, considering the many unique choices and specialty stores that are abundant on the peninsula. The Kitsap Peninsula Business Journal stopped by a few local shops to find out what's new and popular, and give you a head start on ideas. Erin Whitson, owner of Les Saisons Boutique ( in downtown Poulsbo, says the last holiday season was good and so far things point to a good one this year. “People seem happy and there is more excitement,” she says. By mid-November, the shop was all decked with Christmas decor, including old fashion-style ornaments in retro colors, which she says are popular this year. The Saisons (selections is focused on women, with choices ranging from jewelry and fashions to body products and decor, but there are also baby items, kids toys and books and a few choices for men. One popular jewelry selection is the interchangeable jewelry from the Magnabilities brand that has magnetized pendants, bracelets and rings in the $15.99$24.99 range — buy the base item, then

switch out the magnets (which cost $3.99 each) to match your colors or moods. “It’s selling like hot cakes around the country,” Whitson says. “You can also upload photos online for a personal magnet.” Stocking stuffers or small gift ideas from Les Saison include $7.50 clip-on hair feathers (much less expensive than the popular crimped ones ladies get at the salon), $4.50 pens made out of recycled motherboard (or notebooks for $5.50) for guys and teens, $12 whimsical mugs for the pet lover (with sayings like “catffeinated” or “think pawsitively”) and $2.99 TungToos (candies that place temporary tattoos on the tongue) for the fashionable youngsters. Liberty Bay Books ( next door is one of the Kitsap destinations if you have a bookworm on your list. But the store has a lot more during the holidays. You can check off stocking stuffers for many people on your entire list: sticky notes with headlines

like “OMG” and “WTF” for the office jokester, mini bell alarm clocks for the teen who can never have enough alarms, Fair Trade earrings for Mom and the popular Kikkerland windup creatures for all ages. You can also find some fun books like “Goodnight Night iPad,” “1000 Places to See Before You Die” and “Awkward Family Photos,” along with various classics, local authors’ books and more. If you’re shopping for the younger crowd, instead of opting for the mass-crowd Mattel favorites, check out the broad selection at Teaching Toys Too (, an independent toy store in Uptown Gig Harbor. Classic toys like Erector sets never go out of style — and Teaching Toys has various choices of classics. “People often come back to them because there’s sentimental value to putting things under the tree that you used to have (as a child,)” says store co-owner Valla Wagner. “All those things that were popular for generations are still popular because kids still love them. They’re open-ended so the child has to be creative with them.” The choices at Teaching Toys range from Playmobil sets and musical instruments to train sets, dress-up costumes and baby toys. You can shop for adults here too — there’s a healthy selections of board and cards games that will appeal to all ages. And the best part is the store offers free

wrapping year-round, and there is staff on hand knowledgeable about every toy. So if you’re not sure what’s appropriate for your niece you only see once a year or your grandson you haven’t seen in a while, all you have to do is ask for help and you’ll walk away with a present that’s bound to be a hit. If you’re shopping for a special lady in your life, you can never go wrong with jewelry. For one-of-a-kind costume jewelry made of semi-precious stones, crystals or pearls, check the collection at That’s Beautiful ( in downtown Port Orchard (a couple of doors down from Amy’s on the Bay). In addition to jewelry handmade by the owners, you can also find fashion tops and other apparel for $20 a piece. According to Jen Horne, owner of Seaport Salon and Day Spa in Old Town Silverdale, a spa service is not something people do all the time. It could be a half day or full day of pampering and people become revitalized and feeling great. It's like a mini vacation. She says gift certificates are a great idea because they allow recipients to select their own services or products, but if you know the person's tastes or preferences, a basket filled with a selection of pampering products is great too. The salon carries the Aveeda line, which she says makes a great gift because it's 97 percent natural. “Everyone likes gift cards but people also like to open things,” she says. At Sport Haus in Poulsbo Village, owner Paulette Huising says, “I think it's going to be similar but our season is closer to the day (of Christmas).” The Ugg brand is popular, especially the slippers when buying a gift. Made out of quality sheep wool, they start at just under $60 for kids and around $90 for men and women; some are good for outdoors too. "The wool is naturally anti-bacterial," Huising says. "Everybody loves them." Other popular selections are the SmartWool socks, which range in styles from dress and running to skiing and are made of the merino wool — which has long fibers and lacks the itching side effect usually associated with wool. For the outdoors person, Huising suggests good quality long underwear, such as the Helly Hansen brand of polypropylene, SmarWool, or the omni-heat style from Columbia, new technology that creates a thermal reflective layer. "All these brands give warmth without bulk," she says, adding that it's equally effective for kids playing on the playground and someone who has to go between office and outdoors, as long as the top layer is appropriately warm. If you have a runner in your midst, Huising recommend a gift certificate for $100 to cover a good pair of shoes.

The gift of local art: Unique, thoughtful and classy By Rodika Tollefson When a girlfriend gave Marti Green a small, 2-by-4-inch canvas painting of apples as a gift, Green says the gesture meant a lot to her. Of course, she’s an artist herself and as such, appreciates art, but being on the receiving end was refreshing, she says. “The gift of art is personal and it doesn’t have to be a huge piece,” says Green, who does watercolor paintings at her Watermark Studios and Fine Printing in Port Orchard and was featured in November at Sidney Art Gallery ( “It’s a conversation piece, and it’s beautiful, even if it’s something small.” Green says what makes local art a great gift is the fact that it’s a treat. “Having a piece of art is a treasure. It’s not something people would go out and purchase for themselves because having something like that, to them, is a luxury,” she says. To find the right gift, she says it helps to know the person a little. When you are out and about and look at a piece, a person may come to mind who would love it. “Because the economy is tough, people like art that’s colorful to have in the home,” she says. Victoria Josslin of the Bainbridge Arts & Crafts Gallery ( says while it does help to know the person a little — since art is so personal — you won’t go wrong if you choose a classic gift, such as a wooden salad bowl, for example. “Art is a wonderful gift because it’s handmade and you know it comes from the studio of an individual,” she says. “Somebody’s imagination and hands made it.” The great thing about shopping at a gallery such as BAC is the wide variety of mediums and prices; you can find everything from unique $8 earrings to small wooden boxes and fine art. In addition, thanks to the generosity of landlord Earl Miller, the nonprofit will have an additional

holiday gift gallery at the corner of Madison and Winslow through January, with the emphasis on photography, ceramics and wood. Josslin points out as one unique gift example the $20 origami earrings made by an island artist and sold at the gallery — the only other place you could find them is at the Smithsonian gift shop. “The art is not stamped or coming from a factory… You’ve got the only one in the world,” she says. She says since art often uses a theme, such as farmscape or water scenery, one good starting point is looking for a theme the recipient will enjoy. Gig Harbor photographer Bryan Peterson says that’s often how people looking for photography make their selection — they’ll come in and ask him if he has a photograph of a specific boat or scene, for example. He says in addition to being unique, art is a connection to the artist’s soul. “You’re taking a piece of a person (when you buy the art). Every photograph I take has a piece of me. It’s how I see the world,” he says. “By buying art, you’re capturing a piece of the soul of the individual who created it.” Peterson is one of 15 artists who are part of the Ebb Tide cooperative art gallery ( in downtown Gig Harbor. The gallery’s selections ranges from $3.25 cards made by artists, to fine art and photography that costs hundreds of dollars. Among the popular gift ideas are semi-precious jewelry, art tiles and fused glass décor. A similar variety can be found at Old Town Custom Framing and Gallery ( in Old Town Silverdale, where the youngest artist is 8 years old. The gallery’s selection ranges from silver jewelry and Christmas ornaments to handbags and

paintings. Owner Maria Mackovjak says this area is “blessed to have such a vast talent pool.” “Short of New York or Santa Fe, we rival any art market,” she says, noting that when you shop at a locally owned store, $68 of every $100 spent stays in the community, vs. $43 when you shop at a chain store. Mackovjak says supporting any local art — literary art, music even culinary art — helps you make a connection with a person “because you’re buying a story.” “When the economy gets tough, we want to know who we are. We nest and decorate the environment around us and we value things that let us know who we are as people, and have a meaning to us as human beings,” she says. She adds that the gift of art doesn’t have to be expensive and you can even buy small bits of art and make your own, or buy a card made by an artist and frame it. She says

education about art is a great gift as well and could be as easy as taking the family on an art walk or a museum, or giving a gift certificate for a class. Karsten Boysen, who makes metal sculptures and is one of the artists at the Collective Visions Gallery ( in Bremerton, says recipients appreciate getting something unique, and notes that some miniature art pieces at the gallery cost as little as $10. Collective Visions is also planning a white sale inventory reduction event in January, with artists bringing in more affordable pieces — so a gift certificate for Christmas could be the perfect gift. “(Art), I think, demonstrates an appreciation for the person you’re giving to,” Boysen says. “It takes more thought and you know they will not get two of the same item.”

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A few gift ideas that are out of this world By Rodika Tollefson Did you miss “Cyber Monday” this year? Your holidays are not doomed — just grab the car keys and take a scenic drive around Kitsap, where you’ll find much better shopping ideas at the locally owned shops. But if you just can’t help yourself with your online shopping habits, at least make sure it’s something really cool. Like every man’s dream, the RoboMower. This handy (though pricey) gadget takes care of what the men (or teenagers) grit their teeth over every time. And the operator doesn’t even have to get off the couch to fiddle with it — just set a timer and off it goes. True, this little invention will set you back as much as two grand (find it online at Sears, or, among other places), but how can you put a price on convenience? Speaking of convenience, ever wish you could send a proxy to that office meeting, or to the office for that matter? Now you can, thanks to the Anybots QB “telepresence” robot. A perfect gift to that annoying coworker you’d love to keep at home, for $15,000 this “self-propelled Skype-cam on a stick,” as one reviewer described it, allows a person to peek over a colleague’s shoulder

from the convenience of his or her home. The company’s CEO described the Anybots as “an extension of you” and who couldn’t use an extension or two? (User beware: Your co-workers can see you clearly on the bot’s screen, so you’re gonna want to change out of those pajamas unless you want to strut your favorite designs in front of the whole office). Sold on the robots theme but not ready to drop 15Gs on a gift for your office mate? Get a walking robot pencil sharpener instead. For under $10 at, you might as well buy one for yourself too — you know your pencil sharpener will eventually walk away from your desk, why not add a little style. With a little digging, there’s a robot for everyone this season. For the domestic soul, you’ll find wind-up salt and pepper shaker robots at No more stretching over the table for your condiments — just ask your tablemate to wind up the bots and wait for them to march on over. If you’re going to shop at this year (and you know you’ll probably be too weak to resist the temptation), you might as well have a little fun with it. Here

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are a few ideas you may be hard-pressed to find anywhere else in the world (and maybe even beyond too): an “egg cuber square egg press” (which lets you make square-shaped hardboiled eggs) for the kitchen queen who has everything, a DCI pop quick clock (which has you solving equations to tell time) for the teen who needs to brush up on algebra, or a stainless steel mug shaped like a Nikon 24-70 lens for that talented photographer. is also a good starting point if you’re shopping for a Star Wars fan — go no further than a Jedi bath robe that will make the Jedi wannabe look like the real deal. But if you want something less spendy than the $80-some robe, has just the thing: Star Wars light saber chopsticks (in three colors, no less). Other “interesting” doohickeys for the Sci Fi geek: a Doctor Who Tardis-shaped cookie jar (complete with Tardis sounds), a Star Trek Enterprise pizza cutter that will make Captain Picard proud, and a Star Fleet Academy titanium spork for those you want to live long and prosper (all from If you have a teen who’s into UFOs (or

perhaps you feel like he or she fell from the third rock from the sun), you could check the LED flashing shoe laces at Or if you want a more serious and practical spacey-ish gift, shop at for a moon dust pen or one of the artifact pens that were flown in space. Wanted to surprise your better half with a vacation for Christmas but didn’t pinch enough pennies? It’s the thought that counts. For a mere $47, you can buy an airframe picture frame that looks like an airplane window from Frame an aerial photo of your vacation spot and put it under the Christmas tree — then every time your other half thinks of that “almost vacation,” he or she will think of you. Finally, if you want something different but a little more down to Earth and your middle name is Practicality, has just the thing for you (and your handy man or woman): a giant Swiss Army knife. With 85 tools and weighing at almost three pounds, this is the Swiss Army knife of Swiss Army knives. Unfortunately it will weigh down as Ideas, page 11

Give the gift of kindness

IDEAS from page 10 much on your wallet — you’ll need to have at least $850 burning in your pocket (and that’s the heavily discounted sale price). But if it’s between that and the RoboMower, this Guinness World Record holder for the most multifunctional penknife beats it hands-down. You can practically clean out the garage and replace its contents with this all-in-one can opener, fork, nail clipper, screwdriver, flashlight, golf club face cleaner, tire tread gauge, fish scaler/line guide, allen wrench, corkscrew (etc.etc.) gizmo. A clean garage — now that’s an outof-this world gift idea, indeed.

16 and under as part of a “giving tree” program (trees are located at local businesses such as Towne Square Mall. “Drop off gift donations at 1012 Mitchell Avenue in Port Orchard by Dec. 21; call (360) 876-4089 for details. Central Kitsap Food Bank will give than 500 food baskets to families and needs things like cash donations as well as the usual holiday trimmings such as canned vegetables and fruits, olives, tomato sauces, stuffing, condiments etc. Gifts for clients are welcome. Drop off items at 3790 NW Anderson Hill Road in Silverdale by Dec. 16, but anything that comes in by Dec. 22 will help as well. Call (360) 692-9818.

The Bremerton Foodline expects to have about 800 families signed up for holiday food baskets. Needs include canned vegetables, fruits and yams; fresh eggs; coffee; flour and sugar (gravy and stuffing are in good supply already this year). The Foodline is in desperate need of gifts such as toys and especially board games. Drop off food donations by Dec. 16 and gift items by Dec. 20 at 1600 12th Street in Bremerton; call (360) 479-6188 for details. The Gig Harbor/Key Peninsula Fish Foodbank will serve food baskets for about 250 Gig Harbor families and give out toys and gifts to more than 400 kids. The food bank is

stocked up on canned pumpkin, cranberries, sweet potatoes and milk, but anything else is welcome. For gifts, gift certificates to merchants like Target, Galaxy Theater, iTunes are great, as well as basics like scarves and gloves. Drop of f holiday donations by Dec. 17 at 4425 Burnham Drive in Gig Harbor; call (253) 858-6179 for information. Helpline House on Bainbridge Island will provide a holiday “shop” children ages infant through high school. In addition to cash donations, unwrapped presents are wanted; go Kindness, page 12

December 2011 Kitsap Peninsula Business Journal• 11

While some businesses are seeing a little uptick in pace, the slow economic recovery has hit charitable organizations hard. Some have used up their reserves and are struggling to fill the continuously growing community need. “We are not seeing the light at the end of the tunnel,” said Jennifer Hardison, executive director for South Kitsap Helpline. “The needs are definitely getting bigger. If everyone can do what they can to help, every bit helps — and we’re grateful for the support we have from the community.” Extend your holiday spirit this year to help a neighbor in need. In addition to the food banks, many local organizations have holiday-giving programs, and those that don’t also rely on donations to help local residents all year long. The Central Kitsap Food Bank’s story is common this year. The organization has served a record number of families in August — 721 — and was close to that in October, at 719. Executive Director Hoyt Burrows said that’s the highest they’ve s een in the food bank’s history. “We do want to thank the community for the generosity and support they provide. Without them, there’s no way we can do this. They are key to our operations.” Even small gifts are appreciated by those who would otherwise not receive a Christmas gift. “It makes all the difference in the world for them to know that someone cares,” said Jan Coen, director at Gig Harbor’s FISH foo d bank. To get you started, we’ve rounded up a list of local food banks and their needs for the Christmas season. There are many others that could use a hand — whether you can give cash, a couple of cans of food, or a toy. As you shop around for the many sales, all you have to do is grab a couple of extras for someone in need. For the gift drives, many of the groups have shortage of gifts for teens. Gift ce rtificates to department stores as well as some teenoriented shop in places like the mall, movie passes or rentals are most welcome. All food banks welcome donations after the cutoff dates, which will be used for their ongoing food programs. South Kitsap Helpline will provide food baskets to more than 1,000 families. Wanted items include cranberry sauce, canned vegetables and fruits and stuffing. A special fresh produce drive on Dec. 16-17 will be collective apples, carrots, celery, oranges etc. A toy and gift drive also collects gifts for children

Making a list and checking it twice By Jim Kendall Wow! How time flies when you are having fun! And sometimes even when you are not. It’s that time of year once again to make our lists and check them twice. So, in the spirit of the Season, a little Naughty is ok, and Nice is really good. Electronic Gadgets and Other Fun Stuff Everything iPad

OK, I admit it. I am having a ball with my new iPad 2, and finding accessories that work is part of the fun. I started by ordering the Apple Wireless Keyboard for the iPad, and while it works, it is a bit clunky. I also purchased the Apple docking/stand, which is even more clunky. As with most things Electronic Gadget-wise, there are third party substitutes out there that claim to do

it better than the original, and in some cases that is actually true. A case in point is the combination cover/stand/keyboard that is a wireless keyboard and cover rolled all into one. The one I purchased actually shipped from China direct which threw me for a bit of a loss, but it works great, and I got rid of two accessories and replaced them with one. Good deal!

My friend the visiting bookkeeper/accountrix (comes in to straighten out my books after I have made a mess of them for a month) showed me a new gadget that I just had to have. If you have the need or even think you may have the need to take credit cards, there is nothing easier than LIST, page 13


12 Kitsap Peninsula Business Journal• December 2011

from page 11 online to for a list of suggestions. There’s not holiday food basket program but clients will receive holiday food with their usual boxes and any special/festive holiday-related food is welcome. Drop off gift items by Dec. 21 and food by Dec. 19. Call (206) 842-7621 for details or bring donations to 282 Knechtel Way. North Mason Food Bank will give away as many as 200 baskets and needs tur keys, cranberry sauce and other usual holiday items such as pies and stuffing. Gifts for all ages are being collected (no stuffed toys); ideas include gas cards, grocery gift cards — even boxed candy. Drop off unwrapped gifts and food/cash donations by Dec. 21 at 22471 Highway 3 in Belfair, or call (360) 275-4615 for information. The Salvation Army in Bremerton gives food baskets to at least 300 families an d as many as 500, along with toys and clothing for the holiday, and has Angel Trees at Kitsap Mall and other businesses for those who can sponsor a family. Food donations and $20-$25 gift certificates to department stores are welcome, along with cash, practical items like socks and toiletries, and food like pancake mix, butter, eggs, Jell-O, turkey and trimmings, onions and potatoes. Call (360) 479-2695 fo r details. United Way of Kitsap County has its annual fund drive this time of year but also works with businesses year-round to accommodate their schedules. The organization has 36 partner agencies and donors can designate specific organizations or give to the general fund, which is split among the charities. Call (360) 377-8505 for details. Carl Borg, United Way of Kitsap County director of resource developm ent, said a lot of the assistance has shifted to basic needs, such as rental and energy assistance or childcare. “We try to focus the money on basic needs to start with. Every dollar given to United Way of Kitsap County stays in Kitsap County (unless the donor requests for it to go somewhere else),” he said. Some often-forgotten categories at Christmas include pets and seniors, and organizations such as Hum ane Society and Faith in Action of West Sound have special programs to bring cheer to those they serve. And if you can’t afford to give financially, consider the gift of time. All the local nonprofits rely heavily on volunteers year round and welcome new helpers.

Five ways to help your charity this holiday season without spending a dime As the economy continues to squeeze donors, a recent report conducted by Campbell Rinker ( showed that nearly seven in 10

Americans say they will give more sparingly to charities this year. As a result, people are looking for other ways to support their favorite causes this holiday giving season. Here are five ways you can give without giving:


store/Google Market has a ton of apps from which to choose, and as with the Droid, you can use a WiFi connection to cruise the internet and save on your data plan. There are too many features to go into here, but it is definitely worth a look if you have a cell phone on your Christmas Shopping List. The Fun Stuff No gunpowder needed! For the end-of-civilization types, or maybe you have always had a deep-seated desire to build a pumpkin-chucker, check out “The Art of the Catapult: Build Greek Ballistae, Roman Onagers, English Trebuchets, and More Ancient Artillery” by William Gurstelle on I like the English Trebuchet, myself. I always wanted to fling a cantaloupe at an annoying chipmunk or bland old rock that needed some color added. And if you do them up in miniature they will fling a grape right well. I dare you! Micra Multi-tool Sometimes packing around that Leatherman Multi-tool on the belt gets a bit cumbersome, and if you are a gadget nut like me, you can’t bear the thought of doing without. Fear not, fellow gadget goons, the Leatherman Micra Multi-tool is here to rescue you and feed the need ( At only two and a half inches short, it is a handy dandy little cutter, screwdriver, ruler that will take care of that hangnail or screw in that loose screw with panache. So there you have it. Nothing particularly fancy this year, no new Metal Storm to drool over, no new kinetic weapons to set a young boy’s heart going pitta pat, but then the “old” one is so much fun it is worth another look (

The Shepherds & The Angels seeking to provide assistance this holiday season The Shepherds and The Angels is Kitsap County’s newest non-profit providing hope and assistance to Veterans, seniors and the community. This holiday season no individual or family should go without. If you know any individual or family in need this year, or would like to donate, contact the office at (360) 8953980 or Nita Wilson at (360) 981-1400.

Seeking turkey sponsors for local families in need Along with more people in need right now than ever before, turkey prices have gone up considerably this year and the South Kitsap Helpline Food Bank really needs help to be able to provide food to the hungry in the community this holiday season. A $15 donation to the South Kitsap Helpline can help to provide a turkey to a local family through the food bank for Thanksgiving. A $30 donation will ensure that a family in need will receive a turkey to cook for their holiday meals for both Thanksgiving and Christmas. Through the food bank in 2010, more than 3,218 local children, adults and seniors received meals for Thanksgiving. Another 3,765 received meals for Christmas. South Kitsap Helpline is predicting it will distribute more than 1,000 full turkey meal dinners for each holiday in November and December, but can’t do that without help. Send donations to The South Kitsap Helpline Holiday Turkey Fund, 1012 Mitchell Avenue, Port Orchard, Wash., 98366 or to donate securely online, visit the website at and click on the “Donate Now” button. Donations are tax-deductible. Call (360) 876-4089 for more information.

search will be donated to your designated charity. The search is powered by Yahoo. Redeem credit card points. You can turn you unused credit card points into a charitable donation to your cause. American Expres and Citi Card offer this program. Volunteer at your local charity. Some companies, like Microsoft, Boeing and Intel, also match volunteer hours with funds so check with your human resources department or manager. Dine out with the help of, which works with more than 10,000 restaurants across the country. Each time you dine, up to 6 percent of what you spend is donated to your favorite charity.

December 2011 Kitsap Peninsula Business Journal• 13

from page 14 using Squareup from The card reader and setting up the account are free (yessiree Bob, I said free!) and there is no monthly fee. There is a per-swipe fee which is comparable or even cheaper than other services I have used in the past for my businesses, and only slightly higher for keyed in transactions. The reader is about the size of a domino, plugs into the audio (headset) p ort on your computer, notepad (iPad or Droid) or even your smart phone. You can’t get much easier than that! The service takes MasterCard, Visa, Discover and American Express. So, if your Rotary Club or Church is having an auction, and you want to take credit cards, this service is for you. It sets up to deposit the funds directly into the bank account of your choice and it all sets up just about as simply as anything you have ever tried. Paired with a printer, you can print receipts and track your transactions. Stylus: If you are like me, it does not take much to lay a big old finger smear across the otherwise sparkling iPad2, or smart phone for that matter. There are several solutions available and I found one that I particularly like. The Targus Stylus for Apple iPad is the size of a small ball-point pen, has a nice soft tip, and works like a champ. My screen stays clean longer and a quick wipe of the screen with a microfiber cleaning cloth and I am good to go once again. Droid Bionic Cell phones for me have been a necessity for long enough that I have gone through about five iterations so far. The last but one incarnation was the original Droid. While I found it to be better for my purposes than its predecessors, there were still issues that I found irritating and in some cases downright infuriating. The Droid Bionic is a huge step forward (in my humble opinion.) I had a choice of shifting over to the iPhone 4S or going with the Droid Bionic, both offering 4G data connections (where available), and after careful consideration, I chose the Droid Bionic. The Droid Bionic has a larger screen and chassis than the original Droid, and a whole lot more horsepower and memory. The App

Shop at, which works with more than 2,500 retailers to give a percentage of almost every purchase back to the shopper’s favorite charity. In addition, GoodShop lists more than 100,000 coupons for shoppers to save money at the same time. GoodShop currently works with more than 102,000 charities and schools. Search the Internet through and about a penny per

Top ten holiday trends

14 Kitsap Peninsula Business Journal• December 2011

By Ellen Davis, VP and NRF spokesperson It’s (officially) the most wonderful time of the year! November 1 marks the beginning of the holiday season, when retailers everywhere strain to get a piece of that $466 billion in U.S. sales. After releasing a holiday sales forecast in early October and distributing the first consumer survey midmonth, the National Retail Federation (NRF) took a look at some of the overarching trends based off survey findings, economic analysis and plenty of conversations with retailers. While it may not seem like this holiday season is too different than years’ past — shoppers are obviously focused on prices and retailers are expected to be offering strong promotions even earlier — this is bound to be a holiday season like none other. Here are ten trends gleaned from our full data reports. Slow and steady wins the race. Early last month, NRF released its holiday forecast, which estimates that holiday sales will rise 2.8 percent this year to about $466 billion. That’s slightly more than the ten-year average but nowhere near the 5.2 percent gain we saw last year. While many current consumer sentiments are eerily similar to what we experienced in 2008, retailers and shoppers have been adjus ting to the uncertain environment, which is good news. But there’s no doubt that continued consumer uncertainty and high unemployment is putting a damper on spending. What’s changed since our forecast? We’ve had both good news and bad news. The good news: Third quarter GDP was stronger than expected, and unemployment claims have been trending downward compared to earlier this year. That said, consumer

confidence isn’t where it needs to be and the housing market is making access to credit difficult for some people who are under water on their homes. While it’s true that September sales rose 5.8 percent, it’s important to remember that Hurricane Irene and a late back-to-school season were both factors behind September’s sales gain, which is why a moderate forecast is still a best-case scenario for the holidays t his year. All shoppers are not created equal. Think we’re in for a ho-ho-hum holiday season? It depends on who you ask. According to’s eHoliday survey, nearly seven in ten online retailers expect their sales to grow at least 15 percent this holiday season. This projection is reinforced by NRF’s holiday survey as well, which found that the average person plans to do 36 percent of their holiday shopping online – up from 33 percent last year and the highest in our survey’s history. (Note: This doesn’t mean that 36 percent of purchases will be made online. It means that more than onethird of the time, people will be leveraging the web to research products, find gift ideas and compare prices before making a purchase — either online or in a store.) There’s no question that the multichannel shopper presents the biggest opportunity for retailers. Holiday shoppers who shop in multiple channels will spend 22 percent more this year than people who are only shopping in a store. All this to say: Retailers, make sure your websites are speedy, accurate and information-filled. (Easier said than done, I know.) And..? You know the Coke Zero commercial that shows the kid growing up who is always expecting more? (An ice cream cone with sprinkles, a job offer with stock

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options…) That’s the holiday shopper in a nutshell. Today’s consumer has high expectations — they already assume retailers will be offering low prices or strong promotions, and they want to know what they’re going to get on top of that. This “price plus” shopping mentality is all part of the value equation, which incorporates price with other elements like quality, convenience and service. In fact, according to our survey, people were more inclined to say these elements are important factors in their decision on where to purchase — possibly because they already assume low prices are a given. How does a shopper define value? Maybe it’s a digital photo frame that holds more pictures and a better resolution, or a store with short checkout lines and fully-stocked shelves. Some consumers may be persuaded by retailers who pledge a certain amount of proceeds to charities, especially if their individual contributions have been impacted as a result of the economy. Even layaway is part of the value equation, as evidenced by Walmart’s newest ads and heavy layaway emphasis from retailers like Sears, Best Buy, Toys “R” Us and TJ Maxx. Now you see it, now you don’t. After retailers got sideswiped by too much inventory in 2008, they pulled way back — causing some inventory shortages of popular products. While inventory l evels are still very lean this year, which may impact availability of top products, retailers have done an incredible job streamlining their supply chains to ensure that they’re maximizing regional or local markets that may be performing particularly well. The handbag selling well in New York that is sitting idly on the shelves in Miami may relocate to the colder climate. Winter coats in Chicago can get shipped off to Des Moines and video games in Phoenix can get transported to Las Vegas. For retailers, this means an even greater opportunity to sell popular products at a profit. For shoppers, it means that merchandise may be easier to find…as long as it’s not “THE” must-have item this holiday season. Also on the inventory front, retailers were able to place holiday orders later this year for shipping — enabli ng them to get a better sense of consumer sentiment closer to the holiday season before making a commitment on how much merchandise to buy. We all know that there’s a lot than can happen in a few short weeks, so having time on their side from a shipping standpoint was a crucial factor in helping retailers protect their profits and manage inventory. You better shop around. In a sluggish economy, people shop i n fewer places… right? Wrong. In fact, during periods of consumer uncertainty, people dedicate themselves maniacally to finding the “best” deal — and they shop all over the place. According to our survey, a majority of shoppers will visit discount retailers this

holiday season. But they’ll also be shopping at department stores, clothing stores, electronics stores, craft stores, grocery stores…you name it, nearly every category is seeing an increase in traffic. And shoppers aren’t discriminating on product. People won’t hesitate to buy toys at a grocery store or stocking stuffers at a wholesale club – and this trend offers opportunities to retailers in all categories. Thank you, sir, may I have another? For anyone who is looking for a reason to loosen the purse strings, your justification can’t get any better than this one. According to our holiday survey, six in ten holiday shoppers have set aside money to make additional “non-gift” purchases for themselves this season. The average person will spend $130 on these purchases, an alltime high and a 16 percent jump from last year’s $112. Why, in an economy like this one, are people setting aside money during the holidays for these other purchases? Quite simply, retailers have done an admirable job telling consumers that the holiday season offers the best prices — and many Americans seem to have delayed purchases to wait for the best deals. Kids might get a new hat and mittens. Dad might replace the snow blower. Mom might swap out some kitchen gadgets or small appliances. And none of those items will get wrapped up and put under the Christmas tree. Regardless of the item, many families have set aside a substantial chunk of change for these “non gifts” this year. Retailers are embracing this trend. Case in point: The home page of J.Crew’s website features a photo of an immacul ately-dressed woman with the caption, “To You, From You.” Just makes you want to go shopping, doesn’t it? This year’s gift-giving theme: “Everyday appropriate.” In 2008 and 2009, both years when holiday sales saw declines from the year before, shoppers were all about practical, necessity gift purchases. This year, there seems to be a little bit of wiggle room on the wish list. The most popular items this year aren’t necessarily cheap, but they are appropriate to wear or use on a regular basis. What this means: don’t be shocked to see people spring for the $200 coffeemaker or the $400 watch, but the evening clutch might be a tough sell. The challenge for retailers, of course, is to present each gift option in a way that people will think it’s versatile and applicable for a variety of occasions. Even that pair o f diamond earrings [cough cough]. The Early Bird catches the worm, but the Night Owl catches the sales — on Black Friday, at least. This is the tenth holiday season we’ve been conducting holiday data with our friends at BIGresearch, so we have some pretty compelling yearover-year trends. Within the last decade, Trends, page 15


ChocMo debuts new holiday packaging, sets event ChocMo of Poulsbo is introducing its updated packaging just in time for the holidays. Formerly CBC Chocolates, the handmade treasures now reflect the new name. ChocMo can meet both personal and corporate giving needs with everything from individual chocolates to gift certificates, gift baskets and a monthly chocolate subscription service. The shop will prepare gift baskets of your choosing that could include tea, coffee, bottled wine or beer, paired with the perfect chocolates. ChocMo is also hosting a holiday event, complete with food and wine pairings, to help plan a holiday party on Wednesday, Dec. 7. There will be hors d'oeuvres, wine tasting and chocolates. Guests will have the opportunity to enjoy the food and receive a complete recipe guide for all the menu items created. The cost is $25 per person and reservations are required. ChocMo is located at 19880 7th Ave NE, Suite 102 in Poulsbo. Hours are 10 a.m. to 10 p.m. Monday through Thursday, and open until Midnight on Friday and Saturday and can be reached at (360) 930-0283.

December 2011 Kitsap Peninsula Business Journal• 15

from page 14 we’ve seen Black Friday morph from a leisurely mid-morning venture around a handful of stores to a competitive free-for-all among retailers eager to nab those first holiday shoppers. Last year, it got even earlier, with 24 percent of shoppers hitting the stores before 4 a.m. And with announcements this week by Macy’s, Kohl’s and Target that their doors will open at midnight Thanksgiving night, you can be sure that more people will be staying up to go shopping rather than setting their alarms to wake up before the sun. (Last year, the number of people who went shopping at midnight tripled from 2009 — no doubt the numbers will climb even higher this year.) And after Gap joined Walmart, Sears and Toys “R” Us by opening on Thanksgiving last year, don’t be surprised if other retailers this year follow suit to offer shoppers an even earlier start to their holiday shopping. What will the Thanksgiving weekend hold for retailers this year? We’ll have to wait until our November survey is released to find out. Free shipping isn’t free…but it works. Here’s a dirty little secret: retailers have a love/hate relationship with free shipping. Why? For starters, it’s hardly free — after all, somebody has to pay for the 20,000 people that FedEx is hiring this holiday season — but shoppers have tunnel vision for this incentive and have come to expect free shipping like they expect low prices. And retailers are listening. According to, a record 92.5 percent of online retailers will offer free shipping this holiday season – and that’s not only going to be a Cyber Monday staple. Free shipping offers are likely to be found all holiday season long, as 56 percent of retailers say their budgets for free shipping are higher this holiday season than last and one-third say free shipping offers will start earlier in the season than last year. The dilemma for retailers has become weighing the “conditions” surrounding free shipping. What’s the minimum purchase required for shipping to be free? Which items are included (or excluded)? Currently, it seems like retailers will be promoting free shipping with conditions most often but a handful are planning some “no minimum” promotions on key spending days. Yes, Virginia, there is an app for that. A few years ago, when everyone in retail started getting themselves in a tizzy over the “mobile” trend, we lumped all the gadgets into the same category. But what we realized within the last year is that people are using their mobile devices in very different ways. This year, we took a deeper look at consumers’ use of smartphones versus tablets, and the results were fascinating. Half of Americans with smartphones will use their devices for holiday shopping this year, according to our survey – primarily to research products or compare prices but also to find retailers’ information like store hours and locations. Consumers will also use phones while shopping in stores to read reviews or redeem coupons – while a smaller number (16 percent) will actually use their phone to make purchases. So when

you think of smartphones, think mobile. These devices are carried everywhere. Tablets are a different beast entirely. While there aren’t too many people whipping out their iPad at retail stores, they are using the devices to shop. According to our survey, 70 percent of tablet owners will use their devices for holiday shopping this year, and they are twice as likely to use tablets to purchase merchandise as smartphones. When you think tablets, think of someone sitting at home on their couch in front of the TV. And there’s our list of the top ten holiday trends based on our surveys and economic analysis. What other trends do you think we’ll see develop over the next two months? What are we missing?

OPSEC in the business world By Dan Phillips OPSEC, short for Operations Security, is a developed process to protect military “Operations” from discovery and exploitation by an adversary. The term itself and its formalized process was developed during the Vietnam war as Operation Purple Dragon, and has been refined over the years to serve not only the military but, government, law enforcement and business. The concept of OPSEC is by no means new, and has been practiced from the time of Sun Tzu (e.g. Art of War). OPSEC uses denial and deception to prevent an enemy from obtaining our Critical Information, that which if discovered, and exploited could be used to defeat, destroy, or damage our Operations. OPSEC in and of itself is not a Security function, but incorporates active and passive procedures and policies to supplement and enhance existing security protocols like, fencing, alarms, etc. Like these hard protective measures, OPSEC has a direct application in business. OPSEC first identifies the Critical Information (CI) requiring protection, then identifies the Threat — how it can be exploited and by whom; identifies the Vulnerabilities to that CI; Then Assess the Risk-measured by the

value of the CI against legitimate threats and related vulnerabilities; then finally develop various Countermeasures to protect the CI. Countermeasures are then implemented and examined for effectiveness, and modified as needed to obtain maximum effectiveness against discovery and exploitation. While these terms differ from that of business and corporations, the way in which processes are applied are the same. From a business perspective, OPSEC can be a valuable tool. Most companies, be it manufacturing, service, or otherwise have some sort of Critical Information that if compromised may have dire consequences for the life of the company or in particular, a company product line. This critical information may be business sensitive, proprietary information, special manufacturing techniques and/or development programs. Unfortunately, much of the information that competitors can learn about you can be easily obtained without the use of espionage, and other nefarious methods. Experts estimate that between 80-90 percent of information can be obtained via Open Sources, public media, trash, etc. While, some companies go to great lengths to protect their physical assets, often times,

things like internal reports, and other sensitive documents, are discarded in the trash and recycling, or maybe inadvertently posted on the web in Powerpoints, etc. Indicators and Observables may also give away information that could lead to the discovery and exploitation of CI. An indicator may be a visible increase business activity at a particular site, schedule changes, delivery of specialized manufacturing material or parts, or signs of increase spending, business travel by executives and others, etc. Any number of things may give an observer clues as to what your business is doing and may present vulnerabilities that can be exploited to discover your Critical Information. Simply varying established routines can prove effective in eliminating observables and reducing vulnerability. Any company with something to protect should consider exploring and perhaps implementing OPSEC into their business plan. In order to effectively employ OPSEC, you must first determine what is critical to your company. Then, through the process of

OPSEC, determine ways to protect it from discovery and exploitation by competitors and criminals. While the implementation of OPSEC sounds somewhat complicated, and it can be, it may be implemented at negligible cost and have a significant positive impact. From a risk management point, OPSEC is a valuable and cost effective risk avoidance tool. Risk avoidance rather than risk transfer better protects the company’s assets, as some things just can’t be insured against. OPSEC has proven to save thousands or even millions of dollars in lost time and material costs of design, development, and production. Thus, OPSEC supplements the bottom line by helping to protect/preserve current and future revenue. (Editor’s note: Dan Phillips is an OPSEC Program Manager for the U.S. government and a private business consultant. He serves as a member of the National Executive Board of the OPSEC Professionals Society and is an adjunct instructor of the OPSEC Program Manager and Analyst course for the U.S. Interagency OPSEC Support Staff. Phillips can be reached at

RIM's BlackBerry impacted by Apple iPhone 4S Sales

16 Kitsap Peninsula Business Journal• December 2011

RIM's BlackBerry franchise is faced with slowing sales due to the success of the Apple iPhone 4S, according to a new analyst report.

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By Nicholas Kolakowski eWeek Research In Motion (RIM) has been impacted by the launch of Apple’s iPhone 4S and faces slowing sales of BlackBerry OS 7 devices ahead of its massive smartphone refresh sometime in 2012, according to a new analyst report. “With the launch of the iPhone 4S, increasingly pricecompetitive Android smartphones, improving Windows smartphones, and the launch of the Amazon Kindle Fire tablet, we anticipate increasing competition across all tiers of RIM’s products in [calendar year] 2012,” Canaccord Genuity analyst T. Michael Walkley wrote in a co-authored Nov. 17 research note. Some of that competition may already be affecting sales of BlackBerry devices, Walkley said. “While our September/October checks indicated solid sales of new BlackBerry OS 7 models, especially the Bold 9000 series as an upgrade enterprise sale, our recent checks indicate slowing sales trends post the launch of the iPhone 4S and price reductions of the iPhone 4 and 3GS,” he said. RIM is prepping a line of “superphones,” running a “BBX” operating system based on QNX, for release sometime in 2012. A wide-ranging software update for its PlayBook tablet, including integrated email, will appear sometime in February. “We expect BBX BlackBerry devices shipping around mid-[calendar year] 2012,” Walkley wrote. “As a result, we anticipate slowing high-end BlackBerry sales at both the enterprise and consumer channels over the next several quarters.” At least one of those devices could feature a dual-core 1.5GHz processor, 8-megapixel rear camera, an ultra-thin body, and a touch-screen sans physical QWERTY keyboard. At least, that’s according to a leaked device image published on The Verge, which then suggested the smartphone (codenamed “London,” and apparently due to arrive on store-shelves in June 2012) is “roughly the same size as a Galaxy S II.” RIM has offered precious few details about BBX’s user interface. According to an Oct. 18 statement released by the company, the operating system will “support applications developed using any of the tools available today for the BlackBerry PlayBook … including native SDK, Adobe AIR/Flash and WebWorks/HTML5, as well as the BlackBerry Runtime for Android Apps.” That suggests BBX will interoperate with RIM’s PlayBook tablet. Research firm Nielsen estimated RIM’s share of the U.S. smartphone market at 18 percent through August, behind both Google Android (43 percent) and Apple iOS (28 percent) but well ahead of Microsoft (8 percent).

Kitsap Community Resources launches capital campaign for South Kitsap project By Rodika Tollefson Kitsap Community Resources started phase one construction in August for its community services center, and the nonprofit is in the middle of a capital campaign. The two-story, 6,900-squarefoot building, at the intersection of Jackson and Lund in Port Orchard, will house its South Kitsap staff and services as well as provide space for community programs. The project’s estimated cost for the first phase is $2.5 million, with 75 percent funded through government grants. The project also has pledges from several private foundations, including a $200,000 challenge matching grant from the Bill & Melinda Gates Foundation. The grant is conditional upon KCR raising $115,000 locally, and the organization has raised about $35,000 toward the challenge so far. Larry Eyer, KCR executive director, said about a third of the agency’s clients are from the south end of the county. “We want to provide countywide services to South Kitsap residents,” he said. “…Our vision is to have a facility designed for the services we provide.” The South Kitsap office, currently located on Bay Street, has been leased for about 10 years. Eyer said their experience at the new Bremerton headquarters has proved that it would be more cost-efficient to own rather than lease. Additionally, since the Bremerton building is green (LEED certified), it brings about 30 percent savings in utility costs. The Port Orchard building is also being built to LEED standards. The second phase of the project will add low-income housing units on the two-acre site. The design is preliminary and currently calls for cottage-style individual housing.

The second phase, estimated to cost another $2.5 million, is likely to be funded through alternative sources including possible low-interest loans. Some of the site work for this phase has already been completed, but the timeline for the rest depends on funding. The South Kitsap Community Services Center is expected to be ready for occupancy by the end of next summer. The center will house the same services as in the current location, but will be designed for growth. Current services include the Women, Infants Children nutrition program and employment training, among

others as well as partnerships with groups such as the Kitsap Adult Center for Education (formerly Kitsap Council for Literacy). Homeless assistance and energy assistance intake will be added in South Kitsap once the new building is operational. The South Kitsap office currently serves about 7,000 clients a year, and that number is estimated to grow at the new location. Eyer said KCR started planning the new facility before the recession hit and there has been such positive response from funders that the agency decided to keep moving forward with it. “The (capital) campaign is going into high gear now and

we’re optimistic we’ll raise the matching funds,” he said, adding that the best case scenario for the completion of the second phase is also next summer, but most likely it would be another year.

Kitsap Bank adds Paulino to mortgage lending team

December 2011 Kitsap Peninsula Business Journal• 17

Kitsap Bank announced that Carl Paulino has joined its mortgage lending team as residential mortgage loan officer. Paulino is based out of the bank’s Silverdale branch. A Kitsap resident for more than 30 years, he has helped hundreds of Kitsap residents over his 17-year career as a mortgage lender. He holds a degree in economics from the University of Washington, and has distinguished himself in his field by being twice selected for Seattle Magazine’s 5-Star Top Mortgage Professional Award. The honor is bestowed based upon customer ratings of mortgage loan officers in the Puget Sound. “Carl’s rich experience in mortgage lending coupled with his knowledge of the area and commitment to serving our local residents, make him an excellent fit for this position,” remarks Steve Politakis, Kitsap Bank executive vice president/CCO. “He joins a team of highly-experienced mortgage professionals, who together, are dedicated to providing our community with the very best in terms of mortgage lending products and customer service.”

18 Kitsap Peninsula Business Journal• December 2011

Why pre-employment screening can be beneficial By Julie Tappero, President West Sound Workforce Your company has an opening for an administrative assistant. You’ve interviewed several candidates and have narrowed it to three. They all say they have the skills and abilities you’re seeking. How do you verify their claims, and select the final candidate who will best fit the job and your company? Many companies today are using preemployment tests to assist with this. They are a great resource when added into the selection process, as long as you understand what tests to use, and how to use them. There are several types of preemployment tests that businesses may utilize in their selection process: • Skills Testing involves sample job tasks, performance tests, and simulations. • Strength and Physical Exams include testing for physical capacity to perform job requirements • Cognitive Tests assess reasoning, reading and math skills, and such areas as memory and accuracy • Personality Tests can include personality traits and the individual’s propensity for certain conduct, such as reliability and honesty Your approach to pre-employment testing needs to start with your job description and the essential functions of the position. You must start by analyzing the job, the skills and abilities that it requires, and the characteristics that would make someone successful in the position. Once that’s done, you’ll have a better understanding of what testing, if any, could be useful in the selection process. When it comes to skills testing, cognitive testing and personality testing, there are two approaches companies take. The first is to utilize commercially marketed validated tests, and the other is to create company-specific tests. Either way, you need to follow the same thought process in order to stay compliant with the governing laws. Laws that pertain to employee testing include Title VII of the Civil Rights Act, the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA). The bottom line is that you must ensure that the testing does not discriminate against a protected class.

As you implement your testing, there are several questions that you must ask. Are the tests validated for the positions and purposes they are being used for? Even if you purchase commercially sold and validated tests, you must ensure that they apply in your specific case. Don’t assume that every test sold has been professionally validated. Do your homework in order to protect your business. If you’ve created a homegrown test, you will have to find methods to validate it yourself. Question whether the test is having a disparate impact on any protected group of people. Don’t assume that because a test has been validated that this protects you. Ford Motor Company paid $8.5 million to settle a claim when they continued to use a cognitive test that had a disparate impact on African Americans, even though another selection method was available that was less discriminatory in its impact. Question whether the test is really needed for the job (and continuously reevaluate its necessity, as job requirements change). Are you requiring that candidates lift 100 pounds, when the reality is that no one in that job lifts more than 50 pounds? If so, your physical test may very well have a disparate impact on women, leaving your company vulnerable to a discrimination claim. This is exactly what happened to the Dial Corporation, to the tune of a hefty $3.3 settlement. In 2006, a federal appeals court upheld a decision against the company, declaring that their pre-employment strength test was discriminatory against women. This was due to the fact that the test required applicants to lift and carry weights that were heavier than those which were actually handled on the job (thus unfairly favoring men), and that the test was found to not achieve its stated purpose of preventing on the job injuries. Some employers are interested in using testing to determine employees’ soft skills, personality traits and future conduct. Clearly, this is a grayer area than testing hard skills, such as someone’s typing speed or their ability to lift a specific weight. A few words of caution here. First of all, you can never use a lie detector test on an employee or potential employee, with a few exceptions for special businesses, such as alarm and guard services, pharmaceutical

distributors, armored car companies, and, of course, the government itself. If you do decide to use a personality test, read through it carefully yourself to be sure it does not delve into areas that intrude on an applicant’s privacy. And, remember, if you use a test that divulges someone’s mental disorder or impairment, you may very well now fall under the ADA and all of the protections and restrictions that it provides. What if the test is needed and it does have a disparate impact on a protected group? Must it be abandoned? Not necessarily. You have to dig down a bit deeper and explore a bit more. Is it jobrelated and is it necessary for the safe and efficient performance of the job? If the answer to that is yes, the next question is whether there is another selection procedure that could be substituted which would accomplish the same thing, without having the same disparate impact. If the answer is no, you’re on solid ground. But if the applicant can show that there is another method, the courts have held it’s in your best interest to listen. If you decide to test candidates by having them perform a sample task based on the duties of the job for which they’re being considered, it really must be just that: a sample task. This is not the same as a working interview, in which applicants are brought in to work for a period of time to demonstrate their suitability for a position. You are required by law to pay people for working interviews. Here’s a good real world example of a sample task test: An organization I work with was recently seeking someone to perform high-level administrative work. They asked their two final candidates to each spend thirty minutes composing a business letter, because creating professional, well-written correspondence was an important element of the job’s duties. This was a perfectly acceptable (and extremely effective) skills test to have applicants perform. So, where does that leave us? Review your application and selection process, including the application, interview, and testing involved, to ensure that it is specific to job duties and requirements. Utilize validated selection tools to assess competencies for the job in order to qualify candidates. Ensure that all candidates are

given the same testing requirements and that they are administered equally to all. Constantly reevaluate your methods, as job requirements and duties evolve and change. We don’t always want to take it on faith that someone can and will perform the job requirements. As they say, the “proof is in the pudding”, and you can save your company’s money by taking a taste of the pudding before you buy a bowlful. As with everything else, you want to be sure that when you take that bite, you don’t end up choking on a lawsuit down the road. (Editor’s Note: Julie Tappero is the President and owner of West Sound Workforce, a professional staffing and recruiting company based in Poulsbo and Gig Harbor. She can be reached at View her LinkedIn profile at The recommendations and opinions provided are based on general human resource management fundamentals, practices and principles, and are not legal opinions, advice, or guaranteed outcomes. Consult with your legal counsel when addressing legal concerns related to human resource issues and legal contracts.)

Holly Ridge Center welcomes new development coordinator Claudia Edmondson recently joined Holly Ridge’s administrative staff as its development coordinator. In this newly created position, she will be responsible for the advancement and growth of the organization’s major gifts program and will be tasked with creating a new planned giving program. She will work closely with key stakeholders to meet fundraising goals, and will assist with the development and implementation of fund-raising and community relations, grant-writing and special events. Edmondson has a Ph.D. in special education and a masters in Vocational Rehabilitation Counseling, with over 20 years of experience working in the fields of social services and special education.

We may be a small business... But we can help your company in a big way! For all your temporary staffing needs call:

Kitsap County Office

Gig Harbor Office

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(253) 853-3633

December 2011 Edition

Events And Activities Thursday, December 1st Developers Council Mtg., 7:30 a.m. HBA Wednesday, December 7th Kitsap HBA Remodelers Council Come Get Business Tax Questions Answered! HBA, 4 p.m.

Congratulations Winners of the 2011 Remodeling Excellence Awards!


In early November, the Kitsap HBA Remodelers Council presented the awards of excellence to member remodelers. With well over 20 separate entries this year, the judges had their Commercial: Pacific Kai Homes, LLC work cut out for them. 15 projects were awarded the coveted REX award. And the winners are: Commercial Over $250K . . . . . . . . . . . . . . . . . . . . . . . . .Pacific Kai Homes, LLC Exterior Finishes . . . . . . . . . . . . . . . . . . . . . .Wayne R. Keffer Construction Inc.

2011 BUILDER & ASSOC. DIRECTORS Derek Caldwell • Karla Cook • John Leage Robert Lubowicki • Judy Mentor Eagleson Jim Way, CGB • Jason Galbreath • Kevin Hancock Leslie Peterson, CGA • Shawnee Spencer

2011 STATE DIRECTORS John Armstrong • Robert Baglio • Derek Caldwell Lary Coppola • Walter Galitzki • Brent Marmon Gale Culbert, CGR, CGB, GMB Wayne Keffer, CGR, CAPS • Greg Livdahl


Thursday, December 8th Build A Better Christmas Gift Wrapping All HBA Members Welcome 4 p.m. ‘til done @ HBA

Existing Garage Remodel . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Andersen Homes

Tuesday, December 13th Spring Home Show Committee Mtg., Noon HBA

Other/Specialty Room . . . . . . . . . . .Sentinel Construction & Consulting, Inc.

Robert Baglio • Justin Ingalls, RCS Wayne Keffer, CGR, CAPS

Specialty Environmental . . . . . . . . . . . . . .Sun Path Custom Construction Inc.


Thursday, December 15th SPECIAL DATE Executive Committee, 2:00 p.m. Government Affairs Cmte., 2:30 p.m. Board Meeting, 3:30 p.m.

Residential Kitchen over $60K . . . . . . . . . . . . . . . .Joe Gates Construction, Inc.

Friday, December 23rd HBA Closed at NOON Monday, December 26th HBA CLOSED

New Carport/Garage . . . . . . . . . . . .Sentinel Construction & Consulting, Inc. Decks, Gazebos, Porches . . . . . . . . . . . . . .Sun Path Custom Construction Inc.

Residential Kitchen $30K-$60K . . . . . . . . .Wayne R. Keffer Construction Inc.

Residential Bath over $25K . . . . . . . . . . . .Sun Path Custom Construction Inc. Residential Add. $75K-$125K . . . . . . . . . . . . . . . . .Joe Gates Construction, Inc. Residential Add. over $175K . . . . . . . . . . . . . . . . . . . . . . . . . . .Andersen Homes Residential Whole House under $100K . . . . . . . .Joe Gates Construction, Inc. Residential Whole Hse $150K-$225K . . . . . . . . . . . . . . . . . . .Accurate Builders Residential Whole House over $300K . . . . . . . . . . . . . . . . . . .Andersen Homes

December 27th - 30th Call before visiting the office HBA on Special Holiday Hours

Bill Parnell


David Smith • Mikael Brown • Jeff Coombe

LIFE DIRECTORS Rick Courson • Jim Smalley • Bob Helm Bill Parnell • Larry Ward John Schufreider • Dori Shobert

2011 COUNCIL & CHAIRS Build a Better Christmas. . . Randy Biegenwald Built Green . . . . . . . . . . . . . . . . Walter Galitzki By Laws & Nominations . . . Ron Perkerewicz Developers Council . . . . . . . . . . . . . Norm Olson Golf Classic . . . . . . . . . . . . . Shawnee Spencer Govt. Affairs Cmte. . . Wayne R. Keffer CGR, CAPS Remodelers Ccl Chair. . . David Godbolt, CGR, CAPS Membership . . . . . . . . . . . . . . . . Robert Baglio Parade of Homes . . . . . . . . . . . . . Dee Coppola Peninsula H&G Expo . . . . . . . . . Melvin Baird Peninsula H&R Expo . . . . . . . . . . . Tom Taylor


Wednesday, January 4th HBA Remodelers Council Kick the Year off Green! HBA, 4 p.m. Thursday, January 5th Developers Council, 7:30 a.m. HBA

Robert Coultas • Rick Courson


Executive Vice President . . . Teresa Osinski, CGP Administrative Coordinator . . Stephanie Buhrman Expo & Events Director . . . . . . . . Toni Probert

Monday, January 2nd HBA Closed

Home Builders Association of Kitsap County 5251 Auto Center Way, Bremerton, WA 98312 360-479-5778 • 800-200-5778 FAX 360-479-0313

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President . . . . . . . . . . . . . . . Justin Ingalls, RCS First Vice President . . Wayne Keffer, CGR, CAPS Second Vice President . . . . . . . . Robert Baglio Treasurer . . . . . . . . . . . . . . Randy Biegenwald Secretary . . . . . . . . . . . . . . Dee Coppola, CGA Immediate Past President . . Ron Perkerewicz

December 2011 Edition

My how time flies. As I sit here brainstorming for my final article, it Justin has given me time to reflect. So Ingalls much I want to say this time, but we’ll keep it to one last opportunity Kitsap Trident Homes to deliver a positive message and 2011 President provide support for our association and industry and for the leadership moving forward. As I mentioned in previous articles, home building has been the driver of recovery and once again will be a key to job growth. Taxes from our industry are what help fund our school systems and build strong communities. Housing normally accounts for more than 17 percent of the nation’s total economic output. With that in mind one would think our government should take steps to spur housing, create jobs and bolster our economy. The new energy code requirements have had dramatic impacts on the cost of new constructi on and remodeling projects. They include changes related to windows, insulation and electrical systems to name a few. There will be required testing on ducting for heating systems and a blower door test for the structure. Don’t forget to take this into account when bidding on your next project or looking to update you own home. This was preceded by storm water code updates and the potential of increased fire flow for both residential and commercial properties. These are just two more examples that also have had significant financial implications that fall back to property owners, developers and in the end all ratepayers. My thought is, instead of continuing to add to the already stringent regulations we have, lets get proactive in getting to be more efficient with what we have currently. For example, we have just completed construction on our HBA office building to showcase what upgrading certain items in your home or business can do for you. We want this to be educational for anyone who wishes to learn more about the process and see the results. There have been open houses during and following the construction with detailed information and comparisons to learn from. The intent was to use this opportunity as an educational tool for our members and the general public to see how you can make your clients or your own home or business more energy efficient and save you money in the long run. The difference is amazing and if you have any interest or questions on this, I’d suggest stopping by and seeing the results or visiting If you are in the market to build you own home, p urchase an existing home to fix up, or remodel your present home, be sure to select a registered contractor to help you achieve your dreams. All members of the Home Builder’s Association of Kitsap County are licensed, bonded and insured and this can all be verified on the Labor and Industries website at Before beginning, protect yourself and your property by using the verification services provided to you. With the economy providing hardship for many in the building industry, there are many who are not up to date on all their legal obligations and the risk ultimately falls on the home owner. The cheapest bid, while may seem good at the time, can cause more trouble in the long run if you don’t watch out for yourself first. Another resource you may find of interest is the L&I’s contractor website at This site will help you find information like whether the contractor is registered and for how long, if they have compensation insurance for their employees, and if there’s pending or past action against their bond. By referring to both of the above you can ensure you are protecting yourself and your investment. Finally I’ll share with you one item that I’m excited to have seen move forward, updating our website. Our leadership and staff are encouraged because once this is up and going, we consider this to be another virtual employee that works 24 hours a day, 7 days a week. My hope is the new website will serve many additional purposes for our members and the general public. First and foremost, I want it to continue to be a resource to find our members when looking for help on a project. I also see this as a great tool to market and promote what we do as an association, in our place of business and our involvement in different events throughout the community. I’d like to see our Virtual Commercial and Residential Tours take off with this new platform, so those that choose to, can have an opportunity to show off their skills. We will continue to have a calendar with our events and a place to sign up for them online. There will be tab that will keep you up to date on all the member benefits, register for events and sign up to become a member. Finally, I’d like to see us provide an opportunity for advertising. This will be great way to promote your business while at the same time, help to support the Association. Many members of the Home Builder’s Association of Kitsap County have been working overtime on your behalf with the County and other local organizations. While the list of volunteers is long and there’s too

much detail to get into each item individually, I would just like to say thank you. I know many have put in countless hours to maintain where we are today. Next year’s President, Wayne Keffer of WRK Construction has some great ideas and a real passion for our industry to succeed. It has been an honor to serve as your President this year. I am grateful for the experience and the confidence you have shown towards me. One final special thank you must go out to our staff Teresa, Toni and Stephanie. Simply put, you guys are awesome.

Teresa Osinski

Got Health Insurance?

Did you know that the Home Builders Association has a health insurance option for its CGP member companies? In partnership with Capital Executive Vice President Benefit Services, the HBA has been able to offer this benefit to our members since 1990. By leveraging the purchasing power of the residential and commercial construction industry the statewide builder associations are able to offer an insurance program with a competitive advantage. The size of this program allows for diverse and responsive benefit options for companies of all sizes and includes additional selections of dental, vision, and disability. As you continue to offer a competitive employment benefit package to your workers while controlling costs, be sure to contact the HBA office for an insurance quote form. If you’ve let your HBA membership lapse or have not yet joined, don’t let that stop you. Quotes are available to all qualified companies and are generally returned to you in about 24 hours. What do you have to lose by getting a quote? Nothing. In fact you may save yourself hundreds of dollars a year! Contact the HBA office so we can email you a health insurance quote form, or call Capital Benefit Services directly at (800) 545-7011 ext 6. Have a healthy holiday and new year!

December 2011 Edition

As the year ends I offer this brief recap on behalf of the Government Affairs Wayne R. Keffer Committee. It has been WRK Construction, Inc. another busy year 2011 Chair representing our members; both Builder and Associates alike. We engaged on many issues important to all our members as well as the general public. The work is ongoing and took place at local restaurants, the HBA office, county offices, and basically everywhere we were invited to participate. Some notable issues we have engaged, and continue to watch, are the rewriting of Kitsap county code. This is important, as we in the building community are the ones working within the code and its application. This year we pushed back on the County’s idea to double the fir flow requirements, If adopted the requirements would be very hard to meet in the most (if not all) of the county and therefore further hurt our industry. The requirements would make water rates go up in some, if not all water districts, several hundred percent, and make Kitsap a negative place to live and do business. We have interviewed many political figures and endorsed many as well. It is important to understand that we often have to make tough decisions when endorsing candidates as often times both candidates are high quality. This said, whether our endorsed candidate is elected or not we will reach out to all elected officials do whatever we can to lend a hand when it comes to policy affecting the development and construction community. The real heroes are our members that give their time to represent us well on the many citizen advisory commissions and boards. Oh, and one last thought: In November we had the opportunity to celebrate our membership with the annual Remodeling Excellence Awards (REX) reception. I would like to thank all who were in attendance. It was a great event and this year there were more entries than ever. The winners represent our membership well and I am proud to be associated with them. The other great opportunity for recognition is at the State level where they also offer a REX Award program. Their application is very similar to ours and it too is a great opportunity to show what your company can do. The Kitsap HBA Remodelers Council represents the best in the business. If you are looking for a way to market your professionalism, please consider getting involved with the Council. Its focus is in helping member remodelers be the most professional and knowledgeable companies in Kitsap. Meetings are held regularly and cover timely topics important to the remodeler.

Government Affairs Committee

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Interested in how to make your home or office more energy efficient and more comfortable? Visit the HBA office for a virtual tour of the upgrades recently made to our 20 year old building. By implementing several easy techniques we have improved the airflow and energy efficiency of our building and you can too! You can also learn all about the techniques and other important information at For information about low interest loans and energy audits available to the public, please visit any of the three local RePower programs: • • •

The Biggest & Best Home Show West of Seattle!® March 16, 17, & 18, 2012 Kitsap Fairgrounds and Event Center Three buildings! Vendors inside and out! Landscape displays! Do it yourself information seminars! Master Gardeners on site! Habitat for Humanity’s Builder Surplus SALE! Answers for every question from hundreds of vendors! NEW This year! Come see:

Ciscoe Morris, Saturday afternoon! - Sponsored by Puget Sound Energy All returning vendors must renew their booth contract by December 2nd to guarantee their space. All new vendors can submit applications as of January 3rd. We are always looking for new and interesting vendors. Our booths are competitively priced and we invest in significant Expo promotion throughout the Kitsap region. The Peninsula Home and Garden Expo is proudly brought to you by the Home Builders Association of Kitsap County, Kitsap Sun, Wave Broadband, Kitsap Credit Union, and Puget Sound Energy. Mark your calendar for March 16, 17, and 18, 2012 and visit this great Expo at the Kitsap County Fairgrounds and Event Center. Visit the HBA website for details at and in February begin monitoring the details at for updates on informative seminars, events for the kids, and late additions to the vendor list.

December 2011 Edition

Welcome New Members Dale Dennis Kelley Imaging Systems 8725 S 212th Street, Kent, WA 98031-1921 (253) 272-7099 Email: Sponsor: Brent Marmon, Pacific NW Title

Thank You Renewing Members Over 30 Years Silverdale Plumbing Inc (34) Over 20 Years Joe Gates Construction, Inc. (21) 20 Year Anniversary Custom Hearth Over 10 Years R-B Enterprises & Associates LLC (17) 10 Year Anniversary EHT Enterprises Inc T-Oz Construction Inc

A Spike is a member who sponsors new members into the association. The association loses a number of members each year from non-renewal due to changes in business circumstances. This membership loss must be made up with new members if the association is to continue; without active Spikes our association would not exist.

Troy Olson TNT Home Builders PO Box 1126, Port Orchard, WA 98366 (360) 621-0186 Email: Sponsor: Walter Galitzki, Sun Path Custom Construction

Over 5 Years Pacific Kai Homes, LLC Port Ludlow Associates, LLC Sunset Electric NW Inc 5 Year Anniversary TN Miller Remodeling Sierra Pacific Windows 2 Years and Over Andersen Homes Jose Technologies Elite Exteriors FIRST YEAR RENEWALS Hanley Construction Inc

5 Great Reasons to Buy or Remodel 1. LOW INTEREST RATES Mortgage rates are at record lows. Buying now may be the best deal you will ever get. Refinancing can reduce monthly payments substantially. 2. GREAT PRICES Housing affordability is the best it’s been in years. As supply and demand in our housing market comes back into balance, prices will begin to rise again. 3. OUR HOUSING MARKET IS IMPROVING Inventory of homes for sale has been declining. Pending sales have steadily improved. If you’ve been waiting for the “bottom” of the market and don’t act soon — you’ll miss it.

LIFE SPIKES CREDITS Gale Culbert . . . . . . . . . . . . . . . . . . . . . . . . . . 271 Dee Coppola . . . . . . . . . . . . . . . . . . . . . . . 256.75 Kerry Chamberlin . . . . . . . . . . . . . . . . . . . . 240.5 Bill Parnell . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221 Kevin Parnell . . . . . . . . . . . . . . . . . . . . . . . . 177.5 John Armstrong. . . . . . . . . . . . . . . . . . . . . 154.75 Rick Courson . . . . . . . . . . . . . . . . . . . . . . . . . 153 James A Ingalls . . . . . . . . . . . . . . . . . . . . . . . . 147 Randy Biegenwald . . . . . . . . . . . . . . . . . . 138.75 Greg Livdahl. . . . . . . . . . . . . . . . . . . . . . . . . . . 96 Robert Lubowicki . . . . . . . . . . . . . . . . . . . . . 93.5 David Smith . . . . . . . . . . . . . . . . . . . . . . . . . . 91.5 Michael Brown . . . . . . . . . . . . . . . . . . . . . . . . . 88 Lisa Phipps . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 Jeff Coombe . . . . . . . . . . . . . . . . . . . . . . . . . . 83.5 Lary Coppola . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Justin Ingalls . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Ron Perkerewicz . . . . . . . . . . . . . . . . . . . . . . 47.5 Wayne Keffer . . . . . . . . . . . . . . . . . . . . . . . . 43.25 Joanne Lockwood . . . . . . . . . . . . . . . . . . . . . 42.5 Donna Milner . . . . . . . . . . . . . . . . . . . . . . . . 41.5 Cheryl Gallup . . . . . . . . . . . . . . . . . . . . . . . . 39.5 Larry Elfendahl . . . . . . . . . . . . . . . . . . . . . . . 36.5 Steve Brett . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.5 Steve Crabb . . . . . . . . . . . . . . . . . . . . . . . . . . 29.5 Brent Marmon . . . . . . . . . . . . . . . . . . . . . . . . . 27 SPIKE MEMBERS CREDITS Dave Revis . . . . . . . . . . . . . . . . . . . . . . . . . . 24.25 Robert Coultas . . . . . . . . . . . . . . . . . . . . . . . . . 24 Jeff Swan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.5 AnnaLee Todd . . . . . . . . . . . . . . . . . . . . . . . . 15.5 Dale Armstrong. . . . . . . . . . . . . . . . . . . . . . 14.25 Joe Gates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Robert Baglio . . . . . . . . . . . . . . . . . . . . . . . . . . 9.5 Darren Devitt . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Mike Haley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

SPIKE CANDIDATES CREDITS David J. Godbolt CGP . . . . . . . . . . . . . . . . . 5.25 Derek Caldwell. . . . . . . . . . . . . . . . . . . . . . . . . . 4 Jim Heins. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Walter Galitzki. . . . . . . . . . . . . . . . . . . . . . . . . 3.5 Bradley Reid . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5 Corey Watson . . . . . . . . . . . . . . . . . . . . . . . . . 3.5 Ted Bowman . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Judy-Granlee-Gates. . . . . . . . . . . . . . . . . . . . . . 3 Frank Murr . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Ronald E House . . . . . . . . . . . . . . . . . . . . . . . 2.5 Robert Simonoff . . . . . . . . . . . . . . . . . . . . . . 2.25 Karen Alyea . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Jon Brenton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Ron Galla. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 John Leage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Daniel Ryan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Al Timm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Michael Glading . . . . . . . . . . . . . . . . . . . . . . 1.75 Ken Holmgren. . . . . . . . . . . . . . . . . . . . . . . . . 1.5 Steve Johnson . . . . . . . . . . . . . . . . . . . . . . . . . 1.5 Mark Khulman . . . . . . . . . . . . . . . . . . . . . . . . 1.5 Rob Smallwood . . . . . . . . . . . . . . . . . . . . . . . . 1.5 Shawnee Spencer . . . . . . . . . . . . . . . . . . . . . . 1.5 Brett Warner . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5 Bill Carter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Molly McCabe . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Judy Mentor-Eagleson . . . . . . . . . . . . . . . . . . . 1 Steve Morrison . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Ken Orlob . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 "Leslie Peterson, CGA" . . . . . . . . . . . . . . . . . . . 1 James T Pickett . . . . . . . . . . . . . . . . . . . . . . . . . . 1 John Ramsdell . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Jim Ullrich . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

4. ENERGY EFFICIENCY Today’s new homes are designed to save you money on your monthly utility bills, and increasingly incorporate exciting new green technologies. Remodels will benefit with energysaving techniques. 5. PROFESSIONAL BUILDERS, REMODELERS & LENDERS The Home Builders Association of Kitsap County has hundreds of member companies ready to guide you through any housing questions you have. Visit our website at or call us at 360-479-5778.

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Kitsap HBA Remodelers Council announces REX Award winners Kitsap Home Builders Association (HBA) Remodelers Council announcesd the winners of the prestigious Remodeling Excellence, or "REX" Awards. This year's applications were numerous and diverse. HBA members can be proud of the professional and cutting edge expertise of its Remodelers.

Andersen Homes Joe Gates Construction, Inc.

• Existing Basement/Carport/Garage Remodel • Residential Addition over $175K • Residential Whole House over $300K

• Residential Kitchen over $60K • Residential Addition $75K to $125K • Residential Whole House under $100K

Pacific Kai Homes • Commercial over $250,000: for Harborside Plaza

Sun Path Custom Construction, Inc. • Decks, Gazebos, Porches, Outdoor Kitchens • Residential Bath over $25K • Specialty Environmental Project

Accurate Builders • Residential Whole House $150K to $225K

Thank You for Your Support Pacific Northwest Title is proud to announce the results of our 7th Annual Holiday Food Drive benefitting Kitsap County food banks. With support from local real estate and lending offices, Chambers of Commerce and the community —

The results by area were:

• New Carport/Garage/Utility Building • Other/Specialty Room

We raised a total of 6,696 lbs. of food and $590.06 cash! SILVERDALE OFFICE 360-692-4141 • 800-464-2823 2021 NW Myhre Road, Suite 300 Silverdale, WA 98383


Wayne R. Keffer Construction, Inc.

206-842-2082 • 800-884-7636 921 Hildebrand Lane NE, Suite 200 Bainbridge Island, WA 98110

• Exterior Finishes • Residential Kitchen $30K - $60K

PORT ORCHARD OFFICE Title Insurance Escrow Services Real Estate Resources

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December 2011 Kitsap Peninsula Business Journal• 23

Sentinel Construction & Consulting, Inc.

255 lbs. + $17.00 cash to Helpline House on Bainbridge Island 80 lbs. to ShareNet Food Bank in Kingston 375 lbs. to North Kitsap Fishline in Poulsbo 587 lbs. + $20.00 cash to South Kitsap Helpline 400 lbs. + $50.00 cash to Bremerton Foodline 4,999 lbs. + $503.06 cash to Central Kitsap Food Bank

TRC completes one project, wins contract for Harrison office building Tim Ryan Construction, Inc. of Poulsbo (TRC) announced that it has been awarded a contract by Harrison Medical Center to provide value engineering services and general construction work for its new administrative offices and warehouse in East Bremerton. The project includes renovation of an existing retail building to create 27,700 square feet of professional office space as well as 14,000 square feet of medical warehouse space. The project will consolidate Harrison’s

administrative functions into one larger facility and provide warehouse space to support Harrison’s various medical facilities. TRC also announced it has completed a project for Vici Metronics, Inc., which included providing water mitigation, new sealants at tiltup panels, exterior water repellent, exterior deck coatings, EPDM, roof repairs and bird control. Vici Metronics, Inc. is located in the Twelve Tree’s Industrial Park in Poulsbo and is a manufacturer of devices and instruments that

Belfair Log Plaza for Sale 23730 NE State Hwy. 3 • • • • • • • •

Single level retail center in Belfair Near QFC, Key Bank & McLendons 9,054 square foot building Excellent visibility along Hwy. 3 Well-maintained building Current occupancy at 83% Call for information package For sale at $597,000

Contact Victor C. Ulsh, CCIM Bradley Scott Commercial Real Estate

24 Kitsap Peninsula Business Journal• December 2011

(360) 479-6900 • (800) 479-6903

are used in the generation of calibration gas standards. They are also a provider of explosives and narcotics dopants for security, law enforcement, border patrol, military and other trace detection industry professionals. For more information, visit TRC is a Poulsbo-based commercial general contractor that specializes in medical and professional office buildings, retail and tenant

improvements. It has completed many local projects such as the new home of Rice Fergus Miller Architecture, Bremerton Bar & Grill, Skookum Corporate Headquarters and the South Kitsap Medical Campus in Port Orchard. For more information, contact Dan Ryan at (360) 779-7667 or visit the website at for current project photos and information.

Realogics Bainbridge Island office expands; Nelson joins as broker Executives at Realogics Sotheby’s International Realty welcomed Kristi Nelson as the newest broker and a Foundation member of the expanding Bainbridge Island branch office. “Kristi’s established network, experience with new construction marketing and her passion for travel complements our services here on the island and well beyond,” says Founding Director, Dennis Paige of Realogics Sotheby’s International Realty. “We anticipate great success for Kristi and further growth at our Bainbridge Island office as the local and resort markets continue to recover.” Paige notes a rise in relocation to Bainbridge Island and increasing home

sales to local residents off island be it downtown Seattle condominiums or second homes and investment properties in feeder markets such as Palm Springs, Calif., Sun Valley, Idaho and the Hawaiian Islands by example. “With affiliate offices in resort markets and global cities around the world, Nelson is uniquely positioned to represent our residents on real estate opportunities outof-state and internationally — the business flows in both directions.” Recently, Nelson joined twenty other brokers to attend the Sotheby’s International Realty’s Global Network Event in Miami, Fla. The event was comprised of more than 1,200 brokers from 40 countries and territories around the world. Sotheby’s International Realty Affiliates, LLC, the luxury real estate franchise expanded by 25 percent in the past year, according to Mike Good¸ CEO for the Brand. Likewise, since opening in Seattle on February 23, 2010, Realogics Sotheby’s International Realty has doubled its sales in excess of $200 million over the past year. “Having experienced the Brand I’m convinced we live in global market, even as an island community,” said Nelson. “I’m excited to leverage the full potential of this incredible organization.”

Viking Financial Services Corp. receives shareholders’ approval for merger Viking Bank announced that, at a special meeting of shareholders held on Nov. 3 by Viking Financial Services Corporation, Viking shareholders approved the plan of merger and acquisition by AmericanWest Bank. The votes cast in favor of the transaction represented more than 88 percent of the total number of shares outstanding. The transaction is expected to close before year end and is subject to customary closing conditions including the approval of Viking Bank’s regulatory agencies. Rich Mulcahy, interim CEO of Viking Bank stated, “Viking and AmericanWest share similar cultures and a relationshiporiented approach to business-focused community banking. We are excited about the positive impact we can make in the communities we serve through this merger, and look forward to receiving the necessary regulatory approvals to close the transaction.”

42 percent of home buyers are unrealistic about home value appreciation While most homebuyers understand how to buy a home, expectations for homeownership are out of line with reality, according to Zillow survey of home buyers Despite widespread volatility within the housing market and five consecutive years of home value declines, more than two in five (42 percent) of polled prospective home buyers believe home values typically appreciate by seven percent a year, according to a recent survey by leading real estate information marketplace Zillow. This is an unrealistic expectation as, historically, home values in a normal market tend to appreciate by two to five percent a year. Zillow, with Ipsos, surveyed prospective home buyers, asking basic questions about the home buying process. Despite the unrealistic expectations about home value appreciation, prospective home buyer respondents seem fairly knowledgeable about the home buying process, answering questions correctly more than half the time (65 percent). However, several important parts of

the process confused them. Two in five (41 percent) buyers think they are required to buy private mortgage insurance (PMI) regardless of the amount of their down payment. In fact, lenders typically require PMI only when buyers are putting down less than 20 percent of the home's purchase price. Additionally, more than half of prospective home buyers who were polled confuse appraisals and inspections. Fifty-six percent said the purpose of an appraisal was to determine if the home is in good condition, when in fact that is the purpose of an inspection. "It's troubling that we're still in the midst of one of the worst housing recessions in history, and yet prospective buyers continue to have such high expectations for home value appreciation," said Dr. Stan Humphries, chief economist at Zillow. "It's great that buyers seem to have a fairly solid grasp of the home-buying process, but since this is one of the biggest financial decisions of most people's lives, it's even more important that they understand how that investment will appreciate after they sign

A Kitchen That Works opens new showroom

the papers. Over-estimation of the appreciation potential will lead many to buy real estate when the time in which they plan to live in the house may make renting a better strategy." Additional survey findings: More than one-third (37 percent) of prospective home buyer respondents believe buying homeowner's insurance is optional. In reality, lenders require that borrowers purchase homeowner's insurance. This insurance protects the lender. If catastrophe strikes, the mortgage will be repaid from the insurance proceeds. Nearly half of polled prospective home buyers in the study do not understand when they will actually own the home they intend to buy. Forty-seven percent said a prospective buyer owns a home after the

purchase contract is signed. The purchase and sales agreement merely kicks off the closing phase, which can be a lengthy process. The majority (87 percent) of polled prospective home buyers know that closing costs are negotiable and can vary by bank and lender. Lender fees, like loanorigination fees, administrative costs and other clerical fees, are typically the most negotiable in the home buying process. An online version of the Zillow survey, the "Buyer IQ Quiz," is available at and contains the correct answers. Following the quiz, participants are given a score and resources to learn more about the home-buying process.

Is It Worth It?

Refinancing the Right Way If you’ve turned on the radio recently, you’ve likely heard about the historically low rates driving the current refinance boom. But with all of the uncertainty in today’s world, how do you determine if refinancing is really right for you? Unfortunately, there is no simple answer. Mortgage financing today is dependent on a variety of factors, which often cannot be addressed without an in-depth analysis by you and your loan officer. However, there are questions that you should immediately ask when considering a refinance.

Kevin Hancock Loan Officer Lic# MLO-108328

The Legacy Group Silverdale, WA


Legacy Group Lending, Inc. NMLS ID # 4455 Legacy Group Capital, LLC License # 520-CL-43276 Legacy Group Escrow, LLC License # 540-EA-40580

December 2011 Kitsap Peninsula Business Journal• 25

A Kitchen That Works, LLC, a full service design-build firm specializing in residential remodels, announces the opening of its new Kitchen and Bath Showroom. The showroom displays three lines of stock and semi-custom cabinetry, countertops, lighting, decorative hardware, and more. The showroom is available by appointment to homeowners, contractors and architects. To schedule an appointment contact Molly McCabe at (206) 780-1906 or For more information visit

1. What is the cost of refinancing compared to what I will save each month? Make sure that the timeframe for recovering the cost of refinancing through monthly savings does not exceed the amount of time you expect to own the home. 2. How long have I been in my current loan? If you’ve been in your current 30-year fixed rate mortgage for 7 years, you only have 23 years (or 276 payments) remaining. Compare this to 30 years (or 360 payments) if you refinance. 3. Would I benefit from shortening the term of my mortgage? Refinancing to a 20- or 15-year mortgage should provide you with a lower interest rate than you would receive on a 30-year refinance and save you a considerable amount of money in the long term. 4. Is my current mortgage an adjustable-rate mortgage (ARM)? Even though your current rate may be low right now, it may be worth it to lock into a longer term fixed-rate to avoid market volatility in the future. As far as refinancing costs, it’s important to recognize the difference between closing costs and prepaid items. Closing costs refer to actual fees and charges associated with the loan, such as appraisal, underwriting, title and escrow fees. Meanwhile, prepaid items refer to things like property taxes and homeowners insurance, which your lender requires to be paid in advance. Prepaid costs are not really additional costs because you’re already paying them, whether or not you choose to refinance. You’ll typically receive a refund of the remaining escrow balance on your old loan shortly after your new loan closes, which can offset those prepaid items. Because there are so many factors that go into making a sound decision to refinance, it’s important to work with a knowledgeable local lender that you trust. If you’d like to learn more about refinancing your mortgage, The Legacy Group Silverdale offers free, educational classes for the community on an ongoing basis. Call 360.698.6440 for more information.

Credit card companies now reporting your activity to the IRS

26 Kitsap Peninsula Business Journal• December 2011

By Chris Fraizer, CPA Waterfront CPA Group Don’t worry; the IRS isn’t going know about your Viagra purchases from Canada or your strange fascination with collecting Michael Jackson look-alike clothing. The IRS is concerned with any income you may be receiving as a business from a credit card sales. OK, now that we clarified that one, breathe easy and read on. This next paragraph is more of a confession. Every time I go to the mailbox and see a piece of mail from a credit card company, only one thing comes to mind: Rip it up and feed it to the recycle bin. Perhaps it is instinct, perhaps I have been conditioned to this response, like Pavlov’s dogs, by years of disappointing unsolicited credit card offers. Who knows? Getting unsolicited offers from the credit cards happens (unfortunately for me) almost every day. Come January 2012, if you are business

owner, you may be getting a special piece of mail from your credit card company you do not want to discard. If you throw this away, it could cause problems with the IRS and an angry, overworked, rigid tax accountant. Starting for tax year 2011, the gross amount of payment-card and third-party network transactions will be recorded on a new IRS form, 1099-K. This is not to be confused with your earnings statement from your 401K, which these days you may be tempted to discard without opening to avoid depression. The 1099-K will be used by the IRS to make sure small businesses report all of their revenues. The 1099-K will put the IRS on notice you received the funds. A reportable payment transaction to the IRS is basically a transaction in which a payment card (such as a credit card) is accepted as payment or any transaction that is settled through a third-party payment network like PayPal. Exemptions may apply in certain circumstances, such as if the total payments settled for the year are less than $20,000. The look and feel of the 1099-K is

very similar to the 1099-INT used by banks to report interest and the 1099-DIV used by banks to report dividends. You may be thinking to yourself: “Why is this even important, I mean I report all my income, have never been audited, live a good, moral life and have never been struck by lightning?” Well, if you do not report that 1099-K as specifically separate and designate “third-party payment” income on your tax return, the IRS will think you did not report it at all. And the IRS will come aknocking and you may find yourself pondering what is worse: being struck by

lightning or having your records examined. Hopefully most credit card companies will mail this form out to the general public with a large red stamp that says “IMPORTANT TAX DOCUMENTATION ENCLOSED.” This phrase’s direct translation from ancient Greek literally means “throw this away and you are cursed.” While reporting your 1099-K income will not earn you “free travel or points,” it will keep your tax-prep fees down by not having to amend your tax return or battle the IRS.


A way to give without a great deal of bureaucracy By Jason R. Parker So, you’d like to make some major charitable contributions, but you don’t want to create a family foundation — with its paperwork and management commitment and the possibility of squabbles. Is there an alternative? Yes, there is. You could consider a donor-advised fund (DAF). How does a DAF work? A donoradvised fund is a private fund established to manage charitable donations of individuals, couples, families and institutions. It is sponsored by a 501(c)(3) non-profit organization. The process of gifting through a donoradvised fund works like this. • You find a sponsoring organization offering a donor-advised fund. It could be a community foundation down the street; it could be a major investment firm that has started a non-profit charitable endowment. • You make an irrevocable contribution of cash or securities to the fund. • You get an immediate tax deduction. • The fund invests the cash or securities in an account you create; the assets benefit from tax-free growth. • While the fund has legal control over the irrevocable contribution you have made, you (or your representatives) advise the fund where the assets in your account should go and how they should be invested. • The fund is the actual grant maker that writes the checks to the charities and nonprofit groups you recommend. DAFs offer control with flexibility. With these accounts, you don’t have the hassles that come with running a private foundation, and you have the ability to advise that the fund make grants to the

charities or nonprofits you think are worthy. (The fund makes the final decisions.) The standard tax deduction for donations to a private foundation is 30 percent of a donor’s AGI. In a donoradvised fund, a donor can make additional cash donations up to 50 percent of AGI. Besides the tax deduction and the satisfaction of helping charities, what also makes donor-advised funds attractive is what you don’t have to do. Since you aren’t creating a private foundation, you don’t have to establish tax-exempt status; you don’t have to form a board that will have fiduciary responsibility and schedule board meetings; you don’t have to pay out at least five percent of asset values for charitable purposes each year; you don’t have to pay set-up fees to attorneys and accountants; you don’t have to file discrete federal and state tax returns annually. DAFs are less expensive than private foundations. You may be able to open up an account in a donor-advised fund with as little as $5,000; minimums are usually in the neighborhood of $10,000-25,000. In contrast, it takes at least $1 million to start a private foundation. The IRS does watch donor-advised funds. There have been instances of nonprofits, donors and families stretching the definition of these funds and accounts. The IRS has cracked down on some that appear to exist mostly to claim undeserved charitable deductions and amass tax-sheltered investment income. DAFs & private foundations are not mutually exclusive. In fact, sometimes it may be useful to have both. For example, a decision might be Give, page 27

Five good reasons to create an investment strategy By Angela Sell Some people buy investments here and there, now and then. Others open an Individual Retirement Account (IRA), put some money in it, and then forget about it. But this type of haphazard investment behavior can lead to haphazard results. On the other hand, you’ve got five good reasons for creating and following a comprehensive, long-term investment strategy. Reason No. 1: You want to enjoy a comfortable retirement lifestyle. For most people, building resources for retirement is the most powerful reason to invest. As a key part of your investment strategy, you’ll want to consider investments that have growth potential. The proportion of your portfolio devoted to these growth investments should be based on your individual risk tolerance and time horizon. And, as you move much closer to your actual retirement date, you may decide to shift some — but certainly not all – of your portfolio from growth-oriented vehicles to those investments that can provide a reliable income stream and incur less volatility. Reason No. 2: You need to stay ahead of

inflation. Over the past few years, we’ve experienced relatively low inflation, but over time, even a low inflation rate can dramatically erode the value of your savings and investments. That's why you may want to consider investments that provide the potential for rising income. Reason No. 3: You need to help manage the unexpected. You can’t predict what life will hold in store for you. To cope with unexpected costs, such as a major car repair or a new furnace, you’ll need to create an emergency fund containing six to 12 months’ worth of living expenses so that

you won’t be forced to dip into your longterm investments. And to deal with other major uncertainties of life, you’ll need adequate life and disability insurance. Reason No. 4: You need resources for major life events. Your retirement may eventually require the bulk of your financial resources — but it’s not the only milestone for which you’ll need to save and invest. You may need a down payment on a house, or you may someday even want to purchase a vacation home. And if you have children or grandchildren, you may want to help them pay for college.

Reason No. 5: You’ll want to keep in mind investment-related taxes. Taxes, like inflation, can eat into your investment returns. You’ll need to evaluate whether you can benefit from tax-advantaged investments and retirement accounts, such as traditional or Roth IRAs. So there you have it: five good reasons to adhere to a unified investment strategy that’s tailored to your situation. This type of “blueprint” may not sound glamorous, and it’s certainly not a “get rich quick” formula, but it will help you stay on track toward your important financial goals.

GIVE from page 26

December 2011 Kitsap Peninsula Business Journal• 27

made to shutter a private foundation. Those assets can be transferred to a donor-advised fund, as it is a qualified public charity. So even though the foundation is gone, the donor who spearheaded it can still go on making charitable gifts. Another example: a private foundation may want to make some anonymous grants. A complementary donor-advised fund gives a donor flexibility to decide if donations will or will not be anonymous on a grant-bygrant basis. So you might want to take a look at donor-advised funds. If you are looking for a way to make significant charitable contributions without the red tape and stress associated with creating and maintaining a private foundation, then this may be a great alternative. (Editor’s Note: Jason Parker is the president of Parker Financial LLC, a fee-based registered investment advisory firm specializing in wealth management for retirees. His office is located in Silverdale. The opinions and information voiced in this material are not intended to provide specific advice or recommendations for any individual, and do not constitute a solicitation for any securities or insurance products. All information is believed to be from reliable sources; however, no representation is made as to its completeness or accuracy. Consult a trusted professional for advice and further information. Parker is insurance licensed and offers annuities, life and long term care insurances as well as investment services.)

Manage your money carefully this holiday season By Michael Allen As you know, the holiday season can be joyous, hectic, celebratory — and expensive. And while you certainly enjoy hosting family gatherings and giving presents to your loved ones, you’ll find these things even more pleasurable if they don’t add a lot more weight to your debt load. And that’s why you’ll want to follow some smart money-management techniques over the next few weeks. To begin with, try to establish realistic budgets for both your entertaining and your gift giving. When you host family and friends, don’t go overboard on your expenditures. Your guests will still appreciate your efforts, which, with a little creativity, can create a welcoming and fun experience for everyone. As a guiding principal, keep in mind these words attributed to Johann Wolfgang von Goethe, the famous German poet and philosopher: “What you can do without, do without.” Set a budget and stick to it. And the same rule applies to your gifting. You don’t need to find the most expensive presents, or overwhelm recipients with the sheer volume of your gifts. This is especially true if you, like so

many people, have been affected by the tough economy. Everyone you know will understand that gifts don’t have to be lavish to be meaningful. Furthermore, by sticking to a budget, you won’t be tempted to dip into your longterm investments to pay for fabulous parties or mountains of gifts. It’s never a good idea to tap long-term investments for short-term needs, but can be especially bad when your investment prices are down, as they may well be this year. So, if you want to stick to a budget but you don’t want to raid your investments, how can you pay for your holiday season expenses? If you can spread out your purchases, you may be able to pay for them from your normal cash flow. But if that’s not possible, you might want to consider “plastic” — your credit card. Using your credit card does not, by itself, need to amount to a financial setback, especially if you’ve chosen a card that offers favorable terms and you’ve already shown the discipline not to over-use that card. Just try to minimize your credit card usage over the holidays and pay off your card as soon as you can. Of course, you can make your holiday

season much easier, financially speaking, if you’ve set up a holiday fund to cover your various expenses. While it’s too late to set up such a fund this year, why not get an early start on the 2012 holiday season? All you need to do is put away some money each month into an easily accessible account, separate from your everyday accounts. You don’t have to put in a great deal, but you do need to be consistent, which is why you may want to have the

money moved automatically, once a month, from your checking or savings account to your holiday fund. When next year’s holiday season rolls around, you might be pleasantly surprised by how much you’ve accumulated. But for now, following some commonsense money management practices can help you get through the holiday season in financial shape – and that type of result can get your new year off to a positive start.

Liberty Bay Bank reports a profitable third quarter President and CEO Rick Darrow states "We are extremely pleased with our earnings and honored by the positive response we have received from our local community. Our clients and neighbors recognize the value of having a community partner such as Liberty Bay Bank. We are privileged with being Kitsap County’s locally owned community bank.” Liberty Bay Bank reports strong loan growth in Kitsap County for the first nine months of the year. With loan totals of $ 32.1 million, Liberty Bay Bank is number one in portfolio loan growth of banks based in Kitsap County. While most banks are shrinking their loan portfolios, Liberty Bay Bank is committed to providing loans to local businesses and individuals. “While we are happy with our growth, we are also very focused on building a strong organization that is here for the long term. This is reflected by our third quarter risk-based capital ratio of 21.59 percent. Only six banks in Washington State carry a higher ratio.” Liberty Bay Bank was recently recognized by the Puget Sound Business Journal as having the highest credit quality of all banks based in the State. The quality of a Bank's loan portfolio is critical to the longevity and safety for both depositors and investors. More information is available on the Bank’s website

Dreaming Up 28 Kitsap Peninsula Business Journal• December 2011

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A checklist for year-end tax planning By Karen E. Klein Bloomberg Businessweek As the end of the year approaches, small business owners need to meet with accountants or tax preparers to review tax-planning strategies. “Every accountant is going to be sitting with their entrepreneur clients in the next few weeks to see what they can do, both on the business — and the personal-tax side — before the end of the calendar year,” says Michael Custer, a CPA and principal at Kaufman Rossin & Co. in Miami. Because so many small businesses are organized as “flow-through” legal entities such as S-Corps and LLCs — meaning that business income is reported on the owner’s personal tax return — it is helpful to have the

same person do all your tax preparation, Custer says. “If you don’t have one accountant working on your business and your personal returns, at least watch out and make sure both of your accountants are aware of everything you’re doing. I have inherited situations where this hasn’t happened and I’ve found missed opportunities,” he says. Here are some crucial items owners should include on their checklist: • Tax and jobs bills passed in 2010 increased the ability for small business owners to deduct new and used equipment purchases under U.S. Tax Code section 179. They allow small companies to deduct the full amount of the purchases upfront, rather than depreciate the cost of such items over many years. The

U.S. Bank recognized by Newsweek for its environmental sustainability efforts

Kitsap Bank triples nine month earnings Kitsap Bank announced that earnings increased 356 percent for the nine months of 2011. Profits totaled $5.7 million, versus $1.6 million for the same period one year ago. Assets for the bank now total $925 million, up $36 million for the year; while non-performing assets have continued to decline, and are less than one percent of total assets, one of the lowest ratios of any bank in the State of Washington. Deposit growth continues to remain very strong, growing $18 million for the quarter. “The nine months of 2011 represents our strongest three quarters in three years,” said Jim Carmichael, president/CEO. “Kitsap Bank has worked diligently throughout the economic downturn to proactively address problem loans, and manage costs through consolidation and lowered expenditures. As a result, we are very pleased to be one of the few banks able to focus on profitability and not problem loans.”

KCU names Holloway as new Human Resources manager Kitsap Credit Union has named Laura Holloway as the new manager of its Human Resources department. Holloway comes to the Credit Union from the non-profit sector, where she has accumulated over 20 years of experience in human resources management. SVP/Chief Operations Officer, Kellie LeTexier, commented on Holloway’s selection by stating, “Holloway’s previous experience within the non-profit community aligns well with the Credit Union philosophy of people helping people. Her knowledge and expertise make her a great asset to the employees of Kitsap Credit Union as well as the community.” Holloway looks forward to working with a team of KCU’s talented individuals as she oversees the daily operations of her department, including employee relations and benefits administration.

make it useful for startups that are investing for the future and companies that have struggled during the recession but see the potential for growth in the coming years. Keep receipts for purchases, leases and installations to document that your equipment was paid for and put into service in 2011, Custer says. • If your company’s financial situation warrants, you can talk to your CPA about accelerating deductions and deferring income into next year but don’t use these widely discussed strategies if they don’t make sense, Custer says. “Often, companies prepay state and real estate taxes in December, even if they are due in 2012, or conclude a big sale in the next calendar year. But if you’re afraid of losing a sale if you delay it — or you need the cash — don’t let the tax tail wag the dog,” he says. • On the personal side, end-of-year charitable donations and Roth IRA conversions would be things to think about before the end of the year. And make sure you are not going to be in a position to attract unwanted IRS scrutiny on your personal or business returns. “The IRS is out there, more so now than ever, and its use of technology is increasing,” Custer says. “There has been an increase in exams fueled by computer crossmatching between what’s being reported on business and personal returns and on returns from separate business entities that are all part of the same closely held business.”

December 2011 Kitsap Peninsula Business Journal• 29

U.S. Bank has once again been recognized for its environmental sustainability efforts. The company placed 57th in Newsweek’s recent ranking of the 500 largest American companies. It was one of only three banks that made the top 100 in this prestigious poll, which rated the sustainable management policies, programs and environmental reporting practices of companies worldwide. Bank Technology News also recognized U.S. Bank this year as one of America’s Greenest Banks. “While we continue to integrate green behaviors into our daily work practices, products and services, it’s great to be recognized for our efforts,” said Lisa O’Brien, senior vice president and director of environmental affairs at U.S. Bank. “We’ve been able to reduce U.S. Bank’s electricity consumption by four percent from 2009 to 2010, which translates to saving enough electricity to power the equivalent of 1,600 U.S. homes for one year.” O’Brien added that since 2008, U.S. Bank has loaned or invested more than $3 billion in environmentally-beneficial business opportunities, such as renewable energy, and LEED-certified commercial real estate. In support of U.S. Bank’s designation by the Environmental Protection Agency as an Energy Star Partner, U.S. Bank is completing the upgrade of more than 87,000 computer hardware devices to more energy efficient equipment throughout its traditional and in-store branches and customer support facilities across 25 states. In addition, it is collecting energy and environmental data on U.S. Bank-owned sites to pinpoint areas for further energy reductions and has built 13 new LEED certified branches in the past two years in California, Illinois, Minnesota, Missouri, Nebraska, Oregon, Tennessee, Wisconsin and Wyoming. At U.S. Bank’s regional corporate offices throughout the country, lights were turned off in support of Earth Hour. U.S. Bank was the first major bank to introduce an auto loan that offers a half-percent rate reduction for “Smart Way” vehicles certified by the EPA as environmentally-friendly. Its customers are also rewarded with the best loan rates if their payments are automatically deducted from their checking account. This past Earth Day, U.S. Bank employees purchased and planted 6,835 trees, and many take part in green team activities throughout the year. To help educate and engage customers around their personal impact, U.S. Bank posted a video on its YouTube channel called “The Power of Us,” and encourages customers to utilize the tools on the website, where U.S. Bank is a founding member.

deductions apply to tangible equipment and personal property purchased and put into service in 2011, including computers, furniture, telephone systems, certain vehicles and software, and machinery used for manufacturing. Leased equipment also qualifies. For tax year 2011, the amount of equipment that can be deducted is $500,000, double the figure for 2010, and the total amount of equipment that can be purchased increased to $2 million, from $800,000 previously. The deduction begins to phase out, dollar-for-dollar, after the $2 million threshold because it is targeted specifically at small and midsized companies that typically have limited budgets for capital purchases, according to Custer. “If you buy $2.1 million, that $100,000 in excess reduces your deduction down to $400,000,” he says. In 2012, the deduction is scheduled to drop to $125,000. In 2013, it’s expected to go back to the 2002 level of $25,000, unless Congress takes action to raise it again. • A supplement to section 179 allows for “bonus” depreciation for companies that buy more than $500,000 in qualified equipment in 2011. It allows for 100 percent depreciation, up from 50 percent last year, and applies only to new equipment, unlike section 179. Typically, bonus depreciation would be taken after companies reach their $500,000 limit under section 179. Bonus depreciation allows businesses that have no taxable profits in 2011 to carry a net loss forward to future years if they claim it this year, Custer says. This would

Kitsap Aerospace Alliance… Gets Lift – Gains Altitude

30 Kitsap Peninsula Business Journal• December 2011

By John Powers, Executive Director Kitsap Economic Development Alliance On November 3rd, over one hundred business and community leaders from

throughout Kitsap County gathered at the Kiana Lodge to explore the dynamics of “Regionalism” and its impact on economic opportunities in Kitsap, including the future

of advanced manufacturing in our region and specifically Boeing’s 737 MAX. You might be wondering, “How’d that came about — what’s Kitsap got to do with Boeing?” Well, it didn’t just drop out of the clear blue sky… Earlier this year, the Kitsap Economic Development Alliance (KEDA), joined with the leadership of the Port of Bremerton and the community to explore new opportunities in the aerospace industry. Discussions centered on how the Port of Bremerton and the South Kitsap Industrial Area (SKIA) could support the State’s Department of Commerce and Washington Aerospace Partnership’s efforts to prepare our State to compete for and win the largest advanced manufacturing economic development opportunity in the Country. That initiative — dubbed “Pegasus Project” — is about insuring Washington State is selected to be home to the next generation of Boeing’s most prolific airplane — the 737 MAX — an opportunity that translates into tens of thousands of well paying jobs for generations! Months of brainstorming gave birth to the Kitsap Aerospace Alliance (KAA) — an affiliation of business leaders and elected officials from throughout Kitsap County. Their efforts positioned Kitsap to participate in the Pegasus Project, and to develop strategies for our Port, businesses, K-12 schools, Olympic College, and our local workforce, to play a greater role in the future of our region’s world renowned aerospace industry (from design to production to supply chain support). Under the bold leadership of: Port Commissioners Larry Stokes, Bill Mahan, Roger Zabinski and CEO Cary Bozeman; County Commissioners Josh Brown, Charlotte Garrido, and Rob Gelder; Mayors Patty Lent, Lary Coppola, and Becky Erickson; and, Business leaders Scott Bosch, Steve Rice, David Overton, Russell Steele, Jim Carmichael, Elliot Gregg, Chad Solvie, Julie Tappero and the Kingston Stakeholders, the Kitsap community came together, collaborated together, and together invested $45,500 in support of the Pegasus Project, while creating a vision for Kitsap’s future in aerospace. KEDA, in conjunction with KAA, convened the November 3rd event to examine Kitsap County’s demographics, economy, market parameters, and competitiveness; as well as to take a closer look at opportunities that emanate from being part of a larger regional economy when it comes to developing markets, attracting investment, creating jobs, and competing globally. As we examine Kitsap’s many strengths and economic resources, we reaffirm our understanding of, and appreciation for, Kitsap County’s role in contributing to a strong, robust and competitive regional economy. Those strengths and core assets are reflected in the following facts: • Naval Base Kitsap – 3rd largest navy base in US (Largest component of Navy Region Northwest which overall totals 40,00 personnel - $2B payroll – 2009); • PSNS - 2nd Largest industrial complex in WA; • 1 of only 8 heavy manufacturing-industrial areas in Central Puget Sound (CPS) and with largest contiguous developable footprint available in region ( SKIA);

• Top-rated cardiac surgery program in WA- Harrison Medical Center; • 2nd Highest educational attainment level per capita in Washington; • 2nd Highest median household income in Washington; • Greenest major manufacturing enterprise in WA – Watson; • Several “Best Companies to Work” in WA honorees — Kitsap Bank, Port Madison Enterprises, Paladin Data Systems; • Highest concentration of architects & engineers per capita in WA; • Leading gov/energy/resource mgt. software firm- Paladin Data Systems; • Two of Washington’s “50 FastestGrowing Technology Companies”Avalara & n-Link Corp; and, • KPUD, providing 120 miles of communication fiber w/ capacity to deliver fastest high-speed broadband as part of NOANET. It is evident that Kitsap County contributes a great deal to the Puget Sound regional economic competitiveness — including its ability to compete for and win the 737 MAX project. The “Dean” of economic development economists, Michael Porter, defines “Regionalism” as being composed of coordinated, integrated economic development tactics executed pursuant to a comprehensive economic development strategy for a geographically contiguous region. A central component of economic regionalism is a focus on collaboration by NGOs, governments, and businesses in multiple jurisdictions within a region to jointly plan for, capitalize, develop, share, and leverage clusters of talent, information, institutions, technologies, infrastructures, and academic and expertise. “Economic Regionalism” connotes an understanding of how infrastructure and capital assets — human, financial, entrepreneurial, innovation, and social political capital — are developed, shared, transferred, and deployed for a leveraged, enhanced economic ROI throughout our region. This is in essence, the prime objective of “The Prosperity Partnership” regional economic strategy adopted by the Central Puget Sound Economic Development District (CPSEDQ)in ’05. Today, our region is in the process of recreating a next generation economic strategy to renew our commitment to foster further collaboration among, and between, the hundreds of communities within the four County CPS (Snohomish, King, Pierce and Kitsap) to develop a skilled workforce, attract investment, and create jobs and economic opportunities throughout the Region. We must work together to strengthen our Region’s competiveness and advance our “Brand” as a region where world class talent produces world class products, innovation, disruptive technologies, and more likely than not gives birth to — “The Next Big Thing” … the 737 MAX, all the while playing an indispensable role in securing our Nation’s Defense!

Remodeled Rings & Things building in Port Orchard features retro look By Rodika Tollefson Longtime Port Orchard jeweler Rings & Things moved to its newly remodeled, “old building” on Bay Street this past summer, but in October the store truly became a showcase. Owner Rudy Swensen designed and built a water feature with a fountain, a huge geode and other crystals, live plants and fiber optic lights. “The city wanted attractions (downtown) and I decided to make my own,” Swensen said. “This is my connection with the public, and it’s going to be educational too.”

building with retail on the ground floor and condominiums on top. It was one of the first projects announced after the city of Port Orchard approved a Downtown Overlay District (DOD). The idea was in the making for several years, with the approval of the DOD giving Swensen and Rider the ability to move forward with designs. And then the economy tanked. “When the economy went south, everything went with it,” Jeannie said. Rings & Things had moved into rented space, across the street, more than two years ago, in anticipation of a building upgrade one way or another. “We could have busted ground (on the new project) and it’s probably good that we didn’t,” Swensen said. “After the economy crashed, we had to break up the LLC for the three lots and do something for ourselves.” Even with the development plans gone, Swensen wanted to create an attractive facility. The entire face of the old building was removed and the structure brought up to code. He hopes other building owners will be inspired to make their own improvements. “If we’re going to do a serious attempt in revitalization, these buildings need to come into compliance with current codes,” he said. “They need to have some curb appeal.”

Scott Bosch, president/CEO of Harrison Medical Center in Bremerton, has been elected chair of the Washington State Hospital Association. As Chair, Bosch will preside over the board of trustees and lead the hospital association’s work for the coming year. “We are proud to have Scott Bosch providing leadership to our association,” said Scott Bond, president/CEO of the Washington State Hospital Association. “He has proven himself to be a valuable member of our board and executive committee. Scott leads with vision, courage, and heart. During this turbulent time in our state’s economy, that is the kind of leadership we need to ensure continued access to high quality health care across Washington.” The Washington State Hospital Association is the members hip association of all 97 hospitals in Washington State. The association takes a major leadership role in issues that affect delivery, quality, accessibility, affordability and continuity of health care. It works to improve the health status of the residents of Washington State. It also engages in public policy advocacy with legislators and regulators on behalf of the hospitals of Washington State. Accepting the chair position, Bosch said, “It is my honor to take the helm as your chair for the coming year. I have been amazed at the courage shown by Washington hospital leaders – administrative leaders, board leaders, and medical leaders – in working together for the betterment of the patient. We have recognized that we’re all in this together. We are all infinitely stronger when we work together and collaborate.” Bosch has been an officer of the hospital association for several years, previously serving as the secretary-treasurer and as chair-elect. Bosch also served on the board of the Health Work Force Institute. December 2011 Kitsap Peninsula Business Journal• 31

The educational piece is not new to Rings & Things. Swensen’s wife and fellow store owner, Jeannie, frequently gives talks to elementary school children about jewelry, its origins from gems, and Earth science. The fountain, Jeannie said, has been a dream for some time, a way to showcase the rough gems. Custom jewelry and repairs are the bulk of the Rings & Things business, and premade jewelry and watches are also available for sale. A part-time watchmaker works out of the shop as well. Rudy is the jeweler but Jeannie also works with customers and likes to do appraisals, in addition to taking care of the administrative and bookkeeping sides of the business. The couple’s business has been a downtown mainstay since 1992, three years after officially launching their business in Sidney Village. They bought the building on Bay Street and moved in after an extensive $60,000 remodel. Last year, Rings & Things secured a $250,000 SBA loan to repair and once again renovate the building, which was damaged in the 2001 earthquake and further in the December 2007 floods — the floor had separated from the wall, showing a gap of one inch or so, and had dropped about six inches. Water damage created mold and other problems. Swensen did about 20 percent of the work himself and hired local contractors as much as he could. In the process of stripping the old sheetrock, the contractors found there were no footings, which were consequently created. The courtyard was enclosed to provide additional space, and a loft was added along with a balcony. Overall, the space gained 1,000 square feet to a total of 2,900.

There’s one new amenity Jeannie especially likes: a full kitchen. “We spend a lot of time here,” she said. “We practically live here.” With the buffing room now enclosed, the shop is quieter. The additional space also allows for in-house casting to be done. Upgraded heating now includes air conditioning. The loft/balcony addition have both provided more natural light and improved the air flow, making the building more comfortable. And the Swensens are not taking their chances in case of future flooding. Among the improvements is greenboard for part of the wall to prevent mold and a five-layer cement and polymer floor in the expanded showroom (the lab areas have new cork flooring). The décor has a hint of nostalgia. The ceiling of the showroom is made of pressed steel, similar to the tin ceilings in vintage buildings. The ceiling was also raised about 18 inches. “It makes it feel so much larger in here with the raised ceiling and the loft, and all the natural light coming in,” Jeannie said. While customers may not see all the improvements behind the scenes, the New Orleans look of the exterior will not escape them. Brick siding, arched windows and wrought iron décor pay tribute to Swensen’s New Orleans roots. It’s the same theme he wanted to see for the project he previously planned on the site with Ron Rider, who owns the building next door (occupied by MoonDogs Too) and the adjacent vacant lot. The two created a limited liability partnership a few years ago with the goal of developing the three lots into a mixed-use

Harrison’s Bosch new chair Washington State Hospital Association

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32 Kitsap Peninsula Business Journal• December 2011

Contributions to our community: Admiral Theatre All-Chamber Business Expo American Cancer Society Amy Burnett Gallery Audubon Washington Bainbridge in Bloom Bainbridge Island Arts & Crafts Bainbridge Island Garden Club Bloedel Gardens Boys & Girls Clubs Bras for a Cause Bremerton Symphony partner Bremerton YMCA Women’s Shelter Built Green Program Chambers of Commerce – Port Orchard – Bremerton – Silverdale – Bainbridge Island – North Mason – Poulsbo City of Bremerton City of Port Orchard Collective Visions Gallery Crosspoint Academy Dr Penrose Guild Envirostars Festival of Trees Fire Districts Gig Harbor Film Festival Gig Harbor Garden Tour Gig Harbor Museum Greenworks Habitat for Humanity Harbor Hounds Harrison Hospital Foundation Holly Ridge Home Builders Association (HBA) of Kitsap County

Humane Society Jungle Bell Run Junior League Juvenile Diabetes Research Partners Foundation Kitsap Community Foundation Kitsap Community Resources Kitsap County Association of Realtors Kitsap County Historical Society Kitsap County Medical Society Kitsap Economic Development Alliance Kitsap Peninsula Farmers Markets Kitsap Peninsula Visitors and Convention Bureau Kitsap Regional Library Kitsap Wine Festival Kiwanis Clubs Master Gardener’s Foundation Mathis Guild National Kitchen & Bath Association Olympic College Foundation Peterson Farm Fall Fair Port of Bremerton Port Orchard Log Cabin Museum Port Orchard Waterfront Art Walk Rotary Clubs School Districts SK Helpline Social Media Marketing Conference Soroptimists The Bainbridge Island Studio Tour United Way Uptown Gig Harbor Concert Series Vino Kitsap Washington CASH West Sound Art Council West Sound Technology Association WSU Kitsap Extension Services 40 Under Forty

Dangerous trees... or double standards? which have not succeeded in stopping the continued, and dangerous, erosion. Less than a mile west of Poulsbo city limits, $2 million in tax dollars are being spent where one traffic lane was closed for more than a year and an entire bank is being stabilized. And, the breaking away of the shoulder continues all along this 1.5 mile roadway.

I know the stability of these shoreline areas is questionable and I would like to see erosioninduced slides and weather-related problems documented — before safety concerns are exacerbated rather than alleviated. This area has already experienced recordsetting floods and snowfall, freezing temperatures, gale-force winds and major storm systems that downed trees and power lines, causing power outages, and polluted runoff washed into area waterways. Meanwhile, well vegetated roads and those employing LID stormwater strategies fared very well. But the deadliest natural disasters are slides.

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credit, did write (on a Saturday) and express her concern, but added that this is Rob Gelder’s district. I suspect that whoever called Commissioner Gelder (pre-election) had an agenda concerning their semi-blocked view while walking... not traffic.

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And each year the risk of death, injury and catastrophic property damage rises as more residents seek water views. While going back to correct decades and sometimes century old development would offer some protection, blanket fixes are not feasible or practical at a cost of millions of dollars to the public — or the few property owners willing to foot the bill. The old adage that “an ounce of prevention is worth a pound of cure” comes to mind as we look to the future. The double standards of county’s plans in a critical area on a state-funded project with stormwater and erosion problems affecting the health of Liberty Bay are, well, mind boggling and more than a disappointment in local government officials. With all the funding our local governments — Kitsap County and Poulsbo — have received from Ecology for Low-ImpactDevelopment (LID) that included roads, walkways, parking lots, shoreline stabilization — to advise now to remove vegetation along critical shorelines? To my knowledge, no permit was sought, nor was the state notified why this restoration work would be destroyed and what proper precautions — at whose expense — would be taken to prevent the shoreline from crumbling once the county took out the only thing holding that fragile shoreline in place. As of this writing, I have not received a response from our district commissioner to these concerns detailed in an email 10 days ago. Commissioner Charlotte Garrido, to her

By Kathleen Byrne-Barrantes Just after the election, Kitsap County Public Works contacted the Liberty Bay Foundation because of a 2001 Right-of-Way permit. Apparently, County Commissioner Rob Gelder received a citizen’s complaint and requested staff, including supervisor Jon Brand, evaluate the trees for road safety reasons. The crew white-paint-marked all trees in the 1/3 mile area of Lemolo Shore Drive with a trunk — 4 inches in diameter. This section was previously part of a State DepartmentofEcology(DOE)andSalmonRecovery Funding Board (SRFB) project I led from 2001 until 2007 (see Just five years ago, DOE’s stormwater engineer filed a derogatory report when Kitsap County and City of Poulsbo’s trail project cut into the buffer and project area exposing areas and putting critical areas at risk, citing that remuneration could be sought (from the City and Kitsap County) for the removed and/or damaged property. On Nov. 10, Brand said, “We reviewed the situation and the trees are considered a DANGER to traffic.” But, he added, the county’s professional arborist would call to discuss alternatives. He was firm with regard to removing all of the white-painted trees and cutting back remaining shrubs to 10 feet of the fog line so as to protect “traffic concerns” along Lemolo. Now, this might resemble a valid concern — if within this one mile stretch there weren’t glaring inconsistencies to the ‘safety concerns’ cited. Because, within a few blocks east (as shown in the photos here) exist mature trees growing right up to the fog line. Adjacent to the subject properties, (at 17224) there is less than two feet from the fog line due to erosioninduced landslides. The county has spent tens of thousands of dollars there dumping rocks...

Lexus IS F: This is definitely not your old man’s Lexus

34 Kitsap Peninsula Business Journal• December 2011

By Lary Coppola The high-performance Lexus IS lineup of sport sedans, coupes and convertibles was expanded in 2011 with more all-wheel drive and performance choices. The Lexus IS offers style and performance in three body styles that’s comparable to the BMW 3 Series — for less money. The Lexus IS 350 now offers all-wheel drive, which continues to be an option for the IS 250. The F-Sport Package is an additional $2,440, and includes the F-Sport suspension, sport pedals, aluminum scuff plates, special 18-inch alloy wheels with 225/40R18 tires (summer or all-season), front and rear spoilers, sport grille, sport steering wheel and shift knob, sport seat with microfiber inserts, heated front seats. All Lexus IS models are built on a rearwheel-drive platform for sporty handling. Trim, and relatively light, these sleek vehicles offer paddle-shift transmissions, great brakes and strong acceleration. Boasting a standard 306 horses, the Lexus IS 350 does the 0 to 60 drill in 5.3 seconds. All Lexus IS models come standard with leather upholstery; dual-zone climate control; pushbutton engine start with SmartAccess keyless entry, and a satellite-ready 194-watt, 13-speaker audio system with a 6CD changer and MP3 auxiliary audio input jack.

However, our test vehicle, the IS F ($62,507 as tested, including destination charges), is a special high-performance version powered by a 416-horsepower 5.0liter V8, 8-speed transmission, speed-rated tires, and sports suspension. With 371 Lb. Ft. of torque, and a top speed of 170 mph, it offers stiff competition for the BMW M3. We will confine this review to that vehicle. Walkaround: The IS F is marked by its tight, edgy bodywork that creates a sophisticated, sporty identity, along with F-

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specific badging. A wide track and high rear deck gives the IS F the crouching, forward leaning stance of a predator ready to pounce. Stylishly shaped body contours, aerodynamic taillights and a subtle slightlycurved trunk lid all contribute to its sleek profile. High-efficiency LED taillights, brake lights and license plate lights are molded into the design, with the stainless steel exhaust pipes hinting at high performance. Interior: The Lexus IS F cabin is driveroriented. The 10-way adjustable front seats balance luxury with performance by being both secure and supportive, yet not overly firm. We found them comfortable on a fairly long drive. The front seats are mounted on a fairly long track that provides 44 inches of front legroom, but at the expense of rear-seat roominess. The rather upright rear-seat offers generous hip room, but not much legroom. It has a deep dish seating position on each side, and center-hump seating for a fifth passenger. Although there is a middle-position headrest and seatbelt set, it’s either designed for temporary use, or possibly a car seat. Personally, we see the IS F built for the driver and passenger, and two occasional passengers. The IS F cabin features contemporary design that conveys the sense of Lexus quality and elegance, that’s showcased by sophisticated lighting and smartly integrated metallic or maple trim. The cockpit conveys the sporty intention of the car, with intelligently designed controls that areeasy to see and use. Premium interior materials and attention to detail remain consistent with the Lexus brand. Instrumentation is designed to reduce visual clutter, including clear, brightly lit, white on black Optitron gauges located front and center, that are dominated by a 160-mph speedometer and 8,000-rpm tach. The multi-information display located within the speedometer has a trip computer integrated into it that combines six different informational functions in one spot — outside temperature, fuel range, average fuel consumption, average fuel consumption since refueling, current fuel consumption,

and average speed. It also includes an oilmaintenance reminder and system warnings. Additional features are added to the multiinformation display depending on selected options. For example, when equipped with Dynamic Radar Cruise Control, the display features a car icon with the selected following distance. When equipped with Intuitive Park Assist, it displays a car icon with the location and distance of objects detected near the bumpers. The standard Lexus Premium Audio System features a six-disc, in-dash CD changer, 194 watts of total power and 13 speakers. Automatic Sound Levelizer (ASL) maintains consistent sound levels at varying vehicle speeds. Also included are iPod/USB connectivity, Bluetooth, and an integrated satellite receiver. A 14-speaker Mark Levinson Premium Surround Sound audio system is available as a stand-alone option or in conjunction with the optional DVD touch-screen navigation system. Under The Hood: The Lexus IS F is one fast car. As mentioned above, it comes with a 416-horse, 5.0-Liter V8 with an electronically limited top speed of 170 mph. It’s married to an 8-speed automatic with paddle shifters, and does the 0-60 drill in 4.6 seconds, with a full-throttle exhaust note says it means business. The V8 has an EPA rating of 16/23 mpg. Behind The Wheel: The Lexus IS F is a quick, tight car that’s fun and easy to drive. We found very little wheel or pedal vibration, while the electric power-assisted steering felt connected at higher speeds, with good oncenter feedback at lower speeds. The IS F features significant suspension differences between it and the standard IS models. Among them: shock absorbers (new internal springs that limit rebound), spring rates, anti-rollbar stiffness, and control-arm bushings with steel inserts to increase rotational stiffness. On winding roads, those differences result in a car that’s nicely balanced, with minimal body roll. Sharp brake-throttle-brake maneuvers don’t result in appreciable front-end dive. The 8-speed automatic is highly intuitive about sensing driver throttle demand. It will hold a gear almost to 6.000 rpm, but perhaps more important, downshifts when appropriate. Like most others, the car demands more attention and a willingness to manage the revs when using the paddle shifters. On a winding mountain road, paddle shifting was fun — for a while, but not all that much faster. Whines: The tight suspension and performance tires let in more road noise than we generally like, and Bluetooth headset phone conversation was a bit strained. Bottom Line: The Lexus IS F is a fast, fun, rear-wheel drive sports sedan. It offers Lexus-quality workmanship, contemporary design, and a surprisingly diverse array of performance options, luxury appointments — and pricing — while delivering racecar levels of performance.

Kia Sportage SX: A compact SUV with lots of sport and value

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rear seat experience. This is another example of features generally expected in much more expensive vehicles. Cargo capacity is good, but not spectacular. The rear seats don’t fold completely flat (it helps to remove the headrests), but the main cargo area is flat. The cargo floor is level with the hatch opening, so loading is easy. There is added compartmentalized storage underneath the floor along with useful cargo loops. The hatch opens high enough for all but the tallest owners. Under The Hood: The turbocharged 2.0-liter I-4 engine is the heart of the SX model. Kia has extracted 256 horsepower and 264 lb-ft of torque from a mere 122 cubic inches. The standard Sportage engine is the 2.4-liter (146.5 cubic inches) I-4, which produces 176 horsepower and 168 lb-ft of torque. The 2012 Sportage SX AWD is EPA rated at 21 city and 26 highway miles per gallon. The 2WD version does better at 22/29, but Pacific Northwest drivers are much better served with the AWD Sportages — better suited to our weather/road conditions and much better resale-wise. AWD Sportages don’t have a low range, but there is a dashboard switch for the locking center differential. It locks in a 50/50 front/rear power distribution. There is also a Hill Descent function (very welcome on slippery hills) and traction control. Both features have dashboard switches next to the locking differential switch. This level of sophistication trails off-road marvels like Land Rovers, but

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provides excellent traction for the types of conditions encountered by most drivers. The Sportage has good ground clearance and short overhangs for optimized approach angles. We’ve driven Sportages on rugged dirt/mud forest roads and never come close to being stuck. Behind The Wheel: The combination of compact outer dimensions and spritely engine make the Kia Sportage SX a fun ride. It’s not a sports car, but it belies its utilitarian heritage. The SX has sport-tuned suspension with high performance shock absorbers and lower profile 18-inch tires on

handsome alloy wheels. Handling is improved in the SX (compared to other model Sportages), but as in all sporty vehicles you can expect additional ride harshness and road noise. We had no complaints with the performance/harshness tradeoff, but we always prefer performance and driver control to numbness. Power application of both the engine and six-speed automatic transmission were excellent. We thought the highway ride was great. The Sportage was easy to use and comfortable both on long freeway stretches and around town. Whines: The heated and ventilated driver’s seat was an unexpected luxury, but the front passenger only gets the heated function. Family harmony and spousal equality would be better served if both front seats had hot and cold buns. The driver also gets power lumbar support, while the passenger doesn’t. Rearward vision could be better if the rear pillars were thinner and if the rear window was larger. Bottom Line: We liked the Kia Sportage SX — a lot. Our constant refrain is that you could put badges from considerably more expensive brands on Kias and no one would question it. The point is that the Kia value proposition is incredibly strong. And, beyond value, the Sportage SX is comfortable, highly functional, and fun to drive.

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December 2011 Kitsap Peninsula Business Journal• 35

By Bruce Caldwell The “S” in SUV supposedly stands for sport, but given the lumbering size and weight of most full-size SUVs the sporting component can be in short supply. The growing compact SUV segment provides more maneuverability, but often at the expense of horsepower. Passenger/cargo capacity is obviously less in the smaller vehicles, but how often do big rig owners really utilize all that available space? The Kia Sportage SX is a compact SUV with surprising amounts of sport, space, and value in a handsome, affordable package. The SX is the top-of-the-line performance model thanks to an impressive turbocharged 2.0-liter inline four-cylinder engine that’s backed by a smooth, efficient 6-speed automatic transmission. Walkaround: The Kia Sportage was redesigned for 2011, so 2012 models are virtually the same. That makes any leftover 2011 models an excellent buy. Styling is consistent with the chiseled looks currently popular with compact Asian sedans and SUVs. The large diameter alloy wheels and performance tires are placed at the far corners. That maximizes interior space and enhances the SUV image. Our SX was painted a handsome, expensive-looking Black Cherry. A black leather interior further boosted the impression that the Sportage should cost much more than it did. Interior: Kia designers do an outstanding job of interior packaging. Compromises have to be made to maintain their highly competitive prices, but the fit, finish, space utilization, comfort, content levels, and feeling of openness far exceeded our price point expectations. Our SX had the optional Premium/Leather Package. The thick, contoured steering wheel had excellent auxiliary controls and a tilt/telescopic function, so finding an optimum driving position was easy. A large, centrally located speedometer and well-placed switchgear complimented the ample storage areas. Legroom is abundant for both the driver and front passenger. As long as the front seats aren’t all the way back there is ample second row legroom. Rear door size is good, which eases ingress/egress. The Premium Package includes a panoramic sunroof, which fills the interior with light. The front sunroof part opens for added mild weather ventilation, while the fixed rear roof glass greatly enhances the

Editor & Publisher Lary Coppola Advertising Sales Dee Coppola Creative Director Steve Horn Webmaster/IT Greg Piper Graphic Design Kris Lively Office Administration Jennifer Christine Web Host Piper Computer Services Contributing Writers Rodika Tollefson Adele Ferguson Don Brunell Kathleen Byrne-Barrantes Dan Weedin Ron Rada Julie Tappero Jason Parker

36 Kitsap Peninsula Business Journal• December 2011

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Are the rich to be blamed for the poor? By Grant Cardone I have had my fill of the finger pointing that is blaming the rich, as the supposed oppressors of all other financial groups. This intense protest against wealthy groups as the victimizers of those that “don’t have” has become a disgusting show of irresponsibility and demonstration of ignorance. No one, particularly the rich, is interested in keeping anyone from getting rich. The rich would love nothing more than for everyone to achieve a higher income level. Contrary to what most people are being led to believe, the rich didn’t get rich because they were able to borrow money, had equity in their homes, were better educated, or more connected. The facts are that a very high percentage of the wealthiest were not college educated, or “connected,” and actually started from nothing. The disparity between the rich and poor is an issue we’ve witnessed since the beginning of time and will not end regardless of how much protesting happens. There is a high probability that protesting against wealthy individuals and companies will only cause the wealthiest to further retreat with the cash they are already hoarding. This is not an issue that is resolved for entire populations of people, but only by individual actions. Not until an individual realizes that nothing is being done to him or her and understands that the rich are actively working at getting and staying rich, the disparity will surely continue. For 30 years I have been studying the lives of rich people, not out of envy or resentment, but in admiration and in search of what it is that these people do correctly to create and maintain their financial position. If you go back 3,000 years, you will see the poor protesting wealth accumulation.

Go back only 100 years to the days of Dupont, Ford and Carnegie and you will see men amassing massive wealth from nothing because they took risk and action in volumes that others did not. These men created wealth at a time when economies were devastated. Furthermore, going back only a quarter of a decade, you will find the young Bill Gates and Steve Jobs, who both quit college and without the help of banks, became extraordinary billionaires. One amassed a net worth of $50 billion and the other $8 billion. Nothing could have stopped their individual tenacity to bring their products to markets. ABC News recently reported “an alltime high 70 percent of this year’s richest people in the world list are self-made; up from 55 percent in 1997.” Statistics show that 99 percent of all rich and successful people started off nearly broke. Did you know that most self-made millionaires have been bankrupt or close to bankrupt more than three times? Most of them failed several times before they finally found the right opportunities that brought them into financial success. Self-made entrepreneurs top the Forbes richest people in the world list. Jeff Bezos, founder of Amazon, with a net worth of $19.1 billion, got his start selling books. Carlos Slim Helú of Mexico is the richest person in the world, and his fortune is selfmade as a result of his efforts in the telecom business. The 5th richest person in American history, John Jacob Astor, with a net worth of $110.1 billion in today’s dollars was a German immigrant who made a fortune trading furs and Chinese imports. He later invested heavily in the Manhattan real estate market. The 2nd richest person in American history, Andrew Carnegie, had a

net worth of $281.2 billion in today’s dollars and was a textile mill bobbin boy. He was not only a successful businessman but also a renowned philanthropist. The difference between the rich and the poor is significant, and the disparity goes far beyond their wealth. Below is a list of other less publicized differences between the rich and the poor: The rich don’t waste time on distractions; they invest time in production. You will never find the rich being distracted. Instead, they spend their time, energy and efforts creating a flow that moves in the direction of wealth creation. The rich don’t point fingers; they point people, money and efforts toward moving their targets forward. I doubt you will ever find a person on the way up to real wealth spending any time finger pointing as to whose fault their setbacks and problems are. Typically, you see these successful people in “full responsibility mode” for every outcome until their purposes are fulfilled. The rich don’t talk about what can’t be done; instead they invest time and money in figuring out how to get things done. Whether it was building pyramids, cars, trains, theme parks, computers, social media or space travel, the rich even risked bankruptcy in many cases to make which had never been done a reality. The richest of the rich don’t believe in limitations and impossibilities; they are moved by the challenge. It is the idea of doing something extraordinary, something unique that moves these people the most, not just the money. The very rich think expansively; they don’t limit the realms of their thinking in hopes of a big payday. See Rich, page 37

Good News, Bad News About Cars

RICH from page 36 Whether it is some hedge fund guy in NY putting together a $10 billion deal that generates $200 million in fees or the bank executive that makes $25 million a year, they do not think in terms of being paid too much but in how they create value while most of the world thinks in limits. Also a few other little-known facts: a) Two-thirds of all billionaires came from nothing b) Almost 1/2 of all millionaires never went to college c) The richest don’t think about

retirement funds; they invest in their companies and projects. If you want to really get the attention of the rich – get rich. Don’t protest them, point fingers at them, or blame them. Instead, do something so big that you get their complete admiration, attention and are able to influence them with how they use their wealth and influence the world. (Editor’s note: Grant Cardone is a New York Times best-selling author, international sales expert, and the star of National Geographic Channel’s “Turnaround King.” He is a regular contributor to The Huffington Post and was most recently featured on, Forbes, and AOL.)

December 2011 Kitsap Peninsula Business Journal• 37

By Don C. Brunell, President Association of Washington Business Today, the good news is cars are safer, more fuel-efficient and emit fewer greenhouse gases. The bad news is today’s automobiles burn less gas and cars in the future will be fueled by cleaner electricity and even hydrogen. So how could this be bad news? Two words: gas tax. Since President Dwight Eisenhower modeled our interstate highway system after the German autobahns, our roads have been built and maintained with federal and state gas taxes. In Washington, the 18th amendment to our state constitution dedicates fuel tax revenues to the road and highway system. When cars and trucks were getting 10 to 12 miles per gallon, there was plenty of money to build and maintain roads. But as cars got more fuel efficient, they used less gas, meaning less gas tax revenue for construction projects and maintenance. When gas tax revenues fell short, voters were asked to approve tolls to finance the construction of bridges such as the SR 520 bridge, the Hood Canal floating bridge, and the I-5 bridge across the Columbia. The tolls were approved with the promise that they would end when the bridges were paid for. Therein lies the problem today. Because cars use less gas and alternative fuel vehicles are often exempt from the sales tax, the highway trust funds are broke. States are finding it impossible to fund added road capacity and even maintain the current highway network. State lawmakers can’t turn to federal highway trust funds because they’re drained as well. Further complicating the problem is the fact that highway construction is much more expensive because increasingly, projects require routes through urban centers and neighborhoods rather than farm fields and woodlands. With gas and diesel hovering between $4 and $5 a gallon, voters are reluctant to support higher gas taxes. Our state gas tax is 37.5 cents a gallon — the eighth highest gas tax in the nation. When you tack on the federal gas tax of 18.4 cents, Washington motorists are really paying 55.9 cents of tax per gallon. However, not all the state’s gas taxes go to build or maintain roads. In 2007, the Legislature passed Senate Bill 5272, which authorized the governor to enter into new fuel tax compacts with federally recognized Indian tribes that operate fuel stations in Washington state. Gov. Chris Gregoire settled tax agreements with 23 Indian tribes that require tribalowned fuel stations to collect the state gas tax from motorists at the pump — but then state officials give back 75 percent, or 28 cents per gallon, to Indian tribes. Since 2005, motorists have lost nearly $91 million in gas tax revenue to Indian tribes — money that could be used for state roads and highways. Washington, like the rest of our nation, is in transition. Even with more cars and trucks on the road, fuel efficiency is not generating the revenue to build and maintain the highways and roads of the future. So what’s the answer? • First, alternative fuel vehicles must contribute their fair share to highway and road construction — as well as bicyclists, who use the roads, but pay no gas taxes. Sen. Mary Margaret Haugen, D-Camano Island, chair of the state senate transportation committee, proposed a $100 annual registration fee for electric vehicles as a way to cover part of the costs of their road usage. • Second, tolling must be part of the construction and maintenance funding for roads and bridges. • Third, motorists seeking to avoid heavy traffic should be able to use special HOT (high occupancy toll) lanes. • Finally, transit schedules should be geared only to customer demand, eliminating runs of virtually empty buses and ferries during non-demand periods. The good news is we have the technology. The bad news is we take too long to study, approve and build anything. The days of relying on the gas tax to carry the freight (and people) are gone. It’s time for something new.

Accenture report should be required reading for legislators

38 Kitsap Peninsula Business Journal• December 2011

As we go to press, the long-awaited Accenture report on Washington’s strengths and weaknesses in relation to securing the proposed assembly line for the Boeing 737 MAX, was recently released. The report was commissioned by the Washington Aerospace Partnership (WAP), which is composed of a myriad of local governments, civic, business, and labor leaders, as well as non-profit and economic development organizations from around the state. It’s interesting reading for certain. The report enumerates Washington’s strengths, and weaknesses, in competing for what has to be the single largest economic opportunity since Boeing’s decision to site the second 787 assembly line in South Carolina. Approximately two thirds of the planes sold worldwide in the next 20 years will be single-aisle, transcontinental planes like the Boeing 737 — the single largest selling commercial aircraft on the planet — and the Airbus A320. Boeing is strongly considering developing a brand new plane, dubbed the 737 MAX, to serve this market segment. If it does so, the company will very likely build a brand new assembly facility, employing thousands of workers. The high-stakes competition for such a plant is stiff, with a minimum of 10 other states in the hunt — including South Carolina. The current 737 is built in Renton, which on the surface would seem like a slam-dunk choice. But considering the combative relationship Boeing has endured with the Machinist’s union — a long, bitter strike three years ago that cost the company billions and put the 787 production years behind schedule, Renton — or anyplace in Washington, is hardly a given.

And then there’s the NLRB complaint the union has filed against the company attempting to force it to shut down the South Carolina facility and move production back to Everett, The report should be required reading for legislators, as it’s a primer for what is wrong with the business climate in our state. For decades, Boeing attempted to make the legislature understand how its decisions on everything from the environment to taxation to transportation and more impacted the company’s ability to do business here. For the most part, its needs were LARY COPPOLA ignored, and not even moving the The Last Word corporate headquarters to Chicago — which should have been a 2x4 to the side of the legislature’s head — worked. At the time Governor Gregoire said, “It’s not a big deal. It’s only 900 jobs.” That was typical of the arrogance the company faced from state leaders, as the legislature continued passing more restrictive rules and regulations on business with abandon. South Carolina and the 787 decision was the gamechanger — for Boeing and for Washington. In this prolonged economic downturn, and with Boeing clearly indicating Washington no longer has a lock on its facilities, the state ha s to compete hard for what once was the golden goose it took for granted. So what does the report actually say? It makes several things clear… Boeing’s customers expect the 737 MAX to be delivered on time to support the growth of

their businesses and help them operate more efficiently. That means no design problems, supply shortages, manufacturing and testing issues — and no work stoppages. It also means a stable workforce and competitive labor costs, along with a flowing pipeline that yields new, quality engineering and production talent on a regular basis. The report cites the significant investments made by other states in prioritized aerospace infrastructure, as well as other strengths such as direct financial incentives, and workforce training programs. It also cites key challenges other states face including development of a quality workforce at the levels required to staff the plant on an ongoing, long term basis, as well as the transition of moving final assembly from Renton. It details Washington’s problems as the significantly higher cost of building and staffing new manufacturing facilities, and calls out the fact that, “The outcome of ongoing Boeing labor negotiations is outside of the state’s direct control, but may cause 737 MAX program risk in Boeing’s eyes that could outweigh economic and other considerations in a site decision.” Is anyone in the Machinists union paying attention here? On the plus side, is our state’s current Boeing workforce, which has a much shorter learning curve, and the existing Boeing fabrication and back shop facilities that support production. The report also detailed what immediate changes Washington would have to make to improve its chances. A lot of them have to do with education and workforce issues, including development of aerospace certification and apprenticeship programs, graduating more engineers,

relevant research at the UW and WSU, and focusing on STEM (Science, Technology, Engineering and Math) learning at the high school and college levels. It also recommends the state extend sales tax credits for investments in research and manufacturing while supporting targeted infrastructure improvements in areas serving the current 737 plant. What has been very interesting has been the effort at the local level to land this facility if it’s going to be built in Washington. In more than 30 years of personal involvement in local economic development efforts, this is the first time I’ve seen such a unified level of determined focus, cooperation, and commitment from local governments and the private sector alike that this project has generated. It’s a notable turnaround from when the county stupidly sent the NASCAR money machine packing. Credit for the idea belongs to retiring Port of Bremerton CEO Cary Bozeman. He was the first to ask the critical question, “Why Not Kitsap?” He spearheaded this effort, while new Kitsap Economic Development Alliance (KEDA) Executive Director John Powers has taken up the mantra and is marching in lockstep. Every local government, and numerous critical quasi-public agencies have all stepped up to fund a local organization focused on landing this project. Will we get it? Who knows? But if it comes to Washington, Kitsap has a legitimate shot at landing it, and/or one or more of Boeing’s major suppliers. What a way for Bozeman to cap an unselfish career in public service. Part of his legacy should be that whenever economic development opportunities arise, we all become conditioned to ask — Why Not Kitsap?

“Our mission is to create hope and opportunity…” – Kitsap Community Resources Funding needed to support matching grant by Bill and Melinda Gates Foundation Have you noticed the construction at Jackson and Lund in Port Orchard? This is the future site of a new “distribution center” – where Kitsap Community Resources will continue to distribute and deliver hope and opportunity to our children and families in need. The mission of Kitsap Community Resources reflects the remarkable nature of our community – one that loves DAVE LAROSE children and g i v e s Guest Editorial generously to help others and change lives. In particular, serving children is clearly our common bond; on a daily basis I see this community rally around children, demonstrating our unwillingness to allow children to hurt or suffer in anyway.

“Success for all takes us all” blameless. Locks of hunger, “Each of Us is a Key to Their Success” homelessness, stress, fear and These are the core statements from uncertainty. The burden of these locks is our “SK Community Declaration of hopelessness – a lock the makes learning Interdependence”/ – a document created with input from parents, “Success for all takes us all” community members, children, business leaders and school district staff. “Each of Us is a Key to Their Success” We use the imagery of locks and keys to represent our collective influence on children and our impossible. community as a whole. Locks reflect the Fortunately, Kitsap Community barriers and challenges that keep Resources possess the mission, vision, staff and services that represent the keys children and families from healthy and to these many locks. KCR provides hopeful lives; conversely, keys represent families with the timely and essential the support, services and the kindness resources they need to remain hopeful that empower children and families to and encouraged about their future. With thrive. less stress in the home, children come to Every day, children in our schools struggle with the many locks that life has school more focused, optimistic and placed on them; locks that they didn’t ready to learn. ask for; locks for which they are It’s impressive that this project has

been funded primarily through grants and private foundations. We can all share our support and gratitude for the great work of KCR and invest in their future by supporting the matching grant opportunity provided by the Bill and Melinda Gates Foundation. This conditional grant will require local contributions before the $200,000 is awarded. KCR is nearly there, with only $75,000 needed locally. On behalf of SKSD, we offer our sincere appreciation to KCR. They truly live their mission and provide the key of hope to our kids and families who need it most!

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Bremerton CBA486951 $110,000 Downtown Redevelopment in Bremerton offer one level Commercial retail/office space with 1,240 SF, 2 restrooms, 5 parking spaces plus on street parking in an area of redevelopment. Victor Targett, CCIM for details 360-731-5550. $200,000 Bremerton CBA481338 Location - Location! This 5021 SF investment building with office/retail areas, loading ramp and lay down areas is situated on 3/4 acre lot. Close to Bremerton Shipyard, located on St. Hwy 3 in Gorst area. Victor Targett, CCIM for details 360-731-5550. Bremerton CBA468464 $285,000 9000 Sq Ft building in the Bremerton Charleston area. Available for lease at .30 per foot, loading ramp, good parking and centrally located. Victor Targett, CCIM for details 360-731-5550. Bremerton CBA482983 Great office space in downtown Bremerton with views & good parking . 1300-7700 sq.ft. Joe Michelsen 360-692-6102/360-509-4009.

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December 2011 Kitsap Peninsula Business Journal• 39

Property For Sale Or Lease

Bremerton CBA498642 $1,427,250 This 2.18 acre Commercial parcel is across the street from new WINCO foods and located at uptown Bremerton plat of Bay Vista. Excellent access and some exposure from St. Hwy 3. Victor Targett, CCIM for details 360-731-5550.

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