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November 2012 Vol. 25 No. 11

The Voice of Kitsap Business since 1988

Craft distillery opens in Gig Harbor, Pg. 6

This little light of mine Leader International Corp. owners Rick and Cathy Flaherty stand by the booth they took to the Lightfair International trade show last April in Las Vegas to display innovative LED lighting products developed through their new company, Differential Energy Global Ltd.

New deal for running Gold Mountain, Pg. 23

Inside Special Reports: Technology & The Internet, pp 8-11 Energy Savings, pp 30, 31 People, pg 2 Real Estate, pp 23, 24 Financial, pp 26, 27 Human Resources, pg 28 Environment, pg 33 Automotive, pp 34, 35 Editorial, pp 36-38 Home Builders Newsletter, pp 19-22

Innovative HI-Lamp gets rave reviews as LED replacement bulb, but Kitsap manufacturer still seeking capital to start production By Tim Kelly, Editor If you’ve got a potentially gamechanging product, you’ve got to find a way to get into the game. That’s what Rick Flaherty has been working on for much of this year. So far he’s hit nothing but dead ends trying to obtain financing for his company, Differential Energy Global Ltd. (DEG), to begin mass production

of innovative commercial light bulbs that he believes will have a global impact. In fact, his confidence in the new product may be exceeded only by his frustration at being unable to get the capital needed to start manufacturing the specialized LED bulbs (see related story, Page 30) at his plant in the Port Orchard Industrial Park. Despite any signs of a recovery in the

post-recession US economy and all the election-year blather about helping small businesses and creating jobs, a perplexed Flaherty said his company’s experience shows that credit remains tight. “We were getting very close to the finish line, but we continue to be dogged at almost every turn by the ‘new normal’,” he said during an interview in October. “The banks don’t want to give you money.” It seems hard to figure why small business owners like Flaherty and his wife, Cathy — who have a strong track record of operating the manufacturing company Leader International Corp. for 22 years — have been turned down by so many lenders. It’s especially aggravating, Flaherty said, because many of the rejections came after loan officers and bank executives visited their company for a presentation about the new product and came away uniformly impressed. Before the search for financing began, Flaherty went to the Lightfair International trade show in Las Vegas in April to exhibit a prototype of DEG’s new product. Afterward he boasted of the positive reviews for the HILamp, an LED (light-emitting diode) replacement bulb for High-Intensity Cover Story, page 4

Oh, behave! Debate over behavioral advertising heats up By Rodika Tollefson Those who’ve seen the Tom Cruise blockbuster “Minority Report” may remember a scene when Cruise’s character, John Anderton, walks through a building and as his eyes get scanned by sensors, advertisements that “know” his name and preferences pop up on giant screens, one after another, for everything from diamonds to American Express travel. “The road you’re on, John Anderton, is the one less traveled,” a soft-spoken female narrator says in a Lexus ad. “John Anderton, you can use a Guinness right about now,” an upbeat male voice proclaims as Cruise walks by. This scenario may still be the advertiser dream of tomorrow, but it’s really not that futuristic. Have you

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Kids Discovery Museum director stepping down The Kids Discovery Museum has announced that executive director Susan Sivitz will leave her position at the end of the year after three and a half years with the Bainbridge Island organization. Sivitz has been working on an undergraduate degree, and she will be moving to Boston for six months to complete her coursework for graduation. She started as the museum’s executive

director in 2009. She was instrumental in completing the capital campaign, and managing the transition from the original rented space to the construction and exhibits for the KiDiMu-owned building in the Island Gateway Development. In partnership with the staff and board of directors, she has worked to expand the museum’s reach throughout the Puget Sound region, and to fulfill KiDiMu’s mission of welcoming children and families to explore and learn through interactive play. The board is currently conducting a search for a new executive director and plans

to fill the position before the end of the year. For more information about the Kids Discovery Museum, visit kidimu.org or call Sonya Marinoni at 206-842-5055.

Surgery center staffer part of charity trip to Dominican Republic For the past eight years, the Pacific Surgery Center (PSC) in Poulsbo has supported the charity Children of the Nations. PSC sends supplies and/or a registered nurse or operating room

technician to the Dominican Republic for a week to assist physicians in providing various types of surgical care. This year, certified surgical technologist Kelly Gorman will travel to to Barahona in the Dominican Republic the week of Nov. 4. She will accompany local physicians Michael Jungkeit, Paul Kremer, Dale Holdren, Tom Curran, Nancy Grey, Susan Reimer and Ward Hendricks, as well as Felix Chu and Steven Bayles from Seattle and Jay Lawrence from Port Townsend. Children of the Nations (CN) partners with organizations to provide holistic Christ-centered care for orphaned and destitute children. CN provides medical care and health education to children to aid in their development and overcome the cycle of poverty and disease. In 2003, Pacific Surgery Center (www.pacificsurgerycenter.com/), helped Children of the Nations build a 10,000square-foot facility in Barahona by contributing 25 percent of the financing needed. The facility houses three operating rooms, a dental suite, and a clinic.

Cole Aesthetic Center adds two to its staff

2 • Kitsap Peninsula Business Journal • KPBJ.com November 2012

Cole Aesthetic Center, a facial rejuvenation and cosmetic surgery clinic in Silverdale and Sequim, has announced the additions of Justine Kinder and Cynthia Chernekoff, RN. Chernekoff previously worked as a nurse in the Harrison Medical Center cardiovascular center. At Cole, she specializes in body and face laser procedures, as well as injectable services. Kinder, hired as office manager at Cole, previously worked at the Eye Foundation of Utah in Salt Lake City, where she managed a multi-specialty ophthalmology group. The center can be contacted at (360) 613-2600 and its website is www.coleaestheticcenter.com.

P5 Photography returns to Kitsap County roots P5 Photography, a multi-service photography business, has recently relocated back to Kitsap County from the Colorado Rocky Mountains area. The owners, Raymond Parmalee and his wife Andrea, an Olympic Peninsula native, are outdoors lovers and started their business in 2009 as a nature photography business. P5 provides its services for outdoor group event (special events, teams, weddings, family reunions and more) to assisting customers with putting their best face forward (back to school, social media, maternity, online dating, new baby and more.) They also offer unique photo experiences such as garden photography packages and the option to have a portrait done using their 1904 Kodak Brownie camera. For more information, call 720-2266327 or 720-227-1819, visit the website www.p5photography.com, or find them on Facebook.


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from page 1

lawsuits or FTC violations (Facebook’s Beacon advertising system is one example; it was ditched after two years just as it was the target of a class-action lawsuit that included many other major websites using the service). But as they continue to experiment with various ways of exploiting the vast field of online data, these companies are not giving up — with Facebook, again, being an example, since behavioral advertising is alive and well on the social networking site even after the Beacon fiasco. The FTC earlier this year issued a privacy framework, “Protecting Consumer Privacy in an Era of Rapid Change: Recommendations for Businesses and Policymakers,” after months of discussions and revisions. The framework is calling on companies to implement best practices that would protect consumer privacy, but doesn’t apply to companies that collect data from fewer than 5,000 people per year and do not share that information with other parties. One of the key principles promoted by the FTC is “simplified choice for businesses and consumers.” It calls for giving consumers the ability to make decisions about their data at a relevant time and context, including through a “do not track” mechanism. ‘Do Not Track’ consumer option The online “do not track” (DNT) concept is similar to “do not call” for consumers’ telephone numbers. Opting for it doesn’t disable cookies on a website but rather sends the site a message that the user doesn’t want to be tracked. The Digital Advertising Alliance (a consortium of the largest U.S. media and marketing associations) launched a self-regulatory program in 2010 that allows consumers to opt out of being tracked on participating websites. The World Wide Web Consortium (W3C), whose long list of member organizations includes many major players (from Apple and Microsoft

have the option to activate the “do not track” mechanism for that site. Many websites don’t use the logo but instead have a link at the bottom of the page, in the same place where terms of use or privacy policies are linked. Opponents of DNT say tighter regulations on online advertising, which could be coming down the pike from the federal government, would spell the end of the internet as we know it; cripple technology innovation, start-ups and small businesses in general; and even lead to the end of free online services or increased prices for online goods. One problem with DNT is that the system, as it currently exists, is full of holes. First, websites’ compliance is voluntary, Ads, page 4

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to Netflix and Yahoo), is also working on web standards for various things including the meaning and technology behind “do not track.” Several digital industry leaders announced their own DNT tools this year, including Twitter and Yahoo. Google gives an opt-out option for personalized ads (which doesn’t stop ads completely, just disables the specific cookie for interestbased ads). And Microsoft plans to set its soon-to-be-released Explorer 10 with notracking as default. What the Digital Advertising Alliance is advocating for is its mechanism marketed under the brand AdChoices (www.youradchoices.com), represented by a blue triangle “logo.” When consumers see the logo on a website, they can click on it to read more about behavioral advertising and

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noticed that last time you logged into say, Facebook or Gmail, the ads you saw seemed to “know” things about your hobbies, likes or shopping habits? Behavioral advertising — or, as the industry players like to call it, “interestbased” —is growing at such a rapid pace that some see it doing to display (nontargeted) advertising what craigslist.org and others have done to print newspaper classifieds. A 2009 Congressional Research Service Report cited an eMarketer study that estimated behavioral advertising spending to grow from $775 million in 2008 to more than $4 billion in 2012. And some estimate that this “smart” advertising form will dominate local digital revenues by 2014. In a nutshell, these ads are based on browsing and other online actions — every time you cruise online, play online games, join social networks, blog about things, shop and even sign up for promotions, marketers collect piles of data that can be used for “personalized” ads. The same CRS report, for example, cited a study that found one major advertising firm that had more than 4,500 sites collecting more than 135 million individual behaviors 50 times per month, and had “segmented the online audience into behavioral buckets.” From a company’s standpoint, all this tracking leads to providing targeted ads that are more in line with a consumer’s interests. As Google explained: “With personalized ads, we can improve your ad experience by showing you ads related to websites you visit, recent searches and clicks, or information from your Gmail inbox.” The advertising industry emphasizes that the data collection doesn’t include personal information such as name, contact information and credit card numbers and that this type of advertising benefits consumers by matching them up with their interests. Yet consumer advocates, members of Congress and the Federal Trade Commission alike have been raising privacy concerns. Sometimes the players — the big ones like Google, Apple and Facebook among them — back off some of their ideas, either due to major public backlash,

What price are consumers willing to pay for their privacy?


4 • Kitsap Peninsula Business Journal • KPBJ.com November 2012

LIGHT

from page 1 Discharge (HID) lights typically used in warehouses, arenas and parking lots. It’s simple to install, saves money through greatly reduced energy usage, and costs significantly less than replacing the whole HID fixture. A promotional email sent out after the show noted that DEG’s entry in the Conventional Lamps, Retrofit/Replacement LED Lamps category at Lightfair was “selected as one of the top 5 products in the category with the judges noting ‘these products embody innovation and show great promise.’” But the momentum from the buzz at Lightfair has not segued as Flaherty hoped into getting the bulbs to market this fall, because he’s been unable to get financing to start production. “I think I’ve been to every major bank … in the state of Washington and been told no,” he said in an interview earlier this summer. That list includes Columbia Bank, where the Flahertys have had personal and business accounts for more than 20 years. Leader International borrowed $2 million from Columbia in 2002 to add a second building on their property in the industrial park, Rick Flaherty noted. But the bank rurned down their $1.5 million loan application for DEG — with no response telling them why, he added. Confidentiality agreements prevent bank officers from discussing customers’ financial information. However, an executive who was part of Columbia’s team that visited DEG said the new product created by Flaherty’s company looks good. “We think it has great potential,” said Craig Chance, senior vice president and manager of community financial resources. “He’s an astute individual and he’s developed a very successful business.” Speaking only about the lending climate in general for small businesses, Chance said “there are credit opportunities for start-up businesses right now,” as the economy continues to stabilize after the recession. However, he noted that “with any kind of business looking to receive financing based on projections, … it’s always a little bit more challenging” to evaluate commercial potential when a new venture is “unique” and there are few enterprises to compare it with. “That’s probably the reason why venture capitalists will get their high returns on high-risk (investments),” he said. In general, one thing Flaherty said seems to be an issue with banks is concern

over cash flow with DEG. “Those that would finance you other than venture capital and private equity groups, they view what you’re doing as too speculative,” he said in the interview this summer. “This is something that could have enormous impact globally on energy costs,” he said. But the problem is “unavailability of capital resources for a company like ours to undold the technology.”

“We are very anxious to see this product come into the market. It definitely will be a game-changer.” — Mark Stewart, executive with New York-based Ra Energy/Smart Energy DEG doesn’t lack for positive projections to show potential lenders. Major lighting distributors think the HI-Lamp is a breakthrough technology and they want to get the products to their customers. “I thnk it will definitely gain market share very quickly,” said Mark Stewart, who handles business development for New York-based Ra Energy/Smart Energy. “There’s nothing currently in the industry that does what his technology will do once it’s mass produced.” “The projections show this is very viable,” Cathy Flaherty said when she joined her husband for the October interview. For instance, Ra Energy wants to order 8,600 of their LED units that will sell for $275 each. “We are very anxious to see this product come into the market,” Stewart said.”It definitely will be a game-changer.” Still, it’s been no easier trying to get a Small Business Administration (SBA) loan, Flaherty said, even though the federal agency provides loan guarantees up to 75 percent that minimize a bank’s risk. He also said their equity in Leader International’s real estate and facilities exceeds the loan amount they’re seeking, but lenders won’t accept it as collateral. He said they’ve considered selling some property to raise production capital for DEG, but they’d prefer not to have to do that. “I’ve had a handful of people approach us who are very interested in the technology, either as strategic partners or to

Coming Next Issue...

buy the technology,” he said this summer. “I felt it was too early … We wouldn’t optimize the return for the technology by selling at this point. I want to optimize the opportunity.” After getting nowhere with banks, Flaherty thought he’d found a lifeline with an outfit called Craft 3, a nonprofit enterprise that pools funds from public and private sources to make small business loans. DEG applied for $1.5 million through the U.S. Treasury-funded Small Business Credit Initiative (SBCI), which has loan criteria — including creation of new jobs — that seem well matched to what DEG is planning and what they need. But after a Craft 3 executive said the company was “a perfect candidate for what we do” and a senior loan officer “told me on the phone this was going to get done,” Flaherty said, the outcome was more disillusionment. He received an email in August — apparently by mistake — that included all the work papers Craft 3 had produced for the loan application. Information in those documents, Flaherty said, was at odds with what he’d been told in previous discussions with Craft 3 — such as no penalty for paying off the loan early, and that he could expect an interest rate toward the low end of the 5 percent to 8 percent SBCI range listed on the lender’s website. The emailed papers listed “7% floor, no ceiling” for the interest rate if the loan were approved, plus a 2 percent loan fee, not the 1 percent for SBCI loans per the Craft 3 website. “There were a whole host of other things that were never even put on the table when we were in discussions,” Flaherty said. Walt Postlewaite, chief lending officer at Craft 3, said in a phone interview that SBCI loans have helped a number of small businesses that “are poised to create jobs.” “It gives them a source of capital that’s not available right now from the traditional sort of banks they’re talking to,” he said. As for whether Flaherty’s company fit that profile, Postlewaite said “I think if they were a good fit we would have done it.” “I feel like Craft 3 dealt with Rick in a professional manner,” he added. “I think he has a great product; I would like to see it scaled and deployed.” But Craft 3 decided an SBCI loan “would not be best course of action,” he said, although he hopes DEG “can find some capital that fits their current needs.” A local loan officer with a major national

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from page 3 even if the company agrees to participate. Second, many interpret the definition of “do not track” as “do not target ads” vs. “do not collect data.” The heated discussion around the balance between privacy and free commerce is not likely to die soon. Take the Microsoft IE10 move, for example. It prompted the Digital Advertising Alliance to take the position that this is not “an appropriate standard for providing consumer choice” because it’s a choice made by the browser manufacturer. The Association of National Advertisers board — which includes VIPs such as CEOs of GM, Walmart, Dell, McDonalds, Verizon and IBM, to name a few — even went as far as writing a scathing letter in October to Microsoft CEO Steve Ballmer and a couple of other top brass (www.ana.net/content/show/id/analettermicrosoft), accusing the company of making the wrong choice for consumers. “ANA’s Board of Directors is very concerned that Microsoft’s action threatens to take the information out of the information economy,” the letter said, asking Microsoft to revise its decision. In the end, all the debates may come down to one question: What price are consumers willing to pay for their privacy? Someone has to foot the bill for things like free information or all the free goodies from Facebook, Twitter, Gmail and other services that have become ingrained in their daily lives. At the moment that “someone” is the advertisers for whom the users’ data is as good as gold. “Get away, John Anderton. Forget your troubles,” the American Express display ad was telling Cruise as he rushed through in the movie. The irony of that scene is that John Anderton was on the run from the authorities — and getting away was a bit problematic with all the “Hello, John Anderton” ads flying at him in a crowded building. Behavioral advertising is perhaps more benign (at least nobody’s scanning retinas … yet). But as long as people are willing to make that trade — lack of privacy for convenience — the days when advertisements talk to consumers a la “Minority Report” as they walk around will continue to creep a little closer to reality. • Rodika Tollefson is a graduate student in the University of Washington’s MCDM program, or Master of Communication in Digital Media.

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Harrison Medical Center plans to affiliate with Franciscan Health By Tim Kelly, Editor After a nearly yearlong search for a larger system to partner with to assure future stability, Harrison Medical Center has announced its plans to affiliate with Tacoma-based Franciscan Health System. The affiliation will allow Harrison and Franciscan, both private nonprofit operations, to “expand services, improve the delivery and quality of care, and broaden access to services for individuals, employers and communities in the South Puget Sound and on the Kitsap and Olympic peninsulas,” according to a news release Harrison issued. Harrison’s 16-member board of directors and an advisory committee have spent most of this year in a process to recruit and evaluate possible partners for a merger or other type of affiliation. “We started off looking at more than dozen systems, both locally and nationally,” Harrison president and CEO Scott Bosch said in an interview Tuesday. “We are all relieved finally to be able to announce this and move forward with the next phase.” Although Bosch had said recently that Harrison — founded as a community hospital in Bremerton in 1918 — is financially able to continue operating independently, the decision to search for a regional partner was prompted by the

current climate of mergers in the hospital industry and the implementation of federal health care reforms in the next couple of years. A Franciscan-Harrison partnership will form a system of nearly 11,000 employees and 2,000 medical staff members, with projected annual net revenues of $2 billion, according to the news release. Harrison has about 2,400 employees, including a medical staff of more than 400 physicians and specialists. Bosch said the affiliation with Franciscan will enhance Harrison’s ability

to implement its long-range strategy to build out the Silverdale campus. “A key part of this is their commitment to invest significant resources into health care services provided through inpatient and outpatient centers across our communities,” he said. “We can enhance the services that we offer and build on the economies of scale that a larger organization can provide,” Bosch said. “In light of upcoming national reforms, this partnership helps ensure we keep our enduring promise of exceptional health care to the residents of the Kitsap

and Olympic peninsulas and North Mason County.” Leaders of both systems said the affiliation process, pending approval by both institution’s boards as well as the state Department of Health and other regulatory agencies, should be completed by June 30, 2013. They also talked about shared values being a key to what they expect will be a long-term partnership. “Harrison Medical Center and Franciscan Health System share similar Harrison, page 7

LIGHT

November 2012 Kitsap Peninsula Business Journal • KPBJ.com 5

from page 4 bank and a regional SBA administrator contacted for this story both noted that small business lending has been increasing the past couple years. That just leaves the Flahertys wondering why their ready-togrow company hasn’t found a backer yet. “They all say they want to support small business,” Cathy Flaherty said, “but I don’t see it.” Through frustrated by the fruitless discussions with banks, Craft 3, venture capital and private equity firms, Rick Flaherty is not about to give up and has other prospects to get a financing deal done. He has resumed discussions started earlier this year with a regional electric company, a process that was put on hold when that company was bought by a European corporation that’s a global supplier of lighting and electrical components. His best shot in the near term may be with a community bank interested in arranging an SBA loan, although not for the full amount Flaherty would like to ramp up HI-Lamp production. “It would probably get us at least into initial production,” he said. Leader International has about 30 employees at the Port Orchard plant, and if DEG takes off the workforce would expand. “To produce for where demand is right now, still at a fairly low level, over the first six months we’d probably have to hire 10 people,” Flaherty said. “To get to the level of demand we expect to be at, we could easily hire 50 up to 200 people in the next two years.” “We’ll get it done,” Cathy Flaherty said, “one way or another.”


New Gig Harbor distillery creates a destination

6 • Kitsap Peninsula Business Journal • KPBJ.com November 2012

By Rodika Tollefson Gig Harbor will add one more attraction to its portfolio in November, when Heritage Distilling Co. opens its doors. Long before opening, the business had already attracted some buzz, thanks in large part to its unique business model. The distillery not only produces handcrafted, small-batch premium spirits, but also gives customers the opportunity to do the same. Through a program called My Batch, connoisseurs can choose a preapproved recipe, run a micro-still and help bottle their own product. The program is the only one of its kind in the country, according to head distiller Justin Stiefel, coowner with his wife, Jennifer. “Most people never thought they’d ever legally make their own whiskey,” he said. That’s because unlike wine or beer, spirits can’t be made at home in the United States. The industry is tightly controlled — and even to open a distillery, the paperwork for the federal and state permits is very complex. Everything has to be in place, from location and equipment to recipes, before an application can be submitted to the federal government — and once that’s approved, the state has its own process, which could result in changes. It only took the couple two weeks to get

their federal approval, where it usually takes as long as six months, according to Stiefel. “We were very detailed and submitted everything we knew they needed,” said Stiefel, who is also a lawyer. The meticulous attention to detail is obvious just from looking at HDC’s website (www.heritagedistilling.com). The branding of the company, the stories told about the owners, the presentation of the programs and the labels — all speak to the thoughtful planning of the business. “We both worked in the U.S. Senate and that’s very detail-oriented and focused on the presentation of your argument,” Stiefel said. “Our argument here is to create a destination and create an impression on people.” For enthusiasts who want a personalized experience but prefer to be less hands-on, Heritage Distillery’s Cask Club gives another option for customizing their spirits. Club members get a private 10-liter oak cask, displayed in the lobby area, with their name on it. Each person can determine the strength of the spirits as well as come in regularly to sample — and request for it to be bottled when they feel it’s aged long enough for their taste. “Every spirit has a story — you’ll hear us say that a lot; that’s a theme we honestly

believe in,” he said. Heritage Distillery, which has its grand opening on Nov. 3, has been in planning stages for months, but the dream goes all the way back to Stiefel’s college days, and his curiosity about fermenting even further, to junior high chemistry. He’s even had to design distillation columns while working on his bachelor of science degree in chemical engineering. The couple, who were high school sweethearts, returned to Washington state shortly after changes in law allowed for small Heritage Distilling Co. owners Justin and Jennifer Stiefel distillers to operate and offer stand in front of a 2,000-liter pot still, which was customtastings. They saw an opportunity made in Italy and they call “Nona.” to offer “a timeless product,” as business is also considered womanwell as become part of what Stiefel feels will owned), had her signature in making sure be a booming industry in the state. He Heritage is an attractive place for the ladies. notes that there were 40 distilleries in Which is why one of the labels is Wherskey Washington when they got started, a (changing “his” in whiskey to “her”), a number that is now at 60. lighter drink for the female palate. “For us, it’s a matter of being at the right “Many times in the spirits industry, it’s place, at the right time and with a unique the men’s story that’s been told. So now, it’s model,” he said. “There are only 250 craft the woman’s chance — we are going to distilleries in the United States — 60 of capture the spirit of the woman,” Jennifer them in Washington. Washington is leading said. “A lot of people are bailing on wine the charge, and it’s only been legal for four and bailing on beer. Spirits is the next upyears.” and-coming industry.” The distillery is looking to tap into the Another unique label is Washington’s growing demographics of premium spirits Rye Whiskey, which uses a variation of the enthusiasts, which include the 20recipe that was perfected more than 200 something “millenials” and women. years ago by Gen. George Washington and Jennifer, who is company president (the his master distiller. Steifel notes that even though the Heritage Distilling Co. will host its grand operation required a seven-figure opening on Nov. 3, from 10 a.m. to 4 p.m., with investment, Heritage is a small distillery — tours, samples and other events. A blessing of the amount it would distill in a year is the business will take place at 10:30, followed probably what an operation like Jim Beam by the Pierce County Pipe and Drum Corps would do in a day. marching in with bagpipes. For more “We’re not trying to compete with the information about the distillery, go to big guys. Ours are fairly expensive products. www.heritagedistilling.com. Go to kpbj.com for People who buy them do it because they’re our sneak-peek video of the distillery. Distillery, page 16

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HARRISON from page 5

year with PeaceHealth, a regional system based in Vancouver, Wash., with a system of hospitals and clinics in Washington and Oregon. “We’ll be coming along with the Franciscans into this new company, which we thank has lot of advantges as well,” Bosch said. “So we’re not just affiliating with Franciscan, we’re also seeing a future where we’ll be part of something large enough to work at any scale. “Whatever health reform brings us, we can work together as a system to meet our community needs.”

Bosch also said that the Harrison Medical Center Foundation will not be part of the affiliation, and that money raised from donors will be used only in the local community.

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cultures, values and goals,” said David Veterane, chair of Harrison’s board of directors. “We see this relationship as a way to expand the good work that has been done in our community for the past 95 years.” Franciscan CEO Joe Wilczek said the affiliation “will benefit the community for generations. Both Harrison and Franciscan have long traditions of service. Each provides health care to everyone, regardless of their ability to pay. Our shared mission and values, as well as our shared commitment to excellence, will allow us to work together to better serve residents throughout the region.” The announcement had no information about how Harrison and Franciscan plan to coordinate specific services, or what effect the deal will have on either organization’s staff and facilities. “That is obviously a very important question,” though it’s too early in the process to predict, Bosch said. It will be part of negotiations as the two systems begin to work out a myriad of details, contracts and other partnership arrangements. “My sense is we will try, where we can, to effectively and efficiently consolidate services,” he said. “But our intent is to grow our ability to serve other communities, perhaps through expansion of existing facilities. So both (consolidation and expansion) are possible.” Harrison employees were told about the affiliation plan earlier in the day, before it was announced publicly on Oct. 16. Harrison’s health care system operates 20 locations, all but two of them in Kitsap County. Harrison’s main hospital, built in Bremerton in the 1960s, houses a cardiovascular center that includes openheart surgery; an oncology department; inpatient and outpatient surgery center; a critical-care unit and a 24/7 emergency room. The hospital also has an orthopaedics department, although that will be relocated to a new orthopaedic hospital scheduled to open next summer at Harrison’s Silverdale campus. Harrison operates a birthing center, pediatrics unit, outpatient surgery center and 24/7 emergency room at its existing Silverdale facility. Harrison’s facility in Port Orchard provides adult primary care, 24/7 emergency care, as well as a lab and a number of specialist services. There is also an urgent care clinic in Belfair; various specialty clinics in Bremerton, Silverdale and Poulsbo; and a family care clinic in Forks. Harrison Medical Center (http://www.harrisonmedical.org) also offers health and wellness services at the Haselwood Family YMCA in Silverdale. Future expansion plans include building an ambulatory care center on Bainbridge Island within the next two years. Franciscan Health System includes St. Anthony Hospital, which opened in 2011 in Gig Harbor; St. Joseph Medical Center in Tacoma; St. Clare Hospital in Lakewood; St. Francis Hospital in Federal

Way; St. Elizabeth Hospital in Enumclaw; Franciscan Hospice House in University Place; and the Franciscan Medical Group network of primary-care and specialty clinics in Kitsap, Pierce and King counties. Franciscan, which has 8,400 employees and 1,550 medical staff members, has in recent years opened a medical clinic in Port Orchard and began offering hospice care in Kitsap County. It has so far been unsuccessful in seeking state approval to provide home health care in Kitsap. Franciscan’s parent company is Catholic Health Initiatives (CHI), a national nonprofit health organization with headquarters in Englewood, Colo. CHI announced a planned merger earlier this


Bainbridge ‘Apple people’ hope to take iPhone market by storm By Rodika Tollefson Robert Solomon is used to getting the attention of tech geeks — his former company, Datadesk Technologies, developed and produced the MAC-101 keyboard, one of the biggest-selling Macintosh accessories. But even he was surprised at the media attention his newest invention has received months before even going into full-fledged production mode. Solomon and his son, Cody, two of the three principals at Bainbridge Island-based SoloMatrix, are self-described “Apple people” and gadgeteers. Together with co-founder Johannes “Hans” van Houte, they have created what they hope will become a blockbuster product for iPhone lovers everywhere: a physical keyboard. “A physical keyboard is the most-requested thing for the iPhone market,” he said. Sure, keyboards are already available for the phone but the challenge is that Apple does not allow any secondary accessories that require a driver, so the solution is to use Bluetooth technology. But since a Bluetooth device needs its own battery, it “turns it into a clunker,” Solomon said. Solomon — one of those Apple fans who

stood in line for hours when the first iPhone came out — was determined to figure out a solution and worked for two years to come up with answers. “We didn’t know how to do it. We started trying everything we could think of with basic R&D,” he said. “We developed the technology and now we’re developing the products to go with the technology.” The products are a family of Spike TypeSmart keyboards, which don’t require an external power source or Bluetooth. And SoloMatrix promises that Spike not only allows users to type easier and faster but also more accurately and under any conditions— including while wearing gloves. The keyboards come complete with hard cases (the case is part of the keyboard’s functionality) and are priced retail at $35 for Spike 1 and $60 for a premium Spike 2 (there’s also a $150 limited edition Spike 3). In mid-October, the newly patented devices were in the tooling stage, with the first production run to follow a month or so later. The plan is to manufacture 10,000 units in this first run — but possibly a lot more if a potential big customer (currently in discussions with

8 • Kitsap Peninsula Business Journal • KPBJ.com November 2012

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Robert and Cody Solomon are the fatherson team running the tech company SoloMatrix. Courtesy photo

SoloMatrix) comes through with a large order. Already, preorders have been coming in strong. About $10,000 in preorders came in, without much advertising, in the first three weeks after they became available online (www.solomatrixinc.com). Part of that is possibly due to the buzz generated through a Kickstarter online crowdfunding campaign earlier this summer (see separate story about crowdfunding). The company surpassed its $75,000 Kickstarter goal by nearly $6,000, attracting 1,205 backers (most of whom will receive one of the Spike keyboards in return). “Beyond just raising capital, it was a great way to do early marketing,” Cody Solomon said. “When we release the product, we’ll have a solid base to work from.” Just before the Kickstarter campaign launch, Spike began building momentum. Solomon, albeit hesitantly, entered SoloMatrix as an exhibitor at the Consumer Electronics Association’s Line Show in New York City in June, bringing the Spike prototype along. The result was product reviews by various publications and blogs, from the Huffington Post to PC World, as the crowdfunding campaign was in full swing. The company was also one of three finalists for the most innovative product in the show’s Technovation Awards. “Nobody was more surprised than me at the amount of press we got. It was a testimonial to what we’re doing,” Solomon said. Bridging the generations Robert Solomon is a known entity in the world of keyboards. Before selling Datadesk (which was based in Rolling Bay on the island) in 2002, he created several award-winning products. In addition to Macintosh keyboards, he developed a Palm mini-keyboard, the first detachable one marketed by Palm exclusively for PDAs. Microsoft at one point offered Datadesk’s MAC-101 keyboard in conjunction with its Word software for Macs — a move that put his company on the map, Solomon said. He had been more or less retired after the sale when Apple swooped the smartphone market with the iPhone, and he saw an opportunity to come back to the drawing board.

Even as a longtime geek and visionary, Solomon admits that his generation does things differently from many of today’s smarthphone users, the young crowd. (According to the Pew Internet and American Life Project, the highest smartphone-adoption rate for adults is among college grads and 18- to 35-year-olds, but even among teens, as many as 25 percent own a smartphone.) That’s where Cody — one of Solomon’s five children — comes in. In his late 20s, not only does Cody understand the user experience of the younger generation, he has the business savvy backed by a master’s degree in business management. “He really speaks to what people his age do and how they use things,” Solomon said. Like all his siblings, Cody grew up around his father’s tech genius and became involved with Datatech when he was young. He soon found himself answering a lot of customer service and tech support calls. But it wasn’t until grad school, when he helped SoloMatrix secure a few substantial investments, that he became interested in the tech industry as a potential career. “It’s an absolutely great learning experience to be part of a company that has an idea and brings it to fruition,” said Cody, who graduated with his master’s degree from New York University in May and is SoloMatrix’s chief information officer. The company is already looking to its next products, not just for iPhone 5 and potentially the iPad but also beyond Apple. The technology works for other touch-type devices on platforms such as Android, and Solomon said they’ve been in discussion with carriers and others for a larger-scale deployment. SoloMatrix may not have cornered the market on smartphone keyboards — even the iPhone has various other options on the market (most of them rated low). But Solomon hopes his team’s vision will take SoloMatrix to the next level. “We could become the go-to people for keyboards in the smartphone market,” he said. “We have the opportunity to build a reputation in that area and become that company.”


Popularity of crowdfunding catches up to businesses Each project has the option of offering rewards, or perks, and often times in the case of start-ups they are actually future products. That’s what Bainbridge Island’s SoloMatrix did as well — offering supporters one of its upcoming iPhone keyboard models, depending on the level of contribution. The company is in the process of manufacturing its first batch of Spike TypeSmart keyboards (see related story), and has raised almost $81,000 through Kickstarter (with a goal of $75,000). Cody Solomon, the company’s chief information officer and the son of Robert

Solomon, the brain behind the Spike technology, said the campaign was as much about getting exposure as it was about the funds. The percentage paid to the site for the campaign was like investing money into early marketing, he said. And the momentum seems to continue — in the first three weeks of making preorders available on its website, the company had $10,000 in presales. “Crowdfunding gives people a chance to be part of something … like an innovative technology that’s going to come to market because you’re willing to take a risk to invest into it,” said Rachel Maxwell, CEO

and co-director with Casey Dilloway of Community Sourced Capital (www.communitysourcedcapital.com). The two are recent graduates of Bainbridge Graduate Institute and more than two months into the process of creating a new and unique crowdfunding platform. They are working with businesses across Puget Sound on a small scale currently, and eventually plan to take CSC to other states. The CSC platform is a micro-lending model for existing businesses to get loans Crowdfunding, page 11

November 2012 Kitsap Peninsula Business Journal • KPBJ.com 9

By Rodika Tollefson When Bainbridge Island’s Soup’r Burgers opens its doors (planned for Oct. 31), the new burger joint will have several dozen instant supporters. The diner, which will serve healthy food including burgers from grass-fed beef, built a fan base weeks before opening thanks to an crowdfunding Josh Bortman online campaign via Kickstarter. The goal of raising $12,000 in three weeks was exceeded by more than $7,000 — and the donors in exchange got “rewards” ranging from a meal to a lifetime supply of burgers, based on their contributed amount. Josh Bortman, one of the Soup’r Burgers owners, said he and his partners had enough money to open the business in Bainbridge Pavilion but they wanted something extra — to hire local artists for some “cool designs.” Launching the online campaign also had a second purpose: getting the word out and having the community involved. “To me, the best part was seeing the overwhelming response and people saying it was a great idea and they couldn’t wait for us to open,” said Bortman, who’s also a coowner of the natural cosmetics store Pretty Stick and previously was one of the owners who operated Real Foods Market and Café until December 2010. “It was a good PR campaign — getting 106 people to back our product was awesome.” Crowdfunding has become a popular way to raise money for everything from charitable causes and medical bills to independent films and education. It’s also caught the eye of many business start-ups in various industries, and is especially popular with tech companies. Crowdfunding is similar to online crowdsourcing except that instead of soliciting ideas or other type of input, the “crowd” is being asked to collectively fund something. Numerous platforms have sprouted over the last few years for this purpose, with kickstarter.com among the more popular ones. Some platforms cater to specific projects, such as science, and a few are focused specifically on entrepreneurs. Congress recently changed its rules to make it easier to make unaccredited investments through crowdfunding, though not many platforms currently use an actual investment model. (The contributions in most cases are essentially donations, even when donors receive “perks,” except they are not tax-deductible unless the fundraiser is sponsored by a nonprofit). Millions of dollars have been raised through crowdfunding, with some projects more successful than others. (Among Kickstarter’s poster children of success is a gadget called TikTok+LunaTik, which raised more than $940,000). Each platform is different but most require for the fundraising goal to be met in order for the project to actually get the funds; otherwise the money is refunded to contributors. Usually the platforms charge a percentage of the money or some other fees.


Bremerton entrepreneurs find niche among the stars community (Drupal is an open-source content management software). This has allowed them to make many business connections as well as raise their profile. They hope next year’s Drupal conference in Portland will expand the opportunities further. Groh and Kelley Courtesy photo play off each other’s The stars of SuperStar Media’s Bremerton office (left to right): strengths, which is why Mike Walpole, Chris Clark, Sean Kelley and Joe Groh. Kelley is more into the business side of things. “The more Sean and I are able to let go, the An accomplished programmer, he’s also more we can focus on work on the company found a passion for design. And Groh, while instead of in it,” Groh said. He notes that they coming from an artistic background, has have bootstrapped the company all along, evolved to do programming. So both can be taking small and calculated steps toward hands-on with their projects all the way growth. through. In addition to seeking out more business Despite those capabilities, the partners clients (they’ve already done work in that have been learning to let go a bit. They say arena, including for clients such as Microsoft), they have a phenomenal team of employees some of their ideas include stretching into the who can do some things better than they can, sports and cinema industries, as well as and they have been learning how to give those developing mobile applications. creative types more autonomy. “We are doing our best to shift our “It’s been a wonderful experience, seeing a entrepreneurial spirit into higher gear,” Kelley little more freedom and people taking control. said. We’re a team,” Kelley said. “Lately one of the Fellow Bremerton High and WSU grad challenges is learning how to delegate work so Nate Murphy, who runs the Kitsap Public we can focus more on the business.” Relations communications firm and has office As they’ve been learning to “let go,” the two space inside SuperStar Media, is excited to partners — who say they don’t see themselves help his two friends and colleagues tell the as bosses but as equal members of the team — story about their successful, multimillionfeel the time is right to take their company to a dollar business. new level. With the development and design “I do think these guys are one of the bestsides running smoothly, they are ready to kept secrets, not just in Kitsap County but in implement new ideas and expand their reach. the entertainment industry,” he said. “They came this far and worked with all these clients without any marketing.” No matter where their entrepreneurial spirit takes them next, Groh and Kelley seem excited to stay true to their roots. Being surrounded by friends (and former college roommates) makes them feel, in a way, like they’re hanging out and having a good time. And they are having a good time, no doubt, 2 not just doing what they love but also having K Strategic Solutions brings together over the flexibility to focus on their top priorities, 50 years of experience and a high level of their families. Each is a father of two, Groh with boys and Kelley with girls (their wives best-practice consulting services to you. both come in as well to help with accounting). Our experts can keep your operation Being together so much and thoroughly Proud sponsor of the running smoothly and yield immediate enjoying their work does sometimes make West Sound Technology them feel like they’re “big kids pretending to improvements in your productivity. Association (WSTA) be adults,” Groh admits. But they’re serious when it comes to one basic thing — and it Windows 7 • Small Business Server 2008 • Exchange, Outlook and Remote Access/Offices • Business Analysis • VoIP phone systems perhaps explains how their friendship has Sharepoint, Joomla and Custom Website consulting and design • System Integrations • Custom Software Development endured through their business partnership Disaster Recovery/Failover • Offsite Backups • Managed Services • Strategic Consultancy • Board Facilitation • Issue or Policy Advocacy (which, as many entrepreneurs will testify, can be a challenge). K2 Strategic Solutions is a “It comes down to one simple rule,” Groh cooperative partnership explained. “If one person feels strongly about between the following 360-792-9100 • 206-356-8449 360-697-9009 • 206-356-0668 (something), we go that way. … It’s about professional companies: info@professionaloptions.com • www.professionaloptions.com info@kcsco.com • www.kcsco.com respect.”

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By Rodika Tollefson When star musicians or comedians need a new website, one go-to designer is Bremertonbased SuperStar Media. The 11-year-old company, located downtown, has created websites, custom social media platforms and various digital content for the likes of Neil Diamond, Chris Rock, REO Speedwagon, Pitbull and George Winston — the list goes on. Each site is unique, custom-designed and programmed, but they all have an unmistakable flair and creativity that is a signature for SuperStar Media (superstarmedia.com). And as it continues to evolve, the company hopes to use this type of pizzazz to wow a new niche: the business world. “Our focus is mostly entertainment but we feel we bring a lot of swagger to our business clients,” said Joe Groh, co-owner and art director. Groh and his business partner, Sean Kelley, are 1994 Bremerton High School grads. Both went to Washington State University, where Groh studied art and digital imaging and Kelley majored in information system management after a short stint as a broadcasting major. They both pursued childhood dreams and talents: Groh was a budding artist who wanted to be a graphic designer as a child, while Kelley consistently plotted about one business idea or another. The pair graduated from WSU during the dot-com bust, when jobs were scarce. Kelley, in fact, had an interview lined up in New York for a systems administrator job, but the interview was cancelled just as the stock market tanked. Since they’ve both been doing multimedia and web design projects, starting a business together seemed like a good move.

That’s where a little serendipity came in. Before and during college, Groh and Kelley — both musicians who played together in a band — got to know and do some design work for Bremerton’s MxPx. The punk rock band eventually went big, signing with major labels and producing several albums. Their label company came to Groh and Kelley as they were getting started and the rest, as the cliché goes, is history. “We immediately started with the big boys,” Groh said. Operating first out of Port Orchard for six months, SuperStar Media then moved to its founders’ old stomping grounds, Bremerton. “Our roots are here; we have friends and family,” Kelley explained the decision of locating in Kitsap. The company started growing immediately — they added an employee, another WSU alum and former roommate, within the first year. Now, SuperStar Media is an eight-person business and recently opened a second physical location, in Portland, after operating a virtual team there for a couple of years. The focus on the entertainment media was deliberate. With their passion for music making the industry a natural fit, Groh and Kelley said they made the decision from the beginning to focus on a niche instead of trying to market to a broader customer base. Their efforts paid off — they say they’ve stayed busy since day one. Being in high demand also means they can be selective with their projects. “But just because you’re not a big name, it doesn’t mean you can’t call us,” Groh said. “It’s about doing the best work for the clients who need our help.” One competitive advantage is the company’s involvement in the Drupal

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Applied Technical Systems expands Applied Technical Systems, Inc. (ATS) has expanded its operations in October, opening a new location on the Silverdale waterfront. The company provides “data-todecision” applications to customers such as the U.S. Army and U.S. Navy. The company said that the plans to expand were initiated after a string of new

E-cards available for library’s digital branch Using features available in Kitsap Regional Library’s new system software, the library has begun offering “e-Cards” for people who wish to access only the online collection of downloadable e-books, audiobooks, music and research databases. Kitsap residents who have no library card and do not wish to borrow items from KRL’s physical collection can sign up online to get the new card. Those who apply for the card using the online application form will be issued an ecard bar code that gives them access to KRL’s downloadable collection and searchable databases. Us ing the e-card, library members can grab a book for their Kindle, download album tracks from Freegal and use resources like Brainfuse, KRL’s online homework help, Live Mocha and Mango language learning programs, or the resume and test preparation support offered by Job and Career Accelerator. Anyone who already has a library card can use its bar code to access these online collections. Anyone who receives a n e-card on the KRL website has the choice of later coming into a branch library with photo ID and proof of address to upgrade to a full library card and the borrowing privileges it adds – access to all of the books, CDs and DVDs in the KRL collection of more than 525,000 items. For more information, call digital branch manager Sharon Grant, 360-475-9036. from page 9

($5,000 and up) from the local community to finance growth. The crowdfunders are called “squareholders” (the businesses sell “squares”) and each is limited to investing $100. The business has two to four years to repay the interest-free loans. “We are mitigating (the investors’) risk by looking at the business’ proven revenue over time,” Dilloway said. “We don’t want it to be rescue capital.” Dilloway said successful crowdfunding takes the funders and the fundraisers having the same goals in mind. “If you think people will support your idea or vision, you’ll be set up for a great campaign, but if you are doing it for easy money, you’ll see that in the results,” he said. Cody Solomon also recommends keeping things simple. If he had to do it again, he said he would have fewer products as part of the campaign to eliminate confusion. Bortman echoes that advice. “Be clear of the ‘ask’ and what the money goes to,” he said. “And be generous in the exchange.”

in the coming year. We intend to grow in areas of competence where we deliver excellence to our customers and help support their burgeoning needs for automation, datato-decision technology and cost-cutting efficiency.” While ATS is primarily in the federal and defense markets, it has also seen a rise in demand for its services in the commercial market where big data, building usercentered applications that streamline workflow and providing effective decision making tools are all on the rise. ATS also has offices in Alexandria and Suffolk, Va.

The company also announced in October that it was awarded new orders from the U.S. Patent and Trademark Office to begin work on next generation usercentered design user interfaces for trademark examiners and fee processing activities. The user interface, to be created with the help of partners Design for Context, will replace the USPTO’s existing revenue account management system, which will provide better tools for managing requests of data associated with patent application fees. For more information about ATS, visit www.DataToDecisions.com.

November 2012 Kitsap Peninsula Business Journal • KPBJ.com 11

CROWDFUNDING

contract awards required significantly more software engineers. The new office, which includes more than 9,000 square feet of recently outfitted high-tech infrastructure, will be the fourth office for ATS and is located within a short walking distance from its corporate office. The space will enable the Kitsap operations to grow by an additional 35 people. “The opening of this office is an important step toward realizing our growth objectives,” said Rick Leenstra, Sr., president and CEO of ATS. “The new office will be one of many important changes for the company


12 • Kitsap Peninsula Business Journal • KPBJ.com November 2012

Bainbridge entrepreneur sees big potential in ‘adaptive mobile’ technology By Rodika Tollefson There’s an app for just about everything these days, but imagine one that turns your smartphone into a virtual concierge during your next trip. It knows when you’ve landed at the airport and has your rental car ready for you to hop in, with directions already displayed on the GPS to your hotel. When you get to your room, John Eisenhauer your favorite bottle of wine is waiting, the channels have been reprogrammed so they match your home TV and, since this concierge knows all your preferences including food, it has the information on the two nearest Thai restaurants waiting at your fingertips. And, all this and more happens as you seamlessly move from one location to the next without having to even stop and show your credentials. Sounds a little Jetsonian? Bainbridge Island entrepreneur John Eisenhauer says the technology is already here and he knows this firsthand — his company, Kombi Corp. (kombicorp.com), has developed a smartmobile platform to sense what a specific user needs at a specific time and location, based on a variety of factors. Mobile devices already know what the user is doing and where, and if that can be associated with a specific set of rules and the reason the user is pushing the screen, the device can then connect the person with the exact solution, Eisenhauer said. The applications are broad, according to Eisenhauer — from retail loyalty reward programs and inventory management, to various security and disaster-response scenarios and dynamic triage. They could also include federal or local disaster management, healthcare delivery, supply chain and logistics, among other things. The smartphone essentially acts as a sensor, reporting the information back to the cloud — anything from the person’s proximity to a specific location, to the temperature in the room. The data is run through an engine against a specific set of business rules, and then suggestions are delivered back to the device as appropriate for that person, in that location, at that specific time. The idea is to anticipate the person’s needs, whether that’s in a consumer or professional environment — in the words of Kombi, it’s “masspersonalized, ambient intelligence.” “You’re not just meat moving through space, we know who you are and what you need next. We can do a mass-personalized world and deliver it through your smartphone,” Eisenhauer said. One simple application is for the smart office. Special outlets that communicate through the smart grid could turn off lights and electronics based on who’s left at the office, saving on energy costs. “By using technology like ours, you can become people-centric and process-centric, instead of focusing on metal and machines,” Eisenhauer said.

Although some users may see this idea as an invasion of privacy, Eisenhauer said the technology has several levels of opt-in steps: The person has to choose to run the application and tell it who he or she is. Plus, there is transparency about what information is captured — it’s not personal information, and it’s not stored on the Kombi system. In fact, he says, it’s like being handed a secret envelope that provides access to a place but without knowing what’s in the envelope itself. “We’re there to enforce the rules but we don’t have to know what the rules are. We just pass things back and forth,” he said. Eisenhauer is not a stranger to big ideas. His last one resulted in technology and a business model for internet signs and kiosks that were deployed all across the United States and in nearly two dozen other countries. It was his company at the time, Mercury Online Solutions, that coined the term digital signage. Mercury was named twice as one of the fastest-growing private companies in the state. It was also ranked 46th on the Inc. 500 list of fastest-growing businesses in the country in 2003. “That business was 100 percent organically grown,” Eisenhauer said. He sold Mercury Solutions to 3M Corp. in 2005, which gave him “kind of a paid vacation, a midcareer retirement.” It also limited him on the type of future business activities he could pursue. But it seems he has found a new niche with Kombi — as well as other enterprises. Eisenhauer owns a few other businesses including Great Catch Management, and is an investor in several island properties. “I stopped using (the description of) serial entrepreneur. It’s more of a chronic entrepreneur,” he said, adding that he’s worked for himself since 1982. “I’m a systems person and I look for things to fix, and I have the stubbornness to keep going when the ideas are enormous.” He says instead of investing in the stock market, he is more interested in businesses that would fuel the local economy and make it sustainable — this philosophy based on lessons learned through Bainbridge Graduate Institute, where he serves on the board and was previously chairman. The holder of “Man of the Year” title from Bainbridge Island School Trust and “Business Person of the Year” from the island’s chamber of commerce, Eisenhauer is known as a philanthropist who supports both local and global organizations. And as if all his other activities didn’t keep him busy enough, Eisenhauer is an accomplished musician who plays several instruments (his goal is to add a new one each year) and has performed with bands. He has also opened up his home and yard for regular concert series (hosting as many as 150 people), fundraising events and performer jams. “For me, a lot of what I do when not sitting at a keyboard doing business is putting calluses on my fingers,” he said. “… I tend to be a very abstract person on one level … and the outrigger part of me is exceedingly tactile.”


November 2012 Kitsap Peninsula Business Journal • KPBJ.com 13


Congratulations — Class of 2012 Drawn from a pool of more than 100 entries the Kitsap Peninsula Business Journal would like to introduce you to the “40 Under Forty” Class of 2012. Our extremely discerning panel of judges selected 40 of the Kitsap Peninsula’s most outstanding individuals based on their career success, community involvement and commitment to making a difference. These young men and women represent our next generation of business community leaders who will help influence, direct and inspire the future of the Kitsap Peninsula and its growth.

14 • Kitsap Peninsula Business Journal • KPBJ.com November 2012

From all the materials the judges have reviewed, it is safe to say our future is in good hands!

Heather Len Adams

Jeannie Allen

Becky Bayness

Chalcy Blake

Gina Buskirk

Community Planner Kitsap County

Owner / Marketing Manager Jeannie Allen Designs / Kitsap Regional Library

Insurance Agent Olympic Northwest Insurance

eServices Manager Peninsula Credit Union

Prosecutor City of Bremerton

Sandra Butler

Caroline Campbell

Erika Cecil

Carla Charters

Annie Corrington

Area Director of Sales Oxford Hotel Group

Attorney Campbell & Miller, PLLC

Owner Boomers Pet Boutique

Owner & Founder Viva Flow Yoga

HR Generalist Metagenics, Inc.

Candace Edwards

Melody Sky Eisler

Joe Groh

April Ihde

David Johnson

Marketing Communications Coordinator Harrison Medical Center

Branch Manager Kitsap Regional Library

Co-owner & Art Director Super Star Media

Senior Financial Services Representative Kitsap Bank

Owner Northridge 4x4

Diane Kehm

Sean Kelley

Dr. Jessica Kennedy-Schlicher

Augustine Lujan

Catie Malcom

Editor & Publisher Macaroni Kid Kitsap

Co-owner & Director of Development SuperStar Media

Physician Harrison Medical Center Urgent Care

Owner Rush Security

Owner Catie’s Creations


Brett Marlo DeSantis

Abigail McDowell

Daniel Miller, Jr.

Derek Mills

Tina Moore

President Brett Marlo Designs & Design Build

Process Improvement Manager Puget Sound Naval Shipyard

Attorney Campbell & Miller, PLLC

Insurance Agent Country Financial

AMI Advanced Medical Imaging Integrated Chiropractic

Nate Murphy

Sean Neal

Emily Olson

Melissa Reed

Stephanie Sagle

Principal - Owner Kitsap Public Relations

District Director Boy Scouts of America, Chief Seattle Council

Vice President Controller Kitsap Bank

Owner & Graphic Designer One Nine Designs

Director of Marketing & Sales Ohana Harbor Coffee Company

Tim Samuels

Melissa Sanders

Shane Skelley

Shad Smallwood

Mitchell Smee

Loan Officer The Legacy Group

Financial Technician Puget Sound Naval Shipyard

Owner Skelley Works LLC

VP of Sales & Marketing Smallwood Design & Construction, Inc.

Commercial Insurance Broker Propel Insurance

Dr. Jen Stonequist

Rachael Taylor

Ryan Witt

Halin Zindell

Owner Advanced Bookkeeping & Payroll

Director of Shelter Medicine Kitsap Humane Society

Human Resources Manager Kitsap Sun

Partner Attorney Glisson, Witt & Altman

Owner Pure Health Zindell Acupuncture

Thank you to our sponsors...

November 2012 Kitsap Peninsula Business Journal • KPBJ.com 15

Lisa Marie Spencer


16 • Kitsap Peninsula Business Journal • KPBJ.com November 2012

Businesses recognized for integrating employees with disabilities into their workforce and assist with training the new employee. Consultants provide innovative and individualized training to ensure the success of the person in his or her job. Last year Trillium started a new program recognizing businesses that best represented what the company sought to achieve: Courtesy photo working environments Jocelyn sorts mail with co-workers at Systems Design, a Poulsbo business where she found a job through Trillium Employment Services. successfully integrating employees both with and Sitting in a spacious corner office, without disabilities. Trillium consultants surrounded by stacks of letters, Jocelyn each chose one business they worked with, works diligently to process the mail. Jocelyn and those employers were presented with a was the answer Systems Design needed: a plaque thanking them for their efforts. part-time staffer to help the business process Some of the businesses that Trillium has large amounts of returned mail. recognized this year are That One Place Several months ago, Systems Design in restaurant in Port Orchard, Bremerton Bar Poulsbo contacted Trillium Employment and Grill, the Pepsi Cola warehouse in Services, a nonprofit that helps businesses Bremerton, the Boat Shed café in recruit and train employees with disabilities Bremerton, and Hop Jacks restaurant in to fill their niche labor positions. Silverdale. Systems Design is among 60-plus The Trillium staff’s goal is to make hiring businesses in Kitsap that have made a a new employee as easy a transition as values-based business decision to hire an possible for a business. Consultants support employee with a developmental disability. both the employers and new employees, National Disability Employment Awareness and work to find a new staff member who Month was marked in October, giving all fits into the workplace flow. businesses an opportunity to consider how Adam Winterowd, the kitchen manager they can strengthen their workforces by at Bremerton Bar and Grill who worked including people with diverse abilities. with a Trillium client, said “In terms of Trillium is a local nonprofit organization training, I have had to adapt very little and with over 30 years of experience assisting Trillium was there to support us. All people employers with hiring qualified workers. Our are different, and effective management employment consultants work with local requires adaptability in terms of providing businesses, learning about job positions and each employee with the tools needed to business needs. Once a qualified candidate is perform efficiently and effectively at their selected, Trillium assists with hiring the job.” employee, with consultants assisting in the For more information about how to interview process and completing new hire integrate your workplace, contact Trillium paperwork. through the website www.trillium.org, or Trillium staff also sets up transportation call program manager Heidi Scheibner at and any other necessary accommodations, 360-698-6659.

DISTILLERY

from page 6 looking for a particular flavor profile,” he said. To receive the designation of “craft” distillery, Heritage has to use at least 50 percent of ingredients sourced in Washington state. The idea suited the couple well not only because it gives them better control of the quality of their product, but also because they want to support local businesses. Everything the company needed for its opening, from labels to custom shelves and bottles, was made in the region, in addition to raw ingredients coming from Washington farms. “Every single thing that has been put into this distillery, whether it’s the sheetrock or the electrical or plumbing, or architecture or lighting — every single one of those people added something to our distillery and every single one has a story to

tell,” Jennifer said. “We’re excited that we can showcase their stories at our distillery.” The Steifels, who have lived in Gig Harbor for about three years, said this was a perfect location for them to open a destination business. They also plan to offer the distillery as an event venue as well as hosting distilling classes for groups, and are taking advantage of their proximity to Gig Harbor’s biggest hotel, the Inn at Gig Harbor, their next-door neighbor. Gig Harbor marketing director Laureen Lund said she’s already seen the classes bringing in overnight visitors for several days. “They’re doing awesome things to expose people to Gig Harbor,” she said. “They’ve really thought through how to get people to take ownership (of their experience) and bring in different audiences. I’m really impressed — not only are they passionate about their product, they’re very business-savvy.”


November 2012 Kitsap Peninsula Business Journal • KPBJ.com 17


GREEN CHOICES, Healthy Communities

Choose ENVIROSTARS businesses.

SM

CERTIFIED

AUTOMOTIVE REPAIR & SERVICE ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★ ★★★★ ★★★★ ★★★

B & B Auto Repair Bainbridge Island Auto Repair Benchmark Automotive DME Auto Service Firestone Complete Auto Care Firestone Complete Auto Care Hansville Auto Repair Hockett & Olsen Automotive Liberty Bay Auto Center Rolling Bay Automotive Suquamish Auto Repair On Demand Auto Repair LLC Parr Ford Mazda Service West Sound Automotive Advantage Autoworks

★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★

Alternative Autobody, Inc. Auto Body Experts Jerry's Auto Rebuild John's Body Shop Kingston Collision & Glass Modern Collision Rebuild North Kitsap Auto Rebuild Parr Ford Mazda Auto Body Trew Auto Body, Inc. Ken's Auto Body

Bremerton Bainbridge Island Kingston Poulsbo Silverdale Bremerton Hansville Bainbridge Island Poulsbo Bainbridge Island Suquamish Silverdale Bremerton Silverdale Bremerton

DRY CLEANING 360-377-0682 206-842-1067 360-297-6812 360-697-3399 360-698-3233 360-479-1775 360-638-2372 206-842-2484 360-697-4066 206-842-7678 360-598-4000 360-509-7394 360-479-1353 360-692-1414 360-373-1448

★★★★★ ★★★★ ★★★★ ★★★★ ★★★★ ★★★★ ★★★★ ★★★★

Fabricare Cleaners Amy's Cleaners East Towne Cleaners Eldon's One-Hour Cleaners Old Town Cleaners Orchard Cleaners Society Cleaners Super Cleaners

★★★★★

Watson Furniture Group

360-479-2040 360-779-4445 206-842-4063 360-779-2938 360-297-1708 206-842-8053 360-779-4799 360-479-1353 360-479-8739 360-876-2448

★★★★★

BICYCLE SHOPS ★★★★★

Classic Cycle

★★★★★

Kat's Carpet Care

★★★★★ ★★★

Olympic College Automotive Program Olympic College Maintenance Fac

★★★★★

Centennial Contractors Enterprises

★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★★

Agape Dental Care Bock, Chris DDS & Hutchinson DDS CD Family Dentistry Hablutzel, Allen DDS Holdren, Rose DDS Hoover, Kregg DDS Huey, Michael DMD & Sevak, Adamian DDS MS PS Huey, Michael DMD & Sevak, Adamian DDS MS PS Ihland Garden Dental Care Mayes, Amanda G. DMD Meadowdale Dental Morell, Michael R. DDS PS Peterson, Jeromy A. DDS Puhn, Scott R. DDS PS Weiss, Patricia J. DDS Wicklund, Lance F. DMD PLLC Anderson Hill Dental Bainbridge Dental Care Bial, John J. DDS PS Eagle Harbor Dental Family Dental Associates Gaskins, Karlie A. DDS Heinemann, Mark R. DDS Houpt, David C. DMD Kingston Dental Kitamoto, Frank DDS Kitsap Implant & Periodontics Malidore, Drew DDS Pollard Dental Rencher, Lance G. DDS Schwager, Steven G. DDS Silverdale Dental Tracyton Dental Valhalla Dental Village Dental Bowman, Brian DDS Current Dental Dr. Pitchers Practice Hepworth, Bradford DDS MD MS PC Johnson, Tracy R. DDS PS Poulsbo Dental Center Schoepflin, Ronald L. DDS PS

Bainbridge Island

206-842-9191

CLEANING SERVICES Suquamish

Poulsbo

★★★★★ ★★★★★

★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★ ★★★★ ★★★

360-697-4651

Bainbridge Island School District #303 Bremerton High School Automotive Program Central Kitsap High School Automotive Program City of Bainbridge Island Public Works Maintenance Facility Kitsap County Fire District 18 North Kitsap School District Transportation Facility Olympic High School Automotive Technology Port of Bremerton Airport and Business and Industrial Park West Sound Technical Skills Center Kitsap Public Health District North Kitsap Fire & Rescue City of Port Orchard Maintenance Facility

360-698-2769

DENTISTS

18 • Kitsap Peninsula Business Journal • KPBJ.com November 2012

★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★ ★★★★ ★★★★ ★★★★ ★★★★ ★★★★ ★★★★ ★★★★ ★★★★ ★★★★ ★★★★ ★★★★ ★★���★ ★★★★ ★★★★ ★★★★ ★★★★ ★★★★ ★★★★ ★★★ ★★★ ★★★ ★★★ ★★★ ★★★ ★★★

Bainbridge Island Bremerton

206-842-4117 360-479-9363

Silverdale

360-662-2516

Bainbridge Island

360-842-1212

Poulsbo Kingston

360-697-8291 360-394-2893

Bremerton

360-662-2793

Port Orchard

360-674-2381

Bremerton Bremerton Kingston Port Orchard

360-473-0577 360-337-5604 360-297-3619 360-876-2722

LABORATORIES 360-475-7345 360-475-7812

CONSTRUCTION Silverdale

360-394-1300

GOVERNMENT AGENCIES

COLLEGES & UNIVERSITIES Bremerton Bremerton

360-478-0334 360-876-3255 360-479-2039 360-373-0700 360-307-0797 360-876-2567 360-307-8531 360-895-3118

FURNITURE MANUFACTURING

AUTOBODY REPAIR & PAINTING Bremerton Poulsbo Bainbridge Island Poulsbo Poulsbo Bainbridge Island Poulsbo Bremerton Bremerton Port Orchard

Bremerton Port Orchard Bremerton Bremerton Silverdale Port Orchard Bremerton Port Orchard

Bremerton Port Orchard Port Orchard Bremerton Bremerton Poulsbo Bremerton

360-377-9800 360-876-6211 360-876-0550 360-373-3515 360-662-1450 360-779-2420 360-377-3779

Port Orchard

360-895-3636

Bainbridge Island Bremerton Bremerton Silverdale Poulsbo Poulsbo Bremerton Bainbridge Island Silverdale Bainbridge Island Bremerton Bainbridge Island Port Orchard Port Orchard Silverdale Silverdale Kingston Bainbridge Island Port Orchard Port Orchard Silverdale Poulsbo Bainbridge Island Silverdale Bremerton Poulsbo Poulsbo Bremerton Bremerton Bremerton Port Orchard Port Orchard Poulsbo Port Orchard

206-842-9890 360-479-2240 360-692-4705 360-692-1122 360-779-3958 360-779-9090 360-373-2025 360-842-5686 360-692-8600 206-842-3764 360-377-4700 206-842-2646 360-895-4321 360-769-0667 360-692-3030 360-692-9437 360-297-2298 206-842-4772 360-874-1954 360-871-0788 360-692-4490 360-779-4141 206-842-8686 360-692-9560 360-479-4152 360-697-5818 360-697-3331 360-479-0444 360-373-2539 360-479-4380 360-895-8841 360-895-8841 360-779-3633 360-871-2959

★★★★★

Twiss Analytical, Inc.

Poulsbo

360-779-5141

LANDSCAPING, NURSERIES & RELATED SERVICES ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★★

Bainbridge Gardens Nursery Bay Hay & Feed, Inc. Goller Grade and Gravel, LLC Pangea Gardenscapes Soil Science Valley Nursery

★★★★★

Sage Manufacturing

Bainbridge Island Bainbridge Island Poulsbo Port Orchard Port Orchard Poulsbo

206-842-5888 206-842-2813 360-779-2388 360-990-3035 360-876-3734 360-779-3806

MANUFACTURING Bainbridge Island

206-842-6608

MARINAS ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★★★ ★★★★ ★★★★

Bremerton Yacht Club Eagle Harbor Marina Port of Bremerton Bremerton Marina Port of Bremerton Port Orchard Marina Port of Brownsville Marina Yachtfish Marine Port Orchard Railway Marina Port Washington Marina Winslow Wharf Marina

★★★★ ★★★★

Cheung, Jason C. MD Kitsap Mental Health Services

★★★★★ ★★★★★

Mayfield & Ashmore DDS PLLC Mayfield & Ashmore DDS PLLC

★★★★★ ★★★★★ ★★★★

Indigo Painting LLC Sabelhaus West, Inc. Action Maintenance & Painting

★★★★★

Sunrise Pest Management

★★★★

Photo Dynamics

★★★★ ★★★★ ★★★★ ★★★★ ★★★★

Companion Animal Wellness Center Day Road Animal Hospital Pet Medical Center Apple Tree Cove Relling Small Animal Hospital Woodside Animal Hospital

Bremerton Bainbridge Island Bremerton Port Orchard Bremerton Port Orchard Port Orchard Bremerton Bainbridge Island

360-479-2662 206-842-4003 360-373-1035 360-876-5535 360-692-5498 360-876-9016 360-876-2522 360-479-3037 206-842-4202

MEDICAL OFFICES, CLINICS Silverdale Bremerton

360-698-6892 360-415-5840

ORTHODONTISTS Bremerton Port Orchard

360-479-2323 360-479-2039

PAINT CONTRACTORS Suquamish Silverdale Kingston

206-842-2050 360-662-9860 360-697-9071

PEST MANAGEMENT Bremerton

360-373-9109

PHOTO SERVICES Silverdale

360-692-3039

VERTERINARY HOSPITALS & CLINICS Poulsbo Bainbridge Island Kingston Bremerton Port Orchard

Call (360) 337-5604 or visit www.envirostars.org, and choose Kitsap County.

EnviroStars is a service of the Kitsap County Health District.

360-779-6534 206-842-1200 360-297-2898 360-373-1467 360-871-3335


November 2012 Edition

Events And Activities VISIT the NEW HBA Website! www.kitsaphba.com On Line Registrations!

Thursday, November 1 Developers Council, 7:30 a.m.

Wed-Fri., November 7-9 BIAW Board or Directors Mtg.

Friday, November 9 HBA Office Closed

Monday, November 12 HBA Office Closed THANK YOU VETERANS! You Are Appreciated!

Tuesday, November 13 Spring Home Show Cmt. Mtg, NOON

Wednesday, November 14 Remodeling Excellence Awards, 5 p.m. Kitsap Golf & Country Club Register to attend now.

Thursday & Friday, Nov 22&23 HBA Closed Happy Thanksgiving all!

Thursday, November 29 Executive Cmt. Mtg (2 p.m.) Government Affairs Cmt. (2:30 p.m.) Board of Directors (3:30 p.m.)

December In View: 12/6/12 @ 7:30 a.m. Developers Council 12/11/12 @ Noon Spring Home Show Cmt. Mtg. 12/13/12 (SPECIAL DATE) Board of Directors’ Meeting

October 11, 2012

2012 OFFICERS

RESOLUTION OF THE BOARD OF DIRECTORS OF THE HOME BUILDERS ASSOCIATION OF KITSAP COUNTY to the Board of County Commissioners, regarding the importance of weekday public access to conduct business with the County’s land development, building, and property conveyance Departments. WHEREAS the Board of Directors of the Home Builders Association serves to represent the Association membership by evaluating matters important to the industry and taking appropriate action on behalf of the membership; and, WHEREAS the Home Builders Association is made up of business owners and business leaders that care about and rely on the construction industry for their livelihoods; and, WHEREAS the Board of Directors and the Association’s membership know that the construction industry is a major employer, important to the many families employed by its member businesses, and that through construction, the County is able to generate crucial tax revenue necessary to provide important community services; and, WHEREAS the Association’s members know that the County’s practice of being closed on Fridays is costing businesses money and losing both the private sector and government important revenue; and, WHEREAS the Board of Directors through the senior leaders of the Association has asked the Board of County Commissioners to return the County Assessor, Auditor, and Community Development to 5 days per week of business; and WHEREAS the Board of Directors believes now is the time for a review of the impact the current practice has on businesses trying to conduct important work in the County; and it is timely because there are indicators of an improving market that a 4 day per week schedule will thwart; and WHEREAS the Board of Directors extends its support to the Board of County Commissioners in evaluating the scheduling and funding issues and offers to assist in finding a mutually agreeable solution; and WHEREAS the Board of Directors voted at the September 27, 2012, meeting to circulate this resolution for signatures from all Kitsap County businesses that support this effort; and. WHEREAS the attached signatures of both Association members and non-members represent support of the Home Builders Association’s Board of Directors, this resolution, and your attention to this important barrier to economic development and commerce. For the Home Builders Association of Kitsap County’s Board of Directors and Membership, Wayne R Keffer President, 2012

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

2012 BUILDER & ASSOC. DIRECTORS Karla Cook • Judy Granlee-Gates Joe Hurtt • David Godbolt, CAPS, CGP, CGR Kevin Hancock • John Leage Robert Lubowicki • Leslie Peterson, CGA Shawnee Spencer • Jim Way, CGB

2012 STATE DIRECTORS Robert Baglio • Greg Livdahl • Gale Culbert Lary Coppola • Judy Mentor Eagleson Justin Ingalls, RCS • Wayne Keffer, CGR, CAPS Robert Coultas • Ron Perkerewicz

2012 ALTERNATE STATE DIRECTOR John Armstrong • Walter Galitzki Brent Marmon

LIFE STATE DIRECTORS Bill Parnell

2012 NATIONAL DIRECTORS Wayne Keffer, CGR, CAPS • Judy Mentor Eagleson

2012 ALTERNATE NATNL. DIRECTORS Michael Brown • Jeff Coombe

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

2012 COUNCIL & CHAIRS Build a Better Christmas. . . Randy Biegenwald Built Green . . . . . . . . . . . . . . . . Walter Galitzki By Laws & Nominations . . . . . . Justin Ingalls Developers Council . . . . . . . . . . . . Rick Cadwell Golf Classic . . . . . . . . . . . . . Shawnee Spencer Govt. Affairs Cmte . . . . . . . . . . . Robert Baglio Remodelers Ccl Chair. . . David Godbolt, CGR, CAPS Membership . . . . . . . . Judy Mentor Eagleson Parade of Homes . . . . . . . . . . . . . Dee Coppola Peninsula H&G Expo. . . . . . . . . . Ardi Villiard Peninsula H&R Expo. . . . . . . . . . . TJ Erickson

HBA STAFF Executive Vice President . . . Teresa Osinski, CGP tosinski@kitsaphba.com Expo & Events Director . . . . . . . . . . . . . . TBD hbaevents@kitsaphba.com Administrative Coordinator. . . Kathleen Brosnan info@KitsapHBA.com

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

THE 2012 FORD F-SERIES TRUCKS TORTURE TESTED

PORT ORCHARD FORD

1215 Bay Street, Port Orchard, WA 98366 • 360-876-4484

brucetitus.com


November 2012 Edition

I am writing this before the elections and do not know who our newly elected representatives will be, but I do know that the HBA will be Wayne R Keffer Construction Inc. extending invitations to all that win the election so we can meet 2012 President and build on our already great partnership we have with local and state government. The HBA is well respected in the community and has worked diligently to be relevant and professional in our approach to solving problems that affect the development, building, and greater Kitsap County community. Our membership is uniquely qualified to take a leadership role at the table because we interface in a professional way with local government on a daily basis. We will continue on this path because local government needs us to be successful. Our success means success for the county and its citizens. New home Construction creates direct and immediate jobs for the community which spends that money in the community to create other jobs. Construction creates immediate taxes and fees for government and creates a long term stable tax base that last for decades. If the county does not help us to be successful they will fail at their job of ensuring the people have the necessary government services important for community success. Local government can and should help us be successful. The first step is returning the county to a five-day workweek. We have been asking for this for a long time and there seems to be no desire to find a way to make it happen. The lack of desire is troubling as government is supposed to serve its citizens. At best this means business can’t be transacted 20% of the time (and if there is a holiday during the week that percentage is even higher). Imagine paying interest on a project for several days because a real estate transaction can’t be filed, or sitting at home not working because you sold a job on Thursday and its a holiday weekend so you cant pick up the permit until sometime later the next week? (These scenarios are hard on everyone and hit the small builders and remodelers even harder.) Another Step that requires immediate action is the process for scheduling and conducting construction inspections. A year ago we were promised that the County’s inspection process would be reviewed. That commitment was put to a back burner while the Department handles other things which we agreed were important. In March of this year, DCD rolled out “Over the Counter Permitting” for many common permits and the result has been beneficial to the entire industry and the Department. The County also embarked on a LEAN process improvement for how permits are reviewed and we are already seeing benefits from Director Keeton’s efforts. We thank the county for the hard work and improvements in both of those areas. However, the time is now to follow thru on the promise to take care of the inspection process. We need reliable, consistent, inspections at a next day pace. Our members cannot stop working and sit on their hands waiting for inspections that may be several days away. I understand DCD is ready to begin this process in November and we look forward to the outcomes. We will continue to push for an environment that allows our membership to flourish. It’s important to them, their families, and all of Kitsap County. If you are a member of the HBA, THANK YOU. Your support provides you great benefits that I hope you are taking advantage of, but it also allows us to continue to work on your behalf. If you are not a member, please call me to find out more about my experience as a member and why your membership is important to your future in our local construction industry. You can find my contact information on the HBA’s new website www.kitsaphba.com.

Wayne Keffer CGR, CAPS

The HBA continues to work on issues of significant importance for our industry. If you are a member, thank you for CGP the contribution you make toward helping all the companies Executive in our county that rely on a Vice President healthy and robust construction industry. In exchange for your annual membership you have many available benefits that I hope each of you are taking advantage of. All are valuable, but at a minimum I hope you have updated your information with the HBA so we can make sure our new website and online member directory maximizes your visibility with other members and the public. Each year the HBA produces a printed member directory. This directory is a very professional tool that we give to all our members and to hundreds of people each year that come to our office or attend our two annual Home Expos. To be in t his directory you must have a current HBA membership. All current members appear in the directory as a benefit of membership. Some members will elect to purchase advertising in this annual directory and we encourage you to consider that option. We have recently sent the ad sheet to all our members, but you will also get a phone call from our publisher, E&M Consulting. Do not hesitate to talk with them a bout your advertising options. The rates are affordable for an ad that will last a full 12 months until we produce the next printed directory. If you’re reading this, and you’re not a current HBA member, I encourage you to consider membership. The HBA is the largest construction trade association in Kitsap County. Among many roles we play, we are proud to advocate for the industry every day. Most of you don’t have the time or resources to prepare testimony or reviews of pending regulations; but through membership you benefit every day by having the Association staff supporting your future in construction. For details about membership, please visit our new website at www.kitsaphba.com or call the HBA office at 360-479-5778. We look forward to signing you up! As you can see from the front page of this ne wsletter, the Board of Directors of the HBA is asking the Board of County Commissioners to seriously look at the budget requirements to return the County to 5 days a week of service. The HBA Board understands that the Auditor and the Assessor are individually elected and that the three County Commissioners do not necessarily have direct influence over those offices, but as it is budget time, it is timel y to remind all the elected offices of the importance of serving the public well. We just concluded the 7th Annual Home & Remodel Expo. It was another terrific event and we are hearing great reports from our vendors of sales being made as a result of the Expo. Don’t miss out! We will begin preparing for the 2013 Home and Garden Expo in the next few weeks and you will want to be on the mailing list if yo u have a business or service you want to get in front of the citizens of Kitsap County. The Home & Garden Expo will be March, 15, 16 & 17 at the Kitsap County Fairgrounds! We hope to see you there! Call the HBA to get on our mailing list now, 360-479-5778.

Teresa Osinski

5 Great Reasons to Buy or Remodel 1. LOW INTEREST RATES Mortgage rates are not expected to remain low. Buying or refinancing now can reduce monthly payments substantially.

2. GREAT PRICES Housing affordability is the best it’s been in years. As the supply and demand in our housing market comes back into balance, prices will begin to rise again.

3. OUR HOUSING MARKET IS IMPROVING Don’t see your dream home on the market? Call one of our professional custom home builders — they can make your dream a reality.

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.

5. PROFESSIONAL BUILDERS, REMODELERS & LENDERS The Home Builders Association of Kitsap County has hundreds of member companies to guide you through any housing questions you have. Visit our website at www.kitsaphba.com or call us at 360-479-5778.

www.KitsapHBA.com


November 2012 Edition

BUILDING CODE UPDATE As we all work hard to try and make ends meet in this tough economy it is easy to get Robert Baglio wrapped up in the day to day The BJC Group struggle and not be aware of 2012 Chair new issues and potential code updates that are being proposed. For this reason I thought it would be helpful to provide an overview of the 2012 code update issues. For information on this code update cycle I turned to the Building Industry Association of Washington (BIAW) website. The following information is from the BIAW website. Every three years the International Code Council (ICC) goes through a code review and adoption process and Washington’s State Building Code Council (SBCC), with the assistance of a Technical Advisory Group (TAG), reviews the proposed national code changes and makes recommendations to the SBCC. A series of public hearings are held during this code review process to receive public input. The hearings are typically in September and October, with the final amendments being adopted by November 30th. Many of the changes focus on the simplification and re-organization of sections as well as clarifications. Some of the main changes in the International Residential Code (IRC) are summarized below:

Government Affairs Committee

Proposed 2012 Changes to the IRC • Doors between the garage and the dwelling units require self-closing devices • Wireless smoke alarms are specifically permitted for satisfying the interconnection requirements in both new and existing dwelling units • Wall bracing provisions have been completely reorganized to place each topic in a separate section and improve the flow of information • Pan flashing is required for windows and doors when flashing details are not provided by the manufacturer Proposed Amendments to the Washington State Energy Code • Interior lighting • A change from 50 - 75% of the permanently installed luminaires, fixtures, or lamps should be high efficiency • Delete the entire section based on federal law regulating higher efficiency bulbs • Air Leakage Rates • Air leakage rates cannot exceed three air changes per hour. This is down from five in the draft document, (BIAW is pushing for this to remain at 5 air changes per hour). • The building thermal envelope shall be constructed to NOT limit air leakage because it creates health problems and mold. Note: the air leakage exception for additions under 750 SF has been deleted from the draft code amendment.

24 hour emergency clean-up

ACTION

O T ff In he eri Se Be ng rv st ic e

Proposed Amendments to the International Energy Code (commercial) • Existing Buildings. When a building changes use or occupancy type to one that uses more energy, the building must comply with the whole code. • Air Leakage Requirements. A continuous air barrier would be required throughout all buildings, not just those over 5 stories. These requirements would necessitate the need for air barrier testing. • Mechanical Requirements. The definition of a simple system would be changed. The only simple system would now be a single zone controlled by a single thermostat. All other systems must follow the complex system path. • Commissioning. HVAC commissioning would be required for all complex systems and simple systems with an economizer. All lighting system would require functional testing. This is just a summary of the proposed code changes. For a complete list of the proposed changes refer to the State Building Code Council website at SBCC@GA.WA.GOV.

Thank You Kitsap County! The first weekend of October was the 7th annual Peninsula Home & Remodel Expo. Wow! This was another great event that has already begun to impact the workload and bottom line of our vendors. We have heard great post-show feedback. The HBA is so glad to be able to provide a high quality event for our industry and the citizens who rely on the professional services they provide. We also want to thank the Kitsap County Fairgrounds staff: Billy, Iain, Jason, Sara, Mike, and Butch were all WONDERFUL! Great job! Thank you so much! Finally, a GIANT thank you to the Kitsap County Sheriff ’s Dept. Cadets. These great young men and women continue to provide an important service to our Expo and we really appreciate what they do. THANK you Deputy Sonja Matthews for your help and support of these fin e young citizens! Peninsula Home & Garden Expo is set for March 15, 16 and 17. VENDORS don’t miss out! Be sure to get on our mailing list now! We will begin working on that show in the next few weeks.

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November 2012 Edition

Welcome New Members Nail Enterprises Inc. 2155 Opdal Rd. E Port Orchard, WA 98366 360-871-3549 And the SPIKE goes to... Robert Lubowicki, Arborview Construction

Nilsen’s Appliance Center PO Box 2450 Silverdale, WA 98383 360-692-3500 And the SPIKE goes to... Randy Biegenwald, Randy Biegenwald CPA

Allen & Charters Enterprises Inc. 243 Bonnie Grace Rd. Sequim, WA 98382 360-461-1381 And the SPIKE goes to... Rick Cadwell, The Cadwell Group/Silverdale Realty

IvyCat Web Services PO Box 1331 Gig Harbor, WA 98335 800-861-4004 And the SPIKE goes to... Brent Marmon, Pacific Northwest Title Company

Thank You Renewing Members Over 30 Years First American Title Ins. Co (34 YEARS!) Over 25 Years Olympic Glass Inc (29 YEARS!) Port Orchard Sand & Gravel Co. Inc (29 YEARS!) 15 Years Bainbridge Landscaping & Topsoil Over 10 Years Stan Palmer Construction Inc (14) Port Orchard Glass (13) Apex Construction (12) Kimco Plumbing (11)

10 Years Peninsula Roofing LLC Over 5 Year Habitat for Humanity (9) Port Ludlow Associates LLC (8) Michael F Wnek PE PS 1st Choice Housekeeping Quadrant Homes Amalani LLC Elite Exteriors Over 1 Year Hanley Construction 1 Year Lexar Homes

UPDATE YOUR HBA Information! With our new website there are added benefits to being a member and we want you to get all the bang for your buck! Please visit the “Find a Member” tab on the new HBA website. View your listing by searching within categories or by your company’s name. You can have a brief company description, your website, links to your social media accounts as well as a company logo. Please send us all the info so your listing can make an impact! 360-479-5778.

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It’s easy to sign up! Just visit www.kpbj.com/user/register and sign-up for our emailer to start receiving breaking area news stories right in your inbox. For more information call (360) 876-7900.

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Columbia Hospitality will manage Gold Mountain By Tim Kelly, Editor Gold Mountain Golf Club is headed for a management transition at year's end when longtime director Scott Alexander leaves, but it won’t involve any newcomers. The city of Bremerton owns Gold Mountain, and has contracted with Columbia Hospitality to manage operations and marketing for the enterprise that includes two 18-hole golf courses, a pro shop and Tucker’s restaurant. Columbia Hospitality has worked for the city for more than seven years managing Kitsap Conference Center on Bremerton’s waterfront. The City Council recently approved a three-year contract that will pay Columbia 5 percent of Gold Mountain’s gross revenues as a management fee, plus 20 percent of any net operating revenues over $600,000 annually. Under the contract, key employees who have worked with Alexander at the golf course for many years will be retained. Club pro Daryl Matheny will take over as director of golf, and Ed Faulk will continue as greens superintendent. “Our council wanted us to keep Darryl and Ed,” Mayor Patty Lent said. “We just didn’t want to lose any of the things we had

in place, and what Scott had developed for us.” Alexander, who’s leaving after 28 years to focus on other business interests but is helping in the transition, oversaw development at Gold Mountain that included adding the highly regarded Olympic Course and a new clubhouse. But his retirement gave the city an opportunity to re-assess the operation’s revenues under a new management arrangement, Lent said. The city previously got revenue only from greens fees, she said, but working with Columbia Hospitality will give the city detailed projections of overall revenues and potential for growth. “The city didn’t have a bottom line of what the revenue could really be,” Lent said, adding that the new management deal “will give us a better view of what the value is of that jewel for the city.” The city’s payments on bonds that financed construction of the Olympic course and new clubhouse will escalate over the next few years. The separate $5 million and $3.1 million bonds were combined and refinanced several years ago. The city will owe $282,000 next year, and in 2018 the payment will reach $471,000, staying at that amount for 10

more years until the bond is paid off. Gold Mountain’s net operating income was $409,000 in 2011, so the city is banking on Columbia’s ability to increase revenue, even at a time when the number of golf rounds played has been dropping nationally. “We’re going to take advantage of what’s been done there the last 28 years,” said Lenny Zilz, Columbia Hospitality’s vice president of operations. “What we bring to the table is additional reach through our marketing processes to reach new customers. We want to entice existing customers to come more often, and find new customers.” “They have a huge marketing budget, which Scott did not have and the city did not have,” Lent said. “I’m looking forward to having the events Columbia Hospitality can provide at Tucker’s, along with the golf.” Besides marketing, Columbia also will handle accounting for Gold Mountain, hiring and training through its human resources department, and cross-staffing with Kitsap Conference Center.

Zilz said Columbia is coming in with conservative projections for boosting revenues under the incentive-based contract, and will focus on “maintaining and improving the quality of the customer experience for golf and for food and beverage. “Once we meet that ($600,000) threshold, we’ll share in that profit.” Lent said she’s excited about bringing Columbia’s resources and expertise to Gold Mountain.“This opportunity with Scott’s retirement gave us a chance to get a management firm in that we knew, to see what the possibilities are, and move forward,” the mayor said. “I think we’re going to be pleasantly surprised by the possibilities.”

A Season of Thanks From all of us at Pacific Northwest Title!

Silverdale CBA509502 Beautifully completed office space on the ground floor of the Cavalon Place II Building (class A), in Silverdale. Six offices, conference room, kitchen, reception and storage in 1815 square feet. Bob Guardino 360-692-6102/360-710-7844.

Commercial CBA486951 $100,000 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.

Bremerton #409249 $495,000 Historic 600 seat Roxy Theater with all the character & charm of the vintage 1940’s, but with superb concert acoustics from the new $120K sound system. New roof, new electric & plumbing upgrades. Mark Danielsen 360-692-6102-360-509-1299.

$1,000,000 Commercial CBA512042 Mixed use building in downtown Bremerton. Skip to the Seattle ferry, the Admiral theater, new 10-screen theater, several parks, restaurants, coffee bars. 11 res units, 3 comm. Units +- 51 space parking lot. Victor Targett, CCIM for details. 360-731-5550. Commercial CBA509296 Commercial (For Lease) Class A office space in downtown Bremerton. 6,108 sq ft on 2 levels with high quality improvements, excellent visibility, with lots of parking. 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.

SILVERDALE OFFICE $2,500,000 Silverdale #406781 Beautifully developed 3.28 acre parcel w/approved Site Dev. Permit (SDAP) for 101 unit Sr. Care facility in heart of Silverdale. Eng. Plans; storm drainage & roads done; hookups paid. Adjacent 1.96 acres also available. Mark Danielsen 360-692-6102/360-509-1299. Silverdale #321883 $200,000 Fully Developed industrial lot in an eight-lot development. Prices vary based on public visibility. Lots 1-5 have strong public visibility. Quality controlled by CC&Rs. Retail activity may include plumbing, electrical, tools, paint, fasteners, auto parts, home decorating, etc. Owner can build-to-suit. Bob Guardino 360-692-6102/360-710-7844.

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November 2012 Kitsap Peninsula Business Journal • KPBJ.com 23

PROPERTY FOR SALE OR LEASE Kingston CBA#513217 Completely remodeled, classic retail opportunity. This Kingston historic landmark is available for lease and ready for your improvements. Excellent visibility, walking distance to everything and ample parking. Two buildings, single story, 2694 SF and available immediately. $17.25 NNN. Kelly Muldrow 206-780-1500.

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City may be out of options after costly litigation over billboards By Tim Kelly, Editor A Gig Harbor businessman is waiting to hear whether he’ll get the go-ahead to put up six billboards in Port Orchard, after the city lost another legal challenge in its twoyear fight to block them. But nobody on the city’s side is talking. In a lawsuit Rick Engley filed against the city, U.S. District Court Judge Benjamin Settle in Tacoma ruled against the city Sept. 12 and determined that the original billboard applications filed by Engley’s business, Gotcha Covered Media, were for building permits and thus are vested under state law. That means they must be considered for approval under city ordinances in effect at the time they were filed in March and April 2010. The city, represented in court by Carol Morris, a Seabeck attorney retained by the

Association of Washington Cities, had argued that Engley applied for construction permits, not building permits. That was a critical distinction the city tried to make in the case, because construction permits are subject to local zoning laws and are not vested. So had the judge agreed that Engley’s applications were for construction permits, they would be denied because the City Council passed an ordinance in June 2010 prohibiting billboards in Port Orchard. Engley prevailed in a similar case several years ago when he went to court to challenge Mason County’s denial of his request to put up billboards in Belfair. Although the Port Orchard case has been much more drawn out, Engley said he still hopes to ultimately get approval to erect the double-sided billboards on leased sites

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on Sedgwick Road, Mile Hill Drive and State Route 16. His attorney, William J. Crittenden of Seattle, has been openly disdainful of the city’s convoluted approach that has prolonged the case. “We’ve been ready to settle this on reasonable terms and move forward for a long time,” he said in September after the latest court ruling. He said his client has claims for damages and attorney fees in excess of $150,000. “Maybe they’ll have a change of attitude about this,” Crittenden added, “after losing two consecutive court cases.” The city had argued unsuccessfully in 2011 that the lawsuit over denial of Engley’s permit requests should be dismissed because he had not filed a timely appeal of the city hearing examiner’s ruling. That April 2010 ruling upheld the city’s interpretation of zoning codes to deny the permit requests, but it said Engley’s application was for building permits and was vested. That court loss led to the City Council pivoting to a completely different position in September 2011 — overruling the hearing examiner’s denial and landing back in court this year to challenge the vested building permit issue. In the judge’s most recent ruling, he notes that Engley’s cover letter said he was submitting “building permit applications” along with required site plans and engineering drawings. The judge also notes that the application forms — which have “Construction permit application” printed at the top — list a $50 “building permit fee” the city collected from Engley, and had a number filled in on the line designated for a

building permit number. “The city has failed to show that it treated Engley’s permit application differently, in any meaningfully (sic) way, than it would have a building permit,” the ruling states. And since the ruling also says Engley’s billboard applications were “permitted under local ordinances in effect on the date of his application,” it seems the city may be out of options. That’s how Crittenden sees it. “We are waiting to receive a response from the City about our permits and whether the City wants to litigate the issue of Engley's damages and costs or go to mediation,” he wrote in an Oct. 16 email to the Kitsap Peninsula Business Journal. Morris, the AWC attorney, said in an email that she could not comment on the lawsuit. Port Orchard city attorney Gregory Jacoby said the City Council will decide what action to take next. However, there’s been no indication when that decision might come. Crittenden called the city’s handling of his client’s permit applications and the subsequent lawsuits “a case study in bad local government.”

WSTA summit delves into innovation opportunities, challenges By Rodika Tollefson Education, immigration and free trade are important issues that affect innovation in the United States, but the government is spending time debating irrelevant topics instead of those that will make the country more competitive. That’s one of the messages that Gary Shapiro had for Kitsap County’s technology and innovation leaders. Shapiro, president and CEO of the Consumer Electronics Association, was the keynote speaker at the West Sound Technology Association summit on Oct. 10 at the Kitsap Conference Center. “We are the most innovative country in the world and should be because of our DNA,” he said. One of the reasons is because American kids are not good at rote memory — they are good at answering questions that request thinking. Americans question authority and push back if they disagree, which Shapiro sees as a big plus. “Our First Amendment is a gift,” he said. He acknowledged that innovation and new technology lead to dislocation of jobs because every new idea replaces something else. One of the things that cripple innovation in this country is the visa system, according to Shapiro. He said “we get the best and brightest people in the world here” but “we educate them and then we kick them out.” He pointed as one example to Congress voting against legislation that would have given visa priority to people with doctorate degrees, because that Summit, page 25


Connecting people who care with causes that matter By Kol Medina My heart starts to beat a little faster as I see the mailman stop at our box and then continue down the road. It’s that time of year, the time when the nonprofit organization I work at mails its first yearend fundraising appeal and hopes that people respond by mailing back donations. I’m out the door, my feet crunching on gravel as I march to the mailbox. “Will anyone respond to our mailing?” I wonder. I take a deep breath and open the mailbox. To my great delight and relief, I see a stack of 10 or so of our return envelopes mixed in with the regular mail.

SUMMIT

minutes talking with your children about why charity is important. A wise woman named Mother Teresa once said “To keep a lamp burning, we have to keep putting oil in it.” I’ll be trying to put oil in the lamp every day because I’ve been hired recently as the new executive director of the Kitsap Community Foundation. The foundation has a simple-sounding mission: Connect people who care to causes that matter. In striving to achieve this mission, the foundation helps to improve our community and strengthen the fabric that binds us all together. This is your community foundation. It belongs to you and every resident of Kitsap County. I hope you’ll feel free to contact me at any time. Currently, the foundation gives out about $125,000 per year to local nonprofits. The application period for our grant cycle is January 2013. On Nov. 15, we’ll be holding a workshop for any nonprofits interested in applying to us for funding. See our website for full details: www.kitsapfoundation.org. My personal goal is to increase the foundation’s annual giving to at least $500,000 per year within five years. To meet that goal, we’ll need to substantially grow our endowment. And that can only happen through the generosity of Kitsap County residents. I encourage anyone interested in creating their legacy in Kitsap County to contact me. Please join me in

putting oil in the lamp. While much more is needed, I’m happy to report that Kitsap County is currently putting quite a bit of oil in the lamp. Earlier this year, a study was released showing the level of giving in each community around our country in 2008 (Google “How America Gives”). We can derive from the study that the good citizens of Kitsap County — you, me, and all of our neighbors — donated over $150 million to charity in 2008. That ranks Kitsap County as the 255th most-giving county in the country, out of 3,115 counties. That’s a lot of giving! I say “thank you” to all of you. Because of this amazing generosity and the work of hundreds of nonprofits, our community is a more healthy, colorful, heartful and spirited place that all of us enjoy. I hope National Philanthropy Day and National Community Foundation Week will inspire you to take a few moments to celebrate charity. I’ll be working hard at Kitsap Community Foundation to do my part. Please put some oil in the lamp by donating some time or money and teaching your children or friends the power of giving. If I’m lucky, I’ll open the mailbox on Nov. 16 and find a $10 check, a check written with love and caring, a check from the bottom of someone’s heart. • Kol Medina is executive director of the Kitsap Community Foundation.

November 2012 Kitsap Peninsula Business Journal • KPBJ.com 25

from page 24 legislation would have taken away from the number of people who immigrate through the U.S. visa lottery program. He also put in a plug for China, saying that in a global system, innovation takes free trade, and even a company like Apple would not succeed without manufacturing in China. “We are married to China. We cannot get a divorce,” he said. Shapiro pointed out some of Washington state’s weaknesses — lack of tort reform and not being a “right to work” state — and its strength, “phenomenal customer service,” with companies like Amazon.com, Nordstrom and Costco leading the charge. The summit, attended by about 150 people, also heard from soon-to-retire Congressman Norm Dicks, who talked about the very real threat of a cyber attack on America and blamed Congress for not acting to adopt better protections. Charles Keating, WSTA president, said the organizers received positive feedback from the summit’s attendees, sponsors and speakers. “We were able to build an agenda around Gary and it’s the right agenda for now because the new economy isn’t going to be the same,” he said. With the year’s major event behind him, Keating is looking ahead at what’s in store for the nonprofit organization. The WSTA’s annual retreat is coming up in December and Keating said that will be an opportunity to recruit some new people for the board and re-energize the organization. He envisions the topic of innovation remaining on the front burner for future events and discussions. “One of the messages (at the summit) was what we need to do to build an innovative economy, how do we do things in a more intelligent manner to support an innovation economy,” he said. “We’ve only scratched the surface on that.” For more information about WSTA and upcoming events, including a presentation on STEM education in November, go to www.westsoundtechnology.org.

Back in my office, I open the envelopes and find myself tearing up a bit. Why tears? It’s not because of the $500 donation that someone mailed us. Rather, one of the envelopes contained a check for $10. I find it difficult to make out the handwriting on the check, but not difficult to feel the deep generosity behind this small gift. You see, it’s clear from the donor’s name and from the shaky, cursive handwriting that this $10 check is from a very old woman, a woman who is probably widowed and who is undoubtedly living on Social Security. I feel that this woman carefully surveyed her finances, took in a deep breath, and gave us the only extra $10 that she has. That is the essence of caring and generosity. Nov. 15 is National Philanthropy Day and the week of Nov. 12 is National Community Foundation Week. These two celebrations are still in their infancy. Unfortunately there are no formal events planned in Kitsap County to mark these celebrations of giving and charity. But that doesn’t mean that each of us, on our own, can’t mark those days by celebrating philanthropy in our own way. Here are some ideas for you. You can donate two hours of time to your nearest animal rescue organization; drop off some food, toys or used coats at your local food bank; or mail a check to your favorite local nonprofit. Or you could just spend 10


Still time to set up owner-only 401(k) for 2012 By Denette George If you’re a small business owner, with no full-time employees (except possibly your spouse or business partner), you’re probably used to taking care of just about everything on your own. So, if you’re thinking of establishing a retirement plan – and you should – you might also be attracted to “going solo” with an “owneronly” 401(k). An owner-only 401(k), sometimes known as an individual 401(k), has been around for a few years now, and has proven quite popular – and with good reason. This plan is easy to establish, easy to administer and, most importantly, gives you many of the same benefits enjoyed by employees of a company that offers a traditional 401(k) plan. These benefits include the following: Tax-deferred earnings — Your earnings aren’t taxed as they accumulate. Tax-deductible contributions — An owner-only 401(k) consists of two components – salary deferral and profitsharing contributions, both of which are

generally 100 percent tax-deductible. If you choose to make Roth salary deferrals to your owner-only 401(k), your contributions aren’t deductible, but you won't pay taxes on your earnings, provided you don’t take withdrawals until you’re 59-1/2 and it's been five years since your first year of Roth deferral. Variety of investment choices — You can choose to fund your owner-only 401(k) with a wide range of investments. And you can construct an investment mix that’s appropriate for your risk tolerance and longterm goals. Furthermore, an owner-only 401(k) can potentially allow you to make greater contributions, at an identical income level, than other small-business retirement plans, such as a SEP IRA. In 2012, you can defer up to $17,000, or $22,500 if you’re 50 or older (as long as you don’t exceed 100 percent of your income). Then, in addition, you can make a profit-sharing contribution equal to 25 percent of your income (slightly less if you are unincorporated). So, by combining the salary deferral and profit-sharing components, you can potentially contribute up to $50,000 to your owner-only 401(k) in 2012, or $55,000 if you’re 50 or older. And these figures are doubled if your spouse also contributes to the owner-only 401(k).

However, you’re not obligated to contribute anything to your plan. So, if your business is slow one year, you might scale back your contributions, or put in nothing at all. Then, when business picks up again, you can get back toward contributing whatever you can afford, up to the maximum. Clearly, the owner-only 401(k) can offer you some key advantages in building resources for retirement. But it’s not the only small-business retirement plan on the market, so, before you make a decision, you

may want to consult with your tax and financial advisors to determine if an owneronly 401(k) is indeed the right plan for you. But don’t wait too long. You’ll have to establish your owner-only 401(k) by Dec. 31 if you want to receive any tax deductions for 2012. And in any case, the sooner you start putting money away, the faster the progress you will make toward the retirement lifestyle you’ve envisioned. • Denette George is a financial adviser with Edward Jones in Port Orchard.

Should you prepare for ���fiscal cliff’? By Brian George As an investor, you can sometimes still feel you’re at the mercy of forces beyond your control. This may be especially true today, when the Federal Reserve has warned of an approaching “fiscal cliff.” What can you do in the face of such a dire prediction? First of all, you need to understand what led to the Fed's remarks. Here’s the story: Some $1.2

trillion in spending cuts are scheduled to begin in 2013 while, simultaneously, the Bush-era tax cuts — including the reduction in capital gains and dividend taxes — are set to expire. This combination of spending cuts and higher taxes could take some $600 billion out of the economy, leading to a possible recession — and maybe something much worse, at least in the eyes of the Fed. Still, there’s no need for panic. Despite its political infighting, Congress is likely to reduce the “cliff” to a smaller bump, though it probably won’t happen until after the Fiscal Cliff, page 27

WE UNDERSTAND 26 • Kitsap Peninsula Business Journal • KPBJ.com November 2012

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No time for ice cream the care they may need as their bodies and minds change with age. This is such a hard topic to talk to people about because most of the people we serve are healthy, independent and financially astute. When we talk about the topic of long-term care most people say, "I eat right. I exercise and my parents didn't need long-term care so I don't want to waste my money paying insurance premiums for something I don't think I'll ever use." And frankly, they may be right. In fact as an advocate for long-term care insurance, if I recommend somebody buy a policy, then I always tell them I hope you pay on this policy for years and years and years and never use it. It really doesn't matter what the national statistics say about the likelihood of you needing care. It doesn't matter what your family history is. It d oesn't matter if you have enough money to self-insure the risk. Because those are not the reasons people buy insurance. The reason people buy insurance is because they love someone. Buying insurance may mean the difference between whether your children have a choice to be your caregiver or if they feel obligated to be that caregiver. Buying longterm care insurance may be the difference between whether or not you have enough money to last for retirement or not. Buying insurance may be the difference between maintaining your independence and staying in your own home versus becoming dependent on the government to provide for you in a facility. Buying insurance may be the difference between leaving a legacy of a thriving, productive, contributing member of society to that of a dependent, sick and broken poor person. Most people don't get healthier with age. The younger you are, the better your

FISCAL CLIFF

vehicles. Contribute as much as possible to your traditional IRA, your 401(k) or other employer-sponsored retirement plan, and any education savings accounts you may have, such as a 529 plan. Consider converting your traditional IRA to a Roth IRA. A Roth IRA provides tax-free earnings, provided you don’t start taking withdrawals until you’re 59½ and you’ve had your account for at least five years. (Be aware, though, that this conversion is taxable and may not be appropriate if you don’t have money readily available to pay the taxes.) Consider municipal bonds. If you’re in one of the upper tax brackets, you may benefit from investing in “munis,” which pay interest that’s free of federal taxes, and possibly state and local taxes as well. Not all these choices will be suitable for your situation, of course. Before taking action on these items, you may want to consult with your tax and financial advisors. But give these options some thought because they may prove helpful in keeping your financial goals from going “over a cliff.” • Brian George is a financial adviser with Edward Jones in Silverdale.

from page 26 election. But as an investor, you may need to be prepared for two significant events: market volatility, at least in the short term, and higher taxes, probably for the foreseeable future. To combat market volatility, you need to own a broadly diversified portfolio that can handle “bumps,” “cliffs” and other rugged investment terrain. This means you’ll need a mix of stocks, bonds and other securities that are suitable for your needs. (Keep in mind, though, that while diversification can reduce the impact of market volatility, it cannot guarantee profits or protect against losses.) You may also need to “rebalance” your portfolio to ensure that it’s still aligned with your goals, risk tolerance and time horizon, despite the impact of volatility. Now, let’s turn to taxes. Even if taxes on income, capital gains and dividends do rise, they will still, in all likelihood, be much lower than they’ve been at various points in the past. Nonetheless, you may want to consider a variety of steps, including the following: Take advantage of tax-deferred

chances of qualifying for long-term care insurance. Over the last several years, several of the major insurance carriers have decided to exit the long-term care insurance arena and are no longer offering new policies. Any time an insurance company decides that a product line is no longer profitable is a big sign, to me, that if the insurance companies are having a hard time figuring out the risk and pricing, then it might be something we, the little guy, should consider. If you are going to buy long-term care insurance be sure to explore all of your options. New insurance products are available to help you protect against this risk. Some are life insurance policies that have long-term care benefits linked to the death benefit. Others are riders on annuity contracts that allow you to use the value of the contract to pay for long-term care. And some are straightforward long-term care insurance policies. You should meet with an expert that specializes in this very complicated insurance niche. The professional you meet with should be independently licensed and have the ability to offer you insurance from many different carriers. Try to find an insurance company that has been in this arena for more than 10 years, has an excellent claims-paying reputation, and has been responsible with rate increases with their existing clients.

Please don't delay looking into this insurance. I heard a very well-respected financial advice giver say you shouldn't consider buying long-term care insurance until you're 60 years old. The problem with that advice is what if your health changes before you turn 60, then you might not be able to qualify for the insurance. I tell people you should consider buying long-term care insurance when you can financially afford the premiums without a change in your lifestyle. At 37 years old, my wife and I own long-term care insurance policies. So if you're healthy, can afford the premiums, and love someone, then consider b uying longterm care insurance. • Jason Parker is 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. Please consult your trusted professional for advice and further information. Jason Parker is insurancelicensed and holds his series 65 securities license. He offers annuities, life & long-term care insurance as well as investment services.

November 2012 Kitsap Peninsula Business Journal • KPBJ.com 27

By Jason R. Parker As a firm that specializes in working with retirees, I am often reminded of how blessed I am to serve such incredible people who are wise, intelligent and living role models on what it means to live the good life. One of the disadvantages to working with folks who are retired is I am often confronted with what it means to lose a spouse after 50 years of marriage or the impact deteriorating health can have on an entire family. Early in my career I had a meeting scheduled with a woman who was concerned about long-term care. She asked me if I would mind coming to her home for the meeting because she said traveling was getting harder. Upon entering her home I sat down at the kitchen table, and I asked her why she was interested in looking into longterm care insurance. About that time her husband came walking into the room to get a drink of water. I stood up to greet him but he just ignored me and walked straight past me. I looked over at his wife and she said, "He has Alzheimer's." I sat back down at the table and for the next hour I listened to her share her story of what it had been like caring for her husband with this disease. I'll never forget when she said, "We spent our whole life saving and looking forward to retirement. We were both excited to spend our retirement years traveling, but now that he has this disease, I don't feel like I can even travel to the ice cream parlor for an ice cream cone." November is national awareness month for long-term care insurance, which is an insurance designed to help people pay for


28 • Kitsap Peninsula Business Journal • KPBJ.com November 2012

Wrongful discharge cases possible even in at-will states By Julie Tappero “I can terminate anyone at any time for any reason. This is an at-will state.” Ever hear those words from an employer? Ever think those words yourself? Ever wonder if the law is on your side? As is often the case with employment law, the answer is ... maybe and maybe not. Washington is an “at-will” state. But that doesn’t preclude the notion of “wrongful discharge.” As employers, it’s important we understand both of these terms in order to stay out of legal trouble. A quick internet search for wrongful discharge suits turned up these recently filed lawsuits. Tiffani Webb, a well regarded high school guidance counselor in New York, was terminated after modeling pictures of her in lingerie taken 17 years prior turned up on the internet. Michael McClatchy was terminated from his South Carolina police job after he issued a speeding ticket to a beloved Clemson University football coach. Mike McQueary, the Penn State assistant football coach who testified against Jerry Sandusky, claims he was fired for that testimony. And, on a more local level, Scottie Lynn Nix claims she was fired from her job as a Tacoma city auditor after she reported alleged mismanagement at Tacoma Rail. All of these individuals have filed wrongful discharge lawsuits against their former employers. First, what does Washington law say? Washington is indeed an at-will state. This means that businesses may terminate at will, without giving the employee notice, warnings, or reasons, and that an employee may also resign without notice. However, there are some reasons that you cannot terminate an employee. These include situations where an employee has filed a workplace rights complaint, a safety complaint, or a workers comp claim. What might constitute a workplace rights complaint? For example, an employee complains that he or she is not being allowed to take legally prescribed breaks — which are a right under the law. Or perhaps your employees are talking

amongst themselves about parity of their wages. This is a legally protected concerted activity. Employees have the right to discuss their working conditions or wages under the law, and cannot be punished or terminated for doing so. So what constitutes wrongful discharge? In a nutshell, it is when a termination violates an employment contract, the employers’ policies, or a provision of law. Most employers are aware that you cannot discriminate based on protected classes. This extends to termination as well. You can’t terminate based on race, creed, color, national origin, sex, marital status, age (over 40), sexual orientation (including gender identity), disability, HIV/AIDS, Hepatitis C, or use of a service animal. Protection also extends to pregnancy status as well as to military and veteran status. There is also a public policy exception to the at-will doctrine. This comes into effect in several instances, which include when an employee is terminated for: 1) refusing to do something that is illegal, 2) performing a public duty such as jury duty, 3) retaliation for whistle blowing, and 4) exerting a legal right such as organizing under a union. It’s not uncommon for employers to proscribe in their handbooks which employee behaviors can result in termination. Employers also may want to describe disciplinary steps that will be followed leading up to termination. While these policies can be beneficial in many ways, it’s important to always include language that preserves the employees’ atwill status. Without that language, an employer cannot terminate an employee without following the proscribed steps, and if they do, it may very well be a wrongful termination. Employers can also unintentionally create an employment contract through wording in an employment offer letter. Have your attorney review your wording for clarity and to ensure you’ve preserved the employee’s at-will status. This year, the National Labor Relations Board (NLRB) inserted itself into the atwill arena through decisions about employee handbooks for the American Red Cross and Hyatt Hotels. Many business people have pondered why the NLRB has stepped into this discussion. The NLRB

asserts that the at-will statements in these employee handbooks were overly broad, resulting in the limitation of employees’ rights to engage in concerted activity. NLRB’s issue is with the standard at-will language often used by employers, which states that the employees’ at-will status can only be altered by written document from a specific company executive. The NLRB believes this violates employees’ rights to organize and protect their employment status. This may be a bit of a stretch, and may not hold up if challenged in court. But to be safe, employers can add a further statement clarifying that the at-will disclaimer is not intended in any way to interfere with or limit an employee’s rights under the National Labor Relations Act. Check with your attorney for the best wording for your business. One thing our state does do is give employees the right ask for the reason that they were discharged. They can do this by submitting a request in writing to their former employer. Employers have 10 days to reply in writing with the reason for the termination. If you find yourself in this position, be sure that you respond accurately to the request. You don’t want to give conflicting information. For instance, you don’t want to say to an employee as they’re being discharged that due to employment at-will, there’s no reason to be given, then respond to a written request that it was because of their attitude, and then put on their unemployment form that it was because they violated company policy by failing to show up for work or call in. Inconsistencies open your company up for the potential of claims.

There are steps businesses can take now to prevent the pain of a wrongful termination claim in the future. They include: • Have an attorney review your employee handbook and standard employment offer letters to ensure that you are preserving employees’ at-will status and are not creating an unintended employment contract. • Train yourself and your supervisors on laws pertaining to discrimination and retaliation and stringently enforce those laws in your workplace. Take employees’ complaints or allegations seriously and thoroughly document your investigation and conclusions. • If you have a proscribed disciplinary process, make sure it is followed carefully. And document, document, document! It’s a lot easier to prove that a termination was merited when documentation is available to back up the claim. • Recognize that your employees have rights that are protected under the law. Respect them and their rights as you make your business decisions. A Missouri jury gave a black detective $6.5 million in a racial discrimination wrongful discharge suit. An Illinois court gave a settlement of over $3 million to an employee who was terminated shortly after testifying in a co-worker’s racial and sexual harassment suit. Mike McQueary is suing for over $4 million in damages in his lawsuit against Penn State. Yes, Washington state is an at-will state. But poking your nose across the line of wrongful discharge can cost your business a lot more than a preventive consultation with your attorney will.

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Lessons from a presidential election By Dan Weedin Fear not. This is not a political op-ed you are about to read. You’ve probably had enough of that by now! As this column hits your mailbox, we are within days of finishing the 2012 election that started three years ago. If you’re like me you’ve cast your ballot and can’t wait for the political pugilism to end. However, there are still lessons to be learned from it, and we would be negligent if we didn’t take a little time to explore them. First, let’s define what these “lessons” are, and what they are not. This has nothing to do with how either presidential candidate might or might not make a good leader. I fear we as a country are now better at attracting candidates (from both parties) with skills to campaign, rather than skills in governing or leading. You as a business leader need to be able to do both. That is, send a message, build a brand, create evangelists, and be a leader. Your “electorate” votes with their feet and their money, making it crucial to you to be good at both. The lessons in this column are not about political parties or platforms. Rather, they are about being a great business leader. Lesson #1 – The eyes have it During the presidential debates, much of the punditocracy gave passing or failing grades to candidates based on what they saw, not necessarily what they heard. In the

first debate, President Obama was roundly criticized for looking flat, uninspired, and tired. Video of him when he wasn’t speaking caught him looking disinterested. Even his most ardent followers acknowledged this. As a leader, you need to understand that all eyes are on you constantly. This may mean everything from walking down the office hallway, sitting in a prospect’s waiting area, or listening to someone else speaking at a company meeting. People will watch for your reactions, your body language, and your table manners during lunch. What are you telling them? You need to pretend there is a camera on you. As a leader, you will be viewed as a role model. You will be judged on whether you can earn the right to be a trusted advisor. Body language accounts for 55 percent of communication. Don’t get caught with spinach in your teeth! Lesson #2 – Sound bytes Boy, did we get a few sound bytes this election season! Remember these — “47 percent,” “You didn’t build it,” and “Binders of women?” While many of the sound bytes end up being used against them, presidential candidates understand that we as an audience are more apt to remember small, bite-size portions of powerful messages. As a leader, you need to speak in sound bytes. That means being proficient in language. Improve your vocabulary, learn to speak pithily, and say things that are powerful and will linger. If you ramble and speak disjointedly, then your message is likely to get lost. Be brief, be exact, be powerful, and then shut up.

Lesson #3 – Don’t rip your competition It never ceased to amaze me that when given the opportunity to talk about themselves and what value they bring, both candidates eschewed the opportunity and instead went about telling us what was wrong with their opponent. The campaign trail, the debates, and especially the commercials focused on the negatives of the other guy, and only countered that they would be just the opposite. Don’t get caught in this trap. You all have competition. You need to focus your language and actions on how you improve the condition of your clients, not what the other guy or gal can’t do well. I spent many years in the insurance industry and know that the practice exists. It may not be as egregious as a national political campaign, but it is there. My guess is that this subtle competitive “spirit” exists in all industries. In the end, you are there to bring value to your client. The focus should be on that and not your “opponent.” Lesson #4 – Keep telling your story The presidential candidates are experienced and skilled in getting their story out to the country. They work for consistency, repetition, and gravity. If they find something, they will seize on it and never let it go (see Big Bird). They

understand the simple business rule that a prospect needs to hear or see you countless times before they begin to trust and buy. You have a story to tell. It might be the mission and values of your company to your employees. It might be the enormous value that you provide your clients to improve their business and lives. Whatever it is, you need to be consistent in that message and walk the talk. You need to repeat it early and often so it will sink in. People have shorter memories than ever before due to our technology-driven world. Don’t ever stop delivering your story. Bottom line – The presidential election will end soon, but your business pursuits are ongoing. Take away some of the lessons, both good and bad, from the people vying for the highest-ranking job in the country, and apply them to your business. If you do, I am confident you will get the votes you need for success. • Dan Weedin is a Poulsbo-based management consultant, speaker, and mentor. He leads an executive peer-to-peer group in Kitsap County where he helps executives improve personally, professionally, and organizationally by enhancing leadership skills. He is one of only 35 consultants in the world to be accredited as an Alan Weiss Master Mentor. You can reach Dan at 360-697-1058; e-mail at dan@danweedin.com or visit his web site at www.DanWeedin.com.

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November 2012 Kitsap Peninsula Business Journal • KPBJ.com 29

The Keeping Up with Technology workshop series will present a session on using the popular online pinboard Pinterest at The Poulsbo Public Library on Nov. 13. The free event runs from 6:30-8 p.m. at the library, 700 Northeast Lincoln Road. The workshop is sponsored by Poulsbo Friends of the Library. Pinterest is a relatively new social media site, popular with both hobbyists and businesses. It is a virtual pinboard where users can organize and share all the things they find on the web. People use pinboards to promote their businesses, plan weddings, and decorate their homes. In this workshop, participants will learn how to get started with Pinterest; Pinterest etiquette and good practices; how Pinterest can drive traffic to your blog; who is using Pinterest successfully; how to make your images stand out. The presenter will be Jenny Ingram, a blogger, social media educator, and founder of www.Jennyonthespot.com. For more information, call the library at 360-779-2915.


30 • Kitsap Peninsula Business Journal • KPBJ.com November 2012

New bulbs offer LED replacement in high-intensity lights By Tim Kelly, Editor The middle-of-the-night, "ah-ha!" moment came two years ago on a trip to Palm Springs, Calif. That's when an idea came into focus for Rick Flaherty about how to incorporate energy-efficient LED technology into replacement bulbs for high-intensity discharge (HID) lights — the kind used to illuminate spacious areas such as warehouses, gymnasiums and parking lots. Since then, Flaherty and his engineering staff at Differential Energy Global Ltd. (DEG) in Port Orchard have developed, tested and fine-tuned a product called the HI-Lamp, an innovation that Thomas Edison could envy. The HI-Lamp offers considerable energy savings, for starters — one of DEG’s new 85-watt bulbs can replace a 400-watt bulb in a typical HID light. And the HI-Lamp replacements for any watt level will provide “equivalent lumen output,” which in non-jargon means they’re just as bright as the watt-hogs. Another selling point is that HI-Lamps make switching to cost-saving LED technology as easy as changing a light bulb, because they’ll screw into the sockets of nearly every kind of HID fixture, and the proces requires only a simple removal of the ballast. Even with a $325 price tag for a HI-Lamp that replaces a 400w HID bulb, that’s less than expensive than a retrofit or replacement of the whole fixture. Julian Herencia, found and co-owner of Caribbean Energy Savings, Inc. in Puerto Rico, is one of the industry distributors who

Some of the HI-Lamp LED replacement bulbs developed by Differential Energy Global Ltd. of Port Orchard. saw Flaherty’s display of HI-Lamp prototypes at the Lightfair International trade show in Las Vegas in May. ”What caught my attention to Rick’s product is number one, the lumen output we can get from that product,” Herencia said in a recent phone interview from his office. “And number two, the ease of application; not having to invest any money

in changing the fixture itself.” His company has sent a $7,100 check for a preorder of the bulbs, and Flaherty said he hopes DEG will soon secure financing to start HI-Lamp production (see related cover story). Another major distributor waiting for DEG to roll out its product line is Ra Energy/Smart Energy, based in New York. “It has unbelievable potential, it could revolutionize the market,” said Mark Stewart, the company’s director of business development. “We’re seeing constant RFPs (reqest for proposal) and RFQ (request for quotation) from various different sectors in the industry for this type of lighting,” he said, as well as from federal agencies such as the Veterans Administration. “The government’s been doing a lot of retrofitting in their facilities, and typically what happens is you get an RFP or RFQ for fixture replacement. “Facility managers are extremely interested in the opportunity to change a light bulb rather than change a fixture.” The research and development on the product has been extensive and costly, but recently resulted in a notable validation that only an electrical engineer might comprehend. “After two failures and months and months, almost a year since we started working on our own proprietary power supply, we passed the fcc/CISPR 22:2008 CLASS A (certification) … for radiated emissions testing,” Flaherty said. The biggest engineering challenge was

making that component compact enough to fit in a screw-in light bulb. “No one had been able to create a 100watt power supply in combination with an LED driver,” he explained. “There may be other companies that want to license the technology.” The HI-Lamp has other technical advancements that deliver secondary benefits, such as giving off much less heat than the bulbs they replace in HID lights, which can heat up as high as 75 degrees Celsius. “We’re down to one-tenth of that,” Flaherty said, because of an “air flowthrough” feature that keeps the bulbs from getting extremely hot. That can prevent “stratification,” hightemperature layers created by HID lights in warehouses and other high-ceiling buildings. “The generation of heat is a lot less,” Herencia said, “and in a place like Puerto Rico where air conditioning is required, it’s a substantial secondary benefit of having this technology installed.” DEG’s promotional brochure for Lightfair described its new LED product as “A transformational, game-shanging innovation,” and potential distributors like Herencia and Stewart don’t disagree with the hype. “At Lightfair, … I take the challenge of visiting every single booth to understand the technology that’s out there,” Herencia said. “When I saw Rick’s booth and saw the LED, page 31

BPA wraps up ‘demand response’ pilot projects By Rodika Tollefson Pacific Northwest energy experts said that the energy market hit a major milestone on Oct. 16 — for the first time, wind energy production has surpassed energy generated by hydropower. Due to new wind-power infrastructure in the region and strong morning winds, 85 percent of that day’s power usage was provided by wind generation. Wind has long been viewed as a renewable resource that can provide an alternative to hydro or nuclear power. But one of the major challenges is being able to integrate renewable energy with demand — wind, for example, frequently happens at night, when the demand for electricity is low. Wind energy cannot be stored, so it is wasted if not used when it’s produced. The industry has been trying to find ways to harness the wind more effectively. Lee Hall, manager of the Bonneville

Power Administration’s Smart Grid Program, said many North American regions have this integration challenge. “Demand response and energy storage, including using electricity to store energy in water heaters, is part of our research looking at potential solutions to help integrate variable generation such as wind,” he said. Several dozen residential customers of Mason County Public Utility District No. 3 got the opportunity to be part of that research. This summer, the PUD wrapped up a monthslong smart-grid project that was part of BPA’s “demand response” research. The pilot project used a device manufactured by the Allyn Technology Group (based in Allyn) and an algorithm created by Grid Mility to allow water heaters to “sync” with wind turbines at the Nine Canyon Wind Farm in Kennewick. The algorithm helped predict ahead of

time when the wind power — which can’t be stored like solar energy — would be generated. The device, which was attached to the heaters, gave the utility the capability to turn them on and off during wind production cycles. Customers also had override switches. The energy savings result from switching to wind power when it’s available, which in turn conserves storable energy produced by hydro or nuclear facilities. “(Customers) thought it was a fantastic project. Their experience was exactly what we were hoping — there was no impact on their home,” said Justin Holzgrove, PUD 3 conservation manager. BPA’s pilot projects tested various ways of the water heaters communicating with the utilities and the power grid. In the case of PUD 3, that method was via cell phones. “One of our learnings is that in rural areas, where the population is more widely

dispersed, relying on cell phone technology to get the signal to water heaters may not be the best option,” Hall said. Another conclusion was that deploying the project on a wide scale would not be cost-effective, Holzgrove said — the cost of manufacturing and installing something like 10,000 devices (assuming there would such wide customer participation) and the signal transmission costs would be too high compared with the kilowatt-hours saved. But, he noted, even though retrofitting is cost-prohibitive, that may not be the case if manufacturers installed them in new appliances. While that idea is gaining momentum from manufacturers (GE is doing it for dishwashers, for example), the challenge is that heaters’ life cycle is 20 to 30 years, so it would take a long time for the market to catch up. “I think it was a successful project Pilot, page 31


Utilities may change incentive rates for upgrading from T12 lighting By Rodika Tollefson Although manufacturers of T12 fluorescent lighting found a loophole earlier this year to keep the bulbs on the market, utilities are encouraging their commercial customers to upgrade to more energy-efficient lighting, such as T8 or LED. And, as the federal government and utilities continue to move to new energyefficiency standards, the incentives offered for the upgrades are likely to decrease. As a result of the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007, the U.S. Department of Energy has launched the effort to remove T12 systems from the market. The federal government changed its standards on July 14, which would have discontinued the T12 bulb manufacturing after that date and would have effectively discontinued rebate programs for them. But the manufacturers found a loophole — keeping the T12s compliant by increasing the number of lumens per watt in the lamps. (Previously, the federal government prohibited the manufacturing and importing of T-12 magnetic ballasts, only allowing electronic ones.) “We will continue to have lighting

Older T12 fluorescent bulbs are being phased out and replaced with thinner, more energyefficient T8 and T5 bulbs. rebates for our commercial customers into the foreseeable future. What may change is how much we pay because codes change,” said Ray Grinberg, power resources director for Peninsula Light Co., a co-op that serves the Gig Harbor Peninsula. Peninsula Light’s rebate program for commercial customers pays for up to 60 percent of the cost of converting to more energy-efficient lighting such as T8, which is a typical office conversion. The incentives can also be applied to LED conversion, but because LED lights are

and irrigation. The projects tested various aspects, from technical and financial feasibility to consumer acceptance and challenges, and in addition to water heaters included systems like HVAC thermostats and cold storage. “Right now, BPA is exploring opportunities to expand from the current small-scale demand response pilots testing technical feasibility to somewhat largerscale projects assessing reliability and commercial viability which benefit the region, the utilities we serve and consumers,” Hall said, adding that demand response is one of the possibilities BPA and regional utilities are pursuing to supplement hydropower. “The federal hydro system has provided ample power and significant flexibility of many years but is approaching constraints,” he said. “”We believe (demand response) is cost-effective, technically viable and can be used with little or no impact on endconsumer convenience and comfort.”

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from page 30 overall because this is just the beginning,” Holzgrove said. The PUD, he said, continues to test out other ideas. One new project is testing the possibility of storing power during lowdemand periods and then discharging it during peak hours. The PUD has installed a 10-kilowatt battery bank at its new headquarters that converts power from AC to DC for storage, and then back to AC. One of the observations so far is that there’s a big loss of energy in the conversion process — only about 60 percent of the power that goes into the battery array comes back out. The grid controller program, which was funded by grants, will be in place for further testing through the cold months. BPA is nearly finished with all its demand response pilot implementation projects, which included 16 utilities and all customer segments: residential, commercial, industrial

Western Coatings, a division of Peninsula Infrared, LLC, has expanded its services into commercial roof maintenance. The company specializes in roof coatings and waterproofing. “The big problem with roofs on most commercial buildings is that they can’t be seen,” said Grant Furness, owner of Western Coatings. “Most roof problems can be avoided by regular maintenance.” Western Coatings offers one-time surveys or annual maintenance contracts. During the survey, minor issues are

programs of their choices from the BPA and pass down incentives from BPA to their customers. Each utility will decide on its own incentive rate changes based on BPA’s move — some may discontinue their programs altogether while others will adjust their rebate rates, but at different times, said Mike Porter, manager of the Northwest Trade Ally Network. The network was created as a service by BPA, with the focus on energy-efficient projects. “The reason people are staying with T12s is you have to spend a little money (upfront) to get the incentives and the T12s are dirt-cheap,” he said. “But the baseline will change — and if T8 is standard, why pay people to switch to it?”

LED

from page 30 product in an environment where it could be applied, it really impressed me. “I said, ‘this is the technology we need.’” Stewart said the products will offer a solid return on investment for Ra Energy’s customers, some of whom have been provided test assemblies from DEG. “One of our clients is very large railroad company. They tested this product a couple months ago, and they loved it,” he said. There are already some LED replacement products available, he noted, but none that match what the HI-Lamp offers. “China has done a very poor job producing these type of replacements; they typically have substandard components,” Stewart said, adding that currently available products are comparatively expensive as well. “We’ve actually kind of downplayed the other products, hoping Rick’s are products will be available sooner rather than later,” he added. The distributor has been telling customers “we’ll have much a better solution in a couple months.” Another feature DEG touts is the HILamp’s “fully rotational 360-degree adjustment,” which Flaherty said allows great flexibility in directing or restricting light to desired areas. All in all, it seems like DEG has created a product offering enregy reduction and costsavings for a lot of end-users who will welcome the product. “From the standpoint of market acceptance,” Stewar said, “we’ve showed this product to several different organizations, and everbody has been very forthoming with acceptance and wanting to place orders.”

November 2012 Kitsap Peninsula Business Journal • KPBJ.com 31

PILOT

more expensive, rebates only cover about 20 to 30 percent of the costs. “The rebates are based on certain measures,” Grinberg said, adding that customers can work with certified electricians to create a retrofit proposal, which will estimate fairly accurately the amount of rebates they will receive after completion. The advantages of T8 over T12 is that the lighting is not only more energyefficient but also brighter, and the lamps last longer. The older magnetic T12 fixtures are also noisy (creating that distinct “buzzing”). Conversion to T8 doesn’t require new fixtures, but does need a retrofit of the ballasts. Justin Holzgrove, Mason County Public Utility District 3 conservation manager, said the PUD pays up to 70 percent of total project costs to convert from T12s (to any type of energy-efficient lighting), but noted their rates may also change because the Bonneville Power Administration was set to adjust its incentive rates in October. “It’s one of our best programs and has a good saturation rate in conversion,” he said. Utilities “subscribe” for energy-efficient


Waste Wise @ Work

Newsletter — November 2012

Waste Reduction for Local Businesses We Recycle! We’d like to recognize the following businesses who have met the membership criteria and are now official members of the program:

32 • Kitsap Peninsula Business Journal • KPBJ.com November 2012

Art Anderson Associates Bremerton Tennis and Athletic Club Clark Whitney, PS Cox and Lucy, CPA Dispute Resolution Center of Kitsap County Ed’s Fly Meat Fisher Distinctive Dentistry Hope Center Kitsap Sun Michael Angelo Construction, Inc. Military Air Cargo Novus Windshield Repair Office Xpats Pacific Northwest Title Peace Lutheran School & Church Peninsula Fleet Services SC Fuels Wall Liebert & Lund P.S. Wet Apple Media

Your company can reduce waste, too!

Complete a Waste Wise @ Work Membership Application On Our Website

NEW Kitsap County Program Provides Incentives for Businesses to Reduce Waste This year, through a state grant, Kitsap County has launched a program to give businesses new tools to increase recycling and cut waste. Businesses can now access and utilize the following:

Business Recycling Kits Businesses can request new toolkits for helping to start or improve recycling. The kit includes information about local recycler options, resources for recycling unusual items such as fluorescent lights, and tips for reducing waste.

Recycling Containers Durable, blue, deskside recycling containers are provided as an incentive for businesses that improve or add recycling. There is a limit of 10 per qualifying businesses while supplies last.

Recycling Stickers Stickers with photos of items that are acceptable for recycling are available to place on or above containers or on employee boards.

Waste Wise @ Work Recognition Program The Waste Wise @ Work program recognizes businesses with outstanding recycling and waste reduction practices. Qualifying businesses will receive local recognition, a certificate, a window cling, and rights to use the Waste Wise @ Work logo on their outreach materials, to show customers their green status.

Onsite Waste Evaluations by Recycling Specialist Businesses can have a recycling expert visit their location to do a quick onsite review, provide recommendations, and help implement new conservation strategies.

Online Resources to Help Your Business What Do I Do With It? This database lists recyclers or drop off locations for many unusual materials including paint and batteries. (www.kitsapgov.com/sw/recycle.asp) Local Recyclers for Businesses. Information on which recyclers will provide recycling service onsite. Call them for pricing. (www.kitsapgov.com/sw/pdf/3741_Business_Recycling.pdf)

Bremerton Tennis and Athletic Club Greens Their Game… A year ago, Bremerton Tennis and Athletic Club (BTAC) started evaluating their practices down the line to determine ways to be more sustainable. As a result, the club has rolled out a new program with the full support of their club members, board, and staff. Facility Supervisor, David Harry (pictured), has been leading efforts by reviewing water use, energy use and waste generation, and developing solutions for the club to become more environmentally friendly. The club now has a staff-run “Green Team” that helps to develop solutions to resource conservation issues including energy use, water use, garbage/recycling, and environmental purchasing. Harry offers this advice to other businesses forming green teams: “The only way to succeed is with buy-in. It is very important that the Green Team is made up of people who want to be in it. It just doesn’t work to appoint someone unwillingly. The way to influence change is to have people from all levels on the team. It empowers everyone to be part of change and have buy-in on where the organization is going.” Harry and the green team have not only conserved resources, but have also helped to cut costs on purchasing and disposal. Recently, BTAC partnered with the Kitsap County Waste Wise @ Work program to add recycling as a preferred method of managing their waste. “The Kitsap County partnership helped make it cost effective to move ahead with recycling plans,” says General Manager Julie Jablonski. “We also notice that our members are very happy to recycle.” The new program allows members and staff to recycle cans, plastic bottles, plastic tennis ball containers, paper, and cardboard. Materials are collected by the custodial staff, who also visually inspects containers to make sure club members have put the correct items in.

According to Julie, “Mostly, members have been doing a great job. There is a little confusion about some things, but we have placed signs on the containers from the Waste Wise @ Work program that show photos of the recyclable items. It’s really clear. There’s really not much left in our garbage!” Here is how they did it:

BTAC’s New Strategies Energy • Lighting retrofit for all courts: They switched to energy efficient T5 fluorescent tubes without sacrificing lighting quality. • Lighting retrofit for parking lot lights: All parking lot lights were changed to Induction lights. The new lights are projected to use 54% less energy. • Vending Misers: Installed vending misers on soda machines to put them in a “sleep” mode. • Updated water heater: The club will soon replace a 64% efficient water heater with a 96% efficient version. • Overhead lighting: LED bulbs will replace existing 40 watt bulbs, saving 1,400 watts in one room without reducing illumination.

Recycling • Recycling: Achieved a 40% recycling rate by recycling plastic bottles, cans, scrap metal, and paper. Also, about 5,000 tennis ball containers are recycled each year. • CFL’s and Fluorescent Lamps: Recycled 300 fluorescent lights.

Reuse • Styrofoam peanuts: Donated to packaging business for reuse. • Tennis and racket balls: Donated to a local day care facility and the humane society for play.

Environmentally Preferable Purchasing • Recycled products: Now using recycled content tissue, green seal toilet paper, and recycled content office products. • Disposable products: Replacing disposable items with durable, such as coffee cups.

Contact Kitsap County Public Works, Solid Waste Division: 360-337-4898

www.kitsapgov.com/sw/ww.htm • solidwaste@co.kitsap.wa.us


Port Gamble tribe reviews alternatives, makes plans to apply for cleanup funds relative and unknowingly eat contaminated fish or clam chowder. Next on the agenda was the revelation of various cleanup plans posed in the U.S. Environmental Protection Agency (EPA) funded Analysis of Brownfields Cleanup Luis Barrantes photo Alternatives made available Port Gamble S’Klallam tribal members and community the previous month on the members attend an Oct. 18 presentation about cleanup efforts tribe’s website. Technical professionals in Port Gamble Bay. potential hazardous substances and and community members were briefed on petroleum contaminated areas. environmental assessment results and status Attendees were then told of the tribe’s of the bay’s health, and they reviewed the intent to apply for another $400,000 in two proposed cleanup alternatives, aired their cleanup grants, and they were invited to opinions and provided comments. provide comments or review current And in those moments, this small tribe proposals. Once the public comment would contribute to choosing cleanup period ends Nov. 10, the grant alternatives — which may involve the fate of development team will incorporate a dock and even their future on the suggested changes into the grant proposal reservation’s shoreline as they know it. as appropriate or provide response to EPA Region 10 officials Sylvia Kawabata affected parties. If there are no significant and Laura Caparosso briefed the audience on changes, the EPA Brownfields Grant the background of the Brownfields funding Proposal is considered final and the programs and thanked the tribal members for application will be submitted. EPA is their continued involvement. expected to announce the grant recipients “These are extremely competitive grants in April. and this tribe competed against projects For anyone who missed the meeting, across the nation to win these awards,” said Kawabata. Since 2009, the tribe has received over $927,000 in EPA funds to respond to and assess known and potential Brownfields sites, which included annual awards of $217,000, $173,000 and $137,000 for the 128 A Tribal Response Program, followed by two Brownfields Assessment program grants — 50 percent of Washington state’s brownfields general program funds — totaling $400,000 in the fiscal year 2010 round of federal aid. Assessments are the first step in addressing

The old Pope & Talbot mill site and previous Port Gamble S’Klallam Tribe’s settlement at Point Julia on Port Gamble Bay in the 1850s grant application materials will be available for review at the Natural Resources office located at 31912 Little Boston Road NE in Kingston, during regular business hours or by making arrangements with Destiny Wellman, tribal response program manager, at (360) 297-4792 or dwellman@pgst.nsn.us, or with Kathleen Byrne-Barrantes, grants consultant, at (360) 697-5815 or grantsolutions@comcast.net. Others can email their comments or concerns to either contact or by mail to Wellman at the above address. The Brownfields Program encourages development of America’s estimated 450,000 abandoned and contaminated waste sites. For more information, the program website is located at www.epa.gov/brownfields.

November 2012 Kitsap Peninsula Business Journal • KPBJ.com 33

By Kathleen Byrne-Barrantes The Port Gamble S’Klallam Tribe held a project update and public information event Oct. 18 in the Reservation Longhouse on Little Boston Road. Tribal Chairman Jeromy Sullivan opened the event with a rich history of tribal activities in the region over the past thousands of years. Its members once thrived on the other side of the bay and likely kept recreational quarters predating the land now serving as the reservation with Point Julia at its center. Port Gamble Bay long harbored a Klallam village prior to and during the mill days and lithic tool sites have been identified at Point Julia, the subject site and current reservation. The current townsite of Port Gamble on the bay’s western shore harbored a Klallam village occupied by the tribe prior to and including 1853 at the start of the mill construction by timber company Pope & Talbot. Sullivan went on to tell the more recent history of his boyhood and common ‘rites of passage’ that included jumping off the creosote piling pier — now in a state of disrepair, a recognized environmental hazard and unsafe in its present state. This bay has historically been central to economic, ceremonial and subsistence harvesting of fish and shellfish, and its health therefore affects the well-being of tribal members who receive physical and cultural sustenance from it. For some, that means every day. “You know, I see families and tribal members gathering shellfish right by that old creosote, and I want to say something … but I’m reluctant to do so because I know that they have been harvesting fish and shellfish here for years,” said Sullivan. Some voiced concerns over the increased incidence of certain types of cancers, and knowing about risks that, even if they choose not to harvest, they may visit a friend or


2013 Infiniti JX — new entry in luxury crossover SUV market

34 • Kitsap Peninsula Business Journal • KPBJ.com November 2012

By Lary Coppola The 2013 Infiniti JX is a totally new midluxury crossover sport-utility vehicle from Nissan’s luxury division. Larger than the five-seat Infiniti FX, but smaller and significantly cheaper than the eight-seat, top-of-the-line QX56, it boasts three-row seating, a base price just over $40,000, and a wide variety of luxury features. The Infiniti JX delivers that perfect balance between self-indulgence and practicality. Offered in both front-wheel and allwheel drive, the JX rides on a stretched version of Nissan’s D platform — which also supports Nissan’s redesigned Altima sedan, and will accommodate the nextgeneration Nissan Murano crossover SUV, and the newly redesigned 2013 Pathfinder SUV. While there are at least 13 mid-luxury crossover SUVs with three-row seating, the vehicle in everyone’s crosshairs — including Infiniti — is the popular Acura MDX. Starting from scratch with the MDX as their target, the Infiniti JX design team ended up with width and height slightly smaller than the MDX, but at 196.4 inches the new Infiniti is 4.8 inches longer, and sports a distinctly longer wheelbase — 114.2 inches, versus 108.3. The combination of longer wheelbase and

additional length gives the JX slightly more cargo and/or passenger room than the MDX, and the longer wheelbase delivers better ride quality. Walkaround: The challenge in crossover SUV design is making your basic box look like something else — without significantly compromising interior room. To do this, the design team gifted the JX with Infiniti’s prominent signature bull nose fenders and grille, flanked by High Intensity Discharge xenon headlights, with a pair of foglights positioned below. They added a raked windshield, curving roofline, and a forward-leaning rear hatch highlighted by a z-shaped rear roof pillar. In spite of being a new vehicle, the JX is hard to ignore, and hard to mistake for anything but an Infiniti. Interior: For $40,000, you expect more than a modest list of standard luxury accoutrements, and the JX doesn’t disappoint. Highlights include high-quality materials, leather upholstery, soft-touch surfaces, a standard power glass moonroof, electroluminescent instrumentation, a seven-inch color info screen, three-zone auto climate control, power rear liftgate, heated power front seats, four 12-volt power outlets, an above-average six-speaker audio system with USB connection for

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iPod and other devices, and a power tilttelescope steering column. There’s also touch-screen secondary controls coupled with some conventional buttons. Available in the numerous option packages are navigation, Infiniti Connection service, heated steering wheel, a 360-degree view camera monitoring system with moving object detection, and two kickass, Bose sound systems — a premium 13-speaker system or 15-speaker Surround Sound. Technology options include remote engine start, Driver Assistance Package with Backup Collision Intervention, adaptive cruise control, brake assist, forward collision warning, blind spot warning, distance control assist, active trace control, lane departure warning and blind spot intervention. The Theater Package comes with dual seven-inch color front seatback monitors, two wireless headphones, wireless remote control, auxiliary audio and video input jacks, a 120-volt power outlet, and two headphone jacks with individual volume control. Other options include roof rails, a Tow Package, polished 20-inch forged wheels, and a maple accents package (no charge). Dealer-installed accessories include a dualDVD entertainment system and crossbars for the roof rails. The spacious interior and accessibility to second- and third-row seats are courtesy of a middle bench that slides 5.5 inches, with seatbacks folding forward to make access easy, rather than the awkward struggle required in most other vehicles. Cargo room is another major advantage the JX boasts over the MDX, with almost 16 cubic feet behind the third row, as much as 47 cubic feet with the third row folded down and the second row adjusted all the way forward, for a total of over 76 cubic feet. Minivans offer more, but they’re still minivans.

Under The Hood: The Infiniti JX35 is powered by Nissan’s world-class 3.5-liter V6. Rated at a modest 265 horses and 248 pound-feet of torque, it’s paired with Nissan’s continuously variable transmission (CVT), a first for the Infiniti division. Like CVTs employed in Nissan passenger cars, the JX version has artificial steps programmed into its control chip if the driver elects to operate in manual mode. Behind The Wheel: The Infiniti JX is exceptionally quiet, very comfortable, and exhibits excellent road manners. However, while the workhorse V6 delivers pretty lively acceleration in the Murano, in the heavier JX it’s more deliberate than spontaneous, with methodical passing acceleration. The CVT is part of the reason. In standard drive mode the CVT keeps up with the engine in unhurried situations, but sudden acceleration demands produce that slipping-clutch sensation that’s been a drawback for all CVT’s since their invention. Nissan has done a much better job with CVTs than other automakers — and there are distinct fuel economy advantages — but it scores low on the fun-to-drive meter. Whines: The electro-hydraulic power steering could use some improvement, and handling isn’t particularly quick either, with hard cornering resulting in both understeer and body roll (lean). Driving the JX is in many respects, more like driving a big Lexus sedan than an Infiniti. Bottom Line: While the Infiniti JX scores well against the Acura MDX in many ways, it concedes some degree of fun if you’re a serious driver. That said, the Infiniti JX35 is one of the more attractive offerings in this market segment. Standard equipment is comprehensive, options are tempting, and optional safety features are innovative. It’s abundantly appointed, quiet, smooth, and roomy, with versatile interior adaptability, and priced competitively well for this class.


2013 Ford Taurus: Bigger and better than ever The only downside to all this great content was a price tag that seemed more Lincoln-like than Ford-friendly. The base price for our AWD Limited tester was $34,850 and with options and freight there was just enough left over from a $40,000 bill for a tank of gas. It’s not that there wasn’t tangible value, it just didn’t sync with our long-standing concept of a Taurus. Interior: The Taurus Limited interior is very upscale. As mentioned above, it was loaded with luxury features usually reserved for far more expensive cars. Interior materials are first-class as is the execution. Front-row leg and headroom are stretchout excellent. Comfort is outstanding, which makes the 2013 Taurus a wonderful long distance touring sedan. Rear seat room is dependent on where front seat occupants position their seats. When front seats are all the way back, rear legroom can be snug. Otherwise, it’s acceptable. Rear headroom and door clearance is a little close for tall people. The center floor hump is tall. Miscellaneous interior storage areas are adequate, but not overly spacious. The trunk is big and deep, but the lift over is high. A big, wide pass-through and folddown rear seat enhance functionality, except that the seats don’t fold very flat. There is a significant rise from the trunk floor to the folded seat backs. Under The Hood: The standard 2013 Taurus engine is the excellent 3.5-liter V6 that’s rated at 288 horsepower (25 hp more than 2012) and 254 lb-ft of torque. There is an available 240 horsepower 2.0-liter EcoBoost 4-cylinder engine and the 365-hp turbocharged SHO version of the 3.5-L V6. All Taurus models feature the fine 6-speed automatic transmission. Front-wheel-drive is standard, but V6 equipped SEL and Limited models can be optioned with AWD. Our AWD Limited Taurus was EPA rated at 18 city and 26 highway. In mostly city and short distance driving we averaged 17.5 mpg. The EPA only docks the AWD models one mile per gallon (city) over the front-wheel-drive V6 models. This is great news for Pacific Northwest drivers where all-wheel-drive is so attractive. Behind The Wheel: The 2013 Ford Taurus drives like a big, but not too big car. We wouldn’t call it nimble, but it’s far from being a wallowing old barge. The all-wheeldrive is a valuable performance/safety bonus. The engine is quiet and refined.

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Whines: A little more rear seat legroom would be nice as would bigger rear door bins. We’re still balking at the idea of a $40,000 Taurus, but we could easily accept it as a bargain Lincoln. Bottom Line: The 2013 Ford Taurus Limited AWD is an impressive, domestic full-size sedan that when properly equipped offers an incredible luxury car proposition at an attractive price. The new Taurus doesn’t wear a prestige badge, but it has all the substance.

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Acceleration is good and the transmission is smooth. Braking, handling, and maneuverability are all very good. If anything, it’s the interior’s high luxury content that discourages spirited driving more than any chassis/engine shortcomings. The well-insulated interior, superior seats, and excellent sound system put the driver in a more relaxed state of mind than what one usually associates with aggressive driving. Again, these are traits that make the Taurus Limited perfect for relaxed cruising.

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By Bruce Caldwell The 2013 Ford Taurus isn’t your father’s old Taurus. The midsize 1986 Taurus established a reputation as a decent, affordable, mostly reliable sedan/wagon that was also popular in fleet and rental pools. With the exception of the “sleeper” Taurus SHO models, the cars were pretty boring. Styling, to be polite, was bland. The well-known nameplate was temporarily shelved in 2006 during the short stint of the Ford 500. Former Boeing honcho Alan Mulally revived the Taurus when he became CEO of Ford. Mulally recognized the value of its strong name recognition and positive brand equity. Dealer demand was another contributing factor to the Taurus revival. When the Taurus returned in 2008 it was a full-size sedan instead of its former mid-size iteration. Substantial changes were made for its 2010 redesign and the Taurus has once again been updated for 2013. Outside of its nameplate and fourdoor sedan configuration there isn’t much in common with the Taurus of twenty-five years ago. Walkaround: The 2013 Ford Taurus is a much bolder, better-looking car than its predecessors. It has a more imposing presence. It is definitely a full-size sedan and as such it has assumed the flagship position in the Ford passenger car hierarchy above the popular Fusion, Focus and Fiesta models. The 2013 Taurus is offered in four models: SE, SEL, Limited and SHO. Our tester was the Limited AWD, which put it just slightly below the high-performance SHO (all-wheel-drive is standard on the SHO). The Limited model loads the Taurus with luxury and high-tech features including leather upholstery, 10-way power seat adjustment, rearview camera, Sync voiceactivated controls, and MyFord Touch, and handsome 19-inch alloy wheels. Our tester had additional options that boosted the luxury car factor including adjustable pedals, blind spot monitoring (a most worthwhile option), heated and cooled front seats, power tilt/telescopic steering column, active park assist, heated steering wheel, heated rear seats, rain sensing wipers (another great Pacific Northwest option), a power rear window sunshade, and a great Sony audio system (in addition to the standard Sirius XM satellite radio).


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

36 • Kitsap Peninsula Business Journal • KPBJ.com November 2012

Press Releases Email to pressreleases@KPBJ.com

The Kitsap Peninsula Business Journal is a special interest publication dedicated exclusively to providing news, information and opinions to the business communities of the Kitsap and Key Peninsulas, and North Mason County. It is published monthly by Wet Apple Media. Copyright, 2012, with all rights reserved. Postage is paid at Tacoma, WA. The Kitsap Peninsula Business Journal is read by more than 26,000 business, professional, political and military leaders in Kitsap, Pierce, and Mason counties. Additional copies are available for $1.50 each. Annual subscriptions are available for $25. Reproduction or use of any editorial or graphic content contained herein in any manner whatsoever without the expressed written consent of the Publisher is strictly prohibited. The Kitsap Peninsula Business Journal is proudly composed using Apple Macintosh® computers and printed by The Kitsap Sun, Bremerton, WA. Views expressed herein are strictly the opinions of the authors and do not necessarily reflect those of the advertisers or ownership of The Kitsap Peninsula Business Journal.

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Delivering solutions valued above existing alternatives... to innovate in Kitsap By John Powers, Kitsap Economic Development Allliance This year’s West Sound Technology Summit focused on “Innovation & Leadership.” The second Wednesday of October saw the Kitsap Conference Center crowded with business leaders and public officials gathered to explore the dynamics of innovation and its impacts on our local, regional, state, national and international economies. The program began with a warm welcome from the chairman of the West Sound Technology Association (WSTA), Charles Keating, and ended with a provocative keynote address by Gary Shapiro, president and CEO of the Consumer Electronics Association. The CEA represents over 2,000 electronics companies — enterprises that survive, or perish, on their ever-evolving capacity to innovate. Hats off to Charles and his board leadership for organizing this outstanding summit. In addition to Mr. Shapiro’s address — “The Comeback: How Innovation Will Restore the American Dream”( based upon his NYT bestseller, a great read) — community leaders were informed on a variety of topics related to innovation and its role in economic development: • Congressman Norm Dicks spoke to the need for enhanced cybersecurity to safeguard American business and intellectual property

• State Sen. Derek Kilmer addressed the critical need to support education and workforce development initiatives in order to enhance our ability to innovate, compete, and create the knowledgebased jobs of the future • Bremerton Mayor Patty Lent told a compelling story of Bremerton’s innovative revitalization of its urban core by doing more with less • Egils Milbergs, director of the Economic Development Commission of Washington State, delivered a persuasive argument for how Washington, known for its innovation, can build a world-class innovation ecosystem sustaining far-ranging economic development opportunities across the state and in particular here in the Central Puget Sound Region. I too was presented with an opportunity to review Kitsap’s economic development balance sheet with the attendees; and to describe how Kitsap’s many strong assets (educated workforce, growing technology cluster, advanced manufacturing prowess, intergovernmental collaboration, robust fiber communication network, and our strategic role in our region’s No. 1 economic cluster – defense) bodes well for Kitsap’s economic future, a future that I believe will continue to be shaped and advanced by innovation — through the public and private delivery of solutions valued above existing alternatives. Typically we look to private enterprise as the source of innovation; represented in such Kitsap-based companies as: Applied Technical Systems, Profile Composites, Rice Fergus Miller, Paladin Data,

Distributed Energy Management, Avalara, Watson, and Differential Energy Global Ltd, a division of Leader International. And, while it’s true that businesses generally lead the way in the commercial job-creating applications of new innovative designs, technologies, products and services – it’s also true that government often plays a significant role in spawning new innovative ways to serve the public and the businesses within their respective jurisdictions. Such an example is found in the collaboration of: Kitsap County’s Department of Information Services, and Department of Community Planning, together with the Kitsap Public Utility District, the cities of Port Orchard, Bremerton, Poulsbo and Bainbridge Island, Kitsap’s 911 first-responders, and the Kitsap Regional Library and five school districts in an effort to build a stronger, more robust fiber optic backbone throughout Kitsap County. This innovative public collaboration doubled the high-speed fiber network to 200 miles serving virtually every corner of the county. This collaborative approach to building a robust, cutting-edge public communication infrastructure right here in Kitsap County is the type of innovative public investment that supports the ability of Kitsap’s businesses to innovate and compete in a fast-moving knowledgebased global economy. Here’s to the innovators in Kitsap – both private and public! Thanks to you, our economic future is bright. • John Powers is executive director of the Kitsap Economic Development Alliance.


Sid Snyder: A good politician, a good man By Don C. Brunell, Association of Washington Business A few years after Sid Snyder retired as Washington Senate majority leader in 2002, elected leaders from both parties voted to honor by him renaming the street leading to the state capitol in Olympia “Sid Snyder Avenue.” It was a fitting tribute to a gracious man who worked tirelessly and in the best interests of our state. Snyder, who died on Oct. 14 at 86, was an icon. He was a politician whose respectful demeanor was in sharp contrast to today’s rancorous partisan atmosphere in the other Washington. The manner in which Sid Snyder approached public service is a model

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bone pain and fracture, bleeding, urinary obstruction) and ultimate death from this disease. As physicians, we recognize the value of evidence based medicine. But we also know the limitations of that data and we must combine our pooled clinical experience and expertise to individualize treatment decisions to optimize the health of our patients. A sweeping “one size fits all” decree such as the one suggested simply won’t do. Blindly following the USPSTF recommendation will result in more suffering and more needless deaths. Let’s not go back to the bad old days, let’s keep moving forward for the good of our grandfathers, fathers, brothers and sons! Respectfully, R. Alex Hsi, MD Peninsula Prostate Institute Peninsula Cancer Center Carleen Bensen, MD Olympic Medical Physicians Urology Clinic Peninsula Prostate Institute Scott Bildsten, DO Kitsap Urology Associates Peninsula Prostate Institute R. Heath Foxlee, MD Peninsula Cancer Center Peninsula Prostate Institute Alan Kowitz, MD Olympic Medical Physicians Specialty Clinic Sequim Peninsula Prostate Institute Berit Madsen, MD Peninsula Cancer Center Peninsula Prostate Institute Marc Mitchell, DO The Doctors Clinic Peninsula Prostate Institute Randall Moeller, MD The Doctors Clinic Peninsula Prostate Institute Keith Schulze, MD Kitsap Urology Asssociates Peninsula Prostate Institute

highways from Olympia to stock the shelves in his store and meet with constituents. To Sid, these folks weren’t just voters; they were his hardworking friends and neighbors. His district, which spread from Aberdeen south to the mouth of the Columbia River and east to Longview, suffered more than its share of economic hardships. For example, when the U.S. Fish and Wildlife Service put the Northern Spotted Owl on the threatened species list in 1992, loggers, truckers, tree planters and mill workers lost their jobs. When the marbled murrelet, a small seabird that nests in the coastal forests of the Pacific Northwest, was listed as a threatened species, it added to his constituents’ adversity. Then, fishermen and charter boat operators in his district were hit hard when the listing of several Pacific Northwest salmon runs curtailed commercial and sports fishing. Those lean years at Westport and Ilwaco wore on Snyder. But what galled him most was when an army of Caspian terns moved onto a sand island in the lower Columbia River and started gobbling up the young salmon heading to the ocean. To Sid, it didn’t make sense to allow the terns to dive bomb the young salmon and let California sea lions feast on the adult

fish at the base of Bonneville Dam. Those decisions hurt working families in his district and the challenge of all those government regulations was overwhelming for the people he represented. Snyder was a gracious, hard-working public servant who rarely personalized differences and leveraged his sense of humor to ease heated spats. His stories and tales were in good taste and funny. He had a calming effect on a legislative process that has often been likened to making sausage. In future years, people will walk down Sid Snyder Avenue and some young child may ask who Sid Snyder was. For those of us who knew, admired and worked with him, the answer is easy. He was a gentleman who liked people and worked tirelessly to do his best to help them. • Don Brunell is president of the Association of Washington Business. Formed in 1904, the Association of Washington Business is Washington’s oldest and largest statewide business association, and includes more than 8,000 members representing 700,000 employees. AWB serves as both the state’s chamber of commerce and the manufacturing and technology association. While its membership includes major employers like Boeing, Microsoft and Weyerhaeuser, 90 percent of AWB members employ fewer than 100 people. More than half of AWB’s members employ fewer than 10. For more about AWB, visit www.awb.org.

November 2012 Kitsap Peninsula Business Journal • KPBJ.com 37

To the Editor: The United States Preventive Services Task Force (USPSTF), a U.S. government supported organization, recently finalized its recommendation to discontinue PSAbased screening for prostate cancer for all men. We feel this was a recommendation that failed to recognize several important facts about prostate cancer, and that dealing with it in a “one size fits all” manner will ultimately lead to more American men dying from prostate cancer. Data from Medicare itself shows that from 1993 to 2007 (when PSA screening became routinely used), deaths from prostate cancer decreased by 40% and patients presenting at diagnosis with metastatic disease (cancer spread beyond the prostate gland) decreased by 75%. It should also be noted that the Task Force based much of its decision on a seriously flawed study while it ignored two other large randomized trials that did show a significant benefit to PSA screening. Even with current screening rates, over 30,000 men will still die of prostate cancer in the United States this year and that number will undoubtedly increase in the future if we blindly follow this recommendation. As clinicians who see prostate cancer patients everyday, we recognize that not all prostate cancer is the same. Prostate cancer can present with different levels of aggressiveness classified as low, intermediate, and high risk prostate cancer. Low risk disease can take 10 or more years to spread beyond the prostate while high risk disease can spread and ultimately kill in just a few years. If we abandon all screening, we will cheat men with the more aggressive forms of prostate cancer and those with a longer life expectancy (> 10 years) out of the chance for cure. As a result, more men will have to face the ravages of metastatic prostate cancer (i.e.

today’s politicians should emulate. He bridged differences and fashioned compromises. He genuinely liked the people he worked with at the state Capitol. In turn, they befriended Sid. Simply, it was hard to find anyone who had a bad word to say about him. Snyder respected the process by which laws were made. He labored long and hard to produce results for taxpayers, understanding that while it may be easy to point the finger of blame at others, it is much harder to find agreement. He was fond of telling everyone that he started as an elevator operator at the state Capitol in 1949, worked his way up to secretary of the Senate, and was elected Senate majority leader in 1995. Snyder was a true citizen legislator. He owned and operated Sid’s Market in Long Beach. Many nights and weekends, he would drive the winding two-lane state


Reopening Kitsap’s government for business five days a week This is being written about two and a half weeks before Election Day. However, by the time you read it, it’s very possible you may already know the outcome of the election. However, writing this in advance, all I can say is I believe there will be no changes taking place at the Kitsap County administration building, and both sitting commissioners — Rob Gelder and Charlotte Garrido — will be (were?) re-elected by comfortable margins. With that in mind, and no matter how the election actually turns out, it’s now time to turn our attention from the election process to what issues the commissioners — whoever they are — need to address moving forward. The number one issue as we see it is reopening the county administration building for business five days a week. As citizens, we pay for full-time government — not for 80 percent of it. This is an issue that was brought up repeatedly in both the county commissioner primary, and general election debate forums. All the candidates at the time stated they could see the need for it. The big question was how to pay for it. It appears Gelder and Garrido have since flip-flopped on that issue. Numerous good suggestions on how to accomplish it were brought forward during those forums, including using flextime; looking at the busiest hours, and adjusting staffing levels so they were minimal during known slow periods and adding people when the workload was known to be heavier; having some people who are currently off on

Friday work, while allowing them to be off Monday instead; as well as just diverting the money to pay the cost of being open from other, less critical budget items. In September, the Homebuilders Association (HBA) Board of Directors voted to put together a petition asking the commissioners to return the Department of Community Development, County Assessor, and County Auditor’s offices back to five days a week of full LARY COPPOLA public access. During the The Last Word HBA’s candidate interview process (in which, as a member of the HBA’s Government Affairs Committee, I participated), and after several meetings with the commissioners, it became abundantly clear they would refuse to budget for full service to the community, or adjust staffing levels to accommodate it. They appeared to be of the opinion that full service to the citizens is just not necessary — or desired — by business owners and community leaders. It has also been reported that both County Assessor Jim Avery and County Auditor Walt Washington have both said that they don't support a return to five days a week of public service either. Avery has told the Kitsap Association of Realtors executive officer Mike Eliason, as

well as the HBA executive vice president Teresa Osinski, that no one has complained to him about his office being closed on Fridays. However, I specifically remember having that discussion with Avery myself. Commissioner Gelder has also commented more than once that the title companies don’t want the county open on Fridays because they don’t have the staff to handle transactions five days a week. That’s simply not true. I don’t know who Gelder talked to, but the HBA went to great lengths to survey local title companies, and found just the opposite to be the case. So why is this important? The Realtors’ and builders’ main concern is transaction closing time frames. A transaction that is signed around on Wednesday won’t be recorded until the following Monday at the earliest, but usually Tuesday. It takes at least another day, and sometimes two, for the recorded paperwork to be conveyed back to the title companies, meaning the transaction can’t disperse until at least Thursday or Friday of the following week. That means buyers can’t move in, and no one gets paid for an additional week because of the Friday closure. But they aren’t the only ones being inconvenienced. When I was campaigning for commissioner, I would spend about two hours on Friday in front of the administration building handling out campaign literature to the people who had come — sometimes from as far away as Bainbridge Island, Kingston and Hansville

— to do their particular business with the county. They may have wanted to register to vote, register a vehicle, pay their taxes, get a permit for something, or a myriad of other things. How busy was it? Well, in spite of the closure, the hot dog vendor in front of the building was open, and the number of people doing business with him must have made it worth his time. I know in the two hours I was there, I would hand out at least 50 flyers to people who were either angry, or disappointed they had come all that way to Port Orchard, only to find they would be forced to return home, and make another trip. For some, this presented a problem because of work schedules. At $4 a gallon for gas, and an hour’s time from North Kitsap, this isn’t just an inconvenience, it’s an unnecessary personal expense for taxpayers. But what I find most disturbing is the elitist attitude of Gelder and Garrido, who don’t seem to believe being open five days a week is necessary at all. In a forum I attended, one of them stated that county employees liked the three-day weekends, and didn’t want that to change back. I’m sorry, but that’s a blatant case of the tail wagging the dog. County employees work for us — the taxpayers — not the other way around. It’s what we want that matters. It’s time the commissioners got that message. If you agree, call them at (360) 337-7146. You’ll probably have to leave a message, but you’ll know by their actions if what you have to say matters to them.

38 • Kitsap Peninsula Business Journal • KPBJ.com November 2012

Rise of ‘dark money’ diminishes democracy By the time readers get this issue of the Kitsap Peninsula Business Journal, many of them probably will have voted. So even if I wanted this column to influence anyone's choices — I don't — and even if I deluded myself into thinking my opinion could have such influence, it would be too late. For the record, political endorsements made by the Business Journal are publisher Lary Coppola's choices, and that's as it should be. Suffice it to say that his political views and mine don't align perfectly. Regardless of who's elected president, governor or county commissioner, this election cycle should compel everyone who claims to cherish and defend our democracy to take a hard look at what's happening to it. Because it's being corrupted by appalling sums of corporate money funneled anonymously through so-called "social welfare" groups, while the two-party system ignores critical issues and excludes important alternative voices. Some things that need to happen to restore our democracy to something resembling the fair system it's meant to be: • Overturn the U.S. Supreme Court's egregious Citizens United decision; • Thwart the hypocritical push for voter-

ID laws that are a cynically disguised voter suppression strategy — it's welldocumented that instances of voter fraud are as rare as sightings of Halley's Comet; • End exclusion of third-party candidates from the presidential debates, and stop arresting the ones who try to take part; • Abolish the electoral college. TIM KELLY Regarding that last item: The Editor’s View possibility that Mitt Romney could win the popular vote only to see President Barack Obama get enough electoral votes to win re-election, well, that may be a wry gratification to contemplate a dozen years after the Bush v. Gore outcome. But there's no justification for continuing such an outdated system. How could anyone still preach that every vote counts if the runner-up in actual voting wins the presidency? If ever there were an election year when a populist third-party candidate might draw support from voters disillusioned with the incumbent and distrustful of the challenger, this would seem to be it. Former two-term

President Teddy Roosevelt ran a robust but unsuccessful independent campaign in 1912 after splitting from the Republican party of his day, but in the century since then the twoparty system has only become more entrenched, as well as more beholden than ever to corporate interests and determined to choke off any third-party insurgencies. People can argue for or against letting third-party candidates in the debates. What’s unjustifiable, though, is the treatment of Green Party presidential nominee Dr. Jill Stein and her running mate when they sat in the street in nonviolent protest after police blocked them from entering the site of the second debate at Hofstra University in New York. These women — on the ballot in 38 states — were arrested and taken to a police holding area in a cold warehouse, handcuffed to a metal chair for hours, and released only after the debate was over. Serves ’em right for posing such a grave threat to the status quo. By far the most noxious force diminishing our democracy is the unfettered rise of groups spending vast sums of “dark money,” as allowed by the Citizens United ruling. Super PACs at least have to identify the billionaires bankrolling them. But the other groups are 501(c)(4) nonprofits, which

means unlimited contributions to them are not tax-deductible but their donors can remain anonymous. They have tax-exempt status because they’re supposed to “primarily” enhance social welfare, and they are subject to IRS restrictions on political spending — which are easily skirted and rarely enforced. The website ProPublica.org has published in-depth articles examining the ramifications of Citizens United and the extensive influence of dark money, including one headlined “How Nonprofits Spend Millions on Elections and Call it Public Welfare.” These groups that operate in “the darkest corner of American political fundraising” are spending more than $100 million this year, and will outspend the lavishly funded super PACs. The Supreme Court ruled corporations (and unions) have the same free speech rights as persons, and that money is protected free speech. So unlimited corporate money buys unlimited attack ads that distort facts and trample on truth. Meanwhile, two real people — beholden to no corporate donors — trying to exercise their real free speech rights are handcuffed and banished. Hard to argue that that’s democracy. • Tim Kelly is editor of the Kitsap Peninsula Business Journal.


ON THE SCENE AT KIANA LODGE (SEE PAGES 12 & 13 FOR THIS YEAR’S WINNERS)

Congratulations to the 40 Under Forty Class of 2012 Orchard; and Teresa Osinski, vice president and executive director of the Home Builders Association of Kitsap County. Special thanks to our sponsors: Kitsap Bank, Harrison Medical Center, Suquamish Clearwater Casino, Betty Skinner Insurance/Allstate, My Printing Services, Custom Picture Framing, and West Sound Workforce. For the second straight year, our keynote speaker (and past 40 Under Forty honoree) was state Sen. Derek Kilmer, 26th Legislative District.

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November 2012 Kitsap Peninsula Business Journal • KPBJ.com 39

The Kitsap Peninsula Business Journal’s eighth annual “40 Under Forty” event recognized a diverse group of people with an impressive list of accomplishments, both in their business careers and in their community involvement. The distinguished panel of judges who selected the honorees from this year’s nominees were Doña Keating, president and CEO of Professional Options consulting firm; Amy Igloi, proprietor of Amy’s on the Bay restaurant in Port

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