July 22-August 4, 2014 Section A

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Health Wise

ege The Coll s es Of Busin ion trat Adminis B At CSUL

Choosin g The Righ t Hospital Fo Your Chil r d’s Surgery

g Developin ning e th g n e And Str s c e onn tion Alumni C 4 e g a See P

See Page 22

lbbusinessjournal.com

July 22-August 4, 2014

Port Truckers

City Budget

Drivers Agree To ‘Cooling Off’ Period; Many Oppose Union Involvement

Foster Cautions Newly Elected Officials That ‘Freight Train’ Coming ■ By GEORGE ECONOMIDES Publisher was an ominous warning IBeachtexpressed by outgoing Long Mayor Bob Foster during

■ By BRANDON FERGUSON Staff Writer or five days during the F week of July 7, striking truck drivers at the ports of Long Beach and Los Angeles formed picket lines causing traffic and cargo delays. Dozens of longshore workers walked off the job in a sympathy strike on July 8 but were ordered back to work hours later after a federal arbiter said that by leaving their posts the workers had violated their contract.

At issue were claims that port drivers working for three companies – Green Fleet Systems, (Please Continue To Page 10)

Cybersecurity The Vault For The New Millennium ■ By MICHAEL GOUGIS Contributing Writer ank security officials no B longer lay awake at night, worried about bad guys with a stethoscope stealthily spinning the dials on the vault lock, listening for the tumblers to fall into place.

Nowadays, the security chiefs’ (Please Continue To Page 14)

New Mayor, Councilmembers Sworn In California Attorney General Kamala Harris administers the oath of office to Robert Garcia on July 15 as he assumes the office of mayor of Long Beach.

(Photograph by the Business Journal’s Thomas McConville) The Inaugural event photo spread – Pages 12 and 13 Publisher’s Perspective: Garcia and the city’s poverty level – Page 23

his early July press conference on the proposed fiscal year 2014-15 city budget. The big question for taxpayers is, will the new mayor and city council heed Foster’s warnings and suggestions?

The proposed budget must be approved in September, and goes into effect on October 1. A series of city council briefings and public hearings have been scheduled

Phone Bill In Telecomm Industry, Surcharges Abound, With Little Explanation ■ By BRANDON FERGUSON Staff Writer f it’s been a while since Ilookyou’ve taken a good, long at your office phone bill, you might want to do it now, unless, of course, you’re sensitive to sticker shock. You’ll probably be disheartened to find a laundry list (or lists) of mystery fees.

After doing a little math on our own bill for the May-June 30-day billing cycle, we here at the Business Journal were shocked to discover that of our total $672.04 bill – which covers 11 phone lines and FiOS Internet and TV – 22.6 percent was for taxes, surcharges and fees, or a total of $151.74. And there is no utility users tax (UUT) in Signal Hill,

Long Beach Business Journal 2599 E. 28th Street, Suite 212 Signal Hill, CA 90755-2139 562/988-1222 • www.lbbusinessjournal.com

where we are located (the Long Beach UUT is 5 percent).

Business Journal Publisher George Economides said that 22.6 percent of the bill for fees, taxes, surcharges, etc., “seemed extreme, especially since there is no explanation to determine how the fee is calculated. Verizon’s

prior to a vote on the budget. City councilmembers are expected to have at least one meeting within their district to discuss the budget with constituents. Contact your councilmember office for more details (refer to map on Page 5 listing city council information).

“While we have weathered a very great storm with the finan(Please Continue To Page 4)

‘Job Killers’ Bills That Target Businesses Advance In Sacramento ■ By SAMANTHA MEHLINGER Staff Writer

service is good, but I’d at least like to know what we’re paying for,” he said. “No matter which phone company a business uses, the fees associated with the bill should be described precisely.”

On the bill, these charges were broken down into two categories: (Please Continue To Page 18)

everal bills labeled “job S killers” by the California Chamber of Commerce (CalChamber) are set for hearings in the State Senate Committee on Appropriations on August 4, including legislation mandating (Please Continue To Page 8)

PRSRT STD U.S. POSTAGE

PAID Long Beach, CA PERMIT NO. 254

Donation From Recent ‘Salute To Bob Foster’ Publication In preparing the recent publication saluting now-former Mayor Bob Foster’s eight years in office, the Long Beach Business Journal offered to donate 10 percent of advertising sales ($7,000) to a charity chosen by Bob and Nancy Foster. Their choice was the Ronald McDonald House in Long Beach. Pictured with the former mayor and first lady are Ronald McDonald House Development Manager Jennifer Moore, left, and Board of Trustee’s President Jill Rosenberg, right.

(Photograph by the Business Journal’s Thomas McConville)

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INSIDE THIS ISSUE 2 Long Beach Business Journal

July 22-August 4, 2014

3 Newswatch 3-Long Beach City Hall News In Brief 3-Long Beach City Budget, continued from Page 1 5-Mayor And City Council District Map, Contact Info 8-Bill Target Businesses, continued from Page 1 10-Truck Drivers, continued from Page 1

11 Real Estate 11-Planning Commission Gives Green Light On Projects

12 Swearing-In Ceremonies 12-Pictures Of And Comments By L.B. Elected Officials

14 Banking 14-Cybersecurity, continued from Page 1 16-Update On Dodd-Frank

18 Analyzing The Phone Bill 18-Surcharges Abound, continued from Page 1

20 In The News 20-Memorial Again Named One Of Nation’s Top Hospitals 21-Nino’s Ristorante Italiano In Bixby Knolls Turns 56

22 Perspective Realty Views Federal Reserve Cites Problems With Housing Market By Terry Ross Effective Leadership How To Build And Maintain Trust By Mick Ukleja HealthWise Choosing The Right Hospital For Your Child’s Surgery By Dr. Fombe Ndiforchu Trade And Transportation Freight From Farm To Market By Tom O’Brien Publisher’s Perspective Addressing Local Poverty Concerns: Mayor Garcia And Other Officials Should Focus On Education, Not Minimum Wage By George Economides

Section B Focus On The City Of Carson

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July 22-August 4, 2014

City Considers Additional Grant Funds To Prepare For Bioterrorism â– By BRANDON FERGUSON Staff Writer The Long Beach Department of Health and Human Services (DHHS) is recommending at the July 22 meeting that the city council approve an amendment to an existing grant agreement between Long Beach and the County of Los Angeles to provide funding for bioterrorism preparedness and public health infrastructure development. The amendment would provide additional funding of $919,328 for the Public Health Emergency Preparedness (PHEP) and Cities Readiness Initiative (CRI) Programs, bringing the total grant amount to $2,817,484.

The Federal Centers for Disease Control and Prevention (CDC) has awarded the county funding for bioterrorism preparedness and other health emergencies since 2002. In August 2012, the city authorized an agreement with the county in the amount of $927,437. The county subsequently amended the agreement to provide an additional $970,719.

In a letter to the city council, DHHS explained, “This funding will allow the city to participate in a comprehensive regional risk hazard and assessment; develop a strategic plan to guide annual and long-term preparedness; enhance testing capacity of biological and chemical agents; and continue training and exercise programs that include issues related to aerosolized biological agent attacks, communicable disease control, pandemic influenza and terrorism.�

Funding is also expected to provide for community educational support for family disaster preparedness and related biological and natural disasters.

Long Beach City Hall News In Brief ■By BRANDON FERGUSON Staff Writer Vice Mayor Elected – At the July 15 city council meeting, 2nd District Councilmember Suja Lowenthal was elected to the position of vice mayor prior to the ceremonial swearing in of the new councilmembers. The process of electing the vice mayor began with Mayor Robert Garcia asking for nominations from the council. Each councilmember was allowed to make a nomination and no second was needed. Fourth District Councilmember Patrick O’Donnell announced his nomination for 8th District Councilmember Al Austin, followed by a nomination for Lowenthal from 6th District Councilmember Dee Andrews. Lowenthal won the election with “yes� votes from the 5th District’s Stacy Mungo, the 3rd District’s Suzie Price, the 1st District’s Lena Gonzalez and Andrews. Following her election, Lowenthal took a moment to

Long Beach Business Journal 3 welcome the new councilmembers. “This is an exciting time and I’m really looking forward to the new councilmembers who have joined us, and becoming a new team together,� Lowenthal said.

Health Department Recognized – The Long Beach Health Department was recognized for its use of social media to engage the community, according to a July 11 press release. Honored with the grand prize in the public health professional category by the American Public Health Association (APHA), the department has also been selected to present its social media strategies during the national public health convention this year. In a statement, former Mayor Bob Foster acknowledged the work of the department. “Our health department promotes, protects and preserves public health throughout our community, and I am very pleased that our health department received this national recognition,� Foster said. The health department’s social media outreach includes a video on the department’s YouTube channel as well as posts on the department’s Facebook, Twitter and Instagram sites. The health department will present its social media strategies during the APHA’s annual meeting in New Orleans in November.

Council To Consider New Budget – Tonight, the Long Beach City Council considers a staff recommendation to discuss an overview of the proposed FY15 budget.

The city manager released the budget in early July to former Mayor Bob Foster. The current council has until mid September, (Please Continue To Page 4)

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NEWSWATCH 4 Long Beach Business Journal

City Hall News In Brief (Continued From Page 3)

Developing And Strengthening Alumni Connections California State University, Long Beach has year by year become more competitive, receiving over 80,000 applications annually. Among the university’s many prestigious programs, the College of Business Administration (CBA) provides excellent educational and career opportunities for its students. Now the CBA

By Roney Bowles, District Manager, seeks to unite its ever-evolvADP (HR/Compliance ing student and alumni Division) and President of CBA A&F bases by creating a bridge for these groups to learn from one another and realize their full potential.

The College of Business Administration Alumni & Friends network (CBA A&F) is that bridge. With 43,500 alumni, the CBA family is large and diverse. CBA A&F engages our alumni community by supporting its professional needs and providing networking and business opportunities. Additionally, we invite friends of the CBA – broadly defined – to join our network.

The CBA A&F mission is to maximize the value of the CSULB degree by engaging alumni and friends of the College of Business Administration in opportunities to develop personally and professionally, enhance each other’s business success, and support CBA and students professional development.

CBA A&F offers alumni resources and events, and provides a platform for networking and job placement. The organization has three events per year in addition to partnering with CBA student clubs and organizations and CBA’s Student Center for Professional Development. Our advisory board members bridge classrooms and careers by speaking at student organization events on professional development topics. CBA A&F members also volunteer as mentors for SCPD’s Junior and Corporate Mentoring programs.

The Annual Kick-Off Mixer attracts 120+ alumni, recruiters, students, and faculty in an informal and open environment for members to get acquainted and take advantage of networking opportunities. Fall and Spring Speaker Events hosted by CBA A&F feature presentations on a variety of topics to audiences of students, faculty, and alumni. Former speakers included executives from UPS and Sketchers, as well as entrepreneurs and social media experts.

CBA A&F is a volunteer-driven organization.

Advisory board members organize events and serve as guest speakers and mentors. Because of what the university has given us, we give back to current students while strengthening alumni connections. We embrace diversity and flexibility, and we encourage you to join and find an area of CBA A&F that matches your passion.

(The College of Business Administration at Cal State Long Beach is an AACSB accredited business school that provides undergraduates and MBAs with the knowledge and skills necessary to be successful in their careers and to propel the economic development of our region.) ■

when a vote will be conducted to approve the final budget.

Real Estate Ordinance – Tonight the city council will consider a recommendation to declare an ordinance amending the municipal code. The amendment would require anyone selling real estate to the city for $1,000,000 or more to disclose the identity of all third party finders and brokers entitled to compensation from the seller. Mayor Bob Foster, who at the July 1 meeting expressed a desire for more transparency in city real estate transactions, proposed the amendment. “In my tenure here, there’s been a number of very large real estate transactions that the city may be involved in and one of the concerns I’ve come up with is that there’s not adequate transparency,” Foster said. “[This ordinance] is really a way to try to make sure that with any transaction going forward there is complete transparency.” At that meeting, the council voted to direct City Attorney Charles Parkin to draft the amendment. Parkin is recommending the city adopt the amendment tonight.

Uptown Property and Business Improvement District – The council will consider at tonight’s meeting a recommendation to approve a $100,000 transfer from the 9th District’s onetime infrastructure fund to the Uptown Property and Business Improvement District (Uptown PBID). Property and business owners voted to establish the Uptown PBID in October 2013 to revitalize business corridors and the surrounding community along Atlantic Avenue from Market Street to Artesia Boulevard and along Artesia Boulevard from Atlantic Avenue to Orange Avenue. Revitalization measures include security, maintenance, marketing and economic development.

Cherry Avenue Improvement – The Long Beach Department of Public Works is recommending the city council adopt plans at tonight’s meeting to improve Cherry Avenue between Ocean Boulevard and Pacific Coast Highway. If approved, the council will award a contract to Alabassi Construction and Engineering of Riverside, not to exceed $2,127,499. The work will include replacing damaged curbs, sidewalks, alley entrances and gutters as well as the trimming or shaving of tree roots. The plan also calls for resurfacing of pavement, addition of bus pads and traffic striping. Old asphalt will be recycled into new concrete or used as base material on other street projects. The total project cost is estimated at $2,500,000, of which $1,550,000 is budgeted in the city’s transportation fund. An appropriation increase of $950,000 is being requested in the transportation fund. There is no estimate on when the work will begin.

Artesia Boulevard Improvements – Tonight the department of public works is recommending the council adopt a plan to improve Artesia Boulevard between the west city limit and Butler Avenue. Public works also recommends the council award the contract to Sully Miller Contracting of Brea for a total not to exceed $965,509. The rehabilitation project will include filling cracks in pavement, street resurfacing, replacing damaged sidewalks and curbs and installing bus pads. The street will be resurfaced with asphalt containing up to 15 percent recycled material.

Landscape Architectural Services – Tonight the city council will consider a recommendation authorizing City Manager West to enter into contracts with four companies in order to provide as-needed landscape architectural services for a twoyear term. The recommendation by the department of public works includes an option to extend the term for three additional years funded by an aggregate amount of $3,000,000 for the entire term. The four recommended companies are: AHBE Landscape Architects of Los Angeles, Hirsch & Associates Inc. of Anaheim, Mia Lehrer & Associates of Los Angeles and RJM Design Group of San Juan Capistrano. The companies’ services are required for a range of capital projects including design services for new parks, street landscaping and improvement of existing open spaces.

New Police Vehicles – Tonight the council will consider awarding a contract to Chevrolet of Watsonville for the purchase of four two-wheel drive Chevrolet Tahoe police pursuit vehicles. The amount of the contract is not to exceed $130,365. The contract, if approved, will allow the option of purchasing an additional two-wheel drive vehicle not to exceed $32,591 for a total contract amount of $162,956.

Childhood Lead Poisoning – Tonight the council will consider accepting additional funding from the California

July 22-August 4, 2014 Department of Public Health totaling $94,781 for the Childhood Lead Poisoning Prevention Program (CLPP).

According to a letter sent to the city council by the Long Beach Department of Health and Human Services, the city first accepted $764,376 from the state for CLPP in October 2013. In June 2014, the state issued a new agreement bringing the total amount of funds available to $859,157. The letter explained that CLPP focuses on children under six years of age and performs outreach to parents, teachers and physicians. The program also ensures that a public health nurse manages cases of children stricken with lead poisoning.

Funding also provides for physician services and home inspections by a registered environmental specialist.

One-Stop Career Providers – The council considers tonight authorizing City Manager Patrick West to execute a contract with One-Stop Career Center service providers. The contract includes funding not to exceed $3,590,097 to support strategies to provide training and employment services to residents. The Pacific Gateway Investment Network is responsible for administering funds received by the city for job training programs.

Recipients of the money include the Career Transition Center, Youth Opportunity Center and the Torrance Career Center.

Additionally, Pacific Gateway provides funds to various community-based organizations. City documents indicate organizations including Cal State Dominguez Hills, Cal State Long Beach and Long Beach Memorial Center receive funding to provide career training. City staff estimates the funding provided in this contract will result in job training for hundreds of residents.

Gas Pipeline Upgrade – Tonight the council considers adopting plans to install a new gas main pipeline and regulator stations. The plan includes awarding a contract, not to exceed $2,441,016, to ARB Inc. of Lake Forest. The Long Beach Gas and Oil Department is requesting approval of the plan, which is intended to improve system integrity.

According to a city document, funding for the project is budgeted in the city’s gas fund. Construction is anticipated to begin in August and be completed by February of next year.

Disaster Preparedness Fair And Jazz Concert – On Saturday, July 26, the Country Club Manor Association presents the Disaster Preparedness Resource Fair & Jazz Concert at Scherer Park. The event, which will provide information on preparing disaster kits, developing an emergency plan and administering basic first aid, will feature booths set up by the city’s police, health and fire departments. The event lasts from 11 a.m. to 3 p.m. Scherer Park is located at 4600 Long Beach Blvd. For more information call Gloria Bradley 626/818-8920. ■

Long Beach Proposed Budget (Continued From Page 1)

cial crisis, there is another very large storm brewing and that is coming starting in 2017 all the way through to 2021,” Foster cautioned. “So the city council wisely rolled over the budget surplus from last year to meet what are sure to be higher anticipated costs in the future.”

But, he said, past council actions are not enough and that much more needs to be done by the new mayor and councilmembers because the “freight train” is on the tracks.

“Unfortunately the nature of those costs and the magnitude of those costs are such that that will be a very small piece of what is necessary. So the good news is we’re on solid ground today; the bad news is that there is so much coming at the city that I felt it incumbent upon me to recommend to the new council and the new mayor some things that have to be looked at, or should be looked at, starting now, to be able to meet what is going to be a, in my view, almost a freight train coming at the city largely due to the very positive notion that the State of California and the public employees’ retirement system are putting their system on an actuarially-sound basis.

“They are going to try to basically put costs on their member agencies so as within 30 years they will eviscerate the unfunded liability,” Foster continued. “That’s a sound principle; it’s the right thing to do. Unfortunately it will start sending costs to the City of Long Beach beginning 2016 or 17 . . . and they will increase every year and pancake on top of one another until 2021 in which they will wind up being more than $35 million a year in ongoing cost.”

Foster has been widely credited with keeping the city fis(Please Continue To Page 6)

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THE LONG BEACH MAYOR AND CITY COUNCIL CONTACT INFORMATION Mayor Robert Garcia

Long Beach City Hall 333 West Ocean Blvd.

Long Beach, CA 90802 www.longbeach.gov

E-mail: mayor@longbeach.gov 562/570-6801 MARK TAYLOR, CHIEF OF STAFF

562/570-6555 (General Information) City Hall is open 7:30 a.m. to 4:30 p.m.

Monday through Friday

SHARON WEISSMAN DANIEL BREZENOFF ISAAC ROMERO DEVIN COTTER (NOTE: AS OF PRESS TIME, THE MAYOR’S STAFF AND RESPECITVE TITLES HAD NOT BEEN FINALIZED)

9TH COUNCIL DISTRICT REX RICHARDSON

8TH COUNCIL DISTRICT AL AUSTIN

E-mail: District9@ longbeach.gov 562/570-6137

5TH COUNCIL DISTRICT STACY MUNGO

SHAWNA STEVENS

7TH COUNCIL DISTRICT ROBERT URANGA

E-mail: District8@ longbeach.gov 562/570-6685

MARINA ESCOBEDO

JONATHAN KRAUS

TED WILLIAMS

CHIEF OF STAFF

AMY TOPETE

STRATEGIC INITIATIVES AND COMMUNICATIONS DIRECTOR

FIELD DEPUTY

JOHN COMFORT

MELODY NGAUETU’UHOLOAKI

District Office

E-mail: District5@ longbeach.gov 562/570-5555

6509 GUNDRY AVE.

MICHAEL CLEMENTS

RELOCATING TO OLD FIRE STATION 12

ALLISON ANDERSON

CHIEF OF STAFF FIELD DEPUTY

SPECIAL LIAISON

FIELD DEPUTY

HEATHER MORRISON COMMUNICATIONS DEPUTY

FIELD DEPUTY

ANTHONY GARCIA

HEIDI WIERSMA

LEGISLATIVE INTERN

FIELD OFFICE COORDINATOR

District Office E-mail: District7@ longbeach.gov 562/570-7777

CHIEF OF STAFF

District Office

5641 ATLANTIC AVE. 562/570-1326

2760 STUDEBAKER RD 562/570-5555

RAY POK CHIEF OF STAFF

CYNTHIA VALENCIA CONSTITUENT SERVICES REP

District Office 2125 SANTA FE AVE. 562/570-4461

6TH COUNCIL DISTRICT DEE ANDREWS

4TH COUNCIL DISTRICT PATRICK O’DONNELL

E-mail: District6@ longbeach.gov 562/570-6816

JOHN EDMOND E-mail: District4@ longbeach.gov 562/570-6918

CHIEF OF STAFF

TONYA MARTIN LEGISLATIVE ANALYST

KIMBERLY DODSON ADMINISTRATIVE ANALYST

1ST COUNCIL DISTRICT LENA GONZALES

BRIAN MINEGHINO

2ND COUNCIL DISTRICT VICE MAYOR SUJA LOWENTHAL

CHIEF OF STAFF

BRENDA CALOCA OFFICE MGR/SCHEDULER

3RD COUNCIL DISTRICT SUZIE PRICE

MARK BLOESER FIELD DEPUTY

ALLISON GALLAGHER COMMUNICATIONS SPECIALIST

E-mail: District1@ longbeach.gov 562/570-6919

E-mail: District2@ longbeach.gov 562/570-6684

SILISSA URIATE SMITH

BROC COWARD

CHIEF OF STAFF

CHIEF OF STAFF

STEFAN BORST-CENSULLO

MARK MAGDALENO

E-mail: District3@ longbeach.gov 562/570-6300

LEGISLATIVE DIRECTOR

FIELD DEPUTY

JULIE MALEKI

FRANCISCO DAVILA

HEATHER BLACKMUN

CHIEF OF STAFF

FIELD DEPUTY

ADMINISTRATIVE ASSISTANT

KRISTINA DUGGAN

ABIGAIL MEJIA

FIELD DEPUTY

PART TIME ADMIN AIDE

RICKY DOCKERY BUSINESS LIAISON

ANTONELLA SCHAUB COMMUNICATIONS DIRECTOR

District Office

Note: City Council District boundaries shown above are approximate.

Presented by the Long Beach Business Journal • July 2014

340 NIETO AVE. 562/570-8756

1_LBBJ_July8_SectionA_LBBJ MASTER LAYOUT 7/20/14 5:08 PM Page 6

NEWSWATCH 6 Long Beach Business Journal

Long Beach Proposed Budget (Continued From Page 4)

cally sound during his two terms in office, staving off potentially devastating cuts to staff and services by instituting fiscal discipline across all city departments.

In his budget message, he outlines a series of recommendations that he believes should be put in play by the city’s new elected leadership. “The point of these recommendations,” Foster said, “is that if the council and mayor take action now and start doing prudent things now, and in some cases some unpleasant things now, you can forestall what would be very draconian measures in the future.”

He stressed that no matter how strong the local economy may bounce back, it won’t be enough to cover future costs.

“Now some of you say, you can have two sides of the equation. You could have reductions in cost and you have revenue enhancements. What’s driving all this are the increases in personnel and pension costs and expenses that far exceed anticipated revenues. New revenue may come in – we hope it does. But even if you have a very robust economy, the revenue will never get close to what is coming at us.”

Mayor Garcia Issues Statement The day after the July 8 press conference, Robert Garcia, who replaced Foster as mayor on July 15, issued the following statement: “Over the last few years, I’ve worked

July 22-August 4, 2014 hard with Mayor Foster to reform our pension system and eliminate our structural deficit. The 2015 budget proposal and recommendations provide a good guide for enacting a responsible and balanced budget. Over the next few weeks I will review the proposal, make recommendations, and work with the city council to pass a budget that protects core services, pays down our liabilities, and sets aside funds for future rainy days. I will not allow the city to spend more than we can afford.”

Foster’s Recommendations Following are some of the highlights from the series of budget recommendations by Foster. He focused on employee costs since they represent about 75 percent of budget expenditures.

• Contract Negotiations: “Employees have grown to expect pay increases during contracts renewals. It is difficult to see how the city can afford any increase in pay for employees with the substantial cost increases coming to meet the obligations for their pensions.

“Every 1 percent increase [in payroll] is $2.6 million more in General Fund costs, and those costs will continue every year.

We know we will need over $35 million per year in 2021. Any amount we provide employees will increase that amount. The 2001 pension spike is now fully making its impact felt. The truth is we could not afford that decision then, and its full impact is unaffordable in the years ahead.”

• Skill Pay: “I recommend that the city council initiate a careful review of skill pay

with the goal of substantially reducing their number and cost.” [Foster noted there are 136 skills pay categories and that in 2013 it resulted in $19.9 million in additional pay to employees.] “It would be difficult to cite a specific number, but a reasonable goal would be no more than 30 citywide. Any cost savings should be “reserved” to meet the CalPERS increases we know are coming.”

• Retiree Medical Sick Leave Conversion: “While Long Beach does not offer medical coverage for its retirees, it does allow them to accumulate their unused sick leave hours and use them to purchase medical coverage when they retire. The present program accumulates unused hours and at retirement, the hours are multiplied by the final salary to arrive at a dollar figure (unused sick leave hours x final salary). This figure is then used to purchase insurance for however long the dollars last. This has created an unfunded liability for the city of $119 million.

“A more fair way of calculating this benefit would be to calculate the value based of the actual rate of pay when the time accrued, instead of the final salary. This would truly reflect what was earned by the employee, and be a more appropriate and equitable manner to calculate this benefit and reduce the city’s unfunded liability.”

• Employee Retirement Contribution: “The pension reform recently achieved, required employees to pay more of their retirement costs. . . . This was a key point during the last negotiations, but there is a huge gap in costs and it will get much bigger in the next few years.

“While I know that this will not be a popular issue with employees, given the needs of CalPERS and the fact that these funds are applied to the employee’s retirement account, it will very likely be necessary to increase the employee contribution by another 2 percent or perhaps 3 percent.

“Consider that increased employee contributions of 3 percent would produce $6 million annually to reduce the deficit. The City Council should begin the MOU negotiations with a specific goal to achieve in this area. To be blunt, it is doubtful the City can achieve the necessary savings for 2016-2021 without larger contributions from employees.”

• Co-Pays And Health Insurance: “Long Beach offers its employees comprehensive health care with relatively low copays and deductible levels. This, too, is an area the city will need to explore to achieve cost savings. Private employers have been moving in this direction for years and while the city has moved forward somewhat, it is time for a more effective cost sharing structure that gives employees more incentive to help control costs.”

Foster also offered suggestions regarding developing more partnerships with the private sector, adding a higher percentage of revenue to the reserve fund for unfunded liabilities and keeping the budgeted revenue expected from oil on the conservative side [currently at $70 per barrel].

The Proposed Budget City Manager Pat West’s proposed budget comes in at $3 billion for the 2014-

Board Chairs Academy “Our agency's participation in the Board Chair Academy has given us the essential tools and approach we need to accomplish our mission. The material is well thought out, expertly presented with lots of opportunity for interaction with other participants.”

TAMMIE KYLE Executive Director, Comprehensive Child Development, Long Beach

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1_LBBJ_July8_SectionA_LBBJ MASTER LAYOUT 7/20/14 5:09 PM Page 7

NEWSWATCH July 22-August 4, 2014

15 fiscal year. Of that total, only $401 million – the general fund – is completely discretionary. The general fund “provides much of the resources for critical city services, including police patrol, fire response, parks, streets and sidewalks repair, and library services.”

West pointed out that general fund revenue has been pretty much flat over the past several years. “The overall trend in the major sources of general fund revenue has been essentially flat over the last five years,” in wrote in the budget document.

“While sources such as property tax and sales tax increased during this time frame, others such as utility users tax and parking citations experienced consistent decline.”

Long Beach Business Journal 7

But he also noted that significant revenue for the general fund come from other city sources such as from towing, the waste-to-energy facility known as SERRF and from oil and gas extraction. “In FY 15, the general fund is expected to receive over $19.4 million from local oil operations,” he wrote.

On the expense side of the general fund, police costs equate to 50.1 percent of all expenditures, while the fire department takes up another 18.9 percent. Combined, public service accounts for 69.4 percent of the general fund. Other expense areas are: public works, 8.6 percent; parks, recreation and marine, 8.1 percent; elected and appointed officials, 4.9 percent; library

services, 3.3 percent; and disaster preparedness is 0.4 percent. The remaining 5.7 percent falls under the “other” category.

Mayor And City Council Offices The total budget for the mayor and city council is proposed at $4,747,735, and includes 45.85 full-time equivalent personnel. These numbers represent two fewer employees than budgeted a year ago, and a reduction if overall expenditures of approximately $128,000.

Each of the nine city council offices has a proposed budget of $403,287 in FY14-15 to use for: salaries, wages and benefits; materials, supplies and services; and for internal support. Each councilmember, in

the proposed budget, receives a salary of just over $34,000, which, per the City Charter, is 25 percent of the mayor’s salary.

The mayor’s office budget is $818,737, with $754,080 budgeted for salaries, wages and benefits for six full-time equivalent employees. The mayor’s salary is $136,664.

The mayor and city councilmembers also have a proposed budget of $299,415 for “department administration,” which, according to the budget document, “provides administrative support to the mayor’s office and nine council districts. Contractual services, citywide community meetings, office equipment and supplies for the mayor’s office and council districts are provided through department administration.” ■

1_LBBJ_July8_SectionA_LBBJ MASTER LAYOUT 7/20/14 5:09 PM Page 8

NEWSWATCH 8 Long Beach Business Journal

Bills Target Businesses (Continued From Page 1)

employers provide all workers with paid sick leave, allowing employees to file liens on an employer’s property due to alleged wage claims and imposing liability on a business when an entity contracted by that business violates wage and hour laws.

One such CalChamber-labeled job killer is Assembly Bill (AB) 1522, authored by Assemblymember Lorena Gonzalez of San Diego, which would require employers to grant paid sick days to employees who work 30 or more days in a calendar year.

Sick days would be accrued “at a rate of no less than one hour for every 30 hours worked,” according to the bill.

AB 1522 allows employers to limit paid sick days to three per year. The bill mandates unused paid sick days be carried over to the following year, a point which an article on CalChamber’s website called “a significant change in existing law.”

CalChamber argued that the bill would “create a huge burden on employers” by causing increased costs to doing business.

When AB 1522 passed the Assembly Labor and Employment Committee in March, Gonzalez released a statement explaining the rationale behind the bill.

“Both workers and their employers lose out when employees have to choose between reporting for work while sick or losing pay because they don’t,” Gonzalez stated.

While CalChamber argued the bill would increase the cost of doing business, Gonzalez believed it would accomplish the

July 22-August 4, 2014 opposite. “Every time this choice comes up for a sick employee, everyone loses money – whether it’s through unnecessary emergency room costs, the billions of dollars lost in productivity annually when sick employees try to work while under the weather or lost wages that impact whether working families can put food on the table.”

Another bill CalChamber has been tracking is AB 2416, also identified as a potential job killer. “It is dealing with the ability for an employee to file a lien on any employers’ property or a third party’s property where work was performed for alleged but unproven wage claims,” Jennifer Barrera, CalChamber policy advocate, told the Business Journal. AB 2416 is also scheduled for a vote on August 4. Assemblymember Mark Stone, who represents Santa Cruz, Santa Clara and Monterey Counties, wrote the bill with Long Beach Assemblymember Bonnie Lowenthal.

The reasoning behind AB 2416, as explained on Stone’s website, is to “provide workers who are victims of wage theft with an opportunity to receive the wages they are owed . . . prior to a business closing.”

One of the main points of contention CalChamber has with AB 2416 is it would allow employees to file liens when they determine they have not been paid due wages rather than when a labor commissioner or judge makes that finding, Barrera said. Essentially, an employee could file a lien for unpaid wages “without anybody overseeing the claim to make sure it is legitimate or has merit,” Barrera said.

Once an employee files a lien, “It would

be up to the property owner at that point to go to court or petition the labor commissioner to have the lien removed claiming it was unjustified or it never should have been filed in the first place,” Barrera explained. “[AB 2416] would be a huge burden not just on employers but on third parties where workers performed on their property, as they could be forced to deal with a lien for a claim that they have no knowledge about or nothing to do with,” she said.

Another CalChamber job killer-labeled item is Assembly Bill 1897, which would require businesses “to share with a labor contractor all civil legal responsibility and civil liability for the payment of wages, the obligation to provide a safe work environment, as specified, and the failure to obtain valid workers’ compensation coverage,” as stated in the proposed legislation. In other words, as Barrera explained it, this would make businesses liable for wage and hour violations caused by contractors they employ.

Not impacted by AB 1897 are motion picture payroll services, hiring halls, nonprofit community organizations and businesses employing less than 25 people, including those directly employed by the business and those hired through a labor contractor.

Barrera said CalChamber’s concern with AB 1897 is that workers employed by labor contractors could pursue labor violation claims against the business using the contractor before first perusing a claim against the contractor. “[Contracted employees] could just go directly to the company that contracted for those services and file a lawsuit against that company for the wage and hour violations that they didn’t control, didn’t have any knowledge about and couldn’t prevent because they were not the actual employer,” she said.

The author of the bill, Assemblymember Roger Hernandez, explained the reasoning behind AB 1897 in a statement he released in June following the bill’s passage in the Senate Judiciary Committee. “Currently, employers are utilizing the subcontracted model . . . to avoid accountability in the workplace. Many times, the employer and the staffing agencies are able to avoid responsibility to the worker, leaving the worker without any rights to hold either party accountable if a labor violation arises,” he stated. “AB 1897 is about saving good jobs and preserving our fragile middle-class, while holding companies accountable for wage theft and other abuses.”

In addition to labor-related legislation, other bills considered anti-business by CalChamber are coming up for votes in August, including AB 52, a bill that would require agencies completing environmental impact reports for development projects to comply with the California Environmental Quality Act (CEQA) to consult with regional Native American tribes about whether or not the development could impact tribal cultural resources. AB 52 states that “a project with an effect that may cause a substantial adverse change in the significance of a tribal cultural resource” would be considered to “have a significant effect on the environment.”

A letter of opposition to the bill by CalChamber, co-signed by other entities such as the California Retailers Association, stated, “AB 52 is a dramatic expansion of CEQA that inserts religion into an environmental statute and, as a

Susan Wise Steps Down From Harbor Commission Harbor Commissioner Wise has decided not to seek another term on the commission, which oversees Long Beach Harbor Department operations. Wise began her sixyear term on the harbor commission in 2008. Her last meeting was on July 14, when she was recognized with comments from her fellow commissioners.

“Commissioner Wise has brought many new ideas and initiatives to the board, and has been a champion of hiring locally and of women in the maritime industry,” Harbor Commission President Drummond said.

Both Drummond and Harbor Commission Vice President Rich Dines commended Wise for being both a role model and champion for women in the international trade industry. “One of the things that really stands out to me is your passion for and drive for women in international trade,” Dines said. Wise’s departure leaves a seat open on the five-member commission, which must be filled by an appointment by Mayor Robert Garcia. His recommendation must be approved by the city council. ■ – Staff Writer Samantha Mehlinger

practical matter, grants Native American Tribes broad, irrefutable authority to determine anything is a tribal cultural resource entitled to CEQA protection.”

Minimum Wage Bill Fails, Is Granted Reconsideration A bill which would have significantly increased the California minimum wage was rejected by the Assembly Labor Committee on June 25, but was granted reconsideration, meaning that the bill’s author may choose to bring it back for another vote.

The legislation, Senate Bill 935, would increase the California minimum wage to $11 per hour on January 1, 2015, to $12 per hour the following year and $13 per hour in 2017. Every year after 2017, the minimum wage rate would be adjusted by the rate of inflation. Once implemented, the legislation would negate Assembly Bill 10, which went into effect on July 1 and increased the minimum wage to $10 per hour.

The bill’s author, California Senator Mark Leno, indicated the bill would not progress this year. “While our minimum wage proposal is not moving forward this year, it is increasingly clear that the state must take further action to help lift Californians out of poverty,” Leno said in a statement. He continued, “Increasing the minimum wage is good for women, children and families in California who rely on low wages. It reduces reliance on taxpayer-funded social safety net programs and boosts the economy. Our work on this issue does not end today.”

Barrera said the Chamber opposed the bill because it was unfair to businesses. “It fails to take into account the other costs other businesses are currently undergoing here in California including higher energy costs, higher workers’ compensation costs, higher taxes,” she said. “From our perspective it was just too much for businesses to take on.”

A report released by the National Federation of Independent Businesses Research Foundation in May forecast 323,300 jobs within California would have been lost by 2024 “due to the bill’s mandated increase in the cost of labor” if the bill had passed. ■

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1_LBBJ_July8_SectionA_LBBJ MASTER LAYOUT 7/20/14 5:09 PM Page 10

NEWSWATCH 10 Long Beach Business Journal

July 22-August 4, 2014

Pictured are several of the 50 truck drivers who gathered July 10 at a press conference. The drivers, most of whom represent two trucking companies, are opposed to union involvement. One driver said that of the 110 owner-operators who work for Pacific-9 Transportation, only 10 or 15 want union representation. Pictured standing, from left, are: Porfidio Campos, Ricardo Cuellar, Walter Solaris, Aaron Perez, Blanca Machado, Xiomara Perez-Barragan, Gloria Rodriguez, Juan Carballo, Hector Amaya, Geovanny Lopez, Julio Huerta, Ana Rodriguez, Hubaldo Rodriguez and Juan Carlos Ramos.

Kneeling, from left, are: Jose Oscar Santos, Erik Orellana, Fausto Diaz, Mario Machado, David Morales, Amado Zamora, Rene Castro, Francisco Medina and Guillermo Amaya. (Photograph by the Business Journal’s Thomas McConville)

Truck Drivers (Continued From Page 1)

Pacific-9 Transportation and Total Transportation Services, Inc. – are misclassified as independent contractors, which deprives the workers of steady wages and benefits. For the time being, the drivers have gone back to work following a request

by Los Angeles Mayor Eric Garcetti for a “cooling off ” period.

In a statement, Fred Potter, international vice president of the International Brotherhood of Teamsters, said drivers agreed to suspend picketing while Garcetti investigates their claims.

“While the drivers wanted to continue the strike, they agreed to a cooling off period,” the statement read. “Mayor Garcetti personally committed to them that he will thoroughly investigate the serious injustices and take strong action

as there is no place for law breakers at the Port of Los Angeles.”

But a statement issued by Green Fleet through Harbor Trucking Association Spokesperson Alex Cherin blamed the strikes on attempts by outside groups to organize the drivers who are not unionized.

“Time and again every segment of the industry has rejected the efforts of these groups and their agenda,” the statement read. “The fact is that an overwhelming majority of contractors and drivers affiliated with Green Fleet don’t want these groups involved in their work.”

Cherin’s statement was supported at a press conference on July 10 held at the Grand Long Beach Event Center, where more than 50 people, many of them employees of Green Fleet Systems and Pacific-9, gathered to express their opposition to union involvement. Speaking through a translator, Xiomara Perez-

Barragan, an employee-driver at Green Fleet Systems, said that the Teamsters have spent more than a year trying to organize port drivers. She added that union organizers have harassed Green Fleet drivers in an attempt to get them to join the union.

“The majority of us don’t want to be represented by [the union],” PerezBarragan said. She claimed that 65 Green Fleet drivers oppose union representation and only 28 want to unionize.

She further explained that she has been accused by union representatives of being an “agent” of the company, a claim she called “absurd.” “I’m just a driveremployee exercising my rights under Section 7 of the National Labor Relations Act,” she said.

Another Green Fleet driver who didn’t give her name, also speaking through a translator, accused union representatives of

Pictured are more drivers who were part of the July 10 press conference at The Grand in Long Beach, and who oppose union involvement with the trucking companies with which they work. Standing, from left, are: Christian Lechuga, Ramon Babun, Jose Saudi, Juan Munoz, Cesar Garay and Jesus Barraza.

Kneeling, from left, are: Lazaro Vargas, Mike Luong, Jung Kim, Il Sun Cha and Bryan Bae. (Photograph by the Business Journal’s Thomas McConville)

bringing non-Green Fleet strikers to the picket lines, adding that claims about Green Fleet drivers not being provided benefits were untrue.

“The 28 drivers that support the union have the nerve to say that Green Fleet does not give them benefits. This is something that is not true,” she said, adding that the company pays drivers’ health insurance and provides a 401k with company contribution. “Green Fleet treats us with respect, and all of our trucks are well maintained.

We are the number one company in Carson regarding safety.”

Following the conference, Ricardo Pasalagua, CEO of Labor Relations Specialists, told reporters that of the 110 owner-operators who work for Pacific-9 Transportation, only 10 or 15 want union representation.

Port truck drivers ship goods for major companies such as Walmart, Skechers Shoes and Home Depot. On July 10, the same day as the press conference, strikers protested outside of Skecher’s flagship retail store in Manhattan Beach. As a result, Green Fleet driver Blanca Machado accused the union of endangering driver job security.

“How should a union claim that drivers will have job security if they support them, but they go after our clients by doing demonstrations at their facilities and lying about what’s really going on at Green Fleet?” Machado asked.

Responding to claims that a majority of port drivers don’t want union representation, Barb Maynard, a spokesperson for the group Justice for Port Truck Drivers, said intimidation of drivers by Green Fleet Systems masks the true numbers of drivers who want union representation.

She pointed to a 50-count complaint lodged with the National Labor Relations Board alleging that the company intimidated pro-labor employees and even issued death threats.

“If and when Green Fleet systems and the other companies stop creating this anti-union environment, only then will it be clear how many pro-union supporters there actually are in these companies,” Maynard said. ■

1_LBBJ_July8_SectionA_LBBJ MASTER LAYOUT 7/21/14 1:37 PM Page 11

REAL ESTATE July 22-August 4, 2014

Long Beach Business Journal 11

Planning Commission Approves New Industrial, Retail Developments ■ By SAMANTHA MEHLINGER Staff Writer The Long Beach Planning Commission on July 17 approved environmental impact reports, site plans and tentative tract maps for two real estate projects that would bring more business to the City of Long Beach upon completion.

Following the success of its Pacific Pointe at Douglas Park projects, real estate firm Sares-Regis Group now plans to build a corresponding Pacific Pointe East project with three industrial buildings. The planning commission unanimously approved the project, which is to be located across the street from Mercedes-Benz USA’s future Western Regional Headquarters at the southeast corner of Conant Street and Lakewood Boulevard.

A report from Long Beach Development Services stated that the three buildings planned for Pacific Pointe East are likely to “be occupied as corporate headquarters for light indus-

trial, office, and research and development companies.” The Pacific Pointe project at Douglas Park was successful in attracting such companies and is now home to the headquarters of businesses such as Turbo Air, a manufacturer of refrigeration equipment, and United Pacific Industries, which manufactures classic vehicle products.

The 25-acre tract of land at the corner of Conant Street and Lakewood Boulevard “has not seen any long-term principal uses since 2006, when production of the [Boeing] 717 aircraft ceased,” the development services report stated.

The site for Pacific Pointe East is a parking lot that formerly served the 717 aircraft production facility now being converted to offices and warehouse space for Mercedes.

Now that Pacific Pointe East has planning commission approval, construction may move forward, according to Zoe Solsby, a spokesperson for Sares-Regis.

The planned buildings in the project measure 228,126 square feet, 140,218 square feet and 114,494 square feet, and are located at 4800 Conant St., 4350 Conant St. and 4600 Conant St., respectively. The designs for the buildings are similar to those at Pacific Pointe North and Pacific Pointe South within Douglas Park, the development services staff report indicated.

Also approved by the planning commission on July 17 were plans for a new retail building within the California State University, Long Beach

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The Tech Park is located near the Long Beach Jobs Corp Center and the Century Villages at Cabrillo, an affordable housing community. The planning commission also voted to allow retail sales, including the sale of alcohol for offpremises consumption, within the zoning area encompassing the Tech Park.

Firearms sales are not permitted.

Plans for the 9.88-acre site include demolishing existing buildings and constructing a single-story retail building measuring 122,500 square feet with 491 parking spaces. A report by Long Beach Development Services said one or two

tenants could occupy the building and that no tenants have been secured at this time. Other buildings within the Tech Park are receiving aesthetic improvements as part of the project, including creating “more dimension, detail and texture” in their facades. New walkways and seating are also included in the project designs.

In a report to the planning commission, Long Beach Development Services staff wrote that the retail project at the CSULB Tech Park “will provide a valuable service to the community through expanded retail shopping opportunities, increased employment generation, and enhanced economic growth and tax revenues.” ■

1_LBBJ_July8_SectionA_LBBJ MASTER LAYOUT 7/20/14 5:09 PM Page 12

SWEARING-IN CEREMONIES OF LONG BEACH ELECTED OFFICIALS 12 Long Beach Business Journal

July 22-August 4, 2014

1st District Councilmember Lena Gonzales: “It is my role now as a city councilmember to make sure that we are continuing to entrust in your visions and ideas, offering and making available more opportunities for involvement in advocacy, and always making sure that we are going even further with that.”

From left: Councilmembers Rex Richardson, Roberto Uranga, Al Austin, Patrick O’Donnell and Stacy Mung Charles Parkin; Councilmember Lena Gonzales; City Prosecutor Doug Haubert; Councilmembers Suzie Pric

5th District Councilmember Stacy Mungo: “I am honored to enthusiastically serve the residents, neighborhoods, businesses and visitors of Long Beach. Together we will reach new heights. Thank you for all your love and support. I’m going to need you to make sure we move forward together. So thank you in advance for your consideration and thank you for trusting me.”

3rd District Councilmember Suzie Price: “During the campaign I repeatedly said I’m running for office because the future of Long Beach lives in my home. And that is true. My two boys are a reminder to me every day that if we make decisions as city leaders with their future in mind, then we will have a healthy city, a balanced city, and they deserve that and we owe it to them. So that will be on the forefront of my mind with every decision I make.”

7th District Councilmember Roberto Uranga: “I speak from the heart as I speak now.

My road to this position to where I am now was a long one. Sometimes it was arduous and sometimes met with trials and tribulations. But in all that journey, there was always one element that kept it together and that kept me focused, and that was family.”

Photographs by the Business Journal’s Thomas McConville

Mayor Robert Garcia: “What I love about our city the most is that you can find the American Dream here. There is an opportunity here for everyone to succeed no matter the color of their skin, no matter who they love, no matter where they live or where they’re from or what country they were born in.

There is a place in Long Beach, an acceptance in Long Beach, which I think is a very special thing about our city.

“As mayor, I want us to embrace our destiny as a great international city with good goals and with good peoples. We will, working together, pass a responsible budget. We will, working together, strengthen our educational ties with the university, with the community college and with our school district. We will do all of those things that make cities strong. Strong public safety services, good parks, open libraries. The things that we care about for our future. We will continue to make our city more sustainable. We’ll innovate and move our city into the new century, and we’ll do it together.

“As we enjoy this night tonight, I want us to remember that there are still almost 20 percent of our neighbors that are living in poverty. . . . struggling between finding health care for their children, child care, food or a roof over their head. And I believe that no matter what you do or where you live, we all are in the business of helping people. We all want to help people. And so I challenge us, if we are ever

going to become a true, international, wo know we believe we will be, we have a re these neighbors, these youngsters that ar Long Beach. These young people through

1_LBBJ_July8_SectionA_LBBJ MASTER LAYOUT 7/20/14 5:09 PM Page 13

SWEARING-IN CEREMONIES OF LONG BEACH ELECTED OFFICIALS July 22-August 4, 2014

Long Beach Business Journal 13

9th District Councilmember Rex Richardson: “Our family has seen the ups and the downs that life has to offer. From being born on an Air Force base in Bellville, Illinois, to being raised in the back woods of Pickens County, Alabama, to finally owning a home and setting roots here in the great City of Long Beach. And personally, I was a kid who barely graduated high school. Statistically I shouldn’t be here. I went on to become student body president in college and now the youngest councilmember our city’s had in recent history.”

onnell and Stacy Mungo; Mayor Robert Garcia; Vice Mayor/Councilmember Suja Lowenthal; City Attorney ncilmembers Suzie Price and Dee Andrews; and City Auditor Laura Doud.

true, international, world-class city that I e will be, we have a responsibility to help ese youngsters that are living in Central e young people throughout the downtown

or in North Long Beach that still need our support and our help. We have prospered so much and we will continue to prosper. We will continue to support business; we will continue to work with our friends in labor. But we will always have to keep an eye as we move forward, that if we are ever going to grow as a city, we must address this issue of poverty. And I know we’ll do it together.

“I want to thank you all tonight for believing in me. I want to thank you tonight for believing in every single person on this stage. This is a great team. This is a great group of individuals who love their city. And I want everyone here tonight, as they leave, and as we enjoy the after celebration, I want you to believe that Long Beach is the greatest city in the country. I want you to believe that we can do anything if we work together and put our minds to it. I want you to believe that we can make our world-class university even better. I want you to believe that we can continue to both, not just grow business in the port, but make it greener. I want us to believe that we can support our artists; that we can do the things that we dream about together.

“So thank you again for being here tonight. You have given me an incredible responsibility that I am excited to take on.

Thank you so much for being here tonight. God bless our city, God bless our country, and go Long Beach! Thank you.”

City Attorney Charles Parkin: “I look forward to doing great things with the new council. We are there to support them. Our office – my second family – I want to thank the office. They’re fantastic. We do great work and I appreciate all the hard work that they do.

It’s behind the scenes, and that’s okay, but we have to be there for this new city council and we’re ready and we’re willing to take that challenge on.”

City Auditor Laura Doud: “As I look out this evening I’m so humbled. I have learned and grown so much over the past eight years in my service as city auditor. One of the great benefits of serving in a position like this is I have the opportunity to go out into the community.

I have met so many of you and have observed the way you have devoted your time, and your talents and your resources in volunteering so many of your hours to make this a better city. I am truly grateful for that. I know the strength of this city is in its people.”

Inaugural Celebration activities were paid for through private donations. No taxpayer money was used.

City Prosecutor Doug Haubert: “To all of us, I ask that may not a day go by that we do not thank God for our blessings, many of which we, undoubtedly, too often take for granted.

May we each find internal peace and fulfillment because no man can bring peace to the world until he has brought peace first to himself. May each of us reflect on the gifts and talents we have, not so that we may inventory them but so that we can consider ways of sharing them with others May we, each of us, use the next four years and the rest of our time on this earth wisely so that we may always strive to leave this place better than we found it.”

1_LBBJ_July8_SectionA_LBBJ MASTER LAYOUT 7/20/14 5:09 PM Page 14

BANKING 14 Long Beach Business Journal

Cybersecurity

July 22-August 4, 2014

Update on Dodd-Frank See Page 16

(Continued From Page 1)

nightmares are digital, their fears expressed in ones and zeros, the threat the bad guys they’ll never see doing their evil deeds deep in the computer banks and erasing all evidence that they’ve ever been there.

The threat has changed. It is as though banks now exist in a world where literally millions of people can – and are – working on making a better lock-picking device and can get to the door of the vault. And it would not take much to create complete havoc. Imagine the chaos that would ensue if one of your kids took a break from playing Lego City Undercover and wrote you a

simple little program that would allow you, once a month, to log into your banking account and add a zero to the end of your checking account balance.

Today, security for the banking industry lies not in harder steel doors or thicker concrete walls on the vault. It lies in those very same ones and zeros, in the world of cybersecurity, and those in the industry know exactly what is at stake if they falter.

“Where do you start? Just think of Target, Neiman Marcus, PF Chang. We read about the damage every day,” Briane Grey, director of corporate security for Los

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Angeles-based City National Bank, the 23rd largest bank in the nation, said to the Business Journal. “The risk is loss of trust, consumer confidence, reputational risk in the market place, loss of market share (and) financial ruin.”

It is for these reasons that banking officials are pushing Congress to streamline and coordinate cybersecurity efforts with the industry, to allow for greater sharing of information about cyber threats and to create a more effective process for dealing with them.

“The threat of cyber attacks is a clear and present danger to our industry and to other critical infrastructure providers that we and the nation as a whole rely upon,” said a letter written to Congress earlier this month from the American Bankers Association, the Financial Services Roundtable and the Security Industry and Financial Markets Association.

“It is critical for Congress to take action to enhance, facilitate and protect threat information sharing across sectors and with the federal government.”

The associations wrote to Congress to express their support for a set of bills now before legislators, including the Cybersecurity Information Sharing Act of 2014, the Federal Information Security Modernization Act of 2014 and the National Cybersecurity and Communications Integration Center Act of 2014. In general, the bills would make it easier and quicker to share information between the federal government and the banking industry when it comes to threats to the information and financial sectors.

The associations say they feel the legislation would allow them greater security and, at the same time, provide protection against anti-trust and liability issues and provide for privacy protections.

Elsewhere on the federal front, the Federal Financial Institutions Examination Council (FFIEC) recently unveiled a web page that combines available resources from the federal regulators on cybersecurity. Supported by such entities as the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation, the establishment of the new site underscores the increasing emphasis financial institutions are placing on cybersecurity issues.

It’s not hard to understand their concerns – it would take so little to destroy so much.

Anyone out there willing to accept bitcoins as payment for a car they have for sale?

At the level of individual banks, the focus is on preventing theft of money and information, officials say.

“Security and fraud prevention are a top priority for Wells Fargo,” Ben Alvarado, Wells Fargo president, Orange County and Long Beach Community Bank, told the Business Journal.

“We leverage proven technologies to help protect customers’ personal and account information. Our layered security approach encompasses unique credentials, dynamic one-time-passwords, encryption, firewalls, technology updates and continuous monitoring,” Alvarado stressed. “If suspicious online or mobile behaviors are detected, we may restrict account access or block transactions. These measures help safeguard our customers.”

Cybersecurity is not a one-time invest-

ment like a lock on a door, Grey explained.

“Security is a process, not a solution.

Cybersecurity has shared ownership throughout the organization,” Grey said.

“All organizations today must acknowledge the advances in technology and have effective cybersecurity to be successful in today’s tech-driven environment.

“A complete cybersecurity program includes defenses and training for those cybersecurity challenges which include technology and human manipulation.

Photo provided by Wiki Commons

Cybersecurity touches all aspects of the modern working space. Cameras, alarms, sensors, control access for physical security and wire walls, filters, patches and good cyber hygiene are necessary to protect the corporation’s assets, people, processes and systems.”

Security comes at a cost, which is now part of doing business.

“The economic impact is seen when allocating additional dollars for information security, corporate security, business continuity, risk management, training and compliance areas,” Grey said. “Additional impact is felt with the constant search for tech-savvy personnel across all business lines, research, development and implementation of new technologies to protect data, systems and personnel, introduction of new products to consumers and to provide continuous training of colleagues and clients.”

Interestingly, just as it always has been, part of a successful security strategy in the cyber realm mirrors a key concept of the physical world – hardening the target. Bad guys don’t care where the ill-gotten goods come from. Money and information stolen from a smaller vendor are just as valuable as that which is cracked out of Fort Knox.

And one of the key concerns in this new era is the vulnerabilities of smaller entities that cannot afford to maintain an ongoing “security process” like the one Grey described.

“In today’s relationships, we are only as secure as our weakest client, partner, 3rd party vendor, contractor or consultant who has access to our data (or) systems,” Grey said. “Modern criminals are chasing data and target organizations with minimal defenses. Effective cybersecurity will make every organization and household more secure and less of a target for cyber criminals.” ■

1_LBBJ_July8_SectionA_LBBJ MASTER LAYOUT 7/20/14 5:09 PM Page 15

1_LBBJ_July8_SectionA_LBBJ MASTER LAYOUT 7/20/14 5:09 PM Page 16

BANKING 16 Long Beach Business Journal

July 22-August 4, 2014

Four Years After Passage, Just Barely Half Of Dodd-Frank Regulations Completed ■By CHRIS SIEROTY Contributing Writer Six years after America’s financial industry had to be rescued by the federal government, which spent billions of dollars to stabilize the industry, the economy remains at risk of another downturn due to speculation and bailouts.

The Dodd-Frank Act of 2010 promised to overhaul the financial sector. But many of the law’s regulations on proprietary trading, derivatives and the financial wellbeing of the nation’s banks have been delayed or watered down by slow moving federal agencies, notably the Securities and

Commission and the Exchange Commodity Futures Trading Commission.

As of July 1, only 208 of the 398 rules required by Dodd-Frank were complete, according to the American Bankers Association. About 45 percent of rule-making deadlines have been missed. “The number one thing Dodd-Frank did is change the tone,� said Wayne Abernathy, executive vice president for financial institutions policy with the American Bankers Association (ABA) in Washington, D.C. “The positive is [that] it has brought more attention to financial risks that involve how a bank operates.�

Abernathy said Dodd-Frank has had a

negative impact on how banks offer new products to their retail customers. He said no bank wants to offer the new products because of new regulations. “In practice, there has been no new innovation in the last four years,� Abernathy said. He admitted that new technology, including remote check deposits or mobile loan applications, has been introduced in recent years.

However, that’s a continuation of new technology that has already been in the pipeline.

Abernathy said new compliance rules have added some costs to banks, but the new rules have made the business of opening new consumer accounts a more difficult and lengthy process.

He said opening a new account takes long in the post-recession world. Where it used to take 15 minutes, now that process is 30 minutes as the vetting of new customers has really slowed down the acquisition of new accounts. He said the evaluation of new accounts, even for anti-money laundering and credit worthiness, has made it all the more difficult for banks to bring in new customers. “We are a small business bank,� said Mike Miller, president and CEO of Long Beach-based International City Bank (ICB). “We are just under $150 million in assets with two branches. Dodd-Frank does not affect us like it would a larger institution.�

Miller said the bank has no mortgages or retail customers. International City Bank strictly deals with Small Business Administration, commercial real estate, working capital and financing deals.

Miller said Dodd-Frank has forced the bank to spend more time and resources on additional compliance. But, he said, with more rules not coming into effect until 2015 and beyond, the costs are still reasonable. “It’s difficult, but we are still able to meet our compliance obligations,� Miller said. “We can absorb the cost and [time] with the staff we have. Next year or the following year, we will have to add another person.�

In other moves related to Dodd-Frank, big banks have either ended traditional free checking accounts or have raised the average monthly balance needed to get free checking. Other changes directly affecting bank customers include increasing monthly fees, raising fees for overdrafts and out-ofnetwork ATM withdrawals. In some cases, banks are also cutting costs by closing branches and reducing available ATMs.

Volcker Rule The main component of the DoddFrank Act is the Volcker Rule, which was expected to go into effect in 2012, but has been delayed until next year. The Volcker Rule, named for former Federal Reserve Chairman Paul Volcker, imposed restrictions in response to the 2008 credit crisis.

The rule bans proprietary trading or banks from making risky investments with clients’ money instead of their own.

It also limits banks’ investments in hedge funds and private equity.

Some large banks have resumed the risky investments and have suffered losses. For example, a JP Morgan Chase

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The Office of the Comptroller of the Currency (OCC) proposes to adjust the timing of the annual stress testing cycle and to clarify the method used to calculate regulatory capital in the stress tests.

The proposal would shift the dates of the annual stress testing cycle by approximately three months. The proposal also would provide that covered institutions will not have to calculate their regulatory capital requirements using the advanced approaches method in 12 CFR part 3, subpart E until the stress testing cycle beginning on January 1, 2016.

Comments must be received on or before September 2, 2014. For more information, including submitting comments, go to the Federal Register, Vol. 79, No. 126, Pg. 37231, dated July 1, 2014.

1_LBBJ_July8_SectionA_LBBJ MASTER LAYOUT 7/20/14 5:09 PM Page 17

BANKING July 22-August 4, 2014

Long Beach Business Journal 17

Michael Miller is president and CEO of International City Bank in Downtown Long Beach, one of two independent banks based in the city. (Photograph by the Business Journal’s Thomas McConville)

trader known as the “London Whale” lost billions of dollars from trading on creditdefault swaps. Meanwhile, Citibank just agreed to a $7 billion settlement over its handling of mortgage securities.

The Volcker Rule will cost U.S. national banks as much as $4.3 billion to implement, according to a study by the Office of the Comptroller of the Currency. The study’s regulator said most of the costs come from the rules that curb investments, such as collateralized loan obligations. The federal agency also said affected banks will most likely be those with more than $10 billion in assets.

“A lot of big banks got out of that line of trading pretty early,” Abernathy said. “They did it so they would not be caught in the crush. For the most part, banks were minority partners in these funds, so they didn’t depress the value by leaving.” He said most banks got into trading “to get some income,” and have sold them off for a modest profit.

The Volcker Rule was adopted December 10, 2013, by five U.S. financial regulators. Abernathy said that the rule’s biggest problem is the challenge for banks to work with five different agencies. Regulators responsible for implementing the Volcker Rule have formed an interagency group to coordinate the multiagency rule.

“It is going to get worse as time goes by,” Abernathy said. The Volcker Rule is one of the most contentious measures arising from the 2010 Dodd-Frank Act. Banks with assets of $10 billion to $50 billion must follow guidelines from which International City Bank and other small banks in Long Beach are exempt.

One requires an annual stress test, which assesses the potential impact of different economic developments on a bank’s losses, revenue, capital and balance sheet.

Abernathy said banks are still learning about the rule and developing pretty rigorous procedures to the new standards.

“Bank supervision is designed to look at future risk,” Abernathy said. “Bank supervision can’t catch problems early enough, . . . more supervision needs to be a motion picture and not a snapshot of activity.” Banks also need to comply with the Bank Secrecy Act, which requires financial institutions to help the federal government detect suspicious activity.

Once bank holding companies grow beyond $50 billion in assets, they’re subject to even stricter regulations under DoddFrank. They must hold more in reserve as a cushion against losses and may have less control over bonuses and dividends.

“Part of the challenge is that we don’t know when the rest of the rules will be written,” ICB’s Miller said. “There are compliance issues on the way we do business today. We just have to figure it out.”

Miller claimed a lot of the larger banks can take on more regulations. He said what is frustrating for a small business bank is that, “We had nothing to do with the mortgage business. We are kind of being thrown into the mix. But, we would all say that things got out of control. If you didn’t qualify for a mortgage, in the old days they told you to come back when you could qualify. We got totally away from that.” Miller also questioned whether Dodd-Frank needed to be 700 pages.

Many people who have followed the legislaton agree that If banks like stability when it comes to regulations, they are in for some uncertain times. Congress has been unproductive, they say, on financial regulation since Republicans took control of the House of Representatives in 2010.

Yet they also concur that the Obama administration has had more than five years to write the rules, however complex, to enforce Dodd-Frank.

While banks wait for additional regulations, the Federal Reserve, led by Chair Janet Yellen, remains supportive of the Central Bank’s post-crisis agenda. In a prepared speech on July 10 to an economic conference, Federal Reserve Vice Chairman Stanley Fischer said the country was making “significant progress in strengthening the financial system and reducing the probability of future financial crises.”

Fischer, an economist and former Israeli central banker who took the Fed’s No. 2 job in May, threw his support behind the Fed’s stress testing program and new requirements that large institutions hold higher levels of loss absorbing capital.

The ABA’s Abernathy wanted to remind everyone that the process is only halfway through. “We are about to get more rules being written,” Abernathy said. “Banks need to remember that half of the proposed regulations have not been finalized.” ■

1_LBBJ_July8_SectionA_LBBJ MASTER LAYOUT 7/20/14 5:09 PM Page 18

ANALYZING THE PHONE BILL 18 Long Beach Business Journal

Phone Bill (Continued From Page 1)

one category covered “taxes, Governmental surcharges and fees,” and the other fees were listed under the heading “Verizon surcharges and other charges & credits.”

The Verizon side accounted for the lion’s share of charges and totaled $134.23 – or 20 percent of the total bill. These included the “long distance access charge” and the “federal universal service fee.” But the largest charge was the combined “federal subscriber line and access recovery charges,” which totaled $74.80.

We wanted to get some answers on what these charges were: Is federal subscriber line charge a tax? What does it cover? Why doesn’t the bill specify the surcharges’ percentages? That’s right, not one of the 16 fees –either the government’s or Verizon’s – shows a percentage charged, nor what it is charged on.

In the quest to find answers, we learned that the issue is complex, and even the telecom experts struggle to explain these fees.

We first reached out to Verizon spokesman Jarryd Gonzalez, who asked the Business Journal to e-mail him some questions. After several e-mail exchanges

July 22-August 4, 2014 with Gonzalez some questions remain unanswered – notably why some of the charges seem to have increased in recent years, and why the company doesn’t specify the percentage of each charge.

Gonzalez did direct us to the Verizon website, which offers brief explanations of the various charges appearing on monthly bills, many of them used to defray Verizon’s business costs. He also provided a list of AT&T’s surcharges – ostensibly to show that other companies bill these charges, too.

Gonzalez did, however, confirm that the federal subscriber line charge was not a tax.

“The subscriber line charge is imposed by the Federal Communications Commission (FCC) as part of its program for local telephone companies to recover the cost of connecting individual phone lines to the interstate long distance network,” the e-mail read. “These costs include telephone wires, poles and other facilities that link each telephone customer to the telephone network.”

Our confusion deepened. If a government agency like the FCC is imposing a charge, isn’t that a tax? Don’t long distance rates already cover the cost of the interstate network? It’s worth mentioning at this

The charges shown here are from a recent Business Journal invoice from Verizon. There are 16 taxes, fees or surcharges on the invoice. None of them indicate the percentage that is being charged, nor if the charge is on part of or the entire bill. (Long Beach businesses also have a 5 percent utility users tax.) On the adjacent page, the Business Journal attempts to provide explanations and percentages for each of these charges. As Business Journal staff discovered, it’s not an easy obtaining the information and the explanations provided by the entities involved are ambiguous. If there is a mistake, it’s because the information is confusing and no one would provide us the data we requested.

“Customers don’t understand why they’re paying all of these fees, and for good reason.

They’re confused.”

Regina Costa, Telcom Research Director The Utility Reform Network

point that repeated requests to speak personally to a Verizon representative went unanswered.

FCC Spokesperson Michael Snyder offered a slightly different explanation for the federal subscriber line charge than the one given by Verizon. Rather than imposing the fee, Snyder said, the FCC merely caps the amount that phone companies are allowed to charge. “The maximum allowable access charges are set by the FCC, but the local telecoms can charge nothing,” Snyder said.

He confirmed that while the term “federal subscriber line” may be misleading, it is not a tax. “It’s not a tax or a government charge, even though it might be confusing the way it’s listed on the bill,” Snyder said.

When we reached out to California Public Utilities Commission (PUC) spokesperson Christopher Chow, he said

his agency only mandates six fees, all of which appeared under the governmental heading of our bill. These charges help to subsidize phone service in rural areas and provide specialized phone equipment for the deaf. But when asked about the surcharges under the Verizon heading, Chow referred us back to the phone company.

“Some of those things you asked about in terms of access charges, those things are not mandated by us. Those are charges that in this case Verizon has come up with,” Chow said.

Before contacting Verizon again, we reached out to The Utility Reform Network (TURN), a consumer advocacy group.

Regina Costa, telecom research director, did her best to explain the origins of the federal subscriber line charge, which included a complex history involving FCC decisions and court cases stretching back to the 1930s. Costa also said it’s ultimately the phone companies’ choice to charge customers the fee. “They choose to pass it on, and there’s very little oversight from the FCC to look at whether that fee is reasonable or not,” Costa said.

When asked why consumers have to pay an interstate charge on top of a long distance rate, she said that maintenance of the interstate network used to be covered by

1_LBBJ_July8_SectionA_LBBJ MASTER LAYOUT 7/20/14 5:09 PM Page 19

ANALYZING THE PHONE BILL July 22-August 4, 2014 long distance rates. She explained that the FCC handed a decision down in the 1980s allowing phone companies to pass the costs

Long Beach Business Journal 19 of maintaining the interstate network on to consumers with a flat rate. “Primarily in those days it was AT&T;

Taxes, Surcharges And Fees (Much of this information comes from the California Public Utilities Commission website) California Advanced Services Fund (CASF) .464% – California Advanced Services Fund (CASF) promotes deployment of high-quality advanced communications services to all Californians.

California LifeLine Program 1.15% – The California LifeLine Program provides discounted home phone and cell phone services to qualified households. The California LifeLine discounts help consumers lower the cost of their phone bills.

Only one discount per household is allowed (except for teletypewriter users and for Deaf and Disabled Telecommunications Program participants).

Deaf And Disabled Telecommunications Program .200% – Provide telecommunications devices to deaf or hearing impaired consumers.

California High Cost Fund-A .180% – Provides a source of supplemental revenues to 13 small local exchange carriers for the purpose of minimizing any basic telephone service rate disparity between rural and metropolitan areas.

California Teleconnect Fund (CTF) .590% – Program provides a 50% discount on select communications services to schools, libraries, hospitals and other nonprofit organizations.

Federal Excise Tax 3% – The Federal Excise Tax is administered by the Internal Revenue Service (IRS) and is imposed on amounts paid for local telephone service and teletypewriter exchange service.

State 911 Tax 0.75% – Government agencies require or authorize a collection of funds to cover the costs of providing 911 emergency responses.

State PUC Fee 0.18% – Funding to support the California Public Utilities Commission.

(The following information comes from the Verizon website. With one

they controlled the long distance network, GTE to a lesser extent. They argued that as a matter of economic theory, the costs associated with that [interstate] telephone line did not vary with use, so it should not be charged on a per minute basis. It should be covered in a flat fee,� she said.

When the rate was first approved, it totaled about $1.50, according to Costa. “The remainder of that interstate loop cost was recovered from the long distance companies.

And over the years that’s been whittled back and back and back until now 100 percent of that cost is recovered from the customer regardless of whether that person makes a single long distance call or not,� Costa said.

Asked whether the phone companies benefit from charging such nebulous fees, Costa said they do. “Customers don’t understand why they’re paying all of these fees, and for good reason. They’re confused,� Costa said.

For now, it appears some in Washington, D.C., are paying attention to this issue.

Costa sent the Business Journal a February 27 letter addressed to FCC Chairman Tom Wheeler, signed by four members of Congress. The letter came on the heels of a 2013 House Communications and Technology Subcommittee investigation

into seven of the largest wireless and wireline communications providers. It focused on what was referred to as “below-the-line fees,� stating that companies often bury the fees in small print when customers sign up for service. The letter also said consumers often find it difficult to get a total list of the taxes, fees and surcharges prior to signing a contract. “Given that the combination of such charges can add as much as 42 percent to a consumer’s monthly bill, we believe that further examination by the FCC is warranted,� the letter read.

Before press time, we sent an e-mail to Verizon’s Gonzalez asking how the company justifies adding discretionary fees on top of its regular rates. He balked at the term “discretionary.� “That is not the case. Unlike some other charges, these are calculated and set pursuant to a regulatory schedule. They are ‘allowable’ because of other regulatory changes.�

Like many of the answers we received in our search to understand this issue, Gonzalez’s response only served to further cross our wires. For now, the answer to the mystery of telecom surcharges continues to resonate with the clarity of a dropped call. â–

REAL ESTATE & DEVELOPMENT QUARTERLY

exception, Verizon does not indicate the percentage used for the charges, and, as you will read, some explanations seem redundant and are not very specific.)

Interviews With Numerous Real Estate Experts

Access Recovery Charge – “This monthly Verizon surcharge is applied on a per line basis and is related to the Federal Intercarrier Compensation Rules, which set the rates charged between carriers for telecommunications traffic.� Note: According to the FCC, it is up to each company on whether it charges this fee. The FCC sets the maximum allowed to be charged.

Federal Universal Service Fund Charge – “This monthly Verizon surcharge allows Verizon and Verizon Long Distance to recover from its customers the funds it pays to the Federal Communications Commission (FCC) on interstate services to support the FCC’s universal service programs. The FCC regulates this charge; reviewing and adjusting the fee quarterly based on the FCC’s quarterly FUSF contribution factor.

The FCC uses the fund to help keep local telephone rates affordable for all customers, support telecommunications services in schools, public libraries, and rural health-care facilities and subsidize local service to high-cost areas and low-income customers.�

Long Distance Administrative Charge – “This monthly line charge helps defray account servicing costs associated with providing voice services. This surcharge is applied by Verizon and is not a tax or fee assessed by a government agency.�

Long Distance Access Charge – “Formerly named the Federal Access Charge, this monthly surcharge is assessed to long distance customers to help defray the access costs charged to Verizon Enterprise Solutions and Verizon Long Distance (or its agents) by local telephone companies.�

Carrier Cost Recovery Charge – “This fee is a monthly surcharge telecommunications carriers, such as Verizon Long Distance and Verizon Enterprise Solutions, are permitted to assess in order to defray the following: a portion of the costs to terminate calls on other networks; fees paid to support government programs such as Telecommunications Relay Service and Local Number Portability; other charges assessed by the FCC; and additional indirect costs associated with administering and complying with government programs.�

Video Franchise Fee – “This monthly fee allows Verizon to recover from its customers the cost of the video franchise fee Verizon is required to pay to local franchise authorities, which may be up to 5.26% of the gross revenues from FiOS TV services, in order to provide TV Services.�

Regulatory Recovery Fee – “This fee is a monthly Verizon surcharge that helps to recover the annual per video subscriber fee that Verizon pays to the Federal Communications Commission (FCC) to fund the FCC’s administrative costs.â€? â–

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1_LBBJ_July8_SectionA_LBBJ MASTER LAYOUT 7/20/14 5:09 PM Page 20

IN THE NEWS 20 Long Beach Business Journal

July 22-August 4, 2014

Long Beach Memorial Medical Center Once Again Named One Of Nation’s Best Hospitals Long Beach Memorial Medical Center, part of the MemorialCare Health System, was ranked among the nation’s top hospitals in an annual list by U.S. News & World Report. This is the 20th time Long Beach Memorial has been included on the list, according to a statement from the hospital. The medical center was identified by the publication as No. 37 in the nation for diabetes and endocrinology care and as “high performing” in the areas of cancer, gastroenterology and gastrointestinal surgery, geriatrics, gynecology, nephrology, neurology and neurosurgery, orthopedics, pulmonary, urology and ear, nose and throat. U.S. News &World Report publishes the rankings “to help patients with life-threatening or rare conditions identify hospitals that excel in treating the most difficult cases,” a statement from the hospital said. The magazine compiles the ratings based on factors including “patient survival rates, advanced technologies, patient volume and safety, reputation for developing and sustaining high quality care” and more, according to Long Beach Memorial. “We are honored to be part of this prestigious America’s Best Hospitals list and that year after year our different specialties consistently achieve these high standards of excellence,” Diana Hendel, CEO of Long Beach Memorial, Miller Children’s & Women’s Hospital Long Beach and Community Hospital Long Beach, said in a statement. Pictured, staff of Long Beach Memorial Medical Center gathered at the hospital following news of the “Best Hospitals” ranking. In the back row, from left, are: Linda Hoff, RN, BSN, vice president of adult medical surgical units, wound care and peri-operative services; Sue Melvin, DO, chief medical officer; Pamela Pyles, diabetes care associate; Tamra Kaplan, Pharm.D., chief operating officer; and Vincent Menendez, RN, MSN, FNP-BC, CDE. In the front row, from left, are: Holly Hackman, RD, CDE; Blanca Lansang, RN, BSN; Linda Kerr, RN, MSN, FNP-BC, CDE, diabetes program director; Stella Rollog, RN, CDE; and Maria Martinez, RN, CDE. – By Staff Writer Samantha Mehlinger

DENSO Announces New IT Manager, Dameon Booker Automotive component sales company DENSO Products and Services America Inc., which employs 420 people in Long Beach and Murrieta, has appointed Dameon Booker as senior manager of its Information and Technology Systems (ITS) Group. In a statement, DENSO Senior Vice President Richard Shiozaki said Booker is the right person for the job. “Dameon brings the technological and business mindset to support and enhance the sales and marketing of the numerous products and services we plan to launch,” Shiozaki said. In his role as senior manager for the ITS Group, Booker oversees company-wide technology systems and support personnel. He is also responsible for guiding and enforcing company policy at Denso’s Murietta and Long Beach operations. In addition to holding a master’s degree in business administration from Pepperdine University, Booker earned a master’s in information systems from the Stevens Institute of Technology. His professional career includes 14 years of information technology experience at domestic and global pharmaceutical, retail and medical manufacturing companies. Most recently, Booker served as IT business relationship and portfolio manager for Mentor Worldwide LLC, a Johnson & Johnson company based in Santa Barbara. DENSO’s product line includes heavy duty and automotive alternators, starters, oil and air filters, spark plugs, AC compressors and other equipment. The company is headquartered in Kariya, Aichi Prefecture, Japan and employs more than 17,000 people across North America. (Photograph by the Business Journal’s Thomas McConville)

People In The News MemorialCare Health System has appointed two of its executives to spearhead the organization’s efforts to improve health in Southern California communities. Chief Helen Macfie Transfor mation Officer Helen Macfie, Pharm.D. and Vice President of Population Health Regina Berman, MA, BSN, are going to coordinate with clinics to improve patient care by makRegina Berman ing it more convenient and less costly, raising awareness about healthy lifestyles and refining the coordination of care between hospitals, physicians and outpatient centers. Both women have served on state and national boards of various health care organizations.

“We are pleased to have two outstanding health care executives spearhead our critical initiatives in population health manage-

ment,” MemorialCare President and CEO Barry Arbuckle, Ph.D. said in a statement.

California State University, Dominguez Hills (CSUDH) recently appointed two new vice presidents in academic affairs and a new dean of the College of Health, Human Services & Nursing. Gitanjali Kaul, Ed.D. has been named associate vice president for institutional effectiveness and assessment, and is responsible for leading the university’s institutional research office. She was previously vice president of strategic planning for Florida Atlantic University. Clare Weber, Ph.D. has been named associate vice president for faculty affairs and is responsible for recruiting and retaining faculty, as well as tenure and other faculty policies. She has served as interim associate vice president for faculty affairs at CSUDH since February. M. Gary Sayed, Ph.D., Ed.D. has been named dean of the College of Health, Human Services & Nursing, the largest college at CSUDH. He starts August 11. He previously served as founding director and professor of biomedical, radiological and imaging sciences at Alfaisal University College of Medicine and as director of a laboratory and research center at King Faisal Specialist Hospital and Research Center in Saudi Arabia.

Loretta Lamb has been named vice chancellor of human resources for California State University (CSU) and is part of CSU Chancellor Timothy P. White’s executive Loretta Lamb leadership team. She is responsible for labor and employee relations, professional development, complying with equal opportunity and whistleblower standards, policy development and academic human resources. She was previously the director of human resource operations at the University of Minnesota, where she oversaw a staff of 50 people and managed a budget of more than $3 million. She has more than 20 years of experience in human resources and labor relations, having worked for the Minnesota State Colleges and Universities system and Washington State University. She holds a bachelor’s degree in social justice from Gonzaga University and a juris doctorate degree from the Gonzaga School of Law. Dieter Hertzog, M.D. has joined his family’s optometry business, Hertzog Eye Care, where he specializes in cataract, refractive and oculoplastic surgery as well as LASIK

procedures. Hertzog has 13 years of training in ophthalmology, having studied and trained at Harvard University, the Loma Linda School of Medicine, the Doheny Eye Institute and the USC Department of Ophthalmology. Hertzog is a fifth generation ophthalmologist. His father, Lief Hertzog, M.D., runs the family business, which has been in Long Beach for 87 years.

Karen Brown has been named senior vice president and team leader of First Bank’s Commercial Lending Group of Woodland Hills, serving the San Fernando Valley region. Brown has worked in the bankKaren Brown ing and finance industry for more than 32 years in senior management roles at City National Bank, California United Bank, US Bank, Pacific Western Bank, 1st Enterprise Bank and Barclays Business Credit. In addition to her new position at First Bank, she serves on local boards for Habitat For Humanity and Camp 4 Kids. She has a bachelor’s of science degree in public administration from California State University.

Patrick Hughes has been named break-

1_LBBJ_July8_SectionA_LBBJ MASTER LAYOUT 7/20/14 5:09 PM Page 21

IN THE NEWS July 22-August 4, 2014

Long Beach Business Journal 21

Inge Cristiano and her daughter, Carina, sit in the dining room of Nino’s Ristorante Italiano. Their family-owned restaurant opened 56 years ago at the same location in Bixby Knolls – 3853 Atlantic Ave. For more information, call Nino’s at 562/427-1003. (Photographs by the Business Journal’s Thomas McConville)

Nino’s Ristorante Italiano Celebrates 56 Years In Bixby Knolls In 1958, European immigrants Vincente and Inge Cristiano came to Long Beach, California, by way of Bogota, Colombia, and opened a little Italian restaurant in Bixby Knolls named after their firstborn son, Nino. Fifty-six years later, the couple still owns the restaurant, with Inge leading operations with the assistance of her three children, Carina, Mike and Nino.

Sitting at a table covered in red and white checkered cloth in the restaurant’s original dining room at 3853 Atlantic Ave., Inge and Carina reflected on the restaurant’s history and its 56th anniversary, which falls on July 31. “I think as a family-owned and operated restaurant in Long Beach we are definitely the oldest with the same family,” Carina said, noting

that while other long-time family-owned restaurants in Long Beach may be run by second or third generations of families, Nino’s Ristorante Italiano is still owned by its founders.

“I am so proud of my mom and dad to have come to this country as foreigners having a two-week-old and a four-yearold, a couple suitcases, and language barriers and a new culture to adopt,” Carina said. “To still have the restaurant here all these years later, I am really grateful for that.”

After World War II, the Italian Vincente and German Inge looked for opportunities to move to the Americas, first moving from Germany to Canada briefly to meet up with Inge’s sister, then moving to Colombia in 1955 when the Canadian winter proved too harsh. At the time, the couple had only their firstborn son, Nino.

Bogota also soon proved unsuited for the

bulk sales director of Ports America Stevedoring, the nation’s largest marine terminal operator and stevedoring company.

He is responsible for business development, market growth and strategies for customer satisfaction. He reports to Chris Smith, vice president of breakbulk. “His experience is a natural fit to Ports America’s focus on providing superior customer service and increasing business development,” Smith said about Hughes in a statement. Hughes has worked in the international trade and logistics industries for more than 18 years.

Before joining Ports America, he was the regional sales team leader for the American branch of CMA CGM, an international shipping company. He also worked for nearly two decades at Sea-Land Services and once owned his own third-party logistics business.

Dr. Greg Perrault, owner of Cats & Dogs Animal Hospital in Long Beach, was recently elected chairman of the Long Beach Health and Human Services Commission. Perrault attended Michigan State University as an undergraduate majoring in microbiology and public health and received his bachelor’s in veterinary science. After an externship in Southern California for avian, exotic and wildlife medicine, he received his doctorate from Michigan State University College of

Veterinary Medicine in 1992. He is a member of the American Veterinary Association, the California Veterinary Association, the Southern California Veterinary Association, the Association of Avian Veterinarians, and the Association of Reptile and Amphibian Veterinarians. Besides operating Cats & Dogs Animal Hospital, Perrault donates his time by providing first aid for many of local promoter Justin Rudd’s events, such as the Halloween parade, and writes a monthly pet article for the Grunion Gazette weekly newspaper.

Janine Falvo was recently named executive chef of the Renaissance Long Beach Hotel at 111 E. Ocean Blvd. in Downtown Long Beach. Concurrently, the hotel announced a “newly revamped menu” at is SIP Lounge, which Falvo said showcases her “Ocean to Fork” philosophy “in everything that is prepared in the kitchen. The menu includes fresh, locally caught fish and shellfish and sustainable mainstay dishes featuring organic meats, artisan cheeses, locally grown produce and vegetarian options.

“Previously, I have fostered a farm-totable approach to locally inspired cuisine using seasonal ingredients from area purveyors,” Falvo said in a statement. SIP Lounge is open daily. For reservations, call 562/437-5900.

■ By SAMANTHA MEHLINGER Staff Writer

family. Inge recalled, “When I was in the hospital having [our second son] Mike, [the Colombian people] were having a revolution.” So in 1957, the family picked up and moved to Long Beach, where Inge’s sister had relocated and where Carina was eventually born.

Leaving behind a restaurant in Colombia, the couple decided not to give up on their dream and immediately began searching for a new restaurant location in Long Beach. Vincente drove around town every night searching for a good location, Carina said. “It was really a nice family location and we really like the neighborhood,” Inge said of settling on Atlantic Avenue in Bixby Knolls. “We like the people who live here.”

The restaurant is still in its original location and expanded to include a meeting room and larger banquet room with a full bar after the Cristianos bought the whole building in the 1980s. Because the restaurant has been in the same location for so long, it has developed generations of repeat customers, mother and daughter said.

“People grow up here at Nino’s and then they come back with their families,” Carina said.

“We go on fifth generation with a lot of them,” Inge said of Nino’s customers. Her own children grew up in the restaurant, too, she added.

Several staff members have worked at the restaurant for decades and are like family to the Cristianos. About half the staff of 10 full-time employees has worked at Nino’s between 12 to 35 years. “It is good to have people you can depend on,” Inge said. Carina noted, “There is not one person who is employed at Nino’s who doesn’t live in Long Beach – even the people we bring in for our banquets and catering. That is really important to us.”

After the restaurant consolidated its once lengthy menu and completed refurbishments thanks to an appearance on the Fox reality show “Kitchen Nightmares” last year, the family is now focusing on growing its banquet and catering side of the business, which is already strong, Carina explained. “It is repeat business,” Inge said of banquets and catering. “Six weeks ago I had a customer who graduated . . . [and] had a wonderful party for almost 100 people.

Two weeks ago she called us and said it is my daughter’s 21st birthday, so she is going to come this Saturday and bring 50 to 60 people,” she said.

The entire family – Inge, Vincente, Carina, Mike and Nino – continue to be involved in the restaurant’s daily operations, Carina said. “My dad, even though he is 90, has lunch and dinner here every day and wouldn’t miss a day at Nino’s.” ■

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PERSPECTIVE 22 Long Beach Business Journal

July 22-August 4, 2014

How To Build And Maintain Trust July 22-August 4, 2014 EDITOR & PUBLISHER George Economides SALES & MARKETING EXECUTIVE Michael Watkins SALES & MARKETING ASSISTANT Heather Dann DISTRIBUTION Conrad Riley EDITORIAL DEPARTMENT STAFF WRITERS Brandon Ferguson Samantha Mehlinger CONTRIBUTING WRITERS Michael Gougis and Chris Sieroty PHOTOJOURNALIST Thomas McConville COPY EDITORS Lindsay Christophe and Pat Flynn The Long Beach Business Journal is a publication

of

South

Coast

Publishing, Inc., incorporated in the State of California in July 1985. It is published

every

other

id you know that the typical Internet user is twice as likely as others to feel that people can be trusted?1 Facebook users are the most trusting of all.

A typical user is 43 percent more likely than Internet users to feel folks can be trusted. They are three times more likely to ■ EFFECTIVE trust people than nonLEADERSHIP Internet users. One of the

By Mick Ukleja reasons for this is because it increases the brains release of oxytocin when people connect.

Oxytocin as been referred to as the “cuddle hormone” because when it is released it fuses an unshakable bond between nursing mothers and their babies. It creates empathy, generosity and trust.

Now these are very subjective criteria for trusting or building trust. But when coupled with more objective components they show that trust is not as simple as we imagined. Trust use to be “don’t lie, don’t cheat, don’t steal.” These are indispensible, but they don’t tell the whole story.

Webster defines trust as “an assured reliance on the character, ability, strength, or truth of someone or something.” It’s different than integrity. It’s more organic in nature because you can earn it or lose it. Integrity is what you are, whereas trust is a feeling or perception you have about someone or something. Trust is also very natural. We want to trust others. You can see this in young children. They naturally trust. They learn to distrust.

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Vol. XXVII No. 14

Tuesday

(except between Christmas and midJanuary) – 25 copies annually. The

It’s important to understand, not only the neurological factors involved in trust, but also the different categories of trust. There is . . .

Personal Trust. This is based on faith in someone else’s integrity, and it is developed through shared experiences. Are they reliable? Do they meet deadlines? When the pressure is on can you count on them? Are they honest?

One of the best ways to garner personal trust is to hang a lantern on your problem rather than excusing it. In other words, when you make a mistake admit it before anyone else finds out. How many times have we seen that what kills people in business, politics, and athletics is not the mistake, but the cover up? What is the private lesson we can learn from public examples? Admit the issue right away. It doesn’t make the problem go away, but it does reinforce trust.

Another component of personal trust is called “positive discretionary behavior.” This is a big phrase that simply means you are a nice person. You are benevolent and kind. You are polite. You hold the door open when you see someone struggling to carry something in. It’s not enforceable. You don’t have to do it. Both on and off the job you do more than is expected. We trust nice people more than we do the “it’s not my job” crowd. The next time you look at an executive’s bio check out what is called “the nice paragraph” at the end. It includes the nice things about the executive, including her charities, church and children.

They are saying, “I’m nice.”

Vulnerability is another aspect of personal trust. You risk getting hurt by being open. But people are prone to trust those who choose not

to self-protect. We trust those who aren’t afraid to show their vulnerabilities.

Personal trust is important. But there is also . . .

Expertise Trust. Expertise trust relies on someone’s specific ability. Is this person competent? I once had a very nice guy install a stereo system in our home. He was nice, fair, kind, and even showed vulnerability. There was just one problem. The house system has never worked right. This is true of professors, doctors, pilots, landscapers and any other professional.

Research has also shown that when people feel trusted, that in turn makes them potentially more trustworthy.

How does it work? The oxytocin level is increased in a person’s brain when they feel trusted.

This in turn makes them become more trustworthy.2 This has implications all the way from raising children to leading in the workplace. Trusting your children or employees has the potential of increasing their trustworthiness. It’s true on a conscious level because they appreciate the respect you are showing them. But it’s also true on a deeper unconscious level as the “trust” hormone is released.

Everyone is talking about the human growth hormone (HGH). Let’s include the human trust hormone (HTH) in the conversation.

1Pew Research Center, “Social Networking Sites And Our Lives”. June 16, 2011.

2Kosfeld, M. et al, (2005). Oxytocin Increases Trust In Humans. Nature. 435.

(Mick Ukleja is the author of several books, a coach, keynote speaker and president of LeadershipTraq, a leadership consulting firm.

Check his blog at www.leadershiptraq.com.)

Business Journal premiered March 1987 as the Long Beach Airport Business Journal. Reproduction in whole or in part without written permission is strictly prohibited unless otherwise stated. Opinions expressed by perspective writers and guest columnists are their views and not necessarily those of the Business Journal. Press releases should be sent to the address shown below. South Coast Publishing also produces Destinations and the Employee Times magazines.

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Choosing The Right Hospital For Your Child’s Surgery hen you live in S o u t h e r n California, it can be easy to become less cautious when it comes to the heat. Being too comfortable with your weather environment can get you dog days of the Southern California summer.

Children and adults ■ HEALTHWISE are different and so are

By Fombe their health care needs.

Ndiforchu, M.D. Many children’s illnesses are rarely seen in adults or affect kids differently, so when a child needs surgery, choosing the right surgeon, care team and hospital is important. Here are some things to consider when choosing where to go for your child’s surgery.

Board-Certified Pediatric Surgeons You should expect a kid-friendly surgical team that includes board-certified pediatric surgeons, pediatric anesthesiologists, nurses and surgical assistants, all extensively trained and experienced in pediatric surgery.

Children are not little adults – many of the conditions and needs they have are unique. Pediatric surgeons are specially trained to evaluate, diagnose and operate on newborns, children and young adults.

Type Of Surgical Specialties Offered Most pediatric surgeons have extensive training in a pediatric surgical specialty. If your child needs a specialized surgery, it’s important to find a surgeon who has the expertise in that area. Pediatric surgical specialties include: general, neurosurgery, orthopedic, plastic, cardiac, urologic, otolaryngology (ear, nose and throat) and more.

Pediatric Anesthesiologists Anesthesia can be scary for both the child and their family. Pediatric anesthesiologists are

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board-certified and specialize in delivering the correct dose to kids.

Pediatric anesthesiologists are instrumental in the safety and success of a surgery, but also plan and provide pain control for children throughout the surgical process. Just like pediatric surgeons, pediatric anesthesiologists have extensive training in treating children and communicating with families.

Patient And Family Centered Care Considering the family as part of the care team is essential to a successful recovery for children.

Make sure the hospital you choose understands the importance of a partnership between families and the care team.

A unique aspect of choosing a children’s hospital is the access to child life specialists. For children, surgery and hospitalization can be the most frightening experience of their life, especially if they’re in the early stages of their development.

A child life specialist’s primary role is to normalize the scary environment of a hospital.

Child life specialists have degrees in child development and prepare children before they go into any surgery or medical procedure, or even anesthesia. Often called “medical play,” the preparation sessions are geared to the developmental level of the child.

Letting children manipulate and explore medical tools, such as an anesthesia mask, helps them understand how it works and gives the child control over a potentially anxiety-producing piece of equipment.

Latest Surgical Techniques To ensure the best recovery for your child, ask about the latest surgical techniques that the hospital uses. Traditionally, many surgical procedures were performed through large incisions using “open” incision techniques. Whenever possible, surgical procedures are now being done through

tiny incisions less than an inch long using a minimally invasive approach.

In most minimally invasive surgeries, a flexible camera and light-weight surgical instruments are introduced to the surgical area through tiny incisions. Guided by magnified images on a television monitor, surgeons are able to perform complex procedures less invasively.

There are many advantages of minimally invasive surgery for children such as less pain, minimized scarring, improved recovery times and shorter or eliminated overnight hospital stays.

Pediatric surgeons can even perform minimally invasive surgeries, such as gall bladder removals and appendectomies, in an outpatient setting meaning children don’t need to spend the night at the hospital.

Environment A pediatric surgical environment should provide comforts to help lessen children’s anxieties and fears. Look at the physical environment of the hospital. Is the décor welcoming for children? Is there an area for them to play while they wait for surgery? What comforts are offered for families while they wait for their child to get out of surgery?

In addition to the physical environment, it’s important that the equipment is tailored to children. In a children’s hospital, everything from the dressing rooms to the operating room will be sized just for kids.

Making A Decision Choosing a place for your child’s surgical care needs can be difficult, but many hospitals offer presurgical tours as a way to learn more and give parents a chance to ask questions. Take advantage of these resources, so that as a family you can make an informed decision (Fombe Ndiforchu, M.D., MPH, MBA, is the medical director for general pediatric surgery at Miller Children’s & Women’s Hospital Long Beach.)

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PERSPECTIVE July 22-August 4, 2014

Long Beach Business Journal 23

Federal Reserve Cites Problems With Housing Market n the published minutes of last month’s policy meeting of the Federal Reserve, the recovery in our nation’s housing is one of the primary topics discussed and a litany of issues is offered as to why progress has been much slower REALTY VIEWS than most anticipated.

By Terry Ross If you were to talk to the various specialists in the fields of banking, real estate sales, home building and economics, you would have a better understanding of why this one of the slowest recoveries since the Great Depression.

Many of the reasons for the slow progress that you don’t see in the headlines or in most daily newspapers were detailed out in the Fed’s discussion. Neither the Administration nor Congress likes to talk about most of these issues because doing so flies in the face of sharing the “happy news” they like to bolster when talking about the economy for reelection hype. But some of the key issues in these discussions point to fundamental problems with the economy in general that are not going away very fast.

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One of the most obvious deterrents to home sales, according to the Fed minutes, is “restrictive credit conditions, particularly for households with low credit scores,” which is largely a by-product of the housing bubble of 2007-08.

And, although lenders are making progress in loosening up requirements, it is a whole different world than it was a few years ago.

Mortgage lenders often demand that borrowers have FICO scores of 680 or more, far higher than what Fannie Mae, Freddie Mac or the Federal Housing Administration will allow. Such "credit overlays" have kept many borrowers, particularly blacks and Hispanics, out of the housing market.

High down payments are now required as opposed to many programs that entailed little or no down payments prior to the Great Recession.

Many consumers now work in jobs where they are not able to save enough for a down payment.

While down payment requirements are low by historic standards at 3.5 percent for Federal Housing Administration loans, private lenders pretty much have deserted this market.

Low demand among younger homebuyers, due in part to the burden of student loan debt, is taking its toll on the first-time buyer market, and this doesn’t look to change quickly. College graduates are saddled with an average of

$29,400 in student loans according to the Project on Student Debt, making it tough to save for a down payment on a home. Plus, new mortgage rules require that potential homebuyers have a debt-to-income ratio of less than 43 percent in most cases, a barrier that is keeping recent graduates from buying a home.

A shortage of buildable lots for developers (and in many cases this means at a reasonable price), especially in the most desirable locations, has emerged as a key factor holding back a more robust housing recovery, according to homebuilders. Construction of single-family and multifamily homes is expected to ramp up dramatically in the next year or so, but builders are being cautious, so don’t look for this to be a boom.

There are low inventories of desirable homes for sale because of the low number of move-up buyers and, with many homeowners still underwater, homes for sale are scarce.

This constrains activity on both sides of the market; buyers have fewer homes to choose from and sellers almost always need to buy another home when they do sell.

Distressed homes remain a dead weight in the housing recovery. Though foreclosures and delinquencies have dropped dramatically in the past year, there were 966,000 properties in fore-

closure in May, according to Black Knight Financial Services. Another 1.2 million homes are delinquent by 90 days or more. This continues to be a drag on the market.

Rising construction costs are another factor that is noted in the Fed minutes, with prices for key construction materials expected to increase.

The cost of softwood lumber has risen 40 percent from 2011 to 2013, according to the Department of Labor, though overall costs are expected to continue to climb only modestly, in the range of one to five percent.

Structural changes in housing demand are underway and continue to change the way people live." An aging population and evolving lifestyle preferences . . . [are] boosting demand for multifamily units at the expense of singlefamily homes," the Fed minutes say. Some in the industry believe a structural change is underway, as buyers demand smaller, cheaper homes and more people choose to rent.

How well we tackle these issues and adapt to the changing landscape looks to be the key to how quickly and how successfully the market recovers.

(Terry Ross, the broker-owner of TR Properties, will answer any questions about today’s real estate market. E-mail questions to Realty Views at terryross1@cs.com or call 949/457-4922.)

Freight From Farm To Market he contract negotiations that are currently taking place in San Francisco between dockworkers and the Pacific Maritime Association will have impacts far beyond the ports.

A contract agreement for West Coast longshoreTRADE AND men keeps the supply TRANSPORTATION chains moving for goods

By Tom O’Brien that use the ports on their way to final markets in this country, or in the case of exports, across the globe. This includes California’s agricultural exports. This state’s agricultural supply chain is a major user of the transportation system.

California produces nearly one-half of the country’s fruits, nuts and vegetables and also is a major producer of livestock and livestock products. Farm-to-market goods depend upon not only working ports but on a network of interstate highways, state roads and small, rural roads, some of which have not been designed to support large trucks.

The seeds of the farm-to-market road system were planted in the early 1930s when the U.S. Bureau of Public Roads called on

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America to “get the farmer out of the mud,” a slogan that led to a greatly improved and expanded system of paved rural roads. These days, geography and environmental concerns also play a role in determining where, how and why infrastructure investments get made.

The San Joaquin Valley is the main contributor to agricultural production in the state. The eastern Sierras, Sacramento Valley, Imperial Valley east of San Diego County, and the Central Coast also contribute to farm-to-market goods movements. The Sacramento Valley controls more than two-thirds of the worldwide prune market with over 400 growers in California. In the Imperial Valley, local farmers produce more than 100 different commodities, including bamboo, sugar cane, flax, corn, artichokes, fish, goats, honey, cilantro, water lilies and more.

The Central Coast region, a five-county region (Santa Cruz, San Benito, Monterey, San Luis Obispo, and Santa Barbara) is a major producer of broccoli, lettuce and strawberries. Wine grapes and nursery products are also important agricultural products. In all of these regions, goods movement is a significant contributor to poor air and water quality. On top of that, increased population growth creates a demand for more goods movement, increases congestion and hastens the degradation of local roads.

Furthermore, deregulation of the rail industry has allowed rail road companies to disinvest in less profitable, inefficient and often rural railroads making agricultural commodities more dependent on trucking. As a result, the road network for the first, last and sometimes “in-between” miles is critical for farm-to-market goods movement in the state.

Underdeveloped roads decrease the efficiency of all types of goods movement. They exhibit high levels of disrepair, thereby slowing vehicular movement, and do not allow for passing, which in turn creates congestion.

Other states are creating their own networks of farm-to-market roadways for rural regions.

Best practices are coming from places like Texas, Iowa and Missouri. In Texas alone, there are 40,985 miles of farm-to-market roadways.

These road networks are designed to directly connect agriculturally productive regions with population centers so that produce can be delivered to consumers efficiently.

California can learn from these other places about how to design and modify roadways to accommodate trucks that meet federal standards while responding to local needs. It’s also worth looking outside of the state for lessons on how the seasonality of certain commodities affects infrastructure demand. And of course,

the more innovative financing tools at our disposal, the better.

But there are in fact efforts underway in this state to improve road conditions and to provide facilities for both short-haul and longhaul truckers. The San Joaquin Valley Interregional Goods Movement Plan, for example, looks at a wide range of issues including the state of existing infrastructure conditions as they relate to freight, the relationship between freight and the valley economy, environmental impacts of freight-related activity, and growth in freight demand.

This effort and California’s Freight Mobility Plan may themselves become national models for addressing farm-to-market issues in the broader context of regional and statewide goods movement. Given the size of both the state and our agricultural industry as well as potential economic impact throughout the country – if not the world – of an inefficient agricultural supply chain, home grown innovations will be important. Of course, that assumes that goods can get through the ports. So, how are those negotiations going?

(Dr. Thomas O’Brien is the interim executive director of the Center for International Trade and Transportation at CSULB and an associate director for the METRANS Transportation Center, a partnership of USC and CSULB.)

Addressing Local Poverty Concerns: Mayor Garcia And Other Officials Should Focus On Education, Not The Minimum Wage PUBLISHER’S PERSPECTIVE

By George Economides n July 15, local residents, business people and others gathered at the Terrace Theater to welcome Long Beach’s new team of elected officials. Three thousand people filled the theater to witness Robert Garcia sworn in as mayor and five councilmembers take the oath for the first time. The city attorney, city auditor and city prosecutor were also sworn in for fouryear terms. It certainly was a joyous occasion with good speeches, a lot of hugging and many statements claiming Long Beach is a great city.

But the focus was on Garcia, the 36-yearold, Peruvian-born, openly gay mayor who won a narrow victory in June to become the

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youngest mayor in the city’s history. Now people are asking, what is his agenda? Will he be a leader who brings people together? For our readership, the important question is: does he understand the business community?

Throughout Garcia’s inaugural speech, he talked about the American Dream: “What I love about our city the most is that you can find the American Dream here. There is an opportunity here for everyone to succeed . . .”

Then he spoke about poverty in Long Beach and that’s when a red flag went up: “We have prospered so much and we will continue to prosper. We will continue to support business; we will continue to work with our friends in labor.

But we will always have to keep an eye as we move forward, that if we are ever going to grow

as a city, we must address this issue of poverty.”

Was Garcia sending a signal that he will push for increasing the minimum wage on businesses in Long Beach? It sure did sound like he was laying the groundwork. With pro-labor councilmembers such as Al Austin, Roberto Uranga, Lena Gonzalez and Rex Richardson – and occasional support from Suja Lowenthal and Patrick O’Donnell – Garcia has enough votes to go after more “contributions” from the private sector to help out those workers who are considered to be living at the poverty level.

One group of businesses that could be targeted are dining establishments, a sector that employs thousands of workers locally at or near the minimum wage. Most of these businesses are small operations with very thin profit margins. The vast majority of restaurants close within two

years of opening, with only a few making it past five years. There’s a reason for that beyond competition: it’s a very tough business with food prices and other costs increasing constantly.

Most small business owners work long hours for a small return. Yes, people at the poverty level are vulnerable, but so too are small businesses.

We never hear labor unions talk about educating people; their approach is always to have business pay more. We would like to see Long Beach’s new leadership – with cooperation from business and labor – focus on getting people at the poverty level an education, or learning a trade. That’s the best solution to helping lift people out of poverty.

Options exist for every challenge a community faces. How elected officials approach solutions will tell us much about the future of Long Beach.

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