January 20-February 2, 2015 Section A

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Local Saluting And its Nonprof s The Art nity In Commu ach Long Be 18 & See Pgs.

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Small Busine ss Dollars & Sense

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lbbusinessjournal.com

January 20-February 2, 2015

MemorialCare’s Arbuckle Discusses Trends, Q&A With Pat West Long Beach City Manager Exudes Challenges In The Health Care Industry In A Candid Interview, Health System’s Top Exec Weighs In On Affordable Care Act

Optimism As He Addresses A Wide Range Of Issues ■ By DAVE WIELENGA Staff Writer lmost eight years after his ascent to the most powerA ful job in city hall, City Manager

MemorialCare Health System President & CEO Barry Arbuckle, pictured at his headquarters office in Fountain Valley, oversees the operation of six hospitals, two medical groups, a health plan and numerous imaging centers, surgery centers and outpatient health centers in Los Angeles and Orange counties (Photograph by the Business Journal’s Thomas McConville)

■ By SAMANTHA MEHLINGER Senior Writer n an effort to adapt to the massive changes in IAffordable the health care industry set in motion by the Care Act (ACA), health systems and hospitals are rapidly diversifying their services and entering into partnerships that, 20 or even 10 years ago, wouldn’t have made sense. Barry Arbuckle, Ph.D., president and CEO of MemorialCare Health

System, has led one of Southern California’s largest and most awarded health care systems in getting ahead of the curve as the industry undergoes a major overhaul.

Arbuckle has served as MemorialCare Health System’s president since 2002. He started as director of patient and family services at Miller Children’s Hospital Long Beach in 1989, later becoming CEO of Orange Coast Memorial Medical Center and then (Please Continue To Page 10)

Pat West has become perhaps the most significant repository of institutional knowledge in Long Beach city government. Talk about good timing.

Long Beach ended an era last year, when elections, term limits and unexpected turns in career paths combined to send the city into 2015 without many of its most experienced public officials, and with lots of new faces in their places.

“With the combination of the new elected officials and the administrative changes, it’s probably been one of the biggest epic sea changes in the leadership of this city that anyone can remember,” West said earlier this month during an extensive interview with the Long Beach Business Journal.

Among elected officials, only 2nd District Councilmember Suja Lowenthal, currently vice mayor, was in office when West was promoted in September 2007. The most recent election cycle gave Long Beach a new mayor and five rookie councilmembers – and whoever wins the April 14 special

election to replace Patrick O’Donnell in the 4th District will be a first-timer, too.

The turnover in West’s uppermanagement staff is even more dramatic.

“This past year has seen a new assistant city manager, a deputy city manager, a police chief, a deputy chief, a police commander, an airport director, an emergency services director, an interim technology and innovations director, a chief of lifeguards,” West said.

“And we have new managers in human resources, our marinas, parks maintenance, business licenses and fleet.”

If West doesn’t sound daunted – and he doesn’t: “I find change exciting, invigorating, fun,” he said – perhaps it’s because of his personal experience with change when he became city manager more than seven years ago.

Back then, West was in his third year of leading the Long Beach Community Development Department and the Long Beach Redevelopment Agency. But he had a quarter-century of public sector experience under his belt with the City of Paramount, where he had served as city manager.

When City Manager Jerry Miller resigned, West was on the (Please Continue To Page 4)

AES Alamitos: Better Turbines And Future-Tech Batteries ■ By MICHAEL GOUGIS Contributing Writer hat do you do with W excess electrical energy?

Stuff it into batteries. Utilitysize banks of batteries.

The renovation of the AES

power plant on the southeast edge of Long Beach is evolving to embrace the latest concept in energy storage. The gas-fired turbines that have been there for 50 years or more are going to be replaced, and a building housing lithium-ion batteries – like the

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ones in your cell phone or laptop – will be erected. Those batteries will be able to store enough energy to power hundreds of thousands of homes in Southern California.

That is AES’ plan for the Alamitos Energy Center, Stephen O’Kane, manager of sustainability and regulatory compliance at the plant, told the Business Journal.

The renovation is driven by a combination of factors: • The existing generators are old and designed for a bygone era.

• Renewable resources are boom-or-bust sources of power that require supplemental sources to bridge the periods of inadequate power generation.

• Batteries now can store power that, because of the nature of power generation, is being dumped outside of the state at a loss.

The older gas-powered generators at the existing facility were designed to power the growth of the Los Angeles region in the post-WWII era, O’Kane said. “[The generators were] literally built to power the great boom of Los Angeles of the 1950s, ’60s, and ’70s. They’re meant to be cruising along at a steady speed.

That was the way they were operated. What’s happened over the years is a complete change in our demand – what we use them for and when we use them,” he said.

(Please Continue To Page 13

Entering its 28th year, the Long Beach Business Journal presents Economic Outlook 2015, a 36-page section focusing on the year ahead.

More than 70 people representing a variety of industries were interviewed for this special focus.

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INSIDE THIS ISSUE 2 Long Beach Business Journal

January 20-February 2, 2015

3 Newswatch 4-Q&A With City Manager Pat West, continued from Pg 1 4-Three Qualify For 4th Council District Special Election 4-New Monthly Feature: Helping Long Beach Businesses Grow 10-Interview With Barry Arbuckle, continued from Pg 1 13-Plans For The AES Alamitos Facility, continued from Pg 1

14 In The News 14-Cesar’s Bistro Opens At Loynes And PCH 14-Sweet Threads Now On Broadway 14-Chad Kurz Joins c a.Architects 14-Brian Addison Joins DLBA Staff As Communications Mgr 15-New Communications Team At L.B. City College 15-Wells Fargo’s Alvarado Promoted To So Cal Region Pres.

16 Perspective Realty Views Housing – Where Is It Going? By Terry Ross Effective Leadership An ‘Inside’ Look At The Wizard Of Oz By Mick Ukleja Third Sector Report Nonprofits And Risk Management: An Essential New Year’s Resolution By Jeffrey Wilcox HealthWise Serious Diseases Are On The Rise In Children

By Dr. Divya Joshi Small Business Dollars & Sense As Small Business Optimism Rises, Worries Decreasing By Ben Alvarado

28

& c Year ou s nti ng !

18 Art Matters 19 The Nonprofit Page Section B Economic Outlook 2015 • Overview • Aviation/Aerospace • Financial Services • Health Care • International Trade • Oil • Real Estate • Retail • Technology • Utilities

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NEWSWATCH 4 Long Beach Business Journal

Helping Long Beach Businesses Grow

January 20-February 2, 2015

Q&A With Pat West (Continued From Page 1)

Spotlight On P2S Engineering

A group of P2S Engineering employees hired through the Pacific Gateway Workforce Investment Network’s On The Job Training Program consult with one another at their new place of work.

Pictured, from left are: Matt Szlachetka, mechanical engineer; Allen Sly, electrical design engineer; Rene Canedo, electrical engineer; and Jay Pangilinan, plumbing design engineer.

(Photograph by the Business Journal’s Thomas McConville)

■ By SAMANTHA MEHLINGER, Senior Writer Working with the Pacific Gateway Workforce Investment Network helped Long Beachbased P2S Engineering fulfill its growing employment needs and cut down on costs.

Pacific Gateway provides workforce development services to individuals and businesses in Long Beach, Lomita, Signal Hill and Torrance. The network, which has a $15 million budget, is administered by the City of Long Beach.

When a Pacific Gateway representative visited P2S’s office last March, the company was in the midst of a growth period, Human Resources Manager Kristine Castillo recalled. “We were heavily recruiting because we were growing, so we needed help in finding qualified candidates,” Castillo said. “We opened our San Diego office last February, and we have grown from 86 employees at the end of 2013 to 105 at the end of 2014,” she said, adding that 100 of those employees are based in Long Beach.

After meeting with a Pacific Gateway representative, P2S immediately signed on for the network’s On-The-Job Training Program, which covers some of the cost of a new employee’s wages while they train for a potential, permanent position. “That program really benefited us because we were able to bring in interns and train them and, if they worked out we were reimbursed [for part of their wages],” Castillo said.

“We’re a specialized firm in chemical, electrical and plumbing engineering consulting,” Castillo said. Due to the specialized nature of P2S’s work, most recruits out of college need some hands-on training, making Pacific Gateway’s program ideal.

One of the bonuses of the program was its flexibility, Castillo explained. “Their program also allowed us to bring in our own recruits and put them through the program as well,” while still allowing P2S the option to use Pacific Gateway’s resources to find recruits if necessary, she said.

P2S told Pacific Gateway’s representatives the basics of what they needed to fill entry-level engineering positions, including what they would be training for, who would be managing them, and what each recruit’s title and wages would be. After that, Pacific Gateway met with P2S’s recruits to assess their skills, and then the recruits went to work. “Their representatives were always really nice to work with, really helpful, and always very knowledgeable,” Castillo recalled.

Pacific Gateway is only as hands-on as necessary, Castillo noted. “We checked in with each other every three to four weeks,” she recalled. After hires completed 250 hours of work, Pacific Gateway would check in with the workers and with P2S to ensure things were going smoothly.

Once recruits completed 525 hours of work, P2S had the option to hire them. Last year, P2S hired 10 employees through Pacific Gateway’s program.

Pacific Gateway reimbursed P2S for $80,000 in wages, which Castillo called an “amazing” benefit to her company. With that savings, Castillo was able to help make up for the cost of other recruiting sources through websites such as Monster and LinkedIn. “Those are costly, and being able to get our reimbursement through [Pacific Gateway’s] On-the-Job Training Program definitely offset my other recruiting efforts,” she said.

P2S Engineering will continue its relationship with Pacific Gateway in the future and may even take advantage of some of the network’s other offerings, such as its youth employment programs.

When asked what she would tell other Long Beach businesses about working with Pacific Gateway, Castillo said, “I would suggest meeting with someone from Pacific Gateway, going over all their options and finding the best program.” ■

Presented monthly by the Long Beach Business Journal and the Pacific Gateway Workforce Investment Network

short list of possible successors while a national search began. Eventually, determining the best candidate for the job was already here, then-Mayor Bob Foster nominated West and the council approved.

About five minutes later, the Great Recession arrived, challenging West to lead one of the nation’s largest, most diverse cities through some of the toughest economic circumstances in nearly a century.

Looking back at that experience, West sounds almost grateful – but certainly serene – as he considers the lessons he can apply to the challenges of 2015.

“More than anything, that baptism by fire, it just provides you with a sense of calm,” he said. “You’ve been through this before – you know you can get through it again.”

LBBJ: What stood out most to you about 2014?

West: 2014 was an incredible year for the City of Long Beach. We accomplished so much and had a lot of exciting things happen.

The public safety arena showed the biggest improvements. We’re experiencing the lowest violent crime in the city in over 42 years. We continue to see property crime decrease. The murder rate was the lowest ever in recorded. Ever. In our fire department, we’re pretty excited that we now have a new model that is allowing paramedics to get to the scene 90 seconds earlier than they have in the past. That’s really fantastic for us.

In the building environment, we’re constructing a new North Long Beach library, we continue to add to and improve our parks. Our parks and library programs are at all-time attendance highs right now.

Finally, after an eight-year effort, adopted a digital billboard ordinance – you’ll see some digital billboards on the freeways,

Three Candidates Vie For 4th District City Council Seat In a winner-take-all race scheduled for April 14, three residents are looking to serve as the next city councilmember representing the 4th Council District.

Daryl Supernaw, a business consultant who ran two years ago, Herlinda Chico, who served as a legislative aide to former councilmember Tonia Reyes Uranga, and Richard Lindemann, who did not indicate a profession, are all vying for the seat left vacant after Patrick O’Donnell was elected to the state assembly last November. O’Donnell served two full terms as councilmember, and ran for a third term as a write-in candidate. He and Supernaw then faced each other in a runoff with O’Donnell’s name on the ballot.

O’Donnell won. A third candidate in that 2012 race, John Watkins, announced he was not running and has endorsed Supernaw.

The 4th District stetches from El Dorado Park on the east, through the Los Altos area and the Traffic Circle, into parts of Cambodia Town along East Anaheim Street. ■ – From Staff Reports

but each billboard comes with many grandfathered and illegal billboards coming down along our corridors. The first new one was approved recently, and for just that one, we’re seeing 36 old, grandfathered billboards come down.

The Belmont Pool project is fantastic, especially getting the temporary pool up and running so fast. Chittick Field in the 6th District, where the old Salvation Army project was going to go, put a hope and a dream there with a football stadium, track stadium and soccer facilities.

Douglas Park continues to knock it out of the park. Basically it’s mimicking the Irvine Spectrum facility out where the 5 and 405 freeways meet. There are some incredible businesses going into Douglas Park.

There are several adaptive reuse projects underway, including the Edison Lofts on Long Beach Boulevard and the American Hotel on Broadway. We also have the 17story, 223-unit Current tower going up at Shoreline Gateway that hopefully will be followed by a 32-story building. Parc Broadway is being constructed across the street from city hall. And I can’t say enough about the Civic Center project.

LBBJ: Could you go over in a little more detail what changes were reflected by the 2014 crime statistics?

West: In violent crime we had a 3.2 percent decrease over last year. Violent crime is down to 42-year lows. And we’ve got an 18 percent decrease in violent crime over five years. Property crime had a 5 percent decrease this year and 4 percent over the last five years.

We want to thank our Public Safety continuum, including not only the police and fire departments, but also a lot of our departments and a lot of our non-profits throughout the community. It’s everybody working in synergy to create this drop in crime. We know crime has been dropping across America, but it’s dropping quicker here, much of it due to the former redevelopment agency. The agency was responsible, in the last 10 years, for taking out about 20 liquor stores that were 911 hotspots; about 18 motels where lives were ruined; about a dozen gang-ridden apartment buildings that were destroying neighborhoods. This was done by relocating existing tenants into better housing.

We have continued to create a record number of affordable units throughout the city to deal with people who are on fixed incomes. We spend, probably, $100 million a year on affordable housing through about 6,500 housing vouchers that are issued through our housing authority annually. A lot of those vouchers continue to go to homeless people and veterans. We have the largest veterans homeless facility in the United States at the Century Villages at Cabrillo [on the westside of Long Beach].

All these things added together keep our streets safe and result in decreased crime.

Additionally, the city prosecutor’s office has been critical to our publicsafety continuum. The gang injunctions he’s put in place during the past three or four years have been huge in making our neighborhoods safer. I can’t say enough about what the city prosecutor has done in working with our police department to go after criminals.

(Please Continue To Top Of Next Page)

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NEWSWATCH January 20-February 2, 2015 LBBJ: You mentioned the RMD program – the Rapid Medic Deployment. If it’s so successful, why are there so many people, especially union members, who are opposed to it?

West: The most important metric in any fire department is how fast you can get to a crisis – a fire or a medical scene. With this new program we’re able to place a paramedic on the scene of a medical crisis 90 seconds quicker that we ever have. All I know is if I have a loved one who’s experiencing a medical crisis – a stroke, a heart attack – I would do everything in my power to guarantee I could get a paramedic there 90 seconds earlier. Lost seconds mean lost lives. In addition, we’re able to save $1.5 million in the general fund. I think you would have to ask the detractors what they have against that – putting paramedics in a place to save lives quicker and saving money.

LBBJ: When you introduce new ways of doing things – the RMD, the gang injunctions – it’s probably unavoidable that there will be some objections. From a personal standpoint, how difficult is it to enter that kind of storm, to get through it to the result you believe is on the other side? Is that where you believe leadership comes in?

West: The RMD process took about two years. We had to go through the L.A. County department that’s in charge of paramedic services and fire departments. We had to go through all of these metrics and changes, we had to meet and confer with our union. So it took about two years. But the bottom line is this is something that’s

Long Beach Business Journal 5

“Let me state categorically that the city is on sound financial footing. We will spend within our means. We have a balanced budget and it will continue to be balanced. We monitor the price of oil on a daily/weekly basis, we report to the council on a quarterly basis. We have a team of budget analysts who are reviewing this every single week.” happening probably in 90 percent of California. Long Beach, L.A., Orange County are probably the last holdouts from going to this type of program. But it’s not easy. Our fire chief, Mike DuRee, has

taken a lot of heat on this. But we couldn’t be more supportive.

LBBJ: Let’s talk about oil. How do you intend to address the impact of the falling price of oil on the budget? Is the

city on sound financial footing? Or is there concern?

West: Let me state categorically that the city is on sound financial footing. We will spend within our means. We have a balanced budget and it will continue to be balanced. We monitor the price of oil on a daily/weekly basis, we report to the council on a quarterly basis. We have a team of budget analysts who are reviewing this every single week.

The bottom line is, oil represents about 4.4 percent of our general fund; that’s about $17 million. So if the worst thing happened and there was no oil revenue, we’d lose about $17 million. No one’s predicting that at all.

Let’s go back to 2009 when we had a crisis related to oil prices – when prices dropped into the $20s. We lost approximately 10 percent of our general fund, a lot of it from oil, but also from other scenarios, and that was over $40 million. And we were able to deal with that. We’re not looking at anything of that measure, but certainly we’re paying attention.We think Fiscal Year 15 is going to be fine; although, as we get closer to the end of the year, if oil continues to drop, it could impact our general fund. It’s certainly going to impact the assumptions we make for next year’s budget, Fiscal Year 16. We’re in the process of putting that together and the assumptions we had last year are certainly going to change as we prepare a balanced budget.

I want to talk a little bit about operating (Please Continue To Page 6)

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NEWSWATCH 6 Long Beach Business Journal

January 20-February 2, 2015

Q&A With Pat West (Continued From Page 5)

versus capital budgets. The dip in oil prices is primarily going to impact our capital budgets, primarily in the tidelands arena – beaches, the parking lots, the Belmont pool, things like that. We don’t expect the dropping price of oil to impact our operating revenues too much . . . but like I said, that can certainly change.

LBBJ: We looked at the recent report from your financial manager, John Gross, which stated that oil prices began falling in July and continued to fall during the budgeting process. Why wasn’t that taken into account during the budgeting process?

West: I don’t believe that when we looked at oil at that time – July, August,

September – we saw it in the $70 range.

When we put together our budget, approximately 70 percent goes to operations – that’s for lifeguards, firefighters, police, beach operations. In the Uplands arena, which is a little bit less, that’s for cops, our fire, our library, things like that. We always know when we put together the plan for the capital tidelands budget that it’s a five-year plan, so it does need to be adjusted based on the price of oil. I don’t think there was so much of a concern regarding the capital budget since we are forbidden from going forward on capital expenditures without having the money up front. We knew that as oil dipped a bit it would impact the projects out in years three, four and five, but not in years one and two. But now as oil has dropped below $50, it’s a whole new ballgame.

LBBJ: Do you have any idea what the city is going to save on gas to fuel its vehicles?

West: I don’t know that off the top of my head. But it’s a two-edged sword for us. We lose the price of oil for our tidelands capital projects, and, if it dips below $70 for too long, our operational projects.

But we save in fuel costs and our sales tax goes up from gasoline taxes.

LBBJ: There was a push to increase the oil price that’s used as the basis for budgeting up to even $100 per barrel.

West: That’s always a push to help put more money in the general fund. You have people who want to say we’re going to get more sales tax this year. Or more property tax. Or more utility users tax, or more oil money. We have a finance department that

The Honorary Members of the

Long Beach Police Officers Association 2865 Temple Avenue • Long Beach, California 90755 • (562) 426-1201

The Honorary Members of the Long Beach Police Officers Association presents the 16th

“Richard A. Rose Career Achievement Award”

Honoring Sergeant Erik Herzog A 25 year veteran who has demonstrated integrity, loyalty, leadership, and professionalism throughout his career.

Luncheon Guest Speaker County of Los Angeles County 4th District Supervisor Don Knabe Supervisor Don Knabe was first elected to the L.A. County Board of Supervisors in November 1996 and was reelected in 2000, 2004, 2008 and 2012. The 4th District stretches from Marina del Rey to the Palos Verdes Peninsula to Long Beach all the way east to Diamond Bar. The District also includes Catalina Island and San Clemente Island. He established the Safe Surrender program in L.A. County and since 2001, more than 120 babies have been safely surrendered. In 2012 he launched a countywide awareness campaign about young girls being sexually exploited for money here in So. California. Last year he advocated for stiffer penalties for the buyers and sellers of young girls.

The Richard A. Rose Career Achievement Award was established by the Honorary Members of the Long Beach Police Officers Association in memory of Sergeant Richard A. Rose. The criteria for the award includes that it

be bestowed upon a police officer who has served a minimum of 20 years with the Long Beach Police Department and has demonstrated outstanding integrity, loyalty and professionalism throughout his or her career.

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just resists that. We’re very conservative in our estimates and we try to budget what we’re expecting is going to happen. Our city councils have traditionally been very conservative when it comes to our budgets.

LBBJ: Speaking of the elected leadership, Long Beach has five new councilmembers, a new mayor and another new councilmember coming from the upcoming special election. Everyone who runs for office has an idea of what they want to accomplish. Do all the new personalities – and perhaps new goals – make your job more . . . interesting?

West: This has been a very unique year.

I don’t recall any in recent history with this type of change in our elected leadership. We also have 61 new commissioners with more coming. Lucky for me I’ve known many of the new councilmembers for a while. We’ve had previous relationships that have helped. But quite honestly, I find it exciting. There is a renewed sense of optimism on the city council. There are new ideas. It’s very exciting.

LBBJ: There are also lots of new people in city management. Does that make your job harder?

West: With the combination of the new elected officials and the administrative changes, it’s probably been one of the epic sea changes in the leadership of this city that anyone can remember. But the bottom line is that change is the only constant in any industry. But I find change exciting, invigorating – it’s fun.

When we lose department heads it’s sad because you have great relationships with them, they’re great people and they wouldn’t be here unless they were at the pinnacle of their professions. But we’ve got a great bench with great depth. So when we’re looking at our department heads and we’re looking at our managers that leave us, we look first at what’s going on internally – can we replace them with the bench or with our depth? But we also have the opportunity to look outside.

I wrote this down because there are so many of them: “This past year has seen a new assistant city manager, a deputy city manager, a police chief, a deputy chief, a police commander, an airport director, an emergency services director, an interim technology and innovations director, a chief of lifeguards. And we have new managers in human resources, our marinas, parks maintenance, business licenses and fleet. Many of these people are home grown, whether it’s a Robert Luna [police chief], whether it’s a Rich Rocchi [deputy police chief], whether it’s Gonzalo Medino [marine safety]. But over the past couple of years we’ve been able to attract some cream-of-the-crop people from all over America. People from Aurora (Colorado), Cincinnati, Shreveport, Phoenix, Fresno, Henderson, Salt Lake City and our new deputy city manager who starts February 2 comes to us from Oakland. So it’s really exciting to bring the best that America has to offer here to Long Beach.

LBBJ: You started this job in 2007 and immediately came the great recession.

How has that experience at the beginning of this job affected your ability to manage this epic sea change? Are there episodes from your experience that you can put into practice or is everything so constantly (Please Continue To Top Of Next Page)

1_LBBJ_DEC_23_2014_SectionA_LBBJ MASTER LAYOUT 1/18/15 6:27 PM Page 7

NEWSWATCH January 20-February 2, 2015 changing that you’re always kind of new?

West: First, I want to say that I am surrounded by incredibly smart people. Every one of our department heads is at the top of their profession. They could easily be a department head in any city in America; many of them could be city managers in any city in America; many of them could be sitting in my chair just as easily. So we have a great management team to lead us through these crises. And the baptism by fire with the worst recession since the Great Depression more than anything just provides you with a sense of calm. You’ve been through this before, you can get through it again and when we have to turn the knobs onto minimized city government, minimized expenditures, minimized hiring, we know we can do that and we know it will be effective.

LBBJ: What is the status of contract negotiations with city employee unions?

West: We are negotiating with one employee group right now, the IAM [International Association of Machinists and Aerospace Workers, which represents most city employees]. We’re in the middle of those negotiations. Our police and fire contracts don’t open for two more years.

Many of our other organizations will come up September 1, 2016.

LBBJ: Are you optimistic about a resolution or are these especially difficult negotiations?

West: I’m always optimistic. We’ve been able to treat our employees very fairly in the past. If you look at trends for cost-ofliving increases, they’ve been there for all nine of our labor groups. We went for quite some time [without a raise] with some of the groups during the recession, but we were able to make up for that when we exited the recession last year. We’re looking forward to streamlining our contracts as much as we can over the next few years.

LBBJ: Perhaps the most ongoing complaint in Long Beach is the condition of its streets. What determines which streets are a priority for rehabilitation?

West: Determining which streets need to be repaved is not rocket science. Anyone can drive down a street and say, “This street needs to be repaired.” We have 52 square miles of city that are laden with arterial streets, connector streets and other thoroughfares. Repairing them is one of the key things that our public works department does. Lucky for us we get routine annual

Long Beach Business Journal 7 dollars for our streets through different funding sources – the federal government, the county, Measure R, Proposition C, Proposition A, gasoline taxes. We also have one-time dollars that have been available when oil has been a little higher that we can allocate to city council offices so they can help us find out which are the worst streets in their neighborhoods. The science in fixing streets is, how do you do it before it gets to the point that it’s alligatored or cracked? Once that happens, it’s going to cost a lot more per square foot to replace than to slurry. We’re doing a lot more slurrying during the past few years and we’re trying to catch streets before we have to tear up an entire street. In the next month a pavement management plan will come before the council. We put that in the budget last year. It was a fourmonth effort with a firm to analyze every street in the entire city and put them in order of what needs to be slurried or resurfaced or replaced. It will show us the good, the bad and the ugly – and how we’ll have to deal with it.

LBBJ: Are you happy with the process your staff has undertaken with the new civic center?

West: I’m amazed at what Mike Conway [director of economic and property development department] and his team have been able to put together with the financing scenario to get us a new civic center, a new world-class library, a world-class park and maintain our parking garages. We’re doing this through a P3DBFOM (public-privatepartnership/design/build/finance/ operate/maintain). It’s a term you’re going to hear a lot more of in California after people see what happens in Long Beach.

It’s the model that was used next door to construct the courthouse – very, very successful. I believe Las Vegas used it for their new city hall. We can take this seismically challenged building – and I want to make it very clear that we would not be going forward with a new civic center except that we have been told in no uncertain terms by a minimum of two nationally ranked seismic experts that this building is in distress and needs to be replaced – as well as the library; the library is actually in worse shape. That’s the only reason we’re going forward with this.

We’ve known this since about 2006. We did a peer review study about a year ago and the news had gotten much worse. But

we believe that there isn’t a public appetite at this time to increase taxes to pay for a new city hall. That’s how city halls are usually built in America. Mr. Conway is able to do this P3DBFOM and use existing dollars we’re paying on our campus as a revenue stream to develop this new 15-acre campus.

We couldn’t be more excited to get the harbor department to put their building here as well. They will be under a different financing scheme. They have more money than us so they’ll probably just pay for their building. But that will be next door to city hall. You’ll have twin towers. Then there will be hotels, condominiums and a new streetscape. I’m amazed at the financial scenario we’ve put together to craft this.

LBBJ: Again, when you are doing something new – building a city hall in something other than the usual way and ending up with one operated and maintained by a private firm – there’s always the possibility of resistance simply because it is new.

What are the obstacles to getting the public to buy into this method?

West: This has been going on since 2006.

So this is not anything that just popped up.

We’ve been spending a lot of time and energy with all the city councilmembers who have been councilmembers since 2006.

It’s the current council that has pulled the trigger on it after months and months of evaluating and taking it on the road to work with different aspects of the community so everybody’s plugged in. But it took this time period to come up with the financing scenario where we didn’t have to build a

new civic center on the backs of the public with new taxes. That was the direction we got from our city council and we were able to deliver that. But not delivering a new civic center is not an option. It just isn’t.

LBBJ: What is your opinion about getting a U.S. Custom’s facility that would allow Long Beach Airport to offer international flights?

West: JetBlue brought this to our attention in November 2013. We evaluated it and brought it to the city council. It didn’t go any further. It was just an economic study. Then our previous airport director left us to go to greener pastures and we chatted with JetBlue about not putting this forward until we had a new airport director.

Our new airport director, Bryant Francis, started yesterday (January 7) so we expect JetBlue to make a formal application for this facility sometime in the next month.

When that comes, it will get before the city council and we’ll talk to our mayor and city council about how they want to have that processed. It will be vetted through the council, through the community, through our airport advisory commission and with public input and staff input it will go to the city council, where the council will make a decision about what they are going to do with that application.

LBBJ: There are some areas of town where there is likely to be concern that the addition of international flights may translate into more noise in their neighborhoods. But would there be more noise?

(Please Continue To Page 8)

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NEWSWATCH 8 Long Beach Business Journal

Q&A With Pat West (Continued From Page 7)

Doesn’t the ordinance governing the noise made by Long Beach Airport remain unchanged?

West: The U.S. Customs facility isn’t related to the noise ordinance at all. We can’t violate our noise ordinance, and we have the toughest noise ordinance in the United States. The customs facility is something totally different. But again, the customs facility needs to go through the vetting process with the public and the community and the council and the commission to determine where it’s going to land.

LBBJ: Is a customs facility vital to the long-term health of Long Beach Airport?

:

January 20-February 2, 2015 West: What I’m hearing from JetBlue is that it is very important to JetBlue, and that will be made more clear when they put in their application and go through the hearing process and make their own statements. But JetBlue is driving this.

LBBJ: There is a renewed focus on economic development in Long Beach.

How do you plan to attract businesses to the city?

West: You asked earlier about the change in the city council and how that impacts our lives and the community. You’ve got a city council now that believes economic development is job No. 1 – for this mayor and for this city council. They couldn’t be more excited, they couldn’t be more supportive. I can’t say enough about what our city council is promoting in their communications to

us and to businesses. I also can’t say enough about the economic renaissance that’s occurring in Long Beach as I speak.

The city council’s adoption of the Downtown Plan, for example, has allowed more businesses to come in and expand as much as any large city in America. We’ve seen the Molina building go in at the old Press-Telegram site, bringing in 1,000 new, high-paying jobs. They’ve adaptively reused the Meeker-Baker historic building, and they’re looking at a third tower. They wouldn’t be able to do that without the Downtown Plan. The Current apartment project that’s going up right now wouldn’t come in without the Downtown Plan. The 34-story condominium complex next door wouldn’t have been entitled without the Downtown Plan. You wouldn’t see Parc

, ' 1 ' * ( 6

Broadway without the Downtown Plan.

You wouldn’t see the change of The Pike to a premium outlet mall. We, right now, have the most successful Restoration Hardware outlet in the United States and they are in the middle of constructing a new building for H&M. Moves like the Downtown Plan facilitated economic activity for us.

Restaurants are probably our new growth industry. Whether it’s BO-Beau, the Federal Bar [both on Pine Avenue] or the Social List [on 4th Street], the assortment of new restaurants is just incredible. Look at what’s happening at Douglas Park. We have all these businesses with super-highpaying jobs and 200 or 300 or 400 employees – Rubbercraft, LD products, Airgas, there’s a new medical center going up, we’ve got a small industry cluster around the Courtyard Marriott hotel.

We’re getting people building spec buildings now – 10 years ago no one would build a spec building in Long Beach – betting that they’re going to get a great tenant.

In addition, look at the growth on our corridors. Of course you have Belmont Shore and Naples, which are the envy of any city in America. But you also have Retro Row, how that has expanded. East Village is growing by leaps and bounds. Broadway now extends all the way from downtown to Belmont Shore. What’s happened in Bixby Knolls, with its business association and leaders like Blair Cohn, has truly been a municipal miracle. Virginia Village is a great little corridor – North of Bixby Knolls on Long Beach Boulevard, just south of Compton – that just looks beautiful. The Los Altos Center by the university is growing by leaps and bounds.

We’re also doing a lot of great work with business or industry clusters. One of them is called the Design District. It’s one of the coolest spots in the city – an old industrial district on Coronado Street, just north of Anaheim, that was deteriorating until people like Carl Dean came in and wanted to bring his creative class graphic artists business there. He approached us and we shared his vision. We had to change the codes a little bit, but you go down that street now and see what’s happening.

They’re even building an Italian butcher shop next door, a working class kitchen that will take care of all the product that they use at Chianina’s in Naples.

We are attracting business. We are doing a great job. We can always do a better job.

We all know we lost a lot of auto businesses back in the day to cities like Cerritos and Signal Hill. We’re expanding now with the help of our auto dealerships. Hooman Toyota is relocating from the Traffic Circle to the old Coast Cadillac building [Willow Street and Redondo Avenue] and he has high hopes to bring four or five other dealerships there and create his own mini-auto mall. The new digital billboard might provide other auto shops the opportunity to locate around it. Even the BMW motorcycle dealership on Spring Street is the country’s top seller six years running.

So there is a lot happening in the city and lot of it is guided by policies of the city council.

LBBJ: There’s an emphasis on innovation now, and some opportunity for it with the $3 million Innovation Grant that (Please Continue To Top Of Next Page)

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NEWSWATCH January 20-February 2, 2015 Long Beach just received. After dealing with tough economic times since you became city manager, are there ideas you had to put aside that you might now be able to implement?

West: During the eight years I’ve been here, we’ve been able to upgrade a lot of our technology services, our customer billing systems, and we’re in the process of upgrading our human resources and financial system – things that we have to do.

And to be honest, I’ve focused on the things we had to do. But Mayor Garcia has come on board and he has taken this to new levels with this new city council. This is something that’s near and dear to his heart.

The Bloomberg grant wouldn’t have come to us without the mayor’s association with [former New York City] Mayor Bloomberg. It’s basically an economic development opportunity but it’s going to start with providing innovative ways for people to access city hall online. All of our city councilmembers are so savvy with social media and they are taking us along with them as we go forward into the 21st Century. It’s a very exciting time. One of the more exciting department heads we’re going to pick right now is our technology and innovation director. We are recruiting right now. We have a great interim director, Chris Wilding, sitting in the chair, but I can’t say enough about this mayor and the council and their drive to provide new innovation for all of us in the city.

LBBJ: We were looking back at an interview with you from 2007, when you

Long Beach Business Journal 9

“The U.S. Customs facility isn’t related to the noise ordinance at all. We can’t violate our noise ordinance, and we have the toughest noise ordinance in the United States. The customs facility is something totally different. But again, the customs facility needs to go through the vetting process . . . to determine where it’s going to land.”

became city manager only a couple of years after coming to Long Beach from many years of distinction as the city manager of Paramount. You spoke about the importance of improved interaction between Long Beach and surrounding cities like Paramount, which rarely saw Long Beach representatives in intergovernmental organizations.

West: When I was city manager at Paramount, everyone looked up to Long Beach, but the people in Long Beach were so busy it was hard for them to get out.

Since I became city manager here I have

definitely encouraged our department heads to participate in League of Cities activities, to get involved, be leaders. We’re getting that. We’re very big players in the Council of Governments. I think we’ve been very successful at reaching out and being more of a presence regionally.

LBBJ: Also in that interview, you talked about the value of having an outsider’s perspective. After eight years, can you still do that?

West: It’s always good to bring in outside blood to our organization, people who can see it through a fresh set of eyes, just as it’s

good when new people are elected to office. That’s extremely healthy. But so is keeping good people here, growing a deep bench. This year we’ve had a lot of both – people promoted from inside and people brought in from outside. This just happened to be a real crazy year.

LBBJ: What do you consider the most challenging part of your job?

West: Communication. For any city manager across the United States, communicating with your elected officials – or bosses – is the most difficult thing. One of the worst things you can do to put an elected official in trouble is not communicate with them. Elected officials – God bless what they do – are out there, available to the public 24/7. I’m not. When they go to church, grocery shopping, to the park, when they’re just hanging out, being themselves, they’re constantly deluged with questions, comments and concerns. If there is a crime in their neighborhood, a development in their neighborhood or just a loud noise and that councilmember is not aware, it puts them in a bad situation, undermines them as leaders in their neighborhoods. So communication is key. I get that. It’s so hard to keep up with media, but we use a lot of tools to keep our councilmembers informed with what’s going on throughout the city.

LBBJ: Those are all the questions we have. Is there anything you would like to add?

West: Being city manager is one of the most fun jobs you can have. It’s exciting, and I continue to enjoy it. ■

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NEWSWATCH 10 Long Beach Business Journal

January 20-February 2, 2015

Barry Arbuckle, Ph.D., president and CEO of MemorialCare Health System, is joined by members of Memorial’s executive staff outside their offices in Fountain Valley. Pictured from left, are: Helen Macfie, PharmD, chief transformation officer; Scott Joslyn, PharmD, chief information officer; Lorraine Booth, vice president, people and culture; Arbuckle; Tammie Brailsford, RN, executive vice president and COO; Diane Laird, chief strategy officer; and Rick Graniere, treasurer and chief investment officer. (Photograph by the Business Journal’s Thomas McConville)

MemorialCare’s Barry Arbuckle (Continued From Page 1)

Saddleback Memorial in Laguna Hills before taking the reins of the whole system. As president and CEO, he oversees about $2 billion in annual revenues, six hospitals, multiple medical groups, a new and growing health plan, a strategic investment company called MemorialCare Innovation Fund, and dozens of ambulatory (outpatient) care centers throughout Los Angeles and Orange counties.

The Affordable Care Act, Diversification And Expansion While initially not a fan of the ACA, once it became the law of the land Arbuckle looked toward the changes it would bring with a positive and strategic outlook. “I will say as kind of a caveat, I wasn’t 100 percent supportive of the Affordable Care Act during the ramp-up.

And I still think it missed the mark in some areas,” Arbuckle said in an interview at his office in Fountain Valley.

“One of the things I agree upon wholeheartedly with the Obama administration and those that were behind the Affordable Care Act, is endeavoring to insure all of our citizens. We have to do that,” Arbuckle emphasized, noting that he committed Memorial to participating in the new system of health care exchanges through Covered California. MemorialCare accepts benefit exchange plans from Anthem Blue Cross, Blue Shield of California and Health Net, among many other plans.

While he believes the ACA could still use some finessing, Arbuckle is pleased with a major shift the legislation brought

on for the health care industry. “It has really pushed many in the health care sector to focus their sights on population health management. And for a provider in health care, to me that’s one of the most encouraging things,” he said.

Prior to the implementation of the ACA, America’s health care providers made their money not by maintaining a healthy population, but by treating the sickest patients. “We, as a provider, were only reimbursed when people were sick or hurt. And we got reimbursed more if they were really sick and really hurt. That’s an odd business model. It’s kind of a perverse model, because if your company is doing well, [that means] there are a lot of sick people,” Arbuckle reflected.

While health care providers knew prevention of sickness was “the right thing to do,” the “reimbursement systems didn’t support that,” Arbuckle explained of the former health care provider model.

Now that health care providers are incentivized to help maintain population health in order to cut their own costs, they are reacting to the new shape of the market through diversification of assets and services. In addition to having more insured patients, “Probably the biggest impact of the ACA is in what I would consider to be indirect outcomes,” Arbuckle said. “That’s things like Vivity, which would not have come together but for the ACA pushing this focus on requiring more people to have insurance, making it affordable and moving toward population health,” he said.

Vivity is one of the first health plans formed through a multi-faceted partnership of health care systems and providers, including MemorialCare Health System, Anthem Blue Cross, Cedars-Sinai, Good Samaritan Hospital, PIH Health, UCLA

Health, Torrance Memorial Medical Center and Huntington Memorial Hospital. The partners share financial risk, but also enjoy shared financial gain.

Health plans like Vivity are just one way health care providers are diversifying their assets and services. “We want to be able to have a continuum of care available and basically have, from a business perspective, a diversified revenue stream,” Arbuckle explained.

While previously the health care industry was very much hospital and acute care-centric, that is no longer the case – now, health care providers are also investing in ambulatory centers, health plans and physician groups, and are often doing so through partnerships. “Diversification makes sense in all businesses, including health care,” Arbuckle noted.

One of the major ways MemorialCare is expanding is by adding more ambulatory care sites to its system via ownership and management models. “We’re moving now and over the last five years to an integrated health delivery system through all the ambulatory sites we have ownership of,” he said.

In some cases, MemorialCare retains partial ownership of these centers through joint venture relationships. Currently, MemorialCare has about eight or nine ambulatory centers, and is adding another six by the end of the fiscal year, he said, adding that the ambulatory side of MemorialCare’s model “is going to grow dramatically.”

In Orange County, MemorialCare is partnering with the University of California, Irvine (UCI) to provide more community-based care in alignment with UCI’s new focus on population health, Arbuckle said. “They didn’t have a way to effectively work with primary care, com-

munity-based doctors,” so they partnered with MemorialCare, he explained. “They have two locations and at least 14 primary care doctors. We are rapidly looking for other locations for them,” he said.

“Basically, they employ the physicians and then contract them to our medical foundation, and we do everything else: we staff it and handle the real estate, facilities, purchasing, managed care and contracting.

Everything is done by our infrastructure for them as they expand into that community.”

Another way MemorialCare is ensuring better physician access throughout the communities it serves is by making an extra effort to accommodate different models of primary care. “Our goal is . . . to be able to partner with physicians in what we call a pluralistic manner,” Arbuckle said.

By that he means MemorialCare is open to partnering with physicians in whatever method they’re most comfortable.

“If physicians want to have an employment relationship and be part of a very large medical group, we have that now. If they want to be part of an IPA [independent practice association] . . . that is attached to an integrated health system, we have that now. If they want to be in a practice but they want us to manage it so they don’t have to deal with all the business stuff that is remarkably complex, we can do that. If they want to be connected with their computer to us and have us subsidize that for them, we do that too,” Arbuckle said MemorialCare’s flexibility in working with physicians “has really helped us keep harmony as we’ve made a lot of changes in the health system because we’re not favoring one segment over the other.”

Seaside Health Plan, MemorialCare’s (Please Continue To Top Of Next Page)

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NEWSWATCH January 20-February 2, 2015 two-year-old health plan, also continues to expand. When Seaside began, it was a “plan-to-plan” model, meaning it was not directly marketed to employers or individuals but was offered for those covered by Medi-Cal, Medicare or commercial plans.

Now that the plan has approval from the State of California as a direct health plan, it is able to grow through direct availability to employers and individuals, Arbuckle said.

While the plan is heavily centered in Long Beach where it was founded, it is expanding into Orange County. Currently with about 25,000 members, the plan should have about 50,000 members by the end of the year.

Looking toward the future, MemorialCare Health System may expand its hospital network through multiple means. “Do I see having more acute care hospitals as part of the MemorialCare Health System? Yes,” Arbuckle said. “But I also see new non-traditional expansions on the acute care side. It won’t be [a situation] where we kind of bring them into our corporation 100 percent.

It may be either a minority ownership where we take 20 percent of another hospital so we have aligned incentives, but they can still kind of be independent as they have always been,” he explained. Another model may be creating “financial linkages between either hospitals or other health systems where we’re financially aligned but still independent,” he added.

In the coming years, MemorialCare is likely to expand across L.A. and Orange counties, and perhaps even further inland, Arbuckle said.

Long Beach Business Journal 11 For now, Arbuckle doesn’t plan to push any out-of-state growth, although he has been advised to pursue that option in the past. “We are not currently thinking about going out of state, although our financial advisors for the past 20 years have told us if you want to expand, expand out of state,” he said. “California is the most difficult place to run a hospital system because it’s got the lowest Medi-Cal [California’s version of Medicaid] reimbursement, a high number of uninsured patients, the most managed care and the most regulations of any state in the nation. If you’re going to invest $10 million, do it in Arizona.”

The Future Of Care As the ACA reshapes the health care industry, other changes impacting health care providers are on the horizon.

Perhaps the biggest shift is a demographic one – the aging baby boomer population. According to Arbuckle, “the big wild card” for the industry in coming years is how the baby boomer population will access health care. A report by the National Institute on Aging indicates one in five people in the United States will be elderly by 2030. The American Association of Retired Persons estimates that, beginning in 2011, baby boomers began hitting age 65 at a rate of 8,000 people per day, a trend the association expects to continue for the next 14 years or so.

The significance of the rapidly growing senior population is that “seniors over 65, until death, use health care at about a fivefold higher level,” Arbuckle said. “We’re

having a hard time predicting how much of an impact that will be,” he said.

Baby boomers may be more likely to access ambulatory centers rather than seeking treatment in acute care settings, Arbuckle pointed out. The wave of seniors likely to access ambulatory care settings is going to compound an existing problem both nationally and in California – the shortage of primary care physicians.

According to a 2013 report by the U.S. Department of Health and Human Services (HHS), if the primary care system remains at status quo, “there will be a projected shortage of 20,400 primary care physicians” by 2020 due to a projected growth in demand for primary care caused by the aging populace. Increased demand is also being driven by the increase of insured persons due to the ACA, the report noted.

Part of the issue is that many physicians who become internal medicine doctors move on to a specialty field rather than becoming primary care doctors, Arbuckle said. In order to create more opportunities for primary care, he suggested allowing specialists to serve as primary caregivers, which some health plans currently allow.

“Right now, some of the health plans let you choose, say, a cardiologist to be your primary care doctor. I think we need to allow that,” he said.

Another solution, one backed by HHS, is allowing nurse practitioners and physician assistants to provide more primary care.

“There is a lot of controversy around that,” Arbuckle said. “I am not a big fan of a lot of

government intrusion and control, but this is a case where I wish it was a federal law and not left to the states. Because, with what we have in California, we’re probably the most restrictive in what non-physician providers can do,” he stressed. “Many other states allow nurse practitioners and physicians assistants to be a primary care physician . . . and it has worked very well,” he said.

Arbuckle emphasized these caregivers should not be allowed to do more than they are certified and trained to do but pointed out that, in California, “what they’re allowed to do is actually below what they’ve been trained to do, which is not right.” He added, “So we’re pushing for legislation to open that up a little bit. That will dramatically help the shortage.”

Additionally, MemorialCare is working to train more internal medicine doctors and incentivize them to provide primary care.

Another way the health care industry is changing is that, as the ACA implementation progresses, more and more physicians are joining medical groups and health systems.

“It’s the rare physician who graduates medical school who chooses to, if you will, hang up a shingle and start their own practice,” Arbuckle observed. “They either join medium to large groups or they join a health system. We of course have many physicians who have been in practice for a couple of decades deciding to join an integrated system,” he said. As this trend continues, MemorialCare is ready to work with these physicians in whatever way they (Please Continue To The Next Page)

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NEWSWATCH 12 Long Beach Business Journal

January 20-February 2, 2015

“I know people don’t like the idea of being mandated or paying a tax, but we either do it that way, or we do it the way socialized countries do it and have an extremely high tax base and just have the government pay for it, which I think reduces the opportunities for innovation.”

Barry Arbuckle, Ph.D., president and CEO, MemorialCare Health System

MemorialCare’s Barry Arbuckle (Continued From Page 11)

choose – including those outlying physicians who have been in solo practice for many years and aren’t likely to make a change, Arbuckle noted.

Innovation And Technology Years before the ACA came about, hospitals and health care systems began investing in technology called electronic medical record (EMR) systems – computerized systems through which doctors, specialists, insurers and others would have access to, and the ability to share, their patients’ and clients’ medical records.

“Over the last decade, the challenge for providers and the health care system in the United States has been getting electronic medical records into the systems,” which involved installing them into hospitals, physicians’ offices, imaging centers and ambulatory centers, Arbuckle said. “That is really for all intents and purposes nearing completion.”

MemorialCare’s hospitals, its physician groups through the MemorialCare Medical Foundation and some of its other health care partners all have a common EMR system. The key to the system’s success was that Memorial allowed physicians, clinicians and nurses to choose the product and lead its implementation, Arbuckle said.

“That’s why we had almost immediate, very high utilization,” he said, emphasizing that, within six hours of installation, nearly 90 percent of Memorial’s network was using the system.

Now that EMRs have been successfully integrated into health systems, a challenge is figuring out how to share data between and connect differing types of EMR sys-

tems. “The next evolution is going to be connecting those EMRs together and communicating in a very big way, for two particular reasons. One is being able to share clinical information on patients between providers. The second is allowing us to begin to really amass very large data sets of rich, clinical and financial information and to do population health analysis in a very big way,” Arbuckle explained.

Being able to amass, share and analyze data across populations has “absolutely immense” and powerful implications for health care, Arbuckle said. Doing so would allow health care providers to better analyze the efficacy of certain treatments and move to improve them, he explained.

Outside of EMRs, which are essentially going to be standard for the entire health care industry, MemorialCare is dedicated to pursuing innovations that hold promise to improve quality of care and even cut down on costs. Principally, this occurs through the MemorialCare Innovation Fund, a private equity company through which MemorialCare invests in startup companies with promise for producing value in the health care industry, Arbuckle said.

“We have a great desire for innovation and development of new technologies and techniques,” Arbuckle emphasized. “We have had a very successful run [with the innovation fund], so much so that we decided to greatly expand and partner in this case with Cedars-Sinai, and we actually have a spot open for another general partner to join us at some later date. And maybe then some limited partner health systems who are kind of like-minded,” he said.

The innovation fund recently produced technology Arbuckle believes may alter the future of health care. Developed by mobile

technology company Gauss Surgical, Inc. with funding from MemorialCare Innovation Fund, a physician and an entrepreneur set out to develop a simple way to measure the amount of blood loss that occurs in surgery.

“I’ve never spent much thought on blood loss during surgery even though we spend a lot of money on infusing blood and blood products,” Arbuckle said.

Blood loss is typically estimated between a surgeon and anesthesiologist during procedures, but they aren’t able to measure accurately due to the infusion of other bodily fluids in surgical gauze. “I always assumed it was a pretty objective and very quantifiable way to measure blood loss. It’s not,” Arbuckle said.

Gauss’s solution is “a remarkably simple thing,” he said. Using an iPad affixed to an intravenous drip pole, a surgeon steps on a foot pedal to snap a picture of a bloodsoaked piece of gauze during a procedure.

A mobile application then uses an algorithm to accurately calculate the amount of blood soaked into the gauze. “I think it’s going to greatly reduce the amount of blood needed in surgery and therefore save costs and improve [care] quality as well,” he said.

Upcoming Challenges Although Arbuckle wasn’t exactly a cheerleader for the ACA to begin with, now that it is implemented, he finds it important to keep it in place. “We need to finesse and add to the ACA and keep expanding it, not dismantle it,” he stressed. “To fast-forward to what might happen in 2015, one of my biggest concerns for the U.S. health care system . . . is that with Republicans in control of both houses [of the U.S. Congress] and their desire to do something with the ACA, that we might begin to systemati-

cally just dismantle pieces of it,” he said.

“That’s the worst thing that could be happening.”

He continued, “I think they’re going to go after the individual mandate and the employer mandates. I am very concerned about that.” Doing so throws the whole system off balance, he said. “You cannot have guaranteed coverage by the health plans on one hand and the ability for an individual to say, ‘you know, I don’t feel like I want to be insured,’ or, ‘if I get in an accident I know they have to accept me.’ It doesn’t work that way,” he explained, referring to what might happen if the individual mandate is dropped. “I know people don’t like the idea of being mandated or paying a tax, but we either do it that way, or we do it the way socialized countries do it and have an extremely high tax base and just have the government pay for it, which I think reduces the opportunities for innovation.”

Arbuckle isn’t sure how likely it is that Republicans will succeed in any efforts to dismantle the ACA – at least from a legislative standpoint. “They don’t have a veto-proof majority, so Obama can veto a lot of things. But they do have funding control, and they can begin to defund certain things, which could begin to cripple it,” he said.

In California, MemorialCare Health System and other health care providers are facing another upcoming challenge – the expiration of the Medicaid fee bump. The subsidy, funded by the federal government, incentivized doctors to participate in the Medicaid system. It ended at the start of the year, and the state government has made no move to make up for the drop in reimbursement.

“When I saw that coming, I asked our legislative advocacy people about that and the first response was no, there is something in the California budget that will offset that. I don’t know that that’s true, so I think it was either a misunderstanding or something has changed,” Arbuckle said.

With a shortage of primary care doctors already an issue, taking away the incentive would mean even fewer doctors would be willing to see Medicaid patients, worsening their already limited access to care, Arbuckle noted.

“We’re the ones with financial exposure.

I’ll continue to pay the doctor the market rate. If I get reimbursed less by Medi-Cal for them, I’ve got to figure out how to deal with that . . . But it’s going to be a big impact,” he said.

Also impacting the health system are government-mandated seismic retrofitting projects, but those have turned out to be less costly than originally anticipated. “It’s far less of an issue now than it looked, say, six or eight years ago when the law first started getting kind of ramped up,” Arbuckle said. “It used to be, if a building was built before a certain year, it must be unsafe. But buildings are built wildly differently,” he explained.

Regulations have since been improved to account for a more scientific analysis of a building’s earthquake safety, reducing the estimated cost to retrofit Memorial’s campus of Long Beach hospitals from half a billion dollars to $50 million. “All that work is in the middle of being done as we speak. It will be done in plenty of time.” ■

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NEWSWATCH January 20-February 2, 2015

Long Beach Business Journal 13

“We are relying more and more on renewable energy – but you take it when you get it. When the wind blows, you’ve got to take it. When the sun is out, you’ve got to take it. You’re constantly trying to balance supply and demand.

It’s much more difficult to balance that demand and load.”

Stephen Kane, Manager of Sustainability and Regulatory Compliance for AES

Stephen O’Kane, manager of sustainability and regulatory compliance for AES Alamitos, is pictured at the top of the generating station located on Studebaker Road in Southeast Long Beach. The facility, a 2,000 MW, natural gas-fueled power plant, is one of the largest in Southern California. In 1998, AES purchased the facility and similar ones in Huntington Beach and Redondo Beach from Southern California Edison. According to the firm’s website, it generates enough power to light some two million California homes and businesses. The website also noted: “To help clean and protect the environment, we’ve installed over $20 million in state-of-the-art emission control equipment, reducing local NOx and CO emission by approximately 90 percent. We’ve also installed $2 million in new ocean water intake screens, and are working with environmental groups to clean local waterways.” (Photograph by the Business Journal’s Thomas McConville)

AES Alamitos (Continued From Page 1)

“You never can turn them off, because it takes a whole day to turn them back on again.”

That has led to overgeneration, where the minimum amount of power the plant kicks out is still more than is needed, he says.

“At times, we have an excess of energy in California. Not only are we exporting it, but we’re paying others to take it. It’s negative pricing on the market because there’s too much energy and no place to put it," O’Kane said.

What is needed is energy that can be kicked into the system quickly for short periods of time as it is needed, O’Kane stated.

“We are relying more and more on renewable energy – but you take it when you get it. When the wind blows, you’ve got to take it. When the sun is out, you’ve got to take it. You’re constantly trying to balance supply and demand. It’s much more difficult to balance that demand and load.”

The renovation, as currently envisioned

by AES, would replace the existing generators – the oldest of which entered serv-

ice in 1958, O’Kane said – with modern combined-cycle, air-cooled natural gas turbines, capable of cranking out 1,040 megawatts.

The modern turbines capture the heat from the burning natural gas and convert that into even more energy; the air cooling eliminates the need for massive quantities of sea water for cooling purposes. The new turbines also can be brought online in a matter of minutes, rather than the days it takes to start the current ones.

The batteries, in the first phase, are designed to store up to 100 megawatts,

enough to power more than 100,000 average homes. Ultimately, AES plans to have up to 300 megawatts of battery power storage on site.

“It would look very much like a server room in a server farm (data storage facility).

You will have racks of these drawers,” O’Kane said. “Think of a C-cell battery, think of a drawer filled with those, think of racks of those drawers, and scale it up until you get to 100 megawatts worth. Emissionsfree, totally quiet, energy storage.”

Current projections call for a project start date of 2017. ■

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IN THE NEWS 14 Long Beach Business Journal

January 20-February 2, 2015

Cesar’s Bistro Opens At Loynes Drive And Pacific Coast Highway Cesar’s Bistro, a Latin American fusion restaurant, opened last month at 6240 E. Pacific Coast Hwy. The venture, co-owned by Executive Chef Cesar Villarreal (left) and Tony York, features a unique blend of Argentinian, South American, Caribbean and Spanish flavors. Since its opening on December 2, York said, the reception from the community has been great. “People have received us really well.” One of York’s favorite menu items includes the Choripán, a gourmet pork sausage served on a light French roll and topped with tomato, lettuce, arugula and Argentinian chimichurri sauce.

Another recommended favorite, York said, is the gluten-free Wagyu Kobe Gourmet Burger, which is served on a handmade corn cake bun known as arepa.

York added that its prices and fine dining grade-food set to South American music is what sets Cesar’s Bistro apart from the competition. The restaurant offers catering as well, will celebrate its grand opening February 5-22, where customers can buy one carafe of Sangria wine and get another free. Cesar’s Bistro is open from Tuesday to Sunday from 7 a.m. to 9 p.m. For more information on, visit www.cesarsbistro.com or call 562/4941000.

(Photograph by the Business Journal’s Thomas McConville)

Sweet Threads Now On Broadway After having outgrown its previous location, at 3301 E. 4th St., the children’s boutique Sweet Threads has found a new home at 2746 E. Broadway. The store, founded in 2012 by Paul Romey and Shella Romey, sells new and vintage clothing for babies and children up to 10 years old. Shella said that the move to a bigger location was necessary to accommodate its growing inventory and customer base. In addition to children’s clothes, Sweet Threads is now selling children’s furniture, Sugarfina sweets, toys, books and home décor. “We get a lot of requests for different items from different categories but we weren’t able to do that in our old space,” Shella said. “[Here] we’ll be able to offer more to our customers.” Moving forward, Shella said she plans to host more events, such as Story Time, at the store. The store is open 11 a.m. to 7 p.m., Tuesday to Friday, and 11 a.m. to 5 p.m. on Sundays. For more information, visit www.shopsweetthreads.com or call 562/439-7933

Chad Kurz Joins c a.ARCHITECTS c a.ARCHITECTS, a long beach-based architectural firm focused on providing healthcare design solutions, welcomed Chad Kurz as its new project manager last month. Kurz, who has been involved with healthcare architecture for 16 years, most recently worked at Taylor Designs in Orange County. The father of two has worked on making medical environments less daunting to children by disguising medical equipment, and providing comforting distractions in the form of graphics and sculptures.“Being in a children’s environment you have to put yourself in their eyes and in their shoes [to see how] they perceive going in and getting treatment, how it can be an intimidating environment,” Kurz said. “So what things can we do to change the scale, the color and the size to make the things more pleasing to children because it’s a tough time in their lives when they have to go get treated?” Among the projects Kurz has worked on include creating a four-story expansion to the Miller Children's & Women's Hospital Long Beach and the creation of an out patient medical office building at the Children's Hospital Oakland. Kurz is currently working on a project to provide structural upgrades to the Children's Hospital Los Angeles, as well as creating a new in-patient pharmacy and chapel.

(Photograph by the Business Journal’s Thomas McConville)

Brian Addison Joins DLBA Staff Former Long Beach Post Executive Editor Brian Addison recently joined the Downtown Long Beach Associates as its new communications manager. Addison, who also is a contributor to Los Angeles Streetsblog, is a graduate of California State University, Fullerton, where he received a bachelor’s in psychology, and of California State University, Long Beach, where he earned a masters.

He is a resident of Long Beach. (Photograph by the Business Journal’s Thomas McConville)

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IN THE NEWS January 20-February 2, 2015

Long Beach Business Journal 15

New Communications Team At Long Beach City College As John Pope And Stacey Toda Come On Board John Pope, the former community relations manager for the Port of Long Beach, and Stacey Toda, the deputy chief of staff to former Mayor Bob Foster, are part of the new communications team at Long Beach College. Pope was selected as the new director of college advancement, public affairs and governmental relations. Toda is the new associate director of public relations and marketing and reports to Pope. She had been serving as interim director. In his new position, Pope will manage media relations, community outreach, legislative affairs and strategic communications efforts for the college. “Long Beach City College is one of the great educational pillars in our community and a tremendous economic asset for our entire region,” Pope said in a statement. “I am very excited to be a part of the college’s mission, and look forward to working with the Long Beach community in this new capacity.” Prior to joining LBCC, Pope spent several years as the media relations manager at the port before being promoted to the community relations manager in 2012. Pope, a Long Beach resident and father of two, spent the early years of his career as a journalist writing for publications, such as the Long Beach-Press Telegram and the Los Angeles Times. Toda, who was named interim associate director last July, will serve as public information officer and governmental affairs liaison, among other duties. She worked for the former mayor from 2008 until his term in office ended last July. Prior to that, she worked in corporate communications for Wells Fargo Bank and as a senior field representative for California Assembly Member George Nakano.

(Photograph by the Business Journal’s Thomas McConville)

Kelly Williams Insurance Marks 120th Anniversary – Kelly Williams Insurance agency is celebrating its 120th anniversary this year, and its 30th anniversary at the same location at 4400 E. Pacific Coast Hwy. on the Traffic Circle. The business was founded in 1895 by Carle L. Williams, and four generations later is owned by Kelly Williams III and Sue Williams, who said in a statement that “the Williams family takes pride in the tradition of trust, expertise and long-term relationships that has been set over the past generations. The business represents several large companies, including Mercury, Liberty Mutual, Progressive, Travelers and others.

Annie Williams Joins Local Camerata Singers – The Long Beach Camerata Singers named Anne Williams, co-founder and artistic director of MorningStar Youth Choirs, as its new education coordinator. In this role, Williams is responsible for the creation of new choral music education programs. Williams, who has an extensive background in youth choral programs, is also responsible for organizing a choral festival in the summer, where local singers have the opportunity to refine their vocal capabilities. “We are thrilled to have Anne on board with us to develop the music education component of our organization.” said Jan Hower, board president, in a statement. “This is something to which we have aspired for many years.”

Accounting Firm Rebrands Itself – The full-service accounting firm, Rossi, Doskocil & Finkelstein LLP, recently underwent rebranding. In addition to changing its name to Rossi LLP, the firm welcomed a new addition to the team.

Tony Gales, a certified public accountant, was brought on as the senior manager of tax and accounting services. Gales, a graduate of California State University, Fullerton, previously worked for the firm in 1993 but left after 15 years to work for

another local CPA firm. The firm also announced that Jeff Lester, a CPA who joined Rossi LLP in 2010, was promoted to manager of audit and accounting services, and Darlene Herrera, tax supervisor, who joined the firm in 2006, was promoted to manager of tax services.

Shadden Group’s Van Dyke Heads Children’s Clinic Board – Mike Van Dyke, vice president, wealth advisor and senior portfolio manager of The Shadden Group at Morgan Stanley, is the new board president for The Children’s Clinic, “Serving Children & Their Families.”

The Long Beach-based organization is dedicated to providing health care to underserved residents across age groups. Van Dyke’s family members were among the founders of The Children’s Clinic 75 years ago. In his new position, Van Dyke will oversee the opening of three new health centers by 2017, according to Penelope Leon, director of development and communications for the clinic. He replaces outgoing Board President Victor Gonzalez, who is a certified public accountant with the accounting firm Holthouse, Carlin & Van Trigt.

Laserfiche Names Belttary VP Of Sales – Hedy Belttary has been promoted to vice president of sales for Laserfiche, the Long Beach-based international software development company. Belttary has worked for the company in various

Wells Fargo’s Ben Alvarado Promoted To Southern California Region President Ben Alvarado, former region president of the Orange County-Inland market and a 23-year veteran of Wells Fargo, has been promoted to president of the bank’s Southern California Region, which stretches from Long Beach to Orange, Imperial and San Diego counties. A graduate of California State University, Long Beach (CSULB) and a former bank teller, Alvarado now oversees 232 Wells Fargo branches and more than 3,600 team members. “Ben is a dynamic, people-focused leader who is dedicated to the communities, customers ande team members he serves,” said Lisa Stevens, head of regional banking sales and marketing and regional banking executive for the Wells Fargo’s Pacific Midwest Region, in a statement. “He has an unwavering commitment to provide our customers with financial products and services that meet their needs and an excellent customer experience.” In addition to graduating with his bachelor’s degree from CSULB, Alvarado earned his master’s from Pepperdine University. He currently serves on the board of directors for Orange County United Way and MemorialCare Foundation, and on the Miller Children’s Hospital Long Beach Advisory Board. (Photograph provided by Wells Fargo)

capacities for 15 years. For the past seven years, she led her own business, Incrementum, which sold and administered Laserfiche products. As vice president of sales, she oversees corporate and channel sales. “I’m thrilled that I’ll have the chance to work with our reseller partners to achieve new levels of channel excellence,” Belttary said in a statement. Chris Wacker, CEO of Laserfiche, stated, “Hedy’s years of experience in sales make her an ideal leader for Laserfiche’s complex channel sales organization.”

Levine Named Medical Director At MemorialCare – Dr. Gary Levine has joined the MemorialCare Health System as the medical director for its MemorialCare Breast Centers based in Long Beach, Los Angeles County and Orange County. The American College of Radiology recognizes these centers as Breast Centers of Excellence for their advanced technology and services. Levine is the president of the National Consortium of Breast Centers, an associate clinic professor of radiology for the USC’s School of Medicine and an assistant clinical professor in the University of California, Irvine’s Department of Radiological Services. He brings more than 20 years of breast imaging and breast center management experience to his new position. He was formerly the medical director of breast imaging for Hoag Breast Care Center, and has conducted 100 medical research presentations and studies about breast cancer. “The addition of a renowned and highly regarded breast radiologist with Dr. Levine’s experience, expertise and

national reputation furthers MemorialCare’s leadership as among the top centers for breast health and breast cancer,” Dr. Barry Arbuckle, president and CEO of MemorialCare Health System, said in a statement.

Hardeman Promoted At LBS Financial – Sean Hardeman was promoted to the new position of executive vice president/chief lending officer for LBS Financial. For the past four year, he served as senior vice president of member services.

In his new position, Hardeman is responsible for more than 80 percent of the workforce of LBS Financial, including the lending operations within the credit union.

CSU Names New Head Of Academic, Student Affairs – California State University (CSU) Chancellor Timothy P. White announced Loren J. Blanchard, provost and senior vice president of academic affairs at Xavier University of Louisiana, as his choice for the next executive vice chancellor for academic and student affairs for the CSU system. “Without question, Dr. Blanchard has the vision and talent to propel us forward as we fulfill our obligation to meet the educational needs of our highly diverse student population thereby sustaining the vitality of California’s society and economy,” White said in a statement. Blanchard will serve on chancellor’s executive leadership team and lead the system’s Graduation Initiative. He will also be responsible for developing and overseeing the educational policy for the entire CSU system. Blanchard, who holds a Ph.D. in educational psychology from the University of Georgia, will begin his employment with the CSU in July. ■

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PERSPECTIVE 16 Long Beach Business Journal

Vol. XXVIII No. 1 January 20February 2, 2015 EDITOR & PUBLISHER George Economides SALES & MARKETING EXECUTIVE Heather Dann SALES & MARKETING ASSISTANT Cori Lambert OFFICE ASSISTANT Larry Duncan EDITORIAL DEPARTMENT SENIOR WRITER Samantha Mehlinger STAFF WRITERS Rabiya Hicken Dave Wielenga PHOTOJOURNALIST Thomas McConville COPY EDITOR 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 Tuesday (except between Christmas and mid-January) – 25 copies annually. The 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.

Office South Coast Publishing, Inc. 2599 E. 28th Street, Suite 212 Signal Hill, CA 90755 Ph: 562/988-1222 • Fx: 562/988-1239 www:LBBusinessJournal.com Advertising and Editorial Deadlines Wednesday prior to publication date.

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For a copy of the 2015 advertising and editorial calendar, please fax request to 562/988-1239.

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January 20-February 2, 2015

EFFECTIVE LEADERSHIP BY MICK UKLEJA An ‘Inside’ Look At The Wizard Of Oz oes The Persona Reflect The Person?

When Dorothy, Scarecrow, Tin Man, and Lion finally met up with the mighty Wizard, they were intimidated by his presence. He was big and powerful and confident and wise.

But then they discovered something that surprised them. Inside the mighty Wizard of Oz was a little man pulling a few levers and feeling quite inadequate about himself.

This brings up an important lesson. There is a difference between the outer PERSONA and the inner PERSON. The premise is this – our inner voice should be as powerful as our outer voice. Our person must be as big as our persona. Too often the opposite is true.

There have been times in my life, when after an evening out with acquaintances, or at an event where I was interacting with a sea of people, I would come home feeling that my person was dwarfed by my persona. This admission might be a little painful, but it is a very good thing to notice. Self-awareness leads to self-management. To deny our inconsistencies is a recipe for staying stuck in a blind spot that is counterproductive both personally and professionally.

Here’s the bottom line. I’ve discovered that when the inside gets right, the outside gets better. The most important relationship to develop is the one with yourself. Like any relationship, this takes time and focus. The

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Wizard was learning this lesson.

You must discover that inner voice. You have to stop and listen for it because the volume level is always on whisper. The Wizard was overwhelmed with his amplified outer voice as it rumbled with impressive reverberation. But it was not reflective of the little guy inside.

This is why being silent, observant and reflective with a listening inner ear is necessary. It’s a matter of taking the time to let your head and heart get to know each other. It requires a “fight to silence” all the other voices that clamor for your attention.

And please note that the contest is not a fair one. That’s why your inner voice must be nurtured. The reflective mindset is the starting point for all leadership. Your ability to lead others will not surpass your ability to lead yourself.

Private victories precede public victories.

When the inner voice is silenced or ignored, self-esteem is diminished. The outer voice gets louder and louder, and pretty soon who we really are is not showing up. The authentic self is missed and the real connection with others is lost. And that impacts our performance.

Here’s an action step. Slow down, be still and listen. Create margin in your life so you can be more silent, less busy and just be in the moment.

If you’ve never done this, then your new behavior can be a little frightening. You begin to discover where your fears, doubts and anxieties come from. You are able to pinpoint their source.

You are demystifying them. You connect them to

certain ways of thinking about your life and what you face. Your frenetic behavior becomes more focused. Your person is now catching up to your persona. In other words, the outer voice is a reflection of the inner voice.

Your inner voice is always with you. It’s your friend. Get to know it. Other voices can be like dive bombers that swoop in, drop their load and go away. They will abandon you, but your inner voice stays put. So give it all the attention it deserves. Energy flows where attention goes.

When the Wizard stepped out from behind his massive mask – his persona – we began to know the real person. And we were drawn to him. He wasn’t as impressive, but he was much more approachable because he was vulnerable.

Successful people are not people who have arrived. Successful people are simply those who have found the road that leads to where they want to go. They are no longer lost. And while they are not at the end of their journey, they are at the end of their wandering. They are in touch with their person and are now free to be themselves. They are authentic.

This keeps our journey on track. This makes our journey meaningful.

This brings out the Wizard in all of us.

(Mick Ukleja, who has co-authored several books, helps organizations create environments in which all generations can thrive. He is a keynote speaker and president of LeadershipTraq. Check his weekly blog: www.leadershiptraq.com.)

THIRD SECTOR REPORT BY JEFFREY WILCOX Nonprofits And Risk Management: An Essential New Year’s Resolution mong the subjects that a board of directors for a nonprofit organization must discuss, risk management will never tip the scale as either engrossing or energizing.

Of course, there are more than a fair share of boardmembers who will never know. The topic rarely gets to the boardroom in the first place.

When it does come up, the number of scenarios about the nasty things that could happen in the course of conducting business are endless. The details of insurance and risk aversion challenge the patience of those more interested in things like fundraising. The costs can be annoying. And, mass confusion, if not hysteria, are guaranteed side-effects.

When an organization is serving the public, hiring employees, welcoming volunteers, operating facilities and using venues, welcoming children and elderly people, handling cash contributions, and collecting highly personal information, the sky is the limit on anything that could possibly go wrong.

For most nonprofit boards, the subject of risk isn’t important until it’s too late. And, that’s too bad considering job number one of a nonprofit board is guaranteeing that prudent stewardship of a noble cause is always at work.

Nonprofit organizations aren’t any different than any other places of business. Liability, responsibility and damages have no special regard for a nonprofit tax status. If anything, for those seeking justice or a settlement, there

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is a belief that an organization “with a heart” better be prepared to show it has one as a result of potential, alleged or actual wrong-doing.

The truth is: Most nonprofits are not adequately prepared for managing their risks; and, most nonprofit boards are not adequately informed about the actual risks that their corporation, albeit tax-exempt, could face.

Looking back at the headlines of the Third Sector over the past year, there is no doubt that unexpected surprises account for as many column inches as successful strategies, innovations, and charitable windfalls. Those unpleasant headlines have highlighted such things as executive director terminations, alleged mistreatment of people in the name of being helped, unfortunate injury while performing a community service, suspicions of mishandling of contributions, or board disagreements gone public.

Every nonprofit is different, but there are a number of risks that are common: Management of confidential information, conflicts of interest, charitable contributions and documents; executive pay determination; whistleblowing, hiring and firing processes; standards of volunteer conduct and the safety of people; and facilities requirements and accessibility are but a few examples.

The bottom line is that a nonprofit board cannot afford to not weigh in on the subject of risk management. Providing a reasonable “peace of mind” in order for everyone to get on with the important work of an organization should be a non-negotiable New Year’s resolution in 2015.

The best way to keep the resolution is to create

a short-lived, but directed, task force of current or former boardmembers, key staff and experts who are charged with assessing risks and recommending prudent management of those risks.

Another resolution should be to never question the need for Directors and Officers (D&O) Insurance. It is troubling the number of nonprofit boards that are asking whether D&O coverage is even necessary. According to the Nonprofits Insurance Alliance Group, one in 25 nonprofits will have a D&O claim in any given year.

The D&O insurance protects boardmembers when there is a claim of intentional or improper action that resulted in a loss. In today’s litigious environment, anything and everything are possible. Over 90% of claims against nonprofit boards are in the forms of wrongful termination, harassment, discrimination or negligence.

For about the price of one hour’s of attorney fees per month or less, D&O insurance can save a whole bunch of attorney, court and settlement costs when the chips are down. For even the smallest and poorest of organizations, boardmembers not chipping in to make sure they are protected by D&O is about as prudent as driving a car to the board meeting without automobile insurance.

The subject of risk management will never be thrilling. However, no board and no boardmember should ever have to find out that the headlines that can be made by avoiding their risk management obligations can be.

(Jeffrey R. Wilcox, CFRE, is president and chief executive officer of The Third Sector Company, Inc. He can be reached at: jwilcox@thirdsectorcompany.com)

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PERSPECTIVE January 20-February 2, 2015

Long Beach Business Journal 17

REALTY VIEWS BY TERRY ROSS Housing – Where Is It Going? s we enter 2015, the housing market both nationally and regionally is one that offers more questions than answers.

Depending on whose information you look at or what day of the week it is, there seems to be no consensus about where things are headed in the new year.

It is pretty obvious that, in most areas, sales volume and price appreciation flattened out in 2014 to a level not seen since 2011.

The mini boom fueled by investors and speculators that drove prices up in 2013 ran out of steam last year as the investors stopped paying prices that began to get inflated, and the regular buyers – owner occupants with good jobs – didn’t come back into the market as was anticipated. The number of homes sold in Southern California during the month of October was near a 25-year low – not good news considering an improving economy and record-low interest rates.

While longer-time owners can celebrate

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the fact that at least some of their equity has come back from the heydays of the mid2000s, a lot of it is still not returned even with double-digit appreciation in 2013 and last year’s pace in the single-digit range.

Many owners are sitting with homes worth hundreds of thousands of dollars less than what they were worth almost a decade ago – which speaks volumes about the severity and length of the recession we have endured.

Many economists believe the kind of market we are likely to see this year is a healthy one because it will have steady growth but won’t be overheated.

“Housing definitely came back to Earth over the second half of 2014,” said Stan Humphries, chief economist at the real estate website Zillow. “And we welcome and expect to see more of the same as we look ahead to 2015. A slower-moving housing market is inherently more stable, more balanced between buyers and sellers and more sustainable over the long term.”

The California Association of Realtors is predicting that prices statewide will

increase by 5.2 percent this year – the lowest level since 2011. Last year the number of sales dropped 10 percent from 2013, according to preliminary figures.

Also, when looking at the direction of median prices, the fact that the high end of the market is doing much better than the middle tends to skew the numbers upward.

These figures are based on a median of all prices, and middle level-priced homes are not doing the same as multi-million dollar homes, where the market is good and buyers are generally in better shape financially.

The real culprit in this dampening of sales and prices is affordability. As prices go up and incomes stay the same, affordability suffers. And without the pre-recession stated-income loan programs and ready access to equity, financing is tight.

Most experts are blaming the high cost of housing in Southern California for our local market stagnation. According to HSH.com, the Los Angeles County-Orange County area is the third most expensive metro market in the country, behind only San Diego and San Francisco. Using the median home price and figuring 28 percent of income for housing expenses (which is low in today’s world), a buyer would need a household

income of $96,513 to buy a typical home in the LA-Orange County area, while in San Diego they would need $101,682 and in San Francisco $145,361.

Some observers point to the reemergence of the Inland Empire and Riverside County as consumers are priced out of the coastal markets in Los Angeles and Orange County.

The Inland Empire was hit hard during the recession with foreclosures and loss of equity, but many feel that with job gains, people will go back to making the long commute if they happen to work in other areas.

Price-wise, the median home price is $305,000 in Riverside County, compared to $455,000 in Los Angeles and $585,000 in Orange County.

“A huge portion of the coastal counties market is priced out of the ability to buy a home,” according to John Hussing, an economist. “Those are the facts that have always driven the market inland before.”

And affordability will no doubt be the main driver of the housing market in 2015.

(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.)

HEALTHWISE BY DR. DIVYA JOSHI Serious Diseases Are On The Rise In Children ith vaccination exemption rates on the rise among children in the region, parents are encouraged to follow the recommended vaccines from the Centers for Disease Control and Prevention (CDC), the American Academy of Pediatrics (AAP), and the Advisory Committee on Immunization Practices (ACIP).

Vaccines are responsible for the control and elimination of many infectious diseases that were once common in the United States, and proper immunization of a child from infancy through childhood can help protect them from their effects. With new

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vaccines, combination vaccines, and the expansion of childhood, adolescent and adult immunization schedules, the capacity to prevent infectious diseases has markedly increased since 2002. However, viruses and bacteria that cause vaccine-preventable disease and death still exist and pose a risk for unvaccinated people.

Many young parents haven’t seen these diseases. They’ve never seen a child die from measles or become paralyzed from polio. When you don’t see the tragedy, you worry less. But the real tragedy is that diseases the United States has been able to completely eradicate are making a resurgence because some parents don’t want to vaccinate their children.

More than 16,000 California children

entered kindergarten in 2013 without vaccinations because of parents’ personal beliefs, a more than 15% increase from 2012 and double the number of children from 2007, according to figures from the California Department of Public Health.

The CDC estimates that infections can spread quickly within a group when as few as 5 percent to 10 percent lack vaccination. And as was seen with 59 reported measles cases this year in California, outbreaks can still occur.

However some parents have raised concerns about the side effects of vaccinations, claiming that certain vaccinations can lead to serious medical conditions, like autism.

There is no scientific evidence linking vaccinations and certain neurological dis-

eases, such as autism. Studies have shown these conditions are present in children prenatally, long before any vaccinations are given. However, once you get a certain kind of fear going in a community, the myths can become almost contagious.

Hospitals, like Miller Children’s & Women’s Hospital Long Beach, has protections in place to make sure that immunization status should be known for every child.

National immunization schedules now cover more than 20 diseases and primary care physicians are able to walk patients through the entire process and comprehensively manage any adverse vaccine events.

(Divya Joshi, MD, MMM, CPE, FAAP, Chief Medical Officer Miller Children’s & Women’s Hospital Long Beach)

SMALL BUSINESS DOLLARS & SENSE BY BEN ALVARADO As Small Business Optimism Rises, Worries Decreasing ‘

ello, My name is Ben Alvarado and I am the President of the Southern California Community Bank, which includes Long Beach. Long Beach feels like my hometown, I grew up just north of here and currently live just south. I began my banking career as a teller her in Long Beach while attending CSULB over 20 years ago. As I have advanced my capacity in the bank, I feel my roots are in Long Beach and proudly sit on Miller’s advisory board and sponsor the Tour of Long Beach every year. Small business has always been a passion of mine. Some of my favorite years were spent as a commercial business banker.

The Long Beach Business Journal is a valuable partner to the business community and I am honored to partner with them in bringing you a small business financial column in each edition. I hope my insights help you create a prosperous business year for yourself and your business!

Owning a small business can be challenging. But, according the latest Wells Fargo/Gallup Small Business Index, small business owners are feeling a renewed sense

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of confidence as they dive into 2015.

Recently, we surveyed small business owners across the U.S. and the findings were clear: Business owners are the most optimistic for the year ahead since the start of the Great Recession. The Small Business Index score rose to positive+58, up nine points from +49 this summer and 34 points from a year ago.

The climbing index score is not just good news for small business owners; it’s also good news for local communities and economies across America. Business owners said they anticipate a better operating environment and higher revenues in 2015. They also plan to increase the amount of money allocated for capital spending and increase the number of jobs at their companies. In order for our economy to thrive, small businesses need to succeed, this trend in improved confidence and positive future outlook is all the more encouraging.

Another trend the survey revealed is that small business owners have fewer worries. Attracting new customers and new business remains a challenge for small business owners, but concerns around key issues that could impact their business are less pronounced than a year ago.

Paying Employees – Balancing cash flow and managing expenses such as payroll can be challenging. In the recent survey, 22 percent of small business owners reported being very worried or moderately worried about not being able to pay their employees. Compared to 32 percent in 2011, this is a strong downward trend that we hope will continue.

Paying Bills – When asked about paying bills, only 5 percent of small business owners said they are very worried about making their minimum credit card payments, compared to 12 percent in 2011.

Retirement – Planning for retirement is another challenge that small business owners face. In the survey, small business owners were asked about their concerns around saving for retirement, and 41 percent said they are not too worried or not worried at all about putting enough money away for retirement. That’s an improvement, up from 29 percent in 2011.

Over the years, we’ve seen time and time again that small business owners are a resilient and optimistic bunch.

Building and running a small business has its challenges, yet as the improvement in the economy continues, business owners may find these challenges easier to overcome.

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ART MATTERS

Long Beach Business Journal 18 January 20-February 2, 2015

Brought To You By The Arts Council For Long Beach

Watch This Page . . .

■ By VICTORIA BRYAN Executive Director, Arts Council for Long Beach

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ne short conversation can surely open up a lot of possibilities, as the Arts Council found out recently when the Long Beach Business Journal’s Publisher, George Economides, offered a remarkable resource to Long Beach’s Arts and Cultural sector.

Throughout 2015, the LBBJ will generously feature a full page of arts coverage in every issue, providing us with a wonderful platform to raise visibility for the many exciting ways that the arts enhance life in our city.

Our focus will be on why the arts matter.

The Arts Council looks forward to curating a year-long conversation about the creative sector’s role in Long Beach – not only what’s happening in our performing and visual arts venues, but also how and why the arts enrich experience in every aspect of life in our city. The breadth of the Business Journal’s regular articles brings widely diverse information to readers and we plan to follow that model by exploring how the arts work across all sectors. We’ll be looking at the intersection of arts and economic development, how the arts work hand-in-hand with hospitals and programs devoted to health and aging, the role that culture and arts play in tandem with our transportation systems, as well as how the arts play an integral role in supporting and enhancing the excellence of our educational institutions. And these are just a few of our hybrid topics!

As George said in his gracious introduction to the new LBBJ pages for 2015, “together the arts and nonprofit sectors play a critical role in moving our city forward in a direction that touches and benefits all citizens and businesses.” We couldn’t have said it better ourselves and we are proud to be in the excellent company of the Long Beach Nonprofit Partnership and the remarkable organizations they represent. There’s a great deal of overlap between all of us working in the Third Sector and these pages will offer a chance to talk about collaborative efforts, as we move towards our shared goals of enriching and improving life in Long Beach.

The arts are at the heart of every great city and Long Beach is no exception. They connect us as individuals, families, and communities. With the exponential growth of Long Beach arts and cultural activity in recent years, I don’t think any of us have a comprehensive grasp on everything that’s happening – that’s why we look forward to expanding awareness of the wealth of creative and economic opportunities created by artists across all nine council districts.

Long Beach’s prodigious roster of arts practitioners and organizations fuels the Arts Council’s Mission – to foster creativity and culture, enlivening communities and enabling a thriving economy; as well as our Vision – that the vibrant arts scene makes Long Beach the premiere destination for residents, businesses, students, and visitors.

After reading our articles throughout the year, we hope that you will agree with us that there is every reason to expect the Arts Council will meet our Strategic Objective, that by 2020, the arts make Long Beach a number-one destination on the West Coast! ■

The Dream of Simultaneous Connection by Ned Smyth at HarborPlace Tower, 510 E. Ocean Blvd., Victory Park, March 1996.

Why Public Art Matters ■ By AMY BODEK Director Of Development Services, City Of Long Beach

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ublic Art defines a city. It can provide hope, character, and backbone and revitalize neighborhoods. From a development perspective, public art is a tool for softening the hard edges of a builtout city. But, it is more than that. Public art helps to shape a community’s identity and to humanize our public spaces, while building culture and fostering a sense of civic pride. From murals to temporary art installations, it celebrates our commonalities and our differences, our history and our future.

Public art belongs to everyone, speaking to us both individually and collectively.

Passing Time by Kerry Zarders at 1st Street and Linden Avenue. Part of the Long Beach Transit Bus Stop Improvement Project, December 2003.

The Art Of Economics: Quick Facts On The Arts And The Economy

2014 National Arts Index

Published in early 2014, The Otis Report on the Creative Economy gives us a regional view of the creative sector’s impact on the greater L.A. economy: • By 2017, creative industry employment in the Los Angeles-Orange County region will total 416,500 wage and salary jobs, an increase of 12,600 jobs from 2102.

• In the Los Angeles region, the creative sectors supported 1 in 7 wage and salary jobs, with a net economic output contribution of 10.4% of the region’s gross total.

• The L.A. regional creative industries sustained 726,300 workers who earned $50.6 billion.

The 2013 Americans for the Arts Local Arts Index adds to the regional picture with per capita consumer spending levels for arts and culture products and services (admissions, music, media, books, photography): • Los Angeles County residents: $293.63 • Orange County residents: $369.76

Gallery Corner In every Long Beach Business Journal this year, join us for our Gallery Corner! This section will feature work by a local artist, and include diverse ways that art is supported in our city. To start the series off, we wanted to engage a unique art form, 3-D photography! Meet Barry Rothstein, a local 3D photographer, currently exhibiting at WE Labs. 3-D photography blends art and technology for an experience nearly identical to viewing something in real life.

Barry, who has authored five books on the subject, describes his work as a “marriage of art and science. Any good photograph records a window into a moment of time. In the case of mine, that moment is 3-dimensional and seems real.” On Friday, January, 30th at 6:30pm, plan to join us at WE Labs for the We Show Art Tour, where you'll have the chance to view Barry’s work with a free set of 3-D glasses, while exploring the whole exhibition featuring over 20 artists. WE Labs, a creative coworking space, created WE Show after recognizing that exhibition space is at a premium for Long Beach artists.

For more information visit Barry Rothstein (www.barryrothstein3d.com & www.3dDigitalPhoto.com) and WE The Many Faces of Shirene Labs (www.welabs.us). (detail) by Barry Rothstein.

In Long Beach, one finds public art throughout our 52-square-mile city, whether the street median of Martin Luther King, Jr. Boulevard, a cornerstone of North Village, a memorial to a fallen police officer in a neighborhood park, or a monument to our aquatic background on Ocean Boulevard in our downtown. It appears in a variety of forms, including sculpture, mosaic, ornamental landscaping, murals – even in the use of water and decorative lighting. The city, through its former Redevelopment Agency, took that first bold step to support public art over 30 years ago and set the stage for a program that has since permeated the very fabric of the entire city.

Public art is also an investment in people: our local artists. When artists share their creative visions, they inspire us to be more imaginative in our planning and decisionmaking. They help us to look outside the box that we live in, testing our perceptions and challenging us to move forward with inspiration and vision toward a better community. By recognizing public art’s importance to the quality of life of our residents and the character of our community, Long Beach continues to position itself as a forward-thinking, world-class city. ■

Image Emergence: Promenade of Clouds by Craig Cree Stone at The Promenade South Block between Ocean Boulevard and 1st Street, October 2011.

Art Through Development

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ince the 1950’s, public art in many US cities has been funded through a percentage of construction costs set aside from private and public development budgets. From 1981 to 2011, Long Beach landscapes became home to hundreds of artworks funded through Percent for the Arts programs, aimed at increasing the aesthetic and economic value of our buildings and public spaces. Long Beach continues to reap the benefits of programs that channeled at least 1% of total costs for public and private developments (over $250,000) to finance public art programs during those 30 years. ■

The 2014 Americans for the Arts National Arts Index delivers a 2012 score of the health and vitality of the arts in the U.S. Arts organizations foster creativity and innovation through new work. Between 2002 and 2012, audiences attended 10,000 new works – over 130 new operas, 1,342 orchestral works, 2,744 plays, and almost 5,900 movies. Regardless of economic cycles, America’s arts industries continued to produce new and exciting work for audiences.

Although the Index figures reflect national trends, Long Beach calendar sections feature new work across performing and visual spectrum. Innovation enlivens the 2015 season, from two world premieres at the Garage Theatre, to a L.A.-first production of The Heir Apparent at ICT, MTW’s recent regional premiere of Big Fish, as well as new works scheduled throughout the Long Beach Playhouse’s Studio Collaborative Season. The music scene fairly bristles with innovation as each second Thursday of the month sees restaurants, bars, and street venues providing new homes for events during Live After 5, and the Long Beach symphony continues their concert series, Sounds and Spaces, in non-traditional community venues. New choreography will be on stage at the CSULB Dance Department spring dance concerts and new visual artwork is seen regularly at museums, galleries, community centers, art walks, and on other walls throughout the city. In coming weeks, we’ll explore how these and other arts innovations are shaping Long Beach into a vibrant cultural hub, while strengthening our local economy.

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THE NONPROFIT PAGE January 20-February 2, 2015

Welcome to the Nonprofit Page

Long Beach Business Journal 19

Knolls as well as a thriving down- play. Through the work of deditown. And, we have an engaged cated staff and volunteers nonand powerful nonprofit commu- profits provide a wide range of nity that I love and work with supportive services from treating every day. broken bodies and hearts to offerFor full disThis past December, I had the ing spiritual uplift through cultural closure, you opportunity to sit down with opportunities as well as spiritual should know George Economides and the folks uplift through service and worthat I love from the Third Sector at the Long ship. Nonprofits provide shelter Long Beach. Beach Business for our homeI love its Journal offices. I less, educate Did you know its left the meeting people, children, our beaches, its energized and that 10% of all jobs feed our souls, architecture, excited about a and contribute in Long Beach the iconic new opportunity to the economic are nonprofit? heritage, the for the upcomhealth of our diversity, the ing year. c o m m u n i t y.

Linda Alexander sunshine and So, what happened in that Whether we work in the public, Executive Director almost per- meeting to cause such a well- private, or nonprofit sector, the Long Beach fect weather. spring of positive emotion? Let work and contributions of nonNonprofit We are a me provide you with a little profits impact our lives in some Partnership charter city background. As many of you way. For nonprofits to make those with our own school district, probably know, George is a long- positive contributions public suphealth department, and commu- time supporter of our local non- port and understanding is critical. nity college district. We have a profits. He is someone who At our meeting, George was world-class port, a highly-rated understands that their effect on inspired to find a new way to university, a great business com- the community is broad and highlight the local nonprofit secmunity, a symphony, theater, deep. He also understands the tor with the emphasis on conmuseums, thriving art scene and many needs of Long Beach. necting more closely with the much more. We are a big city with Nonprofits are an integral and local business community. It is small interesting neighborhoods vital contributor to making our common knowledge that Long filled with unique business dis- community of Long Beach such a Beach businesses strive to protricts like Retro Row and Bixby desirable place to live, work and viding goods and services to the public to generate profit. It is also common knowledge that our local business community has a long and storied tradition of giving back. They give generously of their varied resources and servFrom the Nonprofit Partnership ices in support of community Supervising Skills for Success projects and programs. They January 21 9:00AM – 4:00PM donate time, money, products, and services that directly and Learn tips and tools to excel in supervision including: exploring the role, challenges indirectly help nonprofits conand pitfalls, factors that lead to success, communication and motivation to improve tinue to do good work. And they staff performance. want to do more.

After lengthy and dynamic conEssentials of Human Resources versation about all of this and January 22 – February 26 (6 sessions) 2:00PM – 5:00PM more, George offered up a gem.

A 6-session certificate program providing knowledge and practical skills for human In 2015, the Long Beach resources administration and management.

Business Journal would dedicate the last page of each publication Excellence in Customer Service to the nonprofit community. The January 29 9:00AM – 12:00PM Nonprofit Page would address the Learn key concepts and critical behaviors leading to customer satisfaction issues affecting our community including: uncovering customers needs, “touchpoints”, and how to "stay cool" from the nonprofit perspective, under pressure. written by nonprofit professionals. It was a brilliant idea. We

Capacity Corner: Upcoming Calendar of Events

agreed on the spot to move forward immediately. I was very grateful for the offer and ecstatic at the opportunities it provided.

In fact, I was so amazed at the generosity of the offer, I wanted to conclude the meeting as soon as I could before George could change his mind.

The Long Beach Nonprofit Partnership is pleased to be able to curate this year-long endeavor for and with the nonprofit community. As the nonprofit management support organization and capacity builder for the greater Long Beach area, we aim to transform communities by supporting the efforts and missions of nonprofit organizations. As the Nonprofit Partnership’s Executive Director, it is my privilege to meet our mission by sponsoring this page and ensuring closer and deeper ties between our nonprofit and business partners.

Over the course of the year, you will have the opportunity to hear from nonprofit leaders who are truly experts in their field.

They will highlight important issues and provide expertise and insight. On the Nonprofit Page we will talk about economic impact, how to engage in giving circles, early childhood education, building greater capacity, how, when and if to start a nonprofit and so much more. There will be opportunities for us to engage individually, organizationally and as a community and there will be calls to action.

My hope is that the content of the Nonprofit Page begins a conversation that sparks a flame.

Within the ink and newsprint of this page, we strive to inspire more communication, collaboration and partnerships. I ask that you take a little time twice a month to take a break from your busy life. Open the Business Journal. Go to The Nonprofit Page.

Learn a little and make magic happen. Join me in a conversation that aims to make 2015 the best year yet for Long Beach.

The Essentials of Fund Development February 11 - February 25 9:00AM – 4:00PM A 3-day certificate program designed to help gain new perspectives on the fund development process while expanding skills to secure funds . For more information on all trainings listed above, visit lbnp.org.

From our Partners Webinar: Making Grants Research Simple January 22 11:00am TechSoup is hosting a webinar tour of several easy to use grant maker databases.

Learn how to build a simple decision matrix to improve success. For more information, visit techsoup.org.

Webinar: Social Media Strategies for 2015 Wednesday, January 21, 2015 11am NTEN is hosting a webinar to take a look at why user-generated content matters and how it can help you achieve your particular goals. For more information, visit nten.org.

The area’s regional capacity builder serving nonprofits throughout Southern California through leadership, education and collaboration. Offering: • Professional Development & Training • Networking & Collaboration • Consulting Services • Information Resources To learn more visit us at www.lbnp.org.

4900 East Conant St., Building O-2, Suite 225, Long Beach, CA 90808 562.290.0018

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