INSIDE THIS ISSUE: Rains Help Drought P.4 | Climate Change P.9 | Job Creation P.11
State Workers Hoarding Vacation Days
Bay Area Considers Regional Housing Agency
By Melody Gutierrez California state workers are hoarding vacation days, creating $3.5-billion debt for taxpayers
By Guy Marzorati Push to Create a Regional Housing Agency for the Bay Area
Last year, the state paid its employees nearly $300 million for time off that wasn’t used, according to a Times analysis of payroll data from the state controller's office. (Myung J. Chun / Los Angeles Times) After 36 years as a California government transportation engineer, Bijan Sartipi retired with much more than a goodbye party: He was paid $405,000 for time off he never used — one of more than 450 state workers who took home six-figure checks when they left their jobs last year. And Sartipi didn’t top the list — a prison surgeon in Riverside pocketed $456,002. In a trend that stems from lax enforcement of the state’s cap on vacation accrual, more and more state workers are able to retire with massive payouts for unused vacation and other leave. That could become a budget breaker for California as an aging workforce heads into retirement. During the next recession, California will be obligated to continue the payouts, forcing lawmakers to cut programs to balance the state budget. Last year, the state paid its employees nearly $300 million for banked time off, according to a Times analysis of payroll data from the state controller’s office. The data include most agencies and departments, but not legislative employees or other taxpayerfunded institutions such as the public university systems. That means the actual cost to taxpayers for unused vacation is much higher. The total unfunded liability also does not account for employees who used stockpiled days off at the end of their careers to remain employed while not actually working, boosting the value of their pensions. All told, state workers had $3.5 billion in unused leave as of 2017, the most recent estimate available. The blame, said Stanford public policy professor Joe Nation, rests entirely on government mismanagement. “It’s like having a speed limit but not enforcing it,” he said. “This is not a good way to run any organization.” California mandates that vacation balances for most employees be capped at 640 hours. Sporadic enforcement of the rule, coupled with an increasing number of state workers retiring, has led to a 60% rise in the number of six-figure payouts since 2012, when 280 employees each cashed in unused paid leave totaling $100,000 or more, The Times’ analysis found. Even so, said Brian Ferguson, a spokesman for Gov. Gavin Newsom, VACATION - Continued on page 6
State lawmakers are proposing to create a housing agency for the San Francisco Bay Area, with the ability to impose regional taxes to fund development, local planning and tenant assistance. The legislation would create a new agency to address a problem felt by residents in all of the region's nine counties. Assembly Bill 1487 is the cornerstone of a controversial regional housing agenda being pursued at the state Capitol. "It is central to what we're trying to do with a regional approach," said Assemblyman David Chiu, D-San Francisco, who authored the bill. “It would allow tenants from across the region to access services, even if their city doesn't have tenant services available. It would allow cities across the region to get access to technical assistance that they may not already have.” The idea for the regional entity — dubbed the Housing Alliance for the Bay Area (HABA) — was birthed from CASA, a committee of elected officials, developers and affordable housing advocates who drew up a set of ideas to ease the housing affordability crisis in the Bay Area. The ideas included emergency rent and legal assistance to tenants facing eviction, a regional rent cap, streamlined approval for more developments and minimum zoning standards for housing around transit stops. Many of those ideas have already been introduced in the state Legislature. The committee also drafted a price tag for their list of solutions: $2.5 billion annually over the next 15 years. AB 1487 would give state authority to HABA to raise up to $1.5 billion through ballot measures voted on in all nine counties. "[It] would allow for funding to be raised regionally and spent regionally," Chiu said. "It would allow tenants from across the region to access services, even if their city doesn't have tenant services available. It would allow cities across the region to get access to technical HOUSING - Continued on page 6
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Funding the Fight Against Homelessness by John Bailey, Chamber Board Chair
As we’ve shared recently, our Chamber membership has told us that the top priorities affecting businesses in our area are 1) Housing 2) Homelessness and 3) Government Regulations. One of our cover articles in this Business Journal discusses some creative efforts underway to help with the housing challenge for our neighbors in the Bay Area. In this article, we share a bit of what’s happening locally with Homelessness – specifically, some local resources that are being put to work. Local schools receive additional funding for students with an education program code of “Homeless.” This makes sense as many students without a stable home will require more from their school to keep up with their peers. But the problem is vast, and there are thousands of homeless students in Monterey County. And these “homeless” students are typically not living on the streets, but in
under-regulated, over-crowded housing, in garages, on couches, or in low rent motels. Homelessness is a cycle, and funding to break that cycle is limited. Tough choices must be made on where the funding should be spent to break the cycle, and local schools where as much as one in ten students are homeless, continue to be the front line in the fight. In the City of Salinas, under the direction of Chief Fresé, the Salinas Police Department appointed a new Homeless Outreach Team Officer who is actively working with homeless in Chinatown. This additional service will be paid for with a portion of the nearly $835,000.00 allocated for “homeless activities” in the city of Salinas General Fund. But it may be that a partnership approach between local government and non-profits is needed for a long-term solution. Local governments are working
collaboratively with nonprofits to find solutions that break homelessness cycles by connecting people to services including mental health services and housing services. But the cost is high and the work is slow. In the first ten months of one local Salinas program working with homeless, only 17% of those counseled were helped into housing. The Chamber supports directing some of this local funding to our Chamber members who provide social services for individuals and families, and we are actively listening to these business leaders as new and creative solutions are developed to fund the ongoing fight against homelessness in our region. If your organization is working to fight homelessness in Monterey County, we invite you to share with us what you’re doing and how the Chamber might help. ■
2019 EXECUTIVE COMMITTEE
Chair - John Bailey Alternative Dispute Resolution ■ Past Chair - Jim Bogart Grower-Shipper Association ■ Vice Chair, GRC - Kevin Dayton Salinas City Center Improvement Assn. ■ Vice Chair, Finance - Bill Hastie Hastie Financial Group ■ Vice Chair, Events - Julie Ann Lozano MBS Business Systems ■ Vice Chair, Membership - Kristy Santiago KION TV ■
2019 BOARD OF DIRECTORS
Bailey (Chevron) Bumba (Consultant Community/Health) ■ Esteban Calderon (Comerica Bank) ■ Raymond Costa (RHC Management Co, LLC dba McDonald's) ■ Frank Geisler (Geisler3) ■ John Haupt (Haupt & Associates) ■ Albert Maldonado (MP Express Printing) ■ Rodney Meeks (Credit Consulting Services, Inc.) ■ Tom Meyer (1st Capital Bank) ■ Kathy Miller (Aera Energy) ■ Krishna Patel (Valvoline Instant Oil Change) ■ Brandon Patterson (Brandon D Patterson Windermere Valley Properties) ■ Starla Warren (Monterey County Housing Authority Development Corporation) ■ Kalah
Kasavan (SPARC) ■ Matt Huerta (Monterey Bay Economic Partnership) ■ Matt
Noble Boss Membership Director ■ Sydney Allred Member Services Coordinator ■ Phillip Saldaña Operations Manager ■ Thom Taft, Finance Manager ■ Paul Farmer CEO & Chief Member Advocate
CREATING A STRONG LOCAL ECONOMY PROMOTING THE COMMUNITY PROVIDING NETWORKING OPPORTUNITIES POLITICAL ACTION REPRESENTING THE INTERESTS OF BUSINESS WITH GOVERNMENT
Salinas's Chinatown neighborhood
Rains Help Wash Away CA Drought By Paul Rogers, The Mercury News
Here’s how much recent rains have washed away California’s drought Less than 1 percent of the state is in any kind of drought status, down from 48 percent a year ago. On Thursday, March 7, 2019, less than 1 percent of California was classified by federal scientists as being in a drought, down from 97 percent the same week three years ago. Yes, it’s caused traffic jams, power outages and even some floods. But there’s a big ray of good news behind all the rain that California has been receiving this year. Soaked by relentless storms, California as of this week has less land area in drought status than at any time in the last seven years. Less than 1 percent of the state — a sliver on the Oregon border — is still classified as being in a moderate drought, according to a new federal report out Thursday. The last time that little of California was in a drought was on Dec. 20, 2011. By comparison, a year ago this week, the weekly report, known as the U.S. Drought Monitor, classified 48 percent of California as being in drought status. And this week three years ago, in March 2016, a staggering 97 percent of California’s land was in a drought, much of it in extreme drought status,
as the state suffered from the worst drought in its recorded history. “The storm door opened up in January and has remained open since then,” said Jan Null, a meteorologist with Golden Gate Weather Services in Saratoga. “The rivers are full, the reservoirs are above historical averages. It’s a good picture.” California’s five-year drought, which extended from 2012 to through 2016, caused widespread water shortages, wildfires and heavy groundwater pumping from desperate farmers trying to keep their orchards and crops alive. More than 100 million trees died in the Sierra Nevada, and millions of residents were hit with mandatory water cutbacks by cities concerned about running out of water. The drought ended in the spring of 2017 with huge storms that caused $100 million in flood damages along Coyote Creek in downtown San Jose and wrecked the spillway at Oroville Dam, the nation’s tallest dam, in Butte County. But last winter saw a return to below-normal rain and snow levels. And when this December ended with only half as much rain as historical averages, some people began to worry that the state was slipping right back into a drought. A wet January and a soaking February have ended those concerns, Null said. The Sierra Nevada snowpack, the source of roughly
Lake Oroville was very low on August 19, 2014 in Oroville, California. Following three years of drought, Lake Oroville was just 32 percent full. On Thursday, March 7, 2019, it was 68 percent full. Photo by Justin Sullivan/Getty Images
one-third of California’s water supply, was recently 161 percent of the historical average, up from just 69 percent on New Year’s Day. Every major reservoir in California is at or above its historic average, and some, like San Luis, east of Gilroy, are full. In 2014, California voters approved Proposition 1, a $7.5 billion bond intended to pay for a broad array of water projects, including recycled water, desalination, storm-water capture, conservation and the construction of new reservoirs. Among the projects state officials have approved for funding are plans to expand Los Vaqueros Reservoir in Contra Costa County and to build a new reservoir near Pacheco Pass in Santa Clara County. How do the storms this year stack up to the past? San Francisco, the best barometer of historic rainfall trends in Northern California, because it has records that go back the furthest, received 7.76 inches of rain in February. That’s double the normal amount, the most in a decade, and the 16th most in 169 years of record-keeping back to 1850. The reason: The persistent ridges of high-pressure air that blocked Pacific storms from hitting California during the drought are gone. Instead, low-pressure systems are pulling moisture-rich atmospheric river storms in from the tropics, hitting the West Coast one after the other. Null noted that rainfall this year also is helping to significantly recharge the state’s groundwater, because the storms are steady and repeated rather than all in one or two huge events that run off into the ocean. All of this means there will be no water restrictions in California cities this summer, water agencies say. But the good times won’t last forever. They never do, experts note. “This seems like one of those very good, above-average years,” said Jay Lund, director of the UC Davis Center for Watershed Sciences. “But there’s always going to be another drought. And another flood. Right now, we are in a happy territory between extremes.” ■
The Salinas Valley Chamber of Commerce Encourages You to Cut This Out and Post on Your Employee Bulletin Boards.
The Key to Excellent Service from the City of Salinas
The City of Salinas gets requests from a variety is resolved, or updates are entered by staff, the user of sources for routine (non-emergency) services such is notified about the progress made on the service as animal control, sidewalk repairs, tree maintenance, request. If a request is not addressed within a specific streetlight repairs, and abandoned vehicles. In order to time period, an e-mail notification is generated and serve the community more effectively and efficiently, sent to the appropriate supervisor or director to the City of Salinas has set up a “SalinasConnect” address. Nothing slips through the cracks. app community request management system for the Our members who have used the SalinasConnect public to use. Salinas City Councilmember Steve McShane app say that it speeds up response time and makes and City Manager Ray Corpuz were instrumental in the city accountable for promptly handling service getting this system in place. requests. In fact, other cities such as Monterey are looking at adopting a public service app People can upload the app onto smart phones or similar to what Salinas has adopted. ■ other electronic devices. SalinasApp is connected to a centralized software system which streamlines the The Salinas Valley Chamber of Commerce encourages service request process between City staff and the you to download the SalinasConnect app public. The system automatically processes a request and tell your employees, colleagues, family, and routes it to the appropriate staff or department to friends, and neighbors to do the same. address. The request is then logged and when the issue
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➟ VACATION – Continued from page 1
“the state has made significant strides in recent years in reducing unused leave balances.” Some departments have offered workers a chance to cash out up to 80 hours accrued time off each year in hopes of reducing the liability of larger payout when workers retire at a higher salary. According to the Department of Finance, the state wrote checks totaling $111 million over a three-year period ending in 2017 to help reduce vacation balances — an effort started under former Gov. Jerry Brown. Most private-sector employers cap vacation between 40 hours and 400 hours and do not allow time to be earned beyond those limits. In California, public-sector union contracts are negotiated at the direction of the governor and must be approved by the Legislature. Any changes to how much vacation employees could store would have to be negotiated and such concessions would not come easily. The state’s powerful and deep-pocketed public-sector unions showered Newsom with contributions, and labor is also among the biggest donors to Democratic lawmakers, who have supermajorities in both houses of the Legislature. State Sen. John Moorlach (R-Costa Mesa) said revising the vacation policy would help California contain its liabilities, but did not believe that was politically feasible. “I doubt Gavin Newsom will go to the bargaining table to see if he can fix it,” Moorlach said. “Our governors are very reliant on public employee union contributions, so this is just not going to happen.” State workers also enjoy another vacation perk most public sector workers have not heard of. When employees cash out their banked leave, the state government pays them not just for the hours they have on the books, but also projects how much additional time they would have earned if they had taken the days off. That means a person with 640 hours of vacation would also be paid for all of the vacation and holidays they would have earned had they taken those 80 days off. For some, vacation payouts can surpass annual salaries. And since state labor code requires employers to compensate workers for unused days off based on final pay rate — not what they were earning when the time was accrued — the actual cost of each vacation hour increases over time. The top 20 employees with the largest payouts in 2018 took home a combined $5.9 million, with all but three receiving raises in the year before they left state service. The raises increased the employees’ leave payouts by an average of $7,500 apiece, The Times’ analysis found. “That’s in line with pension spiking,” said Jon Coupal, president of the Howard Jarvis Taxpayers Assn. — likening it to boosting retirement pay with last-minute salary increases, a practice banned in many cases under a 2012 reform law. “It’s an abuse and it should be corrected with legislation,” Coupal said. Sartipi took home an additional $15,000 for unused time off thanks to a 4% raise in his final year of work. The onetime district director for the California Department of Transportation in Alameda County received $405,119 for banked time off — the equivalent of more than 4,400 hours of vacation, or two years of stored leave, according to The Times’ analysis. His annual salary when he retired was $191,208. When asked for comment, Sartipi declined.
➟ HOUSING – Continued from page 1
assistance that they may not already have." The entity would not have any land use authority, and while it could purchase land for affordable housing, it would not be able to take property through eminent domain. AB 1487 proposes that the governing body be split between local mayors, council members and supervisors who serve on the Metropolitan Transportation Commission (MTC) and the Association of Bay Area Governments (ABAG), along with appointees of the governor. Even some supporters of CASA have argued against the creation of a new housing government, particularly one that could include unelected appointees. It would be up to the Alliance to determine what tax proposals end up on the ballot. The CASA Compact suggested a suite of ideas, including a regionwide parcel tax on property owners, a new fee on developers, increased taxes on businesses, a regionwide sales tax increase and direct contributions from local governments. Supporters say the regional approach to taxes would ease the burden on cities that currently have to go to the ballot individually to raise funds for housing.
The state controller’s office would not provide the number of vacation days for individual employees, saying the information was confidential, but did provide how many hours agencies had on the books as of 2017. But of the 20,400 workers who cashed out their time off last year, nearly 6,200 received at least $10,000. The majority of vacation payouts were less than $5,000, the analysis showed. Many who received large payouts worked in prisons or public safety positions, where staffing shortages and emergencies can make it difficult to schedule vacations. “I would have rather had been taking time off than taking a payout,” said Kim Zagaris, the former fire and rescue chief for the Governor’s Office of Emergency Services. Zagaris, whose state career spanned three decades, received $218,000 from unused vacation when he retired last year. He said the tax bite out of that lump-sum payment was around 40%. The number of vacation hours banked by state workers jumped in the years after 2009, when California furloughed workers during the recession. The forced unpaid time off meant many did not need to use vacation or could not afford to. In 2016, the Department of Human Resources began tracking the amount of unused leave accumulated and working with managers to have those over the cap create plans to use the time up. A spokesman said the department plans to post the state’s total number of unused vacation hours and the cash value of that liability online later this year. As of 2017, state workers had accrued 75 million hours of paid leave, according to the controller’s office. The Department of Rehabilitation and Corrections accounted for a third of those hours, which carried a $1-billion price tag. The California Highway Patrol had $396 million in unused leave on the books, the data show; Caltrans was on the hook for $366 million. When J.J. Jelincic was ready to retire from the California Public Employees’ Retirement System in January 2018, he opted to take his vacation time instead of a lump-sum payment. Jelincic, who has been on vacation for more than a year, said that was the smarter investment. Because while on vacation, he has received a 4% raise that went to everyone in his job classification. And since he is still an employee, he is increasing his total state service. The net impact will mean an increase of his pension. Jelincic is also accruing more vacation time while on vacation — and receiving holiday pay. The state requires employees to get a manager’s approval to burn down their vacation before retiring instead of receiving a lump-sum payment. Mike Genest, who served as budget director for former Gov. Arnold Schwarzenegger, said there are times when large payouts to hardworking state employees are warranted. “But, I would say most of the time it is abused,” Genest said. He received $37,000 in unused time off when he left the Department of Finance in 2009. “I have no guilt for the taxpayer that I was milking the system,” Genest said. “People knew I worked ungodly hours most of the time.… It could be looked at as abuse, but I tell you I deserved it and I have no qualms saying that as a fiscal conservative.” ■
They point to measures to fund affordable housing in San Jose and Santa Rosa that failed in the November election. HABA's plans for spending the tax money -- sending cash and legal assistance to tenants, buying properties to build affordable units, and paying for planners to help cities prepare for development -- could be particularly helpful to cities and towns that lack the resources to take on those initiatives now. "Some jurisdictions have a lot of staff and revenue but there's a wide range within the region," said Amie Fishman, executive director of the Non-Profit Housing Association of Northern California. "So having a regional strategy will also help to generate the local solutions that are needed." A separate bill in the state Legislature could make it easier to pass a regional housing tax. Assembly Constitutional Amendment 1 would lower the threshold needed to pass a sales tax or parcel tax from two-thirds to 55 percent, if the funds are used for infrastructure or affordable housing. ■
Changes to Family Care & Medical Leave By Erika Frank
New Required Poster for California Employers Starting April 1
Look out, California employers! Another required posting is coming your way. Last week, the Office of Administrative Law (OAL) approved the Fair Employment and Housing Council’s (FEHC) changes to the Family Care and Medical Leave (CFRA Leave) and Pregnancy Disability notice (now called Family Care and Medical Leave and Pregnancy Disability Leave), adding information about the New Parent Leave Act (NPLA). California employers covered by the California Family Rights Act (CFRA) and the NPLA are required to post this new notice starting April 1, 2019. The NPLA is a narrowly tailored California leave law that took effect last year. Both the CFRA and NPLA provide 12 weeks of unpaid, job protected leave to bond with a newborn or a child placed with the employee for adoption or foster care. The CFRA applies to employers who have 50 or more employees and the NPLA applies to employers who have less than 50 employees but have at least 20 employees. While the CFRA provides additional medical leave, the NPLA does not and is limited to baby bonding leave. Over the past year, the FEHC has been working on regulations to mirror CFRA’s baby bonding leave requirements with the newly enacted NPLA. Unfortunately, last week, these efforts came to a standstill when most of the proposed regulatory changes were withdrawn from the regulatory process. What remains, however, is defining the NPLA in the CFRA definition section; amending the CFRA required notice (as mentioned above); and adding
Photo Courtesy of MPCC
It’s no joke – employers must post a new notice starting April 1.
reference to FMLA in the CFRA medication certification form. No additional changes were approved; the FEHC will have to go back to the drawing board before employers see more guidance on the NPLA. For now, effective April 1, 2019, employers with 20 to 49 employees will need to post the Family Care and Medical Leave and Pregnancy Disability Leave notice in their workplace and employers with 50 or more employees will need to replace their existing notice with the new version. CalChamber’s 2019 all-inone California and Federal Labor Law poster includes the 18 state and federal employment notices every California employer must post, including the Family Care and Medical Leave and Pregnancy Disability Leave notice. Make sure you have an updated posted by April 1 and consider our Poster Protect option – if a mandatory change happens in 2019, like this new notice on April 1, you automatically receive a replacement poster at no additional cost. ■
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Failed Tech Projects Cost State Millions
tips & advice on digital marketing by Phil Fisk, President Coastline Marketing Group
By Hector Amezcua, Alyssa Hodenfield, The Sacramento Bee
All Reviews ARE Created Equal Get reviews! Get reviews! Businesses are constantly told about the importance of reviews. Both good and bad reviews are going to be helpful for your business, especially when it comes to search engine optimization. Once you see how all reviews are created equal, you will know how to react when you get a good or a bad review. Focus on Obtaining Reviews Try to get reviews however you can. This will depend on the kind of business that you have. Ask people to leave reviews on Facebook. Offer a link to Yelp on the bottom of emailed receipts. Simply reminding people to leave a review will often result in obtaining more. The reason that many businesses don’t have many is that employees don’t ask for them. Respond to Negative Reviews A negative review may seem like a bad thing. However, it’s not. It gives you a chance to learn from what happened and work to make it better. The first thing you want to do is recognize that someone has complained. Many customers want to be heard, so a review is a chance for them to air their grievance. Apologize online to the review so that it’s public. The two words, “I’m sorry” can make a big difference. Offer a solution that will allow you to go out of your way to make up for it. Invite them in for a meal on you, offer to have the office staff call them, or some other solution. When you can make it right, you’ve actually provided excellent customer service. Additionally, potential customers will see that you went out of your way to make it right. It ends up eliminating the negative review in the eyes of people who are reading them to decide about you as a business. Respond to Positive Reviews Check your reviews on a regular basis where you see them appear. This can be Facebook, BBB, Google, Yelp, Houzz, and more. As you see compliments and positive reviews, thank them. Obviously, you did something right because someone took the time to leave you a review. Now, make sure that you think them for their business. You can also use the positive reviews as various marketing tools. For example, you can use the comment as a free advertisement. Various online review builders will funnel directly into your website, too. This allows you to showcase positive reviews to anyone visiting your website so that they can make more educated decisions about contacting you. All reviews truly are created equally. You will want to encourage people to leave reviews for your business however you can. From there, maintain active reputation management so that you’re able to stay actively engaged in your business. Customers will see how active you are and anticipate what it means for the experience they will have when doing business with you. ■
California’s failed tech projects come in late and over budget. Gavin Newsom wants to fix them. A $100 million government computer program doubled the time it takes to license California nurses. A $290 million tax software upgrade unveiled last summer made it more difficult to file taxes online, prompting a major accounting firm to file by paper instead. And, a $900 million accounting system the state has been working on for 14 years is now causing delays that threaten to impact the state’s credit rating. Those are just a few examples of what has gone wrong when California state government has tried to improve its technology. They demonstrate the depth of Gov. Gavin Newsom’s challenge as he begins a new effort make the state’s cumbersome, outdated IT systems more responsive and effective for taxpayers. He declared technology to be a priority his opening budget with a $36 million proposal to create an Office of Digital Innovation that he says would foster a more flexible, creative approach to government technology. Before becoming governor, Newsom wrote a book titled, “Citizenville: How to Take the Town Square Digital and Reinvent Government.” He announced initiatives shortly after taking office that target some of the state’s most notorious tech failures, such as an attempt to overhaul DMV systems that has floundered since a first attempt in 1987. “We’re going to accept credit cards,” Newsom said during a budget address. “It’s a governor in 2019 in California saying that we’re going to accept credit cards in 2019 at the Department of Motor Vehicles. That is in the ‘you can’t make that up’ file.” Some of his objectives with his new office resemble guidance from a task force created six years ago by former Gov. Jerry Brown and former Treasurer John Chiang. That task force, like at least one IT task force before it, suggested its recommendations could set the state on a better path. Audits and at least one legislative review since then show mixed results. The state maintains an IT tracker that classifies current projects as green, yellow or red depending on their failure risks. Eight of 26 major projects under development are classified as yellow or red, indicating they are at risk of failing or requiring corrective action. Right now, a $918 million project to replace hundreds of old accounting systems in the state with a new one is scheduled for full implementation in July, despite a January warning from the state auditor that lingering inefficiencies could threaten federal funding and impede annual financial reporting, which affects the state’s credit rating. ■
Teaming Up on Climate Change by Sammy Roth, LA Times
Here’s why Arnold Schwarzenegger and Kevin de León are teaming up on climate change Former Gov. Arnold Schwarzenegger, a Republican, is joining forces with an influential Democrat to tackle one of California’s biggest problems: pollution from cars and trucks. The transportation sector is California’s largest source of planetwarming greenhouse gas pollution — and emissions are trending up, not down. But Schwarzenegger and Kevin de León, the former state Senate leader who is now running for a Los Angeles City Council seat, see an opportunity to clear the air. Schwarzenegger and De León are launching an initiative with environmental activists and researchers at USC and UCLA to study how local governments can speed the adoption of cleaner transportation options and to promote more aggressive action at the state level. Reducing dependence on oil for transportation, they say, would benefit the climate and reduce lung-damaging air pollution in disadvantaged communities. De León, who ran unsuccessfully against incumbent Democrat Dianne Feinstein for a U.S. Senate seat last year, has been a leading advocate
Arnold Schwarzenegger, alongside Kevin de León, shakes hands with then-Gov. Jerry Brown at a 2017 event for legislation aimed at reducing climate change. Photo by Eric Risberg / Associated Pres)
for political action on climate change and air pollution. As a state senator, he wrote the bills that raised California’s clean energy mandate to 50% by 2030, then 100% by 2045. Schwarzenegger is also a climate change policy veteran. As governor, he signed the Global Warming Solutions Act of 2006, which set the first legal requirement for California to slash its greenhouse gas emissions. The movie star and former governor said he and De León “come from different parties, but we share the belief that we can do better at protecting the people from
the health impacts of pollution.” “I’ve always said there is no Republican air or Democratic air,” Schwarzenegger said in a statement. The laws pushed by Schwarzenegger and De León have helped reduce emissions to 429 million metric tons of carbon dioxide equivalent in 2016 from 494 million metric tons in 2004, according to state officials. But most of those reductions have been driven by the electricity sector, as homes and businesses use energy more efficiently and utilities replace coalfired power plants with solar panels, wind turbines and natural gas. Transportation was responsible for 41% of California’s climate pollution in 2016. And as the economy has grown in recent years, transportation emissions have risen, fueled by increased driving. Tailpipe pollution also contributed to the 87 consecutive days Southern California violated federal smog standards last summer, said Antonio Bento, an economist who leads USC’s Center for Sustainability Solutions. “Electrification of the fleet” means replacing fossil-fuel-powered cars and trucks with electric vehicles. It’s California’s main strategy for slashing transportation emissions,
along with promoting alternatives to driving. So far, the state’s highest-profile efforts to clean up transportation have had mixed results. Former Gov. Jerry Brown set a goal of putting 5 million electric vehicles on the road by 2030, but just 550,000 EVs have been sold in the state to date, according to Veloz, a nonprofit backed by environmental groups and car companies. Now, De León and Schwarzenegger are taking an approach they hope will sidestep those thorny politics: focusing on local governments. Although the state can subsidize electric vehicles and prod utility companies to install EV chargers, cities and counties are largely responsible for the policies that influence how many miles people drive, through actions such as housing and zoning decisions, investments in public transit and regulation of ride-sharing services. Local governments also buy a huge number of buses, trucks and passenger vehicles. Cleaning up the transportation sector won’t be easy, especially in Southern California, which has long been defined by freeways and suburban sprawl. The state’s longterm plan for reducing climate pollution envisions a 15% reduction in miles traveled by light-duty vehicles by 2050, which the state plan says will require strategies such as more infill development, congestion pricing and expanded roles for transit, biking and walking. The state’s ability to cut emissions will also hinge on the private sector, such as battery manufacturers, automakers and ride-share companies. The biggest player in the electric vehicle market is Elon Musk’s Tesla Inc., which said recently it would finally start selling its Model 3 sedan at the long-promised $35,000 price point. ■
Website Accessibility: the New Wave of Disability Lawsuits
Chamber Events Connect at Lunch met for sandwiches and more at the new Boardwalk Sub Shop, 1220 S Main St.
by Lindsey Berg-James Attorney, Noland, Hamerly, Etienne & Hoss
In 2016, a blind customer sued Domino’s Pizza after he unsuccessfully attempted to order a pizza online using Domino’s website and mobile app. The customer generally accesses the internet using screenreading software which vocalizes visual information on websites. He determined he could not order pizza on Domino’s website or mobile app because they were not designed so that the software could read them. While the trial court agreed that the American with Disabilities Act (ADA) applies to Domino’s website and mobile app, it dismissed the lawsuit in part because there are no legal technical standards for public accommodation websites which Domino’s could rely on to ensure it was in compliance with the ADA. On appeal, the Ninth Circuit agreed that the ADA applies to Domino’s website and mobile app because the ADA applies “to services of a place of public accommodation, not services in a place of public accommodation.” The court ruled that to limit the ADA to discrimination in providing services occurring only on the premises would contradict the plain language of the law. However, the appellate court disagreed with the trial court
that Domino’s lacked notice of what was required for website accessibility, stating that since 1996 the Department of Justice has made clear that a business’ website must provide effective communication with its disabled customers. The Ninth Circuit did not express any opinion as to whether Domino’s website and mobile app in fact violated the ADA. Rather, it instructed the trial court to allow the case to proceed in order to make that determination. While a determination of whether a particular business website and/or mobile app violates the ADA is always a fact-specific, individualized inquiry, the Ninth Circuit’s decision adds to the growing legal authority that business owners cannot just ensure their physical places of business comply with the ADA. Websites and mobile apps must also be in compliance. Given this rapidly developing area of the law, businesses must be aware of the risks associated with maintaining a website that is not accessible for customers with disabilities. As a starting place, companies should ensure their websites use text in a format compatible with screen reading software to aid blind and visuallyimpaired customers. Businesses may also wish to hire a website accessibility consultant to perform an assessment of the website and to assist in making any necessary changes. ■ This article is intended to address topics of general interest and should not be construed as legal advice. © 2019 Noland, Hamerly, Etienne & Hoss Lindsey Berg-James, an attorney with Noland, Hamerly, Etienne & Hoss, focuses her practice on civil litigation and employment law. She is President of the Monterey County Women Lawyers Association and serves on the Board of IMPOWER.
After the ribbon was cut, Loaves, Fishes and Computers brought some excitement for our monthly mixer.
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Job Creation Breaks Record By NFIB
Small Business Job Creation Breaks 45-year Record
Percentage of owners citing labor costs as Single Most Important Business Problem reaches all-time high; Difficulty of finding qualified workers remains top problem overall. Job creation among small businesses broke the 45-year record in February with a net addition of 0.52 workers per firm, according to NFIB’s monthly jobs report, released today. The previous record was in May 1998 at 0.51 workers per firm. The percent of owners citing labor costs as their most important problem also hit an all-time high, with 10 percent of owners reporting labor costs as their biggest problem. “Small businesses are creating new jobs at an all-time high, which has massive implications for the economy since two of every three new jobs is created by a small business,” said NFIB President and CEO Juanita Duggan. “Owners are doing everything they can to hold onto the employees they have, while trying to produce effectively without a full staff.” Up one point from January, 57 percent of owners reported hiring and trying to hire, with 49 percent of those owners reporting few or no qualified applicants for open positions. Owners again cited the difficulty of finding qualified workers as their Single Most Important Business Problem at 22 percent, only
three points below the record high. Thirty-seven percent reported job openings they could not fill in the current period, two points below the record high. “With the government shutdown behind us, the labor markets will get back to normal,” said NFIB Chief Economist Bill Dunkelberg. “However, it appears that the shortage of workers will continue to restrain Main Street growth. If businesses were fully staffed, more could be produced and sold. Owners are reporting increasing employment at their firms at the highest rates in survey history, now they just need workers to fill them.” The February jobs report showed that owners are still planning to expand their workforce with a seasonally-adjusted 16 percent of owners planning to create new jobs in the next three months. Job creation plans were strongest in construction (net 42 percent) and manufacturing (net 28 percent). Along with creating new jobs, owners continued to increase employee compensation at a solid rate. In February, a net 31 percent reported higher compensation and a net 18 percent planned increases in the next few months. The labor markets are tight for both skilled and unskilled workers. Thirty-one percent of owners reported openings for skilled workers, and 14 percent reported openings for unskilled labor. ■
Make Your Reservation Today Enjoy lunch with wine service
$65 per person
Seating is limited and advance ticket purchase is required. Purchase your tickets online at www.impowerwomen.org
Thursday, May 9th at Corral de Tierra Country Club 11:00 am—12:00 pm
Registration & Wine Reception
12:00 pm—1:30 pm
Lunch & Program
Lessons in Disguise
Guest Speaker: Adele Fresé, City of Salinas Police Chief Event Emcee: Drea Blackwell, KSBW
Featured Nonprofit: Women’s Leadership Council, CSUMB Call to Action: Please bring lightly used professional clothes to the luncheon to donate to Otter Outfitters
Media Sponsors: Monterey Herald Richard Green Photography Supporting Sponsors: ANNIEGLASS Geisler3 Hana Kong
Other sponsorships available. Visit www.impowerwomen.org
Professional Services The Salinas Valley Chamber of Commerce encourages you to shop and dine at local businesses. For every $100 spent at locally owned businesses, $73 stays in the community.
Letâ€™s keep the Salinas Valley strong â€“ shop at these member businesses.
Computer Software and Moxxy Marketing (831) 975-5002 Services Adaptive Information Systems (831) 644-0300 Alvarez Technology Group (831) 753-7677 DeVeera Technology (831) 240-4703 L & M Computers (831) 422-0300 ZAG Technical Services (831) 424-1806
Marketing Services The Gennis Agency (831) 422-6636 Coastline Marketing Group (831) 789-9320
Geisler3 (831) 372-6789
PageOneDesign (831) 917-2118 TMD Creative (831) 758-6425
Copy Machines & Supplies
Brian Finegan & Michael J Harrington (831) 757-3641
Law Offices of Bruce Julian Kitchin (831) 424-0777
Chilton and House Attorneys (831) 759-9000
Legal Services for Seniors (831) 899-0492
Cypress Coast Law (831) 424-1764
Fenton & Keller (831) 373-1241 DataFlow Business Systems (831) 759-8760 Granberg Law Office (831) 422-6565 MBS Business Systems (831) 758-1048 Herendeen & Bryan (831) 758-8282 Quality Toner Products (831) 641-7363 JRG Attorneys at Law (831) 754-2444 Smile Business Products (831) 758-1474 Knowmad Law (831) 275-1401 Attorneys Alternative Dispute Resolution APC (831) 783-0779
Law Office of Thomas S. Worthington (831) 758-1688
Moncrief & Hart, PC (831) 759-0900 Noland, Hamerly, Etienne & Hoss (831) 424-1414 Ottone Leach & Ray (831) 758-2401 Patane Gumberg Avila (831) 755-1461 T. Bob Uemura, Attorney At Law (831) 424-9330 Thomas Vogele & Associates, APC (831) 272-6676
A Special Thanks to Our Strategic Partners and Stakeholder Members
New Member Profiles Express Employment Express Employment of Monterey County provides a full range of employment solutions in a wide range of areas, including professional, commercial, and administrative. We are a locally owned franchise invested in the success of Monterey County businesses. We also have the financial backing of one of the top staffing companies in the U.S. and Canada. Contact us today and ask how we can help with your HR challenges! 831-920-1857 • ExpressPros.com
Greenbelt Labs Greenbelt Labs is coming to Salinas, CA. It is the newest in a long line of analytical labs spanning North America. Using the latest analytical and automated robotic equipment, Greenbelt Labs strives to offer top tier customer service, accuracy, and efficiency so our customers can move forward without lengthy wait times. As a resident of Salinas, our CEO is committed to serving the local community and building customer relationships by earning them one at a time. For more information please contact: Admin@greenbeltlabs.com • GreenBeltLabs.com
Monterey Bay Economic Partnership Monterey Bay Economic Partnership (MBEP) is a regional nonprofit, membership organization consisting of public, private and civic entities located throughout the counties of Monterey, San Benito and Santa Cruz. Founded in 2015, our mission is to improve the economic health and quality of life in the region. We are fulfilling our mission by taking an active role in topics concerning transportation, housing, workforce, and technology. (831) 915-2806 • MBEP.biz
Progressive Packaging Group Progressive Packaging Group is an agricultural packaging company independently owned and operated out of Salinas, CA with strong local roots and a commitment to evolving the packaging industry. Founded by Kathy DeVoy, Eli Riddle, and Barry Johnston in 2008, we have grown our operations to include facilities in Santa Maria, Oxnard, El Centro and Yuma, Arizona. Founded on the principles of adaptability, flexibility, and respect, we pride ourselves on our forward thinking and commitment to evolving our business in ways that best suit our customers. PPG provides superior service, innovative packaging, and a highly effective inventory tracking system which is essential in finding the most affordable and practical packaging solutions to meet your needs. 831-975-4701 • PPGPackaging.net
Quality Toner Products Quality Toner Products is a local company serving the Tri- County area. We feature the highest quality of environmentally friendly re-manufactured toner cartridges from award winning Clover Imaging Group which has 3-year warranty and a 99.6% success rate, which is an excellent alternative to the OEM product. We offer all brands of toner cartridges for all printers, faxes and copiers. We do not require a minimum order and all orders are shipped freight free. Call us today at (831) 641-7363. ChuckBelnick@QualityTonerProducts.com
The Sanctuary Beach Resort The Sanctuary Beach Resort invites guests to experience a luxurious seaside escape overlooking Monterey Bay. Nestled amid 19 acres of environmentally protected sand dunes, The Sanctuary provides travelers with inspirational ocean views, pool and spa, and the world-class Salt Wood Kitchen and Oysterette. The Sanctuary Beach Resort is the perfect setting for corporate retreats and special occasions. Please call 831-883-9478 for more information about hosting your next company outing or social gathering at our resort. TheSanctuaryBeachResort.com
Tierra at Monte Bella Century's newest community in Salinas, Tierra at Monte Bella, offers five distinct 1- and 2-story floorplans that range in size from 1,543 - 2,853 sq. feet. Tierra is in the heart of the Salinas Valley, an emerging hub of agriculture technology and renowned for its natural beauty and spectacular landscapes. Located just 15 miles inland from Monterey Bay, Tierra at Monte Bella provides residents all the shopping, restaurants, activities and culture the area has to offer. CenturyCommunities.com
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Social Security Benefit Planning
by Bill Hastie, MBA
In the handful of years prior to one’s desired retirement, little is more important than detailed retirement income planning. In a nutshell, this involves projecting current and future income needs, and matching that up with all sources of retirement income. Relevant considerations include cost of living adjustments, tax ramifications, required minimum distributions and expected longevity to name a few. Another consideration that is often overlooked and misunderstood is the planning for receiving social security benefits. Social security is designed to provide older Americans and disabled persons with a portion of the financial support needed to cover essential retirement expenses. The program offers benefits such as lifetime income which is indexed for inflation, certain spousal and survivor benefits and preferential income tax treatment. We cannot nearly address social security benefits planning in its entirety in this presentation, but we will address some of the key issues to consider. The Timing of Benefits When to begin receiving social security benefits depends on a number of factors, but primarily on when full or partial retirement is anticipated. Full retirement age (FRA) is the age when the retiree may begin to receive the entirety of the monthly benefit they are eligible for based on their lifetime employment record. That amount, known as their primary insurance amount (PIA), is the monthly benefit due at FRA (to obtain your PIA, download your current benefit
statement at ssa.gov/myaccount). Other timing options are to begin receiving benefits at age 62 (early filing) at a reduced benefit level, or delay benefits until age 70 and increase the monthly benefit by as much as 76%. Early filing may impact the options that family members may be eligible for, so the decision of when to begin benefits should be coordinated with the overall retirement income plan in mind. Working During Retirement It is not uncommon for retirees to seek a “fun” or part-time job after leaving their primary employment, but it may cause some portion of monthly benefits to be withheld. For example, if the retiree is under their FRA for the full year, their monthly benefit is reduced by $1 for every $2 earned above $17,640 (annual limit, or $1,470 per month). In the year during which FRA is reached, monthly benefits are reduced by $1 for every $3 earned above $46,920 (annual limit, or $3,910 per month). In the month during which the retiree reaches their FRA and beyond, there is no reduction of social security benefits. Overall Retirement Income Planning Social security benefits are a major part of most retiree’s overall retirement income plan. But there are no easy answers and no rules of thumb at should be considered. Many financial advisors use sophisticated software applications to determine the most efficient way for an individual or couple to begin to receive benefits. Using these applications, the advisor can provide guidance for obtaining maximum lifetime benefits, taking into consideration potential benefit reductions, the taxation of benefits, and spousal benefits in the case of death or divorce. ■ Bill Hastie, MBA is the Founder of locally-owned Hastie Financial Group. If you would like to discuss your personal or company’s investment needs, please contact Bill at William.Hastie@lpl.com
Loaves, Fishes and Computers cut a ribbon to celebrate ten years since their founding. Congrats!
Can you spot the baby who helped Leo Melgar cut the ribbon at Central Coast Entertainment?
Can you spot the baby (different baby) who helped cut the ribbon at Monarch Orthodontics? No, the Chamber is not including a free baby with each ribbon cutting.
Nick Del Pozzo Nick Del Pozzo was born and raised in Carmel, CA, graduating from Carmel High School and then Cuesta College in San Luis Obispo. Following in the footsteps of both his father and grandfather, he launched his career by joining the Wholesale Beverage Industry as a Chain Sales Account Representative within a high-profile California market spanning from San Francisco to Napa. After the birth of his first daughter, Tianna, Nick and his wife, Michelle, moved back to the Monterey Peninsula where he has enjoyed working in the Monterey County Tourism and Hospitality Industry for more than 20 years. Nick has held management
The Leadership Monterey County class recently enjoyed a day learning about Hospitality and Tourism in Monterey County. The day began with a visit to Portola Hotel & Spa, where we met with Janine Chicourrat, General Manager of Portola Hotel & Spa, and Tammy Blount-Canavan, President & CEO of Monterey County Convention & Visitors Bureau. We discussed the role and funding of the MCCVB, and the important effort of Sustainable Moments, an initiative that encourages travelers to enjoy Monterey County responsibly. Afterwards, the class participated in a tour of the newly renovated Monterey Conference Center. Doug Phillips, Conference Center General Manager, spent time with the cohort describing the venue’s capacity, the types of events scheduled in the coming year and the success of the Conference Center since its re-opening in January of 2018. The next stop of our day took us to Cannery Row, where we enjoyed
positions ranging from Sales Manager to Associate Director of Sales at a variety properties and resorts, most recently spending nearly 10 years at the Hyatt Regency Monterey before returning to where he started his hospitality career at Quail Lodge and Golf Club. Nick has currently held the Associate Director of Sales and Marketing role at Quail Lodge since August 2018. Nick has been married to his wife, Michelle, for 22 years and share two beautiful daughters, Tianna (21) and Ashlen (11). In his free time, he enjoys being with his family and doing a variety of activities from camping, boating, fishing and traveling to, of course (when time permits), a few rounds of Golf at his favorite course Quail! Nick joined the Salinas Chamber of Commerce Ambassadors Committee to volunteer and help the Chamber further accomplish its mission to serve the community within we work and live. ■
a delicious lunch hosted by InterContinental The Clement Monterey. John Turner, General Manager, discussed the history of the hotel and Cannery Row. Gary Cursio from the Monterey County Hospitality Association shared the role of MCHA and the challenges to recruiting and maintaining a workforce in the hospitality industry. The day ended with a tour and discussion at the Pebble Beach Company, where we met with General Manager Julie Weaver and learned about the newly constructed employee housing and water solutions at the resort. We had a lovely tour of the property and some of the accommodations on site, including the Lodge at Pebble Beach and Casa Palmero. The group is looking forward to the next class, where we will learn about Defense and Security in Monterey County. ■
Focus on Non-Profits Monterey Zoo Monterey Zoo is the destination in Monterey County for families to spend fun, safe, educational and quality time together observing exotic animals. Monterey Zoo’s animal trainer, Charlie Sammut strives to create a place that residents and travelers enjoy visiting, but his ultimate goal is to create a habitat that benefits the animals. He made his living in film and television, but now he focuses on
Elephants in Monterey County? Yes! See them at the Monterey Zoo.
managing and operating the Monterey Zoo. The Board of Directors for this non-profit effort hopes the zoo will contribute greatly to addressing youth, drug and gang issues that continue to have a negative influence on all residents and businesses in our communities. To do this, Monterey Zoo Youth Programs will offer kids an alternative place to spend their time and energy, while learning how to enable staff to concentrate on youth programs. be productive and caring stewards to our planet. Assistance is needed to help Monterey Zoo reach Originally, the property was designed to house Sammut’s its ultimate goal. Private and business sponsorship animals that were not being filmed on movie sets. The opportunities are available and needed to help finish transformation into a world class zoological experience this project. ■ is being accomplished as economically and efficiently as possible, but there are still great strides to make. The Monterey Zoo invites you to its next Funding of course is the highest hurdle. Dependent special event on Sat., Sept. 28th from 5-10pm solely on donations from individual and business The theme will be 007. Guests can purchase tickets sponsors, all animals are achieving much larger and now by calling the gift shop at (831) 455-1901. mentally stimulating zoological exhibits, while new For more information, please visit MontereyZoo.org. barriers will one day afford families the ability to roam the property freely for hours. New improvements will
Non-Profit Calendar Apr. 5:
5th Annual Casino Night 6 to 10 pm Salinas Valley Fairgrounds- Orradre Building, King City Non-Profit: Rancho Cielo 831-444-3533 • RanchoCieloYC.org Online Registration Closes for Race for Open Space 12pm Online Non-Profit: Big Sur Land Trust 831-625-5523 BigSurLandTrust.org
Cowboys, Cocktails, Rhythm & Rhymes: Cowboy Poetry 4:30pm 241 South Main St. Non-Profit: California Rodeo Inc. 831-775-3100 • CARodeo.com
Noche Bohemia Art, poetry, music, dance 7:00 – 9:00pm 940 N Main St Non-Profit: Youth Orchestra of Salinas 831-204-0617 NocheBohemiaDeSalinas@gmail.com
Race for Open Space 2.5K, 5K, and 10K Trail Run/Walk 6 AM-11 AM 497 Monterey Salinas Hwy (117th Drive) Non-Profit: Big Sur Land Trust 831-625-5523 BigSurLandTrust.org Twilight Cycling 5:30-7:30 pm 1025 Highway 68, Monterey Non-Profit: Sports Car Racing Association of the Monterey Peninsula 831-242-8205 • WeatherTechRaceway.com
14th Annual Seniors' Prom "Aloha Salinas" 6:30-10:00 pm Salinas Community Center Santa Lucia Room- 940 N. Main St. Non-Profit: Salinas Senior Center 831-757-6030 • SSC@SalinasSeniorCenter.org
Take It Outside Salinas! / ¡Vamos Afuera Salinas! 10 AM - 2 PM 1395 Nogal Dr. Non-Profit: Big Sur Land Trust 831-625-5523 • BigSurLandTrust.org
Luncheon- Guest Speaker: Adele Frese 11am-1:30pm 81 Corral de Tierra Rd IMPOWER (831) 905-6471 IMPOWERWomen.org
YOSAL Spring Concert 2:00 – 4:00pm 411 Central Ave Youth Orchestra of Salinas 831-756-5335 InfoYosal.org
- May 9:
Ticket Sales"Wine Lovers" Drawing 40 Clark St., Suite C Meals on Wheels of the Salinas Valley 831-758-6325 MOWSalinas.org
Give Back To Your Community! APRIL 2019
U.S. Adds 20,000 Jobs Last Month, Fewer Than Expected By Amrith Ramkumar, Jessica Menton, The Wall Street Journal
Economists surveyed by The Wall Street Journal had expected the Labor Department to report employers added 180,000 jobs last month while the unemployment rate ticked down to 3.8%. Key Takeaways from the February Jobs Report A weak headline number has investors worrying again about a slowdown in economic growth. While some note long-term hiring trends remain strong, others are worried the
much softer-than-expected increase of 20,000 jobs in February could signal more tepid data points lie ahead. That trend could give the Fed more room to be patient with interest rates but also hurt stocks and other risk assets. The weak sectors of the job market last month included construction, mining and retail, while the health-care and business services industries created jobs in February. Despite job creation stalling last month, figures from the two prior months were revised higher. Wages grew at the fastest pace in nearly a decade in February, rising 3.4% from a year earlier. Still, some analysts don’t think that increase will translate to an inflation surge that forces the Fed to change its patient approach. ■
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California Tourism Update
California has the nation’s largest tourism industry with more than 100 tourism business districts. The following statistics reported by Visit California demonstrate the significant impact of tourism on the state’s economy. This data represents activity in 2017 (most recent data available):
• Travel spending in California increased 4.8% during 2017 to $132 billion. That spending directly supported about 1.14 million jobs, an increase of 3.1% from 2016. • Travel-generated tax revenue topped $10.9 billion, an increase of 2.8% over 2016. • Hotel room occupancy rates reached a record average of 80.8% in August 2018, which translates to 76.8% year to date. • $6 of every $10 spent at local visitor destinations was attributable to residents of other states and countries. • The gross domestic product (GDP) of the California travel industry represents about 2.5% of the total GDP of the state. ■
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Don’t Let New Federal Overtime Regulations Confuse You by Sharilyn Payne, Fenton & Keller
You may have heard about some recent proposed changes to the overtime regulations under the Fair Labor Standards Act (FLSA). Under those regulations, proposed on March 7, 2019, an individual must earn at least $35,308 a year to qualify as an exempt employee who is not entitled to overtime. California employers should not confuse this new proposed federal regulation with California law. The FLSA establishes federal wage and hour laws and is enforced by the Department of Labor. The California Labor Code and wage orders establish state wage and hour laws and are enforced by the Division of Labor Standards Enforcement. California laws are far more protective of employees than the federal law, and when there is a conflict between the two, employers must follow the law that is more advantageous to employees. Under California law, for a position to be classified as exempt, it must pay a threshold salary of two times the state minimum wage for full time employment. Under the current minimum wage, that means that employers with 25 or fewer employees must pay a salary of $45,760, and employers with 26 or more employees must pay a salary of $49,920. Both amounts are far more than the $35,308 threshold set forth in the proposed federal regulations, and will increase again in 2020 when the California minimum wage increases. Under federal and California law, in addition to the threshold salary, exempt positions must meet a duties test, which varies with the type of exemption. The key exemptions are the executive, administrative, and professional exemptions. The duties test under California law is stricter than under federal law. For example, under federal law, to meet the executive exemption, the primary duty of the position must be managing the enterprise or a recognized department or subdivision
of the employer, and the employee in the position must customarily and regularly direct the work of at least two or more other full-time employees, and must have authority to hire or fire other employees or make recommendations in this area. Under California law, the employee in an executive exempt position must have these duties, but must engage in them more than half of the employee’s work time, and must customarily and regularly exercise discretion and independent judgment. If a position does not meet the exemption requirements and overtime must be paid, federal and California laws differ. Under federal law, nonexempt employees must receive overtime at time-and-a-half for all hours worked over forty in a workweek. Under California law, in most industries, non-exempt employees must receive overtime for all hours worked over eight in a workday or forty in a workweek. The rate for all hours worked over eight up to twelve in a workday, and the first eight hours worked on the seventh consecutive day in the workweek, is time-and-a-half. The rate goes up to double time for hours worked in excess of twelve in a workday, and in excess of eight on the seventh consecutive day in the workweek. Because the workday and workweek determine when overtime has been worked, and when the seventh consecutive day falls, it is important for California employers to define the workday and workweek. The bottom line is that the change in the threshold salary for exempt employees under the federal regulations does not alter California law, and California employers must be careful when classifying positions as exempt or face liability for unpaid overtime. ■ Sharilyn Payne is a lawyer with the Fenton & Keller law firm in Monterey. This article is intended to address topics of general interest, and should not be construed as legal advice. For more information, please visit www.fentonkeller.com
Member News Sue Storm Promoted Pacific Valley Bank (PVB) is pleased to announce that Sue Storm has been promoted to Market President. Anker Fanoe, CEO, announced the promotion after a recent Board of Directors meeting. Sue joined Pacific Valley Bank in January 2011 as a Senior Vice President of Business Banking. Sue has deep roots within the community. She was born and raised in the Salinas Valley and her Sue Storm, Pacific Valley Bank agricultural roots go back five generations. In addition to her busy work schedule, Sue is also a tireless advocate for the community. She is an active volunteer with Cal State University Monterey Bay, the California Rodeo, IMPOWER, Junior Achievement of Northern California, Rotary, and more.
Big W Celebrates 40 Years Big W Sales was founded by Cliff Wunsch in 1979 in Stockton, CA. Unfortunately, Cliff passed away in 2003, but his values and vision for our company are alive and well. Today, the company is run by Cliff’s two sons – Bud Wunsch, who serves as the company President and Ed Wunsch – who serves as the Vice President. Cliff’s wife, Ann, who has been involved with the company from the on-set, is still active in the company today.
Takikawa at Cal Coastal California Coastal, a non-profit financial development corporation that provides both technical training and financing to family farmers and small businesses, is pleased to announce the retirement of long-time President, Karl Zalazowski; and, the appointment of Lee Takikawa as its new President and CEO. Lee most recently worked for the United States Department of Agriculture, Rural Development Agency, as a Business and Cooperative Specialist for
Lee Takikawa, California Coastal
the California State Office. Lee has deep roots in the Monterey Peninsula area as he grew up here and is very pleased to return home.
Earth Day Mixer Presenting:
April & May 2019 Apr
Government Relations Committee (GRC) Meeting
11:30 AM - 1:00 PM • Chamber Office
Earth Day Mixer
5:00 PM - 7:30 PM 115 Monterey-Salinas Hwy.
Ambassador Committee Meeting
Donations & silent auction will benefit The Lincoln School Healthy Kids Program. To donate to the silent auction contact Tabitha at firstname.lastname@example.org
12:00 PM - 1:00 PM • Chamber Office
Lunch and Learn – Obtaining the Perfect Intern
• • • • •
Thur., April 18TH, 5-7:30PM McShane’s Landscape Supply 115 Monterey—Salinas Hwy. (831) 455-1876 FREE Admission ( Non Profit Donations Accepted)
RSVP at SalinasChamber.com For questions or sponsorship, call Steve at (831) 455-1876 or via email: email@example.com
Connect at Lunch
11:30 AM - 1:00 PM Chamber Office
Connect at Lunch – Flying Artichoke Restaurant
12:00 PM - 1:00 PM 40 Mortensen Ave.
Government Relations Committee (GRC) Meeting
11:30 AM - 1:00 PM • Chamber Office
Join us for great food and great connections. Your cost is your lunch. 40 Mortensen Ave., Salinas 12-1 pm Wednesday, May 1st
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Proud to support the Salinas Valley Chamber of Commerce It means Ready to Help RabobankAmerica.com/ReadyToHelp
Food & Agriculture