july 22-august 4, 2014 section a

July 22-August 4, 2014 lbbusinessjournal.com

HealthWiseChoosingThe Right

Hospital ForYour Child’s

Surgery See Page 22

The College

Of Business

Administration

At CSULB

Developing

And Strengthening

Alumni Connections

See Page 4

Long Beach Business Journal2599 E. 28th Street, Suite 212Signal Hill, CA 90755-2139562/988-1222 • www.lbbusinessjournal.com

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

New Mayor, Councilmembers Sworn InCalifornia Attorney General Kamala Harris administers the oath of office toRobert Garcia on July 15 as he assumes the office of mayor of Long Beach.(Photograph by the Business Journal’s Thomas McConville)

The Inaugural event photo spread – Pages 12 and 13

Publisher’s Perspective: Garcia and the city’s poverty level – Page 23

City BudgetFoster Cautions Newly ElectedOfficials That ‘Freight Train’ Coming � By GEORGE ECONOMIDES

Publisher

I t was an ominous warningexpressed by outgoing Long

Beach Mayor Bob Foster duringhis early July press conference onthe proposed fiscal year 2014-15city budget. The big question fortaxpayers is, will the new mayorand city council heed Foster’swarnings and suggestions?The proposed budget must be

approved in September, and goesinto effect on October 1. A seriesof city council briefings and pub-lic hearings have been scheduled

prior to a vote on the budget. Citycouncilmembers are expected tohave at least one meeting withintheir district to discuss the budgetwith constituents. Contact yourcouncilmember office for moredetails (refer to map on Page 5listing city council information).“While we have weathered a

very great storm with the finan-

Phone BillIn Telecomm Industry, Surcharges Abound, With Little Explanation� By BRANDON FERGUSON

Staff Writer

I f it’s been a while sinceyou’ve taken a good, long

look at your office phone bill,you might want to do it now,unless, of course, you’re sensi-tive to sticker shock. You’llprobably be disheartened to finda laundry list (or lists) of mys-tery fees. After doing a little math on our

own bill for the May-June 30-daybilling cycle, we here at theBusiness Journal were shocked todiscover that of our total $672.04bill – which covers 11 phonelines and FiOS Internet and TV –22.6 percent was for taxes, sur-charges and fees, or a total of$151.74. And there is no utilityusers tax (UUT) in Signal Hill,

where we are located (the LongBeach UUT is 5 percent).Business Journal Publisher

George Economides said that22.6 percent of the bill for fees,taxes, surcharges, etc., “seemedextreme, especially since there isno explanation to determine howthe fee is calculated. Verizon’s

service is good, but I’d at leastlike to know what we’re payingfor,” he said. “No matter whichphone company a business uses,the fees associated with the billshould be described precisely.”On the bill, these charges were

broken down into two categories:

Port TruckersDrivers Agree To ‘Cooling Off’Period; ManyOppose UnionInvolvement� By BRANDON FERGUSON

Staff Writer

F or five days during theweek of July 7, striking

truck drivers at the ports of LongBeach and Los Angeles formedpicket lines causing traffic andcargo delays. Dozens of long-shore workers walked off the jobin a sympathy strike on July 8but were ordered back to workhours later after a federal arbitersaid that by leaving their poststhe workers had violated theircontract.At issue were claims that port

drivers working for three compa-nies – Green Fleet Systems,

‘Job Killers’Bills That TargetBusinessesAdvance InSacramento � By SAMANTHA MEHLINGER

Staff Writer

S everal bills labeled “jobkillers” by the California

Chamber of Commerce(CalChamber) are set for hearingsin the State Senate Committee onAppropriations on August 4,including legislation mandating

CybersecurityThe Vault For The New Millennium� By MICHAEL GOUGIS

Contributing Writer

B ank security officials nolonger lay awake at night,

worried about bad guys with astethoscope stealthily spinningthe dials on the vault lock, listen-ing for the tumblers to fall intoplace. Nowadays, the security chiefs’

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1_LBBJ_July8_SectionA_LBBJ MASTER LAYOUT 7/21/14 1:40 PM Page 1

INSIDE THIS ISSUE2 Long Beach Business Journal July 22-August 4, 2014

3 Newswatch3-Long Beach City Hall News In Brief3-Long Beach City Budget, continued from Page 15-Mayor And City Council District Map, Contact Info8-Bill Target Businesses, continued from Page 110-Truck Drivers, continued from Page 1

11 Real Estate11-Planning Commission Gives Green Light On Projects

12 Swearing-In Ceremonies12-Pictures Of And Comments By L.B. Elected Officials

14 Banking14-Cybersecurity, continued from Page 116-Update On Dodd-Frank

18 Analyzing The Phone Bill18-Surcharges Abound, continued from Page 1

20 In The News20-Memorial Again Named One Of Nation’s Top Hospitals21-Nino’s Ristorante Italiano In Bixby Knolls Turns 56

22 PerspectiveRealty Views Federal Reserve Cites Problems With Housing Market By Terry RossEffective Leadership How To Build And Maintain Trust By Mick UklejaHealthWise Choosing The Right Hospital For Your Child’s Surgery By Dr. Fombe NdiforchuTrade And Transportation Freight From Farm To Market By Tom O’BrienPublisher’s Perspective Addressing Local PovertyConcerns: Mayor Garcia And Other Officials Should FocusOn Education, Not Minimum Wage By George Economides

Section BFocus On The City Of Carson

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NEWSWATCHJuly 22-August 4, 2014 Long Beach Business Journal 3

City ConsidersAdditional GrantFunds To PrepareFor Bioterrorism

� By BRANDON FERGUSON

Staff Writer

The Long Beach Department of Healthand Human Services (DHHS) is recom-mending at the July 22 meeting that thecity council approve an amendment to anexisting grant agreement between LongBeach and the County of Los Angeles toprovide funding for bioterrorism prepared-ness and public health infrastructure devel-opment. The amendment would provideadditional funding of $919,328 for thePublic Health Emergency Preparedness(PHEP) and Cities Readiness Initiative(CRI) Programs, bringing the total grantamount to $2,817,484.The Federal Centers for Disease Control

and Prevention (CDC) has awarded thecounty funding for bioterrorism prepared-ness and other health emergencies since2002. In August 2012, the city authorizedan agreement with the county in theamount of $927,437. The county subse-quently amended the agreement to providean additional $970,719. In a letter to the city council, DHHS

explained, “This funding will allow the cityto participate in a comprehensive regionalrisk hazard and assessment; develop astrategic plan to guide annual and long-termpreparedness; enhance testing capacity ofbiological and chemical agents; and con-tinue training and exercise programs thatinclude issues related to aerosolized biolog-ical agent attacks, communicable diseasecontrol, pandemic influenza and terrorism.” Funding is also expected to provide for

community educational support for familydisaster preparedness and related biologi-cal and natural disasters.

Long Beach City HallNews In Brief

� By BRANDON FERGUSON

Staff Writer

Vice Mayor Elected – At the July 15city council meeting, 2nd DistrictCouncilmember Suja Lowenthal waselected to the position of vice mayor priorto the ceremonial swearing in of the newcouncilmembers. The process of electingthe vice mayor began with Mayor RobertGarcia asking for nominations from thecouncil. Each councilmember was allowedto make a nomination and no second wasneeded. Fourth District CouncilmemberPatrick O’Donnell announced his nomina-tion for 8th District Councilmember AlAustin, followed by a nomination forLowenthal from 6th DistrictCouncilmember Dee Andrews. Lowenthalwon the election with “yes” votes from the5th District’s Stacy Mungo, the 3rdDistrict’s Suzie Price, the 1st District’sLena Gonzalez and Andrews. Followingher election, Lowenthal took a moment to

welcome the new councilmembers. “Thisis an exciting time and I’m really lookingforward to the new councilmembers whohave joined us, and becoming a new teamtogether,” Lowenthal said.Health Department Recognized – The

Long Beach Health Department was recog-nized for its use of social media to engagethe community, according to a July 11 pressrelease. Honored with the grand prize in thepublic health professional category by theAmerican Public Health Association(APHA), the department has also beenselected to present its social media strategiesduring the national public health conventionthis year. In a statement, former Mayor BobFoster acknowledged the work of the depart-ment. “Our health department promotes,protects and preserves public health through-out our community, and I am very pleasedthat our health department received thisnational recognition,” Foster said. The healthdepartment’s social media outreach includesa video on the department’s YouTube channelas well as posts on the department’sFacebook, Twitter and Instagram sites. Thehealth department will present its socialmedia strategies during the APHA’s annualmeeting in New Orleans in November.Council To Consider New Budget –

Tonight, the Long Beach City Council con-siders a staff recommendation to discuss anoverview of the proposed FY15 budget.The city manager released the budget inearly July to former Mayor Bob Foster. Thecurrent council has until mid September,


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NEWSWATCH4 Long Beach Business Journal July 22-August 4, 2014

when a vote will be conducted to approve the final budget. Real Estate Ordinance – Tonight the city council will con-

sider a recommendation to declare an ordinance amending themunicipal code. The amendment would require anyone sellingreal estate to the city for $1,000,000 or more to disclose theidentity of all third party finders and brokers entitled to com-pensation from the seller. Mayor Bob Foster, who at the July 1meeting expressed a desire for more transparency in city realestate transactions, proposed the amendment. “In my tenurehere, there’s been a number of very large real estate transac-tions that the city may be involved in and one of the concernsI’ve come up with is that there’s not adequate transparency,”Foster said. “[This ordinance] is really a way to try to makesure that with any transaction going forward there is completetransparency.” At that meeting, the council voted to direct CityAttorney Charles Parkin to draft the amendment. Parkin is rec-ommending the city adopt the amendment tonight.Uptown Property and Business Improvement District –

The council will consider at tonight’s meeting a recommenda-tion to approve a $100,000 transfer from the 9th District’s one-time infrastructure fund to the Uptown Property and BusinessImprovement District (Uptown PBID). Property and businessowners voted to establish the Uptown PBID in October 2013to revitalize business corridors and the surrounding commu-nity along Atlantic Avenue from Market Street to ArtesiaBoulevard and along Artesia Boulevard from Atlantic Avenueto Orange Avenue. Revitalization measures include security,maintenance, marketing and economic development. Cherry Avenue Improvement – The Long Beach

Department of Public Works is recommending the city coun-cil adopt plans at tonight’s meeting to improve Cherry Avenuebetween Ocean Boulevard and Pacific Coast Highway. Ifapproved, the council will award a contract to AlabassiConstruction and Engineering of Riverside, not to exceed$2,127,499. The work will include replacing damaged curbs,sidewalks, alley entrances and gutters as well as the trimmingor shaving of tree roots. The plan also calls for resurfacing ofpavement, addition of bus pads and traffic striping. Oldasphalt will be recycled into new concrete or used as basematerial on other street projects. The total project cost is esti-mated at $2,500,000, of which $1,550,000 is budgeted in thecity’s transportation fund. An appropriation increase of$950,000 is being requested in the transportation fund. Thereis no estimate on when the work will begin.Artesia Boulevard Improvements – Tonight the depart-

ment of public works is recommending the council adopt aplan to improve Artesia Boulevard between the west city limitand Butler Avenue. Public works also recommends the coun-cil award the contract to Sully Miller Contracting of Brea fora total not to exceed $965,509. The rehabilitation project willinclude filling cracks in pavement, street resurfacing, replac-ing damaged sidewalks and curbs and installing bus pads. Thestreet will be resurfaced with asphalt containing up to 15 per-cent recycled material. Landscape Architectural Services – Tonight the city coun-

cil will consider a recommendation authorizing City ManagerWest to enter into contracts with four companies in order toprovide as-needed landscape architectural services for a two-year term. The recommendation by the department of publicworks includes an option to extend the term for three addi-tional years funded by an aggregate amount of $3,000,000 forthe entire term. The four recommended companies are: AHBELandscape Architects of Los Angeles, Hirsch & AssociatesInc. of Anaheim, Mia Lehrer & Associates of Los Angeles andRJM Design Group of San Juan Capistrano. The companies’services are required for a range of capital projects includingdesign services for new parks, street landscaping and improve-ment of existing open spaces.New Police Vehicles – Tonight the council will consider

awarding a contract to Chevrolet of Watsonville for the pur-chase of four two-wheel drive Chevrolet Tahoe police pursuitvehicles. The amount of the contract is not to exceed$130,365. The contract, if approved, will allow the option ofpurchasing an additional two-wheel drive vehicle not toexceed $32,591 for a total contract amount of $162,956.Childhood Lead Poisoning – Tonight the council will con-

sider accepting additional funding from the California

Department of Public Health totaling $94,781 for theChildhood Lead Poisoning Prevention Program (CLPP).According to a letter sent to the city council by the LongBeach Department of Health and Human Services, the cityfirst accepted $764,376 from the state for CLPP in October2013. In June 2014, the state issued a new agreement bringingthe total amount of funds available to $859,157. The letterexplained that CLPP focuses on children under six years ofage and performs outreach to parents, teachers and physi-cians. The program also ensures that a public health nursemanages cases of children stricken with lead poisoning.Funding also provides for physician services and homeinspections by a registered environmental specialist. One-Stop Career Providers – The council considers tonight

authorizing City Manager Patrick West to execute a contractwith One-Stop Career Center service providers. The contractincludes funding not to exceed $3,590,097 to support strategiesto provide training and employment services to residents. ThePacific Gateway Investment Network is responsible for admin-istering funds received by the city for job training programs.Recipients of the money include the Career Transition Center,Youth Opportunity Center and the Torrance Career Center.Additionally, Pacific Gateway provides funds to various com-munity-based organizations. City documents indicate organiza-tions including Cal State Dominguez Hills, Cal State LongBeach and Long Beach Memorial Center receive funding to pro-vide career training. City staff estimates the funding provided inthis contract will result in job training for hundreds of residents.Gas Pipeline Upgrade – Tonight the council considers

adopting plans to install a new gas main pipeline and regula-tor stations. The plan includes awarding a contract, not toexceed $2,441,016, to ARB Inc. of Lake Forest. The LongBeach Gas and Oil Department is requesting approval of theplan, which is intended to improve system integrity.According to a city document, funding for the project is bud-geted in the city’s gas fund. Construction is anticipated tobegin in August and be completed by February of next year.Disaster Preparedness Fair And Jazz Concert – On

Saturday, July 26, the Country Club Manor Associationpresents the Disaster Preparedness Resource Fair & JazzConcert at Scherer Park. The event, which will provideinformation on preparing disaster kits, developing an emer-gency plan and administering basic first aid, will featurebooths set up by the city’s police, health and fire depart-ments. The event lasts from 11 a.m. to 3 p.m. Scherer Parkis located at 4600 Long Beach Blvd. For more informationcall Gloria Bradley 626/818-8920. �

Developing AndStrengthening

Alumni ConnectionsCalifornia State University, Long Beach has

year by year become morecompetitive, receiving over80,000 applications annu-ally. Among the university’smany prestigious programs,the College of BusinessAdministration (CBA) pro-vides excellent educationaland career opportunities forits students. Now the CBAseeks to unite its ever-evolv-ing student and alumnibases by creating a bridge

for these groups to learn from one another andrealize their full potential. The College of Business Administration

Alumni & Friends network (CBA A&F) is thatbridge. With 43,500 alumni, the CBA family islarge and diverse. CBA A&F engages our alumnicommunity by supporting its professional needsand providing networking and business opportu-nities. Additionally, we invite friends of theCBA – broadly defined – to join our network.The CBA A&F mission is to maximize the value

of the CSULB degree by engaging alumni andfriends of the College of Business Administration inopportunities to develop personally and profession-ally, enhance each other’s business success, and sup-port CBA and students professional development.CBA A&F offers alumni resources and events,

and provides a platform for networking and jobplacement. The organization has three events peryear in addition to partnering with CBA studentclubs and organizations and CBA’s StudentCenter for Professional Development. Our advi-sory board members bridge classrooms andcareers by speaking at student organization eventson professional development topics. CBA A&Fmembers also volunteer as mentors for SCPD’sJunior and Corporate Mentoring programs.The Annual Kick-Off Mixer attracts 120+ alumni,

recruiters, students, and faculty in an informal andopen environment for members to get acquaintedand take advantage of networking opportunities. Falland Spring Speaker Events hosted by CBA A&F fea-ture presentations on a variety of topics to audiencesof students, faculty, and alumni. Former speakersincluded executives from UPS and Sketchers, as wellas entrepreneurs and social media experts.CBA A&F is a volunteer-driven organization.

Advisory board members organize events andserve as guest speakers and mentors. Because ofwhat the university has given us, we give back tocurrent students while strengthening alumni con-nections. We embrace diversity and flexibility,and we encourage you to join and find an area ofCBA A&F that matches your passion.(The College of Business Administration at Cal

State Long Beach is an AACSB accredited businessschool that provides undergraduates and MBAs withthe knowledge and skills necessary to be successful intheir careers and to propel the economic developmentof our region.) �

By Roney Bowles,District Manager,

ADP (HR/ComplianceDivision) and

President of CBA A&F

City Hall News In Brief(Continued From Page 3)

cial crisis, there is another very large storm brewing and thatis coming starting in 2017 all the way through to 2021,”Foster cautioned. “So the city council wisely rolled over thebudget surplus from last year to meet what are sure to behigher anticipated costs in the future.” But, he said, past council actions are not enough and that

much more needs to be done by the new mayor and coun-cilmembers because the “freight train” is on the tracks.“Unfortunately the nature of those costs and the magnitude

of those costs are such that that will be a very small piece ofwhat is necessary. So the good news is we’re on solid groundtoday; the bad news is that there is so much coming at the citythat I felt it incumbent upon me to recommend to the newcouncil and the new mayor some things that have to be lookedat, or should be looked at, starting now, to be able to meetwhat is going to be a, in my view, almost a freight train com-ing at the city largely due to the very positive notion that theState of California and the public employees’ retirement sys-tem are putting their system on an actuarially-sound basis.“They are going to try to basically put costs on their mem-

ber agencies so as within 30 years they will eviscerate theunfunded liability,” Foster continued. “That’s a sound princi-ple; it’s the right thing to do. Unfortunately it will start send-ing costs to the City of Long Beach beginning 2016 or 17 . .. and they will increase every year and pancake on top of oneanother until 2021 in which they will wind up being morethan $35 million a year in ongoing cost.”Foster has been widely credited with keeping the city fis-


Long Beach Proposed Budget(Continued From Page 1)


THE LONG BEACH MAYOR AND CITY COUNCIL CONTACT INFORMATION

E-mail: [email protected]/570-6918

BRIAN MINEGHINOCHIEF OF STAFF

BRENDA CALOCAOFFICE MGR/SCHEDULER

MARK BLOESERFIELD DEPUTY

ALLISON GALLAGHERCOMMUNICATIONS

SPECIALIST

4TH COUNCIL DISTRICTPATRICK O’DONNELL


MICHAEL CLEMENTSCHIEF OF STAFF

ALLISON ANDERSONFIELD DEPUTY

HEIDI WIERSMAFIELD OFFICE COORDINATOR

District Office2760 STUDEBAKER RD

562/570-5555

5TH COUNCIL DISTRICTSTACY MUNGO


SHAWNA STEVENSCHIEF OF STAFF

MARINA ESCOBEDOFIELD DEPUTY

TED WILLIAMSSTRATEGIC INITIATIVES AND

COMMUNICATIONS DIRECTOR

JOHN COMFORTSPECIAL LIAISON

District Office6509 GUNDRY AVE.RELOCATING TO OLD

FIRE STATION 12

9TH COUNCIL DISTRICTREX RICHARDSON

E-mail: [email protected]/570-6685JONATHAN KRAUS

CHIEF OF STAFF

AMY TOPETEFIELD DEPUTY

MELODY NGAUE-TU’UHOLOAKIFIELD DEPUTY

HEATHER MORRISONCOMMUNICATIONS DEPUTY

ANTHONY GARCIALEGISLATIVE INTERN

District Office5641 ATLANTIC AVE.

562/570-1326

8TH COUNCIL DISTRICTAL AUSTIN


RAY POKCHIEF OF STAFF

CYNTHIA VALENCIACONSTITUENT SERVICES REP

District Office2125 SANTA FE AVE.

562/570-4461

7TH COUNCIL DISTRICTROBERT URANGA


SILISSA URIATE SMITHCHIEF OF STAFF

STEFAN BORST-CENSULLOLEGISLATIVE DIRECTOR

FRANCISCO DAVILAFIELD DEPUTY

ABIGAIL MEJIAPART TIME ADMIN AIDE

1ST COUNCIL DISTRICTLENA GONZALES

E-mail: [email protected]/570-6684BROC COWARDCHIEF OF STAFF

MARK MAGDALENOFIELD DEPUTY

HEATHER BLACKMUNADMINISTRATIVE ASSISTANT

2ND COUNCIL DISTRICTVICE MAYOR

SUJA LOWENTHAL

E-mail: [email protected]/570-6816JOHN EDMONDCHIEF OF STAFF

TONYA MARTINLEGISLATIVE ANALYST

KIMBERLY DODSONADMINISTRATIVE ANALYST

6TH COUNCIL DISTRICTDEE ANDREWS

E-mail: [email protected]/570-6300JULIE MALEKICHIEF OF STAFF

KRISTINA DUGGANFIELD DEPUTY

RICKY DOCKERYBUSINESS LIAISON

ANTONELLA SCHAUBCOMMUNICATIONS DIRECTOR

District Office340 NIETO AVE.562/570-8756

3RD COUNCIL DISTRICTSUZIE PRICE

Mayor Robert GarciaE-mail: [email protected]/570-6801MARK TAYLOR, CHIEF OF STAFF

SHARON WEISSMAN

DANIEL BREZENOFF

ISAAC ROMERO

DEVIN COTTER

(NOTE: AS OF PRESS TIME, THE MAYOR’S STAFF

AND RESPECITVE TITLES HAD NOT BEEN FINALIZED)

Long Beach City Hall333 West Ocean Blvd.Long Beach, CA 90802www.longbeach.gov

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

Monday through Friday

Note: City Council District boundaries shown above are approximate.

Presented by the Long Beach Business Journal • July 2014



cally sound during his two terms in office,staving off potentially devastating cuts tostaff and services by instituting fiscal disci-pline across all city departments. In his budget message, he outlines a

series of recommendations that he believesshould be put in play by the city’s newelected leadership. “The point of these rec-ommendations,” Foster said, “is that if thecouncil and mayor take action now andstart doing prudent things now, and insome cases some unpleasant things now,you can forestall what would be very dra-conian measures in the future.”He stressed that no matter how strong the

local economy may bounce back, it won’tbe enough to cover future costs. “Now some of you say, you can have two

sides of the equation. You could havereductions in cost and you have revenueenhancements. What’s driving all this arethe increases in personnel and pensioncosts and expenses that far exceed antici-pated revenues. New revenue may come in– we hope it does. But even if you have avery robust economy, the revenue willnever get close to what is coming at us.”

Mayor Garcia Issues StatementThe day after the July 8 press conference,

Robert Garcia, who replaced Foster as mayoron July 15, issued the following statement:“Over the last few years, I’ve worked

hard with Mayor Foster to reform our pen-sion system and eliminate our structuraldeficit. The 2015 budget proposal and rec-ommendations provide a good guide forenacting a responsible and balancedbudget. Over the next few weeks I willreview the proposal, make recommenda-tions, and work with the city council topass a budget that protects core services,pays down our liabilities, and sets asidefunds for future rainy days. I will not allowthe city to spend more than we can afford.”

Foster’s RecommendationsFollowing are some of the highlights

from the series of budget recommenda-tions by Foster. He focused on employeecosts since they represent about 75 percentof budget expenditures.• Contract Negotiations: “Employees

have grown to expect pay increases duringcontracts renewals. It is difficult to see howthe city can afford any increase in pay foremployees with the substantial costincreases coming to meet the obligationsfor their pensions.“Every 1 percent increase [in payroll] is

$2.6 million more in General Fund costs,and those costs will continue every year.We know we will need over $35 million peryear in 2021. Any amount we provideemployees will increase that amount. The2001 pension spike is now fully making itsimpact felt. The truth is we could not affordthat decision then, and its full impact isunaffordable in the years ahead.”• Skill Pay: “I recommend that the city

council initiate a careful review of skill pay

with the goal of substantially reducing theirnumber and cost.” [Foster noted there are136 skills pay categories and that in 2013 itresulted in $19.9 million in additional pay toemployees.] “It would be difficult to cite aspecific number, but a reasonable goalwould be no more than 30 citywide. Any costsavings should be “reserved” to meet theCalPERS increases we know are coming.”• Retiree Medical Sick LeaveConversion: “While Long Beach does notoffer medical coverage for its retirees, it doesallow them to accumulate their unused sickleave hours and use them to purchase medicalcoverage when they retire. The present pro-gram accumulates unused hours and at retire-ment, the hours are multiplied by the finalsalary to arrive at a dollar figure (unused sickleave hours x final salary). This figure is thenused to purchase insurance for however longthe dollars last. This has created an unfundedliability for the city of $119 million.“A more fair way of calculating this ben-

efit would be to calculate the value basedof the actual rate of pay when the timeaccrued, instead of the final salary. Thiswould truly reflect what was earned by theemployee, and be a more appropriate andequitable manner to calculate this benefitand reduce the city’s unfunded liability.”• Employee Retirement Contribution:

“The pension reform recently achieved,required employees to pay more of theirretirement costs. . . . This was a key pointduring the last negotiations, but there is ahuge gap in costs and it will get much big-ger in the next few years.

“While I know that this will not be a pop-ular issue with employees, given the needsof CalPERS and the fact that these fundsare applied to the employee’s retirementaccount, it will very likely be necessary toincrease the employee contribution byanother 2 percent or perhaps 3 percent.“Consider that increased employee con-

tributions of 3 percent would produce $6million annually to reduce the deficit. TheCity Council should begin the MOU nego-tiations with a specific goal to achieve inthis area. To be blunt, it is doubtful the Citycan achieve the necessary savings for2016-2021 without larger contributionsfrom employees.”• Co-Pays And Health Insurance:

“Long Beach offers its employees compre-hensive health care with relatively low co-pays and deductible levels. This, too, is anarea the city will need to explore to achievecost savings. Private employers have beenmoving in this direction for years and whilethe city has moved forward somewhat, it istime for a more effective cost sharing struc-ture that gives employees more incentive tohelp control costs.”Foster also offered suggestions regarding

developing more partnerships with the pri-vate sector, adding a higher percentage ofrevenue to the reserve fund for unfundedliabilities and keeping the budgeted rev-enue expected from oil on the conservativeside [currently at $70 per barrel].

The Proposed BudgetCity Manager Pat West’s proposed

budget comes in at $3 billion for the 2014-

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Small Business Enterprise ProgramTake advantage of the City of Long Beach Small Business Enterprise (SBE) Program. To learn more about becoming a part of the SBE Program and

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Improvements of Cherry Ave ITB-LB-14-101 8/05/14Fire Fighter Turnouts ITB FD 14-089 7/30/14Zodiac In�atable Boats RFP DV14-059 7/30/14Solar Power Purchase Agreement RFP PW 14-054 7/30/14Websense Upgrade RFP PW14-054 7/30/14Blueprint & Reprographics Svcs ITB TS 14-100 7/30/14HP Openview Software & Maint ITB LB-14-110 7/30/14 New Civic Center, Port HQ WD-24-14 7/30/14Improvement of Artesia Blvd ITB LB-14-106 7/29/14Surveillance Camera & Parts WD-29-14 7/28/14Furnish & Deliver Water Meters WD-20-14 7/24/14Rental of Portable Chemical Toilets R-6957 7/23/14Custodial Services RFQ PW-14033 7/23/14

Long Beach

Proposed Budget(Continued From Page 4)

Board Chairs Academy“Our agency's participation in the Board Chair Academy has given us the essential tools and

approach we need to accomplish our mission. The material is well thought out, expertly presented with lots of opportunity for interaction with other participants.”

TAMMIE KYLE Executive Director, Comprehensive Child Development, Long Beach

THE BOARD CHAIRS ACADEMYA Comprehensive Five-Part Seminar Series For Nonprofit Boards of DirectorsDesigned As A Cohort Learning Experience For Three to Six Representatives

The Art of Nonprofit Leadership - August 7, 2014The Science of Board Development - September 4, 2014

The Effective Fundraising Board - October 2, 2014CEO Performance Planning & Review - November 6, 2014The Strategic Nonprofit & Its Board - December 4, 2014

All Session are held atThe Petroleum Club

3636 Linden Avenue – Long Beach, California8:30AM to 12:00PM

Register to attend at www.thirdsectorcompany.com or by calling Third Sector Company at (562) 484-8281. Space is limited to the first 12 organizations. Participants may register for a single seminar or the entire series.

The Board Chairs Academy Faculty will include Jeffrey Wilcox, John Glaza and Kathy McCarrell.


NEWSWATCHJuly 22-August 4, 2014 Long Beach Business Journal 7

15 fiscal year. Of that total, only $401 mil-lion – the general fund – is completely dis-cretionary. The general fund “providesmuch of the resources for critical city serv-ices, including police patrol, fire response,parks, streets and sidewalks repair, andlibrary services.”West pointed out that general fund rev-

enue has been pretty much flat over thepast several years. “The overall trend in themajor sources of general fund revenue hasbeen essentially flat over the last fiveyears,” in wrote in the budget document.“While sources such as property tax andsales tax increased during this time frame,others such as utility users tax and parkingcitations experienced consistent decline.”

But he also noted that significant rev-enue for the general fund come from othercity sources such as from towing, thewaste-to-energy facility known as SERRFand from oil and gas extraction. “In FY 15,the general fund is expected to receive over$19.4 million from local oil operations,” hewrote.On the expense side of the general fund,

police costs equate to 50.1 percent of allexpenditures, while the fire departmenttakes up another 18.9 percent. Combined,public service accounts for 69.4 percent ofthe general fund. Other expense areas are:public works, 8.6 percent; parks, recreationand marine, 8.1 percent; elected andappointed officials, 4.9 percent; library

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

Mayor And City Council OfficesThe total budget for the mayor and city

council is proposed at $4,747,735, andincludes 45.85 full-time equivalent person-nel. These numbers represent two feweremployees than budgeted a year ago, and areduction if overall expenditures of approx-imately $128,000.Each of the nine city council offices has

a proposed budget of $403,287 in FY14-15to use for: salaries, wages and benefits;materials, supplies and services; and forinternal support. Each councilmember, in

the proposed budget, receives a salary ofjust over $34,000, which, per the CityCharter, is 25 percent of the mayor’s salary.The mayor’s office budget is $818,737,

with $754,080 budgeted for salaries, wagesand benefits for six full-time equivalentemployees. The mayor’s salary is $136,664.The mayor and city councilmembers also

have a proposed budget of $299,415 for“department administration,” which,according to the budget document, “pro-vides administrative support to the mayor’soffice and nine council districts. Contractualservices, citywide community meetings,office equipment and supplies for themayor’s office and council districts are pro-vided through department administration.” �



employers provide all workers with paidsick leave, allowing employees to file lienson an employer’s property due to allegedwage claims and imposing liability on abusiness when an entity contracted by thatbusiness violates wage and hour laws.One such CalChamber-labeled job killer

is Assembly Bill (AB) 1522, authored byAssemblymember Lorena Gonzalez of SanDiego, which would require employers togrant paid sick days to employees whowork 30 or more days in a calendar year.Sick days would be accrued “at a rate of noless than one hour for every 30 hoursworked,” according to the bill. AB 1522 allows employers to limit paid

sick days to three per year. The bill man-dates unused paid sick days be carried overto the following year, a point which an arti-cle on CalChamber’s website called “a sig-nificant change in existing law.”CalChamber argued that the bill would“create a huge burden on employers” bycausing increased costs to doing business.When AB 1522 passed the Assembly

Labor and Employment Committee inMarch, Gonzalez released a statementexplaining the rationale behind the bill.“Both workers and their employers lose outwhen employees have to choose betweenreporting for work while sick or losing paybecause they don’t,” Gonzalez stated. While CalChamber argued the bill would

increase the cost of doing business,Gonzalez believed it would accomplish the

opposite. “Every time this choice comes upfor a sick employee, everyone loses money– whether it’s through unnecessary emer-gency room costs, the billions of dollars lostin productivity annually when sick employ-ees try to work while under the weather orlost wages that impact whether workingfamilies can put food on the table.”Another bill CalChamber has been track-

ing is AB 2416, also identified as a potentialjob killer. “It is dealing with the ability for anemployee to file a lien on any employers’property or a third party’s property wherework was performed for alleged butunproven wage claims,” Jennifer Barrera,CalChamber policy advocate, told theBusiness Journal. AB 2416 is also scheduledfor a vote on August 4. AssemblymemberMark Stone, who represents Santa Cruz,Santa Clara and Monterey Counties, wrotethe bill with Long Beach AssemblymemberBonnie Lowenthal.The reasoning behind AB 2416, as

explained on Stone’s website, is to “provideworkers who are victims of wage theft withan opportunity to receive the wages theyare owed . . . prior to a business closing.”One of the main points of contention

CalChamber has with AB 2416 is it wouldallow employees to file liens when theydetermine they have not been paid duewages rather than when a labor commis-sioner or judge makes that finding, Barrerasaid. Essentially, an employee could file alien for unpaid wages “without anybodyoverseeing the claim to make sure it islegitimate or has merit,” Barrera said.Once an employee files a lien, “It would

be up to the property owner at that point togo to court or petition the labor commis-sioner to have the lien removed claiming itwas unjustified or it never should have beenfiled in the first place,” Barrera explained.“[AB 2416] would be a huge burden notjust on employers but on third parties whereworkers performed on their property, asthey could be forced to deal with a lien fora claim that they have no knowledge aboutor nothing to do with,” she said.Another CalChamber job killer-labeled

item is Assembly Bill 1897, which wouldrequire businesses “to share with a labor con-tractor all civil legal responsibility and civilliability for the payment of wages, the obliga-tion to provide a safe work environment, asspecified, and the failure to obtain validworkers’ compensation coverage,” as statedin the proposed legislation. In other words, asBarrera explained it, this would make busi-nesses liable for wage and hour violationscaused by contractors they employ. Not impacted by AB 1897 are motion pic-

ture payroll services, hiring halls, nonprofitcommunity organizations and businessesemploying less than 25 people, includingthose directly employed by the business andthose hired through a labor contractor.Barrera said CalChamber’s concern with

AB 1897 is that workers employed by laborcontractors could pursue labor violationclaims against the business using the con-tractor before first perusing a claim againstthe contractor. “[Contracted employees]could just go directly to the company thatcontracted for those services and file a law-suit against that company for the wage andhour violations that they didn’t control,didn’t have any knowledge about andcouldn’t prevent because they were not theactual employer,” she said.The author of the bill, Assemblymember

Roger Hernandez, explained the reasoningbehind AB 1897 in a statement he releasedin June following the bill’s passage in theSenate Judiciary Committee. “Currently,employers are utilizing the subcontractedmodel . . . to avoid accountability in theworkplace. Many times, the employer andthe staffing agencies are able to avoidresponsibility to the worker, leaving theworker without any rights to hold eitherparty accountable if a labor violation arises,”he stated. “AB 1897 is about saving goodjobs and preserving our fragile middle-class,while holding companies accountable forwage theft and other abuses.”In addition to labor-related legislation,

other bills considered anti-business byCalChamber are coming up for votes inAugust, including AB 52, a bill that wouldrequire agencies completing environmentalimpact reports for development projects tocomply with the California EnvironmentalQuality Act (CEQA) to consult withregional Native American tribes aboutwhether or not the development couldimpact tribal cultural resources. AB 52states that “a project with an effect thatmay cause a substantial adverse change inthe significance of a tribal culturalresource” would be considered to “have asignificant effect on the environment.” A letter of opposition to the bill by

CalChamber, co-signed by other entitiessuch as the California RetailersAssociation, stated, “AB 52 is a dramaticexpansion of CEQA that inserts religioninto an environmental statute and, as a

practical matter, grants Native AmericanTribes broad, irrefutable authority to deter-mine anything is a tribal cultural resourceentitled to CEQA protection.”

Minimum Wage Bill Fails,Is Granted Reconsideration

A bill which would have significantlyincreased the California minimum wage wasrejected by the Assembly Labor Committeeon June 25, but was granted reconsideration,meaning that the bill’s author may choose tobring it back for another vote.The legislation, Senate Bill 935, would

increase the California minimum wage to$11 per hour on January 1, 2015, to $12 perhour the following year and $13 per hour in2017. Every year after 2017, the minimumwage rate would be adjusted by the rate ofinflation. Once implemented, the legisla-tion would negate Assembly Bill 10, whichwent into effect on July 1 and increased theminimum wage to $10 per hour.The bill’s author, California Senator Mark

Leno, indicated the bill would not progressthis year. “While our minimum wage pro-posal is not moving forward this year, it isincreasingly clear that the state must takefurther action to help lift Californians out ofpoverty,” Leno said in a statement. He con-tinued, “Increasing the minimum wage isgood for women, children and families inCalifornia who rely on low wages. It reducesreliance on taxpayer-funded social safety netprograms and boosts the economy. Ourwork on this issue does not end today.”Barrera said the Chamber opposed the bill

because it was unfair to businesses. “It failsto take into account the other costs otherbusinesses are currently undergoing here inCalifornia including higher energy costs,higher workers’ compensation costs, highertaxes,” she said. “From our perspective itwas just too much for businesses to take on.” A report released by the National

Federation of Independent BusinessesResearch Foundation in May forecast323,300 jobs within California would havebeen lost by 2024 “due to the bill’s man-dated increase in the cost of labor” if thebill had passed. �

Bills Target Businesses (Continued From Page 1)

Susan Wise Steps DownFrom Harbor CommissionHarbor Commissioner Wise has decided

not to seek another term on the commis-sion, which oversees Long Beach HarborDepartment operations. Wise began her six-year term on the harbor commission in2008. Her last meeting was on July 14,when she was recognized with commentsfrom her fellow commissioners.“Commissioner Wise has brought manynew ideas and initiatives to the board, andhas been a champion of hiring locally andof women in the maritime industry,” HarborCommission President Drummond said.Both Drummond and Harbor CommissionVice President Rich Dines commendedWise for being both a role model and cham-pion for women in the international tradeindustry. “One of the things that reallystands out to me is your passion for anddrive for women in international trade,”Dines said. Wise’s departure leaves a seatopen on the five-member commission,which must be filled by an appointment byMayor Robert Garcia. His recommendationmust be approved by the city council. �

– Staff Writer Samantha Mehlinger



Pacific-9 Transportation and TotalTransportation Services, Inc. – are misclas-sified as independent contractors, whichdeprives the workers of steady wages andbenefits. For the time being, the drivershave gone back to work following a requestby Los Angeles Mayor Eric Garcetti for a“cooling off ” period. In a statement, Fred Potter, international

vice president of the InternationalBrotherhood of Teamsters, said driversagreed to suspend picketing while Garcettiinvestigates their claims.“While the drivers wanted to continue

the strike, they agreed to a cooling offperiod,” the statement read. “MayorGarcetti personally committed to themthat he will thoroughly investigate theserious injustices and take strong action

as there is no place for law breakers at thePort of Los Angeles.”But a statement issued by Green Fleet

through Harbor Trucking AssociationSpokesperson Alex Cherin blamed thestrikes on attempts by outside groups toorganize the drivers who are not unionized.“Time and again every segment of the

industry has rejected the efforts of thesegroups and their agenda,” the statementread. “The fact is that an overwhelmingmajority of contractors and drivers affili-ated with Green Fleet don’t want thesegroups involved in their work.”Cherin’s statement was supported at a

press conference on July 10 held at theGrand Long Beach Event Center, wheremore than 50 people, many of thememployees of Green Fleet Systems andPacific-9, gathered to express their oppo-sition to union involvement. Speakingthrough a translator, Xiomara Perez-

Barragan, an employee-driver at GreenFleet Systems, said that the Teamstershave spent more than a year trying toorganize port drivers. She added thatunion organizers have harassed GreenFleet drivers in an attempt to get them tojoin the union.“The majority of us don’t want to be

represented by [the union],” Perez-Barragan said. She claimed that 65Green Fleet drivers oppose union repre-sentation and only 28 want to unionize.She further explained that she has beenaccused by union representatives ofbeing an “agent” of the company, a claimshe called “absurd.” “I’m just a driver-employee exercising my rights underSection 7 of the National LaborRelations Act,” she said.Another Green Fleet driver who didn’t

give her name, also speaking through atranslator, accused union representatives of

bringing non-Green Fleet strikers to thepicket lines, adding that claims aboutGreen Fleet drivers not being providedbenefits were untrue.“The 28 drivers that support the union

have the nerve to say that Green Fleet doesnot give them benefits. This is somethingthat is not true,” she said, adding that thecompany pays drivers’ health insurance andprovides a 401k with company contribu-tion. “Green Fleet treats us with respect,and all of our trucks are well maintained.We are the number one company in Carsonregarding safety.”Following the conference, Ricardo

Pasalagua, CEO of Labor RelationsSpecialists, told reporters that of the 110owner-operators who work for Pacific-9Transportation, only 10 or 15 want unionrepresentation.Port truck drivers ship goods for major

companies such as Walmart, SkechersShoes and Home Depot. On July 10, thesame day as the press conference, strikersprotested outside of Skecher’s flagshipretail store in Manhattan Beach. As aresult, Green Fleet driver Blanca Machadoaccused the union of endangering driverjob security.“How should a union claim that drivers

will have job security if they support them,but they go after our clients by doingdemonstrations at their facilities and lyingabout what’s really going on at GreenFleet?” Machado asked.Responding to claims that a majority of

port drivers don’t want union representa-tion, Barb Maynard, a spokesperson forthe group Justice for Port Truck Drivers,said intimidation of drivers by GreenFleet Systems masks the true numbers ofdrivers who want union representation.She pointed to a 50-count complaintlodged with the National Labor RelationsBoard alleging that the company intimi-dated pro-labor employees and evenissued death threats. “If and when Green Fleet systems and

the other companies stop creating thisanti-union environment, only then will itbe clear how many pro-union supportersthere actually are in these companies,”Maynard said. �

Pictured are several of the 50 truck drivers who gathered July 10 at a press conference. The drivers, most of whom represent two trucking companies, are opposed to union involvement. One driver saidthat of the 110 owner-operators who work for Pacific-9 Transportation, only 10 or 15 want union representation. Pictured standing, from left, are: Porfidio Campos, Ricardo Cuellar, Walter Solaris,Aaron Perez, Blanca Machado, Xiomara Perez-Barragan, Gloria Rodriguez, Juan Carballo, Hector Amaya, Geovanny Lopez, Julio Huerta, Ana Rodriguez, Hubaldo Rodriguez and Juan Carlos Ramos.Kneeling, from left, are: Jose Oscar Santos, Erik Orellana, Fausto Diaz, Mario Machado, David Morales, Amado Zamora, Rene Castro, Francisco Medina and Guillermo Amaya. (Photograph by theBusiness Journal’s Thomas McConville)

Truck Drivers(Continued From Page 1)

Pictured are more drivers who were part of the July 10 press conference at The Grand in Long Beach, and who oppose union involvement with the truckingcompanies with which they work. Standing, from left, are: Christian Lechuga, Ramon Babun, Jose Saudi, Juan Munoz, Cesar Garay and Jesus Barraza.Kneeling, from left, are: Lazaro Vargas, Mike Luong, Jung Kim, Il Sun Cha and Bryan Bae. (Photograph by the Business Journal’s Thomas McConville)


REAL ESTATEJuly 22-August 4, 2014 Long Beach Business Journal 11

PlanningCommission

Approves NewIndustrial, Retail

Developments � By SAMANTHA MEHLINGER

Staff Writer

The Long Beach Planning Commissionon July 17 approved environmentalimpact reports, site plans and tentativetract maps for two real estate projects thatwould bring more business to the City ofLong Beach upon completion.Following the success of its Pacific

Pointe at Douglas Park projects, realestate firm Sares-Regis Group now plansto build a corresponding Pacific PointeEast project with three industrial build-ings. The planning commission unani-mously approved the project, which is tobe located across the street fromMercedes-Benz USA’s future WesternRegional Headquarters at the southeastcorner of Conant Street and LakewoodBoulevard. A report from Long Beach

Development Services stated that thethree buildings planned for Pacif icPointe East are likely to “be occupied ascorporate headquarters for light indus-

trial, office, and research and develop-ment companies.” The Pacific Pointeproject at Douglas Park was successful inattracting such companies and is nowhome to the headquarters of businessessuch as Turbo Air, a manufacturer ofrefrigeration equipment, and UnitedPacific Industries, which manufacturesclassic vehicle products.The 25-acre tract of land at the corner

of Conant Street and LakewoodBoulevard “has not seen any long-termprincipal uses since 2006, when produc-tion of the [Boeing] 717 aircraft ceased,”the development services report stated.The site for Pacific Pointe East is a park-ing lot that formerly served the 717 air-craft production facility now being con-verted to offices and warehouse spacefor Mercedes.Now that Pacific Pointe East has plan-

ning commission approval, constructionmay move forward, according to ZoeSolsby, a spokesperson for Sares-Regis.The planned buildings in the projectmeasure 228,126 square feet, 140,218square feet and 114,494 square feet, andare located at 4800 Conant St., 4350Conant St. and 4600 Conant St., respec-tively. The designs for the buildings aresimilar to those at Pacific Pointe Northand Pacific Pointe South within DouglasPark, the development services staffreport indicated.Also approved by the planning com-

mission on July 17 were plans for a newretail building within the CaliforniaState University, Long Beach

Technology Park at 1801 W. PacificCoast Hwy. in Westside Long Beach.The Tech Park is located near the LongBeach Jobs Corp Center and the CenturyVillages at Cabrillo, an affordable hous-ing community. The planning commis-sion also voted to allow retail sales,including the sale of alcohol for off-premises consumption, within the zon-ing area encompassing the Tech Park.Firearms sales are not permitted.Plans for the 9.88-acre site include

demolishing existing buildings and con-structing a single-story retail buildingmeasuring 122,500 square feet with 491parking spaces. A report by Long BeachDevelopment Services said one or two

tenants could occupy the building andthat no tenants have been secured at thistime. Other buildings within the TechPark are receiving aesthetic improve-ments as part of the project, includingcreating “more dimension, detail andtexture” in their facades. New walkwaysand seating are also included in the proj-ect designs. In a report to the planning commission,

Long Beach Development Services staffwrote that the retail project at the CSULBTech Park “will provide a valuable serv-ice to the community through expandedretail shopping opportunities, increasedemployment generation, and enhancedeconomic growth and tax revenues.” �

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SWEARING-IN CEREMONIES OF LONG BEACH ELECTED OFFICIALS12 Long Beach Business Journal July 22-August 4, 2014

7th District Councilmember Roberto Uranga: “I speak from the heart as I speak now.My road to this position to where I am now was a long one. Sometimes it was arduousand sometimes met with trials and tribulations. But in all that journey, there was alwaysone element that kept it together and that kept me focused, and that was family.”

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

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

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

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

Mayor Robert Garcia: “What I love about our city the mostis that you can find the American Dream here. There is anopportunity here for everyone to succeed no matter the colorof their skin, no matter who they love, no matter where theylive or where they’re from or what country they were born in.There is a place in Long Beach, an acceptance in Long Beach,which I think is a very special thing about our city.“As mayor, I want us to embrace our destiny as a great inter-

national city with good goals and with good peoples. We will,working together, pass a responsible budget. We will, workingtogether, strengthen our educational ties with the university,with the community college and with our school district. Wewill do all of those things that make cities strong. Strong pub-lic safety services, good parks, open libraries. The things thatwe care about for our future. We will continue to make our citymore sustainable. We’ll innovate and move our city into thenew century, and we’ll do it together.“As we enjoy this night tonight, I want us to remember

that there are still almost 20 percent of our neighbors thatare living in poverty. . . . struggling between finding healthcare for their children, child care, food or a roof over theirhead. And I believe that no matter what you do or where youlive, we all are in the business of helping people. We allwant to help people. And so I challenge us, if we are ever

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

Photographs by the Business Journal’s Thomas McConville


SWEARING-IN CEREMONIES OF LONG BEACH ELECTED OFFICIALSJuly 22-August 4, 2014 Long Beach Business Journal 13

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

City Auditor Laura Doud: “As I look out this evening I’m so humbled. I have learned andgrown so much over the past eight years in my service as city auditor. One of the great ben-efits of serving in a position like this is I have the opportunity to go out into the community.I have met so many of you and have observed the way you have devoted your time, andyour talents and your resources in volunteering so many of your hours to make this a bettercity. I am truly grateful for that. I know the strength of this city is in its people.”

City Attorney Charles Parkin: “I look forward to doing great things with the new coun-cil. We are there to support them. Our office – my second family – I want to thank theoffice. They’re fantastic. We do great work and I appreciate all the hard work that they do.It’s behind the scenes, and that’s okay, but we have to be there for this new city counciland we’re ready and we’re willing to take that challenge on.”

City Prosecutor Doug Haubert: “To all of us, I ask that may not a day go by that we donot thank God for our blessings, many of which we, undoubtedly, too often take for granted.May we each find internal peace and fulfillment because no man can bring peace to theworld until he has brought peace first to himself. May each of us reflect on the gifts and tal-ents we have, not so that we may inventory them but so that we can consider ways of sharingthem with others May we, each of us, use the next four years and the rest of our time on thisearth wisely so that we may always strive to leave this place better than we found it.”

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

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

or in North Long Beach that still need our support and ourhelp. We have prospered so much and we will continue toprosper. We will continue to support business; we will con-tinue to work with our friends in labor. But we will alwayshave to keep an eye as we move forward, that if we are evergoing to grow as a city, we must address this issue ofpoverty. And I know we’ll do it together.“I want to thank you all tonight for believing in me. I want

to thank you tonight for believing in every single person onthis stage. This is a great team. This is a great group of indi-viduals who love their city. And I want everyone heretonight, as they leave, and as we enjoy the after celebration,I want you to believe that Long Beach is the greatest city inthe country. I want you to believe that we can do anything ifwe work together and put our minds to it. I want you tobelieve that we can make our world-class university even bet-ter. I want you to believe that we can continue to both, notjust grow business in the port, but make it greener. I want usto believe that we can support our artists; that we can do thethings that we dream about together. “So thank you again for being here tonight. You have given

me an incredible responsibility that I am excited to take on.Thank you so much for being here tonight. God bless our city,God bless our country, and go Long Beach! Thank you.”

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


BANKING14 Long Beach Business Journal July 22-August 4, 2014

nightmares are digital, their fears expressedin ones and zeros, the threat the bad guysthey’ll never see doing their evil deeds deepin the computer banks and erasing all evi-dence that they’ve ever been there.The threat has changed. It is as though

banks now exist in a world where literallymillions of people can – and are – workingon making a better lock-picking device andcan get to the door of the vault. And itwould not take much to create completehavoc. Imagine the chaos that would ensueif one of your kids took a break from play-ing Lego City Undercover and wrote you a

simple little program that would allow you,once a month, to log into your bankingaccount and add a zero to the end of yourchecking account balance.Today, security for the banking industry

lies not in harder steel doors or thicker con-crete walls on the vault. It lies in those verysame ones and zeros, in the world of cyber-security, and those in the industry knowexactly what is at stake if they falter.“Where do you start? Just think of

Target, Neiman Marcus, PF Chang. Weread about the damage every day,” BrianeGrey, director of corporate security for Los

Angeles-based City National Bank, the23rd largest bank in the nation, said to theBusiness Journal. “The risk is loss of trust,consumer confidence, reputational risk inthe market place, loss of market share (and)financial ruin.”It is for these reasons that banking offi-

cials are pushing Congress to streamlineand coordinate cybersecurity efforts withthe industry, to allow for greater sharingof information about cyber threats and tocreate a more effective process for deal-ing with them.“The threat of cyber attacks is a clear

and present danger to our industry and toother critical infrastructure providers thatwe and the nation as a whole rely upon,”said a letter written to Congress earlierthis month from the American BankersAssociation, the Financial ServicesRoundtable and the Security Industry andFinancial Markets Association.“It is critical for Congress to take action

to enhance, facilitate and protect threatinformation sharing across sectors andwith the federal government.”The associations wrote to Congress to

express their support for a set of bills nowbefore legislators, including theCybersecurity Information Sharing Act of2014, the Federal Information SecurityModernization Act of 2014 and theNational Cybersecurity andCommunications Integration Center Act of2014. In general, the bills would make iteasier and quicker to share informationbetween the federal government and thebanking industry when it comes to threatsto the information and financial sectors. The associations say they feel the legis-

lation would allow them greater securityand, at the same time, provide protectionagainst anti-trust and liability issues andprovide for privacy protections.Elsewhere on the federal front, the Federal

Financial Institutions Examination Council(FFIEC) recently unveiled a web page thatcombines available resources from the fed-eral regulators on cybersecurity. Supportedby such entities as the Board of Governors ofthe Federal Reserve System and the FederalDeposit Insurance Corporation, the estab-lishment of the new site underscores theincreasing emphasis financial institutionsare placing on cybersecurity issues.It’s not hard to understand their concerns –

it would take so little to destroy so much.Anyone out there willing to accept bitcoinsas payment for a car they have for sale?At the level of individual banks, the

focus is on preventing theft of money andinformation, officials say.“Security and fraud prevention are a top

priority for Wells Fargo,” Ben Alvarado,Wells Fargo president, Orange County andLong Beach Community Bank, told theBusiness Journal.“We leverage proven technologies to

help protect customers’ personal andaccount information. Our layered securityapproach encompasses unique credentials,dynamic one-time-passwords, encryption,firewalls, technology updates and continu-ous monitoring,” Alvarado stressed. “Ifsuspicious online or mobile behaviors aredetected, we may restrict account access orblock transactions. These measures helpsafeguard our customers.”Cybersecurity is not a one-time invest-

ment like a lock on a door, Grey explained.“Security is a process, not a solution.Cybersecurity has shared ownershipthroughout the organization,” Grey said.“All organizations today must acknowl-edge the advances in technology and haveeffective cybersecurity to be successful intoday’s tech-driven environment.“A complete cybersecurity program

includes defenses and training for thosecybersecurity challenges which includetechnology and human manipulation.

Cybersecurity touches all aspects of themodern working space. Cameras, alarms,sensors, control access for physical secu-rity and wire walls, filters, patches andgood cyber hygiene are necessary to pro-tect the corporation’s assets, people,processes and systems.”Security comes at a cost, which is now

part of doing business.“The economic impact is seen when allo-

cating additional dollars for informationsecurity, corporate security, business conti-nuity, risk management, training and com-pliance areas,” Grey said. “Additionalimpact is felt with the constant search fortech-savvy personnel across all businesslines, research, development and implemen-tation of new technologies to protect data,systems and personnel, introduction of newproducts to consumers and to provide con-tinuous training of colleagues and clients.”Interestingly, just as it always has been,

part of a successful security strategy in thecyber realm mirrors a key concept of thephysical world – hardening the target. Badguys don’t care where the ill-gotten goodscome from. Money and information stolenfrom a smaller vendor are just as valuableas that which is cracked out of Fort Knox. And one of the key concerns in this

new era is the vulnerabilities of smallerentities that cannot afford to maintain anongoing “security process” like the oneGrey described.“In today’s relationships, we are only as

secure as our weakest client, partner, 3rdparty vendor, contractor or consultant whohas access to our data (or) systems,” Greysaid. “Modern criminals are chasing dataand target organizations with minimaldefenses. Effective cybersecurity willmake every organization and householdmore secure and less of a target for cybercriminals.” �

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Cybersecurity(Continued From Page 1)

Update on Dodd-FrankSee Page 16


BANKING16 Long Beach Business Journal July 22-August 4, 2014

� By CHRIS SIEROTY

Contributing Writer

Six years after America’s financialindustry had to be rescued by the federalgovernment, which spent billions of dollarsto stabilize the industry, the economyremains at risk of another downturn due tospeculation and bailouts.The Dodd-Frank Act of 2010 promised

to overhaul the financial sector. But manyof the law’s regulations on proprietary trad-ing, derivatives and the financial well-being of the nation’s banks have beendelayed or watered down by slow movingfederal agencies, notably the Securities and

Exchange Commission and theCommodity Futures Trading Commission.As of July 1, only 208 of the 398 rules

required by Dodd-Frank were complete,according to the American BankersAssociation. About 45 percent of rule-mak-ing deadlines have been missed.“The number one thing Dodd-Frank did

is change the tone,” said Wayne Abernathy,executive vice president for financial insti-tutions policy with the American BankersAssociation (ABA) in Washington, D.C.“The positive is [that] it has brought moreattention to financial risks that involve howa bank operates.”Abernathy said Dodd-Frank has had a

negative impact on how banks offer newproducts to their retail customers. He saidno bank wants to offer the new productsbecause of new regulations. “In practice,there has been no new innovation in the lastfour years,” Abernathy said. He admittedthat new technology, including remotecheck deposits or mobile loan applications,has been introduced in recent years.However, that’s a continuation of new tech-nology that has already been in the pipeline.Abernathy said new compliance rules

have added some costs to banks, but thenew rules have made the business of open-ing new consumer accounts a more diffi-cult and lengthy process.

He said opening a new account takeslong in the post-recession world. Where itused to take 15 minutes, now that processis 30 minutes as the vetting of new cus-tomers has really slowed down the acquisi-tion of new accounts. He said the evalua-tion of new accounts, even for anti-moneylaundering and credit worthiness, has madeit all the more difficult for banks to bring innew customers.“We are a small business bank,” said

Mike Miller, president and CEO of LongBeach-based International City Bank (ICB).“We are just under $150 million in assetswith two branches. Dodd-Frank does notaffect us like it would a larger institution.”Miller said the bank has no mortgages or

retail customers. International City Bankstrictly deals with Small BusinessAdministration, commercial real estate,working capital and financing deals. Miller said Dodd-Frank has forced the

bank to spend more time and resources onadditional compliance. But, he said, withmore rules not coming into effect until 2015and beyond, the costs are still reasonable. “It’s difficult, but we are still able to meet

our compliance obligations,” Miller said.“We can absorb the cost and [time] with thestaff we have. Next year or the followingyear, we will have to add another person.” In other moves related to Dodd-Frank,

big banks have either ended traditional freechecking accounts or have raised the aver-age monthly balance needed to get freechecking. Other changes directly affectingbank customers include increasing monthlyfees, raising fees for overdrafts and out-of-network ATM withdrawals. In some cases,banks are also cutting costs by closingbranches and reducing available ATMs.

Volcker RuleThe main component of the Dodd-

Frank Act is the Volcker Rule, which wasexpected to go into effect in 2012, but hasbeen delayed until next year. The VolckerRule, named for former Federal ReserveChairman Paul Volcker, imposed restric-tions in response to the 2008 credit crisis.The rule bans proprietary trading orbanks from making risky investmentswith clients’ money instead of their own.It also limits banks’ investments in hedgefunds and private equity. Some large banks have resumed the

risky investments and have sufferedlosses. For example, a JP Morgan Chase

businessmade

personal

Four Years After Passage, Just Barely Half Of Dodd-Frank Regulations Completed

The Office of the Comptroller of theCurrency (OCC) proposes to adjust thetiming of the annual stress testing cycleand to clarify the method used to calcu-late regulatory capital in the stress tests.The proposal would shift the dates of theannual stress testing cycle by approxi-mately three months. The proposal alsowould provide that covered institutionswill not have to calculate their regulatorycapital requirements using the advancedapproaches method in 12 CFR part 3,subpart E until the stress testing cyclebeginning on January 1, 2016.Comments must be received on or beforeSeptember 2, 2014. For more informa-tion, including submitting comments, goto the Federal Register, Vol. 79, No. 126,Pg. 37231, dated July 1, 2014.


BANKINGJuly 22-August 4, 2014 Long Beach Business Journal 17

trader known as the “London Whale” lostbillions of dollars from trading on credit-default swaps. Meanwhile, Citibank justagreed to a $7 billion settlement over itshandling of mortgage securities.The Volcker Rule will cost U.S.

national banks as much as $4.3 billion toimplement, according to a study by theOffice of the Comptroller of theCurrency. The study’s regulator said mostof the costs come from the rules that curbinvestments, such as collateralized loanobligations. The federal agency also saidaffected banks will most likely be thosewith more than $10 billion in assets. “A lot of big banks got out of that line of

trading pretty early,” Abernathy said. “Theydid it so they would not be caught in thecrush. For the most part, banks were minor-ity partners in these funds, so they didn’tdepress the value by leaving.” He said mostbanks got into trading “to get some income,”and have sold them off for a modest profit. The Volcker Rule was adopted

December 10, 2013, by five U.S. finan-cial regulators. Abernathy said that therule’s biggest problem is the challengefor banks to work with five differentagencies. Regulators responsible forimplementing the Volcker Rule haveformed an interagency group to coordi-nate the multiagency rule.

“It is going to get worse as time goesby,” Abernathy said. The Volcker Rule isone of the most contentious measuresarising from the 2010 Dodd-Frank Act.Banks with assets of $10 billion to $50

billion must follow guidelines fromwhich International City Bank and othersmall banks in Long Beach are exempt.One requires an annual stress test, whichassesses the potential impact of differenteconomic developments on a bank’slosses, revenue, capital and balance sheet.Abernathy said banks are still learningabout the rule and developing pretty rig-orous procedures to the new standards.“Bank supervision is designed to look

at future risk,” Abernathy said. “Banksupervision can’t catch problems earlyenough, . . . more supervision needs to bea motion picture and not a snapshot ofactivity.” Banks also need to comply withthe Bank Secrecy Act, which requiresfinancial institutions to help the federalgovernment detect suspicious activity.

Once bank holding companies growbeyond $50 billion in assets, they’re subjectto even stricter regulations under Dodd-Frank. They must hold more in reserve as acushion against losses and may have lesscontrol over bonuses and dividends. “Part of the challenge is that we don’t

know when the rest of the rules will bewritten,” ICB’s Miller said. “There arecompliance issues on the way we do busi-ness today. We just have to figure it out.”Miller claimed a lot of the larger banks

can take on more regulations. He saidwhat is frustrating for a small businessbank is that, “We had nothing to do withthe mortgage business. We are kind ofbeing thrown into the mix. But, we wouldall say that things got out of control. If youdidn’t qualify for a mortgage, in the olddays they told you to come back when youcould qualify. We got totally away fromthat.” Miller also questioned whetherDodd-Frank needed to be 700 pages. Many people who have followed the

legislaton agree that If banks like stabilitywhen it comes to regulations, they are infor some uncertain times. Congress hasbeen unproductive, they say, on financialregulation since Republicans took controlof the House of Representatives in 2010.Yet they also concur that the Obamaadministration has had more than fiveyears to write the rules, however com-plex, to enforce Dodd-Frank.While banks wait for additional regula-

tions, the Federal Reserve, led by ChairJanet Yellen, remains supportive of theCentral Bank’s post-crisis agenda. In a pre-pared speech on July 10 to an economicconference, Federal Reserve Vice ChairmanStanley Fischer said the country was mak-ing “significant progress in strengtheningthe financial system and reducing the prob-ability of future financial crises.”Fischer, an economist and former Israeli

central banker who took the Fed’s No. 2job in May, threw his support behind theFed’s stress testing program and newrequirements that large institutions holdhigher levels of loss absorbing capital. The ABA’s Abernathy wanted to remind

everyone that the process is only halfwaythrough. “We are about to get more rulesbeing written,” Abernathy said. “Banksneed to remember that half of the proposedregulations have not been finalized.” �

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


ANALYZING THE PHONE BILL18 Long Beach Business Journal July 22-August 4, 2014

one category covered “taxes,Governmental surcharges and fees,” andthe other fees were listed under the heading“Verizon surcharges and other charges &credits.”The Verizon side accounted for the lion’s

share of charges and totaled $134.23 – or20 percent of the total bill. These includedthe “long distance access charge” and the“federal universal service fee.” But thelargest charge was the combined “federalsubscriber line and access recoverycharges,” which totaled $74.80.We wanted to get some answers on what

these charges were: Is federal subscriberline charge a tax? What does it cover? Whydoesn’t the bill specify the surcharges’ per-centages? That’s right, not one of the 16fees –either the government’s or Verizon’s –shows a percentage charged, nor what it ischarged on.In the quest to find answers, we learned

that the issue is complex, and even the tele-com experts struggle to explain these fees.We first reached out to Verizon

spokesman Jarryd Gonzalez, who askedthe Business Journal to e-mail him somequestions. After several e-mail exchanges

with Gonzalez some questions remainunanswered – notably why some of thecharges seem to have increased in recentyears, and why the company doesn’t spec-ify the percentage of each charge. Gonzalez did direct us to the Verizon

website, which offers brief explanations ofthe various charges appearing on monthlybills, many of them used to defrayVerizon’s business costs. He also provideda list of AT&T’s surcharges – ostensibly toshow that other companies bill thesecharges, too.Gonzalez did, however, confirm that the

federal subscriber line charge was not atax. “The subscriber line charge is imposed

by the Federal CommunicationsCommission (FCC) as part of its programfor local telephone companies to recoverthe cost of connecting individual phonelines to the interstate long distance net-work,” the e-mail read. “These costsinclude telephone wires, poles and otherfacilities that link each telephone customerto the telephone network.”Our confusion deepened. If a govern-

ment agency like the FCC is imposing acharge, isn’t that a tax? Don’t long distancerates already cover the cost of the interstatenetwork? It’s worth mentioning at this

point that repeated requests to speak per-sonally to a Verizon representative wentunanswered.FCC Spokesperson Michael Snyder

offered a slightly different explanation forthe federal subscriber line charge than theone given by Verizon. Rather than impos-ing the fee, Snyder said, the FCC merelycaps the amount that phone companies areallowed to charge. “The maximum allow-able access charges are set by the FCC, butthe local telecoms can charge nothing,”Snyder said. He confirmed that while the term “fed-

eral subscriber line” may be misleading, itis not a tax. “It’s not a tax or a governmentcharge, even though it might be confusingthe way it’s listed on the bill,” Snyder said. When we reached out to California

Public Utilities Commission (PUC)spokesperson Christopher Chow, he said

his agency only mandates six fees, all ofwhich appeared under the governmentalheading of our bill. These charges help tosubsidize phone service in rural areas andprovide specialized phone equipment forthe deaf. But when asked about the sur-charges under the Verizon heading, Chowreferred us back to the phone company.“Some of those things you asked about

in terms of access charges, those things arenot mandated by us. Those are charges thatin this case Verizon has come up with,”Chow said.Before contacting Verizon again, we

reached out to The Utility Reform Network(TURN), a consumer advocacy group.Regina Costa, telecom research director,did her best to explain the origins of thefederal subscriber line charge, whichincluded a complex history involving FCCdecisions and court cases stretching backto the 1930s. Costa also said it’s ultimatelythe phone companies’ choice to charge cus-tomers the fee. “They choose to pass it on,and there’s very little oversight from theFCC to look at whether that fee is reason-able or not,” Costa said.When asked why consumers have to pay

an interstate charge on top of a long dis-tance rate, she said that maintenance of theinterstate network used to be covered by

Phone Bill(Continued From Page 1)

“Customers don’t understand

why they’re paying all of these

fees, and for good reason.

They’re confused.”

Regina Costa, Telcom Research DirectorThe Utility Reform Network

The charges shown here are from a recent BusinessJournal invoice from Verizon. There are 16 taxes, fees orsurcharges on the invoice. None of them indicate the per-centage that is being charged, nor if the charge is on partof or the entire bill. (Long Beach businesses also have a 5percent utility users tax.) On the adjacent page, theBusiness Journal attempts to provide explanations and per-centages for each of these charges. As Business Journalstaff discovered, it’s not an easy obtaining the informationand the explanations provided by the entities involved areambiguous. If there is a mistake, it’s because the informa-tion is confusing and no one would provide us the datawe requested.


ANALYZING THE PHONE BILLJuly 22-August 4, 2014 Long Beach Business Journal 19

long distance rates. She explained that theFCC handed a decision down in the 1980sallowing phone companies to pass the costs

of maintaining the interstate network on toconsumers with a flat rate.“Primarily in those days it was AT&T;

they controlled the long distance network,GTE to a lesser extent. They argued that asa matter of economic theory, the costs asso-ciated with that [interstate] telephone linedid not vary with use, so it should not becharged on a per minute basis. It should becovered in a flat fee,” she said.When the rate was first approved, it totaled

about $1.50, according to Costa. “Theremainder of that interstate loop cost wasrecovered from the long distance companies.And over the years that’s been whittled backand back and back until now 100 percent ofthat cost is recovered from the customerregardless of whether that person makes asingle long distance call or not,” Costa said. Asked whether the phone companies

benefit from charging such nebulous fees,Costa said they do. “Customers don’tunderstand why they’re paying all of thesefees, and for good reason. They’re con-fused,” Costa said.For now, it appears some in Washington,

D.C., are paying attention to this issue.Costa sent the Business Journal a February27 letter addressed to FCC Chairman TomWheeler, signed by four members ofCongress. The letter came on the heels ofa 2013 House Communications andTechnology Subcommittee investigation

into seven of the largest wireless and wire-line communications providers. It focusedon what was referred to as “below-the-linefees,” stating that companies often burythe fees in small print when customerssign up for service. The letter also saidconsumers often find it difficult to get atotal list of the taxes, fees and surchargesprior to signing a contract.“Given that the combination of such

charges can add as much as 42 percent to aconsumer’s monthly bill, we believe thatfurther examination by the FCC is war-ranted,” the letter read.Before press time, we sent an e-mail to

Verizon’s Gonzalez asking how the com-pany justifies adding discretionary fees ontop of its regular rates. He balked at theterm “discretionary.” “That is not the case. Unlike some other

charges, these are calculated and set pur-suant to a regulatory schedule. They are‘allowable’ because of other regulatorychanges.”Like many of the answers we received in

our search to understand this issue,Gonzalez’s response only served to furthercross our wires. For now, the answer to themystery of telecom surcharges continues toresonate with the clarity of a dropped call. �

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Taxes, Surcharges And Fees(Much of this information comes from the

California Public Utilities Commission website)

California Advanced Services Fund (CASF) .464% – California AdvancedServices Fund (CASF) promotes deployment of high-quality advanced communi-cations services to all Californians. California LifeLine Program 1.15% – The California LifeLine Program providesdiscounted home phone and cell phone services to qualified households. TheCalifornia LifeLine discounts help consumers lower the cost of their phone bills.Only one discount per household is allowed (except for teletypewriter users and forDeaf and Disabled Telecommunications Program participants). Deaf And Disabled Telecommunications Program .200% – Provide telecommu-nications devices to deaf or hearing impaired consumers. California High Cost Fund-A .180% – Provides a source of supplemental rev-enues to 13 small local exchange carriers for the purpose of minimizing any basictelephone service rate disparity between rural and metropolitan areas. California Teleconnect Fund (CTF) .590% – Program provides a 50% discounton select communications services to schools, libraries, hospitals and other non-profit organizations.Federal Excise Tax 3% – The Federal Excise Tax is administered by the InternalRevenue Service (IRS) and is imposed on amounts paid for local telephone serviceand teletypewriter exchange service.State 911 Tax 0.75% – Government agencies require or authorize a collection offunds to cover the costs of providing 911 emergency responses.State PUC Fee 0.18% – Funding to support the California Public UtilitiesCommission.

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

exception, Verizon does not indicate the percentage used for the charges, and,

as you will read, some explanations seem redundant and are not very specific.)

Access Recovery Charge – “This monthly Verizon surcharge is applied on a per linebasis and is related to the Federal Intercarrier Compensation Rules, which set the ratescharged between carriers for telecommunications traffic.” Note: According to theFCC, it is up to each company on whether it charges this fee. The FCC sets the maxi-mum allowed to be charged.Federal Universal Service Fund Charge – “This monthly Verizon surcharge allowsVerizon and Verizon Long Distance to recover from its customers the funds it pays tothe Federal Communications Commission (FCC) on interstate services to support theFCC’s universal service programs. The FCC regulates this charge; reviewing andadjusting the fee quarterly based on the FCC’s quarterly FUSF contribution factor.The FCC uses the fund to help keep local telephone rates affordable for all customers,support telecommunications services in schools, public libraries, and rural health-carefacilities and subsidize local service to high-cost areas and low-income customers.”Long Distance Administrative Charge – “This monthly line charge helps defrayaccount servicing costs associated with providing voice services. This surcharge isapplied by Verizon and is not a tax or fee assessed by a government agency.”Long Distance Access Charge – “Formerly named the Federal Access Charge, thismonthly surcharge is assessed to long distance customers to help defray the accesscosts charged to Verizon Enterprise Solutions and Verizon Long Distance (or itsagents) by local telephone companies.”Carrier Cost Recovery Charge – “This fee is a monthly surcharge telecommunica-tions carriers, such as Verizon Long Distance and Verizon Enterprise Solutions, arepermitted to assess in order to defray the following: a portion of the costs to terminatecalls on other networks; fees paid to support government programs such asTelecommunications Relay Service and Local Number Portability; other chargesassessed by the FCC; and additional indirect costs associated with administering andcomplying with government programs.”Video Franchise Fee – “This monthly fee allows Verizon to recover from its cus-tomers the cost of the video franchise fee Verizon is required to pay to local franchiseauthorities, which may be up to 5.26% of the gross revenues from FiOS TV services,in order to provide TV Services.”Regulatory Recovery Fee – “This fee is a monthly Verizon surcharge that helps torecover the annual per video subscriber fee that Verizon pays to the FederalCommunications Commission (FCC) to fund the FCC’s administrative costs.” �


IN THE NEWS20 Long Beach Business Journal July 22-August 4, 2014

Long Beach Memorial Medical Center Once Again Named One Of Nation’s Best HospitalsLong Beach Memorial Medical Center, part of theMemorialCare Health System, was ranked among thenation’s top hospitals in an annual list by U.S. News & WorldReport. This is the 20th time Long Beach Memorial has beenincluded on the list, according to a statement from the hospi-tal. The medical center was identified by the publication asNo. 37 in the nation for diabetes and endocrinology careand as “high performing” in the areas of cancer, gastroen-terology and gastrointestinal surgery, geriatrics, gynecology,nephrology, neurology and neurosurgery, orthopedics, pul-monary, urology and ear, nose and throat. U.S. News&World Report publishes the rankings “to help patients withlife-threatening or rare conditions identify hospitals that excelin treating the most difficult cases,” a statement from the hos-pital said. The magazine compiles the ratings based on fac-tors including “patient survival rates, advanced technologies,patient volume and safety, reputation for developing and sus-taining high quality care” and more, according to LongBeach Memorial. “We are honored to be part of this presti-gious America’s Best Hospitals list and that year after yearour different specialties consistently achieve these high stan-dards of excellence,” Diana Hendel, CEO of Long BeachMemorial, Miller Children’s & Women’s Hospital Long Beachand Community Hospital Long Beach, said in a statement. Pictured, staff of Long Beach Memorial Medical Center gathered at the hospital following news of the “Best Hospitals” ranking. In theback row, from left, are: Linda Hoff, RN, BSN, vice president of adult medical surgical units, wound care and peri-operative services; Sue Melvin, DO, chief medical officer; Pamela Pyles, diabetescare associate; Tamra Kaplan, Pharm.D., chief operating officer; and Vincent Menendez, RN, MSN, FNP-BC, CDE. In the front row, from left, are: Holly Hackman, RD, CDE; Blanca Lansang, RN,BSN; Linda Kerr, RN, MSN, FNP-BC, CDE, diabetes program director; Stella Rollog, RN, CDE; and Maria Martinez, RN, CDE. – By Staff Writer Samantha Mehlinger

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

People In The NewsMemo r i a l C a r e

Health System hasappointed two of itsexecutives to spear-head the organiza-tion’s efforts toimprove health inSouthern Californiacommunities. ChiefT r a n s f o r m a t i o nOfficer HelenMacfie, Pharm.D.and Vice President ofPopulation HealthRegina Berman,MA, BSN, are goingto coordinate withclinics to improvepatient care by mak-ing it more conven-

ient and less costly, raising awarenessabout healthy lifestyles and refining thecoordination of care between hospitals,physicians and outpatient centers. Bothwomen have served on state and nationalboards of various health care organizations.“We are pleased to have two outstandinghealth care executives spearhead our criti-cal initiatives in population health manage-

ment,” MemorialCare President and CEOBarry Arbuckle, Ph.D. said in a statement.California State University, Dominguez

Hills (CSUDH) recently appointed twonew vice presidents in academic affairs anda new dean of the College of Health,Human Services & Nursing. GitanjaliKaul, Ed.D. has been named associate vicepresident for institutional effectiveness andassessment, and is responsible for leadingthe university’s institutional researchoffice. She was previously vice presidentof strategic planning for Florida AtlanticUniversity. Clare Weber, Ph.D. has beennamed associate vice president for facultyaffairs and is responsible for recruiting andretaining faculty, as well as tenure andother faculty policies. She has served asinterim associate vice president for facultyaffairs at CSUDH since February. M. GarySayed, Ph.D., Ed.D. has been named deanof the College of Health, Human Services& Nursing, the largest college at CSUDH.He starts August 11. He previously servedas founding director and professor of bio-medical, radiological and imaging sciencesat Alfaisal University College of Medicineand as director of a laboratory and researchcenter at King Faisal Specialist Hospitaland Research Center in Saudi Arabia.

Loretta Lamb hasbeen named vicechancellor of humanresources forCalifornia StateUniversity (CSU)and is part of CSUChancellor TimothyP. White’s executiveleadership team. She

is responsible for labor and employee rela-tions, professional development, comply-ing with equal opportunity and whistle-blower standards, policy development andacademic human resources. She was previ-ously the director of human resource oper-ations at the University of Minnesota,where she oversaw a staff of 50 people andmanaged a budget of more than $3 mil-lion. She has more than 20 years of expe-rience in human resources and labor rela-tions, having worked for the MinnesotaState Colleges and Universities system andWashington State University. She holds abachelor’s degree in social justice fromGonzaga University and a juris doctoratedegree from the Gonzaga School of Law.Dieter Hertzog, M.D. has joined his fam-

ily’s optometry business, Hertzog Eye Care,where he specializes in cataract, refractiveand oculoplastic surgery as well as LASIK

procedures. Hertzog has 13 years of trainingin ophthalmology, having studied andtrained at Harvard University, the LomaLinda School of Medicine, the Doheny EyeInstitute and the USC Department ofOphthalmology. Hertzog is a fifth genera-tion ophthalmologist. His father, LiefHertzog, M.D., runs the family business,which has been in Long Beach for 87 years.Karen Brown has been named senior

vice president andteam leader of FirstBank’s CommercialLending Group ofWoodland Hills,serving the SanFernando Valleyregion. Brown hasworked in the bank-ing and finance

industry for more than 32 years in seniormanagement roles at City National Bank,California United Bank, US Bank, PacificWestern Bank, 1st Enterprise Bank andBarclays Business Credit. In addition toher new position at First Bank, she serveson local boards for Habitat For Humanityand Camp 4 Kids. She has a bachelor’s ofscience degree in public administrationfrom California State University.Patrick Hughes has been named break-

Helen Macfie

Regina Berman

Loretta Lamb

Karen Brown


IN THE NEWSJuly 22-August 4, 2014 Long Beach Business Journal 21

� By SAMANTHA MEHLINGER

Staff Writer

In 1958, European immigrantsVincente and Inge Cristiano came toLong Beach, California, by way ofBogota, Colombia, and opened a littleItalian restaurant in Bixby Knolls namedafter their firstborn son, Nino. Fifty-sixyears later, the couple still owns therestaurant, with Inge leading operationswith the assistance of her three children,Carina, Mike and Nino. Sitting at a table covered in red and

white checkered cloth in the restaurant’soriginal dining room at 3853 AtlanticAve., Inge and Carina reflected on therestaurant’s history and its 56th anniver-sary, which falls on July 31. “I think as afamily-owned and operated restaurant inLong Beach we are definitely the oldestwith the same family,” Carina said, noting

that while other long-time family-ownedrestaurants in Long Beach may be run bysecond or third generations of families,Nino’s Ristorante Italiano is still ownedby its founders.“I am so proud of my mom and dad to

have come to this country as foreignershaving a two-week-old and a four-year-old, a couple suitcases, and languagebarriers and a new culture to adopt,”Carina said. “To still have the restauranthere all these years later, I am reallygrateful for that.”After World War II, the Italian Vincente

and German Inge looked for opportuni-ties to move to the Americas, first movingfrom Germany to Canada briefly to meetup with Inge’s sister, then moving toColombia in 1955 when the Canadianwinter proved too harsh. At the time, thecouple had only their firstborn son, Nino.Bogota also soon proved unsuited for the

family. Inge recalled, “When I was in thehospital having [our second son] Mike,[the Colombian people] were having arevolution.” So in 1957, the family pickedup and moved to Long Beach, whereInge’s sister had relocated and whereCarina was eventually born.Leaving behind a restaurant in

Colombia, the couple decided not to giveup on their dream and immediately begansearching for a new restaurant location inLong Beach. Vincente drove around townevery night searching for a good location,Carina said. “It was really a nice familylocation and we really like the neighbor-hood,” Inge said of settling on AtlanticAvenue in Bixby Knolls. “We like the peo-ple who live here.”The restaurant is still in its original loca-

tion and expanded to include a meetingroom and larger banquet room with a fullbar after the Cristianos bought the wholebuilding in the 1980s. Because the restau-rant has been in the same location for solong, it has developed generations of repeatcustomers, mother and daughter said.“People grow up here at Nino’s and thenthey come back with their families,” Carinasaid. “We go on fifth generation with a lot of

them,” Inge said of Nino’s customers. Herown children grew up in the restaurant, too,she added.

Several staff members have worked atthe restaurant for decades and are like fam-ily to the Cristianos. About half the staff of10 full-time employees has worked atNino’s between 12 to 35 years. “It is goodto have people you can depend on,” Ingesaid. Carina noted, “There is not one per-son who is employed at Nino’s who doesn’tlive in Long Beach – even the people webring in for our banquets and catering. Thatis really important to us.”After the restaurant consolidated its

once lengthy menu and completed refur-bishments thanks to an appearance onthe Fox reality show “KitchenNightmares” last year, the family is nowfocusing on growing its banquet andcatering side of the business, which isalready strong, Carina explained. “It isrepeat business,” Inge said of banquetsand catering. “Six weeks ago I had a cus-tomer who graduated . . . [and] had awonderful party for almost 100 people.Two weeks ago she called us and said itis my daughter’s 21st birthday, so she isgoing to come this Saturday and bring 50to 60 people,” she said.The entire family – Inge, Vincente,

Carina, Mike and Nino – continue to beinvolved in the restaurant’s daily opera-tions, Carina said. “My dad, even thoughhe is 90, has lunch and dinner here everyday and wouldn’t miss a day at Nino’s.” �

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

Nino’s Ristorante Italiano Celebrates 56 Years In Bixby Knolls

bulk sales director of Ports AmericaStevedoring, the nation’s largest marine ter-minal operator and stevedoring company.He is responsible for business development,market growth and strategies for customersatisfaction. He reports to Chris Smith, vicepresident of breakbulk. “His experience is anatural fit to Ports America’s focus on pro-viding superior customer service andincreasing business development,” Smithsaid about Hughes in a statement. Hugheshas worked in the international trade andlogistics industries for more than 18 years.Before joining Ports America, he was theregional sales team leader for the Americanbranch of CMA CGM, an internationalshipping company. He also worked fornearly two decades at Sea-Land Servicesand once owned his own third-party logis-tics business.Dr. Greg Perrault, owner of Cats &

Dogs Animal Hospital in Long Beach, wasrecently elected chairman of the LongBeach Health and Human ServicesCommission. Perrault attended MichiganState University as an undergraduate major-ing in microbiology and public health andreceived his bachelor’s in veterinary sci-ence. After an externship in SouthernCalifornia for avian, exotic and wildlifemedicine, he received his doctorate fromMichigan State University College of

Veterinary Medicine in 1992. He is a mem-ber of the American Veterinary Association,the California Veterinary Association, theSouthern California Veterinary Association,the Association of Avian Veterinarians, andthe Association of Reptile and AmphibianVeterinarians. Besides operating Cats &Dogs Animal Hospital, Perrault donates histime by providing first aid for many of localpromoter Justin Rudd’s events, such as theHalloween parade, and writes a monthly petarticle for the Grunion Gazette weeklynewspaper.Janine Falvo was recently named

executive chef of the Renaissance LongBeach Hotel at 111 E. Ocean Blvd. inDowntown Long Beach. Concurrently,the hotel announced a “newly revampedmenu” at is SIP Lounge, which Falvosaid showcases her “Ocean to Fork” phi-losophy “in everything that is preparedin the kitchen. The menu includes fresh,locally caught fish and shellfish andsustainable mainstay dishes featuringorganic meats, artisan cheeses, locallygrown produce and vegetarian options.“Previously, I have fostered a farm-to-table approach to locally inspired cui-sine using seasonal ingredients fromarea purveyors,” Falvo said in a state-ment. SIP Lounge is open daily. Forreservations, call 562/437-5900.


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Lindsay Christophe and Pat Flynn

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Vol. XXVII No. 14

July 22-August 4, 2014

PERSPECTIVE22 Long Beach Business Journal July 22-August 4, 2014

When you live inS o u t h e r n

California, it can be easyto become less cautiouswhen it comes to theheat. Being too comfort-able with your weatherenvironment can get youdog days of the SouthernCalifornia summer.Children and adults

are different and so aretheir health care needs.Many children’s ill-

nesses are rarely seen in adults or affect kids dif-ferently, so when a child needs surgery, choosingthe right surgeon, care team and hospital isimportant. Here are some things to consider whenchoosing where to go for your child’s surgery. Board-Certified Pediatric SurgeonsYou should expect a kid-friendly surgical team

that includes board-certified pediatric surgeons,pediatric anesthesiologists, nurses and surgicalassistants, all extensively trained and experiencedin pediatric surgery.Children are not little adults – many of the con-

ditions and needs they have are unique. Pediatricsurgeons are specially trained to evaluate, diag-nose and operate on newborns, children andyoung adults. Type Of Surgical Specialties OfferedMost pediatric surgeons have extensive training

in a pediatric surgical specialty. If your child needsa specialized surgery, it’s important to find a sur-geon who has the expertise in that area. Pediatricsurgical specialties include: general, neurosurgery,orthopedic, plastic, cardiac, urologic, otolaryngol-ogy (ear, nose and throat) and more. Pediatric AnesthesiologistsAnesthesia can be scary for both the child and

their family. Pediatric anesthesiologists are

board-certified and specialize in delivering the cor-rect dose to kids. Pediatric anesthesiologists are instrumental in

the safety and success of a surgery, but also planand provide pain control for children throughoutthe surgical process. Just like pediatric surgeons,pediatric anesthesiologists have extensive train-ing in treating children and communicating withfamilies.Patient And Family Centered CareConsidering the family as part of the care team is

essential to a successful recovery for children.Make sure the hospital you choose understands theimportance of a partnership between families andthe care team. A unique aspect of choosing a children’s hos-

pital is the access to child life specialists. Forchildren, surgery and hospitalization can be themost frightening experience of their life, espe-cially if they’re in the early stages of their devel-opment. A child life specialist’s primary role is to nor-

malize the scary environment of a hospital.Child life specialists have degrees in childdevelopment and prepare children before theygo into any surgery or medical procedure, oreven anesthesia. Often called “medical play,” thepreparation sessions are geared to the develop-mental level of the child.Letting children manipulate and explore med-

ical tools, such as an anesthesia mask, helps themunderstand how it works and gives the child con-trol over a potentially anxiety-producing piece ofequipment. Latest Surgical TechniquesTo ensure the best recovery for your child, ask

about the latest surgical techniques that the hospi-tal uses. Traditionally, many surgical procedureswere performed through large incisions using“open” incision techniques. Whenever possible,surgical procedures are now being done through

tiny incisions less than an inch long using a min-imally invasive approach. In most minimally invasive surgeries, a flexible

camera and light-weight surgical instruments areintroduced to the surgical area through tiny inci-sions. Guided by magnified images on a televisionmonitor, surgeons are able to perform complex pro-cedures less invasively.There are many advantages of minimally inva-

sive surgery for children such as less pain, mini-mized scarring, improved recovery times andshorter or eliminated overnight hospital stays.Pediatric surgeons can even perform minimally

invasive surgeries, such as gall bladder removalsand appendectomies, in an outpatient settingmeaning children don’t need to spend the night atthe hospital. Environment A pediatric surgical environment should provide

comforts to help lessen children’s anxieties andfears. Look at the physical environment of the hos-pital. Is the décor welcoming for children? Is therean area for them to play while they wait for sur-gery? What comforts are offered for families whilethey wait for their child to get out of surgery? In addition to the physical environment, it’s

important that the equipment is tailored to chil-dren. In a children’s hospital, everything from thedressing rooms to the operating room will be sizedjust for kids. Making A DecisionChoosing a place for your child’s surgical care

needs can be difficult, but many hospitals offer pre-surgical tours as a way to learn more and give par-ents a chance to ask questions. Take advantage ofthese resources, so that as a family you can make aninformed decision(Fombe Ndiforchu, M.D., MPH, MBA, is the

medical director for general pediatric surgery atMiller Children’s & Women’s Hospital LongBeach.)

D id you know that thetypical Internet user

is twice as likely as othersto feel that people can betrusted?1 Facebook usersare the most trusting of all.A typical user is 43 per-cent more likely thanInternet users to feel folkscan be trusted. They arethree times more likely totrust people than non-Internet users. One of thereasons for this is because

it increases the brains release of oxytocin whenpeople connect.Oxytocin as been referred to as the “cuddle hor-

mone” because when it is released it fuses anunshakable bond between nursing mothers and theirbabies. It creates empathy, generosity and trust.Now these are very subjective criteria for trust-

ing or building trust. But when coupled with moreobjective components they show that trust is notas simple as we imagined. Trust use to be “don’tlie, don’t cheat, don’t steal.” These are indispensi-ble, but they don’t tell the whole story.Webster defines trust as “an assured reliance

on the character, ability, strength, or truth ofsomeone or something.” It’s different thanintegrity. It’s more organic in nature because youcan earn it or lose it. Integrity is what you are,whereas trust is a feeling or perception you haveabout someone or something. Trust is also verynatural. We want to trust others. You can see thisin young children. They naturally trust. Theylearn to distrust.

It’s important to understand, not only the neuro-logical factors involved in trust, but also the differ-ent categories of trust. There is . . .Personal Trust. This is based on faith in some-

one else’s integrity, and it is developed throughshared experiences. Are they reliable? Do they meetdeadlines? When the pressure is on can you counton them? Are they honest?One of the best ways to garner personal trust is

to hang a lantern on your problem rather thanexcusing it. In other words, when you make a mis-take admit it before anyone else finds out. Howmany times have we seen that what kills people inbusiness, politics, and athletics is not the mistake,but the cover up? What is the private lesson wecan learn from public examples? Admit the issueright away. It doesn’t make the problem go away,but it does reinforce trust.Another component of personal trust is

called “positive discretionary behavior.” This isa big phrase that simply means you are a niceperson. You are benevolent and kind. You arepolite. You hold the door open when you seesomeone struggling to carry something in. It’snot enforceable. You don’t have to do it. Bothon and off the job you do more than isexpected. We trust nice people more than we dothe “it’s not my job” crowd. The next time youlook at an executive’s bio check out what iscalled “the nice paragraph” at the end. Itincludes the nice things about the executive,including her charities, church and children.They are saying, “I’m nice.”Vulnerability is another aspect of personal

trust. You risk getting hurt by being open. Butpeople are prone to trust those who choose not

to self-protect. We trust those who aren’t afraidto show their vulnerabilities.Personal trust is important. But there is also . . .Expertise Trust. Expertise trust relies on

someone’s specific ability. Is this person compe-tent? I once had a very nice guy install a stereosystem in our home. He was nice, fair, kind, andeven showed vulnerability. There was just oneproblem. The house system has never workedright. This is true of professors, doctors, pilots,landscapers and any other professional.Research has also shown that when people feel

trusted, that in turn makes them potentially moretrustworthy.How does it work? The oxytocin level is

increased in a person’s brain when they feel trusted.This in turn makes them become more trustworthy.2

This has implications all the way from raisingchildren to leading in the workplace. Trustingyour children or employees has the potential ofincreasing their trustworthiness. It’s true on aconscious level because they appreciate therespect you are showing them. But it’s also trueon a deeper unconscious level as the “trust” hor-mone is released.Everyone is talking about the human growth hor-

mone (HGH). Let’s include the human trust hor-mone (HTH) in the conversation.

1Pew Research Center, “Social Networking Sites And

Our Lives”. June 16, 2011.2Kosfeld, M. et al, (2005). Oxytocin Increases Trust In

Humans. Nature. 435.

(Mick Ukleja is the author of several books, acoach, keynote speaker and president ofLeadershipTraq, a leadership consulting firm.Check his blog at www.leadershiptraq.com.)

� EFFECTIVELEADERSHIP

By Mick Ukleja

How To Build And Maintain Trust

Choosing The Right Hospital For Your Child’s Surgery

� HEALTHWISE

By Fombe Ndiforchu, M.D.


PERSPECTIVEJuly 22-August 4, 2014 Long Beach Business Journal 23

In the published min-utes of last month’s

policy meeting of theFederal Reserve, therecovery in our nation’shousing is one of the pri-mary topics discussed anda litany of issues isoffered as to why progresshas been much slowerthan most anticipated.If you were to talk to

the various specialists in the fields of banking,real estate sales, home building and econom-ics, you would have a better understanding ofwhy this one of the slowest recoveries sincethe Great Depression.Many of the reasons for the slow progress that

you don’t see in the headlines or in most dailynewspapers were detailed out in the Fed’s discus-sion. Neither the Administration nor Congresslikes to talk about most of these issues becausedoing so flies in the face of sharing the “happynews” they like to bolster when talking about theeconomy for reelection hype. But some of thekey issues in these discussions point to funda-mental problems with the economy in generalthat are not going away very fast.

One of the most obvious deterrents to homesales, according to the Fed minutes, is “restric-tive credit conditions, particularly for house-holds with low credit scores,” which is largely aby-product of the housing bubble of 2007-08.And, although lenders are making progress inloosening up requirements, it is a whole differ-ent world than it was a few years ago.Mortgage lenders often demand that borrowers

have FICO scores of 680 or more, far higher thanwhat Fannie Mae, Freddie Mac or the FederalHousing Administration will allow. Such "creditoverlays" have kept many borrowers, particularlyblacks and Hispanics, out of the housing market.High down payments are now required as

opposed to many programs that entailed little orno down payments prior to the Great Recession.Many consumers now work in jobs where theyare not able to save enough for a down payment.While down payment requirements are low byhistoric standards at 3.5 percent for FederalHousing Administration loans, private lenderspretty much have deserted this market.Low demand among younger homebuyers,

due in part to the burden of student loan debt, istaking its toll on the first-time buyer market,and this doesn’t look to change quickly. Collegegraduates are saddled with an average of

$29,400 in student loans according to theProject on Student Debt, making it tough to savefor a down payment on a home. Plus, new mort-gage rules require that potential homebuyershave a debt-to-income ratio of less than 43 per-cent in most cases, a barrier that is keepingrecent graduates from buying a home.A shortage of buildable lots for developers

(and in many cases this means at a reasonableprice), especially in the most desirable locations,has emerged as a key factor holding back a morerobust housing recovery, according to home-builders. Construction of single-family and mul-tifamily homes is expected to ramp up dramati-cally in the next year or so, but builders are beingcautious, so don’t look for this to be a boom.There are low inventories of desirable

homes for sale because of the low number ofmove-up buyers and, with many homeownersstill underwater, homes for sale are scarce.This constrains activity on both sides of themarket; buyers have fewer homes to choosefrom and sellers almost always need to buyanother home when they do sell.Distressed homes remain a dead weight in the

housing recovery. Though foreclosures anddelinquencies have dropped dramatically in thepast year, there were 966,000 properties in fore-

closure in May, according to Black KnightFinancial Services. Another 1.2 million homesare delinquent by 90 days or more. This contin-ues to be a drag on the market.Rising construction costs are another factor

that is noted in the Fed minutes, with prices forkey construction materials expected to increase.The cost of softwood lumber has risen 40 per-cent from 2011 to 2013, according to theDepartment of Labor, though overall costs areexpected to continue to climb only modestly, inthe range of one to five percent.Structural changes in housing demand are

underway and continue to change the way peo-ple live." An aging population and evolvinglifestyle preferences . . . [are] boosting demandfor multifamily units at the expense of single-family homes," the Fed minutes say. Some inthe industry believe a structural change isunderway, as buyers demand smaller, cheaperhomes and more people choose to rent.How well we tackle these issues and adapt to

the changing landscape looks to be the key to howquickly and how successfully the market recovers.(Terry Ross, the broker-owner of TR Properties,

will answer any questions about today’s realestate market. E-mail questions to Realty Views [email protected] or call 949/457-4922.)

REALTY VIEWS

By Terry Ross

Federal Reserve Cites Problems With Housing Market

The contract negotia-tions that are cur-

rently taking place in SanFrancisco between dock-workers and the PacificMaritime Associationwill have impacts farbeyond the ports. A contract agreement

for West Coast longshore-men keeps the supplychains moving for goodsthat use the ports on theirway to final markets in

this country, or in the case of exports, across theglobe. This includes California’s agriculturalexports. This state’s agricultural supply chain isa major user of the transportation system.California produces nearly one-half of the coun-try’s fruits, nuts and vegetables and also is amajor producer of livestock and livestock prod-ucts. Farm-to-market goods depend upon notonly working ports but on a network of inter-state highways, state roads and small, ruralroads, some of which have not been designed tosupport large trucks. The seeds of the farm-to-market road sys-

tem were planted in the early 1930s when theU.S. Bureau of Public Roads called on

America to “get the farmer out of the mud,” aslogan that led to a greatly improved andexpanded system of paved rural roads. Thesedays, geography and environmental concernsalso play a role in determining where, how andwhy infrastructure investments get made.The San Joaquin Valley is the main contribu-

tor to agricultural production in the state. Theeastern Sierras, Sacramento Valley, ImperialValley east of San Diego County, and the CentralCoast also contribute to farm-to-market goodsmovements. The Sacramento Valley controlsmore than two-thirds of the worldwide prunemarket with over 400 growers in California. Inthe Imperial Valley, local farmers produce morethan 100 different commodities, including bam-boo, sugar cane, flax, corn, artichokes, fish,goats, honey, cilantro, water lilies and more. The Central Coast region, a five-county

region (Santa Cruz, San Benito, Monterey, SanLuis Obispo, and Santa Barbara) is a major pro-ducer of broccoli, lettuce and strawberries. Winegrapes and nursery products are also importantagricultural products. In all of these regions,goods movement is a significant contributor topoor air and water quality. On top of that,increased population growth creates a demandfor more goods movement, increases congestionand hastens the degradation of local roads.

Furthermore, deregulation of the rail indus-try has allowed rail road companies to disinvestin less profitable, inefficient and often ruralrailroads making agricultural commoditiesmore dependent on trucking. As a result, theroad network for the first, last and sometimes“in-between” miles is critical for farm-to-mar-ket goods movement in the state.Underdeveloped roads decrease the efficiencyof all types of goods movement. They exhibithigh levels of disrepair, thereby slowing vehic-ular movement, and do not allow for passing,which in turn creates congestion. Other states are creating their own networks

of farm-to-market roadways for rural regions.Best practices are coming from places likeTexas, Iowa and Missouri. In Texas alone, thereare 40,985 miles of farm-to-market roadways.These road networks are designed to directlyconnect agriculturally productive regions withpopulation centers so that produce can be deliv-ered to consumers efficiently. California can learn from these other places

about how to design and modify roadways toaccommodate trucks that meet federal stan-dards while responding to local needs. It’s alsoworth looking outside of the state for lessonson how the seasonality of certain commoditiesaffects infrastructure demand. And of course,

the more innovative financing tools at our dis-posal, the better.But there are in fact efforts underway in this

state to improve road conditions and to pro-vide facilities for both short-haul and long-haul truckers. The San Joaquin ValleyInterregional Goods Movement Plan, forexample, looks at a wide range of issuesincluding the state of existing infrastructureconditions as they relate to freight, the rela-tionship between freight and the valley econ-omy, environmental impacts of freight-relatedactivity, and growth in freight demand.This effort and California’s Freight Mobility

Plan may themselves become national models foraddressing farm-to-market issues in the broadercontext of regional and statewide goods move-ment. Given the size of both the state and ouragricultural industry as well as potential eco-nomic impact throughout the country – if not theworld – of an inefficient agricultural supply chain,home grown innovations will be important. Ofcourse, that assumes that goods can get throughthe ports. So, how are those negotiations going?(Dr. Thomas O’Brien is the interim executive

director of the Center for International Trade andTransportation at CSULB and an associate direc-tor for the METRANS Transportation Center, apartnership of USC and CSULB.)

TRADE ANDTRANSPORTATIONBy Tom O’Brien

Freight From Farm To Market

PUBLISHER’S PERSPECTIVEBy George Economides

O n July 15, local residents, business peopleand others gathered at the Terrace Theater

to welcome Long Beach’s new team of electedofficials. Three thousand people filled the the-ater to witness Robert Garcia sworn in asmayor and five councilmembers take the oathfor the first time. The city attorney, city auditorand city prosecutor were also sworn in for four-year terms. It certainly was a joyous occasionwith good speeches, a lot of hugging and manystatements claiming Long Beach is a great city.But the focus was on Garcia, the 36-year-

old, Peruvian-born, openly gay mayor whowon a narrow victory in June to become the

youngest mayor in the city’s history. Now peo-ple are asking, what is his agenda? Will he bea leader who brings people together? For ourreadership, the important question is: does heunderstand the business community?Throughout Garcia’s inaugural speech, he

talked about the American Dream: “What Ilove about our city the most is that you can findthe American Dream here. There is an opportu-nity here for everyone to succeed . . .” Then he spoke about poverty in Long Beach

and that’s when a red flag went up: “We haveprospered so much and we will continue to pros-per. We will continue to support business; wewill continue to work with our friends in labor.But we will always have to keep an eye as wemove forward, that if we are ever going to grow

as a city, we must address this issue of poverty.” Was Garcia sending a signal that he will push for

increasing the minimum wage on businesses inLong Beach? It sure did sound like he was layingthe groundwork. With pro-labor councilmemberssuch as Al Austin, Roberto Uranga, Lena Gonzalezand Rex Richardson – and occasional support fromSuja Lowenthal and Patrick O’Donnell – Garcia hasenough votes to go after more “contributions” fromthe private sector to help out those workers who areconsidered to be living at the poverty level. One group of businesses that could be targeted

are dining establishments, a sector that employsthousands of workers locally at or near the mini-mum wage. Most of these businesses are smalloperations with very thin profit margins. Thevast majority of restaurants close within two

years of opening, with only a few making it pastfive years. There’s a reason for that beyond com-petition: it’s a very tough business with foodprices and other costs increasing constantly.Most small business owners work long hours fora small return. Yes, people at the poverty level arevulnerable, but so too are small businesses.We never hear labor unions talk about educat-

ing people; their approach is always to have busi-ness pay more. We would like to see Long Beach’snew leadership – with cooperation from businessand labor – focus on getting people at the povertylevel an education, or learning a trade. That’s thebest solution to helping lift people out of poverty.Options exist for every challenge a community

faces. How elected officials approach solutionswill tell us much about the future of Long Beach.

Addressing Local Poverty Concerns: Mayor Garcia And OtherOfficials Should Focus On Education, Not The Minimum Wage


july 22-august 4, 2014 section a

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