It’s difficult to believe that this is my 50th Capitol Punishment column. My first was published on June 9, 2003. At that time I thought that I might be able to sustain the column for six months (at the outside) but thanks to our California Legislature I don’t believe I will be running out of material any time soon. Since this is my 50th column I have decided to look back at my previous columns and select a few of the earlier ones for follow-up. In August, 2003 I discussed the decline of jobs in the manufacturing industry stating that from December 2000 through September 2002 Californians lost 167,000 manufacturing jobs. At that time total California manufacturing jobs were approximately 1,550,000 (down from 1.9 million in 2000). Since August, 2003 manufacturing jobs have continued to decline. As of June 2007, total California manufacturing jobs were approximately 1,495,000. In March, 2004 I discussed two bills that I believed would worsen the existing hospital crisis. The first, SB 1953, required costly seismic retrofit at all acute care facilities with standards exceeding those for school buildings and without regard to whether the hospitals suffered significant damage from prior earthquakes. The second, AB 394, mandated minimum nurse-to-patient ratios that have been very difficult to achieve due to the significant nursing shortage in California. Recently the California Hospital Association published its list of 2007 advocacy priorities which included “make rational and necessary adjustments to the seismic mandate to maintain access to hospital services” and, “address the severe shortage of qualified nurses and other health care workforce shortages through legislative and public advocacy.’ In December, 2004 when California’s projected structural deficit for the next year was between $6 billion and $10 billion I suggested the need for creative solutions and for more moderate legislators to be able to work together to avoid major budget battles and be able to pass a balanced budget on a timely basis. Today, the governor has proposed a budget that would reduce the structural deficit to approximately $1.4 billion and balance the current budget yet there are still few moderate legislators (due to the failure to pass legislation that would provide for either an open primary or independent redistricting) and we are, once again, dealing with a delayed budget due to battles between the extremes. In April, 2005 I discussed the significant increase in public pension plans from $160 million in the year 2000 to $2.6 billion in 2005 with a projected increase to $3.5 billion by 2009 and that there was more than $30 billion in additional unfunded costs for future state and local government retirees. At that time I supported alternatives (for new hires) to the existing extremely costly defined benefit pension plans in the hope of curtailing future state coffer hemorrhages. The legislature has not yet found a solution to this problem. Since June, 2003 I have reported on many bills which I considered to be “Job and Business killer” bills. Twenty-nine of those bills were still involved in the legislative process when I reported on them. Of those twenty-nine bills, eighteen were subsequently passed by both houses of the legislature; one was vetoed by Governor Davis; nine were vetoed by Governor Schwarzenegger; five were signed by Governor Davis; three were signed by Governor Schwarzenegger; and, eleven died in the Legislature. In conclusion, it appears that many of the issues that existed up to four years ago still exist. What a shame! I have chosen the following bill to profile this month: SB 942: This bill creates unreasonable requirements for employers when bringing injured employees back to work. The employer is required to return the previously injured employee to work within 5 days of receiving a physician’s written statement that the employee is able to perform the essential functions of the employee’s regular position or face new monetary costs, placing the employer on the defensive and opening the door to more claims. The monetary penalties apply regardless of whether the employer believes that the employee is unable to perform the job functions, the employee is terminated for cause during the return period or the employer closes his facility and does not have a job available for the injured worker. Status: Passed Senate 5/31/07, currently in Assembly. Valley Senators voting for bill: Padilla, Kuehl, Scott. Valley Senators voting against bill: Margett, McClintock, Runner Gregory N. Lippe, CPA, is managing partner of the Woodland Hills-based CPA firm of Lippe, Hellie, Hoffer & Allison, LLP and vice-chair of the Valley Industry and Commerce Assoc. (VICA).

Businesses in need of employee training are in luck. This month the Learning Alliance will launch. A collaboration of the Economic Alliance of the San Fernando Valley and the eight adult centers of the Los Angeles Unified School District in the area, the Learning Alliance will provide course instruction to employees in industries such as manufacturing, hospitality and retail. The instruction “will consist of English as a second language, academic math and English preparation, as well as career and technical programs,” Richard Wormus, principal of West Valley Occupational Center, explained. “We’re reaching out to offer quality educational services to local businesses to help improve their employees in their job skills, as well as their literacy skills.” Bert J. Seneca, general manager of Beverly Garland’s Holiday Inn at Universal Studios, oversees a staff of approximately 130. His company is the first to sign up to use the Learning Alliance’s services. Five years ago, Seneca had employees take advantage of similar training through the Economic Alliance, and he was thrilled by the improvements made in their performance. “It not only helps them at work; it also helps them in life,” he recalled. Seneca said that the renewed sense of confidence staffers have, especially if they have been trained in English as a second language, enhances their ability to provide customer service. “If an associate learns the conversational side of English, they can direct (the customer) in a more detailed way. The customer thinks, ‘I’ve got someone who may be limited from a language standpoint but not limited in the ability to help me.'” In the warehouse industry, English skills can make the difference in how timely a shipment arrives, or if it arrives, according to Economic Alliance Director of Workforce & Education Kenn Phillips. “One of the big reasons why a person gets terminated in the warehouse is when they’ve shipped things out to the wrong location because their vocational English is not strong,” he said. “Here they could improve their error rate and language speaking and knowledge.” The Learning Alliance will also provide instruction in learning industry jargon, particularly in the area of healthcare literacy. “For example, if I worked in the hospital, but my assignment did not have anything to do with patients, I would learn the type of language necessary to understand basic hospital matters, improving customer service,” Phillips said. Flexible schedules Flexibility will be paramount in the services provided by the Learning Alliance. Classes may be held before work, at lunchtime or after hours. Also, when a “semester” starts and stops is at the company’s discretion. The locations of the classes will also be up to the business. “Even though there’s eight adult centers, there’s 350 satellite locations where things can be taught,” Phillips said. “Most of those sessions could be held at a park, a neighboring high school, community center, a WorkSource California center, or it could be done at a business site.” While classes held in the centers need to have a minimum of 20 people, companies who would like to enroll a smaller number of employees in the course could supplement the difference. Seneca appreciates the flexibility the Learning Alliance affords to businesses. “They will offer more locations throughout the Valley versus some other organization that will have limited resources,” he said. The fact that Los Angeles Unified School District will have a role in the training makes it even more unique, according to Wormus. “We have a history of working with adults in providing services,” he said. “We have a proven track record in terms of working with people to improve their English and helping people to improve their lives through better skills. The adult program offers individualized training, and the teacher will be placed at the job site, so they can work directly with that employer to serve those particular needs.” In celebration of its launch, the Learning Alliance presents a “Coffee Session” with Los Angeles Councilman Tony Cardenas Aug. 16, 7:30 to 9:30 a.m., at the Economic Alliance, 5121 Van Nuys Blvd., Suite 200, in Sherman Oaks. The event is on a first come, first served basis. For information, call (818) 379-7000.

Investor Paul Allen will sell 10 million shares of DreamWorks Animation SKG Inc. stock in a public offering. At the same time, the board of directors for the Glendale-based studio approved the company purchasing $150 million in shares from DW Investment II Inc., an equity firm controlled by Allen. The reduction of Allen’s investment in DreamWorks Animation is part of an effort to rebalance the portfolio of Vulcan Capital, his private asset management company. Allen is a co-founder of Microsoft and owner of the Seattle Seahawks football team and Portland Trail Blazers basketball team. “I am pleased to have been a principal investor in DreamWorks since its inception and proud of the company’s many successes to date,” Allen said.

The Walt Disney Company has acquired Club Penguin, an online virtual world for kids ages 6-14. Since its launch in October 2005, Club Penguin has grown to more than 700,000 current paid subscribers. The site has more than 12 million activated users. Company founders Lane Merrifield, Dave Krysko and Lance Priebe join Disney and remain the senior management team of the unit. Merrifield, Club Penguin’s chief executive officer, will become an executive vice president of The Walt Disney Internet Group (WDIG), reporting to WDIG President Steve Wadsworth. Disney plans no immediate changes to the operation or business model of Club Penguin.

July 16th was the anniversary of my father’s death. He died forty-seven years ago. My father died of a massive coronary a heart attack while vacationing in Greece in 1960. I can’t tell you “why” he died. But, I believe I can tell you “how” he died. I am sure the reasons given were many and complex ranging from blocked coronary arteries to poor health and dietary habits to significant stress to a genetic predisposition. Why my father died at such a young age of 35 is an altogether different story and may be of interest to many of you especially those involved in the procuring or delivering of training to your employees. Because this was not his first heart attack, but his second, exactly two years after his first. He was young in his business career. As a graduate from Yale Law School near the top of his class, he left the practice of law to become a sales executive as the son-in-law to my maternal grandfather’s large and successful family-owned business. Young, successful and ambitious, he had the support of a large family franchise to work for following his recovery from the first heart attack. While he made some of the necessary lifestyle and dietary changes to adjust to his circumstances, what were missing from his life were the ongoing education, support and accountability needed to sustain these new behavioral and lifestyle changes. And, that is precisely what’s missing in most training programs. As a 20-year veteran business consultant and personal coach with significant experience in training, financing, managing and growing small businesses from 5-150 employees, I graduated over 600 adults through an entrepreneurial training program during the 1990’s and had over 150 business owners go through my coaching program during these past several years. What I have found with the training graduates is that a much smaller percentage of them utilize the materials or lessons learned in the training program in the years following the training. The coaching clients, on the other hand, feel they have made at least significant improvements and see consistent gains in their productivity, incomes and effectiveness because they are still enrolled in the coaching relationship. Thus, without ongoing mentoring, accountability and support, training simply doesn’t have the last impact or effect that coaching has. In other words, most training programs don’t work. What’s wrong with most training programs today are that they are treated as an event a one-shot deal leaving the trainee to fend for himself after the training takes place. For a small business to build a strong organization of emotionally engaged and committed employees, continuous training is a must. And, without ongoing training that focuses on the reinforcement and repetition of the materials and skills previously covered, most training programs are simply just ineffective. While new skills are being learned, other older skills may be being forgotten. Evidence of why training with reinforcement is needed is found in the stories of most heart attack victims. Like my father, these victims don’t have the ongoing support and accountability required to make highly needed lifestyle changes. With countless bypass surgeries and angioplasty procedures annually, many patients could avoid the return of symptoms and the need to repeat surgeries not to mention arrest the course of their disease before it kills them by switching to healthier lifestyles. Yet very few do. In a May 2005 Fast Company article by Alan Deutschman, Dr. Edward Miller, the dean of the medical school and CEO of the hospital at Johns Hopkins University was quoted as saying: “If you look at people after coronary-artery bypass grafting two years later, 90 percent of them have not changed their lifestyle. And that’s been studied over and over and over again. And so, we’re missing some link in there. Even though they know they have a very bad disease and they know they should change their lifestyle, for whatever reason, they can’t.” “Changing the behavior of people isn’t just the biggest challenge among heart attack patients. It’s the most important challenge for businesses trying to compete while simultaneously struggling with the human condition,” wrote Deutschman. “The conventional wisdom says that crisis is a powerful motivator for change. But severe heart disease is among the most serious of personal crises, and it doesn’t motivate at least not nearly enough.” Similarly, most young, less experienced, or less successful entrepreneurs need ongoing skills training in subjects ranging from sales and marketing to finance and operations. And, often overlooked as important in their training are soft skills training in leadership and people management. The problem with some small businesses today is that they are small because their owners think small. Ongoing mentoring in sales, marketing, leadership, and people management along with strategic planning, strategic focusing, goal setting and accountability is often required to increase success levels. To understand what type of training (or coaching) is recommended to the owners of small businesses, let’s review some of the top challenges faced by established entrepreneurs and managers. While most established entrepreneurs start a business with the best of intentions to achieve more freedom, financial success and personal fulfillment, and, while most want to feel the pride of being an independent business owner in control of their own destiny, most owners fall short in meeting their objectives. Unfortunately, for most business owners, after a few short years the entrepreneurial dream starts to warp into a partial nightmare. An insidious form of imprisonment sets in. The owner is trapped on a treadmill, working harder and harder but making little progress. They find it increasing more difficult to focus on their goals because most don’t have any. And, they don’t know what their most important activities are because they have stayed involved in doing everything. Many of these business owners are faced with the same challenges: resisting their technical tendencies, fighting busy-ness, lacking in leadership skills or experience and being ineffective at delegating, weak or inadequate business systems and escalating business complexity. Technical Tendencies Too many entrepreneurs are former technicians now masquerading as owners. They think they are entrepreneurs, but they don’t act that way. As once accomplished technicians, they have a hard time letting go of such expertise and familiarity. They remain trapped in a technical comfort zone, mindset and work approach. Technical expertise is woefully insufficient for managing a business. And, technical tendencies make poor leaders. As such, they fail to develop the visionary, strategic, and leadership skills necessary to run a successful business. Busy-ness Many owners and managers confuse activity with accomplishment. They confuse busy-ness with results, hard work with smart work, perspiration with purpose, and efficiency (doing things right) with effectiveness (doing the right things). Instead of working smarter, many owners hold tight to the delusion that working harder and harder is the solution. They keep trying to shift into higher and higher gears. The more the business grows, the harder they work, the more imprisoned they become. No matter how much energy you expend, however, wrong strategies inevitably lead to poor results less freedom and more headaches. It is like trying to catch fish in a pond with your bare hands. No matter how many hours you work or how deep you wade, a poor strategy leads to poor results no fish dinner! Ineffective Leadership & Delegation Far too many small business owners are by default small leaders. Instead of leadership, they excel at doer-ship. They are micromanagers that like to touch and control everything. They trust no one but themselves. They believe “no one does it as well as me”. They seldom delegate, if at all. They mistake such busy-ness for business leadership. Instead of thinking and leading like owners, most think and behave like employees. Instead of reflecting and planning, they excel at sweating and doing. They act like they have a job instead of owning a business. To lead effectively, one must trust others. Not developing their leadership potential costs them dearly. Inadequate Business Systems A vast majority of small business owners don’t know how to design a new business or re-engineer an existing one to be more systems-oriented and professionally equipped with plans, procedures and policies. As a result, entrepreneurs don’t create and document the processes (specific and repeatable ways to do something), procedures and policies that allow for well organized, smoothly running, easier-to-manage companies. That’s why owning a franchise is a better solution for many inexperienced and first-time entrepreneurs. Without defining and documenting the specific work that needs to be done, owners can’t delegate effectively and eventually remove themselves from their technical roles. As a result, owners are forever feeling “out of control”. Tragically, most entrepreneurs have unknowingly, reactively and accidentally created an owner-centered and owner-dependent company. As a result, they are trapped! Growing Business Complexities A growing business with its increasing number of customers, transactions and problems will eventually crush a business not properly designed and prepared to handle such growth. Without effective leadership and adequate business systems (an integrated web of processes), a growing company does not stand a chance. Growing pains are unavoidable. Producing predictable and consistent results will be nearly impossible. By failing to plan for growth, you are by default planning to fail. Untreated, these challenges will eventually lead to frustration and in some cases may be fatal. Programs that draw attention to these challenges offer resources and support to overcome these tendencies and revisits to the lessons learned are recommended. If my father had the proper training that combined the emotional support from others and self-accountability to make the behavioral and lifestyle changes following his first heart attack, he might still be alive today. But, then my career in personal and business coaching along with my personal development path and commitment to live a healthy lifestyle might never have gotten so far along. Jonathan Goldhill, CEO of The Growth Coach, runs a business coaching company dedicated to helping entrepreneurs and small business owners grow their businesses. He can be reached at (818) 716-8826 or [email protected].

For a business to grow the following advice must be heeded: “Create an environment people want to be part of.” At least that’s the philosophy of Scott Firestone, area president of Arthur J. Gallagher & Co.’s Los Angeles office, based in Glendale. Started as a family operation in 1927, Gallagher is now the fourth largest insurance brokerage and risk management services firm in the world. It employs more than 8,000 people and has operations in the United States, Great Britain, Australia and Bermuda. Its headquarters are in Itasca, Ill. In 1984, the company adopted a body of shared values, now known as “The Gallagher Way.” Featured values include “fear is a turnoff,” “leaders need followers” and “never ask someone to do something you wouldn’t do yourself.” This year alone Gallagher has made about a dozen acquisitions, most recently obtaining Midwestern-based companies Strategic Health Plans Corporation and Spanjers Insurance Agency. Firestone became a Gallagher area president in 2001, after it acquired a small firm called MDM of which he co-owned, grew and served as president. “I’m the poster child because, here I am, I merge a company, and now I’m running their largest office in the company.” Before excelling in the brokerage industry, Firestone worked on the carrier side for Hartford Insurance Company. He believes the experience gave him an advantage. “Working with all these various brokers in the Los Angeles area, it (was) just so easy to differentiate the quality, and how these people are serving their customers, so, when I was fortunate enough to go on that side, I had a head start.” Question: Give an overview of Gallagher. Answer: To be honest with you, it’s such a complex business. First and foremost, for your average reader, we do everything from homeowners’ insurance to complex insurance for offshore oil rigs. So, in the world of insurance and risk consulting, there’s nothing that we don’t do. We have a third party claims administrator. We have what they call a wholesale side of the business, but, in the purest sense, if it looks and smells like insurance consulting whatsoever, we do it. We have loss control engineers on staff. We have claims consultants on staff. We do actuarial work. We allow clients to own their own insurance companies. In the world of insurance consulting and brokering, which is placing insurance for clients, there’s nothing we don’t do. And there literally isn’t an insurance company that somewhere we don’t represent. That’s a really important point. Most agents and brokers, they only represent a few insurance companies. Q: How did Gallagher end up in Glendale? A: Well, when we merged our firm, about half the people were in my company at the time, which was in downtown Los Angeles, and half of the people were in the current Gallagher Los Angeles office, which was in Woodland Hills, and bringing the two cultures together, we consulted with our HR department and corporate and also with our leasing agent to (determine) where we thought we could attract people from all different areas of the city that weren’t currently with us. We wanted to pick a place that was somewhat centrally located to the freeway and the transit systems, obviously. The train station proximate to Glendale that was very convenient for many in the outlying areas. And we really liked the sense of being part of a community as well. We’re really pleased to see the development that’s taking place. One of our clients Caruso is building the Americana brand down the street. (Moving to Glendale) also allowed us some expansion opportunity. Most of the landlords downtown won’t build in those options. And, while all of our other competitors have chosen to consolidate downtown, we think it’s just an absolute important decision that we ended up in Glendale, and we’re committed to being in the Valley. We’ve been able to have firms merge with us. We’ve been able to create an environment where the best people in the business were calling us. We really typically don’t use recruiters. I mean the best people in the business were saying, “Hey, we want to be part of your company,” and that’s really what it’s about. Q: Discuss your company’s performance. A: As a company we’re thrilled with five percent organic growth in a market where premiums are coming down dramatically. The good news in our business right now is most clients’ premiums are dropping rapidly, well below any of the forecasts. The reason for that is that the insurance companies’ results themselves over the last three years have been record breaking. I mean, the best results ever in 75, 80 years since they’ve been keeping track, 100 years. What’s good for our clients is that the business is healthy. Their costs are going down. We’re able to increase our growth from the standpoint of working on our market share. Q: Chart the company’s growth. How did it become the fourth largest insurance broker in the world? A: It started with a family that had their own brokerage. They went public. Basically, Bob Gallagher, Pat Gallagher and John Gallagher created an environment father, son, nephew where the best people in the business wanted to be part of it, and those of us that go to sell our business like I did have a lot of choice. There’s countless analyst supplier buyers out here, so you to say to yourself, ‘if I’m going to merge my people and my culture into a business with somebody else, I want to be there.’ So how has Gallagher grown? Gallagher’s grown the same way our Los Angeles office has. They’ve created an environment where the best people in the business, the best firms in the business, the best intellectual talent in the business want to be part of it, and, you know, nothing happens until we sell something, so, we’re either convincing somebody to join us as a client, convincing a colleague in the business or industry to join us, and when they do, the clients follow because in our business, like in any professional service business, clients have a choice as to who they want to do business with. Q: How has the insurance landscape changed? A: The challenges are how do you help a sister client navigate through the changing marketplace, consider changing insurance companies? How do we help them as consultants establish what risks they want to have and not have? How much risk should they bear because all risks are never insured 100 percent, so, as the business marketplace changes, as technology comes in, as companies go international, as the world becomes more of a global economy, how can we ramp up as quickly as possible, from an intellectual standpoint, with the people that are part of our organization educate them, reeducate them, invest in education, attract new people to the business. How do we keep our intellectual knowledge and talent up to speed with the changing economic climate of the world? We have clients that are virtual businesses doing billions of dollars, and all their manufacturing is done in 72 different countries worldwide. The interdependency you have a plant in India go down how does that affect U.S. operations? And where does insurance start and stop? It used to be, 15, 20 years ago, that most U.S. businesses were pretty locked up in the U.S. Their manufacturing was here. Maybe they distributed a few products. There really wasn’t cross partnerships with a lot of different operations around the world. Today, whether it be via supply side, distribution side, staffing side, most companies are truly international. They have operations around the world. They have partnerships around the world. They have people around the world. Q: How does insurance legislation, pending or in existence, affect your operation? A: We’re in a 100 percent disclosure environment. We’re one of the few firms out there that discloses 100 percent of the monies we make on a client’s insurance policies and that’s really, truly rare for our business. Most buyers have no idea what they pay their agent or broker. And our businesses have all been to a consulting practice. Most agents and brokers are really resisting this change, but, if you just think logically about it, there’s really not a professional service out there where there’s not disclosure of what your compensation is, what are you doing for the money, whether that’s embedded in the premium or whether the client chooses to pay you a fee. Q: Talk about Gallagher’s acquisitions. A: Once you’re part of a bigger team, there are more resources to pull upon. I can tell you unequivocally that the service that my clients have available to them are unparalleled to what I could provide them at my other firm. We have lawyers on staff. We have actuaries on staff. We have engineers on staff, and what’s interesting about our business is what you pay us is the same thing you pay that small agent without the same resources. SNAPSHOT: Scott Firestone Title: Area President, Arthur J. Gallagher & Co. Age: 37 Education: Bachelor of Business Administration, Southern Utah University Most Admired People: All of the men and women that have served our country or that are serving our country. Career Turning Point: When we (MDM) merged our firm with Gallagher in 2001. Personal: Married with two sons and a daughter.

“Who knows the city? Those who walk. Those who ride the bus.” Los Angeles Plays Itself More than a month has now passed since the Metro fare increase. The transit agency said it was still too early to tell how ridership numbers will be affected by the change in price for day, weekly and monthly passes. I can tell them there is one passenger not riding the Red Line and Orange Line as much as before the day pass fare rose to $5 from $3. Namely, me. For a year I budgeted $30 for Metro day passes. At the $3 fee, that was 10 passes over a four-week period. With the July 1 increase that $30 gets me only six passes. The question before me is what to do about those other four days. Do I drive to Woodland Hills and put another car onto the freeway? Or do I continue taking the subway and bus? Either way I need to spend an additional $20 on transportation. I know how far that $20 gets me with a day pass. How far $20 in gas gets me is a different story. When I commute by car, my minimum daily mileage between where I live in Hollywood and the business journal office in Woodland Hills is 40 miles. Then add in extra miles for when I do in-person interviews that can be anywhere in the Valley, or as far out as Camarillo, or Santa Clarita or even Palmdale and that $20 in gas goes quickly. Even with the increase it does make more economic sense to continue using Metro as much as I can for my daily commute and save using the car for when I absolutely need it. Riding the train and bus I know I am doing my part to reduce the traffic headaches plaguing Los Angeles. Besides, I get a lot of reading done. Those Orange Line Metroliners have become my reading room on wheels. Transit fan I’m lucky when it comes to using public transportation in Los Angeles. The two biggest complaints I hear and read about mass transit in L.A. is that it doesn’t serve the areas you want to go; and service isn’t frequent enough. The combination Red and Orange lines take me exactly where I want to go: I live three blocks from a Red Line station in Hollywood. The Business Journal office is across the street from the Warner Center Transit hub the end of the line. I don’t need to catch the train or bus at a specific time. I leave early enough to get to work by 9 a.m. If a Metroliner pulls away from the NoHo stop while I’m on the other side of Lankershim, no problem. Another one will pull up within 10 minutes. I realize that’s not the case for everyone. Other riders have connecting buses to catch. They have places to be at certain times. I realize that the question of whether using my car more or shell out an additional $20 for day passes was not one many Metro riders face. There are those who have no choice but to pay the higher fare. I ride alongside them, trying not to bump them with my knees as they make their way down the bus aisle. Not being a Los Angeles native, I’m not averse to using public transportation. I am not wedded to using my car for even simple errands. I haven’t completely adopted the “Los Angeles Public Transit Lifestyle” promoted by Fred Camino of MetroRider LA (http://metrorider.elhay.net/) because work reasons necessitate I have a car but I do make the effort to use Metro whenever possible. The ocean and beachfront are a ride away using the No. 4 Santa Monica bus. Ditto for Glendale and Pasadena using the No. 181 bus. I’ve used the Red/Blue/Green line to get to LAX. Or at least as close as I could get before having to hop on that shuttle bus. When the Cubs were in town in May to play a Saturday afternoon game with the Dodgers I (naively?) took the bus to Dodger Stadium. Or at least as close as I get could get before making that walk up the hill to the park. It can’t compare with taking the el to Wrigley Field but at least I got the satisfaction of a) not putting another $15 into Frank McCourt’s pocket; and b) seeing the Cubs win. (The next day I went to the game by car. The Cubs lost. Stupidly. Perhaps there’s a lesson there.) Using Metro remains an option for as long as I can afford to live in Hollywood. Get on the bus This column started out with a quote from “Los Angeles Plays Itself,” a documentary on the social history of the city as it’s been depicted on film since, well, since film began. That may not be the exact wording used in the narration but it catches the spirit of what filmmaker Thom Andersen wanted to say about those who use public transportation and their connection to the city. Within the film’s three hours Andersen addresses Hollywood’s nostalgic treatment of the streetcar system (using clips from “Who Framed Roger Rabbit”) and challenges the notion the major automakers were behind the demise of the Red Cars in order to build more freeways. A mention of the Red Cars is a reminder that Los Angeles has always had mass transit yet it’s deficient in a commuting culture and the unspoken rules that go along with it. I’ve seen riders do things here that would never be done back in Chicago. On the Red Line trains, riders on the platform tend to crowd directly in front of the doors at the stations when a train pulls in rather than standing to the side to let people off. On the Metroliners, the standing riders congregate directly in front of the doors and move in only when forced to. They do slightly better when it comes to walk-on-the-left, stand-on-the-right when using the escalators. To create a better commuter culture there needs to be more commuters. But that doesn’t happen by increasing fares, reducing service and consolidating bus lines like Metro has done in the Valley and other parts of the city. I suppose though the biggest help is getting across the message to cut down on using a vehicle. Even if for just one day. I admit there is a certain comfort to being in your car. After using the train and bus multiple days in a row, I like having that personal space. But once on the 101 Freeway and traffic slows up near Woodman or Coldwater Canyon or at the junction with the 405, that is when I think to myself, What is it about this commute that I miss? Staff Reporter Mark Madler can be reached at (818) 316-3126 or by e-mail at [email protected].

The victory Providence Holy Cross Medical Center won when the Los Angeles City Planning Commission approved a conditional use permit for its $146 million expansion project could be temporarily short-circuited. Before the project’s several dozen supporters could exit Van Nuys City Hall July 26, members of Community Advocates for Responsible Expansion at Providence Holy Cross (CARE) were discussing plans to appeal the decision before the City Council. “It was a railroad job, show business,” retired Holy Cross physician Timothy Germann called the decision. “There was no real hearing. It was just pushed through.” Members of CARE, a newly formed collective of area neighborhood councils and community groups, say that they do not oppose the expansion itself but that administrators of the Mission Hills hospital want to build the 101-bed South Addition without conducting an environmental impact report (EIR). “The Planning Commission wants to fast track this,” Nick Krall, a Sylmar Neighborhood Council board member, said. Krall addressed the commission during the public hearing portion of the meeting. The commission first reviewed the project in March but delayed voting on it. Despite requests by Councilman Richard Alarc & #243;n and Commissioner Cindy Montanez to issue another continuance, the commission declined, citing the large number of community members who had gathered in anticipation of a decision. In a statement, Alarc & #243;n expressed his dismay over the one ultimately reached. “For the life of me I do not understand how the City Planning Commission does not see the need for a full environmental impact report for a project that is 119,570 sq. feet of construction, 136 additional beds and four stories high, equaling 97 feet in height,” he said. “This is a large project that will definitely impact traffic for many miles around.” According to Department of Transportation engineer Sergio Valdez, a traffic study the department completed on the expansion revealed otherwise. The South Addition will not have a significant impact on its surroundings, he said. Therefore, an environmental impact report was rendered unnecessary, and the hospital performed a mitigated negative declaration (MND), which it recently expanded. “The endpoint of an EIR is not different from an expanded MND,” Providence Holy Cross administrator Kerry Carmody said. “That’s a misconception.” In an EIR, methods, including alternatives, by which a project’s major environmental effects may be minimized are named. In a mitigated negative declaration, the project is revised to ensure that its environmental impact will be insignificant. “(CARE) is asking for an EIR no matter what, and we’re not legally required or recommended to have one,” Carmody said. But CARE members assert that the city’s planning standards are outdated and inadequate; thus, Holy Cross administrators should heed the outcry of local neighborhood councils and other community groups and conduct an EIR. “An EIR would specifically tie in what they have to do with traffic and air quality,” Bart Reed, executive director of the Sylmar-based Transit Coalition, said. “With a project this large there should have been hearings with the community and input taken from the public. They should have put together a list of community betterments.” Delay threatened Holy Cross representatives say that conducting an EIR would delay the construction of the expansion by at least 18 months, a major concern because two nearby medical facilities the Sherman Way campus of Northridge Hospital Medical Center and Granada Hills Community Hospital have closed in recent years. “This is a health care crisis,” Carmody said. “We run at 110 percent capacity every day. There is a true urgent need for beds.” CARE advocates bristle at the notion that they will endanger lives by appealing the Planning Commission’s decision, as members first requested that an EIR be performed in late 2005. “Why would they be so adamant in not wanting an EIR?” Reed asked. “If these issues had been addressed, you wouldn’t see hospital employees’ cars parked all over the neighborhood.” During the planning meeting, Commissioner Spencer Kezios validated the concerns over parking. He told his fellow commissioners that, before the meeting, he visited the hospital and found no available street parking. As a result of his finding and others, the commission agreed to approve the hospital’s expansion only if more signs were erected to point out available parking, a tree was situated per every eight stalls and a pre-disaster mitigation program was implemented. While pleased with the meeting’s outcome, hospital spokesman Dan Boyle objected to the characterization of Holy Cross as parking-deficient. “Parking has always been available,” he said. “We have almost 1,000 spaces.” Creating parking Moreover, the hospital has taken several steps to create more available parking and reduce traffic in the area, according to Carmody. That includes decreasing the cost of parking to zero and giving employees assigned spaces. “We have made significant financial and operational commitment to the community to keep parking affordable and to make as much space as possible available for parking,” Carmody said. “Our commitment is to continue to look for additional parking.” To reduce traffic, Carmody said the hospital has worked to synchronize traffic lights in the area. But he added, “Our hospital is only a small portion of traffic. There’s a high school. We’re between five freeways.” Carmody believes that some of the people who object to the expansion plan as it is might not realize this. “I understand that many of the individuals who are opposing this don’t live in the neighborhood,” he said. “They live in the outlying areas.” In contrast, the Mission Hills Neighborhood Council has given its support to the expansion plan.

Los Angeles native Alan Duke finds himself in familiar waters at New Wave Entertainment. Assuming duties as the company’s general counsel and head of business affairs, Duke takes the helm backed by a wealth of legal and entertainment industry expertise. “(My) basic responsibilities are to act as general counsel and head of business affairs for all deal-making. . . from the highest level network licensing agreement, all the way down.” Burbank-based New Wave Entertainment, is a premier content development and production company; in addition to being one of the industry’s largest entertainment marketing and creative services agencies. While officially the company’s legal go-to guy, Duke is comfortable wearing many hats and cites the cooperative environment of New Wave and the multi-faceted nature of his role as head of business affairs, “Above all, I’m a problem solver. A lot of my skills go beyond line-item by line-item. I know how to read a budget and deal with budget issues. I know how ‘below the line’ works.” Having served a ten year hitch with Disney where he was also charged with business and legal affairs, in addition to overseeing a staff of 35 Duke currently employs his “broad level of experience” in all aspects of New Wave’s creative, marketing and legal initiatives, “(I want) to cover all the bases. . . avoid potential claims and advise (the) owners on strategy.” New Wave Entertainment takes a unique approach when it comes to many projects. Breaking the long-held industry idiom of OPM (other people’s money) New wave often takes the first steps in project development, using its own resources and funds to get the ball rolling and the project started, “(It’s) an interesting way for an independent company like ours that has so many facets to help break through the clutter of pitches,” remarks Duke. “Everybody believes in and sees the bigger picture, (we’re) all in it together,” remarks Duke of New Wave’s approach and the distinctive “entrepreneurial spirit” of the company’s leadership. Duke’s career began with 20th Century Fox, where he served for 11 years, before moving on to hold senior level positions with such companies as Miramax Television, Grant/Tribune Productions and G4 Television. New Wave maintains clients the likes of comedian Dane Cook, in addition to producing a stable of hit shows; such as Last Comic Standing, ABC’s Next Best Thing and a project currently in development to star impressionist guru Frank Caliendo, tentatively titled Frank T.V. By Ryan C. DeSales ENTERTAINMENT Ron Scott has been promoted to senior vice president, worldwide sales and distribution, Warner Bros. Interactive Entertainment. Scott joined the entertainment giant in 2007, and assumes current responsibilities including the oversight of a new direct to retail games business for the company. Scott previously served in the post of president and board member of Crave Entertainment, in addition to a stint as executive vice president of worldwide publishing for Activision. Scott is a graduate of Occidental College. FINANCIAL AFA Financial Group, LLC announces the addition of Angela Strauss in the capacity of senior vice president of alternative investments. Strauss offers twenty years of combined expertise in real estate operations management, loan acquisition, property and asset management, banking and the real estate finance fields. Strauss most recently served as an executive within the company’s managing broker-deal team. Prior to her responsibilities at AFA, Strauss founded and acted as principal of NoMax Group; a firm specializing in due diligence, asset management and investment services. David B. Connelly, CPA, JD, joins Singer Lewak Greenbaum & Goldstein LLP. Connelly’s expertise will be focused on the areas of forensic accounting, business valuation and litigation support, for the Woodland Hills Firm. Connelly has 25 years of collective financial investigation, audit and legal experience and most recently served at his own practice of Connelly & Associates, before assuming his current responsibilities with SLGG. Robert A. “Rocky” Mills, CIMA, senior vice president, financial advisor; joins Morgan Stanley’s Global Wealth Management Group in Thousand Oaks. Additionally, Mills has been appointed as branch manager. LOGISTICS Jim George assumes duties as president of the U-Haul company. George has accrued six years experience with the firm, initially joining in 2001 and serving in several key supervisory and managerial positions to date. George will help ‘drive’ the company’s growth and oversee day-to-day operations from U-Haul’s Canyon Country location. MANUFACTURING Management changes have been made at Kreido Biofuels Inc., a Camarillo manufacturere of bio-diesel products. Phil Lichtenberger has been appointed as chief operating officer. He had previously been senior vice president and chief financial officer. John Philpott has taken the position of chief financial officer. He previously served as chief accounting officer. Richard Redoglia and Murli Tolaney have been elected to the Kreido board of directors. Redoglia serves as executive director of Global Energy Horizonsm an investment firm focusing on the energy industry. Tolaney is chairman of Montgomery Watson Harza, a privately-owned environmental engineering, management, and construction company. MARKETING Julie Prentice has been promoted to vice president, client relations at NMA Entertainment & Marketing in Sun Valley. In that position, Prentice will lead placement and promotion strategies for a number of clients, including Arby’s, Baskin-Robbins, Dyson and USA Today. She previously served as a senior account director. MEDIA Heidi Joy Pike has joined the editorial team of YNOT, a Burbank-based webmaster resource site for the adult entertainment industry. Pike previously served as an associate editor at Adult Video News and has directed two adult films. Jason Sechrest has been named as director of public relations for KSEX, a Chatsworth-based online television and radio station. John Arthur has been named as managing editor/news at the Los Angeles Times. He previously had been the page one editor. John Montorio has been named as managing editor/features. He previously had been an associate editor. REAL ESTATE Vaughn Smith assumes new duties with Move Inc. Smith joins the Westlake Village-based company as acting executive vice-president of corporate development and strategic partnerships. Smith brings experience from a tenure with internet auction powerhouse eBay, where he also served as vice-president of corporate development. TECHNOLOGY Dr. Teong Lim assumes advisory duties with Newbury Park-based Electronic Sensor Technology. Lim’s current consulting agreement with EST places him as an advisor to acting-CEO and President Barry S. Howe, who succeeds Lim as head of the company. Lim’s expertise will be applied to consult on company matters ranging from market strategies, to the establishment of sales sub-channels in Asia and other foreign markets. Lim will retain his seat as a member of EST’s board of directors, in addition to his new consulting responsibilities. EST provides patented vapor analysis technologies which are employed in homeland security, environmental and quality assurance applications. Barry S. Howe takes over responsibilities as Electronic Sensor Technology’s acting CEO and president. Howe most recently served as chief financial officer of EST and assumes duties from recently retired CEO and president, Dr. Teong Lim. Dr. Lim will remain on as an advisor to Howe and continue as a member of the board of directors. Howe brings experience from a 17-year tenure at Thermo Electron, where he served in various executive capacities; including three years as CEO of the company’s $600 million measurement and control sector and as corporate vice president. Keith Wright joins Tri-anim as national director of surgical. Wright offers the experience of a 25-year career in the healthcare and surgical products industries, and will relocate from Pennsylvania to Tri-anim’s Sylmar location. Wright most recently served as director of sales and marketing of Closure Technologies for the B. Braun/Aesculp company. Tom Steele assumes duties as director of market development for Sylmar based QPC lasers. Steele is an 18 year industry veteran and most recently served as director of marketing and North American commercial sales manager for Spectra Physics Lasers. Young K. Sohn joins the Inphi Corporation as acting CEO. Sohn is a veteran of such companies as Intel, Quantum, and Oak Technology and provides 25 years of experience in technology business growth. Sohn is a graduate of the University of Pennsylvania and holds a master’s of science degree from the MIT Sloan School of Management.

Question: How do you recommend we, as a company, determine if we should trademark our name? Answer: A simple yet effective process is for the executive team to ask themselves, “Do we want to be able to stop another competing business from using our name or something confusingly similar?” If the answer is “yes,” you want to obtain a registered trademark. A trademark is a limited monopoly in the right to use a word, phrase, or logo in connection with particular goods or services. Although you will develop common law rights to your business name by virtue of using it in the marketplace (even if you never register it), if you want nationwide protection, and for other good reasons (some of which I touch on below), you will want to register your trademark with the USTPO. Federal registration provides benefits, both strategic and legal, beyond those afforded common law owners, such as putting the public on notice of the registrant’s claim of ownership of the mark; creating a legal presumption of the registrant’s ownership of the mark and the registrant’s exclusive right to use the mark nationwide on or in connection with the goods and/or services listed in the registration; allowing registrants the right to bring an action concerning the mark in federal court; providing a basis to obtain registration in foreign countries; and the ability to file the U.S. registration with the U.S. Customs Service to prevent importation of infringing foreign goods. In order to file for federal registration, your company must conduct business in interstate commerce. Generally speaking, if your company uses the mark on the web, this requirement is deemed satisfied. If you have not yet actually begun using the trademark in commerce, you can file a trademark application based on your intent to use the mark, provided you, in fact, have a bona fide intent to use the mark in interstate commerce. Q: What is all the fuss I hear from business/management over meal and rest periods in the workplace? A: You’re likely picking up on the fallout from a recent decision that came down from the California Supreme Court captioned “Murphy v. Kenneth Cole Productions, Inc.” Under California law, subject to just a couple of limited exceptions, non-exempt employees must be afforded the opportunity to take a ten-minute paid rest break for every four hours of work and must take at least a thirty-minute, uninterrupted, unpaid meal break for every five hours of work. Employees are entitled to receive one hour of pay for every day they miss rest or meal periods. The issue presented in the Murphy case was whether the “one hour of pay” constitutes a “wage” or a “penalty”. What’s the big deal you ask? If you’re a non-compliant employer in California, the answer is “a lot”! “Wages” are subject to a three-year statute of limitations. “Penalties” are subject to a one-year statute of limitation. The Murphy court, much to the joy of class-action lawyers and the chagrin of California employers, determined that the “one hour of pay” remedy provided under Labor Code Section 226.7 constitutes a “wage,” thus allowing employees to seek damages going back in time for a period of up to three-years, in addition to waiting time penalties and attorney fees. Employers should consider new policies to ensure non-exempt employees are afforded the meal and break opportunity the Labor Code provides. One option is to have your employees certify, under the penalty of perjury, in their time records that their entries are accurate, including those reflecting their meal and rest periods. Q: We’re in negotiations to sell our business. I hear terms such as “pre-emptive rights,” “drag-along rights,” “tag-along rights,” and the like. What language is this? A: These are industry terms in the mergers and acquisition world. They describe various rights afforded shareholders. In your world, these terms are relevant if you roll over some of your sales proceeds into equity in “Newco” (verbiage to describe the new company the buyer may contemplate forming to operate your business on a go-forward basis). A thorough discussion of the definition and impact of these terms, and numerous others, is beyond the scope of this column. However, the three you mention can be explained as follows: “Preemptive Rights” ~ the right of certain stockholders to maintain ownership of a constant percentage of a company’s stock. Such stockholders have the first opportunity to purchase new stock in the company proportionate to the percentage of shares already held; “Drag-Along Rights” A right that enables a majority shareholder to force a minority shareholder to join in the sale of a company. The majority owner doing the dragging must give the minority shareholder the same price, terms, and conditions as any other seller; “Tag-Along Rights” A contractual obligation used to protect a minority shareholder (usually in a venture capital deal). Basically, if a majority shareholder sells its stake, then the minority shareholder has the right to join the transaction and sell their minority stake in the company. This concept is also sometimes referred to as “co-sale rights.” Ira Rosenblatt is a business and corporate lawyer and a co-founder and director of Stone, Rosenblatt & Cha, a business law firm in Warner Center. Rosenblatt has earned Martindale-Hubbell’s highest rating (“AV”) for legal ability and ethics and is listed in the Martindale-Hubbell’s National Bar Register of Preeminent Lawyers. He can be reached at [email protected].