The aviation industry is readying itself for a dogfight. On one side is the commercial aircraft industry and on the other the general aviation community which owns and operates smaller planes that fly in and out of Van Nuys and Bob Hope Airports. At issue is a proposal for private aircraft owners to contribute up to $1.5 billion to $2 billion more a year to fund the Federal Aviation Administration and its air traffic control system. In the general aviation industry, a change to its contribution to the Airport and Airway Trust Fund is a hot topic of discussion. “People don’t realize the costs we do pay and the fact the airlines are looking for a way to get someone else to carry the burden,” said Marc Foulkrod, chairman and chief executive officer of AvJet, an aircraft management and sales firm based at Bob Hope Airport in Burbank The Congressionally approved structure of the trust fund will expire in September 2007, but already the two sides are marshalling their forces to get their respective messages out. Trade associations located in Washington, D.C. are doing the heavy lifting the National Business Aviation Association for the general aviation side, and the Air Transport Association of America for the commercial airlines. The ATA supports doing away with the current structure of having airlines pay a 7.5 percent tax on ticket price; a $3.20 departure tax; and a 4.3 cents fuel tax and replace it with a user fee they say would be more fair and equitable. The NBAA, however, would like to maintain the 21.8 cents per gallon fuel tax that general aviation currently pays. A change to a user fee would shift an estimated $1.5 billion to $2 billion to the private aircraft users. In 2005, more than $10 billion in taxes was collected for the trust fund from all aircraft types. The NBAA position is that a user fee would create a new administrative burden as invoices would be generated to tell an aircraft user the charges for using the FAA’s air traffic control system. If there was a problem with an invoice it would then have to be arbitrated. “The accounting would be onerous trying to figure out how to charge people for a flight from here to there,” said Harold Lee, of Million Air with facilities at both Van Nuys and Bob Hope airports. “Imagine the expense of administration of a system like that,” added Robert Rodine, a Sherman Oaks consultant who has clients in the aviation field. “It’s going to be astronomical.” To get its point across, the ATA is tying the user fee to a replacement of the current air traffic control system using radar beacons with one based on satellite technology that will allow for greater efficiency in the airspace. ATA spokesman David Castelveter said that with the price of airline tickets decreasing, the amount of money going into the trust fund is less and that trend needs to be reversed if the air traffic control system is to be modernized. It would be unfair to levy more money against the air carriers when the excess demand is being placed on the system by private planes, Castelveter said. “We don’t expect to pay any less, the commercial carriers, all we’re saying is everybody who uses the air traffic control system should pay fairly and equally,” he added. Castelveter sums up the association’s position by saying that to an air traffic controller tracking planes on a radar screen a blip is a blip is a blip. Rodine, who serves as co-chairman of the aviation committee of the Valley Industry and Commerce Association, calls that argument utter nonsense. “If you take away all the general aviation blips, the system does not get smaller or less expensive,” Rodine said. A bulk of the FAA’s system is used by commercial flights landing at heavy volume airports such as Los Angeles International or O’Hare International in Chicago and smaller to mid-size airfields such as those in Phoenix, Las Vegas and San Diego, Rodine said. Many planes operating out of Van Nuys fly under visual flight rules and do not utilize the FAA traffic control system yet they have still paid the tax on the fuel they use, Rodine said. “You might have a blip out there but it’s not a controlled blip,” he added. “It could be a Cessna 172 that is in the airspace but FAA controllers are not vectoring it.” The expiration of the current tax structure is still 15 months away but for the players on both sides time is of the essence, especially considering that the debate over the last FAA reauthorization in 1996 lasted nearly two years. The NBAA is now conducting an education campaign for local and community aviation groups to make them aware of what is at stake, said association President Ed Bolen. “They are not focused on it day in and day out,” Bolen said. “We have to make them aware there is a threat out there and help them understand what the issue is and how they can participate.” NBAA representatives have come to Southern California to meet with its area members, including those from the San Fernando Valley. Both the NBAA and the ATA have also been lobbying members of Congress on the importance of the issue. For the ATA, the greatest concern is that if there is no change in the funding structure this time around, the opportunity will not arise again for another decade, Castelveter said. “This isn’t something that changes once a year,” Castelveter said. “We have to live with the system as it exists today incapable of handling this growth for another 10 years.”

N.Y.P.D. Pizza, an Orland-based chain of Big Apple-themed pizzerias and delicatessens, has opened its first L.A.-area outpost in downtown Burbank. The restaurant at 150 S. San Fernando Road serves up a variety of hand-made pizzas, heroes, calzones and pastas, plus a full-service deli. The chain started in 1996 and has locations in Florida, Arkansas and South Carolina. Through franchises, it plans to add 18 branches in coming years, mostly in southwestern states, the company said. The new Burbank branch is part of the Burbank Village Walk, a mixed-use complex that opened late last year.

The Tujunga-based online dating sevice Luvoo has reported a 725 percent increase in subscribers since it went public last month. For the first three weeks of June, 4,100 new singles subscribed for the matchmaking service at luvoo.com, the company said.

A report on whether the Los Angeles Board of Airport Commissioners should move ahead with a ban on certain jet aircraft at Van Nuys Airport is expected to be given when the commissioners meet again on July 17. In April, the board adopted a resolution instructing the Los Angeles World Airports executive director to report back on pursuing the ban of stage 2 aircraft. At the time, the move took business tenants at Van Nuys Airport by surprise because they had not been aware the issue was on the agenda. Robert L. Rodine, a management consultant with clients in the aviation industry, said the commission’s action is counter to a previous decision to include a Stage 2 aircraft ban as part of a larger noise mitigation study, a move that would put it into the realm of objective analysis. “The decision will now be made in the absence of any objective analysis at all,” said Rodine, co-chairman of the Valley Industry and Commerce Association’s aviation committee. The commission’s action reaffirms a position originally taken in 1990 on phasing out the Stage 2 aircraft. In 1999, the commission allowed any of the aircraft that had been tied down or stored at the airport for a 90-day period to remain. Stage 2 is a designation by the Federal Aviation Administration for aircraft with a certain noise level when operating. Stage 1 aircraft are banned in the United States while Stage 3 aircraft are the quietest. Manufacturers stopped making Stage 2 aircraft in 1986. The report from the executive director will focus on four areas a nighttime curfew for planes with takeoff noise levels above 74 decibels; restrictions on repetitive aircraft operations; restrictions on maintenance run-ups; and designating a preferential runway for nighttime hours. The airport currently has a nighttime curfew in place and the shorter of its two runways is not used evenings. During his mayoral campaign, Los Angeles Mayor Antonio Villaraigosa came out in favor of phasing out the Stage 2 aircraft to reduce the noise impacts on adjacent residential neighborhoods.

BY CHRIS COATES Staff Reporter Rafael Vega loses count of the number of neighboring restaurants along Ventura Boulevard that have closed since he opened Casa Vega 50 years ago. Once lined with eateries like Rondelli’s, Barone’s Famous Italian Restaurant and Iron Horse, Ventura today is a blur of strip malls, chain restaurants and ubiquitous coffee houses. But the tan-colored, Christmas-light-trimmed pueblo known as Casa Vega remains. It’s for a simple reason, according to Vega. “It’s the combination of the food and the drinks and the service,” says Vega, 72, sitting in the wood paneled office near his Sherman Oaks restaurant. Since 1956, Casa Vega with its oversized bushes carved into “C” and “V” out front has been slinging countless plates of pollo en mole, chile relleno and other south-of-the-border specialties to hungry Valley residents (not to mention formidable peach, coconut and raspberry margaritas). The sheer longevity has brought the kitschy eatery ringed in bullfight paintings a cadre of culinary fans willing to wait in long lines for a chance to sit in Casa Vega’s candy apple red booths. “There probably isn’t a day when I don’t hear from someone who says they have been coming here since they were 5 years old,” Vega says. Down in Old Mexico Born in Tijuana, Vega immigrated to Los Angeles as a child, settling in Burbank. In the late 1930s, the family opened a restaurant on Olvera Street in downtown Los Angeles. The hands-on training became practical when Vega was drafted into the Army: He soon secured a place on cooking duty. Vega went on to formal culinary arts classes in San Francisco, around which time he began thinking of opening his own place. At age 22, with his mother’s recipes, a small business loan and some money from his parents, he opened Casa Vega sometime in June 1956. (The exact date has slipped Vega’s mind. “Being 50 years ago, I don’t know when we started,” he says with a chuckle.) The space at Ventura Boulevard and Mary Ellen Avenue sat around 45 people, but business was swift, albeit cramped. So when a corner property two blocks west became available a few years, Vega jumped at the chance. The new site, a former steakhouse at Ventura Boulevard and Fulton Avenue, sat 145. In the 1950s, Mexican restaurants were something of a rarity, even in Southern California. That changed with Casa Vega, whose exotic food and drinks drew raves. Soon, people were lined up outside the door. Today, Casa Vega employs 65, some of whom have been on the job for 40 years. The restaurant has grown consistently every year, Vega said, today bringing in about $4.2 million annually. Vega said it didn’t come easy. “If you want to start a business, you have to be willing to work seven-days-a-week, 16 hours-a-day,” he says matter-of-factly. Change with the times The other key, Vega said, is to make sure to embrace change. “A lot is timing,” he said. “You have to change with the times.” For example, when the trend of health-conscious dining became popular, Vega eliminated cooking with lard. When he heard that patrons wanted to stay at the restaurant after its 11 p.m. closing, Vega expanded its hours. The kitchen now serves food until 1 a.m., with the restaurant closing at 2 in the morning. That means Casa Vega is one of the handful of restaurants open to night owls looking for a bite to eat, he said. “We get a lot of the studio people,” he said. There’s the celebrity factor too: George Clooney and Jennifer Aniston have been spotted in the dark interior. (The exterior, meanwhile, is featured in the film “Valley Girl.) There have been challenges, although Vega deftly glosses over them. The big issue is parking, which should change after the small bungalow that houses the company’s offices is demolished, allowing the existing lot to expand. Success story While Vega is recognized in the Valley, he is lesser known for his accomplishments outside Sherman Oaks. That path started back in 1958, when Vega landed a lucrative catering contract providing meals to a military base in Nevada. That led to the creation of Vega Enterprises, which eventually grew to include 275 employees with annual sales of $60 million, he said. From there, Vega created a laundry list of businesses, from a check cashing service to a marketing firm, food distributor, dairy company and vending service. He also at one point partially owned the Las Vegas Telemundo affiliate. Vega eventually sold off many of those interests, deciding instead to concentrate on the original restaurant, he said. The experience, however, made Vega well known in political circles throughout the southwest. President Nixon in 1976 nominated him to the Federal Home Loan Bank of San Francisco and Los Angeles Mayor Sam Yorty named him to the Sister Cities Committee and Department of Social Services Commission. He has also served on the Civil Service Board of Trustees for Las Vegas and the State of Nevada Selection Committee, to name a few. In one corner of his office is a painting of a smiling Vega in black suit and bow tie. Beneath it reads, “Honorary Consult General of Mexico,” a post he held representing Las Vegas from 1996 to 2001. Vega is not ashamed of his success. Today, he lives about two miles from the restaurant in a Studio City home built by Mickey Rooney (and once owned by Tom Green and Drew Barrymore). “I live very nicely,” he said. “I know what is to be without money and I know what it is to be with money.” While his daughter, Christina Vega Fowler, is poised to take over the family business, Vega is adamant that he does not plan to slow down. He still works five days a week, five or six hours a day. Vega says shepherding the business day-to-day gives him his reserve of energy. “I tell everybody I’m 59 again,” he says. Michael Chibidakis is president of the Sherman Oaks Chamber of Commerce and recently went to lunch at Casa Vega, where a youthful Vega was full of stories. Chibidakis said that energy comes across in the restaurant. “That’s why people keep going back. If you have lousy food and you have lousy service, you’re not going to last in business,” he said. “I think it starts with the people he hires. He really takes care of his people.”

Recognized as the world’s busiest general aviation airport, the Van Nuys Airport is an important part of business life in the San Fernando Valley. Overseeing its daily operations is Selena Birk, a veteran administrator with the Los Angeles World Airports, the agency that owns and operates not only Van Nuys but also Los Angeles International, Ontario and Palmdale airports. As the general manager, Birk handles airfield operations, property functions, maintenance, security, environmental management, and public relations. “There is also a significant community component in coordinating with local elected officials, the citizen’s advisory council and individual homeowners and homeowner groups,” Birk said. In April, the most recent statistics available, the airport handled 31,400 general aviation aircraft movements. Van Nuys is also home to well known aircraft management and charter service companies and the home base for many media helicopters. Birk has been manager at Van Nuys Airport for more than six years. Prior to that, she was at LAX for 10 years in a variety of positions from operations, contract management, risk management and security functions. Question: What work have you been involved in since coming to Van Nuys? Answer: Since I’ve been here at Van Nuys I’ve had the opportunity to participate in significant projects, including the completion of the master plan, which was completed in January of this year. We’ve had some significant construction projects including upgrading electrical vaults and replacing a number of signs on the west side of the airport. We are also in the process of replacing our maintenance yard. We’ve begun the process of changing the Air National Guard site to a propeller aviation center. Q: Can you describe more what the master plan entails? A: It’s primarily a land use plan that will help guide the development of the airport. It sets aside the former Air National Guard site, which is about 30 acres, and it will be used for development for use only by propeller aircraft. Q: Why is it important that land be set aside for them? A: The propeller aircraft tend to be more price sensitive as far as rents. This sets aside an area guaranteed for them. It allows for development at the airport depending on how the tenants plan to move forward. Q: Assess Van Nuys Airport’s economic impact on the San Fernando Valley? A: We’ve done an economic impact study. We do them approximately every five years. The last one that was done in 1998 showed we had a $1.2 billion economic impact in the greater San Fernando Valley. We are beginning now a new economic impact study and selecting a consultant to do that for us. By early next year we should have the results of that study. The significance of the airport to the Valley is jobs. In addition to that it is a key part to the national transportation system as well as being a reliever airport for LAX by having the general aviation component of the greater Los Angeles area come here rather than to LAX. Q: One of the bigger issues that needs to be resolved is on the use of Stage 2 aircraft at the airport (Stage 2 is a noise-level designation for aircraft Stage 1 aircraft are banned in the United States while Stage 3 aircraft are the quietest). Can you give a status on that? A: There is an existing ordinance that controls the number of Stage 2 aircraft based at the airport called the non-addition rule. It was an amendment to a curfew ordinance that was put into place before 1990. This fixed the number of Stage 2 aircraft that could be based at the airport. If they were at the airport for 90 days or more in 1999, that was the criteria that was set. We allow other Stage 2 aircraft in if they are coming for significant maintenance or they can be at the airport for 30 days in a calendar year. We’re also in the process of data gathering as part of the Federal Aviation Regulation 161 study, which is a process required by the federal government if an airport wants to take action to restrict noise at an airport. One of the measures being studied is a phase out of Stage 2 aircraft. Q: Are there still a lot of Stage 2 aircraft at the airport? A: There are 34 at this time. Q: If those are phased out will it have significant effect on the companies that have those planes? A: That’s what the 161 study will help tell us. It looks at the operational impacts of any restrictions on the airport. It looks at the economic impacts. It looks at the impacts to the national aviation system and looks at the impacts of what would happen to the other airports in the area should we enact some sort of restriction on a type of aircraft. Q: Any timetable on when that will be done. A: It’s supposed to be completed in 2008. It will be submitted to the FAA and they’ll have a period to go through and make sure the study was done to their standards. Q: What’s the relationship between the airport and the surrounding community? Is there a dialogue there on noise issues and other issues related to the airport? A: We have a speaker’s bureau where we provide topic experts to any community function that invites us. We have experts on LAWA staff in addition to tenants and there’s a school on site that provides speakers. We have a wide variety of people who are very generous with their time. We’ll do airfield tours to community leaders as well as to educational facilities. We open our doors as often as we can both on site and by taking presentations and speakers off site. Q: Can you talk about your relationship with Los Angeles World Airports and the Board of Airport Commissioners. A: It’s similar to a legislative board. The Board of Airport Commissioners is our policy making board. They are appointed by the mayor. All of the airport managers report to Paul Haney, a deputy executive director and he reports to Lydia Kennard the executive director. Q: Do you stay in contact with the business tenants. A: There is contact both officially and unofficially. They feel comfortable contacting me. I talk with one or another of the tenants daily. There is a tenant association and I attend their meetings. I also attend, as I am able to, the meetings of the propeller (aircraft) association.

In banking at least, it seems that size does matter. So went the thinking behind the just agreed-upon merger of Camarillo-based FCB Bancorp and National Mercantile Bancorp in Century City, a move that mirrors a burst of merger activity among banks across the country. The merger, a stock transaction expected to close in the fourth quarter of the year, will create an entity with assets of nearly $1 billion, enabling the new bank to double its lending limit while saving something in the neighborhood of 7 percent to 12 percent in operating costs. “This will create a larger platform to realize benefits from a larger organization,” C.G. Kum, president and CEO of FCB, who will also assume the top job at the merged bank, told a group of investment bankers recently. Following the merger, FCB and National Mercantile will create a new bank called First California Financial Group. “I particularly like the words financial group because I believe over the next five or ten years, banks will have to add more than just banking services,” Scott Montgomery, CEO and president of National Mercantile, said in a conference call. The bank will be headquartered in Camarillo with Kum as president and CEO. Montgomery, who will be 65 in March, will retire once the transition is complete. The new board will be comprised of five directors from each of the banks. In a conference call to analysts Montgomery and Kum said that the merger will provide the bank with resources that neither company enjoyed independently. As a matter of course National Mercantile Bank was selling off loans it would have preferred to keep on its books because of the bank’s legal lending limits. And as sales at some of its clients grew and they sought larger and larger credit lines, it was likely that they too would have to be turned away. Kum said that, although FCB has grown to just under $500 million in assets from $100 million when he arrived six years ago, lending limits, based upon a bank’s net worth, limited its lending abilities as well. The new bank will rank 12th in Los Angeles County, up from the 17th and 18th spots that the two organizations occupied prior to the merger. With the merger, the new bank’s lending limit will increase to the $15 million to $18 million range. The move by FCB and National Mercantile is part of a larger trend in the banking industry, which has seen mergers and acquisitions jump by more than 14 percent annually since 2003 when there were 276 such transactions across the country, according to data from American Bankers Association. “In the first quarter of this year, there’ve been 85 bank mergers,” said Keith Leggett, senior economist at Washington, D.C.-based ABA. “I think right now it seems the pace is on track for 2004 and 2005 levels (with 322 and 315 mergers respectively). That reflects several factors.” Leggett noted that as the stock market has improved so too have the prices banks can command. Many too are flush with excess capital after several years when lending slowed in 2003 and 2004. At the same time, banks are facing far more regulatory burdens, and smaller institutions have been hard-pressed to handle the expense of compliance. The National Mercantile/FCB merger grew out of somewhat different needs. National Mercantile had been looking for a merger partner for several years, in part to assist with succession planning. But officials at both banks also recognized that, with more mass, they could afford resources that neither could accommodate independently. “National Mercantile and FCB were not able to afford certain capabilities we will now be able to afford a marketing officer and a full-fledged compliance staff,” Kum told the analysts. “One of our objectives is not to lose talented bankers.” Besides their combined size, the bankers expect to benefit from the fact that the two banks have operated in somewhat different sectors and in distinct geographies with little overlap. First California operates eight branches in Thousand Oaks, Simi Valley, Westlake Village, Anaheim Hills, Irvine, Oxnard in addition to Camarillo. The bank’s commercial mortgage group is based in Sherman Oaks. National Mercantile, which also owns South Bay Bank, has one branch in Encino. Torrance-based South Bay has an El Segundo branch and a regional loan production office in Costa Mesa. “There literally is no branch overlap here,” said Montgomery. For the most part, though, the bank officials said that the anticipated cost savings will come from combining the operations of both banks, particularly legal, data processing, compliance and audit and some staff overlap. “One area that comes to mind is my associate Scott will be retiring,” Kum joked with the analysts. About 25 percent of National Mercantile’s lending business comes from entertainment lending. “If it’s not the most profitable division, it’s the second most profitable,” Montgomery said. And First California has a small-business lending program while National Mercantile does not. “It is our intent to grow the division due in part to higher legal lending capability that the company will have,” said Kum of the National Mercantile entertainment lending division. “There will be opportunities to buy back participations or to be involved in transactions that are much larger.” Nestle Changing Diet The media had some fun characterizing Nestle as playing both sides of the fence when it announced plans to acquire Jenny Craig. But somewhat lost in the joke was the increasingly acquisitive bent of the Swiss chocolate maker with U.S. headquarters in Glendale. The acquisition of Jenny Craig Inc., a weight loss products and services provider for about $600 million, is just one of a number of acquisitions Nestle has made in recent years. The company acquired Power Bar in 2000 and Hot Pockets in 2002 and, this year, it bought an Australian maker of nutritional cereals and snacks. The company’s expansion and diversification likely will not stop there. When the U.S. company hosted a meeting of venture capitalists, Maverick Angels, several months ago in Glendale, officials told the group that the company was embarking on an internal effort to develop new products in a more entrepreneurial environment and partner with other entrepreneurial companies. Called an “innovation development system,” Nestle is sponsoring retreats that allow some of its employees to work free of the requirements of sales reports and phone calls in order to brainstorm ideas and develop new products. At the same time, the company said, it plans to approach M & A; somewhat differently, partnering with nascent companies and assisting them in reaching the kind of critical mass that would make them attractive to the M & A; market.

Alan Shorr and Morrie W. Reiff, founders of AFA Financial Group LLC, didn’t think twice when they launched the company in 1999. Legislative changes were opening the door for CPAs to sell securities and other financial instruments, and Shorr and Reiff, both accountants turned financial planners, figured a firm that essentially acted as a financial service department for accountants would be just what they were looking for. Their expectations have taken shape AFA’s volume has increased about thirteen-fold since 2003. But as it turned out, getting from the partner’s initial concept to the current-day company, wasn’t so easy after all. Calabasas-based AFA is a broker/dealer much like any securities house, with a twist. The company also partners with CPAs and financial planners in a revenue sharing arrangement. In its research and investment options too, AFA is somewhat different. Rather than just dealing primarily in stocks, AFA provides research on a wide variety of investments, ranging from securities trades to oil and gas, tenant-in-common real estate transactions and other alternative investments. CPAs and financial planners can work directly through AFA or they can use the company’s team business model where a planner and accountant along with an AFA business development manager work together to develop investment strategies for clients. That way, the CPA can oversee the process to be certain that the investments mesh with the client’s personal goals and tax issues. “Clients ask us, where should we put our money? What will be best tax-wise? Do we need life insurance, annuities and all of the financial products that most people are totally confused about,” said Ben Kendall, CPA and partner with The Allegent Group CPAs and Business Advisors LLP in Woodland Hills. “Before, we would recommend brokerage firms but we could have no control. We would prefer to be associated with somebody where we could get paid for that monitoring and do a better job for our clients at a lower cost.” CPA dilemma Changes in legislation in the late 1990s lifted a former prohibition on CPAs selling securities and other investment instruments. But many CPAs have been reluctant to do so because they worry that such services may undermine the relationships they have with their clients, and because they don’t have the time or resources to conduct the needed research. By the same token, referring clients interested in investment services to outside brokers means that the accountant cannot control the process, often until it is too late. “In the old way, a CPA would lose total control,” said Shorr, who is chairman of AFA. “Now they have total control and ultimately say so, and they get paid for their time and expertise.” For the planners, AFA provides a source of clients as well as research that is better targeted to their wealth management clients than that provided by the bigger broker/dealer firms, the planners say. “The wire houses very often have their own research departments, but typically what they’re researching is stocks,” said Larry Schechter, an AFA financial advisor, “not investment strategies, not conceptual strategies for how to build a portfolio.” Planners and CPAs each receive 40 percent of the fees and commissions generated through the relationship while AFA gets 20 percent. Schechter, who joined AFA about two-and one-half years ago, is one of about 40 such planners and advisors working with the firm. AFA’s roster also includes about 25 CPA firms. The firm first launched in Encino as Accountants Financial Group. At its inception, the company employed one staffer in addition to the two partners, and Shorr and Reiff brought on the CPAs they had been working with as financial planners previously, about 15. Trades were handled through an outside broker/dealer. But by 2003, the firm decided to apply for its own NASD license. The decision turned out to be a pivotal one in the company’s evolution. It was also arguably the biggest hurdle AFA has had to jump. Getting a broker/dealer license through NASD, federally-required for trading securities and other investments, is a complex process that is especially difficult to navigate, the partners say. There are no instructions or guidelines for those seeking to apply, and the Byzantine-like process unfolds by trial and error. “It’s almost like a franchise, but they don’t give you any information,” said Reiff who is president of AFA. “What franchise doesn’t give you the business plan? We hired a consultant who gave me half the money back.” Process completed Instead, Reiff pulled all-nighters, addressing each of the omissions as the agency revealed them, a process that he plowed through in about two months instead of the average four-to six-months the process typically takes, he said. With its licensing to conduct trades in hand, however, AFA was able to move the business forward at a pace it had not experienced previously. In 2004 the company moved to larger offices in Calabasas, and its network now extends to Houston, Idaho and Nevada as well as California. AFA is adding about three or four CPAs or financial planners each month and expects its network to grow to 100 by year end. Revenues are expected to double compared to 2005. “Our company is very well-known for due diligence,” said Daniel Oschin, who joined AFA last year as COO. “That’s just one of the reasons a financial planner might join independent of a CPA. We’re going to give you this marketing plan. We’re going to hook you up with a CPA and they get a whole world of business open to them.”

By BERT BOECKMANN Guest Columnist Buying a car is often the second most expensive purchase consumers make, but unlike buying a home, the average person will buy many cars over a lifetime. It can be an overwhelming and daunting proposition. But the process just got easier. As of July 1, car buyers have more benefits in the car buying process thanks to the Car Buyer’s Bill of Rights. The first of a kind legislation, supported by The California Motor Car Dealers Association (CMCDA) and signed by Gov. Schwarzenegger, was a result of working closely with the legislature and consumer advocate groups to craft legislation that puts the consumer first in the car buying process. The Car Buyer’s Bill of Rights represents benefits that aren’t available to consumers in any other state such as a side-by-side comparison of monthly payment terms with and without the inclusion of certain products and services such as service contracts, anti-theft devices, surface protection products, debt cancellation or “GAP” insurance. Some of the other benefits that consumers can expect among the new law include: >The right to purchase an optional two-day contract cancellation option on used vehicles priced below $40,000. >Receiving a copy of your credit score obtained from a credit bureau. >First in the nation standards for certified used cars. For example, dealers cannot advertise a vehicle as “certified” if they knew it had its odometer tampered, replaced or rolled back. Over the past couple months, thousands of dealership employees have attended comprehensive compliance seminars throughout the state sponsored by CMCDA so that dealers would be ready to implement this law. As dealers, customer satisfaction drives every decision we make. Auto dealers are taking positive steps to help consumers get the right car at the right price. Creating loyal customers is the ultimate goal of every new car dealer and informed car-buyers are likely to be those satisfied customers. California auto dealers are proud to be the first in the country to provide these unprecedented benefits to car buyers that will improve the car buying process in the state. Bert Boeckmann, president of Galpin Motors in North Hills, is also chairman of the California Motor Car Dealers Association.

By GREGORY N. LIPPE Guest Columnist In 2002 a Court of Appeals decision in Salazar v. Diversified Paratransit, Inc.., 103 Cal. App. 4th 131 (2002) held that workers in California are not protected against workplace sexual harassment perpetrated by customers, vendors and other third parties. In 2003 AB 76 (Corbett), which was approved by then Gov. Davis on October 3, 2003 and signed into law as one of the governor’s last acts in office, repudiated the reasoning of the appellate court and rejected the 2002 decision. AB 76 provided that California employers could be held liable for sexual harassment committed against their workers by clients, customers and other third parties if the employers new or “should have known” of the harassment and failed to take immediate and appropriate corrective action to stop the harassment. There is no requirement to notify the employer and there doesn’t appear to be specific or objective criteria for determining whether the employer “should have known.” This bill added one more reason for employees to sue their employers thereby increasing the unfriendly business climate and costs of doing business in California. Now, as if the legislature’s and prior governor’s actions regarding AB 76 weren’t enough to exacerbate the negative aspects of doing business in California, on Thursday June 8, 2006 the California Supreme Court joined the apparent movement to drive more businesses out of California by holding, in direct opposition to the 2002 Court of Appeals decision, that the state’s sexual harassment law in existence prior to the passage of AB 76 already authorized workers to sue their employers for failing to stop harassment by customers, clients, patients, students and other non-employees thereby opening the flood gates to allow numerous lawsuits to be filed against employers for alleged harassment by third parties. California Supreme Court Justice Ming W. Chin, writing for the court, said, that the Legislature, in approving AB 76, merely clarified existing law. One case that will be affected by this ruling was reported in the Los Angeles Times (June 9, 2006 edition). It involves an 84 year-old male patient who was an in-patient in a Barstow hospital in the late 1990s. The patient, who was recovering from penile implant surgery, allegedly badgered a nurse for sex and spread rumors of having slept with the nurse at a local Motel 6. The anticipated cost to the employer consists of a monetary award to the nurse in the amount of $180,000, fees to the nurse’s attorney and court costs totaling $380,000 and an undisclosed amount for the defendant’s (employer’s) legal defense fees. It appears that the hospital could be facing a total cost of close to $1 million for an act that the administration didn’t control and may not have even known about. Clear rules Sexual harassment cannot and should not be tolerated. The laws with respect to such harassment in the workplace are relatively clear. Most employers have a sexual harassment policy to limit their liability which provides a procedure for notification and correction. When the perpetrator is not an employee, the employer does not have control. Because of this lack of control, it would seem that an employer should be subject to liability for the actions of non-employees only in situations where the employer participated in the harassment or clearly knew of it and didn’t take corrective action. I believe that the only accurate means of determining whether the employer clearly knew of the harassment would be to require written notification. I believe that AB 76, as written, is very dangerous to businesses and will perpetuate the perception that California is unfriendly to business. Therefore we must concentrate on changing the law as soon as possible instead of applying it to time periods prior to its existence. The following are the “Business/Job Killer” bills that I have chosen to profile this month: SB 1489: This bill would require the court to award the Attorney General (“AG”) all reasonable costs of investigating and prosecuting specified civil actions in cases where the AG prevails. The term prevail could include settlements, changes in operation by a defendant and nominal monetary awards. The bill would encourage the AG to bring actions, knowing that it would be relatively easy to get his/her entire costs paid for. SB 1489 provides a potential for harassment of employers by a governmental agency and provides a disincentive for doing business in California and could result in the loss of jobs. Status: Passed Senate, 4/27/06, Currently in Assembly. Valley Senators voting for bill: Kuehl, Scott. Valley Senators voting against bill: Margett, McClintock, Runner. Valley Senators absent, abstaining or not voting: Alarcon. SB 109: Currently, when civil penalties are recovered for minor violations of air quality, criminal penalties cannot be assessed and vice versa. This bill allows the assessment of both civil and criminal penalties for the same minor violation. If passed, it could result in increased costs of litigation and a potential increase in the number of lawsuits. It is a disincentive for business and could result in the loss of jobs. Status: Passed Senate, 5/31/05, Failed Assembly 9/7/05, returned to Assembly for reconsideration. Valley Legislators voting for bill: Senate, Alarcon, Kuehl, Scott; Assembly, Frommer, Koretz, Levine, Montanez, Pavley. Valley Legislators voting against bill: Senate, Margett, McClintock, Runner; Assembly, Sharon Runner, Strickland. Valley Legislators absent, abstaining, or not voting: Assembly, Richman. Gregory N. Lippe, CPA, is managing partner of the Woodland Hills-based CPA firm of Lippe, Hellie, Hoffer & Allison, LLP and a director and vice-chair of the Valley Industry and Commerce Association. (VICA).