Shenandoah Valley Business Journal by Daily News-Record

A Byrd Newspapers Publication

Volume 15, No. 9, July 28, 2015

Risk Management Safety No Accident

SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, July 28, 2015

BUSINESS JOURNAL Inside This Issue Shenandoah Valley

The Shenandoah Valley Business Journal is a monthly publication of Rockingham Publishing Company, Inc., 231 S. Liberty St., Harrisonburg, VA 22801.

Editorial Staff

Focus Section: Risk Management ■ Workplace Safety No Accident . . . . . . . . . . . . . . . .Page 6

Other Business News ■ Dynamic Aviation Inks Deal . . . . . . . . . . . . . . . . . .Page 5

Harrisonburg, Va.

By email: svbjnews@dnronline.com

■ Northwestern Mutual Opens In City . . . . . . . . . . . .Page 8

By fax:

Editor and General Manager: Peter S. Yates

Columns

433-9112

■ Movers and Shakers . . . . . . . . . . . . . . . . . . . . . . . . Page 2

By phone:

Managing Editor: Jerry Blair

■ Valley Business Scene . . . . . . . . . . . . . . . . . . . . . . Page 2 ■ Investments by Gannon Irons . . . . . . . . . . . . . . . . . Page 3

574-6267 (news) 574-6229 (ads)

Staff writers: Vic Bradshaw

■ Investments by Adam Miller . . . . . . . . . . . . . . . . . Page 3

On The Cover:

■ Real Estate by Tim Reamer . . . . . . . . . . . . . . . . . . Page 4

Contributing photographers: Austin Bachand

Roberts Named Chairman Of VMI Investment Holdings Board HARRISONBURG — Wharton Aldhizer & Weaver PLC recently announced that George H. “Skip” Roberts Jr. has been named chairman of the board of directors of VMI Investment Holdings LLC, the investment manager for the Virginia Military Institute’s endowment holdings. Roberts With more than $400 million in assets, VMI ranks second in the nation among public colleges and universities in its endowment per student. It provides almost 25 percent of the annual budgets of VMI, an undergraduate school of 1,700 cadets.

■ Investments by Matthew Frakes . . . . . . . . . . . . . . . Page 9 ■ Local Ledger . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 10

Roberts has more than 24 years of experience as an executive, board member and general counsel for endowments, including his years of service as executive vice president and general counsel of the VMI Foundation, interim president of the George C. Marshall Foundation and general counsel and managing director of Ivor & Co. LLC, a New York-based investment firm. He continues to concentrate his practice in representing high net worth individuals, corporate entities and tax exempt organizations. Wharton Aldhizer & Weaver PLC is a full-service law firm with offices in Harrisonburg and Staunton. The firm serves individuals and businesses in the Shenandoah Valley and the mid-Atlantic. — Staff Reports See MOVERS, Page 11

Union Bankshares Corp. Earnings Slip In Second Quarter HARRISONBURG — Union Bankshares Corp., the Richmond-based parent company of Union Bank & Trust, reported in July that it earned $15.3 million, or 34 cents a share, during its second quarter. The results for the reporting period lagged behind the company’s results in the previous quarter and from a year earlier. Net income totaled $15.7 million, or 35 cents a share, in the first quarter of 2015 and was $17.7 million, or 38 cents a share, during the second quarter of 2014. According to a press release, branch closures had an after-tax cost of $832,000, or 2 cents per share, during the quarter. “Union’s second quarter results clearly demonstrate the steady progress we are making toward the growth objectives we envisioned as the largest community banking institution headquartered in

Austin Bachand / DN-R George Harper, a Truck Enterprises Inc. employee, works at the company’s Harrisonburg garage. Truck Enterprises is one of several Valley firms that makes safety a priority.

Virginia,” G. William Beale, president and chief executive officer of Union Bankshares, said in the press release. “During the quarter, loans grew by 9.1 percent while deposits grew by 8.1 percent on an annualized basis as we continue to build the core engine to generate sustainable, profitable growth for our shareholders.” The company’s mortgage segment performed well during the period, accounting for $95,000 in net income compared to a loss of $602,000 in the second quarter of 2014. Its community bank segment posted net income of only $15.3 million, down $22,000 from the same quarter last year. Union Bank & Trust operates 131 banking offices in Virginia as well as Union Investment Services, Union Mortgage Group and Union Insurance Group. — Vic Bradshaw See SCENE, Page 9

Harrisonburg, Va.

SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, July 28, 2015

Inflation And Your Retirement Income Strategy

ou might not think much about inflation. After all, it’s been quite low for the past several years. Still, you may want to take it into account when you’re planning your retirement income strategy. Of course, no one can really predict the future course of inflation. But it’s a pretty safe bet it won’t disappear altogether — and even a mild inflation rate, over time, can strongly erode your purchasing power. Consider this: If you were to purchase an item today for $100, that same item, in 25 years, would cost you $209, assuming an annual inflation rate of 3 percent. That’s a pretty big difference. During your working years, you can hope that your income will at least rise enough to match inflation. But what about when you retire? How can you minimize the impact of inflation on your retirement income? One thing you can certainly do is include an inflation assumption in your calculations of how much annual income you’ll need. The number you choose as an inflation factor could possibly be based on recent inflation levels, but you might want to err on the conservative side and use a slightly higher figure. Since you may be retired for two or three decades,

Investments Gannon Irons you might have to periodically adjust the inflation factor to correspond to the actual inflation rate. Another important step is maintaining an investment portfolio that can potentially provide returns well above the inflation rate. Historically, stocks have been the only investment category — as opposed to investments such as Treasury bills and long-term government bonds — whose returns have significantly outpaced inflation. So you may want to consider owning an appropriate percentage of stocks and stock-based investments in your portfolio, even during your retirement years. Now, you might be concerned at the mention of the words “stocks” and “retirement years” in the same sentence. After all, stocks will fluctuate in value, sometimes dramatically, and even though you may be retired for a long time, you won’t

want to wait for years to “bounce back” from a bad year in the market. But not all investments move in the same direction at the same time; spreading your dollars among a range of asset classes — large stocks, small and midcap stocks, bonds, certificates of deposit, foreign investments and so on — may help you reduce the impact of volatility on your portfolio. And you don’t even have to rely solely on stocks to help combat inflation. You could also consider Treasury InflationProtected Securities, or TIPS. When you purchase a TIPS, your principal increases with inflation and decreases with deflation, as measured by the Consumer Price Index. Your TIPS pay interest twice a year, at a fixed rate; this rate is applied to the adjusted principal, so your interest payments will rise with inflation and fall

with deflation. When your TIPS matures, you will receive adjusted principal or original principal, whichever is greater. Yield to maturity cannot be predetermined, due to uncertain future inflation adjustments. If TIPS are sold prior to maturity, you may receive less than your initial investment amount. If bonds are not held in a tax-advantaged account, investors will be required to pay federal taxes on the accredited value annually, although they will not receive any principal payment until maturity. When the inflation rate is high and the principal value is rising significantly, the taxes paid on TIPS may exceed interest income received. Therefore, TIPS may not be suitable for investors who depend on their investments for living expenses. As is the case with other bonds, though, you could choose to sell your TIPS before it matures. Work with your financial adviser to help decide what moves are right for you to help protect your retirement income from inflation. It may be a “hidden” threat, but you don’t want to ignore it. This article was written by Edward Jones for use by your Edward Jones financial adviser Gannon Irons.

How To Monetize Your Heirlooms

hat you consider an heirloom might not be to younger generations. Have your adult children already started asking you what you are going to do with all your “stuff” when you retire? Years of furniture, souvenirs, great deals, and collections add up over time. As you get closer to retirement, you may want develop a strategy for your belongings. Perhaps you’re planning to downsize. Maybe you want to see your children enjoy those items now or simply have more time to take inventory and organize what you have. While your heirs may appreciate the quality of your Wedgwood china, antiques, and collectibles, they may not want your dishes, furniture, or rare book collection. Be sure to talk with them about any objects you assume they want — you may be surprised by their answers.

Prepare For Sale

Investments Adam Miller Whether you want to get rid of it all at once, or little bits over time, selling some of your items now might be a good option. This may give you a modest financial bump, make it easier for your heirs to manage your property, make it easier to move, or de-clutter your retirement home.

Evaluate Your Goods Start by seeking out a professional. Ask your financial adviser and estate planning attorney for appraiser referrals, and check

in with friends and family for recommendations. After you get a list of candidates, meet with a few of them to see how they propose valuing the items you’d like to sell. If you have standout items such as valuable art or rare coins, ask a specialist to appraise those separately. Taking inventory of what you have and estimating ballpark values help you set realistic expectations for possible profits.

Know what’s “in.” Styles and tastes change. That handcrafted cherrywood Queen Anne dining set you think should draw $15,000 might only fetch $1,500 at auction if midcentury modern maple is popular at the time. Do any of your items need repairs? Some items gain greater value if you have them repaired before sale. Ask your appraisers what they recommend. Regardless of repairs, make sure everything is clean, in excellent condition, and in good working order. Good “curb appeal” can often help your items sell quicker and for a better price.

Decide Where To Sell After getting an item’s market value, See MILLER, Page 11

Tuesday, July 28, 2015

SHENANDOAH VALLEY BUSINESS JOURNAL

Harrisonburg, Va.

An Invisible Gorilla And Objective Third Parties I magine six kids in a circle passing a basketball around when a man in a gorilla suit walks right into the middle and waves hello. Would you notice the gorilla? Chances are pretty good you wouldn’t if I asked you to count how many times the ball was passed between the children. Nobody that was paying the slightest bit of attention would miss the gorilla, right? And that’s exactly the point, because you don’t think you would, but half of the people that have watched a video of this very scenario missed the gorilla. It’s called, appropriately, the Invisible Gorilla Test, and it was part of a study conducted by Christopher Chabris and Daniel Simmons to illustrate “unattentional” blindness. In other words, we tend to think we are taking in information as if our eyes are a video camera and our brain is a DVR when in fact we are only aware of a very small amount of what is going on around us and processing even less. It allows for overconfidence that leads to silly mistakes. That’s a problem, and it’s one of the reasons that I have made mistakes as an investor that I likely wouldn’t have made as an objective broker performing the same task for clients. As an investor:

Overlooked Key Information On more than one occasion the gorilla waved right at me and I missed it. Not in the video, but in the form of underground fuel tanks, easements, and various liens among other items. One time, as a personal project, I was eager to put together a plan to purchase several lots to locate a large fuel station near a small, but growing, university. It made perfect sense — the student population would drive both fuel purchases and inside sales of items like coffee, sodas, and other snacks. I submitted the idea to the site selector who wrote back a very simple, and in retrospect, very kind sentence, “Isn’t this University associated with the LDS Church?” In other words, the inside sales of high margin items like coffee, cigarettes, and alcohol were likely nonexistent, soda sales, while not prohibited, would have been drastically reduced, and just for good measure — most of the students didn’t drive.

Real Estate Tim Reamer

What’s worse is I knew this. I just ignored it because I was focused on the idea and not the components of the transaction. As a broker, I have a 13-page checklist detailing all sorts of due diligence items that require attention. It’s reviewed with each transaction, grows longer with each project, and includes a reminder not to be an idiot.

actual costs by 20 percent or more and it’s not the contractor’s fault. How could it be? The contractor was never consulted. I’ve been guilty of all three and more. These mistakes allowed me to look brilliant on paper early on (in my own mind) and less so within my rental accounts later on. After the early missteps, I know I prefer the opposite.

Lost Good Deals Trying To Make Better Ones

Been Too Optimistic About the Numbers When I first started purchasing small residential properties as investments, I put together a budget for the projected rents; operating costs like taxes, insurance, and lawn care; and improvements like painting, roof repairs, and more. The funny thing about those pro forma budgets is they generally produced a handsome positive net cash flow. The less funny thing about my actual financial statements is they didn’t match the rosy assumptions. They didn’t match for a couple of reasons. First, they never match exactly — the goal is just to be reasonably close. Secondly, they couldn’t be reasonably close because I didn’t use reasonable numbers. As a broker I’ve had the opportunity to review hundreds of financial statements and pro forma budgets from parties with varying degrees of experience. This practice has allowed me the benefit of recognizing a few common mistakes within the spreadsheets of those with less experience: Real expenses such as snow removal, turnover costs and property management, among others, are often forgotten and when they’re not they are underestimated. Reserves are rarely maintained or shown on budgets by those that have not felt the pain of funding an unplanned, but easily anticipated, capital expenditure. Budgets for initial improvements or ongoing maintenance generally miss the

On a few occasions, I have had the opportunity to purchase a property at what I considered to be significantly less than the actual market value. I didn’t purchase a single one of them. Why? On each occasion, I tried to negotiate the price down an additional $5,000 or $10,000. In some cases, I believed the property was undervalued by five to seven times that amount, which is kind of like driving for twenty minutes to save a nickel per gallon on gas, but I just couldn’t help myself. In the end that equity went to someone that wasn’t penny wise and good for those purchasers — because their temptation to negotiate was probably

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just as strong as mine, but they were smart enough to discuss it with a trusted third party, realize their foolishness, and just pay the reasonable asking price. The one bit of solace I can take from these mistakes and, hopefully, you’ve taken from your errors is a finding from a study examining dopamine neurons — when the mind is denied the emotional sting of losing, it never learns how to win. If that doesn’t sound as pleasant as you might like, consider this: A lot of my mistakes, and perhaps yours, could have been avoided with the assistance of an objective and informed third party. Tim Reamer provides commercial real estate brokerage and consulting services with Cottonwood Commercial and specializes in national retail representation, investment property (multifamily | commercial | NNN), and development projects. Learn more at www.timreamer.com.

GOOD PRINTERS EMPLOYEE OF THE QUARTER

Good Printers, Inc. is proud to announce the selection of Todd Slaubaugh as Employee of the 2nd quarter for 2015. This is an employee nominated honor that recognizes employees for outstanding job performance. Other criteria include versatility, attendance, work ethic and pride in their job. Todd has been with Good Printers for 25 years working in the Prepress Department. Todd’s peers recognize him as being pleasant to work with, quality conscious and mindful of customer’s expectations. He’s a team player that does a great job with a smile on his face. Congratulations, Todd, you are a deserving recipient of this award for the 2nd time. Todd first received the Employee of the Quarter award in 2006.

213 Dry River Road Bridgewater, Va.

(540) 828-4663 (800) 296-3731

Harrisonburg, Va.

SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, July 28, 2015

Bridgewater-Based Aviation Group Inks Deal Dynamic Working With Massachusetts Company HARRISONBURG — Dynamic Aviation is entering an emerging segment of the corporate executive travel business. The company headquartered in Bridgewater announced July 9 that it is partnering with Beacon, a subscriptionbased corporate air travel service for frequent fliers, to serve the Boston-based startup’s customers in the Northeast. The service will begin with regularly scheduled flights between Boston and New York, but seasonal flights to highend tourism hotspots Nantucket, Mass., and the Hamptons in New York are planned. “The idea emerged in 2012,” Dynamic Aviation President and CEO Michael Stoltzfus said of the subscription-based model of providing air transportation. “We’ve been tracking it since then and had an interest. We were able to connect with the founders of Beacon, and now we’re able to respond to their need.” Beacon’s inaugural flight is expected to take off on Sept. 15, he said. A press release about the deal said the launch of shuttle Beacon clients. service is dependent on Dynamic being Dynamic Aviation is expected to delivapproved by the Federal Aviation Admin- er 27 planes within three years for Beaistration and U.S. Decon’s exclusive use. partment of TransportaThe local company We were able to tion to offer scheduled inwill maintain and operconnect with the terstate commuter servate the fleet, including ice. providing pilots. founders of Beacon, The companies inked a Beacon will charge and now we’re able 10-year deal, according to its customers $2,000 a to respond to their the release, with the busimonth for the service, need. nesses expecting it to take Stoltzfus said. In rethree years to implement turn, customers can fly Michael Stoltzfus, Beacon’s full flight schedas often as they’d like on Dynamic Aviation its scheduled flights. ule. CEO and president, The partnership is exThe travel model is pected to have “considernot new to the industry able” impact on Dynamic’s business, or Beacon’s founders. According to artiStoltzfus said. cles in numerous national publications, The company employs 600 people, and such as Financial News, Fortune and he said it could add as many as 300 more Fast Company, three of the company’s to its payroll when it reaches the full-ser- four founders were involved in the vice level. launch of Surf Air, a similar service Most of the new jobs would be in the launched in California in early 2013. Northeast, but a few dozen hires — mostBeacon’s founders told those publicaly mechanics — could be made locally to tions that they’re eyeing service to other overhaul and outfit the Beechcraft mid- locations, including Washington, D.C. sized executive turbo-prop fleet that will Though the business model is new,

LEFT: Hiram Leon (left) and Luke Fahreny, both of Harrisonburg, work on a plane at Dynamic Aviation in Bridgewater on July 10. Dynamic Aviation is getting a contract to provide private, commuter-service flights for Beacon, which serves frequent fliers in the Northeast. BELOW: Dustin Showalter works on a plane at Dynamic Aviation on July 10. Photos by Austin Bachand / DN-R File

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Stoltzfus thinks it has staying power. “This is a growing segment of the airtravel industry,” he said. “We see this segment as a long-term need in the marketplace. As a result, our interest is to provide exceptional service to Beacon in the United States and to respond to other needs in other markets.” Dynamic Aviation’s core business is

providing special mission aviation solutions for government and commercial clients around the globe. Stoltzfus said this is the first time the company has created a solution of this nature and magnitude for corporate travelers. Contact Vic Bradshaw at 574-6279 or vbradshaw@dnronline.com

Tuesday, July 28, 2015

Safe Havens The following companies in Harrisonburg and Rockingham County are enrolled in the Virginia Department of Labor’s Voluntary Protection Program (for large businesses) or its Safety and Health Achievement Recognition Program (for small, hazardous businesses with 250 or fewer employees). Companies enrolled in the programs have been deemed to have workplace safety programs and records that are strong enough that Virginia Occupational Safety and Health has removed them from their routine inspection list.

Virginia Protection Program MillerCoors Shenandoah Brewery, Elkton Cargill Turkey Production LLC — Harrisonburg Feed Mill Cargill Turkey Production — Harrisonburg Hatchery

Safety & Health Achievement Recognition Program Good Printers, Bridgewater Riddleberger Brothers, Mount Crawford Truck Enterprises, Harrisonburg Source: Virginia Department of Labor

SHENANDOAH VALLEY BUSINESS JOURNAL

Harrisonburg, Va.

Minimizing Risk: Safety No Accident By VIC BRADSHAW

in a different place every day. Getting into the heads of our employees and influencing their behaviors and habits, that’s a challenge for us.” HARRISONBURG — Outside the offices of RiddleRiddleberger isn’t the only local company that priberger Brothers Inc. is a sign promoting the company’s oritizes safety. current safety record. The approximately 650 employees at the TennecoInside the Mount Crawford busiWalker facility in Harrisonburg had ness are two framed, full-page newsWe have improved our worked 3.3 million hours without a paper ads heralding the times the lost-time incident as of June 20. safety awareness, company surpassed the 5 million Truck Enterprises Inc. hasn’t had our culture, our and 6 million safe-hours marks earlia lost-time incident in about 3½ er this decade. employee involvement, years and is enrolled in the state’s Safety and Health Achievement The mechanical and plumbing and our management Recognition Program, which contractor with about 290 employcommitment. means it’s not subject to routine inees, including roughly 200 that work spection by Virginia Occupational in the field from Lexington to Fred Woody Sanders, Safety and Health. ericksburg and into West Virginia Human Resources Manager, “It’s a cultural thing,” said counties to the north and west, hasTruck Enterprises Inc. Woody Sanders, TEI’s human ren’t achieved those marks by accident. sources manager. “We have imIts safety emphasis extends beyond proved our safety awareness, our culture, our emmere programs to reach corporate culture status. “It really comes down to the employee and individ- ployee involvement, and our management commitual basis,” said Lisa Seekford, Riddleberger’s director ment.” of human resources. “We work in an industry that is inherently risky, and we have employees who could be See RISK, Page 7 Daily News-Record

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Harrisonburg, Va.

SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, July 28, 2015

SHARP Aids Safety, Benefits Businesses Risk

FROM PAGE 6

How They Do It Last year, Tenneco’s local employees made $230 million in passenger and commercial vehicle and marine exhaust systems, plant manager Chris McHugh said. And they did it with the lowest U.S. Occupational Safety and Health Administration recordable-injury rate in the plant’s 54year history. “That’s a huge achievement for us,” he said, “even more than 3 million hours without a lost-time injury.” The first topic of each daily shift meeting, he said, is safety. It’s also the first topic of management meetings each day and tops the agenda at quarterly meetings. Safety training is provided on a monthly basis. Among the other safety measures at Tenneco is tracking first-aid cases and near accidents. McHugh said anyone with two events in 18 months goes through secondary safety training.

Truck Enterprises employs about 135 people in Harrisonburg, 30 of them in

the corporate offices and 105 who sell and service Kenworth and Volvo vehicles ranging from dump trucks to truck tractors. General Manager Edgar Miller said each department has a quarterly safety meeting to discuss job-related safety issues. For parts it might be lifting heavy objects; sales might focus on safe driving. It also has a contest for employees to come up with safety banner slogans — such as “Let’s keep safety on the scene, no accidents in 2015” — that are displayed. “It’s a constant reminder in front of them every day,” said Sanders. Riddleberger, like TEI a SHARP-program participant, requires field personnel to complete a 10-hour OSHA training Austin Bachand / DN-R course and recently began requiring project managers and superintendents to take the 30-hour course, said Seek- Dean Steel employees, (left to right) Casey Stroop, Freddy Hernandez,Ian Baucum, Helli Alaberto ford. The company tries to have half of Moreno work at James Madison University’s East Tower site on July 17. Safety is a priority for construction companies, such as Mount Crawford-based Riddleberger Brothers Inc., a general its field workers trained in first aid. See RISK, Page 8

contractor of many of JMU’s capital projects. The company has twice surpassed 5 million safe-hours worked with in the last five years.

Tuesday, July 28, 2015

SHENANDOAH VALLEY BUSINESS JOURNAL

Harrisonburg, Va.

Insurance Firm Opens Harrisonburg Location Northwestern Mutual Wants ‘Physical Presence’ By VIC BRADSHAW Daily News-Record

HARRISONBURG — A national insurance and financial services company has increased its local presence by opening an office in the city. Northwestern Mutual has created a Shenandoah Valley District, which includes the company’s Roanoke operations and its new office at 420 Neff Ave., Suite 230. Christopher Bowen has been hired as the managing director of the Valley operations, which cover a territory extending from Rockingham County south to Montgomery and Henry counties. Bowen, who grew up in Waynesboro, had covered the Shenandoah Valley for the last six years while working out of Northwestern Mutual’s office in Charlottesville. Growth in this area prompted the company to establish the local office. “To better serve the area, we felt it was necessary to have a physical presence,” said Bowen, who began working in his new position July 1. “We opened a satellite office last year. The Shenandoah Valley was not managed as a cohesive region. [The home office] rearranged things so the whole Shenandoah Valley was under one district.” Four Northwestern representatives and two administrative assistants work out of the Harrisonburg office, Bowen

said, and he hopes to add four more representatives in the next 12 months. The company both hires people with financial services experience and those who have worked elsewhere but can be licensed to sell insurance and investment products. Based in Milwaukee, Northwestern Mutual is a nearly 160-year-old company owned by its 4.3 million clients that has $230 billion in assets, $27 billion in revenue and life insurance coverage totaling more than $1.5 trillion for its clients, according to a press release. It and its subsidiaries offer life, long-term care and disability insurance, as well as annuities, investment products and advisory products and services. The company is the nation’s sixthlargest independent investment brokerdealer, said Bowen, who earned a bachelor’s degree in management and a master’s degree in finance from Virginia Tech. Its approach is to work with clients to develop investment and risk management strategies to meet client goals. “We want to understand what is most important to our clients,” he said, “and help them devise an investment and insurance strategy to achieve those goals.” The company also assists the owners of small businesses. Bowen said Northwestern Mutual can help clients with insurance, succession planning, group retirement plan, 401(k) and simple IRA products. Contact Vic Bradshaw at 574-6279 or vbradshaw@dnronline.com

Austin Bachand / DN-R

Brandon Delawder, a general repair technician for Truck Enterprises Inc., raises a truck while working July 21. TEI, which hasn’t had a lost-time incident in about 3½ years, is one of three area companies enrolled in the state’s Safety and Health Achievement Recognition Program.

Better Safety, Means Lower Costs Risk

FROM PAGE 7

It also created a video in which employees discussed their injuries or ones they’ve witnessed. In it workers tell of exposure to a flesh-destroying chemical, dropping a manhole cover on a toe, and a fall-from-scaffold death by another company’s employee. “We try to drive home that it can happen to anybody,” Seekford said. “We wanted to try to make it as relevant as possible so we were able to reach people.” Officials with all three companies said they have employee safety incentive programs or hold events, such as catered steak dinners, to celebrate safety achievements.

Expensive Matter Companies focused on safety can save money by having lower premiums for general liability, workers’ compensation and fleet insurance. Riddleberger markets its safety record and has won jobs because of it, company President Daniel Blosser said. But there’s also a cost to not keeping an eye on safety. Thomas Ullrich has practiced law with Wharton, Aldhizer & Weaver in Harrisonburg since 1988, with an em-

phasis on OSHA issues for the last decade. The federal agency has increased its enforcement efforts in that time, he said, making compliance important for businesses. But many business owners aren’t familiar with its “extensive” rules and regulations, which can be a costly mistake. “OSHA inspections and citations are costly, contesting citations is costly,” said Ullrich. “Over the last five years the number of federal OSHA inspections and citations has declined, but the average penalty is three times higher than what was happening with [the Obama] administration took office.” Some employers have incentive programs to reward employees for safety achievements. Blosser, for instance, said Riddleberger provides periodic incentives, including annual awards for meeting safety goals. Ullrich, however, said OSHA recently has said it will look closely at such programs because officials think they might be leading employees to under-report injuries. “The jury is still out on what’s going to happen,” he said. “I’m not aware of employers abandoning these programs just yet.” Contact Vic Bradshaw at 574-6279 or vbradshaw@dnronline.com

Harrisonburg, Va.

SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, July 28, 2015

Retirement Savings Options For the Self-Employed

s a self-employed individual, you have access to several types of retirement plans. As is the case for large plans, a plan-of-one allows you to put away large amounts of money on a tax-deferred basis while deducting your contributions from your income. Among your options as a self-employed individual are IRAs, defined contribution and defined benefit plans.

IRA Options The two main types of IRAs for self-employed individuals are the Simplified Employee Pension and Savings Incentive Match Plan for Employees. A key benefit of both is the ability to contribute tax deferred amounts greater than that of a traditional IRA. A SEP allows you to make tax-deferred contributions of 20 percent of net earnings from self-employment (25 percent of compensation for incorporated businesses), to a maximum contribution that is set annually by the IRS. (For 2015, the earnings limit is $265,000 and the maximum contribution is $53,000). Generally, it is up to you as to whether to contribute in a given year, allowing for fluctuations in your business’s cash flow.

tions of up to 25 percent of net earnings from self-employment are also permitted, up to a maximum of $53,000 for combined total contributions (including elective deferrals). A profit sharing plan allows discretionary contributions up to the smaller of 25 percent of compensation or the annual IRS limit ($53,000 in 2015). Money purchase plans have the same limits, yet contributions are required.

Investments Matthew R. Frakes

A SIMPLE IRA is designed for employers with 100 or fewer employees; self-employed individuals make contributions as both employee and employer. For 2015, you may contribute 100 percent of compensation but not more than $12,500 through salary reduction as an employee. In addition, you may make catch-up contributions of $3,000 if you are at least age 50. As your own “employer,” you must make an employer contribution, matching (up to a maximum of 3 percent of compensation) or a nonelective contribution of 2 percent of compensation (for purposes of the 2 percent nonelective contribution, compensation is limited to $265,000 for 2015).

Defined Contribution Options Self-employed individuals may also op-

erate a 401(k), profit sharing or money purchase plan. These are more complex to implement and maintain, even for a sole proprietor. Among the requirements is the annual filing of IRS Form 5500, Annual Return/Report of Employee Benefit Plan, or, if eligible, Form 5500-SF for small employee plans or Form 5500-EZ for sole proprietors Although 401(k)s are associated with larger companies, they are also available to self-employed individuals. Often referred to as a solo 401(k), it has the same rules and limits as traditional 401(k)s other than it is, by design, exempt from discrimination testing. Elective deferrals for 2015 top out at $18,000, (plus $6,000 in catch-up contributions if applicable). Additional contribu-

Defined Benefit Option If you prefer a plan that will promise a monthly income at retirement, you might consider a solo defined benefit plan. The monthly benefit is determined by a formula based on salary history and years of service. Your contribution amount is not fixed, it is calculated each year by an actuary based on reasonable actuarial assumptions, and there is no upper limit. However, the annual maximum benefit you may receive at retirement is limited ($210,000 in 2015). Article by Wealth Management Systems Inc. and provided courtesy of Matthew R. Frakes, a Morgan Stanley financial adviser.

DuPont Credit Union, Equipment Store Open Harrisonburg-Area Locations Scene

FROM PAGE 2

DuPont Opens Third City Branch HARRISONBURG — DuPont Community Credit Union opened its third Harrisonburg branch at 1820 S. High St. on July 20, according to a press release. The approximately 5,200-square-foot building at the corner of South High Street and Erickson Avenue is open from 9 a.m. to 5:30 p.m. Monday through Thursday and 9 a.m. to 6 p.m. on Friday. DCCU is a not-for-profit financial cooperative with more than 72,000 members and assets totaling more than $980 million. — Vic Bradshaw

Greens & Grains Marks Opening HARRISONBURG — Greens & Grains

Café celebrated its grand opening July 17 at 865 Port Republic Road. The eatery features sandwiches and wraps, soups, salads and pasta as well as Virginia beers and wines. Its dishes include fresh ingredients from local sources, and its breads are baked locally, owner and chef David Engel said. It also has vegan, glutenfree and dairy-free options. Greens & Grains is in the former Salad Creations space at the 865 East complex. A Keezletown native, Engel said he made the switch from the Salad Creations he operated at the site for four years when his franchise agreement expired to an independent café to respond to market changes and support the local economy. “People are firmly into local nowadays,” said Engel, who was involved with the Salad Creations franchise elsewhere for nine years. “As a local guy myself, I really tried to take this concept and get as much product as we can locally to keep the money in Rock-

ingham County.” — Vic Bradshaw

been a community staple for more than 25 years marked the opening of its new building at 4072 N. Valley Pike with a ribbon-cutting ceremony July 10.

Shade’s N. Valley Pike Store Open HARRISONBURG — A business that’s

See SCENE, Page 10

SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, July 28, 2015

Candence Inks Marks Milestone Scene

Harrisonburg, Va.

Local Ledger

FROM PAGE 9

The 8,400-square-foot building includes a showroom for the lawn and garden equipment Shade sells, said John Kearns, the location’s general manager. The 5,000-squarefoot old building behind it is being used as a warehouse. Based in Winchester, Shade Equipment is a family-owned business that sells and services outdoor power equipment as well as distributing and installing commercial truck bodies and equipment. Founded in 1947, it’s operated in Harrisonburg since the mid- to late 1980s, company officials said. — Vic Bradshaw

Vape Company Opens In City HARRISONBURG — A lounge and retail shop for electronic cigarette users has opened in the Wetsel Seed Co. building. LiBeau Omens Vape Co. opened in July at 128 W. Market St., Suite 102. The lounge and retail outlet has entrances off West Market and from the Wetsel building parking lot. Owner Beau Morgan, who opened his first lounge in Woodstock this year, said the business offers users of e-cigarettes, often called vaporizers or vapes, a place to gather to try out the different flavored juices it sells.

Harrisonburg Rockingham County Page County Shenandoah County Augusta County Staunton Waynesboro

STAUNTON — Cadence Inc., a contract manufacturer of products and service provider to the medical, life science and industrial markets, recently celebrated 30 years in business. The company, originally founded as Specialty Blades in 1985 by engineer Martin Lightsey, was developed with the concept of combining computer numerical control and razor-blade sharpening technologies to address the needs of companies who required high-performance, custom-made blades. Cadence now employs nearly 500 people worldwide with headquarters in Staunton, and other locations in Massachusetts, Pennsylvania, Rhode Island, Wisconsin and the Dominican Republic. — Staff Reports

May 2015 6.4 4.7 7.0 4.7 4.6 5.0 5.4

April 2015 5.0 4.0 6.9 4.5 4.2 4.6 5.1

May 2014 6.7 4.7 7.2 5.0 4.8 5.3 5.5

Source: Virginia Employment Commission

Labor Force Harrisonburg Rockingham County Page County Shenandoah County Augusta County Staunton Waynesboro

May 2015 24,182 41,347 12,130 21,783 37,347 11,970 10,045

April 2015 24,232 41,443 11,951 21,246 36,823 11,852 9,951

May 2014 24,129 41,067 12,166 21,627 37,627 12,101 10,126

Source: Virginia Employment Commission

Building Permits*

— Vic Bradshaw

Staunton-Based Cadence Marks Its 30th Year In Business

Home Sales

Unemployment (percentage)

June 2015 $162,500 $199,900 $128,000 $167,500 $229,900 $173,750 $189,900

June 2014 $163,000 $198,200 $131,250 $170,000 $192,000 $129,900 $95,000

$1.7M $12.0M $403,651 $3.7M

May 2014 Permits Estimated Issued Cost

5 $620,770 33 $6.5M N/A N/A 24 $5.2M

Source: censtats.census.gov/bldg/bldgprmt.shtml *Permits are for residential construction only, single- and multifamily buildings, as recorded by the U.S. Census Bureau. The figures do not reflect the actual number of units associated with each permit issued for multifamily construction.

Days On Market Harrisonburg Rockingham County Page County Shenandoah County Augusta County Staunton Waynesboro

June 2015 30 35 208 105 58 47 74

June 2014 Pct. Change 42 — 28.57 80 — 56.25 148 40.54 127 — 17.32 95 — 38.95 90 — 47.78 95 — 22.11

Units Sold Harrisonburg Rockingham County Page County Shenandoah County Augusta County Staunton Waynesboro

June 2015 45 81 11 49 91 33 27

June 2014 Pct. Change 43 4.65 68 19.12 12 — 8.33 63 — 22.22 78 16.67 53 — 37.74 28 — 3.60

Retail Sales (in millions) May 2015 $106.4 $ 54.5 $ 16.5 $ 36.7 $ 45.9 $ 36.9 $ 45.2

Harrisonburg Rockingham County Page County Shenandoah County Augusta County Staunton Waynesboro

Source: Virginia Department Of Taxation

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Pct. Change — 0.31 — 0.86 — 2.48 — 1.47 19.74 33.76 99.89

Sources: Funkhouser Real Estate Group; RealEstate Businesss Intelligence

May 2015 Permits Estimated Issued Cost

Harrisonburg 14 Rockingham County 53 Page County 2 Augusta County 19

Median Price Harrisonburg Rockingham County Page County Shenandoah County Augusta County Staunton Waynesboro

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SHENANDOAH VALLEY BUSINESS JOURNAL

University Names New Spokesman Movers

FROM PAGE 2

JMU Taps Communications Chief HARRISONBURG — Bill Wyatt has been named the new director of communications for James Madison University. As director of communications, he will be responsible for guiding JMU’s communications strategy, including in the areas of media relations, social media, crisis comWyatt munications and com-

munity affairs, according to a press release from JMU. Most recently, he served as associate director of communications and deputy spokesperson for JMU, the release states. Before coming to JMU, Wyatt served as the director of media relations at the National Conference of State Legislatures in Washington, D.C., according to the release. Wyatt earned a bachelor’s degree in political science from Frostburg State University in Maryland, and is expected to complete a master’s in public administration from JMU in 2016. — Staff Reports

Tuesday, July 28, 2015

BrownEdwards Names Partner HARRISONBURG — City-based certified public accountant Billy R. Robinson is one of four men recently named a partner with BrownEdwards. A graduate of the University of Virginia’s College at Wise, Robinson concentrates on accounting for clients in the construction and real estate industries, family-owned businesses and governmental agencies. Robinson has earned the Certified Construction Industry Financial Professional and the Lean Six Sigma Green Belt designations and has been recognized as a Super CPA by Virginia Business magazine and one of the top 10 business people under 40 in the Harrisonburg area by the Shenandoah Valley Business Journal. BrownEdwards provides accounting services out of five offices in Virginia

and two in West Virginia. — Vic Bradshaw

PepsiCo Honors Local Rep HARRISONBURG — PepsiCo has recognized local salesman Roy Varner for his work. A sales representative for the company’s Frito-Lay North America operations in Harrisonburg, Varner was inducted into the multinational food and beverage company’s Ring of Honor this summer, according to a press release. It’s PepsiCo’s highest award for sales performance, earned in 2015 by 227 sales team members from more than 50 countries. Varner has been with the company since 1987. — Vic Bradshaw

Keep In Mind Managing Any Proceeds You May Gain From Estate Sale Miller

FROM PAGE 3

consider whether to sell at auction, hold an estate sale, or put them on consignments. Time, commissions, fees, and transportation are all factors to consider. Taking time to evaluate your options can help you choose methods that work best for your overall strategy. Meeting your potential sellers can help you establish relationships with them and feel good about your decisions and the method of sale.

Sell At Auction A rare and attractive antique, painting, or grand piano, for instance, might be maximized at auction. But auctions take time. The turnaround for consigning items to an auction house could run several months. Auctioneers often charge higher fees. You might also be asked to pay for shipping or delivering the items to the auction house.

Hold An Estate Sale Estate sales allow you to sell a wider range of items, from valuable antiques to smaller collectibles. These events are typically staged in your home, so make sure you’re comfortable inviting the public through the front door. An estate sale manager can help plan the sale and take precautions to secure personal items — such as financial documents — before the event. If you are planning both an auction and an estate sale, resist the temptation to put all your best pieces on the auction block. Include a few special antiques or collectibles in

your estate sale to lure buyers who might buy smaller pieces while perusing the bigticket items.

Consign Some Items Selling by consignment without an auction is another option. Shop around for vendors. Some sell from stores, while others hold events at various locations. Compare contracts, fees, and commissions because they can vary. Many antique stores take consignment items. Visit several stores and talk to the staff to see what would be a good fit for your treasures. If you frequent some of these stores, you are probably already familiar with their inventory and their clientele. You may have even purchased some of your items from them in the first place.

Manage The Proceeds However you approach selling your heirlooms, keep in mind you’re not the only one who would like to profit. Estate sale liquidators may charge a commission, depending on the value of your items and the difficulty of the sale. Consignment sellers often split the profits. Since they are selling in a retail situation, they may also reserve the right to discount the asking price after a certain amount of time has passed. If you receive any profits from your sale, work with your financial adviser to decide how to put the funds to good use. Will you shore up your cash cushion, prepay a vacation, or make a donation to a favorite charity?

Whatever you do with your profits, knowing you’ve pared down your estate, decluttered your home, and discovered what your children value can be a good experience for your entire family.

This article was written for Wells Fargo advisers and provided courtesy of Adam Miller, financial adviser in Harrisonburg; 540-434-9926.

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