UTAH’S BUSINESS JOURNAL www.slenterprise.com
THIS WEEK
Sept. 5-11, 2011
Report: large federal Intermountain Lift Truck projects to prevent to more than triple size construction job losses of SL Valley footprint
EMC Corp. leases site in Draper
Cloud computing firm plans to add 500 jobs over several years. See page 5.
Dine O' Round to return This year's dates are Sept. 16-Oct. 1. See page 6.
• Industry Briefs • Begin on page 9.
• Calendar • See page 7.
$1.44
Volume 41, Number 6
Three large federal government projects should help prevent more job losses for Utah’s nonresidential construction sector, which is particularly vulnerable due to the anticipated lower levels of state building and road construction, the completion of City Creek Center and the winding down of fiscal stimulus spending. That’s according to Jim Wood of the Bureau of Economic and Business Research at the University of Utah in a report commissioned by Commerce Real Estate Solutions. The most important project,
according to Wood, is the National Security Administration’s massive data center, which began construction in late 2010 near Camp Williams. In terms of construction value, the NSA building will be the largest construction project in Utah’s history. A few non-building projects have had higher value — the Intermountain Power Project and the I-15 reconstruction — but no actual building projects. Construction of the data center will take three years and cost an
By Barbara Rattle The Enterprise Intermountain Lift Truck will more than triple the size of its footprint in the Salt Lake Valley when it relocates in early October. Currently located in 7,400 square feet on one acre in West Valley City, the company has leased 24,000 square feet on 2.25 acres at 3350 W. 2100 S., Salt Lake City, where it is scheduled to be fully operational by Oct. 3. Owner Mark Williams said Intermountain Lift Trucks, which embarked on a diversification path when the economy soured, needs more room because the firm is no longer limited to selling and
servicing lift trucks. For several years, the company has also engaged in the service and repair of cranes, semis and a variety of other construction equipment. “That’s one of the things that’s really helped us through this economy,” Williams said, “to diversify and not just deal with one particular product. Initially it was just lift trucks, and when the economy started turning we started getting into semis and crane work and now that’s kind of expanded into construction work as well. We felt that diversification would be one of the things that would hopefully keep us going.” Intermountain continues to see LIFT page 2
Dallas-based Brazilian steakhouse to enter Utah
see CONSTRUCTION page 2
New laws increase transparency at State Construction Registry
New laws affecting The State Construction Registry, which is designed to connect owners and their money with the people working on their construction projects in Utah, went into effect last week. The changes are designed to increase transparency on construction projects — both commercial and residential — by connecting all parties involved so all participants will get paid. Updates to the law allow financial institutions and title companies visibility into construction projects through the website. This is designed to improve management of construction projects by helping payments flow from the bank to the parties working on a construction job if
they have filed a notice on the website. Only those parties who have filed a notice on the State Construction Registry are allowed by law to file a lien against the property. To further increase transparency, the Utah Department of Commerce and Utah.Gov, the official state website, have made significant changes that aim to decrease ambiguity and create more certainty for all parties involved in a property. “The changes to Utah’s mechanic’s lien process will maximize the capabilities of the State Construction Registry and make it easier for every stakeholder to manage their risk throughout the see REGISTRY page 2
The Texas de Brazil location in downtown Salt Lake City will measure 8,000 square feet and seat about 225 guests. By Barbara Rattle The Enterprise Two national restaurant chains will open locations in downtown Salt Lake City’s City Creek Center next year — one of them with an existing presence in the valley and the other new to the state. The Cheesecake Factory is slated to open at City Creek next spring, complementing its existing location in Murray, while Texas de Brazil will be new to the market. Both will serve alcohol. Candyce Hedlund, director of public relations and events for Dallas-based Texas de Brazil, said the firm’s Utah debut location
will measure 8,000 square feet, seat roughly 225 guests, employ roughly 55 people and open in March. The eatery will be open seven nights a week for dinner; lunch hours will likely be added later. Regular dinner price is $42.99 per person and a light dinner price is $24.99 per person. “Texas de Brazil specifically chose City Creek as it is one of the most beautiful centers we have worked with and this will be our fifth location partnering with Taubman,” Hedlund said, referring to Taubman Centers, which is developing the retail portion of the see STEAKHOUSE page 5
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The Enterprise
REGISTRY from page 1
Intermountain Lift will be moving from 7,400 to 24,000 square feet.
LIFT from page 1 sell and service Komatsu, Hyundai and Healy forklifts and JLG van lifts, he said. The firm also does a significant amount of service and repair work on IMT cranes. “We’ve pretty much become a
one-stop shop for our customers,” Williams said, noting a staff of 20 will make the move and plans call for new mechanics to gradually be added to staff. The firm leased its new location, which it has an option to buy, with the assistance of Spencer Knight of Knight Realty Co.
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course of a construction project,” said Howard Headlee, president of the Utah Bankers Association. “This will lower costs, expedite construction, enhance oversight and, most importantly, make it easier to ensure that everyone working on a job is fairly compensated.” The website was also updated to be more user friendly for all users, including property owners, banks, general contractors, subcontractors, suppliers, architects, lenders and title associations. New services available include: • The ability to access all property information from a mobile phone and instantly record data using a property specific QR code. • The ability to view a list of all parties listed on a property. • The ability to control and monitor priority. • The ability to determine work start date The online service allows the user to search by six different categories: name, date, address, permit number, parcel number or entry number. Users can find specific information related to their respective role by selecting from a drop box menu; all related forms and information automatically generate.
READ THE ENTERPRISE ONLINE Contact Sarah at (801) 533-0556 ext. 208 to set up an account.
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CONSTRUCTION from page 1
estimated $1.2 billion. The project site is at the northern boundary of Utah County and the southern boundary of Salt Lake County. The primary purpose of the facility will be data storage; several hundred people will be employed there. Construction employment estimates range from 8,000 to 10,000 over the three-year build period. Total square footage of the facility is one million square feet. Two other large federal government buildings have recently broken ground — the $110 million Frank E. Moss Federal Courthouse in downtown Salt Lake City and the $75 million FBI field office in the Salt Lake International Center. They should protect the nonresidential construction sector from further job losses, according to Wood. Utah received $212 million in fiscal stimulus funds for transportation. According to Wood, that money is 98 percent spent. The largest project was less than $15 million. Utah chose to spend the funds on 135 smaller projects in a belief that smaller projects would maximize employment impacts. The Utah Constitution imposes a cap on debt for the state at 1.5 percent of the fair market value of taxable property. In the last few years the taxable value has declined, with the economic recession and loss of value in residential real estate. The most recent valuation was at $280 billion, putting the debt cap at around $4.6 billion. The state is currently within 87 percent of the constitutional bonding limit or cap, leaving little room for bonding in fiscal years 2012 and 2013. According to Wood, legislators have used 85 percent as a soft cap and are reluctant to go above that level, reserving the final 15 percent for emergencies such as earthquakes or floods. Wood writes that it is important to note that Utah’s debt is relatively short-term. No bonds exceed 15 years and 75 percent
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have terms of 10 years or fewer. All bonds for buildings are on a six-year term. Consequently, debt is paid down rapidly. By 2013 and beyond about $300 million will be added to bonding capacity due to debt maturing. The current bonding limit predicament is unusual and temporary, according to Wood. It was created by the declining value of taxable property and the extraordinary (for Utah) amount of debt taken on in the past few years for highway construction. Utah state government is also a major source of new building construction as well as ongoing rehab and maintenance of existing buildings ($50 million annually). Over the past several years the state ramped up spending on building as a counter-cyclical measure to the housing cycle. Interest rates and construction costs were very favorable. However, according to Wood, beginning in 2013 the level of state building construction will drop by around $100 million annually. The bonding limit is a factor here as well. Another major builder of large projects has been Intermountain Healthcare, which has constructed two hospitals in the past three years (Riverton and Park City). In 2006 IHC finished the $400 million Intermountain Medical Center in Murray. From 2011-2015 the firm has two major construction projects — reconstruction of the Salt Lake Clinic ($40 million) and expansion of Primary Children’s Hospital ($75 million). IHC will not be expanding as rapidly in the 2011-1015 period as in the 20061010 period, according to Wood. The loss of construction jobs during the past five years has been staggering. Since 2007 the number of construction jobs has declined nearly 40 percent, a loss of 38,000 jobs. Without the support of large public projects, job losses would continue this year and likely into next year, Wood writes. But the $1.5 billion in construction spending by the federal government will prevent further losses. Employment projections indicate the construction sector is expected to gain about 1,000 new jobs this year and grow by 3,000 jobs next year. THE ENTERPRISE [USPS 891-300] Published weekly by Enterprise Newspaper Group Inc. 825 N. 300 W., Suite C309, Salt Lake City, UT 84103 Telephone: (801) 533-0556 Fax: (801) 533-0684 Web site: www.slenterprise.com. For advertising inquiries, e-mail david@slenterprise. com. To contact the newsroom, e-mail barbara@ slenterprise.com. Subscriptions are $55 per year for online only, $65 per year for print only and $75 per year for both the print and online versions. or $1.25 per copy. Opinions expressed by columnists are not necessarily the opinion or policy of The Enterprise Copyright 2011 Enterprise Newspaper Group Inc. All rights reserved Periodicals postage paid at Salt Lake City, UT 84199. POSTMASTER: Send address corrections to P.O. Box 11778, Downtown Station, Salt Lake City, UT 84147
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Sept. 5-11, 2011
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Union Pacific to invest $13 million in Utah rail line Union Pacific Railroad said it will continue improving the transportation infrastructure in Utah with an investment of more than $13 million to enhance the rail line that runs from Provo to Lynndyl. The more than 84-mile project includes removing and installing more than 106,000 ties, renewing the surfaces at 88 road crossings and replacing more than
STEAKHOUSE from page 1
massive project. Texas de Brazil is a Brazilian “churrascaria” (steakhouse). Guests begin their dining experience with a visit to a seasonal salad area that includes appetizers, soups, salads and gourmet cheeses. They then turn their “flip card” to green, signaling a group of gaucho-clad carvers serving 15 types of seasoned meats tableside with large skewers. The meats are slow-roasted over an open flame and accompanies by garlic mashed potatoes, Brazilian cheese bread and sweet-fried bananas. Family owned and operated and founded in 1998, Texas de Brazil has 18 domestic locations and one international restaurant.
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Sept. 5-11, 2011
one mile of rail in various curves. Crews will also spread 72,000 tons of rock ballast to help provide a more stable roadbed. The Roseville, Calif.-based railroad firm plans to invest approximately $3.3 billion in capital during 2011 to enhance the safety and efficiency of its 32,000-mile network. According to the Association of American Railroads, the country’s largest railroads keep pace with the top nine states in terms of highway spending, and they do it with private money. In 2010, capital spending by Class I railroads totaled $9.8 billion, and the industry plans to spend $12 billion during 2011. All told, freight rail companies have invested $480 billion to maintain and modernize the national rail network since 1980. Improved and additional rail capacity allows freight rail service to grow. Union Pacific said it can move one ton of freight nearly 500 miles on a single gallon of diesel fuel, and, according to the U.S. Environmental Protection Agency, freight trains are nearly four times more fuel efficient than trucks.
EMC selects site for new customer service center EMC Corp., a global information technology firm, has selected a site in Utah for the expansion of its customer service operations, a move that is expected to add 500 new jobs to Utah by the end of 2015. The firm has leased 35,000 square feet at the Lone Peak Center, 11747 Lone Peak Parkway, Draper, which should be ready for occupancy during this year’s fourth quarter, although the hiring process will begin immediately, said EMC spokesperson Lesley Ogrodnick. She declined to say how many people will initially be employed at the Draper facility,
but did say they will perform technical and field support functions. Based in Hopkinton, Mass., EMC core function is helping businesses transition to cloud computing through IT infrastructure products and services that are designed to help store, manage, protect and analyze often massive quantities of data in a more flexible and cost-efficient way. The firm also offers security products through RSA and virtualization software through majority-owned VMware. EMC employs more than 48,500 people worldwide and ranks 152 among the Fortune 500 companies.
Utah home sales up 16.4 percent in July There was good news for the Utah real estate market in July as home sales rose 16.4 percent compared to last year. This is the biggest increase in sales since May of last year, when buyers were rushing to finalize tax-crediteligible transactions. During the month, Utah Realtors sold 2,686 homes compared to 2,307 sold in July 2010. The number of contracts signed to buy homes was also higher in July, up about 22 percent compared to last year, which signals sales will likely increase next month as well. Year-to-date pending sales are outpacing the
first seven months of last year by nearly 4 percent. This is the third straight month of double-digit gains in pending sales. Other good news from the Utah Association of Realtors report was the fact that inventory dropped significantly in July. The number of homes for sale at the end of July was 25,240, down 17.5 percent from last year, when 30,607 properties were on the market. Combined with the pickup in sales, it would now take 9.9 months to sell the entire supply of homes at the current sales pace. This is the lowest statewide reading for month’s supply since
EMC, which received an incentive from the state to expand here, has committed to investing more than $7 million to bring the new Draper facility online. Wages at the center are expected to exceed 125 percent of the average county salary. During a 10-year period, the state will offer a post-performance, single taxpayer incentive not to exceed $3.5 million. EMC leased its Draper facility with the assistance of Eric Smith of CB Richard Ellis. Wesley “Tab” Cornelison, also of CBRE, represented the landlord, San Francisco-based Maier Siebel Baber.
March 2008. The median price of homes sold in July was $175,268, down about 12 percent from last year. However, prices have hovered around this level since January. The top 10 counties for closed sales in July were Sevier (up 50 percent), Uintah (up 46.7 percent), Tooele (up 45.1 percent), Sanpete (up 44.4 percent), Salt Lake (up 34.3 percent), Emery (up 33.3 percent), Weber (up 25.9 percent), Cache (up 25.5 percent), Utah (up 21.4 percent) and Juab (up 20 percent).
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Sept. 5-11, 2011
Downtown Dine O' Round returns Sept. 16 Some of Salt Lake City’s best restaurants will participate in the Ninth Annual Fall Downtown Dine O’ Round Sept. 16-Oct. 1. In addition to the regular menu, 40 participating restaurants will offer a three-course dinner for $15 or $30 per person and 29 restaurants will offer Lunch On Us!, a twoitem lunch for $5 or $10. Zy, Rio Grande Café, Bocata, Hapa Taqueria, Maxwell’s East Coast Eatery, Dojo Asian Inspired
Cuisine and Lounge, Washington Square Café, Stoneground, Thaifoon Taste of Asia and Inferno Cantina are new to Dine O’ Round this autumn. Fifteen dollar three-course dinners will be offered by Biaggi’s Ristorante Italiano, Cannella’s, Cedars of Lebanon, The Garden Restaurant, The Green Pig Pub, Hapa Taqueria, Iggy’s Sports Grill Downtown, Inferno Cantina, J. Wong’s Asian Bistro, Lamb’s
BELFOR Property Restoration’s office in North Salt Lake recently added a specialized high-capacity flood restoration vehicle to its equipment fleet, something unique to the Utah market, and one of only 65 such vehicles BELFOR owns in the U.S. According to general manager Jason Leavitt, the six-passenger vehicle cost more than $120,000 for the truck and equipment, including a $30,000 state-of-the-art Sapphire Scientific 570SS water extraction system. The system includes a 31HP Kubota gasoline engine and a 90-gallon in-truck waste tank. The vehicle was custom-made by Japanese-headquartered Isuzu, with the water extraction system installed at BELFOR’s Philadelphia office. “This truck is designed for larger commercial property losses,” said Leavitt. “We can fit 45 fans and 12 dehumidifiers in one load, which is a lot of equipment. Plus, it can be a nightmare trying to park multiple vehicles at a scene, especially at places like the University of Utah or downtown Salt Lake.” Marketing manager Linn Griffith said the vehicle “eliminates the need for other trucks and equipment. Being able to carry six technicians and three times the amount of equipment of a regular-sized truck saves us on fuel consumption and time.” BELFOR’s Utah office has increased annual revenues every year since it opened in North Salt Lake four years ago. Sales are currently upGSBS_Enterprise_4x4.pdf 148 percent over last 1year, and rose 300 percent from 2009 8/4/11 5:14 PM to 2010.
Grill Café, Maxwell’s East Coast Eatery, Red Rock Brewing Co., Rio Grande Cafe, Settebello Pizzeria Napoletana, Squatters Pub Brewery and Stoneground. Thirty dollar threecourse dinners will be offered by Alforno’s, Bambara, Caffe Molise, Christopher’s Seafood & Prime Steakhouse, Copper Canyon Grill House & Tavern, The Copper Onion, Dojo Asian Inspired Cuisine and Lounge, Eva, Faustina, Fleming’s Prime Steakhouse and Wine Bar, Market Street Grill, Market Street Oyster Bar, Martine, The Melting Pot, Metropolitan, Naked Fish Japanese Bistro, New Yorker, Oasis Cafe, Ruth’s Chris Steak House, Star of India, Takashi, Thaifoon Taste of Asia, Tin Angel Café, Wild Grape Bistro and Zy. Five dollar two-item lunches will be offered by Bocata, Gracie’s, The Green Pig Pub, Hapa Taqueria, J. Wong’s Asian Bistro, Maxwell’s East Coast Eatery, Stoneground and Washington Square Café. Ten dollar two-item lunches will be offered by Alforno’s. Caffe Molise, Canella’s, Cedars of Lebanon, Christopher’s Seafood and Prime Steakhouse, Copper Canyon Grill House & Tavern, The Copper Onion, Faustina, Iggy’s Sports Grill Downtown, Inferno Cantina, Lamb’s Grill Cafe, Market Street Grill, Market Street Oyster Bar, Martine, New Yorker, Red Rock Brewing Co., Settebello Pizzeria Napoletana, Squatters Pub Brewery, Thaifoon Taste of Asia, Tin Angel Café and Wild Grape Bistro.
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• Sept. 8, 6-9 p.m.: Social Commerce Exchange, hosted by Whitehall Ventures. Interactive learning sessions with leading experts and networking opportunities with like-minded businesses will be available. Representatives of Adobe, BlueGrass, KSL.com and others will lead discussions on effective Facebook and Twitter strategies, social content management, social media measurement and mobile applications. Location is the Miller Campus of Salt Lake Community College, 9750 S. 300 W., Sandy. Free, but seating is limited. Register at http://socialcommerceexchange-6428.eventbrite. com. • Sept. 12, 8:30-10:30 a.m.: “Economics of the Cloud — the U.S./U.K. Perspective,” sponsored by the World Trade Association of Utah. Leading proponents of cloud computing will provide their insight and advice to help attendees understand how to access the benefits of the cloud, dispel negative myths associated with cloud computing, empower business leaders with basic knowledge they need when developing a road map for cloud adoption within their organization and outline essential legal considerations. Location is the Zions Bank Founders Room, 1 S. Main St., 18th floor, Salt Lake City. Free, but seating is limited.
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Register with egorn@wtcut.com or by calling Elizabeth Goryunova on (801) 532-8080. • Sept. 13, 3-5 p.m.: “Workforce Preparation,” a Utah Technology Council Life Science workshop. Co-chairs of the workshop will be Clark Turner of Aribex and Ronald Weiss of ARUP Laboratories. Location is Bionnovations Gateway, 2500 S. State St., Room M, South Salt Lake. Free to UTC members, nonmembers pay $30. Register at www.utahtech.org. • Sept. 13, 10 a.m.-noon: “Developing Superior Customer Service,” sponsored by Associated Builders and Contractors of Utah. Henry “Dutch” Hempel, a business consultant for the construction industry, will be the presenter. Location is the ABC offices, 2130 S. 3140 W., Suite B, West Valley City. Cost is $10 for members, $15 for nonmembers, who must prepay. Register with Jodi Frank at (801) 708-7036 or jfrank@abcutah.org. • Sept. 13, 7 p.m.: “Advantage: How American Innovation Can Overcome the Asian Challenge,” presented by Westminster College and the Utah Council for Citizen Diplomacy. Dr. Adam Segal will make the case for the crucial role of the “software” of innovation and argues
• Calendar • that by strengthening its politics, social relations, and institutions that move ideas from the lab to the marketplace, the United States can play to its greatest economic strengths and preserve its position as a global power. Segal is currently an Ira A. Lipman Senior Fellow for Counterterrorism and National Security Studies at the Council on Foreign Relations. Before joining the council, Segal was an arms control analyst for the China Project at the Union of Concerned Scientists. He is the author of Digital Dragon: High-Technology Enterprises in China and writes for the blog Asia Unbound. Location is the Vieve Gore Concert Hall in the Emma Eccles Jones Conservatory at Westminster College, 1840 S. 1300 E., Salt Lake City. Free. • Sept. 13, 7:15-9 a.m.: Association for Corporate Growth Breakfast Meeting. Guest speaker will be Tom Holmoe, athletics director at Brigham Young University. Location is the Little America Hotel, 500 S. Main St., Salt Lake City. Free to ACG members, nonmembers pay $30. Register at www.acgutah.org. • Sept. 20, 8-9:30 a.m.: “European Regulatory Affairs — Update on Medical Device Directives,” sponsored by the Utah Technology Council. Dr.
Michael Rinck, CEO of MT Promedt Consulting in Germany, will review the changes over the past year and to provide information on how Utah companies can maintain compliance with the EU regulations. There will be Q & A session following the presentation. Location is the Little America Hotel, 500 S. Main St., Salt Lake City. Cost is $15 for UTC members, $30 for nonmembers. Register at www.utahtech. org. • Sept. 28, 8 a.m.-3 p.m.: Smart Women Smart Money Conference, presented by Zions Bank’s Women’s Financial Group. Guest speaker will be actress Geena Davis. Breakout sessions will show participants how to travel at full speed toward retirement, how to fuel a business career, and how to navigate the financial freeway with a budget. Davis’ keynote speech will motivate the audience to drive the road to success by highlighting the importance of gender equity and empowerment for success in life, finance and business. Location is the Salt Palace Ballroom, Salt Lake City. Free, but registration is required. Register at www.smartwomen. zionsbank.com or by calling 800737-6586. • Sept. 30, 9 a.m.-5 p.m.: Dave Ramsey’s EntreLeadership
Nationwide Simulcast Training Event, presented by ChamberWest and hosted by the Salt Lake Community College Jordan campus. Cost is $39. Register at www. chamberwest.org or by contacting Holly at (801) 673-332 or holly@ chamberwest.org. • Nov. 4, 7 p.m.: Utah Technology Council 2011 Hall of Fame Gala. Keynote speaker will be Larry Ellison, founder and CEO of Oracle Corp. Location is the Grand America Hotel, 555 S. Main St., Salt Lake City. A networking session will begin at 6 p.m. Cost is $300 for UTC members, $450 for nonmembers. Register at www.utahtech.org.
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Real Estate Matters Legal Matters
Sept. 5-11, 2011
The Enterprise
HR Matters Legal Matters Human resources Q&A Do you have human resourc- the same amount of paid leave es questions? Most employers do, across the board to avoid discrimialthough many business owners nation charges. Some employers don’t realize these questions are take a risk by offering varying actually HR-related. In work- amounts of PTO to employees ing with clients of all industries, within a given work group (oftenour ESG human resources times extra PTO days consultants hear questions are offered as a “deal that might be educational sealer” when recruiting (or great reminders) for all employees); however, employers to read. Test this is a gray area. If your knowledge and see if an employee someday you’re in line with where believes he or she is not the law stands. being treated fairly in Q: Do I have to proregards to PTO amounts vide paid sick or vacation and entertains the reatime to my employees? Wyatt Curran son to be due to some A: No, not in Utah. protected class charThere is no Utah labor law acteristic (because I’m that requires employers to pro- Catholic, I’m a woman, I’m an vide benefits to its employees. ethnic minority, I’m over 40, etc.), However, employers who do pro- this risk could someday turn into a vide PTO and/or other paid leave lawsuit. must establish and abide by their Q: My Utah business has paid leave policies in a non-dis- employees that occasionally criminatory manner. This gener- travel into California. I don’t ally means that employees with- have to abide by California in a given class (i.e., first-level labor code when those employemployees, mid-level employees, ees are actually in California, do managers, etc.) should be offered I?
A: It’s complicated. Perhaps you are concerned about this because California requires that employers pay overtime for any time worked more than eight hours in a day rather than based on the federal standard of 40 hours in a workweek. And perhaps adding to your concern is the recent California Supreme Court ruling that nonresident employees working for a California-based company would, indeed, have to be paid according to California rules when actually working in California. What complicates this issue even more is the careful wording used by the California Supreme Court after this case ruling, where it stated, “California law might not apply to non-resident employees of out-of-state businesses who enter California temporarily during the course of a work day.” Our interpretation of this (and final answer to the question) is no, you do not currently have to abide by California labor code for your non-resident employees working for your out-of-state business who
occasionally enter California for business purposes. However, this answer is subject to change pending the next lawsuit that is bound to occur by somebody also wanting a piece of California’s generous overtime payout. Q. My business partner and I own two separate companies with different FEINs. They are both wholly owned by the same partnership and we have employees that work for both companies (they bounce back and forth). Are we required to combine their hours in order to calculate overtime? A. Yes. Whenever there is joint employment (meaning employers share control of the employee, or there is common ownership of the employers, or there is common management of the employers), then hours must be combined in the week to determine overtime (OT). Q: I have given all of my employees smartphones so I can reach them when they’re out on the worksite. Is this a good or
bad idea? A: Both good and bad. Advancements in technology have allowed employers and employees to become much more productive and efficient than they were even just a few years ago. And, as you’ve experienced, smartphones have greatly enhanced communication when employees are typically out-and-about for their jobs. The tricky side to providing an employee with any smartphonerelated device is both calculating work time accurately, as well as having a comfortable level of trust with how the phone will be used. Anytime employees are actually performing work for the company, they must be paid for time worked. This includes responding to e-mails and answering work-related phone calls on their smartphones. Wage and hour laws clearly state that simply having an electronic device on your person for work purposes does not necessarily mean the person is working, however. To help track see Q&A next page
ARTS/ENTERTAINMENT
• The hillside behind Red Butte Garden amphitheater will be closed next year to people who are now using it as a free viewing area for the Red Butte Garden Concert Series. The new policy for the University of Utah property takes effect as soon as this year’s concert season concludes. In closing the area, the university is citing the inherent fire danger posed by people smoking, damage to vegetation on the hillside that prevents native grasses and plants from thriving, the risk of injury due to the rough terrain and lack of lighting and also potential revenue loss. Signs have now been posted along the main access routes to the hillside area and will remain in place for the remainder of this year’s concert season. These signs will serve as advance notice to those who have been using the hillside as a free alternative to the paid concerts.
BANKING
• Virginia-based Chartway Federal Credit Union has appointed Bruce Bryan regional president of the organization’s Utah region. Having been involved in the credit union industry for more than 30 years, Bryan attended Ricks
Q&A
from previous page hours outside the workplace, the company may want to set up an online time-keeping system and then train employees on how to record time worked, particularly when they are unable to clock-in immediately. Perhaps allowing employees to keep the smartphone device for personal use should be in conjunction with an electronic device policy that outlines the company’s expectations and appropriateness of its use. If employees violate the phone use policy, they may be disciplined for the misuse and/or have their phone rights amended so as to only have it at the start of the work day and returned at the end. Generally speaking, demonstrating to employees that you trust them enough to keep a smartphone at all times will provide greater morale and higher productivity returns.
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The Enterprise
Sept. 5-11, 2011
• Industry Briefs •
College, BYU and the University of Phoenix. He also holds a degree in business Administration. In his new role, Bryan will oversee the HeritageWest, SouthWest Community and Utah Central Credit Union brands. • A $10,000 donation by Bank of American Fork to West Valley charter school American Preparatory Academy-School for New Americans has resulted in the school’s first playground to serve students in grades K-9. The playground comes two years after the school’s opening and was met on the first day of school today with gleeful shouts by the students, many of whom are refugees and immigrants. • TAB Bank, Ogden, will be the title sponsor at the annual Ogden Rescue Mission Charity Golf Tournament Sept. 9 at the Wolf Creek golf course in Eden. TAB Bank has been a sponsor of the Ogden Rescue Mission Charity Golf Tournament every year is has been held. The first tournament was held in 2001, where with TAB’s help, $8,500 was raised. To date, the golf tournament has raised $173,325 for the Ogden Rescue Mission or an average of $17,332 per year. The last six years have been the most successful in terms of dollars earned with a total of $136,300 being raised or an average of $22,716 per year.
COMPUTERS/ SOFTWARE
and other sources for business and business owner information. When a problem is reported, resolution experts stand ready to take immediate action to protect the business and its owners. • A new website by a Utah blogger aims to help people in Utah save money. The site, founded by Mindi Eldredge, is located at www.UtahSweetSavings.com and has a selection of daily deals and coupons. Eldredge teaches a weekly coupon class at the Saratoga Springs Walmart. She has also taught classes at the Jump Start 2011 Conference, Avondale Academy, West Lake High School and other groups throughout Utah. • South Salt Lake-based VLCM, an IT provider for the Rocky Mountain region, will hold its fourth annual United Against
Cancer Golf Tournament at the Wasatch Golf Course on Sept. 21. The tournament benefits Huntsman Cancer Foundation (HCF). All proceeds fund research and development of new ways to diagnose and treat cancer. The main purpose of HCF is to support the mission of Huntsman Cancer
Institute (HCI). Annually, they secure one third of the operating budget for HCI.
CONSTRUCTION
• The historic ZCMI façade has returned to Main Street in continued on next page
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• Provo-based INVISUS has launched iDefend Business, which it bills as the first identity theft protection service specifically designed to protect entrepreneurs and their businesses against business identity theft and fraud. iDefend Business includes proactive monitoring and identity restoration services for both the business and the business owners. To provide early detection of compromised information, iDefend Business proactively monitors the Internet black market, underground sites,
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10 from previous page downtown Salt Lake City following three years of restoration. Removed for construction of City Creek, the cast iron structure has been reinstalled approximately 25 feet north of its former location, attached to the west face of a new Macy’s store set to open next spring. The façade’s return heralds the spring 2012 full completion of City Creek, the mixed-use, masterplanned project developed by City Creek Reserve Inc. and the March 22, 2012, opening of City Creek Center, the retail centerpiece of
Sept. 5-11, 2011
The Enterprise the overall development. The new Macy’s is one of two department store anchors at City Creek Center.
Sept. 20 at 6:30 p.m. at the Waterford School Concert Hall (1700 E. 9600 S.) The symposium is free and open to the public.
anniversary, The Waterford School in Sandy will host a symposium entitled Citizenship and Education, featuring nationally renowned speakers and Columbia University professors Richard Bushman and Andrew Delbanco. The Symposium will take place
Utah Ventures’ Medical Device and Technology “Concept to Company” Contest have until Oct. 7 to submit their ideas for consideration. The contest is open to any Utah-based entrepreneur or small business with a new product or service innovation involving
EDUCATION/TRAINING FINANCE • In celebration of its 30-year • Participants in Grow
medical devices or technology. Entrepreneurs and small business owners interested in participating can apply online at www. ConceptToCompany.org. A group of finalists will be selected and will have the opportunity to present their ideas to a panel of expert judges on Oct. 19 in Salt Lake City, where the field will be narrowed to three. One grand-prize winner and two runner-up winners will be selected that day and then announced on Oct. 26 at the MD4 Utah 2011 Summit and luncheon event at Thanksgiving Point
in Lehi. The grand-prize winner will receive a cash and service prize up to $21,000. Runner-up winners will each receive a cash and service prize up to $9,500. Service prizes are being offered from Workman Nydegger, Ballard Spahr, Advanced CFO Solutions and Bio Innovations Gateway. Grow Utah Ventures and Zions Bank are providing the cash prize.
GOVERNMENT • Salt Lake City has unveiled
a new mobile phone app, Salt
Lake 311, which is available free of charge. It allows members of the public to take an active role in their neighborhoods by requesting services from, or reporting issues to, Salt Lake City government. Initial features will allow requests for weed abatement, reporting of inoperable vehicles, construction without permits and illegal signs while expanded service request options are in the works. The program walks the user through an anonymous process that requires simply choosing the type of request or complaint, verifying the address and shooting a photo of the issue. On completion, the user also gets a tracking code that allows verification of resolution. See how the new system works and link to the free application at www.slcgov.com/slc311.
LAW
• Douglas P. Farr, an associate in the Salt Lake City office of Snell & Wilmer, has been elected to serve on the board of directors for the Indian Walk-in Center, a cultural, medical and behavioral health facility for American Indians and Alaska Natives in Utah. • Labor and employment attorney Karen M. Clemes has joined Ballard Spahr as of counsel in the firm’s Salt Lake City office. As a member of the firm’s Litigation Department and Labor and Employment Group, Clemes will concentrate her practice on representing employers of all sizes, both in litigation defense and in preventive counseling and training. She has experience handling employment litigation and has defended numerous lawsuits, including claims of wage and hour violations, discrimination, harassment, wrongful termination, retaliation, leave law violations, defamation, breach of contract, unfair/unlawful competition, and trade secret violations. Previously, Clemes served as in-house employment attorney and chief ethics officer for The Church of Jesus Christ of Latter-day Saints in Salt Lake City. Prior to that she was a labor and employment partner at Luce, Forward, Hamilton & Scripps LLP in San Diego.
MEDIA/MARKETING
• SOAR Communications, Salt Lake City, has picked up several new clients. Focusing on the sports, outdoor, athletics and outdoor recreation industries — thus the moniker SOAR - the marketing communications company recently signed agreements with the Bicycle Leadership Conference, Gyrobike, Sea Otter Classic, Taiwan Trade (TAITRA) and Vittoria Cycling Shoes.
REAL ESTATE •
Agents
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The Enterprise
Sept. 5-11, 2011
and
staff
in
Commerce Real Estate Solutions’ Utah offices and divisions competed against each other during the past five weeks to collect supplies for seven Title 1 schools. The firm’s School Supply Drive Competition grossed 3,156 items to be shared among the seven schools, such as crayons, glue sticks, pencils, sanitizing wipes and hand sanitizer. Each agent and staff member spent their own money to purchase the supplies, which will be delivered just in time for teachers and students to start the school year. • Sales of previously-owned homes in Salt Lake County in July rose 35 percent compared to July 2010, according to the Salt Lake Board of Realtors. In July, there were 1,012 housing units (all housing types) sold, up from 752 units sold in July 2010. The median home sales price (all housing types) in July declined to $189,000, a 16 percent decrease compared to a median price of $226,244 in July 2010.
www.harmonsgrocery.com/cooking-school, print the receipt, pick up the book either at the Business Center at Harmons Bangerter Crossing at 125 E. 13800 S. in Draper, or at The King’s English Bookshop at 1511 S. 1500 E. in Salt Lake City, and then simply attend the class.
RESTAURANTS
• USA Cycling has awarded the 2012 and 2013 Collegiate Road National Championships to Ogden. The events, to be held May 4-6, 2012 and May 3-5, 2013, will utilize roads from the 2011 Larry H. Miller Tour of Utah for the road race. The team time trial, a mainstay event of collegiate cycling, will take place on a scenic course with expansive views of the Wasatch Mountain range while the criterium will make circuits through Ogden’s downtown district. The Weber State University cycling team will be assisting the city of Ogden and the Ogden/Weber Convention and Visitors Bureau in hosting the
• Kneaders Bakery and Café, a Utah-based restaurant franchise that specializes in serving gourmet sandwiches, soups, salads, pastries and European hearth breads baked daily in onsite hearthstone ovens, has opened its newest location in Layton at 480 W. Antelope Dr. It is run by franchisees Andrew and Shauna Smith and their partners Riley and Allison Booth.
RETAIL
• Harmons Grocery Stores Cooking School at Bangerter Crossing is partnering with The King’s English Bookshop to offer a monthly class that pairs cooking with reading. Recipes will be inspired by the contents of the selected book of the month. Cooking demonstrations will be led by Harmons’ chef Evan Francois, and a reading discussion will be led by select booksellers from The King’s English. Whenever possible, the book’s author will attend to cook and discuss their books. The first book will be Day of Honey: A Memoir of Food, Love and War by Annia Ciezadlo to be paired with Middle Eastern cuisine. Other fall classes include Small Sweet Treats by Marguerite Marceau Henderson, to be paired with chocolate cookies and other desserts on Oct. 12 and Chocolate Snowball: and Other Fabulous Pastries from Deer Valley by Letty Halloran Flatt to be paired with desserts on Nov. 9. Classes will be held the second Wednesday of each month beginning in September from 6:30 to 8:30 p. m. at the Bangerter Crossing Harmons store. The cost is $50 per participant, which includes the price of the book and food. To participate, sign up at
SCIENCE
• Salt Lake City-based Lifetree Clinical Research, one of the largest specialized clinical research organizations in the western region of the United States, has appointed Matthew Iverson as vice president of the organization. Iverson most recently held the position as executive director of clinical trials management at Lifetree, where he was responsible for managing third-party vendors and project management. Prior to joining Lifetree, Iverson worked for 10 years with ZARS Inc. in Salt Lake City.
SPORTS
event.
TELCO
• Salt Lake City-based Sorenson Communications has unveiled CaptionCall, a new service that will benefit millions of Americans with hearing loss. The service is for anyone who has difficulty hearing on the telephone. Similar to captioned television, CaptionCall uses innovative voice recognition technology and a transcription service to quickly display written captions of what callers say on a large, easy-toread screen. The free, Federal Communications Commission (FCC)-funded service is delivered through the state-of-the-art CaptionCall telephone, which works like a regular phone.
TRANSPORTATION
• C.R. England, a Salt Lake City-based global transportation provider, has partnered with the University of Utah football program and donated a 2012 Freightliner Cascadia truck and two Ute branded trailers (one 53foot trailer and one 28-foot trailer) to transport the team’s equipment to all road games. When not in service for the Utes during the football season, the truck and trailers will be incorporated into England’s regular transportation routes in its Southern California dedicated fleet. The truck and trailer donation also includes the costs for fuel and the assignment of two of C.R. England’s most experienced drivers to the transportation team. The Cascadia meets and exceeds the EPA SmartWay voluntary specifications
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that dramatically improve fuel economy and reduce emissions. The England family is a supporter of both academic and athletic programs at the University of Utah, most recently having donated $3.5 million to the David Eccles School of Business complex.
TRAVEL/TOURISM
• The Utah Valley Convention and Visitors Bureau has hired Dan Williams as its new director of sales. Williams will be responsible for managing group and convention sales efforts for the UVCVB. He has worked for Marriott, Hilton and Carlson hotels, holding similar sales and management positions. Williams will also oversee event booking for the Utah Valley Convention Center, scheduled to open in spring 2012.
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At The Gateway, we believe that when you work hard, you deserve some perks. That’s why The Gateway, FM100 and The Enterprise have created and exclusive “Office Worker At Work Perk Card” for all of you hardworking people. (Fill out your At Work Perk Card application at The Gateway Concierge desk.) Flash your card and get savings and discounts at participating shops and restaurants at The Gateway. Just keep your card in your wallet and look for special deals throughout The Gateway. FM100 will be e-mailing you ever Monday with the “Perks of the Week.” Log on to www.fm100.com or check out The Enterprise for the most up to date list of specials. Turn in your completed form to The Gateway Concierge, located across from Urban Outfitters or to any participating retailer to be eligible for monthly drawings.
12
The Enterprise
Sept. 5-11, 2011
Your golden ticket is September tech tips — do within your grasp; maybe you tablets work for business? already have it Since the release of Apple’s iPad, tation can be a unique way to show
AUTHOR’S NOTE: This article came tweet? about because of a spam e-mail I received 6. Customers who post positive things claiming that “excellent communication is the on your business Facebook page. Do you golden ticket,” and all you have to do to get even have a business Facebook page? it (you guessed it), is give them some of your 7. People who watch your videos on gold. I mentally corrected the concept. It’s YouTube. How many testimonial videos are not excellent communication. It’s transferable on your YouTube channel? Not enough! communication! And my thoughts about a 8. People who ask to connect with golden ticket went on to become this … you on LinkedIn. Do you have more than Who is Roald Dahl? 500 connections that you “value message” He wrote Charlie and the weekly? Chocolate Factory in 1964. You 9. People who subscribe to your may have seen “Willy Wonka & the e-mail magazine. If you’ve been Chocolate Factory,” the original starthinking of starting your own e-zine, ring Gene Wilder, or “Charlie and the but you’re not sure where, how, or Chocolate Factory,” the darker verwhat, go to www.aceofsales.com. sion (not dark chocolate) with Johnny Mystery solved. Depp. 10. People who subscribe to The book and movies focus your blog. No blog either? Yikes! around a slightly nutty entrepreneur, Blogspot.com and wordpress.com are Jeffrey a chocolate factory, tiny workers and a both no cost (except for your labor), Gitomer contest to find one of the five “golden and come with complete instructions. tickets” inside Wonka’s chocolate bars. Launch! Almost like a lottery, if you got a Golden 11. Your reputation in your business Ticket, the reward was an all-day tour of the and in your community. This is more prosecret candy factory by Willy Wonka himself. found. Maybe most profound. What are you Charlie Bucket, the hero and ideal child, known for? What are you known as? What is was one of the five winners. The other four your image? children were spoiled brats, and as they went 12. Your personal assets. Not your on the factory tour they revealed their greed or material things. Golden tickets are found misbehaved in such a way as to be punished among your intellect, your health, your peror banished. Charlie Bucket was the winner sonal development, your drive, your dedicaof the tour, and was rewarded with the entire tion, your creativity and other priceless intanfactory and empire. Not a bad day of work! gibles. But there’s much more to this children’s 13. Your inner circle of friends and story. There are lessons to be learned, both connections. People who encourage you and in sales and in life. Charlie Bucket was an lift your spirits. People who help you without impoverished kid with a vision and a belief. expectation. You may call it a dream – but his vision and 14. Your YES! Attitude. This is the belief were so strong, he made them a real- foundation for finding and taking advantage ity. He was certain he would find the golden of your ticket. Your YES! Attitude is not an ticket, in spite of his doubting family. And he option. It’s gold. did. 15. The random acts of kindness you Looking for your golden ticket? perform. Doing things that make others feel Hoping for it? good make you feel GREAT! They’re the best Have doubters? one-a-day vitamins in the universe. What’s your vision of it? 16. Your family. Family strength com How strong is your belief for it? pounds personal strength. Family is both gold Maybe you already have a golden tick and golden. It’s love at its unconditional best. etc. As an aid to your self-discovery, it may Maybe more than one. be time to read or re-read the Russell Conwell NOTE WELL: A golden ticket is NOT lecture “Acres of Diamonds.” It gives an intera winning lottery ticket. It doesn’t have to be esting perspective to those in search of their money. But it may lead you to money by turn- diamonds, their gold or their golden ticket. Or ing your gold into wealth. yours. Here are several areas to evaluate as you “Acres of Diamonds” has been in the begin the search for your golden ticket. There public domain for years. It’s easy to find a may be several golden tickets you already copy on the Internet. The best version I’ve possess but you haven’t yet realized their found, which contains historical background value. and interesting facts on Conwell’s life, is here: 1. Communication that’s transferable. http://www.igniteyouressence.com/ebooks/ Who is acting on your words? AcresOfDiamonds.pdf 2. Customers that are loyal and give Hope you find your golden ticket. It may repeat business without a bid or quote. be closer than you think. How many of your customers fit into that category? 3. Customers who give referrals with- Jeffrey Gitomer is the author of Social BOOM!, out you asking for them. How many refer- The Little Red Book of Selling and The Little Gold Book of YES! Attitude. President of rals did you earn last month? As many as you Charlotte, N.C.-based Buy Gitomer, he gives wanted? What are you doing about it? seminars, runs annual sales meetings and 4. Prospective customers who call and conducts Internet training programs on sellwant to buy. How many unsolicited referrals ing and customer service at www.trainone. did you get last month? Ouch! com. He can be reached at (704_ 333-1112 or 5. Followers who re-tweet you. Do you salesman@gitomer.com. © 2011 All Rights Reserved understand the power of Twitter is in the re-
tablet computers have been increasing prospects and clients your message, and in popularity with consumers. As more communicate that your company uses manufacturers release their tablet offer- the latest technology. Businesses that ings, the devices have also made their are service-based can use Web applicaway into the boardrooms and offices of tions to gather customer information, fill many businesses. Do tablets make sense out invoices and even take credit cards. for businesses? Are there enough appli- A business can use tablets to create a cations and customization available for paperless process for invoicing and billtablets to permeate the business world ing. Some medical offices use tablets to record patient vitals and other like laptops and smartphones information. Many sales people have? use CRM (customer relation So what do tablets bring to ship manager) websites such as the table that notebook computsalesforce.com, and using a tabers and handheld smartphones let is a snap to update and pull can’t? For starters, most tablets customer information. run operating systems that are Retail businesses like coffee similar to smartphones, with John Stewart shops, restaurants and clothiers incredibly fast start times and have started implementing tabmultiple desktop options. The let devices into their operations, devices allow easy access to e-mail and calendar programs, play allowing serving staff to enter food video and display pictures in a snap, and orders right from table, and retail stores offer easy web browsing. Some tablets can swipe credit cards and input cuscan even make phone calls and access tomer information anywhere inside their 3G and 4G wireless networks. Most of store. Some hotels use tablets inside the devices have screen sizes of seven rooms, allowing guests to control temto 10 inches, offering high quality view- perature and lighting, place orders for room service and housekeeping, and ing. Tablets are generally lighter than make reservations. Are there any drawbacks for tablets notebooks, with most weighing in at less than two pounds. Some of the devices in the corporate world? Many people have USB, HDMI and DVI ports, allow- want a tablet computer to be a replaceing for connections to external devices ment for a laptop or desktop computer. such as keyboards and storage, as well as Apple’s iPod and subsequent release of displays and projectors. Built-in micro- the iPad2 opened the door to the tablet phones and speakers make the tablets revolution; however, the applications handy for conference calls, while some available on the iPad can be limited devices allow for recording audio and for business purposes. Displaying documost include a camera for still pictures ments and pictures are a snap for the and video. Borrowing technology from Apple tablet, but creating presentations smartphones, the touchscreens work and editing spreadsheets can be somewell for navigating applications, and what taxing. Tablets running the Android opereven the onscreen keyboard has tested ating system have many applications, well for moderately fast typing. With remote access applications and integrate with Google Apps, which like VNC Viewer, tablet users can can be a plus for e-mail and calendar remotely access their desktop or laptop tasks. Most tablets boast good graphics computer, allowing them to run full and many options for gaming, which versions of applications not available may be a negative for a business owner on a tablet device. Using a touchscreen or manager contemplating a purchase of and onboard keyboard may be a little tablets for their employees. As the popularity of the devices difficult to use those applications on a normal computer, but for quick access to grow, expect more applications that help information, this solution may be a help businesses stay on top of the cutting edge of technology. Running a small business for a mobile user. Do all these features make sense today can be challenging, and does not for businesses? With their compact size always take place sitting in front of and weight, tablets help redefine the the desk. The mobility of the tablets, mobile office. Unlike laptops, that can along with business applications, help be bulky to hold and work best on a flat the business-anywhere professional. surface, tablets are extremely portable and can be used nearly anywhere. One John Stewart is the operations manager great feature that may help a business- for inQuo, a computer support and repair person is the note-taking ability. Imagine company based in Salt Lake City. With more than 20 years of combined expesitting in a board meeting, writing notes, rience, the inQuo staff can fix a wide drawing diagrams, viewing spreadsheets variety of computer issues for small and recording the entire meeting with businesses and home users. For more one device, and not having your face advice and information visit www.inquo. blocked by the screen. wordpress.com, call (801) 349-2762, or Using a tablet to make a presen- send e-mail to info@inquo.com.
Sept. 5-11, 2011
13
The Enterprise
Low interest rates — a two-sided coin I have noted previously about the damage being done by that the Federal Reserve (this politicians in Washington, D.C. Flip Side of the Coin nation’s central bank) has set its Even as the low interest rate most important interest rate, the federal funds rate, at a record game has largely failed to ignite low target level of 0-0.25 percent the housing and business secsince December 2008, a period tors, another major victim of the now reaching 32 months. Equally extremely low interest rate policy important, the Fed’s monetary pol- exists. It is the millions of older and retired people who icy arm — the Federal have seen their interest Open Market Committee income drop like a rock. (FOMC) — noted a few The old adage of investweeks ago that it would ing in stocks during one’s maintain this rate at the primary working years and current record low “at then shifting from stocks least through mid-2013,” to “fixed-income” investunlike any statement the ments for greater “safeFed has ever made. A ty” has been a disaster in Federal Reserve that has Jeff Thredgold recent years. It will get traditionally found value worse over the next two to in keeping financial market players guessing as to impend- three years. Tens of millions of retirees ing monetary policy changes, for the moment, abandoned such pol- would argue they did everything right. They shifted from volatile icy in a major way. stocks to bonds and certificates of Good Intentions The intent of incredibly low deposit (CDs) and money market longer-term interest rates is clear- funds and saving accounts, seekly to provide greater incentive ing to sleep better at night with for consumers and businesses to the 3, 4, 5 or 6 or 7 percent annual borrow for various reasons, and returns provided by these fixedfor homeowners to take advan- income investments over the past tage of very attractive refinance 20 years. Then the bottom fell out. or home purchase opportuni- The Fed cut its key interties. Unfortunately, the combi- nation of weak U.S. economic est rate to near zero, with all growth, high unemployment, anx- other short- and intermediate-term iety about Europe, enormous and interest rates plunging as well. destructive budget deficits and a Money market funds now pay general mistrust in the political an average of 0.01% annually. direction of this nation have large- Savings accounts average 0.15 ly kept consumer and business percent. One-year CDs pay 1 percent or less. borrowers on the sidelines. Two-year U.S. Treasury notes One might logically assume that incredibly low mortgage now provide a less-than-exciting interest rates of recent weeks and annual return of 0.19 percent. attractive home prices would lead Even a five-year U.S. Treasury mortgage applications to jump note yields less than 1 percent sharply. One would be incor- annually. Overall interest income in rect. In fact, as reported last week, applications for new mortgages hit the economy fell by 27 percent a 15-year low! Refinance applica- between 2008 and 2010 (The Associated Press). Additional tions dropped as well. Why aren’t more homeown- painful declines will occur as ers and would-be homeowners bonds and CDs that were purtaking advantage of such low inter- chased three or four or five years est rates? The Mortgage Bankers ago at more attractive rates are Association in a statement blamed rolled over at rates approaching the fall on “volatile markets and zero. Individually … Collectively rampant uncertainty,” which kept I see this with my own mothhome purchasers on the sidelines. Last week’s reported plunge in er, who now rolls over maturing consumer confidence only sup- CDs or IRAs at incredibly low interest rates. She noted that she ports that view. Fewer mortgage lenders and recently had an IRA mature and more complex and onerous lend- was offered 0.10 percent annually ing documents compliments of on the renewal. A few complaints Uncle Sam have only added to the finally pushed the rate all the way weakness. Businesses have kept up to 0.40 percent. We all know retired people new borrowing under wraps and limited hiring for the same general with similar stories. However, reasons, including major anxiety the cumulative “macro” or col-
lective impact on the U.S. and global economies is highly significant. Tens of millions of retirees have seen their monthly and annual incomes cut dramatically. Retirees now travel less; support the arts, local restaurants and museums less; and donate less. In addition, the value of their homes has declined sharply in recent years, also leading to less confidence about tomorrow’s financial future. It would be better if incredibly low interest rates were matched by incredibly low inflation. Such is not the case. As discussed in last week’s column, consumer inflation during the most recent 12-month period was 3.6 percent. Many economists would argue that inflation is actually higher for retired people as they spend more on health care, food and basic necessities, and less on technology, where prices have been consistently declining. If It Sounds Too Good to Be True … One unfortunate byproduct of retirees facing severe financial pressures is their susceptibility to financial schemes. Yes, this is also true for all age groups. It seems that one can find in a newspaper almost weekly someone who was arrested for running a Ponzi scheme or a “get rich quick” program geared to older consumers. There is an investment adage that is always true: the higher the return, the higher the
risk — and vice versa. If someone promises you a 5, 7 or 10 percent monthly return in an investment opportunity, run the other way! They can tell you it is safe and it is guaranteed. They can and will tell you whatever is necessary to satisfy your fears and get their hands on your money. If it sounds too good to be true… it is!
RUNNING OUT OF BREATH RUNNING OUT OF TIME
Jeff Thredgold is the only economist in the world to have ever earned the CSP (Certified Speaking Professional) international designation, the highest earned designation in professional speaking. He is the author of econAmerica, released by major publisher Wiley & Sons, and serves as economic consultant to Zions Bank.
She is too young to have a fatal disease… Thousands of young women are living with a deadly lung disease called LAM — and don’t know they have it. LAM is often misdiagnosed as asthma or chronic bronchitis. There is no known cure. But there is hope.
Learn more about LAM.
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14
Sept. 5-11, 2011
The Enterprise
Why Perry hates regulators: they're bad for (his) business Like so many Republican that,” Simmons boasted in 2006, officials of the tea party persua- after the Texas legislature and the sion, Rick Perry despises the governor rubber-stamped initial Environmental Protection Agency legislation and approvals for the — a feeling he has expressed project. “Then we got another law repeatedly in speeches, lawsuits, passed that said (the state) can legislation and even a book titled only issue one license. Of course, Fed Up! Perhaps that is we were the only ones only natural for the govthat applied.” ernor of Texas, a “dirty Most Americans energy” state where the have never heard of protection of air, water and Simmons, despite human health rank well his fantastic wealth, below the defense of oil because he wisely keeps company profits for most his head low, generally politicians. refusing press inter But Perry has at least Joe Conason views and avoiding one other reason for smackmedia coverage. Last ing down those bureaucrats year, a local monthly in so eagerly. When environmental his hometown published the headregulators do their job properly, line “Dallas’ Evil Genius” over a that can mean serious trouble for scathing and fascinating investigaPerry’s largest political donors. tive profile that examined not only The outstanding example is the peculiar history of litigation Harold Simmons, a Dallas mega- between Simmons and his children billionaire industrialist who has (who no longer speak to him), but donated well over a million dol- his political machinations, corpolars to Perry’s campaign commit- rate raiding and continuing corpotees recently. With Perry’s eager rate penchant for pollution. assistance — and despite warn- In D magazine, reporter Laray ings from Texas environmental Polk explained how Simmons and officials — Simmons has gotten a company he owns — innocuapproval to build an enormous ously named Waste Control radioactive waste dump over a Systems — manipulated state and crucial underground water supply. federal law to allow him to build a “We first had to change the nuclear-waste disposal site in West law to where a private company Texas. But construction has been can own a license, and we did delayed for years in part because
the site appears to overlay the Oglalla Aquifer, an underground water supply that serves 1.9 million people in nine states, raising obvious concerns over radioactive contamination. In the Simmons profile and subsequent posts on the Investigative Fund website last year, Polk explored the controversy over the proposed WCS facility, including strong objections by staff analysts at the Texas Commission on Environmental Quality who found evidence that atomic waste might indeed leach into a huge pool of drinking water. Now reporters for the Los Angeles Times have revived, advanced and updated the WCS story with much additional detail, including interviews with the Texas environmental officials who oversaw the approval process for the facility. For a period last summer, that process appeared to have been slowed down to allow serious consideration of the scientific data collected by the commission’s staff. In other words, the regulators were trying to do their job, which meant expensive delays and perhaps an eventual ruling against the nuclear waste site. That would have protected the Oglalla Aquifer and cost Simmons hundreds of millions in lost investment and
profit. But then Perry’s appointees on the commission voted by two to one to issue licenses for the WCS site. This year, officials on another Texas commission appointed by Perry — who oversee lowlevel radioactive waste in the state — voted to allow the WCS site to accept nuclear waste from 34 other states in a highly controversial decision later ratified by the state legislature and signed by Perry himself. Not long after that, according to the Los Angeles Times report, Simmons gave $100,000 to Americans for Rick Perry, an “independent” committee supporting his presidential candidacy. (Back in 2004, Simmons was a major contributor to another “independent” political committee, the notorious Swift Boat Veterans group that distorted Democratic presidential nominee John Kerry’s war record in a series of TV ads.) According to a spokesman for WCS, the Texas governor’s happy and lucrative relationship with Simmons did nothing to help the company except to turn the billionaire into “an easy target. ... It made the state redouble its efforts to be thorough.” But the Texas officials who opposed the approval on principle have since
quit their jobs with the state. As one of them told the Times reporters, “This is a stunningly horrible public policy to grant a license to this company for that site ... . Something had to happen to overcome the quite blatant shortcoming of that application. ... The only thing I know in Texas that has the potential to do that is money in politics.” As for the Texas official (and Perry appointee) who overruled his own scientists and approved the deal, he left state government, too — to work as a lobbyist for Simmons. He says that no undue influence led to the favorable outcome for his new employer. Texas must be the only place on earth where anyone would believe that. Joe Conason’s articles have been published in Harper’s, The Nation, The New Republic, The Guardian (London) and The New Yorker, among many other periodicals in the United States and abroad. He also appears frequently as a commentator on television and radio programs. A winner of the New York Press Club’s Byline Award, he has covered every American presidential election since 1980. Copyright 2011 Creators Syndicate
Sept. 5-11, 2011
15
The Enterprise
An unusual economy? Many in the media are saying as in the early 1920s, were folhow unusual it is for our economy lowed quickly by bouncing back to be so sluggish for so long, after to normal levels or beyond. The we have officially emerged from government did nothing — and it a recession. In a sense, they are worked. right. But, in another sense, they In that sense, this is an unusuare profoundly wrong. al recovery in how long The American econit is taking and in how omy usually rebounds a slowly the economy is lot faster than it is doing growing — while the today. After a recession government is doing passes, consumers usually virtually everything increase their spending. imaginable. And when businesses see Government demand picking up, they intervention may look Thomas usually start hiring workers good to the media but its Sowell to produce the additional actual track record, both output required to meet that today and in the 1930s, is demand. far worse than the track record of Some very sharp downturns letting the economy recover on its in the American economy, such own.
Americans today are alarmed that unemployment has stayed around 9 percent for so long. But such unemployment rates have been common for years in Western European welfare states that have followed policies similar to policies being followed currently by the Obama administration. Those European welfare states have not only used the taxpayers’ money to hand out “free” benefits to particular groups, they have mandated that employers do the same. Faced with higher labor costs, employers have hired less labor. The vast uncertainties created by ObamaCare create a special problem. If employers knew that ObamaCare would add $1,000 to
their costs of hiring an employee, then they could simply reduce the salaries they offer by $1,000 and start hiring. But, since it will take years to create all the regulations required to carry out ObamaCare, employers today don’t know whether the ObamaCare costs that will hit them down the road will be $500 per employee or $5,000 per employee. Even businesses that have record amounts of cash on hand are reluctant to gamble it by expanding their hiring under these conditions. Many businesses work their existing employees overtime or hire temporary workers, rather than get stuck with unknown and
unknowable costs for expanding their permanent work force. As unusual as 9 percent unemployment rates may seem to the current generation of Americans, unemployment rates stayed in double digits for months and years on end during the 1930s. Franklin D. Roosevelt’s administration followed policies very similar to those of the Obama administration today. He also got away with it politically by blaming his predecessor. Thomas Sowell is a senior fellow at the Hoover Institution, Stanford University, Stanford, CA 94305. His Web site is www.tsowell.com. Copyright 2011 Creators Syndicate
SHELLEY BOVERO Owner of Marin County Arborists
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