Recently the CalChamber reported that “California has been underperforming the rest of the United States by most economic indicators, largely due to fallout from housing-mortgage problems.” While some national indicators point to a sluggish economy, local businesses are seeing different trends. The Goleta Business Journal, in an ongoing series of articles, will be examining different community sectors to explore how they are affected by the economy in the rest of the State and the nation.

Space is the Limit for High Tech
Perhaps one of the brightest spots on the local scene is the high tech space industry. Business is generated from both government and commercial sectors, and companies, such as Goleta’s ATK Space, are seeing growth. ATK’s Vice President Earl McCutcheon reported that “this trend of growth has been accentuated here in the Goleta area due to large space companies’ desire to use smaller, focused businesses to design, fabricate, test, and deliver specialized portions of their total program. This trend towards ‘outsourcing’ has led to larger and ever growing market shares for the small businesses focused on some specialized aspect of the overall space work.” This translates into good news for ATK.

While election years sometimes result in a slowdown until budgets are reevaluated, the government sector outlook remains strong.

Commercial business is seeing even greater growth. The production demands allow for more efficiency, standardization, and a steady flow of business – all factors contributing to stability in the operation.

ATK’s recently announced $50 million contract [see Business Briefs, page 3] exemplifies the upward trends Goleta’s high tech industries are experiencing. However, McCutcheon explains that such growth creates other concerns. “More market share is causing several local businesses to be growing at phenomenal rates, thus pushing the limits of the Goleta’s infrastructure.”

Banking on Opportunity
Growth at local companies like ATK Space help to offset some of the challenges facing the banking industry on the South Coast. For that reason, despite the national mortgage crisis, Joanne Funari, President/CEO of Santa Barbara’s Business First Bank is optimistic. “We are positioned well and ready for the opportunities this market brings,” she reported. “Earnings are exceptional and loan pipelines are strong.” Businesses that are doing well on the South Coast are borrowing, which is good news for Business First.

Funari does point to a couple of trends related to national indicators: declining deposits and dropping interest rates. Customers are not able to maintain their savings accounts at previous levels. Additionally, lower interest rates translates to a shrinking margin for the banking business. However, that’s where Funari’s expertise comes in. “We must focus on strengthening and expanding our banking relationships,” she explains.

Banking professionals, like Funari, who have been in the business for a while, describe the current economic situation as virtually unprecedented. “The economy has turned on a dime.” That said, Funari is proud of Business First’s standing in the top percentile of regional community banks in the nation in terms of financial strength. She explains that community banks are much better positioned to weather this current storm than the bigger banks that had much greater exposure to the mortgage lending crisis.

Healthcare in the Balance
Local healthcare providers are facing challenges different from both the high tech and banking sectors of the economy. Paul Jaconette, Executive Vice President and Chief Administrative Officer of the non-profit Sansum Clinic, closely monitors the ongoing healthcare policy debate on both a state and national level. The upcoming national elections could have major implications for healthcare reform and organizations such as Sansum Clinic.

Jaconette described two major trends affecting local healthcare providers. First, employer sponsored healthcare is challenging because it is a system geared toward price in which the costs are rising rapidly. Employers want to reduce the price they have to pay for care without sacrificing the quality of services patients expect to receive.

Secondly, concierge medical practices are on the rise in Santa Barbara County, a recent trend where physicians charge a flat cash fee for service and may not accept insurance or Medicare. As a result, practices limit the number of patients they serve and so those who cannot afford the concierge service, or who choose not to, often turn to Sansum for medical care. In short, the number of patients cared for is rising while Sansum’s cost per patient is also rising. All while the reimbursement for the care decreases due to pressure from insurance providers.

“2008 is going to be a challenging year for us,” Jaconette said. Yet, despite a tougher time balancing the books, Sansum continues to be a leader in the community serving the underinsured and uninsured through its own programs and partnership with the Santa Barbara Neighborhood Clinics. Additionally, Jaconette points out that his is the only organization to bring new physicians to Santa Barbara in the last few years. The South Coast saw few, if any, new private practices start up, yet physicians continue to retire so the demand for new doctors is increasing.

Sansum, Business First, and ATK face different challenges in the coming year. Yet each is well situated to weather the ups and downs and appears confident in managing the effects of the current national economic downturn, uncertainties in an election year, and the challenges of maintaining a local workforce.

“I take my job title seriously, and that’s ‘Representative,’” stated Congresswoman Lois Capps while speaking to the Goleta Valley Chamber on March 28th. Over thirty members and guests heard her detail some of Congress’ successes over the past year including port safety and veterans’ health care reform. She also reiterated her commitment to energy self-sufficiency, sustainability, and green jobs.
Capps explained the economic stimulus package passed by Congress and signed by President Bush and how local small business owners might benefit. To encourage business investment, the bipartisan plan doubles the amount small businesses can immediately write off their taxes for capital investments made in 2008 from $125,000 to $250,000, and for purchases of new equipment up to $800,000, an increase from $500,000.

Of particular interest to the Chamber, Capps explained that she is currently not in favor of the Free Trade Agreement with Colombia, although she said the issue was still “open for discussion.” The Chamber has publicly supported the pending agreement and hand delivered a letter to the Congresswoman stating that position. Capps explained that she had concerns about Colombia’s labor and environmental record.

However, she acknowledged “we can be tougher on countries we trade with.” She explained that she had supported free trade with China and Peru, both countries facing international scrutiny of their environmental and human rights policies.

The Congresswoman also indicated that she was in favor of transparent and fair redistricting in the state of California – an issue the Chamber considers critical for progress to be made in the State Legislature.

Earlier this year, I had the opportunity to participate in a pilot project with the City ofGoleta, the Goleta Chamber of Commerce and members of the business community to discuss how businesses and local government can work together. For whatever reason, in the past, it has been difficult to get these two groups together and I am excited that we’ve been able to get the ball rolling. Bringing key players together to make doing business easier and moreeffective is one of the key roles the Chamber plays.
Our initial breakfast meeting at FLIR Systems, Inc. was attended by Goleta Mayor Michael T. Bennett and Councilmember Eric Onnen along with representatives from FLIR, ATK Space Systems, Citrix Online, and the Goleta Chamber. We discussed both how business can help the City and how the City can help business.

Mayor Bennett gave an overview of the main issues facing the city in amending the General plan and finding balance for growth in Goleta’s community. He said that a stronger voice should be heard from business people who work in the city and have a stake in modest growth.

Onnen would like to find a way to see a better balance between periods of no growth and modest growth because managing the extremes makes it difficult for both business and local government.
Earl McCutcheon, Vice President of ATK Space Systems, discussed the difficulties ATK had in the City’s permitting process. This growing business wants to do a remodeling project. While stating that the “customer service” at City Hall has greatly improved, processes for applications are still excruciating, mostly due to the use of out-of-town planner contractors. An interesting discussion ensued on how to incentivize both parties in the planning transaction to get a plan check approved on one pass, or two at the most. It was a great example of using business-model thinking to solve a difficult compliance problem.
David Dart from FLIR and Laura McCormick from Citrix Online mentioned the challenges their companies are facing with hiring additional employees and the lack of workforce housing. With the two housing projects recently approved by the City – Sumida Gardens and Village at Los Carneros – some relief should be in sight in the next few years.

I am pleased that we were able to help get business leaders and elected officials together to discuss some of the challenges of doing business in Goleta. While we didn’t solve the problems, the group, now known as the Executives Tech Group, felt the discussion was helpful and planned to hold additional meetings..

Every now and then, a bill comes along that I’m really excited about. The Small Business Family Scheduling Option of 2008 is just one of those bills. If passed, AB 2127 (Benoit), as it is officially known in the State Legislature, would amend current labor code to provide employees and employers flexibility in work schedules by allowing a small business (with 25 or fewer employees and not covered by a collective bargaining agreement) to agree to offer scheduling options requested by an employee. Such options would include working four 10-hour days a week or eight nine-hour days and one eight-hour day in two weeks, known as a 9/80 schedule.

The Goleta Valley Chamber of Commerce has joined numerous other local Chambers throughout the state to strongly support the proposal for the multiple benefits both to our region and to individual employees of local small businesses.

Reducing commuter traffic at peak hours with flexible workweeks is easy, immediately effective, and minimally disruptive to employers. Not only are drivers on the roads at different times throughout the day, total trips throughout the month also decrease. Fewer trips and fewer cars mean fewer headaches for all of us.

Moreover, as employees at some larger companies who already enjoy a 9/80 or similar work schedule know, spending less time at the office and on the road getting to the office, means more time at home or pursuing other interests. Any employer can tell you that happy and healthy employees are more productive and good for the bottom line.

Iterations of AB2127 have failed in past legislative cycles. However, this is the right bill at the right time and the Goleta Valley Chamber will be pushing for it to pass. But our lawmakers need to hear from you. Ironically, small businesses often cannot afford to send employees to Sacramento to speak to legislators to push for this bill. The Chamber works hard to make sure that those voices are heard through your letters and phone calls.

Contact Assemblyman Pedro Nava’s office via mail, phone, or email to make sure that he knows that our community stands to benefit from AB 2127. Employees at companies of all sizes should have options open to them so they may lead balanced, healthy, and happy lives.

In the past month, the Goleta Valley Chamber of Commerce submitted position letters to and spoke before local and state lawmakers on the following topics: (Partial list)

SB1539 (Calderon) Meal Periods - SUPPORT

SB 1420 (Padilla) Food labeling - OPPOSE

Encouraging revenue sharing between the County of Santa Barbara and the City of Goleta resulting from production at Venoco’s Ellwood operation.

Opposing the extra cost to the County to rewrite the community plan in the eastern Goleta Valley versus efficiently addressing a few specific parcels and outdated policies.

ATK Wins $50 Million Contract
Alliant Techsystems, also known as ATK, has been selected by a division of Lockheed Martin Corporation to design, develop and build UltraFlex solar arrays for NASA's next generation Orion crew exploration vehicle. The value of the initial design and development contract is expected to exceed $50 million.
Program management, design, engineering, analysis, manufacturing, assembly and test work for the solar arrays will be conducted at ATK's facility in Goleta, CA. Because the flight solar array system is expendable for each Orion mission, ATK expects continuous production through 2020 and beyond.
Powered by ATK's solar arrays, Orion is being designed to carry astronauts to the moon. It also will transport crew and cargo to the International Space Station.

Southern California Gas Company Offers Incentives for Businesses
The Southern California Gas Company is offering more than $18 million in rebates and incentives to its business customers this year for making their business operations more energy efficient. The Gas Company has a variety of programs which include incentives and rebates for equipment replacement, improving business processes, energy-efficient improvements in expanding or adding new facilities, and energy-efficient home building.

The Gas Company also offers the free Industrial End User Program to help industrial customers work through technical issues to identify and quantify cost savings. For more information on these programs, visit www.socalgas.com/energyefficiency or call 800-GAS-2000.

Edison Launches Largest Solar Panel Installation
Southern California Edison (SCE) has launched the nation’s largest solar cell installation, a project that will place 250 megawatts of advanced photovoltaic generating technology on 65 million square feet of roofs of Southern California commercial buildings – enough power to serve approximately 162,000 homes.

Spring Food Drive Begins for the Foodbank of SB County
The annual KCOY Spring Food Drive to benefit the Foodbank of Santa Barbara County kicks off on April 21 and runs through May 21. The goal is to gather more than 100,000 pounds of food.
For more information, contact Jane Lindsey at 967-5741 extension 101 or drop off your contributions at the Foodbank of Santa Barbara County at 4554 Hollister Avenue.

Here are three things you can do today to help your business be prepared:

1. Identify a disaster preparedness contact or team for your organization.
2. Purchase a first aid kit and/or restock your existing kits with fresh materials.
3. Locate all of the fire extinguishers in your building. For more information on how to use and maintain them, visit www.fireextinguisher.com/main.html.

On March 26th, Hampton Inn Goleta had the opportunity to host the March Business After Hours where we were able to meet and mingle with Goleta's most influential leaders. As the newest hotel in the Goleta Valley, and a member of the Goleta Chamber for eight months, we were honored to host this very special event.

As the Sales Director I am responsible for negotiating our corporate accounts, groups and meetings at our hotel. Being a part of the Goleta Chamber helps me effectively reach out to our distinguished leaders of the community by actively participating in monthly mixers, city issues and meeting with other business professionals like myself who are new to the community, and educating them on the services and amenities we offer at the Hampton Inn Goleta.

If you’re like me and are interested in getting to know the business community we hope that you will join us at all of our Business After Hours. They are an excellent opportunity to network with and learn from Goleta executives, political influentials, planners, marketing, and sales directors, and professionals in all industries. A highlight of the evening is always the presentation of our newest Goleta Chamber Members who all demonstrate their uncommon drive, innovative courage, prosperity and civic responsibility.

I hope you will join us to salute this new group of dedicated individuals who represent the imagination and spirit of Goleta, and to celebrate and support our community. The next two Business After Hours will be held at the El Capitan Ranch on April 23rd and the Stow House on May 28th. Don’t miss these great events.

I would like to once again thank the hard work of all of the Ambassadors—Christine LeBon, Cynthia Estrella, Adlean Fuller, Kathy Gleason, Del Hegland, Betty Hensel, Kelly Long, Clara van Meeuwen, Gina Miller, Joanne Uhl, Charlotte Valentine, Tony Vallejo, Mike Vidal, and Kevin Young—who helped welcome our guests.