Tag Archives: September 2009

healthcare onsite for large employers

Healthcare Solutions Center Provides Onsite Health Care To Large Employers

Time and money are two things few people can afford to waste, especially these days. In an effort to save both, people often put their own health concerns on the backburner. After all, who wants to take time away from work or family to go to the doctor, wait around to actually see the doctor, and then get a diagnosis and a prescription that has to be filled for a hefty fee (not to mention the cost of the visit)?

But Frances Ducar is changing the way health care is handled in the workplace and making it much more convenient for people to confront their health concerns. As founder and director of Healthcare Solutions Center, she strives to save Arizona employers and their employees money. And she’s saving lives along the way.

Ducar spent more than 20 years in the health care industry in various positions, including first assistant to some of the country’s top surgeons and as a family nurse practitioner.

“I’ve worked with some really amazing specialists, and a little piece of each of them is what makes me who I am today,” she says of her mentors.

In her experiences over the years, she saw how companies were being “eaten alive” by insurance companies. She knew she wanted to find a way to help employers offer their employees quality health care and help employees afford the health care they deserve. With that, Healthcare Solutions Center was born in 2003.

Healthcare Solutions Center offers large companies (with 500 employees or more) an onsite health care clinic staffed by a family nurse practitioner. With HCS onsite clinics, employers save money on their overall health care costs. Employees save money because HCS eliminates co-pays and deductibles and reduces prescription costs to as little as $4. Employees also receive confidential and top-notch care from a nurse practitioner. In addition, HCS has a relationship with a network of some of the state’s finest specialists. If a patient needs further examination beyond what the nurse practitioner can provide, HCS can arrange a timely appointment with a specialist — sometimes even the same day.

“A company is only as healthy as its employees,” says Ducar, adding that people are much more likely to visit an onsite clinic because it eliminates the need to take time off work to travel offsite to a doctor’s office.

Employees don’t just see the nurse practitioner if they are sick. HCS onsite clinics also offer wellness programs to help patients quit smoking and lose weight.

“Knowing you are helping everyone you see in one way or another, seeing a person change their lifestyle, and seeing companies save money and put it back into their wellness plans — these are just a few of the immense rewards of this business,” Ducar says.

She feels good knowing that employers are saving millions on their health care costs and that HCS is helping employees appropriately utilize every avenue and benefit of the company’s wellness plan, including counseling and beyond.

But there are challenges as well. Ducar personally selects her family nurse practitioners, and she admits that placing the right nurse practitioner with the right company is one of the hardest and most important, parts of her business.

“My nurse practitioners are a reflection of me,” she says. “They become the advocate for their patients who just don’t know where to go.”

Ducar must have a knack for placing her nurse practitioners because she says she’s never had a dissatisfied patient.

“The patients trust (the nurse practitioners), and they are all happy to have us there,” she says.

The entrepreneur predicts huge growth for the future of her company, but she says her business will remain in the state for the long haul.

“Love of medicine and the desire to help Arizona companies afford their health care is what drove me to start this company,” Ducar explains.

operational nightmare

Prevent An Operational Nightmare At Your Company

Imagine this scenario: Your business has superior processes and efficiencies in place for R&D. As long as payroll is made on time, sales are coming in and operations are otherwise running smoothly, you don’t question what is going on in your non-development related departments. Then, the person who’s been running your human resources department for 10 years leaves.

All of a sudden, claims are slipping through the cracks, payrolls are missed and there are major issues with your vendors. These are the very real problems that arise in businesses every day when they rely too much on the knowledge of their long-term employees and fail to transfer that knowledge into systems. In many companies, there always seems to be that one person in every department who has been there the longest and knows the most. But this knowledge does not last forever. Once this person leaves the company, you may have to start over in many ways — and that’s when time and money are lost.

You’ve likely gone to great lengths to implement processes with your development team so your products don’t fail. Now is the time to do the same with your other teams so your business doesn’t fail.

Hands-off the tactical work
For starters, you can outsource, locally, the operations that are imperative to running your business. Customer service and HR are two areas that are worth looking into, along with sales-lead generation, training and technical support. This doesn’t always mean you have to cut your own teams. Many times, companies find that the managers they already have in place running sales, support and HR, can be much more effective overall when the more mundane and automated tasks are outsourced. Pairing internal technological systems with outsourcing to companies that specialize in any one area not only can improve efficiencies, but also prevent disaster when the internal manager leaves. Companies that outsource their operations see many benefits, including:

  • More efficient operations that are automated and run seamlessly, no matter what’s going on inside the company.
  • Fewer missed deadlines, as results aren’t dependent on one person who may be the bottleneck, preventing operations from moving freely.
  • Better performance from employees who are freed up to work more on big-picture strategy.
  • Better team work and company culture, as there is less confusion over who handles which responsibilities.

Find the technology
It’s amazing how many companies are still using manual spreadsheets and logs to track things such as benefits, billing and sales leads. What good is your best salesperson’s lead-generation strategy, for instance, if it’s recorded on a document that only he or she can decipher? Your business needs visibility into how results are accomplished every day, in every department, so work doesn’t ever miss a beat.

So what technology solutions does your company need? CRM (customer relationship management)? Online time sheets? Benefits tracking? Start with those managers who are hoarding all that great knowledge. Ask them to research and implement solutions that will easily capture and communicate the processes they’re putting into action every day. The greatest benefit here is that once others have visibility into how your internal “experts” are working, they can learn from those experiences and improve their own performance. The expertise of your best players isn’t being put to full use if those who work alongside them aren’t learning from it. Additionally, if everything is being captured and shared correctly through these systems, then any new person should be able to step in and take over rather seamlessly.

If you do explore the outsourcing route, the vendors you use may also be able to point you to the best technologies available to help streamline the processes. For instance, your HR company should be able to help you find timesheets, reporting and other tracking systems that easily integrate into their own systems. Same with your lead generation company, which should be able to recommend the best CRM or CMS (content management system) for your business. This may seem like a tedious and expensive undertaking, but most companies find they save money and improve productivity (and their bottom line) greatly over time.

Hiring the best people to run your various operational needs is an important task for every company. But hiring the best expert you can find is only the first step. Do your business a favor for the long-term and make sure that expertise is shared and supported in a way that ensures smooth operations.

piggy bank

Cash Strapped Companies Seek Solutions

The economic downturn and volatility of the financial markets has left a large number of established businesses with difficulty managing cash flow. Cash-strapped businesses, big and small, are paying their bills more slowly than ever. It’s a cash flow river — or trickle in this case — that flows downhill, impacting the businesses below that require healthy cash flow to operate effectively.

As larger companies and small business owners have trouble paying their bills, they are quickly discovering fewer and fewer options. Banks are not lending and credit lines are stressed. What many businesses owners and managers don’t know or have not previously considered is the possibility of factoring.

For small to mid-size companies doing business-to-business or business-to-government transactions, factoring may offer a financial solution that will keep the doors open and even help them grow.

Factoring is a form of financing based on a company’s accounts receivables or billing invoices. A company with slow-paying customers who pay between 30 and 90 days will approach a factoring company to provide cash. The factoring firm will make an advance of 80 percent to 85 percent against the company’s billing invoices for a percentage less than they are worth. The factoring firm charges a fee for the advance, which is based on how long the advance is outstanding, then provides the company with cash as if the bill had already been paid, and the factoring firm collects on the invoice itself.

The result is the factoring firm can help close the cash gap by advancing funds on earned, unpaid invoices so the company can use the funds to pay daily operating expenses such as payroll and vendors. Factoring will usually give business owners more availability of funds than a bank. In addition, factoring funding can be available within a day or two after the application process is complete. The best factoring firms make factoring fast, easy and flexible.

Factoring differs from a bank because factors make funding decisions based on the credit worthiness of a business’ customers. Banks, on the other hand, make credit decisions based on a company’s financial history, cash flow and collateral. Most importantly, a factor makes funding decisions in days or hours, while banks generally take weeks or even months.

This was precisely the case for Phoenix-based American Printhouse, which provides design and screen-printed apparel and accessories to local and national accounts. Its clients include Chaps Ralph Lauren, Calvin Klein, Disney, Liz Claiborne, the U.S. National Parks Service, Sony Signatures, the Arizona Diamondbacks, the Phoenix Zoo and Discount Tire, to name a few. Garments created and screened at American Printhouse are then sold to 1,500 independent specialty retailers and larger clothing retailers such as Hot Topic, Urban Outfitters, Buckle, Dillard’s, Kohl’s and Target. The company offers 12 different types of printing options for its garments.

Despite employing a staff of 15 and securing an impressive book of accounts on a local and national scale, the company still found itself experiencing the effects of the tightened financial markets.

“We really started feeling the slowdown and clients began asking for net 60 (day) terms beginning in September,” explained Sam Akkad, president and CEO of American Printhouse. “Then we hit the slow season and I was looking at the possibility of layoffs and difficulties paying the rent.”

After multiple banks refused to give the company a loan, and they received notice that their credit card lines were significantly reduced, the building owner suggested factoring. After learning more about factoring in late 2008, the company received $75,000 against their receivables in January 2009, within days of submitting an application for funding. This got them through a rough spot and allowed Akkad to turn things around.

“We didn’t have to do layoffs and today our business is booming,” Akkad said. “We have experienced 125 percent increase in revenue, we are adding new lines of business and looking at hiring.”

Johnny Benson, president of USMX, likes the flexibility factoring allows. Benson joined the company in the 1990s and served as the general manager for a number of years. In early 2008, he purchased the company despite its large debt load due to slow-paying customers. Benson was familiar with factoring and knew the banks would not be favorable to providing a loan or line of credit given the nature of the business.

The company is an environmentally friendly tire recycling facility in Phoenix that fabricates raw product and sells it to be used in playgrounds, artificial turf, molded rubber piping and landscaping. The company picks up tires at retail outlets and other locations throughout Arizona. USMX also cleans up areas where tires have been dumped, both for the state and for private land owners.

The business is growing due to more stringent regulations in recent years pertaining to the disposal of tires. But in order to continue growing, better cash flow is required.

“Working with a factor that allows you to select which customers and which invoices you want to factor is the ideal situation,” Benson explained. “We use factoring as a tool to bring cash flow in order to run our day-to-day operations.”

Regardless of size, factoring can work for companies seeking to fill the gap between invoice payment and payroll, purchasing and other business expenses. If businesses work with a flexible factoring firm, they also have the option of making factoring a big or a small part of their working business plan. Also, while long-term factoring relationships do contribute to a healthy, prosperous business, it would be best to seek out firms that consider factoring a shorter-term relationship. They will be the firms to help get your cash flowing again.

Factoring 101

Questions to ask when considering factoring:

  • Do I have to factor all my invoices?
  • Do I have to factor a minimum amount each month?
  • How much can I factor?
  • Where do my customers send their payments?
  • What fees will I pay?
An End in Sight

Hit Harder Than The Rest Of The Nation, The Valley’s Economy Is Starting To Show Faint Signs Of Recovery

Don’t dust off that party hat just yet, but there are early signs that the worst recession in the Valley’s history is easing its stranglehold on the economy. To be sure, as fall approaches and the recession’s two-year mark looms in December, Phoenix residents and businesses still struggle with plenty of economic problems. But economists and business leaders see hopeful signs.

Conventional wisdom says the housing market will pull the Valley out of the recession, after having led it down that path in the first place. Lee McPheters, economics professor at the W.P. Carey School of Business at Arizona State University, sees that milestone unfolding right now. The Greater Phoenix Blue Chip Real Estate Consensus Panel estimates 8,260 single-family housing permits will be issued this year, McPheters says. That’s down dramatically from the 57,360 issued in 2004, but McPheters says the forecast also calls for 12,600 permits in 2010, establishing 2009 as the bottom for that economic indicator.

New-home sales may have hit their low point the first half of this year and sales of existing homes, or re-sales, are bouncing back, according to McPheters.

“We are on track here to have easily over 75,000 re-sales for 2009, and it could be closer to 100,000 because there’s lots of inventory out there,” McPheters says. “At least half of that is bank-owned foreclosures but, nonetheless, re-sales are quite robust.”

There were 110,000 re-sales in 2005 during the Valley’s housing boom.

“New permits and sales of new homes seem to have bottomed out and re-sales have been going up,” McPheters says. “Those seem to be pretty strong trends, but still at a low level.”

What McPheters is saying is that good news in the housing sector alone does not constitute an overall recovery.
“There is nothing in the makeup of the Phoenix economy at all that would provide the stimulus for any independent recovery,” McPheters says.

Metropolitan Phoenix is still plagued by continuing job losses, declining personal income, decimated retail sales, declining home prices, home foreclosures, weak commercial real estate construction and more. The shrinking labor force likely won’t bottom out until the second half of next year after recording a historic three-year stretch of job losses — 2008, 2009 and 2010.

“By the time all the job losses have been recorded, Phoenix will have several hundred thousand fewer workers, and it probably will be 2011 before there is any kind of vigorous recovery in retail sales,” McPheters says.

In the meantime, 96 percent of the economists in the national Blue Chip Economic Indicators newsletter expect the national recession will end in the fourth quarter of this year. McPheters sees the national downturn drawing to a close with a modest turnaround and he thinks Phoenix will follow suit.

“Nationally, at the end of 2009, we will stop talking contraction and start talking about indicators that are more positive,” McPheters says. “Then there will be a period of slow growth. Phoenix probably will follow that, but remember that we have been harder hit than the rest of the country.”

Still, there is more to the Valley’s economy than statistics. Local business leaders are encouraged by what they see.

“From my perspective, we have seen a dramatic increase in headquarters activity,” says Barry Broome, president and CEO of the Greater Phoenix Economic Council.

Businesses primarily from the Northwest and California and, to some extent, Boston and New York, are either researching the Valley or making definitive plans to move their headquarters here, he says. Broome expects 10 to 15 headquarters to relocate to Arizona over the next 18 months and Phoenix will land some of them.

Broome also sees “new, sophisticated capital” moving into the Phoenix market. Investors are deploying the money now and plans are being written up for commercial real estate and science and technology projects, he says. Existing companies poised for growth are attracting capital infusions, Broome adds.

“This is not the cheap Las Vegas capital coming into the Valley where they buy it, zone it and flip it,” Broome says. “Now we’re seeing private equity firms that have 50 to 100 years of reputation in the U.S. and the world that didn’t get burned in this downturn. They are coming out of the Northeast markets, which we have not seen before.”

Bruce Coomer, executive director of the Arizona Association for Economic Development, is amazed at how busy city and county economic development departments are in the Valley and around the state.

“I don’t think there are any in Metro Phoenix cities that are not extremely busy,” Coomer says. “They are telling me that they are having trouble keeping up with the work.”

Although cities are likely conducting outreach programs, Coomer believes staffers are scrambling mainly because companies are approaching them.

Economic developers, Coomer says, “have got some big deals in the wings. That tells me companies, site selectors and developers know that sooner or later the recovery is going to come and they all want to position themselves. They want all their ducks in a row and all their due diligence done so they can pull the trigger and be on the front lines in a short period of time.”

Richard Hubbard, president and CEO of Valley Partnership, sees two encouraging signs within the business community.

“Commercial development companies have come face to face with the difficult decisions they have to make, be that layoffs, stopping projects or filing for bankruptcy,” Hubbard says. “A lot of those decisions are being made.”

Hubbard also is pleased with decisions made by sources of capital.

“Lending companies — whether that’s banks, private institutions or individuals — who have taken back property through foreclosure are starting to bring that property to market at reasonable prices,” Hubbard says. “They’re cutting their losses and deciding they can’t hold onto the property anymore. That will allow these companies to move forward.”

Hubbard says he also is encouraged that the housing market is well into the process of working its way out of the recession.

“The home-building industry has been suffering for a long time and they made their tough decisions a year ago,” Hubbard says. “Now it’s time for the commercial industry to follow suit.”

The Arizona economy and Tucson, Southern Arizona’s economic engine, continue to suffer from the same maladies as Greater Phoenix, says Marshall Vest, an economist at the University of Arizona’s Eller College of Management. Vest sees no hopeful signs of a statewide recovery for the time being. The only positive for Tucson is that its housing boom was not as strong as Phoenix, and its economy was not dragged down as far as the Valley’s, he says.

Vest sees the national recession receding in the third quarter.

“Arizona and Tucson will lag behind the nation by at least a quarter or two,” Vest says. “So Arizona should bottom out by the end of the year or the first quarter of next year and start its recovery at that time.”

The first sign of a statewide recovery will be a peak in the number of initial unemployment insurance claims, followed by stabilization of the labor market and then an uptick in retail sales, Vest says.

Flagstaff dominates the Northern Arizona economy. Marc Chopin, dean of the W.A.

Franke College of Business at Northern Arizona University, says the city has been logging double-digit declines for sales tax revenues and bed, board and beverage tax receipts. Building permits for single-family homes and additions and alterations to existing homes also have been declining, he says.

“I don’t expect things will turn around for some time,” Chopin says. “Construction, I expect, won’t recover for some time. About a quarter of the homes in Flagstaff are second homes. Until there’s a recovery under way in Phoenix, from which many of our second-home owners come, the second-home market in Flagstaff is unlikely to recover.”

www.aaed.com
www.cba.nau.edu
www.ebr.eller.arizona.edu
www.gpec.org
www.valleypartnership.org
wpcarey.asu.edu

Arthur Andrew Medical

Justin Marsh, Of Arthur Andrew Medical, Uses Japanese Enzymes To Cure People

Justin Marsh
Arthur Andrew Medical
Title: Founder and CEO
Est: 1999  |  www.arthurandrew.com

Justin Marsh, co-founder and CEO of Arthur Andrew Medical, is shining a light on an unconventional approach to improving health. But it all started far from the world of medicine.

Marsh left college with an electronics engineering degree and began his career working as a subcontractor for Motorola, Intel and AMD, developing and installing software.

“Ultimately, it wasn’t my education that allowed me to get into my current industry, it was more by chance and some key contacts that pointed me in this direction,” Marsh says.

Marsh switched careers when he joined the medical field as an investor, eventually buying out all of his partners to become the CEO of Arthur Andrew Medical. The company’s name derives from the middle names of the two founders, Thomas Arthur Aldrich and Justin Andrew Marsh.

The Scottsdale-based company began in 1999 as an international broker and distributor of enzymes and probiotics. To launch the line, Marsh took out a portion of equity from his house and relied on revolving credit. In 2003, Arthur Andrew Medical had a breakthrough when it found enzymes in Japan that it claimed surpassed any available in North America. Enzymes — along with several other benefits — convert our food to energy, eliminate viruses, and purify our blood. When they are formulated with materials found in nature, their beneficial uses can increase. These formulations are known as nutraceuticals or dietary supplements.

Arthur Andrew Medical teamed up with specialized doctors to formulate these enzymes and create nutraceuticals as a natural and alternative way to heal and help patients. The company’s line now consists of seven products that perform several different functions.

The business originally began with the intent of selling only to health care professionals. But Marsh says that as customers wanted more availability of the product, the company decided to open up the line to distribution across the U.S., and one day it plans to expand internationally.

The company has a staff of 10 and a sales force that includes more than 20 contractors and distributors. Besides the office in Scottsdale, Arthur Andrew Medical has a satellite office in San Diego. With four competitors worldwide, including three right here in Arizona, the company must work hard to earn consumers’ trust. One challenge the company struggles with is creative marketing.

“We are not permitted to say that we can diagnose, treat, cure or prevent any disease without first spending millions of dollars on FDA approval,” Marsh says, adding that as a result, the company relies on patient and doctor referrals.

With a claimed 70 percent rate of returning customers, this hurdle hasn’t stopped Arthur Andrew Medical from achieving success.

“Unlike pharmaceuticals, our products are effective without any concern of becoming habit-forming or causing damaging side effects,” Marsh says. “We have had success with patients that were considered untreatable with conventional methods.”

Marsh says his main goal is for people to know that, depending on the product, the FDA does not always have the final say.He adds there are options that can help when conventional medicine can’t.

“We approach medicine in an entirely different manner,” Marsh says. “We know our products work and we know there are no risks.”

Today, despite the poor economy, the company continues to grow. Marsh says Arthur Andrew Medical is on track to exceed its growth expectations for this year, with record-breaking sales logged in March.

“It seems the public eye is beginning to see the value of nutraceuticals as the cost of maintaining good health is much less expensive than recovering from poor health,” Marsh says.

First Job: Pam Conboy, Regional President Of Wells Fargo Arizona Regional Banking

First Job: Pam Conboy, Regional President Of Wells Fargo Arizona Regional Banking

Pam Conboy

Regional President, Wells Fargo Arizona Regional Banking

Describe your very first job and what lessons you learned.
My first job was while I was in high school. I had just made the frosh/soph cheerleading squad and needed to pay for my uniforms. I was hired as a hostess at a local restaurant — Rod’s Grill in El Monte, Calif. My primary role was to greet and seat our customers, and to assist the waitresses. I learned so much about providing great service and about coming to work prepared to focus entirely on the customer; smiling, welcoming and thanking with each and every interaction.

Describe your first job in your industry and what you learned.
My first full-time job within the banking industry was as a personal banker right here with my current great company, Wells Fargo! I was a banker at the Flair Industrial Park Branch in El Monte nearly 30 years ago. I brought many of my earlier customer service skills to my new job and further learned the power of listening. Engaging in dialogue with my customers was the very best way to identify how I could help them financially. … I learned when we focus on customers’ needs, they reward us with their loyalty, new business, repeat business and lots of referrals.

What were your salaries at both of these jobs?
As a hostess, I made minimum wage; it was 1976. My full-time salary at Wells Fargo was $800 per month or $9,600 per year.

Who is your biggest mentor and what role did they play?
One of the most influential is my mother. She taught me much at a young age and still continues to support my successes and teach me every day. One lesson was to always be a leader. She instilled a high degree of confidence, as I knew I had her and my family for great support. … Some of my professional mentors also provided encouragement, as well as tough coaching when I needed it. They always identified what was a strength to build upon, as well as an opportunity for further development … Providing conscious awareness was one of the greatest lessons: that of which you are aware can be improved.

What advice would you give to a person just entering your industry?
We often use this phrase at Wells Fargo: “People don’t care how much you know until they know how much you care.” … Do what is best for the customer, do what is best for the team. Do what is best for the company, and you win! … The other advice is to keep learning and keep growing, stay hungry for knowledge and gain experiences! Learning is a journey!

If you weren’t doing this, what would you be doing instead?
I enjoy numbers and analyzing data, also listening, providing advice and solving. If I weren’t a banker, I might be an accountant or a psychologist. I also have a passion for helping our communities and our youth, so possibly a youth career coach or counselor.

hospital bed and xray

For Medical Building Owners, Are Lease Workouts Worth The Work?

The market is stormier these days. Many of the lease rates presented by medical building owners today would previously have been considered anomalies, but they’re now more of a trend. Nonetheless, some medical buildings have stayed afloat maintaining their asking rates successfully. So is it worth it to seek to propose or consider a modification to an existing lease within a medical building? The answer at first is simple — it depends.

As with any investment, having and understanding one’s basis of using applicable data to support a position is imperative. Because of the looming distress in the financial markets, many notes are being sold that are secured by well-performing investment properties. However, even if a subject property owner is making timely payments on its mortgage, that doesn’t mean the note-seller is weathering the economic storm as soundly. In some cases, a note discounted by a troubled lender may translate into double-digit returns for the new note-owner. Logically in such cases, lease modification requests should be approved by the owner of the building, because of the superior return on the original note to the new note owner. Nonetheless, any loan modification allowing for additional flexibility is ultimately between the owner and current note holder, and not the tenant.

The aforementioned factors are part of today’s property investment philosophy, and consequently the nature of tomorrow’s tenancy. Even so, there are medical buildings out there today that may be considered “gems,” just as there were similar “gems” in previous recessions. This begs the question for owners and tenants alike — “Is my medical building a gem in this recession?” This answer will often dictate the likelihood of one’s success in the renegotiation or a workout of a lease.

Basis Breakdown
How does one know if their building is a gem? First off, it is important to have a basis for understanding the market and how the medical building fits within that market. What classification is the building? On what standard is this classification based — BOMA (Building Owners and Management Association) or just a general opinion of the owner? Secondly, it is important to compare similarly classified buildings, their locations and amenities. For instance, in comparing two similar buildings, one may offer superior signage, visibility and may have a higher rental rate, even though they both may be Class B properties. Overall, it is important to understand that building classification does play an important role, yet it doesn’t always dictate the rental rate.

Additionally, it is difficult for a tenant to support an argument for a lower rate if only general evidence is supplied to the owner, such as hearing something about the economy on the news, or using a building rate from a completely different class of building, or even a building from a completely different submarket. Sometimes poor business/practice performance may be the only supporting evidence in justifying the request for lease modification. However, it is important for tenants to understand their liabilities relating to guarantees, current business income, personal income, etc. That being said, the owner will be likely to seek evidence of such hardship before even considering a workout.

As a building owner, it is important to understand the nature of the tenant’s request. Probing questions may be asked and supporting evidence sought.If the building is a “gem,” maybe it is better off to let the tenant default under the agreement in order to replace the current tenant with a new tenant that presents less risk. However, if the building is not a “gem” per se, it may be better to take a closer look at what the tenant is proposing and attempt to understand the basis for his or her request.

Even though the economy is in flux, it is always important to seek an edge. It is important to seek and analyze trends in the economy and how they relate to your lease(s). Being a good steward to your investment and/or business is always important, regardless of the market conditions. Recessions come and go, but the persevering have a much better chance of reaching their goals.

Credit Union CEOs

Profiles Of ACULA Members And Credit Union CEOs

Pat Bodnar

Senior Vice President
Arizona Credit Union League & Affiliates

Pat Bodnar has never worked at a credit union. Yet, as senior vice president of the Arizona Credit Union League & Affiliates, she certainly works for them.

In the 24 years that Bodnar has been at the league, her colleagues say she has reached out to the business community more than anyone else on the staff.

Bodnar started out as an administrative assistant before moving on to director of administration and finance. She then became vice president of governmental affairs, and in 2004 was promoted to her current position of senior vice president.

“I didn’t know anything about credit unions when I started,” Bodnar says. “It’s been great fun to have a job that you love.”

Prior to joining the league, Bodnar handled constituent services for then-Gov. Bruce Babbitt. When Babbitt left office, the credit union opportunity came up.

“I fell in love with credit unions and their philosophy,” she says.

No doubt her tenure in the Babbitt Administration boosted her interest in political activity.

“I’ve always been interested in politics and politicians,” Bodnar says.

She was instrumental in developing a governmental affairs department at the league, and continues to oversee legal and legislative affairs and regulatory issues that affect state and federal credit unions. Bodnar is also responsible for public awareness campaigns, communications, community involvement, international partnerships and member service issues.

She credits her development of a government affairs program with helping to advance her credit union career.
“We’re turning credit union members into political activists,” Bodnar says. “Things like getting out the vote turn them on.”

When credit unions wanted to expand by making loans available to the business community, Bodnar was instrumental in forming a business lending council. The group assists business members in obtaining Small Business Administration loans and shares best practices among credit unions interested in making business loans.

“Small businesses need more options, not fewer,” she says. “Small business is the engine that drives economic growth.”

For her efforts, Bodnar was named SBA Advocate of the Year in 2007. She also serves as treasurer of Arizona Saves, an organization that strives to help Arizonans become financially self-sufficient through debt reduction and asset building. Bodnar also is a founding member of ArizonaFirst, a coalition of financial institutions dedicated to a public/private partnership aimed at preparing for any disaster or crisis in Arizona.

Robert D. Ramirez

President and CEO
Vantage West Credit Union

Not many people get promoted after 30 minutes on the job, but that’s exactly what happened to Robert D. Ramirez, president and CEO of Vantage West Credit Union in Tucson.

Born in Nogales, Ramirez received a degree in accounting from the University of Arizona in 1976. He worked for Sundt Corporation and Capin Mercantile Corporation before joining the Davis Monthan Federal Credit Union (which later became Vantage West) as assistant controller in 1985.

“I always tell my employees, watch for the keys that drop at your desk,” Ramirez says. “On my first day, my supervisor, the chief financial officer, resigned. I became acting CFO a half hour after I started.”

Six months later, examiners gave the credit union what Ramirez calls “a pretty bad rating.”

“I promised my boss, the president, that if he would give me three months I would get us back to a No. 1 rating,” Ramirez says. “If I did, he said he would double my salary and make me chief financial officer.”

Ramirez and his boss both made good on their promises. Ramirez moved up the ranks to executive vice president in 1996, and has served as president and CEO of Vantage West since April 2000. In addition, he holds the title of vice chair of the Arizona Credit Union League & Affiliates board of directors.

When Ramirez came onboard, the credit union had $99 million in assets with 36,000 members. It has grown to more than $1 billion in assets with 105,000 members.

“We’re consistent in providing overall value for the member,” he says. “Our goal is to be consistent, to meet their needs whenever we can.”

That became a little more challenging since the national economy took a nosedive. In the past year, Vantage West modified more than 3,000 loans totaling in excess of $55 million.

Mary Marshall

Retired CEO
Alhambra Credit Union

Early on, Mary Marshall experienced the value of credit unions. While living in the state of Washington, a local credit union provided needed assistance to her family.

“That’s when I knew I wanted to work there,” Marshall says. “I convinced them they needed to hire me.”

She started as a loan officer, and after five years enrolled in the Credit Union National Association (CUNA) Management School in Madison, Wis. Attending the CUNA Management School, Marshall says, “opened my eyes to the possibility of running my own credit union.”

When her family relocated to Arizona in 1984, Marshall figured it was time to pursue her career goal.

“I felt that I was schooled in credit unions and was prepared to see what I could do with another small credit union,” she says.

At the time she joined the Alhambra Credit Union, currently located at 35th and Northern avenues, it was what she referred to as “a sleepy little shop” that was serving the Alhambra School District, and was housed in the district.

“It wasn’t growing,” Marshall recalls.

It had 700 members and assets of less than $2 million. Twenty-two years later, when Marshall retired in December 2007 as Alhambra’s CEO, the credit union had 3,700 members and close to $20 million in assets.

So it’s not surprising that Marshall was the 2009 recipient of the Arizona Credit Union League and Affiliates Very Outstanding Credit Union Person award. For more than 35 years, the league has given the award to a special individual, recognizing that person’s level of service to the credit union community.

credit unions reaching out to small business

Arizona’s Credit Unions Are Reaching Out To Small Businesses

Relative newcomers to the field of making business loans, credit unions nonetheless have become key players in today’s tight-money economy. Barely 10 years ago, credit unions concentrated mainly on savings and checking accounts, and made personal, auto and home loans. But the Credit Union National Association says credit unions nationally originated $6.5 billion in business loans in the first six months of 2008, up 36 percent from the $4.8 billion in the corresponding period of 2007.

Credit union business loans in Arizona average about $240,000. Because the loans are relatively small, credit unions focus on small businesses.

For the past six years, Arizona credit unions have been working closely with the Small Business Administration and have emerged as strong SBA lenders. But because of the expertise involved in making such loans, only the larger credit unions are active in that segment of lending.

Steve Dunham, president and CEO of Canyon State Credit Union and board chairman of the Arizona Credit Union League & Affiliates, suggests that credit unions with assets of at least $400 million generally have the ability and staff support, so they are most likely to make business loans.

Then there is the issue of the federal cap, which the credit union industry has been trying to get Congress to increase or eliminate. Under the cap, credit unions may make business loans totaling no more than 12.25 percent of their assets.
The business lending cap comes into play at Arizona State Credit Union, one of the state’s largest.

“We’re getting very close to the cap, so we are being selective about what we do,” says Paul Stull, senior vice president of marketing at Arizona State Credit Union. “We keep bumping into it, and we have to find a way to make room. It’s quite a challenge to manage that.”

Despite the regulatory limits placed on credit unions, opportunities for businesses to borrow are available. Businesses face a combination of challenges, such as finding a money source and finding the right rate, Stull says.

“For many of the people we deal with, the rate is important, but many times they don’t have too many alternatives to look at for financing,” Stull says. “That usually means their needs are somewhat smaller than the targeted range of other providers. It takes just as much work to originate a small loan as it does a large one. Some would prefer to do only larger loans. A small business person might fall outside of that window. When they do, it’s tough for them to get the attention they want and deserve. Certainly small enterprises are not coming up on the radar of some of the larger lenders. That doesn’t mean rate isn’t important. It still is. But clearly you need to talk to somebody before you can get a rate.”

In all phases of lending, credit unions traditionally follow very conservative underwriting principles and only make loans to members. It’s not uncommon for an individual member to approach a credit union with a business loan request.

“The strong suit for credit unions is what it has always been — credit unions take the time to know their members,” Stull says. “That certainly puts us in a better position to meet the needs of a business. Many of our business customers have a personal relationship with us. They like the way we treat them personally, and they realize they can do their business banking with us as well. And that leads to a deeper relationship. The wider use of our business services is a more recent phenomenon. It’s a natural progression, and is indicative of the way we like to know our customers.”

Most experts see the economy beginning a slow turnaround toward the end of this year or early 2010. Consumers for the most part are still on the sidelines. Credit unions and the business community are keeping an eye on the nation’s savings rate.

For the past 20 to 30 years, Americans saved 7 percent of the income. But in recent years, before the recession hit, people were spending and borrowing more and saving considerably less. The U.S. Department of Commerce notes that the U.S. savings rate has been on the rise after almost five years in which consumers barely saved a penny.

Stull calls the rise in savings a good sign-bad sign situation.

“It’s good because people are being more cautious, developing more security,” he says. “The money they save goes to financial institutions and becomes available for lending. But, it’s a bad sign because people are not buying cars, motor homes, washers and dryers, and they’re not dining out as much as they used to. So it’s really kind of a double-edged sword.”

Antigua map

The ACULA Formed A Partnership To Help Peer Credit Unions In Antigua

Arizona credit unions are reaching out to professional colleagues in the former British colony of Antigua, offering instruction, training and guidance to help credit unions on the tiny Caribbean island expand and modernize.

Working through the World Council of Credit Unions (WOCCU), the Arizona Credit Union League & Affiliates has established a partnership with the Credit Union League of Antigua. The term partnership indicates joint interests and benefits, and that’s the nexus of what the industry calls its financial cooperative concept.

Credit union experts from Arizona have traveled to Antigua, which is in the eastern Caribbean north of the equator, to share ideas and strategies for improving services to their members and becoming more sophisticated in the making of loans.

Antigua has an estimated population of 85,000 and was granted its independence in 1981. The largest of the English-speaking Leeward Islands, Antigua is about 14 miles long and 11 miles wide. The island has a handful of credit unions, the largest of which has assets of approximately $24 million, compared to one of Arizona’s largest, the Arizona State Credit Union, with assets of $1.1 billion.

Scott Earl, president and CEO of the ACULA, says the partnership was formed last year to enable Antigua credit unions to see what drives the industry in the United States.

“Typically, partnerships are established with developing countries,” Earl says. “It goes both ways. We send folks to Antigua who did some training there, and they have come up here. We learn from them as well, focusing on the roots of providing services to our members. The exchange helps rejuvenate our industry as well.”

Robin Romano, certified chief executive and CEO of MariSol Federal Credit Union, recalls a trip to Antigua last year. The focus was on bringing Antigua’s credit unions up to today’s standards.

“No matter what country you are in, credit unions pretty much operate in the same basics,” Romano says. “Members are members, and uniformity is comforting. Since Antigua got its independence, credit unions have been trying to improve their regulations and become a little more modern. When I say modern, I don’t mean technology. Most of them are computerized. But, they operate similarly to the way credit unions here did 30 years ago.”

What has changed in the past 30 years? Antigua credit unions were only offering signature or auto loans and savings accounts.

“Many had not ventured into checking accounts, certificates of deposit or money markets,” Romano says. “Few were doing any form of real estate lending.”

Because Antigua has no credit reporting system, much of the training dealt with how to determine the credit-worthiness of potential borrowers.

“We talked about different methodologies,” Romano says. “It’s a small island. You can call around for shared information. We talked about the evaluation of credit to make better decisions. In modern times, more people default. They were having issues with defaults and weren’t quite sure how to handle that. I have expertise in lending and I went to six credit unions, making presentations to staff and board members on how to do things better. We also talked about different collection methods. Collectors there have the same issues we have here. We were able to relate to one another.”

The trip did provide sort of a return on investment for the Arizonans.

“Going back to smaller institutions was a way of refreshing yourself on one-to-one operations,” Romano says. “Somebody comes in and they know that person’s entire life history. That intimate relationship was very rewarding.”

Mary Lee Blommel, a member services consultant for the ACULA for 27 plus years, went to Antigua last year with representatives of three Arizona credit unions. One of the Arizonans visited five Antigua credit unions, conducting sessions onloan underwriting and emphasizing the importance of doing a check with creditors. Another visitor focused on how best to provide services to members.

In addition to the face-to-face exchanges, the league arranges conference calls and Webinars to keep the lines of communication open with Antigua credit unions. Topics have included risk management and asset liability management — making sure they have adequate funds to lend.

“We did a one-hour Webinar on risk management — investment risk, loan risk, and credit union risk in these trying times,” Blommel says. “It went very well. They had the opportunity to ask questions. I could count at least 20 people in that room.”

credit unions transformation

The ACULA Has Transformed Over The Decades

In the 75 years since the formation of the Arizona Credit Union League & Affiliates, the organization’s role has changed markedly as its membership soared. Actually, the first credit union law in Arizona was introduced, passed by the Legislature and signed by the governor in 1929. Thus, Arizona became the 29th state to enact a credit union bill.

Even before credit unions were officially recognized and regulated by the state, a mutual investment group known as Pyramid was launched in Tucson in 1925. Once the Arizona law was passed in 1929, Pyramid Credit Union received one of the first — some say the first — charter to formally operate as a credit union.

Five years later in November 1934, the Arizona Credit Union League, as it was then called, was formed. By 1948, there were 25 credit unions in the state with 3,000 members and almost half a million dollars in assets. Today, 56 Arizona credit unions represent about 1.6 million members, with assets in excess of $11 billion.

Initially, the league focused on organizing new credit unions throughout the state. In the early years, there were just a few state-chartered credit unions. Scott Earl, president and CEO of the Arizona Credit Union League & Affiliates, tells how the league’s efforts fostered growth.

“Field reps would arrange meetings with employer groups,” Earl says. “They’d be driving down the road looking for parking lots outside of businesses. If a lot of cars were parked there, they’d put credit union charter applications on the hoods of the cars. I don’t know how many organizations were created as a result during those years, but I’m sure many were.”

Gary Plank, who retired as president and CEO of the league in 2007, recalls being an organizer when he entered the credit union profession in Iowa in 1966.

“We felt the best way was to talk to the management of the company to see if we could generate interest in a credit union for the good of their employees,” Plank says.

The largest Iowa credit union back then had assets of about $7 million. Today, the assets of that same credit union exceed $1 billion, Plank says.

Plank says two factors triggered the phenomenal growth of credit unions: the addition of share-draft checking so direct deposits, including Social Security benefits, could be accepted; and a decision by the federal government to insure savings accounts.

Indeed, as credit unions grew, officials saw the need to offer more products and services, such as debit and credit cards, individual retirement accounts and first and second mortgages.

“The league was the incubator for a lot of these products and services, helping individual credit unions along the way,” Earl says. “An outgrowth of that cooperation is shared branching.”

Under shared branching, credit unions join networks that enable their members to transact business from virtually anywhere in the country where a joint operating logo is displayed.

“Shared branching addresses one of the competitive disadvantages credit unions had, which was a lack of convenient locations,” Earl says.

In the 1990s, the league’s role shifted dramatically, becoming more of an advocate for credit union legislation at the state and federal levels. In other words — lobbying.

“We put a great deal of resources into that today,” Earl says.

Services the league provides include consulting, governmental affairs activities, regulatory compliance, legal, human resources, education, communications, publications and public relations. The league works in cooperation with Credit Union National Association (CUNA), U.S. Central Credit Union, the World Council of Credit Unions and the CUNA Mutual Group.

Having the support of the league and national and international credit union organizations is helping Arizona credit unions cope with the current recession. Though a few mergers have taken place, Earl says they are not the result of the economic downturn.

“Almost always when a merger occurs it’s to provide better service to the members,” he says.

Yet, the economy is having an impact on credit unions. Many of its members — average Arizonans — have defaulted on loans or gone into bankruptcy. The good news, Earl says, is that credit unions have been reworking those loans to help their members get through difficult times.

“The challenge for the league,” says Earl, “is to find new efficiencies for credit unions to collaborate so they can provide better products and services to their members. We have to keep looking for ways for credit unions to work together.”

Credit unions, which are not-for-profit operations, have good capital and strong reserves, Earl says.

“We built those reserves for a rainy day,” he adds. “And for a lot of consumers, it’s pouring rain. But we will be around. We’ll be just fine and will continue to be of greater service to citizens.”

Changing Course

Law Firms Are Altering Their Strategies To Cope With The Recession

The downturn in the economy that is affecting all businesses has not spared law firms. Like all other businesses, law firms have been forced to cope with fewer and thriftier clients. Specifically, law firms have had to deal with sharp reductions in transactional and real estate work, large increases in litigation and bankruptcy matters, and clients who are often unable to pay for legal services. Providing legal services to clients that may declare bankruptcy in the near future has become commonplace.

Law firms have responded to these trying times with various strategies. Many law firms have primarily focused on reducing costs through hiring and compensation freezes, recruiting cutbacks, and event cancellations. Other firms have started to transition transactional attorneys to bankruptcy or litigation work.

Not all strategies, however, are created equal. The reduction of costs is always a worthwhile aim, but when conducted without strategic vision, it can leave a firm with frustrated employees and choke off any avenue for organic growth. The transfer of attorneys to other divisions certainly creates revenue for the firm by keeping otherwise inactive attorneys productive, but the work product can suffer. For example, transactional attorneys will not necessarily provide the highest level of service to a client with litigation or bankruptcy needs.

Firms that take a different approach may be best suited to not only survive the current economic difficulties, but to emerge on the other side as stronger firms. This approach is simple: Focus on the client. While all law firms profess to keep the client’s interest at heart, in these times, paying more than lip service to that ideal is the key to success. Now more than ever, many clients are not able to afford full service legal representation. Obviously, providing the highest quality legal service to the client is always the first priority, but providing value should be a close second. Focusing on the client and its specific needs allows attorneys to add value by identifying and zeroing in on the particular requirements of that client. Once the particular needs are identified, it is simple to eliminate any superfluous services that do not add value, and to concentrate only on the services that really move the client closer to its ultimate goal. This focus keeps the representation more efficient, less costly, and will ensure that the client is satisfied with all of the legal services provided.

One major example of how an increased focus on the client is more important than ever is the looming prospect of bankruptcy. Recognizing that a bankruptcy could be on the horizon for a client is very important to shaping any legal strategy. Most importantly, a bankruptcy provides unique legal challenges and opportunities that need to be addressed in a timely manner. Identifying the possibility for a bankruptcy, and when it might occur, allows the lawyer to properly gauge which long-term strategies will be ineffective, and how to use the limited time and resources as efficiently as possible. Moreover, a possible bankruptcy underlines the client’s absolute necessity for value from legal services. Particular attention from the attorney at the outset of a representation can identify a possible bankruptcy, shape the representation, and let the law firm know which services will be most valuable to the client under the circumstances.

With the need to adjust to the current economic difficulties paramount for all law firms, smaller firms may be the best equipped. Like the tugboat and the ocean liner, smaller firms are more nimble and able to focus resources to needed areas more quickly than larger firms. Most importantly, small firms often provide a higher level of personal attention and a greater focus on the client’s needs. Focusing on the client is the best way to ensure success for both the law firm and the client.

Charles J. Morrow also contributed to this article.  He is an associate at Galbut & Galbut. He can be reached at cmorrow@galbutlaw.com.

man sitting in chair in front of office window

CEO Series: Steve Cowman

Steve Cowman
Appointed CEO and Board Member, Stirling Energy Systems (SES)

How has the recession affected the alternative energy industry?
It’s had a major impact on the solar industry and the renewable energy industry on two fronts. First of all, there are a lot of solar companies that are not going to make it through the current credit crisis because they are going to run out of capital. … You need to have a pretty strong balance sheet at the moment and you need to have a pretty strong parental structure to support you through this. That’s not just solar — that’s a lot of the renewable companies.

The second issue is getting the funding for the projects themselves. That is a huge challenge because these projects are typically between half a billion and a billion dollars in terms of capital requirement. … What’s really impressed me about the Obama Administration and the DOE (Department of Energy) is that they recognize that there is a technical challenge here given where the credit markets are. They also recognize that renewable energy has the real potential to be competitive in price with fossil fuel after three to five years. But to do that (companies) need some help to actually get there. I think the stimulus package, as it’s been outlined, has tremendous potential to help the renewable (industry) in general and the solar (industry) in particular.

Why is Arizona behind other states in developing solar energy?
Arizona is a great state and Phoenix has clearly grown, but it’s grown on the back of a particular focus … real estate, the holiday center, the golf complexes. … It hasn’t really focused on the industrial side of it. I think if you look at what has actually happened to Phoenix over the past 10 to 15 years, there’s been a slow erosion of its industrial and technological base. And some of the very large companies like Motorola, ON Semiconductor, Intel … have significantly slimmed down or have actually outsourced. And they haven’t just outsourced overseas. …

They’ve moved to New Mexico, they’ve moved to Nevada, they’ve moved to California. I think, to be honest, Arizona fell asleep at the wheel. … (it) didn’t really provide the right type of incentives, and I think it has paid the price.

However, I would say that in the last year, there’s been a shock of reality. Obviously, Arizona has seen the biggest collapse in housing prices. It saw the biggest run-up and it saw the biggest collapse, as well. I think of GPEC (Greater Phoenix Economic Council) as being particularly proactive in terms of trying to bring that awareness, in terms of trying to attract (companies). … That (Arizona) Senate bill (1403) that just went through … is significant, but it won’t fix the problem. But, it does show a culture change in the Arizona Legislature in terms of wanting to be more proactive about attracting inward investment at this time.

What do governments have to do in order to get more companies to turn to alternative energy?
There are two things the state has started to do. The first thing they’ve done is they are mandating renewable targets. So, they are mandating to the utility companies that they must have a certain percentage of their power come from renewables. And if there’s not, there will be financial penalties. That’s the stick, if you like. And the carrot that they are actually providing is the stimulus package to help the renewable companies to get the projects in the ground. So they’ve got those two things running parallel.

What do you see in the future for the alternative energy industry?
The potential is tremendous. You have a fantastic manufacturing and engineering base here. …  You have a large number of really blue chip, Fortune 100 U.S. multinationals that have established a really strong technology base here. You have Arizona State University that has some fantastic programs, and you have a great environment for people to live in. So, it’s a really attractive place and I have to think that the future will be really good. … (However) there are companies who have worldwide headquarters here but do no manufacturing here — who shall remain anonymous. So, the real challenge for Arizona is how do you get those companies to increase their level of vertical integration and move beyond just having headquarter functions to having manufacturing and design (here)?

What kind of leadership team works best for a company like Stirling?
Ideally, you want someone who brings a well-honed skill set. You want someone who has experience in, hopefully, one or two different areas, someone who has good interpersonal skills. … So it’s your personality, it’s your attitude. … If you have a can-do, we can knock down any barrier to make it work (attitude), you will make it work. … So what’s the ideal executive? The answer is there is not an ideal executive. What you want is a good mix.

    Vital Stats



  • Appointed CEO of Stirling Energy Systems in June 2008
  • Held numerous senior management positions at Greenstar Ireland, General Electric, Harris Corporation, General Semiconductor, Vishay Intertechnology, Volex Europe.
  • Earned a bachelor’s and master’s degree in engineering from the University College, Dublin and Sheffield University; master’s degree in management science from Trinity College Dublin
  • www.stirlingenergy.com