Inside Tucson Business 3/15/2013

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HEALTHCARE REFORM

Your Weekly Business Journal for the Tucson Metro Area

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Historic Manning House noticed for foreclosure auction Inside Tucson Business

After 14 years of fi nancial strug-gles under its current ownership, the historic downtown Manning House, which has been up for sale since it closed as an events venue last July, has been noticed for foreclosure auc-tion.

According to the notice, Manning House LLC is delinquent on an origi-nal note of $1.89 million. At the time it was put up for sale last summer, own-er and CEO Colleen E. Concannon said the asking price was $2.48 mil-lion for the 37,204 square-foot build-ing on two parcels of land at 450 W. Paseo Redondo totalling 5.1 acres.

In a 2005 attempt to sell the prop-erty, it was off ered at $6.25 million, or $5 million for just the Manning House and its immediate 3.5-acre parcel.

Concannon, her brother Dr. Kevin Concannon and other family mem-bers bought the building in 1997 for $2.19 million from Pochter Group, Chicago. Th e Concannon family sub-sequently invested $3 million reno-vating and restoring the building and buying the adjacent 1.6 acres.

In 1998, the Concannons’ com-pany fi led for bankruptcy.

Over the years, the Concannons made at least two public eff orts to sell it, once to the Tucson Convention and Visitors Bureau and another to

Tucson Electric Power. Neither came to fruition.

Last July before closing it and put-ting it up for sale, the Concannons reached a purchase option agree-ment with the downtown Rio Nuevo Multipurpose Facilities District to acquire it, providing that the agency could fi nd a development partner. But that failed, too.

Th e original 12,000 square-foot mansion was designed by architect Henry Trost for Levi Manning, a prominent businessman and Tuc-son’s mayor from 1905 to 1907. Th e Manning family moved out of the home in 1949 and it became the Elks Club Lodge. Th e group added 20,000

square feet to the building and con-verted the atrium/courtyard into a ballroom.

In 1979, the city’s Downtown De-velopment Corporation acquired the worn building and re-purposed it as offi ce space. In 1994, the Pochter Group bought the property.

It is listed on the National Register of Historic Places.

Th e trustee’s sale is being handled by the Scottsdale law fi rm of Kutak Rock. Th e benefi ciary is City National Bank, Los Angeles. Th e foreclosure auction is scheduled for 11 a.m., May 29 at the on the steps of the Pima County Superior Court Building, 110 W. Congress St.

An inside look at the possible impacts of the Aff ordable Health Act

Incremental

increasesSmall gains in home prices are holding up

Page 27

More than wordsValue of communication focus at SHRM-GT awards

Page 5

Sun burnedTax-credit’s end could harm solar unit installers

Page 4

PAGE 11

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Solar industry representatives worry that interest in solar installations at commercial and nonprofi t sites, like this one at the Benedictine Sanctuary of Perpetual Adoration, 800 N. Country Club Road, will die because tax incentives were eliminated.

Public Notices 6Arts and Culture 8 Meals and Entertainment 8 Briefs 9 Inside Media 9 Profile 10Lists 19-21

Calendar 24-25Finance 26Real Estate &Construction 27Biz Buzz 28Editorial 28Classifieds 31

EDITION INDEX

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EDITORIAL INTERNSLAUREN SHORESALEX WAINWRIGHT`

NEWS

Corporation Commission rule change could hurt solar system installers

By Patrick McNamaraInside Tucson Business

When the Arizona Corporation Commis-sion unanimously ruled in January to end tax credits for companies that purchased and installed photovoltaic solar systems on their businesses, members of environ-mental and solar industry sectors were out-raged.

Among the complaints were claims the elimination of incentives would kill demand for solar power from the business commu-

nity. Now, at least anecdotally, that ap-pears to be happening.

“I think what you will see in the in-dustry is that companies will be cutting commercial installer crews,” said Michael Neary, executive director of the Arizona Solar Energy Industries Association, the state affi liate of the national Solar Energy Industries Association.

In fact, Neary said he knew of at least one Tucson-based solar company that al-ready had laid off installers. Inside Tucson Business tried to contact the company for

confi rmation but could not get a re-spons and we’re not naming the com-pany. It wasn’t the only company that apparently didn’t want to talk.

What the Corporation Commission ruling did was eliminate the incentives for commercial solar installations in the service areas for Tucson Electric Power (TEP) and Arizona Public Service (APS) in Phoenix.

Th e incentives had allowed commer-cial, industrial and nonprofi t groups

CONTINUED ON NEXT PAGE

Patri

ck M

cNam

ara

Tucson region’s populationis still below 1 million

Th e Tucson region continues to grow, but at a slow pace that still has yet to reach 1 million in population.

Figures released Th ursday (March 14) by the U.S. Census Bureau show the Tucson re-gion had 992,394 residents as of July 2012.

Th at represents a growth rate of 1.1 per-cent, or just 10,479, since July 2010 when the populations was 981,915.

Th e metropolitan Phoenix area grew 2.9 percent, or by 120,000. Elsewhere in the state, population growth was similar to the Tucson region.

Population totals for other metro areas in the state are:

• Flagstaff : 136,011 • Lake Havasu, Kingman: 203,334 • Phoenix, Mesa, Scottsdale: 4,329,534 • Prescott: 212,637 • Sierra Vista, Douglas: 132,088 • Yuma: 200,022Statisticians in October 2007 claimed the

Tucson region had topped 1 million popula-tion, a fi gure they based on growth rates pro-jected from the 2000 Census. But based on the offi cial 2010 Census, it was determined those projections had been over-estimating the region’s growth since about 2004.

University of Arizona economist Marshall Vest has for the last two years been projecting that the region will fi nally cross the magic 1 million mark some time early in 2014.

East-side hotel, offi cecomplex planned by HSL

A new east-side hotel and offi ce complex with a possible restaurant is in the planning stages on 17 acres of land adjacent to Dora-do Country Club Estates on Speedway, east of Wilmot Road.

Residents of the area have been informed the HSL Properties, owned by developer Humberto Lopez, of the plans which in-clude realignment of the fi rst, ninth and 10th holes of the par-62 golf course.

HSL’s proposal is for a four-story, 144-room hotel that would be branded as an Embassy Suites. Th e hope is that Hilton, parent company will give the green-light so that construction can begin before the end of the year.

Meanwhile, a committee of residents of Dorado Country Club Estates is continuing to meet with HSL to address concerns that may crop up.


NEWSSOLAR INSTALLERS CONTINUED FROM PAGE 3

to receive a tax credit of 10 percent, or up to $25,000, of the installed cost of a solar power system. Th e tax credits were capped at $1 million per year.

In making the decision, Corporation Commission leaders noted that in the case of TEP, the renewable-energy power gen-eration threshold for commercial systems had been met, making the incentives un-necessary.

Commissioners also argued in a guest opinion in the Arizona Daily Star that in-centives have aided the solar industry for several years and the time had come for it to stand on its own.

Industry representatives like Neary say solar has made impressive strides in the years since the incentives were enacted and that costs of solar-power systems and solar power have begun to fall as a result.

“Th e commercial programs have been very popular,” he said. “With the loss of the program it breaks the momentum.”

Th e incentives were implemented, in

part, to help power companies meet goals set in the state’s Renewable Energy Stan-dard of 2006. Th e intent of the standard was to have 15 percent of Arizona’s power come from renewable sources by 2025.

Under those rules, utilities are required to meet the 15-percent threshold incre-mentally by a larger percentage each year. In 2013, for example, utilities are required to reach 4 percent of power generation from renewable sources.

In addition, 30 percent of the renewable energy generated has to come from distrib-uted renewable resources, meaning com-mercial and residential installations.

Neary said the long-term eff ect of the Corporation Commission ruling would be a loss of human capital.

“We’ve built up a workforce,” he said. “Arizona will be losing those people who we’ve trained to install solar systems.”

As solar systems proliferated, the cost-per-watt of solar power has declined. By some estimates the per-watt costs have

fallen from nearly $3 to 75 cents. While the cost has fallen, traditional

coal- and gas-fueled power costs as little as 3 cents and 5 cents per watt, respectively.

As result, all utility customers are charged additional surcharges to help make up the cost diff erential. For TEP cus-tomers, those come in the form of “Green Energy Charges” on monthly bills.

Neary said solar power suff ers as result of government policies that create an un-level playing fi eld.

“Th ere’s billions of dollars that go to coal, oil and gas (in the form of tax breaks),” he said.

As for what the future has in store for the people who install commercial solar systems, Neary wasn’t optimistic.

“It’s going to be diffi cult for the com-mercial side to recover,” he said.

Contact reporter Patrick McNamara

at [email protected] or (520)

295-4259.

CBRE boosts capital markets division; hires Jim SellersBy Roger YohemInside Tucson Business

Jim Sellers, president of Heritage Advi-sory Corp. and a leading mortgage bank-er in the Tucson region, this week joined CBRE’s Capital Markets Debt & Equity Finance Group as senior vice president. Sellers teams up with CBRE fi rst vice president Tim Prouty to co-lead the capi-tal market group’s Tucson operations.

With four decades of industry exper-tise, Sellers is almost an icon among lo-cal and national mortgage professionals. As sole owner of Heritage Advisory, Sell-ers operated a full-service commercial mortgage banking company.

As part of his move, CBRE is acquiring part of Heritage Advisory’s loan servicing portfolio. Sellers brings to CBRE a network of capital sources that include life insurance companies, pension funds, foreign and do-mestic banks, and securitized lenders.

“Th e only real change is going under a new fl ag with great enthusiasm,” said Sellers. “Th is is a great opportunity to bring more capital into the community and CBRE has the tools to do that in a bigger way.”

Sellers will work out of the CBRE of-fi ce at 3719 N. Campbell Ave.

Ike Isaacson, managing director of CBRE’s Tucson offi ce, said Sellers’ experi-ence, market knowledge and deep con-tacts will “complement our team of profes-sionals. Jim is considered one of the most respected mortgage bankers in the busi-

ness and a leader in the Tucson community.”“I am excited to have Jim here. I’ve only

been recruiting him for 15 years,” added Prouty. “Our goal was to emerge from this economic cycle with a much stronger mar-ket share.”

Heritage Advisory specialized in loan origination, negotiation and the place-ment of debt. Sellers transaction expertise includes permanent loans, acquisitions fi -nancing, construction loans, joint ventures

and acquisitions.Brian Stoff ers, president of CBRE Debt &

Equity Finance, said hiring Sellers enables CBRE to off er additional capital sources and enhance its fi nancial solutions for investors.

Th eresa Witz, who has worked at Heri-tage Advisory since 1997, also joins CBRE as a senior analyst.

Contact reporter Roger Yohem at

[email protected] or (520) 295-4254.

Jim Sellers

What next for Marana, Pima on wastewater?

With Tuesday’s voter approval in Marana for a pair of ballot measures giving the town authorization to operate a wastewater sys-tem, Pima County and Marana offi cials now appear willing to leave past animosity be-hind.

Pima County Administrator Chuck Huckelberry said the county would help the town in its eff orts to operate the system and a treatment plant in north Marana, which it acquired from the county last year.

Marana was empowered to take the wastewater facility from the county’s re-gional system following a change in state law pushed by Republican lawmakers.

A deal struck prior to this week’s election would let the town purchase the facility from the county for $18.2 million. Marana also would have to lobby for repeal of the law that allowed it to take ownership of the treatment facility.

Th e county currently has a court chal-lenge to the constitutionality of the law.

Th e two governments have been disput-ing ownership of the facility, which serves a few thousand customers in north Marana, since 2007.

Brewer unveils AHCCCSplan; fi ghting can begin

In what could develop as one of the big-gest showdowns of this session of the Legis-lature, Gov. Jan Brewer on Monday (March 11) unveiled her promised proposal to ex-pand Medicaid to cover another 400,000 people.

“I’ve always been proud to be a member of a pro-life party,” Brewer said at a rally. “I refuse to stand by and let this many people needlessly suff er, especially when we have a solution.”

Th e Republican governor is facing divid-ed support among members of her own party in the state House and Senate and is counting on enough of them to join with Democrats to get a measure passed.

She is predicating her arguments on the idea that expanding the state’s Medicaid pro-gram, the Arizona Health Care Cost Contain-ment System (AHCCCS), will help the state’s health care providers who are being saddled with caring for uninsured patients.

Brewer said that without expansion of AHCCCS, 50,000 people would be dropped from Medicaid coverage when a federal waiver expires at the end of this year.

Th e Arizona Hospital and Healthcare As-sociation has come out in favor of the draft legislation, which proposes that hospitals kick in money to trigger federal matching funds of $7.9 billion over the next four years.

Th e plan would put more than $8 billion into Arizona’s economy over the next four years while preserving a safety net for hos-pitals facing millions of dollars in uncom-pensated care.


NEWS

Individuals, businesses honored as HR innovators

By Lauren ShoresInside Tucson Business

Nine individuals and fi ve businesses were honored Tuesday (March 12) with Innovation Awards for their dedication to engaging em-ployees.

Th e awards were part of the Society for Human Resource Management of Greater Tucson’s (SHRM–GT) 2013 Innovation in the Workplace Celebration at the Doubletree-Tucson Reid Park Hotel.

“We need innovative, better ways to de-velop company leadership, educational tools, technology incorporation and working with the community,” said Ann Berkman, presi-dent of SHRM–GT, who explained the pro-gram was structured to focus on people who work towards the future and impact the com-munity.”

Pamela Jett, an internationally recognized expert in communication skills, was the key-note speaker. In her humorous hour-long talk, “Communicate To Keep ’Em: Enhance Employee Engagement Th rough Remarkable Communication,” she said positivity, respect and future focus are the three keys to success-ful employee communication within a com-pany.

“Communication is the thread which runs through a pearl necklace. It is invisible, but without it everything would fall apart,” Jett emphasized, stating it twice in her presenta-tion.

Jett noted the No. 1 reason employees be-come disengaged at work — which tends to happen around the two-year mark — occurs because employees are dissatisfi ed with their

immediate supervisors. Most are dissatis-fi ed because their supervisors are moody, emotional roller coasters. Th is dissatisfac-tion can be prevented from the employer down, Jett says, by allowing self-happiness, rather than promoting a toxic, pessimistic work environment.

She also gave tips on how to make em-ployees feel respected rather than criticized, particularly by encouraging their good work and suggesting future improvement simul-taneously. However, word choice is crucial. For example, she suggests banning the word “should” from an employer’s vocabulary.

“Don’t ‘should’ all over people,” Jett joked. “Don’t say ‘You should do it this way.’ It implies that whoever is saying so really means ‘I am better than you.’ Use ‘It would be better if you did it this way’ instead.”

Individual Innovation Award winners this year were:

• Hannah Lozon, University of Arizona Residence Life, for promoting diversity and inclusion.

• Diane-Marie Landsinger, Pima Com-munity College, for helping to incorporate veterans into the community.

• Stephanie Pella, Town of Oro Valley, for increasing engagement through metrics and action plans.

• David Dowling, IBM, for engaging HR professionals through the SHRM study group.

• Hilda Slanina, Xeridium, for integrat-ing company values as core to the company lifecycle.

• Kim Murray and Brenda Schemel, both with Universal Avionics, for partnering with

the community in workforce readiness pro-grams.

• Sandra Abby, Tucson Airport Authority, for creating two new HR programs.

• Kate Goldman, the Off shore Group, for promoting diversity and reducing micro-aggression in the workplace.

Company winners were:• Tucson Airport Authority, for creating

an onboarding program to ensure future employee success.

• Lazydays RV, for partnering with vari-ous organizations in the community.

• SynCardia Systems, for creating intern-ships.

• Arizona’s Generation and Transmission Cooperatives, Benson, for helping develop a certifi cation course that teaches skills in technical math, blueprint reading and com-puter essentials that has become a pipeline for recruitment.

Th e honorees were chosen from 20 indi-viduals and 11 companies that were fi nal-ists. More than 50 people and companies were nominated for the awards.

“Th e nominations were so fabulous this year, and we were amazed by everybody,” said Berkman. “Th ese people think every-body’s doing what they’re doing and it’s no big deal, but it is a big deal. Th ey’re all doing signifi cant stuff .”

SHRM-GT provides resources for small businesses and human resources depart-ments in the Tucson region, including monthly workshops with highly regarded speakers, a study group program for HR pro-fessionals, and outreach to high school stu-dents, to prepare the future workforce.

Sam

anth

a Sa

is

Employee Communications expert Pamela Jett.

This Week’s Good News Silver award goes to ...

Th is is the time of year tourists relish Tuc-son and its weather — and we in turn should be relishing tourists for the money they bring into the economy. One local business that’s making a good impression is Rincon Country West RV Resort, 4555 S. Mission Road, which was honored with a second-place award for best RV camp in the U.S. from the readers of MotorHome Magazine.

Congratulations to owner George O’Leary and his teams at both Rincon Country Resorts.

The Tucson

INSIDERInsights and trends on developing andongoing Tucson regional business news.

Not so bright solar Tucsonans familiar with the solar industry

know all too well how foreign manufacturers are able to make solar panels cheaper than they can be made in this country. Th en came word Tues-day that China-based Suntech Power Holdings is closing its panel assembly plant in Goodyear, blaming tariff s the U.S. imposed last year and unfair subsidies and product dumping by other companies.

It took less than 24 hours to fi nd out that wasn’t the only issue facing Suntech. Th e com-pany has $541 billion in bond debt payments due and is having trouble securing more fi -nancing. It’s also looking at a possible govern-ment takeover in China.

Beyond those issues, the New York Times re-ported Suntech is facing inquiries into business dealings by the company’s founder and former chairman.

Th e Times also reported Suntech put its plant in Goodyear so it could claim it was assembling solar panels on U.S. soil and qualify under “Buy American” poilicies and procurement rules.

We’re adults Considering how politicians are acting about

the federal spending cuts called the sequester, it’s apropos that their actions are being compared to children’s stories. But is it Chicken Little’s the sky is falling? Or is it the Aesop’s Fable, “Th e Boy Who Cried Wolf”?

Despite the dire threats, it’s true that the im-mediate impact of the cuts hasn’t been felt by most Americans. On the other hand, it could be that people are numb to the “crises every month” that seems to be coming from Washington, D.C.

Th ere are real issues that will hurt people the longer the sequester drags on — and that will af-fect social programs as well as people employed in the defense industry. And that doesn’t event take into account the time, eff ort and cost that’s being wasted to prepare for it, if it’s not going to happen. So are is Insider Chicken Little or ignor-ing the boy who cried wolf?


PUBLIC NOTICESSelected public records of Southern Arizona bankruptcies and liens.

BANKRUPTCIESChapter 11 - Business reorganization William C. Oetting and Patricia A. Oetting, 5121 N. Amapola Drive. Principal: William C. Oetting and Patricia A. Oetting, joint debtors. Estimated assets: $50,000 or less. Estimated liabilities: More than $1 million to $10 million. Largest creditor(s): Schedule not fi led. Case No. 4:13-bk-02411 fi led Feb. 21. Law fi rm: Eric Slocum Sparks

Florence Hospital at Anthem LLC, 4545 N. Hunt Highway, Florence. Principal: Timothy A. Johns, manager. Estimated assets: More than $1 million to $10 million. Estimated liabilities: More than $10 million to $50 million. Largest creditor(s): Morrison Management Specialists, Atlanta, Ga., $67,809.67; Professional Hospital Supply, Pasadena, Calif., $64,116.27; and Blood Systems Inc., Phoenix, $51,955.00. Case No. 4:13-bk-03201 fi led March 6. Law fi rm: Allen Sala & Bayne, Phoenix

MV Apartments LLC, 4400 E. Busby Drive, Sierra Vista. Principal: Michael Rosberg. Estimated assets: $50,000 or less. Estimated liabilities: $50,000 or less. Largest creditor(s): Schedule not fi led. Case No. 4:13-bk-03240 fi led March 7. Law fi rm: Waterfall Economidis Caldwell Hanshaw & Villamana

Stinger Welding Inc., 4248 N. Highway 87, Coolidge. Principal: Stephanie Jordan, corporate secretary. Estimated assets: More than $1 million to $10 million. Estimated liabilities: More than $10 million to $50 million. Largest creditor(s): Schedule not fi led. Case No. 4:13-bk-03240 fi led March 8. Law fi rm: Ryan Raypp & Underwood, Phoenix

Ajax Concepts LLC, 7286 N. Oracle Road. Principal: Brian E. Metzger, manager. Estimated assets: More than $100,000 to $1 million. Estimated liabilities: More than $100,000 to $1 million. Largest creditor(s): Schedule not fi led. Case No. 4:13-bk-03371 fi led March 8. Law fi rm: Thompson Krone Gibson

FORECLOSURE NOTICES Manning House LLC 450 W. Paseo Redondo 85701 Tax parcel: 116-19-226C Original Principal: $1,890,000.00 Benefi ciary: City National Bank, Los Angeles Auction time and date: 11:30 a.m. May 29, 2013 Trustee: Joy A. Sullivan, Kutak Rock, 8601 N. Scottsdale Road, Suite 200, Scottsdale

LIENSFederal tax liens San Ignacio Yaqui Council LLC, 785 W. Sahuaro St. Amount owed: $5,898.02. ECS Construction Services LLLP LLC and Ernest C. Santamaria, 3114 E. District St. Amount owed: $15,883.42. Zainab 76 Union and Mohammad S. Rana, 6401 N. Oracle Road. Amount owed: $11,572.41. Supplemental Human Resources Inc., 1150 E. Pennsylvania St., Suite 605. Amount owed: $175,050.09. J.R. Tuttle Co., PO Box 41553, 85717. Amount owed: $2,094.00. A&K Transportation, 1137 N. Winstel Blvd. Amount owed: $14,450.50. El Coqui Puerta Rican Restaurant Inc., 6610 S. Empire Vista Drive. Amount owed: $12,872.52. Rhino Linings Southern Arizona LLC and Kevin Stnatka, 2440 N. Coyote Drive, Suite 130. Amount owed: $5,324.40. Las Cazuelitas De Tucson and AJF & Sons Inc., 1365 W. Grant Road. Amount owed: $18,682.91. Cimaco Floor Service Inc., 3812 E. 37th St., Suite 200. Amount owed: $10,903.03. Floors To Go Tucson LLC and Suzanna T. Harrison, PO Box 89655, 85752 (9150 N. Desert Ironwood Place). Amount owed: $12,422.45.

State liens (Liens of $1,000 or more fi led by the Arizona Department of Revenue or Arizona Department of Economic Security.)Garcia Metal Products Inc., 4201 S. Randolph Way. Amount owed: $8,542.43. One Call Cleaning LLC, 9661 E. Stonehaven Way. Amount owed: $1,227.09.

Is border secure enough? Reforms could hinge on answerBy Lourdes Medrano Th e Christian Science Monitor

Twenty-fi ve miles north of the U.S.-Mexico border, a giant white canopy stretches over the northbound lanes of Interstate 19, with green-shirted border patrol agents and drug-sniffi ng dogs buzzing around the checkpoint.

Farther south in Nogales green-and-white border patrol vehicles are as conspic-uous as yellow cabs in major cities and sta-dium lights trained on the border fence dwarf the rustic Sonoran homes below.

Ten years ago, the permanent checkpoint, the stadium lights, and the ubiquity of those green-and-white cars would have seemed jarring. But since 9/11, the southern border has changed.

President George W. Bush’s most famous surge might have been in Iraq, but along the U.S.-Mexico border, he also presided over a doubling of manpower and a shift in the bor-der patrol’s mission to make it a tool in the war on terror.

Now, as Washington considers immigra-tion reform, the border patrol and its mis-sion are again in the spotlight. A Republi-can-based opinion says reform, without increased border security, is a nonstarter. But Bush’s surge off ers lessons about what can realistically be accomplished — and what tops an unfi nished to-do list.

Statistical and anecdotal evidence show there has been progress in reining in illegal im-migration, most agree. But there have been un-intended consequences, such as the rise in hu-man traffi cking to avert the border buildup.

Moreover, stakeholders remain divided about whether the border needs even more attention, or whether the United States should shift its focus on immigration-en-forcement eff orts inward.

“While we have made enormous progress in improving border security, the job is not fi n-ished,” says Jessica Vaughan, director of policy studies at the Center for Immigration Studies, which advocates tighter border enforcement.

Th at sentiment is echoed by Republicans whose support could be crucial to immigra-tion reform. During the fi rst Senate hearing on the topic this year, GOP senators chal-lenged the assertion by Department of Homeland Security Secretary Janet Napoli-tano that “our borders have, in fact, never been stronger.”

Sen. John Cornyn, R-Texas, responded: “I do not believe the border is secure, and I still believe we have a long, long way to go.”

Going forward, a central question in the immigration-reform debate will be what more can — or should — be done.

While the massive rise in illegal immi-gration throughout the 1980s and ‘90s brought some increases in manpower and technology to the Southwest border, 9/11

NEWS

started a sea change.In 2003, the border patrol had 10,717

agents. In 2012, the number totaled 21,394, with 18,516 stationed along a Southwest border reinforced with state-of-the-art tech-nology that includes ground sensors, hand-held thermal-imaging equipment, surveil-lance cameras, and predator drones.

During that time, the border patrol bud-get increased from $1.4 billion to $3.5 bil-lion, according to agency data.

Th ose increases have been supplemented by other initiatives. In 2006, Bush signed the Secure Fence Act, which authorized 700 miles of fencing — as well as infrastructure such as vehicle barriers, roads, and checkpoints — along the 2,000-mile border with Mexico.

Th e same year, the Bush administration endorsed plans for a “virtual fence” of sur-veillance equipment to run almost the en-tire length of the border.

Th e Secure Fence Act aimed to achieve “operational control” over the entire border, defi ning the phrase as “the prevention of all unlawful entries into the United States, in-cluding entries by terrorists, other unlawful aliens, instruments of terrorism, narcotics, and other contraband.”

Th at, experts say, was an unrealistic expec-tation. Th ere will never be a secure border by that defi nition, says Donald Kerwin, executive director at the Center for Migration Studies, which defends migrants’ rights, who noted that the Berlin Wall failed by that measure.

“At that point they were shooting at un-authorized crossers. Even on a heavily forti-fi ed, militarized 37-mile wall, people were crossing,” Kerwin said. “To think that no-body will cross illegally over a 2,000-mile border is fanciful.”

In 2010, that realization — together with rising costs and technological challenges — led the Obama administration to kill the vir-tual fence.

Th at doesn’t mean the border surge was a failure, though.

Border patrol offi cials say a historic decline in total apprehensions nationwide — from a peak of 1.6 million in 2006 to 356,873 in 2012 — is a sign of success.

As further proof that the border is under

control, the agency touts its record of inter-cepting a massive amount of smuggled drugs, and off ers FBI statistics showing that crime is lower in border areas than in some parts of the U.S. interior.

“Th e high-speed chases, the rollovers, the chaos that comes with a border out of control, that is no longer the norm,” said Manuel Padilla, acting chief of the border patrol’s Tucson sector, at a recent meeting. “Th at is no longer there.”

Th e soft U.S. economy has been a signifi -cant contributor to the drop in illegal entries — fewer jobs attract fewer immigrants. But other experts agree that the security surge has played a role in bringing apprehensions down to levels last seen in the early 1970s.

Th e buildup also has changed how mi-grants cross the border. As the agency has made the trek north more diffi cult, more people have started crossing through re-mote regions of the desert and mountain-ous terrain.

In Arizona alone, more than 2,400 peo-ple have died since 2000, according to hu-man rights groups.

Th e district of U.S. Rep. Ron Barber, D-Ariz., is, in many ways, at the center of the im-migration debate. It is in the Tucson sector, which for years has been the most popular gateway for illegal immigration. In the rolling hills and high desert grasslands, where agents say rough terrain makes access diffi cult, vet-erinarian Gary Th rasher carries a gun when he travels to ranches near the border.

“Th e ranchers on the border have to put up with a huge amount of (illegal) traffi c,” says Th rasher, who wants more agents.

Barber sounds a similar note. In 2010, Congress approved $600 million for border security and sent 500 National Guard troops to Arizona, but too many border crossers and drugs are still getting through, he says. In his view, the border patrol needs to get better at using its resources eff ectively.

“We’ve got a long, long fence or wall across most of the border in my district, but it’s not patrolled,” Barber says. “Most of the time there’s nobody on it in terms of per-sonnel. So is it eff ective? Not really because people go over it and cut through it.”


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SALES JUDO

Professional selling can now be a college major or minor As you snap open and read this morn-

ing’s issue of Inside Tucson Business, a team of two seniors from the University of Arizona Eller College, Chase McLaughlin and Yeenkie Situ, and their coach, Jim McLean, a marketing and management lecturer, will be in the air en route to Atlanta to compete in the 15th National Collegiate Sales Competition (NCSC) held just an hour north of Hartsfi eld–Jackson International Airport in Kennesaw.

Roughly 120 seniors and 20 graduate students from 70 colleges and universities in the U.S., Canada and Europe will joust their way through four rounds of simulated consultative selling to determine the winners. Corporate sponsors representing 25 fi rms will provide judges and talent scouts whose task it will be to recruit outstanding new sales executives for their own companies.

A few of the companies there to recruit include ADP, AT&T, Bausch+Lomb, Cintas, Cisco, Cox Media, DHL, EMC2, FedEx, Johnson & Johnson, McAfee, NetSuite, Oracle, 3M, Reynolds & Reynolds, Sam-sung, Verizon and Xerox.

Most of the college students hired by recruiting fi rms can expect to receive extensive sales training from their new employers. Th ose who graduate (and most do) often earning six-fi gure incomes in as few as three years after starting with these fi rms.

Th e focus of this competition will be solely on business-to-business consultative selling — sorry Mary Kay and Amway — which is what all of the contestants have been studying at their colleges either in their business school’s marketing programs or in the growing numbers of Centers for Professional Selling.

Th e salient point here is that Consulta-tive Sales is rapidly becoming a recognized

profession, one which we as parents should be proud to have our college grads enter into.

Th e stated mission of the NCSC is also uplifting:

• To promote the sales profes-

sion as an honourable and viable career option for college graduates;

• To provide an occasion for highly talented and qualifi ed students to exhibit and enhance their selling skills on a national stage;

• To provide a venue for students, professors and sales executives to share sales philosophy techniques, education methods and networking opportunities.

Well over half of the contestants study at their universities’ Centers for Professional Selling, of which there are now 33. Just fi ve years ago there were only 12, and about four are being added to the ranks each year.

Member organizations include Indiana University, Baylor University, DePaul University, Ball State, Kansas State, Kennesaw State, Florida State, Weber State, Illinois State and Florida State.

While there are no members from the Ivy League — and may never be — this trend is a part of an evolving discussion about the philosophy and objectives of post secondary education, liberal arts versus fi elds with more immediate employment potential, like engineering, accounting, information technology and now consulta-tive sales.

A case in point is Katie Marvinney, who attended the University of Ohio at Athens.

Both of her parents are professionals. Her dad is an attorney and her mom, an accountant. She was majoring in commu-nications and minoring in business when her parents suggested she might land a better job upon graduation if she were able to add further value to herself for potential employers and to diff erentiate herself from the 1.8 million college seniors graduating that year.

Marvinney refl ected on this and thought, “I’m passionate about helping people, and relationship selling does just that.” Th is led her to enrol in the Ralph and Lucy Schey Sales Center at the university and to earn a Sales Certifi cate.

Doing so required her to complete 28 credit hours by taking courses such as Advanced Selling Techniques, Advanced Sales Eff ectiveness, Entrepreneurial Sales, Social Media in Sales, Achieving Customer Satisfaction and Service Excellence and Sales Management.

Th e best parts, she noted, were the 300-hour summer internship program and the sales learning events where outside speakers came to campus to share their real world sales experiences with students. Th e next best part was the sheer number and quality of employers who came to campus to recruit from the program’s 130 participants.

She was recruited to be a sales associate for EMC2, a publicly traded Fortune 500 data storage fi rm with 53,000 employees and revenues of $20 billion. She rapidly advanced to positions of Inside Sales Account Manager and then on to Univer-sity Relations Campus Manager of the Sales Associate Program, where, among other duties, she develops “a pipeline of ‘A’ candidates to ensure Inside Sales head-count requirements are being satisfi ed.”

“Sales isn’t easy,” she confi rms. “What keeps sales managers up at night is the concern that new recruits will say some-thing like ‘I didn’t know that this would be so tough’ and, after months of training have been invested in them, they quit.”

“But,” she added, “Sales Centers are actually gold mines for recruiters, because they have a pool of candidates who already know what they are getting into and who are far more likely to succeed and to stay.”

As a result, recruiting companies often provide Universities the fi nancial assis-tance they need to establish and to operate Sales Centers like hers.

An organization called the University Sales Center Alliance (USCA) plays a vital role in the expansion and development of Centers. Founded in 2002, the USCA has the mission of advancing the sales profes-sion through academic leadership, education, research and outreach. More importantly it provides the framework and guidance that universities need to start their own Sales Centers and to and to stay on track.

Most Sales Centers grow out of the marketing departments of their business colleges and become associate members of the USCA. Th e requirements for this are that the college formally establish a Sales Center, suffi cient funds (donations) be earmarked for its operation and a formal foundation account be established for it. Over time as additional mile posts are reached, Full membership is awarded.

Contact Sam Williams, president of the business-to-business sales consultancy fi rm New View Group, at [email protected] or (520) 390-0568. Sales Judo appears monthly.

SAM WILLIAMS

SALES

Log on TODAY! www.InsideTucsonBusiness.com


Th e Friday Night Live music series is back at Main Gate Square. Th e series features live, local entertainment starting at 7 p.m. Fridays in Geronimo Plaza Square, 820 E. University Blvd. Tonight (March 15) acoustic guitar band Reno Del Mar is on stage with its dynamic renditions of latin, jazz, adult contemporary, fl amenco, bebop and blues.

Coming up in future weeks singer-songwriter Amber Norgaard performs March 29, and then two bands the play R&B, blues and funk, Shaky Bones on April 12 and Railbirdz on April 26.

Th e free concert series is a collaboration of the Southern Arizona Arts and Cultural Alliance and the more than 20 retailers and 30 restaurants that make up Main Gate Square on University Boulevard west of the University of Arizona campus. Free parking with validation is available from 5 p.m. to midnight weekdays and on weekends in the UA’s Tyndall Garage, at Euclid Avenue and Fourth Street.

More musicTh e Tucson Symphony this week-

end hosts guest pianist Markus Groh performing Béla Bartók‘s Piano con-certo No. 3 in a program that also includes Ludwig van Beethoven’s Symphony No. 6 in F major, “Pastorale,” and Gioac-chino Rossini’s overture to “Th e Th ieving Magpie.” Th e concerts also feature guest conductor Danail Rachev, conductor of the Eugene Symphony in Oregon.

Performances are at 8 tonight and 2 p.m. Sunday in the Music Hall of the Tucson Convention Center complex, 260 S. Church Ave. Individual show

tickets are priced from $26 to $79. Buy them through the Tucson Symphony’s website www.tucsonsymphony.org/ .

ArtTh e annual Fresh Paint

fundraiser for the University of Arizona Museum of Art, 1031 N. Olive Road at the southeast corner of East Speedway and Park Avenue on the UA campus, takes place today and Satur-day featuring new, or “fresh,” artwork that has been donated by more than 160 artists. Th e works are being sold to benefi t the museum, which is one of Tucson’s best-kept secrets and

a repository for one of the fi nest per-manent collections in the Southwest.

A preview of the works will be held from 9 a.m. to 5 p.m. today and then the Art Auc-tion and Soiree takes place from 6 to 9 p.m. Saturday with live music by the Gabriel Ayala Trio. Tickets are are $75 each. To get them, contact Christine Aguilar at [email protected] or call (520) 621-5676.

Meanwhile, the eighth annual Encaustic Invitational exhibition is on display at the Conrad Wilde Gallery. Th e show features paintings by 18 artists in the encaustic medium, which combines wax, paint and lots of patience to create rich, layered works. Th e Conrad Wilde Gallery, 439 N. Sixth Ave. at Sixth Street. is open from 11 a.m. to 5 p.m. Tuesdays through Saturdays.

Contact Herb Stratford at [email protected]. Stratford teaches Arts Management at the University of Arizona. His column appears weekly in Inside Tucson Business.

ARTS & CULTURE

Friday Night Live music atMain Gate Square is back

OUT OF THE OFFICEON THE MENU

Authenticity is a word used by chefs to promote their preservation of culinary traditions of a certain region or culture. We’ve all been to restaurants that boast of authen-ticity of everything from salsas to sushi, and I may very well be the fi rst foodie to have personally tasted virtually every authentic margarita under the Tucson sun.

While the pledge of authen-ticity may be used merely as a marketing tool by some, others have built their entire business-es around it, and in two Tucson restaurants what tells the story best is what their kitchens are built around — their ovens.

When Aric Mussman and Josh Mussman opened their fi rst Vero Amore restaurant they claimed to be the fi rst authentic Neopolitan pizzeria in Arizona.

Th e brothers Mussman tell me their restaurants — now two locations, at 2990 N. Swan Road in Plaza Palomino and 12130 N. Dove Mountain Blvd., Marana — have earned the coveted certifi cation from the Associazione Verace Pizza Napoletana (VPN), an organization with authority from the Italian government to confer the designation on pizzerias which “meet strict requirements that respect the tradition of the art of Neapolitan pizza making.”

While the criteria address everything from ingredients to the cooking process itself, it’s the Vero Amore oven that stands at the center of the authenticity claim.

Th e oven was sourced from volcanic stone from Mount Vesuvius and manufactured near Naples. Th e volcanic stone allows the oven to withstand the high heat VPN certifi cation requires, which routinely approaches 1,000 degrees. “To earn certifi ca-tion, you have to be able to cook a pizza in less than three minutes, and our usual pizza

time is about 90 seconds,” he says.While an authentic Neapolitan oven

focuses on heat, the Peruvian oven lays claim to health.

Fatima Campos of Inca’s Peruvian Cuisine, 6878 E. Sunrise Drive in Ventana Village, says her restaurant’s authenticity is manifest in everything from the artwork on the wall, to the live music, to the specifi c pisco she uses for her pisco sours, the national cocktail of Peru. But it’s her oven, imported directly from Lima, that she says brings out the authentic fl avors of Peru. Th e kitchen is anchored by what Campos calls “an ecological

oven” that reportedly delivers as much health as it does fl avor.

An example of this claim is Inca’s pollo a la brasa, a traditional roasted chicken seasoned with Peruvian herbs and spices. Because “vegetable charcoal” is used in this special oven, Campos says neither oil nor butter is necessary to lube up the chicks prior to cooking to get the sought-after sheen. “Th e glaze on the chicken when it’s done cooking is really an outcome of a natural process, not from using oils or fats,” she says.

Two very diff erent affi rmations of authenticity originating from two very diff erent ovens. Get it while it’s hot.

Contact Matt Russell, whose day job is

CEO of Russell Public Communications, at

[email protected]. Russell is also

the host of “On the Menu Live” that airs 4-5

p.m. Saturdays on KNST 790-AM and does

the Weekend Watch segment of the “Buck-

master Show” from noon-1 p.m. Fridays on

KVOI 1030-AM.

Food authenticity heats up in Tucson restaurant ovens

MATT RUSSELL HERB STRATFORD


MEDIA

KGUN news director Carr to take a break from TV news By David Hatfi eldInside Tucson Business

Forrest Carr has decided to “take a break” from the rigors of being a TV station news director, staff ers in the newsroom at KGUN 9 were told this week.

By all accounts, Carr’s decision was entirely his. In fact, Carr said Journal Broadcast Group management had been

extremely supportive of not only this decision, but during his entire time at the station. He said that included Jim Arnold, who took over in December as vice presi-dent and general manager for Journal’s Tucson operations, made up of TV stations KGUN, an ABC affiliate, and KWBA 58, a CW affiliate, and radio stations Mix-FM KMXZ 94.9-FM, the Truth KQTH 104.1-FM, the Groove KTGV 106.3-FM and ESPN Radio the Fan KFFN 1490-AM/104.9-FM.

“You can love television news but it’s never going to love you back,” Carr said, noting that being a news director is a 24/7 job.

He said his immediate goals are to “take a long road trip and finish two novels” he has started.

As for future work, Carr said he doesn’t know what that might be but he would like to give up the “vagabond lifestyle” that’s common with a career in TV and stay in Tucson.

This was Carr’s second tour of duty as KGUN’s news director. He had been news director at the station previously from 1997 to 2001 and then returned in September 2009. In the intervening years, Carr was a news director at stations in Tampa and Fort Myers, Fla. and in Albuquerque. Before coming to Tucson the fi rst time, he worked in news departments at stations in San Antonio, Texas, and Memphis, Tenn., where he graduated from the University of Memphis in 1980.

In Tucson, Carr has been a champion of KGUN’s “On Your Side” brand and the news department’s Viewer Bill of Rights, which lays out standards and responsibili-ties viewers can expect from KGUN and to

hold the station accountable for them.While the brand is strong, competitiveness

among Tucson stations has stymied KGUN’s eff orts to move beyond being a competitive No. 2 from time to time in the local Nielsen TV ratings. In addition to newscasts on KGUN, the news department produces a 9 p.m. weekday newscast for KWBA and provides news and weather reports for the company’s Tucson radio stations.

A decision has not been made as to when will be Carr’s last day on the job.

Randy Garsee diesFormer KOLD News 13 anchorman

Randy Garsee died in his sleep last weekend. He was 50. Garsee was living in Virginia near where he was a communica-tions and public aff airs advisor for the Center for Naval Analyses and Institute for Public Research, based in Washington, D.C., since April 2010.

Garsee, who had started at KOLD in March 1997, was paired with Kris Pickel as the top-rated station’s main news anchors on the weekday 5 p.m., 6 p.m. and 10 p.m. newscasts until he said he was fi red in October 2006 after sending out an email in which he was critical of news director Michelle Germano.

Pickel, who had left KOLD three months earlier for a station in California, is now a news anchor in Cleveland. Germano is still the news director at KOLD.

After leaving Tucson, Garsee went to work for a TV station in Ada, Okla., near the Texas state line where he worked until January 2009. After that, he went to work as a civilian public aff airs specialist and journalist working for the U.S. military in Iraq before going to Washington, D.C. Garsee’s ex-wife, Amy Blankenship, and their two daughters still live in the Tucson area.

Contact David Hatfi eld at

dhatfi [email protected] or (520) 295-4237.

Inside Tucson Media appears weekly.

Randy Garsee

Forrest Carr

GET ON THE LISTNext up: Banks andCredit unions

Research is underway gathering data for Inside Tucson Business’ 2014 Book of Lists.

Upcoming lists are: • March 22: Investment capital and lend-

ing, Venture capitalists• March 29: 501(c)3 organizations, Unit-

ed Way allocations, Charitable trusts • April 5: Banks, Credit unions• April 12: Residential real estate fi rms,

Real estate brokers, Appraisers• April 19: Architectural fi rms, Interior

design fi rms, Engineering fi rmsIf your business has been on a previous

list in one of these categories, look for an email from Jeanne Bennett, List researcher for Inside Tucson Business, with details on how to update your profi le. If you would like to add your business to one of these lists, go to www.InsideTucsonBusiness.com and click the Book of Lists tab at the top of the page to create a profi le.

GOVERNMENTState House OKs bill onbusiness property tax

A bill that would lower the tax rate as-sessed on new construction, fi xtures and other property owned by businesses that use them for expansion to add jobs has been approved by the state House of Representa-tives.

As part of the bill (HB 2264), self-em-ployed people in Arizona would bet a 2 per-cent tax deduction on their fi rst $113,700 of annual earnings, which will cost the state an estimated $58 million a year in revenue.

Th e bill’s sponsor Rep. Tom Forese, R-Chandler, said the self-employment tax de-duction is intended to off set the federal 2 percent increase in withholding for Social Security that took eff ect Jan. 1.

Th e bill is now in the state Senate.

MILITARYSequestration won’t cutorders for F-35 fi ghterAs questions over the federal budget cuts called sequestration continue, one item that will mostly evade them is the $400 billion F-35 fi ghter jet program, according to the Washington Post.

Although the Joint Strike Fighter, de-signed and built by Lockheed Martin Corp., is years behind schedule and 70 percent over its initial price tag, the Pentagon’s over-all purchase of 2,443 jets remains un-changed.

Th e work of the F-35 is spread across 45 states, which has generated broad biparti-san support on Capitol Hill.

PROFESSIONAL SERVICESBBB sees 95% increase in tax preparer inquiries

Since the start of the year, the Better Business Bureau of Southern Arizona has received more than 500 inquiries from con-sumers into tax preparation services, which represents a 95-percent increase over the same period last year.

During tax season BBB advises taxpayers to take the proper steps to avoid making mistakes when selecting tax preparation help to avoid costly mistakes on their re-turns. It notes the IRS holds fi lers, not tax preparers, responsible for any mistakes on tax forms.

BBB tips for selecting a tax preparer:• Ask around. Get referrals from friends

and family on who they use, and check the BBB Reliability Report on tax preparation services free-of-charge at www.tucson.bbb.org.

• Look for credentials. Tax preparers should either be a certifi ed public accoun-tant, a tax attorney or an enrolled agent. All three can represent taxpayers before the IRS in all matters, including an audit. Also, fi nd out if the preparer is affi liated with a profes-sional organization that holds its members to a code of ethics.

• Don’t fall for the promise of a big re-fund. Be wary of any tax preparation service that promises larger refunds than the com-petition, and avoid any tax preparers who base their fee on a percentage of the amount of the refund.

CIVICSeven So. Ariz. groups get humanities grants

Th e Arizona Humanities Council has awarded $58,398 in grants to support proj-ects that engage the general public with the humanities through public programming.

Among the grant recipients were seven organizations in the Tucson region:

• $5,000 to the Arizona Historical Society for its National History Day in Arizona.

• $1,000 to the Culture of Peace Alliance for its 2013 Youth and Peace Conference: Making Peace Now Th rough Art, Education, Engagement.

• $5,000 to the University of Arizona’s Center for Middle Eastern Studies for its Balkans and the Middle East: A Workshop for Secondary/Post-Secondary Educators.

• $10,000 to Empire Ranch Foundation, Sonoita, for Cowboy Life at Empire Ranch.

• $2,953 to the UA’s Department of His-tory for Showdown on the Border: Civil Dis-course for Uncivil Times.

• $4,845 to the UA’s Arizona State Muse-um for its course Continuity and Change in Traditions.

• $6,100 to the Vail Preservation Society, Vail, for Steam and Steel Rails.

BRIEFS


BECAUSE WE NEEDEACH OTHER

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Strong Kids CampaignYMCA OF SOUTHERN ARIZONAWhen you give to the Y, you strengthen the community. As the nation’s leading nonprofit for youth development, healthy living and social responsibility, the Y uses your gift to make a meaningful lifelong impact. The Y gives everyone an opportunity to learn, grow and thrive.

tucsonYMCA.org

By Patrick McNamaraInside Tucson Business

Even in the arid deserts of Southern Ari-zona, water is the source of life.

One Tucson startup has staked its future on water, more specifi cally, water quality.

“Water is one of the hardest media to keep bacteria from growing in,” said Dew-ard Manzer, chairman of Instant BioScan.

Th e west-side com-pany developed and builds an optical scan-ning machine that monitors water quality for medical, industrial, municipal and numer-ous other uses.

“What we have is a technology that de-tects the presence of bacteria in water in real time,” Manzer said.

Unlike traditional water-quality monitor-ing, which involves taking of samples and waiting days for defi nitive results, Manzer said the Instant BioScan devise continuously samples and tests water for microbial pres-ence. And the results come in an instant.

As Manzer explained, an optical viewer

Instant BioScan sees big potential in water-purity testing

NEXT GENERATION

scans water as samples fl ow through the de-vice from the source. Th e viewer essentially sees particulates in the water and diff erenti-ates between inert material and those with potential to multiply and contaminate.

Results of the tests are viewed on a series of scrolling graphs on a device-mounted monitor and from remote locations.

Th e Instant BioScan system can be set up for in-line continuous sampling or testing in-dividual samples in a laboratory setting.

Th e idea was born out of a previous ven-ture Manzer was in-volved in that used similar technology for testing air quality.

“What we found out when we showed up with an air product, people said, ‘don’t you have this for water?’” he said.

After some research, Manzer said he learned that more than $6 billion are spent each year on testing water for microbial contamination.

A potential major customer for the In-stant BioScan product would be municipal

water companies. To ensure for safety, water providers har-

vest and test water samples regularly. While municipal water supplies have traditionally been safe, Manzer said the ability to contin-ually test for water quality would increase safety of water supplies.

Food and beverage manufacturers also have been targeted as possible customers.

One of the biggest potential customers would be the pharmaceutical industry.

Th e Instant BioScan system would help to maintain the purity of water, a major in-gredient in many pharmaceutical products, especially for injectable drugs.

Other customers could be managers of recreational water sites, like swimming pools, rivers, ponds and manmade reservoirs.

“It’s been more than positive,” Manzer said of the reception the systems have re-ceived from some of the industries that have seen demonstrations.

Manzer said he hopes for the company to have somewhere between $50 million and $100 million worth of sales within fi ve years.

To get there, the company has sought an-gel and other investor funding.

“We’re still at the point where we have to have investors to keep the company going,” he said.

System costs start at about $40,000 with annual service contracts for $5,000.

Instant BioScan, 2102 N. Forbes Blvd., Suite 105, has 10 full-time employees and three consultants. Th e company was started in January 2012.

Next Generation is a monthly feature

of Inside Tucson Business profi ling Southern

Arizonans on the cutting edge of developing

their ideas. If you’ve got an idea or someone

you think should be profi led, contact reporter

Patrick McNamara at pmcnamara@azbiz.

com or (520) 295-4259.

sfsdl

otvst

BIZ FACTS

Instant BioScan2102 N. Forbes Blvd., Suite 105(520) 261-2464www.ibioscan.com

The Instant BioScan water monitoring system. Courtesy of Instant BioScan

Be up to date withwhat’s importantfor your business.

For subscription information,

please call 294-1200.

Subscribe


Answers to FAQs you need to know about Aff ordable Care law Inside Tucson Business

In spite of the wrangling over the se-quester, offi cials in Washington, D.C., say only a small fraction of the $1.6 trillion in planned spending to expand coverage for the uninsured over the next decade under the Aff ordable Care Act fell in the proposed

areas of cuts. On the other hand, there could be some

modifi cations to the law as part of a broader defi cit deal to reduce federal spending.

Regardless, what is clear at this point is that the law will have sweeping ramifi ca-tions for consumers, state offi cials, employ-ers and health care providers, including

MARCH 15, 2013 11InsideTucsonBusiness.com ,

HEALTH CARE

hospitals and doctors.While some of the key features don’t

kick in until next year, the law has already altered the health care industry and estab-lished a number of consumer benefi ts.

Here are some frequently asked ques-tions on parts of the law already up and

CONTINUED ON NEXT PAGE


running, what’s to come and ways that pro-visions could still be altered.

Q. I DON’T HAVE HEALTH INSURANCE. UNDER THE LAW, WILL I HAVE TO BUY IT AND WHAT HAPPENS IF I DON’T?

A. Today, you are not required to have health insurance. But beginning in 2014, most people will have to have it or pay a fi ne. For individuals, the penalty would start at $95 a year, or up to 1 percent of income, whichever is greater, and rise to $695, or 2.5 percent of income, by 2016.

For families the penalty would be $2,085 or 2.5 percent of household income, which-ever is greater. Th e requirement to have coverage can be waived for several reasons, including fi nancial hardship or religious be-liefs.

Millions of additional people will qualify for Medicaid or federal subsidies to buy in-surance under the law.

Q. I GET MY HEALTH COVERAGE AT WORK AND WANT TO KEEP MY CURRENT PLAN. WILL I BE ABLE TO DO THAT? HOW WILL MY PLAN BE AFFECTED BY THE HEALTH LAW?

A. If you get insurance through your job, it is likely to stay that way. But, just as before the law was passed, your employer is not obligated to keep the current plan and may change premiums, deductibles, co-pays and network coverage.

You may have seen some law-related changes already. For example, most plans now ban lifetime coverage limits and in-clude a guarantee that an adult child up to age 26 who can’t get health insurance at a job can stay on her parents’ health plan.

Q. WHAT OTHER PARTS OF THE LAW ARE NOW IN PLACE?

A. You are likely to be eligible for preven-tive services with no out-of-pocket costs, such as breast cancer screenings and cho-lesterol tests.

Health plans cannot cancel your cover-age once you get sick – a practice known as “rescission” — unless you committed fraud when you applied for coverage.

Children with pre-existing conditions cannot be denied coverage. Th is will apply to adults in 2014.

Insurers will have to provide rebates to consumers if they spend less than 80 to 85 percent of premium dollars on medical care.

Some existing plans, if they haven’t changed signifi cantly since passage of the law, do not have to abide by certain parts of the law. For example, these “grandfathered” plans can still charge benefi ciaries part of the cost of preventive services.

If you’re currently in one of these plans, and your employer makes signifi cant changes, such as raising your out-of-pocket costs, the plan would then have to abide by all aspects of the health law.

Q. I WANT HEALTH INSURANCE BUT I CAN’T AFFORD IT. WHAT WILL I DO?

A. Depending on your income, you might be eligible for Medicaid, the Arizona Health Care Cost Containment System (AHCCCS). Currently, non-elderly adults without mi-nor children don’t qualify for AHCCCS. But beginning in 2014, the federal government is off ering to pay the cost of an expansion in the programs and Gov. Jan Brewer has proposed expanding AHCCCS to take ad-vantage of that so anyone with an income at or lower than 133 percent of the federal pov-erty level, (which based on current guide-lines would be $14,856 for an individual or $30,656 for a family of four) will be eligible.

Q. WHAT IF I MAKE TOO MUCH MONEY FOR AHCCCS BUT STILL CAN’T AFFORD TO BUY INSURANCE?

A. You might be eligible for government subsidies to help pay for private insurance sold in the insurance marketplaces, called exchanges, slated to begin operation in 2014. Exchanges, which will be set up state-by-state — Arizona has opted to have the federal government set up its exchange — will sell insurance plans to individuals and small businesses.

Th ese premium subsidies will be avail-able for individuals and families with in-comes between 133 percent and 400 percent of the poverty level, or $14,856 to $44,680 for individuals and $30,656 to $92,200 for a fam-ily of four (based on current guidelines).

Q. WILL IT BE EASIER FOR ME TO GET COVERAGE EVEN IF I HAVE HEALTH PROBLEMS?

A. Insurers will be barred from rejecting applicants based on health status once the exchanges are operating in 2014.

Q. I OWN A SMALL BUSINESS. WILL I HAVE TO BUY HEALTH INSURANCE FOR MY WORKERS?

A. No employer is required to provide insurance. But starting in 2014, businesses with 50 or more employees that don’t pro-vide health care coverage and have at least one full-time worker who receives subsi-dized coverage in the health insurance ex-change will have to pay a fee of $2,000 per full-time employee. Th e fi rm’s fi rst 30 work-ers would be excluded from the fee.

However, fi rms with 50 or fewer people won’t face any penalties.

In addition, if you own a small business, the health law off ers a tax credit to help cover the cost. Employers with 25 or fewer full-time workers who earn an average year-ly salary of $50,000 or less today can get tax credits of up 35 percent of the cost of pre-miums. Th e credit increases to 50 percent in 2014.

Q. I’M OVER 65. HOW DOES THE LEGISLATION AFFECT SENIORS?

A. Th e law is narrowing a gap in the Medi-care Part D prescription drug plan known

as the “doughnut hole.” Th at’s when seniors who have paid a certain initial amount in prescription costs have to pay for all of their drug costs until they spend a total of $4,700 for the year. Th en the plan coverage begins again.

Th at coverage gap will be closed entirely by 2020. Seniors will still be responsible for 25 percent of their prescription drug costs. So far, 5.6 million seniors have saved $4.8 billion on prescription drugs, according to the U.S. Department of Health and Human Services (HHS).

Th e law also expanded Medicare’s cover-age of preventive services, such as screen-ings for colon, prostate and breast cancer, which are now free to benefi ciaries. Medi-care will also pay for an annual wellness visit to the doctor. HHS reports that during the fi rst nine months of 2012, more than 20.7 million Medicare benefi ciaries have re-ceived preventive services at no cost.

Th e health law reduced the federal gov-ernment’s payments to Medicare Advantage plans, run by private insurers as an alterna-tive to the traditional Medicare. Medicare Advantage costs more per benefi ciary than traditional Medicare. Critics of those pay-ment cuts say that could mean the private plans may not off er many extra benefi ts, such as free eyeglasses, hearing aids and gym memberships, that they now provide.

Q. WILL I HAVE TO PAY MORE FOR MY HEALTH CARE BECAUSE OF THE LAW?

A. No one knows for sure. Even sup-porters of the law acknowledge its steps to control health costs, such as incentives to coordinate care better, may take a while to show signifi cant savings. Opponents say the law’s additional coverage requirements will make health insurance more expensive for individuals and for the government.

Th at said, there are some new taxes and fees. For example, as of this year, individu-als with earnings above $200,000 and mar-ried couples making more than $250,000 are paying a Medicare payroll tax of 2.35 percent, up from 1.45 percent in 2012, on income over those thresholds. In addition, people with higher incomes now have a 3.8 percent tax on unearned income, such as dividends and interest.

Starting in 2018, the law also will impose a 40 percent excise tax on the portion of most employer-sponsored health coverage (excluding dental and vision) that exceeds $10,200 a year and $27,500 for families. Th e tax has been dubbed a “Cadillac” tax be-cause it hits the most generous plans.

Additionally, the law imposes taxes and fees on several major health industries. As of this year, medical device manufacturers and importers must pay a 2.3 percent tax on the sale of any taxable medical device to raise $29 billion over 10 years. An annual fee for health insurers is expected to raise more than $100 billion over 10 years, while a fee for brand name drugs will bring in another $34 billion.

Th ose fees are likely to be passed onto consumers in the form of higher premiums.

Q. HAS THE LAW HIT SOME BUMPS IN THE ROAD?

A. Yes. For example, the law created high-risk insurance pools to help people purchase health insurance that were established in 35 states, not including Arizona. Although en-rollment was far less than anticipated, it was suspended in February amid projections that the $5 billion could run out of money sooner than expected. HHS offi cials say they expect the state health exchanges to be able to better handle these cases.

Another provision of the law for long-term care is dead for now. Th e Community Living Assistance Services and Supports program (CLASS Act) was designed for peo-ple to buy federally guaranteed insurance that would have helped consumers eventu-ally cover some long-term-care costs. But last fall, federal offi cials eff ectively suspend-ed the program even before it was to begin, saying they could not fi nd a way to make it work fi nancially.

Q. ARE THERE MORE CHANGES AHEAD FOR THE LAW?

A. Some think there could be pressure in Congress to make changes to the law as a larger package to reduce the defi cit. Among those options is scaling back the subsidies that help low-income Americans buy health insurance coverage. Th e amount of the sub-sidies, and possibly the Medicaid expansion as well, could be reduced.

It’s also possible that some of the taxes on the health care industry, which help pay for the new benefi ts in the law, could be rolled back. For example, legislation to repeal the tax on medical device manufacturers was approved by the U.S. House of Representa-tives, though it was never considered by the Senate.

Meanwhile, the Independent Payment Advisory Board (IPAB), one of the most con-tentious provisions of the health law, is also under continued attack by lawmakers. IPAB is a 15-member panel charged with mak-ing recommendations to reduce Medicare spending if the amount the government spends grows beyond a target rate. If Con-gress chooses not to accept the recommen-dations, lawmakers must pass alternative cuts of the same size.

Some Republicans argue that the board amounts to health care rationing and some Democrats have said they think the panel would transfer power that belongs on Capi-tol Hill to the executive branch.

Th is report was compiled from a variety of sources including the U.S. Department of Health and Human Services, Kaiser Health News and National Conference of State Legislatures.

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Has Obamacare already slowed the rise of U.S. health care costs?By Mark TrumbullTh e Christian Science Monitor

In his State of the Union message in Feb-ruary, President Obama said, “Already, the Aff ordable Care Act is helping to slow the growth of health-care costs.”

He didn’t dwell on the point. Members of his own party applauded, and he moved on to talk about the need for further steps to tame health-care costs.

But it’s worth a pause, because the claim is controversial. Is it true?

First, it is true that the pace of medical cost increases has slowed. Th e real question is why things have changed and whether the trend will last.

Beyond that, it’s worth noting the slow-ing of medical infl ation doesn’t mean the problem has gone away, as Obama himself allowed during the speech.

Whereas private-employer insurance had often seen double-digit annual in-creases, that hasn’t happened since 2004, according to the Kaiser Family Foundation, which tracks the issue.

Health insurance premiums off ered as an employer benefi t, the foundation says, rose a cumulative 51 percent during the fi ve years before the recession. By contrast, the fi ve years from 2007 through 2012 saw a 30 percent cumulative increase — including a rise of just 4 percent last year.

Government data fi nd a similar pattern.Kathleen Sebelius, secretary of Health

and Human Services, wrote in a January blog post that in 2011 “the overall growth in health spending was at a historic low (of roughly 4 percent) for the third year in a row.” Th at tally wraps private-sector spend-ing in with government programs like Medi-care and Medicaid.

So … why?Sebelius, like Obama, asserted “the sta-

tistics show how the Aff ordable Care Act is already making a diff erence.”

A little problem: Th e Aff ordable Care Act, also known as Obamacare, wasn’t passed until 2010, and the key portions of the law don’t take eff ect until 2014. Some of the provisions that had taken eff ect by 2011 may have added to health-care spending by making coverage more generous.

For her part, Sebelius elaborated by saying the “net cost ratio” for individ-ual health polices “declined, thanks in part to the new 80/20 rule, which requires insurers to spend at least 80 percent of premiums on health care or provide rebates to their customers.”

She also said the law has a rate review provision that “prevents insurance com-panies in all states from raising rates with no accountability or transparency.” Th e rate

review policy didn’t start until 2011.Th e Wall Street Journal, in an editorial

on the subject, quoted government actuar-ies calling the law’s impact on health costs through 2011 “minimal.”

Drew Altman, president of the Kaiser Family Foundation, joins other health-care analysts in saying that a weak economy is one big reason for slower-growing costs.

“No one has yet been able to disentangle the causes of the slowdown persuasively,” he wrote in September. “Health care use and the economy have always been closely tied, and my sense is that the recession and slow recovery are responsible for much of the recent health spending and premium trends.”

Increases in cost-sharing are probably important, too, he said. “In tough times, when wages are fl at, people avoid using the health care system if they can. We also know that higher out-of-pocket costs deter utiliza-tion.”

Altman noted some other possible fac-tors:

• Th e rise of “wellness” programs.• Tighter forms of managed care by in-

surance providers.• Grass-roots eff orts to modify how pri-

vate-sector care is delivered and paid for. “Employers, insurers, and providers have

been organizing a range of eff orts to reduce costs and improve quality,” Altman wrote.

Some good news, in a way, may be how little change in health costs so far is attrib-utable to federal reforms, not how much. Th at may mean there’s ample room for new policies, such as payment reforms in Medi-care (to make fees based more on outcomes and less on how many procedures or tests are done) to achieve further gains, if Obama and Congress push down that road.

But health policy experts generally see the Aff ordable Care Act as, at best, a start down the road toward meaningful cost con-trols.

And as for the recent slowdown in health costs, Altman concluded there’s no guaran-tee that the recent trend will prove lasting.


By Sarah VarneyKaiser Health News

In a low-slung building in the vast des-ert expanse east of Phoenix, a small school of tropical fi sh peer out, improbably, from a circular tank into the waiting lounge of the Apache Junction Health Center. Th e hallways of the nursing home are still. Only half of the rooms are fi lled, and the men and women who live there seem surely in life’s fi nal season.

“Th ese are folks that have chronic cog-nitive and physical disabilities that are not going to improve,” said George Jacobson, administrator of the nursing home.

Th at this nursing home is sparsely fi lled with residents too disabled in mind or body to return home is a stunning achievement for Arizona’s public health insurance agen-cy. A decade ago, 60 percent of Arizonans covered by Medicare and Medicaid, and deemed sick, frail or disabled enough to live in a nursing home, resided in a skilled nurs-ing facility. Today, only 27 percent of them do, and the rest — nearly three out of four — live in assisted living facilities or at home with the help of nurses, attendants and case managers provided by government-paid health plans.

As Congress debates an ambitious and far-reaching eff ort by the Obama admin-istration to streamline medical care and rein in spending for the nation’s sickest and most expensive patients, Arizona — with its fi nger-wagging Republican governor and Tea Party enthusiasts — is occupying an un-usual place in the national landscape: as a model for how a generously funded, tightly regulated government program can aid vul-nerable, low-income patients.

Th e 9 million people nationwide who

Arizona’s AHCCCS could be Medicaid model for U.S.are eligible for both Medicare and Medicaid are by far the sickest and most expensive patients in the country. Known in policy circles as “dual eligibles,” their care costs federal and state governments some $300 billion a year. And yet, although they suf-fer from physical disabilities, dementia or pressing frailty, they are often caught in the bureaucratic eddies that have plagued the two public health insurance programs since their debut in 1965. Th ese patients receive medical and hospital services from Medi-care and nursing home and at-home care from Medicaid.

Largely left out of previous trends that swept patients into managed health care with a single insurance company oversee-ing their needs, “dual eligibles” are often subjected to duplicated tests and unnec-essary medical care, and must divine for themselves which services are paid by which program.

Th at’s not the case in Arizona where state health offi cials have aggressively applied managed care strictures for more than two decades. While Arizona was the last state to join Medicaid in 1982, it was an early adopt-er of paying private health plans to manage care for public benefi ciaries. Th at was in part because Arizona’s system of providing basic medical service to its most impover-ished residents was in disarray.

Arizona had long required county gov-ernments to provide basic health care to impoverished residents – the fi rst territorial legislature addressed the issue during the Civil War. But each county “had diff erent eligibility, diff erent packages and no Medic-aid money,” said Dr. Len Kirschner, a former state Medicaid director.

Still, in order to overcome Republican hostility to the federal insurance program

for the poor — and the federal dollars that would fl ow for the fi rst time into the state — lawmakers “didn’t want anything that sounded like Medicaid,” said Kirschner. “So they came up with this name.” Th e Arizona Health Care Cost Containment System (AHCCCS), is such a pervasive brand in the state, some benefi ciaries and even lawmakers don’t realize it is Medicaid. And since its beginning, a long line of the state’s conserva-tive lawmakers and governors have lent strong support to Ari-zona’s novel public-private model in which health plans are paid a set monthly fee and are expected to care for all of a patient’s needs.

Critics of managed care say the incen-tives for companies to keep the cash and withhold care are too great, the potential profi ts too tempting. Th ey point to the scan-dal-fi lled 1990s when some HMOs in the private insurance market nationally kept costs down by denying treatment. But today in Arizona, advocates for the elderly and disabled and the patients themselves say the case managers from their health plans are less like Grim Reapers and more like guardian angels.

Th e program gets praise from patients who are healthier, too.

Th is generosity toward the poor can seem at odds with Arizona’s cultivated reputation for self-reliance, until that is, the actuaries get involved: an Arizonan in a nursing home costs the state $5,400 a month for custodial care alone.

If a patient can live at home, the cost is only $1,400. Th is cold arithmetic has led to noble gains, advocates say, in keeping people out of nursing homes and a reason-able profi t for insurance companies, who say they typically make two to four-percent profi t in Arizona.

Th e state’s fervent belief that private companies are best suited to deliver public services doesn’t mean Arizona is the Wild West. Health plan executives, hospital and provider groups, and case managers said in interviews that state regulators are strict, vigilant and quick to rebuke health plans that don’t meet their standards.

“We have 75 staff whose job it is to over-see the health plans and make sure they are meeting all of our requirements,” said Tom Betlach, director of Arizona’s Medicaid agency, AHCCCS. “We sit down on a quar-terly basis. We bring the plans in. We look at their performance.”

Th ose requirements include quarterly reports on access to medical care, quality measures and proof that patients are getting needed services, like attendant care.

“If there is some speculation that the health plans can’t be trusted,” said James Stover, head of the University of Arizona Health Plan in Tucson, “I think in Arizona, we’ve demonstrated the health plans have been… models for improved health.”

Betlach testifi ed before a Senate com-mittee last December about the results of Arizona’s system: those Arizonans eligible for both Medicaid and Medicare who were enrolled under one managed care plan had a 31 percent lower rate of hospitalization than those in traditional fee-for-service. Th ey used the emergency department less frequently, and when they did end up in the hospital, they spent far fewer days and were readmitted less often.

Th ere’s widespread consensus within the state that Arizona’s model works because the state is what’s known as a “good payer:” physicians and health plans are paid much higher rates than nearly every other state. Even with a recent rate reduction, most Ari-zona physicians and hospitals accept AHC-CCS patients, a mark of access not found in many states.

Still, Stover cautions other states that might want to replicate the Arizona model that the system is fragile: managed care companies can provide rich services and wide access, he said, so long as state budget makers keep rates healthy.

For now though, health plans continue to see a business opportunity in fi ne-tuning Arizona’s model even more, by stamping out more wasteful and unnecessary medi-cal care.

Kaiser Health News is an editorially

independent program of the Henry J. Kaiser

Family Foundation, a nonprofi t, nonpartisan

health policy research and communication

organization. Its website is www.kaiserhealth-

news.org .

HEALTH CARE

MARCH 15, 2013 15

Cause for celebration in South Tucson home of Luz SepadaKaiser Health News

It’s a day for celebration at the South Tucson home of Luz Sepada. Her husband picks at his guitar, marking 60 days Sepada has stayed out of a hospital. Her case man-ager from the University of Arizona Health Plan, Martha Rodriguez, a trained nurse, sits across from her, under a painting of the Virgin Mary. Rodriguez was fi rst dispatched to Sepada’s hospital room to fi gure out why the 59-year old with diabetes and conges-tive heart failure who relied on a feeding tube kept ending up in the emergency de-partment – 10 hospitalizations in one year alone.

“When I fi rst met Mrs. Sepada, I knew she was very sick,” said Rodriguez. “I was looking to see: Who was at home? Who was helping her?”

Rodriquez went to her medical director with a list of services she believed would stabilize Sepada and spare her the trauma

of so many hospital trips.“Usually our medical directors are very

good at listening to us,” said Rodriguez. “We have to show them, ‘this is the pros and the cons.’”

Sepada said she was relieved to have Ro-driguez’s help: “I trust her because they’ve really been working close with me.” Build-ing that trust can take time, Rodriquez said: “A lot of our members are very suspicious of people coming to see them in their home or going to visit them in the hospital. Why are they here? Is it my insurance? Am I in trouble?”

Health plan nurses are quick to point out their role in patient care: to fi nd out what the patient needs to be safe and healthy in their home and prevent unnecessary calls to 9-1-1.

For her part, Sepada says the nurses give her comfort. “Th ey’re right there with me,” she said. “Th ey’re always with me.”

HEALTH CARE

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COMMENTARY

Governor’s plan to restore, expand AHCCCS will benefi t all of S. Ariz.Gov. Jan Brewer’s plan to restore and

expand Arizona Health Care Cost Con-tainment System (AHCCCS) coverage has been endorsed by Tucson Medical Center and other hospitals across the state. Th is is the right time to restore AHCCCS to childless adults and to expand it to other low-income, uninsured Arizonans.

Th e past two years have been diffi cult for hospitals like Tucson Medical Center as uncompensated care has skyrocketed; the number of low-income, uninsured Arizonans has soared; and more and more people are going without care or delaying care and ultimately seeking help in hospital emergency departments. And while the impact to hospitals is unmistakable, the toll it has taken on individuals in terms of their ability to access life-saving care is incalcu-lable. Time and again the caregivers on the frontline see people faced with impossible decisions about how to pay for health care they can’t aff ord but desperately need.

Governor Brewer’s plan — announced during her Jan. 14 State of the State address — restores AHCCCS coverage for approxi-mately 240,000 adults and expands eligibil-ity up to 133 percent of the federal pov-

erty level (FPL). Combined, these actions would extend AHC-CCS coverage to an additional 300,000 low-in-come Arizonans through 2016. Th e proposal would be paid for through an assessment on hospitals and would enable Arizona to receive a 10-to-1 matching rate on the provider assess-ment and bring an additional $7.9 bil-lion into Arizona’s economy and health care system over the next four years.

Grappling with a state economy in steep decline in 2011, lawmakers re-duced funding for AHCCCS by about $2.6 billion per year. Th is was accom-plished by freezing new enrollments for childless adults. As a result, more than 140,000 low-income, uninsured Arizo-nans are no longer covered by AHCCCS.

From July 2011 to July 2012, fol-lowing the AHCCCS freeze, hospitals’

uncompensated care costs doubled increasing by $269 million, according to the Arizona Hospital and Healthcare Association (AzHHA). Uncompensated care at Tucson Medical Center nearly doubled during the same time period.

We appreciate the diffi cult decisions lawmakers were forced to make during the Great Recession. With the Governor’s plan, we have an opportunity to reverse the tide, strengthen Arizona’s hospitals, invest in our economy and help more people live healthier more productive lives.

A strong health care system is vital as Southern Arizona strives to be competi-tive in attracting new businesses and top talent to live and work here. Medicaid expansion will allow hospitals through-out the state to survive and continue to provide care to those in need. More importantly, expansion of Medicaid will give more of our citizens access to critical health care services that will allow them to continue to be productive in their workplace and in our communities.

Judy Rich is president and CEO of Tucson Medical Center.

JUDY RICH

HEALTH CARE

Governor Brewer’s plan — announced during her Jan. 14 State of the State address — restores AHCCCS coverage for approximately 240,000 adults and expands eligibility up to 133 percent of the federal poverty level (FPL)


Hospital innovations, new facilities make for economic drivers

HEALTH CARE

By Christy KruegerInside Tucson Business

In an era of health care reform and ag-ing baby boomers, acute-care hospitals in the Tucson region are growing in all aspects — with new facilities, additional personnel and implementation of high-tech equip-ment. Th e common theme with each is newer, better and more innovative.

Tucson Medical CenterOn May 6, Tucson Medical Center, 5301

E. Grant Road, will open its four-story West Pavilion, part of a $109 million, multi-year construction plan. Th e building will house TMC’s orthopedic unit and will be the new home for the Tucson Orthopaedic Institute, which is one of the Southwest’s largest full-service orthopedic practices. A 632-space parking garage, loop road improvements and a founders’ park are also part of the hospital’s project.

Physician offi ces and clinics will be lo-cated on the fi rst fl oor, and the second and third fl oors will be dedicated to operating rooms. Th e fourth fl oor will contain 40 pri-vate patient rooms.

One of the goals of partnering TMC with the Tucson Orthopaedic Institute is to im-prove effi ciency. Th e hospital’s executives believe that bringing all aspects of orthope-dic care together will allow surgeons to save time and, therefore, costs. Th ey can perform surgeries, see patients in their offi ces and visit post-surgical patients all within one building.

Information technology is another area of health care effi ciency for which TMC has been recognized. Th e hospital was one of the fi rst in the U.S. to convert to electronic medical records and last year was named one of America’s “Most Wired” hospitals by the American Hospital Association. TMC is currently part of a pilot group of account-able care organizations (ACOs). Working under Centers for Medicare and Medicare Services, the idea behind ACOs is to im-proving patient care while lowering costs.

UA Medical Centers A couple of high level appoints at the

University of Arizona: Dr. G. Michael Lem-ole is the new chief of staff at the University of Arizona Medical Center University Cam-pus, 1501 N. Campbell Ave., and Dr. Michael R. Waldrum as president and chief execu-tive offi cer of University of Arizona Health Network (UAHN).

Lemole, who became widely known as the neurosurgeon for former U.S. Rep. Ga-brielle Giff ords after she was shot through the head on Jan. 8, 2011, specializes in skull-based diseases and surgeries. He came to the UA in 2009 and is a professor of surgery and chief of the Division of Neurosurgery at the UA Department of Surgery. In his new position, succeeding Dr. Paul Gordon as

chief of staff , Lemole oversees 800 physi-cians at the hospital’s University Campus.

Waldrum came to Tucson from Birming-ham, Ala., where he was CEO of University of Alabama Hospital and vice president of University of Alabama Birmingham Health System. While in Alabama, Waldrum was actively involved in teaching and clinical practice and hopes to continue doing so here. He’s a board-certifi ed specialist in in-ternal medicine, critical-care medicine and pulmonary health.

In his new position with UAHN, Waldrum leads two hospitals — the University Cam-pus and the South Campus, 2800 E. Ajo (formerly University Physicians Hospital) and University Campus — plus numerous clinics, health plans and physician practices that are members of the group.

“As a physician executive, Dr. Waldrum has a unique perspective and proven record of leading a highly complex academic med-ical system. His experience will be critical to the success of the health network’s mission of providing excellent medical education, patient care and cutting-edge research,” noted Dr. Steve Goldschmid, dean of UA College of Medicine-Tucson.

Carondelet Health NetworkCarondelet Health Network leaders have

been busy with new facilities and depart-ments, including the Breast Center and the Heart and Vascular Institute at St. Mary’s Hospital, 1601 W. St. Mary’s Road, and the planning of a health and wellness pavilion in Sahuarita, now in the pre-construction stages.

Th e Breast Center, which opened in 2012, takes a team approach to the diagnosis and treatment of breast cancer. “Our Breast Cen-ter is diff erent in that we’re not just a center for imaging or a single physician offi ce. We encompass the whole scope of breast dis-ease,” explained Dr. Gerlinde Tynan, medi-cal director of the program.

Patients not only benefi t from having all their physicians in one location, they’re also off ered the latest technology in diagnostic imaging software and in treatments.

Last year the Carondelet Heart and Vas-cular Institute relocated to the campus of St. Mary’s Hospital from the former Tucson Heart Hospital, 4888 N. Stone Ave., and is undergoing a $17 million renovation. Th e nationally recognized cardiovascular care center is also taking on an educational com-ponent, in which the institute’s surgeons teach other experienced physicians the lat-est procedures and treatments in the fi eld.

“In 1959, St. Mary’s was the fi rst hospital in Arizona to perform open-heart surgery and the fi rst in Southern Arizona to use a heart-lung machine. Today our surgeons are modern-day pioneers, off ering the most technologically advanced and minimally invasive options available,” said James K. Beckmann, president and CEO of Caronde-

let Health Network.Th e fi rst of two

construction phas-es for Carondelet’s Sahuarita health and wellness pa-vilion is set to be-gin within a few months and com-pletion is expected by summer of 2014. Th e new facility will be built on 21 acres along Desert Gem Lane, just south of Sahuarita Road. Carondelet lead-ership considers Sahuarita’s reputa-tion for innovative growth an ideal fi t for such a partner-ship.

When the fi rst phase opens, resi-dents will have ac-cess to a variety of outpatient medical services and see a doubling of the number of primary care physicians covering the area. It will also be a sat-ellite location for specialists from the Carondelet Heart and Vascular Institute and Carondelet Neurological Institute, which is housed on the campus of St. Joseph’s Hospital, 350 N. Wilmot Road.

Th e second phase of the Sahuarita proj-ect, starting construction in 2014, will likely include a lab, imaging equipment, urgent or emergency care, a pharmacy and technolo-gies for outpatient procedures.

Northwest Medical CenterNorthwest Medical Center, 6200 N. La

Cholla Blvd., broke ground in January on a $50 million operating room expansion that will include the addition of four minimally invasive operating room suites designed to accommodate the da Vinci Surgery Robot.

New hybrid suites for cardiac and vascular procedures will also be a part of the expan-sion. Hybrid rooms combine the function of an operating room with interventional imag-ing equipment, allowing patients to stay in one place and for physicians with diff erent specialties to work together.

“I’m excited Northwest is looking to the future with this expansion,” said Dr. Richard Chua, department of surgery chairman and chief of staff . “It really demonstrates North-west’s commitment to both its patients, phy-sicians and staff to stay on the cutting edge of health care in the Tucson community.”

Oro Valley HospitalLast summer medical staff at Oro Valley

Hospital, 1551 E. Tangerine Road, Oro Val-ley, performed the fi rst surgeon-controlled robotic-assisted partial knee resurfacing surgery in the Tucson region. Th e minimal-ly invasive treatment is recommended for patients who are experiencing decreased mobility but don’t necessarily require total knee replacement. Advantages include a shorter hospital stay, quicker recovery time and preserving more of the patient’s natural knee.

Dr. Kevin Bowers performed the proce-dure. “Th e robotic-assisted knee resurfac-ing allows us to treat patients with knee osteoarthritis at earlier stages with greater precision,” he said, because the system creates three-dimensional views of the pa-tient’s bone surface and correlates the im-age to a pre-programmed surgical plan.

Growth in the health care sector seems to be here for the long haul. Th is trend should be embraced not only for its obvious patient-care benefi ts, but also for its contri-butions to the entire community. Th e cre-ation of construction, medical and IT jobs, as well as the indirect fi nancial impacts the industry generates, are a great boost to our local economy.


Carondelet adds state-of-the-art care at St. Mary’s HospitalBy Lisa K. HarrisInside Tucson Business

Carondelet Heart and Vascular Institute is now located on the campus of Carondelet St. Mary’s Hospital and off ers nationally rec-ognized, award-winning care for the treat-ment of cardiac and vascular conditions.

Th e former Tucson Heart Hospital, 4888 N. Stone Ave., was moved by the Carondelet Health Network to a new state-of-the-art fa-cility at St. Mary’s, 1601 W. St. Mary’s Road, in November. In its new home, Carondelet Heart and Vascular Institute, off ers patients superior multi-disciplinary care under one roof.

Th e $17 million renovation to St. Mary’s Hospital to accommodate the Carondelet Heart and Vascular Institute added three key areas:

• A dedicated Cardiac Intensive Care Unit.

• A specialized cardiovascular Patient Care Unit on the hospital’s third fl oor.

• Dedicated cardiovascular surgery fa-cilities.

In total, Carondelet Heart and Vascular Institute has 92,000 square feet in the hos-pital.

Th e bulk of the year-long renovation has been completed and the fi rst cardiovascu-lar surgery occurred in the new facility Nov. 6. Additional construction will continue through July and includes a hybrid oper-ating room for minimally invasive cardio-vascular procedures, a noninvasive testing area, a catheterization lab for electrophysi-ology procedures, a dedicated waiting room and lobby for patients’ families and additional improvements to the third fl oor impatient wing. Th e contractor is Tucson-based Diversifi ed Design and Construction Inc.

Relocating to St. Mary’s, Carondelet Heart and Vascular Institute off ers patients several advantages, according to Dr. Amy Bieter, CEO at St. Mary’s Hospital. “Patients now have easy access from both Interstates 10 and 19 and via two helicopter pads for emergencies. Most importantly, being a part of a tertiary medical center provides its patients other care, especially those who may face health issues beyond cardiac and vascular ailments.”

About 120 staff members moved from the old facility to the new one, adding to the existing 1,000 associated medical staff at St. Mary’s.

Lives have already been bettered. “Recently, one of our patients suff ered a

stroke while being treated for a heart attack and developed paralysis on his left side,” Bi-eter said. “Within minutes St. Mary’s stroke team administered a clot-busting drug, and the patient was later able to walk out the door.”

Carondelet Heart and Vascular Institute

focuses on minimally-invasive surgery for both heart and vascular procedures. For example, it’s a leader in treating thoracic aneurysms, a life-threatening disease, with endovascular stent grafts.

“Th ere is nothing more satisfying than seeing a patient walking, eating a regular diet and being discharged home on the fi rst day after an one of these procedures,” said Dr. Scott Berman, chief of cardiovascular surgery at St. Mary’s. “Th is is in stark con-trast to traditional open surgery that would require days in the intensive care unit, a week in the hospital and months for full re-covery.”

With the Carondelet Heart and Vascular

Institute, St. Mary’s continues its tradition of performing pioneering cardiovascular surgery.

Th e hospital was the fi rst to perform open-heart surgery in Southern Arizona back in 1959, according to James Beck-mann, president and CEO of Carondelet Health Network.

Just last month, Carondelet Heart and Vascular Institute was the fi rst facility in Arizona to off er a new endovascular aneu-rysm repair system for patients who were excluded from typical treatment by their kidney artery anatomy.

“Th e new facility expands CHVI’s abil-ity to treat and care for patients,” Berman

HEALTH CARE

added. Renovation of portions of St. Mary’s

Hospital for the Heart and Vascular Insti-tute is a signifi cant investment by Caronde-let Health Network, both for the community and itself. Th e hospital, like many other area hospitals, has been aff ected by the regional and national economic downturn. With cutbacks in Medicaid coverage and Med-icaid reimbursements, hospitals, including St. Mary’s, have witnessed increased un-compensated care.

“Our mission includes providing the highest quality and safest care to everyone, with special attention to those who are poor and vulnerable,” said Lisa Contreras, direc-tor of external communications for Caron-delet Health Network. “When business and families in our region struggle fi nancially, we certainly feel the eff ects. Our mission, however, will not change and our commit-ment will not waver.”

Carondelet is part of Ascension Health, based in St. Louis, Mo. It is a non-profi t or-ganization and the largest Catholic health-care system in the U.S., providing care at more than 1,400 locations. In its 2011 annu-al report, Ascension Health listed income from operations at $424 million.

Th e level of investment in Southern Arizona, and Tucson in particular, contin-ues Carondelet’s history in the region. St. Mary’s is the longest operating hospital in Arizona. Built in 1880 with funds raised by J. B. Salpointe, the fi rst Bishop of Arizona, the hospital has been operating continuously since. With the expansion of the hospital to include the Carondelet Heart and Vascular Institute, St Mary’s will attract patients from throughout the southwest seeking supe-rior health care, according to Dr. Derek Von Haag, medical director of Cardiothoracic Surgery for the institute. “We’ve already had patients from Phoenix, northern Arizo-na, New Mexico, and as far away as El Paso, Texas,” Von Haag said.

Th e new, still under construction, hybrid operating room will further boost Caronde-let Heart and Vascular Institute’s reputa-tion. Th e hybrid operating room with ambi-ent technology empowers patients in their own care and decreases their anxiety. “In-creased patient satisfaction translates into patients recovering faster,” Von Haag said.

Carondelet Heart and Vascular Institute’s hybrid operating room, opening at the end of July, lets patients choose their own light-ing, music, and surrounding colors so that they create a customized atmosphere. “Our hybrid OR with ambient technology will be the fi rst in North America.”

Carondelet Heart and Vascular Insti-tute’s move to St. Mary’s campus “is a fan-tastic one,” Bieter said. “Both in terms of patient care as well for the greater Tucson economy by serving as a referral center for state of the art cardiovascular treatment.”

Patient care at Carondelet Heart & Vascular Instititute.

Tom

Spi

tz


PROFILE

Walgreens undergoes ‘Well Experience’ concept makeover at stores

By Christy KruegerInside Tucson Business

Th e next time you have a question on a medical condition, need a tetanus vaccine or want to sit and chat with a pharmacist about medications, you might want to stop by a re-cently transformed Walgreens store, where you can also pick up a fresh, healthy salad or a carton of milk.

So far three stores in the Tucson region are operating under the new format, called the Well Experience concept, but 16 more are on their way this year, according to Chris Elliott, district manager of Walgreens Tucson East. Two stores that have been reformatted, at 4685 E. Grant Road, on the northwest corner of Swan Road, and 1880 E. Irvington Road, at the southwest corner of Campbell Avenue. Th e third store is a new one that opened Feb. 28, at 4655 E. Sunrise Drive, at the northwest corner of Swan.

Th e focal point of the new format is mov-ing the pharmacy toward the front of the store and bringing the pharmacist out from behind the counter. Seated at a desk, the pharmacist is more approachable and better able to in-teract with customers, off ering advice and answering questions.

“Up front we do what we were trained to do — counsel in a one-on-one role,” said El-liott, who is a licensed pharmacist.

He believes that Walgreens’ Well Expe-rience format is not necessarily a diff erent direction for the company but an enhance-ment with additional services and products. “Our business model has always been conve-nience and our new model is to also be a des-tination for health and daily living choices,” he said.

Providing grocery items is another spoke in Walgreens’ wheel of health.

“It started in other states three or four years ago with food deserts. Th ere are a lot of areas in cities where customers don’t have access to basic groceries. Walgreens made a commitment to the federal government to put in healthy food products,” Elliott said.

Fresh foods available in the Well Experi-ence stores in Tucson include produce, pre-pared salads, sandwiches, soups and vegeta-ble plates. Select foods, as well as prescription refi lls, can be ordered online and picked up at the store. In some cases, staff will even carry items to your car.

Eight Tucson area Walgreens now have Take Care Clinics — acute-care settings with a nurse practitioner who can treat minor ill-nesses, perform blood pressure screenings and off er health exams and vaccines.

“Th ere’s a potential for a shortage of hos-pitals and doctors in the future, and I think having retail clinics fi lls a niche,” Elliott said.

Th e eight stores with clinics are at 2180 W.

Grant Road, 3910 E. 22nd St., 4685 E. Grant Road, 6767 E. Broadway, 10315 E. Broadway and 2150 W. Orange Grove Road, Tucson; 10405 La Canada Drive, Oro Valley; and 7800 N. Cortaro Road, Marana.

Some stores also have a health guide representative who, equipped with an iPad, answers product and service questions and helps customers navigate the store.

Female shoppers make up a large portion of Walgreens’ clientele, Elliott said, and many of the stores’ physical changes have been made with this in mind.

“We took out the front wall and put in windows and lowered shelving so aisles are brighter. Th e whole store is designed to fl ow better,” he said. Th e cosmetics department has been expanded and moved up front. Light

blue and white are the stores’ new colors.Walgreens began transitioning a portion

of its stores to the Well Experience concept three years ago in Illinois, where the com-pany began in 1901. It then continued with stores in Florida, Minnesota and, now, Arizo-na. Th e company is sinking substantial funds into the project, in both physical renovations and in personnel. Elliott noted that remodel-ing costs and payroll increases vary by store, but the Grant-Swan location added six em-ployees to handle the additional services be-ing off ered.

Many of Walgreens’ innovations, includ-ing the idea of moving pharmacists in front of the counter, came about through customer surveys and focus groups. “We will continue to do follow-up,” Elliott said. “Well Experi-ence stores from two years ago are diff erent than today because we’re adjusting as per what works.”

Increased competition has also directed the company to stay fresh with its strate-gies. But the greatest impetus for the recent changes, Elliott said, comes from the health care industry. “A lot of reform is happen-ing that now allows the pharmacist to take on expanded responsibilities. Our concept is making health care more convenient and aff ordable. We will benefi t from health care changes by making services more accessible to the public.”

An old layout for a Walgreens pharmacy, left, and the new one, right.

HEALTH CARE

BIZ FACTS

Walgreens Well Experience stores4685 E. Grant Road(520) 326-4341

1880 E. Irvington Road(520) 294-1975

4655 E. Sunrise Drive(520) 917-0556

Sam

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is


CORPORATE REAL ESTATE SERVICES3709 N. Campbell Ave, Suite 201 | Tucson, AZ 85719 | 520.881.8180 | FAX 520.881.5844Contact us at 1.800.831.4090 or at www.cotlow.com | Dean P. Cotlow [email protected]

Whatever you’ve told us drivesour every move.Therefore, what you want iswhat we pursue.What you need is what we get.We never forget that we workfor you.

Whatever you’ve told us drivesour every move.Therefore, what you want iswhat we pursue.What you need is what we get.We never forget that we workfor you.

TECHNICALLY SPEAKING

Directory assistance listing mistakes could hurt your business

Heavy traffi c makes a business woman think she’s going to be late to her appoint-ment at a popular downtown restaurant. She calls 411 Directory Assistance to get the restaurant’s phone number to leave a message, “On the way, running a bit late.”

Th e directory assistance operator says, “I show no listings under that name.” A supervi-sor confi rms the “no-listing” results and adds, “Maybe the restaurant went out of business.”

A business man heads off in his car to a meeting but needs to call an out-of-state law fi rm on the way. He dials directory assitance to get the number. When the operator connects him, a fax machine answers and screams in his ear.

What do these two businesses have in common?

Th e same city and state? No. Th e same type of business? No.Th e same phone companies or carriers? No. Th e restaurateur is perplexed because,

when he calls directory assistance from his restaurant, he’s given the correct phone number. But some customers have told him his restaurant is not listed with directory assistance.

Th e law fi rm gets its phone service through an information technology (IT) consulting fi rm. Th e IT company tells the law fi rm that getting it listed in directory assistance will cost an additional $1,500 and might not work anyway.

Th e IT company sold the fi rm its Voice over Internet Protocol (VoIP) phone system. VoIP gives the fi rm a wide range of handy features without requiring a big, up-front cash expense. Th e fi rm has heard a few comments about it not having a directory assistance listing.

An accurate directory assistance listing is still important these days. In 2008, one source states people used directory assistance 6 billion times in the U.S. As recently as 2010, more than one report makes a reference to “billions” of directory assistance calls.

In the two cases I described, the carrier, or “phone company,” dopped the ball on the businesses’ “phone book” listing. For the restaurant, Cox Communications (the cable company) made the mistake. For the law fi rm, the provider of the VoIP service failed to get the listing completed correctly.

Today, the range of carriers and re-sellers is so wide and deep it’s no surprise mistakes get made. We have dozens, perhaps hundreds, of carriers. Every city has an “incumbent” local exchange carrier (in Tucson its CenturyLink, the current company that was Qwest, US West and go back far enough, Mountain Bell). It has competitors, which in Tucson include TW Telecom and cable companies such as Cox and Comcast. Additionally, there are wireless carriers, including Verizon, AT&T, Sprint and T-Mobile that must all provide directory

assistance service. As simple as it might seem to get a listing right, mistakes get made. Some carriers have re-sellers, so the mistake may be made by the re-seller. Other carriers have people on staff who simply may not enter a

listing exactly correct. For a business to have its customers get the

desired directory assistance experience, carriers complete two steps correctly:

1. Th ey must manage their own directory listings and keep them complete and current.

2. Th ey must correctly share that database with all other carriers.

Th e repercussions of a bad database being shared extend past directory assistance issues. Websites such as MapQuest and other online directories such as DexPates, YellowBook and WhitePages.com amalgamate data from various sources. Th ese sites then provide phone numbers in their listings. In the law fi rm’s case, that meant providing the fax number as the voice number.

Th e solution to the problem begins with double-checking the listing by calling amalgamate from more than one carrier – for example, from both a land line and a mobile phone. Next, the organization can just ask its carrier to provide it with a copy of its directory assistance listing, from the database. A screen-shot will do. Th en make sure the listing is correct, especially the business name and city and state fi elds.

When data goes missing or is incorrect, bad things happen. A woman on the way to lunch may have to listen to a directory assistance supervisor suggest the popular restaurant she’s headed to has gone out of business. Or a man may think he’s being connected to a law fi rm only to have a fax machine answer the phone.

Take a wide variety of carriers, mix in a new technology (VoIP), throw in hundreds of re-sellers, require carriers to share data with each other in specifi c ways, and the system has just written a recipe that guarantees some bad outcomes. Happily, the restauranteur is so gifted his restaurant continues to fi ll up with happy customers, even if directory assistance does say he may have gone out of business.

Contact Dave Tedlock, president of the website development and marketing company NetOutcomes, at [email protected] or (520) 325-6900, ext. 157. His Technically Speaking column appears regularly the third week of each month in Inside Tucson Business.

DAVE TEDLOCK

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SPECIAL EVENTS

Tucson eBay Sellers ConferenceSaturday (March 23)Viscount Hotel 4855 E. BroadwayContact: Sally Milo [email protected] (520) 270-6456Cost: $45http://tesconference.comLearn to grow your business at the TESConference, where employees and experts will present classes on best practices and more.

SAHBA Spring Home and Patio ShowFriday through Sunday (April 5-7)10 am. To 7 p.m.Tucson Convention Center 260 S. Church Ave.Contact: Amy McReynolds [email protected] (520)795-3025Cost: $8www.sahbahomeshow.com

UA College of Public Health presents Dr. Dean Ornish, M.D.Thursday (April 4)5:30 to 6:30 p.m.University of Arizona DuVal Auditorium 1501 N. Campbell Avenue Contact: Donna Knight [email protected], (520) 626-6459publichealth.arizona.eduFreeDr. Dean Ornish is the author of six best-selling books and founder and president of the non-profi t Preventive Medicine Research Institute.

IONS Tucson Presents: A Workshop with Gregg BradenSaturday (April 6)9:30 a.m. to 4 p.m.Westward Look Resort 245 E. Ina Road Contact: Clara Kramer [email protected] (520) 399-8285www.ionstucson.orgIONS Tucson presents an all day workshop with Gregg Braden, “The Turning Point: Thriving in the World’s Perfect Storm.”

REGULAR MEETINGS

SCORESouthern Arizona free business counselingEvery Tuesday, Wednesday and Thursday 9 a.m. to 1 p.m.SCORE Main Offi ce330 N. Commerce Park LoopInfo: (520) 670-5008

SCORE Southern Arizona free business counselingEvery Wednesday 9 a.m. to noonOro Valley Library 1305 W. Naranja DriveCall Oro Valley Library at (520) 229-5300 to schedule

Roadrunner Civitan Club of Civitan InternationalSCORESouthern Arizona free business counselingEvery Monday10 a.m. to 1 p.m.Nanini Branch Library 7300 N. Shannon RoadInfo: (520) 791-4626

SCORESouthern Arizona free business counselingFirst and third Tuesday9 a.m. to 1 p.m.ASBA4811 E. Grant Road, Suite 261Call ASBA at (520) 327-0222 to schedule

SCORESouthern Arizona free business counselingEvery Tuesday9 a.m. to noonMarana Urgent Care Center (South Classroom) 8333 Silverbell RoadInfo: (520) 682-4314

SIDT Thursday BreakfastsSoroptimist International of Desert Tucson Every Thursday through Sept. 067:15 amThe Good Egg 4775 E. Grant RoadContact: Carol Cloutier [email protected] (520) 882-4873sideserttucson.com

Small Business Commission MeetingFourth Thursday 3 to 5 p.m.Mayor and Council chambers 255 W. Alameda First fl oorInfo: Ellen Hitchings, (520) 791-4343 ext. 245 or [email protected]

The S.M.A.R.T. GroupEvery Friday12 to 1:30 p.m.Nova Home Loans Multi-Media Conference Room6245 E Broadway Blvd., 5th Floor$25 Members $45 nonmembersContact: Dale Dillon Lips (520) 429-6000 or [email protected]

Society for Human Resource Management - Greater Tucson ChapterSecond Tuesday 11 a.m. to 1 p.m.DoubleTree, 445 S. Alvernon WayMembership:Garrett Kowalewski, (520) 647-9100 [email protected] by Thursday prior to meeting: www.shrmgt.org

Solutions ForumFourth MondayNoon to 4 p.m.Clements Insurance6245 E. Broadway, Suite 310Information: 1-800-716-9626 or (480) 200-5678RSVP requiredOpen only to business owners and divisional heads

Southern Arizona Chapter of Enrolled AgentsThird Tuesday 11:30 a.m.Knights of Columbus Hall601 S. Tucson BoulevardInfo: (520) 751-8986, www.aztaxpros.org/sacea

Southern Arizona Chapter of the Society for Design AdministrationFourth Tuesday Noon to 1:30 p.m.Viscount Suites Hotel

4855 E. BroadwayInformation: www.sacsda.com or [email protected] RSVP: [email protected] Cost: $20 members, $25 nonmembers

Southern Arizona Logistics Education Organization (SALEO)Third Wednesday Location and times varyInformation: al@saleo, (520) 977-3626 or www.saleo.orgCost: $25 members and 1st-timers; $30 nonmembers

Superior Business NetworkingFirst and third Tuesday 11:30 a.m. to 1 p.m. Info: (520) 631-7398, [email protected]

The Annuity Doctor — Curt ZachariasEvery Tuesday 3:30 p.m. Bookmans 6230 E. Speedway, Community RoomInformation: Curt Zacharias (520) 990-0009Cost: Free

Tucson Association of ExecutivesEvery Wednesday 6:30 to 8 a.m.Tucson Country Club 2950 Camino PrincipalRSVP: (520) 321-0879, taeoffi [email protected]

Tucson Christian Business Connections First and third Thursdays 7 a.m.3516 E. Grant RoadInformation: Robert E. Hinske, (520) 795-7195 or (520) 990-5374

Tucson Computer SocietyThird Monday 6 p.m. (pre-session) 7 p.m. (meeting)Pima County Medical Society Auditorium 5199 E. Farness DriveInformation: (520) 625-4419 or www.aztcs.orgCost: Free*No meeting in September

Tucson Downtown Sertoma Club First and third Wednesday 11:30 am to 1 p.m.Viscount Suites 4855 E. Broadway Information: www.tucsonsertoma.org RSVP: [email protected]

Tucson Goal GettersEvery other Sunday 1 p.m.Spill the Beans 2920 N. Swan RoadInformation: www.meetup.com/The-Tucson-Goal-Getters or (520) 370-6961Cost: $20

Tucson GLBT Chamber of CommerceMonthly breakfast meetingThird Thursday 7:30 to 9:30 a.m.Hotel Tucson City Center475 N. Granada Ave.RSVP: (520) 615-6436 or [email protected]: $15 members, $20 guests

CALENDAR

Submissions: Deadline for calendar submissions is 10 days prior to publication. Post your event online at www.insidetucsonbusiness.com/calendar. Email any questions to [email protected].

{YOUR EVENT HERE}

A complete calendar listing is atA complete calendar listing is at

InsideTucsonBusiness.com


PEOPLE IN ACTION

NEW HIRES

Bill Davies joined Silverado as a network technician. Davies has 11 years of computer services experience, having worked as a computer analyst and fi eld technician for Advantage Micro Corp and, most recently was with Intellitech. Davies is a graduate of Mohawk College in Hamilton, Ontario, with a diploma in network systems, and has multiple certifi cations in computer technology.

Teresa Nolan has joined Silverado

Technologies as a network technician. Nolan specializes in Windows, Exchange and IT Security implementation. Nolan worked most recently as a network operations center technician at Intellitech, providing server support, virus removal, and desktop support. Nolan is an adjunct instructor at ITT Technical Institute, and has a BS and MBA from ITT.

Zain Khalpey, MD, Ph.D., MRCS (UK), has joined the University of Arizona Department of surgery as associate professor in the Division of Cardiothoracic Surgery.

He has been appointed surgical director of the Heart Transplant and Mechanical Circulatory Support Program at The University of Arizona Medical Center – University Campus. Khalpey comes to the UA from Columbia University in New York City, where he also has a tenure track appointment in cardiothoracic surgery. His surgical interests include adult and pediatric heart transplant, mechanical circulatory support (ventricular-assist devices and total artifi cial heart), ex vivo lung perfusion, minimally invasive treatments for

valve disease, arrhythmia surgery and robotic mitral valve surgery. Khalpey has published more than 100 manuscripts, abstracts and book chapters in heart and lung transplantation in basic science and clinical outcome studies. He is an American Heart Association reviewer and Early Career

Reviewer for the National Institutes of Health (NIH).

ELECTIONS

The Southern Arizona Logistics Education Organization (SALEO) recently elected the following people to its board of directors: Miguel A.

Valencia, with Commodity Merchants Exchange, has been elected as president; Sally Crum, of Raytheon Missile Systems, has been elected as executive vice president of logistics and transportation; Hector Valenzuela, of Mode Transportation, has been elected senior vice president of business development; Evelyn Wright, of Pima County OneStop and Goodwill Industries of Tucson, has been elected secretary; and Nils Urman, of Pima County OneStop and Upsilon Consulting International, has been elected treasurer. SALEO

is a nonprofi t that offers a forum for logistics providers and users to share information about the latest issues affecting transportation and logistics.

AWARDS

Lewis and Roca has announced that Tucson attorney Matthew Sweger will be highlighted in the upcoming March/April issue of AZ Business Magazine within the publication’s 2013 Top Lawyer List. Sweger was named in the publication’s Top Lawyer List in the area of securities/sorporate

fi nance. As a partner in the fi rm’s corporate and securities, tax and health care groups, Sweger has a diverse corporate practice that includes mergers and acquisitions, joint ventures, corporate governance, fi nance, securities and healthcare-related matters.

Drew Blease, RFC, CFS, an independent fi nancial advisor at Blease Financial , was recognized as a top fi nancial advisor and named to the LPL Financial Patriot’s Club. This distinction is based on a ranking of all registered advisors supported by LPL Financial LLC.

NILS URMANZAIN KHALPEY HECTOR VALENZUELATERESA NOLAN SALLY CRUMBILL DAVIES

To announce a professional promotion, ap-pointment, election, new hire or other com-pany personnel actions. Attention: People; or email submissions to [email protected]. Include an attached photo at 300 dpi.

{YOUR NAME HERE}

Tucson Hispanic Chamber of CommerceMonthly Networking LuncheonThird Thursday 11:30 a.m.The Manning House 450 W. Paseo RedondoRSVP: www.tucsonhispanicchamber.org.Cost: $25 members, $30 nonmembers

Tucson Hispanic Chamber of CommerceMonthly Fiesta MixerFirst Thursday 5:30 p.m.Locations varyInformation: www.tucsonhispanicchamber.org.Cost: $10 members, $15 nonmembers

Tucson-Mexico Sister CitiesMonthly Board MeetingSecond Thursday5:30 p.m.Ward VI offi ces, 3202 E. 1st StreetInformation: (520)250-3901 or http://tucsonmexicosistercities.org

Tucson Presidio Rotary ClubEvery WednesdayNoon to 1 p.m.Hotel Tucson City Center 475 N. Granada Information: Jay McCall, (520) 909-9375Cost: $15, lunch provided

Tucson Presidio Rotary ClubREINFirst Friday of each month7to 8 a.m.

Breakfast & Wealth DiscussionsVillage Inn6251 N. Oracle RoadInformation: Jay McCall (520) 909-9375Tucson Presidio Rotary ClubMonday MixerFirst Monday of each month5 to 7 p.m.Conversation & ConnectionsRedline Sports Bar445 E. Wetmore RoadInformation: Jay McCall (520) 909-9375

Tucson Presidio Rotary ClubReal Estate Wealth PlanThird Thursday of each month6 to 7 p.m.Investing WorkshopKeller Williams Realty1745 E. River RoadInformation: Jay McCall (520) 909-9375

Tucson Presidio Rotary ClubNo Place Like HomeSecond Thursday of each month6 to 7 p.m.Home Ownership WorkshopKeller Williams Realty1745 E. River RoadInformation: Jay McCall (520) 909-9375

Tucson Utility Contractors AssociationSecond Wednesday 7 to 8 a.m. Locations varyRSVP: (520) 623-0444

Tuesday Morning Business ClubLeads and networking Every Tuesday 7 to 8 a.m.The Hungry Fox 4637 E. BroadwayRSVP: Mike Ebert (520) 320-9311www.tucson-networking.com

Varsity Clubs of AmericaMidtown MixerFirst Tuesday5 to 7:30 p.m.3855 E. SpeedwayRSVP: [email protected]: (520) 918-3131Cost: free, cash bar, menu available

Alliance of Construction TradesThird Wednesday5 to 7 p.m.Hotel Tucson City Center475 N. Granada Ave.Information: www.actaz.netRSVP: By noon on Monday prior to meeting, (520) 624-3002Cost: $20

American Society of Training and DevelopmentThird Friday (excluding August) 7:30 to 10:30 a.m.Breakfast and professional development meeting Viscount Suite Hotel 4855 E. BroadwayInformation: www.ASTD-Tucson.org

CALENDAR


FINANCEYOUR MONEY

Setting up college fund sendsa message to your child

Most parents look at the price of a college degree as an expense, like an electric bill or a cable TV bill, but what if you looked at it as an investment in your child’s future? According to the U.S. Census Bureau, in 2009 the average male college graduate, aged 25-34, earned 85 percent more than the average male who complet-ed only high school or had a General Education Development (GED) certifi cate. Among women the same age, college graduates earned 111 percent more than non-college graduates.

Over a lifetime, the additional earnings resulting from this “investment” in educa-tion could easily exceed $1 million. Th ere are many savings vehicles specifi cally designed to help fund a child’s future college tuition. Th ese include 529 plans, Coverdell Education Savings accounts, Roth IRAs, and custodial accounts under the Uniform Gifts to Minors Act (UGMA) and Uniform Transfers to Minors Act. Th ese plans vary in risk, liquidity, tax advantages and ability to qualify for student grants and/or loans so check with a fi nancial professional.

OK, a college degree may help a child earn more money in his or her lifetime, but you may be asking yourself, why you should pay for their college education? Th e answer could send a message that may be a lesson in itself.

Amy Dickinson, in her “Ask Amy” advice column for the Chicago Tribune, published a letter Sept. 27, 2012, from a mother who said her daughter was dissapointed that the family couldn’t aff ord to send her to a dream college. Instead, she was attending a state college at half the price. Even that was costing more than $26,000 a year. Th e mother was feeling sad because she had been saving since her daughter’s birth to avoid being crushed under a mountain of debt at college time.

Dickinson’s response: “Your daughter needs to learn a lesson tougher than any course she will take in college; that she is responsible for her own success and happiness, now and beyond.”

Wall Street Journal columnist Sue Shellenbarger raised questions in May 2006 when she wrote: “Do student loans teach responsibility or foster a lifelong over-reliance on debt? Are parents who pay their kid’s way through college modeling self-suffi ciency or martyrdom? Does requiring a student to get a job during the academic year instill work ethic or workaholism?”

Eileen Gallo, a psychotherapist, who along with her husband Jon Gallo, co-au-thored two books on childhood and money tell of an attendee at one of their work-shops. He noted that students graduating

from college or graduate school can owe thousands of dollars in loans and asked whether they would advise parents to pay for their children’s college education or tell them to get a student loan.

Eileen Gallo’s response: “In a vacuum, the issues surround-ing how parents choose to fi nance their children’s education would seem to be entirely fi nancial in nature. In reality, the choices are modeling values, and sending important messages to college-age children.”

As parents of three adult children, the Gallos have strong feelings in this area. “We originally believed that parents should pay 100 percent of their children’s undergradu-ate college expenses. Over time, we reached the conclusion the problem isn’t giving children money for college, it’s failing to involve them in the money process. College-age children who are involved in the economics of their educa-tion and pay part, even a small percentage of their expenses, are less likely to develop a sense of entitlement, and (more likely to) learn valuable life lessons that help them cope with adult life,” she says.

Many families have no alternative but to rely on student loans, part-time college jobs, and student and parental savings. But what about those who can aff ord to pay for college? Does paying the bill produce entitled children?

Eileen Gallo’s advice is to meet periodi-cally with your adult child to establish a clear understanding – preferably in writing – of the economic arrangement. A couple of issues that should be covered are:

• Will the parents require a minimum grade point average?

• What is the student’s fi nancial contribution to his/her education and how will the student earn money?

Th e Gallos strongly recommend the student work part-time, but no more than 15 hours per week. Alternatively, the student could work full-time during the summer.

It’s important for parents to be aware of the messages and values their decisions send to a college-age child. What message are you sending?

Contact Drew Blease, president and

founder of Blease Financial Services, 7358 N.

La Cholla Blvd., Suite 100, at drewblease@

bleasefi nancial.com or (520) 299-7172.

DREW BLEASE

TUCSON STOCK EXCHANGEStock market quotations of some publicly traded companies doing business in Southern Arizona

Company Name Symbol Mar. 13 Mar. 6 Change52-Week

Low52-Week

HighTucson companiesApplied Energetics Inc AERG.OB 0.03 0.03 -0.01 0.02 0.10CDEX Inc CEXIQ.OB 0.08 0.06 0.02 0.01 0.51Providence Service Corp PRSC 16.47 17.51 -1.04 9.56 19.67UniSource Energy Corp (Tucson Electric Power) UNS 46.79 47.67 -0.88 35.20 48.01

Southern Arizona presenceAlcoa Inc (Huck Fasteners) AA 8.54 8.57 -0.03 7.97 10.75AMR Corp (American Airlines) AAMRQ 3.93 2.92 1.01 0.36 4.16Augusta Resource Corp (Rosemont Mine) AZC 2.60 2.62 -0.02 1.48 3.13Bank Of America Corp BAC 12.06 11.92 0.14 6.72 12.44Bank of Montreal (M&I Bank) BMO 62.43 62.02 0.41 50.95 64.79BBVA Compass BBVA 9.91 9.66 0.25 5.30 10.57Berkshire Hathaway (Geico, Long Cos) BRK-B* 103.65 103.24 0.41 78.21 104.19Best Buy Co Inc BBY 20.96 18.75 2.21 11.20 27.95BOK Financial Corp (Bank of Arizona) BOKF 60.98 60.00 0.98 50.89 61.26Bombardier Inc* (Bombardier Aerospace) BBDB 4.24 4.06 0.18 2.97 4.93CB Richard Ellis Group CBG 25.36 24.48 0.88 14.97 25.38Citigroup Inc C 46.97 44.58 2.39 24.61 47.92Comcast Corp CMCSA 40.59 40.84 -0.25 28.09 42.00Community Health Sys (Northwest Med Cntrs) CYH 43.23 41.98 1.25 20.71 43.81Computer Sciences Corp CSC 49.39 49.35 0.04 22.19 50.14Convergys Corp CVG 16.99 16.71 0.28 12.38 17.05Costco Wholesale Corp COST 103.42 102.56 0.86 81.98 105.97CenturyLink (Qwest Communications) CTL 34.72 35.60 -0.88 32.05 43.43Cvs/Caremark (CVS pharmacy) CVS 52.90 52.22 0.68 43.08 52.93Delta Air Lines DAL 16.36 15.67 0.69 8.42 16.42Dillard Department Stores DDS 80.21 80.30 -0.09 60.76 89.98Dover Corp (Sargent Controls & Aerospace) DOV 73.70 73.28 0.42 50.27 73.99DR Horton Inc DHI 24.02 23.71 0.31 13.80 24.66Freeport-McMoRan (Phelps Dodge) FCX 33.08 32.84 0.24 30.54 43.65Granite Construction Inc GVA 31.21 30.80 0.41 21.38 37.74Home Depot Inc HD 70.76 70.48 0.28 46.37 71.45Honeywell Intl Inc HON 73.95 71.27 2.68 52.21 74.02IBM IBM 212.06 208.38 3.68 181.85 212.36Iron Mountain IRM 36.40 34.81 1.59 27.10 37.70Intuit Inc INTU 66.25 67.99 -1.74 53.38 68.41Journal Communications (KGUN 9, KMXZ) JRN 6.30 5.75 0.55 3.94 6.53JP Morgan Chase & Co JPM 50.16 50.03 0.13 30.83 50.86Kaman Corp (Electro-Optics Develpmnt Cntr) KAMN 35.15 34.99 0.16 27.96 38.62KB Home KBH 20.28 19.55 0.73 6.46 20.76Kohls Corp KSS 48.82 46.27 2.55 41.35 55.25Kroger Co (Fry's Food Stores) KR 31.31 29.36 1.95 20.98 31.41Lee Enterprises (Arizona Daily Star) LEE 1.29 1.21 0.08 1.07 1.81Lennar Corporation LEN 41.18 41.25 -0.07 23.48 43.22Lowe's Cos (Lowe's Home Improvement) LOW 39.40 38.83 0.57 24.76 39.98Loews Corp (Ventana Canyon Resort) L 43.97 43.12 0.85 38.14 44.25Macerich Co (Westcor, La Encantada) MAC 61.99 61.86 0.13 54.32 62.83Macy's Inc M 42.11 41.08 1.03 32.31 42.47Marriott Intl Inc MAR 40.18 39.38 0.80 33.93 41.84Meritage Homes Corp MTH 43.35 43.16 0.19 24.31 44.93Northern Trust Corp NTRS 54.85 54.05 0.80 41.11 55.11Northrop Grumman Corp NOC 67.18 64.96 2.22 56.59 71.25Penney, J.C. JCP 15.65 14.43 1.22 14.20 37.52Pulte Homes Inc (Pulte, Del Webb) PHM 19.87 20.08 -0.21 7.63 21.97Raytheon Co (Raytheon Missile Systems) RTN 57.18 55.36 1.82 49.03 59.34Roche Holdings AG (Ventana Medical Systems) RHHBY 55.90 57.70 -1.80 38.63 58.34Safeway Inc SWY 24.00 23.94 0.06 14.73 25.14Sanofi -Aventis SA SNY 49.07 48.29 0.78 33.03 49.70Sears Holdings (Sears, Kmart, Customer Care) SHLD 51.01 46.28 4.73 38.40 85.90SkyWest Inc SKYW 15.52 14.85 0.67 6.25 15.53Southwest Airlines Co LUV 12.45 12.05 0.40 7.76 12.53Southwest Gas Corp SWX 46.80 46.68 0.12 39.01 47.29Stantec Inc STN 42.07 41.42 0.65 25.77 42.55Target Corp TGT 67.43 66.12 1.31 54.68 67.56TeleTech Holdings Inc TTEC 20.33 19.58 0.75 14.04 20.42Texas Instruments Inc TXN 35.29 35.14 0.15 26.06 35.72Time Warner Inc (AOL) TWX 56.63 55.46 1.17 33.62 57.85Ual Corp (United Airlines) UAL 30.84 29.30 1.54 17.45 31.64Union Pacifi c Corp UNP 139.56 138.96 0.60 104.08 140.84Apollo Group Inc (University of Phoenix) APOL 16.92 16.61 0.31 16.80 43.80US Airways Group Inc LCC 15.91 14.57 1.34 6.78 16.20US Bancorp (US Bank) USB 34.22 33.74 0.48 28.26 35.46Wal-Mart Stores Inc (Wal-Mart, Sam's Club) WMT 73.65 73.38 0.27 57.18 77.60Walgreen Co WAG 42.78 39.96 2.82 28.53 42.91Wells Fargo & Co WFC 36.77 36.06 0.71 29.80 37.18Western Alliance Bancorp (Alliance Bank) WAL 13.91 13.80 0.11 8.00 14.20Zions Bancorp (National Bank of Arizona) ZION 25.58 25.09 0.49 17.45 25.70Data Source: Dow Jones Market Watch

*Quotes in U.S. dollars, except Bombardier is Canadian dollars.


closings. Next-best were 102 sales of homes in the $120,000 to $139,999 range. Seven units sold for $1 million or more.

As for listings, the most inventory was in the $200,000 to $399,999 price range where there were 1,390 units for sale. Th ere were 179 homes priced at $1 million or more on the market. Overall listings are down 5 per-cent from a year ago, falling from 4,560 in February 2012 to 4,325 currently.

Price per square footIn addition to stronger median and aver-

age sales prices, the vital metric of selling price per square foot also gained momen-tum. Over the past year, the biggest increase was in the red-hot Marana submarket where square-foot values jumped 34 percent.

Since February 2012, the sales price per square foot in Marana has surged to $119 from $89.

Oro Valley recorded the next-highest in-crease, 20 percent, going to $142 from $118.

Inside the Tucson city limits, the square-

INSIDE REAL ESTATE & CONSTRUCTION

Small gains in home prices adding up By Roger YohemInside Tucson Business

Over time, small gains can add up to some-thing signifi cant. An improvement here and there creates optimism for the future. For real estate agents and home sellers, an emerging trend signals better times are ahead.

In the Southern Arizona residential mar-ket during February, median and average sales prices continued to increase, albeit in-crementally. Th e signifi cance is that the sales levels have consistently held onto their small gains dating back to mid-2012.

For 10 consecutive months, median sell-ing prices have been at $140,000 or above. Average selling prices have stayed above $180,000 in seven of the last eight months.

Th e new data is from the Tucson Associ-ation of Realtors Multiple Listing Service (TAR MLS).

Th e median selling price in February was $149,000, the highest it has been since August 2010 when it was $150,750. Since May 2012 when the metric was at $140,000, median sales prices have been at or above that value.

Th e average selling price in February was $186,482, the highest average since Decem-ber 2010 when it was $186,399. With the ex-ception of October 2012, this category has been higher than $180,000 every month since July 2012.

From January to February, both mea-surements gained about $4,000.

“Th e real estate market is very active now. It looks like 2013 is defi nitely our breakthrough year,” said Sue Cartun, TAR MLS president.

Last month, 951 homes sold across the region. Th e best-selling units were in the $200,000 to $249,999 price range with 103

THE PULSE: TUCSON REAL ESTATE

3/4/2013 2/25/2013

Median Price $150,000 $150,000Active Listings 4,980 5,041New Listings 411 404Pending Sales 478 459Homes Closed 214 357Source: Long Realty Research Center

WEEKLY MORTGAGE RATES

Program Current Last WeekOne

Year Ago12 Month

High12 Month

Low

30 YEAR 3.63% 3.75%APR 3.50% 3.625%APR 4.95% 4.95% 3.38%

15 YEAR 3.00% 3.25%APR 3.00% 3.25% APR 4.22% 4.22% 2.75%

5/1 ARM 2.63% 2.875%APR 2.63% 2.875% APR 2.87% 2.87% 2.70%The above rates have a 1% origination fee and 0 discount . FNMA/FHLMC maximum conforming loan amount is $417,000 Conventional Jumbo loans are loans above $417,000Information provided by Randy Hotchkiss, National Certifi ed Mortgage Consultant (CMC) Hotchkiss Financial, Inc. P.O. Box 43712 Tucson, Arizona 85733 • 520-324-0000MB #0905432. Rates are subject to change without notice based upon market conditions.

3/12/2013

foot selling price rose 15.5 percent year-over-year, growing to $97 from $84. In Sahuarita, the increase was 8 percent, going to $80 from $74.

Coldwell Banker Residential Brokerage asserts the square-foot selling price is the best indicator of housing value trends. Th e company’s monthly analysis normalizes the mix of luxury and low-end properties sold, according to Malcolm MacEwen, president of the fi rm’s Arizona division.

As for closings in February, they oc-curred fastest inside the city limits where homes were on the market an average of 87 days. In other municipalities, the pace was 92 days on the market in Sahuarita, 103 days in Marana; and 109 days in Oro Valley.

Short sales tipsFannie Mae’s eff orts to process short

sales faster should help the region’s foreclo-sure-torn real estate market. To capitalize on the changes, the Southern Arizona Mort-gage Lenders Association (SAMLA) will present a forum March 28 titled, “Mock Tri-al on Short Sales.”

Attorney Dax Watson, a founding part-ner of the Phoenix-based fi rm Mack Druck-er & Watson, will lead the session. His ex-pertise is in commercial law with an emphasis in real estate.

Th e forum is off ered as a three-hour con-tinuing education credit. It is free to SAMLA and Tucson Association of Realtors mem-bers; prices vary for non-members.

It will be held from 1-4 p.m. at the Tucson Association of Realtors, 2445 N. Tucson Blvd. Registration and lunch starts at 12:30 p.m. To make reservations send an email to [email protected] or call (520) 609-4999.

Sales and leases• Purcell Properties purchased 4.4 acres

at 1551 E. Ajo Way in Interstate Business Park for $850,000 from Interstate Ajo Investors LLC, represented by Gary Emerson and Randy Emerson, GRE Partners LLC.

• University City Church leased 34,163 square feet at 604 N. Sixth Ave. from First Baptist Church of Tucson/Crosslife Min-istries. Th e transaction was handled by Paul Hooker and Rob Tomlinson, Picor Commercial Real Estate Services.

• Tres Amigos World Imports Holding Company leased 22,115 square feet at 7375 W. Bell Road, Peoria, from Arrowhead Palms LLC, represented by Donna Reece, Zell Commercial Real Estate, Phoenix. Th e tenant was represented by Rick Borane, Volk Company Commercial Real Estate.

• Strongpoint LLC leased 4,000 square feet at 616 N. Country Club Road from Sieg-mund Properties, represented by Tari Au-letta, Newmark Grubb Knight Frank. Th e tenant was represented by Bruce Suppes and John Ash, CBRE.

• Oro Valley Hospital leased 3,844 square feet at 10370 N. La Canada Drive, Oro Valley, from Americanada LLC, repre-sented by Jayme Fabe, CBRE.

• Rafael Furniture leased 3,025 square feet at 750 E. 46th St. from Rich Rodgers In-vestment Inc. Th e transaction was handled by Brandon Rodgers, Picor Commercial Real Estate Services.

• Health Information Network of Ari-zona leased 3,004 square feet at 5055 E. Broadway from Pacifi c International In-come Properties, represented by David Montijo, CBRE. Th e tenant was represented by Jeff Casper, CBRE.

• DLS Properties leased 2,750 square feet at 2018 E. 14th St. from Michael and Jeannie Williams. Th e transaction was han-dled by Brandon Rodgers, Picor.

• Lawless Creation LLC leased 2,080 square feet at 2044 E. 14th St. from Rich Rodgers Investment. Th e transaction was handled by Brandon Rodgers, Picor.

• Austin Electric Services leased 2,000 square feet at 2112 N. Dragoon St., Suites 1 and 2, from Rich Rodgers Investment. Th e transaction was handled by Brandon Rod-gers, Picor Commercial Real Estate Services.

• Academy of Math and Science South leased 1,941 square feet at 6810 E. Broad-way, Suites 201, 202 and 205, from Lackey Pat II. Rick Kleiner, Picor Commercial Real Estate Services, handled the transaction.

• Curves for Women leased 1,792 square feet at 2752 N. Campbell Ave. from Gee Prop-erties-3 LLC, represented by Greg Furrier, Picor Commercial Real Estate Services.

Email sales and leases and other real

estate news items to [email protected].

Inside Real Estate & Construction appears

weekly.

Residential median sales prices have held above $140,000 for 10 straight months.


At a breakfast the other morning, a couple of business leaders I know were talking about the ramifi cations of the Patient Protection and Aff ordable Care Act, a.k.a the Aff ordable Care Act, a.k.a. Obamacare. One man was working with a Tucson business said he does about $700,000 in annual sales but doesn’t off er a healthcare plan to any of its employees.

In exploring the costs of a health plan with minimally acceptable coverage, managers of the business determined the less-costly alternative would be to pay the $2,000 per-employee penalty, which was still going to cost $100,000 per year.

Th e man, a friend, wouldn’t name the business but obviously it’s one that must have about 80 full-time employees. Th e penalty doesn’t apply to the fi rst 30 employees. Anyway, it seemed to me to be a signifi cant employer.

Th e law also won’t apply to businesses that have fewer than 50 employees working 30 or more hours per week. Getting below that threshold wasn’t a practical option for this particu-lar business. Or was it?

According to my friend, management at the business was giving more than passing consideration to what would happen if enough employees were limited to working 29 hours per week. Th ere have been reports of businesses — especially retail and restaurants — looking to go that route. And the deadlines are looming.

Th e law requires these decisions be based on employee schedules for at least three months or more before the law kicks in on Jan. 1, 2014.

Th e other businessman in this conversation has fewer employees and probably will fall under the law’s exclusion for providing coverage. But he wasn’t shying away from it. When he started the business 41 years ago, he off ered a health-cover-age plan to employees.

“I think you get a better employee and when you factor in the costs of employee turnover, it doesn’t cost you any more,” he said. “Lots of employees have been with us for many years, including a couple who’ve been with us since the beginning.”

Th e Aff ordable Care Act is raising questions. It changes the paradigm under which some business plans were developed. And if there’s one thing we all know, change creates anxiety and fear.

This week’s issue of Inside Tucson Business includes our annual look at the State of Healthcare in Southern Arizona. Typically, this section looks at issues regarding the delivery of healthcare. A couple of years ago, for instance, it was the first general media report on Tucson Medical Center’s test of becoming an accountable care organization.

Th is year’s special includes an update on what’s happening at acute-care hospitals in the region. It includes a longer report on Carondelet Health Network’s move of its Heart and Vascular Institute; a report on the Arizona Health Care Cost Containment System (AHCCCS) and how it could be a model for Medicaid; and a profi le of the reformatting of Walgreens’ stores, moving the pharmacist almost front and center.

As time draws near to comply with the Aff ordable Care Act, that’s what is on people’s minds now when it comes to health care. Please let me know if there are other healthcare issues specifi c to our region you would like to see us cover.

Contact David Hatfi eld at dhatfi [email protected] or

(520) 295-4237.

EDITORIAL

DAVID HATFIELD

BIZ BUZZ

Obamacare, good or bad? Yes, maybe

EDITORIAL

TUSD is making progress, but slowly Pop quiz: Name the one large school district in

Arizona that actually increased the amount of money it spent per pupil in the classroom from fi scal 2011 to 2012.

Time is up.Th e answer is Tucson Unifi ed School District (TUSD).

According to an Arizona Auditor General’s report to the Legislature this month, classroom spending increased by 7.4 percent to $4,429 per pupil in 2012 from $4,124 in 2011. Remember this is money that goes directly to such things as teacher and aide salaries and benefi ts, text-books, software and supplies for students.

Yes, there are still issues with other expenses in TUSD. But before dealing with those, here’s a bonus question: Name another large unifi ed school district in Arizona that spent more money per pupil than TUSD did in 2012.

None, according to the Auditor General. Th at puts TUSD, with 48,969 students, with other large urban districts. But we’ll allow three by stretching the defi ni-tion: Phoenix Union, a high school-only district that serves 25,499 students, spent $5,162 per pupil; Flagstaff Unifi ed, which has 9,009 students, spent $4,695 per pupil, and Chinle Unifi ed in Apache County, which has 3,537 students, spent $6,014 per pupil.

Chinle was the only district among them, besides TUSD, to increase classroom spending in 2012.

Th e point is TUSD has been making progress in how it spends money and in student achievement.

But as we noted, there are still matters that need to be fi xed. Th e old ways of doing business in TUSD are hard to break as was evidenced at Tuesday’s meeting of the school board which once again dismissed the idea of even exploring the idea of outsourcing certain services.

Take student transportation. According to the Auditor General, TUSD’s cost per rider in 2012 was $2,454. Th at’s far more than any other large district and 1.8 times more than the $1,372 average of other large districts.

It’s not uncommon for local school districts to outsource things such as student transportation, food

services, custodial services and landscaping.Exploring the possibilities was an opportunity for TUSD’s

board. Again, using the Auditor General’s report, when it comes to spending outside the classroom, TUSD is over-spending its peer school districts’ per-pupil average by 63 percent for salaries, benefi ts and support for jobs as curricu-lum and special education directors, teacher trainers and librarians; 52 percent for salaries, benefi ts and support for people including attendance clerks, counselors and nurses; 37.7 percent for administration; 37.1 percent for plant operations; and 15.6 percent for food service. Also troubling is that each category of spending was up in 2012 over 2011.

In fact as a percentage, TUSD spends 49.4 percent of each dollar it receives outside of the classroom — more than any other large district in the state, which average 43.1 percent.

TUSD has been struggling to fi nd ways to cut $17 million from its budget for next year.

New school board member Cam Juárez, who in January had voted as part of 3-2 majority to explore the possibility of outsourcing before having a change of heart at subsequent meeting voting to stop the exploration, saying he wanted to show his support for the district’s long-time employees. In so many words, he admitted a low bid from a private contractor would be impossible to turn down, putting district wages and jobs on the line.

If the goal is to keep TUSD running just as it has in the past, then it was a good idea not to go ahead with the charade of exploring outsourcing.

But we believe all fi ve TUSD board members have a genuine desire to improve student achievement, which is what education is all about. As the Auditor General’s report shows, TUSD is beginning to make progress, but it’s also continuing to squander too much money outside the classroom.

We’ve said several times that improving K-12 education is the single most crucial concern for economic development. And when it comes to K-12 education in Tucson, the elephant in the room is TUSD.


OPINIONBUSINESS INK

Rra wee. Rrrra weeee. Rrrraa weeeeeeeeeeeeeeeeeeeeeeeeeTh ey’re baaack. Outside the offi ce

window. In the parking lot. Th e landscape maintenance crew. With their hand-held leaf blowers.

No, check that. Th ey’re not leaf blowers, they’re dirt and trash blasters.

Th is crew doesn’t mess around with those wimpy, cheapo electric blowers that puff at debris with a lame 35 miles-per-hour air fl ow. Th ey are equipped with powerful, heavy-duty backpack blowers that look like something the U.S. Marines would use.

Rrra weeee.Th ey’re on the move, blowing away the

dead plant parts, lizards, pebbles and rubble with air blasts up to 100 mph. At quitting time, there can be enough dust covering cars in the lot to scribble “wash me” with your fi ngers on co-workers’ windshields.

Th at prank however, is only funny if the blower’s shock waves didn’t trip their car alarm.

Rrraa weeeeeeeee.Despite the noise, fl ying grit and

whirlwind of activity, is the job being done right?

At any offi ce complex, plaza, apartment building or commercial property, mani-cured shrubs and parking lot maintenance is important. A quality job can boost the

image and “green” reputation of the building’s owners and tenants.

Cosmetically neat grounds create the impres-sion the owners take care of their investment and tenants. It’s all about drive-by

curb appeal. And in this hyper-competitive market, great-looking properties can be a subliminal leverage for getting higher rents.

Yet I’m not convinced dirt blasters are the right tool for the job. Exactly what is a worker with a leaf blower supposed to do?

Obviously, the main task is to blow leaves around. Yet the job also requires crews to blast every piece of dog poop, top soil, fertilizer, sticks, beer cans, bags, cigarette butts, plastic straws, palm fronds and dead birds that are in the way.

Leaf blowers excel at that, blasting all the fi lth from the Pizza Hut parking lot into the Chevon gas station. Th en tomorrow, Chevron’s groundskeepers report for duty and blast it all back.

As a result, the debris simply migrates circuitously between parcels. And no one notices that Chloe’s Starbucks cup that was

lying on the sidewalk is back again after a two-day absence.

What’s most maddening are landscape laborers who just blow it all into the city streets, gutters and right-of-way, then pack up and drive off . Aren’t they paid to PICK IT UP?

Perhaps not, low-bid contractors have to cut corners somewhere. Or maybe they think that’s what taxes and government workers are for: let them use their Zambo-ni-sized street sweepers to pick up the mess, akin to a lazy teenager who leaves dirty laundry askew on the bathroom fl oor.

In just one generation, these blowers symbolize how far workplace standards have fallen.

Traditionally, untidy grounds and parking lots were cleaned with a simple rake, broom, shovel and physical eff ort. Th e entire mess was piled up, picked up, put into a trash can and hauled away, i.e., a job well done.

But the weak economy was a game-changer. To survive and stay profi table, landscape companies have had to adjust to the times. Maintenance crews have been cut. Wages are lower. Th ere’s more turnover and less pride in their work.

Th e focus is on productivity, that’s business-speak for doing more with less.

Plus, struggling commercial building

owners with high vacancies and cash-fl ow problems have trimmed routine mainte-nance costs such as landscaping.

Most random independent workers are hired by the hour, so they don’t care if they rake up the clutter or blow it away. Th ey’re mostly clock-watchers.

Maintenance companies are under contract and paid a fl at fee for the job. Gone are the days when they could aff ord extra workers to use rakes and shovels to pick it all up and take it away.

A leaf blower is more effi cient, cutting hours off the time needed to clean a site. With hurry-up labor, time is money. Th e faster they fi nish one job, the faster they can move on to the next.

Having once owned a business, I get it. When you sign the front of the checks, the money must be there when your employees and suppliers sign the back of the checks.

But pride in workmanship still has an important role; it should not yield to profi tability. We live in an era of green environmentalism. Maintenance crews should be responsible and do the job right: man up and pick up.

Contact Roger Yohem at ryohem@

azbiz.com or (520) 295-4254. His Business Ink

appears biweekly and weighs in on local

political, social and business issues.

ROGER YOHEM

SPEAKING OUT

A tax break on equipment would help Arizona businessesA 2011 poll conducted by the non-profi t,

non-partisan National Federation of Independent Business/Arizona (NFIB) found an overwhelming 93 percent of Arizona business owners favor “spurring job creation by lowering the property tax burden on new equipment and machinery.”

In a news release NFIB said “lowering the cost for small businesses to create jobs through meaningful property tax relief and further lifting the regulatory burden would help restore Arizona’s economy and put our citizens back to work.”

Th at’s why so many people were caught off guard when voters in November failed to pass Proposition 116 that sought to increase the annual property tax exemption businesses can take when they invest in new equipment and machinery. Th e Legislature had voted unanmiously to put the proposition on the ballot.

In 2003, a Citizens Finance Review Commission developed recommendations for a broad-based low tax system. Th eir only recommendation receiving signifi cant attention was the tax exemption on business equipment. But, since the exemption is in the state constitution, any substantive change needs voter approval.

Prior to 2012, businesses could exempt the fi rst $50,000 in property taxes on equipment. Due to infl ation, that now has risen to $65,000.

Perhaps voters last year were concerned their

own residential property taxes would go up if Proposition 116 were passed. But that would not have been the case. Legislative budget researchers estimated that while adjustments would “depend upon each individual taxing- jurisdiction, the maxi-mum tax shift would be about $3, or 0.3 percent, a negligible amount.”

Th ere might also have been concerns the tax exemption would have taken funds away from public education. Legislative research-ers pointed out the state pays for the costs of K-12 education not generated with local property taxes. Under the Basic State Aid formula, the state share of K-12 funding would increase to cover the amount that might be lessened by the exemption.

“Personal property taxes are paid by businesses and not homeowners,” noted Farrell Quinlan, Arizona director of NFIB.

A restauranteur who buys a $50,000 refrigerator pays sales taxes on the transac-tion plus annual property taxes on the restaurant’s equipment. A homeowner would pay the sales tax but not property taxes on a refrigerator for home use.

County assessors include business equipment in the total assessed valuations of a business plus the valuation of their land and structures. Th e equipment’s value is adjusted annually through depreciation.

If the business owner bought used equipment rather than new, the valuation for tax purposes is less, but the acquisition is also subject to the highest tax exemption, just as if it were new from a factory. Proposition 116 provided a nexus to acquire this “new” equipment in order to expand and employ more people.

Th is is important because “Small businesses have historically led our state and nation out of recessions through creating new jobs and investing in the future….job creation is the top issue, and lowering small business costs is a great place to start,” according to NFIB’s Quinlan.

Small business owners who’ve been elected as state lawmakers are interested in resurrecting another measure like Proposi-tion 116 and putting it on the Nov. 4, 2014, Arizona ballot.

“Confusion coupled with voters’ healthy skepticism about amending the constitu-tion doomed Proposition 116 in 2012,” said Quinlan. “Why should we think voters will be more likely to pass it in 2014?”

Quinlan believes the business commu-nity must do a better job of educating voters about the benefi ts of relieving the tax burden on equipment and machinery. Th at means raising the money to fi nance a vigorous campaign that was absent in 2012.

NFIB and other small business advocates are working now to develop such a campaign plan to ensure the next time the measure is on the ballot, voters will have all the informa-tion they need to pass the proposition.

Quinlan is recruiting help for the eff ort and has more information. Contact him at [email protected] .

Contact Carol West at [email protected]. West served on the Tucson City Council from 1999-2007 and was a council aide from 1987-1995.

CAROL WEST


Phone: (520) 294-1200 Fax: (520) 295-40713280 E. Hemisphere Loop, #180Tucson, AZ 85706-5027 Internet: www.azbiz.com

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OPINIONCOLLABORATION CORNER

With incoporation, region is stronger together than apartTo annex or not? How has a simple

question become such a major focal point in our political sphere?

Like his predecessors, Tucson Mayor Jonathan Rothschild recently announced annexation as a major agenda item. Th e premise is simple: some state-shared revenue formulas are based on the percent-age of residents in an incorporated munici-pality. Specifi cally, Rothschild stated we could gain up to $70 million if closer to 100 percent of our region’s residents lived in an incorporated municipality, as opposed to the current 65 percent.

However…. County Administrator Chuck Huckelberry countered the revenue loss is closer to $32 million.

Th e discrepancy between the two estimates? In Arizona revenues from the state transaction privilege tax (sales tax), Highway User Revenue Fund, vehicle license tax and Local Transportation Assistance Fund are all shared with municipalities and counties.

Th e only state-shared revenue exclusive to cities and towns is the income tax. Th erefore, if Pima County was 100 percent incorporated, we essentially end up shifting dollars. Th e county receives less and incorporated areas more. Th e only new revenue to the region is a larger portion of the income tax, making the net gain not nearly as profound.

For example, while the city of Tucson may

have more residents and state-shared revenues, it has higher costs of services now extended to the new residents. In the end, the city may not have any additional funds then it has now unless it can

provide services at a lower per capita cost than it receives in state-shared revenues.

Now let’s put the dollars aside and address the most important issue. Why have so many annexation attempts in this region failed?

In a long list of reasons, I argue our biggest weakness is a lack of community and regionalism. Per Arizona State Statute regarding incorporations, “community” is a locality where residents have common interests in public services (police, fi re, water) that “bind” them together.

While unincorporated Pima County is a “community,” there is no sense of commu-nity and we continue to have turf wars. Th ere is little incentive to annex as long as the county government continues to do a good job providing urban services. With the aide of multiple supporting fi re departments, an eff ective sheriff ’s depart-

ment and a Development Services Depart-ment that proactively works to streamline review processes, it is understandable why residents and businesses in unincorpo-rated Pima County do not want to be annexed or incorporate with the possibility of higher fees and property taxes.

Pima County’s strict environmental regulations help create a competitive environment for the municipalities and remain one of the few disadvantages to remain unincorporated.

Unable to entice residents to become part of Tucson, Mayor and Council have resorted to withholding Tucson Water service as an annexation carrot. Other negative policies include the anti-big box ordinance on revenue-producing retailers. While it may be commendable to try to preserve small businesses and the grocery workers union, the city starts the conversation with an immediate “no” that pushes these retailers to jurisdictions where the initial response is “yes.”

Tucson is reviewing its Infi ll Incentive District that has been widely successful in encouraging development of vacant areas inside the city limits. In spite of its success and the enormous amount of collaboration that went into creating the district, the council is contemplating restrictions.

Despite the many signs of positive changes within the city of Tucson, as long as there is an atmosphere of “us” versus

“them,” progress will be stunted.Th ere is still too much political infi ghting

in the Tucson region. Annexation cannot work as long as there are battle lines of land use versus environmentalists, Tucson versus Pima County, Pima County versus Marana, growth versus no-growth, neighborhoods versus developers, and the list goes on.

From the federal government to state government to county government and municipalities, each includes a level of bureaucracy and representation. Th is structure was created for a reason. As it exists now, residents of unincorporated Pima County must rely on their county supervisor to represent them on all issues, including those usually done by municipali-ties, when the Board of Supervisors should be focused on county-wide, regional issues.

While debates remain on which govern-ment entity is better, the entire Tucson region must work to try to right the ship. We are stronger together than apart. If we want to actually compete with other areas for dollars, events and jobs, we must have a united front willing to support each other instead of continuously knocking each other down.

Once we succeed at that, we can be successful in our annexation and incorpo-ration eff orts.

Contact Amber Smith, executive

director of the Metropolitan Pima Alliance, at

[email protected] or (520) 878-8811.

AMBER SMITH

p , y

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