FBAC members and sponsors had a great time at the association’s first Sacramento Area Networking Event on August 20. The event provided them with quick updates about FBAC’s activities and important legislation as well as ample time to network.
Ken Monroe making points about membership
FBA Chairman Ken Monroe kicked things off with a progress report about the association’s growing influence at the Capitol and urged members to help build membership.
“More members give us the power to make a huge difference with the Legislature, and we’re at a point where we think we can make a difference,” he said.
Political Director Robert Rivinius followed with a brief summary of key ballot measures and legislation, especially the need to support Proposition 36 in November. That measure would create tougher penalties for serial retail theft and smash-and-grabs while confronting the fentanyl crisis and incentivizing drug and mental health treatment. FBAC is part of the coalition working hard to pass the measure.
Members and sponsors interviewed at the event strongly agreed that having a family business presence at the Capitol is critically important.
Kenneth Fat and Dan Kellow
“I think FBAC does a good job on behalf of California’s family businesses,” said Dan Kellow, a commercial and industrial relationship manager with River City Bank – one of the few family-owned banks in California.
“I think that it’s refreshing to have people speaking on your behalf in this maze of lobbyists and legislators who don’t really understand the impact of their legislation and that the Legislature is more receptive when a family member represents his business as opposed to just a business owner. A lot of people vilify business owners, but they don’t really understand that family businesses primarily support their own family and the families of their employees.”
Jim Relles
Jim Relles, the second-generation owner of Sacramento’s beloved Relles Florist – soon to mark its 78th anniversary – said his company is a member because FBAC’s mission is so important.
“It’s so important to get the word to the public and the legislators how important family businesses are,” Relles said. “I mean, you constantly hear the politicians always say that small business is the backbone of America. But I would say probably 90% of small businesses are family businesses, so it just goes hand in hand.”
Relles also pointed out the difference between family businesses and corporate ownership: family businesses treat employees like family.
“We’re involved with the employees, we care about our employees, and they work together with us. We’re close to them, and we’re very fortunate that is the case,” he said. “We had one employee who recently retired. I think she was with us for 40 years. She was a hearing-impaired lady and we worked around her abilities.
“And we have a couple of other ones who are reaching 30 or 40 years, and I sometimes think that I must be doing something right that they want to stay. I think they do because they know we’re a family business.”
Another beloved institution is Frank Fat’s restaurant in downtown Sacramento, which has been serving great Chinese food and being the place legislative deals are made since 1939. Kenneth Fat, Frank’s son and a prominent area dentist, said the family business is an FBAC member because members have common issues.
“We’re a family business, right? And, of course, the business climate in California and Sacramento has been tough. It’s a great, great challenge. And so it’s interesting to compare notes, discuss similar problems and how we’re going to approach them politically and businesswise and, personally,” said Fat, whose son, Jerry, is the company’s CEO.
He added that how to transition from generation to generation is also a reason to belong.
“You know, time goes by, and our generation will be gone, so what do we do next and how do we do the transition?” he said.
Fat echoed Relles about the difference being a family business makes.
“We have a lot of long-term employees. I was just speaking to one waiter for example. I think he’s been with us close to 30 or 40 years. He’s doing well and told me his youngest son graduated from UCLA, with a Ph.D. So here’s this young waiter building his family while he started as a waiter and he’s been able to support his family,” Fat said.
“And I think I think he likes working in a family business. He likes knowing the owners. He likes the personal aspect versus corporate, you know. We have several employees who have worked for us for 20-plus years. And we’re proud of that.”
Cameron Rappeleye
FBAC Sponsors also see the value in supporting family businesses. Cameron Rappeleye is an interim vice president and partner with InterWest Insurance who has emerged as an evangelist for the Association, having recruited five new members last year alone.
“I went to an FBAC meeting last year and what really sparked my interest was what they were trying to accomplish with PAGA reform, which was taking the attorneys out of it and actually thinking about the employees. I sent that information to about 10 family business clients and five came back and said they were interested in learning more,” he said.
“This was a group that was specifically built over 10 years ago to fight for reforms versus just complaining about things and hoping something gets done.”
He also tells prospective members about the networking opportunities.
“These are pretty intimate settings, right? If you just walk across the room, you get to meet Ken Monroe of Holt Caterpillar. That’s not available for most business owners. There are people you’re going to meet that you would probably never cross paths with in everyday life,” he said.
After 145 years in California, Chevron finally threw in the towel and announced last week that the company had had enough and was relocating its corporate headquarters from San Ramon to Houston effective Jan. 1.
The San Francisco Chronicle reported that during the next few years, some 2,000 corporate positions will be shifted to Houston, joining the 7,000 corporate employees who have been relocated there in recent years.
Given California’s relentless push to eliminate the use of fossil fuels – despite the fact the state generates less than 1% of the world’s carbon emissions and thus its actions will have no significant impact on worldwide climate change – it was probably inevitable that the country’s second-largest oil company would move its corporate operations to a much more business-friendly state.
While Chevron CEO Mike Wirth said the move was made to “enable better collaboration and engagement” with other executives, employees, and partners and remains committed to its refineries and other oil-related operations, the company stated that the state’s regulatory climate was a factor.
“We have previously stated that we believe state policy makers have pursued policies that raise costs and consumer prices, creating a hardship for all Californians, especially those who can least afford it. These policies have also made California investment unappealing compared with opportunities elsewhere in the U.S. and globally,” the company said. “Texas offers a business-friendly environment, a more affordable cost of living, and better proximity to key counterparts in the service sector, our industry and academia.”
Jim Wunderman, CEO of the business-backed Bay Area Council, said state officials needed to take a hard look at what their actions are doing to the economy.
“Chasing jobs and employers out of California is no way to run the economy,” Wunderman said in a statement. “It’s an embarrassment for California that we’ve lost so many global companies because of misguided policies that make it incredibly difficult to do business here. California’s elected leaders need to take stock of the decisions they’re making that affect millions of families and workers, impact the state budget and have grave consequences for the future economic health of this state.”
FBAC has been carrying that message to lawmakers, the Governor’s Office and regulators since our founding 12 years ago. Unfortunately, too many policymakers just don’t understand how businesses and the economy work. Perhaps this blow to the state’s ego will help.
Unfortunately, Governor Gavin Newsom’s spokesperson basically said goodbye and good riddance in a statement to the Chronicle. “We’re proud of California’s place as the leading creator of clean energy jobs — a critical part of our diverse, innovative, and vibrant economy.”
But there may be more to the story. CalMatters columnist Dan Walters pointed out that Chevron’s exodus from California may not be done quite yet.
In his column today, the veteran newsman noted that Chevron has warned state officials it might close its two refineries in the state, which are major producers of the state’s unique gasoline blend.
Voters in Richmond, the site of one Chevron refinery, will decide in November whether to impose a special tax on the refinery, $1 per barrel, and the company has accused Richmond’s leaders of “playing chicken” with their largest taxpayer and employer.
Politico reported that Andy Walz, a top Chevron executive, warned in an interview about the potential consequences of the Richmond tax measure. “I’m not going to tell you that that’s the death knell, but we’re getting close,” he said, adding, “if I can’t invest there, and I can’t get a return, we will move on.”
Newsom and other California politicians openly intend to eventually shut down the oil industry to reduce the state’s carbon footprint. But they want a gradual reduction so many millions of gasoline-powered cars still on the road can run until phased out.
Were Chevron and other producers to decide, as Walz warns, that continuing operations in a politically hostile California no longer pencils out, the state could see an abrupt and economically devastating fuel shortage.
Business owners who reduce operations in California due to its onerous taxes and regulations usually don’t say much about their reasons. After all, they still have to deal with politicians and regulators who often don’t want to hear the truth. So give Eric Schnetz credit for telling the truth about why he abruptly shut down his Chicago Fire restaurant in Elk Grove.
Schnetz, the owner and founder of the Sacramento-area restaurants, told the Sacramento Business Journal last week his reasons included the state’s new $20/hr minimum wage for fast-food workers, the frequency of employment-related lawsuits within an unfavorable legal framework, higher than necessary food inflation due to current laws and regulations on food producers, and exorbitant energy costs. (The store’s monthly gas and electric bills totaled $8,500.)
“People really should interpret the closure of this Chicago Fire as the canary in the coal mine,” Schnetz told the paper in an email. “Many more restaurants will close until the perspective of the state legislators changes. If California residents don’t start electing legislators that understand microeconomics and the impact of their endless costly initiatives and regulations, our full-service restaurant choices will be reduced to only the largest chains.”
FBAC will continue making those points in the halls of the Capitol. Fortunately, at least for now, Sacramento-area pizza connoisseurs can still enjoy Chicago Fire’s offerings in Folsom, Roseville, and midtown.
While California continues to raise taxes and impose even more costly regulations on the state’s #familybusinesses, Denmark is taking a different approach, according to @Forbes:
“Denmark’s policy shifts reflect a concerted effort to retain its invaluable family-owned enterprises…Bloomberg reported a new initiative from the Danish government, valued at 1.8 billion krone ($260 million), aims to ease the tax and regulatory burden on family-owned companies during generational transitions. The goal is clear: the initiative aims to prevent these companies from being compelled to sell to foreign investors due to stringent taxation and current rules.”
The Family Business Association of California is deeply disappointed that the California Supreme Court ruled today that the voters will not have the opportunity to decide on the Taxpayer Protection Act, which would have protected taxpayers from local tax increases by giving them the right to decide if they wanted to tax themselves.
“We are deeply disappointed that the CA Supreme Court won’t let voters decide on the Taxpayer Protection Act. This court probably would not have allowed Proposition 13 to be on the ballot in 1978. What a shame for California voters,” said FBAC Political Director Robert Rivinius.
The justices – six of the seven appointed by Democratic governors – agreed with the arguments made by the Governor and Democratic legislative leaders that the measure would have constituted a “revision” of the Constitution because they would “fundamentally restructure the most basic of government powers” and therefore could only be enacted through established protocols for changing the Constitution, not a voter initiative.
The court ordered the initiative – placed on the ballot by the signatures of over 1 million Californians – stricken from the ballot.
It is the first time in decades that the court removed an initiative measure from the ballot.
Undeterred by this setback, proponents of the TPA, including FBAC, are making plans to place a new taxpayer protection measure on the 2026 ballot.
JaniTek Cleaning Solutions, a Stockton-based commercial cleaning company serving the Central Valley and Central Coast, has joined FBAC as a Founding Member. Blain Bibb purchased two commercial cleaning franchises in 2007, then left the franchise and started JaniTek in 2014. The company employs more than 400 people and services more than 800 facilities.
Also joining as an FBAC Member is Golden State Strategy Group, a nationally recognized political strategy and fundraising firm founded by Molly Parnell in 2012. She began her career in 2003 working on Arnold Schwarzenegger’s campaign and later served as finance director and chief financial officer for the California Republican Party before forming her company. She has raised over $200 million for campaigns in the past 17 years.
Welcome to both new members who understand the importance of family businesses standing together against new laws and regulations that negatively affect them.
