Recognize need to be part of only statewide group focusing solely on family businesses
Five more companies have recently joined the Family Business Association of California, the only statewide organization that solely focuses on the impacts of new laws and regulations on family businesses.
Joining the Association during the first quarter of the year were Pini Hardware, a 100-year-old retailer based in Novato; Shubert’s Ice Cream and Candy, a Chico-based store marking its 80th anniversary this year; Peter Boysen Realty of Linden, established in 1979; Rediger Labor Law, a Sacramento firm founded in 1999; and Hemphill Solutions, a Carlsbad-based commercial real estate consulting and engagement firm established in 2001.
Pini Hardware: The company was established as a small grocery in 1918 by Swiss immigrant Henry Pini. The Young family became the third family to own Pini’s when they purchased what was by then a hardware store in 1968. The second- and third-generation of Youngs now own and manage the business. Russ Young, the CFO and treasurer, said like most family businesses, the company is deeply involved in Novato.
“We are a community-based business and are heavily involved in local events and give back to our community and schools. Some of the events we do are a Christmas Tree lighting, Scream on the Green on Halloween, and School Fuel, a fundraiser for public schools. And we pride ourselves on being one of the last full-service hardware stores around,” he said.
“Family businesses, big or small, are the cornerstone of this nation. We are what keep the economy strong and growing, and family businesses have been mistreated and misunderstood by today’s society and our local, state, and federal government for far too long. It is time for a change, which is one of the reasons that we joined the FBA to see how we can help make that change.”
Shubert’s Ice Cream & Candy: Leonard C. Shubert left Montana in 1938 at the age of 54 to find a location in California for an ice cream store. Highway 99 led him to Chico and he decided it was the right place. The company has been in the same location since it opened and even still uses one of Leonard Shubert’s original ice cream-making machines. In 2008, as the store was marking its 70th anniversary, it was named one of the two best ice cream stores in the country by ABC’s Good Morning America.
Kasey Reynolds and her brother, Nathan Pulliam, are the fourth-generation owners of the store. Like many sons and daughters of a family business owner, Reynolds at first wasn’t interested in staying at home. “I did go off and do corporate America for a while and it made me appreciate what we have in a family business,” she said.
She joined FBA because she believes small businesses need a bigger voice. “I decided I needed to get involved and do what I can to preserve family businesses for the future,” she said. She also announced in January that she will be a candidate for the Chico City Council this year.
Peter Boysen Realty: The Linden-based firm was founded in 1979 and now has 10 agents, including Peter and Rance Boysen, Peter’s son. As is often the case, for many years while growing up Rance wasn’t interested in joining his dad’s company.
“I never wanted to be in real estate. I said ‘never’ many times growing up,” he recalled. But after a few years as a farm manager after graduating from Cal Poly San Luis Obispo in 1997, he reconsidered. “I wanted to be more than just an employee. I wasn’t having fun. My Dad said he could use some help,” and he soon discovered he enjoyed the new career.
He decided to join FBA after hearing the Association’s Chairman, Ken Monroe, owner of Holt of California, talk on a podcast about the challenges facing family businesses. “I got to thinking, you know – we are a small family business. I think it’s important to do what can be done to help family businesses succeed. Family businesses should be helped in whatever way possible.”
Rediger Labor Law: Attorney Robert Rediger had been a successful labor and employment law attorney for nearly 20 years when he decided to start his own firm in 1999 – and he has since inspired a second generation of family members to join the firm. The firm focuses on traditional labor law, employment law, and related litigation, including defending companies against wage- and-hour class-action lawsuits.
He said daughters Candice and Arielle and son Justin decided on their own to join the firm after graduating from UC Berkeley and from three different law schools. “They said, ‘you’re always excited about your profession and enjoy your job.’ They studied a variety of different areas in law school, but found they enjoyed labor and employment law. When they graduated, I said ‘our firm could use some excellent attorneys,’” he recalled.
Advantages a family firm have include being able to trust people you’re working with and the opportunity to discuss ideas and brainstorm legal strategies with each other outside of the workplace. “Family businesses are also more solid and stable,” he added. “They’re often more conscientious because they have the family’s reputation on the line.”
Hemphill Solutions: The firm was established in 2001 and advises independent businesses on the real estate component of their enterprises, helping clients develop real estate solutions that save costs, reduce liabilities, and maximize operational flexibility.
Ralph Hemphill has more than 30 years’ experience in real estate and private equity and is the firm’s senior advisor while his wife, Katherine, is the broker/manager. He said they joined FBA to share expertise with other family business owners about issues they face.
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About the Family Business Association of California (FBA): Founded in 2012, the Family Business Association of California is the only organization working exclusively at the Capitol to educate lawmakers and regulators about the importance of family businesses to the state’s economy and to their communities – and to advocate positions on legislation and regulations. For more information, visit www.myfba.org.
When Jim Dobbas incorporated his business, he figured doing so on April 1, 1968, was fitting.
“It was April Fool’s Day, but I didn’t care because I didn’t think I was going to make it anyway,” he recalled with a chuckle. Fortunately for California’s railroads, his pessimism was ill-founded.
From a single truck hired out to haul heavy loads, Jim Dobbas Inc. has grown to be a premier heavy equipment contractor, specializing in emergency and derailment response service for class 1 railroads such as the Union Pacific and Burlington Northern Santa Fe. From its yard in Newcastle, northeast of Sacramento, the company now serves Northern California, northern Nevada and southern Oregon.
Three generations of the Dobbas family - from left, Jim, Dillon, and Don.
Don Dobbas, the second-generation president, said railroad-related work makes up about 80 percent of the company’s business, with the rest outside transportation and heavy equipment hauling. A crew of about 40 employees man the fleet of excavators, loaders, dozers, trucks and trailers, and other heavy equipment.
That’s a far cry from the beginning. The family emigrated to the region in 1855 and owned dairies, but Jim was fascinated with trucks since he was a young boy. While still a student at Placer High School in Auburn, Jim bought a 1932 Ford school bus hoping to get it running in auto shop. When that didn’t work out, he bought a running 1931 Chevy truck and then after graduating bought a new Chevy two-ton truck.
Before starting his own company, he was a dispatcher for another company and finally decided to go out on his own.
“Then, I had one truck and no employees, and I didn’t want any. I was going to run that truck until I died,” he said. But a former coworker had other ideas. He kept pestering Jim for a job and finally Jim bought an old truck with no motor for $500 and the new employee soon got it running. That driver started in 1969 and stayed with Dobbas until he retired – and still drops by from time to time to see how things are going.
The company got its big break in 1973, when a train containing 21 freight cars, each carrying 330 bombs and bound for Vietnam, exploded in the massive Roseville rail yard, then owned by the Southern Pacific Railroad. Hot brakes caused by the descent from the Sierra had caused some of the cars’ wooden floors to catch fire.
Jim, now 87, was at home in Auburn when he heard the bombs going off at about 7 a.m. He learned what was happening from a Fire Department radio in his pickup and called SP’s division engineer, who told him to get all the heavy equipment he could and head for Roseville.
His crews stacked the twisted debris and broken tracks in a side area and helped the railroad install new track. “We cleaned up the yard and they were running trains in seven days,” he said.
Jim and Don, who took over as president in 1990 and assumed ownership in 2000, attributed the company’s success and longevity to excellent employees and sheer tenacity.
“It was just going at it every day, answering the phone and saying yes,” Don said. “Working for the railroad you don’t know what that call is going to be. It’s not like bidding a contracting job. Sometimes you’re working seven days straight in bad weather. It takes special people to do it.”
Jim Dobbas crews lifting a tank car.
The jobs often entail bringing the heavy equipment in on rail as close as possible, pulling up the cars, and lifting them back onto good sections of track – one car at a time. The worst derailment they had to deal with was 94 loaded cars in Cajon Pass north of San Bernardino.
Like many second-generation family business owners, Don got his start by going along with his dad on jobs when he was 7 and 8 years old. He worked during summers while in high school and then started full-time as a laborer, equipment operator, and driver after graduating from high school in 1979.
“I never really had the urge to do something different,” Don said. “I was comfortable with it and it was fun – there was no way I was going to be in an office job back then.”
His son, Dillon, is now working as an equipment operator but like many next-gen family members, isn’t sure yet if he wants to make the company his career.
Like many California business owners, the Dobbases say doing business here is always a challenge. The state’s strict environmental regulators – the California Air Resources Board and the Water Quality Control Board in particular – can be difficult to work with.
“The scariest thing is the environmental movement. The smallest mistake – a broken hydraulic line that leaks oil into a river – could cost us the entire company,” Jim said.
Don said family businesses have unique interests unlike other companies, especially inheritance taxes. And, of course, finding family members interested in working for the business and eventually taking over. That’s where FBA has been very helpful, he said.
“Family businesses are different. They have different challenges than a big (public) corporation. For us to have a voice at the Capitol is very important and FBA is there to keep an eye on all the legislation that add more burdens to business,” he said. “That’s invaluable.”
For another perspective, read the article about the Dobbas family business in the Auburn Journal.
The Family Business Association of California is one of the business groups that signed on to the following letter to Assembly Members Phil Ting, D-San Francisco, and Kevin McCarty, D-Sacramento, opposing their proposal to impose a 10 percent “surcharge” on corporate taxes. The effort is being led by the California Taxpayers Association (CalTax.) You can also view and download a fact sheet opposing the measure here.
CalTax and the organizations listed in this letter oppose ACA 22, one of the largest tax increases in state history. ACA 22 imposes a 10 percent “surcharge,” in addition to the existing state corporate tax rate of 8.84 percent, on California employers. Companies with annual net income of more than $1 million that are subject to corporate income and franchise taxes in California would be required to pay the new tax. We oppose this policy for the following reasons:
Creates the Highest Corporate Tax in the U.S. ACA 22 would more than double the state’s corporate tax rate, which already is the highest among the Western states, and one of the highest in the nation. This would represent one of the largest tax increases on California employers in the state’s history. The 18.84 percent corporate tax rate proposed by this measure would be the highest corporate tax rate in the United States, by a wide margin, and would create a huge incentive for California businesses to take their jobs and operations to other states. Texas, Nevada and Washington, for example, have no corporate income tax, and even New York’s 6.5 percent corporate tax would be roughly two-thirds less burdensome than California’s tax.
Creates a Competitive Disadvantage for Employers Who Stay in California. Higher corporate tax rates put California companies at a tremendous competitive disadvantage. The 49 other states all would benefit from California’s decision to make itself less attractive to employers. A thriving economy is the best source of growing revenue for important government programs, but by chasing jobs away, this proposal would hurt rather than help.
A 2017 study by the Washington, D.C.-based Tax Foundation found that the corporate tax falls predominately on labor, which it estimates bears at least 70 percent, if not all, of the burden. At some point, a tax increase on business impacts individuals through less economic growth, lower wages, higher prices, fewer jobs or decreased returns in retirement accounts.
California already has sufficient revenue to provide additional funding for programs that benefit the Middle Class. The Legislative Analyst’s Office stated in its review of the governor’s proposed 2018-19 budget: “Under our current revenue and spending estimates, and assuming the Legislature makes no additional budget commitments, the state would end the 2018-19 fiscal year with $19.3 billion in total reserves (including $7.5 billion in discretionary reserves).” The analyst added that revenue is expected to be even higher when the
budget is revised in May, and noted that these estimates do not account for possible economic stimulus from federal tax changes. When the state is bringing in surplus revenue, it simply is unnecessary to impose one of the largest tax increases in California history, targeted directly at companies that employ California workers and fuel the state’s economy.
For the foregoing reasons, we must oppose this legislation.
California Taxpayers Association
Advanced Medical Technology Association (AdvaMed)
Association of California Life & Health Insurance Companies
Biocom
California Ambulance Association
California Apartment Association
California Beer & Beverage Distributors
California Business Properties Association
California Forestry Association
California Hotel & Lodging Association
California Life Sciences Association
California Manufacturers & Technology Association
California Railroads
California Restaurant Association
California Retailers Association
CompTIA
Council on State Taxation
Family Business Association of California
Los Angeles Official Police Garages
Orange County Taxpayers Association
San Diego County Apartment Association
Silicon Valley Leadership Group
Western Growers Association
Western Manufactured Housing Communities Association
Wine Institute
Legislation that would have reinstated the Estate Tax in California if the Federal government repealed the tax died last week.
SB 726, by San Francisco Democrat Scott Wiener, would have asked voters to reinstate California’s estate tax if the federal government had repealed it. The bill became difficult to justify after the final federal tax reform legislation doubled the estate tax exemption for a period of eight years, forgoing an outright repeal.
After fierce opposition led by the Family Business Association, Senator Wiener was forced to amend the bill to prescribe procedures for fiscal review on any tax legislation considered that exempts products from sales and use taxes.
“Defeating this effort to reimpose the death tax in California has been our top priority for the past year, and we’re pleased that Senator Wiener has removed the language from his bill,” said FBA Executive Director Robert Rivinius.
“However, there is already an initiative campaign under way to reinstate the Death Tax to pay for higher student aid benefits — and given the costs associated with numerous legislative proposals, it is quite likely that resurrecting the death tax will be proposed again. FBA will remain vigilant and be ready to fight any new proposal.”
Eight family-owned businesses have joined the Family Business Association of California in recent months, increasing the strength and effectiveness of the only organization devoted solely to advocating for family businesses in Sacramento.
“Now more than ever, family businesses need to stand together as the Legislature and the regulators continue to impose new requirements that make it more difficult for these firms to remain family-owned,” said Robert Rivinius, FBA’s Executive Director.
“While family businesses have a great track record of supporting their employees and giving back to their communities, only about 30 percent survive into the second generation, 12 percent to the third and just 3 percent to the fourth generation and beyond. FBA was founded to be an aggressive advocate for family businesses and we’re extremely pleased that these companies have joined.”
In alphabetical order, the new members are:
Acorn Surfaces and Treatments, a first-generation Fresno-based company that provides concrete treatments and solutions for its customers.
Allied Managed Care, a medical case management company founded in 1995, and Acclamation Insurance Management, a third-party insurance claims management firm launched in 1989. The two second-generation, Sacramento-based companies are owned and managed by the same family.
Ceronix, Inc., an Auburn company that is the leading U.S. developer and manufacturer of custom color monitors and circuit boards, primarily for the gaming industry. Its first-generation founder launched the company more than 30 years ago.
Flyers Energy, which is one of the largest commercial fueling providers and Mobil lubricant marketers in the nation. The Auburn-based company, founded in 1979 by four brothers, also produces renewable energy.
Haney Business Ventures, a Rocklin-based business and management consulting firm dedicated to helping entrepreneurs grown their businesses.
River City Bank, a Sacramento-based bank founded in 1973 and has 12 branches in the Greater Sacramento Area and a commercial banking office in Walnut Creek. Its chairman is a second-generation member.
Skyline Self Storage, a Susanville company that operates two self-storage facilities and is run by first- and second-generation family members.
Taylor Farms, a Salinas-based fresh produce processor and packager founded in 1994 that has grown to have 12,000 employees and sales of more than $3 billion per year.
As an example of the obstacles family businesses face, Rivinius noted that legislation was introduced this year that would create a new California estate tax to replace the federal tax being considered for elimination. While the bill is currently on hold, its author has stated it will be brought back in 2018 if federal tax laws are changed. Estate taxes are one of the biggest obstacles in allowing businesses to remain family-owned from one generation to the next.
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About the Family Business Association of California (FBA): Founded in 2012, the Family Business Association of California is the only organization working exclusively at the Capitol to educate lawmakers and regulators about the importance of family businesses to the state’s economy and to their communities. For more information, visit www.myfba.org.
Only about 30 percent of family businesses survive into the second generation, 12 percent to the third and just 3 percent to the fourth generation and beyond.
But while keeping a family business thriving can be especially difficult in California due to the state’s taxes and regulations, a number of companies that are members of the Family Business Association of California have beaten the odds and are celebrating milestone anniversaries this year.
“These companies deserve congratulations for standing the test of time despite all of the challenges family businesses face,” said FBA Executive Director Robert Rivinius.
“Family businesses are the bedrock of our communities and the economy. In fact, our state’s 1.4 million family businesses employ 7 million people and tend to pay their employees better, train them better and provide more generous benefits than nonfamily companies. We hope examples like these help persuade state officials to encourage and incentivize family businesses instead of making it harder for them to continue on.”
The companies are:
Teichert Inc., Sacramento, founded in 1887 (130 years). The company was founded by Adolph Teichert, who immigrated from Germany in 1866 and whose early work can still be seen in Golden Gate Park and near the Mark Hopkins Hotel in San Francisco and in the sidewalks around the State Capitol. The business has grown into a diverse mix of businesses, most notably Teichert Construction and Teichert Materials. Judson Riggs, the fourth-generation member of the family to run the business, serves as president, CEO and chairman of the board. http://www.teichert.com/teichert-way/about-us/our-history/
C.F. Koehnen & Sons, Glenn, 1907 (110 years). The company was founded by Carl Fredrick Koehnen as a beekeeping operation and over the years has grown to be one of the largest honey bee and queen producers in the world. Koehnen also grows, maintains and harvests almonds and walnuts in Glenn and Butte counties. Third-generation Mike Koehnen is the company president, while his cousins Kamron and Kalin Koehnen manage operations. https://www.koehnen.com/history
Nor-Cal Beverage Co., West Sacramento, 1937 (80 years). Nor-Cal is the largest independent co-packer of teas, ades, chilled juice, waters and energy drinks west of the Mississippi and also produces its own line of Go Girl Energy Drinks. The company was founded by Roy Deary as the Hires Root Beer Bottling Company but sold off its soft drink franchises in 2007 because of changing market trends and soon after sold its beer distributorship. Third-generation Shannon Deary-Bell was named president and CEO in 2010. http://www.ncbev.com/ncbev/assets/File/Our_History_full_story.pdf
Rogers Jewelry, Modesto, 1937 (80 years). The company was founded by Harry Marks, a young jewelry salesman, and his partner, Dr. Robert Moon. Two third-generation family members are now in charge. Robert Marks is president and Bart is vice president and CEO of the company’s Nevada operations. Rogers is best known for its Superstores, which have more than four times the square footage of average mall jewelry stores. https://www.thinkrogers.com/about/
The Fruit Bowl, Stockton, 1947 (70 years). This San Joaquin County landmark began accidentally over the Fourth of July weekend when Frank and Ina Lucchetti had a bumper crop of freestone peaches but stores in San Francisco didn’t want to buy them because they were closing for the holiday. So on the advice of a fieldman they placed a couple of signs on Waterloo Road and set up a table to sell produce. A parade of cars stopped as people drove back from the Sierra and the stand has been operating ever since. Today, second-generation Ralph and his wife, Denene, run the farm and The Fruit Bowl. http://www.thefruitbowl.com/about-us/
Kenco Engineering, Roseville, 1957 (60 years). Kenco manufactures longer-wearing parts for asphalt plants and construction machinery designed to reduce unnecessary equipment downtime. The company was founded by Ken Lutz and his wife, Dorothy, as a welding supply house before moving into manufacturing parts in the 1960s. Dave Lutz is the second-generation president and brother Don is vice president, while third-generation son-in-law Brian Handshoe is VP for Operations. https://www.kencoengineering.com/general/aboutus.php
“Family businesses are the bedrock of our communities and the economy. In fact, our state’s 1.4 million family businesses employ 7 million people and tend to pay their employees better, train them better and provide more generous benefits than nonfamily companies,” Rivinius said.
“For example, legislation was introduced this year that would create a new California estate tax to replace the federal tax being considered for elimination. Estate taxes are one of the biggest obstacles in allowing businesses to remain family-owned from one generation to the next. Proposals like this are absolutely the wrong approach and would make it harder for family businesses like these to survive.”
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About the Family Business Association of California (FBA): Founded in 2012, the Family Business Association of California is the only organization working exclusively at the Capitol to educate lawmakers and regulators about the importance of family businesses to the state’s economy and to their communities. For more information, visit www.myfba.org.
