Groundwater management needed during a drought

Managing water in California is no small task.  State legislators took a major step with the enactment of the 2014 Sustainable Groundwater Management Act. Prior to this Act, there were no comprehensive regulations governing groundwater in California.  Individual court decisions provided the only governing rules.

While much of the public attention related to water supply has been focused on the depth of the snow cap and the conditions on the Colorado River, local groundwater typically provides approximately 38 percent of the state’s water.  The State Department of Water Resources has identified 515 alluvial groundwater basins and sub-basins which provide this important water source.

The courts have adjudicated 22 of these basins - 20 in Southern California.  Where there are multiple users and development or other pressures have threatened to overwhelm the limits of the water supply in the basin, courts have been asked to establish rules determining the pumping rights of each user.

Adjudication takes years, even decades, as court must unravel established practices and water rights.  After adjudication, the court usually appoints a water master to make sure that going forward the court imposed limits are adhered to by all users having rights in the basin.

In non-adjudicated basins, the courts have upheld landowners “overlaying rights” – the right to extract and use water from the groundwater basin beneath their lands - as long as the water is used only on the land directly above the basin.  Of course, not everyone owns land over a basin but may still have a right to pump water.  So-called “appropriative rights” allow these owners to pump water for use on land not located above the basin or sell it to other customers.

But it isn’t just where your land is, it is also when you can show a chain of title to the land. Riparian rights - land abutting a waterway - that are pre-1914 are senior rights. 

This all works fine when there is plenty of water but when there is a drought, things quickly become complicated.   Disputes trudge through the courts.  Holders of “overlaying rights” and “senior rights” generally win leaving “appropriative rights” and later rights holders and their water uses high and dry. 

During the drought groundwater pumping around the state has increased to an unprecedented level with devastating results.  In some areas over pumping has caused land to sink at an alarming rate - as much as one foot per year. This is an irreversible condition.  The inequities of the current system were apparent.  The need for better groundwater management was clear. 

The new regulations require that non-adjudicated basins form local “groundwater sustainability agencies” (GSA).  Each GSA must measure how much water is being pumped in its basin, estimate future demands, and develop a plan that protects the basin from over-pumping.  If the basin is in a critical condition because of over-pumping, a plan must be completed within five to seven years.  If the basin is not endangered, a GSA may be given up to twenty years to complete its plan. If a plan is not completed on schedule, the state may intervene to impose its own plan.

Every person and business needs water.  Until the Legislature acted, California was one of the few western states that did not have a comprehensive statutory framework for groundwater management.  There remains much more to do and additional legislation will be needed as the plans are developed but this is a great first step to protect California’s future water supplies.

Business launch can be aided by crowdfunding

Have a great idea for a new product? Maybe you figured out how to make a cheaper phone or tastier pizza or even a better mousetrap. Perhaps you have a new service in mind that you are sure everyone is going to want to buy.

There are a lot of things you need to pull together before you start - a business plan, customer analysis, production and capacity contingencies - and don’t forget money.  You are going to need some money. 

Often traditional funding institutions aren’t as excited as a new entrepreneur is about that great idea. So many entrepreneurs are shifting the task of raising capital into their own hands by utilizing crowdfunding. 

Crowdfunding involves raising funds directly from a large number of people - friends, family and strangers - then using the money to launch your business. The internet is the preferred means for contacting the potential funding sources and telling them about your new project.

If you think this must just be for small players or is a passing fad, think again. According to the 2015 Crowdfunding Industry Report prepared by Crowdsourcing.org, a professional industry organization serving crowdsourcing and crowdfunding entities, crowdfunding “experienced accelerated growth in 2013, expanding by 167 percent to reach $16.2 billion raised, up from $6.1 billion in 2013.  In 2015 the industry is set to more than double once again.”

Crowdfunding can be structured in different ways. The vast majority - over 68 percent - is debt based, in other words, receiving a loan that you have to repay. But crowdfunding can also be reward-based with investors not expecting to be repaid directly but instead opting to be the first to receive your new product or service.

In 2012 the passage of the Jumpstart our Business Startups (JOBS) Act opened the door for equity participation allowing crowdfunders to become shareholders in your company.

You need to consider all your options before jumping on the crowdfunding bandwagon.  If your project doesn’t attract investors or customers, it is unlikely that you can later turn to traditional funding sources.  Banks and venture capitalist (VC) will be leery of the marketability of your great idea if crowdfunding fails.

On the plus side, if you attract a lot of interest with early crowdfunding, it will serve as validation of your idea when you need more capital from a bank or VC.

Reward based crowdfunding may sound like the best option. You get to keep all the equity in your company and the crowd funders share the risk. Crowdfunding can have tax implications. You are receiving income that may be taxable. Laws vary state by state so do your homework before starting out and taking any money.

The Small Business Development Center (SBDC) cautions that “no one like to be the first to a party.” Contributors will be hesitant to commit their dollars until you have reached about 30 percent of your stated goal. That means finding other sources up front - friends, family and selling the second car may all be part of the funding plan.

Don’t confuse crowdfunding with pennies from heaven. It is hard work. Don’t expect to do this in your spare time. You are introducing your idea to your future funders, customers, and competitors. Crowdfunding is a full-time commitment.

With the right plan and preparation, crowdfunding just may be the answer to funding your dream.

California Roads and Bridges are Hurting

California has the worst roads in the nation. The Road Information Program (TRIP), a national transportation research group, released a study in July on pavement conditions in large and mid-size urban areas ranking 25 of each size area which have the worst roads.

First on the large urban area list is San Francisco-Oakland with 74 percent of the roads in poor condition.  A close second is Los Angeles-Long Beach-Santa Ana with 73 percent of the roads in poor condition.  San Jose is 4th (53%), Riverside-San Bernardino 14th (46%) and Sacramento 24th (42%).  Six California cities - Antioch, Santa Rose, Temecula, Hemet, Stockton, Modesto and Oxnard - made the list of 25 mid-size urban areas with poor roads. 

And it’s not just roads.  Transportation for America ranks California as being the 18th worst state for bridge repairs.  Of the 24,542 bridges that are elements of California’s roads and highways, 12.8 percent or over 3,000 bridges are structurally deficient. 

So it is pretty clear we have a problem. Caltrans estimates the state has a $59 billion backlog while cities and counties have an additional $78 billion maintenance backlog..

If all these numbers only bore you, the collapse of the bridge on Interstate 10 near the Arizona border during a rain storm should serve as a wakeup call.  Bridges should not fall down because of rain storms.

You may wonder how we got in this predicament.  There are many reasons.  During a recession the politically easiest way to cut down spending is by deferring maintenance and repair so the transportation system went wanting.  Gas tax revenues - the traditional funding source for roads and bridges - are shrinking due to fuel efficient and alternative fuel vehicles.  And transportation funds have been diverted for other purposes.

As soon as the current state budget was passed, which didn’t include any new funding for road or bridge repairs, the Governor called a special session of the Legislature “To consider and act upon legislation necessary to enact pay-as-you-go, permanent and sustainable funding to adequately and responsibly maintain and repair the state’s transportation and other critical infrastructure…”

That includes finding money without resorting to borrowing. No easy task. The Legislature has not reached an agreement on where to find this funding - some $6 billion per year.  The sources being discussed include both existing ones such as cap-and trade funds and vehicle weight fees and new ones such as increasing the gas tax, diesel fuel tax, vehicle registration fees, vehicle weight fees and a new fee on clean fuel vehicles that don’t pay gas taxes.

The final legislation will most likely include something for everyone to like - the promise of safer, smoother roads - and something for everyone to dislike - new taxes and fees to pay for them.

If we don’t fix our roads and bridges, we will “save” on repair costs. However, poorly maintained highways and bridges raise vehicle maintenance costs, contribute to accidents, and slow down commerce. We “pay” for poorly maintained roads with increased vehicle operating costs, increased insurance costs, and higher prices for goods and services.  You know the lesson: pay me now or pay me later.  

The Art of Good Customer Service

Nordstrom has long been known for its gold standard customer service.  When you are shopping at Nordstrom, a good sales representative makes sure everything revolves around you - what you are looking for and what else you might like.  A few days later you get a personal note from your new BFF thanking you for the purchase and looking forward to your next visit.

Nordstrom isn’t the only store with a reputation for customer service - the Ritz Carlton Hotel, Whole Foods, and Trader Joe’s are just a few of the well-known companies known for great customer service. 

A more recent entry into the excellent customer service arena is Apple with their Genius Bar - the cadres of high tech geniuses who will remove the evil spirits from your Mac or iPhone without making you feel stupid in the process.

Great customer service creates brand loyalty.   When it is a great experience, you’ll return and buy again. You feel good. You are pleased with your selection. However, there is a lot more than soft and fuzzy feelings motivating great customer service. 

A great customer service representative will help you make decisions - decisions to buy things. You won’t notice.  You’ll think you made that decision on your own.  But while you are focused on the product, the store representative is focused on you. 

They are watching for hints about what is holding you back from saying “Yes” to the deal and  then relating that information to their sales approach. Your attitude, your expressions, and even your body language are all providing information about what is standing between you and the “cha-ching.”

If you hesitate about a new outfit, you might hear, “I bought that same skirt last month and wasn’t sure where I would wear it either but I found it can be the right outfit for almost any occasion.”   You express reluctance about learning something new and the techie might say, “I don’t like to change systems either but when I had to upgrade I found it was easy to install and the computer ran faster.” 

The scientific theory about what is going on is called Emotional Intelligence Competencies or EI Competencies.   First studied in 1998 by Daniel Goldman, EI Competency skills relate to both intra-personal awareness skills and inter-personal social skills.  The better you are at being aware of your own emotional state, controlling your emotions, and using your emotions to motivate your behavior, the better you will be at empathizing with others and building positive relationships.

Often a sales representative will offer you three choices.  Just a coincidence?  No – that too is based on research. It is easier for humans to choose between three products than it is to choose between two.  Too many options overwhelm but three are just right - and mostly likely the choice will be neither the premium nor the least expensive options but the value option in the middle.

Knowing that customer service is based on reading you may sound intrusive or manipulative.   But it shouldn’t.  Yes, the goal is to make a sale - but to make a sale that you are happy with and that makes you feel good.  And if you later decide it wasn’t a good purchase - no problem - good customer service means easy returns with no questions asked.

Study examines mindset of entrepreneurs

We all marvel at the innovation and creativity of young entrepreneurs.  Some people seem to be born with the entrepreneurial spirit - destined for careers of purpose and accomplishment.

Two renowned institutions decided to study the development of entrepreneurs and the qualities that spur their drive.  The Institute for Applied Research in Youth Development at Tufts University and the Stanford Center on Adolescence jointly developed a longitudinal study to identify the "cognitive, motivational, behavioral and ecological" characteristics of adolescents and young adults who display entrepreneurial purpose. 

The Young Entrepreneurs Study (YES) was in part funded by the John Templeton Foundation. 

If YES could identify the attributes of entrepreneurship and determine if those attributes were inherited or could be taught, the findings might have profound impacts on teachers, parents, employers and even on individuals themselves who wanted to prepare themselves for entrepreneurial careers.

Beginning in June 2011 YES tracked over 4,000 participants between the ages of 18 and 24 for three years.  The group represented a wide range of ethnic groups; 60 percent were females and 40 percent males; 16 percent were foreign born and 84 percent were U.S. born.

There were four areas where young people who were engaged in entrepreneurial activities exhibited markedly different traits.  They were twice as likely to have"business sense" - always on the lookout for investment opportunities and understanding the tax implications of financial decisions.  Many had started a business on their own as children mowing lawns or shoveling snow in the neighborhood.

Perseverance and initiative were also important.  Whether it was organizing others around a cause, reworking businesses plans until the winning model was developed, or overcoming challenges, once the goal was established setbacks didn't stop them. 

Over 76 percent of those identified as aspiring entrepreneurs demonstrated innovative thinking skills. They found new ways to do things rather than follow the beaten path.

The other major difference was in the availability of mentors and role models - 45 percent of the aspiring entrepreneurs had a family history or someone close who had started a business. 

Entrepreneurship comes with high risk and high reward.  Having these skills doesn't guarantee financial success.  However, for those who want to chase the golden ring, it can mean a lifetime of fulfillment.

Equally important, the researchers determined that these are skills can be learned.  Parents, teachers, friends and family can encourage young people to start businesses, become financially aware, spend time with entrepreneurial adults, and above all try, try again.