Iverson Language Associates of Milwaukee has acquired Wordnet Inc., a small localization company located outside of Boston with sales under $1 million. The acquisition price was undisclosed. Wordnet was founded in 1982. The majority of the exiting customer base being acquired is located on the East Coast of the United States.

"A key reason Wordnet is a good fit is because of its geographical client base, said Steve Iverson, president of Iverson Language Associates. "The acquisition of Wordnet fits well with the long-term focus of our company to increase market share on the East Coast. I truly think this is a positive move for both companies, and look forward to the coming challenges." Iverson (www.iversonlang.com ) provides translation, desktop publishing and project management to a wide variety of industries such as manufacturing, finance, travel, advertising, high tech, health care and education.

TriCore AEA, a Racine-based systems integrator specializing in food and beverage applications, has joined forces with Rockwell Automation via Rockwell Automation’s Solution Provider Program. "We are delighted to name TriCore AEA a Rockwell Automation Solution Provider," said Chris Vaidean, manager, Rockwell Systems Integrator Programs. "TriCore AEA continuously provides the technology, research and product analysis necessary to insure that client needs are met now and in the future. They fully understand this industry, therefore always yield the highest quality and value for our mutual clients." TriCore AEA works with the food, dairy, beverage, pharmaceutical and consumer products industries.

Visual Systems Inc., a Milwaukee-based manufacturer of book components, overhead transparencies and ancillary products for educational publishers, has expanded its printing capabilities with a new six-color Heidelberg Speedmaster.
The state-of-the-art $2 million+ press from Germany is one of the only presses like it in the United States, according to the company. It allows the company to print unique, high-impact work faster and at a lower cost to customers.
The Speedmaster also gives Visual Systems the ability to handle larger production runs with shorter lead times. "The new press solidifies our leadership position in the production of high-end book components, transparencies and related products," said Mike Humber, operations manager for Visual Systems. He said the press brings a new level of automation to Visual Systems’ pressroom with its major functions monitored and controlled digitally by Heidelberg’s press operating system. That system allows the press to be set and run from a single console. As a result, only one pressman is needed to operate the press.
Another feature of the Heidelberg Speedmaster is its closed loop color-measuring system, which can distinguish even the subtlest differences in color intensity on printed page proofs.

Clifton Gunderson and the information technology-consulting firm of Network Technology Solutions (NTS) joined forces on June 1 to launch Clifton Gunderson Technology Solutions.
Clifton Gunderson Technology Solutions will be the name under which Clifton Gunderson will now market its technology consulting services throughout Wisconsin and the other 12 states in which it has offices.
"This winning combination offers our clients enhanced capabilities and an even greater depth of valuable products and services," said Ted Hart, managing partner, Clifton Gunderson.
The addition of NTS brings Clifton Gunderson’s Wisconsin presence to 340 partners, consultants and staff in 15 locations throughout the state. Clifton Gunderson Technology Solutions will continue to serve clients from the former NTS office location at 1111 Deming Way, Madison.

Hampshire Co. in Milwaukee (www.hampshirecompany.com) has announced the appointment of Reptron as its first US distribution partner. Hampshire develops universal touch-screen controller programs. While the company has other sales distribution in Europe and Asia, Reptron is the first US distributor to be approved by Hampshire to re-sell the TSHARC touch-screen controller products domestically.
According to Carl Bauman, president of Hampshire, "The versatility and performance benefits of Hampshire’s products combined with Reptron’s ability to supply a variety of display and overlay products makes this new partnership a winning combination for all US customers wanting to implement touch screen technology into there products."

Target Logistic Services, an international air, surface and ocean logistics provider, has opened a full-service facility in New Berlin. The new 27,000-square-foot facility is at 5065 S. Emmer Dr. It has a staff of 25, headed by John Teraoka, managing director, and David Fortier, general manager.
"The Milwaukee area has many different industries ranging from the most advanced high-tech electronic and computer businesses to traditional printing and the building-supply materials companies," Teraoka said. "These businesses require reliable, precise and safe delivery of cargo. We are confident Target Logistic Services will be fulfilling these high-service standards."

Pro Graphics has consolidated its operations at its Waukesha site, closing its printing division facility just north of downtown Milwaukee. Four Heidelberg presses were relocated to the Waukesha facility, at W222 N600 Cheaney Rd.
"Having everything and everyone in the same facility is really refreshing for us," said Craig Jacob, who owns Pro Graphics with Will Massek and Greg Kryzston. "We are truly one company now."

Boxx Magazine has been launched in Milwaukee to focus on women’s issues. Stefanie Klopp is managing editor while Amy Grau is an editor and art director. Bet-z Boenning is an editor and business manager and Holly Grey is an editor and advertising sales and technical consultant.
"Unlike other free publications, Boxx offers more of an inside look at women in the Milwaukee community, focusing on the kind of people you may interact with every day, those who make the small differences in life, yet are so meaningful," Grau said. Klopp added, "Our mission is to reclaim the ideas of equality and help shed feminism of its stigmatic cultural status." Boxx (www.boxxmagazine.com) will be distributed through businesses serving as outlets for free publications.

Nemschoff Chairs Inc. in Sheboygan has launched the Foxxman brand of healthcare industry furnishings.
The "budget-conscious" line was created in deference to a heightened price-sensitivity among designers and buyers for health-care facilities, noted Mark Nemschoff, president and CEO of Nemschoff Chairs Inc. He said the company enhanced its manufacturing efficiencies to help reduce cost, and also developed a streamlined product offering, with fewer options or opportunities for customization. It also has standard wood finishes and a five-year warranty rather than a lifetime warranty. The new line can be seen on the Web at www.foxxman.com.

Centare Group (www.centare.com) of Brookfield has moved its offices from 15850 W. Bluemound Rd. to 125 N. Executive Dr. in Brookfield. The new offices have triple the space of the Bluemound Road site. "By moving to the new location we will have the space necessary to accommodate the growth we have experienced over the last few years, and be able to handle our expected future growth," said Dave Glyzewski, president of Centare Group.
The extra space will allow Centare to handle more software project development in-house. "We are seeing more and more software projects as opposed to staff augmentation," said Ed Chaltry, chief technology officer and a partner in the firm. "We expect that trend to continue and be the future of our industry."

The law firm of McCoy & Hofbauer has moved its offices from the Crossroads Corporate Center on Swenson Drive in Waukesha to the new Riverwood Corporate Center III, at N19 W24200 Riverwood Dr., Waukesha, according to the firm’s managing partner, John V. McCoy. "The new office space poised us for our firm’s projected growth over the next few years," he said. The firm has eight lawyers on staff, complemented by a support staff of seven.

Ace Precision Machining Corp. of Menomonee Falls is building a 90,000-square-foot facility at Pabst Farms in Oconomowoc. The Ace Precision facility, going up at at 977 Blue Ribbon Circle North, will be the first commercial building to be constructed in the Pabst Farms development.
The facility will house a full range of manufacturing processes similar to those offered at the Menomonee Falls location. Those processes include five-axis laser cutting, vacuum brazing and heat treat, hydroforming, machining, turning, resistance and TIG welding, sheet metal fabricating, and plasma spray coating.
Ace Precision is a supplier to the domestic and international aerospace gas turbine marketplace, manufacturing combustion liners, heat shields, tailpipes, and compressor housings. Ace Precision is also a FAA approved and licensed component repair and overhaul facility, for both the commercial and military marketplace.
Stephen Perry Smith Architects, Menomonee Falls, is the project architect and designer. Hunzinger Construction, Brookfield, is the project contractor.
Construction, which has begun, is expected to be done by December.
The design of building will feature precast exterior wall panels in the 70,000-square-foot manufacturing area, and a stone exterior skin panel with limestone accent columns in the 20,000-square-foot, two-story office area. Maximum flexibility for future equipment and operations will be designed into the facility. A commitment has been made to use American made building materials when possible.

Ground has been broken in the Town of Oconomowoc for AngelsGrace Hospice, a $5-million facility that will be Waukesha County’s first inpatient hospice.
AngelsGrace Hospice, which will provide end-of-life care to all ages regardless of ability to pay, is an initiative led by ProHealth Care and made possible with donations from three individuals.
Situated next to a tree-lined pond just East of Highway P and north of Highway K, the hospice will have 27,000 square feet of space and 15 private rooms.
Construction of the hospice, scheduled for completion by next spring, is being funded by a donation from the Walter L. and Grace M. Merten Charitable Trust.
The 7.5-acre hospice site was donated by Waukesha County residents Robert and Diana Schowalter.
Those major gifts will be supplemented by additional donations for operating expenses, all raised through the Waukesha Memorial Hospital Foundation and Oconomowoc Memorial Hospital Foundation.
"We had dreams of building a residential hospice to answer the great need for this type of care in our area, and they became a reality with the generous gifts from our donors," said Mary Jo O’Malley, executive director, ProHealth Home Care and Hospice, who will serve as the new hospice’s administrator.
The organization’s Rolland Nelson Crossroads Hospice last year served more than 450 patients and their families in their own homes.
"While the focus of hospice is to have patients remain at home, this facility will offer another important patient option to the community," O’Malley said.
Grace Merten and the Schowalters were actively involved in the hospice design as part of a planning team including ProHealth Care staff, architects from EngbergAnderson Design Partnership, and builders from the C.G. Schmidt construction company.
The hospice design is residential, divided into three wings of five rooms each to help convey a homey feeling.
ProHealth Care, based in Waukesha, is a healthcare delivery organization that also includes Waukesha Memorial and Oconomowoc Memorial hospitals, a network of primary care clinics, assisted and independent living for seniors, home care services and a fitness center.

The Redmond Co., Waukesha, is designing and managing construction of Fox River State Bank at 256 N. Dodge St. in Burlington. Redmond will design the $1 million, 10,400-square-foot construction project which will include partial demolition and remodel of an existing building. The project requires Redmond to turn an existing car dealership into Fox River State Bank. Construction began in May and will be completed July 15.
The Redmond Co. has completed construction of th 22,000-square-foot Trane Federal Credit Union Operations Center. The $3.3 million project is located at 1700 Oak Forest Dr. in Onalaska. The two-story facility has the capabilities of a call center as well as a training and operations center for their multiple branches located nationally. The new facility houses the accounting, human resources, and marketing departments, as well as the executive management staff.
The Redmond Co. will provide consulting, brokerage and architectural services as well as manage the construction of Northwoods Community Credit Union in Park Falls. The $2.2 million construction project will be a 10,800-square-foot branch facility, including 500 square feet of tenant space. The new facility includes a vault with safe deposit boxes, a training room, a fireplace and cultured stone veneer on the exterior. The project will be completed July 1.

June 13, 2003 Small Business Times, Milwaukee

Four Common myths of family businesses

By Harry S. Dennis III, for SBT

TEC is in the process of putting the final touches on a new program designed specifically for parents and offspring of family-held businesses. While consulting with experts about future program content, we unraveled a number of "myths" about family businesses. They are the subject of this month’s column.
First, let’s put the myths in some perspective. According to a recent survey done by MassMutual Financial Group/Raymond Institute, 40% of family businesses in the US will see a leadership change in the next five years. That fact has serious implications for four common myths discussed in this article.

Myth No. 1: Most family businesses have clearly defined management succession plans.
To the contrary, this is far from the case, especially in those situations where more than one sibling is active in the business. Here are some typical approaches that TEC members who are in family businesses have taken to resolve this problem:
1. They have hired an outsider to mentor and be responsible for the ultimate determination of who will succeed and perpetuate the family leadership in the business.
2. They have used industrial psychologists to assess an offspring’s potential to become the eventual CEO in the business.
3. They have enrolled the offspring(s) in advanced management training courses.
4. They have created "career profiling" experiences such as so much time in sales, then in manufacturing, accounting, etc.
5. They have created a "co-CEO position," where, for example, two sons or daughters have proven they are equally capable of running the business. (In fact, in the survey mentioned above, this is becoming a common practice, although, I personally see major problems with this alternative.)
6. They have prepared a specific succession timeline, along with action steps to enforce it.

Myth No. 2: Because of the desire to perpetuate the family business for future generations, a strategic business plan is developed and implemented.
Sorry folks, the MassMutual survey found that only a third of their respondents had the faintest clue about what a strategic plan looks like, much less actually having one. It’s not a monster, really, and with a little outside professional guidance, can be accomplished without a lot of fanfare. Here’s what you might find in it:
1. Major ownership objectives for the business
2. Assessment of strengths, weaknesses and opportunities
3. Definition of core competencies
4. Business vision and mission commitment
5. Short- and long-range corporate goals
6. One- and three-year financial pro forma
7. Market segment and key customer analysis
8. Specific action plans: Who does what and by when?

Myth No. 3: Most family businesses have ironclad estate plans, including stock transfer arrangements.
This is so sad. I don’t have the statistic. But the number of family businesses that go down the tubes because of ineffectual estate plans leading to aberrant estate valuations and painful tax consequences is criminal. And totally unnecessary. Please consult a reputable estate counselor. If you have not done so in the past two years, make it a high priority now. Among other items:
1. Is a "family partnership" right for your business?
2. Have you reduced your estate’s value to the minimum?
3. Does voting control go where you want it to go?
4. Have non-active family members been in the communication loop insofar as your estate plan is concerned?
5. Are you certain your company’s working capital or borrowing capacity will not be jeopardized as a result of your death?
6. Have you psychologically accepted the premise that you can relinquish ownership, still maintain control, and still generate income for the lifestyle to which you have become accustomed?

Myth No. 4: Most family businesses recognize that working family members should not be compensated differently than non-family employees.
I wish! Again surveys on the matter tell a different story. In principle, I believe every family business owner supports the underlying premise here. The problem raises its ugly head when there is more than one sibling in the business, with different responsibility levels, and the one with less responsibility feels the need for parity. Some thoughts:
1. Compensation for ALL family employees should be market driven. Period.
2. Paying for "non-work" is a no-no.
3. Special privileges and perks for family employees visible to non-family employees must be avoided (e.g., big office, nice car, space in the parking lot, longer vacations, etc.).
4. Dividends are a separate issue and should not be confused with the business issue of compensation.
5. Dividends can level the playing field for family members who hold stock, whether employed or not.

There are other family business considerations beyond the scope of this article. A family business specialist can help address them:
1. Do you hold regular family meetings to discuss business matters?
2. Do you have a family "mission statement" about the business?
3. Have family members worked elsewhere before joining the family firm?
4. Do you have a process for "firing" a non-performing family member?
5. Is your process for hiring a family employee any different than for hiring a non-family employee?
6. Do you have a process for mediating family disputes about the business?
Well, if you answered yes to these six questions, you are far ahead of the pack. I know they will be high on the list of subjects covered in our new Family TEC program. Until next month, here’s to the perpetuation of America’s strong family enterprise!

Harry S. Dennis III is the president of TEC (The Executive Committee) in Wisconsin and Michigan. TEC is a professional development group for CEOs, presidents and business owners. He can be reached at 262-821-3340.

June 13, 2003 Small Business Times, Milwaukee

Manufacturing assistance program loses out on funding

The state legislature’s Joint Finance Committee adjourned without following a request by Gov. Jim Doyle to fund a subsidized consulting program that benefits small Wisconsin manufacturers.
Wisconsin Manufacturing Extension Partnership (WMEP), an organization that helps small Wisconsin manufacturers implement lean manufacturing techniques, was initially zeroed out of the budget by Doyle.
WMEP received about $1 million in funding from the state in 2002. State funding and additional revenue from fees charged to manufacturing clients for consulting and training are matched by the federal government – which means pain caused by the loss of state funding will be amplified by loss of federal money.
During Joint Finance proceedings, Sen. Bob Welch (R-Redgranite) was behind a measure to give WMEP $100,000, with the money coming from another state program.
Doyle got in the act by submitting to the committee a letter asking that WMEP be funded at a level of $500,000. But, according to sources close to the committee, time and budget constraints prevented the committee from coming up with the cash.
"We just got word on Thursday (June 5) that it didn’t happen," WMEP executive director Mike Klonsinski said. "We have already been consolidating and leaving a couple of positions open, cutting back on a few services. One of the things we are going to have to cut back on is the support we were providing the suppliers in our supplier development activity.
"WMEP helps small manufacturers with the cost of participating in technical college programs that help them be more effective suppliers to major Wisconsin OEMs (original equipment manufacturers). We won’t be able to do that anymore. And we’ll have to do away with free offerings and seminars, and informal pro bono or long-term support or advice between paid projects," Klonsinski said.
Klonsinski said he doubted the full legislature would make major changes to the amended budget.

June 13, 2003 Small Business Times, Milwaukee

Want to secure your child’s future? Try a trust

Parents and grandparents wanting to make a substantial gift to a child should consider establishing a trust, recommends the Wisconsin Institute of CPAs. Trusts offer tax advantages and flexibility. For example, you can set up each trust to achieve a specific purpose and specify when the children actually gain access to the funds. Thus, you can be generous without giving up control.

Tax implications
A trust creates a separate taxpayer, with its income taxed to the trust. The child pays income tax only on the trust income actually distributed to him or her. This is especially important if other assets owned by the child push his or her income into a high tax bracket.
For 2003, taxpayers are allowed to give an individual up to $11,000 ($22,000 for married couples), without incurring any gift tax, for gifts of "present interest." The present interest requirement means that the recipient must be able to use the property immediately. Under most circumstances, a gift made to a trust for the benefit of a minor would not be considered a gift of "present interest" and, as such, would not be eligible for the annual gift tax exclusion.
The law recognizes that giving such a large sum to a child would not be prudent. There are, therefore, three notable exceptions to the present interest rule: the Section 2503(c) Qualifying Minor’s Trust; its close counterpart, the Section 2503(b) Trust; and the Crummey Trust. CPAs point out that gifts to these particular types of trusts may qualify for the gift tax exclusion even though most gifts in trust do not. Here’s how they operate.

Section 2503(C) qualifying minor’s trust
The Section 2503(c) Qualifying Minor’s Trust is named after the section of the Internal Revenue Code upon which it is based. Under Section 2503(c), a gift to a trust established for a minor qualifies for the gift tax exclusion if the child has the right to withdraw the money at age 21. However, a child can be granted the right to continue the trust term beyond age 21.
This trust essentially enables a parent or grandparent (or any other individual) to transfer property that would be subject to income or estate taxes into a trust that is taxed separately. The principal and any interest earned can be used for the child’s benefit, such as college expenses.
In order to be a valid 2503(c) Trust, the trust must meet these additional requirements: (1) the trust must have only one beneficiary; (2) the principal and income of the trust must be available to the trustee for the benefit of the child during the term of the trust; and (3) if the child dies before age 21, the assets must be distributed to his or her estate.

Section 2503(b) qualifying minors’s trust
This variation of the 2503 Trust creates a "present interest" by requiring that all income from the trust be distributed annually. The distribution of income can be made to the child directly or to a custodial account where it can be accumulated or used for the child’s benefit. The principal can be held in the trust until after the child reaches age 21.
The key difference between a 2503(c) trust and a 2503(b) trust is the distribution requirement. Parents who are concerned about providing a child or another beneficiary with access to trust funds at age 21 might be better off with a 2503 (b), since there is no requirement for access at age 21. In fact, assets may be held long into the child’s adulthood. The main disadvantage to a 2503(b) is that the annual distribution requirement may limit growth of the trust principal.

Crummey trust
The Crummey Trust, named for the man who invented it, is an irrevocable trust that permits greater flexibility in designating when trust assets will be distributed to the child. Any time you give property to the trust, the beneficiary must have the right to withdraw the contribution during a brief time period, typically 30 to 60 days. Thus the child does not have to wait until he or she reaches age 21 to use the trust funds. The right to withdraw the contribution converts the gift to one of present interest, thereby ensuring that the gift qualifies for the gift tax exclusion, even if not exercised by the child.
If the child does not withdraw the gift within the prescribed window, the withdrawal right is revoked and the money remains in the trust until the child reaches the age specified. Parents, grandparents or others who are trustees of the account can use the trust’s income for other purposes, such as paying the premiums of a life insurance policy or meeting their child’s education expenses.
Unfortunately, these trusts have high administrative costs and the trust is treated as an asset if a child seeks financial aid for college. Keep this in mind as you evaluate your needs.

Carthage begins work on Clausen Center
Complex will be devoted to international business

By Charles Rathmann, of SBT

Demolition work has begun to turn 25,000 square feet of space in Carthage College’s Straz Center into a new complex devoted to international business.
John Camosy, chief operating officer of Kenosha-based Camosy Construction, said asbestos removal and demolition was scheduled to begin in the second week of June.
Construction of the new classrooms, offices and conference space for the A.W. Clausen Center for World Business is scheduled to be completed by June 2004 and ready for the fall semester that year.
Camosy is the construction manager for the project and plans to let bids in August.
Space in the building was freed up by completion of a $40 million athletic center and library at Carthage in Kenosha.
According to Camosy, three stories of space in the Straz Center will in essence be turned into two stories with a mezzanine level.
The project is being designed by Meyer, Scherer & Rockcastle, Ltd., of Minneapolis.
"The center will be comprised of conference space and faculty offices for social science faculty primarily," said Arthur Cyr, the center’s director and Clausen distinguished professor. "Carthage will greatly expand and coordinate existing strength for education and analysis on business development. We will be giving a lot of attention to the global impact on Wisconsin and the surrounding region."
Cyr will bring substantial business and international relations experience to the center, having served previously as the president of the World Trade Center Chicago Association and as vice president of the Chicago Council on Foreign Relations.
Cyr has been a member of the faculty and international studies staff at UCLA and a staff member of the Ford Foundation in the International and Education Divisions.
He has authored four books on international relations and British politics and serves on the boards of the Japan-America Society of Chicago, the Driehaus Center for International Business at DePaul University, the Center for International Business Education and Research at the University of Illinois, the Chicago Area Fulbright Program and the editorial board of Orbis.
"There are very few businesses now that can survive without a global perspective," Carthage spokesman Robert Rosen said. "We will have an executive-in-residence program that brings people here for a week or a semester — and this could be a corporate CEO."
The center is named for Carthage alumnus Tom Clausen, whose international banking and public service career took him to almost 120 nations. After graduating from Carthage in 1944, Clausen earned a law degree from the University of Minnesota.
Clausen entered Bank of America’s executive training program in 1949 and, in 1970, was elected president and chief executive officer of BankAmerica Corp. He led the bank through dramatic growth from 1970 through 1981, then served during the Reagan administration as president of the World Bank.
In 1986, he returned to BankAmerica as chairman and chief executive officer, retiring in 1990.

June 13, 2003 Small Business Times, Milwaukee

New tax bill passed
‘Half a sausage is better than none’

By Jim Brandenburg, for SBT

Forgive me for mixing metaphors. You may have heard the expression, "making a new law is a lot like making sausage. You may not like what goes into the process, but the end-product is pretty good." There was much involved in the political process of passing the "Jobs and Growth Relief Reconciliation Act of 2003," but the end result is tax relief for individuals and businesses.
President Bush had originally proposed a tax-cut package of more than $700 billion, but the final package passed at $350 billion. It is still a significant tax cut — the third largest in history.
The Republican leadership in Congress had to walk a fine line within its own party to pass this tax-cut bill. With narrow majorities in each chamber, and with little Democratic support, the leaders had to craft a tax bill to gain enough support within their own parties, while also navigating through legislative obstacles.
The goal was to provide tax incentives to stimulate the struggling economy.
Although the president did not receive all that he wanted, he is pleased with the "half a loaf" he did receive.

Let’s look at the highlights of this bill.
Individual benefits
Tax rate cut – Congress reduced the individual tax rates in 2001. Some of which were effective in 2001; others were delayed until 2006. The 2003 tax bill accelerates the rate cuts across the board to 2003. Here are the top new tax rates:
Tax year 2002 27.0%30.0%35.0%38.6%
Tax year 2003 and after 25.0%28.0%33.0%35.0%

Marriage penalty tax relief – Relief from the "marriage penalty tax" was also scheduled to take effect gradually through 2010, but this relief has been accelerated to 2003.

Child tax credit – Finally, the increase from $600 to $1000 in the tax credit for dependent children under age 17 has been accelerated to the 2003 tax year. Congress felt the need to provide immediate tax relief for 2003 and will send rebate checks this summer to those families affected by the increase in child tax credit.

Business benefits
"Bonus" depreciation – In 2002, Congress passed a measure providing tax relief for new fixed-asset purchases by allowing businesses to write off 30% of the cost in the first year. The new bill increases the percentage from 30 to 50 for any new assets placed into service on or after May 6, 2003.

First-year expensing – Previously, small businesses could write off up to $25,000 of fixed assets in the year of acquisition, provided their total fixed asset additions did not exceed $200,000 in a year. This $25,000 figure is increased to $100,000 for 2003 along with an increase in the annual limitation on additions to $400,000. This expensing measure now includes "off-the-shelf" computer software.

Investor benefits
Dividend income – The tax treatment of dividends was a central theme of the president’s initial tax proposal, and it labored through the legislative process. What eventually passed is not a total elimination of the tax on dividends, but a reduction in the rate of tax to about half of the current rate. The new law will now treat dividends as capital gains taxed at 15%, rather than as ordinary income taxed at rates up to 35%. Those in the bottom 10% and 15% tax brackets will have their dividends taxed at a new 5% rate.

Capital gains – The tax rate on long-term capital gains had been 20%, but under the new tax law the rate will drop to 15% like the new tax rate on dividends (5% for those in the bottom brackets). This is effective for sales occurring on or after May 6, 2003.
This tax package was a long involved process and was by no means a certainty. Congressional leaders plan to introduce and push more tax bills later this year. Look for bills on the tax treatment of exports, charitable giving measures and retirement plans. It is still uncertain what may pass.

Jim Brandenburg is a tax shareholder of Kolb+Co., a CPA and business advisory firm in West Allis; www.KolbCo.com.

June 13, 2003 Small Business Times, Milwaukee

Norquist unplugged
Shining the light on the mayor’s legacy

In his last few months as the mayor of Milwaukee, John Norquist is not going quietly into the good night.
As he reflects back on his 15 years in office, Norquist defines the success of his tenure not in terms of what he did, but in terms of what he allowed the private sector and the people of his city to accomplish.
In an interview with Small Business Times executive editor Steve Jagler, Norquist discussed his career as Milwaukee’s mayor, his priorities in his remaining months in office and his personal future. Norquist has a full agenda of issues that will have significant on Milwaukee’s businesses and its citizenry.
Indeed, the Norquist years have included many triumphs: A rebirth of downtown housing, the Midwest Airlines Center, the Riverwalk, the redevelopment of the Historic Third Ward and others. At the same time, Norquist reduced the size of city government and the city’s tax rate.
Still, Norquist’s legacy no doubt will be tarnished by a sex scandal.
The following are excerpts from the interview, in which Norquist pulled no punches and spoke candidly about issues such as regional cooperation, the Marquette Interchange, downtown development, Miller Park and what he says is former Gov. Tommy Thompson’s lasting adverse impact on the city.

SBT: Mr. Mayor, let’s start with some current things bubbling at the surface. Waukesha County Executive Dan Finley recently accused the City of Milwaukee of "pirating" Roundy’s Inc., of raiding the company to move its headquarters from Pewaukee to downtown Milwaukee. It is my understanding that, in fact, the company approached the city. Is that true?
Norquist: Right. We did talk to a Waukesha County development person, so they knew about it. We didn’t offer them (Roundy’s) anything unusual. The bulk of the big financing is very typical.

SBT: What did the Roundy’s people tell you about why they wanted to move to downtown Milwaukee?
Norquist: Well, I think (Roundy’s chief executive officer Robert) Mariano is kind of an urban guy. He’s from Chicago, and this is closer to Chicago for him. I think he didn’t want to just be in a parking lot someplace.

SBT: Similarly, GE Medical is shopping around for a location to bring 300-some well-paying jobs in the region and seems to be dangling those jobs in front of places like the Heritage Reserve development in Menomonee Falls, Pabst Farms in Oconomowoc and downtown Milwaukee. Do you think downtown is very much in the running for that project?
Norquist: I do, but I don’t really want to say too much about it, because GE doesn’t want us to talk about it. I think the basic reason they’re interested in downtown is because they have high-income, high-education workers for this part of their operation, and if you’re trying to get some engineer from the University of Illinois or a Ph.D from Columbia or New York or something like that, they tend to want to be in or near a large, sophisticated city. And Wisconsin has one entry in that category — Milwaukee.
You look at tech companies clustering downtown. There’s a reason for that. Young, urban, professional types really do want to have a 24-hour, or at least 18-hour, environment.

SBT: And diverse.
Norquist: Yeah, they like the diversity. They like the sophistication. They like the feel they get when they’re around a lot of other smart people. And if they’re in a world dominated by cars, they don’t meet people as much.
It’s not that we don’t have cars. We have lots of them. Most people in Milwaukee have a car. They just don’t have to use it to travel quite so far so often.

SBT: The Park East development — is that making progress, as far as recruiting tenants, businesses, to locate there?
Norquist: The land isn’t available on the market yet. They’re still preparing it. I am (confident), because of what we’ve seen on the Beer Line nearby.
We’ve added 3,330 units of housing since 1997 downtown. We have two high-quality office buildings nearing completion downtown right now. The desire to be in the urban place is really strong. It’s the trend in the East Coast and West Coast, and now it’s the trend here.
There are some cities that aren’t experiencing that very much, like Detroit, but the cities that have quality urban destinations (are thriving).

SBT: This trend is a total reversal from the 1980s, when all of the movement was out of the cities to the suburbs.
Norquist: Yeah, people are bored with it. After World War I, the Depression and World War II, anything old was bad. So, abandoning the cities seemed like the natural thing to do. But that only worked as long as the World War II generation was in power. Their theories still run a lot of government policy.

SBT: Like highways? You’ve been critical of the state’s plans to widen the freeways in Milwaukee.
Norquist: They spend way too much money. They’re raising taxes in this budget by raising $10 on the (vehicle) registration fee. It’s amazing. If we put the $10 registration fee on it for the city, which we could – it’s called a wheel tax – there would be an outcry in the press. The reason there would be an outcry is because it wouldn’t necessarily go to the road-builders.
The road-builders are completely dependent upon the government for almost every dollar they get. They’re part of the government. They’re not really part of the private sector.

SBT: In the big picture, the federal and state governments are broke, and they’re freezing or cutting aid to municipalities. Are they just passing the buck, as far as the tax burden goes?
Norquist: There’s some of that. There’s no question it’s a passing of the buck. But I think state government has too much money, it spends too much money, it has too much power.
One of the biggest threats to Milwaukee is the huge buildup of state government under (former Wisconsin Gov. Tommy) Thompson. He added 20% to the state workforce. He commandeered money and started handing it out through the political process under the name of economic development. We don’t need that. We have banks here. He kept taxes high, and he was able to raise taxes consistently, because, without raising their tax rate, as income went up with inflation, the state just kept taking in more money.
At the local level, you have to lower your rate to keep from taking more money. There’s much more scrutiny at the local level. Since I became mayor, the city’s municipal tax rate has gone from $13.09 to $10.15. And I bet if you polled the average person in Milwaukee, they’d say their taxes went up.
We’ve cut 9% of our workforce. The state added 20% to their workforce. I think the city has benefited economically from having a smaller city government. I just think it’s bad that the state has gotten so fat.

SBT: Can the city’s government be cut any more?
Norquist: Sure. It should be cut steadily, mostly in ways that increase its value to citizens and increase its productivity. Right now, the state’s in a tough position. The governor’s budget cuts shared revenue 7%. We can live with that. It’s going to be tough, but ….

SBT: You don’t think the next mayor is going to walk into a situation where it’s inevitable that he or she is going to have to raise taxes?
Norquist: No. But it’s difficult to cut taxes. I’ve never had the endorsement of AFSCME (American Federation of State, County and Municipal Employees), the main municipal employees’ union. I ran four times and never got its endorsement. I like AFSCME. I have nothing against them, but in order to get its endorsement, you have to spend a lot of money, which Thompson did. Thompson had the state employees’ endorsement the last two times he ran. That’s one of reasons spending ramped up. If somebody wanted something from the state and they had political power or clout, they got it.

SBT: Road-builders?
Norquist: They got it. Anybody who had a lot of political power and clout, they got it. And in the long run, it doesn’t work. Right now, the state has hit the wall. And (Gov. Jim) Doyle has the unpleasant job of cleaning it up.

SBT: Do you think Doyle will reverse the trend?
Norquist: I think Doyle has got his plate full just trying to balance his budget. My one criticism of Doyle is that at a time when he’s cutting back on the state budget … why on earth he would want to spend $360 million more on the Marquette Interchange than the DOT (Department of Transportation) itself was recommending in 1997 …? Why?

SBT: So, you would agree that the Marquette Interchange is crumbling and needs to be replaced, but you disagree on the plans that are advocated by the state?
Norquist: Right. There’s no reason to double-lane all the ramps and build this whole, huge facility. It’s a complete waste.

SBT: A couple of downtown developments still hanging fire — the Harley-Davidson Museum. Have you heard anything from them?
Norquist: No. It’s not a city museum, and they can put the museum anywhere they want. I hope it’s in the city. It would be nice if it was downtown, but I honestly don’t know.

SBT: Is The Grand Avenue redevelopment coming along as you would have liked?
Norquist: I don’t own The Grand Avenue. I’m not trying to be flippant about these things, but I really believe in the private market, and I don’t think the City of Milwaukee should try to operate The Grand Avenue. So, you’ll have to ask them how they’re doing.
I like what’s happening on Wisconsin Avenue. You have Borders Books, which is doing really well, and from what I’ve heard, they’re making money. I think the retail on Wisconsin Avenue’s starting to come back really strong on both sides of the street.

SBT: In the same vein, I realize that you’re not a member of the Potawatomi tribe, but would the notion of their casino being moved downtown, maybe in the Park East development, appeal to you?
Norquist: From the city’s standpoint, if they went to the northwest corner of downtown, they’re not around retail. You can’t have retail next to a gambling casino. It doesn’t work. Retail next to a gambling casino tends to be where people get "comped" if they lose a lot of money. You know, if they lose $100,000, then the casino will give them a $10,000 comp, and they can go to a jewelry store and buy something for their girlfriend and feel like a winner, even though they lost. That’s basically the kind of retail you find next to casinos. You don’t find department stores and shoe stores and regular retail next to a casino.
The real key thing is, does the Potawatomi want to do it? It’s up to them.

SBT: It’s water under the bridge, but looking back at the Miller Park debate now, was an opportunity missed by not locating that ballpark downtown?
Norquist: No. I actually think it worked out pretty well, because the housing market downtown is so strong, and the stadium would have cast a huge parking shadow. I mean, it didn’t need to. It could have been like Wrigley Field, where you have very little parking associated with the stadium.
There’s plenty of parking spaces downtown. It’s just that the Brewers didn’t control it. In order to get the stadium downtown, you would have had to have 12,000 surface spots, which means that huge blocks after blocks would have had to be torn down to create a parking lot.
And you know, if the team’s finances wouldn’t have worked out, you would have had a huge white elephant downtown. So frankly, I think downtown’s much better off as it turned out. If the team had not been so parking-obsessed, a stadium could have worked downtown. In Baltimore, there’s no parking at all associated with the stadium. You just find your parking spots downtown.
Whatever. I don’t feel bad about that anymore.

SBT: There’s a lot of development spilling out of the Historic Third Ward into Walker’s Point and the Port of Milwaukee, isn’t there?
Norquist: Let me get to some of the main points. Basically, I’ve been kind of reacting to things you have brought up. Downtown Milwaukee, and Milwaukee generally, is well placed in the market. Young people like the city. They like urban. They like Chicago. They like Milwaukee. They like New York. Wisconsin has one big city, and it’s a real opportunity for the state, if they don’t screw it up.
What they really need to do is try to support urbanism. This could really be a hot place. This can be the second wave of the tech revolution. In order for Wisconsin to get a piece of that, you have to have an urban center. You can’t come in and bust it up, break it up and be jealous of it, smash it into the ground.
That’s where my problem comes with the SEWRPC (Southeastern Wisconsin Regional Planning Commission) regional plan strategy. They have no understanding of urbanism; they have no understanding of the value of the city. They’re out in an office park in Pewaukee. No one who uses transit can even visit the place, and they’ve come up with a plan that will basically make Milwaukee a mini-Detroit.
I think people need to resist it. The best way to resist it is to stop the DOT from getting any more money, because they’re not going to spend it on things that are good for the cities. They’re not going to spend it on things that are good for Wisconsin generally, either. They’re spending it on things that will drain the vitality of the state and turn it into sort of a truck route for people going from Chicago to Minneapolis. That’s basically what they’re doing. And it’s very thoughtless.
If everybody agrees that no taxes in Wisconsin should go up, then DOT won’t be able to do this. The State of Wisconsin has just gotten bold and arrogant and over-financed.

SBT: Turning to the Menomonee River Valley. Things haven’t been moving too quickly there. CMC Heartland still owns a large tract of land there. Is that the holdup? Is that near a resolution?
Norquist: Yeah, it’s very near. It’s near the end of the condemnation process. I think the valley will really turn out to be a real asset over time. I think Canal Street is going to help open up development opportunities.
You know, the businesses people really care about aren’t always the real big ones. I mean, having a café latté stand near your workplace has become real important. We have the highest density of café latté stands in the state of Wisconsin. Some of the coffee companies, you know, their real estate agents were reluctant to open coffee stands in the inner city, so we have independent coffee stands like Bean Head and yes, Sherman Perk. These entrepreneurs figured out that Blacks drink coffee — quite a revelation. Maybe Starbucks will figure that out someday.

SBT: As you look back, mayor … the Riverwalk, the condos, more people are living downtown, the Midwest Airlines Center, the redevelopment of Capitol Court, the creation of some 50 commercial districts in the city, you’ve streamlined the city development permit process ….
Norquist: The ones I’m most proud of are the things that are private sector or induced private sector investment, like the Riverwalk. For a little bit of city money, there was a lot of development along the river. And the same thing for Capitol Court. We helped a little bit with the environmental cleanup and the streets that came in there, but you have the first complete conversion from a suburban-style shopping center to an urban village kind of product, including a Wal-Mart in it with a front-door street address.

SBT: I hate to ask the Barbara Walters question, but what will John Norquist’s legacy be 20 years from now?
Norquist: I think it will probably be not much. Twenty years, I mean if I try rattling off the names of Milwaukee mayors … Mayor (Henry) Maier — people will remember him. (Frank) Zeidler — people remember him because he’s still living and he’s still very articulate. But who remembers John Bohn? Daniel Hoan, you might remember him from the (Hoan) bridge, which he probably wouldn’t have appreciated that much. He probably would have thought it was too big (laughs). Then you go before that, and who was mayor before Dan Hoan? I’m embarrassed to say I can’t tell you.
I’m not into the legacy thing. You try to hang on to a legacy; it’s gone.
I think that, overall, the city’s better off for the time I’ve been in, and I think that most of the people that work for me in policy-making positions were proud to do it and proud to be part of the Norquist administration.
I don’t think there’s any point in trying to embed your legacy. I don’t want to name anything after myself, but if the city’s prosperous 20, 30 years from now, and I’m sitting in a wheelchair someplace in a nursing home, and you look at Milwaukee on TV and you hear good things about it, then I’ll feel pretty good about that.

SBT: Do you plan to continue living in the city?
Norquist: I don’t know yet. My wife and I are both looking at our career options and so forth. So, we’ll see.

SBT: Might you ever consider running for a public office ever again?
Norquist: I don’t think so. I don’t see that as part of anything.

SBT: Finally, an obvious question. It would look like I’m putting my head in the sand if I don’t ask it. But, your sexual relationship (with former aide) Marilyn Figueroa — would that be the main regret of your career as mayor?
Norquist: I don’t rank my regrets. And I don’t dwell on them.

SBT: What are your main priorities in the remaining months in office?
Norquist: Well, we’ve got this budget shortfall that is being pushed down from the state. We want to do the best we can. You know, we are going to hit bone. We’re going to hit muscle, anyway. It’s going to be a tough budget.
We want to push the real estate market real hard, the urbanism. We’re seeing booming development on Brady Street, the east side, Bay View, downtown, Martin Luther King Drive and Mitchell Street, which the business community doesn’t pay much attention to, I think partly just because there are a lot of merchants on Mitchell Street that don’t speak English.
We’ve got our Main Streets Program, and we’re starting to see a Hmong/Laotian street develop along National (Avenue) between 33rd and 38th streets, called "Silver City." I think that’s going to be big — a huge plus for the neighborhood.
That’s how the city regenerates itself.

SBT: As you look at the field of potential candidates to succeed you as mayor, do any of them have a vision that most closely resembles your philosophy?
Norquist: I don’t think they’ve had a chance to express themselves. I mean, all the questions they keep getting from the media are, "How much money have you raised?" and "Which sleazebag PR guy is on your side?" You know, the media really needs to start to focus on issues and find out how the candidates feel. Ask them. Don’t ask me. I don’t know where a lot of them stand, because no one has ever asked them where they stand.

SBT: Are you bullish about Milwaukee’s future?
Norquist: I am. Milwaukee’s a really great city. It suffers its slings and arrows from time to time, but it’s the most valuable real estate per square mile in the state of Wisconsin.

June 13, 2003 Small Business Times, Milwaukee

CEOs say few jobs will be eliminated in Cobalt takeover
The acquisition of Cobalt Corp. by WellPoint Health Networks Inc. will not result in any significant job losses in Milwaukee, according to the chief executive officers of both companies.
In a joint conference call with the media June 4, Stephen Bablitch, CEO of Cobalt, said, “The expectation is that it will remain the same here. To the extent that there’s duplication of services, that may result in some minor job loss, but we don’t expect anything major at this time.
“The merger with Wellpoint will enhance our ability to grow … Our intention is to grow our market share profitably,” Bablitch said.
Leonard Schaeffer, chairman and chief executive officer of Thousand Oaks, Calif.-based WellPoint, said that when WellPoint acquired the Blue Cross & Blue Shield of Georgia, local employment in Georgia actually grew by 113 jobs.
Cobalt, the largest health maintenance organization (HMO) in Wisconsin, currently has 2,200 employees in the state.
Cobalt is the Blue Cross & Blue Shield health insurance licensee for Wisconsin.
Cobalt’s health maintenance organizations (HMOs) – Compcare Blue, Unity Health Plans and Valley Health Plans – cover about 300,000 members in Wisconsin.
Cobalt also provides point-of-service (POS) plans, specialty health care products and related administrative service.
WellPoint and Cobalt officials said Milwaukee will continue to be the headquarters for Blue Cross & Blue Shield United of Wisconsin and the national headquarters for the combined company’s Medicare Part A claim processing business. Currently, more than 600 employees work in that division at Cobalt’s downtown Milwaukee offices, located at 401 W. Michigan St.
Schaeffer said the Wisconsin operation will continue to be locally directed.
He said the fates of Bablitch, as well as Cobalt president Michael Bernstein and vice president Timothy Cullen, have not been determined, because “all three of those gentlemen have been scrupulous” in keeping their futures out of the negotiations for the acquisition.
“We have yet to have those discussions,” Schaeffer said, adding that the local leadership team likely will not be determined until the acquisition is approved by the shareholders of the companies and approved by the Office of the Commissioner of Insurance in Wisconsin.
“The management team will reside here,” Schaeffer said in the media call from Milwaukee. “We see significant growth potential for the ‘Blue’ brand in Wisconsin.”
Schaeffer said he did not anticipate any immediate changes in Cobalt’s relationships with its vendors, some of whom are other Wisconsin-based companies.
Blue Cross & Blue Shield United of Wisconsin members ultimately will have more choices and products to choose from when the acquisition is completed, Schaeffer said.
The acquisition, with a total value estimated at $906 million, will create a significant windfall for the Wisconsin United for Health Foundation. The foundation will receive approximately $513 million in additional funding, including $256 million in cash and the remainder in shares of WellPoint common stock.
Those funds will create endowments that will be dedicated to promoting the health care of Wisconsin residents after Cobalt Corp. is acquired by the nation’s second-largest health insurer.
The funds will be distributed evenly to the Medical College of Wisconsin in Milwaukee and the University of Wisconsin Medical School in Madison.
The Medical College will use 35 % of the annual interest from its endowment to fund community public health initiatives throughout the state, said Richard Katschke, spokesman for the college.
The remaining 65 % will fund educational and research programs at the college, he said. Those programs will focus on the major health issues facing the state’s residents, including cardiovascular disease and cancer, Katschke said.
The endowment will help the state compensate for the funds it lost from the tobacco settlement money Gov. Scott McCallum used to help balance the state budget, Katschke said.
“This is an opportunity to benefit generations of people in Wisconsin,” Katschke said. “The monies can’t be used for bricks and mortars, and it can’t replace any programs that are in place. It’s got to be new initiatives.”
The educational and research programs could result in additional jobs being created at the college, Katschke said.
“New positions could be created. This could result in expanded workforce. At this point, we don’t know how many jobs that will be,” Katschke said.
The foundation owns approximately 60 % of the outstanding shares of Cobalt and has agreed to vote in favor of the acquisition.
The transaction will result in Milwaukee losing the corporate headquarters of another publicly traded company.
Small Business Times first reported last September that Cobalt could become a takeover target by WellPoint, based on speculation by Robert W. Baird & Co. Inc. analyst Craig Kennison.
“Cobalt also may be in an enviable market position, in that it is one of just three publicly held companies in the Blue Cross & Blue Shield network of 43 companies,” SBT reported Sept. 27, 2002. “That could make Cobalt a takeover target of WellPoint Health Networks of Thousand Oaks, Calif., and Anthem Inc. of Indianapolis, Ind., which have been buying up the publicly traded blues affiliates, Kennison said.”
Kennison said June 4 that federal securities regulations prohibited him from further discussing the Cobalt acquisition. Kennison is the Baird analyst who covers Cobalt, and Baird also is acting as an advisor to the foundation that will receive the windfall from the transaction.
The SBT report last September noted that Cobalt was one of the top 20 performing U.S. stocks since the previous year’s 9-11 terrorist attacks, based on a review of stocks for companies with a minimum market capitalization of $25 million and a minimum share price of $5.
At that time, Cobalt’s shares had risen 173 % to $18.10.
Cobalt’s recent successes came after some corporate hiccups. The company had withdrawn a proposed secondary stock offering last August, due to unfavorable market conditions. Cobalt also announced plans to close its claims and customer service departments in Stevens Point and Evansville, eliminating 176 jobs, after the firm lost $140 million from 19999 through 2001.
Cobalt bounced back to compile a net income of $73.9 million in 2002.
“I am convinced that this merger will be good for our customers, the policy holders, our employees and our shareholders, and will enable the Wisconsin United for Health Foundation to advance public health in the state,” Bablitch said.
The acquisition marks the continued growth of WellPoint, which is ranked #103 on Fortune magazine’s 2003 Fortune 500 list of America’s largest corporations.
June 13, 2003 Small Business Times, Milwaukee

Where is your greatness?

By Jo Hawkins Donovan, for SBT

Quite a few years ago, my business was in the midst of a lean season when it was time to plan the holiday party. As usual, I reserved a private room at the elegant Grenadier’s Restaurant in downtown Milwaukee. That year though, instead of any exchange of material gifts, I gathered a lot of big smooth stones from the shores of Lake Michigan.
At the beginning of the evening, I gave each associate one of the stones and a permanent marker. I asked that they each take a few minutes to think, and then write a word on the stone that represented his or her greatness. This was to be our version of the proverbial stone soup.
As a longtime coach, I know that there is greatness in all of us; a coach is often the catalyst for the discovery and expression of a client’s greatness. My associates, stars every one, had already revealed to me varying levels of greatness, although we had not ever had conversations about it. Our spouses or significant others were all involved in making this stone soup as well.
Some at the table got right into it and had no trouble identifying their brilliance.
Others had a lot of reluctance to really label any of their talents as "great", and said so.
There has been a lot of programming in our culture against "tooting your own horn" which has left a lot of false modesty in the way of achieving potential. We seem to be more comfortable with inadequacies than with our greatness.
One guest, to our delight, unabashedly broke into song when it came his turn to describe his greatness — and it was great singing!
Some words that people wrote on their stones were "fire", "Nike", "straight arrow" and "vision."
Eventually each person admitted to greatness within and we had our very nourishing stone soup, followed by Grenadier’s amazing cuisine.
I know there is greatness in all my clients. Sometimes it seems ready to blossom; sometimes it seems just a seed. In getting to know a client, I want to know what is it that gets in the way, what keeps her from identifying that greatness and expressing it into her world.
Marcus Buckingham and Donald O. Clifton have a book with a similar theme, Now, Discover Your Strengths. On their Web site is a short quiz you can take to help identify your greatest strengths, with some "so what?" commentary that is helpful. These authors share my belief that when we are using our greatness, or our top talents, in our work, we are the most engaged in the job and the most committed to the organization. Sadly, when asked if they are using their strongest talents in their jobs, most people say they aren’t. What a waste!
The coaching relationship provides a safe place for exploration of greatness.
Sometimes, with care, I help clients accept that they are built to do lots more than they think. If I suspect that they are walking around in a small-sized version of their real selves, I might invite them to think bigger thoughts, do bigger, be bigger. Together we develop clarity about the barriers getting in the way of this and any disadvantages, any costs involved in shedding that too- tight skin and setting much higher standards for themselves.
Greatness doesn’t have to mean being CEO of a Fortune 500 company or getting into the football hall of fame. It might mean baking the best-darned lemon meringue pie in the Midwest. It might mean reading to first graders in that school on the corner. It might mean staying calm in a crisis. The point is that it is your greatness, not a diluted version of someone else’s.
You might use a coach to help elicit your greatness. You might already have a firm idea of where it lies but be hesitant about what to do with it. You might want to check out the tools offered by Buckingham and Clifton. However you choose to become more aware of and more comfortable with your greatness, you will learn some delightful tidbits along the way. I’d like to hear about your discoveries.
And always. I urge you, do not go to the grave with your song unsung.

Jo Hawkins Donovan has a coaching and psychotherapy firm in Whitefish Bay, and can be reached at 414-332-0300, or jo@hawkinsdonovan.com. The firm’s Web site is www.hawkinsdonovan.com. Hawkins Donovan will respond to your questions in this column. Her column appears in every other issue of SBT.

June 13, 2003 Small Business Times, Milwaukee

Quirky ‘bennies’
Creative benefits help retain valued employees

By Steve Jagler, of SBT

Imagine a workplace in which the employer offers its employees free use of a resort condominium on the beach in Mexico. Or how about a paid trip to Europe to learn more about the economies in Belgium, Hungary, Spain, France and Poland?
Better still, how about an employer who actually provides loans for down payments for employees to become first-time homeowners (see accompanying article)?
As the costs of health care continue to skyrocket, forcing employers to shell more of the burden for insurance premiums onto their employees, more companies are looking for creative perks to keep and motivate their best people.
"That is true. Some of these things are very inexpensive to do, and yet have a great deal of value," said Arvid "Dick" Tilmar, chairman and chief executive officer of T.E. Brennan Co, a consulting company in human resources and management issues. "These types of benefits are easy ways to do that. A lot of these can be used as incentives, you know, ‘Here’s your carrot.’ The return on investment is there."
Tilmar refers to such extra perks as "De Minimis Benefits," referring to the Latin for "nontraditional."
Marshall & Swift/Boeckh (MS/B), a building cost information consulting company in New Berlin, may be offering one of the perkiest of employee perks in southeastern Wisconsin.
The company owns a condominium in the Terra Sol Resort in Cabo San Lucas, Mexico. Employees are encouraged to use the resort, free of charge, according to Ron Quimby, MS/B’s human resources manager.
The resort condo is becoming a hit with the company’s employees.
"Of course I wanted to take advantage of the condo. It’s a really unique opportunity, not just for MS/B employees, but for a Milwaukee employer," said Clay Rice, a national accounts claims customer support representative at the firm. "The condo was great – two swimming pools, grass tennis courts and 90 degrees every day! There was never a shortage of things to do."
"It was fantastic! And it’s also a fantastic way to reward all the employees, not just the executives," said Jim Adams, a national sales consultant with the company. "Of course, being a Milwaukee boy, it’s also hard to turn down warm weather and sunshine in the middle of winter!"
Strong Financial Corp. in Menomonee Falls takes advantage of its worldwide scope of business by offering an annual educational tour for select employees.
Last year, a handful of Strong employees joined company chairman Richard Strong on a whirlwind tour of Europe, visiting Belgium, Hungary, Spain, France and Poland to better understand the European Union.
"It is something that Dick picks a number of associates each year, and it’s educational," Strong spokeswoman Meredith Evans said. "It is, for employees, a nice learning opportunity and a chance to spend some time with our chairman. It is something employers look forward to."
Faced with a nursing shortage and a competitive employee market, the southeastern Wisconsin health care industry also is creating unique perks to retain competent people.
Froedtert Memorial Lutheran Hospital in Milwaukee provides a "Seven-Seventy" program, in which employees can choose to work seven consecutive 10-hour days, followed by seven days off. The program also provides a benefit to patients, because it minimizes the turnover of nursing staff over the course of a one-week stay, according to Froedtert spokeswoman Karen LeSage.
Covenant Healthcare System Inc. in Milwaukee has created an "employee life crisis fund," in which employees give time off and money for other employees in need.
Covenant also provides surprise employee gifts, such as beach towels and sunscreen, and employer-sponsored shopping trips, tickets to events and a trip to New York City.
"In light of the intense competition for health care workers, it’s vital that we value our employees and respect their need for a work/life balance," said Anne Ballentine, regional vice president of Covenant. "Even more important than financial compensation, studies show that appreciation and recognition are the keys to keeping quality employees. People want to work at a place where they are cared for in many ways."

June 13, 2003 Small Business Times, Milwaukee

Six life insurance myth busters

When it comes to life insurance, there are plenty of common misconceptions that can result in inadequate coverage and unnecessary financial hardship for families who suffer the loss of a loved one. The Wisconsin Institute of CPAs dispels some of these myths and offers advice on the best way to protect your family.

Myth No. 1: Everyone needs life insurance
The primary reason for purchasing life insurance is to protect those who are dependent on your income. If you’re young and single, with no children and no aging parents, chances are you don’t need life insurance. Understandably, some single people want life insurance for covering funeral expenses, paying off accumulated debt, or making bequests to charities or special individuals. However, this is the exception rather than the rule.

Myth No. 1: Only the family breadwinner needs life insurance
Although the stay-at-home parent may not contribute cash income to the family, he or she provides important services, such as caring for the children and keeping up the home, which would be costly to replace. To calculate the life insurance needs of a stay-at-home parent, determine how much it would cost each year to pay someone to provide those same services for as long as your family would need them.

Myth No. 3: The amount of life insurance you need is equal to seven times your salary
Life insurance needs vary from individual to individual and can even vary throughout your lifetime. The better answer to how much life insurance you should carry is not a standard amount, but rather, "It depends." Determining the right amount takes homework. You need to inventory all your other financial resources and think long and hard about how much it would take for your family to maintain its lifestyle without you. Families with young children typically need more life insurance than a couple close to retirement. Similarly, if your assets are tied up in real estate or in a family business that would have to be sold for your family to financially survive, you may need more insurance than a family with significant liquid assets.

Myth No. 4: Permanent life insurance costs more so it must be better
Don’t make judgments about life insurance based on cost. For people looking strictly for income replacement, term insurance typically is the better choice. Term life insurance is "pure" insurance with no investment component. You buy term insurance for the duration of time you will need coverage. Your premiums typically go up each year unless you opt for a level premium term policy. The premiums for this type of policy are higher but remain constant for the term of the policy.
While the primary reason for any life insurance purchase should be income protection for your family, permanent insurance policies, including whole life, universal life, or variable life provide long-term, investment-like features that some people find appealing. For example, with these policies you can build a cash accumulation value from which you can withdraw during your lifetime, though doing so may affect your death benefit and have tax consequences. If you’re looking for pure return on capital, other investments usually provide better results. Keep in mind, too, that the premiums on these policies are higher than on term insurance policies.

Myth No. 5: Term insurance policies are renewable
While term policies may be renewable, you can expect to pay more, perhaps considerably more, when you renew. If you took out a 15-year level premium term insurance policy and, at the end of the term, decide to renew it for another 10 years, your premium would be significantly higher because term insurance premiums increase with age. And, if you have developed serious health problems since you first applied for the policy, you may find the cost of renewing your policy to be prohibitively expensive. A better strategy might be to take out level premium term insurance for a longer period than you expect to need it. You can always shorten the term and let the policy lapse by simply not paying the premiums.

Myth No. 6: Life insurance is expensive
How much you pay for life insurance will depend on a number of risk factors, including your health, your age, your family’s medical history and the type and amount of insurance you are looking to purchase. Generally speaking, you’re likely to find that the cost of term life insurance policies for a person in good health is reasonable.

The above was provided by the Wisconsin Institute of CPAs, based in Brookfield, www.wicpa.org.

New investment option builds more than retirement security

By Susan Rockhill, for SBT

There’s good economic news if you’re a woman who owns a small business, small office or home office: Recent U.S. Commerce Department census data shows the growth of "female-owned" businesses outpaced overall business growth by three to four times.
Further evidence suggests this trend will continue, making woman-owned businesses one of the most significant wealth-generating segments of the economy.
But there’s more. Recent tax law changes now permit small-business owners to create additional wealth through a new retirement investment option called "off the shelf" defined benefit plans. These plans not only make it easier for you to set aside more assets for retirement, but to also use retirement planning as a wealth-building strategy.
That’s very good news, especially if the early years of personal financial sacrifice have resulted in a profitable business, but left a female entrepreneur without enough tax-sheltered assets to assure a comfortable retirement.
Money growing tax-free in a defined benefit plan helps offset losses when your business – or the market – is doing poorly. The new "off the shelf" defined benefit plans offer the same tax deduction and assets sheltering as traditional customized plans, but with lower initial set-up and administrative costs.
These plans let you invest conservatively. But because age is such a significant factor in determining retirement savings, you can still "catch-up" at a faster rate through high tax-deferred contributions. And that’s especially important.
That means if you’re a high-income, self-employed individual or owner of a one-to-five-person business and over the age of 45, you can shelter up to $160,000 per year, depending on your age and income. That’s in sharp contrast to the maximum $40,000 a year other tax-deferred retirement plans allow.
Many restrictions can apply, and the size of the deduction is influenced by several variables, including your age and assumed rate of return. When launching your plan, you’ll need to account for several factors: