In Your Corner Magazine | Spring 2022

ISSUE 10 | 2022

C H A M P I O N I N G T H E P E O P L E & B U S I N E S S E S B U I L D I N G C A L I F O R N I A

Ideas for business and lifestyle sustainability California Greenin’

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1. See page 31 for important details and disclosures.

In this issue ISSUE 10 | 2022

WHAT IT TAKES An inside look at how California businesses get it done 02

SUSTAINABLE STRATEGY 7 ways to make your business more environmentally friendly

FRAUD ALERT A true story of a foiled fraud attempt 09

GREEN TAX CREDITS Which home products qualify?

THE NEW POWER PARADIGM CB&T’s commitment to sustainability and green building is helping to shape a new environmental archetype

TALKING SENSE ABOUT INFLATION What should Americans do during this inflation period? 22

3-step approach to successful composting 26

COMPOSTING FOR CALIFORNIANS 101

WEEKEND FORECAST: GLAMPING Check in to comfort at these luxury California camping destinations 28

TAKE 5 Q&A with David Russell, CB&T Senior Vice President, Corporate Real Estate and Facilities

PUBLISHER California Bank & Trust (CB&T)

VP | MARKETING MANAGER Angelia Hage COMMUNICATIONS OFFICER Kari Luu Stoddard

CONTRIBUTORS Diana Ramos, Tom Stacey, Kathryn Guinn, Michelle Jacoby, Nathan Joseph, Bruce Farr, Aaron Berman, Jake Poinier, Sally J. Clasen, Nicolle Lee

EVP | DIRECTOR OF MARKETING Jathan Segur

VP | CREATIVE DIRECTOR Ron Gligic

In Your Corner magazine may contain trademarks or trade names owned by parties who are not affiliated with California Bank & Trust, Zions Bancorporation, N.A. or its affiliates. Use of such marks does not imply any sponsorship by or affiliation with third parties, and California Bank & Trust does not claim any ownership of or make representations about products and services offered under or associated with such marks. Articles are offered for informational purposes only and should not be construed as tax, legal, financial or business advice. Please contact a professional about your specific needs and advice.

BY JAKE POINIER

What it takes In our new series, What it takes, we focus on California companies and small businesses that move the economy, and get an inside look at how they allocate their financial resources and their outlook.

Business Name: Louis Tommasino, CPA & Associates Owner: Louis Tommasino

Industry: Accounting, financial and business advisory services Location: San Diego

Five biggest expenses (as percentage of gross revenues in 2021):

Logistics 20%

TOP 5

Staff 40%

Marketing 5%

Miscellaneous 17%

Profit margin 23%

IN YOUR CORNER ISSUE 10 | 2022

From your perspective, how important is financial resource allocation to success? Our mission is to provide value-added services to our clients as a trusted business advisor, so this topic is really at the heart of everything we do. That includes taking a proactive approach to tax planning and financial statement preparation and, above all, analyzing how their clients are using their resources. We use a collaborative team to solve problems, including our financial advisors, attorneys and, of course, CB&T. In the 26 years we’ve been in business, we’ve handled a wide range of industries, which allows us to apply that breadth of knowledge to each industry. Since staffing is your largest expense, what are some of the factors in your decision-making process? Obviously, COVID-19 skewed the business world in many ways, and that’s true in our industry, too. A rule of thumb for professional services used to be spending about 33% to 35% of revenues on team members or staff. Right now, accounting and tax professionals are leaving the industry, while fewer young ones are coming in. We’re having to recruit at increased salaries and full benefits. So that’s a challenge for us. But in a way, that can be viewed as a benefit since our services are going to be even more in demand. It’s going to be hard for some companies to find in-house accounting or outside CFOs, which means they need to retain services like ours on a contractual basis. As we invest higher figures into salaries and benefits, we’re analyzing our pricing and costs. Because we’re now fully staffed, we’re anticipating adding new clientele in business management and higher-level tax-return preparation. Did the pandemic influence your marketing allocation? Historically, we spend about 5% of our budget for marketing, although last year we didn’t market as aggressively. Most of that is dedicated to our website and marketing materials for potential clients. The one big change is that we haven’t been doing live seminars with our collaborative partners, such as attorneys and bankers. We’re hopeful we can get back to those, and anticipate marketing being a bigger part of our 2022 budget.

How does logistics figure into the equation? That’s about 20% of revenue, including software, supplies and all our IT needs, which are handled by in-house IT managers. I believe we’ve done a good job with our facilities — only about 5% or 6% of our revenues go to rent and about 7% to utilities and maintenance. We negotiated a long-term lease about five years ago, with the possibility of purchasing the space as an office condo at some point.

Regarding profit, how does that number compare historically? Our target profit margin is about 33%, but that’s not achievable in the current economy. I’ve noticed the same trends in other service industries, with salaries and benefits increasing and so many professionals moving from one place to the next. Our goal is to make the company more profitable with higher-end or higher-paying clients, while having the staff work at a reasonable pace — not 80-hour weeks! Any final thoughts on what companies can do to allocate their resources more strategically? One of the main lessons of the past two years is that organizations with a solid infrastructure in place were able to withstand the pandemic. In our business, we call it the “enterprise risk assessment process.” The sustainability of your business isn’t just about IT and facilities. It requires retaining quality personnel and the only way to do that in a place with a high cost of living is with high-level services and fees that can support it. Finally, management needs to develop solid client relations so that, as the company grows, everyone in the company can prosper.

calbanktrust.com/ inyourcorner

Sustainable

strategy

BY JAKE POINIER

Seven ways to make your business more environmentally friendly

IN YOUR CORNER ISSUE 10 | 2022

WHEN CONSIDERING THE different approaches to making your business more environmentally friendly, it’s easy to get focused on zero — including zero waste, zero fossil fuel energy and zero carbon emissions. Even if those are the long-term goals, the sheer magnitude of such a task can make it daunting. It’s easier to think of sustainability in terms of a strategic marathon than a sprint — and every day you strap on your shoes, you’re one step closer to making a difference. Here are seven ways to get started on a program or to ramp up your existing efforts.

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Power play Few people enjoyed the transition from incandescent to buzzing fluorescent lights when they became the office standard, but LEDs haven’t met the same resistance.

“Thanks to years of research and development, LEDs have come a long way in light quality and cost, which makes them a better option for retrofitting,” says David Russell, senior vice president of corporate real estate and facilities for CB&T. “Not to mention that the CALGreen portion of California’s Title 24 has put a lot of urgency into energy efficiency, including lighting.”

According to the U.S. Department of Energy, LEDs use up to 90% less energy, can last 25 times longer than incandescent bulbs, and can even reduce air-conditioning needs since they produce very little heat. While you’re in the process of doing a retrofit, motion-sensitive light switches can also

make a difference on utility bills. Energy Star-certified appliances are yet another way to conserve on power, especially if that office refrigerator is getting up in years. If you’re looking to augment your power with solar panels, it’s worth investigating the tax-credit subsidies available for corporations.

Watch your waste Talk of the “paperless office” has been around for decades, but we’re not quite there yet. Nonetheless, using digital transactions wherever possible represents a significant way to reduce waste, storage and costs.

Transitioning away from single-use water bottles — one of the largest office-waste culprits — can help on multiple fronts. By switching to a water cooler or reverse osmosis, you’re sending less plastic into landfills and probably saving enough money to buy everyone in the office a reusable company-logoed plastic cup. If you prefer recycled cups, the good news is that they’re now about the same cost as Styrofoam, without the environmental harm.

Recycle The list of materials that can be recycled today continues to grow, from plastic and paper to toner

cartridges and all types of electronics. “If your business requires document shredding, look for a vendor that also recycles,” Russell says. Different cities, counties and municipalities have standardized programs to handle recycling of plastic and other products. Participating can help save money in some cases, or it might just be doing the right thing. The other side of the recycling coin is buying products with recycled content, whether it’s paper, furniture or even carpeting.

IN YOUR CORNER ISSUE 10 | 2022

Compute the commute If you have the option, leasing or owning a building near mass transit makes environmental sense on a variety of levels. By having employees take a bus, train or trolley, you’re decreasing the volume of emissions from their vehicles, with the

side benefit of helping them avoid the frustration of traffic jams and eliminating parking problems. But there are other commuting aspects to consider, too. In particular, vehicle chargers have

become a popular trend, with California leading the way in EV adoption and companies such as Amazon planning a move to all-electric fleets. “Charging stations are relatively inexpensive to put in and maintain,” Russell says. “Our landlord installed high-voltage quick chargers and let everyone use them for free for a year. It’s not designed to be a major revenue source, but rather trying to make it convenient for tenants.” Finally, for those employees who’d prefer to get in a workout and cycle, run or walk to work, offering shower or locker facilities is an appreciated perk.

Evaluate your office footprint Even with energy-efficient lighting, recycling and other green programs, simply running an office is a sustainability factor. “COVID-19 has really made a lot of companies reexamine

how large a footprint they need,” Russell says. “Along with the cost to lease or own, you’re paying to operate and maintain the office with utilities and everything else. To the extent that you can downsize and become more efficient, you’re being a wiser and more frugal consumer.”

Encourage responsible construction Licensed contractors should adhere to California regulations as a matter of business practice, but you should still confirm they’re using low-VOC

(volatile organic compounds) materials for tasks such as gluing down carpet, painting and other chemical usage. A healthy building equals healthier workers!

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Watch your water use Water use is an obvious place to start a sustainable initiative, given California’s extreme drought conditions. Inside your building, low-flow toilets and sink aerators are an easy fix. If you have landscaping responsibilities as an owner or tenant, paying attention to the environment around your building makes a difference, too. Adding drought-tolerant plants and a low-flow irrigation system will ensure you’re not prone to overwatering — and will save on water bills, as well. 7

Another less-obvious aspect of water management in the outside environment is when you’re doing landscape work or exterior construction. Larger projects may have regulations in place that require netting or other mitigation to control runoff, but don’t ignore smaller jobs. “Just taking that little added step to control the runoff into the local sewer system plays a part in overall water quality,” Russell says.

Promote your sustainability efforts One of the most important things you can do to support your sustainability programs is to talk about them. “If a company is truly making an effort to use environmentally sound practices, they should be shared through informative pieces with employees and customers,” Russell says. “Who doesn’t want to feel good about where they work or the company they’re doing business with?” In addition to regular internal and external communications about specific initiatives, an annual corporate social responsibility report is a popular way for businesses to highlight the good they do. Sustainable business is smart business As a leader in environmental initiatives, California has many of the strictest and most sweeping regulations

in the country. Still, creating a true culture of sustainability is a matter of taking ownership in meaningful change, not just reacting to new laws. The best approach, according to Russell, is to create a plan. “It can be as simple as a green initiative checklist or as detailed as the project may require,” he says. “Ideally, you want to look at all the different attributes of a space and ferret out all the opportunities to minimize consumption, reduce waste, or improve efficiency, and revisit them regularly. Even if you don’t take advantage of all of them, you know what they are and can address them when it makes sense.” Whether you keep it simple or go beyond government initiatives, working toward sustainable goals for your business can often pay off on the bottom line in the long run.

IN YOUR CORNER ISSUE 10 | 2022

Foiled fraud squad FRAUD ALERT: BY JAKE POINIER

E MAIL SCAMS AREN’T just the domain of far-off “princes” and international “billionaires” anymore. Fraudsters have become increasingly sophisticated, using proper grammar, real logos and legitimate-looking email addresses. In November, a CB&T branch service manager and their team helped prevent a customer from falling for an especially convincing scam. The fake invoice “Our customer, let’s call him Bill, received a renewal invoice from a company pretending to be Geek Squad,” the branch service manager said. “It included an account number and date of activation, and coincidentally, Bill had used Geek Squad in the past so it seemed like it could be real.” The email included a phone number, so Bill called to question the invoice and, sure enough, they answered “Geek Squad,” further adding to the legitimacy. When he questioned that he’d ever signed up, the fake agent responded, “Oh, you’re right, we actually owe you a refund of $300!” Who wants to turn down a windfall?

allowed the agent to remotely access his computer, open his bank browser and manipulate Bill’s refund request for $300. The agent on the phone convinced Bill that he entered too many zeros and submitted a “refund request” of $30,000 instead of $300. And indeed, Bill’s checking account showed a pending $30,000 deposit. The agent advised the

solution was to go to his bank as soon as possible to wire the $29,700 overpayment.

The red flags First, the agent cautioned Bill not

to tell the bank why he was making the transfer. Second, the wiring instructions were

directed to an individual in Peru. Bill was suspicious he’d fallen into a trap and, ignoring the secretive instructions, went to the branch to resolve the issue. Foiled fraud attempt The wire wasn’t sent, and the CB&T fraud department employed additional countermeasures to help keep Bill’s account protected. It’s a happy ending to this cautionary tale and a reminder that if something sounds too good to be true, it probably is.

The link that gave fraudsters remote access

The agent asked Bill to log in to his bank account and sent a link that would allow them to do the refund. However, this phishing link that Bill clicked

SIX TAKEAWAYS TO HELP AVOID FRAUD

Carefully scrutinize all requests for funds transfers to determine if the requests are out of the ordinary 1

Don’t feel rushed. Be wary anytime an unknown person expresses extreme urgency about a questionable payment 3

Think before you speak — scammers want you to act and give out information before you think things through Scammers may try to scare or pressure you. If you’re ever unsure, just default to “no.” 6 5

Don’t click suspicious links in email messages

Confirm requests for transfers of funds by using

from people you don’t know and never allow remote access to your computer unless you initiated the request and are dealing with a known, vetted source

phone or in-person verification; use previously known numbers and not the numbers provided in the email request

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IN YOUR CORNER ISSUE 10 | 2022

Green tax credits Which home products qualify? BY SALLY J . CLASEN

T HE REASONS FOR BEING green in your home are significant, from enhancing your home’s efficiency to helping the planet. But there’s another advantage to maintaining an energy-efficient home that helps reduce the carbon footprint: the tax savings. Here are some tips to help you get the most out of being green during tax season. If you have questions about what home upgrades are covered under energy-efficient tax benefits, contact your tax preparer or the Internal Revenue Service (IRS) for more information. Basic tax credits around the home Homeowners can take advantage of their sustainable efforts under different federal tax credit programs. One of the more familiar ones is the EPA’s Energy Star program, recognizable for the government-backed symbol that promotes energy-efficient products, which use less energy and help save consumers money. While your dishwasher and refrigerator don’t come with tax credits, the equipment that powers them might. Products certified and recognized

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as energy efficient by Energy Star that qualify for eligible tax credits on your

primary residence include: • Central air conditioning • Air-source heat pumps • Gas, propane or oil boilers

• Natural gas, propane or oil furnace • Advanced main air circulating fans • Biomass stoves • Water heaters (non-solar) Each product tax credit can range from $50 to upwards of $300 and can certainly add up. All products must have been in use from December 31, 2017, to the end of 2021, which can be a great write-off for your 2022 taxes. For more information, visit www.energystar.gov.

Here comes the sun — and savings More and more homeowners are using renewable energy alternatives, relying on solar energy systems, fuel cells, small wind turbines and geothermal equipment for electricity. And federal, state and local governments are rewarding citizens for choosing cleaner home processes by implementing tax benefits for those who invest in natural resources to power up their lives. In 2006, the federal solar Investment Tax Credit (ITC) was established. You can qualify for the ITC for the tax year that you installed your solar panels, as long as: • The system is new or being used for the first time between January 1, 2006 and December 31, 2023 • It generates electricity for a home in the U.S. that you own outright • It’s located in your primary or secondary U.S. residence Additionally, this past year, the ITC provided a 26% tax credit for systems installed between 2020 and 2022. The credit reduces to 22% and will end in 2023 unless Congress reinstates the ITC. (The IRS does allow a taxpayer to claim a section 25D tax credit for purchasing a portion of a community solar project, as well). Under the Consolidated Appropriations Act of 2021, the renewable energy tax credits for fuel cells, small wind turbines and geothermal heat pumps feature a gradual step down in credit value, the same as those for solar energy systems. Existing homes

Which home improvements qualify for energy tax credits? It’s not just your home’s air conditioner or water heater that may qualify for federal tax credits. Residential energy-efficient improvements that fall under your home’s envelope — the term for physical barriers that separate the inside conditioned space from the outside unconditioned space — and meet Energy Star standards also can reduce your tax load. Some tax credits include: • Windows, doors and skylights: If you replaced any windows, doors or skylights — or installed new ones that have earned the Energy Star — you are eligible for a tax credit of 10% of the cost (not including installation) on up to $200 for windows and skylights and up to $500 for doors. You can also claim the credit if you installed a window or door where one didn’t exist prior. • Roofs (metal and asphalt): Roofing materials that meet Energy Star requirements can qualify for a credit of 10% of the cost up to $500, not including installation. • Insulation: Typical bulk insulation products, such as batts, rolls, blow-in fibers, rigid boards, expanding spray and pour-in-place, can qualify for 10% of the cost, up to $500 (not including installation costs). • Products that air seal: Products that reduce air leaks can also qualify, as long as they come with a Manufacturer’s Certification Statement.

IN YOUR CORNER ISSUE 10 | 2022

Homeowners have opportunities to reduce their tax burden for adopting sustainable practices at the state and local level with incentives including tax credits, rebates and renewable energy certificates.

Tax tips for energy-efficient homeowners Tips to help you get the most out of being green during tax season Apply for energy-efficient tax credits using IRS Form 5695: Residential Energy Credits

and new construction qualify, as well as principal residences and second homes. Homeowners have additional opportunities to reduce their tax burden for adopting sustainable practices at the state and local level with incentives including tax credits, rebates, and renewable energy certificates, which vary by location. Plus, some homeowners who install solar systems may qualify for a tax exemption, which can reduce taxable income liability. Homeowner green watch Taxes can be complicated, but you don’t want to miss the chance to gain some tax savings due to your energy-efficient ways at home. The tax benefits for creating energy-efficient homes are fluid as technology changes, interest in greener lifestyles becomes more mainstream and federal laws are amended and enacted. Take advantage of the current incentives that benefit your tax status with equipment and upgrades that make a difference to everyone.

Visit Energy Star’s website to learn what energy-

saving equipment qualifies for tax credits under the federal program’s guidelines

Keep equipment and product receipts and

other documentation such as Manufacturer’s Certification Statements (found on manufacturer’s website or on the product packaging), and keep them with your tax records to back up your claims of green home practices in the event of an audit

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T HE LOFTY NOTION of a country that’s dedicated to creating cleaner, more renewable energy sources and a more sustainable climate has captivated our attention for generations. The same holds true for CB&T, which has increasingly been committed to creating a more environmentally friendly company culture through sustainability and green building. In measures small and large, CB&T has demonstrated what it means to be a responsible corporate citizen, one that’s keenly attuned to the prospect of changing our climate for the better. Power & finance One aspect of that responsibility was for the bank to take some deliberate action toward bolstering environmental sustainability. Along with Zions Bancorporation, N.A., CB&T created a special banking unit to help identify, finance and aid in the development of utility-scale renewable energy projects. Robert Park, Zions Bancorporation executive vice president and director of Power & Finance, helms that group. Since 2016, the division has been providing financing for power projects and related infrastructure projects with a common profile. CB&T’s commitment to sustainability and green building is helping to shape a new environmental archetype The new power paradigm BY BRUCE FARR

IN YOUR CORNER ISSUE 10 | 2022

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“We work with clients who are the developers of these various power projects and handle the financing for construction and operation of new projects or the refinancing of existing projects — the vast majority of these are sustainably oriented,” Park explains. As he describes it, the group’s portfolio is focused on several energy- and power-related sectors. “Most of our portfolio involves financing for new solar projects ranging from large, utility-scale projects in the $500 to $700 million range, to portfolios of smaller commercial

capacity. With each GW providing energy to 150,000 homes, that funding helps power more than 5 million households. Such impressive success didn’t simply happen. It involved a lot of hard work. “Coming into this sector — power project financing — is difficult, so we had to get ramped up for these kinds of projects very quickly and thoroughly,” Park notes. “It’s a credit to our team and to the bank’s management and credit department that they were able to get up to speed as rapidly as they did in order to understand the risks involved and how to manage them effectively. I attribute the growth and the ‘buy-in’ to this group to them: the stakeholders who took the time to learn about and understand these complex renewable power projects.” Making green an inside job CB&T’s commitment to “green and clean” energy doesn’t merely extend to its external clients. The bank’s dedication to sustainability, green building and the environment reaches throughout the nearly 95 CB&T branches and admin centers throughout California. Michael Edson, CB&T’s first vice president and facilities operations manager, helps implement the company’s sustainability commitments and with his team, supervises the daily facilities management of every CB&T structure in California. To say that he is passionate about his job and that commitment is a marked understatement. Edson’s operating principal is straightforward. “The question I ask of every building I oversee is this, ‘How can we make this structure operate more efficiently, more economically?’ To that end, we

projects, such as solar panel

“Most of our portfolio involves financing for new solar projects ranging from large, utility-scale projects to portfolios of smaller commercial projects.” Robert Park Executive Vice President and Director of Power & Finance, Zions Bancorporation

installations on the rooftops of big box stores or parking garages.” He adds that CB&T also focuses on large, utility- scale wind-power projects, financing the development and construction of these innovative power generators. It also handles financing for large, clean and efficient

natural gas-fired power plants and, on a smaller scale, some battery storage and transmission line systems. The funds at the Power & Finance Group’s disposal are earmarked for a very select number of projects. “These solar and wind projects represent an important part of what we consider responsible growth for CB&T,” Park says. “In fact, that’s why the group was formed.” Gigawatt ‘Cumulative Capacity’ growth Since its inception, the Power & Finance Division has shown marked success. As of late 2021, through its increasing roster of projects, the bank has financed nearly 40 gigawatts (GW) of renewable energy

IN YOUR CORNER ISSUE 10 | 2022

monitor the buildings’ water consumption, their electricity use and have even installed drought tolerant landscaping in some of the bank facilities. Of course, there’s also each building’s construction and renovation materials to consider and that’s a big part of our job.” The green evolution Over his past 20 years with the bank, Edson says he’s witnessed enormous changes in many aspects of bank building construction, renovation and physical plant operation. “When the green movement was just getting underway, we were already changing out light bulbs that used a lot of energy and replacing them with more

related efforts throughout the state. “It essentially was established by the Building Standards Commission,” he notes, explaining that its purpose is to improve public health, safety and general welfare by enhancing the design and construction of both residential and commercial buildings. “The goal is for positive environmental impact and the encouragement of sustainable construction in every aspect of these buildings’ planning, design and operation.” The little things mean a lot CB&T’s ongoing commitment to green standards and sustainability doesn’t always refer to big designs and big projects. Rather, as Edson describes it, it’s smaller efforts that collectively add up to a big result. “What we see for our CB&T building standards involves continuing to address the many opportunities for embracing sustainable practices,” he says. “For example, it’s the type of carpets you install and whether or not they contain recycled material. Or if we can find appropriate areas to implement LED lighting. Or if we’re installing building systems that have economizers that draw in outside air before we turn on air conditioning that will use more energy. It’s not always these grand-scale, skyscraper-level projects

economical lighting,” he said. The idea of sustainability in building practices really hit its stride in 2011, Edson recalls, when CALGreen was born. Edson adds that CALGreen really advanced the notion of environmental sustainability in construction- and building-

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“Today’s CB&T branches are smaller, friendlier, brighter and, most importantly, more energy-efficient. It’s an improvement on these facilities across the board.” Michael Edson Vice President and Facilities Operations Manager, California Bank & Trust

Doing the right thing for the future Edson has seen a dramatic change in the way that CB&T answers its commitment to green construction and sustainability. “I remember the old-style bank buildings that were effectively ‘energy hogs,’” he says. “It was 20,000-square-foot banks with huge lobbies and high ceilings and grand chandeliers suspended from them. All that’s changed now. Today’s CB&T branches are smaller, friendlier, brighter and, most importantly, more energy-efficient. It’s an improvement on these facilities across the board.” The philosophy of sustainability that CB&T embraces — and its belief in the idea of reducing climate change — puts the bank into a category of employers that Edson says is the reason he loves his job. “It makes you proud of your employer and you hope your colleagues see it as something they can adopt in their own homes and lives. It’s all about taking care of our planet which helps take care of each other.”

that make a difference; it’s the combined effect of many smaller-scale ideas and implementations.” One prime example is the bank’s decision to eliminate the use of all Styrofoam coffee cups in its facilities and replace them with cups that are 100% recyclable. “I know it’s a simple example, but it’s just one more instance of how this company makes these decisions. It’s just a matter of doing the right thing.”

IN YOUR CORNER ISSUE 10 | 2022

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IN YOUR CORNER ISSUE 10 | 2022

As of this February 2022 writing, the U.S. inflation rate is at 7.5%, a marked acceleration over the past several months and the highest it’s been since the 1981-1982 spike. Consumer prices surged as a roaring economy overwhelmed struggling supply chains and fueled inflation, according to data recently released by the U.S. Labor Department. So, the looming question for all of us is, “What does it all mean and what should we do?” For some answers, we sat down with Anthony Valeri, Director of Investment Management for Zions Bancorporation. possibility of our financial condition has always lingered uncomfortably in Americans’ minds: inflation. Over the past few decades — whether the U.S. economy has been up or down, thriving or declining — one unwelcome Talking sense about inflation What should Americans do during this inflation period?

BY BRUCE FARR

“We all have to remember that [in past trends], the inflation rate is the result of strong demand, which in turn has fueled a strong economy.” Anthony Valeri Director of Investment Management, Zions Bancorporation

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Last year, you predicted an upbeat economy from the grip of the pandemic. Back then, did inflation ever enter your mind as a possibility? Did we see it coming? The answer is yes. Back in May and June 2021, we had expected to see a notable increase. But what we didn’t anticipate is the degree to which [inflation] has persisted and the level at which it’s persisted. So, it’s this higher and longer period of inflation that’s surprised us. What do you think is causing this surge in inflation? For one, the unprecedented response from governments and central banks across the world to stem the impact of COVID. The strength in demand for goods and services is one of the biggest drivers. And when you add to that supply and labor shortages, you get the price increases we’re seeing. What’s more, low- interest rates have fueled higher real estate values and rents, so that’s another factor in the inflation increase.

well the economy and the stock market do in light of higher inflation. The answer so far has been “just fine.” The economy has continued to expand at a good pace, although the third quarter of 2021 was a little weaker than expected. But the fourth quarter is tracking to a very strong growth rate of almost 8%, although that will probably come down a bit. Under these conditions, what should your bank clients — and Californians in general — do to cope financially? What we’ve been watching for — and haven’t seen quite yet — is the degree to which Californians change their spending patterns across the board in response to inflation. At some point, it probably will take a toll, leading to reduced spending that could impact the local economy. My advice to investors is that they shouldn’t panic. They should be patient and remain committed to an investment program. Stocks are still the best hedge against inflation. It’s the one investment that weathers the storm better than any other.

What’s the impact of this situation on CB&T clients? The environment creates uncertainty regarding how

IN YOUR CORNER ISSUE 10 | 2022

and providing ongoing support for consumers and businesses. If I was to go a step further, we’re probably at or near what I would call “peak inflation” right now. While inflation is likely to stay high, we may be witnessing the peak now. One thing I want to emphasize, though, is that I definitely don’t think this is a return to the 1980s and doubled-digit inflation. The California economy is much less reliant on energy and oil than it was back then. Additionally, globalization and aging demographics trends remain largely in place and put downward pressure on prices. From an investment standpoint, what is CB&T doing to help combat the inflationary conditions right now? Broadly, in terms of how we invest, we’re adding to stocks and reducing bonds. That’s because inflation really does erode the value of fixed-interest payments and therefore we expect lower returns from conservative investments such as bonds. If we look out five years, we think our clients will be better served with stocks. With the current rate of inflation, how does it bode for California’s economic future? The question is, how do you expand resources, hire more people, add more equipment, etc, to handle strong demand? But it’s a double-edged sword because you have to wonder how long does that demand remain strong? It’s a tough one for companies to manage through and is a multi-year dilemma. For now, most companies are simply passing higher prices along to consumers and preserving profit margins. Along with low interest rates that fueled housing market strength, a higher cost of living is going to persist. This has been good for employment and the economy but may end up a longer-term challenge if it erodes consumers’ purchasing power. While 2022 is likely to witness above average growth, how the above gets resolved will determine the degree of any economic slowdown in late 2022 and 2023.

“My advice to investors is that they shouldn’t panic. They should be patient and remain committed to an investment program.” Anthony Valeri Director of Investment Management, Zions Bancorporation

Is there any light ahead — any positive trends that you can point to? We all have to remember that the inflation rate is the result of strong demand, which in turn has fueled a strong economy. That bodes well for people’s wages, home values and their overall financial wellbeing. There’s that benefit to consumers and it’s a definite bright spot. One aspect people haven’t considered is that interest rates are still low on a historical basis

Hear more about the market and the state of the economy at calbanktrust.com/economy .

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Composting for

Californians 101

Composting has come to California: Senate Bill 1383 went into effect Jan. 1 and it requires that we recycle our food scraps and other leftovers. Implementation of the law is still rolling out and rules vary by municipality, but here are the basics:

Separate your compost You’re going to put your food scraps in the same green bin you use for yard waste. If you don’t have one yet, some cities are providing a counter-top container, or you can use a piece of sealable Tupperware or a brown paper bag, which you can keep in the freezer until you dispose of it.

Store it for pick up Your trash service will provide a green bin or other receptacle. Private companies and nonprofits are also providing pick-up service, or you may be able to drop your food scraps at local farmers markets and/or community gardens.

Compost at home If you have a yard, you can start composting on site and reap the benefits with your very own organic soil amendment that your flower beds and vegetable garden will love.

IN YOUR CORNER ISSUE 10 | 2022

Compostable

Coffee grounds and filters

Fruit and vegetable scraps

Egg shells

Used/dirty paper food containers

Juice pulp

Paper towels, tissues and paper plates

Some cities accept more food items. For example, Santa Monica also accepts meat, seafood scraps and dairy products. Check with your city ordinance to learn more.

Not compostable

Keep in mind, Californians are early in the composting era. It may seem odd or inconvenient right now, but there are benefits to processing our food waste this way. We’re reducing the load on landfills and replenishing the soil, which promotes plant growth and in turn, takes carbon dioxide out of the air – all good reasons to start composting now.

Liquids

Grease

Plastic, paper or metal

Raw meat

calbanktrust.com/ inyourcorner

BY SALLY J . CLASEN

WEEKEND FORECAST: Glamping Check in to comfort at these luxury California camping destinations I F YOU LIKE THE IDEA of camping, but aren’t so enthusiastic about the earthy aspects of an outdoor adventure — wildly varying temperatures, getting dirty, no electricity — then glamping is for you. A cross between camping and a resort-style experience, glamping lets you be one with Mother Nature… without sacrificing all the creature comforts. Here are four travel-worthy glamping destinations in California that cater to your call for the well-appointed wild.

Alila Ventana Big Sur Despite Big Sur’s endless miles of craggy coastline, there’s nothing remotely rough about glamping at Alila Ventana on California’s Central Coast — except, of course, for the breathtaking rustic backdrop. Guests of the world- class resort near Monterey

in your comfort zone. Adirondack chairs, sinks with instant hot/cold, electric lamps and outlets, handheld lanterns and a picnic table are some of the featured amenities. A luxurious bath house with teak- enclosed showers and heated floors at the campsite also make it a snap to answer nature’s call. And don’t worry about tidying up your bunk quarters — housekeeping visits the campground daily. ventanabigsur.com Mendocino Grove No camping gear is required at this coastal woods retreat. Perched high above the Pacific Ocean, Mendocino Grove is located on 37 acres of redwood forest minutes from the artsy and historic seaside village of Mendocino in Northern California. The sophisticated campground has safari-style tents on wooden platforms

can opt for the Redwood Canyon Glampsites and experience nature at a secluded, adults-only destination. “Campers” sleep on custom-designed mattresses with premium bed linens in upscale tent cabins with decks, equipped with wood and propane fire pits, making it convenient to stay

IN YOUR CORNER ISSUE 10 | 2022

Mendocino Grove

calbanktrust.com/ inyourcorner

the light, bright two-bedroom angular structure has heating and AC, a bath and kitchen, 16-foot ceilings, five skylights and a star-gazing loft — the perfect list of amenities to free your mind and take in the uncluttered views and energy of one of the most spiritual spots on the planet. The funky Southern California space is purposefully low on distractions, but the majestic environment, the owners’ eclectic collection of books and games and the 60s swing chair help guests unwind in relaxing retro style. weareinourelement.com/dome-in-the-desert Wildhaven, Sonoma It’s easy to connect comfortably with the great outdoors when you’re in the heart of wine country surrounded by vineyards. A stone’s throw from the Russian River with a view of the Alexander Valley in Sonoma County, Wildhaven’s extra-large, heated safari canvas tents are outfitted with covered porches, decks with gas fire pits, cozy beds, heating/cooling,

with upgrades that include hotel-quality heated beds, electricity and redwood decks with leather butterfly chairs — perfect for stargazing under the cover of wool blankets. Family- and pet-friendly, Mendocino Grove has ample fire rings and gas grills, and a communal area with a tea and coffee bar. You also can soak up nature on a private hiking trail with guided tours and catch an ocean breeze and spectacular sunset from the nearby bluff of the Mendocino Bay Overlook. When it’s time to clean up, glampers can use the camp’s two stylish spa-like bathhouses, which have restrooms, marble vanities, subway-tiled hot showers (indoor and outdoor) and fluffy towels. mendocinogrove.com Dome in the Desert If you really want to trip into nature than a boho- inspired geodesic outpost close to Joshua Tree National Park just might be your vibe. Dome in the Desert is a quirky Airbnb glamping destination 2.5 hours outside of Los Angeles in the middle of

the Mojave Desert. While just minutes from Joshua Tree Town Center, the dome provides a

firewood and more. The 10-acre riverfront property also has free Wi-Fi, a cabin-style central bathroom with flush toilets, indoor and outdoor hot shower facilities and an outdoor communal kitchen. Other amenities at the affordable glamping escape include complimentary access to classes and events designed to immerse guests in the natural beauty of the property. The “glampground” is minutes from downtown Healdsburg, close to hiking trails, patio and al fresco dining and, of, course, wine tasting. wildhavensonoma.com

serene, indoor/outdoor experience that makes

you feel like you’re a million miles from anything, including your thoughts. Decorated with a mix of vintage mid- century modern furniture and unique handcrafted finds,

IN YOUR CORNER ISSUE 10 | 2022

Important disclosures

Owner-Occupied Commercial Real Estate – Inside front cover

Merchant Services – Pg. 33

1. Merchant Services products and services are provided by Clover affiliate First Data Merchant Services LLC and not by Zions Bank, a division of Zions Bancorporation, N.A. Member FDIC. © 2022 Clover Network, Inc. The Clover name and logo are registered trademarks owned by Clover Network, Inc. and are registered or used in the U.S. and many foreign countries. All trademarks, service marks and trade names referenced in this material are the property of their respective owners.

1. Loans subject to approval in accordance with Bank eligibility and lending guidelines with credit approval. Terms and conditions apply. Contact bank for details or visit calbanktrust.com/oore-offer.

Business Financing and Credit Card – Pg. 10-11

1. Loans subject to approval in accordance with Bank eligibility and lending guidelines with credit approval. Terms and conditions apply. See banker for details. 2. Credit cards are subject to credit approval. Terms, conditions, and restrictions apply; see banker for details. 3. Cardholder will earn cash back on all net purchases 3% cash back or 3X points is earned on office supplies, wireless telephone services, computer network services and telecommunications services and equipment. 2% cash back or 2X points is earned on airlines and car rentals when the purchase is made directly with the airline or car rental company. 1% cash back or 1X points is earned on all other net purchases. 3% cash back or 3X points and 2% cash back or 2X points applies to the first $750,000 in combined purchases per calendar year, then 1% cash back or 1X points applies thereafter. Cash back and points are not earned on transactional items such as cash advances, balance transfers, returned merchandise, etc. Must have at least $1 earned cash back or 2,500 points in order to redeem. Purchases redeemed using points must be redeemed within 90 days of purchase date. Account must be in good standing. See the Amazing Cash Back for Business Program Terms and Conditions or Amazing Rewards for Business Program Terms and Conditions for full details.

Online Banking – Pg. 34

1. User Management and certain administrative capabilities are restricted to Customer System Administrators on the business profile. Other conditions may apply, such as if the business has enrolled in Dual Authorization for certain transactions. Refer to the Digital Banking Service Agreement for more information. 2. Mobile Banking requires download of the smartphone version of the California Bank & Trust app from the Apple® App Store or Google Play® App Store. Message and data rates from your wireless provider may apply. Requires enrollment in Business Online Banking. Please refer to the applicable schedule of fees. Subject to terms and conditions of the Digital Banking Service Agreement. Trademarks used are the property of their registered owner and California Bank & Trust is neither affiliated with nor endorses these companies or their products/services.

Mortgage – Pg. 21

1. All loans subject to credit approval. Terms and conditions apply; see banker for details. Zions Bancorporation, N.A. NMLS # 467014. The loan discount rate of 0.125% is available to all new and existing customers on residential purchase portfolio loans. Offer valid through June 30, 2022. 2. The relationship discount program is available to all new and existing customers on new refinance and purchase portfolio loans. Exceptions are: the 3/1 ARM and Employee loans. Zions direct accounts, Business operating accounts and CDs are ineligible deposit account types. Relationship discount program subject to change at any time.

Equal Housing Lender | SBA Preferred Lender | NMLS #467014

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