Daily Business Report — May 15, 2012

Council Approves Outsourcing City’s IT Systems

Contracts with two companies that will handle the bulk of the city of San Diego’s information technology systems were passed unanimously by the City Council in hopes of saving money while improving services, reports City News Service. The deals with Atos IT Solutions and Services and CGI Technologies and Solutions — part of a move by the city to end its 30-year relationship with the quasi-independent Data Processing Corp. — are worth a combined $117.8 million. The agreements should result in a minimum cost savings of a range of $7.4 million to $20 million, as estimated by the mayor’s office, or as little as $2.1 million up to $14.8 million, as calculated by the city’s Independent Budget Analyst’s office. Mayor Jerry Sanders said the firms will also upgrade the city’s IT infrastructure, which is “stuck in the 1970s.” “Until now, for some reason, the services have never been put out to bid,” Sanders said.

The two firms will perform software development and maintenance and provide help-desk support for city employees, among other services, the mayor said. If they perform well, and two years are added to the contracts, the savings would range from $21.6 million to $39 million, he said. “This is no small amount — this money can be used to resurface more roads, hire more police officers and extend library and rec center hours even further,” Sanders said. Chief Operating Officer Jay Goldstone said the transition from DPC to the other companies will cost the city more than $12 million next year, including $6 million from the general fund. That money is already in the mayor’s budget proposal, he said. Goldstone said the savings from the contracts will catch up, though, and the city should break even after about three years. The last couple of years will result in the savings, he said.

According to Goldstone, about 95 percent of DPC’s revenue comes from the city of San Diego, and 144 of its employees work on municipal functions. Many of the workers are expected to be hired by the new vendors, he said. DPC will continue to provide IT services to the city for a transition period of about one year, Goldstone said. He promised to update the City Council’s Rules Committee on plans to dissolve the Data Processing Corp. in July. Language is in the contracts to prevent the companies from sending jobs from the contracts to other countries. Another IT contract with an outside firm also has been reached and will be announced in the near future, with similar savings totals, city officials said.

Bill Regulating Pet Groomers Advances in State Senate

A measure by state Sen. Juan Vargas that would create a voluntary certification program for the pet grooming industry has been approved by the Senate Appropriations Committee. The bill, called “Lucy’s Law,” was submitted to prevent injuries and fatalities to pets resulting from visits to the pet groomer. The measure now goes to the Senate floor. “Professionalizing the pet grooming industry is a necessary step toward ensuring that groomers are properly trained and pets are protected from harm,” said Senator Vargas (D-San Diego).  “Through this certification program, pet owners can be confident that their pets are in good hands. Vargas  authored SB 969 after learning about Lucy, a small Yorkshire terrier mix, who sustained multiple injuries during a routine trip to the groomer. Among these injuries were a detached retina, a severed ligament in her leg, and lacerations to five of her eight nipples. According to Vargas, there have been thousands of life-threatening injuries to pets over the years due to negligent and under-trained pet groomers who use improper techniques when grooming animals. Injuries from these negligent acts range from severe lacerations due to incorrect usage of grooming tools, toe injuries, broken bones caused by the animal being dropped, eye injuries, and in the most severe of cases, death.  SB 969 would create the California Pet Grooming Council and would allow for voluntary certification of pet groomers and pet bathers and brushers. SB 969 would establish the requirements necessary to obtain a certificate as a pet groomer or pet bather and brusher, and set forth the duties and obligations of a certified pet groomer or pet bather and brusher.

Silvergate Bank Reports First Quarter Income

San Diego-based Silvergate Bank announced first quarter 2012 net income of $1,029,000, the second highest quarterly earnings in the bank’s history. Silvergate Bank’s financial results for the three-month period ending March 31 also included funding $419 million in residential mortgage loans through its warehouse lending division; acquiring $53.5 million in reverse mortgage loans guaranteed by the U.S. Federal Housing Administration; and maintaining capital ratios substantially above industry averages and federal regulatory standards. The Bank’s Tier 1 Leverage Capital Ratio was 13.39 percent and its Total Risk-Based Capital Ratio was 17.36 percent, both of which substantially exceed “well capitalized” minimums of 5 percent and 10 percent, respectively, the bank said.  “Our well capitalized position ensures our ability to provide clients with innovative services and products to meet their needs today and well into the future,” said Alan Lane, president and CEO. The bank opened a new full-service branch in Carlsbad and relocated and expanded its La Mesa branch during the quarter.

Memorial Day Ceremony at Fort Rosecrans National Cemetery

Fort Rosecrans National Cemetery is the site for the 112th annual Memorial Day Ceremony on Monday, May 28, at  10 a.m. Live music by the U.S. Marine Band will begin at 9:55 a.m.  The one-hour program will include a flyover by the Air Group One-Commemorative Air Force, a wreath tribute, U.S. Navy soloist, cannon and rifle salute, bagpipe soloist and special readings for the occasion. Lt. Gen. Thomas Wauldhauser, USMC, will be the keynote speaker. Special parking has been arranged for this event.  Beginning at 8:30 a.m., double-decker busses and other donated vehicles will be shuttling spectators to the cemetery from the main gate parking lot at Electron Street directly to the program site. Parking is also available at the Veterans Museum and Memorial Center in Balboa Park (2115 Park Blvd.) with free Old Town Trolley shuttle service to and from the service.  Boarding begins at 8:00 a.m. and the shuttles depart at 8:30 a.m. for Fort Rosecrans National Cemetery.

PERSONNEL MOVES ____________________________________

San Diego — Paul Najar has joined Gafcon Inc. as vice president and general counsel. Najar’s work is to build and maintain the legal infrastructure of both Gafcon and SharePoint 360. He has more than 23 years of corporate law and administrative management experience in a variety of industries, including construction, financial services, health care and information technology. Prior to Gafcon and SharePoint360, Najar was co-founder and principal of Mayfair European Advisors, an international consulting firm  that helps U.S. companies establish or improve  their operations in Europe.

Peter F. Wallick has been appointed regional vice president for Golden Eagle Insurance Co.’s mid-California region. Wallick will be responsible for the growth of commercial lines and maintaining strong relationships with Golden Eagle Insurance-appointed agencies in his region. He is based in the company’s Aliso Viejo office.