COCPA NewsAccount - March/April 2018 by Colorado Society of Certified Public Accountants

NewsAccount March/April 2018 Colorado Society of CPAs

The Drones Are Coming PAGE 16

Leadership News PAGE 8

Charitable Giving and the New Tax Act PAGE 12

Contents Features

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Joining the COCPA and Educational Foundation Boards From relevancy of the profession to emerging technologies to encouraging students to pursue the CPA designation, these incoming leaders are focused on the profession’s value.

Charitable Giving and the New Tax Act Now is the time to focus on advising clients about how to donate to their favorite charities to maximize the tax benefits and support the causes most important to them.

Flying High: Colorado’s Drone Industry What may have seemed a fanciful idea a few short years ago is now being deployed rapidly. As the drone industry evolves, Colorado is playing an important role.

At the Capitol: Hope and Bipartisanship Spring Eternal Governing the debate over all bills the Colorado General Assembly will consider is the fact that 2018 is an election year. And, this session features one new, major wrinkle: more money.

The Evolving Immigration Environment: What Does It Mean for Colorado Businesses? Immigration remains one of the biggest political footballs in modern times. And, without a comprehensive approach to addressing the system, uncertainty is certain.

Top 20 Technology-Driven Hard Trends Shaping 2018 and Beyond These trends highlight enormous, game-changing opportunities in a broad array of applications and industries. What could they mean for you?

Departments

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Chair Column Movers & Shakers/Tax Study Groups Classiﬁed Ads/In Memoriam

It's no April Fools Joke, as veteran COCPA Member Services Director Susan Vachereau chose March 31 for her retirement date. Serving in a variety of roles during her tenure, Susan leaves a legacy of legendary service to members – especially accounting faculty; in overseeing the peer review program; and through her support of numerous committees and groups including a stint as executive director of the Educational Foundation of the COCPA. We will miss her and wish her all the best.

Chair Column

NewsAccount

Change = Opportunity BY TAWNYA Y. RAMIREZ, CPA, CGMA

A bimonthly publication of the Colorado Society of Certified Public Accountants Vol. 63, No. 6 March/April 2018 Board of Directors Tawnya Y. Ramirez, Chair Victor A. Amaya, Vice Chair Benjamin T. Hrouda, Treasurer Mark T. Solomon, Immediate Past Chair Mary E. Medley, Secretary Directors Renny Fagan, Dana J. Miller, Gregory P. Osborn, Christopher J. Telli, Karen F. Turner, Randy L. Watkins Editorial Board Jack Allgood, Alan D. Bennett, Peggy Jennings, Georgia Z. Phillips, Lori Anne Reinwald, Laura J. Theiss, Barbara J. Tedesko, Steve Van Meter, Michael D. West, Charlie Wright Mary E. Medley, President/CEO Natalie G. Rooney, Contributing Writer Ariana Cassard, Blue Ocean Ideas, Design NewsAccount (ISSN #10899952) is published bimonthly by the Colorado Society of Certified Public Accountants, 7887 E. Belleview Ave., Suite 200, Englewood, CO 80111. NewsAccount is published in January, March, May, July, September, and November and reports information, news, and trends in the accounting profession. The Colorado Society of CPAs assumes no liability for readers’ business decisions in reference to advertisements or other information included in this publication. Membership dues include a $10.00 one-year subscription to NewsAccount. Periodical postage paid in Englewood, CO, and additional mailing offices. POSTMASTER: Send address changes to NewsAccount, Colorado Society of Certified Public Accountants 7887 E. Belleview Ave., Suite 200 Englewood, CO 80111 Net press run = 6,924 copies; sales through dealers and carriers, street vendors, and counter sales = 0; paid or requested mail subscription = 6,852; free distribution by mail = 0; free distribution outside the mail = 17; total free distribution = 55; total distribution = 6,869; office use, leftovers, spoiled = 55; returns from news agents = 0; total sum = 6,924; percent paid and/or requested circulation = 99%.

303-773-2877 • 800-523-9082 Fax: 303-773-6344

NewsAccount is available online at www.cocpa.org.

• NewsAccount • March/April 2018

COCPA Board members from left: Randy Watkins, Victor Amaya, Tawnya Ramirez, and Chris Telli congratulate Sheila Balzer (center), who has been elected to the AICPA Board of Directors.

ur profession has seen a lot of changes since the last issue of NewsAccount, as the result of the new Tax Cuts and Jobs Act. At the January 2018 COCPA Board of Directors meeting, we discussed at length how the changes affect our members in public and non-public practice. In particular, we talked about the implications for those working in the nonprofit realm. One thing is certain: 2018 will be a new world for charitable deductions as we wait to see what implications doubling the standardized deduction will have for organizations that rely on donations. Read more about this important topic in Charitable Giving and the New Tax Act on page 12.

he new tax law also has created a scramble as practitioners try to determine how to get through what has shaped up to be a very challenging

tax season. While the situation presents challenges, it also presents opportunities for practitioners to move into an advisory capacity with clients. The last time we had tax reform, it leveled the playing field for new CPAs. Simply put, there are no experts right now. We’re all trying to develop the expertise to understand the impacts of this new law. This is a great time for our new CPAs to become the experts. While the AICPA advocated for simplification (see the AICPA statement on page 15) – and that did happen in some areas – it wasn’t the simplification for which we’d all hoped. But it is a change, and with change comes great opportunity. Make the most of it! THE EVOLUTION OF LEARNING A commitment to continuous learning is one of the hallmarks of our profession. How we access and earn CPE has and will continue to evolve. The trend continues

to be toward earning CPE on demand and in small bites or chunks. The proliferation of sites like Lynda and Udemy are changing expectations in adult learning and are driving change in the broader professional education space. Although these sites don’t qualify for CPE because they don’t fit our compliance framework, the model of these platforms and others like them is shaping how the profession moves forward with developing CPE delivery. It is critical that the profession continues to evolve how and when we learn. The current pace of change in today’s work environment without access to CPE that provides the skills and knowledge needed is a risk to our profession. The opportunity is in creating CPE that is available on-demand, 24/7, and that provides deep learning for CPAs to apply immediately and strategically. CHANGING FEDERAL POLICY ON MARIJUANA Another issue on the COCPA Board’s radar is U.S. Attorney General Jeff Sessions's announcement about rescinding the Cole memo, an Obama-era U.S. Department of Justice document that provided some legal protections for businesses operating in states that allow and regulate cannabis sales. The issue has shaken the marijuana industry in Colorado and beyond. Here’s what you need to know: Things have not changed here in Colorado. To date, the Colorado State Board of Accountancy has not changed its position. If you are in compliance with state laws, your CPA license is not

in jeopardy just for providing services to marijuana businesses. REFLECTIONS When I look back on my year as Chair, first and foremost, I’m immensely grateful to all of you with whom I’ve talked – some new and some familiar. You’ve been supportive and thoughtful, coming forth and sharing wisdom and new ideas. Your passion for the CPA profession was and is inspiring! The Chair Tour was a great affirmation that we are all part of something bigger. It’s easy to get tunnel vision, to not pick up your head and look around at our fellow CPAs doing great work. Over this past year, I heard fear, and I heard optimism. And in that, I heard entrepreneurialism. Many of you said, “Things are changing. We get it.” You’re taking thoughtful and innovative approaches to work and hiring – that showed up in every area of the state, rural and urban. That was refreshing to see. I can’t end my year as Chair without talking about the transformation the COCPA staff has undergone over the last few years. A big thank you goes out to the team. They have done a great job of facing changes head on and candidly sharing where they’ve gotten a lot of joy, where things have improved, and also offering feedback on what hasn’t quite worked out and still needs tweaking. They’ve been flexible and adaptable, and their efforts are bearing fruit.

I’ve said it over and over: Change is the new normal. There’s no full-on steady state. It’s just always change. Everyone is settling into that reality. Thank you, especially, to Member Development Coordinator Leslie O’Donnell for organizing the Chair Tour, and to CEO Mary Medley for driving all those miles I enjoyed in the shotgun seat. As someone who has handled logistics in the past, I know it’s not easy. I just had to show up, and everything was ready. That was easy! While I was Chair for just one year, I know there’s intentional continuity in the way the COCPA leadership operates. Vice Chair Victor Amaya has been preparing for his upcoming year as Chair, and I’ll continue on the Board as Past Chair. This process brings stability to the COCPA while allowing space for new ideas and a different way of doing things. As COCPA Chair, you feel like you have a full support system from the staff, fellow Board members, and the membership. It is truly a leadership team model designed to benefit members and the profession. Thank you for the honor and opportunity to serve. I look forward to watching our profession evolve into its next iteration. ▲ Email Tawnya at tramirez@chartergrowthfund.org.

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2018

CPAS MAKE A DIFFERENCE

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For complete details, contact the COCPA at 303-773-2877, 800-523-9082, or www.cocpa.org.

Colorado State Board of Accountancy

Sunset on the Horizon This year, the Colorado State Board of Accountancy is undergoing Sunset Review, in preparation for continuation legislation to be introduced in the 2019 legislative session of the Colorado General Assembly. Here’s a succinct look at the process between now and next January and the criteria used in developing recommendations for legislative consideration. The Sunset Report will be released by Oct. 15, 2018.

he Colorado General Assembly sets specific dates that a particular agency, board, or function of government will terminate unless the legislature passes new legislation to continue. So, the “sun sets” on that part of government if it is not reauthorized. The term "sunset legislation" was originally coined in Colorado in the 1970s as a response to problems with regulatory boards, regulatory efficiencies, and government transparency. Many states now have sunset provisions, and the specific provisions may differ among states. In Colorado, a sunset review will generally question the need for regulation to protect the public. If regulation is determined to be needed, the sunset review will look for the least restrictive level of regulation consistent with the public interest. WHO CONDUCTS THE REVIEW COPRRR, the Colorado Office of Policy, Research, and Regulatory Reform, is charged by statute to conduct a sunset review of the entity or function and produce a report of its findings and recommendations prior to the agency’s sunset. Reviews are conducted according to the statutory review schedule and according to statutory criteria. PROVIDING INPUT The review process involves soliciting and receiving input from interested parties and stakeholders. Anyone can contact COPRRR to provide input on a review at www.colorado.gov/pacific/dora-oprrr/ coprrr-sunset-reviews.

STATUTORY CRITERIA Sunset reviews are based on the following:

not available, whether the agency stimulates or restricts competition;

(I) Whether regulation by the agency is necessary to protect the public health, safety, and welfare; whether the conditions that led to the initial regulation have changed; and whether other conditions have arisen that would warrant more, less, or the same degree of regulation;

(VII) Whether complaint, investigation, and disciplinary procedures adequately protect the public and whether final dispositions of complaints are in the public interest or self-serving to the profession;

(II) If regulation is necessary, whether the existing statutes and regulations establish the least restrictive form of regulation consistent with the public interest, considering other available regulatory mechanisms, and whether agency rules enhance the public interest and are within the scope of legislative intent; (III) Whether the agency operates in the public interest and whether its operation is impeded or enhanced by existing statutes, rules, procedures, and practices and any other circumstances, including budgetary, resource, and personnel matters; (IV) Whether an analysis of agency operations indicates that the agency performs its statutory duties efficiently and effectively; (V) Whether the composition of the agency's board or commission adequately represents the public interest and whether the agency encourages public participation in its decisions rather than participation only by the people it regulates; (VI) The economic impact of regulation and, if national economic information is

• NewsAccount • March/April 2018

(VIII) Whether the scope of practice of the regulated occupation contributes to the optimum use of personnel and whether entry requirements encourage affirmative action; (IX) Whether the agency through its licensing or certification process imposes any disqualifications on applicants based on past criminal history and, if so, whether the disqualifications serve public safety or commercial or consumer protection interests. To assist in considering this factor, the analysis prepared pursuant to paragraph (a) of subsection (5) of this section must include data on the number of licenses or certifications that the agency denied, revoked, or suspended based on a disqualification and the basis for the disqualification. (X) Whether administrative and statutory changes are necessary to improve agency operations to enhance the public interest.▲ Questions? Contact COCPA CPE Director Rebecca Campbell, CAE, rebecca@cocpa. org, 303-741-8618, or 800-523-9082, ext. 118, or CEO Mary E. Medley, mary@ cocpa.org, 303-741-8601, or 800-5239082, ext. 101.

Accounting Standards

FASB Addresses Stranded Income Tax Effects of New Tax Cuts and Jobs Act BY KEN TYSIAC

On Feb. 14, 2018, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update that is designed to help organizations address certain stranded income tax effects in accumulated other comprehensive income resulting from P.L. 115-97, known as the Tax Cuts and Jobs Act.

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Under the new FASB rules, financial statement preparers are provided an option to reclassify stranded tax effects within accumulated other comprehensive income in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (or portion thereof) is recorded.

The amendments apply to any organization that is required to apply the provisions of FASB Accounting Standards Codification Topic 220, Income Statement — Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP.

The update requires financial statement preparers to disclose:

The new rules take effect for all organizations for fiscal years beginning after Dec. 15, 2018, and interim periods within those fiscal years.

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A description of the accounting policy for releasing income tax effects from accumulated other comprehensive income Whether they elect to reclassify the stranded income tax effects from the Tax Cuts and Jobs Act Information about the other income tax effects that are reclassified

Early adoption is permitted. The amendments should be applied in either the period of adoption or retrospectively to each period (or periods) in which the effect of the change in federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. FASB moved quickly following the enactment of the Tax Cuts and Jobs Act to provide financial statement preparers with answers to the accounting difficulties created by the law, which was enacted in December 2017. The Board also has posted numerous staff Q&As to help preparers handle the effects of the new law at www.fasb.org/taxcutsjobsact. ▲ Ken Tysiac is a Journal of Accountancy editorial director. Contact him at Kenneth.Tysiac@aicpa-cima.com.

Federal Taxation

Planning for Business Tax Reform BY BRANDON POWERS, CPA

he most significant tax reform legislation enacted in decades was signed into law by President Donald Trump on Dec. 22, 2017. Referred to as the Tax Cuts and Jobs Act (the Act), provisions of the legislation aim to reduce the tax burden of domestic businesses and encourage corporate investment in the economy. The Act's major overhaul of the U.S. tax system will affect every taxpayer in the U.S. and will have a far-reaching impact on tax reporting and planning, financial statement reporting, and mergers and acquisitions (M&A) deal strategies in the middle-market. Additional guidance is expected in the forthcoming weeks, but uncertainty and numerous operational challenges exist related to the application of the Act's complex provisions, including state conformity and the substantial international tax reform shifting the U.S. to a "quasiterritorial" system. Here are some key changes for businesses including the expected impact on tax planning and transaction structuring. CORPORATE TAX RATE REDUCTION AND AMT REPEAL For businesses structured as statutory C corporations, the top income tax rate has been permanently reduced by 40 percent from a graduated 35 percent rate structure to a flat 21 percent rate. The corporate alternative minimum tax (AMT) was repealed for tax years beginning after Dec. 31, 2017. The rate reduction and AMT repeal are two of the permanent changes from the Act and will require the remeasurement of financial statement amounts. Financial ratios such as liquidity, working capital, and earningsper-share will be affected, and taxpayers will need to evaluate the impact on existing debt covenants and dividend distribution and cash flow planning.

â&#x20AC;˘ NewsAccount â&#x20AC;˘ March/April 2018

The new tax rate increases competitiveness of doing business in the U.S. and may encourage corporations to reconsider a U.S. domicile for their business activities. Corporate cash flow is expected to increase, which may result in an increase in employee wages, investment in capital expenditures, and M&A activity. In the weeks since the Act's enactment, a number of U.S. corporations have announced an increase in employee bonuses and a shift of production back to the U.S., attributing tax reform as the leading factor in their decision. The popularity of a C corporation as a taxpayer's choice of entity is expected to rise, and taxpayers already have begun the challenging task of modeling out choice of entity determinations for their existing operations or targeted acquisitions. The reduced rate, coupled with limitations on the deductibility of state and local income taxes and the application of AMT at the individual level, may reduce the attractiveness of a passthrough entity structure. The Act also includes provisions to help alleviate the tax consequences of converting from an S corporation to a C corporation. With the gap closing on the tax rate differential between a C corporation and a pass-through entity, the integration and separation of businesses is anticipated to increase. Taxpayers are encouraged to proactively review choice of entity determinations. NEW LIMITATION ON DEDUCTING INTEREST EXPENSE The Act includes a limitation on the deduction of business interest by any taxpayer for tax years beginning after Dec. 31, 2017. The Act limits the deduction for net interest expenses incurred by a business to the sum of: 1. Business interest income 2. 30 percent of the adjusted taxable income of the business (a metric similar

to EBITDA) Floor plan financing (financing related to dealers of certain vehicles and equipment) Businesses with average annual gross receipts of $25 million or less are exempt from the limit on deducting interest expense, and certain industries are exempt from the limitation. Interest disallowed is carried to the following tax year and will have an indefinite carryover period. Change in control impacts will need to be evaluated, as the disallowed interest expense carryover will be subject to the same limitations on utilization as net operating losses (NOLs) following certain corporate ownership changes or a shift in equity structure. 3.

Businesses with excess cash that are subject to the limitation may consider paying down high interest or variable interest debt. The impact on this provision to the after-tax return on investment (ROI) of leveraged acquisitions will need to be assessed as part of transaction structuring. NET OPERATING LOSSES The Act limits the deduction of NOLs to 80 percent of a taxpayer's taxable income for losses arising in tax years beginning after 2017. The Act eliminates both the two-year carryback of NOLs and the expiration of NOL carryovers arising in tax years ending after 2017. Taxpayers will have to separately track and maintain NOLs arising before and after the effective date of the Act to properly account for their utilization. Businesses may consider deferring certain deductions to years where they are fully deductible as opposed to a year that may limit the deduction to 80 percent of taxable income. BONUS DEPRECIATION The Act's provisions on expensing business assets allows the 100 percent expensing of cost for qualified property acquired and placed in service after Sept. 27, 2017, and before Jan. 1, 2023. Importantly, this

so-called "bonus depreciation" is now allowed for the acquisition of used property. When planning for an acquisition, the expansion of favorable expensing to used property will increase the desire of buyers to acquire the assets of a target and will increase the frequency of deemed asset acquisitions (stock acquisitions treated as asset acquisitions for federal tax purposes).

Tax reform has created an uncertain landscape for tax and business planning, as much remains to be determined regarding how these provisions apply to the multitude of deal structures. Strategies will continue to evolve for businesses of all sizes through the application of the Act's provisions. Taxpayers must review the Act's provisions holistically to

help estimate their overall impact on tax planning, financial statement reporting, and transaction structuring. ▲ Brandon Powers, CPA, is a tax partner with Anton Collins Mitchell LLP. Contact him at bpowers@acmllp.com or 303-830-1120. This article first appeared in the Denver Business Journal, Feb. 12, 2018, and is reprinted with permission.

Sales and Use Taxation

HB 18-1022 Passes

CDOR to Issue Sales Tax Request for Information

n January 2015, the Simplify Colorado Sales & Use Tax Coalition was established by a group of small business leaders, business organizations, and businesses. Simplify CO is dedicated to reforms that will create a simple, fair, and predictable sales and use tax system in Colorado. Simplify CO seeks to simplify the state's overly complex sales and use tax system, which puts a nearly impossible burden on businesses – especially those that work across local jurisdictions.

The Coalition spearheaded HB18-1022 authorizing the Department of Revenue to issue a request for information for an electronic sales and use tax simplification system. This proposal was recommended by the Legislative Sales and Use Tax Simplification Task Force that was created by HB16-1216 to simplify certain administrative details of the state and local sale tax system which could be piloted on an elective basis. The electronic sales and use tax simplification system must provide: • Accurate address location information for a retailer to determine the correct taxing jurisdiction • A single application process for both state and local sales tax licenses • A uniform sales and use tax remittance form

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A single point of remittance for state and local sales and use tax A taxability or exemption matrix

Access to data for the purposes of auditing a taxpayer or revenue projection reconciliation must be available. The RFI process must: • Identify initial and annual costs of an electronic sales and use tax simplification system • Interface with existing retailer and government accounting systems • Allow for various payment options to pay for development or implementation of the system • Anticipate the changing sales and use tax rates and maintain a record of the changes and the effective dates of such changes • Anticipate the changing jurisdictional boundaries and maintain a record of the changes The RFI respondent shall not anticipate a taxing authority will: • Adjust its sales and use tax base or rate • Adopt uniform definitions • Unify its audit authority and process in any fashion HB18-1022 passed the House 62-1 (two

excused) and passed the Senate 35-0. It awaits Gov. Hickenlooper's signature at press time. In 2016, the Coalition supported passage of SB16-36 to reform the states's unfair system that required a taxpayer to pay the full tax audit assessment or post a bond before seeking a ruling from an independent court. Now taxpayers can appeal to district court before any tax payment is due (but retain the option to bond if desired in order to stop further interest and penalties from accruing). Successful passage of legislation in 2017, HB17-1216, created the Legislative Sales and Use Tax Simplification Task Force which is authorized to meet for three years to examine ways to simplify the state's complex sales and use tax system. The Simplify CO Coalition is now poised to spearhead the legislation recommended by the task force. View the 2017 Final Report of the Legislative Sales & Use Tax Simplification Task Force at https://leg.colorado.gov/sites/default/files/ sales_and_use_tax_simplification_task_ force_2017_annual_report_0.pdf. ▲ Register as a Coalition supporter to receive updates, or submit a story of your own experience that demonstrates the complexity of sales/use taxes in Colorado: www.simplifycosalestax. org or contact the Coalition at info@ simplifycosalestax.org.

March/April 2018 • www.cocpa.org •

Leadership News

Joining the COCPA and Educational Foundation Boards, May 1 From relevancy of the profession to the impact of rapid change and emerging technologies to the need to encourage students to pursue the CPA designation and more, these leaders are focused on ensuring the profession’s value – and value add – to and for those it serves today and well into the future. Chair-elect Amaya and Vice Chair/Chairelect Hrouda will serve one-year terms. Treasurer-elect Telli and Directors-elect Brands, Phillips, and Rolland will serve two-year terms. Educational Foundation Trustees-elect Hilliard, Lytle, and Theiss will serve three-year terms. Here’s a brief look at who they are and what’s on their minds.

VICTOR A. AMAYA, CPA COCPA BOARD CHAIR-ELECT Co-Founder, ClearPath Advisors, Littleton

LLC,

Victor puts is simply: “Although change is happening all around us, we must focus on how we keep ourselves relevant. What is our value add, every day, in everything we do?” A 2013 graduate of the AICPA Leadership Academy and 2005 graduate of the Disney Institute Leadership Development program, Victor served as a COCPA director in 2014-2015; has served on the COCPA Financial Literacy Committee since 2010; is completing his year as COCPA Vice Chair/Chair-elect and Budget Committee Chair; and is treasurer for the Vega Collegiate Academy. This former ALPFA Denver Chapter Board member and YouthBiz Board member and treasurer also is a decorated U.S. Army veteran. In 2015, he was awarded the Top 10 Public Accounting Professional Rising Star Award from the National Academy of Public Accounting Professionals and was nominated for the Denver Business Journal’s 40 Under 40 list in 2014 and 2015. Victor’s client focus is brick and mortar retailers, online retailers, general contractors, and subcontractors. He aids his clients in understanding their businesses by optimizing their accounting systems to help in the decision-making process. Prior positions include a teaching assistantship at Colorado State University (CSU) and audit work with PricewaterhouseCoopers LLP. Victor completed his BSBA and Masters of Accountancy degrees at Colorado State University. Victor was born in Honduras and grew up in New Jersey. He is fluent in Spanish and learned to drive a tank before he drove a car. When Victor isn’t thinking about how to ensure the profession’s relevancy into the future, he loves to get away with his fly fishing gear. He also enjoys hunting, camping, and spending time with his wife Kim and their two children.

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BENJAMIN T. HROUDA, CPA, CGMA COCPA BOARD VICE CHAIR/ CHAIR-ELECT Managing Partner, Flywheel Capital, Denver A University of Denver (DU) graduate with his M.A. and B.S. in Accountancy, Ben already has under his belt Big Four public accounting experience (Ernst & Young LLP), teaching experience (DU adjunct faculty), real estate development experience (formerly with several organizations including Sage Hospitality and now with his own company), and COCPA leadership experience (former Young Professionals Committee chair, Board of Directors member, Budget Committee member, and Investment Committee member). He will complete his two-year term as COCPA Treasurer in April. Flywheel Capital is a privately held real estate investment company with a focus on creating value by sourcing and managing value add and stabilized commercial real estate assets across multiple property types. Ben also is an AICPA Leadership Academy graduate. He talks about the importance of clearly communicating how CPAs are relevant in today’s environment and the value CPAs provide. “I hope we can be proud in our accomplishments, our service, our relevance, and why the profession remains important. We should not be shy in these areas.” This 4th generation Colorado native is a devoted husband, brother, and dad who thought his daughters would benefit from learning more about nature. So, the family, living in urban Denver, not only enjoys outdoor sports such as skiing but also collects, shares, and enjoys the daily production of their backyard chickens.

CHRISTOPHER J. TELLI, CPA, CIA® COCPA TREASURER NOMINEE Partner, BKD, LLP, CPAs & Advisors, Colorado Springs Chris is a regional industry leader for BKD’s National Governmental Group and a member of the firm’s Not-for-Profit and Government Committee. He serves on the BKD Governmental Center of Excellence, an internal committee of governmental leaders from across the firm which discusses a variety of issues important to governments. He has served on both peer review and internal inspection teams. Chris is a member of the Government Finance Officers Association of the United

States and Canada (GFOA, where he serves as an advisor on its Committee on Accounting, Auditing, and Financial Reporting), the Association of Government Accountants, the Institute of Internal Auditors, and the Association of Certified Fraud Examiners, Inc. He currently serves on the Mountain and Plains Intergovernmental Audit Forum board, is board chair for the American Red Cross of Southeastern Colorado, and is completing a two-year term on the COCPA Board of Directors.

KRISTINE M. BRANDS, DM, CMA COCPA BOARD OF DIRECTORS NOMINEE Associate Professor, Regis University, Denver; Adjunct Faculty, University of Colorado, Colorado Springs and Colorado Mountain College When Kris says, “I love to travel,” she’s hardly scratching the surface of her passport. This past Educational Foundation of COCPA trustee and president routinely travels the world to present on a wide array of topics, teach classes abroad, and participate in conferences. She’s a past co-chair of the Institute of Management Accountants (IMA)

national task force to update the COSO Internal Control Integrated Framework and assisted in developing three volumes of guidance for smaller public companies to comply with Sarbanes-Oxley. She’s served two terms on the IMA Global Board of Directors and is recognized for

GEORGIA Z. PHILLIPS, CPA COCPA BOARD OF DIRECTORS NOMINEE President and Shareholder, The Phillips Allderdice Consulting Group, Inc., Englewood

He says, “A top issue is technology and how it will affect the future of our profession. Advancements in areas such as blockchain, data analysis, and artificial intelligence will have an enormous impact, and CPAs will need to prepare for the changes which result. Secondly, attracting new and retaining existing talent still will be a significant issue for the profession.” Chris is a summa cum laude graduate in accounting from Regis University, Colorado Springs, and received his MBA, concentration in finance, from the University of Colorado, Colorado Springs. He describes himself as a “huge baseball fan.” One item on his bucket list: To visit all the major league baseball parks.

her work in XBRL, with the International Federation of Accountants, and with the Institute of Certified Management Accountants. She serves on the COCPA Careers Committee and the Pikes Peak Community College Accounting Academic Advisory Committee, to name just a few of her volunteer activities. Kris highlights the needs for the CPA profession to adapt to rapidly changing technology, recruit new CPAs into the profession, and deal with and manage information overload. And, “I want to continue to add value to our members’ experience in the COCPA.”

Subsequent local firm roles as a tax manager and tax partner polished her problem-solving skills. She opened the doors of her own firm in fall 2017.

“New technologies, the regulatory environment, the number of new CPAs coming into the profession annually, firm consolidations, and continuing education are just a few of the areas that CPAs need to navigate in this increasingly more compressed time frame each year,” Georgia says.

government and private industry, how do you compete for the best talent? Should there be a push to specialization? Are the days of the generalist gone?” Count on Georgia not only to ask the important questions but also to invest in finding answers and framing solutions.

Georgia has served on the COCPA Editorial Board, the joint working group with the Colorado Department of Revenue, and as chair of the CPE Board. She’s focused on making sure the COCPA is relevant for members in all practice areas – public, government, private industry, etc. – and promoting the value of membership, especially to younger CPAs.

She asks, “In the public accounting sector, how will sole practitioners and smaller firms continue to compete in the marketplace as consolidation continues to take place? In

A University of Portland graduate, magna cum laude, in both accounting and management, Georgia gained her initial experience with a local CPA firm and Arthur Andersen.

What’s not on her extensive resume? Georgia met her husband at Disneyland, “The Happiest Place on Earth”! CONTINUED ON PAGE 10 March/April 2018 • www.cocpa.org •

Leadership News JOINING THE BOARD, CONTINUED FROM PAGE 9

MATTHEW O. ROLLAND, CPA COCPA BOARD OF DIRECTORS NOMINEE Partner, Moss Adams LLP, Denver Matt began his public accounting career at a Big Four firm in 2005. Subsequently, he joined Hein & Associates LLP, which merged with Moss Adams LLP in November 2017. He provides audit and accounting services to public and private companies in the energy industry. His experience includes exploration and production, transportation, gas processing, and refinery and oilfield services. Matt’s

expertise includes SEC reporting, public and private offerings, SOX 404 implementation and continued compliance, and complex accounting issues. He spent two years in the Netherlands performing statutory audits under GAAP for various European Union countries, as well as group reporting under IFRS. A member and past president of the Council

of Petroleum Accountants Societies – Colorado, Matt will complete his three-year term on the Educational Foundation of the COCPA in April. What’s on his radar: The impact of technology on CPA firms, how they staff engagements and perform services, and the ever-increasing regulatory environment, especially for public companies. “This profession has been and will continue to change significantly. I want the COCPA to be at the forefront of those changes to help members navigate through the uncertainty.” Something most people don’t know about Matt: “I make a mean rack of ribs.”

THERESA DIPONIO HILLIARD, PH.D., CPA EDUCATIONAL FOUNDATION TRUSTEE NOMINEE Associate Professor of Accounting, Fort Lewis College, Durango Almost from the start, Theresa’s career path included both practicing and teaching. She taught accounting as an adjunct professor for 11 years while working at two top 20 public accounting firms. Eventually, she decided she could make a more profound impact on the profession in academia. She left public accounting and taught full time at a teaching college while studying for her doctorate. She enjoys mentoring students and conducting research that investigates questions relevant to the profession and addresses current business problems. Top of mind for this Western State University of Colorado undergrad in marketing and

Georgia State University Executive Doctorate in Business are succession planning of professionals and the impact of technology. “With the decreasing number of students taking and passing the CPA Exam, I believe mentoring is critical to the future of the profession to educate accounting students about the significance and value of the CPA credential. The CPA Exam and subsequent certification should be integrated as the final requirement of an accounting degree. The future of the profession globally requires practitioners to embrace technological changes and adapt our skill set to demonstrate the value of our technical expertise in advising our clients in critical business decisions.

“Technological advances also require an overhaul of our accounting education programs. Educators need to partner with the profession to develop and deliver dynamic accounting programs that provide students critical analytical and problem solving skills along with relevant technology skills for evolving entry-level accounting positions. “As a member of the Educational Foundation Board, I hope to empower students through financial and mentoring resources to pursue rewarding careers as CPAs in the accounting profession. I also hope to effectively work with Foundation members and the wider COCPA leadership to strengthen the profession in Colorado and nationally. From my experience, a career in accounting has been the gift that keeps giving.”

PATRICK A. LYTLE, CPA, CGMA EDUCATIONAL FOUNDATION TRUSTEE NOMINEE Director, Financial Planning and Analysis, SM Energy Company, Denver To read Pat’s resume, you’d think he must be approaching Medicare eligibility. He’s not. This AICPA Leadership Academy graduate, graduate of the COCPA inaugural LeadFit program, SM Energy inaugural Early Career Leadership Development Program graduate,

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Kansas Jayhawk (B.S. 2003), and Colorado Buffalo (M.S. 2009) began his career as an audit staff member with Deloitte & Touche LLP just shy of 15 years ago. He joined SM Energy in December 2007 and has been on the advancement track since day one.

A past president, vice president, and still member of the COPAS Board of Directors, Pat is co-founder of its New Professionals Committee and serves on its Financial Reporting Committee. He also serves on the AICPA Student Recruitment Committee and is a member of the COCPA Careers Committee, CPAs in Industry Conference Planning Committee, and past member of the Editorial Board.

Pat says, “One issue I am working very hard to address is closing the gap between the number of accounting students in university accounting programs and the number of those students sitting for the CPA exam. Through my involvement on the AICPA’s Student Recruitment Committee, I am regularly on Colorado campuses sharing with students the importance of sitting for and passing the CPA Exam and the many career opportunities available to CPAs in addition

to the traditional audit or tax career paths. I hope that by giving back and serving on the Educational Foundation I am able to make a positive impact on others’ careers, particularly for accounting students who are eager to enter the profession. “A second issue on the horizon is the impact of artificial intelligence and technology on accountants’ work. It will be increasingly important for CPAs to leverage

LAURA THEISS, CPA EDUCATIONAL FOUNDATION TRUSTEE NOMINEE Partner, Holben Hay Lake Balzer, CPAs, LLC, Denver A graduate of the University of Northern Colorado, magna cum laude, and the University of Denver Graduate Tax Program, Laura began her career with a Greeley accounting firm while in college. She worked at KPMG LLP, Denver, before joining Holben Hay Lake Balzer in 2009. Laura partners with residential and commercial real estate investors, debt acquisition companies, manufacturing companies, retailers, distributors, and professional and closely held corporations in a variety of industries. She has extensive experience in tax consulting, entity formation, strategic planning, and general consulting services and provides income tax

preparation services for corporate, individual, partnership, fiduciary, and non-profit clients. She serves on the COCPA Editorial Board and also is a graduate of the COCPA inaugural LeadFit program. She notes, “As technology advances and transforms the profession, it is both a challenge and an opportunity. Finding ways to innovate and leverage technology to provide value will keep the CPA profession relevant and a desired career choice.” She’s looking forward to joining the Educational Foundation. “I’ve been lucky

technology to add value to their employers and clients by being able to translate data into relevant and timely information for decision making.” Pat and his wife Sarah have four kids and two dogs. He reports that while most weekends are “absolute chaos with soccer, basketball, baseball, or softball games, or dance competitions, we love living in Colorado and wouldn't have it any other way.”

to have had the assistance of teachers, mentors, and scholarships that helped me achieve many of my professional dreams. Promoting the profession and contributing to scholarship efforts is part of what I hope to achieve by giving back through volunteer service.” Laura’s “something interesting that’s not on her resume”: “I am a sixth generation Coloradan. During the Ute uprising in September of 1879, my relatives fled along with many others out of the Hayden area. A letter from the family describing their peril was published as part of Utes Last Stand. I am married to a wonderful guy who grew up in the Chicago suburbs. I am passionate about continuing to make Colorado a desired place to live for many generations to come.”▲

Support Colorado accounting students year-round at www.coloradogives.org/EFColoradoSocietyCPAs. March/April 2018 • www.cocpa.org •

Not-for-Profit Strategies

Charitable Giving and the New Tax Act BY NATALIE ROONEY

hen the Tax Cuts and Jobs Act (the Act) went into effect on Jan. 1, 2018, it included many changes, not the least of which are an increase to the standard deduction – which nearly doubled to $12,000 for single taxpayers, $18,000 for head of household, and $24,000 for married couples who file jointly – and the elimination of personal exemptions. Charitable donations are deductible only when they are itemized. But it only makes sense to itemize if deductions are more than the standard deduction. Under the new Act, far fewer people are expected to do so. The Tax Policy Center (TPC) estimates the number of itemizers is expected to drop from 46 million to 13 million. TPC also says the new law will reduce the federal income tax subsidy for charitable giving by one-third, from about $63 billion to roughly $42 billion. Prior to the Act, the biggest itemized tax deductions were: • Medical expenses in excess of 10% of AGI (7.5% for taxpayers over 65) • State and local income taxes paid • Mortgage interest • Charitable giving COCPA Past Chair Steve Corder, CPA, CGMA, managing director of Kundinger, Corder & Engle, P.C., Denver, which provides audit and tax services to nonprofit organizations, says charities are keeping an eye on two things: the tax law’s impact on charitable giving and what’s happening here in Colorado with House Bill 18-1013, the Colorado Nonprofit Sustainability Act. If passed, it would create a tax credit for donations of cash by individuals to nonprofits' endowments. Donors can claim a 25 percent state of Colorado income tax credit for donations up to $20,000 to a charitable endowment. While some fear that the Act will cause a massive decrease in charitable giving, others think Americans are generous and give from their hearts, not because of the deduction. The good news: Federal taxes for most Americans are going down, and there are ways to manage

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donations so that charities and taxpayers continue to benefit. WATCHING, WAITING, PREPARING Renny Fagan is president and CEO of the Colorado Nonprofit Association (CNA) and the Community Member on the COCPA Board of Directors. CNA works to educate Colorado nonprofits about new ideas, best practices, and public policies. He says association members already are talking about ways the new law might affect them and how they can solve potential problems. In Colorado, TPC estimates charitable giving will drop 6.5 percent. “That’s $250 million. Taxpayers will still be generous and donate,

"DONORS BELIEVE IN CAUSES, BUT WE DO KNOW FROM SURVEYS THAT TAX BENEFITS FOR GIVING ARE AN IMPORTANT FACTOR IN DONATIONS" but the incentive to donate will no longer be there for many Colorado donors,” Fagan says. “The charitable deduction has been around for a hundred years. It’s how nonprofits make their appeals and how taxpayers think about the sum of their charitable contributions.” Fagan says the 2018 and 2019 tax years will be transition years as donors realize the charitable donation incentive may not be what it used to be, and nonprofits are thinking of new ways to attract the same level of donations. “We aren’t saying that donors are solely motivated by tax incentives,” he emphasizes. “Donors believe in causes, but we do know from surveys that tax benefits for giving are an important factor in donations, particularly for some groups. To that extent, organizations are taking stock of the new law and thinking about how to make donor appeals with a different emphasis.

Organizations also may be thinking about how to diversify revenue sources so they’re not as reliant on donations.” Fagan emphasizes that the group of taxpayers that is very generous with charities won’t be affected by the doubling of the standard deduction “because they’re over that limit anyway. The upper income groups are still going to have the itemized deduction as an incentive.” NEW YEAR, NEW STRATEGIES As charities are watching what donors will do, CPAs can focus on advising clients about how to donate in new and different ways to maximize their tax benefits while still supporting the causes most important to them. COCPA Past Chair Mark Solomon, CPA, CGMA, vice president, controller, and assistant secretary for SM Energy Company, Denver, sits on several nonprofit boards. He will be discussing the tax law changes and implications at upcoming board meetings. “There are things we need to be thinking about,” he says. “It’s hard to tell based on what a donor gives to any one organization what the personal tax situation might be, but if we look at our donor base, I think it would be helpful to craft a message to encourage donors to talk to their tax advisors about tax planning. One tool to consider is an everyother-year strategy.” The every-other-year strategy Solomon discussed with his own advisor is already garnering attention from both taxpayers and their advisors. The concept has donors “bunch” donations from several years into one year through a donor-advised fund (DAF), which is like a charitable investment account. Donors contribute cash, securities, or other assets to a DAF and are then generally eligible to take an immediate tax deduction. Those funds can then be invested for tax-free growth, and donors can recommend grants to any IRS-qualified public charity. According to The Wall Street Journal, Fidelity Charitable, the largest donor-advised fund,

COCPA member Mark J. Smith, CPA/ PFS, CFP, CIMA, and past president of the COCPA Educational Foundation, says he is advising clients to donate to a donor-advised fund, or create one, and make contributions to it. “There’s going to be a very proactive initiative on behalf of a lot of us tax planners to have clients bunch their deductions,” he says. “Donor-advised funds are easy to set up and relatively inexpensive. They will be very creative tools to bunch up donations and then spread them out over whatever period you’d like the charities to receive the funds.” Smith offers an example of how donations through a DAF would work: A donor wants to donate $5,000 a year to a church, but because of the new standard deduction, the likelihood of getting a tax benefit is diminished unless the taxpayer has a lot of other deductions. But if the donor puts $25,000 in a DAF, she receives an immediate deduction. The donor would then have $5,000 per year distributed from the fund to the church over the next five years. Assuming the taxpayer would otherwise take the standard deduction, this technique would save thousands of dollars in taxes in most situations. “It’s a way for donors to remain generous and still achieve tax benefits if they don’t itemize,” Smith says.

added 22,000 accounts last year, nearly double its goal, pushing its total to 105,000. Donors created 3,200 new accounts at Vanguard Charitable in 2017, about double the 2016 total, while total contributions were up 16% for the year to $1.6 billion. More than 20% of Schwab Charitable's 45,000 accounts were started in the second half of 2017. Donor-advised funds held $85 billion in total assets in 2016, according to the National

Philanthropic Trust. Such funds affiliated with commercial money managers are now among the nation's largest charities. Solomon says bunching donations can make it “a bit lumpy when giving directly to nonprofits, but if people utilize a donoradvised fund, they can smooth things out by recommending grants from the donoradvised fund over time to keep the funds flowing to the organization.”

Smith also advises nonprofits to reinforce and reinvigorate their appeals to mid-level and middle-income donors, saying there has been a trend at nonprofits, even prior to the new tax law, to concentrate more heavily on upper income donors as middle-income donors have become less likely to participate in philanthropy. “Nonprofits and philanthropies need to focus on seeking donors of mid-sized donations and middle incomes to contribute dollars,” he says. “Donations from mid-size donors can help to sustain an organization.” UNIQUE OPPORTUNITY FOR COLORADANS Smith says Colorado residents are in a unique position regarding the tax benefits of certain charitable gifts. While most qualified charitable gifts will entitle the donor to a federal and state tax deduction (assuming the taxpayer itemizes), certain gifts made to CONTINUED ON PAGE 14 March/April 2018 • www.cocpa.org •

Not-for-Profit Strategies CHARITABLE GIVING

CONTINUED FROM PAGE 13

qualifying Colorado Child Care and Enterprise Zone programs entitle taxpayers to a Colorado income tax credit of 50% and 25%, respectfully. Smith emphasizes that a tax credit is far superior to a tax deduction. The tax benefit of a tax deduction is the contribution amount times the taxpayer’s marginal tax rate. But the tax benefit of a credit is that it is a dollar for dollar reduction in the tax. • The Colorado State Child Care Contribution Tax Credit (www. colorado.gov/pacific/sites/default/ files/Income35.pdf) enables taxpayers to receive a 50% Colorado state tax credit for any cash gift of $350 or more. This is in addition to the applicable state and federal charitable deductions currently allowed. • The Enterprise Zone Credit offers a 25% Colorado state tax credit to those who make cash donations to qualifying homeless housing programs (www. colorado.gov/pacific/sites/default/ files/Income23.pdf). In addition to generating a Colorado tax credit, a contribution is deductible as a charitable gift for reducing federal taxes. According to Smith, here’s how powerful these programs can be for Colorado taxpayers: By giving $10,000 to a qualifying charity – for example, the Salvation Army – that is designated toward the Colorado Child Care Contribution Tax Credit, a taxpayer would get a $10,000 deduction, possibly deductible under the new tax law based on other deductions. Assuming a 22 percent federal tax bracket and 5 percent (rounded) Colorado state tax, the taxpayer would save $2,200 in federal taxes and $500 in Colorado taxes. Combined, that is $2,700 in taxes saved on a $10,000 donation. In addition to the deduction, the taxpayer also would get a 50 percent tax credit if the donation were made to a qualifying Colorado State Child Care Contribution Tax Credit organization, or 25% if it qualifies for the Enterprise

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Zone Tax Credit. Combining the $2,700 savings in tax deductions and up to an additional $5,000 tax credit, the taxpayer’s tax bill is reduced by $7,700 from a $10,000 donation. “Taxpayers get a huge benefit tax credits,” Smith says. “These become even more important new tax law no longer allows write off state and local taxes $10,000 a year.”'

by utilizing benefits will because the taxpayers to in excess of

Smith also has new strategies for clients who are age 70.5 and required by law to take distributions from their retirement accounts. These individuals have the ability to give directly to charity up to $100,000 a year. And they can withdraw funds without them showing up as taxable income on the tax return. Using the example of the donation to the Salvation Army again, if the donor is age 70.5 or above, he or she should instruct the custodian to withdraw $30,000 from an IRA and give $10,000 directly to the Salvation Army. That $10,000 doesn’t show up as income. Only the $20,000 shows up. “Now, imagine I’m crashing some cymbals here because this is important,” says Smith. “If I designate that $10,000 to go to the Colorado State Child Care Contribution Tax Credit, I still get a 50 percent tax credit on my Colorado income tax return. The Salvation Army gets $10,000, I reduce my Colorado taxes by $5,000, and nothing shows up as taxable income. It’s obscenely attractive in terms of what you can do with a tax credit program when someone is age 70.5.” COLORADO NONPROFIT SUSTAINABILITY ACT On Jan. 10, Colorado House Bill 18-1013 was introduced to create the Nonprofit Sustainability Act of 2018. For income tax years commencing on or after Jan. 1, 2019, but prior to Jan. 1, 2022, the bill, if passed, allows an individual taxpayer to claim an income tax credit for a contribution of money to an eligible endowment fund that is equal

to 25 percent of the contribution. An “eligible endowment fund” is defined in the bill as an endowment fund that is managed by a charity in accordance with the Uniform Prudent Management of Institutional Funds Act. According to the bill’s language, a Colorado charitable organization that receives the donation is required to provide a credit certificate to the taxpayer, who must submit the certificate to the Colorado Department of Revenue (CDOR) along with his or her tax return. The maximum credit an individual may claim for an income tax year is $5,000. CDOR is required to track all the credits claimed in each income tax year, and, when the total amount of credits claimed equals $12 million per income tax year, is required to disallow all subsequent credits claimed in that income tax year. Five other states have successfully passed such a bill: Iowa, Kentucky, Maryland, Montana, and North Dakota. The Colorado House Committee on Finance referred the bill unamended to the House Appropriations Committee on Jan. 31. The purpose, says Steve Corder, is to allow nonprofits which have established endowments to build reserves in the endowment. “The thinking is that it leads to a more sustainable Colorado because these endowments can grow, and the money can be given to those who need it most,” he says. “With the federal tax bill that just passed, Colorado nonprofits will need this. I’ve been following the legislative efforts for many years, and it’s exciting that the bill may finally become law next year.” TO GIVE OR NOT TO GIVE? Solomon says while programs such as the Colorado State Child Care Contribution Tax Credit encourage people to give more, he also believes that most people give to support causes important to them. “Plenty of giving comes from those who don’t get that credit, but tax incentives can encourage bigger giving. I think some people may scale back, but I’m hopeful most people will continue to support the causes they care about.” ▲

Advocacy

Institute Responds to Tax Act Passage

n Dec. 20, 2017, the American Institute of CPAs (AICPA) issued the following statement by President and CEO Barry C. Melancon, CPA, CGMA, after Congressional passage of the Tax Cuts and Jobs Act: “While the tax reform legislation contains several provisions that should be welcomed by CPAs and their clients, the AICPA is very disappointed by lawmakers’ decision to exclude CPAs from the measure’s treatment of passthrough entities. Congress should have provided parity for pass-throughs, regardless of their line of business, in order to achieve a fairer, simpler, and more competitive tax code. The AICPA pointedly and repeatedly made the case that all professional service firms – including accounting firms – should have received the new

deduction. The professional services sector, a critical element of America’s economic success, has been ignored. Accounting firms play an important role in the nation’s growth and job creation and legislators erred in excluding them. Those who suggest that CPA firms can adjust to the change by reforming as C corporations do not understand that the nature of state licensing regulations make such a transition impractical, if not impossible. The AICPA’s advocacy led to the inclusion of several beneficial provisions in the final tax package. Specifically, Congress expanded the number of taxpayers who may use the cash method of accounting without further restricting its use. Lawmakers also retained the business interest expense deduction for small businesses (under $25 million), preserved the current

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tax treatment of nonqualified deferred compensation, simplified the kiddie tax, simplified the inventory rules for small businesses, expanded the exception for small businesses from the uniform capitalization rules, removed computer or peripheral equipment from the definition of listed property, provided consideration of an inflation index, allowed nonresident aliens as qualifying beneficiaries of an electing small business trust, repealed the PEASE phase-out of itemized deductions, repealed the technical terminations rule for partnerships, and repealed the corporate Alternative Minimum Tax, all of which were profession goals.” For resources and information on the Tax Cuts and Jobs Act, go to aicpa.org/ taxreform and cocpa-tax-resources. webflow.io/. ▲

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Colorado Business

Flying High:

Colorado’s Drone Industry BY NATALIE ROONEY

When Amazon first announced it would begin testing package delivery via drone, late night talk show hosts had NATALIE a fiBY eld day. After all, ROONEY quipped Stephen Colbert, what could go wrong with a device that “lands on your doorstep while your family cowers inside until after the semi-autonomous blade-wielding octocopter leaves.” But what may have seemed a fanciful idea a few short years ago is now being deployed rapidly as businesses begin to understand the benefits drones can oﬀer. And as the drone industry evolves, Colorado is playing an important role.

nmanned aerial vehicles (UAVs), commonly referred to as drones, have been around for about a century, used primarily by the military which has driven UAV technology development. These days though, drones occupy a much wider playing field. UAVs deliver packages, take photos, provide wireless internet services, and fight wildfires, to name just a few uses.

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DRONE, UAV, UAS Drone tends to be the generic term used most often in the media. Drones and UAVs are considered to be fairly synonymous although industry experts might emphasize that a drone can be differentiated by a level of automation that renders its flight dependent upon pre-programmed behaviors, as opposed to a UAV which is a remotely piloted aircraft

flown by someone using a stick and rudder type of remote control. Unmanned Aerial Systems (UAS) is an allencompassing description that encapsulates the aircraft or UAV, sensor payload, the ground-based controller, and the system of communications connecting the two.

For the purposes of this article, we’re going to be typical media types and rely on the term drone. WELCOMING DRONES TO COLORADO Several years ago, the Federal Aviation Administration (FAA) announced it would be setting up UAV test sites in six states. Constantin Diehl, CEO and president of UAS Colorado, was part of a team that developed a proposal to name Colorado one of the sites. In the end, Colorado wasn’t chosen, but several positive outcomes occurred from the proposal process, including the formation of UAS Colorado (www.uascolorado.com), a nonprofit business league committed to promoting and improving the aerospace industry in Colorado, specifically supporting the safe integration and use of unmanned aircraft systems, throughout the state, for the benefit of the public. Diehl says the silver lining to the Colorado proposal’s rejection is that governmental red tape has hampered growth at those sites. “Four years later, it’s hard to tell if being one of those test sites was really a significant factor for economic development in the field,” he says. Colorado was approved for an 8,000-square mile area operations site in the San Luis Valley. Drones weighing at least 55 pounds can fly up to 15,000 feet above sea level, which is well above the federal limit of 400 feet. That means all sorts of organizations and businesses are keen to test their UAVs here, which is exactly what UAS Colorado wants as it works to attract more drone-related businesses to the Centennial State. “We needed an area in Colorado to test advanced systems in a larger environment,” Diehl says. “We worked with the FAA to create the operations site where UAS can be flown, operated, tested, and evaluated.” THE BUSINESS OF DRONES Bill Emison, an independent UAS consultant, describes the drone industry as booming. “Drones, whether in the air, on the ground, or in the water, are coming, and they’re coming fast,” he says.

While you may be familiar with a drone buzzing around over a sporting event snapping candid photos, the business world already has seen how many dirty, dangerous, and often deadly jobs drones can take on, such as inspecting power lines, bridges, and nuclear power stations. Drones also are being used for fighting wildfires and inspecting crops. Oil and gas companies were some of the first to realize the advantages of using drones to inspect pipelines. Other industries, such as mining and construction, soon jumped on board. Cameras on drones are so good, they can read a serial number printed in a 6-point font on a cellular tower. Now, companies and organizations in every industry are looking into how they can use drones to save money – and lives. Got a bridge to inspect? The days of doing it via stringing ropes and sending up an employee are likely over. “Any lawyer for that company is going to tell it to put up a drone,” Emison says. “They can afford to lose a $1,000 drone, but they can’t afford to lose a human.” Xcel Energy is using drones to inspect transmission lines across Colorado. In the past, the company used a helicopter or a plane. No surprise that officials say using drones is cheaper, quicker, and safer. And then there are the amazing search and rescue stories involving drones. In January, a drone in Australia dropped flotation devices to swimmers caught in a riptide. In June, two missing hikers and their dog were found by a drone operated by a Douglas County, Colo., search and rescue team. “Colorado is positioning itself as a dronefriendly state,” Emison says. “We have a lot of public safety expertise here because of the mountains. We’re seeing increased use of drones by sheriff’s departments in Colorado’s rural areas that are short on money and resources. A drone gives them amazing capacity at a pretty low cost – and it gives them the ability to save lives.” Beyond dirty jobs and search and rescue efforts, how can white collar businesses take advantage of drone technology? One example is insurance companies which are using drones to inspect roofs for hail

damage. Rather than putting an employee on a roof to crawl around and perform the inspection, companies can put up a drone to take high resolution pictures of roof surfaces. The images can be loaded into an online application, sharing the results with the homeowners or business owners to allow them to see the problem for themselves. It’s just one example of how the technology can improve the quality of the job and move it along more quickly in terms of the claims adjustment process. The photos also can be used to create digital documentation of a facility. “So, a building owner now can have a digital archive of that structure,” Emison says. “It can be a marketing niche for that insurance company to market to other insurance companies.” ADVOCACY & PROJECTS Diehl says beyond campaigning for the operations site in the San Luis Valley, one of the key roles of UAS Colorado is as an advocate to deal with regulatory constraints at the local level. He says there were five bills introduced in the Colorado legislature between 2014 and 2016 to restrict the use of UAS in Colorado. “Most of the bills were introduced with good reason, but in each case, it was found that there was no need for that particular legislation,” Diehl says. Universities, the Department of Justice, law enforcement, the ACLU, and companies all came together to bring their knowledge to the table when the proposed bills were in committee. “By default, we became an advocacy institution. We’ve maintained a position that this is a topic we could approach logically. We’ve earned a reputation with legislators and other parties as a good point of reference and as a trusted entity with an almost neutral approach.” UAS Colorado continues to fight legislation that it says is counter-productive. Diehl says Colorado House Bill 17-1070, Study Drone Use By Public Safety Agencies, is a step in the right direction. The study will provide a baseline at the state level to examine the technology and make recommendations on how to employ it for certain applications and uses. CONTINUED ON PAGE 18 March/April 2018 • www.cocpa.org •

Colorado Business FLYING HIGH

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“Colorado is one of just four or five states that doesn’t have anti-UAS legislation of any kind on its books,” Diehl says. “In fact, we have pro-legislative efforts on the books to encourage companies to come here, develop, and test. We hope this encourages economic development and maintains Colorado as an attractive place for the next generation of aerospace companies coming here.” Since 2015, UAS Colorado has been taking part in some exciting projects, including working with the National Park Service to map the Great Sand Dunes. Park officials want to better track the ecosystem to see how sand shifts over time and impacts the dunes’ height and depth. It was a great opportunity for the industry to provide a free service and assessment to the National Park Service, Diehl says. “It was good for Colorado and good for the counties in the San Luis Valley. The story was picked up internationally, and the project benefited everyone. We like doing these types of projects where everyone gets something out of it. It’s not necessarily a commercial endeavor, but everyone takes a step forward.” With so much potential, Diehl says there isn’t a sector of life that won’t somehow be impacted by UAS or UUV (Unmanned Underwater Vehicle). In Colorado’s highaltitude mountain terrain, much of which is hard to access, the technologies can fly beyond visual line-of-sight (BVLOS). “There is enormous potential for lifesaving,” he explains, and describes how in a wildfire setting, a communications payload can be put on a UAS and then parked on a ridgeline, creating a relay station so firefighters can be in communication with their command center. “The impact to communities here in Colorado is huge.” Some companies are creating their own departments to test and determine how drones will benefit them. Others are reaching out to third parties for the technology. No matter how it happens, the industry is creating new jobs. There is a need not only for the drone vehicles themselves but also for sensors and software to evaluate the data drones generate.

• NewsAccount • March/April 2018

Diehl says the industry’s next major step will be developing beyond line of sight commercial impact. Currently, an operator still has to maintain sight with a drone at all times – either the pilot or a visual observer who has voice contact with the pilot. “It will be a big challenge for the FAA and all entities in the field to determine how we pilot beyond the line of sight. Then you can fly down a power line without having an observer. Search and rescue can follow the terrain and come back.” Diehl says making sure there aren’t collisions will be part of the process.

With his $300,000 Hummingbird drone in production, Bishop is focusing on sales opportunities. “It’s a great market that is growing exponentially,” he says. “We’ve garnered the support of the state legislature and the governor. Per capita, we have the most aerospace companies – Lockheed Martin, Boeing, Ball Aerospace. They’re all here with significant facilities. The technology used in high end, sophisticated drones is being developed here. Colorado is becoming a leader in UAV development, testing, and applications. “

PLENTY OF SPACE, NO FUNDING In 2014, Allen Bishop, founder, president, and CEO of Reference Technologies in Lafayette, Colo., received a $250,000 grant from the state’s economic development office as part of the Advanced Industry Accelerator program. Bishop’s company has secured $20 million worth of contracts that require it to make one unmanned aircraft per workday next year, which means great things for employment. But Bishop says even though Colorado has this amazing 15,000-foot ceiling and the operations site, funding is still problematic.

PRIVACY AND REGULATIONS Mention drones, and inevitably someone will raise privacy concerns. Emison says there already are enough laws on Colorado’s books to address privacy. “There are a million ways to invade someone’s privacy, whether that’s using binoculars, a high-powered camera, or a drone,” he says.

“The money isn’t flowing,” Bishop says. “In the 70s and 80s, there were tons of investment funds in Colorado. Money was everywhere. Then the dot com era came and went, and a lot of people got burned. The economy changed. Venture capital folks seem to put their money into other things rather than new investments.” Bishop turned to angel investors – small investors who typically have $25,000 to $100,000 for funding – scraping together what he needed. “Trying to raise funds took a lot of time away from trying to develop an aircraft,” he says. When he found out about the grant opportunity through the Advanced Industry Accelerator program, he applied, won, and Gov. Hickenlooper handed him a big check. “If it weren’t for that grant, I probably wouldn’t be speaking with you right now,” he says.

UAS Colorado continues to advocate for legal and proper usage of drones. “We’re seeking to build a business-friendly climate for business and commercial application,” Emison says. “We want businesses to feel welcome and not constrained by unnecessary laws.” The Colorado Department of Transportation has developed guidelines for both recreational and commercial drone users (www.codot.gov/programs/aeronautics/ FlyUASResponsibly). The bigger challenge is how to deconflict drone usage with other air traffic, especially if line of sight regulations are removed. The FAA and NASA are both working to address the issue. Despite the challenges, the potential benefits the industry is bringing to businesses are palpable. “I’m bullish on the industry,” Emison says. “Faster. Better. Cheaper. It’s a better mousetrap. The wave is cresting and will hit us soon.” Imagine when people will say routinely, “It’s a bird. It’s a plane. It’s a drone.” And think nothing of it. ▲

Forbes America’s Top 100 Wealth Advisors 1 2016

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Colorado General Assembly

At the Capitol: Hope and Bipartisanship Spring Eternal This information is reprinted with permission of the Colorado Association of Commerce and Industry. For further details, contact Loren Furman, CACI Senior Vice President, State and Federal Relations, at 303-866-9642.

ith the opening day ceremonies and speeches out of the way, state lawmakers have rolled up their sleeves to get to work under the Gold Dome. Swirling around the business bills that will be the focus of the Colorado Association of Commerce and Industry’s (CACI) lobbying efforts this year will be many other important issues – some more directly tied to the business community than others – including alleged sexual harassment at the Capitol, reform of PERA (the public employees’ retirement system), the opioid epidemic, and rural economic development (including increased access to broadband). Governing the debate over all bills will be the fact that 2018 is an election year. Once again, political control at the statehouse is split between the Democrats, who control the House, and the Republicans, who control the Senate.The majority Senate Republicans this session, however, have a two-vote margin over the minority Democrats. Term-limited Senator Cheri Jahn (Wheat Ridge) recently changed her party affiliation from Democrat to unaffiliated. For CACI and the statewide business community that it represents, the most important issues will again be ones that have been debated by legislators in past sessions. This session features, however, one new, major wrinkle: more money. The December revenue forecast by Legislative Council economists projected an

• NewsAccount • March/April 2018

additional $962.7 million for the 2018-2019 fiscal year beginning July 1st largely because of the enactment of the federal Tax Cuts and Jobs Act and its effect on Colorado’s tax base. This amount represents an 8.7 percent revenue increase above what the legislature had approved for spending and the reserve for the current 2017-2018 budget year, which ends June 30th. Consequently, political wrangling between Republicans and Democrats over how to allocate the additional revenue will be a hallmark aspect of the session. TRANSPORTATION FUNDING Last year, Senate Bill 17-267, among other things, provided a $1.9 billion downpayment towards addressing the reported $9 billion need over the next decade for new funding to modernize and expand the state’s roads and bridges to handle Colorado’s economic growth and booming population. CACI supported the bill. The bill also will

begin to provide $100 million per year from the General Fund for transportation. Governor John Hickenlooper has called for the legislature to refer to the voters a measure for the November 2018 ballot to increase taxes to pay for transportation improvements. Prior to his speech, he had called for $148 million of the revenue to go to transportation. Many Republican legislators, however, oppose this idea. Last year, a bipartisan bill to put the question before the voters of increasing the state sales tax died. Many Republicans believe that money should be found in the State’s General Fund budget for transportation. This year, the Senate Republicans’ first bill, Senate Bill18-001, “Transportation Infrastructure Funding,” would (a) take $300 million annually from the projected increase in state revenue for transportation funding and then (b) ask voters in

November to approve the issuance of up to $3.5 billion to fund transportation. The money would be used to widen I-25 between Castle Rock and Monument Hill, expand I-25 in northern Colorado, and expand I-70 in the mountains to the west. OIL AND GAS OPERATIONS While localities in northern Colorado continue to try to enact ordinances to restrict oil and gas production, attention at the State Capitol will be focused on the problem of abandoned wells and pipelines because of the fatal explosion last year at a northern Colorado residence that killed two men and was caused by a leaking, abandoned gas line. CACI anticipates efforts at the State Capitol to restrict oil and gas production as has been the case in past sessions. THE COLORADO ENERGY OFFICE A Republican bill would expand the Office’s responsibilities to include coal, oil, and gas beyond its past portfolio of renewable energy. AFFORDABLE HOUSING Last year’s bipartisan, landmark achievement to jumpstart the construction of condominiums was House Bill 17-1279. Nonetheless, the lack of affordable housing plagues many communities. Employers find it difficult to attract and retain workers because of the affordable housing shortage. Expect further attention to this topic in this session. EDUCATION FUNDING K-12 education proponents are calling for more money for schools to address the $828 million deficit in funding called for by Amendment 23, which voters approved in 2000 and which mandates increased K-12 spending each year. The legislature has not provided funding to date because of revenue shortfalls since the Great Recession of 20082009 and other, competing demands. The $828 million shortfall is known as the “negative factor” at the State Capitol. OF INTEREST TO THE CPA PROFESSION COCPA legislative counsel and staﬀ are monitoring the following specific bills. HB stands for House Bill, and SB stands for Senate Bill, meaning the primary bill sponsor

is a member of that chamber, and the bill is introduced and considered by that chamber first. For more information, contact CEO Mary E. Medley, mary@cocpa.org. HB18-1013, Income Tax Credit for Endowment Contributions, sponsored by Rep. Garnett and Sen. Priola, would create the Nonprofit Sustainability Act of 2018. HB18-1022, Department of Revenue Issue Sales Tax Request for Information, sponsored by Reps. Sias and Kraft-Tharp and Sens. Jahn and Neville, would require the Colorado Department of Revenue to issue a request for information for an electronic sales and use tax simplification system that the state or any local government that levies a sales or use tax, including a home rule municipality and county, could choose to use that would provide administrative simplification. NOTE: The bill has passed both the House and Senate; it awaits the Governor’s signature. HB18-1060, Income Tax Deduction for Military Retirement Benefits, sponsored by Reps. Landgraf and Danielson and Sen. Crowder, would allow an individual under age 55 to claim a deduction of up to $20,000 for the individual’s military retirement benefits. HB18-1128, Protections for Consumer Data Privacy, sponsored by Reps. Wist and Bridges and Sens. Lambert and Court, concerns strengthening protections for consumer data privacy and notification requirements in the event of unauthorized acquisition of personal data. HB18-1175, Sunset Community Association Managers, sponsored by Reps. Kraft-Tharp and Thurlow and Sen. Gardner, would continue licensing of community association managers and management companies for an additional five years, until Sept. 1, 2023, and make other changes to the existing statute as recommended by the Department of Regulatory Agencies. HB18-1208, Expand Child Care Expenses Income Tax Credit, sponsored by Reps. Duran and Winter and Sens. Martinez and Humenik, would expand the state credit by allowing a resident individual with an

AGI that is less than or equal to $150,000 to claim a credit that is equal to 80% of the individual’s federal credit. HB18-1209, No 529 Account Income Tax Deduction for K-12 Expenses, sponsored by Rep. Pettersen and Sen. Garnett, would amend Colorado law to ensure that a taxpayer may not claim a deduction for contributions to qualified state tuition programs for elementary or secondary school expenses and clarifies that such expenses are not qualified deductions. HB18-1217, Income Tax Credit for Employer 529 Contributions, sponsored by Rep. Van Winkle and Sens. Garnett and Gardner, would create a temporary income tax credit for employers that make contributions to 529 qualified state tuition program accounts owned by their employees. HB18-1218, Definition of Veterans’ Organizations for Sales and Use Tax, sponsored by Reps. Carver and Melton and Sens. Crowder and Todd, would make state law consistent with federal law and treat veterans’ organizations registered under section 501(c)(19) IRC the same way as those registered under section 501(c)(3) IRC. SB18-061, Reduce the State Income Tax Rate, sponsored by Sen. Sonnenberg and Rep. Grantham, would, for income tax years commencing on and after Jan. 1, 2018, reduce both the individual and the corporate state income tax rate from 4.63% to 4.43%. The bill also would reduce the state alternative minimum tax by 0.2% for income tax years commencing on and after Jan. 1, 2018. SB18-141, Income Tax Check-oﬀ Nonprofit Donation Fund, sponsored by Sen. Court and Rep. Wilson, would create the donate to a Colorado nonprofit fund in the state treasury with a voluntary contribution designation line to appear on the state individual income tax return form when a space becomes available, and the fund is next in the queue. The line will allow a taxpayer receiving a refund to designate a contribution to an eligible charitable organization of choice. ▲

March/April 2018 • www.cocpa.org •

Government Funding

Putting Bond Money to Work BY NATALIE ROONEY

n November 2017, Denver voters approved a $937 million General Obligation (GO) bond package to restore, replace, and expand infrastructure and capital assets across the city, including roads, libraries, parks, city buildings, and health and cultural facilities over the next decade. The bond program was Denver’s largest ever. And now, says Brendan Hanlon, CFO for the City and County of Denver, “the real work begins.” The bond program includes: • $431 million for transportation and mobility • $116.9 million for cultural facilities • $75 million for the Denver Health and Hospital Authority’s outpatient Ambulatory Care Center • $77 million for public safety projects • $69.3 million for the library system • $151.6 million for parks and recreation centers • $16.5 million for public facilities Source: The Denver Post WHAT HAPPENS FIRST? It would be great if all the affected organizations received their allocations right away and could proceed with their projects, but it’s not quite that easy. The process for fund disbursement is complicated and extends over many years. Hanlon says the City and County of Denver is bringing on a third-party program management contractor to provide support and help deliver the bond. With more than 460 projects on the list, staff will be added to help deliver the projects as well. “This is going to be a multi-year effort,” Hanlon explains. “We need to staff up for this first tranche. There is often confusion about how to issue $937 million, and get it done.” The answer, he says, is breaking it into pieces. While some projects already are designed and ready to go, others need to be designed, and land needs to be procured. Some are maintenance projects, and some are new projects. For example, annual street paving funds already exist, so new funds will

• NewsAccount • March/April 2018

be rolled into the existing paving program. But a new project, such as the West Denver Recreation Center, must go through design, land procurement, and construction. That project will receive funds in several different allocations as it goes through various phases. There will be a series of debt issuances over the next few years, depending on the project. City and County of Denver staff and the third-party program management firm will help support the development of the process. Hanlon says he anticipates going to market with the first tranche in May or June 2018. “Everything has to go through City Council,” he says. “Everything will be transparent. We’ll be explaining what is in the first package, which will include pieces of some projects.” He says there could be three to four issuances over the next 10 years. “The funds are reserved for each project, but each will go through its own schedule and scope,” Hanlon says. “We will balance out issuances based on what stage the projects are in.” By law, 85 percent of funds must be spent within three years, “but even if that weren’t a requirement, you don’t want to have bond funds sitting around accruing interest while projects are getting ready,” Hanlon says. “We legally cannot hold onto bond funds for a long period once they’re issued.” The city will establish an assessment process to determine how to spend funds in a threeyear timeframe, which is the governing assessment factor. ONE HAPPY RECIPIENT Thanks to the passage of the bond issue, the Denver Zoo will be replacing its animal hospital, says COCPA member and Denver Zoo CFO Charlie Wright, CPA. “We have a lot of work to do around the Zoo,” Wright says. Other projects include replacing and renovating certain exhibits as part of an approved Master Plan. The Zoo specifically asked for the money for the animal hospital and additional priority deferred maintenance projects as part of the bond issue. Wright adds that the Zoo will conduct a capital campaign in the future to raise money for other needed Master Plan projects.

The Zoo team already has done a lot of design and architectural work, gathering input from staff and visitors to prepare for the new animal hospital. “We’d like to get the $20 million we need in the first issuance tranche, but everyone probably wants that,” Wright notes. “We’ve put in the time to show we’re shovel ready, but the city finance team has a challenging assignment to decide the best way to go to market and provide funds for several projects.” PROVIDING ACCOUNTABILITY Accountability for spending bond funds has less to do with the bonds themselves and more to do with how the City and County of Denver manages its projects. Financial reporting systems and processes assure there is a robust public transaction for bids. Once bids are awarded, contractors must follow specific requirements. “Everything is tracked, accountable, and transparent,” Hanlon says, adding that for the bond projects, information will be available online to provide transparency (www.denvergov. org/2017gobond). The public can watch City Council discuss and deliberate on the bond projects on the Denver 8 TV channel (https://denver8.tv/). Courtney Law, communications director for the Denver Department of Finance, says the office is making progress on getting the operation up and running. “The development of the team will happen quickly,” she says. “We anticipate that our first issuance will be mid-year.” Hanlon says he often receives questions about how these massive projects get done. “You put a bond issue on a ballot, and people wonder how you can wait so long to implement,” he says. “When we built the 2018 budget, we reserved funds for the program management team and staff, but we didn’t automatically build it on the assumption that (the bond issue) would pass. We wanted the voters to weigh in first.” When the bond issues did pass, Hanlon says it was important to respect the voters as to the size and complexity before activating the funds. “Now we will go to City Council to set everything up and get our house in order. It’s the best way to respect the will of the voters.” ▲

Business Strategies

Time to Hit the Refresh Button: KPIs and Metrics for Nonprofits BY PEGGY JENNINGS, CPA

ith 2018 upon us and hope still present for many New Year’s resolutions, you might consider spending time to refresh your organization’s success measurements. WHAT IS SUCCESS? How do you know if your nonprofit is making a difference? Despite the myriad of books and articles written on this topic, many nonprofits are still uncertain how to measure, or even what to measure, to evaluate their success in accomplishing their mission.

As Marc J. Epstein, coauthor of “Measuring and Improving Social Impacts: A Guide for Nonprofits, Companies, and Impact Investors” says in a Forbes article, “If an organization is unclear or does not communicate clarity on what it specifically wants to achieve, it will be more difficult to measure whether its activities or other factors caused changes. So the clarity is critical for both achieving and measuring success. Once it has clarity on objectives, it can focus on whether the sequence of activities it plans to perform can logically be expected to create the desired impacts.” In other words, first identify what success looks like; then make a plan that will get you

there, collecting information along the way to evaluate whether your nonprofit's progress is actually getting you closer to success. All of this is referred to variously as "outcomes measurement," "performance management," or simply "evaluation." MEASUREMENTS MATTER In an environment of increasingly limited resources, those nonprofits that can demonstrate that they are truly making an impact will be the ones most likely to attract resources and talent, and therefore be most sustainable. And, of course, measuring outcomes is not just about attracting resources to your nonprofit; it's about the mission. Your nonprofit will only know that it is indeed helping individuals, solving problems in communities, and protecting the environment etc., if it is evaluating its performance. As a McKinsey & Company article discusses, there are three types of performance metrics to consider. Two of the three types are relatively easy to create: those that measure the mobilization of resources (membership growth, fundraising performance, market share) and those that track the activities of staff (number of people served, number of projects

completed). It’s the third metric – measuring the success of an organization in achieving its mission – that can be considerably more difficult to create. DETERMINING SUCCESS To effectively measure mission success, a nonprofit must first be very clear about what success looks like. For example, a nonprofit with the mission of raising people out of poverty through work might measure success by counting the number of people participating in its training programs and then being placed into jobs. But is initial placement into employment the final outcome of the mission? Should achievement of mission also consider long-term employment (five years or more) as a measure of success? And then to take this one step further, should success include the measurement of whether that individual’s children gain employment to fully embrace the movement of a family from poverty into the workplace? ▲ Peggy Jennings, CPA, is an audit parner with Eide Bailly, LLP, Denver. Contact her at pjennings@eidebailly.com. Originally published on Eide Bailly’s website, eidebailly. com. Reprinted with permission.

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March/April 2018 • www.cocpa.org •

Human Capital

The Evolving Immigration Environment: What Does It Mean for Colorado Businesses? BY NATALIE ROONEY

mmigration remains one of the biggest political footballs in modern times. Nearly every presidential administration since the Reagan era has experienced immigration as a focal point of controversy. Now, with DACA (Deferred Action for Childhood Arrivals), issues dominating headlines, and the situation changing almost daily, many are wondering how the Trump Administration’s immigration policy will impact Colorado businesses. WHAT IS DACA? The DACA program was formed through executive order by former President Obama in 2012. It allowed certain people who came to the U.S. illegally as minors to be protected from immediate deportation. Recipients, called Dreamers, were able to request “consideration of deferred action” for a period of two years, which was subject to renewal. Along with permission to remain in the country, Dreamers were able to obtain work permits, through which many obtained health insurance from their employers. The ability to work allowed Dreamers to pay for school, pursue higher education, serve in the military, and, in most states, drive legally. DACA also opened up access to in-state tuition and state-funded grants and loans in some states. And depending on where they live, DACA recipients can qualify for statesubsidized health care. A COMPLEX SITUATION Immigration law is complex, says David Kolko, managing partner of Kolko & Associates, P.C., Denver, where he specializes in U.S. immigration and naturalization law. “It’s a complex and substantive area of the law that has developed over many years in a piecemeal accumulation of different laws that don’t work in a comprehensive way,” he explains. “Immigration law is continually subjected to the waves of political forces, and it’s always a hot button issue for politicians wanting to appeal to different political, social, and business interests within the country. From the Chinese to the Irish to the Eastern European

• NewsAccount • March/April 2018

immigrants, and with those seeking refuge, there always has been debate and controversy about how foreigners ‘interfere’ or ‘contribute’ to the the American way of life.” Even though immigration has been a divisive political issue, Kolko says it’s clear that the U.S. has reached an increased level of uncertainty as to how existing immigration laws are being interpreted, changed, and implemented. The result is a more uncertain business environment for Colorado employers which utilize or seek to employ foreign nationals to help them operate their businesses. BY THE NUMBERS Colorado’s immigrant community makes up nearly 10 percent of all residents and is growing. Immigrants compose nearly 14 percent of all business owners in the Denver metro area. According to the American Immigration Council: • Nearly 1 in 10 Colorado residents is an immigrant, and a similar share of residents are native-born U.S. citizens who have at least one immigrant parent. • In 2015, 537,066 immigrants (foreignborn individuals) composed 9.8 percent of the state’s population. • Colorado was home to 250,879 women, 249,029 men, and 37,158 children who were immigrants. • The top countries of origin for immigrants were Mexico (43.3 percent),

•

India (4.4 percent), Vietnam (3.2 percent), Germany (3.2 percent), and China (3.1 percent). In 2016, 508,934 people in Colorado (9.4 percent of the state’s population) were native-born Americans who had at least one immigrant parent.

More than 140,000 U.S. citizens in Colorado live with at least one family member who is undocumented. • 200,000 undocumented immigrants composed 37 percent of the immigrant population and 3.8 percent of the total state population in 2014. • An estimated 276,589 people in Colorado, including 127,582 born in the United States, lived with at least one undocumented family member between 2010 and 2014. • During the same period, 1 in 11 children in the state was a U.S. citizen living with at least one undocumented family member (110,634 children in total). More than 15,000 Deferred Action for Childhood Arrivals (DACA) recipients live in Colorado. • As of 2016, 82 percent of DACA-eligible immigrants in Colorado, or 19,103 people, had applied for DACA. • An additional 6,000 residents of the state satisfied all but the educational requirements for DACA, and another

•

4,000 would be eligible as they grew older. One in nine workers in Colorado is an immigrant, together making up an important part of the state’s labor force across industries.

In 2015, 342,387 immigrant workers composed 11.8 percent of the labor force. Immigrant workers were most numerous in the following industries. • Construction: 59,034 • Accommodation & Food Services: 43,882 • Health Care & Social Assistance: 36,974 • Retail Trade: 36,901 • Administrative & Support; Waste Management; and Remediation Services: 33,283 The largest shares of immigrant workers were in the following industries: • Construction: 22.6% • Administrative & Support; Waste Management; and Remediation Services: 20.6% • Accommodation & Food Services: 15.9% • Manufacturing: 14.9% • Agriculture, Forestry, Fishing & Hunting: 14.1% Source: American Immigration Council IMMIGRATION UNCERTAINTY With up to 20,000 DACA recipients in Colorado, there is continued uncertainty about whether Dreamers can remain in the U.S. Every industry feels the reverberations. “There is uncertainty about how companies can staff their workforce,” Kolko says. With the present situation, employers don’t know if they can continue to retain people currently authorized to work under the DACA program. Should they hire and train new people? “There is no sense of stability,” Kolko adds. “By eliminating the DACA protections without first putting a new plan in place, the Administration has created a wave of uncertainty about the future use of those workers in Colorado and across the U.S.” BEYOND DACA The situation employers face with DACA is just one example of the potential impact immigration policy instability has on Colorado’s business environment.

In October 2017, USCIS (U.S. Citizenship and Immigration Services) changed the rules on “giving deference to prior adjudications,” which means that someone already authorized by USCIS to work in the U.S. might not be approved for an extension based on the same criteria used for the prior approval. “It is our understanding that the Immigration Service is no longer giving that deference to prior approvals, and the impact of this change in policy is open for interpretation,” Kolko says. “That creates an enormous amount of uncertainty within an existing foreign labor force about whether prior approvals will be extended.” He gives the example of an employee previously approved for an H-1B visa (which applies to many workers in Colorado in the high-tech fields). “Now, when businesses file for an extension, they have no reasonable expectation that USCIS is going to rely on the prior decision to approve that worker. The situation undermines businesses’ confidence when they use the immigration system.” Going against longstanding protocols, the Administration has increased the level of scrutiny on all visa applications, including H-1B applications. In November 2016, only 27.2 percent of applications required additional evidence. A year later, almost half of all applications (46.6 percent) required additional evidence. The USCIS also has increased the number of denials for all visa categories, essentially making it harder for Colorado employers to utilize the system and rely on qualified foreign nationals to meet employment needs that aren’t being met by the existing U.S. workforce. In addition, the Administration’s continued attempts to implement a travel ban have created a tremendous amount of litigation. The ban applied to people with existing visa approvals, who had already been screened and vetted by the agency and U.S. embassies. “The agency isn’t keeping up with this current workload either,” Kolko says. “The system is bogged down for employers who want to receive benefits through the existing system.” OTHER KEY ISSUES Termination of H-4 work authorization: The agency has signaled that it plans to remove “certain H-4 spouses of H-1B nonimmigrants as a class of aliens eligible for

employment authorization.” This move is not a surprise after the Trump Administration indicated it was preparing to revise or overturn the 2015 rule in question, but it will potentially prevent thousands of H-4 spouses from working in the United States. The 2015 regulation has not been modified or rescinded yet, but the DHS regulatory agenda provided the clearest indication yet that the rule will be scrapped. Reorganization of the H-1B lottery: The agency plans to propose a pre-registration system for cap-subject H-1B visa applicants. The agency indicated it may modify the selection process, currently completed through an electronic lottery, so that visas would be awarded to the “most-skilled or highest-paid petition beneficiaries,” as was contemplated in President Trump’s “Buy American Hire American” executive order in April 2017. Few additional details are available at this point, but USCIS said it would implement the pre-registration system first for H-1B visas before extending it to other numerically capped nonimmigrant visas as needed. Revision of H-1B eligibility and wage protections: USCIS plans to propose a rule to revise the definition of “specialty occupation” for H-1B eligibility to “increase the focus on truly obtaining the best and brightest.” The rule also would revise the definition of employment and the employer-employee relationship and add new requirements designed to ensure that employers pay appropriate wages to H-1B workers. The rule is likely to continue the Administration’s focus on H-1B wages, entry-level jobs, as well as “H-1B dependent” companies that rely on large numbers of H-1B workers and companies that place H-1B workers at offsite employers. The rule could impose wage thresholds that employers must meet for H-1B employees. Revision of the OPT program: Immigration and Customs Enforcement will issue a proposed rule that comprehensively reforms the optional practical training (OPT) program for foreign students in the U.S. The rule aims to reduce fraud and abuse and improve the protection of U.S. workers who may be negatively impacted by CONTINUED ON PAGE 26 March/April 2018 • www.cocpa.org •

Human Capital THE EVOLVING IMMIGRATION ENVIRONMENT CONTINUED FROM PAGE 25

employment of foreign students. The Trump Administration has indicated that it will limit the work opportunities available to foreign students and is likely to rescind Obama’s STEM-OPT Extension rule that expanded the extensions of OPT for foreign nationals holding U.S. degrees in STEM fields from 17 months to 24 months. NEXT STEPS FOR COLORADO BUSINESSES Without a comprehensive approach to addressing the immigration system in the U.S., uncertainty will continue to increase, Kolko says. The situation is exacerbated because the economy is doing well, unemployment is low, and there is an increased demand for the U.S. workforce to expand beyond the U.S. borders. At the same time, employers need workers, the pool of available workers – both skilled and unskilled – is decreasing, making it difficult to meet the growing needs of the

Colorado economy. And as rapidly as things are changing, some of the impacts won’t be felt for months or even years. “You can’t change the immigration policy within days,” Kolko says. “It can take months or years for the full force of an administration’s changed policies and attitudes to filter down to all areas within the agencies, ports of entry, embassies, and within the immigration court system.” Kolko recommends working with an experienced attorney well-versed in immigration law who understands the complexities and impact an administration’s shift can have on the visa system. “It’s very difficult for employers and the public to gain a full understanding of how the Administration is affecting the workings of the immigration system,” he says. “It has become an increasingly difficult environment in which to provide reliable legal advice to employers within this complex system so that they can

execute their business plans successfully. Daily, weekly, monthly – things are moving in a more restrictive and difficult direction.” Ultimately, Kolko says when policy isn’t well thought out or comprehensive, it doesn’t serve the long-term business interests of Colorado or the United States. “Anyone who has expert knowledge of the system understands a comprehensive approach is needed. This includes not only smarter enforcement and border protection but also updating the employment visa categories to meet the needs of Colorado businesses, such as seasonal, hospitality, and recreation jobs, farm workers, construction laborers, and the increasing demand for professional and hightech workers. Without that approach, we’re just creating more uncertainty and instability within the system, and not meeting the demands of businesses across Colorado.”▲

IF YOU WANT THE WORLD TO SEE YOU DIFFERENTLY, GET A DIFFERENT KIND OF CREDENTIAL. Earning the AICPA Personal Financial Specialist (PFS ) credential says TM

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standard. It says you are an impartial adviser who puts your clients’

Human Resources

A Good Match: OpHaus Links Career Management and Talent Acquisition on One Platform BY NATALIE ROONEY

As a hiring manager, COCPA member Kate Ferreira, CPA, CGMA, found that recruiting talent for open positions was challenging, time consuming, and expensive. So, she decided to develop a business that would create talent solutions for both job seekers and companies. Now, that business, OpHaus, is in full swing, helping finance professionals and companies connect with their next opportunities.

t would be easy to label OpHaus as just another job board, but as a CPA who knew how hard it was to attract and retain talent, Kate Ferreira wanted to leverage technology to create something completely new that not only connects finance professionals and companies but also adds value. Drawing on her background in public accounting and at a commodities trading firm in New York, Ferreira says the struggles she experienced trying to hire and build a team led directly to founding OpHaus. “The ask of accounting and finance professionals is changing,” she says. “We’re being asked to do more meaningful, analytical work, but when you have new challenges, you have to recruit talent in a new way.” Ferreira talked to her mentors and her network and quickly realized others were experiencing the same problem: efficiently finding really good talent, especially on a project or flexible basis. And she points out how costly it is for companies and professionals to find talent. “I wondered how we could use technology to be an effective connector, give professionals tools they can use to build their career history, and have the process be more efficient than a paper resume or a job board.” HOW OPHAUS WORKS OpHaus decentralizes how companies and talent connect. Professionals can easily promote their accomplishments, skills, and experiences, and continuously update their information throughout their career. Hiring managers can connect directly with

relevant, matched talent after describing their requirements. Hiring managers cannot see a professional’s profile unless that professional wants to be viewed. All job opportunities are confidential. Only candidates who are contacted for an interview are aware of the opportunity. Once a connection is made, OpHaus provides technology to manage the relationship over time. If the opportunity is project-based, OpHaus handles engagement letters, timesheets, invoicing, and all aspects of the engagement process. For full-time positions, OpHaus can provide customized learning, skill-gap analysis, and many other tools to promote the team's success. “The tool is really easy to add to and build as your career progresses,” Ferreira explains. “OpHaus isn’t a traditional job board model where someone finds the job, applies, and then waits to see what happens. It’s a central place where you can build a digital record of your career, and, when you’re ready for an opportunity, you tell us. It’s your data,” she says. “You take it with you. OpHaus Resume Builder is a tool that works with you over time.” RAMPING UP Ferreira spent more than a year collecting data, building the platform, and testing it to develop the user experience. She launched OpHaus on her own but now has a team of three working full-time and two additional individuals who work on a contract basis.

The OpHaus Match algorithm is accomplishment-focused. Ferreira says one of the most important things is knowing the level at which someone works. “The terms accounting and finance have such broad implications. Focusing on accomplishments and skills can interest someone in scheduling that first interview and get the very best people in front of the very best opportunities. The process moves away from the flat resume.” Companies can use OpHaus data to identify where their teams are strong and where additional training is needed. Hiring managers have the ability to analyze skills and accomplishments across their network. The Match algorithm can be customized to find the skills a company wants to build. Ferreira adds, “A machine will never make the final decision on the best candidate or which job that candidate should take. People do that. But we can absolutely leverage technology to reduce the friction between talent and hiring companies.” OpHaus started matching companies and talent in 2016 with a beta model before rolling out the full model in 2017. “We’ve had some good successes and have expanded in a bigger way,” Ferreira says. “We’re excited about the platform and the opportunities for helping companies and people find each other.” ▲

March/April 2018 • www.cocpa.org •

Game Changers

Top 20 Technology-Driven Hard Trends Shaping 2018 and Beyond BY DANIEL BURRUS

here has never been a shortage of trends. The real problem is figuring out which ones will happen so that you know where to place your strategic bets. I have been publishing a list of top trends since 1983, as well as speaking and writing about their future impact, and if you have read any of my seven books or thousands of articles over the decades, you know they have been highly accurate. The reason for this is the methodology that I developed back then, which separates what I call Hard Trends, the trends that will happen, from Soft Trends, the trends that might happen. Knowing their distinctions can make all the difference, and the following Top 20 List is no exception. I have been writing about each one of these technology trends for many years, but for one to make it on my Top 20 list, it has to be developed enough for you to apply it to exponentially grow your business. Each is growing at an increasingly exponential rate. As such, they all will impact our lives, both personally and professionally, in the coming year and beyond. These trends highlight enormous, gamechanging opportunities in a broad array of applications and industries. As you read through them, look for opportunities for you to leverage them and become a positive disruptor. 1. ARTIFICIAL INTELLIGENCE (AI), ADVANCED MACHINE LEARNING, AND COGNITIVE COMPUTING APPLICATIONS Cognitive computing applications grow rapidly. Advances in machine learning and artificial intelligence (AI), such as Google’s DeepMind and IBM’s Watson, coupled with networked intelligent machines and sensors will create a giant leap forward thanks to exponential advances in computing power, digital storage, and bandwidth. AI increasingly will become embedded in our applications and processes. Also, thanks to better sensors, increasing machine intelligence, and Siri-like

• NewsAccount • March/April 2018

voice communications, advanced automation and intelligent robotics increasingly will work with humans in new and productive ways. As AI is applied to vehicle-to-vehicle (V2V) communications, we will see acceleration in the use of semi-autonomous and fully autonomous vehicles. 2. ADAPTIVE AND PREDICTIVE CYBERSECURITY SYSTEMS Business, government, and education have moved cybersecurity from an underfunded back-office activity to a major initiative going forward. With the rapid growth of connected technologies such as the Internet of Things (IoT) and semi-autonomous as well as fully autonomous vehicles, security systems will move beyond reacting faster to include adaptive security systems using AI and other advanced tools, such as behavioral analytics. This will add a level of predict and prevent, allowing us to stop many, but sadly not all, attacks before they start. 3. BIG DATA AND THE USE OF HIGHSPEED DATA ANALYTICS “Big data” is a term that describes the technologies and techniques used to capture and utilize exponentially increasing streams of data. The goal is to bring enterprisewide visibility and insights that enable making rapid, critical decisions. Using advanced cloud services, high-speed data analytics increasingly will be employed as a complement to existing information management systems and programs to identify actionable insights from a mass of big data. Separating good data from bad data also will become a rapidly growing service. 4. ADVANCED CLOUD COMPUTING SERVICES Businesses of all sizes will increasingly embrace new variations on public, private, hybrid, and personal mobile clouds. This represents a major shift in how organizations obtain and maintain software, hardware, and computing capacity to cut costs in IT, human resources, and sales management. Not all clouds are

created equal. Some are optimized for IoT applications, while others are designed for different levels of security and speed. 5. VIRTUALIZATION OF STORAGE, DESKTOPS, APPLICATIONS, AND NETWORKING The virtualization of hardware and software will see continued acceptance through growth in both large and small businesses as virtualization security improves. Hardwareas-a-Service (HaaS) is increasingly joining Software-as-a-Service (SaaS), creating what some have called “IT as a Service.” In addition to the rapid growth of virtual storage, virtualization of processing power will continue to grow, allowing mobile devices to access supercomputer capabilities and apply them to processes such as purchasing and logistics. These services will help companies cut costs, as they provide access to powerful software programs and the latest technology without the expense of a large IT staff and time-consuming, expensive upgrades. 6. VIRTUALIZATION OF PROCESSES AND SERVICES (ON-DEMAND SERVICES) The virtualization of processes and services will increasingly be accessed by companies needing to update and streamline existing services, and to deploy new services rapidly. The rapid growth of Collaboration-as-aService, Security-as-a-Service, Networking-asa-Service, and many more is giving birth to Everything-as-a-Service. 7. BLOCKCHAINS AND CRYPTOCURRENCY Introduced as a means of transferring bitcoins, blockchains are fast gaining traction in any number of areas. A system that enables secure, digital, direct transfers, blockchains decentralize transactions by eliminating the middleman, thereby allowing for direct connection among all involved parties. In addition to currency, blockchains can be used to transfer contracts, insurance policies, real estate titles, bonds, votes, and other items of

value. They provide increased transparency and, as a result, distributed trust. Given their security and lower cost, blockchains create a platform that will impact limitless products and services, thereby enabling innovation and growth. Look for applications in healthcare, supply chain, and finance to grow rapidly. In 2017, the average person discovered bitcoin thanks to its meteoric rise in value, as well as other coins such as ethereum, used for initial coin offerings (ICOs), and litecoin, to name a few. The crypto genie is now out of the bottle, and thanks to bitcoin trading, bitcoin ATMs, and bitcoin mania, we will see blockchains and cryptocurrency increasingly become part of our lives.

contrast, virtual reality (VR) – using oversized headsets to provide an immersive, computergenerated, 3D environment with which the wearer can interact – will grow more slowly due to the need for more time-intensive software design and the need to shut out the real world in order to use it. With headsets dropping in price, increasing numbers will want to experience it. Commercial growth in VR will focus on more specific industries. For instance, it’s already being used by architects and designers to show potential clients specific features of buildings prior to actual construction. But that’s just the beginning. AR and VR will soon shift from a single-user to a multi-user social experience.

8. AUGMENTED REALITY (AR) AND VIRTUAL REALITY (VR) APPS AND DEVICES Augmented reality (AR) will quickly become more common by adding just-in-time information to our physical world. Simply aim your smartphone camera at a crowded street to find the stores that have the exact products you’re looking for. Better yet, we soon will be using conventional-looking glasses that allow wearers to overlay data on their fields of vision, providing useful information about what they’re looking at. By

9. SMART VIRTUAL E-ASSISTANTS AND VOICE-ENABLED DEVICES The use of smart e-assistants is accelerating, offering what is rapidly becoming a mobile electronic concierge available on any smart device, including phones, tablets, televisions, and cars. Stand-alone audio assistants such as Amazon Echo and Google Home will expand rapidly into business and governmental applications. Soon retailers will have a Sirilike sales assistant, and soon many of us will be using an e-personal health assistant that taps into real-time health data from a smart

watch to predict potential problems and offer suggestions. 10. IOT BECOMES INCREASINGLY INTELLIGENT Machine-to-machine (M2M) communications using chips, microsensors, and both wired and wireless networks will join networked sensors to create a rapidly growing IoT, sharing real-time data, performing diagnostics, and making virtual repairs, all without human intervention. By 2020, there will be well over 50 billion “things” talking to each other, performing tasks, and making decisions based on predefined guidelines using AI. Not all data need to come back to the mother ship to create high value. Edge computing will increasingly be used to tame the massive amounts of data IoT will create. 11. 3D PRINTING (ADDITIVE MANUFACTURING) OF FINISHED GOODS Personalized manufacturing of finished goods using 3D printing will grow exponentially. These printers build things by depositing material, typically plastic or metal, layer by layer, until the product is finished. Originally CONTINUED ON PAGE 30 March/April 2018 • www.cocpa.org •

TOP 20 TECHNOLOGY-DRIVEN HARD TRENDS CONTINUED FROM PAGE 29

designed to print prototypes, they are increasingly being used to print final products, such as jewelry, iPhone cases, shoes, car dashboards, parts for jet engines, prosthetic limbs, human jaw bones, blood vessels, organs, and much more. This allows companies to manufacture one-of-a-kind or small runs of items quickly, locally, and with far fewer costs. 12. SMARTER SMARTPHONES AND TABLETS DRIVE MOBILE PROCESS INNOVATION The vast majority of mobile phones sold globally have browsers, making a smartphone our primary computer. This signals a profound shift in global computing, allowing businesses of all sizes to transform the ways in which they market, sell, communicate, collaborate, educate, train, and innovate using mobility. An enterprise mobility strategy that puts mobile first is rapidly becoming mandatory for organizations of all sizes. The next phase is to embed a layer of AI in everything. 13. MOBILE APPS FOR BUSINESS PROCESS INNOVATION As we increasingly transform business processes using mobility, use of mobile apps for purchasing, supply chain, logistics, distribution, service, sales, and maintenance will grow rapidly. There will be an increasing focus on business app stores within companies, giving the company a competitive advantage and giving users access to the personalized information they need on their mobile devices anytime and anywhere. 14. MOBILE BANKING AND PAYMENTS Mobile banking, using smartphones as eWallets, is already being used in an increasing number of countries. Use is finally taking off on a larger scale in the U.S. thanks to an increasing number of phones with secure mobile banking apps, Near-field communications (NFC) chips, biometric identification, and the use of tokens where no credit card or personal information is exchanged. 15. WEARABLES AND APPLICATIONS Wearables increasingly will be used for both personal and business applications.

• NewsAccount • March/April 2018

Apple, with its smartwatch fitted with health sensors and software, joins Google, Samsung, Microsoft, and others in a battle for market share. More complex software and applications will drive further innovation and sales in other wearable technology. One example is a patch that can be attached to the skin for remote disease management, diagnostics, and general health via wireless transfer. 16. SOCIAL BUSINESS APPLICATIONS “Social” takes on a new level of urgency as organizations shift from an Information Age “informing” model to a Communication Age “communicating and engagement” model. Social software for business will reach a new level of adoption, with applications to enhance relationships, collaboration, networking, social validation, and more. AR and VR will increasingly play a role. Marketers and researchers will employ social search and social analytics to measure real-time sentiment of large groups of targeted people. 17. VISUAL COMMUNICATION FOR BUSINESS Visual communication takes video conferencing to a new level thanks to free programs like Skype, FaceTime, Zoom, and others for video communication on phones, tablets, and home televisions. Businesses of all sizes are rapidly embracing this as a primary relationship-building and communications tool. 18. ENHANCED LOCATION AWARENESS FOR RETAIL Location awareness using in-building systems allows customers with smartphones to navigate stores and quickly find what they are looking for. This, combined with geo-social marketing and AR, will drive the creation of more business-to-consumer apps. In addition, geospatial visualization combines geographic information systems (GIS) with location-aware data, radio-frequency identification (RFID), and other location-aware sensors (including identifying the current location of users from the use of their mobile devices) to create new insights and competitive advantage.

19. DRONES REACH A NEW HEIGHT ADDING AI The number of applications for drones will continue to expand rapidly. Drones have already proven to be of high value for search and rescue, and they are rapidly being applied to many industries. For example, agriculture uses drones to check crops, fences, and cattle; utility companies use them to look for downed power lines; and real estate agents use them for aerial photography. The explosion of hobby drones will drive innovation for both personal and industrial applications. AI will be increasingly integrated, expanding capabilities far beyond today’s applications. 20. ENERGY STORAGE AND MICROGRIDS Energy storage starts to become a reality as companies such as Tesla begin to sell their smart battery systems (SBS) to businesses and homes that generate some of their own power using solar, wind, or other systems. In addition, as first-generation hybrid vehicles get too old for the marketplace, there will be millions of batteries that still will hold enough of a charge to be repurposed into inexpensive energy storage systems. This will enable a national network of smaller and more secure smart microgrids. Ready to see the future and plan with greater confidence? Have a look at my Anticipatory Organization System at www. AnticipatoryOrganization.com. ▲ Daniel Burrus is considered one of the World's Leading Technology Futurists on Global Trends and Innovation and is the founder and CEO of Burrus Research, a research and consulting firm that monitors global advancements in technology-driven trends to help clients understand how technological, social, and business forces are converging to create enormous untapped opportunities. He is the author of seven books including the newest, The Anticipatory Organization: Turn Disruption and Change Into Opportunity and Advantage. Burrus also is the creator of The Anticipatory Organization™ Learning System–named a Top 10 Product of 2016.

LeadFit 2018

Interested in attending LeadFit or sponsoring someone from your organization? Complete and return the application. You’ll be notified of your acceptance. Your sponsor will be invoiced for the $1,445 program fee, which is payable on receipt and no later than July 1, 2018. The program is recommended for 24 hours of CPE credit in the Communications field of study.

APPLICATION DEADLINE: JUNE 29, 2018

MAJOR SUBJECTS

• Relationship Building – listening and presence; professional and personal • Managing a Team v. Leading a Team – goal setting; conflict resolution • Performance Evaluation and Feedback – acknowledgement; confrontation; resolution; rewards • Negotiation – message tailoring; requesting • Rainmaking – thinking styles; generational styles • Role Definition – qualitative and quantitative • Defining Your “Best Work” – linking to purpose, commitment, and boundaries

LEADFIT FACILITATOR

Lorrie Blanchard Tietze is the founder and manager of Interface Consulting, LLC, Castle, Rock, Colo., a consulting firm focused on helping companies enable change and build productivity through process, tools, and skills. She is committed to helping people help themselves and their businesses.

Lorrie consults with Fortune 500 companies, governmental agencies, and not-for-profit organizations. The COCPA chose her to help create and facilitate LeadFit because she understands the professional services world and the importance of the human dimension in creating meaningful, sustainable relationships. her high energy approach and commitment to personal growth guarantee that you will not only gain the skills you need for success but that you will truly enjoy the learning experience. Before establishing her consulting practice, Lorrie worked in the manufacturing and engineering fields. She is adept at maintaining strong customer relationships, developing international, multi-functional teams, and working in fast-paced, challenging environments.

SPECIALTY INSTRUCTION

This innovative leadership development program, created in collaboration with Interface Consulting, LLC, is designed to enable you to gain the knowledge, skills, and practice to achieve your desired professional and personal results including interacting effectively with, leading, and managing people. The program is limited to 16 participants who commit to attending all sessions. You are also encouraged to identify an individual from your firm or company who will serve as your sponsor. Delivered over five months, the program is recommended for 24 hours of continuing professional education credit. It includes two 8-hour and two 4-hour group workshops, a special debriefing session, individual coaching, a welcome BBQ hosted by COCPA CEO Mary Medley and COCPA leadership, and a celebration event at its conclusion.

INDIVIDUAL COACHING

You will receive, over the five-month period, up to two hours of optional, individual phone coaching to address your specific needs. Additional coaching time will be available at a discounted rate. All coaching and group sessions are confidential.

SESSION DATES JULY 5-10

Pre-call with each participant to determine individual goals, wants, and needs. Optional call with the participant’s sponsor.

JULY 12

Kickoff BBQ/Casa Cloud

JULY 13

Session One – all day, COCPA classroom

AUGUST 10

Session Two – half day, 8:00 a.m. to 12:30 p.m., COCPA classroom

TO APPLY/FEES

For an application, email Terry Cervi, terry@cocpa.org or download one at leadfit.cocpa.org. Complete and return the application form by June 29, 2018. You will be notified of your acceptance. Your sponsor will be invoiced for the $1,445 program fee, which is payable on receipt and no later than July 1, 2018.

SEPTEMBER 7

Session Three – half day 8:00 a.m. to 12:30 p.m., COCPA classroom

OCTOBER 18

Optional Debrief – 4:30-6:30 p.m., Casa Cloud

NOVEMBER 12

Session Four – 8:30- a.m. to 5:00 p.m., including graduation/reception, COCPA classroom and Board Room

March/April 2018 • www.cocpa.org •

Movers & Shakers

Tax Study Groups

Boulder/Longmont Tax Study Group at the Meadows Branch Public Library Tuesday, March 20 Congratulations to senior tax accountant Justine F. Arnold, staff accountant Katie J. Thompson, and staff accountant Dillon D. Washburn who recently received their Colorado CPA licenses. All three are employed by Dalby, Wendland & Co., P.C. in its Glenwood Springs office.

This informal roundtable discussion group meets at the Meadows Branch Public Library, 4800 Baseline Rd., Boulder, BYO Bag Lunch. 2018 Meeting Dates: Mar. 20, May 15, June 19, July 17, Aug. 21, Sep. 18, Oct. 23, Nov. 27, Dec. 18. For additional information, contact Lynn M. Mitton, CPA, MT, MPA, (303) 499-7445 or email lynn@flewellingcpa.com.

Denver Tax Study Group at the COCPA Office Tuesday, March 27 and Tuesday, April 24 RLR CPAs and Advisors LLP named Patrick Roesler, CPA, Greeley, a senior manager.

GREAT NEWS!

COCPA Now Offers Membership Subscriptions We’re launching this new member service to make maintaining your COCPA membership convenient and easy. How It Works By choosing a membership subscription, membership payments are made automatically at the interval you select, annually or monthly. There is no extra cost, and you can cancel at any time. This new subscription service is as simple as maintaining your Netflix account or paying your cable bill. Just choose the payment schedule most convenient for you, provide a credit card number, and we’ll take care of the rest. You’ll automatically maintain access to the benefits you know and expect from your COCPA membership.

This informal roundtable discussion group meets over lunch, the last Tuesday of most months, at the COCPA office, 7887 E. Belleview Avenue, Ste. 200, Englewood. 2018 Meeting Dates: Mar. 27, April 24, May 22, June 26, July 31, Aug. 28, Sept. 25, Oct. 30, Dec. 4. Register at www.cocpa.org.

North Metro Tax Study Group at The Ranch Country Club Thursday, March 8 and Thursday, April 19 This informal roundtable discussion group meets over lunch ($25/ person), the third Thursday of most months, at The Ranch Country Club, 11887 Tejon St., Westminster. 2018 Meeting Dates: Mar. 8, Apr. 19, May 17, June 21, July 19, Aug. 16, Sept. 20, Oct. 18, Nov. 15, Dec. 20. Register at www.cocpa.org.

Four Corners Tax Study Group at the Durango Public Library Tuesday, March 20 and Tuesday, April 24

You Can Choose We still will offer the option of “traditional dues membership” as well. If you’d like to continue with traditional membership renewal (a non-subscription membership), simply send in a check to pay your annual dues when you receive this year’s invoice.

This informal roundtable discussion group meets at the Durango Public Library, 1900 E. 3rd Ave., Durango. BYO Bag Lunch. 2018 Meeting Dates: Mar. 20 and April 24. For additional information, contact Michelle Sainio, CPA, CGMA, (970)247-0506 or email msainio@durangocpas.com. Register at www.cocpa.org.

We’re excited to offer you this new service and believe it will make staying connected to the COCPA easier than ever. Questions? Contact us at 303-773-2877 or 800-523-9082.

If you'd like to create a tax study group in your chapter, contact Leslie O'Donnell at leslie@cocpa.org.

• NewsAccount • March/April 2018

Classifieds

In Memoriam

Daniel A. Chenoweth

OFFICE SPACE AVAILABLE Two furnished window office spaces available in DTC, Greenwood Village, for immediate move in. Copier, phone, internet, covered parking, and tax software available. Shared break room. Walking distance to restaurants and Colorado Athletic Club. Contact Portia@ gjstanley.com, 303-722-633. See www.gjstanley.com. OPPORTUNITY AVAILABLE Senior Tax Manager Busy accounting firm in Avon, Colo., seeks CPA with 15+ years of experience in Tax Preparation and Consulting. Competitive salary, full benefits package, and flexible schedule. If you enjoy mountain life, this may be the opportunity for you. Qualified candidates can submit cover letter and resume to jobs@nla-cpas.com.

August 15, 1948 January 11, 2018 A dedicated COCPA member for more than 45 years, Dan Chenoweth touched countless lives through his time in the classroom, teaching “Making Ethics Count” and various other CPE courses in Colorado and across the U.S. His joyous spirit and commitment to the profession and lifelong learning were legendary. Dan was a former COCPA Board of Directors member and CPE Board Chair, avid volunteer for several Loveland area nonprofits, optimist, and extrovert who didn’t know a stranger. His courage, strength, laughter, and quirky sense of humor will be remembered and missed by all who knew him.

Your career should be a marathon, not a sprint. We have you every step of the way.

COCPA CPE Director Rebecca Campbell and I are beyond grateful that we made the drive to Loveland, Nov. 22, 2017, to visit him and his wife, Georgia. Both were upbeat, realistic, and looking forward to Thanksgiving with their kids and grandkids. Though Dan had suffered vision and equilibrium troubles recently – side effects of his treatment for multiple myeloma – he was jaunty and jovial in his eye patch, sharing stories and memories. His personal goal was to celebrate Georgia’s birthday with her on January 12 – and he almost made it. Memorial contributions may be made to the First United Methodist Church, 533 Grant Avenue, Loveland, CO, 80537; the Loveland Rotary Club; or a charity of choice in care of Kibbey-Fishburn Funeral Home. - Mary E. Medley

303.830.1120 ∙ www.acmllp.com/careers Boulder ∙ Denver ∙ Northern Colorado ∙ Laramie

We extend our sympathy to the families and friends of the following COCPA members and former member: Michael Kamin Member since 1998, Pueblo, Colorado

We're seeking your stories! If you or someone you know has a story to tell (and photos too), like trekking the Colorado Trail, writing a new book, motorcycling on Route 66, or competing in national snowboard events, etc., let us know! Send your story ideas to Mary E. Medley, COCPA CEO, at mary@cocpa.org.

Arnold Loeckle Member since 1967, Denver, Colorado AJ Lorie Member since 1960, San Francisco, California Samir Naguib Member since 2002, Denver, Colorado Beverly Warburton Member since 1983, Pagosa Springs, Colorado

March/April 2018 • www.cocpa.org •

Colorado Society of Certified Public Accountants 7887 E. Belleview Ave., Suite 200 Englewood, CO 80111-6076

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