The Kansas City Star from Kansas City, Missouri • 21

BUSINESS EXTRA THE KANSAS CITY STAR Wrednenday February 2 2005 wwwkanttagcitycoin C'S COMMENTARY Block adds small-business focus 1 1 FM glance buki the chief operating officer said in a statement released by the company Hitting that target would create a network about a tenth the size of the more than 10000 traditional tax offices are more than 20 million small businesses in the United States but no national brand serving their tax financial and business Yabuki said see a huge opportunity to provide a wide range of superior products and services that business owners need from a single Ousted The new business unit intends to hire CPAs enrolled agents and sim-ilariy credentialed tax and financial McGladrey Business Services Inc provides similar services to medium-size businesses with 5000 or fewer workers The former American Express offices that Block bought have a combined roster of about 15000 clients and reported about $9 million in revenues last year said Linda McDougaQ Block's chief spokeswoman Yabuki and other Block executives who shared some broad outlines of their planned new service last month with New York securities analysts indicated then that the fully expanded network potentially would add more than 15 million clients to Block's base and increase the tax service revenues by $800 million to $1 billion Meantime Block plans campaigns to raise awareness of the new service in the 11 markets where it now isopea Those are Tucson Ariz Rancho Palos Verdes and Walnut Creek Calif Fort Wayne and Rochester Ind Cedar Rapids Iowa Wakefield Mass Livonia Mich Omaha Neb Dublin Ohio and Roanoke Va Block shares closed at $4832 up 1 cent on the New York Stock Exchange To reach Gene Meyer call (816) 234-4883 or send e-mail to gmeyerkcstarcom By GENE MEYER i The Kamo City Star Block on Tuesday unveiled plans to open a chain of tax and financial service centers designed to serve small businesses the way its traditional tax offices serve individuals First links in the new chain known as Block Small Busi ritiss Resources are being formed from 11 former American Express Tax and Business Services offices in nine states that Block bought Terms of that transaction were not disclosed Block intends to expand that network to as many as 1000 offices in the hext five to seven years Jeff Ya- Block's new service geared toward small businesses is initially available in 11 markets: Tucson Ariz Rancho Palos Verdes and Walnut Creek Calif Fort Wayne and Rochester Ind Cedar Rapids Iowa Wakefield Mass Livonia Mich Omaha Neb Dublin Ohio and Roanoke Va service professionals to provide year-round tax preparation and planning bookkeeping and payroll processing and advisory services for businesses with 25 or fewer employees A separate Block unit RSM Identity theft still top fraud complaint By PAUL WENSKE The Kansas City Star Rendering courtesy of GSAI) ArchitccturcSeibcrt Design Inc An architectural rendering of a proposed casino that would be built in Wyandotte County presumably near Kansas Speedway Bill envisions Kansas casinos slots A First glance By RICK AI The Kansas City Star KANSAS CITY KANSAS Parallel Pkwy a State Ave State Ave si i Parking area Speedway ft V' For the fifth year in a row identity theft tops the list of complaints that consumers made to the Federal Trade Commission Identity theft accounted for 39 percent of the 635173 consumer fratid complaints filed with the FTC in 2004 In all consumers reported fraud losses of more than $547 million the commission said Tuesday Kansas City ranked 19th out of 49 metro areas in the number of consumer fraud complaints per 100000 residents In state-by-state comparisons Missouri ranked 18tH and Kansas 23rd in the number of complaints Highest rates of complaints occurred in the Washington DC area followed by the San Jose-Surinyvale-Santa Clara area in California PTC spokeswoman Betsy Broder said the was that new-account frauds most often involving stolen credit cards had shown a slight decline Broder said the bad news was that electronic-fund transfer frauds such as the unauthorized use of a debit card or check routing number to drain money from a consumer's bank account appeared to be growing That was a concern she said because credit cards you have more protections not as clear with debit cards With debit cards you have to really monitor your (bank) account for unauthorized use to minimize the damage Internet-related complaints also remained high accounting for 53 of all complaints involving ud Consumers can lodge com-ilaints by going to wwwftcgov or calling the FTC at Proposed casino The Kansas City Star GRETCHEN M0R6Elfffl One option for reform is options Top executives on the receiving end of munificent pay packages argue that their troughs full of stock options have no relationship to impro- prieties that keep erupting in corporate America But an episode last week involving Brocade Communications a San Jose Calif company that makes switches for computer storage networks suggests that every now and again there just might be a connection after all Back in the bubble of 2000 you may recall Brocade Communications was one heck of a stock The shares went public in May 1999 at a split-adjusted $475 By October 2000 the stock had climbed to $133 It closed Friday at $599 Last week Brocade announced that its board had appointed a new chief executive to replace Gregory Reyes its longtime chief that it would be restating its results for the last six fiscal years and that its annual financial report would not be filed on time tb the Securities and Exchange Cbm-mission Financial restatements are distressingly common But Brocade certainly wins a prize for having to recompute its results for every year that it has existed as a public company The amounts being restated are considerable In fiscal 2004 net loss swelled to $32 million from $2 million as a result of the restatement The restatements all had to do with errors in its option accounting After a review the audit committee of board concluded that the company must record additional compensation charges relating to option grants from 1999 through the third quarter of 2003 more the committee found iq connection with the docu of option grants given to a small number of employees before mid-2002 and concluded that the documentation delated to certain option grants before August 2003 was unreliable Options have been the drug of choice for years at Brocade as they have been at many Silicon Valley businesses These companies have fought strenuously against the move last year by accounting rule milkers to require that the costs of this employee compensation be run through The profit -and-loss statement Brocade's top management have been big recipients of options Last year's proxy states that Reyes got 4 percent of the total number of options granted to Brocade employees in fiscal 2003 directors also receive stock options as part of their com pensation Under a new plan which Brocade put to a shareholder vote last year the company proposed a system by which a committee of the board would be free to determine how many options to dispense to directors their vesting provisions and terms Shareholders shouted down the plan Many analysts have concluded that hasty departure was clearly related to the accounting improprieties But in a conference call David House a Brocade director refused to link the two events Indeed he told surprised listeners Reyes would stay on the board and have "a significant and important there But why would Reyes still have a coveted place on Brocade's board given the wall-to-wall restate tnents that occurred on his watch? At the end of last fiscal year Reyes had 17 million options with exercise prices of either $553 or $654 each A spokesman said Brocade had not determined whether those options would become immediately exercisable now that Reyes has passed the baton Brocade gets some credit for identifying the stock option improprieties And it has instituted more restrictive policies in its option program recently But its insistence on keeping Reyes shows how entrenched the obeisance to chief executives remains at some companies Shareholders interested in reforming corporate America have a good deal more work to do Gretchen Morgenson writes for The New York Times A proposal to allow state-owned casinos will be introduced in Topeka Similar legislation failed last year The proposal is supported by River Falls Gaming which would like to build and run a destination casino and hotel near Kansas Speedway in Wyandotte County like been there and done Kevin Neuman eastern region director said of the state-owned casino approach which he noted was last year Ihe bill would allow up to five slots in private clubs operated only by veterans groups such as the VFW and American Legion The bill last year would have allowed a limited number of games at Elks Moose and other lodges Ihe River Falls proposal calls for a $200 million resort including a 100 000-square-foot casino floor with 2000 slots and 60 table games a 400-room hotel with a 500-seat showroom a conference center and several restaurants nightclubs and pubs Statewide Waldrop said casino projects could create 4500 construction jobs and 6000 permanent jobs The state would be in line for at least 22 percent of casino revenues mid host cities and counties would share 4 percent The dog and horse racing industries would each get a 7 percent share to bolster purses and improve the sport A hall percent would be set aside for Kansas programs to aid compulsive gamblers River Falls' casino would sit on 52 acres in Edwardsville along the south side of Interstate 70 between the Interstate 435 exit and 110th Street the main exit for Kansas Speedway To reach Rick Aim call (816) 234-4785 or send e-mail to ndmkcstarcom Several new gambling parlors and at least 4000 more slot machines could open in the Kansas City area under a bill to be introduced today in Topeka River Falls Gaming LLC a Texas-based partnership controlled bv Canadian financial interests has since 2002 unsuccessfully advanced proposals for privately managed state-owned casinos regulated by the Kansas lottery Under the bill at least one casino resort would be built in Wyandotte County presumably near Kansas Speedway in the Village West retail and entertainment district Other "destination development include Sedgwick County and Crawford and Cherokee counties in southeast Kansas The measure would also allow a limited number of lottery-owned slot machines at five racetracks and at private clubs operated by the 84 nonprofit veterans organizations Gov Kathleen Sebelius pushed a similar bill last year but it was voted down after crippling amendments were added including one that would have permitted slot machines at bowling alleys The Village West attraction is the top tourism draw but River Falls principal Larry Waldrop said visitors there spend their gambling dollars at riverboat casinos The state faces added fiscal pressure this year from the Kansas Supreme Court which has ordered lawmakers to increase and reallocate public school funding Under the River Falls plan gambling revenues could start flowing immediately to state coffers Contractors selected to operate the state-owned casinos would make advance payments to the state equal to $15000 per proposed slot machine After the casinos opened probably no earlier than 2007 those payments would be Reimbursed over five years as credits against future casino payments to the state Waldrop said the first payments could be made as early as next summer and could teach $150 million Noncasino slot parlors could be open by fall he said The legislation is attracting opponents "We like a lot of said Iarry Seeking ton an executive with Kansas Racing which owns The Woodlands racetrack Though the measure would allow the track an estimated 2000 slots Seckington said that the share of revenues was set too low and that the bill would establish racing sched ules and other requirements for the track to qualify for slot machines not going to let them manage our fa Seckington said Instead he said Ihe Woodlands this year has struck a bargain with the Kickapoo and Sac and Fox tribes to support their plan for a trihal-owned casino in Village West under a compact with the state in exchange for the support for 600 slots at the track If the tribal proposal fails Seckington said Ihe Woodlands is prepared to press plans from prior years for its own casino and resort hotel on the property Stand Up for Kansas the most visible anti-gambling lobby plans to fight the River Falls measure wwwkamascitycom For the latest financial news point your browser to The Kansas City Web site and click on Business A guide on how best to celebrate Super Bowl Sunday STARWATCH CONSUMER A news roundup from consumer affairs writer Paul Wenske and news services The first year of OnStar service will Ire free After that owners will have to pay $199 for a year or $1695 a month to maintain the service OnStar officials said die retention rate is 60 percent after the first year OnStar alerts emergency services when air bags deploy or the sides of the vehicle are hit in a moderate to severe crash Around 3 million GM owners now have OnStar which was first offered in 1997 Electronic stability control systems first appeared in Europe in 1995 and are now standard on some luxury brands including Mercedes Audi BMW and Infinite In November GM and Ford Motor Go announced they were making the systems standard on most SUVs Chrysler Group quickly followed saying it would make stability control standard on all its SUVs by 2006 To reach Paul Wenske call (816) 234-4454 or send e-mail to pwenskekcstarcom gles Consumer Reports staffers put it to a blind test and showed a slight preference for the newcomer Fans can access the Sunday and all its reports at wwwconsumeneportsorg GM safety features General Motors Corp plans to put two safety features OnStar in-vehicle communications service and electronic stability control in all its vehicles by the end of 2010 the company said this week GM thinks it will be the first automaker to make both features standard across its entire fleet a spokesman said The largest automaker said OnStar will be included on all vehicles in 2007 Stability control will be standard on all GM sport-utility vehicles and vans by the end of 2007 and on all cars and trucks by the end of 2010 GM declined to discuss the cost of adding the safety equipment or how it will affect a vehicle's price While the players prepare for Super Bowl XXXIX ConsumerReport-sotg is offering helpful hints to fans on gearing up to watch the big game Take pizza for example While receivers reach for passes consumers will be reaching for slices of their favorite flattened food Who gets the touchdown? According to Consumer Reports taste testers Papa original crust cheese pizza gets a touchdown for its chewy Italian-style crust Pizza pan pizza gets a field goal But taste testers say classic hand-tossed pizza merits only a safety The free online Sunday stop with pizza It offers advice for buying a big-screen TV a digital video recorder for replays even barbecue grills And forget the snacks Advice is offered on the best nuts and chips and where to buy at the best prices "The Super Bowl our annual un official national sports holiday is the ultimate informal entertaining said Helen Popkin associate editor for ConsumerReport-sorg a relative handful of Americans ever experience one in person for most of us the focus is on the living room and making sure our guests have a great time put together this special free section to help readers make this year's Super Sunday party the best she said The guide focuses on the latest big-screen TV technology including plasma TVs conventional tube sets LCD screens and projection TVs Conventional tube sets still offer some of the best viewing quality for the price the report states Consumers- can also make a game plan for the healthiest snacks Studies suggest that nuts are a healthy partof a diet as long as you choose the right nuts and eat too many the report states i Some nuts including almonds peanuts pecans pistachios hazelnuts walnuts and some pine nuts have fewer of the most harmful fats But they are still high in calories Potato chips are another game-day staple Stax have made a Super Bowl bid challenging a "formed category long dominated by Procter Gamble's Prin MONEY mis Sunday Paul In Your Comer: Take a money date WISE Family Money: Tax time.