New York state saw a recent spike in layoffs, according to new government data. The number of people filing initial applications for unemployment benefits in
BINGHAMTON — Background checks for employment and medical-fraud avoidance purposes are a hot topic. The U.S. Equal Employment Opportunity Commission has brought suit for the improper use of background checks of employees against high-profile defendants such as BMW North America and Dollar General. Attorneys have also brought class-action law suits against employers that fail to
BINGHAMTON — Background checks for employment and medical-fraud avoidance purposes are a hot topic.
The U.S. Equal Employment Opportunity Commission has brought suit for the improper use of background checks of employees against high-profile defendants such as BMW North America and Dollar General.
Attorneys have also brought class-action law suits against employers that fail to follow the requirements of the Fair Credit Reporting Act (FCRA). Recent settlements of FCRA alleged violations include K-Mart, which agreed to pay more than $3 million; US Xpress, which paid $2.75 million; Domino’s Pizza, which paid $2.5 million; and Swift Transportation, which paid $4.4 million to settle the claims of 10,000 applicants seeking employment. Whole Foods and Disney are contesting their suits.
The rash of law suits has captured the attention of employers, who are not only concerned that they have to conduct these investigations to protect against accusations of an “unsafe workplace,” but also have to conduct them in a manner that complies with strict federal and state regulations.
The legal exposure of all employers is a bonanza for agencies such as Evolution Consulting, LLC (Evolution), headquartered at 49 Court St. in downtown Binghamton. Founded in 1994 by Anthony (Tony) P. Elwood, Evolution began as a one-man specialty drug-screening and background-investigation firm.
“Tony started this business in his home,” says Tia Allen, the company’s vice president of operations. “Early on, he used to drum up [drug-screening] business by watching trucks drive down the street and recording the [company’s] contact information. His more than two decades of training and experience in law enforcement with the New York State Police were instrumental in growing the business.
“The company grew rapidly beginning in 2009 when it expanded into the medical-fraud area. In 2011, Elwood created his second corporation — OIG Compliance Now, LLC. (OIGCN) — as a third-party administrator to help health-care employers prevent Medicaid/Medicare fraud in their organizations and to protect themselves against the loss of reimbursements from government health-care programs.
Today, the two companies employ 45 people in one location at the Metro Center where they lease about 9,000 square feet. Both firms are privately owned. The Business Journal News Network estimates that the companies generate about $5 million annually in consolidated revenue. Evolution and OIGCN together serve several hundred clients.
Background checks
The idea of negligent hiring dates back to 1908 when the legal precedent was established that employers have an affirmative duty to provide a safe workplace. The concept included the hiring and retaining of safe employees. It wasn’t until the late 1970s, however, that negligent-hiring claims became common as a cause of action in cases of workplace violence. Employers soon learned to screen not only employees, but also prospective business partners, vendors, board members, and even volunteers. Background checks also became highly regulated with the passage of the FCRA in 1970, which was followed by myriad federal and state rules. The law now provides consumers with a number of provisions to protect their privacy rights, including not just the obtaining and use of information but also the distribution of this information by consumer-reporting agencies.
“It’s no surprise, then, that background-checking in the workplace has exploded in the last 10 years,” says Allen, “with employers finally realizing that the cost of these background checks is small when compared with exclusion from reimbursement and defending a law suit plus paying damages, fines, and penalties. Since 9/11, the threat of terrorism [by a lone wolf] has only added to employers’ concerns. Background screening is here to stay, and it’s not just for sensitive or high-level positions; it’s for everybody, including minimum-wage workers and volunteers.”
The National Association of Professional Background Screeners estimates that the industry’s revenues are in the multi-billion-dollar range. Evolution’s first big contract was with Ascension Health — a leading voice for Catholic health care in the U.S. that employs 330,000 health-care associates nationwide.
Evolution offers a menu of services from which clients can choose. “Pre-employment background checks include Social Security number verification, criminal and civil records search, government-watch search, sex-offender registry check, military DD214 verification, professional licenses, references, verification of education and employment, and comprehensive sanction screening,” says Allen. “A la carte services include specialty criminal searches (e.g., state police criminal records), e-verify (memorandum of understanding), motor-vehicle record search, financial/credit profile, international background checks, education GPA verification, international degree verification and equivalency, and corporate-criminal investigations. However, we do not conduct private investigations (e.g., matrimonial or property disputes).”
Evolution has added other services, such as professional caregiver/nanny checks, tenant-screening for property managers, and DNA paternity testing. Every health-care background check includes OIGCN sanctions screening and validation.
Evolution attracts clients from the corporate world, professional organizations, educational institutions, and anyone else who has exposure as an employer.
Sanctions screening
Fraud perpetrated against government-sponsored, health-care programs is rampant. Estimates just for Medicaid fraud range as high as $70 billion annually. “The Department of Health and Human Services Office of Inspector General (OIG) has a mission to root out fraud, waste, and abuse in the department’s programs,” asserts Allen. “The OIG has the authority to exclude individuals and entities from participating in federally funded programs, including Medicaid, Medicare, the State Children’s Health Insurance program, and all federal, health-care programs.
Any conviction for program-related crimes, health-care fraud, patient-abuse, failure to repay [Health Education Assistance] loans, fraud against non-health-care programs, license suspension or revocation, and a misdemeanor health fraud are all grounds for exclusion. No payment for any items or services can be made to an excluded provider under these programs. Submitting any claims in which any portion is attributed to an excluded individual or entity can be considered fraudulent and subject to strict monetary penalties.
The burden for compliance is squarely on hospitals and other health-care providers. To compound the problem, they must review not only federal lists of excluded parties but also lists from multiple states. It’s no surprise that sanction-screening requirements are a high priority now for corporations and institutions with both the Centers for Medicare and Medicaid Services and individual states mandating monthly screenings. OIGCN sanction-screening services help clients develop a proactive approach to screening compliance so that when they are audited, they can avoid fines/penalties,” Allen continues.
OIGCN’s target clients include hospitals, physician practices, senior-living centers, home-health-care agencies, educational institutions, clinical laboratories, third-party billing companies, durable-medical-equipment companies, hospice facilities, ambulance suppliers, pharmaceutical/biologic/device manufacturers, government agencies, and other providers of health-care products and services. Evolution and OIGCN have clients across the U.S., Canada, Puerto Rico, and the Virgin Islands.
Technology
“Technology has increasingly become integral to the screening business,” notes Allen. “You need enterprise-level software that can integrate with multiple databases, including client and vendor platforms. This is no longer a manual, fax-based process with people handling a lot of paper. We want to develop software and systems that truly meet the needs of our clients and supersede what is available by the government alone. OIGCN researches and updates more than 300 screening sources on a weekly basis. We have invested more than $500,000 to develop and maintain our proprietary software and systems. To give you an idea of the size of the health-care fraud problem, we currently store 425,000 names of excluded parties in our secure database. We have embraced technology not only to manage the volume of data to be screened for excluded individuals but also to make the process easier for our clients.
For example, we have the capability to screen a list of 30,000 names and complete our investigations in five business days. For Evolution clients, we just developed an online consent form that has forced fields and even includes the capability for the applicant to provide a ‘wet’ signature using a computer mouse or a finger on a smart phone. But it’s not just about the machine technology; there is also the human technology. We need to develop employees who exhibit a variety of traits: They must be persistent, cooperative in solving problems, capable of determining the truth, adept at research and detail oriented, committed to continual learning, and enjoy talking on the phone. This is one of those industries where you have to be on the job to learn it … All of our training is done internally with our own investigators and technicians,” Allen continues.
Competition
Evolution and OIGCN are thriving in a highly competitive field.
“There are a number of national [and even international] firms that offer background checks and act as third-party administrators for sanction screenings. Names like PreCheck, GoodHire (10,587 clients), Pinkerton (founded in 1850), PrivateEyes, MBI [Worldwide], Amrop (84 offices in 56 countries), and HireRight [Has 45,000 customers including one-third of the Fortune–500 companies] come to mind,” Allen says. “What makes us unique is that we are a licensed, private-investigative firm that also completes sanction-screening. It’s not enough just to gather large volumes of data; you have to have the investigative culture to know what to do with it. That’s what lets us utilize our technology, tools, and huge data repository to provide accurate information to help guide our clients in making intelligent hiring decisions. Add to this our accurate and timely reporting; our knowledge of compliance; competitive pricing; and outstanding customer service: That’s how we compete.”
Elwood, 61, the CEO of Evolution, spent more than two decades with the New York State Police before he retired. Among his responsibilities as a trooper, he was a certified drug-recognition expert capable of detecting drugs and alcohol in a person’s system through observation only, without the need for any type of chemical test. He is a licensed, private investigator who has multiple certifications. Elwood attended Broome Community College, majoring in psychology with a minor in sociology.
Allen, 46, was born in Endicott. She received her bachelor’s degree in chemistry from Canisius College in 1990, a master’s degree in chemistry from Princeton University, and has completed her course work for a Ph.D. She worked as a chemist at Wyeth Pharmaceuticals, Inc. and later held positions as an executive recruiter at Korn Ferry in New York City and at Lamalie (now Amrop International). Allen returned to the Binghamton area in 2001 to open her own executive-coaching and recruiting business. In 2009, she became global director of resources at Universal Instruments in Binghamton. Her move to Evolution occurred in 2011. At that time, the company employed 15 people. In her spare time, Allen is active in greyhound rescue, home improvement, and is an avid baker.
Evolution and OIGCN rely on local professionals for a variety of support services: Community Bank, N.A. for financing: Hinman, Howard & Kattell, LLP, and Levene, Gouldin & Thompson, LLP for legal work; Payco for payroll services; The Partners Insurance & Financial Services for risk management and investments; Davidson Fox & Co., LLP for accounting; and ICS Solutions Group for computer support.
Allen is optimistic about continued growth for the companies. “We are a finalist with Premier [Inc.], a group-purchasing organization (GPO) with 100,000 customers, including 2,700 hospitals, and $46 billion in buying power. Premier currently has four sanctions-screening vendors on its contact list, and I’m optimistic that … Evolution and OIGCN will be added. This alone could more than double our business. In anticipation, Tony and I are already talking about buying our own building with adequate room to expand. Longer-term, with the U.S. Department of Justice finding more employer liability and government adding more regulations and oversight to corporate operations, demand for our services will only continue to grow.”
DeWITT — Loretto plans to move PACE CNY’s Catherine McAuliffe Center to a new facility at 115 Creek Circle, across from the East Syracuse Fire Station No. 2, in June. The 38,000-square-foot building sits on a 10-acre property that will include parking for 30 shuttle buses and 130 cars. PACE CNY has operated in a
DeWITT — Loretto plans to move PACE CNY’s Catherine McAuliffe Center to a new facility at 115 Creek Circle, across from the East Syracuse Fire Station No. 2, in June.
The 38,000-square-foot building sits on a 10-acre property that will include parking for 30 shuttle buses and 130 cars.
PACE CNY has operated in a 15,000-square-foot space on the first floor of Loretto’s main campus — on Brighton Avenue in Syracuse — since 2000. It has outgrown the space and needs to expand.
“We felt … really the only way we could continue to serve people and expand in our community is to build a new center,” says Penny Abulencia, senior vice president and director of PACE CNY at Loretto.
The Brighton Ave. space has been “cramped” for the last three to four years, she adds. The organization decided to pursue the new center in 2010.
Abulencia, and Kimberly Townsend, president and CEO of Loretto; Ellen O’Connor, CFO of Loretto; and Ruth Kirk, program director at PACE CNY, spoke with CNYBJ on March 2.
The current program at Loretto serves about 270 people, while the new building can accommodate and serve about 400 residents, Abulencia says.
About 80 employees will move to the new McAuliffe Center in DeWitt.
PACE CNY is a nonprofit corporation that Loretto owns and sponsors, according to its website. The organization, a community-based, managed-care program, describes itself as an “alternative to nursing care that allows the frail elderly to continue to live in the community.” The acronym PACE is short for a program of all-inclusive care for the elderly.
Building the facility
Construction on the new facility in DeWitt started in June 2014 and should finish in April, says Kirk.
Loretto purchased the land from Peter Muserlian of the PEMCO Group in a transaction that closed last June, according to the Loretto officials involved.
PEMCO Group is a Syracuse–based commercial real-estate firm.
O’Connor declined to disclose the project cost, but indicated the organization is using a loan from First Niagara Bank and the nonprofit’s own assets to finance and fund the project.
Parsons-McKenna Construction Co. of Salina is the contractor on the project. Peter Crissey, a principal in Crissey Architectural, PC of DeWitt, was the project designer. Rick Ruggaber, an employee with PEMCO Co., and PACE CNY’s Kirk assisted on the design process, says Kirk.
Parsons-McKenna’s James Schanzenback is serving as the project manager, working with Ruggaber and Kirk throughout the process, according to Kirk and O’Connor
Subcontractors included Bruce Electric of DeWitt, which handled the electrical work; Paragon Supply, Inc. completed the masonry work; Effect Group, Inc. of Syracuse provided the flooring; Gladd Security, Inc. of Salina installed the building security; and Finger Lakes Technology Group, Inc., handled the technology and telephone installation, according to Kirk.
When asked about the new center’s amenities, Kirk explained that the new center will include smaller activity rooms for arts and crafts, larger rooms for lunch and gatherings, heated flooring in the bathing area, and a larger salon area.
“[PACE enrollees] are [also] going to have an outside patio area that they’ll be able to enjoy,” says Kirk.
Once PACE CNY moves to the DeWitt location, Loretto will consider several possibilities for the available 15,000-square-foot space, including expanding its
rehabilitation services, says Townsend, the Loretto CEO.
It’ll be part of Loretto’s strategic plan covering the years 2015 through 2018 as the organization reviews its entire campus “as a whole,” Townsend adds.
WATERTOWN — Business leaders from across America descended on the nation’s Capitol during the week of Feb. 23 to lobby Congress for the reauthorization of the Export-Import Bank (Ex-Im), the official export-credit agency of the U.S. If Congress doesn’t reauthorize the Ex-Im Bank, it will no longer exist after June 30. Among those lobbying their
WATERTOWN — Business leaders from across America descended on the nation’s Capitol during the week of Feb. 23 to lobby Congress for the reauthorization of the Export-Import Bank (Ex-Im), the official export-credit agency of the U.S.
If Congress doesn’t reauthorize the Ex-Im Bank, it will no longer exist after June 30. Among those lobbying their representatives were two employees from New York Air Brake, headquartered in Watertown.
“Ex-Im is a critical benefit to U.S. corporations of all sizes,” says Brian Morrow, director of locomotive original-equipment sales at the manufacturer. “While people talk about the funds that go to large corporations, 80 percent to 90 percent of the transactions support small business. A substantial amount of those funds that support large corporations flow to small suppliers. At New York Air Brake, 15 percent of our sales results from direct exports and another 18 percent to 20 percent from our domestic customers shipping to foreign buyers. That means that a significant number of our jobs are dependent on exporting. Because 95 percent of the world’s [private-sector] consumers live outside the U.S., many in economies that are growing rapidly, exporting will be even more important in the future.” The Ex-Im Bank claims to have supported 164,000 jobs in 2014.
The National Association of Manufacturers and the U.S. Chamber of Commerce, both advocates of reauthorizing the Ex-Im Bank, point out that small business is often shut out of exporting because commercial banks will not lend against foreign receivables. Small businesses usually need a line of credit to finance the manufacturing and to bridge the gap between the placement of the order and the payment, a period that often takes three to five months or more. The Ex-Im Bank’s export-credit insurance also enables small businesses to offer terms to foreign buyers who cannot or prefer not to pay for the whole order at one time.
Morrow goes on to note that the Ex-Im Bank is not a burden on the taxpayers. “The Bank makes loans,” he declares, “not grants. The agency charges fees for its services and nets a surplus which is returned to the taxpayers. With an historic default rate under 1 percent [since its inception], Ex-Im is actually profitable.
“We would be at a serious disadvantage without Ex-Im,” Morrow continues. “There are 60 countries that have agencies to promote their exports, and some spend a lot more money to subsidize … [the process] than the U.S. does. I saw this first-hand when I was responsible for our international sales [for New York Brake].”
Another argument put forth by advocates is the concern for national security. President Franklin Roosevelt talked about America as “the arsenal of democracy.” While the Ex-Im Bank is not permitted to finance military exports, its loan and insurance programs play a role in sustaining our defense industrial base by ensuring a minimal pool of skilled workers, helping military contractors weather domestic defense retrenchments, and maintaining a defense supply chain of subcontractors and suppliers.
How it started
The Ex-Im Bank, headquartered in Washington, D.C. with regional export centers in 12 U.S. cities, was established by executive order in 1934 and made an independent agency in the executive branch in 1945. The mission of the Ex-Im Bank, which is chartered as a government corporation, is to finance and facilitate U.S. jobs through sales of U.S. exports to foreign buyers that the private sector is unwilling or unable to undertake. Its financial products include direct loans with fixed-interest rates to foreign buyers of U.S. goods and services; loan guarantees of commercial lenders to foreign buyers; working-capital finance, typically for raw materials or supplies; and export-credit insurance to protect against losses from non-payment. As an aside, why the Bank is called Ex-Im is a mystery to this reporter, since the agency doesn’t finance any imports.
Over the years, legislators have attached a number of “social” mandates, including the proviso that not less than 20 percent of its total aggregate authority must be allocated to small business and not less than 10 percent to renewable-energy exports. The Ex-Im Bank must also conduct a review of all long-term transactions of more than $10 million to evaluate any harmful environmental impact. A sub-Saharan statutory mandate requires the Ex-Im Bank to promote its financial commitment to that region. And, a minimum of 85 percent of the labor, materials, and overhead associated with a project must be associated with the production of the project. In 2014, the Ex-Im Bank’s aggregate exposure level was $112 billion: By product, guarantees were $69 billion; by geographic region, Asia received $46 billion; and by economic sector, air transportation netted $50.7 billion. In that same year, the Ex-Im Bank authorized $20.5 billion to support $27.5 billion in exports.
Criticism of Ex-Im
While the Ex-Im Bank has its supporters, it also has its detractors. Barack Obama, before he became president and an advocate for reauthorization, denounced it as “… little more than a fund for corporate welfare.” Opponents of the Ex-Im Bank criticize it for favoring special interests over the taxpayers. They point out that while most of the transactions go to small business, 10 of 3,746 recipients of Ex-Im Bank support last year received 76 percent of the dollars, and these companies are customers of multinational conglomerates such as Boeing, GE, and Caterpillar. (In fiscal year 2012, Boeing customers alone received 82 percent of all Ex-Im loan guarantees; in 2013 it was 67 percent.)
Domestic corporations complain that Ex-Im support of foreign purchases harms non-subsidized companies by putting them at a competitive disadvantage. Delta Airlines, for example, protests that sales by Boeing to foreign competitors are based on interest rates charged by the U.S. Treasury, which loans the funds to the Ex-Im Bank. Delta, on the other hand, has to borrow funds from commercial banks at market interest rates, which are substantially higher.
Minnesota iron-ore miners raise a similar objection to a $694 million Ex-Im loan to Australia’s richest man, which helps their competitor compete in the global trade. Tampa–area employers complain that a $117 million loan to a state-owned fertilizer company in Morocco puts them at a competitive disadvantage.
The argument that the Ex-Im Bank is a profitable agency is also disputed. Opponents contend that Ex-Im’s “supposed” profitability is based solely on its accounting method. If it had adopted a fair-value estimate, which incorporates market risk, the long-term guarantee program would actually show a loss.
Then there is the proverbial argument about government choosing winners and losers. In 2011, the Ex-Im Bank provided $10 million of loan guarantees to Solyndra, a solar-technology company that subsequently went bankrupt. But the poster child for the harm caused by business subsidies has to be Enron, which received $4.4 billion from Ex-Im (and other U.S. agencies) just for two projects: one in New Guinea and the other in India. Following its collapse, the public saw that Enron’s energy empire was really a group of corporations that spent time manipulating the tax code, lobbying for self-serving regulations, and chasing taxpayer handouts.
Finally, detractors of reauthorization debunk the idea that Ex-Im creates jobs. They argue that the Ex-Im Bank’s subsidies merely shift jobs from one sector to another with no net gain in employment.
The basic argument against the Ex-Im Bank is that it is just another example of rent seeking, where companies spend their money and energy on political lobbying in an effort to enrich themselves without actually creating any wealth. In the end, these efforts reduce overall economic growth, misallocate resources, stunt wealth creation, reduce government revenue, and even increase income inequality. In short, the time and money spent on lobbying would be better spent if invested in things such as research and development, improved business practices, employee training, and capital goods.
As the Congressional vote to reauthorize the Ex-Im Bank approaches, both proponents and opponents are ratcheting up the pressure on Congress. Despite being reauthorized numerous times over the past 80 years, it’s not clear this year how Congress will vote.
New York Air Brake was founded in Watertown in 1890. The company designs and manufactures electronic air brakes and integrated-control systems for the train industry. The Watertown plant employs 530 and the corporation’s total U.S. employment exceeds 800. New York Air Brake is owned by Knorr–Bremse A.G. of Munich, Germany, which operates a rail-vehicle division and a commercial-vehicle-systems division. Knorr-Bremse employs 20,800 people with 2014 consolidated sales of 5.2 billion euros.
CLAYTON — The Thousand Islands Performing Arts Fund (TIPAF) at the Clayton Opera House has appointed Amy Getman, of Clayton, as the nonprofit’s house administrator. Getman was selected because of her “outstanding” customer-service background and her commitment to the 1000 Islands region, according to a news release from TIPAF. Julie Garnsey, TIPAF’s executive director, said,
CLAYTON — The Thousand Islands Performing Arts Fund (TIPAF) at the Clayton Opera House has appointed Amy Getman, of Clayton, as the nonprofit’s house administrator.
Getman was selected because of her “outstanding” customer-service background and her commitment to the 1000 Islands region, according to a news release from TIPAF.
Julie Garnsey, TIPAF’s executive director, said, “I am very pleased to have Amy on our team. I think she will be a valuable asset to the Clayton Opera House. She brings with her a lot of energy and enthusiasm.”
Since 2009, Getman has been the tasting-room manager at Coyote Moon Vineyards’ downtown wine bar, where she managed eight employees and oversaw all aspects of daily operations in the store. She holds a business-management certificate from Jefferson Community College in Watertown.
Getman’s new duties include supervising part-time opera house staff, ensuring that contracted artists’ needs are met for each performance, handling all opera house rental contracts, managing the box office, and overseeing opera house maintenance.
TIPAF manages operations at the Clayton Opera House under an agreement established in 2007 with the town of Clayton, which owns the building, according to the news release. The opera house, the performing arts center of the 1000 Islands, has been dedicated by the town of Clayton as a live performance venue and community center in perpetuity.
FORT DRUM — Fort Drum may be pumping $1.3 billion to $1.8 billion into the North Country’s economy annually, but it stands to lose 84 percent of its workforce if potential Army budget cuts come to fruition. Worst-case scenario: Fort Drum has the potential to lose 16,000 of its 19,000 soldiers currently assigned to the
FORT DRUM — Fort Drum may be pumping $1.3 billion to $1.8 billion into the North Country’s economy annually, but it stands to lose 84 percent of its workforce if potential Army budget cuts come to fruition.
Worst-case scenario: Fort Drum has the potential to lose 16,000 of its 19,000 soldiers currently assigned to the post, according to the Army’s 970-page Supplemental Programmatic Environmental Assessment. This report details the environmental and socioeconomic impact of 30 military installations where troop reductions may occur.
Fort Drum, home of the U.S. Army’s 10th Mountain Division, is the largest single-site employer in New York state. It is one of the nine Army bases nationally that could lose as many as 16,000 troops.
Losing that many troops at Fort Drum could result in a loss of more than 4,700 additional off-post civilian jobs in Jefferson, Lewis, and St. Lawrence counties, according to the Fort Drum Regional Liaison Organization’s economic model. That’s nearly 21,000 total jobs gone from the North Country region.
“It is a disaster economically,” says Carl McLaughlin, executive director of the Fort Drum Regional Liaison Organization (FDRLO).
In fiscal year 2014, Fort Drum contributed $1.3 billion to the local economy, according to the Fort Drum economic-impact report released by the Fort Drum base at the beginning of March. With the reduction of 1,500 troops announced in June 2013 and construction projects starting to wane, the post’s direct economic impact decreased about $119 million from fiscal year 2013 to fiscal year 2014, according to the report. Fort Drum’s fiscal year runs from Oct. 1 to Sept. 30.
The FDRLO’s economic-impact model pegs Fort Drum’s total annual economic impact at closer to $1.8 billion. This figure is determined by plugging in Fort Drum’s direct spending with off-post jobs, and business income stimulated by Fort Drum’s spending and the re-spending of that income on consumer purchases and additional business sales in the region, according to McLaughlin and the FDRLO report.
The FDRLO began using the IMPLAN input/output modeling tool designed by the Economic Development Research Group around 2003. This tool allows the organization to track the impact of military and civilian payrolls, plus Fort Drum construction and non-construction expenses throughout the regional community.
McLaughlin speculates that the public will hear about the first round of Army budget cuts sometime in June, and the remaining cuts by September.
Large troop cuts at Fort Drum will have major economic repercussions on a North Country region that lacks other major economic options.
“We’re a rural community. We don’t have anything else to fall back on. If you pull Fort Drum out of here, we have nothing to replace it with,” says McLaughlin.
Soldier population
If Fort Drum loses 16,000 soldiers plus their families, the area would lose almost 30,000 people. That’s a quarter of Jefferson County’s total population, and nearly equal to the entire population of the city of Watertown.
For the last few years, Jefferson County has been the fastest-growing county in the 16-county Central New York region, according to census figures. It’s been one of just a few counties in the state growing in population at all.
For comparison’s sake, take Fort Bragg in North Carolina, the nation’s largest U.S. Army base. A troop reduction of 16,000 would represent about a 30 percent cut in its 53,000 soldier total, compared to the 84 percent cut that losing 16,000 troops at Fort Drum would represent.
At the other end of the spectrum, you have Fort Stewart in Georgia and Fort Riley in Kansas, both of which have a comparable number of troops to Fort Drum and operate in similar rural communities. Fort Stewart and Fort Riley also stand to lose 16,000 soldiers.
“We built our population that includes those 16,000 soldiers,” says McLaughlin.
To accommodate the influx of the soldier population in recent years, the North Country community built new houses and apartments, created more capacity at area schools, developed commercial districts, and expanded medical services. Fort Drum is the only installation in the Army without an on-post hospital, as it was able to use the excess medical services within the community, says McLaughlin.
Fort Drum soldiers also spread their money further than Jefferson County. Syracuse is a favorite destination for the troops, who often travel down to visit Destiny USA, the entertainment venues, and summer festivals, says McLaughlin.
Asking the community to show its support
In August, FDRLO, on behalf to the community, submitted a formal written response to the Army that addressed the effects the proposed cuts would have on the socio-economic status of the area.
The North Country community has the opportunity to continue to show its support for Fort Drum by signing a petition and attending a listening session scheduled for Friday, March 20 at the auditorium at Jefferson Community College in Watertown. As part of the evaluation process to determine troop reductions, the Army has been conducting public listening sessions at each of the 30 installations.
“Numbers count, so sign that petition. Go to the rally. Make a statement,” says McLaughlin. He also suggests that people address the Army directly. “The more people talk, the more they get the message.”
More than 14,000 online and hand-written signatures have been collected by the FDRLO as of press time.
At the listening session, McLaughlin advises citizens not just to talk about the negative impact the cuts could have, but also to address the value of the post on the community.
“We add value to the military model. We, plus the soldiers, make a better team. Show how you support soldiers and their families,” says McLaughlin.
Other community leaders and organizations are urging citizens to participate in the rally efforts.
“Take a step back and think, ‘How does the military impact you? How does Fort Drum impact you?’ ” says Lynn Pietroski, president and CEO of Greater Watertown-North Country Chamber of Commerce. “If it in any way impacts you, sign the petition and show your support.”
“We’ve had invaluable support and help from many volunteers and community partners,” says Dave Zembiec, deputy CEO of the Jefferson County Local Development Corp. Zembiec also sits on the FDRLO board of directors and is co-chair of the sustainability committee that coordinates the FDRLO’s efforts to organize the March 20 rally.
On March 10, National Grid announced its commitment to the effort with a $48,000 grant to the FDRLO. This grant plus a $23,000 donation from the New York State Association of Realtors and $3,000 from the Jefferson-Lewis Board of Realtors are helping to fund the FDRLO’s multi-media campaign to raise public awareness. Additionally, all the local news media have contributed more than $31,000 of in-kind support by pledging to match paid advertising, according to the FDRLO.
“It’s a tough one. That’s why we’re fighting so hard,” says McLaughlin.
To sign the petition, visit: www.drum2025.com
PHOTO CAPTION: Showing support
U.S. Senator Charles E. Schumer (D–N.Y.), right, on March 10 met with Major General Jeffrey Bannister, left, incoming commander of Fort Drum. “During our meeting, I re-iterated my firmly-held belief that the 10th Mountain Division is exactly the kind of highly-trained, nimble, and tactical unit that the Army needs as the new standard for our armed forces, and I made it clear to the General that Fort Drum has my unwavering support. Major General Bannister and I have worked well together in the past, and I look forward to working with him in the years ahead to make sure Fort Drum stays as strong as possible,” Schumer said in a news release.
Ogdensburg, Massena, and Plattsburgh are among the communities that Site Selection magazine is recognizing as “top micropolitan areas for corporate-facility investment in 2014.” Empire State Development (ESD), New York’s primary economic-development agency, announced their ranking in a news release issued March 4. Site Selection, a corporate real estate and economic-development publication, has all three communities
Ogdensburg, Massena, and Plattsburgh are among the communities that Site Selection magazine is recognizing as “top micropolitan areas for corporate-facility investment in 2014.”
Empire State Development (ESD), New York’s primary economic-development agency, announced their ranking in a news release issued March 4.
Site Selection, a corporate real estate and economic-development publication, has all three communities tied for eighth place for the number of projects in the communities that have led to additional investment or job creation.
The magazine also ranked Batavia in Western New York in fourth place.
The magazine’s ranking of top micropolitan areas included areas with a population of 10,000 to 50,000 that cover at least one county, using U.S. Census data, ESD said.
Site Selection’s new-plant database provides the basis for the rankings, which are focused on new corporate-facility projects or expansions with “significant impact.”
The projects must meet at least one of three criteria, which include a capital investment of at least $1 million, create a minimum of 20 new jobs, or add at least 20,000 square feet of new floor area.
New York’s North Country is establishing itself as a business-development location where the communities, colleges, developers, and state “understand how to work together” to help both existing companies and those firms that are looking for new facilities, Patrick Kelly, CEO of the St. Lawrence County Industrial Development Agency in Canton, said in the ESD news release.
“Looking forward, we expect this trend will continue with the new low-cost power and specialized economic-development resources made available for St. Lawrence County through the New York Power Authority’s power-proceeds allocation program. With our border location, quality workforce, available facilities, aggressive programs and coordinated approach to development, there’s never been a better time to look at St. Lawrence County,” said Kelly.
The ranking “recognizes success” over the last year, which is “very gratifying” for the area economic-development team, Garry Douglas, president of the North Country Chamber of Commerce in Plattsburgh, and co-chair of the North Country regional economic-development council, said in the news release.
“But even more importantly, it is the latest confirmation that our economic-development strategies are on the right track and need to be carried forward, especially the continued deepening and broadening of our special economic connections with Quebec. And with Ogdensburg and Massena in the top group along with Plattsburgh, I believe it provides confirmation that Gov. Cuomo’s regional approach to economic development is truly working in the North Country,” said Douglas.
He also contends “this sort of national spotlight” will reinforce the region’s marketing efforts and “attract fresh interest.”
About Site Selection
Site Selection, the 61-year-old Atlanta, Georgia–based magazine that Conway, Inc. publishes, is a corporate real estate and economic-development publication.
The magazine’s circulation base consists of 48,000 subscribers, most of whom are involved in corporate site-selection decisions at the CEO/president/COO level, according to the description in the ESD news release.
CARTHAGE — Independent Medical Evaluation Company, LLC (IMEC) is hoping to generate additional contract work now that it is certified as a minority and women-owned business enterprise in New York. The firm handles independent medical evaluations (IMEs) on issues such as workers’-compensation claims, no-fault liability cases, fitness for duty evaluations, and functional-capacity evaluations, and others,
CARTHAGE — Independent Medical Evaluation Company, LLC (IMEC) is hoping to generate additional contract work now that it is certified as a minority and women-owned business enterprise in New York.
The firm handles independent medical evaluations (IMEs) on issues such as workers’-compensation claims, no-fault liability cases, fitness for duty evaluations, and functional-capacity evaluations, and others, says Amy McEathron, owner and president of IMEC.
The Carthage–based firm announced its certification in a news release issued Jan. 29.
IMEC operates in a building it owns at 111 Riverside Drive in Carthage, its fourth location since launching in 2006, according to McEathron.
IMEC pursued the certification to have the ability “to get certain contracts,” says McEathron, who spoke with CNYBJ on March 5.
The designation will help IMEC when competing with other IME firms that aren’t women-owned, she adds.
“I would have priority over anybody in a bid for a contract [with] New York state,” says McEathron.
She wants IMEC to pursue contracts for local prisons, the New York State Insurance Fund (NYSIF), federal contracts, and those associated with Fort Drum.
NYSIF is the largest provider of workers’-compensation insurance in New York, according to its website.
IMEC employs 10 people, including five full-time workers, two per-diem employees and three at-home transcriptionists, who type the medical reports “that the doctors dictate,” says McEathron.
The per-diem employees work “variable hours” as the demand increases, she adds.
“The flow … sometimes is really busy one week and then not as busy the next week, so depending on the flow they work in the office,” she notes.
McEathron hopes to add two full-time and two part-time employees during 2015 due to the contracts that the firm can pursue with the new certification, she adds.
McEathron declined to disclose IMEC’s 2014 revenue total, but says it increased 40 percent from 2013. She’s hoping for similar, additional growth in 2015.
“We’re on track for that right at the moment,” she says.
The firm has generally produced annual growth of 20 percent to 40 percent since launching, says McEathron.
Medical evaluations
The medical evaluations that IMEC arranges are “like a second opinion.”
“It’s a nonbiased, medical opinion. The doctors do not work for anybody. They’re independent contractors … they review the medical records that are given to
them,” says McEathron.
The attorney, insurance company, or employer requesting the evaluation provides a list of questions the physician needs to address, she explains. The doctor will then handle the physical exam.
As McEathron explains it, the independent evaluation becomes part of the process when a workers’-compensation board or a Social Security review board denies a claim. The board may not view the initial evaluation from a treating physician as “accurate,” so the claimant would then “have to fight it.”
McEathron notes that a patient’s personal physician will “believe and listen to” what the patient is saying, whether it’s true or not.
The physician providing the IME is someone who isn’t “related” to the case.
“They’re not your treating doctor. They’re not paid by anybody. It’s nonbiased,” she contends.
IMEC works with “thousands” of physicians across New York, stretching from Buffalo to New York City to Plattsburgh. It also works with doctors that are located outside of New York state.
“We pay them whatever their fee is. Each exam is its own fee, and then we bill the party requesting the evaluation, so there’s an administrative fee plus a doctor’s fee,” she says.
IMEC has built its client base through marketing to create awareness of its service, McEathron says.
IMEC has “hundreds” of clients in the North Country and across New York. They include insurance companies, attorneys, and employers.
The clients include the Jefferson County Department of Insurance & Safety’s division of self-insured workers’ compensation; Oneida Herkimer Madison Board of
Cooperative Education Services’ (BOCES) workers’-compensation consortium; and St. Lawrence-Lewis BOCES’ workers’-compensation and self-insurance consortium.
In addition, McEathron says the IMEC clients include the Alex Dell law firm and the law firm of Fischer, Bessette, Muldowney & Hunter, LLP.
The Dell law firm operates offices in Albany and Plattsburgh, according to its website; and the Fischer, Bessette, Muldowney & Hunter firm has offices in Malone, Tupper Lake, and Saranac Lake, according to its site.
“We’re always busy because the paperwork is just astronomical,” says McEathron. “But the volume [of work] … you just don’t know.”
SYRACUSE — This year looks much the same as 2014 when it comes to real estate and construction in the Syracuse market, according to the Integra Realty Resources (IRR) 2015 Viewpoint report. However, the area is seeing several bright spots of activity that will show some growth this year. “For the most part, Syracuse
SYRACUSE — This year looks much the same as 2014 when it comes to real estate and construction in the Syracuse market, according to the Integra Realty Resources (IRR) 2015 Viewpoint report. However, the area is seeing several bright spots of activity that will show some growth this year.
“For the most part, Syracuse doesn’t change much,” says William Kimball, senior managing director of IRR’s Syracuse office and current president of the Upstate New York Chapter of the Appraisal Institute. The region typically doesn’t follow the boom-and-bust cycles other areas across the country sees, he says, so there isn’t a lot of change in the real-estate market from year to year.
However, things have improved nominally on both the sales and leasing side of things, Kimball says. “Things are improving.”
Then there are those bright spots — areas of increased activity — that shows promise for the year ahead, he says.
“The biggest thing that’s going on in the area is the Township 5 project,” he says. The 500,000-square-foot retail project by Cameron Group LLC in Camillus is stirring up a lot of activity from businesses new to the market, such as Costco, as well as interest from existing businesses who may want to move to a newer building at a busy location, Kimball says.
That’s especially true with uncertainty surrounding other retail centers in the area. The future of Great Northern Mall, located in Clay and owned by Macerich Co, could be uncertain, Kimball says. The mall lost several large tenants, including Dick’s Sporting Goods, but there is more than just that, he says. The location is not the draw it once was, there is more competition, and the facility has the disadvantage of age. Destiny USA has already done a great deal to draw both tenants and shoppers away from other retail centers, and Township 5 will continue that trend, Kimball says.
Other positive changes are taking place in the region’s office-space sector, he says, where former offices are being redeveloped into apartments. “It takes some of the dead, inactive space off the market,” Kimball notes. With plenty of space available and no new major construction projects in the works, the sector is now more in line with his expectations for it.
One place where there is new activity going on is one particular retail segment — the dollar store. “Where there is a little void of space, a new one pops up,” Kimball says. Over the past year and a half, between 15 and 20 new dollar stores have opened in the region, with Dollar General and Family Dollar as the leading locations. Kimball says he expects the dollar-store trend to continue to flourish in 2015.
On the residential side, the downtown Syracuse area continues to be a bright spot in 2015. Numerous projects to develop apartments have boosted interest in the downtown area. As a result, the vacancy level for the area remains at a very low 2 percent, Kimball says. “That market has legs, and it’s going to continue,” he says. The market is particularly attractive to the younger crowd and “it’s really become cool to be downtown,” he says. In addition, the Township 5 project will contain 96 apartments once complete.
Overall, the IRR report found that the Syracuse market had lower levels of Class A and B office space, as well as lower inventory of multifamily housing. The area’s retail sector is in its second stage of recovery with decreasing vacancy rates; however, new construction and rental-rate growth are still low.
To read the full 2015 Viewpoint report, visit www.irr.com/_FileLibrary/Publication/16/IRR_Viewpoint_2015.pdf.
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