Newsflash: Obama is tightfisted with taxpayer dollars

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I felt like Rip Van Winkle, waking up from a 20-year sleep and seeing a world I didn’t recognize. On May 22, Rex Nutting, the international commentary editor for MarketWatch, a financial website affiliated with the Wall Street Journal, published a column entitled “Obama spending binge never happened.” The author posited that he had reviewed […]

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I felt like Rip Van Winkle, waking up from a 20-year sleep and seeing a world I didn’t recognize.

On May 22, Rex Nutting, the international commentary editor for MarketWatch, a financial website affiliated with the Wall Street Journal, published a column entitled “Obama spending binge never happened.” The author posited that he had reviewed data of presidencies covering the last 60 years and concluded that President Barack Obama had presided over the smallest increase in federal spending. Within hours, the column had gone viral on Facebook, and the media dutifully reported Nutting’s findings as the truth delivered from Mount Sinai.

Hitting the campaign trail in Des Moines, Iowa, President Obama declared: “Federal spending since I took office has risen at the slowest pace of any president in almost 60 years.”

I quickly checked to see whether I had taken my medication that day. I had. I then checked to confirm that I was wearing my latest optical prescription. Affirmative. How, I asked, could my president be cast as the biggest spender of federal dollars one day and then be cast as a miser the next? The answer was in the details.

First, Nutting made the decision that a president’s first year in office is not really his, since the fiscal year is already four months old at the swearing-in ceremony. This made President George W. Bush largely responsible for the economic-stimulus package, the Children’s Health Insurance Program, and the 2009 expenditures under the Troubled Assets Relief Program (TARP). In short, Nutting raised the Bush expenditure baseline and decreased that of President Obama.

Second, Nutting cast roughly $110 billion of bailout money, which was paid back to the federal government, as “spending cuts.” If you combine the TARP lending in 2009 and the money paid back in 2010, Nutting says that President Obama spent $261 billion less than the record shows.

Third, the federal takeover of Fannie Mae and Freddie Mac also makes Obama’s record look better than it was. Uncle Sam spent $96 billion in 2009 on the takeover, but only $40 billion in 2010. Guess what? Nutting claims the $56 billion as a spending cut. If you combine the TARP bailout and the Fannie-Freddie takeovers, these two bailouts account for another $72 billion in spending “cuts” in 2011.

Fourth, the MarketWatch analysis incorporates the Congressional Budget Office’s (CBO) annual “baseline” as its estimates for fiscal years 2012 and 2013. The CBO assumes $65 billion in automatic, across-the-board spending cuts that will take effect in January, cuts in Medicare payments to doctors, and the expiration of refundable tax credits that are “scored” as spending in the federal ledgers. The likelihood of these spending cuts occurring is, at best, dubious.

Douglas Holtz-Eakin — a former professor at Syracuse University’s Maxwell School; former Congressional Budget Office director; and current president of the American Action Forum, a free-market think-tank — believes that a better analysis of federal spending is to view TARP and Fannie–Freddie as one-time budget anomalies and remove them from the comparison. The result is an explosion of federal spending under the Obama Administration.

Are there benchmarks Nutting ignored? How about the fact that the federal debt has increased 14.6 percent each year President Obama has presided in office? How about the explosion of federal spending as a percentage of GDP, which has reached levels not seen since World War II? How about the budgets presented by the president, restrained only by a House of Representatives controlled by the Republicans?

Nutting and the press call President Obama “tightfisted.” Maybe this is what the president meant when he campaigned on “hope and change.” Hope for the best and change reality.

Norman Poltenson is publisher of The Central New York Business Journal. Contact him at npoltenson@cnybj.com

CNY BEST AWARDS

Subscriber Only

SYRACUSE — The following are the winners of the fourth Annual CNY BEST Learning and Performance Awards, presented by the Central New York Chapter of the American Society for Training & Development (CNY ASTD) at an awards ceremony on Thursday, June 7. The awards recognize excellence in learning and performance practices in the region. The

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The awards recognize excellence in learning and performance practices in the region. The program honors organizations, internships, consultants, and individuals who have linked learning to strategic growth or success through a demonstrated commitment to helping employees enhance their skills and continue learning.

LEARNING AND PERFORMANCE INDIVIDUAL

– Christy Rohmer

Christy Rohmer is senior business professional instructor at New Horizons Computer Learning Center of Syracuse & Rochester. This award recognizes contributions to internal or external customers’ learning progress or success. Rohmer saw a need for, developed, delivered, and fine-tuned a new Microsoft SharePoint 2010 Designer Workflow Workshop, which is now offered as part of New Horizons’ training schedule. The judges complimented Rohmer “on taking the initiative to develop and successfully execute a program that benefits external and internal clients with significant measurable results.”

CONSULTANT

– Dale Sherman, EnergyWright, Inc.

The consultant recognized for helping link learning to clients’ strategic growth or success was Dale Sherman, EnergyWright, Inc., for its Zonal Pressure Diagnostics House. EnergyWright is a Manlius–based energy education and design consulting company that designs and manufactures innovative instructional props to support energy efficiency and green-technology curriculum. The judges acknowledged EnergyWright’s “creative idea that positively impacts learning efficiency.”

INTERNSHIP

– LaFayette Big Picture School

LaFayette Big Picture School was recognized for its “Real Learning Internships,” which provide internship opportunities for college or high-school students. At LaFayette Big Picture School, internships enable students to improve their education and personal growth while addressing their interests, passion, and curiosity with personalized learning plans under the guidance of school advisers and work-force mentors. The judges noted that these internships were “an integral part of their students’ education, preparing them well for their post-high school lives.”

ORGANIZATIONS

(not-for-profit)

– Institute for Veterans and Military Families at Syracuse University

The Institute for Veterans and Military Families at Syracuse University was recognized for linking learning for its internal and external stakeholders to the organization’s strategic growth and success for its Entrepreneurship Bootcamp for Veterans with Disabilities and Entrepreneurship Bootcamp for Veterans’ Families. The aim of the program is to open the door to economic opportunity for veterans and their families by developing their competencies in the many steps and activities associated with creating and sustaining an entrepreneurial venture. The judges commented on how this program “highly enhanced the performance of its graduates.”

ORGANIZATIONS

(for-profit)

– Oneida Nation Enterprises, LLC

– Saab Sensis Corporation

– SavOn, LLC

Three for-profit organizations were recognized for linking employee learning to their organization’s strategic growth or success.

Oneida Nation Enterprises, LLC received the Organization Sapphire Award for its “Leading Through Learning: The Leader Learning Circle program,” which was designed to teach core leadership skills and create personal accountability for applying these skills on the job. Using the book “Monday Morning Leadership: 8 Mentoring Sessions You Can’t Afford to Miss,” by David Cottrell, as its basis, leaders are accountable for setting goals each week to change one of their own behaviors as it relates to the book. The judges called it a “very simple, yet well thought-out program with impressive results.”

Saab Sensis Corporation received the Organization Emerald Award for its “Listening to Learners” program. The Saab Sensis training group undertook a challenge to improve student satisfaction, and training effectiveness while maintaining the organization’s cost-reduction strategies. It conducted a front-end analysis and acquired insights by reviewing student surveys, observing classroom behaviors, assessing students’ cultural backgrounds, and asking for ways to improve existing training. Outcomes included increased student engagement, enhanced development of skills and knowledge, and a re-engineering of training design that has improved the effectiveness of training. The judges mentioned the “high degree of commitment to providing and sustaining high-quality learning outcomes.”

The CNY BEST Learning and Performance Organization Diamond Award recognized SavOn, LLC for its “Exceptional Customer Service: Shopping for the BEST!” program. When through observation and customer focus groups, SavOn learned that its main competitive advantage was low cost versus its competition, which rated highly on customer service, it knew it needed to make changes to remain competitive. In response, SavOn launched a customer-service training and mystery-shopper program. The judges’ observations included: “a well-designed program covering performance, culture, and rewards with successful results,” and a “strong link between training practices and positive individual and overall company results.”

In addition to recognizing excellence in learning and performance practices, CNY ASTD awarded the first annual CNY ASTD John Burns Memorial Scholarship Awards to Krista Bartlett and Steven DeHart. ASTD established the scholarship program to encourage and support continuing education and professional development in the field of work-force learning and performance. The awards are named in honor of CNY ASTD’s 2010 Lifetime Achievement Award winner John Burns.

The keynote speaker for this year’s CNY BEST Learning and Performance Awards ceremony was Jeffrey M. Stonecash, Syracuse University Maxwell professor of political science, who discussed managing the future work force. Stonecash highlighted the importance of having a work-force development system that includes training, incentive management, and a policy infrastructure.

Confidence improves among learning executives

New York News, Subscriber Only

Learning executives were feeling more optimistic during the first quarter of 2012, according to the latest confidence index from the American Society for Training and Development (ASTD). The index for the first quarter totaled 67.3, up from 66.6 in the fourth quarter of 2011. The first-quarter total matched the all-time high for the index, previously

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Learning executives were feeling more optimistic during the first quarter of 2012, according to the latest confidence index from the American Society for Training and Development (ASTD).

The index for the first quarter totaled 67.3, up from 66.6 in the fourth quarter of 2011. The first-quarter total matched the all-time high for the index, previously reached during the first quarter of 2011.

Overall during 2011, the index varied just 1.4 points, indicating that learning executives remained cautiously optimistic throughout the year, according to ASTD.

The index measures executives’ outlook and expectations for the learning function. ASTD surveyed 237 learning executives about their expectations for their effect on corporate performance, ability to meet learning needs, status as a key strategic component, and availability of resources.

More than 84 percent of the executives surveyed expected either the same or better availability of resources to meet learning needs, according to ASTD, and more than 67 percent believe the creation of new learning content will moderately or substantially increase.

Still, executives in the survey recognized they’re not immune from continuing economic pressures. Sixty-seven percent of them said their organization’s funding for workplace learning and development will either stay the same or moderately or substantially decrease.

Overall, the executives were feeling good about their company’s prospects. More than 68 percent said their profit expectations will be moderately or substantially better.

The confidence that learning executives displayed in the recent survey reflects the fact that they’re viewed now as key partners with management in many companies, says Melanie Brunet Relyea, training manager for Oneida Nation Enterprises.

Businesses have increasingly identified learning as an important part of corporate success, she adds. Companies have recognized that their people are resources and that to perform well, they need to be trained.

That means that learning executives now often have a seat at the table when critical corporate decisions are made, Relyea says. It doesn’t mean that companies will start throwing lots more dollars at learning, but it doesn’t mean the likelihood of drastic declines is lower.

It’s important to remember as well that it’s not just about money, Relyea adds. Employees need the time to participate in learning activities, whether it’s a classroom session or a project meant to stretch their capabilities.

Because businesses have been running lean during difficult economic times, demand for those time resources is at a premium, Relyea says. That situation is likely to improve as firms begin to hire again, she adds.

Many learning departments themselves didn’t experience deep cutting during the recent economic downturn, Relyea says. That’s partially because businesses slashed or outsourced training during previous economic dips.

It’s also because learning is increasingly recognized for its important corporate role, she adds.

The Palmerton Group says sale gives it resources to grow

Construction, Design & Real Estate, Energy, Environment & Sustainability, Small Business

DeWITT — David Palmerton says he decided to sell his DeWitt–based environmental-consulting firm to help it keep growing. “We’ve tripled our staff in the past

Defenshield deploys veteran sales force to pursue growth

Manufacturing & Engineering, Subscriber Only, Technology

Maker of armor and shields seeks more consistent revenue DeWITT — Defenshield, Inc. decided to change its sales tactics by placing a different set of boots on the ground early this year. Now the 10-year-old DeWitt–based company, which manufactures bullet-, blast-, and fragment-resistant armor and shields, is laying out a path to march toward consistent 20

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Maker of armor and shields seeks more consistent revenue

DeWITT — Defenshield, Inc. decided to change its sales tactics by placing a different set of boots on the ground early this year.

Now the 10-year-old DeWitt–based company, which manufactures bullet-, blast-, and fragment-resistant armor and shields, is laying out a path to march toward consistent 20 percent annual-revenue growth.

“We went from hiring salespeople and trying to teach them the [defense] market to hiring military folks and teaching them sales,” says Collins White, the company’s president and majority owner. “It’s really redefined where we’re going. It’s making a big difference.”

In the last six months, Defenshield hired two military veterans to work in sales positions. And it would like to hire two more veterans for similar positions in the next six to eight months.

Sales employees with military experience seem to have more credibility when they sell to branches of the armed forces or other players in the law-enforcement industry, White contends. He also believes former military members, who typically have experience living in other countries, give the company a better chance to increase its sales in overseas markets.

“A lot of these guys have traveled,” White says. “It makes these guys more culturally aware than they could be under any other circumstances,”

Outside the United States, Defenshield has clients in eight countries, including Iraq, Afghanistan, Kuwait, Mexico, Singapore, Greece, the United Kingdom, and a “Pacific Rim” country White declined to name. Domestically, its clients include the different branches of the U.S. military as well as other government agencies like the Secret Service and FBI.

White predicts that the new veteran sales force will help the company double its revenue in 2012 to about $5 million. After that, he targets 15 percent to 20 percent annual revenue growth for up to 10 years.

Growing sales at that rate will require some other expansions at the company. White expects to hire several administrative and engineering staff members, bringing the company up to a total of 15 employees. It currently has 10 workers, and it will have 12 after it hires for its two remaining sales positions later this year.

All but one of the firm’s employees are based in Syracuse. It has one part-time worker in Idaho, who handles selling to the Air Force.

Early in the year, Defenshield also took on more space at its headquarters, which it leases in a building at 14 Corporate Circle in DeWitt. The company enlarged its footprint to 10,000 square feet from 7,500 square feet before. It leases the space from DeWitt–based Oliva Cos.

Additionally, the firm has a small branch office in Washington, D.C. to help it sell to different agencies of the U.S. government. A Syracuse–based employee typically uses that location, which does not have its own dedicated staff, about three weeks a month, White says. He is leaving open the possibility of hiring a full-time salesperson in the nation’s capital, but says he has no firm plans to do so.

Defenshield is also trying to introduce new products for different markets in order to help reach its growth targets. For example, it is coming out with a new piece of armor and ballistic glass that can be mounted on a ship’s rails to defend against pirate attacks — equipment that could be useful for the commercial shipping industry, White says.

Diversifying its customer base will help Defenshield weather dry spells in military purchasing, he adds.

“We’re not recession proof,” White says. “When Congress cuts the budget or they do contingency budgets, interim budgets, the military understands what that means, and they don’t spend. We’ve had $5 million years, and we’ve had $900,000 years. It’s important for us to even that out and show consistent growth year to year.”

White, an 11-year Air Force veteran, founded Defenshield in 2002. He owns 85 percent of the firm, while vice president and chairman of its board of directors, Richard Husted, owns 14 percent. Other minority owners hold the remaining 1 percent, according to White.

Family Business Center, TDO partner on talks

Health Care, Subscriber Only, Technology

SYRACUSE — The Central New York Technology Development Organization (TDO) and the New York Family Business Center are working together on a series of talks on key topics for family businesses. The first event took place May 24 at the TDO office on Electronics Parkway in Salina and was focused on exit planning and valuation

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SYRACUSE — The Central New York Technology Development Organization (TDO) and the New York Family Business Center are working together on a series of talks on key topics for family businesses.

The first event took place May 24 at the TDO office on Electronics Parkway in Salina and was focused on exit planning and valuation of family businesses. Future scheduled topics include tax incentives (June 28), fraud in a family business (July 19), human-resources issues (Sept. 21), estate planning (Oct. 18), and a tax-law update (Dec. 13).

Teaming up on the talks, entitled the “Food For Thought Series,” with TDO makes sense, says Donna Herlihy, executive director of the New York Family Business Center.

TDO works largely with manufacturers and technology companies on training and consulting. Many of the manufacturers are family-owned companies, Herlihy says.

Instead of competing for attention, the two groups decided to join forces. The Family Business Center provides tools, resources, consulting, training, interaction, and education specific to family-owned businesses in upstate New York. The center is based in the Tech Garden at 235 Harrison St. in downtown Syracuse.

Herlihy notes the two groups often get similar questions from business owners and managers. When she’s talking with a company about a unique family-business issue, a specialized manufacturing matter might come up. She says the TDO is a natural place to refer a firm for advice on those problems.

The New York Family Business Center has experience in dealing with family matters that the TDO lacks, says Robert Trachtenberg, president and CEO of TDO.

“We hope to be able to bring to our client base additional resources,” he says. “And I think the Family Business Center can bring to their members the resources we can provide.”

Even though a family manufacturing business has some of the same challenges as a publicly held company, some are different, Trachtenberg says.

“They have some unique and distinct issues that need to be addressed differently,” he says.

In human resources, for example, questions might come up on whether it’s appropriate to hire certain family members for positions at a firm or whether they need to be paid for some bit of work they performed, Herlihy says. Job-performance evaluations are another potentially sensitive topic for human resources at a family business.

And while TDO and the Family Business Center certainly work with some of the same companies, both Herlihy and Trachtenberg say the collaboration should help each group get in front of some new businesses. Herlihy notes that TDO has been around longer than the Family Business Center.

“So hopefully they can get the word out to people who might not know us,” she says.

She also notes that many owners and managers of family businesses and manufacturers are busy. Giving them a smaller set of events to attend should help boost attendance.

Herlihy says the groups might look to work together on more events in the future. For more information on the Food For Thought Series, visit www.nyfbc.org or call (315) 579-2871.

Consultant: Firms need to be savvy about complying with ID-theft rules

Regional News, Subscriber Only, Technology

NEW HARTFORD — Federal “red flag” regulations that help provide protection from identity theft have been in effect since 2007.But a recent uptick in enforcement to make sure businesses are complying means that firms need to make sure that if they need to comply, they are doing so, says one local compliance expert. Any businesses

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Any businesses that collect the type of personal information divulged when someone is applying for credit — think auto dealers and furniture stores, for example — need to have a system of safeguards in place. They have to protect that information, even if they are just collecting the applications and passing those along to a financial institution, says Michelle Tuttle, owner of Smart Business Solutions, a marketing and consulting firm based in New Hartford.

“Any business that is taking information from you has to have checks and balances in place,” she says.

The problem, she adds, is that not every business is aware that it needs to comply with the Red Flags Rule (http://www.ftc.gov/bcp/edu/microsites/redflagsrule/faqs.shtm).

Along with the Red Flags Rule, businesses also need to comply with Office of Foreign Assets Control to make sure they aren’t doing business with anyone on the agency’s terrorist list.

Businesses that should comply but fail to do so face fines ranging from $250 all the way up to $10 million, Tuttle says.

Non-compliance is no joke, especially since the federal government this year is stepping up its effort to weed out non-complying businesses.

You can’t just ignore it,” she says. “The government is starting to crack down.”

Fortunately, there are several things businesses can do to find out if they need to comply and take steps to ensure their compliance, Tuttle says.

Businesses can visit the U.S. Treasury’s website and the Federal Trade Commission’s site for a plethora of information about the Red Flag Rules and the Office of Foreign Assets Control lists.

Of course, a business such as Tuttle’s can also help a company navigate the process. She offers packages, which include helping a business set up checks and balances to ensure compliance, starting at $500. Many businesses, particularly in smaller areas like the Mohawk Valley, believe identity thieves will never target them, Tuttle says. That attitude, unfortunately, is exactly why identity thieves love to target small businesses in non-urban areas. They know those firms are less likely to have safeguards in place to protect the information the thieves are after, Tuttle says.

“I think it’s a false sense of security,” she adds.

On top of working to prevent identity theft, businesses that deal with credit applications also need to be aware of the risk-based pricing rule, which went into effect Jan. 1, 2011. The rule states that companies that use a credit report or score in connection with a credit decision must send notice to a customer when the company uses that information to grant credit with not the most favorable terms offered other customers. In other words, if they offer a higher interest rate based on a credit score, businesses have to let the customer know that, Tuttle says.

More information about risk-based pricing is available online at http://www.experian.com/consumer-information/risk-based-pricing-rule.html.

Tuttle, who worked for Bank of New York and AmeriCU Federal Credit Union before starting her own business, offers an array of business services at Smart Business Solutions (www.smartbusinesssolutions.com). Along with providing compliance assistance, she also offers marketing, website design, budgeting, needs assessment, and strategic-planning services.

Tuttle, who has one employee — a certified fraud examiner — started her business in 2008 and operates it at 19 Augusta Drive, New Hartford. She declined to share revenue figures.

Beacon deal expands Berkshire’s reach into CNY banking market

Banks & Credit Unions, Subscriber Only

Berkshire Hills Bancorp, Inc.’s recently announced acquisition of Beacon Federal Bancorp, Inc. moves the Massachusetts–based banking company firmly into the Central New York market at a time when some larger competitors are focusing elsewhere. Berkshire Hills Bancorp (NASDAQ: BHLB), parent company of Berkshire Bank, announced May 31 that it will acquire Beacon Federal (NASDAQ: BFED)

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Berkshire Hills Bancorp (NASDAQ: BHLB), parent company of Berkshire Bank, announced May 31 that it will acquire Beacon Federal (NASDAQ: BFED) in a $132 million stock and cash deal expected to close in the fourth quarter.

The acquisition will give Berkshire seven Beacon Federal branches, including one each in East Syracuse, DeWitt, Rome, and Marcy. Beacon, which has deposits of $677 million and is headquartered in the village of East Syracuse, concentrates most of its business in the Syracuse metropolitan area as well as the Utica–Rome market, which Berkshire entered last year when it acquired Rome Bancorp. Beacon Federal will be merged into Berkshire Bank.

The Syracuse and Utica–Rome areas are largely overlooked by larger banks such as Bank of America or Citizens Bank as hot growth spots, says Damon DelMonte, an analyst covering Berkshire in the Hartford, Conn. office of New York City–based equity-research firm Keefe, Bruyette & Woods, Inc.

Many of those larger banks have focused their attention these days on larger markets where they can see a faster turnaround and more robust revenue growth, DelMonte contends.

But the Syracuse and Utica–Rome markets are right up Berkshire’s alley, he adds. “They typically open in what are perceived to be slow-growth markets,” DelMonte says of Pittsfield, Mass.–based Berkshire. The company successfully accomplished this last year when it acquired five Rome Savings Bank branches through the acquisition of Rome Bancorp, Inc. “I think it’s a logical acquisition for them,” he adds.

The deal is a good one for Beacon and its customers as well, DelMonte says. “It’s a difficult environment for smaller banks to continue to grow,” he says. The acquisition by Berkshire should provide growth for Beacon’s shareholders and expand the product and service offerings to its customers, he says.

Beacon President and CEO Ross Prossner echoed that by saying his customers will benefit from Berkshire’s resources in banking, wealth management, and insurance. “Our combined operations will position us well to further increase market share in the Central New York market,” Prossner said in the joint news release the banking companies issued May 31.

Berkshire President and CEO Michael P. Daly said in a June 1 conference call with investors and the media that it was natural for Berkshire to respond when Beacon reached out to the company to talk about an acquisition.

“Their business is concentrated in the Central New York or upstate New York [market],” he said. “It’s a market that we targeted with our acquisition of Rome last year.”

The markets also boast a solid population of about 1 million people and weathered the recession reasonably well, he noted. After taking on Beacon’s two Syracuse–area branches and two Utica–Rome area offices, Berkshire Bank will have 10 branches serving the Syracuse and Utica–Rome markets upon completion of this deal. Berkshire says it will have $700 million in deposits and the third position in the market share among regional banks.

That will bump Berkshire’s total number of branches to 73 — up from 42 offices just 18 months ago. Last year, Berkshire acquired Legacy Bancorp and just completed the acquisition of The Connecticut Bank and Trust Company on April 20 of this year.

Daly expects the Beacon deal will provide Berkshire with a 22-cent boost in core earnings per share (EPS) starting in 2013, making the deal attractive for its shareholders.

Acquisition terms

Under the terms of the agreement, 50 percent of outstanding Beacon shares will be swapped for Berkshire shares at a fixed ratio of 0.92 shares for each Beacon share. The remaining 50 percent of the Beacon shares will exchange for $20.50 per share in cash. The transaction was valued at $20.35 per Beacon share based on the $21.96 Berkshire closing price on May 30.

The acquisition will cost Berkshire $14 million pre-tax, and the company is using more cash for this deal than some of its previous ones in an effort to right-size its capital, Daly noted. Berkshire will fund the balance of the deal through subordinated debt, and the banking company has already seen positive response to its debt placement, he added.

Beacon’s share price jumped nearly 45 percent to close at $19.23 on June 1, the first trading day after Berkshire announced the acquisition the evening before. The stock barely fluctuated the next three trading days. Meanwhile, Berkshire’s stock price fell nearly 5 percent to $20.75 on June 1, and then was flat the next three trading days.

Each Beacon shareholder will have the right to elect the form of consideration, subject to proration procedures to maintain the 50-50 mix of stock and cash. The transaction is intended to qualify as a reorganization for federal-income tax purposes and the shares of Beacon stock exchanged from Berkshire should transfer on a tax-free basis, the banking companies said in their news release.

The boards of both businesses have approved the acquisition, which is now subject to the approval of Beacon’s shareholders as well as state and federal regulatory agencies.

Berkshire expects to appoint one Beacon board member to its board.

In addition to the Central New York branches, Berkshire will also add Beacon’s Chelmsford, Mass. office to its roster, making it Berkshire’s first eastern Massachusetts full-service branch. Berkshire currently operates 10 residential and commercial-lending offices in central and eastern Massachusetts. Berkshire plans to divest Beacon’s modest-sized Tennessee operations — it has two branches there.

New York City–based Sandler O’Neill & Partners, L.P. served as the financial advisor to Berkshire, while Keefe, Bruyette & Woods, Inc., also based in New York City, was the financial advisor for Beacon. Washington, D.C.–based Luse Gorman Pomerenk & Schick, P.C. served as outside legal counsel to Berkshire, while Atlanta–based Kilpatrick Townsend & Stockton LLP was outside legal counsel to Beacon.

Headquartered in Pittsfield, Mass., Berkshire Hills Bancorp has $4.3 billion in assets and 68 branches in Massachusetts, New York, Connecticut, and Vermont.

Beacon Federal earned $5.7 million, or 93 cents a share, in 2011, up almost 7 percent from 2010. In the first quarter of 2012, Beacon Federal reported profit of $1.3 million, down more than 13 percent.

Gaetano Construction gears up for busy season

Construction, Design & Real Estate, Small Business, Subscriber Only

UTICA — After a mild winter that enabled the company to keep a number of projects on schedule, Charles A. Gaetano Construction Corp. is gearing up for a busy building season in 2012. Among the projects are an expansion of the American Alloy Steel plant in Rome, an addition at the TRI-Valley Beverage, Inc. facility

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UTICA — After a mild winter that enabled the company to keep a number of projects on schedule, Charles A. Gaetano Construction Corp. is gearing up for a busy building season in 2012.

Among the projects are an expansion of the American Alloy Steel plant in Rome, an addition at the TRI-Valley Beverage, Inc. facility in Westmoreland, the renovation and expansion of the Liberty Gardens housing project in Rome, and a project at Matt Brewing Co.

“We’ve got a really nice project going on at the brewery,” David Kleps, vice president of Gaetano’s design-build / Butler Building division, says. Gaetano is building an anaerobic digester at Matt Brewing in Utica that will convert waste product into methane that will, in turn, provide energy to the brewery.

The projects aren’t the large building initiatives the company saw in the 1990s, Kleps says, but even these smaller projects are welcome after several lean years during the recession.

“The private sector, I think, has been sitting tight for the past few years,” says William Gaetano, executive vice president. Now, he notes, those businesses are starting to loosen their purse strings and invest some cash in their facilities.

The result for Gaetano Construction is that it has been able to land new projects as soon as it completes others. The company recently built a primary-care facility in Little Falls for Bassett Healthcare and will wrap up a 40,000-square-foot building addition at St. Luke’s Home in New Hartford by September. While those health-care projects conclude, work will ramp up on other projects, Gaetano says, such as the construction of a new 80,000-square-foot theater and studio arts building at Hamilton College that will break ground this month.

The company has also landed a number of jobs renovating buildings it constructed years ago that now have new owners, Kleps says

Gaetano Construction has been a franchised builder of Butler Manufacturing Co.’s pre-engineered buildings for 30 years. As of this spring, Gaetano has constructed 2.5 million square feet of Butler projects across Central and Northern New York.

Now, Kleps says, some of those buildings are cycling back around to Gaetano again as new owners seek to have them renovated. One example is the 160,000-square-foot former Curtains N Fabrics facility on Gros Boulevard in Herkimer. Gaetano just finished renovating the facility for ELG Utica Alloys, a steel-recycling company, he says.

“There are more projects like that,” Kleps says. It’s that mix of expansions and renovations, almost all involving Butler buildings, which has helped Gaetano Construction weather the recession and start this year strong with a number of projects in the works when the construction industry, as a whole, is still somewhat depressed. Gaetano generated revenue of $46 million in 2011 and expects to meet or exceed that number in 2012.

Tough construction-industry climate

Nearly a quarter of upstate construction companies, 24 percent, are losing money, according to the 2012 Upstate New York Contractors State of the Industry Study by The Bonadio Group accounting firm. That’s an increase of 10 percentage points over the survey’s last edition in 2010 (see full story in this issue, page 10.)

And according to a June 1 report from Associated Builders & Contractors, Inc., a national association representing 22,000 merit shop construction and construction-related firms, non-residential construction spending declined 0.7 percent in April, and private-sector, non-residential construction spending declined 0.2 percent.

Sectors seeing a decline in construction included lodging, manufacturing, conservation and development, religious, public safety, sewage and waste disposal, amusement and recreation, power, communication, and education. At the same time, construction spending increased in the health-care, transportation, water-supply, commercial-construction, office, and highway and street sectors.

“This current trend is largely a reflection of the way the economy has been when decisions to move forward with projects were made,” Associated Builders and Contractors Chief Economist Anirban Basu said in the report. He expects non-residential construction will continue to lag.

Gaetano notes that New York state is holding off on construction projects, aside from highway repairs, which has resulted in struggles for some firms. He’s thankful his company has stayed busy enough to keep about 45 field employees in work all through the winter and this spring. That number is normally closer to 80 people for the busy summer season, and Gaetano said the number will start growing by the end of this month. Gaetano also employs 24 people in its office at 258 Genesee St., Utica, and employs 18 superintendents.

Other notable area projects Gaetano Construction (www.gaetanoconst.com) has worked on include the expansion at Nirvana Water’s plant in Boonville, a new Harley-Davidson store for the Carbone Auto Group near Amsterdam, a new student center at SUNY Institute of Technology at Utica/Rome, a new athletic/events center at Mohawk Valley Community College, and an expansion project at Meyda Tiffany in Yorkville.

Samaritan Counseling Center expands, aided by grants

Health Care, Nonprofits, Small Business, Subscriber Only

UTICA — The Samaritan Counseling Center of the Mohawk Valley, Inc. is able to add staff and serve more clients from its new, larger facility as a result of two grants. The center received two grants totaling $188,000 from the Community Foundation of Herkimer & Oneida Counties, Inc. to purchase and renovate the three-story building

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UTICA — The Samaritan Counseling Center of the Mohawk Valley, Inc. is able to add staff and serve more clients from its new, larger facility as a result of two grants.

The center received two grants totaling $188,000 from the Community Foundation of Herkimer & Oneida Counties, Inc. to purchase and renovate the three-story building at 1612 Genesee St. in Utica. The counseling center previously leased space at 1643 Genesee St.

“It’s more comfortable, it’s brighter, it’s larger,” Gregory Kovacs, the Samaritan Counseling Center’s executive director, says. The center outgrew the old space, which had fewer offices, conference space, and file space. (He did not know the square footage of either facility.) There wasn’t any room to add another therapist to handle the center’s growing waiting list, he notes.

Kovacs first approached the Community Foundation several years ago to begin the process of seeking assistance. Founded in 1952, the foundation provides grants for charitable purposes and has awarded more than 5,200 grants totaling more than $41.3 million from the 290 funds that make up its endowment.

“Once they were ready to purchase a building, our grants committee looked at it and said, ‘Maybe this is a chance to go beyond what we normally do,’ ” says Jan Squadrito, senior program officer at the Community Foundation (www.foundationhoc.org). In the past, she says, the foundation typically gave grants to help organizations purchase facilities or equipment or fund programs and services. However, recently they have noted a large number of organizations needing to invest money in their facilities for renovations or improvements.

“That limits what they can do in serving the community,” Squadrito says. A dollar spent on renovating a building is one less dollar the agency has to invest in its programs.

That’s what prompted the Community Foundation to give the Samaritan Counseling Center (www.samaritancentermv.com) two grants — $100,000 toward the building purchase and $88,000 for the renovations done by Lewis Brothers Construction of New Hartford, Kovacs says.

As a result, the center has a small loan (he did not disclose the amount) in connection with the project that it will pay off in four years and has the resources to hire an eighth therapist to fill one of the 10 offices in its new building.

The Samaritan Counseling Center is actively seeking someone to fill the therapist slot, Kovacs says. Adding that person will add an additional 1,100 hours of service to the current 6,000 hours the center provides annually, he notes.

The center is also expanding the services it offers in the larger building, now that it has space to offer activities like group therapy, he says. The third-floor conference room will also enable the center to host educational programs such as parenting classes and offer professional training sessions, he adds.

On top of expanding services in its Utica facility, the Samaritan Counseling Center is also growing through its satellite locations, Kovacs says. The center currently operates a satellite location in Hamilton, where no changes are planned, and one in Rome, where it is in the process of searching for a larger location to accommodate increased demand in that market, Kovacs says.

“We expect to be adding a third satellite office as well,” he adds. He expects the Samaritan Counseling Center will open an office in the Herkimer area by the end of summer. “There’s a huge need out there,” he says of the market.

Founded in 1980, the Samaritan Counseling Center provides family counseling, a clergy and congregation care program, individual therapy, and couples therapy. The not-for-profit organization accepts most insurance and relies on community philanthropy and other support for the balance of its funding. According to its 2010 Form 990 on file at www.guidestar.org, the center reported revenue of $558,065 and expenses of $545,142.

The center provides services to those without insurance on a sliding-fee scale.

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