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RIT hires former Bush administration exec

A top executive from the Bush administration has joined Rochester Institute of Technology to lead its efforts in pollution prevention.
Edwin Pinero, until recently the federal environmental executive, has been named director of the Pollution Prevention Institute at RIT.
Gov. Eliot Spitzer last week announced RIT would be the site for the new institute, designed to coordinate efforts among research universities and government agencies to help manufacturers adopt green practices.
“I am a firm believer that environmental stewardship not only is the right thing for our environment but is an incredible, untapped business opportunity,” Pinero said in an interview Tuesday. “There is actually money to be saved and to be made in environmental stewardship.”
As the federal environmental executive, Pinero oversaw presidential orders that mandated efforts to ensure that the government itself was as environmentally conscious as possible, Pinero said. He was appointed to the post in 2004, after serving as the deputy environmental executive for a year.
Pinero also played a role in international initiatives, including a summit of the United Nations last summer focused on sustainability. It was at that conference he became better acquainted with Nabil Nasr, director of the new Golisano Institute for Sustainability at RIT.
“I’ve been very impressed with the stuff (RIT) is doing,” Pinero said.
Pinero has been tapped to lead partnerships among labs at RIT, Clarkson University and SUNY at Buffalo, each specializing in different areas of reducing waste in manufacturing. The institute also calls for partnerships with regional technology centers and government.
Pinero will lead the development of 16 research and development test beds across the state, officials said. He also will promote research and education at the Golisano Institute, which is developing one of the first doctoral programs in sustainability.
RIT has been involved in work in pollution prevention for many years around New York, Nasr said. The designation by the state last week for the Pollution Prevention Institute-with $6 million pledged by Spitzer-provides a wonderful opportunity to strategically address needs of industry.
Nasr had attended the U.N. conference in Stockholm, Sweden, last summer on a team in sustainable production, in a delegation led by Pinero. The two hit it off immediately, Nasr said.
“He’s done a lot of excellent work in this area,” Nasr said.
RIT is looking to build on its programs helping manufacturers reduce waste, which have included development of remanufacturing processes for toner cartridges that have diverted hundreds of tons of waste from landfills to be reused effectively.
“It’s a win-win from every side, environmentally, economically and scientifically,” Nasr said.
Before joining the federal government, Pinero served as director of the Bureau of Environmental Sustainability and Pollution Prevention in the Pennsylvania Department of Environmental Protection, as well as Pennsylvania’s energy director.
Pinero also has worked for various environmental consulting firms, promoting best practices in the areas of pollution prevention, environmental management and sustainability. He taught graduate courses in environmental management for Duquesne University in Pittsburgh.
“I think this is a wonderful thing,” Nasr said. “When you have someone like Ed who has been active in international committees, the White House-someone who actually has seen a lot of programs around the country, to come to RIT is significant in my mind. It shows that he has a lot of faith and trust in what we’re doing, and he thinks our program is on the right track.
“One of the things we’re trying to do in Rochester, we want to be the best place in the world you go to for answers to the challenges that we’re facing and for our businesses to become sustainable,” Nasr said.
Sustainability is going to be the next frontier for competition among nations in the industrial world, Nasr said. The United States can leverage the infrastructure, resources and talent among its universities to help industry become more competitive and innovative.
“If we leverage all of these capabilities to help industry become more competitive, it would solve a lot of our issues now dealing with what’s impacting the economy,” he said.
Pinero said that while there may be critics of the Bush administration’s environmental policies, the government had been making enormous progress in areas that do not tend to attract a lot of attention.
A top initiative was requiring vendors of any electronic equipment to federal agencies to meet certain environmental standards.
“The federal government has phenomenal purchasing power,” Pinero said.
With the government spending roughly $60 billion a year on information technology, it wields enormous influence on manufacturers, he explained.
“Imaging devices, television, cell phones-we use our market leverage to improve the environmental attribute of a particular product,” he said.
The RIT institute may be a perfect alignment in its commitment from the state and leveraging of technology at the university and its partner organizations to help businesses enhance their environmental performance, Pinero said.
“The whole is greater than the sum of the parts,” he said. “It’s a cliche, but if you look at what we all can do, the order of magnitude is more effective. My vision for this is that this institute becomes a key resource for New York State industry to tap into.”
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03/07/08 (C) Rochester Business Journal

A new start

A new company has emerged from the wreckage of a failed partnership at Horning Construction LLC.
The multimillion-dollar business resurfaced this year as Holdsworth Klimowski Construction LLC, marking a new beginning for the successful construction firm.
After a dispute over buyout terms, Jeffrey Horning left Horning Construction Co. Inc., the commercial building firm he founded in 1984. His partners, Ted Holdsworth II, now president, and Robert Klimowski, now executive vice president, have been running Horning Construction LLC without him.
Holdsworth, in an interview, indicated there were troubles between the partners and Horning. Court records attest to that.
Horning left the firm in May 2006. Calls made to Horning and his attorneys for this story were not returned.
“I don’t really know (what he’s doing now). He’s retired. He’s dabbling in some development stuff,” Holdsworth said. “It wasn’t an amicable split. Since we bought his third out, I haven’t had any contact with him.”
Holdsworth did not disclose the details of the deal, but court documents reveal details of wrangling over the buyout terms.
The papers are part of a petition Horning filed in 2006 to dissolve Horning Construction LLC, following a breakdown in negotiations between Horning and his partners.
Holdsworth, a former project manager at Allied Builders Inc., joined Horning Construction Co. in 2001 and helped Horning double its revenues by 2004, court documents state. Klimowski was at the firm from its early beginnings in 1988.
State Supreme Court documents dated March 21, 2006, state Klimowski first discussed becoming a partner in 2001 when Horning approached him about forming a limited liability company.
In 2001, the corporation had logged $10 million to $15 million in annual sales, and Horning was having trouble shouldering the successful business alone, court documents state.

A move to split

In his 2006 petition, Horning requested dissolution on grounds Klimowski despised him, Holdsworth resented him and that neither man trusted Horning.
In the documents, Horning is quoted: “It is Klimowski and Holdsworth’s intention to defeat an involuntary dissolution and make my remaining time with Horning LLC so unbearable that I will relent and give them, for a pittance, the remainder of the company for which they have paid nothing to date.”
Holdsworth and Klimowski joined Horning Construction LLC six years ago, each as one-third partners, though the trio never determined a formal operating agreement.
In absence of an agreement, court documents show Horning made an offer to sell the company to his partners in 2005, but they rejected it, deeming it unfair.
Horning wanted to retire under a buyout that would pay him $358,000 for 12 years with 2.5 percent yearly escalators, court documents state. According to Holdsworth’s version of events in the petition, Horning said he would shut the business if the other partners did not agree to the deal.
The partners looked for other alternatives but none were chosen. According to Horning’s version of events, the documents state:
“As a result of the inability to agree on a sales proposal, the relationship between the three of them has deteriorated to the point that they cannot work together. He asserts that the animosity is ‘palpable.’ (Horning) maintains that this status has reached a critical stage because they cannot put together competitive bids on projects because of this strain.”
Horning’s court petition included a letter from Klimowski to demonstrate the partner’s animosity.
Horning wanted the court to appoint a temporary receiver to handle the firm’s business affairs while it was in the process of dissolving.
The partners opposed Horning’s petition and asked the judge that Horning be “enjoined from engaging in activities inimical to the LLC’s interests, which respondents characterize as a breach of fiduciary duties to the LLC.”
Horning, they claimed, had tried to thwart the company’s business and recruit some of its 40 employees to head a new firm he was organizing, Horning Inc.
Each side contended the other was not pulling its weight. Affidavits from employees were filed along with court documents to support the allegations. Holdsworth acknowledged Horning’s behavior was disruptive to the business, the documents state.
The partners stated that revenues topped $25 million by 2005, after Horning Construction LLC began doing business in March 2002. The two partners contended they were responsible for some 73 percent of the company’s 2004 gross profits and 80 percent of its 2005 gross profits, court documents state.
Because of the company’s success and its continued ability to meet all of its financial obligations, Holdsworth and Klimowski claimed there was no reason to dissolve it.
Dissolving the company, they said, would only jeopardize the livelihood of Horning’s employees.
Holdsworth and Klimowski added they were not trying to freeze Horning out of the business and that he continued, in 2006, to receive his $120,000 annual salary, which they said was greater than their own salaries.
The company, they claimed, was not deadlocked and still could run by majority rule, and as such should not be dissolved.
Horning’s petition and Holdsworth and Klimowski’s counterclaims were dismissed in March 2006 by Judge Kenneth Fisher, who wrote that while one might sympathize with Horning’s plight, he failed to provide an operating agreement that gave him fair exit rights in “the event of future disharmony.”
“Despite the petitioner’s stated frustration with the failure of the members to reach terms of an operating agreement through the LLC until he unsuccessfully proposed a buyout to respondents in 2005, the company’s most successful year,” Fisher stated. “Only then did he seek dissolution. The company continues to thrive in the ups and downs of the construction business.”

The future

A generally weak national economy is affecting current business at Holdsworth Klimowski Construction, the new firm that emerged from Horning Construction.
Holdsworth declined to reveal annual revenues but did say business was up approximately 10 percent in 2007, but that business in 2008 is expected to stay flat.
The firm splits its business into public and private work, 60 percent and 40 percent respectively.
“That mix has stayed the same over the last four or five years,” Holdsworth said. “We’re kind of part of the new direction, the new name, the new company. We’re not trying to eliminate or cut back on the public work, but we’re looking to increase the private side a little bit.”
Much of the company’s public work is done at schools in outlying areas such as Avoca, Perry, Batavia, Waterloo and Seneca Falls. The firm constructed the new pool and classroom addition in Brighton and now is working in the Rush-Henrietta Central School District.
With the exception of school projects, public bid work recently has slowed, Holdsworth said, which is one reason for the focus on building private work.
“I think there’s a little less competition than in the public bid work. It’s repeat business, and we have a big theme of building relationships, which in the public side, it’s more competitive-the low number wins,” he said.
Manufacturing firm Getinge USA Inc. in Henrietta is a current client and one with which Holdsworth Klimowski Construction has built a lasting relationship.
“In the late ’90s, we did a front-entrance upgrade and probably about a $5 million project for them,” he said. “Now we’re over there again doing $3 million or $4 million worth of work for them now. Over that 10-year period we go over and do little things for them here and there. We’d like more clients like that.”
In that direction, the company is working now to re-brand itself with a new Web site, scheduled for completion in the first half of this year. With its marketing efforts, Holdsworth said, the company has a fresh focus.
“With the new name, we want to be a friendlier company. I think my partner and I have a good reputation in the industry. We’re honest; we’re fair. We do what we say we’re going to do. We’re going to work with you, not against you,” he said.
“I think that’s a huge shift in the company from the past–we’re more team-oriented.”
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03/07/08 (C) Rochester Business Journal

Trillium, Jasco join with state in investment

Trillium Group LLC of Perinton and Jasco Tools Inc. of Rochester have partnered with the New York State Common Retirement Fund on a multimillion-dollar equity investment in Buffalo-based Ontario Specialty Contracting Inc.
The amount of the investment was not disclosed.
Founded in 1997, Ontario Specialty Contracting focuses on environmental remediation, including PCB remediation and asbestos abatement and removal, as well as demolition and dismantlement. The company employs 120.
Ontario Specialty Contracting lists the state, the federal government and companies such as Eastman Kodak Co. among its clients. The company has managed several implosions at Kodak Park, including the June 2007 demolitions of buildings 9 and 23.
The investment will allow Ontario Specialty Contracting to target companies with annual revenues of $300 million to $500 million, said Jon Williams, company president.
“The investment is really to further capitalize the company for growth,” he said. “It’s designed to enable us to take the next step.”
Trillium’s investment comes from its Trillium Lakefront Partners III Fund, a regional private equity fund targeting growth and expansion opportunities in Upstate New York. Investments range from $2 million to $10 million, Trillium officials said.
“Throughout North America’s industrial sector, companies are sitting on aged manufacturing facilities that are either idle or underutilized, and in many cases have an environmental challenge,” Trillium general partner Christopher O’Donnell said.
“More and more multinational companies are realizing that these aging assets need to be demolished and remediated, opening up an incredible market opportunity for Ontario Specialty and the local community.”
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03/07/08 (C) Rochester Business Journal

Rise of meal assembly stores reflects lifestyles

Busy professionals balancing a full-time job while raising a family are learning they do not have to rely on the value meal at a fast-food restaurant as their only source of energy.
A relatively new type of store, Make and Take Gourmet LLC, has exploded onto the Rochester area, offering meal assembly services so dinner can be healthy and inexpensive, without taking up a lot of time.
The first Make and Take Gourmet store opened in East Rochester in November 2006. Today there are five stores in the Rochester area, including Fairport, Henrietta, Victor and Webster.
The business is referred to as a meal assembly kitchen and is billed as a healthy alternative to fast-food takeout. Make and Take Gourmet stores are modeled after the first meal-assembly store, Dream Dinners, which opened in Seattle in 2002.
There are more than 1,100 meal-assembly outlets in the United States and Canada, the Easy Meal Prep Association, an industry trade group, reports.
Financial experts call it one of the fastest-growing food-related trends in the country.
In 2006, the meal preparation industry logged some $270 million in revenue and is estimated to pass the $1 billion mark by 2010, according to EMPA.
Michael Czora, vice president and chief operating officer of Henrietta-based Hydroacoustics Inc., and Tina Servis opened the Henrietta store Nov. 1.
Servis, a customer of the Make and Take Gourmet store in East Rochester, was impressed with the convenience it offered.
Czora said having this type of store is a no-brainer for Rochester.
“It is ideal for busy professionals who do not have time to shop for food after work and then go home and prepare a meal,” he said, noting omitting those steps can free up hours each month.
It costs $180,000 to $300,000 to start a franchise, Czora said, depending on buildout costs, but he and Servis are already seeing financial results.
Sales at the store doubled from December to January, he said. The store has nine employees.
Those who come are not only professionals, Servis said. Females outnumber males, but men do come in to make the meals. A growing number of husbands whose wives are pregnant are frequenting the store, she said.
Groups, or parties, are common at the sites. They range from corporate team-building events to baby showers. Couples also frequent the store to make meals together.
Customers can gather in the commercial kitchen and assemble as many as a dozen family-size main courses in less than two hours. There are 16 entrees to choose from, and menu options are updated monthly.
All ingredients are prepared and lined up at individual work stations, along with the needed utensils. Assembly instructions for each recipe are posted. The meals are not cooked on-site but are taken home in freezer-proof containers, where they are used as needed. Choices range from Cajun chef tilapia, to bourbon chicken and a breakfast casserole.
The cost for each meal is roughly $4 a person. The nutritional value of the meals is posted on the Web site, and dietary restrictions can be taken into account if requested.
The Henrietta store also holds a monthly tasting where customers can try the menu options. The day care dropoff service means a customer can order meals for the store to deliver to the customer’s day care provider. Kids and the meals can be picked up together.
The Make and Take stores also sell prepared meals and side dishes.
Sue Dietz opened the area’s first Make and Take store in East Rochester.
The chain–with 18 stores in New York, New Hampshire, Pennsylvania, Maryland and Virginia–was started by her sister-in-law, Michele Bellso, in May 2006 in the Syracuse area.
Dietz has watched the business grow.
“People just don’t have the time to make a homemade meal anymore,” Dietz said.
Due to the business’ success, Dietz opened a second store in Webster in August. She employs a total of 10 to 15 workers at both stores.
Dietz’s Make and Take stores also offer Old Forge Pizza Express pizzas, which gives customers the choice of ordering a pizza the store prepares to take home to bake.
Dietz said the busiest times seem to be nights and weekends. Parties are popular, she said, noting that women are known to come in groups, even bringing beer or wine to enjoy while preparing the food.
“It’s a guilt-free night out,” Dietz said. “You are doing what you need to do, but having a fun time doing it.”
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03/07/08 (C) Rochester Business Journal

New branches on tap for Northwest Bancorp

Northwest Bancorp Inc., which entered the Rochester market with a downtown branch two years ago, plans to add Northwest Savings Bank branches in Greece and Penfield by year’s end.
The Warren, Pa.-based financial institution has purchased property on Long Pond Road and is negotiating for property in Penfield, said Jonathan Scalise, regional president for Northwest in New York.
“I’m hoping we can open the facility by the third quarter of this year, as long as we don’t have any snags there,” he said. “We’re also having some final discussions about a piece of property in the Webster market, which we’re pretty excited about.”
Northwest (Nasdaq: NWSB) is awaiting approvals from the Federal Deposit Insurance Corp. and from state banking departments in New York and Pennsylvania.
“We don’t anticipate any snags,” Scalise said. “The (Long Pond Road) property is flat, so we don’t have to remove anything. The working drawings are pretty much in place. We’ll put it out to bid once we have the regulatory approvals.”
Construction is likely to take four to five months, he said.
The new branches will either be two stories and 7,000 square feet or one story and 3,500 to 4,000 square feet, Scalise said. Each will be a full-service bank with drive-up facilities and with a lending staff as well as investment management.
A 2008 opening for the Penfield branch is contingent on how quickly Northwest can close on the property, said Scalise, who would not disclose the site.
An application filed with the state identifies a site on Empire Boulevard in Penfield.
“If we can get that done in the next 30 days, maybe in the fourth quarter we’ll have that one open,” he said. “We are hoping that by year end both facilities will be up and running.”
The bank is scouting for additional branch locations, Scalise said.
“We have been looking for pieces of land in various spots,” he said. “That’s been a challenge. All the good parcels are pretty much filled. But based on how things have been going downtown, and how we feel things are going to happen in the Greece area, we’re cautiously optimistic. We’ll certainly proceed with some of our expansion thoughts in that market.”
Todd Schirmer, manager of the downtown branch, will become manager at the Greece branch, overseeing six to nine employees, Scalise said.
A native of Dansville, Livingston County, Schirmer joined Northwest after serving as a vice president and branch manager for KeyBank N.A. in Greece.
A new manager for the downtown branch has not been determined but will come from within the branch, Scalise said.
New branches have been part of Northwest’s long-term plans since before it opened its offices on West Main Street.
“The office in downtown Rochester has met our expectations,” Scalise said. “I think it’s a wonderful market, with some nice opportunities there. We’re cautiously optimistic, and moving along at a comfortable pace.”
Loans and deposits at the West Main Street branch exceed $50 million, he said.
Northwest ranked 20th in local deposits with $13.6 million in 2007, FDIC data show. It has deposits of $5.81 billion at 166 branches in New York, Pennsylvania, Ohio, Maryland and Florida.
“They offer basic banking products and services,” said Joseph Ryan, a research analyst who tracks the banking industry for Brighton Securities Corp.
“I’m not sure they’re necessarily a niche or anything like that,” he added.
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03/07/08 (C) Rochester Business Journal

City officials move forward on Paetec Park

Ten years ago, when Paetec Park was little more than a concept, owners of the Rochester Raging Rhinos soccer team pledged $26 million toward construction of the stadium.
Five years later, the Rhinos had whittled their pledge to $8 million.
In May 2005, having enlisted Albany lobbying firm Excelsior Advocates LLC to secure an additional $15 million in state funding to complete the stadium, the Rhinos promised to spend $1 million of it to develop the Paetec Park neighborhood.
Now, the franchise is facing bankruptcy for allegedly not making payments on $10.6 million in loans from NBT Bancorp Inc.
The city of Rochester this week announced its intention to take ownership of Paetec Park, which sits on city-owned land but is in the hands of Rochester Rhinos Stadium LLC and principal owners Frank DuRoss and Stephen Donner.
If the stadium reverts to the city, Mayor Robert Duffy said, the city would not be responsible for the NBT Bancorp loan or for any of the Rhinos’ unpaid bills, including a February lawsuit by the stadium’s primary contractor, LeChase Construction Services LLC, seeking $578,000.
New Jersey businessman Daniel Williams, who has been negotiating with NBT Bancorp to buy the franchise, said this week a possible deal had fallen through, leading city officials to make their announcement.
“Our hope is that we find a way out, find a way that the Rhinos will play this year and beyond, and that other sports teams will be successful,” Duffy said. “But one dynamic that I have seen here in my very short time in office, and here’s one of them, sometimes the public money is used but a lot of the private money that the developer has promised is not delivered.”
The Rhinos, buoyed by their promise of $26 million, initially secured $15 million in state grants for a proposed $44 million facility. The $15 million remained even after the stadium project was reduced to $23 million and the Rhinos’ commitment to $8 million, but not until after some state lawmakers expressed concerns about the Rhinos’ finances.
In September 2003, former Rochester Mayor William Johnson Jr. announced funding issues related to the stadium had been resolved, and the Rhinos would not ask for state funding beyond the $15 million.
“There were a number of things done before,” Duffy said of previous agreements between the city and the franchise. “There were even some promises made as to what would be done in the neighborhood.
“People come in with promises, and the promises come with public monies, but the promise of private investment doesn’t happen. It didn’t happen in this case, with the neighborhood. I found absolutely nothing in writing about improvements to that neighborhood.”
Nor did the Rhinos follow through on plans to create adequate parking, Duffy said.
“We understand the issue of parking,” he said. “I think we’ll get creative this year to see what we can do. I love the stadium. I think it’s a beautiful asset.”
Duffy was skeptical of would-be investor Williams’ plan to bring with him a second investor who would spend “tens of millions of dollars” to turn the Paetec Park neighborhood into a soccer village.
“I don’t get excited about that,” he said. “Talk is cheap. Before you talk about spending tens of millions of dollars in the neighborhood, first you have to talk about what it will take to buy that team.
“The people in the neighborhood have had their expectations raised and lowered. We don’t want to do that again. I believe economic development can be sparked (by Paetec Park), but not with false promises.”

Government investment

The city, beginning with the Johnson administration, spent more than $3 million to upgrade Broad Street near the stadium. In March 2004, the Rhinos were approved for $336,325 in sales tax exemptions on construction costs over 10 years by the County of Monroe Industrial Development Agency.
“This has not been a failure of government,” Duffy said. “I was not in office when this project began but, from everything I have looked at, the state and the city did their job. There is almost $20 million in (public) funding.
“The failure here lands solely in the lap of the (Rhinos) management team. That’s where the responsibility lies. There is no dodging that.”
The Rhinos are in arrears on their city and Monroe County tax bills, as well as their water and utility bills, City Corporation Counsel Thomas Richards said.
The city became concerned about the Rhinos’ finances as it prepared to release $4 million in state funding for the construction of revenue-producing luxury suites. The release was contingent upon the Rhinos showing “financial solvency,” Duffy said.
“We asked the right questions, we probed and that solvency clearly was not there. Had we not done that, I think there would’ve been $4 million lost in this effort,” he said.
The $4 million has not been released.
“The current grant from the state is dedicated largely to the suites and the other items,” Richards said. “Those are important for the long term because they generate revenue for the operation.
“Quite frankly, one of the reasons the parking issues didn’t get straightened out was the current manager ran into some financial difficulties and didn’t make some of the commitments that were promised.”

State funds

The city plans to hold on to the $4 million until ownership of the franchise is determined, Duffy said.
“It would be in our best interest if there is a clear path forward before we dispense that money,” he said.
Even if the ownership issue is resolved within days, Richards said, the luxury boxes will not be completed for the 2008 season, scheduled to begin May 2 for the Rhinos.
The city is not directly involved in the Rhinos’ ownership situation, he said, but will work to make sure Paetec Park is available to a potential new owner.
“One of the things we can contribute is to enter into a new lease with whoever takes the franchise,” he said. “So if you’re talking about what are we doing to assist, it’s not funding someone and it’s not paying any of the debt.”
There is no timetable for resolving the issue of stadium ownership, Richards said. Richards is confident the city has grounds to assume control of Paetec Park.
“The Rhinos had a series of obligations they had to perform at the stadium,” he said. “The principal one was to, in fact, have a season, to make sure the team played there and performed. They are clearly unable to do that.
“The bank loaned money to the Rhinos with that understanding. They knew what our rights were under the lease, and they knew if they failed to perform, the stadium reverted to us.”
The city has a cordial relationship with NBT Bancorp, Duffy and Richards said.
“The city is willing to work with the bank, which has liens against that (stadium) LLC, or will unilaterally reclaim the property shortly,” Richards said.
“There are certain terms of the lease that allow us to act. We have to give (Rhinos employees) notice and we have to ask them to vacate the property, and we’ll do that if necessary. Or we’ll work through the bank, who may in fact surrender the lease.”
Richards would not estimate how much it could cost the city to maintain and safeguard the stadium but said it would be less expensive than a conventional building.
A city-owned stadium, Richards said, is an attractive bargaining chip in the search for new ownership for its soccer franchise.
“The city doesn’t have to go begging here,” he said. “We have a finished soccer stadium that’s paid for, that’s brand new and for rent for $1 a year. There aren’t many places in this country where that’s available for minor league soccer.”
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03/07/08 (C) Rochester Business Journal

Largest Veramark shareholder wants changes

Veramark Technologies Inc.’s largest shareholder is up in arms again and appealing to the new CEO to cut the compensation for former, now retired, CEO David Mazzella.
In a filing and letter sent Monday to the Securities and Exchange Commission and Veramark’s board of directors, Summit Capital Management LLC, which owns more than 1.5 million shares of common stock-some 17 percent of the firm-questioned Veramark’s compensation practices and accused the board of failing its duty.
John Rudolf, president of Seattle-based Summit, wrote that despite “horrific operational and share price performance” over the last 10 years, Summit remains firmly convinced of Veramark’s strength in its industry.
The Pittsford-based Veramark’s products consist mainly of Web-based telemanagement software that tracks telecommunications expenses for companies.
Summit’s letter urged Veramark’s new CEO to consider three actions:
–Evaluate alternatives, mergers or transactions to maximize stockholder value.
–Change the composition of the company’s board.
–Reach an agreement with Mazzella to “terminate, or at least substantially reduce” his supplemental retirement arrangement, 900,000 stock options and a consulting contract.
In interviews with the Rochester Business Journal over the last year, at least a half-dozen Veramark shareholders have expressed dissatisfaction with company management in light of the firm’s weakening stock performance and rising executive compensation.
Shareholders in December expressed hope over Mazzella’s replacement, Anthony Mazzullo, who joined the firm in January.
About Summit’s letter, Mazzullo said Wednesday, “We will take all suggestions from shareholders seriously and will meet with Mr. Rudolf to address his concerns.”
“While it is difficult for me to predict how this will unfold, I will support actions that best serve the interests of our customers, shareholders and employees. In addition, I see my role is to facilitate cooperation and agreement among all of the interested parties,” Mazzullo said.
Shareholders have complained about the unresponsiveness of the board and the company’s former CEO. For this story, board members were invited to comment on the letter but did not respond.
In 2005, Summit submitted a letter to the SEC to express concerns. A meeting with company officials followed, but ultimately Veramark never acted on the points presented, Summit officials reported.
From the latest letter this week, Summit wrote, “We now believe it is imperative that certain changes with respect to the company and the composition of the board be made immediately, including the renegotiation of Mr. Mazzella’s stock option grants and severance and retirement arrangements, all of which (unless eliminated or significantly changed) weigh heavily on the prospects of the company over the next 10 to 15 years.”
Summit cited stock option grants, cash bonuses and retirement cash compensation obligations that it claims are out of line with company performance. According to Summit, Mazzella used the company “as his personal ‘piggy bank’ while the company, its stockholders and other shareholders suffered,” the March 3 letter states.
Most egregious and damaging, Summit wrote, was the reissue of Mazzella’s stock options and extension of their exercise term.
Last spring, documents filed with the SEC show, Veramark’s compensation committee approved a new 10-year grant to Mazzella and other key employees.
In accordance with Mazzella’s 2005 employment agreement, the options previously issued to him in May 1997 expired during his term at the company without being exercised. As a result, Veramark last May issued him an identical number of new options to expire in 2017. The exercise price of shares issued in 1997 that have expired was $2.34. The new exercise price was considerably lower, at 78 cents.
In December 2007, the board approved another new grant of 100,000 stock options with a new 10-year term to replace the expired options originally issued to Mazzella in 1997, Summit’s letter states.
Those options in 1997 were issued at an exercise price of $5.47.
“The exercise of these new stock options is an even lower 73 cents a share, also very unfair and very unrealistic based on the actual trading volume and bid/ask prices during the month for this illiquid stock,” Summit wrote.
Wednesday afternoon, shares of Veramark (OTCBB: VERA.OB) were trading at 89 cents a share, within a 52-week range of 65 cents to $1.11.
Mazzella’s compensation agreements, Summit maintains, will make it difficult for other shareholders even to recover their original investment.
“Additionally, Mr. Mazzella’s stock options may adversely affect any future business transaction involving the company-such as a merger-as any potential suitor will be forced to deal with this huge number of low-priced stock options in the context of such a transaction,” the letter states.
The letter goes on to list a loan that was made to Mazzella in 1997 that in 2005 was forgiven by the company and other company agreements with Mazzella that Summit summarizes as dubious.
In its letter, Summit notes its plans to request a list of company stockholders and to review the company’s records, pursuant to Delaware law. Summit asked to schedule a meeting with the company and its board.
As a newcomer to Veramark, Mazzullo said there is a lot of good happening at the company that he hopes will not be overshadowed by Summit’s letter.
“This is a most unfortunate situation because it redirects attention away from all of the great things happening within Veramark,” Mazzullo said. “We have added significant new talent to the company and developed a new, market-driven strategy.
“The first new products and services defined by that strategy will be launched within the next four months,” Mazzullo added. “I am confident that Veramark is well-positioned for growth and that the shareholders and the board will come to an agreement.”
[email protected] / 585-546-8303

03/07/08 (C) Rochester Business Journal

Q4: Russell Bullock, chairman and CEO, Erdman Anthony and Associates Inc.

Q: Erdman Anthony said last week it plans to add 50 positions to its staff of 300. What is behind this growth?
A: Since 1954 Erdman Anthony has been known throughout the Northeast as one of the premier highway and bridge design firms. Over the past decade or so we have diversified into several other areas of engineering expertise and geographic locations. We now have six offices located in New York, Pennsylvania and Florida, offering a broad array of engineering and related services. We have seen tremendous growth opportunities in a number of these areas and have reorganized ourselves to take advantage of these opportunities.

Q: How will the company’s new organization structure differ from the old?
A: Our organizational changes will align our business to better serve our clients’ needs. Our past structure has been focused around our own geographic locations. Our new structure is based around our five core business units: Transportation Engineering, Facilities Engineering and Design, Geospatial Services, Civil Engineering, and Construction Services. Leaders of each of these core business units report to our new chief operating officer, Vince Weiser.

Q: What was the impetus for the change?
A: Simply put, the impetus for our change was to better align our organization to grow business and meet client needs. Our new structure allows our business units to grow wherever opportunities present themselves. They are able to easily draw from resources anywhere in the company to match the needs of a project. While it is still very important to have a physical presence near our clients, technology today allows much of the work to be done anywhere, whether in an office or even out of someone’s home.

Q: What geographic markets and disciplines are producing the most growth for Erdman Anthony, and how is the firm capitalizing on that?
A: Each of our core businesses has growth areas. With some of them, the growth will come from expansion of market share in what we currently do; in others it will come from geographic expansion; and in others it will come from new services that we are offering. Obviously, some of the fastest growing areas that we are seeing are in Florida. But we are also seeing growth of our services in parts of New York state. … Higher education facilities, energy and green buildings are also examples of areas that have been generating significant growth.
-Mary Stone

03/07/08 (C) Rochester Business Journal

Spotlight: National housing prices fall, along with overvaluation

House prices saw a nationwide drop in 2007’s third and fourth quarters, but overvaluation is declining as well-this according to a recently updated report from Global Insight Ltd. and National City Corp. Prices fell at a 5.1 percent annualized rate in the fourth quarter. The decline indicated the beginnings of a market correction in overvalued areas such as California, Florida and Michigan. The Northeast metro areas generally had undervalued or fairly valued housing markets. Registering at 15.5 percent below the market rate in the fourth quarter, Rochester’s house prices ranked as undervalued. Although both Buffalo and Syracuse’s housing markets were below average, the study’s guidelines considered them fairly valued. The Albany and New York City markets were fairly valued and moderately overvalued, respectively. The study used several factors to determine regional housing market values, including median home selling prices, household income and interest rates.
-Julia Dickinson

03/07/08 (C) Rochester Business Journal

Our parents were right: There is no free lunch

All the recent indicators point toward an economy that is now creeping ahead. Direction remains positive, but pace continues to slow. The Fed has opened the monetary gates and Congress has chipped in with fiscal stimulus. So where are we headed?
Fed chairman Ben Bernanke stated the country’s position well in his semi-annual Monetary Policy Report to Congress: “The economic situation has become distinctly less favorable since the time of our July (2007) report.” The combination of the contraction in the U.S. housing market and the general malaise in all credit markets has not yet improved. In fact, the chairman says “homebuilders are likely to cut the pace of their building activity further.”
The Fed doesn’t see a lot of help coming from consumers, who are balancing slower real income gains with declining net worth due to housing and equity price problems. Job growth has slowed. The business sector is expected to see slower gains in equipment and software purchase and non-residential construction. Is there any good news in the chairman’s message? Absolutely.
With the exception of the financial sector, businesses in general “remain in good financial condition, with strong profits, liquid balance sheets, and corporate leverage near historical lows.” The chairman’s point is that business batteries have a pretty full charge. They should be able to support and expand themselves through a slow economy without major help from financial institutions, allowing these institutions to replenish capital through profits made on less risky investments. Less leverage, continued growth-that’s a dandy salve.
Growth should come, in large part, from export sales, which are growing at an 11 percent rate. I’m asking a lot to depend so heavily on export sales, but our economy is simply slowing faster than anyone else’s right now, and our dependence of imported oil has cheapened the dollar in enough countries to give a good boost to our foreign sales.
Inflation is the reef in this economic channel of recovery. Measured the chairman’s way, using personal consumption expenditures, it rose to 3.4 percent in 2007 from 1.9 percent in 2006. Extracting food and energy, the rate was a more palatable 2.1 percent. But energy remains a wild card.
Some kind of general global slowdown would actually drop demand for oil and help smooth out any inflationary tendencies. Thus the Fed’s attempt for a soft landing should help ease inflationary pressure. But a sharp economic contraction and increasing energy prices bring the “stagflation” word out of the closet. That’s an economic imbalance the United States really doesn’t want to suffer through again.
But imbalances in a free capitalist society always have evened out. The excesses of the housing market are now being unwound, as were the equity market follies earlier in this decade. It’s a sometimes painful but necessary and natural process that restores true value to all economic equations. The attraction of “easy money” in whatever venue chosen will always be there. I like to remember all the grandparents and parents I knew who said “Remember, there’s no such thing as a free lunch.”
I started the year talking about fortitude and patience. The Fed has indicated rate cuts will continue but the effect takes many months. In the Fed’s own prediction, GDP growth will be lower while inflation and unemployment should be a bit higher than previously thought for 2008. We’re paying for lunch with this slowdown, but we should see the predicted soft landing and moderate growth out to 2010.
Gregory S. MacKay is a senior vice president and chief economist of Canandaigua National Bank and Trust Co.

03/07/08 (C) Rochester Business Journal

Audit firms’ characteristics, quality, price vary widely

“There is no kind of dishonesty into which otherwise good people more easily and frequently fall than that of defrauding the government.”
-Benjamin Franklin

Ralph Farkas resigned in February as the executive director and CEO of a Long Island non-profit human service agency know as PSCH. PSCH is a human service organization funded by the New York State Office of Mental Health and Office of Mental Retardation and Developmental Disabilities. A recent audit report from the New York State Audit Bureau known as the Commission on Quality Care reported numerous findings and allegations of impropriety that will continue to add fuel to the firestorm of criticism being waged by taxpayers, contributors and State funders against the non-profit sector.
One of the numerous allegations in the case of PSCH included an audit finding that the organization’s independent external CPA firm took advantage of the organization’s tax-exempt status by purchasing goods and services for the CPA firm in the name of PSCH. The motivation of this CPA firm was apparently the avoidance of paying sales tax and the ability to purchase items at a lower cost due to the tax-exempt status of PSCH.
Guess what?
The new board of directors of PSCH, who had no involvement during the period of these allegations, replaced the external CPA audit firm with a new firm. This government audit report and allegations regarding PSCH prompt me to address a timely topic for all non-profit organizations subject to the New York State Charities Bureau requirement that an annual CPA audit be performed.
As is true with any type of purchased service, there is a wide range of quality and expertise available within the CPA audit profession. It is this wide range of quality and expertise that has a direct impact on the cost of an external audit. Equally important in terms of audit cost is the amount of time necessary for the auditor to complete an external CPA audit in accordance with the hundreds of rules and regulations promulgated by the Auditing Standards Board of the American Institute of Certified Public Accountants. These Statements on Auditing Standards, with more than 115 issued at last count, establish the requirements, guidelines and roadmap for CPA firms to follow in the conduct of any independent CPA audit in the country.
The remainder of this column is a must-read for any board volunteer involved in making the decision regarding which CPA firm to hire for your next external CPA audit.
Our strategy point in the analysis is predicated on the following assumptions:
–Price variations for audit services are at their greatest range in my 30-year career. Firms, depending upon their size, quality, profit objectives, audit risk and overhead will price audit services between $50 and $175 per hour.
–All non-profit boards do not view the external audit process in the same way. Some see it as a necessary evil, some perceive value and others are looking to fulfill the New York State audit requirement for the lowest cost possible.
–In addition to the more than 115 Auditing Standard pronouncements, 150 Financial Accounting Standards Board financial reporting opinions and a myriad of governmental cost and financial reporting regulations have created an environment that rivals the complexity of the legal profession.
In my career, I have observed firms conducting four types of audits of varying degrees of quality and cost. Each non-profit board must select a qualified, competent CPA firm with the required expertise and knowledge. From the descriptions which follow, it should be obvious where your organization belongs in the spectrum of audits. The characteristics referred to in each type of audit may appear in more than one.

The Fly-By

–There is generally little to no partner involvement.
–The auditors assigned give you the impression that you are training them as opposed to them auditing you.
–A significant portion of the audit work is not conducted at your office but rather, at their office.
–The firm places extensive reliance on one individual in your organization, generally the finance officer, for virtually all audit explanations and representations without corroboration.
–The auditors do not meet with the board or its designated committee to review audit findings and results.
–The fly-by audit fee is most often the lowest price quote.

The drive-by

–Inexperienced personnel perform the majority of the work.
–Auditor assesses the risk of fraud at a low level even though internal control policies and procedures may be lacking in certain areas, such as the lack of segregation of incompatible duties.
–Significant pressure on the audit staff to “get in and get out” as quickly as possible with the emphasis on the profitability of the auditor versus the audit risk of the engagement.
–Generally, the auditor does not issue a management letter with recommendations for internal control and operating improvements. (The auditor states “everything is ok.”)
–The focus of the auditor is on getting the job done, not understanding your business processes and procedures.
–Limited procedures are applied to assess the risk of fraud, such as errors, omissions and misappropriations of funds.
–The drive-by price quote may be 25 percent or more below what the organization has historically paid for audit services.
There may be rare situations in which the fly-by and the drive-by audit are appropriate. However, I would encourage finance and audit committee members to focus on hours of audit effort more than the price quote. What are we getting for the fee being charged in terms of audit effort that will position the auditor to detect material fraud and the inherent risks associated with internal control policies and procedures?
To answer that question, consider the attributes of a “stop-by and stay awhile audit.”

The stop-by-and-stay-awhile

–Planning process, interim internal control testing prior to year-end and final audit fieldwork are clearly defined.
–Auditor risk assessment, audit scope and materiality thresholds are communicated to management and board in advance of the audit being performed.
–There are at least two meetings with the finance/audit committee, including one before the audit begins and the final audit report presentation.
–Comprehensive analysis and report of auditor findings presented directly to the finance/audit committee, including management letter, financial trend analysis, benchmarking data and a plain-English presentation of the messages derived from the audit process and financial statements.
–Executive session (without management personnel) between auditors and finance/audit committee at least once each year.
–A formal report entitled Required Communications under Auditing Standard No. 114 addressed directly to the board or its designated committee.
–A summary of the level of audit effort in hours by financial statement classification and internal control procedural area.
–The fee associated with the stop-by-and-stay-awhile audit may be in line with what the organization has paid in the past but is largely influenced by the quality of financial reporting, competency of internal staff and the timeliness of account reconciliations.
–Auditors should be primarily responsible for auditing, not as bookkeepers closing the books for the organization. More than six audit adjustments each year should be viewed as an indication that changes should be considered in your internal finance staff organization, resources or personnel.
The stop-by-and-stay-awhile audit is most often the desirable approach if your objective is to view the audit process as adding value to your organization processes.
Finally, the fourth and final audit type is one which demands evaluation and assessment if you find familiarity with the following characteristics.

The never-can-say-goodbye

This audit has certain attributes that may be desirable but, at the core, it is most frequently characterized by:
–Extremely late delivery of audit reports to the board and management usually more than 150 days after year-end. Ideally, less than 120 days for finalization, wrap-up and presentation of reports is desirable.
–Numerous audit adjustments are frequently necessary and the auditors are more bookkeepers than auditors.
–The resolution of audit issues can seemingly take forever.
–Management letters frequently include repeat recommendations from the prior year since no action has been taken on them.
–Frequently, a lack of internal staff preparation for the audit in account reconciliation and analysis leads to an intermittent field audit process. A general lack of clear communication between the auditor and finance staff is common.
–The fee is typically higher than the market value price.
Your mission is to develop internal processes and procedures that allow the audit process to be thorough, effectively completed and with added value to your organization. Ninety percent of the time that means a stop-by-and-stay-awhile audit is the desirable objective.
Gerald J. Archibald, a CPA, is a partner in charge of management advisory services at the Bonadio Group, and is known for his expertise in non-profit and tax-exempt accounting, management and governance issues. He can be reached at (585) 381-1000 or [email protected]. Download podcasts of his articles at

03/07/08 (C) Rochester Business Journal

Community Place reaches to past and future

Jack Quinn has fond memories of the Lewis Street Center in Rochester, which he led for more than 30 years.
During those years, from 1967 to 1998, crime rates in the city were lower, fewer people moved around and neighborhood residents were actively involved in the governance of the center.
“We made it available and accessible. We were open day and night,” Quinn recalls. “I think it was like one big family. It was like a second home.”
He is one of many expected to be on hand when Community Place of Greater Rochester Inc. begins an effort this spring to reconnect with those from the original settlement houses that make up its organization. The first alumni event, at Lewis Street, will take place April 5 and the second occurs later in May at the Genesee Settlement House.
“It’s the first time we’re seeking to engage all those who have come through this process,” says Roderick Jones, Community Place’s president and CEO.
Community Place is a non-profit that traces its roots to the old settlement houses in Rochester, which formed at the turn of the 20th century to educate immigrants and help them participate in American society. Their purpose was not to offer handouts or “charity,” but to partner with people to help them work toward improving their lives.
“A lot of prominent Rochester people came through these urban communities,” Jones says. “We were part of the fabric of life.”
The settlement houses continued as individual entities through the 1990s, belonging to an umbrella organization for a time. Community Place was incorporated in 2001 and provided integrated services for the Genesee Settlement House and Eastside Community Center. The following year, the Lewis Street Center became part of the organization.
Since then, the organization has expanded, renovating facilities and enhancing services for families, early childhood and youths, seniors and those with developmental disabilities. It supports the Rochester Step-Off Educational Foundation, a youth development program, and Families and Friends of Murdered Children and Victims of Violence Inc. Community Place also has formed two limited liability corporations to provide opportunities for more affordable housing.
The Step-Off and the Families and Friends organizations are examples of the changing scope of Community Place, says Andrew Burke, chairman of the board of directors.
“Community Place is greater than the sum of the three settlement houses,” he says. “We have a broader communitywide impact, and that couldn’t have happened with three organizations.”
Community Place has received a lot of attention for expanding into housing and encouraging the development of micro-enterprise businesses. It purchased its first property, an apartment building on Parsells Avenue, in 2002, Jones says.
It now owns two apartment buildings and two storefronts in the neighborhood as part of the Housing Opportunities for Sustainability and Transition program. The HOST program is designed to provide low-cost housing to reduce transience and improve the stability of the neighborhood.
“We want to reduce the movement of people and create shared agreements around how they want to live,” Jones says.
Community Place worked with a small upholstery business in one of the vacant
storefronts, which since has moved to another location. The agency now is working with two residents to open a Cricket Communications Inc. store and also with another non-profit agency, Threshold Center for Alternative Youth Services Inc., which plans to open a health clinic in the other location.
“The goal is to keep adding until we have a small economic network,” Jones says.
With the help of grant funding, the HOST program also purchases and renovates houses and apartment buildings in the Parsells Avenue area. It then works with tenants to help them move toward homeownership, Jones says. And that includes not only making the mortgage payments affordable but being able to renovate as well. The agency is working to acquire additional properties, which would also house neighborhood businesses.
“Our whole goal is to work back to the same model we had in the early days of settlement houses, where you have strong neighborhoods providing for their own needs,” Jones says.
Providing such a wide array of services may seem ambitious, he says, but that is part of the nature of the original settlement houses.
“All of our services are neighborhood-based and driven by the needs and providing a broad spectrum of services across age groups,” Jones says.
As it has grown, Community Place is looking to diversify its funding base. It recently has named Linda Weissegger vice president for development. She will oversee development, including building individual and corporate donor relationships, and organize fundraising events and work with newly formed alumni societies, including the Lewis Street Society of Friends, Genesee Settlement House Society of Friends and the Eastside Community Center Society of Friends.
The organization, which celebrated its 100th birthday last year, is proud it has been able to keep its administrative costs to 16 percent, Jones says, but it also faces financial challenges in terms of dealing with the maintenance and depreciation of aging buildings and a fleet of vehicles.
“Long term, as we increase our funding base, we would like to be able to expand the program base as well,” Burke says.
Jones, however, acknowledges that money is not everything.
“There’s never going to be enough to solve the challenges,” he says. “It’s about creating capacity. It’s by investing in people that you get exponential gain.”
Kathleen Driscoll is a Rochester Business Journal columnist and freelance writer. Contact her with questions or comments by phone at (585) 249-9295 or by e-mail at [email protected].

Financials at a glance

Revenues: $4.9 million
Operating expenses: $5.5 million
Excess of public support and revenue over operating expenses: $545,708
Note: Finances for the year ended March 31, 2006
Source: Community Place of Greater Rochester Inc.’s 2005-2006 annual report

03/07/08 (C) Rochester Business Journal

Familiar retirement refrain bears yet another repetition

Small-business owners earn major respect in the United States as the enterprising, visionary leaders who make the economy go and grow. However, anyone who assumes these leaders would exhibit superior foresight in planning for retirement might be disappointed. In a recent KeyBank/Zogby International poll of 976 small-business owners across the United States, nearly 70 percent expect they could or will go broke during their lifetime. Specifically, 56 percent are uncertain if they will have enough money to last their lifetime while 11 percent are certain they will run out of money.
Although they tend to have confidence in how they manage the finances of their companies, many pay too little attention to personal financial planning, especially planning for retirement.
Fear of outliving their money is growing among small-business owners, a fear that may be influenced by the fact that Americans are living longer in retirement than ever. Many of today’s small-business owners of the baby boom generation are expected to live well into their 80s or 90s, through 20 to 25 years of retirement. In 1900, the average time spent in retirement was only 1.2 years, and by 1980 the average time Americans spent in retirement was 13.6 years.
The U.S. Census Bureau reports only 41 percent of workers from 25 to 64 years old have retirement savings, and more than half with savings have saved less than $33,000.
As a clearly measurable effect of this shortfall in retirement savings, many small-business owners are considering a change in the timing of their retirement. The KeyBank/Zogby International poll found that 40 percent of small business owners are reconsidering their originally planned retirement age. Not surprisingly, 85 percent of those contemplating such a change expect to delay retirement and work longer than they had originally planned. The reasons are no surprise either: 64 percent attribute the delay to the need for more savings while 47 percent are concerned by rising health care costs. A majority of respondents (54 percent) either lack the financial resources to retire (22 percent) or are uncertain when they will be able to retire (32 percent).
Doubts about the availability of Social Security and a rapid reduction in the prevalence of fixed-benefit pensions also contribute to the uncertainty about retirement. In 2006, Social Security was the largest source of income for Americans age 65 and older, comprising 39.8 percent of their income on average. However, benefits have been reduced already through increasing the age eligibility for full benefits, and further cuts are under consideration.
Meanwhile, old-fashioned, fixed-benefit pensions with dependable payouts are diminishing across America. Watson Wyatt Worldwide reported the number of Fortune 100 companies offering fixed-benefit pensions had dropped from 68 percent in 1998 to 50 percent by 2002. Many companies are replacing these plans with 401(k)s, but only 15 percent of working Americans had IRAs in 2002 and only 22 percent contributed to 401(k)s, according to the Employee Benefit Research Institute. By 2004, the most recent data available, 36 percent of Americans participated in 401(k)s, but recent fluctuations in the stock market have put 401(k)s on a roller coaster ride, making millions jittery.
Despite these factors, as reported above, small-business owners are not following their own common-sense recognition of the need to take control of their retirement planning. Nearly everyone-78 percent of the 976 small business owners surveyed in the KeyBank/Zogby International poll-agrees that retirement planning should begin by age 30. Many of those entrepreneurs, however, said they are more likely to get a physical exam from a doctor (32 percent) or a vehicle tune-up from a mechanic (33 percent) than review their finances with an outside expert (5 percent).
This procrastination brings big penalties. A business owner investing $2,000 annually starting at age 21 will have $347,508 more at 65 than an owner with the same salary who waited until age 30 to start investing.
However, it’s never too late. Regular allocations to retirement accounts such as 401(k) plans and IRAs can produce significant savings, even when small-business owners begin systematic saving relatively late in their careers.

How to start?

First, realistically assess ongoing needs by totaling what you owe on your mortgage, credit cards and children’s college funds.
Next, visualize your future in three basic steps:
–Calculate how long you expect to live in retirement based on health-factor longevity predictors. Many such calculators are available on the Internet.
–Determine the lifestyle you want in retirement. Most experts estimate that retirees need in retirement approximately 70 percent of the annual income they had while working.
–Consult a financial planning specialist to help calculate your real costs of retirement versus your current obligations and income, and then develop a plan to close the gap.
Financial professionals can help not only with this crucial step of planning and setting up an investment program to fulfill the plan, but also to fine-tune your plan as your needs evolve. In addition, they can assist with business succession plans and the sale of a business.
It’s never too early, and it’s never too late; and it’s absolutely not a foregone conclusion that you’ll outlive your money.
James Carriero is president of KeyBank N.A.’s Rochester District. He may be reached at (585) 238-4181 or [email protected].

03/07/08 (C) Rochester Business Journal

Medvedev wins 70% of Russia vote

Dmitry Medvedev has won Russia’s presidential election with more than 70 percent of the vote, final results released Friday show, AP reported. Russia’s Central Election Commission said Medvedev won Sunday’s election. Turnout was 69.8 percent.

Oil prices fluctuate but hit new record

Oil prices jumped to a new record, above $106, Friday but extended their recent pattern of choppy trading after a weak jobs report convinced many traders the Federal Reserve’s interest-rate-cutting campaign will continue, AP reported.