I was honored to have at my table at the third annual Absolutely Business Forum a fascinating and diverse assembly of community leaders. As the snow gently fell outside the windows, the discussion took over and I began to soak in the experience and intellect of this interesting group.

Richard Brooks is the Administrator for Samaritan Health System, which oversees two major anchor facilities, Samaritan Medical Center, a 287 bed full-service hospital and Samaritan Keep Home, a 272 bed long-term care nursing home, as well as a number of rural health clinics around the region. They manage over 1,700+ employees and 180+ physicians. Brooks started his professional career working for a psychiatric center. He then became interested in healthcare management so he went back and, in 1977 he obtained a graduate degree in Healthcare Administration from Xavier University. Brooks worked in Florida for a hospital facility, then relocated and worked at Binghamton General Hospital. He became hospital director for Wilson Memorial Hospital in Ohio, then Delaware Valley Hospital in Southwestern New York before moving to Watertown and working in his present capacity.

Rick W. Tague, A.I.A., is a Registered Architect in New York and is the President and Partner in The Bernier Carr Group, a full service engineering, architectural, surveying, and construction management firm with offices in Buffalo, Syracuse, and Watertown. The Bernier Carr Group is celebrating their 40th anniversary and was voted the 2009 Greater Watertown North Country Chamber “Business of the Year.” They have approximately 120 employees, most of who work in the Watertown area, and they perform mostly public works projects such as in schools, municipalities, and health care facilities. The firm also does STAR preservation work with properties such as the Bolt Castle. Tague graduated from Columbia University with a Master of Science in 1982 and from SUNY at Buffalo with a Bachelor of Professional Studies in Architecture Degree in 1978. He has been with the firm since 1989. He is also a licensed pilot.

Dave Mance is the President and CEO of the Greater Watertown North Country Chamber of Commerce, a four-star accredited chamber as designated by the U.S. Chamber of Commerce, and held to be a rare designation. Mance has been actively involved with the Chamber for 10 years, including Chairman of theBoard back in 2003. He has also been active in the community by serving on various hospital boards for the last 25 years, chairman of the Samaritan Hospital Board in 2003, Jefferson Community College Chairman in 2003, and assisted with Samaritan Hospital Foundation for two years during the Capital Campaign that resulted in that team raising $13.5 million. Mance owned a group of 10 radio stations during his career and, after selling seven of them, now owns three stations, two in Sydney and one in Cape Vincent, New York.

Mary Anne Hanley is the Director of Marketing for the Jefferson County Industrial Development Agency. JCIDA’s economic role is to entice employers to come to the region and create jobs, and also to help existing businesses to expand utilizing financing and other particular incentives. JCIDA also administers the Watertown Center for Business and Industry, a low cost facility option for small businesses. It is located inside the Watertown Empire Zone that provides a variety of tax credits, tax abatements, low cost utilities and financial incentives to certified businesses. Hanley moved to Watertown 23 years to the week of the Absolutely Business Forum. She was previously Director of Religious Education for the Diocese of Syracuse when her husband had a job transfer to the area. Hanley started out working for the Chamber and worked her way into the JCIDA after only a few years.

Steve Winkler is the owner and operator of Lucki 7 Farms, located in Rodman, NY. Lucki 7 Farms is a 1000 head hog farm operated by Steve, his wife Lisa, and their five children. The farm also has 1,200 chickens. Winkler grew up on a 200 year old farm in Rensselaer County, went to college, and after graduation, was recruited into the feed business in the nutrition field in Northern New York. He was the General Manager of Blue Seal Feeds in Watertown for three years, but his passion always lay in running a farm. Winkler decided to start a farm, and in 1997 he purchased a 100 acre farm, and expanded his holdings to 320 acres while renting an additional 50. The farm outgrew their sales potential so they had to team up with other farms to create a bigger network that could serve their target niche. Teaming up with those other farms led to Winkler creating an offshoot business called Certified Natural New York, that has trained 58 other farmers to strict protocols and they market their high-end products to metropolitan areas.

Matt Cervini is a Professional Engineer for Act Us Lend Lease. Act Us contracts with the Federal Government to build houses on Fort Drum and other military installations across the country. Currently, they are working on their second phase of homes which will bring the total up to 1,400 Energy-Star Certified homes. Act Us also has built the infrastructure for these homes, such as streets and sidewalks, and also four community centers and five miles of trail systems. The project started in 2003 when Act Us Lend Lease formed a partnership with the U.S. Army as part of the Military Housing Privatization Initiative to become Fort Drum Mountain Community Homes. So Act Us builds the communities, and Fort Drum Mountain Community Homes manages them. Cervini grew up in Carthage and graduated from Clarkson University and went to work for a local contractor, then for GYMO of Watertown, then in 2004 moved on to Act Us.

Cervini started our conversation about how businesses fared in 2009 by noting that Act Us has spent over $57 million during the year in their building projects at Fort Drum, a little over $1 million a week. 90-95% of that money is spent regionally from Buffalo to Rochester to Watertown with local contractors, stores, and consultants. Cervini feels quite lucky to be a part of such a successful business and is quite pleased at the company’s performance within the last year.

Lucki 7 Farms and Certified Natural New York have also had a great year according to Winkler. In 2009, they doubled their sales due to creating a niche market whereby his farm, along with a partnership of 58 other farms, set specific protocols for the production of higher end products, and then market them to gourmet distributors in Boston, New York City, New Jersey, and Connecticut and other metropolitan areas. Lucki 7 Farms’ main product is port, poultry, and beef, and their 58 partner farms produce lamb, and exotic items such as deer and pheasant.

Winkler’s other business, Certified Natural New York institutes strict protocols, very similar to organic protocols, such as the right of animals to go in and outside of their own free will, and grain rations must be specified. They are now distributing to Wegman’s Stores all over the Northeast, and Winkler does Wegman’s certification work for all farms looking to distribute to this national chain. Winkler admits that this niche marketing has been so successful because their target is high end disposable incomes. They send nothing commercially or into the mainstream food system. Winkler stated, “What’s happening in the sustainable food movement is that New York doesn’t want food from other states if they can find it in their own state. We provide that market.” Locally, Green Thyme in Adam’s Center carries their meats, eggs, and local cheeses.

Hanley commented that JCIDA fared better than many other counties due to Fort Drum. JCIDA tries to monitor the pulse of the business community to see how they are doing. The loss of the Covidien’s

Watertown manufacturing plant to China has phased out 200+ jobs. The Department of Labor is working with those former employees to get them back to work. JCIDA also works with Jefferson County to get the word out about opportunities in the county, with incentives like low interest loans, programs, and training available.

Hanley stated, “I am really proud of our local manufacturers as it was a really tough year, and many of them got through it with creative plans rather than layoffs. It was amazing how they preserved jobs.” Drum Country Business is a great local opportunity as well. They work with the Fort Drum Regional Liaison Organization, DANC, Jefferson County Job Development Corporation, Lewis County Department of Planning and Economic Development, and the St. Lawrence County IDA to market the DCB entity to promote the entire region.

According to their website (www.drumcountrybusiness.com), in 2008, Fort Drum spent 72.8 million dollars on 225 contracts with local construction companies and $22.2 million on 322 contracts with local suppliers and services. Hanley also mentioned Creative Core, an upstate initiative of 12 counties that brands a green apple logo on local products and services. Partners from each of these counties work collaboratively to spotlight regional strengths, grow strategic industries, and encourage investment and innovation.

The JCIDA also does a lot of outreach to local businesses and has just applied for and received a grant through the USDA Rural Development office to training for local employers for people who will be applying for jobs to work on their soft skills, e.g., general skills that may need a bit of tightening up such as computer skills and answering the telephone. Hanley states that a number of businesses have already taken advantage of their loan programs in 2009. Finally, she focused on the partnership with the Small Business Development Center for their Entrepreneurial Program, “Do you want to start your own business?” Hanley states, “In our most recent program, we interviewed over 50 kids, and the ideas they presented were unbelievable. Some of them have already started their own business or want to take over their parents’ business. This truly is a wonderful program.”

Mance echoed Hanley’s sentiment regarding the Entrepreneurial Program, and added that the week before the AB Forum, the Chamber sponsored the Career Fair with JCIDA, and nearly 1,500 high school seniors from 19 high schools came to Jefferson Community College to talk with 80 employers. Mance stated, “For most of the kids, it was the first time they had done an interview with a stranger, so it was a great experience for them.”

Although Mance has only been at the reins of the Chamber for 3 days as of the Forum, he had interesting statistics. Last year, there were 970 Chamber members, down from 1001 the year before, a three percent drop. Mance doesn’t view that negatively, “that is still a significant amount of members in comparison to other chambers.” The Chamber’s revenue comes from membership dues and various events throughout the year. In 2009, their revenue was down eight percent; however they managed to keep expenses down to 16% under budget so the bottom line was that their budgets were up slightly from 2008 to 2009.

As for other Chamber activities, they hosted a quarterly speaker series on January 19, 2010 featuring Dr. Greg Gardner, former professor of business at Jefferson Community College and now at SUNY Potsdam. Dr. Gardner spoke of his economic forecast for 2010 predicting that things will remain unchanged in our region. Mance stated, “We are lucky in this region because we don’t have the highs and lows that places like Florida, California, or Las Vegas has in issues such as the real estate market where it exploded with fervor, then tanked. We didn’t see the collapse of the market up here even close to the degree they saw partly because there weren’t any sub-prime loans in this area. So we’re more even keeled, and with Fort Drum present, they help us make it through the rough spots.” In terms of Mance’s radio stations, their revenue was down 17% for the year, and he believes it was due to the automotive business problems, as 40% of the radio advertising business is related to automotive advertising.

“2009 was a very good year for The Bernier Carr Group” noted Tague. “Our projects take a long time to gestate; it might take three years for a school or sewer project, so by the time we talk with a client and get through the approval and funding processes, it might be years for a project to start.” Their biggest objective for 2010 is to find the next big projects for the next three years, and their backlog of projects is doing better than they anticipated when they sat down at the end of last year. Driving their bottom line is the funding through local municipalities as well as New York State and the Federal Government. “Taxpayer votes on school budgets certainly can affect the firm,” states Tague.

The Bernier Carr Group added 10 people to their staff in 2009. They have an intern program that provides 20+ kids every year with experience in engineering and architecture with the understanding that if they move away to go to college, they can come back and work at positions the firm is looking to fill. However, they still struggle to find young people to fill the positions as many don’t seem to want to come back to the North Country.

One thing that has helped his business is telecommuting. Tague commented, “Telecommuting will increase in the future. Westelcom provides the service that helps us provide our services quicker; we have employees who can work from home because they have the high-speed connections, so better technology helps us immensely.”

Samaritan Health System had a successful year according to Brooks. Of Samaritan Medical Center’s $150 million budget, 54% comprises salaries. Of Samaritan Keep Home’s $21 million budget, 65% is directed for salaries. “Those salaries definitely have a significant impact on the local communities”, noted Brooks. Samaritan Medical Center made approximately $5 million in profit in 2009, although their accounting books are not closed yet. They budged a 3% margin, but actually did better than that, which is important because the hospital has bonds to pay and the covenants on those bonds require them to operate at a certain level with goals in order to maintain the interest rates on those bonds at the current level.

The $61 million capital project at Samaritan Medical Center is progressing very well, including a parking garage that is currently open, four new floors with a new emergency department that will expand capacity from 25,000 visits annually with the old emergency department to 50,000 with this fine new facility. On the second level are eight new operating rooms and four outpatient procedure rooms, as well as a new central supply and a post anesthesia recovery room. The third floor comprises a new intensive care unit and progressive care unit for cardiology patients. The fourth level has 36 beds for medical surgical patients all with private rooms because of issues with infectious diseases. Brooks cited, “Fort Drum is a valuable asset to our community as it provides 33% of our services including 50% of our maternity care and 15% of our emergency department care.”

Regarding non-profit verses profit health care, Brooks informed the group that pursuant to New York State legislation, all hospitals in the state must be non-profit. However, nursing homes can be for profit, although Samaritan Keep Home is a non-profit. Last year, Samaritan Health System gave $4 million in charity care, not including bad debt or contractual allowances. Brooks said, “That $4 million is actually a line item in our budget as a way of giving back to our community.” No matter what department in human disease, whether be cancer, heart, orthopedics, they have 65-95% of the market share in the area. They serve over 200,000 people including people from northern Oswego County, Lewis County, and St. Lawrence County, even though there are hospitals in some of those counties already.

Mance spoke up and said that there is a list near the cafeteria at the medical center of all the job postings available and most people may not realize it is there – over 100 jobs are available including 50 nursing assistants. Brooks cited that the staff they have is very dedicated to their jobs considering the employee shortage, “they are willing to pitch in and work long hours to make sure everyone is cared for effectively, with people working on their days off, and part timers working full time.” Certain specialties, called “hot jobs”, are tough to fill, such as CT technicians, ultrasound technicians and registered nurses. Many of these jobs will provide a $3,000 stipend per semester for people willing to get their degree and commit to working at the medical center for a minimum period of time.

As for local colleges supporting these degrees, Brooks states, “Jefferson Community College has been a wonderful asset and they are continually developing new programs, and also establishing a nursing assistant degree.” He mentioned that BOCES also has a nursing assistant degree as well as a licensed practical nurse degree and a medical transcription services degree. “There are a lot of opportunities for the young people of this area as the jobs are here. Not only at Samaritan, but also River Hospital, Carthage Hospital, Odgensburg, and in Lewis County.”

On the issue of national health care overhaul, Brooks knows well that will have an effect both on the state level and locally. “New York is one of the most severely regulated states in the nation regarding healthcare and pretty much everything else,” stated Brooks. Samaritan Keep Home lost money in 2009.

The problem was that the State had not issued a new reimbursement rate- the last was in April 2009- so they went the whole year without getting paid. On January 16 of this year, they found out what the rate would be for the year, instantly losing $150,000. This is the first year ever that they have budgeted a negative number on their $21 million dollar budget. As the state is proposing tougher budgets, the nursing home has already budgeted for a $144,000 loss for 2010. And to add to the bad news, Brooks informed everyone that the State government is proposing a $240.2 million increase in assessments on hospitals and nursing homes, an increase of 6-7%. Brooks said, “This is actually a tax by New York State on hospitals, but we will not pass that increase onto consumers. We just have to make sure we’ll be there for the future.”

To put it in perspective, Brooks mentioned a conversation he had with a certified nursing assistant who had just moved from an Alabama hospital to Samaritan. “She told me that there were 2 medical care workers for every 40 patients, whereas at Samaritan we have 6 medical care workers for every 40 patients – I’d say we have good healthcare in the North Country.”

Brooks was quite complimentary of CEO Tom Connors, “he is a very good CEO as he has the temperament, the background, and the knowledge to carry the weight of this enormous facility.” Samaritan Medical Center is the largest hospital north of Syracuse and west of Plattsburgh. “We have a significant role to play in this area,” chimed Brooks.

Upon being posed the question of what are the most important issues facing the North Country business community, Tague piped up, “New York State is a tough state in which to do business. We’re highly regulated, and our clients look to us to guide them through the regulatory process. However, the state mandates regulations for local communities that cost them substantial monies. Although our firm benefits from some of these mandates, it is still a burden on the municipalities as it makes it difficult for our communities to not increase their taxes or drive away businesses.” Tague also stated, “We have such a beautiful area here, but it is only utilized in the summer and autumn. We should be doing more to market this area for the off season as well.”

Mance quipped, “We are very proud to have the 10th Mountain Division in our area, but being that they are the most deployed division in the U.S. Army, that has an effect locally in retail and services.” There are major deployments scheduled through 2011, and as soon as we can get our troops home, it will be better for our communities.” He also brought up the health care reform debate and the surmise that no one will really know what effect it will have on our health care. “We all agree that there needs to be some reform, but the small business man should not have to shoulder the burden. Double digit increases in premiums are not sustainable.”

Mance also believes pre-existing conditions must always be covered by insurance companies. “Health care reform is not transparent, although it should be.” Mance is also frustrated by New York State, “The state budget cuts have affected everyone. We’ve been taxed to death, and none of the politicians, no matter what party affiliation, can say ‘no’ to the lobbyists. They need to prioritize what needs to be done, especially in these tough times.” Mance also believes that airport expansion would be quite beneficial to everyone, and also would make this area more accessible.

The most important business community issues for Hanley start with lending. “If the banks start lending again, small business will be helped and we need to open the lines of credit. The credit crunch is a national issue, and it affects us just as much in this region. In the past, financing issues used to trickle down to this area, but now, it’s virtually instantaneous.” Hanley also believes in preserving employee retention and finding the right talented people to fill the jobs the area does have. “We have to make sure we have that next generation here to take over. If we don’t have strong future leadership here, the entire area will be affected.” Hanley also spoke about the taxing issues and the difficulty in convincing businesses into coming to New York State, “it just isn’t really happening right now.”

Winkler echoed Hanley’s statements, “Keeping young people in this area is an issue tantamount to our future success. Often times, our best intellectual students will move from this area for a variety of reasons, and I think we should be marketing this area to other regions to get the best students to come to us.” Energy costs and taxes are another hot issue for Winkler, “They are extreme at this point, and one place we can point to is Albany. We’re going to have to fix our business environment to reduce taxes, reduce energy costs, and keep our young people here.”

Cervini’s view of the future for his organization and businesses in general in the North Country is rooted in privatization-the transfer of a business or public entity from the public sector to the private sector. “I believe our governments will get more into privatization in consideration of the debt load they are carrying. They have figured that out with the housing business on military bases, and they are increasing the privatization of prisons and schools in other areas of the country as well.” Cervini thinks the business sector is starting to recognize that it can work. “The problem is that in this economic crisis, the money just isn’t there. It’s very difficult for any developer to secure funding these days. We employ 300-400 people in the summer, but after this project at Ford Drum is done, those jobs will wind down unless we get further contracts.” Cervini noted that there have been no major housing developments since he moved here in 1998. “So if the 4th Brigade relocated here, we would have a major housing shortage.”

Mance sees a positive future for Fort Drum. “It will be a positive future for our retail services. Considering our retail services, Target, Coles, Best Buy, and two major Walmarts, among others, the expansion has been great here and I believe it will continue.” Mance also stated, “As retail does well, so too does membership in the Chamber.” He cited the issue of the cost of health care for small businesses, “60% of small businesses were paying for some part of the health care premiums for their employees before, now it is down to 37%. That is a great example of why some reform is needed.”

Natural resources are an important tool in marketing this area, believes Winkler. “Good clean air and plentiful water, that’s a benefit to the North Country.” He believes that the future of our business community is teamwork, “the future of our organization is in teaming up with like businesses, and doing things well, not just pretty good.”

Hanley stated, “As a region we have to be aware of our changing economy. We have to think regionally because our organization has found out that regional funding may be available in a few years.” Hanley believes that our local banks have been doing very well in working with the Jefferson County IDA and local small businesses. However, she stressed the need for a venture capital fund, “Other areas have a venture capital fund to enable entrepreneurs to invest in their regions.”

Hanley sees agriculture and industry as strong sectors in the North Country, and tourism is great in the summer, but she agrees with Tague in ensuring tourism is a year-round benefit. Hanley also supports extending the recreational trails that have been established in the southern part of Jefferson County to the northern half as well.

“Businesses have to learn to adapt and follow their markets more effectively in order to compete in the present economy,” stated Tague. Technology is very important to The Beriner Carr Group because, “it allows us to do more with the people we have and expand what we can do. Without the technology we have, we wouldn’t be as efficient as we are.”

Tague complimented Lucki 7 Farms, “I am pleased to hear what Steve (Winkler) has done, taking a local farm and evaluating that business model and distributing outside of New York.” He also cited Samaritan Medical Center for being able to offer, “First class health care for the North Country.”

Brooks mentioned how the baby boomers generation will have a tremendous effect on how Samaritan will deliver services, “Adapting different types of long-term care and assisted living in Jefferson County is virtually non-existent at this time.” The county-run nursing home is the only one that accepts Medicaid in Jefferson County as Brooks states, “We are working to implement a plan for assisted living in Jefferson County as many boomers will not need full blown nursing home care, but rather minimal care such as what the assisted living programs provide.”

One problem with the future of Samaritan is that of shortage of workers, “The average age of our nurses is 47 years old. One can do the math – we are heading towards a serious shortage of registered nurses in the future at this rate. Most nurses usually don’t work beyond 55-60 years of age and as people are living longer, there will be more chronic diseases.” Brooks believes in teaching wellness, “Things such as obesity and diabetes are serious problems and teaching wellness at an early age is a proactive way of fighting these diseases.” Brooks summed it up, “The future is good in health care, and we just need more people willing to work this field.”

Everyone at our table expected their businesses to face certain challenges in 2010, but at the same time, everyone was also optimistic that the North Country is a region that can weather most economic downturns, and return to a strong and vibrant economy regionally once again. Perhaps Winkler put it best, “I have learned a lot from the rest of you around the table today, and I think we have great stories to tell that we don’t share or tell enough. We really need to get out to the world that we have incredible businesses here. It would be a great recruitment for young people. I don’t think we tell our story enough.”

I would like to thank the participants for their insightful candor on their businesses and the local and regional economy and also for caring so much about the future of our region to participate in these focal discussions.

Article written by Gerald R. Forcier, Jr.