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Making Connections

After a chaotic start, the pandemic has proven to be good for business in the IT world, where professionals were deluged with requests from clients to set up remote networks for their employees, not to mention a flood of new clients seeking network services for the first time. More than perhaps anyone, these IT pros have seen first-hand how COVID-19 has changed the way companies are doing business. And some of the changes, they say, may be here for the long term.

 

By Mark Morris

As the world begins to emerge from the pandemic, many businesses that survived are trying to understand what the new landscape will look like.

Right now, many business owners are trying to figure out when and if their employees should return to the office or continue to work from home. Either way, access to technology plays an increasing role in getting the job done.

For example, said Delcie Bean, CEO of Paragus Strategic IT, before the pandemic, many businesses were getting by with outdated communication and collaborative tools and depended on e-mail and phones to support their working environment.

“When the pandemic hit, they had to suddenly adopt new technologies like Zoom, Microsoft Teams, or other virtual platforms to keep doing business. Almost overnight, we had to set up about 4,000 people to work remotely who weren’t previously set up to do so.”

“When the pandemic hit, they had to suddenly adopt new technologies like Zoom, Microsoft Teams, or other virtual platforms to keep doing business,” Bean said, noting that, as employees in many industries were sent home to work remotely, local IT firms saw a huge influx of work. “Almost overnight, we had to set up about 4,000 people to work remotely who weren’t previously set up to do so.”

Delcie Bean

Delcie Bean

Sean Hogan, president of Hogan Communications, said the last time businesses experienced this much disruption was October 2011, when a surprise snowstorm knocked out power for thousands across the region. This time, the disruption has had a more profound and lasting impact.

“The pandemic woke up a lot of people and forced them to understand they’ve got to change the way they do business,” Hogan said, explaining that, while the pre-Halloween storm a decade ago encouraged investments in backup generators, the pandemic has shown many the importance of storing data in a remote data center, commonly known as the ‘cloud.’

In Bean’s estimation, the idea of a business keeping a server at its facility to host its network is already a legacy model that was on its way to being phased out in the next five years.

“COVID dumped gasoline on that timetable and made converting to the cloud a much higher priority,” he said. With cloud-based technology, employees can more easily access their company’s network from multiple locations and devices.

Resistance to change comes natural to New England business owners as many prefer to keep their data on a server in their office. Hogan often explains to these reluctant clients that cloud-based data centers have spent millions of dollars to make sure there is a disaster recovery set up, as well as backup systems for power, internet and HVAC.

“The average business owner couldn’t afford to make that type of investment to keep their data safe,” Hogan said. “So when people say they don’t trust the cloud we point out how much more reliable it is compared to their office.”

BusinessWest spoke with a number of local IT providers about what several of them called the ‘roller-coaster year’ we’ve just had and what’s on the horizon. As business owners themselves, they, like their clients, have had to figure out how to keep things running during a pandemic and anticipate what that means in the long term.

“I’m looking at the service tickets we’re completing while working remote, and they are right on par with where they were when we were in the office. In fact, we might be a little more efficient.”

As an IT-services vendor, Bean believes firms like his should be a little ahead of the curve so they can test new technologies before they recommend them to clients. For example, Paragus employees have been on the cloud and set up to work from anywhere since June 2019.

“So when the pandemic struck, moving our staff remotely was pretty seamless,” Bean said. “About 80% of our people work remotely, and 15% to 20% come into the office on any given day.”

Jeremiah Beaudry, owner of Bloo Solutions, said his employees are working so well from home, it’s not necessary to come into the office. He noted that productivity has not suffered, and employees have less stress.

Jeremiah Beaudry

Jeremiah Beaudry

“I’m looking at the service tickets we’re completing while working remote, and they are right on par with where they were when we were in the office,” Beaudry said. “In fact, we might be a little more efficient.”

One important thing businesses have learned from the pandemic, according to Charlie Christianson, president of CMD Solutions, is that it’s OK to work from home.

“We can do a lot more than we thought we could outside of the office,” he said. “People are far more open to remote work, and there’s no mystery to it anymore.”

 

Change of Scenery

While some of Hogan’s employees have always worked remotely, the percentage has grown, and their efficiency allows them to escape the daily commute. “They don’t need to be behind a windshield for an hour and a half each day just getting to and from work,” he said.

When companies first sent workers home, IT providers spent most of their time helping clients integrate employees into their respective networks. While they suddenly had a huge amount of work, IT professionals did not see much revenue because many clients had contracts to cover this extra work. Increased revenue soon followed, however, as many new clients sought these services.

“We signed more new customers in 2020 than the previous two years combined,” Bean said, adding that much of the new business came from companies that found their dependence on technology had suddenly increased and their IT capabilities couldn’t meet these new demands.

In addition to new clients coming on board, Christianson explained that many of his current clients, who at first only wanted a “down-and-dirty” setup for remote access, were now looking for a more permanent solution for their network.

“We can do a lot more than we thought we could outside of the office. People are far more open to remote work, and there’s no mystery to it anymore.”

“Those of us in the IT industry are very fortunate,” he said. “We have done well during this time and were not hit hard like so many other industries were.”

With the end of COVID in sight, businesses have begun looking at what comes next. Those we spoke with agree on one thing: it will not be business like it was before or even during the pandemic.

“Most of our clients want some hybrid between those two options, where there is more in-person interaction than during the pandemic, but probably not as much as there was before,” Bean said. Once people started learning videoconferencing and Microsoft 365, he noted, they saw how helpful these tools can be even when everyone is in the office.

As IT providers continue to transition their clients from premise-based servers to the data cloud, they also predict other big shifts on the horizon. For example, with so many companies using smartphones and laptop computers to make calls, the company phone system may soon be a thing of the past.

“A few years from now, the idea of having both a computer and a phone on your desk at work is going to be a very strange concept,” Bean said, especially when companies consider the economics of supporting two systems that make phone calls.

While the demise of the office phone seems inevitable, office space itself could be in for a big reduction, Christianson added. “We’ve seen a lot of instances where people are moving from bigger spaces to smaller ones. They are making the calculation that some people are not coming back.”

Charlie Christianson

Charlie Christianson

Even if it’s in a smaller space, Hogan asserted that an office presence is still vital. “I don’t think we’ll go back to the way it was before, but many people still want to return to their offices, even if only for collaboration and camaraderie.”

Because Zoom and other virtual platforms make it easy to meet with people anywhere, companies have begun to look more closely at their business travel budgets, too. CEO clients have told Beaudry they will not eliminate business travel, but will look to reduce it to only what is necessary.

“One CEO who used to travel 40% of the year said he plans to move most of his meetings to virtual platforms,” he said. “He figures to be 10 times more efficient and save his energy from traveling all over the country.”

As much as Bean would like to see some of the fatigue and expense of travel go away, he also admits that important interactions happen in person that just don’t occur in a virtual setting. He gave an example of logging on to hear a keynote speaker versus attending the event in-person.

“Oftentimes, the person sitting at my table is more valuable to me than the keynote speaker,” he said. “That person might lead to a great networking opportunity where they need my services, or maybe they have a service I need.”

 

Safe at Home

While working at home can provide many benefits for employees and their companies, IT providers say it comes with a whole new array of challenges. Looking at a business with 30 employees, Beaudry gave an example of how quickly technology issues change when working remotely.

“If half the employees work from home,” he said, “the company has gone from managing one network to dealing with the struggles of 15 home networks.”

Common issues when working at home include internet signal strength and the different types and capacities of home modems. Topping all those concerns, however, is the increased vulnerability to a company network getting hacked.

All it takes is one employee to click an attachment in a suspicious e-mail, and the whole network can be damaged by a cyberattack. When working from home, Beaudry said, employees are less likely to ask the simple questions when they confront something that looks suspect.

“You don’t have someone turning to their co-worker, saying, ‘hey, did you get this e-mail? It looks weird,’” he said, adding that he encourages his clients to call whenever they see anything suspicious. “If you take 30 seconds to call and ask, it can save you a week of losing your computer.”

Christianson said cybersecurity is a never-ending battle. “Hackers are always looking for ways into your network. They only have to be right once; we have to be right all the time.”

That’s where IT service providers come in. While today’s technology tools are better than ever, Bean said IT pros can set up a company’s system to make it work best for its needs and stay current on all the security threats.

Beaudry compares his work to that of a plumber. “People need computers for business just like they need water in their home and business,” he said.

And, just like plumbing, if security on a computer network isn’t handled properly, you can have a real mess on your hands.

Education

Making Change

By Mark Morris

Sustainathon

Students gather at a booth during the 2019 Sustainathon, the last time it was held in person.

One modest act can inspire others — and when that happens, the entire community benefits.

That’s the premise behind the Cooler Communities effort led by Uli Nagel, project director for Ener-G-Save, a program run by the Harold Grinspoon Charitable Foundation.

Cooler Communities (the word ‘Cooler’ refers to reducing global warming) encourages school systems in Western Mass. to take on class projects relating to energy and energy efficiency. These projects are then displayed at a public exhibition in the community, where all attendees are asked to pledge one action they will take to conserve energy.

“Whether a person replaces standard light bulbs with LEDs or decides to buy an electric car, we encourage every action that saves energy,” Nagel said. Staff from Ener-G-Save keep a running total on pledged actions to measure their impact on the community.

For example, in 2019, Agawam schools held a Cooler Communities event in which 115 people took an energy-conservation pledge. Ener-G-Save estimated that follow-through by those Agawam residents would result in $87,600 in energy savings and 605 tons of carbon emissions eliminated from the air every year.

“Put another way, the energy-saving impact would be similar to removing 86 cars from Agawam roads every year,” Nagel said, demonstrating the impact from just one town.

The Cooler Communities efforts have continued this spring in the Berkshires and Agawam. This is the first year Springfield is taking part, as more than 1,000 high-school students have researched energy-related topics and recommended different actions they and their peers can take to make Springfield a safer, cleaner, and healthier place to live.

“Whether a person replaces standard light bulbs with LEDs or decides to buy an electric car, we encourage every action that saves energy.”

Nagel credited Springfield school officials for taking on Cooler Communities during the challenging year everyone has faced due to COVID-19 concerns. Ron St. Amand, director of Science for Springfield schools, appreciates the educational opportunity.

“It’s exciting to be able to help our students understand their choices have an impact,” he said. “This is a great opportunity to empower students to save energy, reduce carbon emissions, and slow climate change.”

To properly display all the student exhibits and invite others to take actions on saving energy, Ener-G-Save worked with Springfield to develop a dedicated website to make the effort accessible to everyone at a time when in-person exhibits are not possible.

From left, the 2019 Sustainathon

From left, the 2019 Sustainathon, STCC mascot Rowdy the Ram, Reena Randhir, the three-student winning team from Springfield Sci-Tech School, and (back row) Springfield City Councilor Jesse Lederman and STCC president John Cook.

Nagel pointed out that setting up a virtual exhibit has definite advantages because more people can see all the student projects and pledge to reduce their energy usage online.

“The Berkshires Cooler Communities online event drew 600 visitors to the site, nearly double the number who attended the live event the year before,” Nagel said. “Keeping the exhibits and information online encourages more people to take part in the experience.”

 

Sustaining Momentum

A similar effort to raise awareness and take action on environmental challenges, known as Sustainathon, is happening at Springfield Technical Community College (STCC). This effort, now in its fourth year, brings together STCC students and high-school students to create awareness of environmental-sustainability challenges and how science, technology, engineering, and math (STEM) fields contribute to finding solutions.

Reena Randhir, director of STEM Starter Academy at STCC, said Sustainathon was developed because many students are not aware of environmental efforts in their own backyard.

“While we certainly have environmental challenges, Western Mass. also has many success stories, like turning food waste into fuel,” Randhir said. “People from other countries are studying what’s happening here, so our students should also be on top of these innovations.”

Similar to Cooler Communities, students who take part in Sustainathon create exhibits relating to environmental issues and present them at a public event. Because of COVID concerns, the public event switched to a livestream on April 14 that attracted more than 800 registrants. While Randhir hopes to once again hold Sustainathon in-person, moving online this year turned it into an international happening.

“This is a great opportunity to empower students to save energy, reduce carbon emissions, and slow climate change.”

“Nearly 80 people from India participated in the live event, as well as smaller numbers of students from five other countries,” she said. “By livestreaming, we were able to reach classrooms around the world as well as our own students.”

The Sustainathon also encourages participants to pledge at least one action to benefit the environment, Randhir said. “We hope everyone is a champion of change in their life. Even the simple act of eliminating the use of plastic bags can make a difference.”

One of the actions she and her students had planned was a tree-planting campaign around Western Mass. timed for Earth Day on April 22.

The Grinspoon Foundation and the Community Fund of Western Massachusetts have come together to provide $5,000 grants to the school systems taking part in Cooler Communities efforts. Nagel explained that philanthropist (and recent BusinessWest Difference Maker) Harold Grinspoon started Ener-G-Save because, as a real-estate developer, he was always troubled by energy-inefficient New England homes that commonly leaked heat from roofs, windows, and walls.

“Harold made it his goal to raise awareness of energy efficiency to help people spend less money on energy that is, literally, going out the window,” Nagel said. At one point, Ener-G-Save took drive-by thermal images of 100,000 homes in Western Mass. and encouraged homeowners with the worst heat leakage to take advantage of free energy audits from Mass Save.

 

Every Bit Helps

Though a number of the energy-saving pledges are tied to home ownership, Nagel said one doesn’t need to own a home to find plenty of ways to make a difference. “Simple acts like stopping junk mail and including more meat-free meals in your diet are two easy things anyone can do that benefit you and the environment.”

She also suggested riding a bike for a short trip instead of driving a car and, when using a car to run errands, consolidating trips to save gas and time.

“Energy use and conservation are huge topics,” Nagel said. “When we see the simple things others are doing that make a difference, we are less likely to feel overwhelmed and more likely to act.”

Education

Prepared for Launch

By Laurie Loisel

 

David Gruel stands next to the launchpad

David Gruel stands next to the launchpad at the Kennedy Space Center on July 29, 2020, the day before NASA’ s Perseverance rover mission launch.

Not many people can say they’ve worked on every U.S.-led rover mission to Mars. One who can is David Gruel, a Holyoke Community College graduate from the class of 1991.

Five years out of HCC, Gruel was part of the Pathfinder mission that landed the Sojourner rover on Mars, the second Mars mission since the Viking became the first-ever U.S. mission to Mars in 1975. Sojourner had limited movement when compared to other rovers (most recently Perseverance) that travel across the planet, but it was a milestone nonetheless.

“Pathfinder was the return to the red planet some 20 years after Viking,” he said of the rover that launched in December 1996, landing on Mars in July 1997.

After that, through his job as an engineer at the Jet Propulsion Laboratory in Pasadena, Calif., Gruel was among the crews working on the Spirit, Opportunity, Curiosity, and Perseverance NASA rover missions.

Considering that Gruel falls into a category of people for whom the maxim “it’s not rocket science” most definitely does not apply, the 50-year-old is modest and candid about his high-school years as an avid underachiever. He is equally clear about the role HCC played in putting him on a path to a career in rocket science. In fact, he flat-out declares that, if not for HCC, he wouldn’t be where he is today.

“I still have an incredible memory of the math and physics professors at HCC, and it was mutual. They went out of their way to know their students and to figure out where they could help.”

As a student at Westfield High School, Gruel spent more energy stocking grocery-store shelves, tending to the car those earnings bought him, and socializing with his friends than on academics. “I was looking for the easy road out at all times,” he admits.

After graduation, when many of his friends headed off to four-year colleges, Gruel continued working in the grocery store. “And then I realized I needed a different challenge in life,” he said.

That’s how he ended up at Holyoke Community College. Despite a less-than-stellar high-school transcript, he knew HCC “would actually give me a chance,” he said. “HCC was there to give people a second chance.”

Once enrolled, encouraged by his professors, he buckled down. He believes he had a better academic experience at HCC than he would have had he attended a four-year program right out of high school.

“The classes were small, and the teachers actually cared about you,” he said. “I still have an incredible memory of the math and physics professors at HCC, and it was mutual. They went out of their way to know their students and to figure out where they could help.”

It was not easy. He worked two jobs while a full-time HCC student, sometimes studying while logging third shift at a gas station.

“I was willing to work at it,” he said, “but there were people who were willing to support me, and that’s what I needed.”

Gruel graduated with honors and an associate degree in engineering, an accomplishment he remains proud of to this day. “This was something I had done for myself, and I had earned it.”

 

Up, Up, and Away

It also earned him acceptance at Rensselaer Polytechnic Institute in Troy, N.Y., where he found he had a real affinity for engineering. And here is where his humility rears its head again.

“A lot of things went my way,” he said. “In addition to working hard, there’s a lot of luck involved in where we end up in our lives.”

In his senior year at RPI, he learned that two friends who also had gone to HCC were doing co-op semesters in the field, working at engineering jobs. He decided to pursue one, landing a co-op placement at the prestigious Jet Propulsion Laboratory (JPL) in California, a federally funded research and design center managed by Caltech, with the vast majority of its funding and contract work coming from NASA.

Dave Gruel’s favorite photo of Perseverance was captured moments before the Mars landing

Dave Gruel’s favorite photo of Perseverance was captured moments before the Mars landing by one of the EDL (entry, descent, landing) cameras he installed on the rover.

Gruel thought the experience would spice up his résumé by adding that he worked on a team designing interplanetary spacecraft. Little did he know it would lead to his life’s work.

After eight months, he went back to RPI to finish school and graduate. Once on the job market, the Jet Propulsion Laboratory was among the job offers he received, and though he always imagined settling down in New England, he found himself changing those plans when such an enticing job.

“The challenge of JPL massively dwarfed the benefits of being in New England,” he said.

Gruel’s role in the last two Mars missions was to lead the team known as ATLO (“I’m the boss man,” he said cheerfully.) ATLO stands for Assembly, Test, and Launch Operations. Essentially, the team takes all the parts for the rover and its spacecraft — tens of thousands of them — and assembles them.

“We get delivered to us a bunch of intricate Legos,” is how Gruel put it.

Next the team conducts endless tests to simulate launch, touchdown, and the harsh conditions on the ground. “So when it’s cruising from Earth to Mars, it works as designed,” he noted.

To simulate launch, the machine goes into a large vibe table; to mimic the Mars environment, it goes into a vacuum chamber that gets as cold as the red planet itself.

From mission start to landing, it takes about six to eight years, he explained. And timing is everything: because the planets align every 26 months in a way that creates optimal conditions for Earth-to-Mars travel, all assembly and testing must be fully complete when that time comes.

“The schedule pressure is intense,” he said. “We need to get our testing done and our design done in order for it to be ready to launch.”

In addition to finding a career at JPL, Gruel met his wife, Danelle, there when she was working in the Finance division, though now she stays home with their two boys, Dylan, 14, and Ethan, 11 (who also love Legos, as well as watching mission launches with their father).

Typically, once a mission has landed, Gruel’s role slows down quite a bit, but the Perseverance landing in February 2021 was different because he had installed a camera system to take video and still images of the descent, and he was responsible for it.

“Even after we launched, I was still intimately involved in making sure that system was going to function,” he said. “We continued to do testing on it to make sure it would reach its full potential, and it sure did. The images were amazing.”

Those images captured the spacecraft’s descent and landing, including video of the rover setting down on Mars and kicking up dust. “We joked it was kind of like our selfie cam,” he said.

 

Back to His Roots

In 1998, Gruel returned to HCC as the recipient of a Distinguished Service Award at commencement and delivered the keynote address, an invitation he seems to still find hard to believe to this day: “I spoke at commencement! Me, a flunkie out of high school!”

It’s a fact he mentions not to boast, but rather to inspire. If there’s anything he hopes people take away from his story, it’s that they should never underestimate their potential, even if they’ve had trouble living up to it.

“When you as a person make a decision to do something, the sky opens up,” he said. “The sky is no longer the limit.”

And that’s coming from someone who knows how to get to Mars.

 

Laurie Loisel is a freelance writer based in Northampton.

Technology

What Works, What Doesn’t

By Lisa Apolinski

 

Here’s a surprising statistic from Kinsta: LinkedIn has over 575 million users, and nearly half of those are active every month (meaning they post, comment, or like on the platform). If that isn’t impressive enough, LinkedIn has its sights on further investments into Latin America. What makes LinkedIn even more powerful is that users update their bios regularly, so the connections you are potentially requesting are in the roles they have listed on their bios.

LinkedIn is a digital goldmine, especially now in the post-COVID digital paradigm. Users post on career engagement, network with others in their industry, and share expertise and advice. Unfortunately, less professional engagement can and does happen on LinkedIn. Understanding what works in the world of LinkedIn for networking, and what hinders, can help remove obstacles for engagement. Here are the five biggest blunders that can hurt credibility and, potentially, career advancement.

“What makes LinkedIn even more powerful is that users update their bios regularly, so the connections you are potentially requesting are in the roles they have listed on their bios.”

 

Blunder #1: Being vague about why a connection is requested. Some people believe more connections are better. However, some connection requests come with a note that does not share why the sender wants to network. If there is not a clear reasoning for the network connection, many of these requests appear to not help or enhance the receiver’s network. A connection request with a note can help put the connection request into context for the receiver.

Try Instead: Clearly state why a request has been sent and how the connection benefits both parties. To get a connection request accepted, think about why you are requesting the connection.

 

Blunder #2: Focusing on selling versus connecting. Many LinkedIn users complain about this practice, and it seems to have become more common. After a connection has been accepted, the next message is a long selling pitch. What is even more surprising is the immediate request for a call or virtual demo. This is a request of someone’s time without taking time to connect first. A focus on selling will not help with lead generation or brand reputation. This type of communication does little for the recipient.

Try Instead: Thank the person for the connection and share something that might benefit the new connection, such as a video or article. Sharing knowledge can go a long way.

 

Blunder #3: Not investing in a current professional photo. One of the first digital impressions from a LinkedIn profile is the user photo. Using a photo that is casual, old, or provocative is missing a great opportunity to showcase a level of professionalism. A photo is a visual precursor to a job interview or lecturer. Investment in a professional photo is also a wise one as it can be used in a variety of digital ways. By keeping the photo current, network members are also easy to identify in other settings (remember those trade shows?).

Try Instead: Even a quick shot with your mobile can work. Use direct lighting, and natural light is best (morning or late afternoon). Capture yourself from the shoulders up and minimize distractions in the background.

 

Blunder #4: Posting on politics. While most people have an opinion on the current political climate, sharing political viewpoints may not be the best decision. Posts and articles on LinkedIn should highlight expertise, provide knowledge and leadership within an industry, and share resources that can help networks. Political postings do not fall into these three categories. These may also be offputting or polarizing to current and future networks.

Try Instead: If you wish to share political viewpoints, consider posting to another social-media channel. Keep your LinkedIn channel focused on how you can provide professional leadership and insight.

 

Blunder #5: The social channel is LinkedIn, not Love Connection. With so many other dating apps and websites available to find a soul mate, LinkedIn is not the place to request a connection with the purpose of asking someone out. Not only is this request unprofessional, it can easily come across as creepy, especially to women. LinkedIn users are using the platform for career and networking and expect others to do the same.

Try Instead: Use LinkedIn for its primary purpose, namely professional networking, and save the search for love to those websites or apps specifically created for that reason.

 

Bottom Line

LinkedIn offers amazing potential to connect with experts, learn about new trends in your industry, and discover new career paths and positions as you explore options. LinkedIn can work well for digital connection and professional networking, especially if these blunders are avoided.

These small modifications can unlock new networking opportunities and strong professional engagement now as well as in the future, and help establish your credibility within both your industry and your organization. By avoiding these five missteps, you will be able to more easily harness the power of LinkedIn in your professional practice and take your career to new heights.

 

Lisa Apolinski is an international speaker, digital strategist, author, and founder of 3 Dog Write. Her latest book, Persuade With A Digital Content Story, is available on Amazon. She works with companies to develop and share their message using digital assets; www.3dogwrite.com

Business of Aging

Peace of Mind

By Mark Morris

 

Heidi Cornwell says families looking for a senior-living community should consider its continuum of care.

Heidi Cornwell says families looking for a senior-living community should consider its continuum of care.

Between now and 2030, 10,000 Americans each day, on average, will reach age 65. That type of growth affects all the industries that serve the senior population — and, not surprisingly, senior living is one industry paying close attention to this trend.

Kimball Farms Life Care provides independent and assisted living as well as dedicated memory-care services. In 2020, the Lenox facility received more inquiries about its residential offering than in any year prior. Heidi Cornwell, marketing and sales director for Kimball Farms, said potential residents are doing more online research to educate themselves about senior community living.

“Many people are ‘shopping around’ earlier because they saw their own parents ill-prepared for this part of their life journey,” Cornwell said. She also noted that, as people live longer, they are moving into senior at a later age.

As a continuing-care retirement community (CCRC), Kimball Farms offers increasing levels of care for those who need it. Residents can easily move from independent living to assisted living, giving the individual and their families greater peace of mind.

For residents who develop dementia or Alzheimer’s disease, Kimball Farms offers memory-care services through its Life Enrichment Program (LEP). Cornwell explained that the program is centered around a philosophy know as habilitation, which increasingly emphasizes a person’s remaining skills instead of the skills they have lost.

For example, if a sandwich is placed in front of a person with dementia, they may not be able to process what to do with it. “However, if someone sits across from them with a sandwich, picks it up, and takes a bite, that is the only queuing they need to understand what to do,” Cornwell said, adding that they can then enjoy their lunch without any further assistance.

“We are so grateful to our residents and their families because they worked with us to find creative and innovative ways to stay engaged and informed, while at the same time keeping everyone healthy.”

Singing is another good example of emphasizing a remaining skill. “The individual may not sing along to a song by themselves, but if an activities person or nurse sings with them, they can sing with pride and remember every word.”

The LEP puts its focus on maximizing quality of life for each resident. Regular routines and programs built around the interests of the individual keep them busy all day and into the evening. As a result, the residents thrive, Cornwell said, noting that the stimulation helps residents with dementia maintain the abilities they still have for as long as possible.

“We place no expectations on them, but encourage them to be the best person they can be,” she said. “We celebrate the good days, bolster self-esteem, and we treat them with the utmost dignity and respect.”

 

Safe Spaces

As research on dementia has evolved, caregivers have increased their understanding on how to manage the condition. Embracing the skills that remain for those with dementia can encourage feelings of acceptance and personal success. That’s important, Cornwell said, because, even though the disease can have an effect on a person’s ability to communicate or recall recent events, they still have a sense of the quality of life they desire.

Or, as she put it, “although they may no longer be able to dance, they still enjoy the music.”

Kimball Farms social worker Jackie Trippico leads what is known as Reminisce Group. This weekly activity begins with staff presenting a specific topic and asking residents to recall a significant memory related to that theme. Cornwell said one popular reminiscence involved talking about a trip to an ice-cream parlor.

Providing comfortable spaces is also part of the program. Kimball Farms’ memory-care neighborhood is a secure, self-contained community. Private apartments are modeled after a typical home with an open floor plan, while residents also have access to a secure outdoor courtyard so they can garden, see visitors, or take part in other activities. The staff ratio is higher than traditional assisted living, and they have all been trained in specialized dementia care.

When COVID-19 hit last year, families could no longer make in-person visits to residents in LEP. Cornwell said the activities professionals and nursing team quickly adapted to using tablets to arrange virtual visits or phone calls so families could stay informed on the care and well-being of their loved ones. Celebrating special occasions simply became virtual events.

“Zoom birthday and anniversary parties, as well as Skype holiday festivities, became our new normal,” she explained.

As COVID vaccine levels rise, Kimball Farms is able to welcome families to visit by appointment. Cornwell reported that residents and their families have been thrilled to resume the personal visits.

“We are so grateful to our residents and their families because they worked with us to find creative and innovative ways to stay engaged and informed, while at the same time keeping everyone healthy.”

As more Americans reach their senior years and live longer than previous generations, the demand for memory-care facilities to treat dementia and Alzheimer’s disease will continue to increase.

According to Seniors Housing Business magazine, from 2013 through 2018 (the latest figures available), the number of new memory-care units increased by 55%.

Cornwell advises those who are looking at senior-living options to consider the continuum of care a community offers. Healthy seniors who may choose independent living in senior housing to downsize from their homes need to think about future needs as well, she said.

“The community they choose should be a place that will provide them with the best quality of life, for the rest of their life, with increasing levels of care when and if they need it.”

Estate Planning

Crunching the Numbers

The $1.9 trillion American Rescue Plan Act of 2021 was passed by the U.S. Congress by the narrowest of partisan margins, but its impact promises to be broad, for individuals and businesses alike. Following is a breakdown of how the act, signed into law by President Biden last month, affects everything from unemployment benefits to tax credits to employee retention.

By Jim Moran, CPA, MST

 

On March 11, President Biden signed the American Rescue Plan Act of 2021 (ARP). Biden’s $1.9 trillion COVID-19 relief package is aimed at stabilizing the economy, providing needed relief to individuals, small businesses, and improving and accelerating the administration of coronavirus vaccines and testing.

The relief package, which is Biden’s first major legislative initiative, is one of the largest in U.S. history and follows on the heels of the Trump administration’s $900 billion COVID relief package enacted in December 2020 (Consolidated Appropriations Act of 2021).

The most significant measures included in the ARP are the following:

• A third round of stimulus payments to individuals and their dependents;

• Extension of enhanced supplemental federal unemployment benefits through September 2021;

• Expansion of the child tax credit and child and dependent care credit;

• Extension of the Employee Retention Credit (ERC);

• $7.25 billion in aid to small businesses, including Paycheck Protection Program (PPP) loans;

• Increased federal subsidies for COBRA coverage;

• More than $360 billion in aid directed to states, cities, U.S. territories, and tribal governments (the Senate added $10 billion for critical infrastructure, including broadband internet, and $8.5 billion for rural hospitals);

• $160 billion earmarked for vaccine and testing programs to improve capacity and help curb the spread of COVID; this includes funds to create a national vaccine-distribution program that would offer free shots to all U.S. residents regardless of immigration status; and

• Other measures that address nutritional assistance, housing aid, and funds for schools.

Here are details on many (but not all) of the provisions of the ARP.

 

MEASURES AFFECTING INDIVIDUALS

The ARP includes several measures to help individuals who have been adversely affected by the impact of the pandemic on the economy. The additional round of stimulus checks, in conjunction with supplemental federal unemployment benefits, should provide some measure of relief to individuals. A temporarily enhanced child tax credit offers another area of assistance.

 

Cash Payments

An additional $1,400 payment is being sent for each dependent of the taxpayer, including adult dependents (such as college students and parents). The previous two stimulus payments limited the additional payments to dependent children age 16 or younger.

jim Moran

jim Moran

“The relief package, which is Biden’s first major legislative initiative, is one of the largest in U.S. history and follows on the heels of the Trump administration’s $900 billion.”

The amount of the stimulus payment is based on information in the taxpayer’s 2020 tax return if it had been filed and processed; otherwise, the 2019 return is used. The amount of the payment will not be taxable income for the recipient.

The stimulus payments are subject to certain limitations with respect to a household’s adjusted gross income. Households with adjusted gross income of more than $80,000 for single filers, $120,000 for head-of-household filers, and $160,000 for married filing jointly will not receive any payment. For taxpayers with adjusted gross incomes below those respective limitations, the stimulus is subject to a phaseout beginning at $75,000 for single filers, $112,500 for heads of household, and $150,000 for married filing jointly.

 

Extended Unemployment Benefits

The current weekly federal unemployment benefit of $300 (which applies in addition to any state unemployment benefits) is extended through Sept. 6, 2021; the Senate cut back the $400 that would have applied through Aug. 29 under the House version. The extension also covers the self-employed and individual contractors (such as gig workers) who typically are not entitled to unemployment benefits.

Additionally, the first $10,200 (per person if married filed jointly) of unemployment insurance received in 2020 would be non-taxable income for workers in households with income up to $150,000. If you have already filed your 2020 federal taxes (Form 1040 or 1040-SR), there is no need to file an amended return to figure the amount of unemployment compensation to exclude. The IRS will refigure your taxes using the excluded unemployment compensation amount and adjust your account accordingly. The IRS will send any refund amount directly to you.

 

Child Tax Credit

The child tax credit will be expanded considerably for 2021 to help low- and middle-income taxpayers (many of the same individuals who will be eligible for stimulus payments), and the credit will be refundable.

The amount of the credit will increase from the current $2,000 (for children under 17) to $3,000 per eligible child ($3,600 for a child under age six), and the $3,000 will also be available for children who are 17 years old. The increase in the maximum amount will phase out for heads of households earning $112,500 ($150,000 for couples).

Because the enhanced child tax credit will be fully refundable, eligible taxpayers will receive a refund for any credit amount not used to offset the individual’s federal income-tax liability. Part of the credit will be paid in advance by the IRS during the period July through December 2021 so that taxpayers do not have to wait until they file their tax returns for 2021. The IRS will publish future guidance as to how the payments will be refunded.

 

Child and Dependent Care Tax Credit

The child and dependent care tax credit will be expanded for 2021 to cover up to 50% of qualifying childcare expenses up to $4,000 for one child and $8,000 for two or more children for 2021 (currently, the credit is up to 35% of $3,000 for one child or 35% of $6,000 for two or more children). The credit will be refundable so that families with a low tax liability will be able to benefit; the refund will be fully available to families earning less than $125,000 and partially available for those earning between $125,000 and $400,000.

 

Earned Income Tax Credit (EITC)

The EITC will be expanded for 2021 to ensure it is available to low-paid workers who do not have any children in the home. The maximum credit will increase from about $530 to about $1,500, and the income cap to qualify for the EITC will go from about $16,000 to about $21,000. Further, the EITC will be available to individuals age 19-24 who are not full-time students, as well as those over 65.

 

MEASURES AFFECTING BUSINESSES

The ARP also contains provisions designed to assist businesses — small businesses in particular.

 

Small Businesses and Paycheck Protection Program

An additional $7.25 billion is allocated to assist small businesses and the PPP forgiven loans. The current eligibility rules remain unchanged for small businesses wishing to participate in the PPP, although there is a provision that will make more nonprofit organizations eligible for a PPP loan if certain requirements are met.

The PPP — which was originally created as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted on March 27, 2020 — is designed to help small businesses that have suffered from disruptions and shutdowns related to the coronavirus pandemic and keep them operational by granting federally guaranteed loans to be used to retain staff at pre-COVID levels. A PPP loan may be forgiven in whole or in part if certain requirements are met.

The Economic Aid Act, which is part of the CAA, earmarked an additional $284 billion for PPP loans, with specific set-asides for eligible borrowers with no more than 10 employees or for loans of $250,000 or less to eligible borrowers in low- or moderate-income neighborhoods. The program has recently been extended from March 31, 2021 to May 31, 2021.

 

Employee Retention Credit (ERC)

The ERC, originally introduced under the CARES Act and enhanced under the CAA, aims to encourage employers (including tax-exempt entities) to keep employees on their payroll and continue providing health benefits during the COVID pandemic. The ERC is a refundable payroll-tax credit for wages paid and health coverage provided by an employer whose operations were either fully or partially suspended due to a COVID-related governmental order or that experienced a significant reduction in gross receipts.

The CAA extended the eligibility period of the ERC to June 30, 2021, increased the ERC rate from 50% to 70% of qualified wages, and increased the limit on per-employee wages from $10,000 for the year to $10,000 per quarter ($50,000 per quarter for startup businesses). The ARP also extends the ERC until Dec. 31, 2021 under the same terms as provided in the CAA.

 

 

Other Measures

• Employers offering COVID-related paid medical leave to their employees will be eligible for an expanded tax credit through Sept. 30, 2021.

• The ARP increases the proposed subsidies of insurance premiums for individual workers eligible for COBRA, after they were laid off or had their hours reduced, to 100% through Sept. 30, 2021.

• Funds are allocated for targeted Economic Injury Disaster Loan advance payments, as well as for particularly hard-hit industries such as restaurants, bars, and other eligible food and drink providers, shuttered venue operators, and the airline industry.

• Effective for taxable years beginning after Dec. 20, 2020, the ARP repeals IRC section 864(f), which allows U.S.-affiliated groups to elect to allocate interest on a worldwide basis. This provision was enacted as part of the American Jobs Creation Act of 2004 and has been deferred several times. The provision is relevant in computing the foreign tax-credit limitation under IRC section 904.

• The ARP does not cancel student-loan debt, but there is a provision that would make student loan forgiveness passed between Dec. 31, 2020 and Jan. 1, 2026 tax-free (normally, the cancellation of debt is considered taxable income).

• A deduction will be disallowed for compensation that exceeds $1 million for the highest-paid employees (such as the CEO, CFO, etc.) for taxable years beginning after Dec. 31, 2026.

• The limitation on excess business losses of non-corporate taxpayers enacted as part of the Tax Cuts and Jobs Act will be extended by one year through 2026.

• The threshold for third-party payment processors to report information to the IRS is lowered substantially. Specifically, IRC section 6050W(e) is revised so that the current threshold of $200,000 for at least 200 transactions is reduced to $600. As a result, such payment processors will have to provide a Form 1099K to sellers for whom they have processed more than $600 (regardless of the number of transactions). This change, which applies to tax returns for calendar years beginning after Dec. 31, 2021, will bring many more sellers, including ‘casual’ sellers, within the 1099K reporting net.

If you have questions about any of the items above, reach out to your tax professional, who will be able to navigate you through any portion of the American Rescue Plan Act and how it may affect you.

 

Jim Moran, CPA, MST is a tax manager at Melanson, advising clients on individual and corporate tax matters; [email protected]

Features

NFTs and Cryptocurrency

By Bart Galvin

 

Digital assets such as Bitcoin and non-fungible tokens (NFTs) are transforming global capital markets and the art world, with market capitalization reaching $2 trillion and digital artworks packaged through NFTs regularly selling for millions of dollars. As these assets gain prominence in the marketplace, it is increasingly important to understand why these assets appeal to investors, how they represent value, and how they function under the hood.

 

NFTs and Digital Art

NFTs have exploded in popularity in the past year, with notable examples like CryptoPunks, which are collectible, algorithmically generated pixel artworks, as well as the works of Mike Winkelmann (known professionally as Beeple), who recently sold a piece of NFT art at a Christie’s auction for $69 million.

Bart Galvin

An NFT is a unique digital token representing an interest in something else, which could be a piece of art, a share of stock, a stream of royalties, or even, in the case of Unisocks, entitlement to a physical pair of socks. NFTs are ‘non-fungible’ because, unlike cryptocurrencies, they aren’t interchangeable — your NFT corresponds to the specific entitlement or right to the underlying thing.

The eye-popping price tags of many digital-art NFTs poses the question: what exactly are you buying when you purchase an NFT? In its most basic form, an NFT is simply verifiable proof that you are the purchaser of whatever the NFT represents. But the devil is in the details. The rights granted by an NFT are entirely up its creator, so some NFTs have strict terms and conditions that prohibit exhibitions or commercial use of the art, while others might grant you the copyright in the work.

 

Cryptocurrency and the Rise of Bitcoin

Bitcoin has been the most prominent cryptocurrency since its introduction in 2008, but many other cryptocurrencies exist, such as Ethereum, an important part of many ‘smart contracts,’ and Tether, which is pegged to the value of the U.S. dollar. Bitcoin accounts for about half of global cryptocurrency market capitalization.

At the end of March, the price of one Bitcoin was approximately $60,000. Unlike a cryptocurrency like Tether, the value of Bitcoin can fluctuate wildly. Indeed, it has increased tenfold in the past year, dwarfing its previous peak of $17,000 in December 2017. The value of Bitcoin is determined almost entirely by what purchasers believe it is worth, and investors speculate on that value, driving price fluctuations. These price fluctuations can have a snowball effect, whereby widespread speculation in Bitcoin that drives the price upward can lead investors to believe Bitcoin will be adopted more widely, leading to further speculation that its value will increase.

 

Why Do People Care?

Cryptocurrencies and NFTs represent a fundamentally new way of transacting. The reason is in the revolutionary qualities of their underlying technology: the ‘blockchain.’ A blockchain can be thought of as a tamper-resistant digital store of data, constructed using computer cryptography and distributed among participants over the internet. Here’s what makes the blockchain special, and why people are jumping on board.

First, the blockchain allows parties to transact without intermediaries. No banks or clearinghouses are needed to execute or verify transactions since the underlying technology ensures that transfers are reliable, practically irreversible, and publicly verifiable.

“In the world of blockchain technology, Bitcoin and digital-art NFTs are the tip of the iceberg. There are already countless blockchain-based technologies, and new ones are invented every day.”

Second, blockchain transactions are not limited by jurisdictional or national boundaries. The transaction’s terms are dictated by computer code, not local law. Perhaps more importantly, the code is self-enforcing, which limits opportunistic behavior. Parties do not need to appeal to the judicial system to enforce an agreement because it happens automatically.

Third, blockchains are not subject to a central point of control or a central point of failure. Blockchains work by interconnecting users running the same software over a peer-to-peer network on the internet. No one party controls the blockchain. All new transactions are shared over the network, and they become final only when a majority of users determines that the transaction is valid. If a user doesn’t own the digital asset they’re trying to transfer, or tries to transfer it twice, the transaction will be rejected.

Fourth, blockchain transactions are publicly visible and verifiable. A blockchain serves as a ledger of transactions and all the transactions that came before them, allowing anyone to view and verify the trail of activity occurring over the network.

Fifth, blockchains allow parties to transact pseudonymously (not quite anonymously), without needing to trust or even know each other. All you need to know is your counterparty’s digital address or ‘wallet.’ And because transactions are practically irreversible and verified by the consensus of the network, the opportunities for fraud are heavily curtailed.

 

The Future of Blockchain Technologies

In the world of blockchain technology, Bitcoin and digital-art NFTs are the tip of the iceberg. There are already countless blockchain-based technologies, and new ones are invented every day. The blockchain is highly flexible and has tremendous untapped potential for consumer transactions, private contracts, corporate structuring, securities and derivatives, and even public administration. If your business is not using the blockchain yet, it’s only a matter of time.

 

Bart Galvin is an attorney at Bulkley Richardson, where he is a member of the Blockchain and Cryptocurrency practice group; (413) 272-6200.

Community Spotlight

Community Spotlight

By Mark Morris

Palmer has a long history as a key train stop

Palmer has a long history as a key train stop, making it an oft-discussed part of conversations about expanded east-west rail.

As the nation recovers from a year of dealing with COVID-19, Palmer Town Manger Ryan McNutt looks to the future with optimism.

While larger cities had to contend with high COVID infection numbers and revenue losses from business taxes, Palmer maintained low infection numbers and relies more on residential taxes, which remained stable.

These days, as many people in the larger metropolitan areas work from home, there is no certainty they will return to five days a week in the office. That dynamic, McNutt believes, gives Palmer a real opportunity. With the average home price in Palmer at $191,000 compared to the Greater Boston area average of more than a half-million dollars, he wants to take advantage of this moment.

“The ability to start a family and work toward the American dream is much more difficult to afford in the Greater Boston area and much easier in our area,” he told BusinessWest. “We may see a change in working conditions where office workers spend up to four days a week at home, which would allow them to live in Western Mass. and take advantage of our affordability.”

McNutt is creating a marketing plan to reach out to the Boston area as well as other densely populated urban areas to promote the value and quality of life available in Palmer and surrounding areas.

“Right now, there are three alternative plans for how the east-west rail will be configured, and Palmer has a stop in each scenario.”

One huge boon for Palmer in this regard would be the proposed east-west rail project. The plan to offer passenger rail service from Pittsfield to Boston has been included in the federal infrastructure plan about to go to Congress. McNutt said east-west rail would be transformative for his town.

“Right now, there are three alternative plans for how the east-west rail will be configured, and Palmer has a stop in each scenario,” he said. Though many steps remain before the plan wins approval and comes to fruition, town planners are looking to identify the right location, and they want to make sure it’s shovel-ready.

“I want to be so ready that, if we were told they could helicopter in a train station and drop it where a site was selected, we want to be ready for that helicopter,” he said.

 

Engine of Opportunity

The economic potential of a train stop in Palmer is not lost on Andrew Surprise, CEO of Quabog Hills Chamber of Commerce. On the job since January, Surprise looks to help chamber members increase their engagement with state and local officials, as well as identify economic programs to benefit the area.

He has already begun working on a grant for downtown Palmer through the Transformative Development Initiative, a MassDevelopment program. The grant provides incentives for businesses to locate in condensed areas, like downtown settings, that are walkable.

“That’s a positive for us because Palmer’s downtown is very walkable,” Surprise said.

He is also applying to the Massachusetts Cultural Council to have downtown Palmer designated as a cultural district. In addition to being a walkable area, a community must show it hosts arts and cultural events on a regular basis.

Surprise admits these projects will take several years to be successful, but the effort would be worth it. “A well-developed and vibrant downtown will help us bring in other businesses.”

Andrew Surprise

Andrew Surprise

“Palmer is well-placed for manufacturing facilities; its access to major highways makes it easy to get products to Boston, Hartford, Albany, and New York City.”

As part of his outreach to local officials, he reminds them of Palmer’s tradition and continued relevance as a manufacturing town.

“There has been a lot of talk on the national level about restoring manufacturing jobs,” he said, adding that communities like Palmer that have plenty of available land could be attractive to Boston-area high-tech companies looking for manufacturing space. “Palmer is well-placed for manufacturing facilities; its access to major highways makes it easy to get products to Boston, Hartford, Albany, and New York City.”

The chamber recently conducted a survey among its members to find out how they weathered the pandemic. Results so far show that two-thirds of businesses have been able to avoid employee layoffs. By finding alternatives such as reducing hours, many avoided having to reduce their staffs.

Palmer at a glance

Year Incorporated: 1775
Population: 13,050
Area: 32 square miles
County: Hampden
Tax Rate, residential and commercial: Palmer, $22.63; Three Rivers, $23.28; Bondsville, $23.67; Thorndike, $23.62
Median Household Income: $41,443
Median Family Income: $49,358
Type of government: Town Manager; Town Council
Largest Employers: Baystate Wing Hospital; Sanderson MacLeod Inc., Camp Ramah of New England; Big Y World Class Market
* Latest information available

“We conducted the survey to learn what types of services the chamber could offer to help businesses find success going forward,” Surprise said, noting that these are only preliminary results, as all surveys have not yet been returned.

As a first step, the chamber is planning a number of seminars for small businesses to help them increase foot traffic and bring in new customers through approaches such as digital marketing.

“Many small businesses are not familiar with digital or social media marketing, and it’s really a necessary tool in the 21st century,” he noted.

 

On the Right Track

McNutt is hopeful some kind of infrastructure package passes Congress because, like municipal leaders all over the country, he faces big projects that need attention.

“There are 47,000 deficient bridges in the U.S., including the nine that are in Palmer,” he said.

But for a small community, he added, taking on a big infrastructure project is a heavy lift, and Palmer has been working with U.S. Rep. Richard Neal to secure funding for at least two bridges, on Main Street and Church Street, which need the most attention.

One project that could add significantly to the town tax revenues involves building 300 seasonal cottages on Forest Lake. McNutt is excited about the potential for this project.

“Folks are coming up from New York to buy our homes because they recognize that living space, fresh air, and not being stuck in small square footage are luxuries that we have here.”

“Right now the cottages are planned for warm-weather use and would bring plenty of folks in to stay in town,” he said. “They will most likely go to local restaurants and make other purchases, so we could see a real economic multiplier effect from this project.”

Palmer has also agreed to be a host community for the cannabis industry. Two retail sites and two cultivation businesses have run into delays to start their enterprises, but McNutt blames COVID for the slowdown.

“The Cannabis Control Commission held fewer meetings than they normally would, and site visits were more difficult to do,” he explained. “In short, everything in the regulatory environment was just harder to do during the pandemic.” He feels confident at least one site will be up and running this year or early in 2022.

As the number of people vaccinated increases and COVID concerns decrease, he believes the opportunity is now for Palmer and surrounding towns.

“Folks are coming up from New York to buy our homes because they recognize that living space, fresh air, and not being stuck in small square footage are luxuries that we have here.”

McNutt noted that people can still pursue the American dream by locating to Palmer because, in addition to its natural surroundings, the town has easy access to metropolitan areas. In short, he said, “we have the best of both worlds.”

Estate Planning

Staying Ahead of the Scams

By Julie Quink

 

With the continued intensity created by the COVID-19 pandemic, business owners and individuals have continued to be victims of fraudulent activity as the scams and schemes are continually changing and increasing in number.

At a time of significant economic stress and uncertainty, the barrage of ever-changing fraudulent attempts and attacks becomes increasingly difficult to manage and prevent. Fraudsters have also become very creative in their methods of gathering sensitive information to commit fraud, so it becomes increasingly difficult to predict what might be coming next in the form of an attack.

Since the onset of the pandemic, these schemes have continued to include filing fraudulent unemployment claims. As practitioners, we have also noticed an increase in stolen identities, whether it be by the interception of documents containing personal information or through online access.

As professionals who work with clients to implement best practices and detection techniques, we fall victim to fraud attempts as well. The most recent fraud attempts include continued false unemployment claims and theft of identities through mail interception.

 

Fraudulent Unemployment Claims

The filing of fraudulent unemployment claims is not a new fraud scheme. However, the repeated attempts at compromising employee data and filing of fraudulent claims in other states has increased.

Fraudsters have taken to heart the saying, ‘if at first you don’t succeed, try, try again.’ Some businesses have seen repeat attempts at fraudulent claims filed against the business using the same employees but citing different reasons for filing for unemployment, such as break in service or lack of work.

Further, claims are being filed for employees in different states. The fraudster is using an employee’s information to file in a state in which the employee does not live or work to gain access to unemployment benefits in the state where they live. It has become a vicious cycle.

“The most recent fraud attempts include continued false unemployment claims and theft of identities through mail interception.”

States have tightened controls and verifications to try to manage these fraudulent claims, but the tightening of controls comes with a cost. Employees who have been victims of fraudulent claims in the past may have a more challenging time filing for unemployment as their account has now been flagged. The ease of filing online for these people has now become complicated and time-consuming as they try to navigate the unemployment system.

The continued monitoring of a business unemployment account to prevent and detect fraudulent activity and responding to fraudulent claims can be time-consuming. If fraudulent claims are paid against an employer account, it can impact the employer’s experience rate and unemployment account if not identified quickly.

This is not a new area of fraud, but the methods that fraudsters use to gain access and apply is ever-changing.

 

Identify Theft

Fraudulent unemployment claims are an example of identity theft. It is believed that some of the personal information used in filing fraudulent unemployment claims has come from data breaches. However, creative methods of accessing personal information have now encompassed intercepting hard documents.

Another area of data interception, with which we have had personal experience, is through the mail. If a fraudster is not able to access personal information through electronic means, why not try the good old-fashioned way, through the U.S. Postal Service or another carrier?

Intercepting mail is a scheme that seems to be on the rise. In one such case of which we are aware, information was intercepted prior to arrival at its intended location. Between the time it was initially mailed and the time it finally arrived at its location, the sender’s identity was stolen, and a loan was opened in their name, unbeknownst to them. The fraudster intercepted tax documents, which had personal identifying information, and secured a fraudulent loan. Ultimately, the fraudster, realizing that the mail was in a tracked envelope, secured the package with significant amounts of tape and forwarded it to the final destination.

The Office of the Inspector General for the U.S. Postal Service is diligent in investigating suspected mail theft, from both internal and external sources. Because of its commitment to finding and detecting mail fraud, the office has devoted the Office of Investigations to handle complaints and fraud.

The impacts of identity theft for a business owner or an individual can be far-reaching. Significant impacts can include compromising credit and financial hardship, compromising legal relationships and documents, and compromising tax filings.

Perhaps one of the most significant impacts may be the feeling of violation, distrust, betrayal, or even embarrassment created by the theft of identity. The unwinding and unpacking of identity theft can be a time-consuming and emotional process for business owners and individuals.

 

Takeaways

What we know is that fraud schemes are changing faster than business owners, individuals, and technology can keep up. Whether the fraud scheme is a recurring scheme or a new and improved scheme, the importance of diligence, communication, and monitoring should not be discounted.

Communication with employees about fraudulent schemes involving unemployment and mail, along with continued monitoring, are best practices in keeping information safe and secure.

 

Julie Quink is managing partner with West Springfield-based Burkhart Pizzanelli; (413) 734-9040.

Estate Planning

State of Uncertainty

By Cheryl Fitzgerald

 

Over the past year, a number of words and phrases have worked themselves into the lexicon, and our everyday usage: pandemic, quarantine, super spreader, and social distancing all make that list. As does the three-word phrase working from home, which quickly morphed into an acronym — WFH.

Indeed, in March 2020, many businesses large and small required or encouraged their employees to work from home as a way to help stop the spread of the coronavirus. At the time, it clearly was intended to be a short-term measure. Nobody could have predicted that, a year later, some of the same employees continue to work from home, whether mandated by their employees or as a way of life now.

However, this has created unintended consequences for businesses and individuals. Employees working in a state other than the company’s home (i.e., their home and business are in different states) could potentially create a need for the business to file in that other state (known as nexus).

From a business perspective, some guidelines have been issued for businesses to follow. Some states have provided relief and have said the presence of an employee working in a state due to shelter-in-place restrictions will not create nexus for tax purposes in that state.

“Employees working in a state other than the company’s home (i.e., their home and business are in different states) could potentially create a need for the business to file in that other state (known as nexus).”

Some states provided a temporary safe harbor or waiver from state withholdings and tax liability for remote work in a different state during the pandemic. And still others have provided that they will not use someone’s relocation during the pandemic as the basis for exceeding the de minimis activity the business can have in the state without it becoming a taxable issue for them.

Massachusetts in particular has provided corporations tax relief in situations in which employees work remotely from Massachusetts due solely to the COVID-19 pandemic to minimize disruption for corporations doing business in Massachusetts. The Bay State has indicated it will not change the intent of whether or not an employee who has started to ‘work’ in Massachusetts because that is his or her home (i.e., a company situated in another state now has an employee physically working in the state of Massachusetts) is subject to Massachusetts corporate tax. These rules are intended to be in place for Massachusetts until 90 days after the state of emergency is lifted.

For employees that had normally worked in Massachusetts, but are now working at home in a different state, Massachusetts has stated that, since this is for pandemic-related circumstances, they will continue to be treated as performing the service in Massachusetts and subject to Massachusetts individual taxes. Most states (but not all) have adopted similar sourcing rules. Most of these rules were put in place for the year 2020. However, some states are still under the same rules and guidelines, and this will continue during 2021.

The intent for most states is to minimize any tax impact for both employees and employers if an employee’s work location has changed solely due to the COVID-19 pandemic.

However, one state has decided the Massachusetts provisions are unfair to its residents. Prior to the pandemic, New Hampshire’s southern border saw a steady stream of workers heading into Massachusetts on a normal workday. With the pandemic and the stay-at-home orders, many of these employees converted to working at their residence in New Hampshire, which does not have an individual income tax.

Therefore, with Massachusetts indicating that these wages were still going to be considered Massachusetts wages and therefore taxable, the governor of New Hampshire felt this was unfair to their residents and has filed a lawsuit in the U.S. Supreme Court over Massachusetts’ “unconstitutional tax grab.”

New Hampshire Gov. Chris Sununu has argued that “Massachusetts cannot balance its budget on the backs of our citizens and punish our workers for working from home to keep themselves, their families, and those around them safe.” This lawsuit was filed in October 2020. Stay tuned.

Remote working becomes even more complicated when employees telecommute in a different state from which they typically work, and this will begin to impact the employee’s eligibility for local leave (i.e., sick leave).

As the pandemic continues, and with some states having set ending dates for some of these relief provisions, employers may continue to have employees who work remotely, either by choice or convenience. The taxability of which state the wages should be taxed in will need to be revisited by employers and employees alike.

 

Cheryl Fitzgerald, CPA is a senior manager at Holyoke-based accounting firm Meyers Brothers Kalicka, P.C.; (413) 536-8510.

Health Care

The Next Step

By Mark Morris

 

Jack Jury

Jack Jury says today’s joint-replacement patients experience less pain and a shorter rehab than in the past.

As we age, it’s not unusual for our joints to become worn down from decades of use. For most people, their knees, hips, or shoulders will develop painful arthritis and need some kind of attention.

When a patient suffers from especially severe joint pain, doctors usually begin treatment by recommending physical therapy, as well as pain medications or an assistive device such as a cane or a walker. When these non-operative approaches work, they can provide relief and delay an eventual surgery.

However, “if the pain, function, and quality of life do not improve for the patient, that’s when we recommend joint-replacement surgery,” said Dr. Ben Snyder, an orthopedic surgeon at Cooley Dickinson Health Care.

Nearly 1 million Americans undergo joint-replacement surgery every year, with around 600,000 for knees and 300,000 for hips. According to Snyder, this safe and effective surgery is proliferating because, as people age, they want to remain active through their later years.

In the past, surgeries were often held off until patients were in their 70s because older-model replacement joints would not hold up for more than 10 or 15 years. “But improvements in joint-replacement techniques and technology have increased the longevity of joint-replacement surgery,” Snyder said. “Because of that, we’ve seen a big increase in patients who are 55 to 65 years old.”

A key to success for joint-replacement surgery involves getting patients out of bed and walking on the same day of surgery, Snyder noted. “We find that mobilizing patients early promotes faster recovery, less pain, and fewer complications.”

Andrea Noel-Doubleday, assistant director of Rehabilitation Services at Cooley Dickinson, has been a physical therapist for 25 years. In that time, she said, helping patients with their rehab has improved greatly because it has become a much less painful process for the patient.

Dr. Ben Snyder

Dr. Ben Snyder

“We find that mobilizing patients early promotes faster recovery, less pain, and fewer complications.”

“Joint-replacement surgeries have evolved and become so good that we just guide patients through their exercises,” she said. “For most patients, there isn’t the high level of pain in a rehab like there used to be.”

Less pain also translates to a shorter rehab process. Jack Jury, lead physical therapist at the Rehabilitation Hospital at Mercy Medical Center, said a full knee replacement for many patients is a day-stay surgery.

“They come in in the morning, have their knee replaced, work with us for couple sessions of physical therapy, and then go home the same day,” he explained.

While home exercises and outpatient rehabilitation remain essential, he noted, even they are taking less time. “A few years ago, it was not unusual for our patients to see us for 12 weeks of outpatient therapy. Now, four to five weeks is a long time to work with someone.”

 

Transition Game

Both Jury and Noel-Doubleday pointed out that rehabilitation hospitals play a key role in the healing process for patients who are not yet ready to move from the hospital directly to their home.

Those patients see people like Nick Rizas, inpatient therapy manager with Encompass Health Rehabilitation Hospital of Western Massachusetts. Rizas explained that patients are usually referred to Encompass because they have chronic conditions (such as obesity, diabetes, and active tobacco use) that make healing more challenging. He also works with patients when they decide to have both knees replaced at the same time.

“When a person is in pain because their knees are giving them trouble, getting both done means they only have to go through the process once,” he said, quickly adding that “this procedure would only happen after a discussion with the surgeon to determine that this is the best course of action.”

Andrea Noel-Doubleday speaks with a joint-replacement patient.

Andrea Noel-Doubleday speaks with a joint-replacement patient.

On occasion, physical therapy plays a role before surgery when doctors recommend patients for a program known as ‘prehab.’ Noel-Doubleday explained that prehab allows patients to increase their strength and become familiar with the exercises they will need to perform to properly heal after surgery.

“It can be hard to go through the exercises when you aren’t feeling great, but it’s worth it,” she said. “By being stronger before the surgery, patients can get back to their normal activity sooner.”

When Rizas does prehab work to help patients build strength in their leg or hip before surgery, he said, “it gives them a running head start on their rehab program.”

Healthy muscles around the joint play an important role in protecting it as well, he added, noting that the hips have a deep socket with lots of muscle surrounding them, while the shoulders have less muscle mass protecting them.

“By being stronger before the surgery, patients can get back to their normal activity sooner.”

“The shoulder socket is more like a golf ball on a tee; it’s much more delicate,” Rizas said. “We have to be more careful when treating a shoulder because the muscles surrounding it aren’t as big as in the hips and legs.”

If a patient needs prehab but has trouble walking, therapists now have the AlterG, an anti-gravity treadmill that supports a person’s weight so they can exercise and build their strength prior to surgery. Noel-Doubleday said the treadmill also helps after surgery.

“If a patient is having difficulty getting their normal walking pattern back, the anti-gravity treadmill helps them get more comfortable and confident with their walking and with their movements before their full body weight is on the joint,” she explained, noting that equipment like this was not available even 10 years ago.

 

 

Playing Catch-up

One year ago, when COVID-19 infection rates began to overwhelm hospitals, joint replacements, along with other elective surgeries, came to a halt. Elective surgeries have since resumed, and doctors continue to catch up with what Snyder described as “innumerable joint-replacement surgeries” that were put on hold due to the pandemic.

One sign that joint-replacement procedures are back in business, Jury noted, was the recent addition of two new orthopedic surgeons at Mercy Medical Center.

The joint-replacement rehab areas have all beefed up their screening process as well as implemented all the necessary safety protocols to continue to see patients, Noel-Doubleday said. “COVID changed our routine, but it hasn’t stopped us from doing our jobs. We might work with patients in a different space or alter things slightly, but overall, we’ve made the necessary adjustments.”

As the world starts to emerge from pandemic times, many people are concerned about the “COVID 15,” a popular expression for the weight gained as a result of less activity during a year of being stuck inside. Maintaining a proper weight provides many health benefits, and lessening the wear and tear on the joints is one of them. Physical therapists say it’s a simple matter of biomechanics: the more weight we carry, the more stress we put on our joints.

Snyder recently authored a whitepaper on treating knee arthritis and discussed the relationship between weight and our joints. In the data he cited, for every pound a person loses, the force on the knees is reduced by five to 10 pounds.

Physical therapist Steve Markey

Physical therapist Steve Markey works with a patient on the AlterG anti-gravity treadmill.

Jury said carrying too much weight over time can also throw off structural alignments in the body, which exacerbates the stress on the joints. “We haven’t yet seen the impact from recent weight gains during COVID, and it will probably be years from now until we do.”

When joint-replacement surgery is necessary, Noel-Doubleday makes it a goal to educate patients before the procedure so they know what is involved. Jury makes sure his patients understand what he termed as “a couple important things” to know about joint replacement.

“First, it’s not an easy rehab, by any means,” he said. “But if the patient puts in the effort at physical-therapy appointments and, more importantly, at home with their independent program, they will most likely have a successful outcome.”

He noted that the success rate based on standard outcomes is much better today than it was even five years ago. In turn, most joint-replacement rehab patients these days expect to resume their activities at high levels after surgery. “If you look at walking, the goal is more than comfortably getting around, it’s being able to take a three-mile walk for exercise every day like they’ve done in the past.”

Noel-Doubleday said identifying specific activities patients want to return to is a change from past rehabilitation practices.

“For example, many patients want to resume playing golf or tennis, so we structure the rehab to help them do that again,” she said. “It’s been interesting to see how rehab has evolved like this, and it’s a lot of fun to be a part of it.”

Construction Special Coverage

Building Momentum

The past year has been an unusual time for the construction industry — one marked by project postponements, soaring prices for materials, and the establishment of strict COVID safety protocols on job sites. But for most builders, it wasn’t a devastating year, and, in many cases, it led to a surprisingly promising 2021. After all, the need for projects to be completed hasn’t gone away, and the backlog is actually creating a surplus of projects to bid on. The aforementioned challenges still remain, contractors say, but the work rolls on.

Laurie and John Raymaakers

Laurie and John Raymaakers say there’s plenty of infrastructure work available — and that trend should continue in the coming years.

 

By Mark Morris

 

For Dan Bradbury, 2020 was “a year of pivoting and finding new ways to get the job done.”

As director of sales and marketing for Associated Builders, Bradbury saw a slowdown at this time last year as several projects that were scheduled to break ground were instead postponed indefinitely.

By including construction as an essential industry, Gov. Charlie Baker allowed job sites to stay open and keep workers employed while following pandemic protocols. While Bradbury appreciated the ability to keep projects moving, other slowdowns were out of his control.

“There are a lot of hurdles to get over in a large industrial or commercial project, and COVID hit the brakes on all of them,” he said, noting in particular the new challenges surrounding what in the past had been routine business with municipal governments.

“We already had some projects scheduled to start this spring, but, more importantly, we’re starting to fill our pipeline again with projects that will take us well into the fall of this year and potentially into 2022 as well.”

“Because municipalities had to move to fully remote meetings, they occurred less often, which made it difficult to get building permits, zoning-board approvals, and the other essential documents we need to start and finish a building project,” Bradbury said, adding that Associated has projects in the works in a number of different sectors. One example is a 30,000-square-foot building in Bloomfield, Conn., where a local chemical company will occupy part of the building and lease the remaining space.

His company’s experience isn’t unique. BusinessWest spoke with several area construction managers to discuss how their industry looks this spring compared to a year ago, when COVID-19 suddenly changed the world — and the main takeaway is one of optimism and promise.

A significant part of Houle Construction’s business involves interior renovations for medical facilities. Company President Tim Pelletier noted that, when COVID first struck, business came to a complete halt as medical professionals were dealing with rapidly increasing numbers of COVID patients. One year later, he’s optimistic about the increase in construction activity.

“It’s absolutely busier than last year,” he said. “We’re seeing more projects taking shape, especially with our hospital clients.” In the meantime, Pelletier has picked up renovation projects at organizations that offer hall rentals, such as the Masonic Temple in East Longmeadow.

“The temple has not been able to host gatherings for the past year, so they are using the downtime to make renovations for when they can open again,” Pelletier said, adding that it’s a way to take advantage of what everyone has gone through and find a positive side.

An aerial view of Worcester South Community High School

An aerial view of Worcester South Community High School, one of the many recent school projects undertaken by Fontaine Brothers.

Bradbury credits pent-up demand for the increase in projects his company has been taking on this year.

“As soon as the calendar page turned to 2021, our phones started ringing,” he said. “We already had some projects scheduled to start this spring, but, more importantly, we’re starting to fill our pipeline again with projects that will take us well into the fall of this year and potentially into 2022 as well.”

Dave Fontaine Jr., vice president of Fontaine Brothers, said his company has been fortunate to have several projects ongoing since before the pandemic hit. Many of his largest projects involve building schools, for which budgets are approved long before breaking ground, so funding for them was not affected by COVID concerns. Since the pandemic hit, Fontaine said some towns have delayed public funding approvals, but not as many as he had anticipated.

“In the last six to eight months, we’ve picked up more than $400 million in new work,” he noted. “Some of these projects are in pre-construction now and will start this summer.”

Among the projects scheduled to begin in June are the $75 million DeBerry-Homer School in Springfield and the $240 million Doherty Memorial High School in Worcester.

Infrastructure construction also experienced steady business last year. J.L. Raymaakers and Sons Construction specializes in installing water and sewer lines as well as site excavation for municipalities, airports, and private companies. After a busy 2019, co-owner John Raymaakers said 2020 was nearly a record year for his company, and he’s on pace to fill up the project list for 2021.

Associated Builders project in Bloomfield, Conn

In this Associated Builders project in Bloomfield, Conn., a local chemical company will occupy part of the building and lease the remaining space.

“It’s amazing the amount of infrastructure work that is out there for bid,” Raymaakers said, explaining that his company subscribes to a register that lists all the new public and private projects available for bid. Since the middle of last year, he has seen no slowdown in the volume of bidding opportunities. “Looking only at our category of construction, there were five to six new projects announced just last week.”

Raymaakers predicted bridge construction, another area of expertise for his company, will also see increased activity.

“In the next few years, I think we are going to see a lot of work on replacing aging bridges in New England,” he said, adding that this should happen even without a federal government infrastructure bill, citing two recent bridge-replacement projects his crews are working on in Stockbridge and Pittsfield. Still, he’s hopeful that some kind of infrastructure legislation passes, saying it would be “a huge boost to us and others in our industry.”

 

Help Wanted

While business activity is brisk for everyone BusinessWest spoke with, they’ve all faced recent challenges; some are unique to doing business in the COVID environment, and others are chronic problems made worse by the virus. The issue of having enough workers was a challenge on both fronts.

“We’ve definitely lost people from the workforce due to COVID concerns,” Fontaine said. “They might be taking care of a family member, or they might be in a group that has underlying health concerns.”

He added that managing COVID on the job site is also difficult. “Anytime someone tests positive for COVID, that individual and anyone in close contact with them has to go home and quarantine for the time period,” he explained. “That can result in a lot of labor disruption on a daily basis.”

COVID also exacerbated the long-running problem of fewer workers in skilled-trade and general-labor jobs. Raymaakers said finding help in construction is a constant challenge. Co-owner Laurie Raymaakers pointed out that heavy-equipment operators and construction laborers can make a good living.

“There’s a misconception that laborers aren’t paid well,” she said. “The pay and benefits at our company are pretty good; the reality is there are just fewer people who want to do this type of work.”

She added that it’s also misleading to suggest laborers are not skilled, pointing out that her company’s laborers are highly skilled at making sure pipes are situated properly and secured to withstand years of service.

“Our workers also put together fire hydrants, which require about 50 bolts that have to be tightened in a certain pattern. Hydrants are under constant water pressure, so if it’s not built correctly, parts of the hydrant will go flying in the air.”

As older craftsmen such as plumbers and electricians continue to retire, their ranks are not being filled by enough younger workers. With projects increasing, Bradbury said an already-competitive labor market gets squeezed even further.

Tim Pelletier, president of Houle Constrution

Tim Pelletier, president of Houle Constrution, at the Masonic Temple in East Longmeadow.

“Between the demand for commercial/industrial as well as residential, everyone in the trades is busy, and they can’t find enough workers,” Bradbury said. “On top of that, solar companies are hiring all the electricians they can find at a time when electricians were already in short supply.”

The biggest hurdle to doing business right now, according to Bradbury, involves managing enormous price increases for materials, in some cases rising by more than 100% compared to this time last year.

“Over a period of months, we’ve seen multiple price increases in steel and lumber products,” he said. “Those two create a trickle up that affects prices for every other building material.”

Bradbury noted that steel manufacturing has been affected by labor outages due to COVID, leading to product-supply shortages. He also pointed to increased demand for lumber, especially on the residential side, where housing starts are booming. In addition, his company and many others receive a great deal of lumber from Canada, where the U.S. still has tariffs in place on lumber.

Bradbury said COVID issues are not affecting project schedules because his firm will not start a job until it has a guarantee that materials are available. “We are also adding cost protections in our contracts as a way to guard against the constant increases in materials.”

It’s too early to determine what immediate impact the pandemic will have on building design, but Bradbury said clients from current and future projects have begun asking about air handling and filtration.

“For sure, air handling and using UV light to sanitize a space are areas where people have been putting more focus,” he said. “I think these requests will continue as there is an increased emphasis on clean air and other ways to keep facilities sanitized.”

At Worcester South Community High School, workers installed air-handling units that use bipolar ionization, or, as Fontaine described it, a system that cleans the air and removes many of the germs and bacteria from the building.

“The motivation to install this system was driven by COVID, but there are other benefits, too,” he said. “Systems like this provide a better environment for people with asthma and other health concerns.”

 

Spring of Hope

The arrival of spring and increased numbers of people receiving COVID vaccines gives all the construction managers we spoke to a sense of optimism about life and getting their projects done.

At press time, asphalt plants in the area had begun to open. Because the plants close for the winter, municipalities will not allow road construction because there is no access to repave the roads. So the plant openings are great news for companies like Raymaakers, which plans its water- and sewer-line projects around those openings.

Other managers look forward to a time when they do not have to socially distance their crews and wear masks all day.

“Masks are another nuisance to deal with,” Pelletier said. “If we can start to get distancing and masks behind us, it will speed things up on the job site.”

As part of planning for future business, Bradbury has begun to ask some fundamental questions about what lies beyond the horizon. “Where is the growth potential going to be as we come out of COVID, and which industries will still want to build and have the money to build?”

As he considers the types of industries that are prevalent in Western Mass. and Northern Conn., such as aerospace and manufacturing, he wonders if government spending will still drive those industries. He has also given some thought to the insurance industry.

“Typically, there has been a huge demand for office space for the insurance industry, and how they address that moving forward is a big question mark coming out of COVID.”

As the insurance industry reconsiders its needs, Bradbury added, there has been a sharp decline in demand for all office space. “We are definitely not building more office space anytime soon.”

But his and other firms are building — and that’s good news after a year of uncertainty and a pandemic that hasn’t yet gone away.

Modern Office

Flexible Thinking, Nimble Action

By Susan Robertson

To survive the pandemic, companies were forced to adapt very quickly to radically new circumstances. Even large organizations — where it’s typically difficult to shift directions quickly — managed to accomplish it. Leaders discovered that, when required, their organization could act much more quickly and nimbly than they normally do.

So, the obvious questions are: what was different? And how can you ‘hardwire’ this flexibility into your organization so it continues to be stronger in the future?

 

What Was Different?

All humans have a set of cognitive biases, which are mental shortcuts used for problem solving and decision making.

To be clear, cognitive biases are not individual or personal biases. They are a neuroscience phenomenon that all humans share. It’s also important to understand that they operate subconsciously; they affect your thinking in ways that you don’t realize.

You have two different thinking systems, commonly known as system 1 and system 2, sometimes referred to as thinking fast and thinking slow.

System 1 is the intuitive, quick, and easy thinking that we do most of the time. In fact, it accounts for about 98% of our thinking. It doesn’t require a lot of mental effort; we do it easily, quickly, and without having to think about the fact that we’re thinking.

System 2 thinking is deeper thinking, the kind that’s required for complex problem solving and decision making. This deeper thinking requires more effort and energy; it literally uses more calories. Since it’s less energy-efficient, our brain automatically and subconsciously defaults to the easier system-1 thinking whenever it can to save effort.

Cognitive biases result when our brain tries to stay in system-1 thinking, when perhaps it should be in system 2. The outcome is often sub-optimal solutions and/or poor decision making. But we don’t realize we have sub-optimized because all of this has happened subconsciously.

In typical circumstances, several of these cognitive biases conspire to make us perceive that continuing as we are — with only slower, incremental changes — seems like the best decision. It feels familiar, it feels lower risk … it just feels smarter. Choosing to do nothing different is, very often, simply the default. It frequently doesn’t even feel like we made a decision; instead, it feels like we were really smart for not making a potentially risky decision.

But during the pandemic, changing nothing, or changing very slowly, were simply not options. This particular situation was so unique that our brains didn’t have the choice to stay in short-cut system-1 thinking. System-2 thinking was required. Since we consciously realized we must change — quickly — our brains literally started working harder, in system 2, and the normal cognitive biases weren’t a factor.

 

How Can We Be More Nimble in the Future?

The key to maintaining flexible thinking and nimble behavior is to not allow our brains to fall into the trap of cognitive biases. Obviously, since these are intuitive and subconscious responses, this is not an easy task. But there are proven ways in which we can better manage our brains. Here are a few ways to start.

• Knock Out the Negativity Bias. This is the phenomenon in which negative experiences have a greater impact on your thoughts, feelings, and behaviors than positive experiences. So you are much more highly motivated to avoid the negative than you are to seek out positive. The way this manifests in your daily work is that you are much more prone to reject new ideas than to accept them, because rejecting ideas feels like you’re avoiding a potential negative.

Respond to “yes, but…” with “what if…?” This requires a dedicated and conscious mental effort, by everyone on the team, to monitor their own and the team’s response to new ideas. Every time “yes, but…” is uttered, the response needs to be, “what if we could solve for that?” This reframing of the problem into a question will trigger our brains to look for solutions, instead of instantly rejecting the idea.

• Short-circuit the Status-quo Bias. The status-quo bias is a subconscious preference for the current state of affairs. We use ‘current’ as a mental reference point, and any change from that is perceived as a loss. As a result, we frequently overestimate the risk of a change, and dramatically underestimate the risk of business as usual.

When weighing a choice of possible actions, be sure to overtly list “do nothing” as one of the choices, so you are forced to acknowledge it is a choice. Also include “risk” as one of the evaluation criteria, and force the team to list all the possible risks. Then comes the difficult part: remind the team that their subconscious brain is making them perceive the risks of doing nothing to be lower than the reality, so they should multiply the possibility of each of those risks.

• Curtail the Curse of Knowledge. In any subject where we have some expertise, we also have many subconscious assumptions about that subject. Under normal circumstances, this ‘curse of knowledge’ (these latent assumptions) limits our thinking and suppresses our ability to come up with radically new ideas.

Rely on advisors who don’t have the same curse of knowledge. In other words, seek out advice from people outside of your industry. When evaluating ideas or actions, these outsiders won’t have the same blinders that you have, so they will likely have a more clear-eyed view of the benefits and risks.

The bad news is that cognitive biases are always going to be a factor in our problem solving and decision making; they’re hardwired into us. The good news is that, with some dedicated and continuous mental effort, we can mitigate them and become nimbler in the face of change.

 

Susan Robertson empowers individuals, teams, and organizations to more nimbly adapt to change, by transforming thinking from “why we can’t” to “how might we?” She is a creative thinking expert with more than 20 years of experience coaching Fortune 500 companies. As an instructor on applied creativity at Harvard, she brings a scientific foundation to enhancing human creativity; www.susanrobertson.com

Community Spotlight

East Longmeadow Focuses on Improvements

By Mark Morris

From left, Michael Meunier, owner Kendall Knapik, and Orpheus Barrows from Pioneer Valley Arms.

From left, Michael Meunier, owner Kendall Knapik, and Orpheus Barrows from Pioneer Valley Arms.


When Mary McNally reflects on 2020, it’s with no small amount of gratitude for how well her town has weathered the pandemic up to this point.

“To state the obvious,” she said, “it’s been one heck of a year.”

As East Longmeadow’s town manager, she credits all the municipal staff, in particular the Health Department, for its efforts to advise and inform the public on COVID-19 matters, as well as the town’s emergency manager, Fire Chief Paul Morrissette.

“The pandemic gave people the chance to see how dedicated and committed municipal public workers are to the mission that is their vocation,” McNally said. “Their willingness to do what has to be done and go wherever they are needed is something people are aware of and appreciate. I certainly do.”

Though Town Hall has been closed since March 16 of last year, staffers have been able to meet the community’s demand for services through online meetings, e-mails, and phone calls.

“We had staff, including department heads, who met people in the parking lot of Town Hall if they needed access to a particular department for a document or other item,” she said. “It was like they were carhops at the old A&W.” Without committing to any specific timeline, she is hopeful Town Hall will reopen to the public in the next 90 to 120 days.

Though she has been the full-time town manager for only 16 months, McNally has been working on a master plan for East Longmeadow to better prioritize important projects. The town recently received a grant from the Pioneer Valley Planning Commission to hire a consultant to develop the plan. McNally said a recent Zoom session to plot out the vision of the master plan drew great participation from residents. Part of the grant requires the master plan to be completed by June, and she is confident about meeting that deadline.

“To state the obvious, it’s been one heck of a year.”

Back in December, the town council changed a zoning bylaw that has a direct impact on the site of the former Package Machinery. Once zoned only as industrial, the change allows for mixed use, which would allow residential as well as commercial buildings to locate there. McNally said the new zoning bylaw applies townwide.

“Previously, mixed-use zoning didn’t exist in East Longmeadow,” McNally said. “Because this zoning change applies to more than just the Package Machinery site, it opens the door for developments all over town.”

At this time, there are no formal proposals to develop the Package Machinery site, but past discussions have suggested construction of single-family homes, condominiums, apartments, and light-use business entities, she noted. “The idea would be to have a new walkable neighborhood near the bike trail and the center of town.”

 

Business Perspectives

While several businesses in East Longmeadow suffered from the pandemic, others experienced more demand for what they sell. Bobbi Hill is the fourth generation to work for W.B. Hill, a custom builder of oil trucks that has been incorporated since 1910 and located in East Longmeadow since 1965.

Hill’s title is manager, which she defines as running sales, marketing, parts, and human resources. The company primarily builds and maintains tank trucks, the kind that carry home heating oil and trailer tanks (known as ‘trailers’ or ‘tankers’) that connect to a truck cab, most often associated with hauling gasoline. Despite the world burning less petroleum during the pandemic, Hill said she saw only minor impact in a couple areas of business.

“The pandemic had a little impact on service work for tankers that needed repair,” she noted, quickly adding that COVID has not affected sales of new tank trucks, which have a backlog of orders. “If a customer walked in today to order a tank truck, I probably wouldn’t be able to deliver it until September.”

In the only consumer-facing part of the business, W.B. Hill is an official vehicle-inspection station. At the beginning of the pandemic, it shut down the consumer-vehicle business but continued with tanker inspections. “Pandemic or not, tankers need to be inspected,” she said. “They go through a lot of rigorous testing every year and cannot travel with an expired sticker.”

Though business is brisk right now and there is still plenty of demand to transport heating oil and gasoline, Hill has begun looking to the future.

“With electricity being pushed all over the country, I’m looking for us to become more of a parts business,” she said. By purchasing a building next door from Northeast Wholesale Lumber, she conceded that her “big dreams” of increasing the parts business is not happening right away because of high startup costs. Until then, Northeast continues to lease half the building.

“We are experiencing a bit of a boom in housing due in large part to the low interest rates.”

“We sell parts now, but I’d like to do more online and on a much larger scale,” she said. “There really isn’t anyone in New England who sells parts for these vehicles.”

Though a relatively new business in East Longmeadow, Pioneer Valley Arms (PVA) is another business that remained active during the pandemic. Owner Kendall Knapik, who opened the shop two years ago, had to shut down in the early days of the pandemic. A lawsuit by other gun stores claiming infringement of Second Amendment rights forced Gov. Charlie Baker to deem gun stores an essential business. When she reopened, Knapik’s already-successful shop saw a jump in sales.

“After the pandemic hit, our customer volume tripled,” she said. “We’ve increased our clientele tremendously, and we’re teaching many more safety classes.”

The combination of COVID-19, protests that took place in different parts of the country, and the presidential election all played a role in driving sales, she added. “Uncertainty and election years tend to drive sales more than a typical year.”

Knapik talked about a new wave of people coming in to protect themselves, their homes, and their loved ones. After 10 years in an industry she described as most often serving middle-aged male clients, Knapik opened her business to counter what she called the “usual gun-shop attitude.”

“It’s an attitude where shop owners and employees tend to be closed off to new clientele such as females,” she explained. “I wanted to have a shop where women and men would feel welcome and not afraid to come in.”

E. Longmeadow at a Glance

Year Incorporated: 1894
Population: 15,720
Area: 13.0 square miles
County: Hampden
Residential Tax Rate: $21.06
Commercial Tax Rate: $21.06
Median Household Income: $62,680
Median Family Income: $70,571
Type of Government: Town Council, Town Manager
Largest Employers: Lenox; Cartamundi; CareOne at Redstone; East Longmeadow Skilled Nursing and Rehabilitation
* Latest information available

Her strategy seems to be working, as female customers to the store have increased 30%. “I’ve done more background checks on gun sales for women in the past few weeks than ever before.”

Knapik made it clear that proper training and gun safety are the top priorities for PVA. She and her staff now hold safety classes every night of the week and, since the pandemic, have increased the number of classes during the day on Sunday.

“Our store draws many who are first-time buyers, so we get a lot of new people who just want to come in to learn about getting their gun license and what’s involved,” she said. “It’s something we definitely encourage.”

A potential gun owner must take a safety course in order to apply for a license-to-carry permit in Massachusetts.

“Some people are ready to pursue the process right away, while others need to mentally prepare themselves for it,” Knapik explained. “We’re just happy to be there to help them, whether they decide to pursue a license or not.”

 

Community Focus

Knapik credits her involvement in the East of the River Five Town Chamber of Commerce for helping to establish her business in town, and called joining the chamber “the best marketing decision we made.”

“Customers have really responded to the small shop and family-owned feel of PVA,” she said, adding that she and her staff are on a first-name basis with many of their customers.

While Knapik praised East Longmeadow as a welcoming place to do business, increasing numbers of people are finding it a good place to call home as well. McNally said 28 new houses and condominiums were completed in 2020, and an additional 19 homes and condos are currently under construction.

“We are experiencing a bit of a boom in housing due in large part to the low interest rates,” she said. Three developments — Bella Vista, Hidden Pond, and Fairway Lanes — have added 45 new building lots to the town.

Looking ahead, East Longmeadow continues to work with the Massachusetts School Building Assoc. to study whether the town needs to replace the 60-year-old high school with a new building or if the existing facility can be renovated to suit educational needs for the future. McNally sees the potential for a new high school as a key to keeping the community vital.

“If people have confidence in the educational system, it inspires them to be happy citizens who want to contribute to the betterment of the town.”

McNally concluded that, while many of the projects in town have not been completed, all are progressing. “We have several big projects that all require lots of time, attention, and planning. I’m pleased because we have a dedicated staff working on them full-time.”

Clearly, despite enduring “one heck of a year” marked by a worldwide pandemic, East Longmeadow is staying on track with important projects that promise to add economic vibrancy and quality of life.

Construction

Starts and Stops

Total construction starts fell 2% nationally in February to a seasonally adjusted annual rate of $797.3 billion, according to the latest report from Dodge Data & Analytics. Non-building construction starts posted a solid gain after rebounding from a weak January; however, residential and non-residential building starts declined, leading to a pullback in overall activity.

“With spring just around the corner, hope is building for a strong economic recovery fueled by the growing number of vaccinated Americans,” said Richard Branch, chief economist for Dodge Data & Analytics. “But the construction sector will be hard-pressed to take advantage of this resurgence as rapidly escalating materials prices and a supply overhang across many building sectors weighs on starts through the first half of the year.”

Non-building construction starts gained a robust 20% in February to a seasonally adjusted annual rate of $200.3 billion. The miscellaneous non-building sector (largely pipelines and site work) surged 76%, while environmental public works increased 26%, and highway and bridge starts moved 11% higher. By contrast, utility and gas plant starts lost 17% in February.

For the 12 months ending February 2021, total non-building starts were 13% lower than the 12 months ending February 2020. Highway and bridge starts were 4% higher on a 12-month rolling-sum basis, while environmental public works were up 1%. Miscellaneous non-building fell 26%, and utility and gas plant starts were down 37% for the 12 months ending February 2021.

The largest non-building projects to break ground in February were the $2.1 billion Line 3 Replacement Program, a 337-mile pipeline in Minnesota; the $1.2 billion Red River Water Supply Project in North Dakota, and the $950 million New England Clean Energy Connect Power Line in Maine.

Non-residential building starts fell 7% in February to a seasonally adjusted annual rate of $208.1 billion. Institutional starts dropped 8% during the month despite a strong pickup in healthcare. Warehouse starts fell back during the month following a robust January, offsetting gains in office and hotel starts, and dragging down the overall commercial sector by 8%.

For the 12 months ending February 2021, non-residential building starts dropped 28% compared to the 12 months ending February 2020. Commercial starts declined 30%, institutional starts were down 19%, and manufacturing starts slid 58% in the 12 months ending February 2021.

The largest non-residential building projects to break ground in February were Ohio State University’s $1.2 billion Wexner Inpatient Hospital Tower in Columbus; ApiJect Systems’ $785 million Gigafactory in Durham, N.C.; and Sterling EdgeCore’s $450 million data center in Sterling, Va.

Residential building starts slipped 7% in February to a seasonally adjusted annual rate of $388.9 billion. Both single-family and multi-family starts fell during the month, with each losing 7%.

For the 12 months ending February 2021, total residential starts were 4% higher than the 12 months ending February 2020. Single-family starts gained 12%, while multi-family starts were down 15% on a 12-month sum basis.

The largest multi-family structures to break ground in February were Bronx Point’s $349 million mixed-use development in the Bronx, N.Y.; the $215 million Broadway Block mixed-use building in Long Beach, Calif.; and the $200 million GoBroome mixed-use building in Manhattan, N.Y.

Regionally, February’s starts fell lower in the South Central and West regions but moved higher in the Midwest, Northeast, and South Atlantic Regions.

Earlier this month, Dodge Data & Analytics released its Dodge Momentum Index, which rose 7.1% in February. The Momentum Index is a monthly measure of the first (or initial) report for non-residential building projects in planning, which have been shown to lead construction spending for non-residential buildings by a full year. The institutional component of the Momentum Index jumped 26.3% during the month, while the commercial component was essentially flat.

February’s Momentum Index marked the highest levels in nearly three years as a result of a surge in large projects that entered planning. It remains to be seen if this level of activity, especially in the institutional sector, is sustainable given the tenuous economic recovery and rising material prices. Institutional planning projects in February were concentrated in large hospitals and labs, while commercial planning projects primarily included data centers, warehouses, and office projects. Compared to a year ago, the overall Momentum Index was up 9.2%; the commercial component was 15.2% higher, while the institutional component was down 3.3%.

Opinion

Opinion

By Sandra Doran

Work has always been a women’s issue. Whether we work or not, the types of jobs we do, how much we are paid, and how far we can advance, it’s all shaped by our experiences as women, and this, in turn, shapes the central mission at Bay Path University. Therefore, it has been hard to see how deeply the pandemic has thwarted working women. In January, the National Women’s Law Center calculated the percentage of women working at 57%, the lowest it has been since 1988.

As the conversation grows louder, and the issues more pressing, this is our moment to seize, for making changes that are long overdue. At Bay Path, we’re doubling down on our commitment to preparing women for the career world, but the pandemic has confirmed it’s high time that businesses, organizations, and policymakers get on board with preparing the career world for women. Here are a few places to start.

• Support mothers. Over the last 30 years, childcare costs have increased by 70%, while real median wages have increased by a scant 7%. The cost of childcare in the U.S. and the allegiance to traditional gender roles still forces women into the slow lane of career growth and pushes many to take the off-ramp. Taking time away from one’s career puts women at risk of re-entering the labor market at a lower entry point than when they left, a scenario that underlies our persistent wage gap. The experiences of mothers during the pandemic has led to renewed calls for subsidized childcare, something every other industrialized country in the world offers. At the same time, the nearly universal pivot to remote work arrangements should inspire us all to develop schedules and create resources that expand the flexibility we can offer.

• Expand access to degrees for more women. It’s never been more important for women to get their degrees. It still holds true that women with bachelor’s degrees will earn $630,000 more over the course of their careers than high-school graduates. Women with graduate degrees earn $1.1 million more. Most women who left the workforce exited the hospitality, health-services, and retail sectors, where the majority of jobs do not require a degree and the majority of workers don’t have one. Due to their disproportionate representation in these sectors, fewer black and Hispanic women are working now than any other demographic. Creating access to degrees and providing the support to help women complete them can have a transformational impact on the types of jobs women fill and the amount of money they earn.

• Put more women in charge of more companies. Today, there are actually fewer women in rising management roles than there were in 2019, even though having more women in leadership roles isn’t just good for women, it’s better for business. Although men and women start in roughly the same positions, by age 30 to 44, 36% of men become supervisors or managers, compared to 30% of women. By age 45 and older, 12% of men ascend to an executive-level role, while only 6% of women do. A Harvard Business School study found that having women represent 30% of corporate leadership leads to a 15% increase in profitability for a typical firm. Researchers attributed this to “increased skill diversity within top management,” which translates to an ability to encourage better employee performance and stronger recruitment, promotion, and retention of talent (the women who otherwise would have left due to gender discrimination).

• Shift the ways we define ‘women’s work’ and what it’s worth. In 2017, 64.2% of mothers were the primary or co-breadwinners for their families. Our jobs are central to supporting our families and ourselves, yet they are routinely undervalued and underpaid (see teachers, 76% women; social workers, 83% women; and healthcare workers, 85% women). Questions to consider: if more men entered these fields, as they did with computer programming, a skill once tied to women’s secretarial roles, would wages go up? If they did, would more men opt to enter these fields? This chicken-egg scenario inevitably leads to the same takeaway: these critical roles need higher pay to truly represent their value to our society.

We’re living in remarkable times, when we’re not just dreaming of change, we’re demanding it — for our daughters, sisters, friends, co-workers, and, obviously, our students. Women’s employment isn’t expected to return to pre-pandemic rates until 2024 (men will get there in 2023), and the road back can’t be paved only with good intentions. A recovery won’t do — what we really need is a reimagining.

Sandra Doran is president of Bay Path University.

Special Coverage Women in Businesss

Learning to Take Charge

By Mark Morris

Only one-third of all businesses in Western Mass. are owned by women, according to a recent survey. In the healthcare sector, one of the largest employers in the region, leadership positions are held by women 41% of the time — with outliers like one hospital where it’s only 16%.

These findings are from a 2019 study commissioned by the Women’s Fund of Western Massachusetts titled “Status of Women and Girls in Western Massachusetts.”

To address disparities like the ones in the survey, the Women’s Fund and Holyoke Community College (HCC) have teamed up on an eight-week training program this spring for women who want to enhance their leadership skills.

Titled “Women Leaning into Leadership: Empowering Your Voice,” the course begins March 25 and runs through May 13.

According to Michele Cabral, executive director of Professional Education and Corporate Learning at HCC, the idea for the course grew out of the Women’s Leadership Luncheon Series, hosted by the college.

Until COVID-19 forced it into a virtual meeting, the college hosted the luncheon every month for the past five years. With attendance limited to 28 attendees, four women leaders would each select a topic relevant to women and leadership, then break out the attendees into four groups to discuss their particular subject. The next month, the groups would rotate so they could discuss a different topic with a different leader. Areas of discussion have included dealing with different leadership styles, the role of communication, and conflict management when you’re the only woman in the room.

When COVID hit, Cabral said they pivoted to a remote video lunch and changed the format to having one person lead the discussion and opening it to anyone who wants to join via video. A recent conversation covered how to deal with changes brought on by the pandemic. Because some women wanted to discuss some of the topics in more depth, Cabral said, developing a course was a logical next step.

Michele Cabral

Michele Cabral

“These women want to get to know themselves better, to identify what skills they need to focus on and promote their strengths. They were looking for a more structured program to help guide them through that process.”

“These women want to get to know themselves better, to identify what skills they need to focus on and promote their strengths,” she explained. “They were looking for a more structured program to help guide them through that process.”

A few years back, Monica Borgatti attended the Women’s Leadership Luncheons at HCC. As chief operating officer for the Women’s Fund of Western Massachusetts, she especially liked the cohort-style of learning (a collaborative approach in which individuals advance together in an education program) that took place at the events.

“The cohort model works well in this type of learning situation because people start to feel comfortable with each other, and they are more willing to be vulnerable as they share and learn together,” she said.

The luncheon reminded her of a program the Women’s Fund used to run known as the Leadership Institute for Political and Public Impact (LIPPI). While it had some success, Borgatti and her colleagues thought the program suffered from trying to be all things to all women and fell short in that effort. After compiling feedback from women who had gone through LIPPI, the Women’s Fund put the program on hold.

“LIPPI grads gave the program its highest marks in the cohort learning approach,” she recalled. The graduates also cited networking opportunities and making connections as solid benefits from the program.

After wrapping up LIPPI, Borgatti explained, the Women’s Fund’s emphasis shifted from creating and running programs to identifying leadership programs it could adapt for this area, as well as support for existing programs.

“When I learned HCC was developing a more in-depth leadership program, I thought it was worth exploring to see if there might be a partnership opportunity for the Women’s Fund,” she said.

 

Engaged in Equity

The course is targeted to women in mid-career, especially those who are emerging as leaders in their careers and the community. As part of its partnership, the Women’s Fund is offering sponsorships of up to $650 to defray the $799 tuition cost.

“The Women’s Fund is contributing in such a meaningful way. With their sponsorships, HCC is able to bring this program to people who would not have access otherwise,” Cabral said, adding that many employers do not reimburse the cost of training, so these sponsorships make the course more accessible for women who struggle to pay for self-development.

“HCC provides the education, the Women’s Fund provides the sponsorship, and together, we bring our common mission out to the community,” she noted.

Borgatti said taking part in the course was an easy call because it allows her organization to reach women who are seeking personal and professional development. “We want to see more women in leadership positions across our region, so we’re proud to partner with HCC to help more women become effective leaders.”

While the goals of the Women’s Fund address gender equity and gender justice, Borgatti also made it clear that her organization also strives to improve racial equity and racial justice.

“We know that women are not in leadership roles as much as men, and there are even fewer women of color in leadership positions,” she said, noting that the HCC course is one way to support the current and future leaders of color in the community.

“HCC provides the education, the Women’s Fund provides the sponsorship, and together, we bring our common mission out to the community.”

Borgatti added that her organization became involved to make sure affordability would not prevent anyone from taking the course. “We want to encourage more women of color in programs like this, and we want to make sure it’s financially accessible for all women.”

Cabral noted several highlights of the course, such as assessing communication styles and techniques, as well as working with each woman to develop a professional roadmap to help her reach her potential. Each program participant will also receive 30 minutes of private, one-on-one coaching from Annie Shibata, owner of Growth Mindset Leadership and Communication Coaching in Cincinnati, who will coach each student via video link.

“Incorporating one-on-one coaching elevates the course to a higher level of really personalizing the experience for each individual,” Cabral said.

One of the main reasons the Women’s Fund got involved was to encourage more representation of women in leadership. Borgatti hopes women who take the course emerge more confident in their skills and abilities to step into all sorts of leadership roles.

“We want to see more women CEOs, more women chiefs of police, more women judges,” she said. “Unless we support women being able to access these opportunities, we’re not going to see real change.”

At the end of the day, Cabral said, she and Borgatti share a common mission: to elevate the skills of women who are willing to put in the work. “We want to make sure those skills are here in Western Mass., and they stay in Western Mass.”

Banking and Financial Services

Taking the Long View

By Mark Morris

Matt Landon and Jeff Liguori saw an opportunity for Napatree Capital to better serve Western Mass. out of its new location in Longmeadow.

In a co-working office space at the historic Brewer-Young mansion, Jeff Liguori and Matt Landon help people build their financial futures.

Liguori, founder and chief investment officer of Napatree Capital in Providence, R.I., relocated to Western Mass. in 2015 and began to sense increasing demand for his firm’s services in this area. In January, he hired longtime acquaintance and Western Mass. native Landon as a partner in the firm. Together, they discussed opening a local office, and on Feb. 1, Napatree Capital opened its five-person firm in the restored mansion in Longmeadow’s center.

While Napatree could have served clients here from Providence, Liguori and Landon both thought it was important to have a physical presence in Western Mass.

“It was serendipity that there was one opening left in the Brewer-Young mansion,” Landon said. “We felt this iconic and different building fit with our image, so we jumped on the opportunity to locate there.”

Liguori, who grew up in Westerly, R.I., named his firm after Napatree Point in Watch Hill.

“Our investment committee is skilled at finding temporarily undervalued, underloved, and underappreciated companies that are selling at a discount. But we feel they’ll get the recognition they deserve in the near- or medium-term horizon.”

“It’s a beautiful stretch of beach where I’ve spent many summers,” he said. “As the southwesternmost point of Rhode Island, it separates Block Island Sound from Long Island Sound, so it really splits Rhode Island from New York.”

Because he liked the symbolism of its location and the relative obscurity of the name, he sought copyrights for several variations of the Napatree name in anticipation of one day starting his own firm. “Very few people have heard of it; even many Rhode Islanders don’t know Napatree Point.”

Liguori explained that his firm specializes in two areas: working with private investors looking to reach long-term financial goals, and managing endowments for nonprofits, which he called a growing area of business.

The firm’s business philosophy starts with ‘value investments,’ which Liguori says has to do with how a stock measures up against its industry or sector. The firm has had success taking a contrarian approach by investing in companies that are currently under the radar and might be underpriced by the market.

“Our investment committee is skilled at finding temporarily undervalued, underloved, and underappreciated companies that are selling at a discount,” Landon explained. “But we feel they’ll get the recognition they deserve in the near- or medium-term horizon.”

Landon also made it clear that Napatree takes the long view toward investing. “We’re not traders; we are long-term owners of companies.”

All advisors at Napatree are fiduciaries, meaning they can only recommend investments that are in the client’s best interest. By contrast, financial advisors who are not fiduciaries are held to a much more lenient ‘suitability’ standard. For example, two index funds based on stocks listed in the Standard and Poor’s 500 may seem similar on the surface. If one fund charges high fees and the other low fees, they are technically both suitable investments. A fiduciary, however, is required to recommend the fund with the lower fee because it is better for the client. Landon pointed out that he enjoys sticking with a fiduciary approach.

“It makes doing business very simple when you operate from a fiduciary standard,” he explained. “If you do what’s in the client’s best interest all the time, it’s an easy path to follow, and everyone wins.”

 

Upward Projections

Liguori pointed out that growth in his business comes in two ways: investment performance and taking on new clients. When the world came to a halt last March, however, meeting with potential new clients became extremely difficult. As advisors and investors, Liguori and his colleagues listened to the concerns of panicked clients, while at the same time they continued to research and act on investment strategies.

“We are also business owners worried about our business,” Liguori said. “We saw assets evaporate, so that meant our fees went down 30%.” Digging in and working harder was a key to getting through the trying times, he added. “As the founder of the firm, and on a personal level, I couldn’t be more grateful for where we are now after what we went through last March.”

Landon added that the pandemic strengthened client relationships as communication became more important and frequent, especially for clients whose industries were hit hard by coronavirus. While there are clear challenges and roadblocks ahead, the market horizon looks further out and toward more recovery.

“We try to reinforce to our clients that better earnings and brighter days are ahead, along with being empathetic to where they are right now,” Landon said.

After a slowdown at the beginning of COVID, Napatree saw a big uptick in the fourth quarter of last year. Liguori said that set the table for projected 20% growth in 2021.

“The last 12 months have been similar to a full market cycle, something that usually takes place over a five-year time period,” he said. “Clients who were full-on panicked in the beginning and were able to stay invested are now reaping the rewards of their patience.”

He admitted that even clients who have stayed invested are still anxious about the future. Most concerns are ones that existed long before COVID-19. In addition to parents who worry about saving enough for their children’s college education, the number-one concern Landon hears involves retirement.

“About 80% to 90% of the people we talk to have not been trained in investing; they would rather be gardening or hiking. So, if we can help put them at ease and feel good about the path they are on, it’s enormously rewarding.”

“People often ask if they will have enough to retire comfortably and live with dignity,” he said, noting that, because people are living longer, financial planning for retirement now involves making sure people have money for up to three decades after they retire.

Recent findings prove the point. Data from the CDC shows the average life expectancy for everyone born in the U.S. to be 78.9 years, but when calculating life expectancy after reaching age 65, it’s a different story. According to 2018 findings from the Society of Actuaries, there’s a 50% chance that a 65-year-old male lives to age 87, and that a 65-year-old female lives to age 89. For couples at age 65, there is a 50% chance at least one of them will live to age 93, and a 25% chance one will live to 98.

Disruptive events, like pandemics, can create the kind of fear and anxiety in people that lead to bad decision making in their efforts to reach long-term savings goals such as college and retirement.

Liguori said behavioral investing, whether it’s driven by fear or greed, usually leads to dangerous outcomes. His firm looks to avoid the herd mentality that can happen during volatile markets and instead focus on the client’s long-term objectives. He noted the GameStop stock bubble as an example that may look good in the near term, but the usual outcome for a small investor in events like this is disaster. Napatree’s philosophy, Landon added, is the exact opposite of chasing bubbles.

“We want to buy compelling long-term businesses that are selling at a discount right now because we’ve researched the likelihood they will be going up, not down,” he explained, adding that, when Napatree recommends a company to a client, the firm also own it.

“When we believe in an investment, it’s where we are putting our own money as well,” he said. “We think it’s important to show that we invest in the same companies as our clients.”

Another part of Napatree’s business involves helping small and medium-sized companies manage their employee 401(k) programs. Landon said the firm works with a couple dozen businesses to make sure programs are designed well and priced fairly, and that employees feel confident about participating in the plan.

“About 80% to 90% of the people we talk to have not been trained in investing; they would rather be gardening or hiking,” he added. “So, if we can help put them at ease and feel good about the path they are on, it’s enormously rewarding.”

 

Bottom Line

Landon said he and his colleagues love to meet with people to dissect their financial situations, and if it leads to someone being a client, that’s even better.

“We’re excited to be here in Western Mass. to expand the Napatree footprint,” he told BusinessWest. “We look forward to helping a lot of people and doing good things in the community.”

Banking and Financial Services

Tax-loss Harvesting

By Gabe Jacobson

Tax-loss harvesting is the selling of stocks, ETFs, mutual funds, and other securities at a loss with the goal of reducing taxes on other short- and long-term capital gains.

Does It Apply to Me?

Minimizing taxes is an important goal for investors, and tax-loss harvesting is a useful strategy for reducing your total tax bill. If you sell stocks, exchange-traded funds (ETFs), or mutual funds for a gain this year in a taxable, non-retirement, investment account, you may want to utilize tax loss harvesting to reduce potential taxes on any capital gains generated by those sales.

Tax-loss harvesting applies to investments of all sizes, so whether you have $5,000 or $5 million in your portfolio, you can still benefit from tax-loss harvesting.

Full-service financial advisors usually perform tax-loss harvesting as a part of their service and will coordinate with your tax advisor, but robo-advisors are beginning to offer this service for additional fees. These fees may not make sense given your situation, so consult your tax advisor if you are uncertain. Even in a rising stock market, some individual stocks or sectors may decline in price, giving an opportunity for tax-loss harvesting, which can be done at the end of the year but may be more effective during periods of volatility throughout the year.

You may want to consult your tax advisor about tax-loss harvesting if you have a self-service brokerage account. Pay special attention to tax-loss harvesting if you bought and sold securities within the same year because your capital-gains tax will be much higher than if you held the investments for over one year.

How Does It Work?

Tax-loss harvesting is also known as tax-loss selling because it involves selling securities at a loss, generating capital losses. This seems counter-intuitive. After all, most people buy securities hoping that the price per share will increase over time, allowing them to earn capital gains when they sell. These capital gains, like all other sources of income, come with a tax bill attached.

“Tax-loss harvesting works because capital losses are subtracted from capital gains when you file your tax return, so you pay taxes only on the gains in excess of losses.”

Tax-loss harvesting works because capital losses are subtracted from capital gains when you file your tax return, so you pay taxes only on the gains in excess of losses. However, capital gains and losses are grouped into two buckets based on how long the investments were held for.

Capital gains on securities sold more than one year after the purchase date are considered long-term and are taxed at lower rates. In 2020, the long-term capital gains rates range from 0% to 20%, depending on income levels; most people will fall in the 15% range.

However, if securities are sold within a year of the purchase date, the gains are considered short-term and are taxed at the same rate as wages or business income, which in 2020 range from 10% to 37%. These two buckets cannot be mixed, so you cannot reduce your short-term capital gains by long-term capital losses or vice versa.

Sure, it’s nice to mitigate your tax liability, but wouldn’t you lose more money selling your investments for a loss than you save in taxes? Why not just wait for those prices to bounce back and sell for a gain, assuming you expect the investment’s price to eventually recover? The price may recover down the line, but the tax bill associated with any capital gains generated this year cannot be avoided unless a loss is generated in the same year.

The solution is purchasing a similar asset shortly after selling for a loss. This way, you ‘harvest’ the capital loss for tax purposes while making little actual change to your investment portfolio. The IRS instructs that you must wait at least 30 days before purchasing another asset that is “substantially identical” to the asset sold for a loss, but there are enough similar assets available to allow immediate reinvestment in most situations.

An Example to Clarify

Here is a hypothetical example using common investments: the S&P 500 large-company index and Russell 2000 small-company index tracking ETFs (the prices are fictionalized for ease of understanding, but the ETFs are real and can be purchased through most brokerages).

In this example, in your brokerage account, you purchased 10 shares of iShares Core S&P 500 ETF (IVV) on Jan. 1, 2021 for $100 per share, for a $1,000 total investment. On the same date, you also purchased 10 shares of the iShares Russell 2000 ETF (IWM) for $200 per share, or a $2,000 investment. By Nov. 1, 2021 the price of IVV (the large-company index) has doubled to $200 per share, and you decide to sell five of your 10 shares, generating $1,000 in short-term capital gains.

However, you do not want to pay income taxes on an additional $1,000 on top of your regular wages. You notice that the small company index IWM’s price has dropped to $100 per share, so you lost $1,000 on that investment. You do not want to sell at a loss, but then you realize that, if you sell all 10 shares of IWM, you can generate a short-term capital loss of $1,000 which will completely mitigate the short-term gains from your sale of five shares of IVV when you file your income tax return.

You sell all 10 shares of IMW, but you still want to invest in small-company stocks. You immediately purchase $1,000 worth of shares in iShares MSCI small-cap index fund SMLF with the cash received from the sale of IWM. This fund gives you similar exposure to the Russell 2000 small-company index fund (IWM) you just sold without tracking the same index, meaning the IRS will not consider the two funds “substantially identical,” so you can purchase it before the 30 days are up. At this point, you have effectively received $1,000 in capital gains without generating any taxable gains, and you have maintained your portfolio allocations.

Note that, if you had purchased IVV more than a year before you sold it on Nov. 1, 2021, the gain would be classified as long-term, so the short-term loss generated on the sale of IMW would not offset this gain. Speak to your tax advisor regarding capital-loss carry-forwards, as capital losses not used to offset gains in one year can be applied to future tax years.

 

Gabe Jacobson is an associate at the Holyoke-based accounting firm Meyers Brothers Kalicka, P.C.; (413) 536-8510.

Law

MREs and HCAs

By Mary-Lou Rup

Under Massachusetts’ recreational-marijuana statute, those seeking to operate a marijuana retail establishment (MRE) must obtain a license to operate from the Cannabis Control Commission (CCC). Municipalities exercise local control over MRE applicants through ordinances or bylaws setting ‘reasonable’ controls on the time, place, and manner of operations and limiting the number of MREs within their borders.

During the first step of the licensing process, MRE applicants must obtain approval from the municipality, and the municipality and applicant execute a host-community agreement (HCA), which sets forth the conditions under which the MRE can operate. During the second step, the CCC determines to which approved applicants it will issue licenses, which in part requires a one-page certification that the applicant and municipality have executed an HCA.

Municipalities may require that MREs pay a ‘community impact fee,’ statutorily capped at 3% of the MRE’s gross sales for five years, to cover a variety of actual costs to the municipality reasonably related to the MRE’s operations.

“An appeal now pending in the Supreme Judicial Court (SJC) may resolve issues related to the degree to which municipalities exercise control over which applicants move on to the second step.”

In HCAs, many municipalities require additional payments by the MREs, often based on an additional percentage of gross sales and/or charitable donations to entities selected by the municipality. These additional costs have, for the most part, gone unchallenged by MRE applicants anxious to obtain the HCA necessary in order to be licensed to operate.

An appeal now pending in the Supreme Judicial Court (SJC) may resolve issues related to the degree to which municipalities exercise control over which applicants move on to the second step. The case involves Mederi Inc., which sought to operate one of five MREs permitted by the city of Salem. Mederi received the necessary special permit and alleges it met all other requirements of the city’s application process. A city committee reviewed the applications before entering HCAs with four applicants; Mederi was not among them and sued. Dismissal of that suit lead to Mederi’s appeal.

Two arguments made by Mederi are of interest. Mederi challenges the city’s authority to select with which qualified applicants it would enter HCAs, effectively controlling those which the CCC could then consider for licensing. Mederi also argues that the city exceeded its lawful authority by, among other actions, imposing as a condition of its HCA fees in excess of the 3% community-impact fee. Specifically, the city required five annual payments of 1% of gross sales to a ‘traffic-enhancement fund’ and at least $25,000 in charitable contributions to local causes.

Mederi posits that allowing municipalities to utilize these ‘pay-to-play’ provisions and to pre-select which qualified applicants it will allow to advance to the CCC adversely impacts the statute’s provisions giving priority to economic-empowerment applicants — provisions intended to assist areas of disproportionate impact disadvantaged by high rates of criminal activity involving marijuana.

In opposition, the city argues that it could properly decide with which applicants to enter into HCAs. It asserts that the local-control step of the MRE-licensing process allows municipalities to weigh competing proposals and exercise discretion in choosing the most suitable applicants. The city argues that its selected applicants were the “strongest possible operators” based on experience in the marijuana industry and intent to operate in the “least impactful locations” in Salem.

The CCC filed an amicus brief in the case. Pointing to competing legislative mandates, it asserted that, while the statute does not authorize it to regulate or participate in the initial local-control portion of the licensing process, the statute also requires that it give MRE licensing priority to existent medical-marijuana treatment centers and economic-empowerment applicants.

It noted that municipalities’ exclusive control of the HCA process seemed to advantage more experienced and better-resourced applicants, leaving economic-empowerment applicants at a competitive disadvantage, and, in effect, controlled those whose license applications the CCC is able to consider. The CCC has recommended amendments to the statute, addressing, among other matters, this issue and the additional fees imposed in HCAs. Its recommendations are presently under consideration in the legislature.

Stay tuned. The SJC heard arguments on Feb. 3 and, under its usual 130-day timeline, may be expected to issue its decision by early summer.

 

Mary-Lou Rup served as associate justice of the Massachusetts Superior Court until her retirement in 2018, when she joined the litigation group of Bulkley Richardson as senior counsel.

Law

Knick-knack Knockouts

By Valerie Vignaux, Esq.

The most prolonged and venomous arguments I’ve witnessed in my estate-administration practice have not been over money. In my experience, the highest level of emotional warfare is reserved for tangible, personal property, or the ‘stuff’ that mom and dad, or grandma and grandpa, leave behind in the house.

The $7 porcelain ballerina that sat on the mantel for 50 years, the carbon-steel chef’s knife in the kitchen, costume jewelry, a crocheted Kleenex holder, photo albums, even the washing machine, if you can believe it — these are the objects that can send otherwise well-behaved, loving, and gentle family members to opposite corners of the boxing ring to steel themselves for a fight. And fight they do.

“Not me, and not my family,” we all say. But it can happen to the best of us, and the conflict has the potential to do serious damage to a family already grieving the loss of a loved one. Adult siblings revert to traits and behaviors not exhibited since ages 6 to 12. Beloved in-laws who were once an integral part of the family are now interlopers who deserve nothing. And only after mom is gone do we learn that she seems to have promised her cuckoo clock to all four of her children. (Pro tip: none of you should take the cuckoo clock. Your own families will thank you for letting that one go.)

How do we prevent such consternation at a time when we should be coming together in our shared sadness? A list. A simple, old-fashioned list. I call such a list a will memorandum, and Massachusetts General Laws recognizes such a “separate writing identifying [the] devise of certain types of tangible property.”

One of the most appealing aspects of the will memorandum is that this list can be updated, changed, thrown out, and begun anew at any time, without having to change the will itself. In fact, a properly written and executed last will and testament document typically provides that the author (the testator or testatrix) may leave such a memo, listing specific items for specific people.

“The most prolonged and venomous arguments I’ve witnessed in my estate-administration practice have not been over money.”

For any object of significant monetary value — jewelry, works of art, vehicles, and rare books are all such examples — I recommend providing for distribution directly in the will or trust document, as opposed to a separate memorandum. Similarly, a will memorandum is not an appropriate place to include gifts of money or real estate. But for all those personal belongings that have more emotional than dollar value, such a list is perfect.

Some of my clients have also placed notes on the backs or bottoms of objects around the house, stating who is to receive it upon the client’s death. This works, but I prefer a list that is dated and signed and kept with the client’s copy of his or her will. It is helpful, too, if I, as the client’s estate-planning attorney, have a copy in my file.

How does one start writing a will memorandum? Ask your family members what they want. Understandably, many people are not eager to have these conversations, but it is a gift to those you leave behind to prepare for your passing, and a gift to prevent discord in the family.

Want to achieve the next level of preparedness? Start giving possessions away before you die. If you know that your niece would enjoy your bamboo fishing pole, give it to her now so you can see her smile, hear her thank you, and forestall any arguments about it later. Further, giving away some of your possessions now will reduce the burden on those you leave behind to clean out your residence.

Take a look around your home. Is there decluttering that could be done now? (For almost all of us, the answer is assuredly yes). Start making a list of items that you can part with now, and ask your family and friends if they’re interested in any of them. By starting the process during your life, you are lessening the burden you might otherwise leave your loved ones.

‘But I’m only 40 (or 50 or 60),” you say. You’re not too young to start. Do yourself and your family members a favor and start making that list. Every one of us has at least a few things that would be meaningful to another. If you don’t have children, consider your siblings, nieces, nephews, and friends.

One last thing: although it can feel like tempting fate, please be assured that making a will memorandum (or having a will prepared, for that matter) will not cause your death. It will not court the agents of your demise. It will be an exercise of control over the uncontrollable. It will actually make you feel better, not worse. And it will make things markedly easier for those loved ones you leave behind.

 

Valerie Vignaux is an attorney with Bacon Wilson, P.C., and a member of the firm’s estate-planning and elder-law team. She assists clients with all manner of estate planning and administration, including probate, and provides representation for guardianship and conservatorship matters. She received the Partner in Care Award from Linda Manor in 2017 and served on the board of directors for Highland Valley Elder Services; (413) 584-1287; [email protected]

Law

Non-competition Agreements

By Timothy M. Netkovick, Esq.

Everyone is aware of the honeymoon phase of the employment relationship — that time period when the employee begins work and both parties are filled with high expectations for the relationship.

Possibly, prior to beginning the relationship, an employer has the employee sign a non-competition agreement as a sort of prenuptial agreement, hoping to never have to use it. However, fast-forward a few years, the employment relationship goes sour, and the employee leaves the company. Not only does the employee leave the company, but they also begin soliciting clients, or maybe even fellow employees, to join them at their new place of employment.

As employers are aware, Massachusetts enacted the Noncompetition Agreement Act in 2018. Prior to the act, there was little restriction on the contents of a non-competition agreement other than what terms would be enforced by a court in the event of a dispute. That changed with the provisions of the act. Now, in the scenario above, if the employer sought to enforce the non-competition agreement, it would need to pay the former employee not to work during the competition period.

This is because the act mandates that, to be enforceable, a non-competition agreement must contain a ‘garden-leave clause,’ defined as 50% of the employee’s highest annualized salary within the two years preceding termination.

“While the Noncompetition Agreement Act requires employers to pay former employees not to work, there may be other options available to employers.”

Employers therefore must answer the question: what do I really want with a non-competition agreement? Is it to stop the former employee from working? Or is the goal to maintain the status of my business? If the goal is to maintain the status of the business, employers may be able to utilize non-solicitation and non-disclosure agreements, which can protect the former employer’s interests while also allowing the former employee to work.

Both such agreements are excluded from the definition of ‘non-competition agreement’ by the act, meaning they do not need to include garden-leave clauses.

A non-solicitation agreement does not prohibit a former employee from working for a competitor when the employment relationship ends. Instead, it serves to prohibit the former employee from soliciting clients and other employees of the former employer to join them at their new place of employment. A non-solicitation agreement can therefore be an effective tool in preserving the current status of the business by prohibiting a former employee from taking clients and other employees with them to their new place of employment.

A non-disclosure agreement also does not prohibit a former employee from working for a competitor when the employment relationship ends. Nor does it prohibit the former employee from soliciting clients and other employees from joining them at their new place of employment. Instead, it serves to prohibit the former employee from disclosing any confidential information from the former employer. The confidential information protected could be a trade secret or other highly sensitive material.

In short, while the Noncompetition Agreement Act requires employers to pay former employees not to work, there may be other options available to employers. It is therefore wise to consult with employment counsel to review your potential options to protect your business interests after the employment relationship has ended. u

 

Timothy M. Netkovick, Esq. is a litigation attorney who specializes in labor and employment-law matters at the Royal Law Firm LLP, a woman-owned, women-managed corporate law firm certified as a women’s business enterprise with the Massachusetts Supplier Diversity Office, the National Assoc. of Minority and Women Owned Law Firms, and the Women’s Business Enterprise National Council; (413) 586-2288; [email protected]

Employment

Don We Not Our BLM Apparel

By Tim Murphy

Americans across the country have been actively engaging in the Black Lives Matter (BLM) social-justice movement, which advocates against incidents of racially motivated violence police. Often, BLM supporters will demonstrate their commitment to the movement not only by protesting, but also by wearing apparel, such as T-shirts and face coverings, with BLM messaging.

But what happens when supporters wear this clothing to work? Can employers enforce a dress code requiring employees to refrain from wearing politically motivated clothing? Yes, a recent Massachusetts federal court determined. Even so, is it worth the negative publicity and PR fallout? You be the judge.

The case involved the well-known Whole Foods grocery store, and a group of nearly 30 Whole Foods’ employees who claimed to be negatively impacted by the store’s “neutral” dress-code policy, which prohibited employees from wearing clothing with visible slogans, messages, logos, and/or advertising that are not Whole Foods-related.

“Can employers enforce a dress code requiring employees to refrain from wearing politically motivated clothing? Yes.”

Beginning around June 2020, in the wake of George Floyd’s killing and subsequent nationwide protests, Whole Foods employees began wearing masks and other attire with BLM messaging to work. Some employees were disciplined for violating the dress-neutral dress-code policy, while others were sent home without pay and directed to change clothing. Several employees quit, and others kept wearing BLM clothing to protest the store’s actions.

Then, a group of 27 employees filed a lawsuit against Whole Foods, accusing the store of racial discrimination. They claimed Whole Foods was selectively enforcing its dress code banning “visible slogans, messages, logos, and/or advertising” against black employees.

Last month, a federal District Court judge dismissed the race-discrimination claims. The court was not convinced that Whole Foods was enforcing the policy based on race-related reasons. Instead, it was enforcing a neutral dress-code policy with no consideration to race. The court noted that, “at worst, they were selectively enforcing a dress code to suppress certain speech in the workplace.” The judge went on to state that, “however unappealing that might be, it is not conduct made unlawful” by anti-discrimination laws.

On its face, this decision makes sense. Generally speaking, an employer can lawfully implement and enforce a dress code, as long as it is applied equally to all employees. This is particularly important when violations of the dress code negatively affect productivity or lead to employee disputes. As far as political speech is concerned, the First Amendment provides no protection for employees unless they work for the government, because the First Amendment applies only to governmental restrictions on speech.

Additionally, in Massachusetts, there are no state laws or protections for speech in a private workplace. It also appears there was no evidence in this case supporting the argument that Whole Foods was selectively enforcing the dress-code policy against black employees.

Given the current political climate, employers may be left wondering whether Whole Foods and other retail employers are making the right move by enforcing dress-code policies in a way that restricts political and socially progressive speech. Certainly, there are arguments to be made that these policies are geared toward improving customer relations and eliminating politically charged disputes between workers and customers. Last summer, much news was made about a customer in Target berating an employee wearing BLM attire with questions about whether “all lives matter.”

The same can be said for employee relations. It is not hard to envision heated disputes around the water cooler over clothing that bears political or social-justice messages.

That said, this case has generated a lot of publicity for Whole Foods. And they are not alone. Starbucks had a similar dress-code policy that prohibited employees from wearing BLM attire and other clothing bearing political and social messaging. After protests and public outcry, Starbucks reversed its position and began allowing employee to wear T-shirts or pins supporting the Black Lives Matter movement.

Businesses need to pay careful attention to this issue. While the adoption of strict, ‘neutral’ dress codes appears legal, there could be unintended consequences, including irreversible harm to employee morale and negative public-relations nightmares.

 

Tim Murphy is an attorney with the Springfield-based firm Skoler Abbott & Presser, specializing in labor relations, union campaigns, collective bargaining and arbitration, employment litigation, and employment counseling; (413) 737-4753.

Women in Businesss

Progress Report

By Janine Fondon

On March 8 (International Women’s Day), the 2021 On the Move Forum to Advance Women, presented by Bay Path University, Springfield Museums, and a host of local organizations, virtually hosted some 200 women of all backgrounds from Western Mass. and beyond. Through conversations and speakers, women voiced their hopes and elevated their concerns to support the future success of women in leadership at all levels.

Speakers noted there is much work to be done to change the trajectory of women in companies and organizations, given that women still operate in a world where they are paid less than men. Also, women have limited leadership opportunities in the C-suite and have experienced workplace challenges in the face of the COVID-19 crisis. Also, black women and Latinas still make less than anyone in the workforce, and their opportunities for promotions are certainly limited. Where do we go from here?

The forum theme, “Women in Leadership: This Is What Change Looks Like — Past, Present, and Future,” offered attendees an inter-generational, cross-cultural, gender-inclusive, and history-infused conversation focused on advancing women, led by moderator Nikai Fondon.

The event presented voices and content that showed what change could look like — young, diverse, professional women on the move to create a new world; experienced leaders of all backgrounds who share their expertise; and college-aged women exploring new skills. Now in its fifth year, the event has engaged more than 1,000 women in community conversations and presentations on women’s history, empowerment, and advancement.

“The numbers also show us that change needs to happen to build more inclusive workplaces at all levels and in all industries. We must keep watch that our colleges and universities understand the magnitude of not only recruitment and retention, but belonging and mentoring.”

This year’s event aligned with the priority theme of the 65th session of the United Nations Commission on the Status of Women, “Women in Leadership: Achieving an Equal Future in a COVID-19 World.” According to Catalyst, “in 2020, women of color represented only 18% of entry-level positions, and few advanced to leadership positions. While white women held almost one-third (32.8%) of total management positions in the U.S. in 2020, Asian women (2.2%), black women (4.1%), and Hispanic women (4.5%) held a much smaller share.”

During the forum, the speakers and participants during the conversations voiced the sentiments expressed in these statistics. Most women still face obstacles in moving up the ladder at work. These statistics remind us that young women professionals who are rising to new opportunities in industry may have to pick up the path of experienced women today who still fight these trends after more than 20 years.

The numbers also show us that change needs to happen to build more inclusive workplaces at all levels and in all industries. We must keep watch that our colleges and universities understand the magnitude of not only recruitment and retention, but belonging and mentoring.

Also, as black women, Latinas, and women of color climb the ladder of success, they find that every step along the way may not come with the support they need or expect. A study conducted by Lean In and SurveyMonkey finds that, although more than 80% of white employees view themselves as allies to women of color at work, just 45% of black women and 55% of Latinas say they have strong allies in the workplace. There is more work to be done to build relationships that drive trust and transformation in the workplace, and more conversations need to confirm informal and formal sources of support.

 

Diversity, Equity, and Inclusion

To help make a change in the workplace, educational institutions, companies, and organizations continue to underscore the importance of diversity, equity, and inclusion. While these efforts allow for some change, we need strategic approaches to systemic racism and inequities that address issues for companies and individuals. Many young professionals, consumers, and communities are at the forefront of social justice, so shifts in social responsibility, outreach, and accountability could drive change on many levels.

Bay Path President Sandra Doran noted in her speech that she has been committed to the advancement of women and the power of education. “I embrace these beliefs because I come from a family of educators and strong women. I have witnessed first-hand the power of higher education for women. My grandmother attended Barnard, a women’s college, and my mother returned to school to earn her degree at a women’s college as an adult learner. With such personal role models, I felt called to be the president of Bay Path.”

However, noting the effects of COVID-19, she noted that, “by now, we all know the burden of the pandemic fell harder on women than on men. Women make up the majority of front-line workers in deeply affected industries like retail, food service, hospitality, and healthcare, and also picked up a disproportionate share of the additional loads of schoolwork, housework, and elderly care. Black women have faced the highest rate of unemployment among women at 8.9%, followed by Latinx women at 8.5%. This pandemic has uncovered the fragility of our systems, from healthcare to daycare to education, and it is our calling, women — and men of substance — to create change. And the pipeline of women in leadership positions has shrunk.”

“As we move past International Women’s Day and Women’s History Month, there must be even more commitment to revisiting practices in workplaces, classrooms, boardrooms, meeting places, and Zoom rooms to deliver equity, belonging, and dismantling ‘isms.’”

Doran also referenced an IBM study that “noted how women on corporate boards and in C-suites around the world have made no progress since 2019, when IBM did its first study on the subject.”

Another report, the 2020 Women in the Workplace study, conducted in partnership with Lean In and McKinsey, tracked the progress of women in corporate America. The data set reflects contributions from 317 companies that participated in the study and more than 40,000 people. According to the report, “the boundaries between work and home have blurred, and women, in particular, have been negatively impacted.”

In the study, women of color were noted as particularly impacted by COVID. “Women — especially women of color — are more likely to have been laid off or furloughed during the COVID-19 crisis, stalling their careers and jeopardizing their financial security. Meanwhile, black women already faced more barriers to advancement than most other employees. This is an emergency for corporate America. Companies risk losing women in leadership — and future women leaders — and unwinding years of painstaking progress toward gender diversity.”

 

Adverse Impact on Black Women and Latinas

While many black women and Latinas have made strides and found success in corporations and organizations, far too many remain underutilized, left behind, not included, and overlooked for opportunities. The numbers document their trajectory in a world where, in most cases, they are paid less than everyone else. Also, according to a report by CNBC, “employment for black women is 9.7% lower than it was in February 2020. Employment for white men, white women, and black men is down 5%, 5.4%, and 5.9%, respectively.”

A report by Lean In also confirms the experiences of black women in the workplace, noting that black women are significantly underrepresented in leadership roles, much less likely to be promoted to manager (and their representation dwindles from there), more likely to see their successes discounted, and less likely to get the support and access they need to advance. In addition, black women face more day-to-day discrimination at work. They want to lead — and they are motivated to improve their workplaces — but often find themselves unfairly penalized for being ambitious.

These findings should cause us all to pause and revisit our workplace policies, practices, and procedures. While not every black woman may have these experiences, other personal scenarios that they face result in negative trends. Most of all, these findings should prompt us to think about how everyone is treated in the workplace and how we treat each other. Most of all, we should consider how we can understand what others feel and find ways to communicate. If we were all treating each other as ourselves, we would not have these trends.

 

LGBTQIA+ Equality

While many communities and individuals experience an uncertain landscape in the workplace, we must continue to stay vigilant about trends that impact inclusion. For LGBTQIA+ (lesbian, gay, bisexual, pansexual, transgender, genderqueer, queer, intersex, agender, asexual, and other queer-identifying) communities, the journey to equality continues to “ebb and flow,” as Kathleen Martin of Springfield College and her wife, Andrea Hickson Martin of Bay Path University, noted:

“There is no doubt that there have been tremendous strides over the past decade for LGBTQIA+ equality. In 2012, the Obama administration supported marriage equality. In 2015, in the Supreme Court of the United States case Obergefell v. Hodges, marriage equality was made federal law, paving the way for our marriage in 2017. In 2019, Congress approved a comprehensive LGBTQIA+ civil-rights bill, providing non-discrimination protections for the LGBTQIA+ community in employment, housing, public spaces, education, jury service, credit, and federal funding. During the Trump administration, however, LGBTQIA+ rights were rolled back through a ban on transgender military service, the appointment of anti-LGBTQIA+ judges at various levels of the judicial system, the rolling back of the Obama-era Civil Rights Act protecting transgender and non-binary workers from employment discrimination, and the rescinding of Title IX rules requiring schools, including colleges and universities, to address sexual harassment, including sexual violence.

“As with everything in life, there is a constant ebb and flow,” Martin and Hickson continued. “On the first day of the Biden-Harris administration, President Biden signed an executive order preventing and combating discrimination on the basis of gender identity or sexual orientation, reinstating the LGBTQIA+ protections the Trump administration removed. More recently, the administration has directed the Department of Education to ‘review all of its existing regulations, orders, guidance, and policies to ensure consistency with the Biden-Harris administration’s policy that students be guaranteed education free from sexual violence.’ This includes an evaluation of the Title IX burden of proof issued under the previous administration.”

As stated, the ebb and flow of policy continue to take us away from setting a more consistent, inclusive world and workplace where all people can succeed.

As we move past International Women’s Day and Women’s History Month, there must be even more commitment to revisiting practices in workplaces, classrooms, boardrooms, meeting places, and Zoom rooms to deliver equity, belonging, and dismantling ‘isms.’ Also, we must begin to employ new ways for engaging, recognizing, and retaining black women, Latinas, and women of color who are still hidden in plain view.

 

Janine Fondon is a writer, speaker, assistant professor, and chair of Undergraduate Communications at Bay Path University. She is a frequent contributor to publications and media outlets on the topics of social justice, women’s history, and diversity, equity, and inclusion. She recently curated and produced an exhibit and series of public events at Springfield Museums, called “Voices of Resilience: The Intersection of Women on the Move.” She was named a 2020 Difference Maker by BusinessWest, a 2020 Pynchon Award winner, and one of the top African-American female professors in 2018 by the African American Female Professors Assoc.

Women in Businesss

Pink Slip

By Joanne Hilferty, Dan Kenary, and Brooke Thomson

In 2020, the same year a record number of women were elected to Congress and the first woman was elected vice president, COVID-19 had a devastating and potentially permanent impact on women in the workforce.

The percentage of women participating in the U.S. labor market in October 2020 was the lowest since 1988, and of the 9.8 million jobs that have not yet returned, 55% belong to women. In one year, COVID-19 wiped out a generation of progress and put the precariousness of being a woman in the modern American workplace into stark perspective.

Before the pandemic, women in Massachusetts were participating in the workforce at increasing rates, surpassing the national rate by 2019. COVID-19 brought them back to where they were at the end of the Great Recession in 2009.

More than 40% of female employees in Massachusetts work in education, healthcare, and social assistance, sectors that have been particularly hard hit by the economic downturn. Add the lack of quality childcare options brought about by the closure of schools and early-education programs, and you have a perfect storm forcing women to face gut-wrenching choices.

“In one year, COVID-19 wiped out a generation of progress and put the precariousness of being a woman in the modern American workplace into stark perspective.”

According to the U.S. Bureau of Labor Statistics, in September 2020, when schools typically reopen, a staggering 69% of women said the pandemic was keeping them from returning to work for reasons other than downsizing or business closure. In a survey conducted by the Associated Industries of Massachusetts (AIM) last fall, 67% of employers listed lack of childcare as a primary concern for their workforces.

Fortunately, organizations in Massachusetts are taking a leadership role in addressing the ongoing challenges facing women in the workforce. The Boston Women’s Workforce Council, the Commonwealth Institute, and the newly formed Massachusetts Business Coalition for Early Childhood Education are focused on advancing important changes, such as pay and representation equity. Even before the pandemic, women on average made about 81 cents for every dollar earned by their male counterparts.

Women and men should have the same options to pursue a career and raise a family, but the pandemic has laid bare the reality that women are expected to take greater responsibility for their families without sufficient support.

Ensuring that jobs traditionally filled by women have more extensive protections and finding a path toward more balanced representation of women in industries like information technology, transportation, and construction — fields where female representation is still limited — are also critical steps to achieve greater balance in the long term. However, immediate action is needed to ensure progress made by women does not erode further.

That is why AIM is calling on employers to make a commitment now to review their practices and policies and make immediate, substantive adjustments to mitigate the impact of COVID-19 on women and other caregivers in the workforce. Specific recommendations include:

• Committing to providing pay increases and advancement steps to women caregivers on schedule rather than penalizing those who have been on leave or working limited hours;

• Extending the time workers can be on leave to coincide with the duration of the pandemic;

• Giving hiring preference to former workers, if their experience and skills allow, who were required to leave the workplace due to family demands;

• Extending the time that returning workers can bridge tenure for benefits and other considerations to coincide with the full duration of the pandemic;

• Listening to individual employees about their specific needs and expectations and not making assumptions about what each woman or caregiver can or cannot do; and

• Instituting practices that reduce conflict with remote schooling, such as not holding meetings before 9 a.m. or at lunch, when children need assistance.

These steps alone will not fully offset the impact of the pandemic on women; they will, however, demonstrate the business community’s commitment to supporting the Commonwealth’s skilled female labor force. Massachusetts cannot afford to go back to business as usual as the light begins to shine at the end of the COVID-19 tunnel, especially when it comes to how businesses and public policy treat working women.

The pandemic has presented an unprecedented responsibility for the Commonwealth and the nation to see decreasing numbers of female workforce participation for what they are — gaps in the system allowing available and accessible talent to fall straight through. Failure to act on them now will have long-term, devastating impacts on the Massachusetts economy.

Joanne Hilferty is board chair at Associated Industries of Massachusetts (AIM) and president and CEO of Morgan Memorial Goodwill Industries. Dan Kenary is immediate past chair of the AIM board and CEO and co-founder of Mass Bay Brewing Co. Brooke Thomson is executive vice president of Government Affairs at AIM. This article first appeared as an op-ed in the Boston Globe.

 

Home Improvement Special Coverage

Backyard Experience

 

By Mark Morris

On a Thursday in February while snow fell on the region, Bob Schwein was answering a steady stream of phone calls at Drewnowski Pools.

Sure, some calls were from people who use their spas year-round, but many more inquiries were to schedule swimming-pool openings.

“Swimming-pool owners know that if they want to schedule a pool opening for Memorial Day, when thousands of other people want to open their pools, they need to schedule now,” said Schwein, sales manager for Drewnowski.

Early spring is typically when he receives calls to replace vinyl pool liners and to repair or renovate pools made from gunite, a concrete product used for many inground pools. “Repairs to gunite pools can take weeks, and people don’t want to interrupt the middle of their swimming season, so we usually schedule these early in the year.”

With his business growing over the last five years, Schwein said backyard pools are not what they used to be, particularly inground pools (see photo above).

“It used to be a rectangle with a three-foot concrete walk around the pool and a fence surrounding it by itself in the yard,” he noted. “Now, the pool is part of an entire backyard experience.”

That trend — toward creating an experience right outside the back door — is one that many different types of outdoor-improvement contractors can attest to, particularly during the era of COVID-19. BusinessWest spoke with several who said people are spending more money on their homes simply because they are spending more time at home.

The oft-heard story is that people were encouraged to only go out when necessary, and those who were fortunate enough to work from home during this time have been able to save some money, while also becoming more acutely aware of repairs and renovations they may have been putting off. As a result, many contractors reported their most successful year of business in 2020.

As many of the pandemic restrictions continue, people are not sure how long they will continue to work and attend school from home. It reminds Brian Rudd, owner of Vista Home Improvement, of the uncertainty that emerged during a different historic time.

“After 9/11, we saw people start to nest, and they began to see their home as their kingdom,” he said. “Since the pandemic, the desire to nest at home has happened to an even larger degree.”

“Right now, people are addressing the aesthetics of their houses because they are home more and able to address these things now.”

And they’ve been increasingly looking outside the home, not just inside. After a record year in 2020, Rudd reported that even more customers want new siding and new windows. “Right now, people are addressing the aesthetics of their houses because they are home more and able to address these things now.”

It’s not unusual for customers to call Dave Graziano, landscape project manager for Graziano Gardens, to replace old, overgrown plantings with new ones. Last year was different because, along with replacing old plantings, customers wanted to make other improvements to their property.

“Whether it was adding a big patio or simply hanging flower baskets, people wanted to create more outdoor living space, no matter how large or small their yard might be,” he said.

Brian Campedelli, president of Pioneer Landscaping, said his business doubled in 2020 because people decided to invest in their homes rather than vacations. “The money they would have spent on vacation instead went into their backyards, where we helped them create an outdoor entertainment area.”

Both Graziano and Campedelli noted that firepits have become one of the most popular additions to the backyard.

“While we build a lot of circular firepits, people are getting creative and asking us for square or triangular pits to match the seating they have around it,” Campedelli said.

A worker with Pioneer Landscaping places patio stones.

A worker with Pioneer Landscaping places patio stones.

Once considered only for warmer climates, outdoor kitchens are also a growing part of his business, with many designs incorporating a pizza oven.

“In the past, people would not build outdoor kitchens because of the short season to use them, but I don’t hear that as much anymore,” he said. “I think people are just going for it.”

 

Dive Right In

‘Going for it’ is an increasingly common mindset when it comes to buying an inground pool as well, Schwein noted.

While Drewnowski sells inground and above-ground pools, installation is handled by its parent company, Juliano Pools of Vernon, Conn. As busy as Juliano was last year, many who wanted pools couldn’t get them, due to higher demand than normal combined with shortages of materials and labor. Schwein said 2021 is off to a good start because those who couldn’t purchase last year can do so this year.

“We have a spillover of people from last year and new people who have decided to buy a pool this year, so I’m positive that combination will mean another banner year,” he told BusinessWest.

For years, many believed that houses with inground pools would be tough to sell. The red-hot real-estate market since last spring seems to have made that concern a moot point. Many first-time homebuyers are also first-time pool owners who are calling Schwein for advice on how to maintain their inground asset.

“From what I’ve seen, people are not afraid to buy a house with an existing pool. In fact, to many, it’s a selling point,” he said. While a typical home inspection does not cover the condition of a swimming pool, Drewnowski has pool inspectors available to help prospective buyers understand what they are getting.

With less inventory in the housing market, Rudd observed that many people choose to upgrade the house they have. By the same token, when people do purchase a home, they often come to see him, armed with plans.

“From what I’ve seen, people are not afraid to buy a house with an existing pool. In fact, to many, it’s a selling point.”

“When people move, they improve. And when they don’t move, they improve,” he said with a laugh.

Sprucing up a house isn’t complete until landscaping provides the final touch. In addition to landscaping services, Graziano Gardens has a retail store for those who want to tackle backyard projects themselves. Graziano saw new faces in the garden center last year, resulting in what he termed a “mini-explosion.”

“We sold out of trowels, shovels, gloves, watering cans, things we’ve never sold out of before,” he said. Also hard to come by were grown items such as hanging baskets, vegetable plants, and even evergreen hedges. “It seems like people just wanted to fill in that spot.”

Brian Campedelli says customers are looking for more creativity in firepit design.

Brian Campedelli says customers are looking for more creativity in firepit design.

Dry, warm temperatures early last spring, combined with parents and kids cooped up in their homes, might have led to a shortage in pool heaters. Schwein said he took many calls from exasperated parents who bought a heater and opened their pool earlier than usual to get their kids outside and squeeze a few more months out of the swimming season. That logic was fine until manufacturers ran into COVID issues and Schwein could no longer get them.

“The demand was high, and the supply was low,” he said. “Heaters are something that would normally take six days to get, but last year we ran into three-month delays.”

The pandemic also forced several contractors to find new ways to do business. A summer ritual for many involves periodic trips to the local swimming-pool retailer with samples of pool water to make sure the chemical balance keeps the water clean and safe. When COVID first hit, Schwein said, customers were no longer allowed into his store. “We had to change our business model.”

Specifically, customers left water samples outside the door where employees would test the sample and call the customer with a list of what chemicals were needed. After completing the transaction over the phone, an employee would deliver the chemicals to the customer’s house. Schwein admits it put a strain on his staff and customers, but everyone adjusted well.

“Our customers were able to get what they needed, but the way we had to do everything was different.”

When the pandemic first hit, Rudd and his staff were forced to become familiar with 10 years of new technology in less than three months. Beyond Zoom meetings, Vista consultants used satellite technology to measure houses for roofs and siding when they could not visit a client in person. While skeptical in the beginning, he now calls the technology “amazing.”

Dave Graziano says his garden center sold out of many popular plants last year.

Dave Graziano says his garden center sold out of many popular plants last year.

“I’m from the days of using a tape measure and a pencil, so at first I took comparison measurements to make sure the satellites were accurate,” he said. “It’s scary how accurate they are.”

Rudd enjoys using computer-design tools to give homeowners a good idea of how their space will look with improvements.

“We take a picture of the house, upload it into one of our applications, and change the house right in front of them,” he explained. “It leads to great interaction with the client and lets them have control of their purchase, with us there to guide them.”

Campedelli said it’s difficult for clients to envision a dramatic renovation of their backyard, so computer design goes a long way toward sealing the deal.

“Once they see the design, they want to move forward,” he noted, adding that, once the job is done, he enjoys how thrilled customers are with the result. “It changes their lives in a positive way.”

 

Getting Ahead

With spring around the corner, contractors are preparing for another busy year. Schwein pointed out that his phone is ringing now because customers have learned from the pandemic.

“Last year, people were patient and understood slowdowns due to COVID issues, so they are calling now because they don’t want to hear the COVID excuse this year,” he said.

After a busy 2020 as both a contractor and a retailer, Graziano’s main takeaway from last year was that people want to make their properties into their own oasis.

“Whether they do it themselves or they hire a landscape professional, I think that trend will continue through this year,” he said.

In the meantime, he’s got what he called a “good problem” — figuring out how many more shovels and watering cans to order for 2021.

Features

Work After the Pandemic

By John Graham

It’s been a year now since we came under the relentless domination of the coronavirus. After all this time, the picture isn’t pleasant. The end is uncertain, and the implications for the future are far from clear.

McKinsey reports that “75% of employees in the United States and close to a third in the Asia-Pacific region report symptoms of burnout. European nations are reporting increasing levels of pandemic fatigue in their populations. The number of those who rate their mental health as ‘very poor’ is more than three times higher than before the crisis, and mental-health issues are still likely to rise.” In spite of their severity, such figures should get our attention, but do they?

Perhaps the most dangerous part of the coronavirus is its divisiveness. More often than not, outside attacks — wars, famines, and natural disasters — bring us together to slay the dragon. But the pandemic has driven us further apart. Who would have thought life could take such a painful turn?

Overnight, workers were told to leave their jobs and work from home. Not only did they do it, they liked it. Now, many are ready to refuse to go back to claustrophobic cubicles or vacuous open spaces where they lacked privacy. To express their pleasure at working from home, they remodeled their bedrooms, kitchens, and basements; upgraded their internet connection; purchased all sorts of digital devices and office equipment; and didn’t miss a beat.

They’re choosy, too. “You want me in the office? I don’t think so.” Some moved to Boise or some other place in the middle of nowhere that welcomed them with open arms and lower living costs. They donned their sweats, popped open a laptop, jumped on virtual meetings, adjusted the lighting, turned on a monitor or two, and went to work in their new, $999 office chair, or decided to stay in bed and make it their office that day. To the utter surprise to everyone, productivity went up.

That’s just the first chapter. The McKinsey report also notes that “there is a veritable flood of new small businesses. In the third quarter of 2020 alone, there were more than 1.5 million new-business applications in the United States — almost double the figure for the same period in 2019.” That’s not all. The fourth quarter found Apple ripe for success with the highest revenue in its history — and the company wasn’t alone.

 

Four Lessons

All this adds up to an amazing, but totally counter-intuitive, story. But what does it mean to all of us who must live it? Literally, what in the world is going on? Even more to the point, what’s the message about the future — our future? Here are four thoughts about that.

“Overnight, workers were told to leave their jobs and work from home. Not only did they do it, they liked it. Now, many are ready to refuse to go back to claustrophobic cubicles or vacuous open spaces where they lacked privacy.”

The genie is out of the bottle. It’s finally happened. To put it another way, like no other phenomenon in modern history (perhaps in all of history), the pandemic released a level of momentum sufficient to turn the world and everything in it upside down in an instant. It may also be the catalyst that changes everything, from politics, government, and public policy to health and medicine, education, work-life balance, business, entertainment, culture, industry, and science. When Jeff Bezos, the CEO of Amazon, steps back, we can be sure profound change is in the air.

 

Far more people have seats at the table. We talked for so long, but nothing changed. Then, suddenly, we became keenly aware of those who had long been invisible to us. We raised our hands and called them ‘heroes’ but never raised their wages. Now, all of a sudden, we’ve finally figured out that when everyone has a seat, we have better healthcare, better jobs, stronger families, and happier communities. Could it possibly be that it took a painful pandemic to make more room at the table?

 

Everything is under a microscope. Again, counter-intuitive but nevertheless true: the number of applications for fall 2021 at the University of California are breaking all records. It’s happening at the same moment when millions of young Americans are questioning the value of a college education, particularly if it will take decades to free themselves from the sobering shackles of student debt. Those who went before them, the Millennials, are dogged in determining their own way in the world. Don’t be surprised. The lens of the microscope may never rest.

 

Don’t drink the Kool-Aid. There are dangers in the tension-filled, stressful times in which we find ourselves. Someone has aptly described it as “hitting the pandemic wall,” and it’s felt at home and at work. It’s when we reach out for relief so we can get our lives on a better path. Simple, quick, and easy answers are what sell in turbulent times: “buy this or do that, and your problems vanish, and your dreams come true.” We’re too resilient to do that to ourselves.

 

Bottom Line

Now, go back to where we started, the original question: “Who will have the upper hand after the pandemic: employers or employees?

All this leads to the final question. Through the pandemic frenzy, who will come out ahead, the workers or employers? The way it looks at the moment, it just may be the workers. But, as we all know, things can change. u

 

John Graham of GrahamComm is a marketing and sales strategy consultant and business writer. He is the creator of Magnet Marketing and publishes a free monthly e-bulletin, “No Nonsense Marketing & Sales Ideas”; [email protected]

 

Home Improvement

Fueling Interest

By Mark Morris

EcoBuilding Bargains

EcoBuilding Bargains, celebrating 20 years this year, has been a trendsetter in repurposing reclaimed and surplus building materials.

John Majercak likes to say the Center for EcoTechnology (CET) has been successful for 45 years because it’s willing to try out approaches to saving energy that in time become a normal way of doing business.

“We helped invent the energy audit in the 1970s, and now it’s a routine thing that lots of people have done, and it’s having a huge impact,” said Majercak, president of CET.

In 2021, the organization marks several noteworthy milestones. In addition to CET’s 45th birthday, Majercak celebrates 30 years with the organization, serving as president since 2010. In his time there, he has seen a growing mainstream awareness of the connection between the community, the economy, and the environment.

“It used to be that environmentalism was thought of as a fringe thing or a nice thing to have,” Majercak said. ”But the work we do in saving energy and reducing waste helps people live better lives, as well as addressing the urgent issue of climate change.”

CET also runs EcoBuilding Bargains, the largest reclaimed and surplus building-materials store in New England. Launched in 2001, the reuse store celebrates its 20th anniversary this year. When it opened, the store was one of only a few of its kind that existed. Today, thousands of stores sell reclaimed building materials.

From the beginning, people liked the idea of saving money and helping the environment by giving a second life to used cabinets, lighting, plumbing fixtures, and hundreds of other items. Through the years, awareness increased as EcoBuilding Bargains was featured on several home-improvement TV shows, most notably This Old House.

Located in Springfield, EcoBuilding Bargains sells products in all 50 states and several other countries thanks to the internet. Once reusing materials became fashionable, Majercak said, interest in the store exploded.

“When reusing materials became stylish, it allowed people to bring their own character to a piece,” he noted. “On top of personal creativity, it’s an inexpensive purchase that helps the environment, so it’s a home run.”

Majercak pointed out that the current boom in home improvement — fueled by the pandemic and people being in their homes much more than would be considered normal — has created both a supply and a demand for items at EcoBuilding Bargains.

“It used to be that environmentalism was thought of as a fringe thing or a nice thing to have. But the work we do in saving energy and reducing waste helps people live better lives, as well as addressing the urgent issue of climate change.”

“All the home improvement that’s going on means more materials we can capture for donation and reuse,” he noted. “Then, when people renovate with these materials, they can save lots of money, help the planet, and make their homes look super-cool.”

Likewise, the pandemic hasn’t slowed business for the store. EcoBuilding Bargains is open for people who want to shop in-person and also offers virtual appointments so people can shop over the phone. With video calls, Majercak said, staff can show items, and customers can ask more specific questions about a piece.

Other parts of CET’s business have also adopted a combination of in-person and virtual interaction. Energy audits, for example, have a whole new feel that creates opportunities and challenges.

“We have people who are happy to get on a Zoom call and show us around their home or business for an energy audit,” Majercak said. “On the other hand, those who wanted an in-person visit are on a waiting list until after the pandemic is over.

“After the pandemic, I’m sure we’ll be doing plenty of things in person again, but we will continue to go virtual for those who prefer that approach,” he went on. “In that way, it opens more opportunity for mission impact.”

 

Cool Ideas

With a stated mission to “research, develop, demonstrate, and promote those technologies that have the least disruptive impact on the natural ecology of the earth,” one of CET’s goals involves reducing carbon emissions equal to removing 100,000 cars off the road for a year by 2022.

There are many ways people can reduce their carbon footprint, all of which use less energy without compromising comfort. Converting to LED lights and adding insulation are two easy ones.

John Majercak says a central focus for CET over the years has been pursuing technologies with the least disruptive impact on the environment.

John Majercak says a central focus for CET over the years has been pursuing technologies with the least disruptive impact on the environment.

“Weatherization is a good example because installing air-sealing insulation in the home increases the comfort dramatically and uses less energy — and, therefore, less carbon,” Majercak said. “We’ve been doing these programs for years, and they save lots of energy and carbon.”

He cited a recent effort in which CET has partnered with colleges in the Community Climate Fund, which provides support for local carbon-reduction projects. By investing in the fund, colleges support the community, as well as creating learning opportunities for students who conduct research and gather data. Projects range from recovering used building materials or helping a homeowner get a heat pump to providing loans to farmers so they can make energy improvements to their operations.

“The Community Climate Fund is a great way to extend the impact of our programs and get even more done,” he told BusinessWest.

Massachusetts recently unveiled a plan to achieve a 45% reduction in carbon emissions by 2030 and to be carbon-neutral by 2050. Majercak has reached out to utilities to encourage them to align their energy-efficiency programs with these climate goals. CET is currently working with a municipal utility company to test an energy-efficiency program that measures carbon reduction, as opposed to just energy savings. It’s one of the first programs of its kind in the country.

“Anytime you save energy, it reduces carbon, but the kind of energy you save and the kind of energy you use also affects carbon,” he said, noting that the car you drive and the lawnmower you use can also make a difference in changing your carbon footprint. “For the foreseeable future, we will be studying energy issues by looking through the lens of carbon reduction.”

CET is also working with utilities on promoting the use of air-source heat pumps for houses. While they have existed for years, Majercak said heat pumps were primarily used in warmer climates. With recent technology improvements, they can now withstand the sustained cold temperatures of a New England winter. Unlike traditional heating systems, heat pumps take heat from outside air (yes, even frigid cold air has heat in it) and move it into the home.

For cooling, the heat pump does the reverse and removes heat from the house to the outside. Instead of using oil, natural gas, or propane, heat pumps run on electricity. As long as renewable energy becomes a larger part of the grid, he said, electric power is the logical choice.

“This is good from a carbon perspective because, as the power grid gets greener and as more people use heat pumps and drive electric cars, the more carbon reduction we’ll get,” Majercak noted, adding that heat pumps are just catching on, and we will see a lot more of them in the coming years.

And they represent only the latest cutting-edge technology that CET has helped establish in its 45 years.

“I’m very proud of the people at CET because they’ve always been real innovators and have helped change the way things work,” he said. As one example in the realm of waste and recycling, CET helped to establish the Springfield Materials Recycling Facility (MRF), which serves 65 communities in Western Mass. Back when recycling was a new approach, CET worked with towns to help them prepare their recycling programs for the Springfield MRF.

In the 45 years since CET has been in operation, energy conservation has hit peaks and valleys in politics and policies on the national level. Majercak noted that the state and regional levels have been more consistent, and asserted that CET has never been, nor ever will be, a political organization.

“We’re a solutions organization; we work with everyone,” he noted. ”As long as we keep that focus, we will be successful.”

Elaborating, he said the key is to meet people where they are and help them either solve a problem or achieve a goal.

“If you’re a small business, your goal may be to save money and have your business perform better. Energy efficiency, as well as waste and recycling management, can help you reach that goal,” he said. “A homeowner might want to be more comfortable or lower their electric and fuel bills. We can do that for you, and it doesn’t matter what you think about climate change.”

“All the home improvement that’s going on means more materials we can capture for donation and reuse. Then, when people renovate with these materials, they can save lots of money, help the planet, and make their homes look super-cool.”

For all the energy-saving opportunities out there, Majercak understands that spreading the word about what CET does and how it can help is essential. “Even when people are aware and want to do something to save money or save the environment, we still do a lot of hand holding to get it done.”

Spreading the word through workshops and social media definitely helps to engage people. Majercak pointed to one effort in which EcoBuilding Bargains runs a “Reuse Rockstar” contest on social media that encourages people to post the creative ways they have used items from the store.

“It’s inspirational to see how people apply their creativity and elbow grease to make beautiful houses and rooms for a fraction of what they would normally cost,” he said.

 

Going for the Green

Because climate change is a global problem, it’s easy for people to feel overwhelmed and doubtful they can make a difference, said Majercak, who assures them that they do not have to solve climate change all by themselves, and shows them different ways they can have an impact.

“When someone switches out their lightbulbs, buys an electric vehicle, or installs used cabinets, these are not overwhelming actions,” he told BusinessWest. But when CET helps tens of thousands of people do these little things, they start to add up.

“Consider that people across the state, the country, and the world are doing similar things, and it’s easier to see how each effort contributes to making a real difference. We are firm believers in little things with big payback.”

In addition to turning new approaches into normal processes, Majercak looks forward to the growth potential for EcoBuilding Bargains as it sells more products to people through eBay and, soon, through its own e-commerce site.

When he considers CET’s 45-year history, he appreciates how far the organization has come, but he’s even more excited about the near future.

As much as we’ve done, I think we will really accelerate and see much more progress in the next 10 to 15 years,” he said. “It’s an exciting time to be doing the work we do.”

Technology

Learning on the Fly

Kimberly Quiñonez says her professors

Kimberly Quiñonez says her professors encouraged her to overcome the challenges of online learning and succeed.

Springfield Technical Community College (STCC) had a long-term plan to ramp up online and digital learning.

But then came the COVID-19 pandemic, which forced staff working at STCC’s Center for Online and Digital Learning to move faster than they ever imagined. The staff includes instructional designers who assistant faculty in online teaching methods they incorporate into the classroom experience.

To maintain the safety of students, faculty, and staff, STCC moved classes to remote instruction last March. Instructional designers worked with faculty over the summer to prepare for fully online teaching in the 2020-21 academic year.

Faculty and administrators acknowledge the abrupt change to remote learning created great challenges and, for some, led to a less-than-ideal learning environment last spring. The sudden need to vacate campus resulted in the use of a slew of digital tools to communicate with students, including e-mail, FaceTime, Google Hangouts, and teleconferencing by phone and Zoom.

“Many faculty had been using online tools for the delivery of their face-to face classes. However, for those faculty who were not familiar with the digital space or whose courses required hands-on instruction, the ‘lift’ to online was great,” said Geraldine de Berly, vice president of Academic Affairs at STCC. “Since the summer, STCC invested in tools and training to assist faculty in developing the best truly online experience possible, including the hiring of a third instructional designer. Today, all online instruction occurs in a single platform, supplemented by class discussions using tools such as Zoom.”

The college anticipates spending nearly $800,000 through May 2021 helping faculty develop hundreds of online classes and labs, de Berly said. Today, more than 80% of the credits are offered online, a jump from 12% prior to the pandemic. Over the coming year, STCC also expects to expand its online-only options in addition to its existing in-person and hybrid degree programs.

STCC English Professor Denise “Daisy” Flaim has years of experience teaching students on campus in classrooms, so converting to the online experience was a big adjustment. But she worked closely with the online team at STCC to prepare for the transition, and now feels confident.

“We’re learning technology, just as the students are learning technology,” Flaim said.

Daniel Misco, an STCC alumnus and faculty member in the Digital Media Production program, said he’s well-versed in the online teaching world. Today, he teaches most of his classes online, but misses the face-to-face interactions with students in a classroom.

“I considered myself a face-to-face instructor,” Misco said. “I always excelled in the classroom. I liked being there with students to build a rapport with them.”

The adjustment to online learning can be challenging for some students, but Misco said faculty try to do all they can to help.

STCC student Kimberly Quiñonez, who is studying social work, expressed gratitude for the support from faculty over the past year.

“My experience as an online learner has really been amazing, although there were times I felt like quitting,” she said. “During those times, my professors would reach out and check in with the class. In the very beginning, I must admit that it was quite challenging transferring from an actual classroom to a computer. The classroom brought security to most students because questions were answered immediately. With online learning, you may have to wait for a response through e-mail.”

Aminah Bergeron, a mechanical engineering technology student at STCC, said she found benefits to online learning, noting she has “gotten the hang of it” after a year of studying from home.

“It wasn’t as difficult as I thought it would be. It was for sure different, but a ‘good’ different,” she said. “I didn’t have to worry about getting ready, or making sure my house doors are locked, or even thinking in the back of my head, ‘did I leave the faucet running?’ I just had to open my laptop and start my schoolwork, whether at my own pace or scheduled Zoom meetings. I also had much more time to research and not worry about calculating the time I’d lose on commuting from one location to another.”

STCC will return to face-to-face, on-campus instruction when it’s safe to do so, de Berly said, but will continue to offer online options and apply digital tools to enhance the classroom experience.

Manufacturing

Keeping Pace

Both the immediate and long-term future of the manufacturing industry will be defined by the development of a number of ever-evolving and prominent trends, according to the Assoc. of Equipment Manufacturers. These trends are poised to have a significant impact in 2021 (and, in many cases, beyond), so it’s critically important for manufacturers to develop a keen understanding of what they are, how they will grow over time, and how they will impact the industry and the customers it serves.

 

COVID-19 and Employee Safety

It almost goes without saying that workplace safety and compliance with CDC guidelines and OSHA regulations (along with local safety measures) will remain front of mind for manufacturers as 2021 gets under way. With COVID-19 cases on the rise in many parts of the world, organizations will need to continue to be vigilant in their efforts to protect employees. Doing so, however, requires a significant investment of time, effort, and resources on the part of company leaders.

While an efficient rollout of an effective vaccine for COVID-19 would bode well for an eventual return to normalcy for the manufacturing industry, the impact of such a rollout won’t be felt for some time. In the interim, organizations will need to continue practicing social distancing in the workplace, restricting visitors to facilities, encouraging the practice of good hygiene, and ensuring employees are healthy and fit for work before allowing them on the job.

It’s been nearly a year since the COVID-19 pandemic took hold in the U.S., and it remains a major challenge for manufacturers across the country and around the world. While companies do have plans and protocols in place to combat the virus, adhering to them and ensuring the health and well-being of employees is — and will continue to be — no small task.

 

Connected Workforce

The desire to equip workers with technology capable of allowing them to connect and collaborate from a distance has long been on a trend on the rise within the manufacturing industry. As older generations continue to leave the workforce and are replaced by younger employees, and the rise of the big-data era in manufacturing takes shape, finding tools and technologies to make an increasingly spread-out and remote workforce as productive as possible is a top priority for companies today.

As a recent article from McKinsey explained, the ongoing COVID-19 pandemic has led to an increased reliance on digital collaboration to establish and maintain a connected manufacturing workforce. An increased emphasis on safety and changes to work processes, in an effort to maintain social distancing and minimize physical contact, has led organizations of all types and sizes to adopt cutting-edge ways to allow for workers to communicate and interact virtually.

While the widespread impact of the pandemic has caused this trend (and the adoption rate of related tools and technologies) to grow, it remains critical for manufacturers to provide training and resources to employees as they try to maximize productivity from afar. Why? Because doing so is poised to pay off over time. According to McKinsey, “by digitizing processes to improve equipment management and optimize physical assets, digital collaboration tools give manufacturers ways to boost productivity while enhancing quality.” And those who do it first — and well — will achieve a significant competitive advantage.

 

Internet of Things

The Internet of Things (IoT) has long been a trend to watch in manufacturing, and this year is no different. As it continues to grow in prominence and becomes more and more widespread over time, IoT technology will drive value for the industry by allowing organizations to make measured, informed decisions using real-time data in an effort to increase efficiency and positively impact their bottom lines.

According to a recent study conducted by the MPI Group, approximately 31% of manufacturing production processes now incorporate smart devices and embedded intelligence. Furthermore, more than one-third of manufacturers have established plans to implement IoT technology into their processes, while 32% plan to embed IoT technology into their products.

IoT technology offers both remote-monitoring and predictive-maintenance capabilities, making it even more valuable for organizations looking to maintain visibility of equipment performance from afar. With the COVID-19 pandemic continuing to impact the industry in 2021, IoT technology will continue to be a go-to for manufacturers looking to maintain efficiency and productivity.

 

Localized Production and Near Sourcing

The rise of customization and personalization has given way to large opportunities for manufacturers willing — and, perhaps more importantly, able — to succeed in a localized economy. By rethinking the way products get out to the public, organizations can craft an ecosystem of smaller, flexible factories located near existing and prospective customers.

Manufacturers are used to thinking on a global level. However, shifting their focus to a local level, they may be better able to meet the ever-changing needs, wants, and preferences of the markets they serve. Consumers are making it abundantly clear that authenticity matters, and a localized approach to manufacturing is proving to be among the most effective ways to for organizations to respond accordingly.

The impact of COVID-19 also cannot be discounted. The pandemic has led manufacturers to re-evaluate and reconsider sourcing, largely due to supply chain disruptions (especially in the earliest days of COVID-19). As a result, manufacturers have made a concerted effort to bring their operations closer to where their offerings are sold, and there has been an increasing desire on the part of many companies to source raw materials from domestic suppliers. All this is being done in an effort to avoid pandemic-related disruptions and support the U.S. economy during these uncertain times.

 

Predictive Maintenance

It’s no secret that the ability for manufacturers to predict impending equipment failures and — more importantly — prevent equipment downtime is incredibly impactful to their bottom lines. Advancements in technology now allow organizations to do just that (and much, much more).

The benefits, according to a recent blog post from EAM-Mosca Corp., showcase why predictive maintenance (PM) is so valuable to organizations today. PM helps companies reduce costs, decrease failures, minimize scheduled downtime, and optimize parts delivery

Effectively conducting predictive maintenance is no easy task, however. Adopting a (successful) predictive maintenance model requires manufacturers to gain insights into the variables they are collecting and — more importantly — how often those variables present themselves on factory floors. Therefore, it’s imperative for manufacturers to possess accurate and relevant knowledge about their equipment. They must know what previous failures have taken place, and they need to make decisions around lead time — becausem the closer to failure a machine is allowed to go, the more accurate the prediction will be.

 

This article was written by the Assoc. of Equipment Manufacturers.

Autos Special Coverage

Revving Up

By Mark Morris

 

In the early days of the pandemic, people huddled in their homes while streets were abandoned by nearly all traffic. Area auto dealers, understandably, braced for a slow year.

Instead, sales for many dealers hit record highs in 2020.

It was that kind of year for Jack Sarat, dealer principal for Sarat Ford, who said the pandemic definitely kept sales down in March. “After that, business rebounded, starting with a strong finish in April, and then every month following kept getting better.”

Auto-manufacturing facilities and many of their subcontractors around the world experienced shutdowns early in the pandemic. Steve Lewis, owner and president of Steve Lewis Subaru, said the delays kept inventories low at many dealerships and were also a factor in sluggish sales early in the spring.

“Once the factories were up and running again, around May or June, our inventory started to build back up, and it continues to build,” Lewis said. “Believe it or not, 2020 was our best year ever.”

“After [March], business rebounded, starting with a strong finish in April, and then every month following kept getting better.”

Even with inventory delays, Lewis continued to take pre-sell orders, so when new cars began rolling into the lot, nearly 65% of them were already sold.

Gary Rome, president of Gary Rome Auto Group, said the Korean factories where Hyundai and Kia are made were fortunate, with only brief shutdowns due to COVID-19 concerns.

“Hyundai and Kia never took their foot off the gas when the pandemic hit,” Rome said, which set the table for a strong year. “Our sales increased nearly 20% in 2020; it was one of the best years we’ve ever had.”

Every year, Presidents’ Day represents the first big sales push for local dealerships. Sarat pointed out that Presidents’ Day as a sales event tends to be more of a Northeast phenomenon.

Jack Sarat (left) and Jeff Sarat

Jack Sarat (left) and Jeff Sarat are among many area dealers reporting strong sales down the stretch in 2020 and into 2021.

“In Virginia, if you ask about the Presidents’ Day sale for cars, they don’t even know what you’re talking about,” he said, adding that ‘Presidents’ Month’ might be a more accurate name because the manufacturers heavily promote sales incentives throughout February.

With an already strong January in the books, Lewis approaches this Presidents’ Day understanding each year is a different experience.

“Last Presidents’ Day, we had a great weekend. Some years sales are magnificent, other years we are slow,” he said, adding that he defines the weekend as running from the Thursday before the holiday through Presidents’ Day Monday.

Good weather is the key to strong President’s Day sales, Rome said. Encouraging car sales on Presidents’ Day has often been a way for people to start thinking about spring and new beginnings.

Steve Lewis

“Once the factories were up and running again, around May or June, our inventory started to build back up, and it continues to build. Believe it or not, 2020 was our best year ever.”

This year, they may be especially clamoring for spring; on top of the normal winter doldrums, everyone has endured nearly a year of pandemic disruption and isolation. In that environment, auto dealers expect plenty of pent-up demand.

 

Rolling Along

Each of the dealers who spoke with BusinessWest shared his thoughts on why people continue to buy cars during the pandemic.

Those who did not suffer a job loss due to COVID-19 were able, in many cases, to increase their savings. After months of staying inside people, Lewis said, people started doing the math and realized that, with used-car values remaining high, they could trade up to a newer vehicle without spending lots of money.

“They capitalized on it, we capitalized on it, and everybody’s happy,” he added.

Sarat talked about customers who canceled vacations that involved air travel but still wanted to get away. “Several customers told me they were buying vehicles just so they could drive to their vacation,” he said.

While zero-percent interest rates across the industry have helped reluctant buyers, Rome said a job-assurance program gave Hyundai customers more comfort about making a purchase. “Through this program, if you buy a car and lose your job, Hyundai will make your payments for up to six months.”

He also believes battling COVID fatigue played a role in many vehicle-purchasing decisions. “People started realizing that life is short, and this might be a good time to do something nice for themselves.”

The pandemic has produced an interesting economic situation in which many homeowners made big investments in their homes, resulting in an extremely successful year for construction and landscape contractors. Sarat reaped the benefit of the contractors’ good fortune in his commercial-truck business. Contractors tend to replace their vehicles in December to obtain a tax credit against their income for the year, so it’s not unusual to see more sales activity then. Thus, the boom in home improvements in 2020 contributed to record sales in December for Sarat.

“We sold twice as many Super Duty trucks than a normal December,” he said. “Contractors were replacing vehicles and, in some cases, adding to their fleet.” Super Duty trucks are a popular choice among contractors because they can be adapted to a variety of trade professions.

While online shopping and purchasing a vehicle are not new, the pandemic brought out more people interested in using this no-touch approach to buying. Before the pandemic, Lewis noted, nearly 45% of his business was generated from the internet, where customers would do their research online, then come in for a test drive before buying the car. Since the pandemic, that’s increased to 70%.

“What’s different now is that people are taking delivery of vehicles they’ve never seen or have driven,” he said, adding that customers who do this are relying on the brand’s reputation.

Website upgrades since the pandemic allow Rome’s customers to complete their entire vehicle purchase online. From figuring out the value of a trade-in to applying for credit, the entire purchase or lease can be generated online and finished off with an electronic signature. “We will even bring the car to your home to test drive if you want,” he added.

Before internet research, the average customer would visit three or four dealers before purchasing a vehicle. Sarat cited industry statistics showing that customers now visit, on average, only 1.3 dealers before making a purchase. “Because they’ve done the research online, they’ve usually made a decision on what they want to buy before they even come in.”

 

Shifting Gears

For several years, buying trends have shifted away from passenger cars and toward SUVs and crossover vehicles.

“SUVs make up 68% of our sales, compared to sedans,” Rome said. “It used to be the inverse.”

He credits the shift to SUVs handling more like a car than earlier models, which were built on truck frames. He also noted that, as buyers age, they prefer a higher vehicle to make it easier to enter and exit.

“We won’t be back to normal for a while, but everything I read in automotive reports suggests new-car sales in 2021 are going to be very strong . I think it’s going to be an exciting year.”

Nearly every model in Lewis’ showroom is an SUV or crossover vehicle. “The crossover is really a replacement for the old station wagon,” he said. “It’s designed to open up the hatchback, put the back seats down, and throw in your junk.”

Ford is another of the many manufacturers moving away from traditional sedans and toward crossovers and SUVs. In addition, Sarat sells one of the most popular vehicles in the U.S., the Ford F-150 pickup truck, calling it his “bread and butter.”

Ford recently released a hybrid version of the popular pickup truck, and the new Ford Mustang Mach E is an all-electric vehicle. And Sarat has made a move toward all-electric vehicles among commercial cargo vans as well. Jeff Sarat, general sales manager, said these vans can run up to 300 miles a day and then plug in for recharging overnight.

“For business owners, it significantly reduces the cost of ownership,” he said, noting that an electric motor eliminates traditional maintenance and substantially reduces the vehicle’s carbon footprint. “We’ve got a lot of good things coming down the road, and our electric vehicles are going to be on people’s shopping list when they look for their next car.”

While hybrid and electric vehicle sales represent about 5% of Rome’s sales, he expects that number to rise to 10% soon.

“The manufacturers have jumped into this market with both feet. Within two years, we expect to offer a dozen hybrid or electric vehicles,” he said, adding that hybrid vehicles can improve mileage up to 140 miles per gallon, while some all-electric vehicles can go 386 miles on a full charge.

“In some ways, it’s like owning an iPhone, where you want to get a new one every three years to stay up on the latest technology,” he added.

Another shift this year has taken place in the used-car market. The economic shutdown last spring affected new-car production, and dealers found they had more empty spaces on their lots. “When fewer new vehicles are coming in, it also creates a lack of used inventory because people are not trading in their cars,” Sarat said.

For this reason, all the dealers we spoke with said used-car prices stayed high last year and will continue to remain strong in 2021.

Rome acknowledged the strength of the used-car market, but said his business runs somewhat counter to the normal trend.

“In our world, we sell about two new cars to every used car,” he explained. “If you can buy a new car with a 10-year, 100,000-mile warranty for about the same price as a used car, why would you buy the used car?”

 

No Slowing Down

With his business finishing 2020 with a 19% sales increase, Rome predicts an 18% increase on top of last year’s success for 2021.

With his dealership in Hadley, Lewis noted that he is located two miles from five colleges and universities. When students and faculty all abandoned campus early in the pandemic, it cut deep into his business. He is hopeful these sales will return as everyone comes back to campus.

“Despite all that, we had our best year ever, and we’re hoping 2021 is as good as 2020,” he said.

Jack Sarat anticipates at least some supply disruptions due to COVID in 2021, but remains optimistic for a good year ahead as well.

“We won’t be back to normal for a while, but everything I read in automotive reports suggests new-car sales in 2021 are going to be very strong,” he said. “I think it’s going to be an exciting year.”

Community Spotlight Special Coverage

Community Spotlight

By Mark Morris

Paul Bockelman said he’s worked with chamber and BID leaders

Paul Bockelman said he’s worked with chamber and BID leaders to address the urgent needs of the business community during the pandemic.

 

Epictetus, the Greek philosopher, first made the observation, “it’s not what happens to you, but how you react to it that matters.”

While Epictetus did not live in Amherst, town officials and business leaders there have certainly adopted the philosopher’s adage in their robust efforts to return the town to vitality in the face of a pandemic.

Last March, when COVID-19 began to affect life in communities everywhere, Amherst took a broader hit than most because UMass Amherst, Hampshire College, and Amherst College all shut down earlier than other area institutions.

Gabrielle Gould, executive director of the Amherst Business Improvement District (BID), said the suddenly empty campuses posed a shock to the system.

“We lost 40,000 people in a 48-hour period,” she recalled. “It was like turning off a light switch.”

With college closings and retail activity coming to a screeching halt, Amherst Town Manager Paul Bockelman said his town lost its two major industries because of the pandemic. Still, he noted, “despite all that, the town has been resilient, and we are prepared to emerge from the pandemic in a very strong way.”

Early on, Amherst quickly mobilized a COVID-19 response team as Bockelman and the department heads of the Police, Fire, Public Works, and other departments met daily to strategize, he explained. “We prioritized the health of our workforce because we wouldn’t be able to help residents if our fire, police, and DPW staff weren’t healthy.”

The next priority was to maintain continuity of government functions. Amherst migrated town staff to remote work and incorporated Zoom meetings to assure key bodies such as the Town Council and the School Committee could keep moving forward. Permit-granting committees soon followed.

“We prioritized the health of our workforce because we wouldn’t be able to help residents if our fire, police, and DPW staff weren’t healthy.”

As plans were coming together to allow outdoor dining, the Town Council passed a special bylaw to delegate simple zoning decisions to the building commissioner. This move sped up the permitting process and cut down on much of the bureaucratic red tape.

“For example, permits for serving alcohol outdoors or expanding the footprint of a restaurant could be done through one person instead of going through an often-lengthy permitting process,” Bockelman said.

To address the urgent needs of the local business community, he also met weekly with Gould and Claudia Pazmany, executive director of the Amherst Area Chamber of Commerce. The BID and chamber share office space on Pleasant Street, so Pazmany and Gould worked together to learn about the many grants available to local businesses impacted by COVID-19. The main goal was to help owners stay in business.

Claudia Pazmany

Claudia Pazmany says one of her most important roles has been helping business owners navigate the grant system.

“We knew that closing their doors would mean closing their doors forever,” Pazmany said. “That’s what we were trying to avoid.”

 

Granting a Reprieve

Before the pandemic, the chamber would host 56 events in a typical year. Pazmany said she quickly moved to digital events to keep everyone together. “We went from 56 events to 56,000 connections on Facebook and other social media.”

More importantly, in addition to helping local businesses apply for the federal Paycheck Protection Program (PPP), Gould and Pazmany have successfully secured grant programs at the state and federal level.

A number of Amherst businesses received grants through the state COVID-19 Small Business Grant Program, which provided a total of $668 million for Massachusetts businesses. Amherst also secured $140,000 in federal Community Development Block Grant funds for local businesses.

State Sen. Joan Comerford helped the Chamber and BID to fund the recently formed Relief and Resiliency Microgrant Program. Originally designed to provide $500 microgrants, Pazmany said they were able to secure matching dollars, so $1,000 grants will soon be awarded to 18 of Amherst’s small-business owners in the first round of the program.

“The microgrant money will help defray some costs and allow people to keep going,” she said. “Many of these business owners are not even paying themselves; they just want to pay their bills.”

One of the more important roles Pazmany and Gould have taken on involves helping business owners navigate the grant system. Whether it’s identifying eligible funding, helping to fill out forms, or solving technical issues, Pazmany said they are not limiting their support to just chamber members. “Right now, it makes no difference if you are a chamber member or not. If you need help and you cross our threshold, we will help you.”

While outdoor dining and takeout have enabled restaurants to keep their doors open, the BID launched an effort to do more, buying meals from local restaurants and giving them to families in need. The effort began two months ago with the moniker December Dinner Delights and recently received funding to continue through April. Gould sees this as a win-win.

“We pay the restaurants $1,500 twice a week to help them sustain business, and we provide meals for families in our community,” she noted.

Another effort to support local business involves a gift-card program run by the chamber. Launched at the beginning of the holiday season, the gift cards can be redeemed at more than two dozen local businesses, from restaurants to a cat groomer. Pazmany said she has had to reorder cards to keep up with demand. “It works because you are able to give someone a gift and, at the same time, support a small business; it’s the best type of reinvestment in our community.”

As for town-run programs, last spring, municipal leaders had to figure out what to do about the farmers’ market it runs every Saturday from April through November. In the past, it was held in a cramped parking lot that would not conform to social-distancing protocols. Because the town common had no activities scheduled, the farmers’ market set up there — and had its most successful year ever.

“Right now, it makes no difference if you are a chamber member or not. If you need help and you cross our threshold, we will help you.”

“Our town common is a bucolic setting, and people who were cooped up all week could safely come and buy things,” Bockelman said. The manager of the farmers’ market reported the average sales week in 2020 equaled the best sales week in 2019, and the booths sold out of their products every week.

The farmers’ market was a highly visible way to revitalize interest in Amherst, as are continuing “quality-of-life developments,” as Bockelman called them, such as the newly opened Groff Park and the building of a new playground at Kendrick Park.

But smaller acts, like making picnic tables available in parks and other public places, were popular as well, he added. “As soon as we put out the tables, people were immediately using them. It was awesome.”

 

Forward Thinking

Looking to the future, Amherst is making decisions on four major capital projects slated for construction in 2022. On the drawing board are a new elementary school, a new library, a new Public Works facility, and a new fire station.

“We are trying to incorporate these projects into our ongoing budget so the taxpayer does not have to take on too much of a burden,” Bockelman said.

The desirability of Amherst as a place to live keeps housing prices high, which he calls a two-edged sword because it hurts the town’s ability to build a diverse socioeconomic community.

“People value diversity in Amherst,” he said. Still, he added, “it’s much more diverse than most people realize, especially our school district.”

To deepen that diverse profile, Amherst is looking to invest in property to develop more affordable housing. Bockelman pointed to a recently approved development on Northampton Road and a potential land purchase on Belchertown Road as additional projects in the works. “The town is willing to make the investment to develop and retain affordable-housing units in Amherst.”

To better address diversity in business, the chamber makes available an open-source document for proprietors who want to identify their business as being run by a woman, minority, or LGBTQ individual.

Pazmany said it’s simply good for business, noting that “we are getting steady requests from people who want to do business with various self-identifying businesses.”

Amherst at a Glance

Year Incorporated: 1759
Population: 39,482
Area: 27.7 square miles
County: Hampshire
Residential Tax Rate: $21.82
Commercial Tax Rate: $21.82
Median Household Income: $48,059
Median Family Income: $96,005
Type of Government: Town Council, Town Manager
Largest Employers: UMass Amherst; Amherst College; Hampshire College
* Latest information available

One element in the town’s strategy emphasizes Amherst’s potential as a tourist destination. Several national news articles have suggested that this decade may become a second “roaring 20s” with a renewed emphasis on cultural attractions. If that’s so, Pazmany pointed out, Amherst has plenty to offer, such as Museums10, a collaborative of 10 area museums, of which seven are located in town. Together, the museums cover various aspects of history, art, literature, and the natural world.

“In a normal year, Museums10 will bring more than a half-million people to the area,” she said. “The Emily Dickinson Poetry Festival itself is a global event.”

For the more immediate future, the plan is to have outdoor dining up and running by April 1. The BID was able to supply enough table umbrellas and heaters during the summer to boost last year’s effort. Because there are so many barriers in place to ensure safe outdoor dining, the BID also paid 35 artists to turn the plain concrete into a medium to express themselves.

“The barriers became nice displays of public art, and they give downtown a bit of an art-walk feel,” Gould said.

Simple touches like the artwork and adding planters around town generated positive comments from visitors and business owners alike. Pazmany appreciated the boost of confidence. “In this next phase, we just want our businesses to be up and running so they can take a paycheck and start to rehire people.”

Most Amherst leaders, in fact, look to the coming year with great anticipation. Bockelman noted that the town has several fundamental strengths, including the university and colleges. Pazmany added that UMass has already reported an increase in enrollment for the coming fall.

Gould admits that pushing forward on grants and other relief efforts helped Amherst through the worst of the pandemic. “Despite how hard everyone was hit, we’ve created a resiliency that kept our businesses here.”

Bockelman agreed. “Everyone’s efforts worked because they were sequential and were patiently done. We just kept moving forward.”

Epictetus would be proud.

Features Special Coverage

Entering a Partnership?

 By Brenden Cawley and Gabriel Jacobson 

 

The COVID-19 pandemic has caused several partnerships local to Western Mass. to either consider or actually effect a change in ownership. When navigating the complexities of these changes in ownership, partnership basis is a vital component.

For tax advisors and taxpayers alike, basis would be better as a four-letter word. However, understanding the basics of cost basis can prevent future headaches.

 

Understanding the Basics of Basis

It stands to reason that the cash spent or provided to acquire an asset would be the cost (basis) of that asset. However, when analyzing partnerships, understand the concepts of ‘inside’ and ‘outside’ basis. The difference is a shift in perspective. The outside basis is established when the partner joins or forms the partnership through the contribution of cash (or property, which adds additional complexity). The partnership then uses that cash to purchase assets.

The cash outlay to acquire those assets establishes the total inside basis of the partnership. Based on each partner’s ownership, a share of the inside basis of the individual assets is assigned accordingly. This inside basis does not fluctuate with changes in market value of the assets. When a tax year closes, the partners each receive a Schedule K-1 and adjust their outside basis by the income, expense, gain, or loss disclosed on the Schedule K-1.

Brenden Cawley

Brenden Cawley

“For tax advisors and taxpayers alike, basis would be better as a four-letter word. However, understanding the basics of cost basis can prevent future headaches.”

Over the life of the partnership, cash or property will be distributed to the partners, which will decrease their outside basis. The inside basis of the partnership will similarly be reduced as the cost of assets is removed from the books through sale or distribution. When the partnership is in need, the partners may contribute additional cash or property. Additional contributions have the same positive impact on outside basis as the initial contribution that formed the partnership or acquired an interest.

As time goes by, differences can arise between the inside and outside basis of the partner(s). As the inside and outside basis of the partnership fall out of alignment, the partners can experience negative tax consequences. Each taxpayer is responsible for maintaining their own outside basis, so consult your tax advisor if questions arise. Through a Section 754 election, the partnership has an opportunity to avoid these consequences.

Like anything worthwhile, this election takes work. It is perhaps especially laborious if the partner or partnership have not been actively tracking the inside and outside basis disparity. The partners’ Schedule K-1s could offer a lifeline. Prior to 2020, each partner’s capital account in item L could be prepared on a book, GAAP, Section 704(b), or tax basis. It is possible that the partner’s capital account prepared using book, GAAP, or Section 704(b) is a reasonable approximation for the inside basis of the partner.

This is a highly simplified approach that needs to be vetted with the partnership’s tax advisor. Starting in 2020, the IRS has mandated that Item L of Schedule K-1 must be prepared on a tax basis. The partner’s tax capital account is a good starting point for both outside and inside tax basis. Again, this simplified assumption needs to be discussed with a tax advisor. Please note that tax capital reported on the Schedule K-1 is not equivalent to outside tax basis. Instead, outside tax basis considers liabilities of the partnership for which the partner is individually responsible and partner-specific adjustments.

 

Everyday Example

In year one, Ann and Bob purchase a building for $200,000 and split the cost evenly, giving them each 50% ownership in ABC Partnership. Initially, they each had outside basis equal to their inside basis of $100,000. In year two, as a result of COVID-19, Bob wants to exit the partnership. The building has appreciated in value to $300,000, so he sells his interest in ABC Partnership to Carl for $150,000. Bob will recognize a $50,000 gain in year two as a result of the excess cash received compared to his cost basis.

First, let’s imagine the partnership does not make a 754 election at this point. Carl steps into Bob’s inside basis of $100,000. However, his outside basis equals the total amount he paid, or $150,000. In year three, Ann and Carl decide to sell the building (for simplicity’s sake, let’s assume no depreciation has been expensed), which is still valued at $300,000 and therefore results in a gain of $100,000. Both Ann and Carl receive Schedule K-1s with a $50,000 gain for the year because they both had an inside basis of $100,000 prior to the sale.

Gabriel Jacobson

Gabriel Jacobson

“Partnerships may be relatively easy to form, but the tax implications can be very complex.”

After recording the gain, their inside basis increases to $150,000. Ann’s inside and outside basis remain aligned, but Carl’s basis disparity persists as the $50,000 of gain impacts his inside and outside basis in the same manner. In year four, Carl and Ann decide to dissolve the partnership. At this point, the $300,000 cash they received from the sale of the building is distributed to both partners evenly. Ann receives $150,000 in cash, which equals her outside basis. For this reason, she recognizes no gain or loss on the dissolution of the partnership.

Alternatively, Carl recognizes a $50,000 loss outside of the partnership since his total outside basis is $200,000. At this point Carl is kicking himself because he paid taxes on a $50,000 gain in year three only to recognize a loss of $50,000 one year later. If Carl does not have any capital gains in year four, he can only utilize $3,000 of the capital losses on his tax return. The remaining losses are carried forward indefinitely.

Now let’s imagine the partnership made the 754 election when Carl purchased his 50% interest in year two. At that time, his inside basis would have been increased by $50,000 to match his outside basis. The partnership would have adjusted Carl’s inside basis in the building to $150,000, matching his outside basis. Then in year three, when Ann and Carl sell the building, Carl would not recognize any gain because his inside basis matches his share of the sales proceeds ($150,0000).

In year four, when the partnership dissolved, Carl would not recognize a loss on the distribution of cash from the partnership because his portion of the partnership’s cash balance ($150,000) equals his outside basis ($150,000). Carl avoided the timing issue regarding any taxable gain on the building sale and any loss on dissolution by making the 754 election.

 

On an Income-tax Return

If Carl and Ann decided to hold onto the building instead of selling in year three, Carl could deduct from his Schedule K-1 the basis adjustments related to the Section 754 election. The total Section 754 adjustment of $50,000 is reduced to zero over time using the same mechanics as the depreciation on the building. The 754 adjustment reduces both Carl’s inside and outside basis equally. The benefit is that he will receive deductions on line 13 of his K-1 against income on his tax return each year until the $50,000 is fully deducted.

Partnerships may be relatively easy to form, but the tax implications can be very complex. Section 754 is important for a partner purchasing an interest and for existing partners looking to secure a new partner to help their business. Accurate tracking of inside and outside basis is of the utmost importance to reduce negative tax consequences down the line.

 

Brenden Cawley is a senior associate at the Holyoke-based accounting firm Meyers Brothers Kalicka P.C., and Gabriel Jacobson is an associate with the firm; (413) 536-8510.

Class of 2021

For This Youth Leader, Opportunities Make All the Difference

By Mark Morris

Leah Martin Photography

Bill Parks like to tell the story of a former ‘Youth of the Year’ at the Boys & Girls Club of Greater Westfield who was discussing possible careers with a staff member.

“She wanted to be a marine biologist but said, ‘I know that will never happen,’” Parks recalled, but the staffer assured her that her desire was most certainly possible. This led to numerous conversations with the young woman about what she could do at the club and in her studies to make this dream a reality.

“He convinced her to think in terms of ‘yes, I can do this,’” Parks said. “Today, she is working in Florida as a marine biologist.”

And it’s not a surprising outcome to someone who believes life is about opportunities and relationships. As the club’s executive director, he follows this guiding principle, which, as much as anything else, is responsible for his being named a Difference Maker.

His own experience with the Boys & Girls Club actually began when he was a young boy attending the Marlborough Boys Club. He enjoyed going there because it was a place to meet up with friends, play basketball, and take part in activities. At that time, the club was for boys only, but Parks credits his sister with breaking the gender barrier and becoming the first girl to become a member.

“We snuck her into a Halloween party one year,” he said with a laugh. “After we did that, the staff decided to allow girls be part of the club.”

Once in high school, the club provided Parks his first job. “I worked at the gym, in the game rooms, and at the front desk,” he remembered. “It taught me how to deal with the public and how to work with kids.”

As a basketball player for Marlborough High School, Parks was recruited to play basketball at Fitchburg State College, allowing him the opportunity to become the first member of his family to attend college.

“That small gesture, to make sure I could go back to school, had a huge impact on my life. I’ve never forgotten it, and it’s been a goal of mine to always pay that forward.”

But the Division III college does not award scholarship money for athletes, and his parents — his father worked in a shoe factory, and his mother provided day-care services in the home — couldn’t afford to send him. To make matters worse, a local bank rejected his student-loan application.

Parks was worried he would have to give up his college plans, but when the club’s executive director heard about the rejection, he got involved, and gave Parks the name of a banker at First National Bank of Marlborough who was willing to approve the loan request. “You’re all set,” Parks recalled the director telling him. “You’re going back to school.”

It’s a story he recalls often as a moment that changed him forever. “That small gesture, to make sure I could go back to school, had a huge impact on my life,” he said. “I’ve never forgotten it, and it’s been a goal of mine to always pay that forward.”

By paying it forward through his role at the Boys & Girls Club of Greater Westfield — by helping other young people act on opportunities they don’t see as possible — Parks is truly a Difference Maker.

 

View to the Future

While the story of the marine biologist is inspiring, Parks told BusinessWest, it’s not really about any particular job.

“It’s more important for young people to see the opportunities they have to develop their futures,” he said. “Our latest campaign is called ‘Building Futures’ because that’s who we are and what we do.”

Education has been a driving force in Bill Parks’s life

Education has been a driving force in Bill Parks’s life, and he emphasizes its importance to those he serves.

Parks’ professional career with the Boys & Girls Club began in Eastern Mass., serving as executive director for clubs in Billerica and Waltham. Before he joined the Westfield club in 2004, he spent two years with the Jason Foundation, where he helped introduce STEM programs to Boys & Girls Clubs on a national level.

While he enjoyed the work at the foundation, he missed the interaction with all the staff and families who form the culture of a Boys & Girls Club. He found that again in Westfield, which was, in some ways, a return to his geographic roots, as he was born in Springfield and moved to Marlborough as a young child.

Applying what he’d learned in his earlier executive roles, Parks began to lay out a vision and a course of action for the Westfield club. He also understood that he could not accomplish his goals alone but needed to convince others to get behind his vision.

“One of the things I am most proud of is that people in the community wanted to be part of the vision we had for the club,” he said.

When he started in Westfield, the club provided services for nearly 100 children every day with an annual budget of $600,000. Now the club provides day-care, educational, and meal services for 350 children and teens every day with an annual budget of nearly $3 million.

Parks credits his staff for helping to make the vision a reality. Many staffers have long tenures on the job, and several started there even before he arrived.

“When you can maintain your existing staff, it allows you to do big things because you are not constantly changing people and roles,” he said, adding that the staff has also grown to 12 full-time and more than 40 part-time workers, making the organization a “decent-size employer in the city.”

A dedicated and consistent staff that gets results, he noted, makes it easier to attract potential donors. One donor told Parks he supports the club because he is confident that the contribution will generate efforts to help young people succeed, adding, “I like what you are doing, and I believe it will have an impact on our community.”

The role of Boys & Girls Clubs today has greatly changed from the days when Parks played basketball with his friends in Marlborough. Once he began his career there, he saw education becoming a more vital part of the organization’s mission.

Bill Parks says, the club became a critical resource

During the pandemic, Bill Parks says, the club became a critical resource for both kids with their remote learning and their parents who had to work.

“It was easy to see that, in addition to having a gym director and game-room director, clubs also needed an education director,” he said, adding that relationships with the School Department and the community at large are essential to his club.

“We are a part of the city of Westfield,” he said. “We think about what’s outside the walls of our club and how to help the overall community because, in the long run, that’s going to help the kids who are members of the club and kids who are members of the community.”

In 2011, the Westfield club was licensed to provide daycare for 77 children. Concerned he was running out of space and anticipating increased demand, Parks led a $3 million fundraising campaign titled “Raise the Roof.”

“We literally took the roof off the gym, raised the gym up to the second floor, and built classrooms underneath for the licensed childcare program,” he said, adding that the club also expanded the education room and technology lab. Now, the facility is licensed to provide daycare services for 200 children.

 

Learning Experiences

When COVID-19 hit, the Boys & Girls Club of Greater Westfield was available for virtual learning for students, and in September, the club became a remote-learning site for the School Department. The city of Westfield provided every school-age child with a Chromebook tablet, and, with club staff making sure to keep age groups separated and properly distanced, students are linked into the school system for a full day of learning via their Chromebooks. Middle-school and younger kids make up most of the students in this program, which has proven to be a vital resource for families.

“Some of the students couldn’t link in from home, while others have parents who have to leave the house for work during school hours,” Parks said. “With no one at home to take care of them, they have the option to come here and not miss school.”

With all those young minds at work, the club has become a significant meal provider for children as well.

“Parents can drop off kids at 7:30 in the morning, and they will get breakfast, lunch, a snack, and a hot meal every day,” he explained. The club also provides meals at three public-housing sites, resulting in the staff serving nearly 600 meals a day. Like remote learning, Parks sees the meals program as essential to the organization.

“A working parent can pick up their kid at the club and know their homework is done and they’ve been fed,” he said. “It allows parents to interact more with their kids instead of rushing around to put a meal on the table.”

Right now, Parks has plans to expand the club and its services further with a 15,000-square-foot addition, which will allow the club to offer services to an additional 100 children.

“We think about what’s outside the walls of our club and how to help the overall community because, in the long run, that’s going to help the kids who are members of the club and kids who are members of the community.”

The building plans originally called for an 11,000-square-foot expansion, but the pandemic forced engineers to increase the square footage per child and redraw the now-larger plans. The addition is scheduled to be completed by August with a September opening, in time for the new school year.

For Parks, the new structures are exciting, but the real payoff is the impact the programs have on people’s lives. “One of the things I’m most proud of is that people in the community say, ‘let’s call the Boys & Girls Club because they can probably help us or help these kids.’”

Thinking back to the time he got some needed help, Parks said he learned, years after graduating from college, that the banker who approved his student loan was on the board of directors for the Marlborough club. Likewise, he credits his current board of directors as the “guiding force” that supports all the Westfield club’s efforts, and points with pride to the cross-section of community members who make up the board.

“It’s not always easy to encourage people to be on your board,” he said. “We’ve been fortunate that people have reached out to us with an interest in joining ours.”

They are people, he added, who are willing to step up and help a kid in the community, and who recognize the value of paying it forward. His future was changed when he was able to go to college, and he’s dedicated his career to changing lives and finding ways to truly make a difference.

Accounting and Tax Planning Special Coverage

Reading the Fine Print

By Julie Quink

 

The economic stress created by the COVID-19 pandemic compelled business owners and individuals to apply for the relief funds provided by the Small Business Administration (SBA) in the form of Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL).

The rollout of these programs came at a time when the reality of the pandemic began to unfold, creating a frenzy for businesses and individuals to apply for the funding, in some cases, before the funding ran out.

Before the ink on the guidance and requirements for these stimulus funds was dry, applications for the funding were being processed, and funds were in the hands of businesses and individuals. To expedite getting funds to those who needed them, much of the clarification about the use of the funds, taxability of the funds, and criteria for forgiveness were ironed out after the funding was in hand and being spent by the recipients. What ensued was months of additions to the SBA’s frequently-asked-questions (FAQ) document clarifying the eligible uses of the funding to ensure forgiveness and further attempts by Congress and the SBA to adjust program requirements as the pandemic continued.

More than 50 FAQs were issued to clarify the PPP requirements, and 20 relating to the EIDL loans.

In the frenzy to obtain the funding for the PPP and EIDL loans, it became clear that not everyone read the fine print, or that the fine print changed as clarity was provided for these programs. The fine print provided recipients with additional requirements for the funding they may have been unaware of at the time of application or even during the spend-down period.

As trained professionals, accountants and business advisors spent months learning the requirements and pivoting as they changed. It would be unreasonable to assume that those who received the funding could keep up with the fast-paced changes that were occurring, including the fine print. For accountants, there have been times we could barely keep up with the changes.

Julie Quink

Julie Quink

“With the second round of PPP funding recently released and requirements more recently clarified, reading the fine print should hopefully not be such a daunting or surprising task.”

The result is that those receiving the funding need to be aware of those items in the fine print for the PPP funding and the EIDL loans that may impact them.

 

EIDL

Recipients of the EIDL loans, which could be up to $2 million in amount, were required to sign loan paperwork, outlining the terms of the funding. In the fine print of these loan documents are provisions that the borrower should look out for and be aware of. Some of the provisions are:

• For loans under $25,000, collateral is not required. For loans of more than $25,000, the SBA is provided collateral through business assets, current and future. Transfers or sales of collateral, except inventory, require prior SBA approval. In addition, prior approval is required by the SBA in the event these business assets will be used to secure other financing;

• Borrowers are required to keep itemized receipts, paid invoices, contracts, and all related paperwork for three years from the date of disbursement;

• Borrowers are encouraged to the extent feasible to purchase only American-made equipment and products with the proceeds of this loan;

• Borrowers must keep all accounting records five years before the loan and three years after in a manner satisfactory to the SBA;

• Borrowers must agree to audits and inspection of assets, if requested by the SBA, at the expense of the borrower;

• Borrowers have a duty to provide hazard insurance on collateral and may be asked to provide proof;

• Within 90 days of the borrower’s year end, financial statements, in the format specified by the SBA, are required to be furnished by the borrower;

• The SBA may require a review-level financial statement for a borrower upon written request by the SBA at the borrower’s expense;

• Prior approval from the SBA is required for distributions of the borrower’s assets to the owners or employees, including loans, gifts, or bonuses;

• Borrowers must submit, within 180 days of receiving a loan, an SBA certificate or resolution. For most borrowers, the SBA has followed up or is following up on this requirement now;

• Default under the provisions may result if a borrower merges, consolidates, reorganizes, or changes ownership without prior SBA approval; and

• The loans can be prepaid, without penalty, if the borrower does not need the funds or secures other financing.

For most borrowers, the requirements may be routine considerations, but for others, these may be new requirements.

 

PPP

In the fine print of the PPP loan documents are also provisions that the borrower should consider, as follows:

• For borrowers who received a PPP loan greater than $2 million, the SBA has indicated it will likely audit those borrowers for compliance with spending requirements;

• Although Congress has confirmed that the proceeds of the PPP loan are not taxable and the expenses paid with PPP are deductible, some states, such as Massachusetts, are not following the federal laws relative to forgiveness of the PPP loans as they have their own rules. For individuals in Massachusetts, the loan forgiveness is taxable income. This affects sole proprietors, S-corp shareholders, and partners of partnerships. A bill, co-sponsored by state Sen. Eric Lesser, state Rep. Brian Ashe, and five other co-sponsors, has been proposed to allow for non-taxability of the forgiveness amounts in Massachusetts;

• Depending on when the PPP loan was funded, the borrower may have a repayment term of two or five years for the loan; and

• Although forgiveness may be granted, the borrower should retain the records used for forgiveness. Generally, most records should be retained for seven years.

 

Bottom Line

Navigating the fine print is key for those who received the PPP and EIDL loans. The navigation becomes increasingly more difficult when the requirements continue to change and the funds have already been received and used to operate the business.

With the second round of PPP funding recently released and requirements more recently clarified, reading the fine print should hopefully not be such a daunting or surprising task.

 

Julie Quink is managing partner with West Springfield-based Burkhart Pizzanelli; (413) 734-9040.

Insurance Special Coverage

Are You Covered?

By Mark Morris

Christine Fleury

Christine Fleury says making alterations to the home — a common sight during the pandemic — could change insurance needs.

Call it the great migration indoors.

When the pandemic first hit, many people were forced to quickly convert their homes into offices, schools, and entertainment centers. Some in the insurance industry predicted this might lead to more homeowners insurance claims. In reality, it didn’t.

Similarly, as people spend more time in their homes, they also depend more on their water, electrical, and heating systems to work. While some insurance claims have been filed due to these systems failing after increased use, the increase has not been notable.

In fact, Christine Fleury, Personal Lines manager at Encharter Insurance in Amherst, said companies have actually seen a decrease in severe claims from homeowners. “As people spend more time at home, they are catching that large loss before it happens.”

Corey Murphy agreed, noting that, because people are home, they are noticing and taking care of seemingly minor problems like leaky gutters.

“As people spend more time at home, they are catching that large loss before it happens.”

“As people pay more attention to fixing the small issues, they prevent the larger problems from ever happening. A little preventive maintenance goes a long way,” the president of First American Insurance Agency in Chicopee noted.

Most homeowners insurance claims are the result of severe weather incidents. When COVID-19 first hit, winter was ending, and warm weather soon followed. Bill Trudeau, executive vice president and partner at HUB International New England in Agawam, said the mild winter this year has helped keep claims down.

“Other than a couple isolated wind events, the weather has behaved itself, and that means claims have tended to be in line with company projections.”

The pandemic has thrown a few wrinkles into the home-insurance picture this year, however.

For instance, many homeowners were motivated to invest in substantial improvements to their homes. Home construction and improvement contractors point directly to being cooped up in the house as the main motivator for people choosing to make improvements to their property.

What impact does all this renovation work have on the homeowners insurance carried on the house? The answer depends on what improvements are made and what kind of coverage is already in place.

Everyone BusinessWest spoke with agreed that, for small or cosmetic improvements, there is no need to contact an insurance agent. Some larger projects, however, may require altering or increasing a home’s coverage.

“Adding square footage to your home, doing a full remodel, or building a garage would all be reasons to consult your agent to make sure you have enough coverage,” Fleury said.

Even if they are not taking on home improvement projects, Trudeau advises people to call their insurance agent at least every couple of years so they understand the coverage that’s in place and whether they may need additional coverage.

“You can work with your agent to run a cost estimator,” Trudeau said. “It’s a software tool that takes the data from your home, including any upgrades, then shows you the current replacement cost if it was all suddenly gone.”

With the lifestyle changes wrought by the pandemic, it’s more important than ever to make sure the home — and everyone in it — are protected. Here are some key factors to consider.

 

Home Work

While they may not have set foot in the office in months, people who work from home are still protected from on-the-job injuries by workers’ compensation coverage. Office workers tend not to get injured on the job, but the coverage is in place if there is an incident.

“There has never been a distinction between whether employee actions emanate from an office at the company or from an office at the person’s home,” Trudeau said. “Because this coverage is broader in scope, COVID did not force us to make changes to workers’ comp plans.”

Bill Trudeau

Bill Trudeau says claims have been kept in check recently by a mild winter.

It’s not unusual for people working from home to have a computer, monitor, and even a printer that belongs to their employer. Murphy said some jobs may require employees to have additional business assets in the home, so it might be wise to make sure everything is covered. “Most policies will pay a little toward assets being home, but it’s usually a minimal amount.”

With homes serving as business offices and classrooms, more people — and their pets — are home at the same time. According to Trudeau, homeowners’ insurance policies consider any issues with an animal as a “strict liability event,” meaning there is no way to defend the action.

“If someone knocks on your door and your dog bites them, it generally means the insurance company pays the claim,” he explained, adding that, as people acquire more pets, the likelihood of claims increases. Most insurance companies keep a list of dog breeds they will not cover because those breeds have higher incident rates.

“You can work with your agent to run a cost estimator. It’s a software tool that takes the data from your home, including any upgrades, then shows you the current replacement cost if it was all suddenly gone.”

Murphy encourages pet owners to speak with their agent because these restrictions can vary widely among insurers. “Just because one company doesn’t want to cover your breed of dog, check with another company; it’s not a universal list.”

Whether they have pets or not, Fleury advises her clients to carry personal liability coverage, commonly known as an umbrella policy, that supplements both homeowners and auto coverage.

“When we write home and auto policies for a customer, we always recommend buying personal liability coverage as well because it gives you that additional safety net,” she said. A typical umbrella policy costs less than $200 but can provide up to $1 million in additional liability coverage when the limits of homeowners or auto coverage are exceeded.

While dog bites and leaking water pipes are obvious reasons to carry homeowners insurance, it can be much harder to detect a leak when personal data is compromised. A significant increase in identity theft has motivated insurance companies to begin offering identity-theft protection as part of their homeowners policies.

“With everyone at home and increased online activity, it’s more important than ever to safeguard your privacy from someone getting into your system and doing real damage,” Trudeau said.

Apart from identity-theft insurance, he advises everyone to follow best practices such as using multi-factor authentication. For example, when working on an important account online, a code is sent to the user’s personal phone that must be entered to gain access.

Corey Murphy

As people pay attention to small issues in the home, Corey Murphy says, they can prevent larger issues from ever arising.

When fraudsters accesses online bank accounts, they often add a payee into the account. Trudeau advises customers to check with their bank to make sure it uses multi-factor authentication to prevent an outsider from accessing their accounts and to make sure it’s turned on at home.

“If someone has logged into your computer and they don’t have your phone, they can’t get that code,” he said.

Fleury said her agency includes identity-theft coverage in all its homeowners policies. “We feel it is important insurance and recommend at least $5,000 worth of coverage for identity theft.”

 

From a Distance

The pandemic has changed the insurance business in other ways. Typically, when a homeowner files an insurance claim, an adjuster will visit the home and walk through to personally inspect the damage. With COVID-19 concerns, that’s happening much less often.

“In some ways, COVID is moving insurance companies along the digital side of things,” Murphy said. “They are allowing homeowners with a claim to submit photos and even have video calls if the insurer is set up for it.”

The trend toward relying on consumer photos rather than a visit by an adjuster follows what’s been happening on the auto-insurance side for some time.

“If someone knocks on your door and your dog bites them, it generally means the insurance company pays the claim.”

“Many auto insurers have created apps where the person making the claim takes a photo of the damage, uploads it for an adjuster to review, and then the payment is processed,” Fleury said.

The move toward more digital interaction is no surprise to Trudeau.

“Long before COVID, people e-mailed pictures and documents to us,” he said. “Companies have simply accelerated the move to modernization by using many tools they already had.”

Murphy likes to remind customers that every insurance company offers something a little different that their competitors. That’s why it’s important to put some thought into selecting a homeowners insurance policy.

“People need to assess what they have, in terms of their house and what’s in it, and then speak with an agent about what needs to be covered,” he said, adding that it’s about matching a person’s situation with the company that can best provide coverage for their needs — especially at a time when those needs, and demands on the home, are still in flux.

Community Spotlight

Community Spotlight

By Mark Morris

Jennifer Nacht

Jennifer Nacht says a heavy focus on outdoor experiences last year helped Lenox weather the economic impact of the pandemic.

For the past year, the town of Lenox showed what happens when uncertainty meets a can-do attitude.

Despite the formidable challenges of COVID-19, Town Manager Christopher Ketchen said, Lenox residents and businesses have been remarkably resilient.

“Throughout the pandemic, our residents demonstrated how much they love our town,” Ketchen said. “They make their homes here, and our businesses are invested in their customers and their community.”

What began as a normal year of planning events at the Lenox Chamber of Commerce was suddenly derailed in March. Once they realized the pandemic was going to last more than a couple months, Executive Director Jennifer Nacht said, chamber members and town officials quickly met to put together a plan to salvage at least some activity for Lenox.

“We went through each season and developed a general outline of things we could do,” Nacht said. “Even though we did not know what the year was going to look like, we were able to turn around some great activities.”

Like many towns, Lenox encouraged restaurants to offer tented outdoor dining and allowed them to expand outdoor seating into public parking spaces. The town also added covered dining terraces in public spaces around town.

“The select board lifted alcohol restrictions so people could bring a bottle of wine to Lilac Park, for example, where we had set up a dining terrace,” Nacht said.

“You couldn’t get a parking place at the trailheads in town. Even obscure trailheads that were once known only to a handful of locals were crowded.”

Some developments last spring were rough. In May, the town learned that, due to COVID-19 concerns, Tanglewood had canceled its 2020 season. For some perspective on the importance of Lenox’s largest summer attraction, a Williams College study in 2017 estimated the economic impact of Tanglewood to Berkshire County and Western Mass. at nearly $103 million annually.

Because they didn’t know what to expect when Tanglewood called off its season, Nacht said everyone concentrated their efforts on making Lenox a welcome and inviting place. Outdoor dining was a first step that helped to establish a more vibrant atmosphere, and it inspired further activities.

For example, the Lenox Cultural District and the chamber organized Lenox Loves Music, an initiative that featured live music performed at the Church Street Dining Terrace for seven straight Sundays in August and September. It was a hit.

“Because we were able to turn on a dime and get everything set up, we were able to make the outside experience fun,” Nacht said. “As a result, we were better able to weather the financial impact of the pandemic.”

 

Hit the Road

If entry points to walking and biking trails are any indication, Ketchen said the pandemic helped many people discover the town’s outdoor attractions for the first time. “You couldn’t get a parking place at the trailheads in town. Even obscure trailheads that were once known only to a handful of locals were crowded.”

For more than 40 years, Lenox has held Apple Squeeze, a harvest celebration that takes over much of the downtown area with 150 food and craft vendors. The event was canceled for 2020 because of concerns that, even with restrictions, too many people would gather, leading to unsafe crowd sizes.

Lenox Loves Music

Lenox Loves Music was a hit during a time when live music was in short supply.

As an alternative, the chamber and American Arts Marketing developed the Lenox Art Walk and scheduled it for the late-September weekend when the Apple Squeeze would have taken place. Forty artists set up in different areas around town in ‘artist villages,’ which were arranged so no more than 50 people could be in one area at a time. Foot-traffic flow was also designed to keep people moving through the exhibits.

Nacht said the Art Walk received great feedback, and the artists involved loved exhibiting their work. The event also led to phone calls from event organizers from several Eastern Mass. towns who wanted to know how to stage a similar event.

The old adage about necessity being the mother of invention definitely has proven true for Lenox. “We just tried some different things that we probably would have never attempted, or done so quickly, had it not been for the pandemic,” Nacht said.

In the beginning of the summer, traffic in town was about half of what it would be during a normal season. As the weather became warmer and travel restrictions eased around the state, both traffic and business picked up.

“We began seeing more day trippers, many from the Boston area who had never been out our way,” Nacht said, adding that good weather in the summer and fall extended the outdoor season nearly to Thanksgiving.

While lodging in the area was restricted by the number of rooms that could be offered, she noted, from September through November, inn and hotel rooms were booked to the capacity they were allowed.

As the owner of the Scoop, a Lenox ice-cream store, Nacht was one of many business owners forced to move customer interactions outdoors. She found a fun way to adjust.

“We did it sort of Cape Cod style, where people order at one window and pick up their ice cream at a second window,” she explained, adding that, while 2020 was not as successful as previous years, the Scoop still saw steady business throughout its season. Even non-food stores, inspired by all the outdoor activity, set up tents in front of their shops to add to the vitality.

In a normal year, Lenox Winterland is a tradition to kick off the holiday season that features a tree-lighting ceremony and Santa Claus meeting with children. In this very-not-normal year, Winterland was forced to cancel.

Instead of losing their holiday spirit, however, the Cultural District and chamber presented a creative alternative. Local businesses and artists teamed up to decorate 30 Christmas trees, which were displayed in a tree walk through town. Nacht said the inaugural Holiday Tree Walk was so well-received, plans are in the works to expand and make it an annual event.

“Despite the obstacles of COVID, we had a decent tourism business,” she said. “We’ll continue to offer more fun events to keep the vibrancy of the town going and improving.”

 

Passing the Test

Lenox has always been proud of its cultural amenities, such as Tanglewood, Edith Wharton’s house at the Mount, Shakespeare and Co., and others. As those were scaled back, Ketchen said, the town’s outdoor amenities gained exposure they might not have otherwise.

“Once we are allowed to enjoy our cultural institutions to their fullest again, people will also have more awareness of all the recreational opportunities Lenox has,” he told BusinessWest. “That’s a big positive for us as we look to the future.”

While Nacht hopes to see Tanglewood up and running, at least in some form, in 2021, she admits the past year was quite the learning experience. “We are so dependent on Tanglewood, it was an interesting test to see what we could do without Tanglewood there.”

Despite the challenges put on municipal budgets, Ketchen said Lenox was able to pursue several modest infrastructure projects in 2020, such as maintaining roads and public-utility infrastructure. “When folks are ready to come to Lenox for the recreation and the culture, the public utilities and infrastructure will be waiting for them.”

“We began seeing more day trippers, many from the Boston area who had never been out our way.”

In short, Lenox is not only weathering the COVID-19 storm, it’s finding ways to come out stronger on the other side. Indeed, when this community, which depends on cultural tourism, was challenged to find creative solutions to stay afloat, it answered the call. Nacht credited Lenox businesses for making quick and significant adjustments in their operations.

“It was really inspiring to see our businesses make the best out of a not-so-great situation,” she said. “It says a lot about their commitment to our town.”

Undaunted by the near future, Nacht noted several businesses are planning for April openings. And she looks forward to the new year knowing that Lenox can present all the outdoor events that worked well in 2020.

“With knowledge, you just learn to do things better, and we learned a lot last year,” she added. “Once the tulips come out, that’s when we start to see everything come alive again.”

Accounting and Tax Planning

Round 2

By Jonathan Cohen-Gorczyca, CPA, and Amila Hadzic

On Dec. 27, 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act was signed into law to assist businesses who have been financially impacted by the COVID-19 pandemic. As a result of the Economic Aid Act, the Paycheck Protection Program’s second-draw loan program was created.

This program will allow the U.S. Small Business Administration to provide eligible businesses with additional loans, similar to those from the original Paycheck Protection Program (PPP). The last day to apply for the second-draw loan is March 31, 2021, and there are eligibility and documentation requirements that need to be met during the application process.

 

Eligibility

This loan can only be made to a business that has received a first-draw PPP loan and has used the full amount of the loan on eligible expenses before the disbursement of the second loan. A business that was ineligible for the first loan cannot receive the second-draw PPP loan.

In order to be eligible for this second-draw PPP loan, the business must have 300 or fewer employees. The business must have also experienced at least a 25% reduction in revenue in 2020 compared to 2019. The revenue reduction can be calculated by comparing one quarter in 2019 with the same quarter in 2020. However, if the business was not in operation for the full year in 2019, there are other periods that can be used for this calculation. If an entity was in operation for all four quarters in 2019, then the annual revenue can be compared with 2020.

 

Loan Amount

The maximum loan amount for the second loan is the lesser of $2 million or two and half months of the business’ average monthly payroll. For those who are assigned a NAICS code with 72 or are a seasonal employer, the loan amount can be greater than two and a half months. The borrower can use either total wages paid in 2019 or wages paid in a 12-month period before the loan was made to calculate average monthly payroll. There is also the option to use 2020 wages.

 

Application and Documentation

In order to apply for this loan, the SBA Form 2483-SD needs to be completed. Form 941, state quarterly wage unemployment forms for the applicable quarter used, and other payroll records may be needed depending on the payroll period used to calculate the loan amount. For ease of applying for a second-draw loan, it is recommended that you apply using the same lender, as much less payroll documentation will be needed because it should already be on file with the institution.

The documentation requirements are similar to the first PPP loan. If the loan is greater than $150,000, documentation will be needed to show the revenue reduction at the time of application. Bank statements, annual tax forms, and quarterly financial statements can be provided as documentation. For loans under $150,000, this information can be submitted during the loan-forgiveness process.

 

What If I Did Not Receive a First-draw PPP Loan?

The SBA is also accepting applications for first-time PPP borrowers. The loan is capped at $10 million for eligible businesses. If the loan is used to pay for payroll and other eligible expenses during the eight- or 24-week period, it is eligible for forgiveness. Eligible costs for both the second-draw loan and first-draw PPP loan include payroll costs, business mortgage interest, rent, lease payments, utility payments, worker-protection costs, property damage costs due to looting and vandalism not covered by insurance, and other supplier and operation costs. Payments made to an independent contractor do not qualify.

As with the first-draw PPP loan, it is best to reach out to both your accountant and loan provider to find out if a second-draw PPP loan is right for you. They will be able to help you determine what is right for your business and help walk you through the application process.

 

Jonathan Cohen-Gorczyca, CPA, is a manager, and Amila Hadzic is a staff accountant with the accounting firm Melanson, which has offices in Greenfield and Andover, as well as Merrimack, N.H. and Ellsworth, Maine.

Accounting and Tax Planning

A Tax-planning Checklist

By Dan Eger

 

It is that time again, your favorite and mine, tax season!

As we have made it through hopefully the worst of the pandemic, dealing with all the ups and downs of learning this new normal in life, one thing will remain the same — the IRS still wants our money. At some things have not changed due to COVID-19.

Here are some steps to take now to help make filing for the 2020 tax season easier. Below is a list of items to gather. These are the most common required forms and items. The list is not all-inclusive, as everyone’s tax situation is different. Also included are a few other things for you to consider as you prepare to file your 2020 tax return.

 

Documentation of Income

• W-2 – Wages, salaries, and tips

• W-2G – Gambling winnings

• 1099-Int and 1099-OID – Interest income statements

• 1099-DIV – Dividend income statements

• 1099-B – Capital gains (sales of stock, land, and other items)

• 1099-G – Certain government payments

— Statement of state tax refunds

— Unemployment benefits

• 1099-Misc – Miscellaneous income

• 1099-S – Sale of real estate (home)

• 1099-R – Retirement income

• 1099-SSA – Social Security income

• K-1 – Income from partnerships, trusts, and S-corporations

 

Documentation for Deductions

If you think all your deductions for Schedule A will not add up to more than $12,400 for single, $18,650 for head of household, or $24,800 for married filing jointly, save yourself the time required to itemize deductions and just plan to take the standard deduction.

 

• Medical Expenses (out of pocket, limited to 7.5% of adjusted gross income)

— Medical insurance (paid with post-tax dollars)

— Long-term-care insurance

— Prescription medicine and drugs

— Hospital expenses

— Long-term care expenses (in-home nurse, nursing home, etc.)

— Doctor and dentist payments

— Eyeglasses and contacts

— Miles traveled for medical purposes

 

• Taxes You Paid (limited to $10,000)

— State withholding from your W-2

— Real-estate taxes paid

— Estimated state tax payments and amount paid with prior year return

— Personal property (excise)

 

• Interest You Paid

— 1098-Misc – mortgage-interest statement

— Interest paid to private party for home purchase

— Qualified investment interest

— Points paid on purchase of principal residence

— Points paid to refinance (amortized over life of loan)

— Mortgage-insurance premiums

 

• Gifts to Charity (For 2020, filers who claim the standard deduction can take an additional deduction up to $300 for cash contributions.)

— Cash and check receipts from qualified organization

— Non-cash items, which need a summary list and responsible gift calculation (IRS tables). If the gift is more than $5,000, a written appraisal is required.

— Donation and acknowledgement letters (over $250)

— Gifts of stocks (you need the market value on the date of gift)

 

• Additional Adjustments (Non-Schedule A)

— 1098-T – Tuition statement

— Educator expenses (up to $250)

— 1098-E – Student-loan interest deduction

— 5498 HSA – Health savings account contributions

— 1099-SA – Distributions from HAS

— Qualified child and dependent care expenses

— Verify any estimated tax payments (does not include taxes withheld)

 

Sole proprietors (Schedule C) or owners of rental real estate (Schedule E, Part I) need to compile all income and expenses for the year. You need to retain adequate documentation to substantiate the amounts that are reported.

 

Other Items to Consider

Identity-protection PIN

If you are a confirmed identity-theft victim, the IRS will mail you a notice with your IP PIN each year. You need this number to electronically file your tax return.

Starting in 2021, you may opt into the IP PIN program. Visit www.irs.gov/identity-theft-fraud-scams/get-an-identity-protection-pin to set up your IP PIN. An IP PIN helps prevent someone else from filing a fraudulent tax return using your Social Security number.

 

What If You Have Been Compromised?

How do you know if someone has filed a return with your information? The most common way is that your tax return will get rejected for e-file. These scammers file early. You may also get a letter from the IRS requesting you verify certain information.

If this does happen, there are steps to take to get this rectified:

1. File Form 14039 (Identity Theft Affidavit).

2. Paper-file your return.

3. Visit identitytheft.gov for additional steps.

 

New for 2021: Recovery Rebate Credit

Eligible individuals who did not receive a 2020 economic impact payment (stimulus check), or received a reduced amount, may be able to claim the Recovery Rebate Credit on their 2020 tax return. There is a worksheet to use to figure the amount of credit for which you are eligible based on your 2020 tax return. Generally, this credit will increase the amount of your tax refund or lower the amount of the tax you owe.

 

Who Will Prepare My Return?

Are you going to be preparing your tax return, or will you hire someone to file on your behalf? You might want to plan that out now so you know the required information you will need and the fee structure you can expect to pay for completion of all applicable forms. In addition to all the items listed above, the tax preparer will ask you for a copy of your last tax return that was filed. The IRS offers a ‘file free platform’ to file your tax return if your income is under $72,000. You can find this at irs.gov or the IRS2Go app. There are also some local tax-assistance and counseling programs, depending on your age and income levels (VITA/TCE).

 

Interactive Tax Assistant

The Interactive Tax Assist (ITA) is an IRS online tool (irs.gov) to help you get answers to several tax-law items. ITA can help you determine what income is taxable, which deductions are allowed, filing status, who can be claimed as a dependent, and available tax credits.

 

Be Vigilant

Finally, be especially careful during this time of year to protect yourself against those trying to defraud or scam you. The IRS will never — let me repeat that: NEVER — call you directly unless you are already in litigation with them. They will not initiate contact by e-mail, text, or social media. The IRS will contact you by U.S. mail.

However, you still need to be wary of items received by mail. Anything requesting your Social Security number or any credit-card information is a dead giveaway. Watch out for websites and social-media attempts that request money or personal information and for schemes tied to economic impact payments. You can check the irs.gov website to research any notice you receive or any concerns you may have. You can also contact your tax practitioner for help and assistance.

 

Dan Eger is a senior associate at Holyoke-based accounting firm Meyers Brothers Kalicka; (413) 536-8510.

Insurance

Expanding the Footprint

Lussier-Dowd’s new office

Lussier-Dowd’s new office at 181 Park Ave. in West Springfield expands the merged company’s footprint to six locations.

The Dowd Agencies and the J. Raymond Lussier Insurance Agency announced last week they have merged their operations and will be known as Lussier-Dowd Insurance.

The merger and addition of a branch in West Springfield expands Dowd’s footprint to six offices located throughout the Pioneer Valley. The new office, located at 181 Park Ave., is minutes from Routes 5 and 20, and Interstates 91, 291 and 391. An open house will be planned at a later date.

“We’re excited for the Lussier Agency to be part of our team. I have known the Lussier family for many years, and they have always been a highly professional, customer-driven insurance agency,” said John Dowd Jr., president and CEO of the Dowd Agencies. “We are also excited to have a location in the fine town of West Springfield.”

The West Springfield office will be a full-service insurance agency providing personal, commercial, wealth-management, and employee-benefits products and services.

A native of West Springfield, David Griffin Jr., vice president of the Dowd Agencies, said he is excited about his company planting roots in his hometown. “I was born and raised in West Side, so it is particularly exciting for me. More importantly, West Side is a great and vibrant town here in Western Mass.”

The Lussier-Dowd Insurance Agency is open Monday through Friday, from 8 a.m. to 4:30 p.m., and can be reached by calling (413) 737-5359.

A full-service agency, the Dowd Agencies has been helping individuals and businesses in Western Mass. with their personal insurance, commercial insurance, employee benefits, and financial needs for more than 120 years. Established in Holyoke in 1898, the Dowd Agencies is the oldest insurance agency in Massachusetts with operations and management under continuous family ownership.