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Accounting

‘Uneasiness.’

That was the word Julie Quink summoned, after considerable thought, to describe the sentiment of most small-business owners as the calendar turns to 2021.

And it seems like an appropriate choice.

Indeed, regardless of how a business fared in 2020 — and some of her clients actually held up pretty well — Quink, managing partner at the West Springfield-based accounting firm Burkhart Pizzanelli, said most simply don’t know what to expect for the year again. Thus, they are uneasy and likely to be cautious and conservative in the months to come, which will likely play a role in how quickly and profoundly this region bounces back from all the body blows it took over the past 10 months or so.

Julie Quink

“I have clients that are doing swimmingly well — they’re in the right industries that are flourishing in this environment — and I have others, third-generation businesses, that are closing; we’re helping them wind down.”

Many of these businesses are also uneasy because they were able to “limp along,” as she put it, thanks to support from the CARES Act, especially in the form of forgivable Paycheck Protection Program (PPP) loans that provided a much-needed cushion from sometimes dramatic drops in revenue.

Starting this past fall, when many businesses effectively spent down their PPP, they’ve been getting a look at operating without a net underneath them, if it can be called that, and for many, it’s a scary proposition.

“That’s why I think we’re going to see the true impact of this crisis over the next 12 months or so, especially as the pandemic continues,” said Quink, adding quickly that, another round of PPP was included in the recently passed stimulus package, little is known about how much help will be available, when, and to whom. And even for those businesses that get another round of help, 2021 is likely to be a struggle, she went on, again because of all that uneasiness.

Quink, like most of those in the accounting and tax field, has a good read on the economy and the factors driving it because her portfolio of clients is diverse and represents virtually every sector. Slicing through the phone calls, the questions asked, and the answers provided, she said some businesses have actually done well during this pandemic (she has a few commercial cleaners, for example), others are holding their own, and still others are really struggling.

“There is such a mixed bag with our clients,” she said, adding that this diversity of performance reflects what’s happening across the region. “I have clients that are doing swimmingly well — they’re in the right industries that are flourishing in this environment — and I have others, third-generation businesses, that are closing; we’re helping them wind down.”

She related the story of a second-generation business, a wholesaler that services the airline industry, among many others. Revenues are down roughly 50% from a year ago, not because there are fewer customers, but because most of the existing customers are ordering far less as their needs have diminished.

“We had a conversation today about how to plan, and I said, ‘you should tighten your belt because I think this is going to be a rough ride this year,’” she recalled, adding that she has given this same advice to many of her clients.

Getting back to that sentiment of uneasiness, Quick said there are many things to be uneasy about, from the ongoing pandemic to a presidential election that, while officially over, has been tumultuous in every way, to the deep uncertainty about the year ahead.

“People are waiting — they’re waiting for things to be final,” she said, using that phrase to describe everything from the stimulus package to the pandemic itself. “And I don’t think the election helped anything; all the events surrounding the election have made people uneasy.”

Still another factor contributing to this state concerns changes that have come to how business is being done, and questions about when, or even if, things will go back to normal.

“I have some clients who are international and can’t fly and can’t participate internationally in person,” she explained. “So they’ve had to refocus on how they do business now, and they don’t really know what the future will bring.”

As for her own profession, 2020 was certainly a different year, one with a tax season that never seemed to end. But it was a good year for most, because clients needed more assistance, or ‘touches,’ as she called them, with PPP and other matters.

And 2021 is certainly shaping up as more of the same, with another round of PPP looming, more questions concerning how to plan for the months and quarters ahead, and more of that uneasiness that will certainly play a large role in determining what kind of year this will be.

—George O’Brien

Hospital Leaders Urge Public Not to Let Their Guard Down

By Joseph Bednar October 27, 2020

COVID-19

A Second Wave?

Dr. Robert Roose says Mercy Medical Center is maintaining its COVID-19 protocols — and hopes the public does so as well.

Dr. Robert Roose knows we’re all sick of this — the mask wearing, the working and learning from home, the lack of fun places to visit … all of it. He gets it. Really.

But here’s the thing.

“The virus has not grown weary of transmitting itself,” said Roose, chief medical officer at Mercy Medical Center. “And it has not waned in the summer months with the hot weather, and it will not wane in the colder months. Our practices need to be just as vigilant as they were in the spring and summer in order to be effective. And we need to continue to be clear, consistent, and fact-based in our messaging.”

We spoke to a few local medical leaders who all cautioned against letting ‘pandemic fatigue’ change behaviors, especially when a vaccine is still not available, infections are rising in many states (the positive-test rate has crept up in Massachusetts, too), and no one knows how the looming flu season will intersect with a still-prevalent coronavirus.

“We aren’t seeing an influx of hospitalized patients like we saw here in the Northeast in March, April, and into May, but we see the data, and it gives all of us some reason for caution, if not broader concern regarding what the colder season might bring. There’s a lot for us still to be cautious about,” Roose told BusinessWest.

That said, local hospitals have learned a lot since the spring as well, he added. “We gained a lot of knowledge we can use to directly improve the health and safety of patients and our colleagues in the community. We have also implemented ways to ensure that care can remain accessible, timely, and safer throughout the pandemic.”

“The virus has not grown weary of transmitting itself. And it has not waned in the summer months with the hot weather, and it will not wane in the colder months.”

Dr. Simon Ahtaridis, chief medical officer at Holyoke Medical Center, said shortages of key supplies in the spring — not just personal protective equipment (PPE), but reagent and transport medium for test kits — led to reviews of processes that will leave hospitals more prepared if a second wave does ensue.

“This virus is unpredictable, and a lot of our early conclusions didn’t bear out,” he said. “We didn’t have lot of experience with this particular virus — how it behaves, how it’s contracted. There was a lot of back and forth in the scientific community on how to best handle it.”

While the medical community saw a great deal of variability in protocols, the goal was always to keep patients — and the community at large — safe. That’s still the case, Ahtaridis said, but part of the challenge is encouraging them to do their part.

Dr. Estevan Garcia

“It’s clear to me that folks are all tired of all the precautions. Until a vaccine is proven effective against COVID, we can’t let our guard down.”

“In terms of thinking about a second wave, a lot of it will depend on the behavior of the public and that virus fatigue. We thought it would be a few weeks, and we’ve seen it drag on and on,” he noted. “The risk is the public starts to lose that caution they’ve been displaying, where they’re not wearing masks, they start to let their guard down. That can lead to a second wave in and of itself.”

Mercy is certainly not letting its guard down, Roose said.

“It’s important to recognize we will continue to maintain the safety protocols in our care that have managed to keep infections much lower than they otherwise would have,” he said. “We’ve managed to reduce and, in some cases, eliminate clusters of infection in hospitals and other settings.”

Local medical leaders hope that trend continues — and they’re doing much more than hoping.

Virus, Meet Virus

That’s because there’s always a new wrinkle — the latest being flu season, which is right around the corner.

“There’s concern about the cooler weather driving everyone indoors, and concern with the flu as well,” said Dr. Estevan Garcia, chief medical officer for Cooley Dickinson Health Care. “We’re beginning to see upper respiratory infections, which are concerns as we move into the fall and winter timeframe. But is it COVID? Is it a cold? Is it the flu? We treat them differently, and we need to make sure we’re isolating the COVID cases.”

Garcia said area hospitals have engaged in a remarkable show of cooperation over the past eight months, communicating with each other on a regular basis and making sure sufficient testing is available. With testing more widely available than it was in the spring, he encouraged not only symptomatic people to be tested, but healthy individuals planning on visiting a grandparent.

He and Ahtaridis both noted that some countries — Australia being the most-cited example — saw much less severe flu seasons than usual earlier this year, and experts credit the widespread use of masks and social-distancing protocols.

“My suspicion is it might be a light influenza season,” Ahtaridis said. “But we are still actively vaccinating patients and making sure patients have information about the flu vaccine, so they’re ready for the season. It might be less severe than last season, but there won’t be zero cases.”

Garcia agreed. “Because of the protections they’ve been taking for COVID, some countries have seen a less severe flu season. But that shouldn’t give people a false sense of security; you should still get a flu shot, use physical distancing, mask wearing, hand washing … all those things are good against the flu.”

He worries, however, that not everyone will recognize the value in continuing COVID protocols.

Dr. Simon Ahtaridis

“My suspicion is it might be a light influenza season. But we are still actively vaccinating patients and making sure patients have information about the flu vaccine, so they’re ready for the season. It might be less severe than last season, but there won’t be zero cases.”

“It’s clear to me that folks are all tired of all the precautions,” he said. “Until a vaccine is proven effective against COVID, we can’t let our guard down. That’s how we have clusters and multiple people getting infected. If we want to get kids back to school and open up businesses again, we’ve got to get through the next wave of late fall and winter and into spring, when, hopefully, there may be some availability of a vaccine.”

The colder weather will pose a challenge, he added, driving people into enclosed spaces for longer periods.

“The fatigue factor is real, but we’ve got to double our efforts to protect ourselves, so masks, hand hygiene, and social distancing are all super important as we move forward,” Garcia said. “One challenge, as we move indoors, will be social distancing at restaurants — these are places we want to continue to stay open, but let’s make sure we’re on top of it and people don’t let their guard down. We need to hold on for the next probably four to six months.”

Roose agreed that pandemic fatigue is a real phenomenon and tough to combat, especially heading into a time of the year usually packed with holiday gatherings. Where people must gather, he said, they need to remember what’s been working in Massachusetts so far.

“We can appeal to people’s sense of generosity and responsibility, their care and love for others — this is something we can do that ultimately can help protect the safety and health of others,” he said. “When you can connect it to something personal or to somebody’s values, that can be a much more effective way to understand the why behind what we’re doing.”

Taking the Long View

These protocols contributed to Massachusetts seeing a relaxation of its infection numbers throughout the summer, but Ahtaridis noted that the positive test rate rose from 2% to 4% recently. “It’s not a huge number, but it’s a doubling of cases, and that probably does reflect changes in behavior and risk tolerance.”

The solution? Do your part.

“Until we have a vaccine, I suspect we’re going to continue with some level of precautions and attention to safety,” he said — and perhaps some of those precautions will never go completely away. He suggested people will look at photos of crowds years from now and be able to tell, by the presence or absence of masks, whether a picture was taken before 2020 or not.

“Even if COVID goes away, even with a vaccine and the advent of better treatments for COVID, I think the public has become more aware of personal space, shared air, and hygiene,” he added. “We’ll probably see some long-term changes.”

With infection numbers still low when compared to some other states, it’s a good time to get vaccinated against the flu, Garcia said — or to get that procedure that was put off in the spring.

“During the spring, people were putting off needed care,” he said, due to both their own concerns and hospitals and other medical facilities shutting down certain treatments to make room for COVID patients. “We’re doing our best to get the message out, make sure people know it’s safe to get care. You shouldn’t put off your care. You don’t want to shut everything down moving forward.”

Roose agreed. “We have processes and procedures in place where we can continue to provide routine, elective, and necessary care while also handling people with COVID,” he said, noting that hospitals, including Mercy, have done a good job of creating separation between patients possibly exposed to coronavirus and those haven’t been exposed. “That’s an important message for the community to hear — that this system has the ability to treat you, even if there’s a second wave of infections.”

While some procedures fall into the cosmetic category, Ahtaridis added, most medical care is not purely elective, which is why hospitals, Holyoke included, have put plenty of thought and resources into making sure they’re safe spaces.

“While the risk never goes down to zero, from a risk-benefit perspective, if you have a medical need, getting it addressed is very important because unmet needs can cause bigger problems down the road,” he said.

“Hospitals tend not to be where people are getting COVID — it tends to be out in the community,” he added. “While not everything is an emergency, most of the things we do are time-sensitive, and if we let medical issues go unaddressed, the consequences can be somewhat dire. We encourage everyone to seek care as appropriate, and do it with confidence.”

And, of course, keep wearing a mask.

Joseph Bednar can be reached at [email protected]

Cautious Reopening Plan Draws Questions, Criticism

By Joseph Bednar May 26, 2020

Coronavirus Cover Story

Baby Steps

After more than two months of a widespread economic shutdown, Massachusetts is opening its economy again — sort of. The plan, announced by Gov. Charlie Baker on May 18, allows some businesses to open their doors under tight health restrictions, while others — including restaurants, spas, and most retail — have to wait longer to invite the public inside. What’s got businesses frustrated is not knowing exactly when their turn will come — and the financial impact they continue to endure every week they have to wait.

Massachusetts is the 15th-most populous state in the U.S., yet, the day Gov. Charlie Baker released his economic reopening report, it had reported the fourth-most total COVID-19 cases in the country.

So, the reopening was never going to be a free-for-all.

“We were all very aware that, no matter what we went forward with, there will be more infection and more deaths,” said Easthampton Mayor Nicole LaChapelle, one of 17 members of the governor’s Reopening Advisory Board. “While the public-health metrics are numbers, statistics, they’re also people — they’re your neighbors, maybe your mother or father.

“People want to open,” she told BusinessWest, “but they don’t want to put people at risk — themselves, their customers, their parents. The compassion is remarkable.”

That’s why it was no surprise that Massachusetts is reopening slowly and cautiously. Last week, manufacturing facilities, construction sites, and places of worship were allowed to return under strict guidelines (more on those later), and on May 25, the list will expand to offices (except in Boston) and labs; hair salons, pet grooming, and car washes; retail, with remote fulfillment and curbside pickup only; beaches, parks, drive-in movies, and some athletic fields and courts; fishing, hunting, and boating; and outdoor gardens, zoos, reserves, and public installations.

That covers what Baker is calling phase 1, with three more reopening phases to follow. Conspicuously not on the phase-1 list? Restaurants, spas, daycare centers, in-store retail … it’s a long list. And, for many business leaders, a frustrating one.

Nancy Creed says businesses in phase 1 got the clarity they were seeking, but those in phase 2 are still waiting.

“There’s certainly an appreciation for public health, but there also needs to be some common sense, and I think it’s very hard to explain why it’s OK for 200 people to be in line at Home Depot, but a small, downtown store can’t have two or three people in it,” Rick Sullivan, president and CEO of the Economic Development Council of Western Massachusetts, told BusinessWest.

“Certainly everyone has to be smart,” he added, “but I think there needs to be more common sense brought into the reopening. I appreciate where the governor is — the balancing act — and I think the reopening committee did a great job with outreach, but there needs to be clear guidance and some common sense.”

Others were less diplomatic.

“While protecting public health is important and something we all support, it defies logic to declare that the opening of barbershops and hair salons is safe, while claiming opening small retail businesses is not,” Jon Hurst, president of the Retailers Assoc. of Massachusetts, said in a statement.

“The same is true for the opening of churches and large office buildings,” he went on. “Having two or three people in a retail shop is every bit as safe, if not safer, than the allowable businesses in phase 1. The Baker administration has consistently picked winners and losers during this crisis, and it is disappointing to see that trend continue in the reopening plan.”

As president of the Springfield Regional Chamber, Nancy Creed has been in touch with her members for almost three months now on the impact of the COVID-19 pandemic. She, like Sullivan, understands the delicate balance the state is walking.

“When we were part of the presentation to the advisory board, the last thing I said to them was, ‘our businesses are struggling, but they are surviving this. What they can’t survive is for it to happen again.”

“Certain sectors thought they’d be in phase 1, so there’s always that frustration,” she told BusinessWest. “When we were part of the presentation to the advisory board, the last thing I said to them was, ‘our businesses are struggling, but they are surviving this. What they can’t survive is for it to happen again. So we need to be smart about it and make sure we’re doing everything we can so the reopening is successful, and this doesn’t happen again.’”

She knows that’s not easy for many small businesses to hear, particularly ones with no revenue stream at all during this time.

“This is different for everyone, but businesses are muddling through it, pivoting, doing the things they need to do for basic economic survival,” she added. “But if it happens again, I don’t think we’ll survive the second round.”

Hence, baby steps, and a multi-phase reopening that offers real hope for many sectors, but continues to draw no small amount of criticism as well.

Guidance — and Lack Thereof

According to Baker’s plan, each phase of the reopening will be guided by public-health data that will be continually monitored and used to determine advancement to future phases. The goal of a phased plan is to methodically allow businesses, services, and activities to resume, while avoiding a resurgence of COVID-19 that could overwhelm the state’s healthcare system and erase the progress made so far.

Each phase will last a minimum of three weeks and could last longer before moving to the next phase. If public-health data trends are negative, specific industries, regions, or even the entire Commonwealth may need to return to an earlier phase.

Nicole LaChapelle

“When talking to businesses and different groups and unions, the question was always, ‘what are the barriers right now, what are your biggest challenges, but more importantly, what do you need to see happen in order for your industry to open, and what is the timeline for that to happen for you?’”

In addition, success in earlier phases will refine criteria for future phases, including travel, gathering sizes, as well as additional openings in retail, restaurants, lodging, arts, entertainment, fitness centers, museums, youth sports, and other activities.

“Going in, the goals were, how do we safely and slowly open the Massachusetts economy?” LaChapelle said. “And that is directly tied to public-health metrics. When talking to businesses and different groups and unions, the question was always, ‘what are the barriers right now, what are your biggest challenges, but more importantly, what do you need to see happen in order for your industry to open, and what is the timeline for that to happen for you?’”

It was helpful, she explained, to seek input from myriad sectors and businesses — those deemed essential and never forced to shutter; those that had to pivot, such as retailers boosting their online presence and manufacturers shifting to making masks and face shields; and businesses that have been effectively sidelined.

“The board, at no point, even at the beginning, was like, ‘let’s get this thing going and roll it out immediately,’” she added, noting that she understands the need for companies to start ramping back up. “They may be a little disappointed, but they’ve been very understanding. There’s some education we have to do, but nobody is really upside-down about it.”

In order to reopen, businesses must develop a written COVID-19 control plan outlining how its workplace will prevent the spread of the virus. They must also create and display posters and signs describing rules for maintaining social distancing, hygiene protocols, as well as cleaning and disinfecting.

“I think there needs to be an appreciation for restaurants and small Main Street businesses that are not going to be able to just comply with the state’s protocols immediately.”

Sullivan appreciates the attention to public-health concerns, but said it offers little comfort for businesses stuck in an as-yet-undefined phase 2 — or beyond. While the reopening plan gives clear guidance for businesses in phase 1, those in phase 2 don’t even get a target date they can work toward or a set of protocols they can begin to develop. And that lack of clarity has led to frustration.

“I do think many businesses, especially smaller businesses, were kind of expecting more things to open up,” he said. “I think there needs to be an appreciation for restaurants and small Main Street businesses that are not going to be able to just comply with the state’s protocols immediately. They’ll need to plan, order some equipment, and spend some time reorganizing their business, because it’s going to be different than it was pre-COVID. And it’s not something they can do overnight. Many businesses are just looking at lead time — they want to open sooner than later, but they want lead time so they can be ready to go.”

Creed agreed.

“I think what businesses wanted, at least in the beginning, was some clarity about the guidelines, about the timelines, about the standards, about the checklists, all those things, so they can create their own plan — and that was achieved, at least for phase 1,” she explained. “But I am hearing the phase-2 people saying, ‘well, I wanted to be able to plan, but I don’t have enough guidance right now,’ so there’s some frustration.”

The Massachusetts Restaurant Assoc. said as much in a statement following the plan’s release.

“Obviously, every restaurateur is disappointed with the lack of a defined reopening date in today’s announcement,” it noted. “Massachusetts restaurants need their suppliers to have time to restock perishable inventory before it can be delivered to them. They need to notify employees about returning to work and conduct other due diligence to ensure restaurants can open effectively.”

Safety and Numbers

Across Massachusetts, the reopening plan sparked a spectrum of reactions, all acknowledging the competing health and economic interests in play, but expressing different levels of understanding and frustration — and often both.

“We realize that every employer in Massachusetts would love to hear that they can reopen immediately. But we also acknowledge that a phased reopening balances the need to restart the economy with the need to manage a public-health crisis that continues to claim 100 lives a day in Massachusetts,” John Regan, president and CEO of the Associated Industries of Massachusetts, noted in a statement.

Even as some businesses start to reopen and others plan to do so, the state Department of Public Health updated its stay-at-home advisory, replacing it with a new “Safer at Home” advisory, which instructs everyone to stay home unless they are headed to a newly opened facility or activity. It also advises those over age 65 and those with underlying health conditions to stay home, with the exception of trips required for healthcare, groceries, or that are otherwise absolutely necessary. All residents must continue to wear a face covering in public when social distancing is not possible, and individuals are advised to wash their hands frequently and be vigilant in monitoring for symptoms. Restrictions on gatherings of more than 10 people remain in effect.

The state also encourages working from home when possible, and Baker’s office released a list of 54 large companies — employing about 150,000 workers among them — that have issued statements extending work-from-home policies for the remainder of the spring, with numerous reporting intentions to extend into the summer and, in some cases, for the remainder of 2020.

“As MassMutual develops our plan to gradually return to the office, the health and safety of our employees is our top priority,” said Roger Crandall, chairman, president, and CEO of MassMutual, noting that his employees will return to the office no sooner than the beginning of September.

“We expect to come back in a slow, phased manner,” he added. “We will continue to monitor and reassess and will be factoring in a number of considerations — from federal, state, and local government and health officials’ guidance to a sustained reduction in cases in our operating locations, to broader available testing and our employees’ personal circumstances and comfort.”

Patrick Sullivan, Massachusetts President of People’s United Bank, is also promoting continued work from home where possible.

“People’s United Bank is assessing re-entry conditions and protocols to ensure the safety of our team members and our customers,” he said. “Our approach will balance the needs of employees with the needs of the business. As we have been successful in pivoting and adjusting to working from home, we will continue to encourage this behavior.”

Still, those are businesses that can at least operate in most aspects. Retail stores can’t so easily adjust — and have been devastated by the inability to invite shoppers into their stores.

“We are incredibly disappointed with how Governor Baker has treated retail businesses throughout the health and economic crisis. Massachusetts has been one of the most hostile states in the nation toward small retailers.”

“We are incredibly disappointed with how Governor Baker has treated retail businesses throughout the health and economic crisis. Massachusetts has been one of the most hostile states in the nation toward small retailers,” said Hurst, noting that Massachusetts stores are losing Memorial Day weekend at a time when other states have let them open up shop by now. “Retail businesses are ready and able to open safely now with a limited number of people in stores and for appointment shopping. By not allowing that until late June, many small, Main Street businesses will close forever.”

That’s not hyperbole for small businesses of many kinds. Matt Haskins, who operates the popular Matt’s Barber Shop in Amherst, said a recent grant from the Downtown Amherst Foundation has helped him stay afloat at a time when he doesn’t know when college business will return.

“Just five minutes before [receiving word of the grant], I was on a phone call discussing if Matt’s Barber Shop was going to make it or break it,” he told foundation officials. “The grant helps me think we’re going to make it.”

So will being able to open his doors again on May 25. And that’s all most business owners want right now — a target. Creed hears that, but at the same time, she’s encouraged by recent chamber polling suggesting the percentage of business owners who feel they’ll survive this crisis is rising.

“What that says to me is people are finding a way to make sure it doesn’t put them out of business,” she said, “which shows the resilience of the businesses we have here.”

Yes, they have resilience, in spades. Now, they want clarity — and some hard dates.

Joseph Bednar can be reached at [email protected]

This CPA Is Advising Clients to Keep the Seat Belt Buckled

Accounting

Hospital Leaders Urge Public Not to Let Their Guard Down