September 2009 Business Magazine

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UNLOCKING THE POWER OF BLUE OCEAN STRATEGY 1. Do you find your business struggling with squeezed margins and loss of market share? 2. Have your customer strategies stopped yielding results? 3. Is your company focused more on cost cutting, quality control, and brand management at the expense of growth, innovation, and brand creation? 4. Is commoditization of offerings a frequent worry?

If you answered “Yes”, it is likely that your business is in a “bloody red ocean” of competition, price wars and reduced margins. Competitive and customer-driven strategies have yielded marginal results at best.

Published in 41 languages ● More than 5 million copies sold Blue Ocean Strategy Introduction: Join us for a two-hour executive awareness briefing to learn how your business can swim out of the red ocean of competition! Learn the basic concepts, tools and methodologies behind Blue Ocean Strategy/Value Innovation and the building blocks you need to differentiate your business’s products and services in today’s competitive marketplace. Discover the Blue Ocean Strategy approach to creating new demand and highly profitable growth based on value innovation: the simultaneous pursuit of differentiation and low costs. -

The strategic logic of Blue Ocean Strategy o What are the underlying principles? o How does Blue Ocean Strategy methodology unlock creativity? o How do I know that it is right for my organization?

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The “toolbox” behind reconstruction of market boundaries o What are the analytical tools and frameworks behind BOS? o How does the “four step” process maximize opportunities while minimizing risks?

Please select the date and location you wish to attend: _____ September 29, 2009: Manufacturer & Business Association Conference Center, Erie, Pa. 4 Easy Ways to Register: _____ October 15, 2009: Hampton Inn and Conference Center, Cranberry, Pa. Time: 8 to 10 a.m.

Price: Free to Members Only

Online: www.mbausa.org Fax:

Phone: 814/833-3200 800/815-2660 Mail:

Name:

Company:

Address:

City, State, Zip:

Phone:

E-mail:

814/833-4844

2171 West 38th Street Erie, Pa. 16508

BUSINESS M A G A Z I N E Manufacturer & Business Association

The Maleno Family-to-Family Fund A Specialized Approach to Reaching Your Realty, Development and Property Management Destinations

Giving Back: One Home at a Time

VOLUME XXII, NUMBER 9

pg.14

SEPTEMBER 2009

Dedicated to Giving Your Business the Lowest Possible Energy Costs in Pennsylvania.

Blue Ocean Strategy Center

The battle against soaring energy prices continues across Pennsylvania. Anticipating substantial increases in electricity costs, coupled with the fluctuation of natural gas prices, companies of every size and type are seeking alternative energy suppliers. On behalf of you, our members, the Manufacturer & Business Association has established the Employers’ Energy Alliance of Pennsylvania, Inc. (EEA­PA). By leveraging our significant buying power and eliminating broker commissions and marketing costs, we are able to buy electricity and natural gas in large quantities at wholesale prices – and pass that savings directly on to you. Call Dave Bell at 814/833­3200 to learn more about how !"#$%&#'()*''%+,)%&*)*-.%/$"0%.1('%*2+(.()3%4$"3$,05

Employers’ Energy Alliance of Pennsylvania, Inc.

Learn how to compete in the digit@l economy Low cost training for a high value approach to marketing your business

2009 Upcoming Lineup 8/20 9/03 9/03 10/08 10/20 10/21 10/29 11/12 12/03

Professional training taught by eMarketing experts.

Comprehensive Guide to Successful Email Marketing Fundamental Guide to Successful Search Engine Optimization Fundamental Guide to Developing a Search Engine Advertising Strategy The Executive’s Guide to the Online Marketing Channel Half-Day Business and Half-Day Nonprofit Workshop on Go-to-Market Social Media Strategy Nonprofit Partnership Conference Content Management Systems: Not All Are Created Equal Comprehensive Guide to Successful Email Marketing Google Analytics Workshop

Wilkes-Barre Erie Erie Erie Erie Erie Webinar Meadville TBD

To learn more visit www.emarketinglearningcenter.org or call 814 898-6500 eBizITPA t ,OPXMFEHF 1BSL t 'SZMJOH 3PBE 4VJUF t &SJF 1"

Photo by Heather Neckers

14

September 2009

3

Blue Ocean Strategy Center

EDITORIAL >

FEATURES >

5 / Health Matters

3 / Spotlight

How cost-effective worksite wellness programs can keep your employees healthy while improving your bottom line.

McInnes Rolled Rings President and CEO Timothy Hunter talks about his appointment to the Manufacturer & Business Association Board of Governors and the state of manufacturing locally.

ROSE K. GANTNER, ED.D., NCC

9 / Financial Adviser

The key steps to successful exit planning. JEFFREY E. BEACH, CPA

27 / Legal Brief Buyers beware: Bulk Sales crackdown. J.W. ALBERSTADT, JR.

31 / Information Tech Why SIP Trunking is a big deal for smallbusiness phone service. JEFF LYTLE

14 / Maleno Family- to-Family Fund Learn why the Maleno family, who own and operate Maleno Development, the lead builder on the “Extreme Makeover: Home Edition” project, created a fund to help similar projects in the Erie area and how area businesses and other organizations have shown their support.

21 / On the Hill Association Government Affairs Specialist Ashley Borchilo explains the current status of federal “card check” legislation and why the Association strongly opposes any compromise.

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BMUA SG IANZEI SN SE

Manufacture

r & Business Asso

ciation

VOLUME XXII,

NUMBER 9

SEPT EMBE R

2009

EVENTS >

29 / Association Golf Classic

See photo coverage of the 11th annual Association Golf Classic Tour held at Whispering Woods in Erie.

DEPARTMENTS > 4 / Business Buzz 11 / The Network 18 / HR Connection

22

The Maleno ily Fund am Family-to-F Home at a Time h to Reaching Your A Specialized Approac tions y Management Destina

and Propert ng Back: One Givi

21 / On the Hill 24 / Legal Q&A 32 / People Buzz

Realty, Development

pg.14

Read this edition of the Business Magazine online at www.mbausa.org!

September 2009 > www.mbausa.org > 1

SPOTLIGHT > by Karen Torres Timothy Hunter is the president and CEO of McInnes Rolled Rings, a manufacturer of forged seamless rolled rings, headquartered in Erie, Pennsylvania, and one of the newest members of the Manufacturer & Business Association Board of Governors. Hunter recently spoke with the Business Magazine about his Board appointment and the state of manufacturing locally.

Tell us about your company. Our company makes forged steel seamless rolled rings primarily for industrial bearing and gearing applications used in construction, mining, agriculture, aerospace, power generation and oil field equipment. Our plant on East 12th Street features the most advanced technology available utilizing a 63-ton Radial Axial Ring Rolling Machine equipped with a state-of-the-art computer-aided rolling system. What role do you feel that manufacturing plays in our economy? Manufacturing forms the foundation for our domestic economy. We continue to hear how critical the consumer will be to the recovery from the current recession. In order for the consumer to play this role, they need to have confidence that good family sustaining jobs are available. Manufacturing companies provide these types of jobs. How would you describe the current state of manufacturing locally? Local manufacturing businesses did see a better 2008 than the national economy. However, global financial markets froze during the fourth quarter of 2008 resulting in a severe liquidity crisis that very few, if any, manufacturing businesses can go through unscathed. The bright spot is that a lot of local manufacturers were coming off some very good years and balance sheets are much healthier heading into this slowdown than past recessions. In your opinion, what are the major hurdles facing businesses today? The global financial crisis has put a halt to most major financing activity that would tend to lead the world economy out of recession. We, or our customers, sell product throughout North America, Eastern and Western Europe and Asia. It’s very slow everywhere. The “Wall Street” banking bailout needed to occur in order to unfreeze the system and get capital flowing again. Other external hurdles facing long-term business prospects will be the potential for more deficit spending, higher taxes, and a tendency to over-regulate businesses as a result of the events leading up to the financial crisis. Internal challenges will be the continuing need to transform our businesses, especially manufacturers, to a template where the work force is comprised of stakeholders who have a vested interest in success and productivity enhancement. What are your thoughts on being appointed to the Board of Governors? The Association has had a tremendous impact on local business and the community for over 100 years. It’s an honor to be asked to serve with a group of Board members and staff who positively impact thousands of people in our community every year. What do you hope to bring to the Board of Governors during your first term? All any new Board member can do is lend a hand in helping the Association continue on its current successful track. I bring a small and mid-sized business perspective to the Board that is representative of a large cross-section of the Association. In addition, I’m coming off a three-year term on our North American Forging Industry Association Board, most recently serving as president; so, this has given me a broader perspective on issues facing business. The Association recently introduced Blue Ocean Strategy and the Employers’ Energy Alliance of Pennsylvania, Inc. as its newest member services. Why should an Association member take advantage of these offerings? These programs are just another example of the Association anticipating the needs of the business community and keeping members on the cutting edge of issues that will affect them. I would encourage any member to get more deeply involved in these services. Is there anything else you would like to add? I’ve been in manufacturing for almost 25 years and contrary to what many people see from the national media, manufacturing is alive and well. It’s so easy to focus on the failures in any sector of the economy; however, deep within the manufacturing sector are entrepreneurs at work everyday developing businesses that will be the future backbone of our economy. The Association focuses on creating an environment that gives these people their best opportunity for success.

VOL. X XII, NO. 9 SEPTEMBER 2009 Manufacturer & Business Association Board of Governors

John Cline Dale Deist Timothy Hunter Dan Ignasiak Richard Knight Mark C. Kulyk John B. Pellegrino Sr., P.E. Dennis Prischak Timothy G. Shuttleworth Lorenzo Simonelli Sue Sutto Philip Tredway

Editor in Chief Ralph Pontillo rpontillo@mbausa.org Executive Editor John Krahe jkrahe@mbausa.org Managing Editor & Karen Torres Senior Writer ktorres@mbausa.org Contributing J.W. Alberstadt, Jr. Writers Jeffrey E. Beach, CPA Jessica Crocker Rose K. Gantner, Ed.D., NCC Patrick J. Mondi Jeff Lytle Advertising Sales Lori Maus Joint 814/833-3200 or 800/815-2660 ljoint@mbausa.org Photography Bruce Bennett Bruce Bennett Photography 814/899-1161 Rachel Lusky Puremotif Photography www.puremotif.com Heather Neckers Heather Neckers Photography www.neckersphoto.com Michael Gallagher Photography www.mikegallagher.tv Design, Production Printing Concepts Inc. & Printing printcon@erie.net

Mission Statement The Manufacturer & Business Association is dedicated to providing information and services to its members that will assist them in the pursuit of their business and community interests. – Board of Governors Manufacturer & Business Association 2171 West 38th Street Erie, Pa. 16508 814/833-3200 or 800/815-2660 www.mbausa.org © Copyright 2009 by the Manufacturer & Business Association. All rights reserved. Reproduction or use of editorial, pictorial or advertisements created for use in the Business Magazine, in any manner, without written permission from the publisher, is prohibited. Unsolicited manuscripts cannot be returned unless accompanied by a properly addressed envelope bearing sufficient postage. The magazine accepts no responsibility for unsolicited manuscripts or artwork. The Business Magazine and Manufacturer & Business Association do not specifically endorse any of the products or practices described in the magazine. The Business Magazine is published monthly by the Manufacturer & Business Association, 2171 West 38th Street, Erie, Pa. 16508. Phone: 814/833-3200 or 800/815-2660.

September 2009 > www.mbausa.org > 3

Business Buzz SEA GLASS FESTIVAL TO BE HELD OCTOBER 17 AND 18 IN ERIE The 2009 North American Sea Glass Festival is coming to Erie’s Bayfront Convention Center in October, and organizers say they already are planning for a large turnout. “Relish is proud to be involved in bringing the fourth annual North American Sea Glass Festival here to Erie on October 17 and 18 at the Bayfront Convention Center,” said Jennifer Reed of Relish Inc., a beach glass jewelry studio and gallery located in Millcreek Township. “We are expecting thousands of visitors hailing from all over the globe. It’s such a great opportunity to show off our city for the gem that it is to this rapidly growing industry.” The festival features informative lectures about the mystery of sea glass and its origins; vendors from across the globe; and shopping that includes a variety of genres such as photography, jewelry, stained glass, notecards, and more. Guests also are invited to bring in their most interesting shards, have them

DEPARTMENTS > Contact: Jessica Crocker

identified and share them with other sea glass enthusiasts. The festival runs from 10 a.m. to 6 p.m. Saturday, October 17 and 10 a.m. to 5 p.m. Sunday, October 18. Admission is $5; tickets will be sold at the door. For more information, visit www.seaglassassociation.org ERIE INSURANCE EARNS J.D. POWER AND ASSOCIATES AWARD Erie Insurance has earned J.D. Power and Associates’ award for “Highest in Customer Satisfaction with the Auto Insurance Shopping Experience.” This award recognizes the top rankings in the J.D. Power and Associates 2009 Insurance Shopping StudySM, which evaluates the experience of customers purchasing a new auto insurance policy. “This award reflects the continued commitment of Erie Insurance employees and agents to being above all in service,” said Terry Cavanaugh, president and CEO. “That commitment is deeply rooted in our 84-year history and our culture.”

For more information, visit www.erieinsurance.com. GREAT LAKES HOME HEALTHCARE SERVICES ACHIEVES ACCREDITATION Great Lakes Home Healthcare Services (GLHHS) recently received its American Board for Certification (ABC) in Orthotics, Prosthetics and Pedorthics. The ABC accreditation demonstrates that GLHHS has complied with the requirements for the highest standards of competent and ethical practices for the provision of these services. Among the services/products this recognition includes are: diabetes shoes, orthopaedic bracing and mastectomy prosthetics. The staff includes certified pedorthists, certified orthotic fitters and certified mastectomy fitters. With locations in Erie, Meadville and Bradford, Pennsylvania, and Jamestown and Fredonia, New York, GLHHS is a provider of home medical equipment, infusion therapy, respiratory/home oxygen services and nutrition, as well as diabetes education and supplies.

I made the Gary Marz, Vice President, Commercial Lending Gary and his 35 years of experience have joined Northwest Savings Bank’s Commercial Lending team in Erie County. After more than a decade of employment with National City and PNC, Gary looks forward to working as a valued member of Northwest’s team of Retail, Mortgage, Commercial Lending and Wealth Management professionals.

20 Erie County locations to serve you. Northwest Direct: 1-877-672-5678 t www.northwestsavingsbank.com 4 < www.mbausa.org < September 2009

Member FDIC

EDITORIAL > by Rose K. Gantner, Ed.D., NCC

Health Matters

Keep Your Employees Healthy With a Cost-Effective Worksite Wellness Program In recent years, worksite wellness programs have become popular because most employers believe it is clearly better to prevent health problems than to treat them later on. That is true both from a health perspective as well as from a cost-effective one. Wellness programs are attractive to employers because they have the potential to decrease absenteeism, reduce medical claim costs and improve employee productivity, recruitment and retention. Other advantages determined in studies include greater employee morale and an improved public perception of the company. In terms of cost saving, only worksite wellness programs have the long-term potential to keep employees healthy and, therefore, reduce medical costs. Effective wellness programs have demonstrated a return on investment ranging from $3 for every $1 spent, to $5 for every $1 spent usually after a 24month timeline. In order for wellness programs to be effective with employees, there are certain elements that need to be present. These include: • Organizational support of a healthy work culture • Supporting leadership commitment to personal change • Increasing awareness of wellness initiatives • Rewards/incentives • Outcome measures and how programs made an impact Worksite wellness programs make sense because, increasingly, Americans are spending more of their waking hours at work. That means that many employees are in danger of not getting enough physical exercise or proper nutrition to maintain a healthy lifestyle.

What are the usual components of a wellness program?

• Programs are offered online, onsite, telephonically and in print;

• Assessments/health risk questionnaire and biometric screenings

• Your health insurer provider can supply wellness programs, information and support; and

• Employee interest survey

• There are multi-program opportunities based on employees’ interest and motivation.

• Wellness education and campaigns • Lifestyle programs that focus on physical activity, nutrition, weight management, stress and resiliency and tobacco cessation Wellness programs can be attractive to employers because they have the potential to prevent modifiable lifestyle behaviors while reducing total health management costs. However, in order to be most effective, employee wellness programs need to provide information about wellness initiatives, support for personal, behavioral lifestyle changes and the promotion of healthy work environment policies. A study by NASA found that for nonexercising office workers, productivity decreased by 50 percent during the final two hours of the workday. However, for exercisers, the work level remains consistent all day. Enhancing the economic benefit of wellness programs is possible if there are factors in place such as: enthusiastic and financial support from senior management, coaching and followup measures, a number of program options, and clear incentives for healthy lifestyle changes. Studies have shown that the impact of wellness programs is greater when incentives are provided because they increase participation. However, employees should be rewarded for participating according to the rules, not for reaching any specific goals. Employee participation can be encouraged when:

Basic questions an employer should ask before starting a wellness program: 1. How committed is senior management to having a health promotion program that aligns with company strategies? 2. Are you setting realistic goals and objectives for the program based on budgetary constraints and staff resources? 3. Do you have champions within the company to support a wellness committee? 4. How will you measure participation, engagement and completion rates? 5. Are expectations realistic for multiyear program offerings? For more information, visit www.upmchealthplan.com. Rose K. Gantner is senior director, Sales and Product Development, for UPMC Health Plan, which is part of the integrated partner companies of the UPMC Insurance Services Division – which includes UPMC Health Plan, UPMC Work Partners, EAP Solutions, UPMC for You (Medical Assistance), and E-Benefits – and which offer a full range of insurance programs and products.

September 2009 > www.mbausa.org > 5

You have to start somewhere. JHB Records Management knows the thought of digitizing all your files can be intimidating. But it won’t be long until Electronic Document Management becomes a business necessity. Unfortunately, many companies—and their files—are left in the dark because they don’t know where to begin. Since 1991, we have been helping companies get started with records retention and document management. Let us help you take the first steps toward a more organized, efficient, productive way of doing business. Call us at (814) 456-5377, and we’ll show you where to start. www.jhbrecordsmgt.com

Strength in Numbers The MacDonald Illig Intellectual Property Group You will not find a team in Northwestern Pennsylvania with more range and depth of experience than the Intellectual Property Group at MacDonald Illig Jones & Britton LLP. With five registered patent attorneys and the resources of MacDonald Illig behind them, clients take confidence in their patent, trademark, copyright and trade secret protections and know they are prepared if litigation is necessary. For all your intellectual property legal needs, the attorneys of the MacDonald Illig Intellectual Property Group stand ready to help.

Business Law • Litigation • Bankruptcy & Creditors’ Rights • Labor & Employment • Environmental • Intellectual Property Health Care • Government & Municipal • Immigration • Family Law • Trusts & Estates • Tax • Real Estate • Construction

100 State Street • Suite 700 • Erie, PA 16507 • MacDonaldIllig.com • 814-870-7600

MacDonald Illig Jones & Britton LLP

Yoder Drilling & Geothermal, Inc.

Company PROFILE Yoder Drilling & Geothermal, Inc. 997 SR 93 Sugarcreek, OH 44681 Phone: 1-800-242-4342 Web site: www.yodergeothermal.com

Yoder Geothermal, it’s owners and employees are excited about geothermal energy!!

•

More than 5,000 loops installed throughout Ohio, West Virginia and Pennsylvania

We were happy and proud to provide the exterior loop of the geothermal heating and cooling system for the Ward family’s new “green home� in Erie, Pa.

•

Five full-time, specially engineered, vertical, geothermal drilling rigs

•

Knowledgeable technical staff to answer your questions

WHY Geothermal: • Realize up to 40-percent savings on your monthly heating and cooling bills with this green energy alternative. •

Federal tax credit of 30 percent available for installing a geothermal system in a new or existing home.

WHY YODER GEOTHERMAL: • A leader in the geothermal industry for more than 18 years

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EDITORIAL > by Jeffrey E. Beach, CPA

Financial Adviser

Exiting a Business in a Troubled Economy Our lingering economic downturn has pushed many northwest Pennsylvania businesses to the brink. Highly stressed owners are weighing whether to wait out the economy’s eventual rebound, or just throw in the towel before losses grow worse. At stake are the owner’s reputation and legacy, future plans for working or retirement, and the company’s ability to build real wealth someday. If opting for an exit strategy, owners have to make difficult decisions about their options for transferring control to a family member, selling to an outsider, or just closing the shop for good. This article summarizes some of the key steps for business owners who decide on an exit strategy involving transfer of control to relatives. Succession Planning Succession planning is a must. It can range from a reevaluation of strategies already in place to the first step toward long-range succession management. Family-owned enterprises often find the process emotional, if not distasteful, as it involves family talks about money, retirement, disability and death. Today’s ownership generation likely has lost substantial retirement account value, leading to worries about having a sufficient income stream during retirement. The up-and-coming generation may be anxious over uncertain financial times and reluctant to commit to funding long-term payouts. In addition, both sides may be at odds over the valuation of the business in the current economy. Families typically struggle with how to recognize each other’s concerns,

and how to identify a consensus of goals and objectives to ensure a successful continuation. Ownership Gifting Lower revenues and weakened profitability have caused the value of many companies to plummet. For many, this likely is temporary, and values should increase as the economy recovers. If owners are considering making a gift of ownership, now can be a good time for this kind of transfer. Because the fair market value of their assets is currently low, owners can gift a more substantial portion without reaching their federally imposed limits. Currently, individuals may make yearly gifts of up to $13,000 per person without paying gift tax, or without tapping into their $1 million lifetime gifting cap. These figures are doubled for married couples. Ownership gifting also will benefit the new owners if the assets someday appreciate, as they will reap the financial benefits. Owners can accelerate the gifting schedule through such techniques as valuation discounts allowed by the Internal Revenue Service, which can potentially drive down value even further. ‘Freezing’ a Company’s Value Another alternative for sellers is to “freeze” the value of the business at today’s value. This can be done using a grantor retained annuity trust (GRAT) or an intentionally defective grantor trust (IDGT).

sale. Long-term capital gains tax rates still are relatively low, and currently are capped at 15 percent. Owner financing of the sale also could provide payment flexibility. Low capital gains tax rates and payment flexibility, in conjunction with valuation discounts, could make a stock sale an attractive option. Managing Emotions One of the keys to success in exit planning is knowing how to separate strong sentiments from rational, logical judgment and decisionmaking. In the highly charged emotional atmosphere of ownership transition, it often is the judgment, diligence and personality of an owner and his or her professional advisers who make the difference between arriving at a smooth successful plan, or having it collapse without a favorable result. For more information, contact Malin, Bergquist & Co., LLP at contactus@ malinbergquist.com or visit the Web site www.malinbergquist.com/ contact.htm. Jeffrey E. Beach, CPA is a partner and chief operating officer of Malin, Bergquist & Co., LLP, Erie’s largest certified public accounting firm. Malin Bergquist has helped clients with business succession for more than four decades. Stacey Sanders of the firm’s Greensburg, Pennsylvania office helped prepare this article.

If a family business is incorporated, another option is an outright stock

September 2009 > www.mbausa.org > 9

Presta Contractor Supply

Company PROFILE Presta Contractor Supply 2669 West 16th Street Erie, Pa. 16505 Phone: 814/833-0655, 800/600-7177 Fax: 814/833-2884 E-mail: tpresta@prestasupply.com Number of employees: 25 Founded: 1984

Presta Contractor Supply Celebrating 25 Years in Business It’s All About The Service!

Company Description:

Since 1984, Presta Contractor Supply has been providing area contractors the best service and products in the industry. We are driven to make sure that every question, problem or concern is taken care of. We have spent the last 25 years building relationships with customers. Our staff experience (many have more than 20 years), wide product offering, on-site millwork shop and fleet of delivery trucks provide our customers with the quality supplies and accessories they need to get the job done right. We carry an extensive line of name brands to complete your project from start to finish.

Products Offered:

Roofing materials, siding, doors (interior and exterior), custom millwork, hardware, decking, molding and more.

Product Lines:

Andersen Windows & Doors, Alside & Norandex Vinyl Siding, GAF/Elk and Certainteed Shingles, Azek Decking, Custom Pre-hung Interior Doors, Simonton Vinyl Windows, Thermatru Steel & Fiberglass Doors and more.

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Markets Served:

Builders, remodelers, property managers, architects, building owners, industrial, school districts, government and more.

Areas Served:

Erie, Crawford, Warren, Venango, Ashtabula, Cattaraugus, Chautauqua and more.

The Network

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The Perfect Floor Thank You Maleno’s for letting us be part of these worthwhile projects.

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Thank You And all the volunteers & sponsors who came together to demonstrate pride in !"#$%&'$()*+,$-'*./$0''1$)*$2!)&23 Joe Sinnott, 45+!#

The personal service, fast loan decisions, and local focus that Marquette has offered to individuals and families for more than 100 years, now means business—business checking, lines of credit, business loans, remote deposit capture, and more. We call it true hometown business banking because Marquette is the only bank with all of its offices located in Erie and Crawford counties. Find out just how good hometown banking can be for your business. In Erie, call David Slomski at (814) 455-4481; in Crawford County, call Eugene Cirka at (814) 337-7929.

Eugene Cirka Business Banker, Crawford County

David Slomski Vice President, Business Banking Michael Edwards CEO

Giving Back: One Home at a Time

Photo by Heather Neckers

Photo by Heath er

Bennett Photo by Bruce

From left: Dominic, Julie, John, Natalie (Washburn), Anne and Jarrod Maleno join Clara Ward outside her new home. The Malenos helped rally a community of support with the “Extreme Makeover: Home Edition” project (as shown in photos at right) and hope to do so again with the Maleno Family-to-Family Fund.

Photo by Heather Neckers

It’s been two months since Clara Ward and her family returned to Erie, Pennsylvania, to see the unveiling of their new home, for the fall airing of ABC Sunday’s hit show “Extreme Makeover: Home Edition.” Long gone are the more than 3,200 volunteers who worked tirelessly for 106 hours to demolish, raze and rebuild the two-story house into a brandnew 3,700-square-foot home and Youth Development & Family Center. Gone are the TV crews and celebrities who attracted thousands of fans to the East 21st Street neighborhood for a sneak peek at the final reveal. But what hasn’t disappeared is the excitement and inspiration that this project has generated in the Erie region – and surrounding area – on how a community can make a difference by giving back. “I really still feel like I’m floating on air. Just like I’m Alice in Wonderland,” said Ward. “These people came here with just a few days and built this beautiful, beautiful home. And it has so much that I can do with the children. It has so improved my life. It gave me a reason to want to live on.” “I’m so grateful, and I am happy that they went out into the community and made a difference…” she beamed. “And they promised to help with other communities, so I know they are going to do that.” In fact, the Maleno family, who own and operate Maleno Development, the lead builder on the “Extreme Makeover” project, took it upon themselves to make certain the endeavor becomes a springboard for similar projects in the Erie area. The family has established the Maleno Family-to-Family Fund, a fund administered by The Erie Community Foundation and distributed by the St. Martin Center, which will help the Malenos identify needy families, to support future renovation and revitalization projects. “We didn’t want this build to be a one-time project,” insisted Maleno Development President and Founder John Maleno. “We are committed to giving back on an ongoing basis.” According to Maleno, the idea for the fund was inspired by the “Makeover” project and Ward herself. “When we realized that we were going to do this project, and we realized the story of the person we were going to do it for, 14 < www.mbausa.org < September 2009

we thought, ‘She’s been giving her whole life trying to help other people’... and the first idea was to try and pay her back, and I think we did in some way help her with that,” he explained. “But we wanted to continue that giving and that’s why we created the Family-to-Family Fund… We want to continue those things, because that’s Clara’s way.” Already the fund has received more than $30,000 in donations, including sizeable contributions from individuals and area businesses. “We hope that’s just the seed money,” said Maleno, “and that we can make that fund grow. We want to help improve the quality of life for our neighbors.” Indeed it was that commitment – and more than 30 years of construction experience – that ultimately gave the Malenos the opportunity to oversee the “Makeover” project in Erie.

Ne

eckers

According to Conrad Ricketts, executive producer of “Extreme Makeover: Home Edition,” “Maleno Development is a family-run business that takes pride in building not only communities, but neighborhoods. Their devotion to giving back is what first caught our eye, and their long-standing tradition of charity and community involvement assured us that they were perfect for this project.”

Building from Experience

Maleno Development was co-founded by Maleno and his wife, Lynn, in 1976. John, who had several years of experience working on smaller construction projects in the Erie area, earned his broker’s license and began selling real estate, as well as building and remodeling area apartments. Units that weren’t sold were rented, allowing the couple to build their business by building equity. Then, with a crew of three, the Malenos embarked on building an average of six houses a year. Their work eventually evolved into subdivisions, creating the 230 singlefamily Calico Fields. The neighborhood is just one of many single-family developments built by Maleno, as well as Ridgewood, Love Farm, South Pointe Condominiums, The Meadows at Summit and Sterling Ridge. Maleno Development also owns several apartment complexes including Lake View Apartments, Scenery Hills, The Village and Shadow Pines. To date, the company has built more than 1,000 homes and apartments in the Erie area. And today five of John Maleno’s seven children work within the company – Dominic, the construction manager; Anne, the company’s property manager; real estate agents Natalie and Jarrod; and Julie, who works as a leasing agent for the firm – and have helped their mother and father turn Maleno Development into a full-service real-estate team, specializing in construction, land development, property management and real-estate sales.

businesses donated games and services to the Ward family; others made contributions to see to it that future projects are carried on. “I visited the site and was very impressed with the number of volunteers who are giving their time, talents and other resources to help others,” noted Michael Edwards, CEO of Marquette Savings Bank. “I’m not sure I fully understand the coordination efforts that go into demolishing and building a home in 106 hours, but my hat’s off to John Maleno and his family for their efforts on this project.” In fact, Edwards was so impressed with the work being done that he presented a check for $5,000 to the Maleno fund on behalf of Marquette toward future improvement projects in the area. “The project was bigger than helping one deserving family in need,” said Edwards. “Marquette saw this as the beginning of a neighborhood revitalization effort in an inner-city neighborhood that needed help. We also like the fact that the Family-toFamily Fund will continue to fund similar projects in the future. “It’s always refreshing,” he continued, “when the people of our community come together to help those in need.” Edwards’ sentiments were shared by several other employers, who also made significant contributions during the “Makeover” project. > Though not as extreme as the “Makeover” project, the Maleno Family-toFamily Fund will help revitalize area neighborhoods on a smaller scale.

Not surprisingly, said Maleno, the “Extreme Makeover” project was a labor of love for their entire family. “It brought us all together,” he said. “And, from a company standpoint, it was a really good team-building project. At the end of the day, you know who you can count on.” Over the course of one week, 3,200 volunteers with the support of 200 businesses helped transform the Ward home into a dream house that could meet Ward’s needs for her Youth Development & Family Center as well as her degenerative muscle disease that requires her to use a wheelchair. Together, they worked to build a two-bedroom, two-bath home as well as an attached community center that includes two bathrooms, a full kitchen, a wheelchair lift, a geothermal heating and cooling system, and basketball court for the children. One of the most astonishing things, in addition to the size and scope of the project, which included more than $1.3 million dollars in contributions of labor and/or materials, was that the project brought together different trades, and even some competitors, to meet a very tight deadline. “The amazing part of it,” noted Maleno, “was that because you have to be done so quickly, no one electrical company can do it at one time. No one framing company can do it at one time. So all the different trades were working together with people they never worked with before.” Michael Anthony of A. Anthony & Sons, Inc. in Erie, which served as a concrete contractor for the project and has been a longtime partner with Maleno on building projects, described the teamwork as simply “awesome.” “I turned around at 2 in the morning and every one of my guys had shown up to give a hand,” he said of his team of 18, all of whom had to be at work the following day. “I think the Erie community has a lot to give. When push comes to shove, we live in a community where everybody is willing to go the extra mile for each other.” And it’s one of the reasons he encourages others to support the Maleno Family-to-Family Fund. “I just believe it’s a cause that every one should see through to help the community…,” stated Anthony. “You’ve got to pay it forward; there’s no way around it.”

A Community of Support

The “Makeover” project has inspired many individuals and businesses, many of whom are eager to donate time and money to worthy causes. Several

Photo by Michael Gallagher

Donate to the Maleno Family-to-Family Fund

The Maleno Family-to-Family Fund was established as a way to allow families in the Erie area help other families less fortunate than themselves. By contributing to this fund, you will help them help others. In order to be considered for an upcoming project, area residents are encouraged to call the St. Martin Center at 814/452-6113 as well as apply online at www.malenoextremehome.com. Individuals and organizations also can contribute to the fund by donating on the www.malenoextremehome.com Web site or by sending checks to: Erie Bank C/O Maleno Family-to-Family Fund attn: Allison Roberts 2035 Edinboro Road Erie, PA 16509

Erie Mayor Joe Sinnott, pictured here with John Maleno, is looking forward to future projects spearheaded by the Maleno Family-to-Family Fund.

Mercyhurst College President Dr. Thomas Gamble presented a $100,000 gift in scholarship money to Ward for the children at her center on behalf of the university located only a mile away from the Ward home. “Whenever something like this happens that’s progressive for our community, we all need to be a part of it,” said Dr. Gamble. “It’s really the case that these neighborhoods and the people who live in these neighborhoods are a great untapped resource for the development of this community, and I don’t think that Erie’s going to get to The Promised Land unless we all go together; so, this is our effort, and I would encourage other business leaders in the area to do the same.”

care, and it inspires others to give, and I think that good things come around back to you when you do things like that.” “We’re going to continue to help (the fund) in any way we can,” Scott said. It goes without saying that the much-anticipated airing of the “Makeover” project will be a proud day for the Malenos, volunteers and the entire Erie community, when it is thrust into the national spotlight in prime time.

ers Photo by Heather Neck

Local businessman Nick Scott Sr. of Scott Enterprises, which owns several area restaurants, hotels and indoor water park Splash Lagoon, said his company is always looking for ways to give back to the community through its own charitable program, We Promise to Care. When the Scotts became aware of the “Makeover” project, the company sponsored the VIP tent during the build, donated thousands of meals for the volunteers, and gave a year’s worth of Splash party passes for children at Clara’s center as well as 1,500 passes for volunteers as a reward for helping out. Scott Enterprises also has gone so far as to pay Ward’s back property taxes and sell “little houses” that are displayed in the windows of their restaurants to support the Maleno Family-to-Family Fund. “I just think this is a great example of our community coming together and really making a difference,” added Scott. “I think if the opportunity comes up and you can afford to do something, you really should seize upon it. …It shows that you care about the community. It shows your employees you

“I think it’ll be great. This is definitely a good way to showcase our community,” stated Erie Mayor Joe Sinnott. “They took a lot of footage outside of the neighborhood to show some of the good things Erie has, and that we’re hoping will air along with the segment, so it’s just another way to get our message out there to the rest of the country.” “We’ve always been this way to come together and really help those in need…,” he continued. “This is just one example of the way in which Erie is all the time.” And it’s why the City of Erie is supportive of the Maleno Family-to-Family Fund going forward. “The fund is not just a one-time project; it’s something that will keep going to revitalize other homes on a smaller scale, and we’ll certainly be supportive of that. I think it’s a great thing that they (the Malenos) have done to keep this going.” They’re giving back, one home at a time. For more information or to learn how to donate to the Maleno Family-to-Family Fund, visit www.malenoextremehome.com.

Sponsors of the ‘Extreme Makeover’ project: Advanced Services Inc. Al’s Awning Shop Alside Amendola Development Amerigas Bearmountwoods Construction Bill Turner Construction Braendel Painting Centerpoint Computers CertanTeed Corporation CJ Kelly Construction Coca Cola Bottling of Erie Colony Pub & Grille Culligan Water Custom Audio Custom Painting & Papering Dan Margosian & Sons Plumbing David Lane Construction, LLC DeSantis Builders Elwell Construction Erie Massage Therapy Center Erie Times-News Fairway Vinyl Systems Family First Sports Park Ferrier’s Hardware Frame It George Cass Construction Glazier Builders Green Distributors Grise Audio Visual Guy E. Allen & Sons HYMA Devore Lumber Mill Co. ICI Paints Irr Supply James Stoll Builders Jerry Whitman JS Plumbing Kids Crooked House Larsons Custom Carpentry Lightscape L.M. Wander & Sons Luciano Builders Matt Krol Construction LLC Mello & Labowski Plumbing & Heating Michele’s Interior Painting/Decor New Designs Unlimited Oz-Post Powell Sanitation Premier Finishes Quality Aluminium Ras Auto Body Schlabach Schluter Systems Sharon Fence Company Spaulding Marketing Stephany’s Catering Steve Burhenn T D Laughlin Custom Builders Teaching Touches Terella Drywall The Flooring Gallery The Remnant Store Inc Tim Colvin Construction Tim’s Maintenance LLC Torchio Designs US Foods Vitelli Drywall Vogt-Brewer-Litz Inc. Wallpapering by Mary Grace West Penn Energy Solutions Wild Planet Entertainment Young Electric Zasada

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HR Connection FIVE WAYS TO STRETCH YOUR CHARITABLE DOLLARS As the recession lingers, there are several ways for individuals and businesses to stretch charitable dollars to make sure their contributions have more impact. According to a recent report by the Associated Press: 1. SET UP A GIVING BUDGET. Treat your philanthropy as you would your household expenses and create a budget. The budget will help organize your resources and fend off less essential requests. 2. EXAMINE CHARITIES CLOSELY. Do the same due diligence on your donations that you would your investments or your business. Giving extra scrutiny to the charities you write your checks to is more than merited.

*NSURANCE 1OSTINGS FROM 1ATTY

On June 10, 2009, Governor Edward G. Rendell signed Act 2 of 2009 to help address the need to extend health-care options to the new ly unemployed. Employees laid off by small employe rs, employing two to 19 employees, are now eligible for state Mini-COBRA benefits. Covered employees and thei r dependents who lose coverage as a result of a qua lifying event are eligible for this continuation of cove rage. Employees eligible for this continuation also may be eligible for premium assistance under the federal stimulus law. Refer to www.ins.state.pa.us/ins for more information.

3. DONATE SERVICES OR VOLUNTEER. Think of nontraditional ways of giving gifts to a charity. Organizations prefer your cash but also may need assistance.

to multiple organizations. Even if you have less money to give, this can have more impact on one favorite recipient.

5. TURN DOWN GOODIES. Some charities offer thank-you gifts or 4. FOCUS YOUR MONEY. Consolidate incentives for giving certain amounts. That means all your money goes to the your contributions for a single charity organization, none for swag. rather than giving smaller amounts

Contractors & Construction Managers ~ Since 1906 2008-09 General Fund Expenditures

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DPW Human Services and Medical Assistance 37%

Pre K-12 Education & Higher Education 42% Corrections 6% Debt Service 3%

18 < www.mbausa.org < September 2009

Patty Smith is the director of Emplo yee Benefit Services at the Manufactur er & Business Associa tion.

DEPARTMENTS > Contact: John Onorato

Tougher Times May Lead Desperate Employees to Embezzle Embezzlement is definitely on the upswing, with the number of employees arrested for embezzlement up a dramatic 70 percent since 1990. And that’s just arrests. How many other incidents are swept under the rug by employers trying to avoid “bad publicity?” A recent survey conducted by The Association of Certified Fraud Examiners echoes this trend, noting that businesses lose an estimated 7 percent of their revenues to fraud — and that the figure could approach $994 billion each year.

of course, but you put the means of your own destruction in the hands of the bad employee by having faulty internal controls. Pressure. Oftentimes, pressure comes not from addiction or a failure to put daily bread on the table; rather, in white-collar settings, theft occurs because the employee seeks to keep up with the Jonses or have the luxuries that their current salary will not afford them.

Traditionally, law enforcement described “embezzlement” as a result of three elements coming together: opportunity, pressure and rationalization. The key is opportunity.

Rationalization. People can talk themselves into believing almost anything: that black is white and that embezzling is not stealing. Also, many convince themselves they will pay the company back for the money they “borrowed.” Unfortunately, that day never comes.

Opportunity created by the employer. You did so unknowingly,

Due to the economic tumult of the last year, the embezzlement paradigm

has shifted and the original elements are now joined by insecurity and fear. Justification makes stealing easier; as economic woes continue, the possibility of being a victim of embezzlement increases. To learn how to protect yourself and your business, contact me at 814/833-3200, 800/8152660 or sbruce@ mbausa.org.

Stacey Bruce is a PHR-certified HR generalist at the Manufacturer & Business Association.

September 2009 > www.mbausa.org > 19

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OntheHill

DEPARTMENTS > Contact: Sheila Sterrett

The Employee Free Choice Act: Possible Elimination of ‘Card Check’ is a Far Cry From Victory Ashley Borchilo is a government affairs specialist at the Manufacturer & Business Association.

Although Democrats may have gained one more co-sponsor in Minnesota’s newest senator, Al Franken (D), this development does not guarantee the passage of the Employee Free Choice Act (EFCA), or “card check” legislation, as it continues to face fervent bipartisan opposition in the Senate. Various “compromise” bills have surfaced in hopes of gaining the 60 votes necessary for passage; however, the Manufacturer & Business Association remains OPPOSED to the EFCA in ANY form.

State of Play

The EFCA remains one of the most dangerous, job-killing proposals in Congress. While proponents of the legislation claim that it will “level the playing field,” this bill will actually decrease a company’s ability to create jobs and manage costs, while also limiting innovation and competitiveness in an increasingly complex global market. While the need for unionization has decreased significantly over the years as employers work to foster positive employee relations, employees who wish to form a union are able to do so, with unions winning nearly 67 percent of all elections. The EFCA, therefore, serves as a sad attempt by union leaders to inflate membership and overhaul the current labor law system in their favor. Just as alarming, this bill also proposes binding arbitration set by a government official if a first labor contract cannot be reached within 120 days of certification. The arbitrator, often unfamiliar with the business, would dictate the terms of a two-year contract including wages, benefits, work rules and job assignments. While there are still many supporters of the original legislation, there also are those who seek to “improve” the bill. Talk of eliminating the card check provision, however, gives little reason for celebration as these alternatives have surfaced: • Quickie Elections – Would give a limited timeframe to complete a secret ballot election, allowing professional organizers to campaign for months, while employees would have little, if any, time to hear from employers. Current law provides both sides the ability to make their case. • Increased Union Access – Would give non-employee union organizers the right to disrupt day-to-day operations by entering a workplace to solicit support during an organizing campaign. Currently, organizers must be provided a

list of employees’ contact information that are eligible to bargain, having the advantage of being allowed to contact employees outside of the workplace, while employers cannot. • Misleading Binding Arbitration – In an effort to garner support, proponents are attempting to blur the difference between dispute and binding arbitration. Dispute arbitration is when both parties willingly agree to have a lawyer/ arbitrator interpret contracts or law to settle a dispute, whereas binding arbitration would have those same lawyers/ arbitrators, who may lack financial and operational business experience, make key business decisions that employers, employees and the union must accept. • Postcard Check – Rarely used, this election is most common when a work force is scattered and a typical election is unrealistic. If implemented in a typical unionization effort, employees would mail in cards, although they would be subject to the same level of influence and coercion while inhibiting National Labor Relations Board protection. • Baseball Style Arbitration – A system similar to that used in Major League Baseball, a government arbitrator would choose from the most reasonable “last and best” offer from both parties. This would force both parties to focus on positioning themselves for the arbitrator’s decision, as opposed to negotiating in good faith. Although the specifics of the legislation are bound to change, it is clear that labor is committed to forcing employees and employers to accept labor contracts within a specific timeframe. And though some business organizations are hailing the possible dismissal of “card check” as a victory, the MBA believes that ANY legislation that stems from the EFCA would cause undue harm to employers and employees nationwide. As Congress remains consumed with health-care legislation, we anticipate that the EFCA will be addressed later in September or October.

Upcoming Events

September 9 – Union Avoidance Briefing (Erie) 8-10 a.m. September 23 – Union Avoidance Briefing (Mercer) 8-10 a.m. Register at www.mbausa.org/upcoming-events/273/schedule/.

Union Avoidance Toolkit Now Online

To access our Union Avoidance Toolkit, please visit www.mbausa.org/government-affairs/.

Do you want to stay up-to-date with the latest happenings on EFCA? Then subscribe to the newest twice-weekly communication piece – EFCA Watch – by e-mailing your name and company to Ashley Borchilo at aborchilo@mbausa.org.

September 2009 > www.mbausa.org > 21

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Legal Q&A ONE OF OUR EMPLOYEES IS PLANNING TO UNDERGO A SURGERY FOR WEIGHT CONTROL. WITH THIS BEING AN ELECTIVE SURGERY, WOULD HE BE COVERED UNDER FAMILY AND MEDICAL LEAVE ACT (FMLA)? OUR COMPANY IS COVERED UNDER FMLA AND OUR SHORT-TERM DISABILITY BENEFIT RUNS CONCURRENTLY WITH FMLA. I KNOW THAT FMLA LEAVE IS FOR SERIOUS MEDICAL CONDITIONS. BUT DOES THIS CASE MEET THAT DEFINITION? As with many things, there are no easy answers to FMLA questions. One would think that purely “elective” surgery could have been one — if the surgery is not a “must,” then why “must” the employer put up with the time off? However, few things are ever as they seem. There is no “per se” elective surgery exception. In a sense,

all surgery is “elective” even if the refusal to submit to treatment may threaten the employee’s life. So, the only thing to do is walk through the requirements one at a time. IS IT A GOOD IDEA TO USE SOCIAL NETWORKING SITES FOR BACKGROUND CHECKS? Many hiring managers are turning to Internet searches to find out more about their current and potential employees. In doing so, they’re finding more personal information than they bargained for just by Googling their names. However, in looking up information on the Internet, employers need to be aware of potential claims against them, such as federal and state discrimination and invasion of privacy claims.

1. Is it legal to search social networking sites on the Internet

DEPARTMENTS > Contact: John Onorato

as part of a background check? No law actually prohibits employers from searching social networking sites on the Internet to conduct their own background checks of current employees or job applicants. However, employers need to be aware of potential federal and state discrimination claims and invasion of privacy claims. 2. Can employers terminate an employee or refuse to hire a job applicant based on information found on the Internet? Yes, as long as the employer does not use the information learned from the Internet in a discriminatory manner or otherwise prohibited by law. 3. Should employers use background screening firms to conduct background checks on ALL potential job candidates? In general, it’s a good idea to do at least a criminal background check on all viable job applicants.

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8/5/09 4:34:50 PM

Pictured (L-R): Don Damon (Senior VP of Private Banking), Kelly Buck (Community Office Manager), John Maleno (Maleno Development), Allison Roberts (Deposit Operations Specialist), Bill DeLuca (Senior VP of Commercial Lending)

Congratulations to the Maleno Development Team on a successful community project — proof to what can be accomplished, in a short time, with the support of the Erie community! ERIEBANK will continue our commitment, serving as the official bank of the Maleno Family-to-Family Fund (established to help support building and renovation projects for Erie families and neighborhoods in need). Visit www.malenoextremehome.com for more information. Main/Interchange Office 2035 Edinboro Road, Erie PA 16509 Phone (814) 868-7523 • Fax (814) 868-7524

Asbury Road Office 2615 Asbury Road • Erie, PA 16506 Phone (814) 835-1116 • Fax (814) 835-1220

Downtown Office 101 West 10th Street • Erie, PA 16501 Phone (814) 454-3477 • Fax (814) 454-3488

Harborcreek Office 5723 Buffalo Road • Harborcreek, PA 16421 Phone (814) 899-5101 • Fax (814) 899-5105

Meadville Office 885 Park Avenue • Meadville, PA 16335 Phone (814) 336-1223 • Fax (814) 336-1256

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Legal Brief

EDITORIAL > by J.W. Alberstadt, Jr.

Buyers Beware: Bulk Sales Crackdown Securing a Clearance Certificate Can Help Protect Your Business In the current economic downturn, there is an ample supply of distressed businesses for sale at bargain prices. As a potential purchaser, you already are savvy enough to know that if you buy the actual business entity, you’ll be stuck with its existing liabilities. You can avoid this thorny problem by purchasing the assets from the business, not the business itself. Problem solved! Or so you thought. Let’s say, as is often the case, that the target business has been unable to pay its income, sales, unemployment compensation, or other tax liabilities to the Commonwealth. In Pennsylvania, the purchaser of 51 percent or more of the assets of a business is personally liable — without any statute of limitations — for any unpaid tax obligations of the seller, including capital gain tax owed to the Commonwealth as a result of the sale of assets. This means that you cannot avoid the seller’s tax liabilities by merely acquiring the assets of the business. Obtain a Clearance Certificate Since the “Bulk Sales Law” is intended to prevent business owners from defrauding creditors by transferring all of the assets of a business to another individual or entity, the Law does provide a method by which a bona fide purchaser can protect itself — the Bulk Sales Clearance Certificate. However, failure to obtain a Clearance Certificate renders the buyer liable for all unpaid taxes owned by the seller through the date of the sale, whether the taxes have been settled, assessed or determined at that time.

A Clearance Certificate can be obtained from Pennsylvania’s Department of Revenue. An application for a Bulk Sales Clearance Certificate is very detailed, and the time frame for obtaining the Clearance Certificate is quite long. The Department of Revenue’s announced position is that a Clearance Certificate can be issued within 60 days of receipt of a correctly completed application; however, experience tells us that it can take nine months or longer to obtain one. Because of this lengthy turnaround, any agreement of sale of a business’s assets should include a representation from the seller, supported by a certification from the seller’s CPA, that the seller owes no Pennsylvania taxes, as well as a complete indemnification from the seller against liability for any such taxes. Moreover, it is prudent to retain sufficient funds in escrow from the seller at closing, to be held until the Clearance Certificate is received. Revised Practices Title insurance companies, once the guardians against bulk sales liability, recently have revised their practices. Correctly so, the title insurance industry now takes the position that bulk sales liability is personal to the buyer, and does not create a lien upon any real property that is conveyed as part of the underlying transaction. Consequently, most title companies no longer raise a bulk sales exception in their title commitments or policies. In response to dwindling tax revenues, the Pennsylvania Department of Revenue has indicated that it is going to renew

its focus on the enforcement of the Bulk Sales Law. In short, the Department of Revenue is beginning a bulk sales crackdown. Bottom Line Avoid the crackdown. As a purchaser of any business, but especially one that is in economic distress, make certain that you comply with the safeguards outlined above. Otherwise, your great deal may turn out to be much more expensive than you anticipated. Attorney Patrick J. Mondi contributed to this article. For more information on the “Bulk Sales Law” or the procedures for securing a Clearance Certificate, contact J.W. Alberstadt, Jr. at MacDonald Illig at 814/870-7750 or e-mail him at jalberstadt@mijb.com.

J.W. Alberstadt, Jr. is a partner with MacDonald Illig. He is co-chair of the firm’s real estate practice group and concentrates his practice in the areas of real estate, commercial and economic development, conventional and tax-exempt financing, and estate planning and administration. He provides legal services to individuals, business entities, lending institutions, municipal authorities and development agencies. Attorney Alberstadt handles matters ranging from residential real estate transactions to detailed title and development issues. He also provides representation in commercial financings and tax-exempt municipal, industrial development and 501(c)(3) bond issues.

September 2009 > www.mbausa.org > 27

Events

11th Annual Golf Classic Tour at Whispering Woods For complete photo coverage, visit the Photo Gallery on www.mbausa.org!

UPMC Health Plan was the major sponsor of this year’s tournament.

Sponsor Howard Industries created the custom signage for the Golf Classic.

Matric Limited of Seneca, Pennsylvania, sponsored the golf balls.

Creative Imprint Systems of Erie donated the coolers.

Golf cart sponsor Highmark Blue Cross Blue Shield.

Several golfers came close to winning this new Cadillac as part of the Hole-In-One Contest sponsored by Roth Cadillac Association members and their guests enjoyed an unforgettable day of play for a very worthwhile cause. Proceeds benefited Pennsylvania Business Week, The Patrick R. Locco Scholarship Awards and The John P. Tramontano Jr. Education Fund.

September 2009 > www.mbausa.org > 29

The calm before, during, and after the storm.

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Information Tech

EDITORIAL > by Jeff Lytle

SIP Trunking: A Big Deal for Small-Business Phone Service In today’s environment where businesses are striving to be lean, green, and cost effective, SIP Technology can make an immediate and significant impact on any operation. What is SIP Trunking? Until recently, all phone calls went over the Public Switched Telephone Network (PSTN), and businesses would purchase “trunks” — a dedicated line or bundle of lines — from their service provider to connect their Telephone System (PBX) to the outside world. Today, many businesses are using SIP (Session Initiation Protocol) Trunks for this connection. SIP Trunks are a service offered by many Internet Telephony Service Providers (ITSP) that connect a company’s Telephone System to the Public Switched Telephone Network, via the Internet. SIP Trunks, sometimes called VoIP Trunks or IP Trunks, carry calls to and from a company’s premises over its Internet connection. There are many advantages for using SIP Trunks versus traditional trunks. For new businesses that are planning to install an IP Telephone System (PBX) and use SIP Trunks, the business can eliminate one set of wiring. Likewise, since IP phones connect to the office Local Area Network (LAN), there is no need for separate phone wiring to be installed, thus cutting down on telecom expenses. Adding Up the Benefits Cost savings is a major advantage of SIP Trunking. A single SIP Trunk connection can efficiently and cost-effectively provide a small business with a total voice and Internet solution. Many SIP Trunking providers promote a savings of 40 percent or more over traditional phone service for small, medium, and large-sized businesses.

of SIP Trunking. For example, a business located in Erie, Pennsylvania can have local numbers in other cities, such as New York or Chicago, thus giving their New York or Chicago customers a local number to dial in order to reach them. The company therefore has the value of presenting itself as a local business in those cities and the added benefit of no toll charges for their customers to call to them. Another benefit of SIP Trunking is Disaster Recovery. Since calls are coming in over the Internet, their SIP Trunks can be moved very easily to another IP address and their business can be back up and running should a physical location have a disaster. Keep in mind: SIP Trunks dynamically allocate bandwidth for voice and data needs. In other words, when a SIP Trunk is not being used for a “voice” call, the bandwidth is freed up for use in less intensive applications, such as e-mail and general Web use. Some Other Special Features of SIP Trunks Are: • Ability to keep existing telephone numbers • Affordable Direct Inward Dial (DID) numbers for small businesses

So What’s the Downside of SIP Trunks? One important consideration is bandwidth. A business obviously will need enough bandwidth to support their voice and data needs. Providers estimate anywhere from 50 Kbps to 92 Kbps per call. We typically calculate it at 80 Kbps per call. Remember though, SIP Trunks dynamically allocate bandwidth to favor voice traffic. Even so, dependent on a business’s current bandwidth and current bandwidth usage, they may need to increase the size of their Internet pipe. Another factor to consider is faxing. Faxing has not been perfected on SIP Trunks, though should be in the near future. An alternative would be to retain one or two traditional analog lines for faxing and also backup for E911 emergency calls. With Unified Communications becoming the goal for many businesses, SIP Trunks are a first step toward that goal. If a business is contemplating whether to purchase a new Telephone System, direct SIP Trunk capabilities is a must. It is no longer a question of if, but a question of when a company should move to SIP. My recommendation is as soon as possible.

• No local or toll charges • Single vendor for voice and data services • Ordering additional SIP Trunks takes hours, not weeks, like ordering traditional trunks • SIP can deliver the Unified Communications functions like chat services, presence, conferencing capabilities, and application sharing • Better bandwidth utilization

Jeff Lytle is a sales representative for Electronic Communication Service (E.C.S.) located in Erie County. E.C.S. has been in the telecommunications business since 1989. For more information, visit www.ecsinc. us.com or call 800/8375790.

Out-of-area presence is another feature September 2009 > www.mbausa.org > 31

People Buzz FIRST NIAGARA FINANCIAL GROUP NAMES REGIONAL PRESIDENT First Niagara Financial Group recently announced that Todd C. Moules has been named its regional president for western Pennsylvania. In this role, Moules is responsible for leading new business development, sales, service and community affairs in the region. He works out of First Niagara’s new western Pennsylvania Regional Market Center in Pittsburgh. PARAGON PRINT SYSTEMS, INC. ANNOUNCES PROMOTION Paragon Print Systems, Inc. has promoted Mary Jo Casillo to vice president Operations. In this position, she has the primary responsibility of overseeing the daily operations of Paragon’s customer

EDITORIAL > Contact: Karen Torres

service, human resources, accounting and shipping departments. Paragon provides barcode labeling systems, labels and related software for companies worldwide.

Erie office. He specializes in nonprofit and government auditing. Hollern is a member of the firm’s Nonprofit and Government Services Group.

PROFESSIONAL GROUP RECOGNIZES MCGILL, POWER, BELL ACCOUNTANTS Chris Hollern and Bruce Lawrence, accountants with McGill, Power, Bell & Associates, have been named to the Pennsylvania Institute of Certified Public Accountants’ (PICPA) 40 Under 40 List of Members to Watch.

Lawrence is a manager with McGill, Power, Bell & Associates in the Meadville office. He specializes in nonprofit and government auditing and management consulting. Lawrence is a member of the firm’s Quality Control Committee, Audit Risk Assessment Standards Committee and Government and Nonprofit Services Group.

Each year, the PICPA recognizes 40 up-and-coming young leaders in the accounting profession. Hollern and Lawrence will be honored at a reception this September in Harrisburg. Hollern is a staff accountant in the

Get $100 when you become a Northwest checking customer.

Offer available to new Northwest personal checking account customers only who open a Switch Checking Account with a $100 minimum opening deposit. Northwest Savings Bank customers with an existing checking account are not eligible for this offer. To qualify, you must initiate a monthly direct deposit of $100 or more. A qualifying direct deposit is defined as a direct deposit of a paycheck, pension, Social Security or other regular monthly income electronically deposited into a Switch Rewards, Switch Free, or Switch Interest Checking Account. The direct deposit must be made by an employer or outside agency. Transfers from one account to another or deposits made at a branch or ATM do not qualify as direct deposits. The credit of $100 will be posted to the eligible account within 7 days of the first verified direct deposit. The credit will be identified as “New Checking Account Credit” on your monthly statement. The $100 credit is not considered part of the minimum opening balance. Account is subject to approval. Employees and affiliates of Northwest Savings Bank are not eligible. $100 credit is subject to 1099 reporting. Any applicable taxes are the responsibility of the account holder. Offer may be extended, modified or discontinued at any time and may vary by market. MEMBER FDIC ErieBusMag_HP-Ad 0909 Final.indd 32 <NWSB-42 www.mbausa.org < September 2009

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8/18/09 10:48:49 AM

THE GREAT LAKES INDUSTRIAL TECHNOLOGY SUMMIT

An event developed to promote industry, opportunities, education and technology, the Great Lakes Industrial Technology Summit is open to the public on October 14 & 15, 2009. Come join us and explore what industry and education has to offer!

Interested in Attending? Visit www.GreatLakessummit.com for more information, a complete agenda for the two-day event and for advanced registration.

October 14, 2009 10:00 a.m. - 8:00 p.m. Dr. Willard Daggett's presentations: "Preparing Students for the 21st Century" and "Making Academics and Career Technical Education a Seamless System" FIRST Robotics and BotsIQ Simulations Student/Industry connection for workforce development

October 15, 2009 10:00 a.m. - 5:00 p.m. Federal R&D Tax Credit Seminar by TMG Consulting Specialized career and education fair

Need To Know More? Tianna Yates, GLITS Sponsorship & Event Coordinator, at (814) 602-4773 or by email at tyates@technwpa.org

Sponsorship Opportunities Available Please consider becoming a partner of GLITS and help make this possible by sponsoring the development and success of our event. Hosted by the Technology Council of Northwest Pennsylvania

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PRSRT STD US POSTAGE PAID ERIE, PA PERMIT #199

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Erie Office: Village West #13 3330 West 26th Street 814-833-6633 This managed care plan may not cover all your health care expenses. Read your contract carefully to determine which health care services are covered. If you have questions, call Member Services at 1-888-876-2756.

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