The Buffalo News - Business Columns http://www.buffalonews.com Latest stories from The Buffalo News en-us Thu, 10 Jul 2014 04:33:35 -0400 Thu, 10 Jul 2014 04:33:35 -0400 <![CDATA[ Michelle Singletary: For elderly, it’s always time to talk ]]> http://www.buffalonews.com/business/money-smart/michelle-singletary-for-elderly-its-always-time-to-talk-20140707
Joining me was Tim Prosch, author of “The Other Talk: A Guide to Talking with Your Adult Children About the Rest of Your Life.”

Here’s an edited transcript of that conversation.

Q: When is it time to move to a retirement home?

Prosch: The time to consider moving to a retirement home is when you obviously are no longer able to handle your day-to-day activities, but it’s important to think about more than just yourself. This really needs to be a family discussion. As you consider the retirement home decision, you should also look at your alternatives such as living at home with in-home care, living with your kids, living with some friends, and then finalize your decision when you sit down to have the other talk.

Singletary: Seniors often take a stand that they “won’t” do one thing or another when it comes to their living situation. But your decision can impact a lot of people, especially family who will be helping to take care of you.

Q: What are the pros and cons of living with your adult children as you get older?

Prosch: As I learned with my own family growing up with my great-grandparents in the same home, there are many benefits to sharing your lives together. But there are also responsibilities and potential for conflict. So I suggest before you make this move that you sit down and ask some very practical questions. How will the finances work? What are the guidelines for using different parts of the house? Who is responsible for food, for housekeeping? What responsibilities do the grandparents have for the kids? How do you and your spouse maintain a healthy marital relationship? There are many things to consider, but it can work and be a very fulfilling experience.

Q: How much should you let your adult children know about your investments and finances?

Prosch: The fact is your financial situation [may] end up in your kids’ lap eventually, so it’s incumbent upon you to sit down now and take them through your financial situation and discuss how you want to manage it from now until the end. I would even encourage you to introduce them now to your financial advisers so they know who to talk to when it’s time for them to begin to take over that responsibility.

Singletary: Your adult kids don’t have to be “involved” in investments or choosing what you invest in or how you save. But you should, as you get older, think about sharing what you have that can be used to take care of you should you need to pay for long-term care.

Q: While the importance of having “the other talk” is clear to me, what would you suggest are the most important specific “outcomes to achieve”? I would imagine, for example, that the first talk would just lay the foundation for having a series of different talks about specifics such as medical directives, long-term care, etc. Prosch: There is a lot to cover and you don’t want to overwhelm your kids initially. Begin to establish the partnership between your kids and yourself. I hear many aging parents tell me “I don’t want to do this because I’m losing control.” The point of the “other talk” concept is that you are not losing control; you’re sharing control.

The talk is not a one-time event. It is something you should do every year because things change. Your health changes, your finances change, your kids’ jobs change and your opinions expressed in that first talk may change. So it’s important that you maintain the dialogue by sitting down annually and going through the talk.”

Q: When should you start having the other talk with your adult children?

Prosch: I almost learned this the hard way when my wife and I took a trip to Italy. We ended up renting a sailboat. A boom slammed into me from the back, which is the last thing I remember. When I came to in the hospital I couldn’t move, I couldn’t speak, but I could think, and I thought, “My God, I’ll never have the other talk with my daughter.”

Don’t wait, have the other talk now. ]]>
Thu, 3 Jul 2014 13:37:10 -0400
<![CDATA[ Avoid a moving nightmare ]]> http://www.buffalonews.com/columns/discount-diva/avoid-a-moving-nightmare-20140706
Unless you can afford to hire a moving company.

Then you have my condolences.

After years of schlepping my own junk from one apartment to another, I was so happy to finally have the help of a moving company when we moved into our house.

Fortunately, our moving company was pretty good. But for many people, hiring movers can spell serious trouble. Lots of people have been ripped off or scammed, or have had their property damaged or stolen.

To do your best to prevent any of those scenarios, here are some tips from the state attorney general’s office:

Request information. Get a copy of the “Summary of Information for Shippers of Household Goods” from the New York State Department of Transportation, 1-800-786-5368. If you’re moving out of state, request a copy of “Your Rights and Responsibilities When You Move” from the U.S. Department of Transportation, 1-800-832-5660.

Make sure your mover is licensed by the NYSDOT. If you’re moving out of state, make sure they’re licensed by the Federal Motor Carrier Safety Administration. Those licenses assure they meet insurance, safety and financial standards.

Make sure you’re selecting a reputable mover. Get referrals from friends and family. Read online reviews about the company, and check them out with the state department of transportation and the Better Business Bureau, 1-800-828-5000 or BBB.org.

Get estimates from several movers. Some will estimate over the phone by asking how many rooms you have in your home, but it’s best to have them make an estimate in person.

Beware offers that are much lower than everyone else’s. It could be a red flag that they’ll hike the price up on the day of the move, warns the state attorney general’s office.

Get a written “order of service” before anything is moved. It should outline the estimated cost of the move and how much extra you can be charged if the actual cost exceeds that. Hourly rated moves should cost no more than 25 percent extra; weight-rated moves, 10 percent extra.

The bill of lading is your contract. Read it carefully and don’t sign it if there are blank sections to be filled in later or if you don’t understand how the final cost is going to be calculated.

Insure valuables separately. Regardless of the level of coverage you have on the rest of your stuff, list valuables separately at their full value.

Keep copies of everything. Save correspondence, receipts, contracts and other documents in case there is a problem with your move. If you have any complaints, file them in writing with the mover right away. If your problem is not resolved, contact the department of transportation and the Better Business Bureau.

Don’t forget to protect your identity. It’s more fragile than your finest china. Storage company SpareFoot.com recommends shredding any unnecessary sensitive documents before the move. For the ones you need to keep, separate them from what the movers will have access to and transport them yourself. For things such as Social Security cards and passports, keep them in a locked safety box and keep the lock box with you.

email: schristmann@buffnews.com ]]>
Sun, 6 Jul 2014 21:30:51 -0400 Samantha Christmann
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<![CDATA[ Some tips on how to prevent being scammed ]]> http://www.buffalonews.com/columns/discount-diva/some-tips-on-how-to-prevent-being-scammed-20140630
The attorney general’s office released a list of the most notorious scams specifically targeting elderly New Yorkers. Each one is a ruse to get your money or personal information.

They are:

The grandparent scam. A caller pretends to be your grandchild, saying they’re in some kind of trouble and need you to send money. Sometimes they say they’re in jail, sometimes they’ve crashed a rental car, but they always ask you not to tell their parents. They may use names of family members and other information they’ve found on social media sites.

Jury duty. This scam uses a caller posing as a court officer, saying the victim has failed to report for jury duty and must pay a fine immediately or be arrested.

Lottery scam. A scammer calls with the wonderful news you’ve won a big cash prize and that all you have to do to claim your winnings is pay a few thousand dollars in taxes or read off your bank account number so they can deposit it directly. But the only ones hitting the jackpot are the criminals whose scams are successful.

IRS scam. A caller claims to be an IRS agent or police officer calling about a past-due tax balance. If the debt isn’t paid immediately, the victim will be arrested.

Utility scam. Posing as a utility company, a scammer says you must pay an overdue bill immediately or have your service shut off.

So what can you do to prevent being scammed?

Don’t engage in unsolicited calls. If you are the person making a call to a number you know and trust, giving information over the phone is OK. For example, calling for a pizza and giving your credit card number, or calling your doctor and giving your insurance information is fine.

But if you’re on the receiving end of a phone call, don’t divulge anything. Just hang up the phone. Call the company back using a number you have found and verified – NOT the number from your Caller ID.

No matter where the caller claims to be calling from, or what information they already know about you, hang up the phone and call the institution they say they’re from by using the verified number you have for that institution.

Someone calls saying they’re from the electric company and need to verify your billing information? Great. Hang up on them, get the electric company’s number from your phone book, and call them back with it.

Scammers can make false information show up on your caller ID, so even if your Caller ID shows that you’re receiving a call from your bank or displays the phone number for the IRS, for example, you still can’t trust it.

Beware secrets. When was the last time a company called you and asked to keep your business with them a secret? If a caller tells you not to tell anyone about your conversation with them, that’s a huge sign that you’re dealing with a scammer.

Hang up. Don’t feel rude hanging up on a caller, even if it turns out to be a legitimate call. Companies and government agencies encourage their consumers to take safety precautions. If it really was them calling you, they’ll probably salute you for being so careful.

Remember: If it sounds too good to be true, it probably is.

If you fall victim to a scam, file a report with the Attorney General’s office by calling (800) 771-7755.



email: schristmann@buffnews.com. Follow me on Twitter, @DiscountDivaSam. ]]>
Sun, 29 Jun 2014 16:31:07 -0400 Samantha Christmann
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<![CDATA[ Get a handle on student loan debt ]]> http://www.buffalonews.com/business/money-smart/get-a-handle-on-student-loan-debt-20140630
Now you have to work on getting rid of your student loan debt. So where do you start?

“If you pay your student loan bills every month, and then try to forget the giant pile of debt to which your loans are attached – stop,” writes Reyna Gobel in “Graduation Debt: How to Manage Student Loans and Live Your Life” (Houghton Mifflin Harcourt, $16.99).

Several years ago, I reviewed the first edition of Gobel’s book. Oh, how times have changed, which is why I’m recommending the recently updated second edition.

College graduates – and many people who don’t have a degree – are carrying $1 trillion in student-loan debt. The burden is so heavy that many households headed by young adults with student loans lag significantly behind their peers in wealth accumulation, according to an analysis by the Pew Research Center. The gap is wide. College-educated young adults with no education loans have about seven times the net worth ($64,700) than households carrying debt ($8,700).

Thirty-seven percent of households headed by an adult younger than 40 currently have some student debt – the highest share on record, Pew found.

But “you can manage your student debt while maintaining a lifestyle that is productive in the grand scheme of a financially secure future,” Gobel writes.

To start, stop thinking one monthly payment at a time. You have to know what you owe. After four years of college, people could have two or three loans per semester, Gobel says. You have to face your debt demons – all of them, she adds.

After a bachelor’s degree and two master’s degrees, Gobel added up her debt. She had amassed $63,000 in loans. She’s still making payments. But she has used her experience and her buckle-down budgeting approach to paying off the debt and written “Graduation Debt,” which is part of the CliffsNotes brand.

Given the complexity of the rules around student loans, having CliffsNotes helps. Gobel gets you started with recommending that borrowers create a chart of their debt. From there, her book covers a lot of territory, including defining loan terms, information on consolidating your loans, the difference between federal and private loans, various repayment options, budgeting, and strategies to pay your loans off early.

I love the advice about constructing a chart. Sounds simple. And yet lots of borrowers haven’t taken the time to map out what they owe. Gobel actually suggests creating two charts, one for your federal loans and another for any private debt you may have.

I’ve come across a disturbing number of student-loan borrowers who know very little about their loans. They can’t tell you the interest rates, what company is servicing their debt or even how many loans they have.

You have to take the step to organize the debt so that you don’t forget any loans and go into default. I was helping a relative organize her debt. She had no idea that she was in default on one of the loans because she had overlooked it.

If you’re having trouble making your loan payments, you’ll find a lot of help in the book on how to recover, including information about new regulations for people in default.

If you fall behind on your student loans, you have to make good faith payments to get out of default. For many people, such payments are unaffordable. But now there’s default rehab, Gobel writes. As of July, a new formula will be used to make default rehabilitation payments more affordable.

There are a lot of myths about student loans and Gobel debunks them chapter by chapter. You’ll find the section on budgeting helpful because you have to figure out where to find the money to make your loan payments.

This isn’t a summer-fun read. But it’s full of the information borrowers need to know. So, if you’re still trying to figure out what type of gift to give a recent college graduate, get this book if he or she has loans. It’ll help them get focused and hopefully on track to pay off their debts on time, if not early. ]]>
Fri, 27 Jun 2014 10:27:01 -0400
<![CDATA[ Money Manners: How to tactfully stop paying for friends’ meals ]]> http://www.buffalonews.com/city-region/money-manners-how-to-tactfully-stop-paying-for-friends-meals-20140630 Dear Jeanne and Leonard: I’m a salesman for a pharmaceutical company, and I had a good quarter, for which I received a nice bonus. So when my wife and I had dinner with a couple we often go out with, I picked up the check, saying I wanted to celebrate my good fortune. That was six months ago.

Since then, our friends have expected us to pay for every meal we’ve shared, even though the four of us had always split the tab in the past. It’s not like our friends are hurting for money. But apparently they’ve decided that I’m loaded (I’m not) and that I want to or ought to be treating them every time we go out. How can I get this to stop?

– Stymied, Southeastern Pennsylvania



Dear Stymied: Tell them you had a really bad quarter and the next six months is on them.

OK, not really, but when the next check arrives, say to your friends: “Do you want to use cash, or should we ask the waiter to divide it between our credit cards?” Too bad you didn’t say this the first time your friends sat on their hands. But it’s not too late. If, as you say, you have a history of splitting tabs with these folks, they won’t be wounded when you indicate that you expect them to pay their share, only disappointed.

...

Dear Jeanne and Leonard: My husband and I were both married previously. I have two children, two children-in-law and four grandchildren. My husband has one child, one child-in-law and one grandchild. He believes that because we give birthday and holiday gifts to eight people in my family and to only three in his family, his family should get larger gifts. I think everyone should be treated equally and no one should be penalized just because they happen to have siblings or cousins. What do you think?

– Diane, Southern California



Dear Diane: If these gifts you’ve been giving are in the $25 range, your husband needs to lighten up. But if they cost hundreds of dollars – or more – you need to start paying for your relatives’ gifts yourself. Whatever the financial arrangement you have with your husband, you surely have some money to spend at your discretion. If you want to give expensive presents to your family of eight, that’s the money you should use, not your marriage’s general funds. And, of course, the same rule applies to your husband.

...

Dear Jeanne and Leonard: My daughter’s cheer team is going to a national competition, and the cheer club has offered families several options for hotel accommodations. The price goes up the more nights you stay and goes down the more people you are willing to share a room with. Long story short, my daughter and I signed up for a three-night, four-person package, meaning we’ll be sharing the room with two other attendees. Well, it turns out that our roommates – another mother and daughter – will be staying for four nights, and now the bookkeeper at the cheer club says we need to pay for a four-night package because there are no more pairs of attendees who want to share a room for just three nights. I realize it may be impossible for the club to accommodate every family’s preferences. But when something like this happens – when two pairs of attendees whose preferences aren’t the same are forced to share a room – I don’t see why the people who want the room for only three nights should have to pay for four. What’s wrong with having the mother and daughter who want the room for four nights pay the entire cost of that fourth night themselves?

– K.M., Kansas City



Dear K.M.: Absolutely nothing. At the very least, they should pay for half of your half of the fourth night. That way, the cost of the apparently unavoidable mismatch would be shared equally by the two families.

Please email your questions about money and relationships to Questions@MoneyManners.net. ]]>
Fri, 27 Jun 2014 09:54:15 -0400
<![CDATA[ Free fun for summer, round two ]]> http://www.buffalonews.com/columns/discount-diva/free-fun-for-summer-round-two-20140623
But Western New York has more free family fun than you can shake a Discount Diva column at, so here’s round two.

• Young Audiences Western New York. The programming offered by this non-profit group of highly-trained, professional teaching artists could keep you busy the whole summer all on its own. It brings arts education to Western New York young people in the form of music, multi-media arts, theater, dance, and visual and literary arts workshops and performances.

It’s got a diverse calendar of fun and educational events scheduled from July 2- Aug. 27, with everything from interactive breakdancing, Guinean drumming and improv comedy performances to juggling, African dance and kite-making.

They’ll be at Canalside, 44 Prime St., at 11 a.m. and noon every Wednesday. They’ll perform on Old Falls Street in Niagara Falls (the three-block strip connecting Niagara Falls State Park with the Conference & Event Center and the Seneca Niagara Casino & Hotel) at noon and 1 p.m. every Wednesday, Friday and Saturday. They’ll also be appearing at various libraries around Western New York.

And get this: They offer a free arts summer camp for teenagers.

Open to Erie County teens ages 13 to 17, Curators of Culture runs from 10 a.m. to 4 p.m. Tuesday through Friday from July 8 through Aug. 29 at the Central Library, 1 Lafayette Square, except for Fridays, when it is at Buffalo State College, 214 Grant St. Register by calling 881-0917

• First Wednesdays at the Steel Plant Museum of Western New York. If you’ve got a former steelworker in your family, you’ll love checking out relics of the steel industry. The museum, at 100 Lee St., hosts free speakers the first Wednesday of each month at 7 p.m. It’s geared for adults, but if you show up at 6 p.m., you can tour the museum free beforehand. How cool would it be for grandpa to share his steel mill memories with the grandkids?

• Eastern Hills Wesleyan Church. Located at 8445 Greiner Road in Williamsville, the church has a jam-packed summer schedule of free classes and events open to everyone.

There’s a five-week knitting class at 6 p.m. every Wednesday in July as well as sailing lessons at the Buffalo Harbor, Chinese cooking lessons, improv comedy workshops, game nights and much more. To register, call 688-7165.

The church will also host a drive-in movie screening of “Turbo,” an animated tale about a snail who wants to win the Indy 500 at 8:45 p.m. July 11 and will be moved inside if it rains.

• Vacation Bible School. Almost every church offers some variation of this, and there are several different themed programs churches have to choose from, so you could send the kids to more than one. Many are free, some charge as much as $25 to cover expenses but will waive the fee if it’s a hardship.

Generally open to children ages 4 to 11, the program usually lasts about four consecutive days and offer games, stories, music, crafts, food, freebies and more. Here’s a couple:

Creekside Assembly of God, 2625 Tonawanda Creek Road in Amherst, will host “Wilderness Escape” from 6:15 p.m. to 9 p.m. July 28 through Aug. 1. Call 689-9944.

Bethesda Full Gospel Tabernacle, 6 Delaware St. in the City of Tonawanda, will present “Weird Animals” from 6 p.m. to 9 p.m. Aug. 11-14. Call 693-6990.

email: schristmann@buffnews.com ]]>
Mon, 23 Jun 2014 06:21:05 -0400 Samantha Christmann
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<![CDATA[ Musk brings thinking big to Buffalo ]]> http://www.buffalonews.com/city-region/musk-brings-thinking-big-to-buffalo-20140619
The billionaire loves to think big, and he’s shown an uncanny knack for coming up with ideas that take off like rockets. He made a fortune when he co-founded PayPal and sold it years later to eBay for $1.5 billion. He went on to start Tesla Motors, where he aims to bring electric cars to the mainstream market. And he started his own private rocket company, SpaceX.

It all has helped Musk build a fortune that Forbes magazine pegs at $9.2 billion.

Now, Musk is planning to work his magic in Buffalo, where SolarCity, the solar power system installer he helped conceive with his cousins, Lyndon and Peter Rive, intends to build one of the world’s biggest solar panel factories in the world.

It’s a bold plan, and because it’s Musk, it’s creating a national buzz about Buffalo.

“It’s super exciting,” said Dottie Gallagher-Cohen, the president of the Buffalo Niagara Partnership. “Elon Musk is betting on Buffalo.”

“Musk’s investment is big because he’s a national figure,” Gallagher-Cohen said. “It’s great from a regional marketing perspective.”

Buffalo Mayor Byron Brown feels the buzz, too. “Just to have someone like that, who is internationally known, in this marketplace is really great for Buffalo,” he said.

SolarCity’s planned investment in Buffalo, which it inherited and expanded last week when it agreed to acquire solar panel maker Silevo in a deal that could be worth as much as $350 million, immediately put Buffalo on the map within the solar power industry.

The factory’s mere size – it will be able to produce enough solar panels each year to generate 1 gigawatt of electricity – will make Buffalo a center for the solar power industry, with enough of activity that it should attract a cadre of suppliers and other businesses that serve the solar module factory.

Not to mention the “well over 1,000 jobs” that the company expects to create within a couple of years, when the factory is running at full steam.

“This is very high profile,” said Howard Zemsky, the co-chairman of the Western New York Regional Economic Development Council, in his typically understated fashion.

But there’s nothing understated about Musk. He built his fortune by thinking big.

At Tesla, Musk wants to build a massive plant, which he calls a “gigafactory,” that will make lithium-ion batteries on such a grand scale that it will make electric cars cheap enough that they can compete with vehicles that run on gasoline.

At SolarCity, the company is planning to build its own solar panels on such a grand scale that it makes solar power affordable to the masses without subsidies.

Notice the similarities?

For SolarCity, the move into solar panel manufacturing is a huge change. The company established itself as the nation’s biggest solar power system installer by offering rooftop solar power systems at no upfront cost to customers. SolarCity provides the financing for the solar power systems it installs for customers who then make monthly payments for decades.

“Leasing is a game changer,” said Shyam Mehta, a GTM Research analyst. “It unlocks a whole class of customer that could not otherwise have afforded solar.”

By branching out into manufacturing, SolarCity is taking on additional risk. There’s a glut of solar panels on the market, and that oversupply has helped push down the price of the solar modules that the company uses. The glut helped push the world’s largest solar panel supplier, Suntech Power, into liquidation last year.

But by acquiring Silevo, SolarCity is moving into the high-efficiency end of the market, with Silevo’s panels able to convert about 21 percent of the sun’s energy into electricity, compared with 17 percent to 18 percent for the less costly, conventional panels. Silevo’s emerging technology that allows its panels to capture reflected sunlight on its underside when mounted on the ground or on a tilt can boost its efficiency as high as 26 percent.

“We’re seeing high-volume production of relatively basic panels, but not high-volume production of advanced panels,” Musk said during a conference call last week.

But because it takes fewer high-efficiency panels to generate the same amount of electricity as one made with conventional modules, SolarCity also can save on installation costs, from labor to wiring and hardware. And by producing Silevo’s panels on a massive scale, Musk thinks SolarCity can squeeze out further cost savings.

“The path to ultimately having solar power be way cheaper than coal or fracked gas power is to combine the huge economies of scale with the most advanced technology,” he said.

The deal also is a hedge against the protective tariffs imposed on the Chinese solar panels that SolarCity now relies on. Those impending duties could increase the price of Chinese solar panels by an average of 14 percent, according to a report issued Thursday by GTM Research. That will only make the panels SolarCity produces in Buffalo more competitive.

SolarCity already sees a booming demand for its solar power systems, with installations of up to 1 gigabyte – the capacity of the Buffalo plant – expected in 2015.

“The demand grows exponentially as the price drops, and you can imagine that it really grows at an enormous pace if we’re able to compete with grid power electricity with no subsides,” Musk said.

And that would be a really big deal.

email: drobinson@buffnews.com ]]>
Sat, 21 Jun 2014 11:20:19 -0400 David Robinson
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<![CDATA[ Greyhound starting to hit its stride once more ]]> http://www.buffalonews.com/life-arts/travel/greyhound-starting-to-hit-its-stride-once-more-20140622
But on a recent weekday, Philip Stevens of Coppell, Texas, and his festive companion dog, Gigi, waited at Greyhound’s Dallas terminal, bound for Houston on their first bus ride.

They sat among a cluster of passengers who included a couple of middle-age professionals, several millennials and a guy with an orange Mohawk.

It was the sort of diversity Greyhound celebrates these days.

In the past decade, old-world, road-worn Greyhound has spent millions to rebuild and reinvent itself, aiming to add the Internet set and others to its traditional lower-income customer base.

In this, Greyhound’s 100th year in business, the company continues to put a new shine on the old dog with leather seats, Wi-Fi and a growing focus on shorter, nonstop routes.

“The future for us looks really exciting,” said David S. Leach, president and CEO of Dallas-based Greyhound.

Urbanization is luring people back to big cities – particularly 20- and 30-somethings – offering new opportunities for a longtime inner-city bus line like Greyhound.

Many Gen Y’s live close to where they work downtown, and some don’t own cars. When they travel, they want convenience, low cost and portals for their digital devices.

Meanwhile, a growing number of veteran travelers, weary of the hassles of airports, are also looking for alternatives – particularly for intrastate trips.

“More people are moving to cities than ever before, and with it comes issues of congestion, infrastructure and transportation that we can help solve,” Leach said.

Last year, Leach said, Greyhound earned a profit of about $73 million on revenue of $990.6 million, and it expects profit to grow to $80 million this year.

“It’s a pretty cool story – for the city of Dallas and North America,” said Leach, 49, who worked his way through college as a baggage handler at Greyhound.

The transit transformation began more than 10 years ago in the midst of a growth era for privately held Greyhound, a period when its buses ran more miles than ever.

But many left terminals with dozens of empty seats, and those that were filled often had been sold at discounts.

Predictably, revenue was weak and fading.

“We realized the network did not make sense,” Leach said. “We realized the urbanization of America was occurring.”

Rather than send its buses out on long trips between distant cities – stopping at small towns along the way – Greyhound began to emphasize shorter, more frequent routes between cities 300 or so miles apart.

“We took miles driven between New York and Los Angeles and put them into New York to Boston, which we do every 45 minutes,” Leach said. “We continue to rationalize our miles, putting buses on routes that people want to ride.”

The bus line now serves thousands of “city pairs,” he said, nonstop routes like Dallas to Austin or Dallas to Houston.

“You take all these pieces and ask where can we provide value? And it’s in shorter trips,” he said.

New companies like Megabus see some of the same changing urban dynamics as Greyhound and also seek to attract customers on relatively short routes like Dallas to Austin – and with newer buses.

But Leach said the competition should benefit all the carriers because it calls attention to buses.

“We’re the ones with the iconic brand and the established network,” he said. “But the fact that Megabus is coming in just gets buses in general out front and at a time when you’ve got all these great changes going on.”

Although privately held Greyhound declined to provide comprehensive financial numbers, Leach said the express bus services generated $121 million in revenue last year, up from $2 million in 2011.

“That’s getting it right,” he said.

Moreover, the bus line currently serves about 10.5 million customers annually. As urban populations and congestion grow, it has “potential prospects” of 31.6 million people, Leach said.

On a recent Wednesday morning, about 40 people sat in contemporary gray-metal chairs at the Dallas bus terminal, waiting mostly for departures from three gates.

While the exterior of the terminal remains well-worn, the interior has been refurbished with a gray tile floor, blue tile trim on the walls, a couple of flat-screen TVs and electronic signboards.

In 2007, Greyhound was purchased by FirstGroup, a Scottish corporation that Leach said is the largest ground transportation provider in the United Kingdom.

At the time, Greyhound had 1,200 old white buses, most of them tired road warriors in need of replacement.

FirstGroup was supportive – to a point.

“If you replaced all of them at once, it would cost you half a billion dollars,” Leach said. “How do you afford that?”

A year or so later, with the national economy mired in recession, Leach and his executives saw opportunity in all the bleak trends.

They realized that Indiana – a center for the recreational vehicle business – had thousands of laid-off workers skilled at building bus-size vehicles.

So Greyhound rented a 100,000-square-foot building and began hiring the unemployed RV workers to rebuild its old buses.

“Those buses had stainless-steel frames, so those were fine,” Leach said. “But we put new floors in them, rebuilt engines, new interiors and better electronics.”

The workers expect to finish their jobs in August – at an average cost of about $120,000 per bus.

“New buses configured the way we wanted them would have cost $500,000 each,” Leach said. “When you’re able to replace your fleet of buses at way less than half the price you were looking at, it’s the kind of investment that gives new life to a company.” ]]>
Thu, 19 Jun 2014 10:23:54 -0400 By Terry Box

Dallas Morning News

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<![CDATA[ Big Data is watching you closely ]]> http://www.buffalonews.com/business/money-smart/big-data-is-watching-you-closely-20140620
Whenever I’ve been searching for a product online, I often see pop-up ads later, as I’m moving from one Internet site to another, pitching the same item or something similar. Frankly, it’s creepy. But, here’s the glass-half-empty part. I’ve accepted that much of the details of my retail life are being snatched and sold.

I’m being profiled constantly and I rarely know what’s in the files and how my information is packaged and brokered.

“For decades, policymakers have expressed concerns about the lack of transparency of companies that buy and sell consumer data without direct consumer interaction,” the FTC says.

Consider this from the report. One broker’s database has information on 1.4 billion consumer transactions. Another’s store of information covers $1 trillion in consumer transactions. One broker adds 3 billion new records each month to its databases.

Before you get completely outraged about this, there are some benefits to the collection of all your data. Knowing your patterns can help prevent companies from being duped by crooks pretending to be you. However, as many people have discovered, there are also many downsides to the storing of your data. Consider the following, according to the FTC:

• Consumers can be turned down for products based on an error or errors in reports they never knew existed. One data broker recently settled charges brought by the FTC after the agency said the firm had violated the Fair Credit Reporting Act by failing to assure information it obtained from sex offender registry records matched the specific job applicants they were researching. In many instances they got it wrong, the FTC said.

• Data brokers often create marketing categories based on your information, including your shopping history. But placing you in a particular segment might end up costing you money.

“For example, while a data broker could infer that a consumer belongs in a data segment for ‘biker enthusiasts,’ which would allow a motorcycle dealership to offer the consumer coupons, an insurance company using that same segment might infer that the consumer engages in risky behavior,” the FTC notes. In the insurance business, higher risk often means higher premiums.

The FTC says Congress needs to pass legislation allowing consumers to find out what is being collected about them.

“Many of these findings point to a fundamental lack of transparency about data broker industry practices,” the FTC said.

“Data brokers acquire a vast array of detailed and specific information about consumers; analyze it to make inferences about consumers, some of which may be considered sensitive; and share the information with clients in a range of industries. All of this activity takes place behind the scenes, without consumers’ knowledge.”

There were three recommendations in particular from the FTC that I hope will be taken up by Congress:

• Give consumers access to their own data, including any sensitive information.

• Provide clear and easy ways for people to opt out of having their data collected and sold.

• Require companies to disclose where they got information or the data source so that consumers can correct errors.

At this point, we can’t put the genie back in the bottle. The best we can hope for is to make sure inaccuracies don’t cause us any financial pain. ]]>
Fri, 20 Jun 2014 14:31:59 -0400
<![CDATA[ SolarCity plans lend credence to the promise of the Buffalo Billion ]]> http://www.buffalonews.com/columns/david-robinson/solarcity-plans-lend-credence-to-the-promise-of-the-buffalo-billion-20140618
With its $200 million acquisition of Silevo, a keystone in the state’s RiverBend clean-energy hub, SolarCity, backed by billionaire Elon Musk, immediately supercharged the state’s efforts to turn the Buffalo Niagara region into a hot spot for clean-energy businesses.

It also eased some of the lingering concerns among skeptics who wondered whether a pair of small startup companies could form the foundation for an ambitious push to create a new industry, essentially from scratch, with $225 million in backing through Gov. Andrew M. Cuomo’s Buffalo Billion economic-development initiative.

“Our partners went from being a promising company with an emerging technology to a publicly traded company with a market value of almost $6 billion,” said Howard A. Zemsky, co-chairman of the Western New York Regional Economic Development Council.

“People have been asking, ‘Is the Buffalo Billion working? Where are the jobs?’ ” said Erie County Executive Mark C. Poloncarz. “Well, in just two years, we could have more than 1,000 jobs in a sector of the economy where today we have zero.”

The acquisition, which could be worth $350 million if Silevo hits certain volume and cost targets, has enormous implications for the RiverBend project:

• It immediately positions Buffalo as a major player in the U.S. solar power industry, with a plant that will be one of the world’s biggest solar module production facilities.

It brings one of the nation’s biggest solar power companies to the RiverBend project, and the massive size of the planned solar panel plant gives it the scale that will help it become a magnet for other businesses that supply components and services to the Buffalo factory.

“There will be suppliers. There will be engineering companies,” Poloncarz said. “It’s not just going to be one company.”

And that could mean many more jobs, beyond the more than 1,000 positions that SolarCity envisions at its Buffalo factory.

“I absolutely think it’s going to change the game,” said Christopher Beitel, the Silevo executive vice president who has been coordinating the plans for the RiverBend factory.

The expanded RiverBend factory “is going to bring opportunities to co-locate the entire ecosystem associated with making solar panels on or very near the manufacturing complexes that we create.”

“That’s really going to be critical to the scale to drive the costs to where we need it to be,” he said. “What’s exciting for Buffalo is not just the 1,000 jobs or so that we’re going to create for the Silevo manufacturing facility, but from all of our partners upstream and downstream.”

And if state officials succeed in luring another major solar panel manufacturer, Solar Frontier, to open a plant in Buffalo Niagara, it will further establish the critical mass needed to attract suppliers and other ancillary jobs to the area. State officials earlier this year signed a preliminary agreement with Solar Frontier to explore the feasibility of the Japanese solar panel-maker opening a significant factory in Buffalo Niagara.

• The acquisition also brings much deeper pockets to the RiverBend project. SolarCity’s chairman, Musk, is a billionaire who also is CEO of electric car-maker Tesla Motors.

The company had $164 million in sales last year and is forecasting that demand for the solar power systems it installs will jump to as much as 1 gigawatt (1,000 megawatts) in 2015. That would roughly match the annual output of the Buffalo factory once it’s running at full steam.

• The deal gives Silevo, a California-based startup with limited production capacity at its Chinese factory, the backing of a major U.S. solar power system installer. Instead of having to find customers on its own, the production of the Buffalo factory will largely be used to install solar energy systems for the surge SolarCity expects in its customer base.

SolarCity, which has more than 110,000 customers, expects to install solar energy systems with a total capacity of up to 550 megawatts this year. At the moment, those installations use solar panels that SolarCity buys from other companies. Once the Silevo acquisition is completed and the Buffalo factory is running, probably two years from now, SolarCity will be able to supply those panels from its own factory on the old Republic Steel site.

“They don’t have to worry about selling to anyone anymore,” said Shyam Mehta, a solar industry analyst at GTM Research.

• And this could be just the beginning. SolarCity executives don’t think the Buffalo plant will be big enough to handle all of the growth they see in the solar power industry – not by a long shot.

They said the Buffalo factory, which would be one of the biggest in the world, could be dwarfed by future production sites that are 10 times bigger in order to achieve the economies of scale needed to drive down prices to their lowest possible point – assuming that demand grows as rapidly as SolarCity executives think it will.

“That could be an expansion of the Buffalo factory, or it could be another location,” said Lyndon Rive, SolarCity’s co-founder and CEO.

Those decisions likely are years away, but for now, SolarCity’s push to meet its forecast boom in demand is centered squarely in Buffalo.

“If we don’t do this, we felt there was risk of not being able to have the solar panels we need to expand the business in the long term,” Musk said.

“We’re concerned that if you look two or three years down the road, there will not be enough production capacity to supply what we need,” he said. “We ultimately expect to be installing tens of gigawatts a year.”

Getting there means bringing the cost of solar power systems down to the point where they are on par with electricity generated with fossil fuels, such as coal or natural gas. In most places, other than high-cost areas such as Hawaii, consumers must rely on subsidies, including federal tax credits, to make solar power systems competitive, Mehta said.

Silevo’s high-efficiency solar panels will be a big factor in SolarCity’s plans to bring those system costs down, especially with the 30 percent federal tax credit on solar projects set to expire at the end of 2016.

“Silevo is a very important part of SolarCity’s long-term strategy,” Mehta said. “It is a huge validation of their technology.”

And it is that technology that caught the eye of state officials when they were seeking tenants for the RiverBend complex, and SolarCity executives when they were looking to expand their business into solar panel manufacturing.

Silevo’s technology allows its solar cells to convert about 21 percent of the sun’s energy into electricity and has the potential to boost its efficiency rate as high as 24 percent. That’s better than the industry average of about 17 to 18 percent and competitive with the efficiency of panels made by the most efficient producer in the market, SunPower Corp.

The downside to higher-efficiency panels is that they tend to cost more, but SolarCity executives said Silevo’s technology, which has fewer production steps and uses copper as a key material rather than more costly silver, has the potential to produce panels that can be more competitive on cost as they move into high-volume production.

That could lower the overall cost of installing a solar power system because the higher-efficiency means that fewer panels are needed to generate the same amount of electricity, which also lowers installation costs by reducing the amount of hardware and labor needed.

“This seems very transformational,” said Patrick S. Jobin, an analyst at Credit Suisse, “kind of buying a competitive advantage in terms of cost and supply.”



email: drobinson@buffnews.com ]]>
Wed, 18 Jun 2014 18:36:49 -0400 David Robinson
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<![CDATA[ Discount Diva: Don’t miss free family summer fun ]]> http://www.buffalonews.com/columns/discount-diva/discount-diva-dont-miss-free-family-summer-fun-20140616 Summer begins Saturday, but we’ve been living it up August-style since the mercury eked above 50.

Now that the region’s jam-packed schedule of free family events has kicked in, we’re about to really party down.

Here are some personal faves.

• Kenmore Children’s Concert Series. Cap off your Tuesday nights with free live music on the lawn at Kenmore Middle School, 155 Delaware Road in Kenmore, starting at 6:15 p.m. Latin jazz band Sol y Sombra kicks off the fun Tuesday, and the Billy Baroo Band closes out the series Aug. 12. Youngin’s can dance with carefree abandon. Self-conscious tweens can hunch over their iPhones pretending not to be related to their parents.

• Live at Larkin. Every Wednesday at 5 p.m., you can find cool moms and dads at 745 Seneca St. in Larkin Square, jamming out to live, local music for free. I’ll be there with my family, too, even though I just outed myself as uncool by using the term “jamming out.” Concerts run through Sept. 17.

Note: To protect your little ones’ (and your own) hearing, pick up a pack of ear plugs [a 20-pack costs about $8]. For infants and toddlers, earmuff-style hearing protection works best. We got the highly-rated Baby Banz for our kids for about $20 apiece on Amazon. A worthy investment.

• Chalkfest. This event, happening from noon to 6 p.m. Aug. 2-3 on the 500 block of Main Street, is one of our favorites. You can just show up and draw on the sidewalk for fun or you can register ahead of time at ChalkfestBuffalo.com to reserve your own square of drawing space, which will make you eligible to win prizes for your work. Either way, it’s free and chalk is provided.

This year’s theme is Dr. Seuss. There will be live music, food, breakdancing, story time, arts and crafts and free balloon art. But my favorite part is watching over the shoulders of local artists as they create their own chalky masterpieces.

• Everyday fun at Canalside. There is always something going on at Canalside. Try the themed crafts and educational activities (Explore & More Children’s Museum’s Family Fun Fridays, from 11 a.m. to 2 p.m. July 11 through Aug. 22). Or sample the youth cooking demonstrations and fitness challenges (What’s Cookin’? Tuesdays from 11 a.m. to 1 p.m.).

But even between special events, Canalside offers free use of table and lawn games such as ping pong, billiards, foosball, bean bag toss, ladder ball, jarts, a giant Connect Four game and more from 11 a.m. to 8 p.m. every day.

It’s also an awesome place to bring a picnic, play in the sand, watch the sunset or get ice cream. Use the address 44 Prime St. for GPS navigation. For a full calendar of events, visit CanalsideBuffalo.com and choose “things to do” from the menu.

• Artpark Free Family Saturdays. Enjoy live performances by the Niagara University Repertory Theatre and the Greater Niagara Ballet Co. as well as hands-on art workshops, crafts and activities. The magic happens Saturdays from noon to 4 p.m. July 5 through Aug. 2 at Artpark, 450 South Fourth St. in Lewiston. Parking is free, too.

email: schristmann@buffnews.com ]]>
Mon, 16 Jun 2014 06:25:09 -0400 Samantha Christmann
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<![CDATA[ The benefits of 529 college savings plans ]]> http://www.buffalonews.com/business/money-smart/the-benefits-of-529-college-savings-plans-20140616
But it also makes me relieved that my husband and I set up 529 plans for our children.

Nevertheless, I was surprised to learn that most people aren’t even aware of this vehicle to save for college, even those who are likely to have the income to make this investment.

For the last three years, the financial firm Edward Jones has commissioned a survey to gauge what Americans know about 529 plans.

The survey found that only 30 percent of survey participants could correctly identify what a 529 plan is about.

And the awareness is dropping. In 2012, 37 percent of respondents correctly identified a 529 plan from among four potential options.

Some thought it was a retirement account, a form of life insurance or a low-cost health care plan. Among those with a household income between $50,000 and $75,000, awareness was only marginally better at 32 percent.

Awareness levels increased when income increased, but it still wasn’t as high as it should be.

Forty-two percent of households with income between $75,000 and $100,000 could identify a 529 plan.

Only 48 percent of Americans making more than $100,000 answered the question right.

Here’s how a 529 plan works. There are two types: prepaid and savings plans.

The advantage to the plans is that earnings are not taxed if the funds are used to pay for qualified college expenses. In most cases, earnings are also free from state and local taxes. There are no income limitations on who can contribute to an account.

And I particularly like this feature – the account owner maintains control over the money.

A prepaid tuition plan allows you to pay a child’s tuition in advance. The point is to lock in for tomorrow at today’s rate.

However, be careful about funding a prepaid plan and thinking you are done. It covers only tuition and fees. What if your child wants or needs to live on campus? Room and board alone can be as much as tuition.

The 529 savings plan is the most popular. With this plan, you invest much like you would in a workplace 401(k). This means your returns are based on how your portfolio performs over the years.

Most 529 savings plans offer age-based investment options in which the investments become more conservative as the beneficiary gets closer to college age.

This is what we have selected for our children.

Every state and the District of Columbia offer at least one type of 529 plan. Although the 529s are state-sponsored, you can invest in any of them regardless of where you live.

New York’s plan allows residents to deduct their contributions on their state income tax.

Start your research about 529 plans by going to the one run by your state. But here are two other websites that provide a lot of good information – collegesavings.org run by the College Savings Plans Network, and savingforcollege.com.

On savingforcollege.com, you’ll find a quarterly analysis of the best and worst 529 plans based on short-term and long-term investment performance.

Some states try to drum up interest in the plans by holding contests.

“The issue gets more notice when there are a bunch of promotions, contests and other hoopla focused on one single day,” said Joseph Hurley, founder of savingforcollege.com.

When it came time to pay for my daughter’s tuition, fees, books and room and board this year, I simply made a telephone call.

It took less than 10 minutes to process the payments for her freshman fall and spring expenses.

Each time, the customer representative ended the call by asking, “Is there anything else I can do for you?”

“Nope,” I said, breathing a big sigh of relief. ]]>
Mon, 16 Jun 2014 00:53:18 -0400
<![CDATA[ Buffalo’s Business: Cleveland BioLabs’ shareholders upset ]]> http://www.buffalonews.com/columns/david-robinson/buffalos-business-cleveland-biolabs-shareholders-upset-20140615
That’s not surprising. The Buffalo drug development company’s stock is down to 50 cents a share – from a five-year high of $8.40 in March 2011 – after the Defense Department funding that it was counting on to help turn its anti-radiation sickness drug into a revenue producer was turned down in January.

The company is trying another path to convince federal regulators to allow its Entolimod drug to be stockpiled for emergency use, like a terrorist attack or nuclear power plant accident. But even if that effort succeeds, it won’t happen until sometime next year.

By then, it may be too late. The company is due to run out of cash by spring.

“I am a very concerned shareholder,” long-time investor Jeffrey Chokel told Cleveland BioLabs’ executives during the company’s annual shareholder’s meeting last week.

“I think, more important than why the stock has tanked, is what you’re going to do about it going forward,” he said. “Are you going to do the right things to make sure the market appreciates the value that’s there?”

Right now, the market isn’t showing much love for Cleveland BioLabs, which lost $3.5 million during the first quarter despite some aggressive steps to cut costs that slashed its cash burn rate from $1.7 million a month to around $1 million.

And Chokel worries that, if Cleveland BioLabs goes to Wall Street to try to raise more cash in the coming months, the terms will be a very bitter pill for the company’s shareholders to swallow.

“History has shown that Wall Street will take you to the cleaners,” said Chokel, an investor from suburban Cleveland who has owned Cleveland BioLabs shares for eight years. “Until you get the stock price up, you can’t go to the market to raise more money.”

Yakov Kogan, Cleveland BioLabs’ chief executive officer, said he thinks the company’s efforts eventually will push the stock back up, although he also cautions that a turnaround is likely to take time. That’s because the company’s plan is to keep plugging away with important clinical studies on Entolimod and a handful of other drugs that have shown early promise as cancer treatments.

The more data the company can compile on the drugs through the studies, the stronger the scientific foundation it will be able to present to Wall Street or potential partners in the pharmaceutical industry when it knocks on their doors seeking financing. Promising clinical results also could give its share price a boost.

“By generating solid clinical results it will be of value to the company in the near term, as well as the long term,” Kogan said.

“We just need enough time for the data to be generated, analyzed and presented,” Kogan said. “We are not rushing to raise money before certain milestones are met.”

An important part of that effort centers around a meeting the company has scheduled with U.S. Food and Drug Administration officials for next month about the potential stockpiling of its Entolimod drug for emergency use through a process, known as a Pre-Emergency Use Authorization. That’s the company’s best hope for turning Entolimod – the most advanced of Cleveland BioLabs’ drug candidates – into a revenue producer.

Chokel, however, thinks that may come too late.

“That won’t even be applied for until the first quarter of 2015,” he said. “At that point, you may be out of money.”

That’s why Chokel questions the wisdom of Cleveland BioLabs’ strategy of pursuing further development of four other cancer drugs. Despite the promise they’ve shown in early studies, they all are several years – and several successful clinical trials – away from hitting the market.

“The other four are cash users,” he said. “I’m not saying they’re not great programs, but I’m concerned about what this does to the share price.”

Kogan said the company is funding much of the development of its cancer drugs through grants from Russian investors and Russian government agencies, that aren’t diluting the holdings of its shareholders. In all, the company’s Russian ties have brought in $23 million in funding. “We have developed a unique ability to tap into the Russian market,” Kogan said.

The company also is looking for partners to help fund its drug development efforts, which would give Cleveland BioLabs more financial breathing room.

That wasn’t enough to satisfy Joseph Weiss, a shareholder from Clarence and a local angel investor in companies such as Kinex Pharmaceuticals and Empire Genomics.

“What you’re doing here is a couple of yards and a cloud of dust, but you’re going to run out of time,” said Weiss, a former Clarence Town Board member.

“I think we need a grandstand play here,” Weiss said. “We need something that lights it up a little bit.”

But Weiss isn’t sure that Cleveland BioLabs’ management is up to the task.

“I don’t think you’ve got a salesman in the whole group,” he said.

email: drobinson@buffnews.com ]]>
Fri, 13 Jun 2014 07:34:07 -0400 David Robinson
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<![CDATA[ The thought counts most with dad ]]> http://www.buffalonews.com/columns/discount-diva/the-thought-counts-most-with-dad-20140609
For Christmas, he gave me a beautiful, vintage 1920s Underwood typewriter. It was much like the ones he used to salvage and bring home for me as a kid, so I could clickety-clack away, pretending to be a journalist.

Just a few days ago, he gave me a little quill, ink well and blotter for my dollhouse. He whittled them out of wood and they’re extremely delicate and detailed.

The tip of the quill has a little smudge of ink, and the bottom of the blotter shows my name reflected backward, as if a little, miniature version of myself had used it to blot my signature on an important, pint-sized document.

He texted me a photo preview of my newest treasures, with the message “A quill for a scribe.”

Is that not freaking adorable?

Can’t you just see him – a 6-foot-tall Vietnam vet in a Harley T-shirt – hunched over a piece of wood smaller than his pinky nail, lovingly etching each sweet, tiny notch?

Makes my heart want to explode with love and gratitude.

But when it comes to finding gifts for my dad, I don’t think I’ve ever come close to giving him anything so special.

It’s not that I haven’t tried, but dads – especially my dad – are notoriously hard to shop for.

So what’s a kid who loves her dad to do this Father’s Day?

• Hang out with him. According to a survey by RetailMeNot.com, dads’ most requested Father’s Day gift this year is to spend time with family.

So, make him dinner. Take him to a concert (The Polish Prince Bobby Vinton is coming to the Riviera Theatre in September. Just sayin’). Get him a membership to a museum he likes, and go with him. Memberships to the Buffalo & Erie County Naval & Military Park are just $20 for the year.

Unless your dad is like my dad. Then just leave him alone and let him watch “Law & Order” in peace.

• Get him a gift card. Gift cards tied for first place as the most requested Father’s Day gift on the RetailMeNot survey. You can buy discounted gift cards for more than 650 retailers on GiftCardGranny.com and instantly-delivered gift cards for locally-owned businesses on Yiftee.com.

I know, gift cards feel impersonal. But a study in the Journal of Experimental Social Psychology showed that people who are able to choose their own gifts actually enjoy them more than ones the giver picks out on their own.

I know you want to show how thoughtful you are by agonizing over the perfect gift. But the same study showed that perceived thoughtfulness usually means more to the gift giver than the person receiving the gift.

So do you want a pat on the head for being creative or do you want your dad to actually enjoy his present?

• Sneak him something he’s not supposed to have. Remember on the “Cosby Show” how Cliff was always trying to sneak a hoagie and some chips? Claire and the kids were always taking them away before he could take a bite. Yeah, they did it for his health’s sake and because they loved him and blah, blah, blah.

But how much happier do you think he would have been if Rudy had guarded the kitchen door while he chowed down instead of running off to tattle?

Yeah, it could kill him. But what a way to go. And at least when he’s gone, you’ll know you were his favorite.

email: schristmann@buffnews.com ]]>
Fri, 6 Jun 2014 21:09:16 -0400 Samantha Christmann
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<![CDATA[ A bad idea for collecting unpaid taxes ]]> http://www.buffalonews.com/business/money-smart/a-bad-idea-for-collecting-unpaid-taxes-20140609
The Internal Revenue Service has a significant number of overdue tax debts it needs to collect. More than 5 million taxpayers were delinquent near the end of April, according to the agency.

But a proposal to allow the IRS to turn over those delinquent accounts to private debt collection agencies isn’t the solution. It’s a bad idea, used before – in the late 1990s and again in the last decade. Both times the outsourcing failed.

Many people are already scared of the IRS if they owe money. I see little upside to this already tenuous relationship if we return to having private collection agencies go after tax delinquents.

This is also what Nina E. Olson, the national taxpayer advocate, said in a 21-page letter to the chairmen and ranking members of the congressional tax-writing committees. Olson noted that she and the Office of the Taxpayer Advocate were involved in the private debt collection program between 2006 and 2009.

“Based on what I saw, I concluded the program undermined effective tax administration, jeopardized taxpayer rights protections, and did not accomplish its intended objective of raising revenue,” Olson wrote. “Indeed, despite projections by the Treasury Department and the Joint Committee on Taxation that the program would raise more than $1 billion in revenue, the program ended up losing money. We have no reason to believe the result would be any different this time.”

Olson is also concerned that collection efforts would put a “bull’s-eye on the backs of low-income taxpayers,” who make up an overwhelming majority of folks whose accounts would be turned over to debt collectors.

“I believe it would be unconscionable for Congress to create a government-sponsored debt collection program that, even if inadvertently, targets such a high percentage of low-income taxpayers,” she wrote.

I fear, as Olson does, that private debt companies driven to collect as much revenue as possible will result in overly aggressive collection tactics, including pressuring people to agree to payments they can’t possibly afford. If someone then defaults, it can cost more money to go back and establish a fairer payment plan.

“Low-income taxpayers often lack financial savvy and are terrified of what a debt collector might do to their lives,” Olson wrote.

The collection agencies could get cases under two scenarios. With the ACA, people shopping on the health exchange may qualify for a tax credit to help pay for insurance. But consumers who receive too much of this subsidy must pay back the excess.

Additionally, individuals and their dependents are required to have minimum essential health insurance unless they qualify for an exemption. If it’s determined they were in the financial position to pay for coverage and don’t fall under an exemption, they face a penalty for being uninsured, which they have to pay when they file their federal income tax returns.

The IRS is responsible for collecting in both instances. The IRS can snatch refunds to satisfy the debt. However, the agency is prohibited from using its usual tough collection tools to collect payments.

“The experiment has failed twice and there is nothing to lead us to believe it will not fail again,” the board said. ]]>
Wed, 4 Jun 2014 12:43:25 -0400
<![CDATA[ Region needs brownfield program ]]> http://www.buffalonews.com/business/region-needs-brownfield-program-20140605
It’s an ambitious project for an iconic industrial building that has stymied developers for years. But Krog said his plans could be derailed, too, if the state doesn’t extend its program that offers lucrative tax credits to projects on environmentally contaminated sites.

“We have to know what kind of shape the program’s going to be,” said Krog, who warned that two other Buffalo projects he’s involved with – he won’t say which ones – could be jeopardized if the Brownfield Cleanup Program goes away or is watered down too much.

If there’s one thing the Buffalo Niagara region has in abundance, it’s brownfields – an unfortunate and costly legacy of our great industrial heritage. Those properties are harder to redevelop because the environmental cleanup required makes the overall costs higher – often too high to make the project financially viable.

Developers usually can find cheaper alternatives on greenfields in the suburbs, but that only encourages sprawl and leaves the contamination in place at the old industrial sites.

That’s what makes the state’s Brownfield Cleanup Program so important to the Buffalo Niagara region. It provides lucrative tax credits to developers who undertake challenging projects to clean up old industrial sites and put them back to good use.

“It’s the best thing to do for the people who live in these neighborhoods and there’s no other way to get it cleaned up,” said developer Sam Savarino. “It’s been a primary reason why there’s been underdevelopment in these neighborhoods.”

But developers like Krog and Savarino are worried because the state program that provides brownfield tax credits is set to expire next year. If that happens, turning the multitude of old factories and contaminated sites will be a lot harder to do. And even if the program is extended, but watered down, they worry that the costs of cleaning up those sites will prove to be too much of a burden for projects to be viable.

The longer the uncertainty lingers, the more damage it does.

“It’s one of the most important things to continue the momentum we’re seeing in development,” said Dottie Gallagher-Cohen, the president of the Buffalo Niagara Partnership.

In fact, no county has benefited from the Brownfield Cleanup Program more than Erie County, which has put 28 projects into the program over the last six years. Niagara County has put 10 projects in the program since 2008, the seventh-most in the state.

“The City of Buffalo has seen a tremendous amount of success with this program,” said Brendan R. Mehaffy, executive director of the city’s Office of Strategic Planning. “There are many projects that would not have happened but for this program.”

Savarino’s $31.7 million project to turn the former F.N. Burt box factory on Seneca Street into high-end office space and apartments is one of them.

The project, which is expected to be ready for its first tenants later this year, will give a nice boost to an old industrial building on the edge of Larkinville. But Savarino said it wouldn’t be happening if it weren’t for the brownfield tax credits.

Savarino’s project is safe because it will be completed before the program is set to expire. But for projects that are just getting underway or on the drawing board, the fate of the brownfield tax credits are up in the air.

A pair of reports last year lambasted the program for showering more than $1.1 billion in tax credits on just 146 projects, including some lavish downstate developments, such as a new Ritz-Carlton Hotel in White Plains. A report from state Comptroller Thomas DiNapoli criticized the brownfield program as being poorly targeted and too generous to projects that probably would have been done even without incentives.

Gov. Andrew M. Cuomo said he wants to keep the Brownfield Cleanup Program in place. “I believe in the brownfields program,” Cuomo said during a stop in Buffalo last week.

But the governor doesn’t share the development community’s sense of urgency. “There’s less pressure in some ways because it doesn’t expire until next year,” he said. “For the legislature, next year is a long time away.”

The Cuomo administration earlier this year proposed extending the brownfield program, but also called for a series of reforms. Cuomo’s proposal would allow remediation tax credits only for “actual cleanup costs.” The Cuomo plan also would put new eligibility restrictions on the program, limiting it to properties that have been vacant for at least 15 years or vacant and tax-delinquent for 10 years or more. Other projects deemed to be “priority” developments or where the cleanup costs exceed the property’s value also could qualify.

Brian T. McMahon, the New York State Economic Development Council’s executive director, opposes the requirement that eligible sites be vacant for a decade or more. He argues that any project that cleans up a contaminated site is good for the community.

He didn’t want to discuss Cuomo’s proposed reforms in detail last week, saying only that his group would only support a modest reduction in the incentives. But he thinks the current program works just fine, with most of the cases cited by critics joining the program before the 2008 reforms put a cap on the incentives.

Those reforms capped the tax credits at $35 million for nonindustrial projects and $45 million for manufacturing projects. About 75 percent of the tax credits granted under the program went to the 20 biggest projects, all of which came into the program before the 2008 reforms took effect. Since then the average project has received $1 million in tax credits.

Local developers say time is of the essence in determining the fate of the brownfield program. That’s because developers don’t receive any of the tax incentives until they complete the project, and it takes an average of just under four years from the time a site is accepted into the brownfield program until it’s finished.

The brownfield tax credits can be worth a lot, too. Excavating contaminated soil from the site of the new Conventus medical office building on the Buffalo Niagara Medical Campus added $9 million to the project’s cost, said Dennis Pennman, executive vice president at Ciminelli Real Estate Corp. The brownfield tax credits for the site will help offset that added expense.

“The Brownfield Cleanup Program levels the playing field and makes these brownfield sites viable properties,” Werthman said.

When you live with the legacy of a dirty industrial past, that means a lot.

email: drobinson@buffnews.com ]]>
Sat, 7 Jun 2014 22:57:50 -0400 David Robinson
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<![CDATA[ Cuomo planting the seeds of change in Buffalo ]]> http://www.buffalonews.com/columns/david-robinson/cuomo-planting-the-seeds-of-change-in-buffalo-20140604
The governor stopped in Buffalo on Wednesday to plant eight more seeds in his quest to rebuild the Buffalo Niagara economy, announcing the first eight companies picked to be part of the state’s Start-Up NY tax-free zones for new businesses.

That came on the heels of the announcement earlier this week that 2,600 entrepreneurs had survived the first cut in the state’s $5 million business plan competition, aimed at luring 11 fledgling companies to the region in a bid to make the region a more innovative place and more appealing to people with a promising idea for a new venture.

And it came as the state gave a powerful boost to help revive the sagging Key Center, with the announcement that IBM Corp. will bring 500 jobs to an office building that largely would have been vacant a year from now, when Delaware North Cos. moves to its new, taxpayer-subsidized headquarters a few blocks away.

It’s all part of the evolution of the governor’s Buffalo Billion economic development plan, which is picking up steam as its key elements move from the idea stage to the early stages of reality.

From big-ticket projects, like the $225 million RiverBend clean energy and technology hub, which is expected to see a groundbreaking in the coming weeks, to the small pieces, like the $5 million 43North business plan competition slated to choose its winners in late October, the Buffalo Billion initiatives are gaining a momentum all their own.

“All of the planets are lining up really well,” said Buffalo Mayor Byron W. Brown. “We’re seeing those seeds grow tremendously and quickly.”

That’s important, because the Buffalo Billion is based on a broad-based plan that doesn’t focus on just one company or a single key industry. It’s backing initiatives in a handful of key sectors, from advanced manufacturing and information technology, to clean energy and medical genomics.

“This is a different Buffalo,” Cuomo said.

“We’re finding new business lines,” he said. “This is not going to be, Are we going to make Buffalo what it was? This is about, Are we going to make Buffalo better than it ever was before?”

The common thread among the ventures is a focus on up-and-coming parts of the economy that are expected to grow rapidly.

“These are attempts to put a stake in the ground on next-generation jobs and reposition Western New York,” said Howard Zemsky, the co-chairman of the Western New York Regional Economic Development Council.

And the governor is casting his net fairly wide. Some of the seeds are bound to take root and grow. But others may wither. That’s why you want to plant a lot of seeds, and different types of seeds, too.

“For a community to grow in a healthy way, you want economic diversity,” Brown said. “You don’t want to put all of your seeds in one basket.”

Half of the first wave of Start-Up NY companies are in biotechnology. The other half are in information technology. Together, they are promising to bring 204 jobs to the Buffalo Niagara region.

The initiatives also are bringing in seeds from far beyond Western New York. One of the companies coming to Buffalo through the Start-Up NY program is from Utah. Another is from Florida, and a third, Aesku NY, is coming from Germany with promises to create 50 jobs here. The Start-Up NY program exempts eligible companies with ties to the state’s universities from state taxes over a 10-year period, while employees don’t have to pay state income taxes on their pay.

“Without Start-Up NY, we might not be here,” said Vijay Kumar, an associate research professor in UB’s department of microbiology and dermatology who also serves as an Aesku vice president. “Start-Up NY sealed the deal for us.”

More than 90 percent of the entrepreneurs who submitted applications to the 43North business plan competition came from outside Western New York. Results like that are helping to change the image of Buffalo Niagara as a depressed, Rust Belt region beset with high taxes and a generally nasty business climate.

“Between the 43North program and Start-Up NY, people are looking at the region,” said Marnie LaVigne, the University at Buffalo’s associate vice president for economic development

“It really is about showing people that this is a different place when it comes to doing business,” said Andrew Pulkrabek, 43North’s executive director.

If enough of the seeds take hold, the Start-Up NY program and the state’s other initiatives could be a game changer for the region, said Satish Tripathi, the UB president who is the other co-chairman of the regional development council.

“It has all kinds of implications. It really has an impact that’s not just directly creating jobs, but on the quality of life,” he said. “Our graduates can actually can remain here. The city’s economy improves so you can attract other people as well.”

After a half century of decline, that would be a welcome change.

email: drobinson@buffnews.com ]]>
Wed, 4 Jun 2014 20:32:24 -0400 David Robinson
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<![CDATA[ Michelle Singletary: Start young to create good money habits ]]> http://www.buffalonews.com/business/money-smart/michelle-singletary-start-young-to-create-good-money-habits-20140602
And he made the mistake of telling me.

What followed was another one of my lectures that ended with him shaking his head. I’m sure my many money conversations will weigh heavily when he and his two sisters are possibly faced with determining who I may have to live with in my retirement years. I bet they’ll play rock, paper and scissors to decide.

Still, despite the moans and groans and threats of putting me in a nursing home, I lecture anyway. I talk about what it means to be a good money manager. I encourage them not to overspend or go into debt. I stress the importance of saving.

Many students will be making their own money for the first time this summer, and so now is a great time for parents to discuss responsible money management with their children. Or maybe your child has already been working for a couple of summers. Are you seeing the development of good financial habits?

There are many initiatives around the country to encourage schools to teach financial literacy. I applaud such efforts and support them. But various studies have also shown that the biggest financial influence in children’s lives is their parents, for better or for worse.

In a survey by the National Foundation for Credit Counseling, 28 percent of respondents said they learned the most about personal finance from their parents or at home. And in a T. Rowe Price survey, 28 percent of parents agreed with the following statement: “I am not good with money, so I should not be the one to teach my kids about money.”

But you do matter. If you’re not a good money manager, learn to become one. As you learn, teach your children, who will then teach their kids. Model good financial behavior and they are more likely to emulate you.

So just like his sister before him when she got her first job, my son was given the “now that you are earning your own money” talk:

• On saving: From the very first paycheck, learn to save something. Anything. It’s the most vital lesson I learned from my grandmother. She wasn’t so much concerned at first with how much I saved, but that I develop this lifelong habit.

Have your child tie the savings to a specific goal.

It’s also a good idea to show kids how to budget their earnings. What summer expenses will they be responsible to pay? I plan to charge my son a little money for the gas it takes to drive him to work (he can’t drive yet). I want him to begin to feel what it’s like to pay for some expenses, which up until now he didn’t have to be concerned with because he didn’t have a job.

It’s important to show him that his pay has to be divided between necessary expenditures and his wants. Since he doesn’t have to work, his dad and I feel his summer job and the money he earns from it should be used to teach him how to be a good worker and financial steward.

• On giving: He must tithe or give a tenth of his gross income to the church we attend. My husband and I make it a priority to donate to our church and charitable causes. We want to teach this custom to our children. My son already is a generous giver. But I reminded him that his giving will be more than he’s used to and that to whom much is given, much is required.

If you encourage giving now as a regular part of a child’s money management, it could become another lifelong habit.

• On spending: I’ve talked to my son about watching what he spends on a daily basis. More money tends to spur the desire to spend more.

• On splurging: I didn’t discourage him from buying the iPad. I encouraged him to save up for it. I want him to have it because I know he’ll work hard and he should get something fun with his summer earnings. Nonetheless, I want him to also learn that it’s OK to splurge if you have the funds to do so. That’s one lesson that took me a while to learn. ]]>
Fri, 30 May 2014 11:15:44 -0400
<![CDATA[ New economy taking toll on midlevel jobs ]]> http://www.buffalonews.com/business/new-economy-taking-toll-on-midlevel-jobs-20140601
And while jobs that require midlevel skills are disappearing, workers with high-level skills are in growing demand, and there are increasing opportunities for the region’s least-skilled workers.

It’s all part of the shifting nature of the economy – a change that was accelerated by the push for productivity and lower costs during the recession.

It’s also a trend that is contributing to a continuing polarization in the job market that is widening the gap between the best-trained workers and those at the bottom of the skills spectrum.

“The types of jobs in the region have changed,” said Jaison R. Abel, a senior economist at the Federal Reserve Bank of New York’s Buffalo office.

“Job opportunities in the middle have continued to shrink,” he said. “Middle-skill jobs that were lost during the recession have not come back. Higher- and lower-skill jobs have grown during the recovery.”

Abel and fellow Fed economist Richard Deitz took a close look at the changes that have taken place within the Buffalo Niagara job market since the Great Recession hit in 2007.

Jobs that the Fed researchers consider to require midlevel skills have shrunk from about 54 percent of the Buffalo Niagara job market before the recession began to about 50 percent today.

In contrast, high-skill jobs have been growing uninterrupted, even during the recession. Those upper-level jobs now make up a little more than 20 percent of our local employment market, up from just under 18 percent in 2007, as demand continues to rise for people with high-level business skills, computer training, engineering and health care expertise.

The low-end – mostly jobs that pay less than $25,000 a year – is expanding, too, from 28.1 percent of all local jobs in 2007 to 29.5 percent in 2013, fueled by growth in the food preparation and personal care fields, the researchers found.

This isn’t just a local trend. It’s happening across the country, where the share of jobs requiring midlevel skills has shrunk to 49 percent from 52 percent in 2007, the Fed study found.

With technology advancements and the tight economy displacing thousands of local midskill workers – from teachers and office administrators to factory and construction workers – the middle class is under increasing pressure.

And the pressure isn’t letting up now that the economy is expanding and local companies are hiring again, albeit at a subdued pace. Those midlevel skill jobs took the hardest beating during the recession, with 5.4 percent of the region’s middle skill jobs vanishing, and they’ve kept disappearing even in a recovery now entering its fourth year. Since 2010, the region lost another 2.1 percent of its mid-skill jobs.

“There really has not been much of a bounce-back at all in the middle skill category,” Abel said. “Technology and globalization are partly driving this pattern.”

When a manufacturer cuts production jobs, that work often ends up going to cheaper markets overseas or being replaced by automation, Abel says. So even when the economy rebounds, those jobs aren’t coming back.

While the middle is being squeezed, there’s growth at both ends of the skill spectrum. Jobs that require the highest levels of skill – from engineers and computer programmers to doctors and financial analysts – actually increased during the recession, expanding by 7.3 percent, and have kept growing during the recovery, adding another 4.8 percent since 2010.

Low-skill jobs – such as food service workers, store clerks, health care aides and child care providers – endured mild losses of just 0.7 percent – during the recession but have been the fastest growing part of the local job market since the beginning of 2010, expanding by 5 percent during that time.

Abel said the shift is a sign that the job market is becoming more polarized. That’s nothing new. It’s been going on for decades. But recessions – and the inevitable push to cut costs and boost efficiency that comes with them – only serve to accelerate the changes.

It is also a reflection of the hard hit the construction industry took during the last recession, especially in home building. Local construction jobs are down more than 14 percent since 2010.

And it’s a sign of the tight budgets that governments are grappling with. That means fewer teaching jobs as enrollments drop; it means fewer government jobs as the state and local municipalities cut back.

That highlights the importance of workers continuing to upgrade their skills so they can adapt to the shift in the job market.

“One thing is clear: Workers will need more education, training and skills to take full advantage of the types of job opportunities being created,” said William C. Dudley, the New York Fed’s president. “Workers are increasingly facing higher skill requirements in order to land a good job.”

email: drobinson@buffnews.com ]]>
Sun, 1 Jun 2014 00:26:26 -0400 David Robinson
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<![CDATA[ Libraries offer more than books ]]> http://www.buffalonews.com/columns/discount-diva/libraries-offer-more-than-books-20140530
But books are just the start of it.

“We’re not yesterday’s library,” said Mary Jean Jakubowski, director of the Buffalo and Erie County Public Library system. “We’ve gone to great lengths to be a modern, warm and welcoming environment with programming for all ages and – oh gosh, look at that, we’ve got books, too.”

Yep, today’s libraries are stocked with movies, music and books – in hard copy and digital form. But even loyal library users may not be familiar with all the great, free services available.

• Free music downloads – for keeps! The library gives you access to the entire Sony music catalog – everything from Elvis and Mozart to Pharrell Williams and Justin Timberlake – and it’s all free and legal.

You can download three songs per week to your iPod, MP3 player, PC or Mac and keep them forever. Downloading the same music on iTunes would cost you $154.96 a year.

• Book your own personal librarian. This is the coolest thing. You can book an hour of a librarian’s time to help you with anything you need.

Whether you’re looking for information to help with your small business, trying to trace your family tree, researching an illness; or just want help finding a good book to read for yourself or your child, you can schedule time with a librarian to walk you through it.

• Book a technology trainer. You can also book one-hour blocks of time for one-on-one tech training.

Staff members can teach you everything from the basics of computing (how to use a mouse, how to search the Internet, how to send email attachments) to more advanced computer stuff (how to use software programs such as Microsoft Excel, Word and PowerPoint) and even how to set up a Facebook or Skype account.

You also can get personalized training on how to use your Kindle or iPad, and how to download library books to your e-reader or tablet. The only thing they don’t do is troubleshoot computer problems or repair computer hardware.

For information, call the Central library, 858-8900, or go online, www.buffalolib.org.

email: schristmann@buffnews.com ]]>
Sun, 1 Jun 2014 23:02:02 -0400 Samantha Maziarz Christmann
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