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After bailing out Benchmark with loans, day care center makes comeback by posting profits

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Board members from the Jefferson County Industrial Development Agency held their monthly meeting at Benchmark Family Services Thursday, where owner Marguerite K. “Peg” Feistel reported the day-care center made a financial comeback after the agency bailed it out with a loan in July.

Benchmark was on the brink of closing its doors when it asked the agency’s board for a bailout loan of $504,726 in July. Though hesitant, board members approved the loan. Some of it went to pay for state fines the center had accumulated for filing paperwork incorrectly, costing the nonprofit about $17,000 per error.

But the board learned Thursday that Benchmark put the loan to good use. The center has gradually increased its monthly income from September through December of 2012: it drew $74,716 in September, and in successive months took in $82,631, $93,705 and $107,728 respectively.

Mrs. Feistel, whose salary was cut from $80,000 to $60,000 as a condition for approving the loan — said that problems at the center have now been cleared up. Most of the penalties at the center occurred when Mrs. Feistel was the compliance officer responsible for submitting paperwork. But after appointing clinical supervisor Chelsea VanArnum to replace her in that position, the center has been error-free. It received no citations for visits three times this summer from the state Office of Child and Family Services.

At the same time, Mrs. Feistel said, the center has been busy enrolling more children in programs. Hosting free screenings for children with disabilities has resulted in more referrals, and more frequent billing to Jefferson County has increased cash flow.

“We’ve had a nice monthly increase and have been working really hard to get better,” she said.

The efforts made by Mrs. Feistel to correct ongoing problems impressed board member Kent D. Burto, who was among those who originally had been hesitant about approving the bailout loan.

“It was a really tough decision for our board members, but I can honestly say that, leaving today, I feel more positive about this organization,” he said.

After touring the nonprofit day care center, board members sat down to talk about policies in Gov. Andrew M. Cuomo’s proposed budget that could affect IDAs across the state.

Much of the discussion at the meeting centered on how the governor’s proposed 2013 budget plan could restrict the way IDAs now do business. One of the issues raised in May at the New York State Economic Development Council conference in Cooperstown was a policy that could restrict sale-leaseback agreements offered to businesses by IDAs. Those agreements enable IDAs to offer abatements on sales tax for the purchase of construction materials.

The proposed policy would require the 4 percent portion of the sales tax included in these abatements to be approved by 10 Regional Economic Development Councils. It’s not known whether the regional councils will need to approve the sales tax every year, or individually for projects. The county portion of the sales tax, which in Jefferson County is 3.75 percent, would not be affected.

“Every time we do this, we thicken the process,” said Donald C. Alexander, the JCIDA’s CEO. “It’s important that you give site selectors timing for projects, but the more regulations you put into it, the more difficult it is to do business. All this will do is add time to the approval process and takes away the ability of board members to increase projects in the community.”

Agreeing, W. Edward Walldroff said, “This might be over $100 million in potential savings for projects. You’re dealing with a state budget of billions, and they want to micromanage this small pot. What do you really gain? It contradicts the message that the governor projects.”

The following business items were approved by the board:

n A five-year extension on Stream Global Services’s lease of its call center at 146 Arsenal St. owned by the JCIDA. To help fund a $4.2 million project at the center, the board also approved $250,000 and $150,000 five-year loans and a $564,000 grant for building maintenance costs.

n A $50,000 five-year loan to RC Spot LLC to start a microbrewery called Skewed Brewing Co. at Salmon Run Mall. The business is co-owned by Ryan N. and Cheryl C. Chaif, owners of the Hops Spot restaurant in Sackets Harbor, and Mark P. Crandall.

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