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75–812 2001

CRITICAL SMALL BUSINESS ISSUES AFFECTING

LONG ISLAND

FIELD HEARING

BEFORE THE

COMMITTEE ON SMALL BUSINESS

HOUSE OF REPRESENTATIVES

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

RIVERHEAD, NY, AUGUST 30, 2001

Serial No. 107–27

Printed for the use of the Committee on Small Business

(

(II)

COMMITTEE ON SMALL BUSINESS

DONALD MANZULLO, Illinois, Chairman

LARRY COMBEST, Texas

JOEL HEFLEY, Colorado

ROSCOE G. BARTLETT, Maryland

FRANK A. LOBIONDO, New Jersey

SUE W. KELLY, New York

STEVE CHABOT, Ohio

PATRICK J. TOOMEY, Pennsylvania

JIM DEMINT, South Carolina

JOHN R. THUNE, South Dakota

MICHAEL PENCE, Indiana

MIKE FERGUSON, New Jersey

DARRELL E. ISSA, California

SAM GRAVES, Missouri

EDWARD L. SCHROCK, Virginia

FELIX J. GRUCCI, JR., New York

TODD W. AKIN, Missouri

SHELLEY MOORE CAPITO, West Virginia

BILL SHUSTER, Pennsylvania

NYDIA M. VELAZQUEZ, New York

JUANITA MILLENDER-MCDONALD,

California

DANNY K. DAVIS, Illinois

BILL PASCRELL, JR., New Jersey

DONNA M. CHRISTENSEN, Virgin Islands

ROBERT A. BRADY, Pennsylvania

TOM UDALL, New Mexico

STEPHANIE TUBBS JONES, Ohio

CHARLES A. GONZALEZ, Texas

DAVID D. PHELPS, Illinois

GRACE F. NAPOLITANO, California

BRIAN BAIRD, Washington

MARK UDALL, Colorado

JAMES R. LANGEVIN, Rhode Island

MIKE ROSS, Arkansas

BRAD CARSON, Oklahoma

ANIBAL ACEVEDO-VILA, Puerto Rico

DOUG THOMAS, Staff Director

PHIL ESKELAND, Deputy Staff Director

MICHAEL DAY, Minority Staff Director

(III)

C O N T E N T S

Page

Hearing held on August 30, 2001 ........................................................................... 1

WITNESSES

Rogers, Aubrey, New York District Director, U.S. Small Business Administration ........................................................................................................................ 2

King, James, State Director, New York State Small Business Development

Center .................................................................................................................... 4

McEvoy, Judith, Director, New York State Small Business Development Center at State University of New York .................................................................. 6

Kozakiewicz, Robert, Supervisor, Town of Riverhead .......................................... 8

Aloisio, Anthony, Director of Economic Development, Town of Brookhaven ...... 9

Cohn, Marion, Assistant Director of Government Affairs, Long Island Association ........................................................................................................................ 11

Goldmacher, Roslyn, President/CEO, Long Island Development Corporation ... 13

Shivak, Judith, Executive Director, Greater Smithtown Chamber of Commerce ..................................................................................................................... 14

Freierman, Sima, General Manager, Montauk Inlet Seafood Inc ....................... 16

APPENDIX

Opening statements: Grucci, Hon. Felix ................................................................ 32

Prepared statements:

Rogers, Aubrey .................................................................................................. 34

King, James ...................................................................................................... 40

McEvoy, Judith ................................................................................................. 46

Kozakiewicz, Robert ......................................................................................... 71

Aloisio, Anthony ................................................................................................ 87

Cohn, Marion .................................................................................................... 89

Goldmacher, Roslyn .......................................................................................... 92

Shivak, Judith .................................................................................................. 99

Freierman, Sima ............................................................................................... 101

Grimm, William ................................................................................................ 105

(1)

CRITICAL SMALL BUSINESS ISSUES

AFFECTING LONG ISLAND

THURSDAY, AUGUST 30, 2001

HOUSE OF REPRESENTATIVES, COMMITTEE ON SMALL BUSINESS, Washington, DC.

The Committee met, pursuant to call, at 2:00 p.m., at the Government Center, 200 Howell Avenue, Riverhead, New York, Hon.

Felix Grucci presiding.

Chairman GRUCCI. I would like to thank everyone for joining us

and I would like to thank our hosts here this afternoon, the great

town of Riverhead and Supervisor Kozakiewicz and the entire

Town Board for allowing us to use this facility to conduct this hearing which makes it easier for everyone to access the federal government in this hearing today.

Good afternoon and welcome to this field hearing of the Committee on Small Business. The hearing will now come to order. On

behalf of Congresswoman Sue Kelly and myself, I welcome all witnesses and thank you for your participation in this hearing.

I would also like to particularly thank Ms. Kelly for taking the

time to travel to my district from hers, which is in Westchester

County. It has been a long and tiring ordeal on the Long Island Expressway on the weekend of Labor Day, but it just shows you her

commitment to the small business community and how we can collectively be helpful to the small businesses who have elected to be

with us today.

Today’s hearing will examine key problems facing Long Island’s

small businesses and potential assistance or solutions involving the

Federal Government. Within the first Congressional district alone

small business men and women work in a truly diverse environment, from historic Montauk Point to the beautiful elusive Hamptons, to the scenic intellectual giant of Brookhaven National Laboratory, the educational center at Stony Brook University and the

Main Street businesses of Smithtown. With this great diversity

comes unique problems for Long Island’s small businesses. Our

small businesses must balance the effects of seasonal tourism, the

significant impact of storms on our coastal businesses, and the high

cost of property, along with many other problems. In these slow

economic times, small employers need all the help they can get to

keep their companies afloat and their employees working. The Federal Government needs to foster the growth of small businesses,

not hamper it.

Today we will discuss the local impact and operations of the

Small Business Administration programs, such as the Small BusiVerDate 11-MAY-2000 14:21 Nov 29, 2001 Jkt 075812 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 E:\HR\OC\B812.XXX pfrm02 PsN: B812
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ness Development Center, the SBDC, and the SBA’s partners, such

as the Service Core of Retired Executives or SCORE, S.C.O.R.E. I

look forward to a lively and informative discussion of the issues

presented. Again, welcome to this hearing.

Before we get underway, I will turn to my colleague and ask Sue

Kelly if she has anything she would like to add.

Mrs. KELLY. I am very happy to be here on Long Island. Actually

it is a wonderful place and we had a lot of fun driving out here.

We made a lot of Long Island jokes, but it is very interesting to

me to be able to be here and be with you.

I am the former Vice Chairman of the Committee. I am also, was

for many years, the Chairman of the Regulatory Reform and Paperwork Reduction Subcommittee, and I sit on the Banking Committee

as well. I have the chairmanship of the Oversight Committee of Financial Services for the House of Representatives. So the business

of being in business is not only of interest to me from that standpoint, but I am the only florist that was ever elected to Congress.

I am a small business woman, and my husband and my children

are small business, independent business people.

This is a topic very close to my heart and I am delighted that

you are all able to be here and join us and I look forward to your

testimony and I thank Mr. Grucci for inviting me here today.

Chairman GRUCCI. Thank you, Sue.

Before we start taking our testimony, let me just introduce the

panel of distinguished people that are with us here today.

We have Aubrey Rogers, the New York State District Director

and Acting Regional Administrator, United States Small Business

Administration from New York.

James King, New York State Director of Small Business Development Center, United States Small Business Administration, from

Albany.

Judith McEvoy, Director of New York State Small Business Development Center at SUNY, Stony Brook and Supervisor

Kozakiewicz here from the Town of Riverhead.

Anthony Aloisio, the Director of Economic Development, the

Town of Brookhaven.

Marion Cohn, the Assistant Director of Government Affairs for

the Long Island Association.

Roslyn Goldmacher, President and Founder of the Long Island

Development Corporation, Plainview, New York.

Judith Shivak, Executive Director of the Greater Smithtown

Chamber of Commerce in Smithtown.

Sima Frierman, General Manager, Montauk Inlet Seafood,

Montauk, New York.

We will get underway with Aubrey Rogers.

STATEMENT OF AUBREY ROGERS, NEW YORK STATE DISTRICT

DIRECTOR/ACTING REGIONAL ADMINISTRATOR, U.S. SMALL

BUSINESS ADMINISTRATION, NEW YORK, NY

Mr. ROGERS. Members of the committee, my name is Aubrey

Rogers and I am the Director the SBA’s New York District Office.

I am responsible for managing SBA’s activities in downstate New

York for all 14 counties in the State.

3

Thank you for inviting me to testify about the assistance that

SBA provides for small businesses on Long Island.

SBA is beginning a new era with a new administration in the

White House and a new Administrator at the SBA, and his name

is Hector Barreto. Administrator Barreto grew up in a small family

business and, in fact, ran a business of his own. He understands

the problems and the issues that concern small business owners.

The SBA is tasked with helping entrepreneurs start, run and

grow small businesses. It does so through a large organization of

employees and resource partners who administer several lending

and management programs. These programs include financial assistance, counseling and training and access to Federal contracts.

SBA’s capital access programs are designed to provide financial assistance to a variety of small business types, and to deliver them

the agency partners with banks, non-bank lenders, certified development companies, the Long Island Development Corporation and

small business investment companies, as well as microloans for intermediate years. The programs include:

Microloans for very small, start-up businesses with loans up to $35,000.

504 loans for the purchase of real estate and equipment, as well

as 7(a) general business loans that are used for working capital

and general business purposes.

Finally, small business investment company deals where SBIC

has invested in small businesses during their growth stages.

Just recently the SBA introduced a new program that’s called the

New Markets Venture Capital Program that is designed to bring

venture capital to low income rural and urban areas. In the first

round of applications, seven companies were approved to deliver

this program, and in the spring of 2002 another request for proposals will be made.

With respect to counseling and training, SBA delivers this program, again through partners, one of them, the Service Core of Retired Executives. Here on Long Island we have 78 volunteers that

deliver that program for Long Island residents, and through the

Small Business Development Centers, two of them here on Long Island and one of them is represented here at this panel today.

The Government, the Federal Government buys approximately

200 billion dollars worth of goods and services annually, and SBA

is tasked with the responsibility of securing some of those contracts

for small businesses. It does so through a Government contracting

program where prime and subcontracts are identified for small

businesses. It does so as well through the 8(a) business development program, where socially and economically disadvantaged

small businessses receive management technical assistance and

Government contracts through this program. On Long Island there

are 41 certified 8(a) firms.

We also have a small disadvantaged business certification program where companies are certified as ‘‘small disadvantaged,’’ in

order to make them eligible for special bidding benefits.

Finally there is a program introduced just two years ago, called

the HUBZone Empowerment Contracting Certification Program,

developed to bring economic development and employment growth

in distressed areas. This is a race neutral and gender neutral proVerDate 11-MAY-2000 14:21 Nov 29, 2001 Jkt 075812 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 E:\HR\OC\B812.XXX pfrm02 PsN: B812
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gram. To date we have two small businesses on Long Island certified in this program and they are reaching out to expand the outreach. Combined, these programs have had a massive economic impact on the Long Island economy, creating jobs and expanding the

local tax base.

With respect to regulations, SBA is also charged with oversight

regulatory compliance and, therefore, we have created the office of

the National Ombudsman to do that. And a new Administrator of

that division has just been named.

Let me close with a word about SBA’s award winning Web site,

www.sba.gov. This site brings information about SBA into the

homes and offices of Long Island businesses, and at the touch of

the keyboard, 24 hours a day. It receives about 1.6 million hits per

week and is a key component of our outreach efforts.

I want to thank you for inviting me and as both of your offices

know, Congressman Grucci and Congresswoman Kelly, we are delighted with the strong support that you have for small businesses

in New York State and for your support of the Small Business Administration.

I will be pleased to answer questions.

Chairman GRUCCI. Thank you. As the format is generally conducted, the questions will be asked at the conclusion of the panel’s

testimony and we will certainly have available some time, I see we

have some guests in the audience, if they have any questions as

well.

[Mr. Rogers’ statement may be found in appendix.]

Chairman GRUCCI. I would just like to take a moment: We will

hear from him momentarily, but I would like to acknowledge the

presence of Supervisor Kozakiewicz who just joined us at the panel.

Thank you once again, personally, for lending us this meeting

room. Thank you for letting me sit in your seat and allowing us to

conduct this meeting.

Mr. KOZAKIEWICZ. You are welcome.

Chairman GRUCCI. Mr. King.

STATEMENT OF JAMES KING, NEW YORK STATE DIRECTOR,

SMALL BUSINESS DEVELOPMENT CENTERS, U.S. SMALL

BUSINESS ADMINISTRATION, ALBANY, NY

Mr. KING. Thank you, Mr. Grucci and Ms. Kelly. First, I feel like

an interloper coming down here to the Island, but I am very

pleased with the invitation. Just so you don’t feel left out, Ms.

Kelly, I was in your district on Tuesday and working with the folks

out of Ulster Center.

I would like to point out, it is kind of significant but this might

be the first hearing I have ever attended where we had two small

business owner families heading up the hearing, and I could also

add that only two small business persons would come in from a day

like today, off the beach or whatever else was calling, and sit here

and pay attention to the issues of small business.

One other thing, before I really get started, I have rather lengthy

testimony and I will provide that for the record, but one thing I

would like to point out is that last year, I would like to seriously

thank the Committee for your efforts in making sure that the

SBDC primary core service of business advisement was not forced

5

to implement fees for our constituents and clients. From my perspective, that would have been a disaster. It would have taken

money out of the equity base that many of our smaller clients use

to get their businesses started and leveraged with the financial

community, and it would have just been the wrong thing to do. So

I do want to thank you for your initiatives in stepping forward on

that critical issue.

Today we are talking about the issues that confront the Long Island small businesses, and I guess I can go back a few years to— I was around regretfully, well, happy I was around—that many

years ago when the soothsayers were pronouncing Long Island’s

economy dead. We were looking at Grumman and several other

large firms leaving the area. The foreign raiders were coming in

from other states trying to recruit our businesses away as fast as

possible. Thankfully, that did not happen and I think the reason

that did not happen was the strength and vitality of the

entreprenuerial community here on Long Island and elsewhere in

New York.

The change, I think, that is underscored here on the Island,

when I looked at the statistics, over 40 percent of Long Island’s employment is now provided by firms or in occupations that did not

exist ten years ago. Some folks would say that that could be as

high as 60 percent. I think that really underscores what I think is

the major issue that small businesses are confronting and that is

change. The change is increasing ever faster and we try and provide a sector analysis focus on each one of the small business

areas. The primary one for us has been manufacturing. Where our

manufacturers—in 1998 we had a turnaround for the first time in

ten years, that manufacturing employment did not decline in New

York State, we actually had an increase. I think that increase is

based upon our manufacturers being much more highly sensitive to

costs, they’re much more productive and they’re getting much more

investment out into their businesses.

That investment or access to capital and at reasonable rates and

terms is often a concern where many small business people fall

short, and that’s where we spend a lot of time within the SBDC,

making sure that small business owners do have proper access to

the capital that they need. In that context, I am a very avid supporter of SBA, of the guaranteed programs and some of the programs that have been launched recently, but I really think that we

should look to concentrate on even expanding those programs and

making them more widely available. There are always many individuals that have good, successful ideas, that cannot get them implemented on a timely basis with the proper amount of capital, because we are confronting some of those loan guarantee limitations,

and I don’t believe those programs cost the Federal Government;

I think they are an investment and they get returned many times

over.

One other area of change that I would like to touch upon, and

that’s an area that, again, the Committee has taken action, and

that is with HR203, that’s a compliance assistance initiative. Small

business people do not have the wherewithal to respond to all the

regulatory compliance agencies that are in existence. They don’t

have experts in OSHA. They don’t have experts dealing with the

6

IRS and some of the intricate rules and regulations there, and definitely they don’t have experts that know every chemical and compound that could be declared hazardous today that wasn’t declared

hazardous yesterday.

My own office, I went out of the way to find someone—we had

a person coming in to review my office. We still had some of that

liquid whiteout around and I was surprised to hear that that was

declared a hazardous material which should no longer be kept in

the office.

So we constantly go out in the field. We meet with individuals

and I was up in Watertown the other day, met with a small bakery, family owned bakery operation. We worked with them to set

up a new facility, expanded to about a 12,000 square foot operation;

it’s employing about 45 people. OSHA came in and fined him

$8,000 because he didn’t have his plug outlets covered in an area

of the factory that wasn’t yet completed. There was no one working

there. It was an area that, you know, he had moved in early and

he was working on it and he got hit with a fine like that, which

was just unbelievable, from the viewpoint that he just moved into

a new facility, he was tight on working capital and he received a

fine of that nature.

I guess I will wrap up by just saying, I would almost say that

the major issue is that small business often times is not a major

issue and should be. Maybe that’s a reflection of the fact that within the Beltway, SBA is not a major agency, and it should be. We

looked at some of the Federal agencies and what we are talking

about and often times SBA’s budget might be equated to a statistical discrepancy. If we look at how important small business is to

the Nation and to Long Island, I think it deserves a lot more.

Chairman GRUCCI. Thank you, I tend to agree with you.

[Mr. King’s statement may be found in appendix.]

Mr. SZYMANSKI. Excuse me everyone. We usually have timing

lights, green, yellow, red. I will just wave my hand when you have

a minute left and help you track your time.

Chairman GRUCCI. We are trying to keep the opening comments

to about five minutes so that we can get to the questions and open

up a dialogue because I am sure that people may have questions

that they would like to bring forward.

At this time we will go to Ms. McEvoy. It’s good to see you again.

STATEMENT OF JUDITH McEVOY, DIRECTOR OF THE NEW

YORK STATE SMALL BUSINESS DEVELOPMENT CENTER,

SUNY AT STONY BROOK

Ms. MCEVOY. My name is Judith McEvoy. I am Director of the

New York State Small Business Development Center at the State

University of New York at Stony Brook. I think I would like to describe the SBDC to a small extent, but what is very interesting

about the SBDC is that we are all located in centers for higher

learning and I believe that we are a true partnership of the public,

private and both Federal and State Government in servicing small

business.

An essential part of the Small Business Development Centers is

that we are located in all 50 states. We can talk to each other and

offer to our clients at least 23 locations in New York State. Again,

7

access to the educational community is a very big part of what we

do.

We also, because of our affiliation with and administered by the

SBA, can help service and retail businesses. There are other economic development agencies; they are looking for value-added business. We are the ones that service the small mom and pop stores

and service the retail sector.

The SBDC provides assistance in financial, marketing, and technical matters. What we do is direct one-on-one business advisement. Every client has their own personal business adviser. There

is no cost. Again, I thank the Small Business Committee for making sure that fees were not imposed for services. The number of clients who have thanked us for our services, who could not afford,

at this point in their establishment, to pay high consulting fees, are

hoping that we get them to grow, that we get them to become larger businesses.

Small business on Long Island is 92 percent of all businesses and

75 percent of all the jobs are in the small business sector. It is essential that the no cost services of the SBDC be maintained and

available to keep the Island thriving.

The Small Business Development Centers routinely see the types

of business that cannot afford the higher priced consultant. Working with our partners, we hope to make these businesses grow.

One of the things that I am proud of, and I am stressing this,

is the fact that we are located in centers for higher learning. I have

the privilege of being located at the State University at Stony

Brook. I tell people many times, in talks that I give, that we see

the sublime to the ridiculous coming through. That is absolutely

the case; we see the smallest, single entrepreneur to the high tech

incubator companies that are being incubated at the State University at Stony Brook. We are a port of entry, if you will, to not only

services but those of the strategic partnership for industrial resurgence, and the Long Island Forum For Technology. We utilize every

single economic development agency on Long Island if it benefits

that client. All of our business advisors know where to send the individual to get the technical services that are available for small

businesses.

I am also very proud of the fact that we are located in Southampton, that enables us to service the east end, and of significant

interest to this Committee, is the Small Business Development

Center located at Brookhaven National Laboratory, the first in the

Nation. It is a joint effort of the United States Department of Energy and SBDC. I support the—I will list them very quickly,

HR203, which is the National Small Business Regulatory Assistance Act, which is geared for our high tech incubator clients. I also

support HR2538, which is the Native American Small Business

Act, because Southampton services the Shinnecock Indians. You

have another bill, the Vocational and Technical Entrepreneurship

Development Act which is important, but more than that, the University utilizes the Small Business Technical Transfer Program

which utilizes students, companies incubating on a campus faculty

and their association with private businesses.

My other concern from the perspective of what we see, that as

banks are merging and becoming bigger and bigger, they are losing

8

the personal touch with our clients. I cannot tell you how many

personnel shifts there have been as each of these banks merge, and

I just want to request as banks merge, that small businesses are

paid attention to, and that their needs are taken into consideration.

Thank you very much.

Chairman GRUCCI. Thank you, Judy. It looks like I am not paying attention, but I’m trying to do a number of things, so please

forgive me if it looked as though I wasn’t, but you know me long

enough to know that I always pay attention to you.

Ms. MCEVOY. Yes, you do.

Mrs. KELLY. We can hear and read, and we won’t talk on our cell

phones.

Chairman GRUCCI. That I promise.

[Ms. McEvoy’s statement may be found in appendix.]

Chairman GRUCCI. At this time I’d love to hear from our host,

Supervisor Bob Kozakiewicz.

STATEMENT OF ROBERT KOZAKIEWICZ, SUPERVISOR, TOWN

OF RIVERHEAD, NY

Mr. KOZAKIEWICZ. Thank you. Good afternoon, Congressman

Grucci and Congresswoman Kelly. I certainly want to first and

foremost once again welcome you to the Town of Riverhead, thank

you for bringing Washington to Riverhead. We are honored to have

members of the House Committee on Small Business here today to

visit our town, and I hope that you have a chance to visit some of

the small businesses that make this town the great community it

is.

We are a small community. We have our roots founded in agriculture and agricultural businesses. We have large shopping districts in three prominent downtown areas, Riverhead, Wading

River and Jamesport. The majority of these businesses in the

downtown areas throughout our 78 square miles are predominantly

small businesses. These businesses are owned by individuals.

These businesses are businesses handed down from parent to child.

We are experiencing a growing spirit that will only be enhanced

by additional small businessses. To ensure this, we have a very active industrial development agency. We have established or are

working to establish, we passed a resolution to establish the East

End Office, which will be the home for the Long Island Development Corporation, as well as the Empire State Agency at the

former Grumman site in Calverton. In addition to that, I am looking to establish a Riverhead Office of Economic Development to further promote and enhance the opportunities for small businesses to

locate within the boundaries of our rural town.

The Town of Riverhead is also collaborating with Stony Brook

University and the State of New York to establish an agricultural

business incubator at the former Grumman site, to further encourage small businessses to start to grow; this means that the town

residents have invested in the future of small businesses. I say this

because it is extremely necessary that these agencies have the appropriate funding needed to sustain the individuals who are willing

to take these risks to start new businesses and expand existing

small businesses. Without your support and without the support of

your Committee, the State of New York is limited in what it can

9

do, as is the County of Suffolk and the Town of Riverhead. Whether we are in an economy that is peaking, stalled or reaching the

depths of despair, small businesses have been the life line of American commerce. Your support, continued support for the funding of

small business agencies and programs is paramount to the survival

of these small businesses into the community here, as well as communities of this great nation.

In closing, as I start to wind down, I do have to take this opportunity to reach out to you and to express to you my sincerest concern that you can address damage that is being incurred in our

small business community as we speak, damage that is being sustained because of the skeleton frame, that eye sore, that albatross

on West Main Street, which was to be the new and improved

United States Postal Office. We in the Town of Riverhead understand that there has been a difference of opinion between the contractor and the Postal Service. We understand the issues surrounding the contractor not meeting schedules and providing an expected quality of work. What we do not understand, and have a difficult time accepting, is the fact that the Postal Service began such

an enormous project and abandoned it to the point of causing us

serious damage to the beautiful vistas that we have here in the

Town of Riverhead and the damage that it has caused, what we are

trying to do for our small businesses along West Main Street and

our community at large. It is one of our main gateways to the heart

of Riverhead Town and it is such an eyesore. It has been forced on

the Town of Riverhead and its residents, and I am asking you to

do whatever it is in your measures, to take whatever necessary

steps you can to help us, to help the Town of Riverhead, to help

its residents remediate this problem. I am asking you to please

help us with that.

I close, thank you.

[Mr. Kozakiewicz’s statement may be found in appendix.]

Chairman GRUCCI. Thank you, Supervisor. You have brought

that issue to my attention day one when I became Congressman

and I applaud you for your efforts in trying to resolve that issue.

We will talk about that more as we get into the question and answer session.

Mr. KOZAKIEWICZ. I do have one additional thing: I have had

some photographs that are being developed with a digital camera.

May I ask permission that they be made part of the record? I don’t

have them available at this point, but before we close today.

Chairman GRUCCI. Without objection, they will be made part of

the record.

At this time we will turn to my former Director of Economic Development. As most of you here know, I used to be the supervisor

of the Town of Brookhaven and Tony Aloisio was the Director of

Economic Development, so let’s hear from Tony.

STATEMENT OF ANTHONY ALOISIO, DIRECTOR OF ECONOMIC

DEVELOPMENT, TOWN OF BROOKHAVEN, NY

Mr. ALOISIO. Thank you, Congressman Grucci and Congresswoman Kelly. It’s nice to have the opportunity to speak to you this

morning and to act as an advocate for some of our small businesses

10

in Brookhaven. I am sure our concerns are similar to what you

might experience in other areas of the country.

What I would like to briefly do is highlight a few areas where

I think we might have some congressional attention in order to alleviate some of the issues that we are dealing with. The first point

I would like to bring up is, you may not think of the dollar figure

that I’m going to use usually associated with small business, but

Roz, you can correct me, small businesses are usually those with

500 or under employees with the Federal Government.

Often I also act and run an industrial development agency which

issues tax exempt bonds, small caps, on behalf of small manufacturers. All of these employees generally fall into what we consider

the small business category, 200 or less employees. They really are

not large enough to access the corporate bond market, and they are

really too large in many cases for traditional bank loans, so industrial revenue bonds are very typically the way they want to go for

building 100,000 square foot, 150,000 square foot factories, with

building and machinery expenses that will usually be in excess of

$10 million, but they very much still fit the small business category.

Since 1979 a cap was put on the amount of individual projects

at $10 million per project, and since that date, that number has not

been adjusted. So as inflation has occurred over time, we have not

been able to assist deals which will have the capital expenditure

requirement of over $10 million for a particular new project. So for

those larger small businesses—that’s the way I like to talk about

them—that is really a major issue, and I really speak probably on

behalf of most IDA’s that that is something that there can be some

attention to in the future.

Again, just having some discussions with some of the small businesses in the town recently, a number of issues have come up, and

they really come up repeatedly. I know it was just mentioned earlier, some of the regulatory problems as with respect to OSHA and

the IRS. You know, I certainly can second those thoughts. A lot of

the complaints that I hear will, for example, relate to the IRS’s discussion or definition, I guess, of who can be contractors and how

they are able to use them effectively. The rules are still somewhat

confusing to some of our small businesses and it really does need

some attention so that they can be effective in the use of those type

of technical skills that an independent contractor can bring.

I might remind you that there was the Small Business Regulatory Enforcement Fairness Act that went into effect a few years

ago that essentially was supposed to have the top to bottom review

of all agencies that impact small business, and I would just hope

that there could be a real commitment to following through on

what that law set in practice, and really, because of changes that

have occurred in the small business environment, really upgrade or

update some of the existing laws.

The other issue that I was little surprised to hear and I actually

went into a little bit more research as a result of it, was the interest of our small business community in global trade. One of the

statistics that I have become aware of recently, and I think it is

up to 67 percent of our businesses with 20 or more employees are

11

now involved in global trade. That’s up eight or nine percent from

1992.

It is really interesting the way some of our companies are really

aggressively trying to get into those market areas, but, again there

are risks, there is some confusion really working in areas where we

do not have any type of trade agreements. I am not only necessarily talking about costs, but issues related to even having the

appropriate credit or, in some instances, letters of credit are required for purchases. That really creates a real problem for some

small companies, and I guess if there could be some progress in

trade agreements between our country and those where there are,

it really does benefit the small businesses.

The last point that comes up a lot with some of my companies

is, again, transportation and infrastructure issues. A company this

morning was just telling me about their concern that the Port of

New York has to be dredged because they get a lot of their goods

and services through that particular port. Roads, infrastructure

connections, trucking to that is very important and there is a concern that we are falling behind in infrastructure, and that, of

course, is really the lifeblood of feeding the east end of Long Island

for goods and services.

I will just close with that.

[Mr. Aloisio’s statement may be found in appendix.]

Chairman GRUCCI. Thank you, Tony. Your information is right

on the money and very current in the things that are happening

and we will talk about TPA trading, the promotion authority in a

moment, but I think that will hit on a lot of issues that you just

talked about.

At this time we will hear from Marion Cohn.

STATEMENT OF MARION COHN, ASSISTANT DIRECTOR OF

GOVERNMENT AFFAIRS, LONG ISLAND ASSOCIATION,

COMMACK, NY

Ms. COHN. For the record, the Long Island Association is not a

recipient of any Government grants.

Good afternoon. My name is Marion Cohn and I am the Assistant

Director of Government Affairs for Long Island Association. I am

here substituting today for Mitchell Pally, the Vice President of

Government Affairs at the LIA, who is taking his second daughter

to college today.

The Long Island Association is the region’s largest business and

civic organization with over 5,500 members, over 5,000 of which

could be considered small businessses. We are very pleased and

honored to be able to testify here today regarding the needs of

Long Island small business community.

Many of the other speakers on today’s hearing list will discuss

specific aspects of the needs of small businesses, including financing and capital needs. The ability of our small businesses to move

an idea or a product from inception to the marketplace is one of

the most important areas where the Federal Government can effect

change. From our Small Business Development Centers to our

Small Business Administration regional offices, these agencies attempt to provide small businesses with the financing necessary to

make their ideas a success and reality. I will defer to the other witVerDate 11-MAY-2000 14:21 Nov 29, 2001 Jkt 075812 PO 00000 Frm 00015 Fmt 6633 Sfmt 6602 E:\HR\OC\B812.XXX pfrm02 PsN: B812
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nesses here today to discuss the specifics of these entities and how

we can make them better for our companies.

In addition to these small business issues, these companies are

faced with many of the same needs as our larger companies on

Long Island, namely, the need for highly skilled workers. The need

for such educated workers cuts across all segments of the Long Island economy, from our service sector to our expanding high technology sector. This need is all the more important, given the issues

which evolve from it, including the ability of Long Island to provide

affordable housing for our young people just coming out of college,

young people who have just the skills necessary for our Long Island

companies. If Long Island cannot provide such affordable housing

to this segment of the population, these young people will not stay

here, nor will they come back here, regardless of the desires of

their families. Not every mom or dad wants their grown-up son or

daughter living in the basement, and not every son or daughter

wants to live in mom and dad’s basement.

It is essential for Long Island to provide appropriate housing opportunities for this segment of the population. It is for this reason

that the Long Island Association has attempted to work with our

municipalities to fashion a program to build affordable rental housing for our young people. Long Island has fewer rental units than

any other comparable region in the United States. This is the type

of housing that our young people want and this is the type of housing which is in such short supply on Long Island.

The Long Island Association is working with the towns of

Brookhaven and Islip and Suffolk County to find sites on which

such housing can be built. In fact, they are attempting to find just

such a site in a downtown area where density can be increased, so

that we can attempt to find two solutions: One for such housing

and one for the redevelopment of the downtown area. Funding from

the Federal and State housing agencies is going to be necessary for

this to work, because these rents must be kept below market rates

to be affordable for our young college graduates. If we can keep

these college graduates here on Long Island, then the expansion of

our small businesses can be possible, but without these prospective

workers, it is going to be very difficult for our small businesses to

expand.

In summation, the Long Island Association remains committed to

working with our elected officials at all levels to assure that the atmosphere of success is available on Long Island to allow small

businesses to succeed. We remain committed to providing affordable housing for our young people, reasonable energy costs for us

all, finding the highly trained workers necessary, providing the financing for the development of new ideas, and providing affordable

and accessible health insurance for all. We thank you very much

for this opportunity.

Chairman GRUCCI. Thank you. We appreciate your comments.

[Ms. Cohn’s statement may be found in appendix.]

Chairman GRUCCI. Roz how have you been? Good to see you

again. The last time I think we were together we were doing a

radio show.

Please, the floor is yours.

13

STATEMENT OF ROSLYN GOLDMACHER, PRESIDENT/FOUNDER, LONG ISLAND DEVELOPMENT CORPORATION, PLAINVIEW, NY

Ms. GOLDMACHER. Good afternoon. I am Roslyn Goldmacher, the

President and CEO and Founder of the Long Island Development

Corporation, which is a 20-year-old regional economic development

organization here on Long Island, serving the small business community. Our membership represents the economic development

community of Long Island, including banks, businesses and Government. We provide 15 different financing and technical assistance programs for small businessses in Nassau and Suffolk Counties. Over the years, Long Island Development Corporation has

made some $450 million in loans to small Long Island companies

and helped small Long Island business obtain and perform on $426

million in Government contracts.

We operate the SBA’s 504 Certified Development Company program for Long Island, as well as the Department of Defense Procurement Technical Assistance Center for Long Island.

We also operate a targeted industry loan fund aiding defense dependent manufacturers, commercial fishermen and targeted industries under a program of the Economic Development Administration.

There are two issues I would like to address today: One of them

is access to capital for small businessses, particularly for minority

and women-owned businesses and businesses located in blighted

areas. Lack of adequate access to such capital on affordable terms

was an issue when LIDC was founded 20 years ago, and it is still

an issue today.

The solutions that I would like to propose are policies which will

increase such capital for small businesses. For example, increased

reliance on Government guarantee programs, such as the SBA 504

program, rather than direct loan programs. It is quite clear from

the historical numbers that Government guarantee programs are

less costly to the Government than direct programs.

Federal agencies, such as the Small Business Administration,

should increase their reliance on private sector, community based

partners, such as the certified development companies like LIDC;

such as the Small Business Development Centers, et cetera, to deliver financing products. It is less costly to the Government, more

efficient, in terms of delivery, and less reliance on limited Government resources, including declining agency staffs. There is also a

better knowledge of community needs by the local community partners.

Another way to increase capital for small businesses is to ask

that agencies, such as the Small Business Administration, monitor

regulations regarding the lending programs, to make sure that they

encourage lending rather than discourage it, and that they have

enough risk tolerance to permit lending to these targeted communities, particularly during times of recession.

Increasing incentives for lenders is another way that the Federal

Government can help increase access to capital for small business.

Both bank and non-bank institutions do better when they are provided with incentives rather than mandates. Incentives to make

such loans, such as tax credits, giving the lending institution the

14

ability to expand in exchange for a good record of such lending,

these are the ways to get these lenders to get more money out into

the small business community.

In addition to access to capital, an issue of importance to Long

Island small businesses is high tech. Our economy out here does

revolve around high technology. These type industries which Long

Island has and continues to foster in the wake of the defense

downsizing. Such industries as biotech, pharmaceutical, high-end

electronics, software development, biomedical instrumentation. Increasingly such companies are proliferating here on Long Island

and we need to support the development of these industries because they provide high paying sustainable wages, they do not negatively impact on fragile physical environment, and they can coexist with our high land costs, high utility costs and labor costs.

It is requested that the Small Business Committee continue to

monitor Federal legislation, regulation and funding to encourage

high tech businesses with direct funding for research and development, funding and technical support for those industries whose

technology can be used by the Federal Government as well as the

commercial sector, and by monitoring Federal regulations to make

sure that they encourage the growth of such companies, not restrict

them with over burdensome reporting and other requirements, particularly in early stages of growth. Finally, that the Federal Government create a tax structure which encourages investment in

these types of companies, their capital assets and their growth.

The Long Island Development Corporation is proud to serve the

small businesses of Long Island, our affiliate, LISBAC, the Long Island Small Business Assistance Corp., makes mini micro loans to

women-owned businesses and we were the first, and to my knowledge still the only community development financial institution in

the nation certified by the U.S. Treasury to provide services to

women-owned businesses. Together we hope to continue serving

the small business community of Long Island with your support.

Thank you very much.

Chairman GRUCCI. Thank you, Roz.

[Ms. Goldmacher’s statement may be found in appendix.]

STATEMENT OF JUDITH SHIVAK, EXECUTIVE DIRECTOR,

GREATER SMITHTOWN CHAMBER OF COMMERCE,

SMITHTOWN, NY

Ms. SHIVAK. Good afternoon, Congresswoman Kelly and Congressman Grucci. I would like to thank you for inviting me to be

part of this panel.

I am the Executive Director of the Greater Smithtown Chamber

of Commerce, which as of this week had 310 members. This week

actually the Long Island Business News had a listing of all the

Chambers of Commerce in Nassau and Suffolk County by order,

and we are the sixth largest Chamber in Nassau and Suffolk County.

I also speak as the Corresponding Secretary of the newly created

Suffolk Coalition of Chambers, which represents chambers of commerce from Suffolk County, from Montauk to Huntington. Chambers of Commerce are the front door to the business community.

We represent professional men, women, merchants, property ownVerDate 11-MAY-2000 14:21 Nov 29, 2001 Jkt 075812 PO 00000 Frm 00018 Fmt 6633 Sfmt 6602 E:\HR\OC\B812.XXX pfrm02 PsN: B812
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ers, wholesalers, servicemen, manufacturers and financial institutions in the communities where we are located. In other words, we

represent businesses from as little as one person up to 500.

We act as the informational center for visitors and for businesses

seeking a new location, and we answer thousands of inquiries by

phone, by fax and even now by the Internet. We represent, according to 1999 statistics, 38,000 of the 42,000 small businesses in Suffolk County, and the definition of that was less than 20 people employed, and a good percentage of that is even less than five.

The panel today is intended to focus on critical business issues,

and I am speaking as someone who represents, quote, ‘‘mom and

pop,’’ the people on Main Street. One of the major issues facing

them and all levels of the small business community is the continuing struggle to find competent and skilled workers to fill their

business needs. This goes across all sectors, from the hourly wage

earners to the highly skilled employees.

I questioned a sampling of the local merchants in both my town

and several of the other Chambers on every retail level, and the

issue that was most often raised was the ongoing shortage of qualified candidates for employment. Almost every store in our town

area has a ‘‘Help Wanted’’ sign in the window. They are constantly

asking Chambers how can we help them.

The latest unemployment figure for Suffolk County was 3.8 percent as of the end of July, almost the same as last year at this

time. This is in comparison to the national unemployment rate figure, the 4.5 percent for the rest of the country, 4.5 for New York

State and 5.3 for New York City. In other words, any resident of

Suffolk County who wishes to find employment has a 96.2 chance

of finding the employment, if he can get there.

What are the reasons for this continued lack of employees? Can

it be tied to the fact that Suffolk County has one of the highest

costs of living for the entire Nation? Does it have to do with the

lack of adequate public transportation to get those willing to work

to the places which have the jobs to offer, especially if you are not

just going east or west but north and south. Is it the lack of affordable housing or is it a combination of all three.

I would like to ask this Committee to work with the small business community and other organizations which were alluded to on

this panel to find these answers.

The downtown area of Smithtown has a unique problem of its

own. Its main street is actually two main State roads which go

through it. The Department of Transportation wants you to go from

A to B as fast as you can. We want people to, quote, ‘‘stop and

shop.’’

One of the problems that we have is the need for adequate parking and traffic mediation. I am happy to say that under the auspices of the last Congress, June of 1998 an IST grant, now known

as T–221, Smithtown did receive a grant of one million dollars,

which will be used now to mitigate traffic and provide parking.

This was passed in 1998, it is now almost September of 2001, and

we hope—we are saying ‘‘hope’’—to have a shovel in the ground

maybe by October.

I think one of the problems has always been when a grant is

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ernment to get this augmented, and this makes long-range planning very difficult. I would like to see a shortening of the time of

actually helping with this. In other words, I would like help from

this Congress to help the small businesses in any way they can.

Thank you.

Chairman GRUCCI. Judy, thank you for your testimony.

[Ms. Shivak’s statement may be found in appendix.]

Chairman GRUCCI. Our last panelist who will be speaking, I have

had the pleasure of visiting her operation out in Montauk. I was

quite impressed with what I saw. You always hear about the east

end fishing industry, how important it is, and we all recognize that,

but to actually see the process, it was very impressive and I thank

you for giving me the opportunity to do that.

You expressed some concerns at that particular time and I think

it was important to bring you here so you can put it on the record

so that we can continue to try to help our fishing industry, not just

here but along the eastern seaboard, as you pointed out.

STATEMENT OF SIMA FREIERMAN, GENERAL MANAGER,

MONTAUK INLET SEAFOOD, MONTAUK, NY

Ms. FREIERMAN. Thank you, Congressman Grucci and Congresswoman Kelly. It is really an honor in this company for commercial

fishing to have been chosen as the small businesses to represent

the front line of folks in the trenches, and it is certainly appropriate to be recognized by the Small Business Committee since the

over 6,000 floating small businesses that make up New York’s commercial fishing industry are under the direct auspices, by an act of

Congress, of the Department of Commerce.

I have a little sense of deja vu sitting here. About 15 years ago,

in the County of Alachua, Florida, I sat on the board of the Gainesville Area Innovation Network—the acronym, of course, was GAIN.

From my office in a glass building, I put together a coalition of

State, County, academic, City, venture capital and small business

entities to start up and support a high tech business incubator at

Florida Power’s Innovation Center. It was sexy and exciting and we

added the 80 percent of job creation, just like the Baker report said

we would.

Now today, as the Congressman mentioned, my office sits at the

end of a long dock in Montauk, and when the big trawlers come

in with their catch, they bump it and my office sways a little bit.

For excitement this week I went in at 5 a.m. one morning to show

solidarity with my totally Hispanic crew, because one of the trawlers wanted to squeeze in one more trip before the market closed

for the holiday weekend. If you want sexy, you should see the baby

bald eagle that hunts from dock piling about 20 feet from my computer.

It is good to be back in the field of economic development, only

this time I am trying not to create jobs so much as I am trying to

save some jobs. The commercial fishing industry contributed $150

million to New York State’s economy in 1999 and $3.6 billion to the

national economy. We helped feed 280 million people about 15

pounds of fresh, canned and cured seafood each. The Long Island

region employs over 10,000 individuals in commercial fishing and

its support industries. I am employed by six middle aged small

17

businessmen who have had the same job since they were teenagers.

They have all been relatively successful so far, but some of them

will be out of business within the next ten years. They will be out

of business like the Boston Harbor fleet. It used to number over

100 boats right there in Boston Harbor; after years of increasingly

restrictive regulations, about 75 percent of the fleet sold out to a

Government buy-back program in the ’90s. They will be out of business because there is now talk of legalizing individual, transferable

quotas that would be issued based on historic catch, and some

them, simply don’t keep those kind of records. I am not talking

about tax evasion or altering records of what was caught. I am

talking about fishermen filing scraps of paper and handwritten logs

in the proper way over many years. I am terribly sorry, but if I had

to produce my paycheck stubs from 1985 to 1995, I would also be

out of business. Those who did keep the records may eventually

have to sell out if too much quota goes to large corporate operations

who will make it financially difficult for small independents to operate.

Some of my employers will be out of business because they are

losing heart. My most successful employer has his 22 year old son

on the boat. He doesn’t want to be a lawyer. He doesn’t want to

manage a dock. He doesn’t want to be a congressman. This boy

wants to fish, and every third night the two of them come in angry

and depressed and talk about crimes against nature because they

had to throw over 4,000 pounds of fish to land the 30 to 60 pounds

they are allowed to keep. I am not talking about juvenile fish, I am

not talking about a rare stock, I am talking about 14, 16, and 18

inch fish that had spawned three times and are too thick to stay

away from. We have to throw them over because of poor science

and mismanagement of the fishery industry.

What small business woe would you like to add to the picture?

How about the impossibility of finding crews who can afford to live

on the east end of Long Island? How about geographic power coalitions that form so that New Jersey processors stop buying

Shinnecock quahogs and that fleet disappears or converts?

The same kind of political muscle results in opening season trip

limits—that’s in January, when all the fish are in southern waters,

that are four times the trip limits allowed in the winter when the

fish are in New York waters.

I sit on the fishing committee for the Town of East Hampton’s

comprehensive plan. We distributed a quick survey to the commercial and recreational fishermen, and we asked them to name the

problem that most bothers them. Everyone said ‘‘regulations.’’ The

very language of fisheries management is stilted, and I am going

to read quickly from the testimony of Bill Grimm, a fisherman who

couldn’t be here because he is taking his daughter to college.

The language of the Magnuson Stevens Fisheries and Conservation Management Act and the Sustainable Fisheries Act referred to

any and all fishery stock depletion as overfished. That is, if an oil

spill results in a fish kill, if an overabundant seal population eats

most of the juveniles of a particular stock, if development destroys

the spawning habit of a stock and causes it to decline, these stocks

are called overfished. The Sustainable Fisheries Act set standards

for the level of fish population that cannot be and have never been

18

attained in nature. Basically, it calls for all stocks to exist at their

maximum level all at once. That’s like saying that foxes and rabbits should exist at the highest level they have ever achieved, all

at the same time.

Mr. Grimm is one of my employers who owns two 90-foot trawlers. Last spring I persuaded his most productive captain to forego

a high priced season and do side-by-side comparisons with the Government’s research vessel Albatross. I stress that the purpose of

this research was not to compete with the Government. They have

a multi-year time line and it is important that they don’t change

their methodology, but the fact is they were catching an average

of two fish per tow of a certain species, while the commercial vessel

caught an average of 110 fish per tow. And when I sat with the

Government scientists earlier this month, because they are finally

ready to release this data, they actually suggested that the fishing

vessel change its gear to reduce professional catchability so that

the figures would be more comparable. I am happy to report that

we were able to convince them that there might be value in the

data to be gained from the commercial boat.

One more example of regulatory language: Managers are beginning to focus on what’s being called ‘‘essential fish habitat.’’ In

reading the definition of that term, one comes to realize that the

whole ocean is, of course, essential fish habitat. The next step, according to the National Marine Fishery Service is to identify potential adverse effects and potential habitat degradation. Fisherman

have been interacting with that habitat for hundreds of years.

Whatever they are doing, it hasn’t prevented certain areas from

being rich fishing grounds for centuries and centuries. Could it be

that they’re really the original conservationists? Is there some reason regulatory language doesn’t try to identify potential beneficial

effects or habitat enhancement?

I will stand here with my education and do quite well splitting

semantic hairs with fishing management counselors, but please

don’t ask the small business fisherman to do that. When you are

all at the beach this weekend, if you can see past the charter boats,

take a look at their world. When a fisherman wants to go from

Point A to Point B, he aims his boat and he goes there. And on the

back of my written testimony you will find a chart on the fisheries

management structure, and you will see there is no Point A and

there is no point B. Not only do management and industry for commercial fisheries work for different companies, sometimes they

don’t even agree on the product.

Thank you, sir.

Chairman GRUCCI. I appreciate your testimony. As always, you

were very articulate about it.

[Ms. Freierman’s statement may be found in appendix.]

[Mr. Grimm’s statement may be found in appendix.]

Chairman GRUCCI. The process now is that we will ask a series

of questions and then we will open it up to see if anyone else in

the audience may have questions they would like to ask of us or

the panel.

Out of consideration and thanks to Congresswoman Kelly for

making this trip down today, I will turn the questioning over to

you.

19

Mrs. KELLY. Thank you very much.

Sima, I do not have a written copy of your testimony, I would appreciate having that simply because I have an interest. I have a

boat and I am in the waters, I see the fishermen.

Thank you, very much. Is the map there too? Thank you.

I want to go to Aubrey Rogers. Mr. Rogers, you and I have talked

with each other over the course of a good many years; I want to

know what you have done recently to help Long Island with the

7(a), 8(a) to help the 41 certified businesses get Government contracts. Have you interacted recently with people out there to get

them contracts?

Mr. ROGERS. The contracts that we are talking about are Federal

contracts with Federal agencies. They can come from local Federal

agencies or Federal agencies located outside of the state.

Mrs. KELLY. I understand that, Mr. Rogers. I am asking what

you, as the head of the SBA in the New York State region have

done to try to help the businesses out here on Long Island? You

said in your testimony there are 41 certified 8(a) firms, for instance.

Mr. ROGERS. That is correct.

Mrs. KELLY. But if I read your testimony correctly, there are only

seven of those firms who actually have a contract. It’s a long process to get certified. It is a hard process to get certified.

Mr. ROGERS. That’s true. We have a number of contractors, 8(a)

contractors, that graduated from a program that indeed received

lots of money and lots of contracts from our program over the

years. In the past two years we have been trying to replace those

contractors with a new group of contractors, so more than half of

the 41 that are now in the program came into the program in the

last two years.

We have staff who reach out to Federal agencies to market the

skills and products of the companies that are now in the program.

They are also training the companies on how to negotiate the Federal process so that they, in turn, will be able to access the contracts on their own.

Mrs. KELLY. Two years, Mr. Rogers, for a small business person

is an eternity. A small business person needs to get in, once they

go through that process of being certified, they need to get contracts or the process of certification is useless. I would like to encourage you to do everything you can from your position to try to

help the small businesses.

I drove through town here in Riverhead and found a fair number

of empty store fronts. There are probably small businesses who

could use some guidance. You have a whole group of people sitting

at this table who have the ability to help you. Having met them,

I hope you will take their advice and I hope you will work with

them—— Mr. ROGERS. Absolutely.

Mrs. KELLY [continuing]. And emerge from a mere seven. Let’s

try to get all 41 some kind of a contract.

Mr. ROGERS. Yes.

Mrs. KELLY. That takes me to you, Roz I understand that part

of what you said you did here was work with the Department of

Defense. Under the Federal Government guidelines, the guidelines

20

are that women and minority owned businesses should have five

percent of all the contracts that are let by the U.S. Government;

what have you done, is my question, to help the DOD make that

goal? Because I know they are currently not at that goal.

Ms. GOLDMACHER. As a procurement technical assistance center

licensed by the DOD, we do have that five percent goal within our

mandate. I am proud to say that here on Long Island we exceed

that goal. That’s not the case nationwide, however.

One of the specific suggestions I would have to help that goal be

achieved nationwide, as well as also help the 8(a) certified companies is a closer working relationship between the Department of

Defense procurement centers and the SBA. Here on Long Island we

do work together. We work with Mr. Rogers’ local representatives.

Any time there is a workshop regarding Federal contracting, our

procurement center is invited to participate. We try to work with

the 8(a) companies to search for specific contracts, but nationwide

there is no formal means of communication linkage.

For example, in the recent past there was a whole system set up

for certification of small disadvantaged business by private certifiers. That’s now discontinued, but when that first came up one

of the first things I asked Congress to do is let’s let the PTAP nationwide do it. You have a whole system out there that can do this

and do it for free, instead of charging fairly large sums to these

small businesses, but there was no mechanism set up to link the

programs. That’s something that perhaps the Committee could

work on, is to establish a more formal means of communication between the PTAP Center program and the SBA 8(a) program and

procurement divisions so that they can work together for the benefit of these companies.

Mrs. KELLY. Thank you very much.

I have a couple of other questions. We have a couple of supervisors here. One of the things that I think several of you brought

up, Roz you did and both supervisors indicated something about

this. I don’t know how many of you are aware that I got through

Congress a bill called the Truth in Regulating Act. This is a bill

that was signed into law. Unfortunately I haven’t been able to get

the funding from the Committee, this Committee or other committees or anybody else in Congress, to get funding there. It sets up

a separate office in the General Accounting Office that would take

a look at all of the rules and regulations that affect small businesses. It would look at them for redundancy, for overlap; it would

also look at them from a cost benefit analysis.

There is a great deal of need for this to happen, just as you

pointed out, because people don’t talk to each other. Both of our supervisors indicated that they felt that there were things that could

be, perhaps, I think could have been addressed had this office been

funded this year, since it was signed into law last year. Since all

of you have something to do with small businesses and this has a

direct impact on how small businessses are really affected by what

the Federal Government does, it is something I hope that you will,

perhaps, talk to your representative and others to help me get

some help to get this thing funded.

I do think that according to some of the testimony that I heard,

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nesses from having to file numerous pieces of paper. Sima, you

talked about your fishermen; if they were able to file once or twice

a year with a particular type of thing—I know because I am in

small business, my husband is in small business, we are a family

of entrepreneurial small business people—we get the weirdest kind

of questions from agencies that we didn’t think had any control

over anything that we did. They invade the privacy of people who

work for us, some of them do.

I think that there is a strong need for all of us to work together

to try to stop that kind of thing from happening so that you can

focus on making money, which is what small business is all about.

I have a couple of other questions. I was writing notes as we

went along.

This is, Judy, you talked about the cost of living, the lack of

transportation, the lack of housing and the problem with tax incentives. I would ask our supervisors what their approach is, because

a lot of this can be handled on a regional level. Are the two of you

working together to try to approach some of this, and do you offer

tax incentives to small businesses to locate in your towns?

Mr. KOZAKIEWICZ. We do have an Empire Zone created in the

Town of Riverhead which does provide tax incentives. We also work

closely with the Industrial Development Agency to provide tax incentives for location to the Town of Riverhead. So, yes, there are

opportunities that are provided. This does not mean that we should

stop looking for other means and other mechanisms to make it

work and we will continue to do that.

Mrs. KELLY. Tony, do you want to speak as the representative

here?

Mr. ALOISIO. We do have a couple of different programs: in fact,

one on a County basis called the Suffolk County Incentive Program, where we have taken downtown areas, special industrial

areas, and offered real estate property exemptions to geographic

areas, mainly taking in small business.

Of course, our industrial development agencies were able to offer

property tax exemptions to small businesses that create jobs. In

fact, I would say, I don’t know, Roz maybe we have done 15 or 20

projects just in the Town of Brookhaven, which used a combination

of an SBA financing, subordinate financing, and an IDA lease, in

order to provide relief fund on real estate taxes and sales tax exemptions. So there is a pretty good network of those programs.

Mrs. KELLY. Judy, you seem to want to add something?

Ms. SHIVAK. Because each town is separate and apart and you

have, what, five towns—ten towns in Suffolk County, and not all

of them are together. I’m not saying ‘‘yes’’ or ‘‘no,’’ but everybody’s

town is independent and that’s why we are looking beyond the

town level.

Mrs. KELLY. You are trying to look at the regional level.

Ms. SHIVAK. Regional.

Mrs. KELLY. I just want to ask one more question and that is indicative of my concern, again, to start small businessses, to get

them moving, and that is: What is the availability of access to capital here on Long Island? It is not terribly good in some areas of

the country. What is it here? I am going to throw that question out

to anybody, anybody who wants to answer that.

22

Ms. GOLDMACHER. I will be happy to because I deal with that all

the time.

It is probably better here than it is in many areas of the country

simply because we have so many banks and non-bank institutions.

Also, over the last few years, many of the banks have finally come

to realize that the small businesses, truly small businesses, are

their only remaining area of profit; that small business lending can

be profitable and that small businesses eventually become big, because there aren’t that many mega-businesses left, so they have to

concentrate somewhere. Since Long Island is mainly made up of

small business, we see many more small business products coming

out from the traditional lending institutions. But there still is a

lack of access.

When I say a lack of access, I am not talking about the person

who has a great idea and nothing else. If someone walks into my

office with a wonderful idea, the first thing I say to them is: Do

you have a business plan? Have you seen the Small Business Development Center? And, do you have some equity to put into this?

And it really amazes me how often people will say to me, ‘‘Well,

no, I have no money to put into this, I want you to give me 100

percent or lend me 100 percent.’’ Even if we get past that and we

can find some equity, then the next thing is, ‘‘Well, for the loan

that I am going to make to you, how can you scrutinize this loan?

What kind of collateral can you give me? Sometimes we may even

have to look to the person’s house. ‘‘Oh, no, I don’t want to give my

house for collateral for a loan.’’ My response to that is always, ‘‘As

a lender you are asking me to put my dollars at risk, you are the

one who is going to benefit economically from this and you don’t

want to put yourself at risk and you don’t have enough faith in

your company?’’ I think what that all points out to is we need more technical assistance at the start-up level. LISBAC, for example, Long Island

Small Business Assistance Corporation, which is a CDFI under

Treasury, was formed specifically to meet that need. We don’t just

make loans to small businesses, to women-owned businesses. Very

intensive, free technical assistance is provided to each of those applicants, along with the series of seminars.

Our targeted industry program, under the EDA, even though

those are slightly larger businesses, that also combines technical

assistance. I am very happy to say that Mr. Grimm was one of our

recipients under the Commercial Fisheries Program, and there we

said, ‘‘Okay, you need a bigger chiller system for your boat so that

you can go out further, catch fish that needs to be refrigerated, but

we are not just going to make you a loan.’’ Cornell Cooperative Extension came in and provided the technical assistance to go with

it.

So that technical component is an important piece of the access

to capital. Just throwing money at people doesn’t do any good if the

technical assistance and the support isn’t there at the start-up

stages.

Mrs. KELLY. It sounds to me like we are lucky to have you here.

Judy, again?

Ms. MCEVOY. In the past year we have helped our clients, that’s

over $21 million, and that is a result of the business plan; if they

23

are willing to do the work that we assign them and work through

the process, there is capital available to them, but many times, as

Roz said, we get the person who comes in and they say, ‘‘Does the

money truck pull up at 3:00, I came here just to get the money

bag,’’ and when we say, ‘‘Well, you have some work to do,’’ those

that absolutely do the work, they have a very good shot.

Ms. FREIERMAN. In further praise of Roz here, not only the technical assistance, but something that they do that I find very important, and the dock is also a client of the LIDC is, they went, they

showed up, they had a representative at the fisherman’s forum,

where there were working people who never have time to think

about. They had a representative there. It was that kind of outreach going on. They said, ‘‘Here is who we are and here is how

we can help you.’’ Mr. ROGERS. We agree with Roz that indeed technical assistance

is necessary. SBA financial assistance programs, have grown tremendously over the last few years. Indeed, as we speak today, this

is the only area in the entire district where the lending will surpass last year’s levels because lending has dropped off in general.

Mrs. KELLY. I feel it in my district, Mr. Rogers.

Mr. ROGERS. Just a little bit, I keep an eye on it.

The importance of the technical assistance cannot be over

stressed, because we know when borrowers see the Small Business

Development Center and other technical assistance providers first,

they will do much better with the lender and they’ll do much better

when they get the loan.

I would also add that we recently introduced the microloan program on Long Island, and the micro-lender here won the award as

being the top micro-lender in our district last year, as a result of

the work they are doing.

Ms. SHIVAK. I just wanted to say that that’s what the roles of the

chambers of commerce are. We get many calls from start-up companies, especially someone who is starting up in their home, and we

tell them to call Roz and Judy and the other agencies. We are the

front door. We give them that assistance, whether it’s from low-cost

marketing or how to develop, where do they go?

Ms. GOLDMACHER. I would like to just ask for one specific issue

of relief.

On the SBA 504 program, as you know, it receives zero appropriations. The subsidy issues are addressed by fees to borrowers

and to the lenders, and the subsidy rate is determined by a model

that OMB manages. Currently OMB is looking at the model, the

subsidy model for the 504 program, looking at providing for a

shorter look-back period; doing that would substantially reduce the

fees to our borrowers and our participating lenders, and it makes

the capital more cost effective and more available for more small

businesses. So I would urge the Committee to continue monitoring

OMB and make sure that they look closely at the subsidy models

in the 504 program, as well as the 7(a), in order to reduce the fees,

particularly for our borrowers under the program.

Mrs. KELLY. Thank you very much.

Mr. KING. In your question about the access to capital, I think

probably for a lot of years I was concerned because money, as a

commodity, was flowing out of New York in huge bundles, financVerDate 11-MAY-2000 14:21 Nov 29, 2001 Jkt 075812 PO 00000 Frm 00027 Fmt 6633 Sfmt 6602 E:\HR\OC\B812.XXX pfrm02 PsN: B812
24

ing development all across the country and world wide, but I have

been pleasantly surprised since about the late 1990s, a lot of our

own financial institutions have come to the recognition that there

are some excellent solid investments here locally. It is amazing to

me for them to realize so late in the game that they can make a

profit lending to small business. They had always approached it as

the necessary evil under CRA or something. I think they are awakening to that. Now they are much more proactive with our own organization in going out and asking us to work with them to improve the borrowers’ access to them.

Mrs. KELLY. Mr. King, are you helping people like Roz move people from 7(a) to a 504 and then out on their own? Mr. Rogers, are

you two working with Mr. King in helping Roz do this kind of thing

so we can get these businesses up and out?

Mr. KING. We are in the unusual position that our golden rule

is we do whatever is right for the client, and if the 504 program

is charging a substantial fee and that fee is very difficult for the

client to handle up front, then it is not a good buy for the client.

In terms of some of the guarantee fees, the committee, I think,

forced them down recently because they were making a profit. I

don’t think that’s what it should be doing. So that we just look at

what is the best financial decision for the client, and if that means

going outside of the guarantee, that’s probably a good thing, but I

think they would improve their term, they would improve their access, and possibly the time line contract if some of these fees were

not so oppressive. I think they are oppressive.

Chairman GRUCCI. If I can just interject for a moment, we are

going to move on, because I did promise if there were any questions

from the audience, and I do want to get to them before our time

expires.

I would just like to ask a few questions myself, before taking

questions from those who came to visit us today.

Mr. Rogers, I would also like to ask you a few questions, if I may:

Obviously, as having a strong voice in Washington and being a

voice here in New York, you have a lot of influence over this program, the SBA program. One of the things that I find somewhat

confusing, maybe you can help me understand it, is the lack of attention that I believe Long Island has been getting from the monies

that are being sent from Washington to New York. It is roughly

$600 million that comes into the State of New York for SBA programs. Long Island gets about $14 million of that, but we have

about one-third of the population of the State of New York. Simple

math would say that we should be looking at about $200 million

worth of SBA involvement here on Long Island, which might ease

up a lot of the trauma of trying to find access to capital.

Could you explain why Long Island doesn’t see more of that

roughly $600 million that is coming here?

Mr. ROGERS. I am not sure about the $600 million, Congressman,

but if the $14 million pertains to the SBIC financing——

Chairman GRUCCI. The number of $600 million, it’s actually $592

million from your testimony, page 3 of your testimony.

Mr. ROGERS. The Small Business Investment Company deals are

based on the applications of small businessses for that money, so

that, for example, in Manhattan, where there are close to, I believe,

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72 Small Business Investment Companies, they tend to get many

more applications than applications in other parts of the district.

For example, in the mid Hudson Valley, we get very, very few applications for Small Business Investment Company money, even

though the programs are advertised across the district equally. The

$600 million is the figure for New York State.

Chairman GRUCCI. That’s correct. That’s what I said. I said the

number for New York State is roughly $600 million that comes in;

we see here on Long Island about $14 million out of that $600 million, yet we account for about one-third of the population for the

State of New York. It would just seem to me that that number of

14 million should be considerably more.

Mr. ROGERS. From these numbers it appears as though these

deals are much smaller deals. I would have to look at this much

closer to see why the number is so very small.

Chairman GRUCCI. I would certainly like to hear the response to

that.

Mr. ROGERS. We will present that to you.

Chairman GRUCCI. Thank you.

Judy, we have been together for a long time on a lot of the

projects; working as a former supervisor of the town, I recognize

the hard work that you have done. Just to stay in focus to what

today was about, today was about to find out how the Federal Government, through its SBA programs, could be helpful to small businesses. Could you tell us what the single most crucial issue is that

you see that’s a problem with our programs and how our programs

can be better tuned or revamped to help the small businesses that

you see coming through your front door?

Ms. MCEVOY. I think one of the things is—I’m out there all the

time, as you know—we get so many people who say to us, ‘‘I didn’t

know about your program.’’ One of the things that we try and do

is to connect them with some of the other Government programs.

I don’t know why there is this lack of knowledge or this lack of access to the things that we do, but I can’t tell you how many times

people say to me, ‘‘I wish I knew you were here five years ago.’’ ‘‘I

wish someone had told me that you were here.’’

So we are trying very hard, all of us here, to connect to each

other, to provide the services that we provide, but I really think

that the Government is really doing a lot. In my shop alone I have

the Deta Delta advisor who is the defense diversification. We have

worked with the New York State Department of Labor to provide

self-employment opportunities for people who are getting unemployment. There is a tremendous amount of programs out there,

but the problem is that people don’t seem to be finding out about

them. I laugh because I say—someone just came in to me recently

and said, ‘‘I wish I knew you had been here.’’ I said, ‘‘I can’t be out

any more than I am.’’ I don’t know whether there should be an advertising type of promotion, but that’s what I get all the time.

I want to add, I was asked specifically to provide some individual

stories. I have included about 14 success stories here, so you can

see the type of individual that comes in, but I would say that the

access to the information that we are out there, that we have these

programs, and that we are more than willing to help.

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Chairman GRUCCI. Anything that you might be able to provide

us as a means to be more helpful to making your programs successful, making your endeavors successful through our programs, we

would welcome that on the Committee, because that’s what our

function is. Our function is to help the small businesses through

the SBA programs and there’s no better person to tell us if we are

succeeding or failing than those on the front line.

Ms. MCEVOY. I would be happy to.

Ms. Kelly, one of the things that I have found interesting, in

terms of your questioning about the 8(a)’s, I have a business advisor on the grounds of the Brookhaven National Labs, and one of

the goals of that individual is to get more of the minority businesses and women-owned businesses involved. We just recently did

a workshop within the last two weeks to advise the purchasing

agents there who now have credit cards that they purchase, on how

they can use the Internet to look for some of these 8(a) companies,

you know, the minority companies, when they do their purchasing

with credit cards, and we will run that workshop again.

Mrs. KELLY. It’s a Federal mandate that the Federal Government

should purchase at the level of 5 percent. Of course, nationally they

are not.

Ms. MCEVOY. Right.

We need to get to those purchasing agents, which we have started to do at Brookhaven National Labs. They have their own credit

cards that they can purchase with. They have to be advised of the

minority 8(a) companies, and we are in the process of doing that;

so there are programs where we are working on that.

Chairman GRUCCI. Thank you, Judy.

Roz, let me ask you that same question: How can we better help

you? What is it that we can do?

Ms. GOLDMACHER. One specific example, you mentioned venture

capital before in terms of the small business investment companies.

I have to say that Aubrey and his representatives were extremely

helpful to us several years ago when a bunch of us certified development companies, ten of us around the country, got together and

we saw a need for that next level of capital for our 504 borrowers,

where they got to that next level and they needed equity or debt,

but they weren’t ready or able to take advantage of the usual

sources. We wanted to be able to provide venture capital.

We put together a venture capital firm, which is licensed by SBA

to do debt and equity, it’s an SBIC. It’s a great program, and Aubrey and his people were very helpful to us in putting that together. Unfortunately, we have been stymied in using that fund to

help our 504 borrowers, because the SBA at the central office level

has instituted a policy prohibiting us from doing so. They are saying that if a Certified Development Company has an interest in an

SBIC, then the same borrower cannot receive 504 financing that

came from that Certified Development Company, as well as SBIC

financing from the SBIC because of an alleged potential conflict of

interest.

Now keep in mind, for example, Long Island Development Corporation invested $150,000 in this fund. We were the largest investor, as far as certified development companies; this is a $70 million

fund. It is a very tiny percentage. We have no seat on the board,

27

we have no part in the loan management, et cetera. Conflict of interest is something that can be always be managed. If we could get

that policy eliminated, then it would open up nationally more venture capital for small businesses. Those who are going from the 504

level up to that next level. So that’s one specific thing that I would

like to see addressed. We have not been able to get it addressed

on the agency level, and we are probably, at some point, going to

be coming to you with some specific proposals.

Mr. ROGERS. If I may, I noted that in Roz’s testimony and I

brought it to the attention of the 504 office in Washington, and we

will be happy to provide a response or an explanation to the Committee.

Chairman GRUCCI. I would be very appreciative of that. I’m

eager to see it.

As you know and you are probably aware, but let me just tell you

from my perspective, our job here in Washington is to help those

on the front line, that’s coming from small town Government, and

watching how the biggest relief, the biggest help to our business

communities have always come at the local level, and the local

level is the least equipped financially to make those kinds of commitments.

You have heard the Town of Brookhaven, the Town of Riverhead

and every other town here in Suffolk County, as I am sure every

town across the State of New York has these programs where they

are struggling by giving up tax revenues that goes to supporting

the local Governments and supporting the fire departments and the

schools and the libraries and a variety of other things, in order to

entice businesses to come and locate in their communities to make

them grow. The most equipped level of Government is the Federal

Government to be able to help with those programs, and if we are

failing to do that, then we are failing in our responsibilities.

I am hearing from the small businesses themselves, I am hearing

from people like this panel that we have some difficulties, we have

some problems, and this committee is very eager to resolve those

and to move those problems aside so that we can continue this

growth. I know I am preaching to the choir here when I say that

the job creation that has happened in this country hasn’t happened

at the hands of the mega corporations. While we need them as part

of the mix, and we all encourage them and we try to do all that

we can to see that they succeed, we can’t do that on the backs of

the small businesses, because 70 percent of the job growth, at least

in this area if not the State has been the direct result of small

businesses. So I welcome these testimonies here today because I

think it is going to help our committee to continue to do its job and

do it more efficiently, and we need your help and your assistance.

I would like to see more of that resource that is coming into areas

that have one-third of the population, that means there’s a lot of

entrepreneurs out there that are sitting there wondering, as Judy

said, ‘‘How do I get involved with this?’’ Maybe what we need is

a better advertising and ad campaign, letting the people know

what we have, what is available to us.

Mr. ROGERS. I want you to know, sir, that we are anxious to do

that; our team is, and our new Administrator, just last week in a

meeting he talked about hearing issues such as this, and listening

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to what small businesses have to say and responding to these

things. So you will see much more of this.

Chairman GRUCCI. Thank you.

I want to turn to Supervisor Kozakiewicz. I know that he talked

a moment ago about the Post Office, and that may not seem like

a small business issue for this panel, but I assure you in the way

that he has presented it and what I have seen here, it most assuredly is because it is the entranceway to their downtown communities, and it is an albatross hanging around the neck of a vibrant

community trying to revitalize itself. I would like to ask the Supervisor to expand a little bit more on the problems and what it is

that this Committee and we, in the Federal Government as a

whole, can do as representatives, to help you alleviate that problem.

Mr. KOZAKIEWICZ. I have the photos by the way, now. Although

I travel by the site often, it is when I started to look at the photographs that I got a little chuckle. It says ‘‘United States Postal

Service,’’ and then, below it it says, ‘‘A new facility.’’ I will hand

up to you 13 photographs which show the condition of the site. It

is not bad enough that the work was stalled, but the site has not

been maintained in any way, shape or form as well. It’s overgrown,

it is weedy, it is an eyesore. It goes beyond what I can do here at

the local level, and, therefore, it is incumbent for me to ask you for

your assistance.

I understand that you can do many things that we cannot do at

the local level or at the State level or at the County level, such as

a direct inquiry to the Postal Service, gathering of records, convince

them that it is time to get past the impasse that they have been

struggling with the contractor, and that is how I come to you. I ask

you to use your resources. Perhaps this is not the proper forum,

but I believe it can be taken to the proper forum so that it can be

done.

It is obvious that the visual impacts are great. If you go past the

site, as the photographs depict, it is in deplorable condition, where

we have seen a spreading of new businesses. There is a new restaurant that opened not too long ago, which now features some

pretty good pizza. There has been the ice cream store that’s just

a stone’s throw away, and they’re still managing well and they’re

improving their site, and we had another nice little business that

opened up which features Mexican food, and it’s called Funcho’s. I

have been there. The amazing thing is that people from far away

from Riverhead are discovering it, and as a matter of fact they told

me that there is one particular person who comes out every weekend on the way to Sag Harbor and makes sure that they stop there

before they head out to Sag Harbor so that they can enjoy this food.

The problem is the businesses are trying to improve their sites.

They are trying to make the investment, which obviously we need

to help them as far as tax incentives or otherwise, but it is tough

to convince them when just a short distance away you have to look

at this. Furthermore, the fact of the matter is while it sits there,

there are jobs that are not being addressed. There are jobs that

could be given out to contracting firms and others on that property,

not to mention once it is up and running, the maintenance of the

site, which are not being addressed.

29

It also goes contrary to visitors and our residents who see this

and tend to want to avoid that area because of its look and because

it is not attractive and inviting. If it is not attractive and inviting,

again, businesses suffer. So these are things that I am asking for

on behalf of our residents that you can address.

Chairman GRUCCI. Supervisor, isn’t it fair to assume also that

the businesses depend upon that post office for being able to get

their bills paid on time and get their invoices out? It was my understanding in reading through the files and records, there was a

consolidation that was taking place of several entities coming together to create a more efficient Postal Service covering this community, and being able to help your business community, as well

as your residents, and without that there has to be some suffering

that is taking place; would you agree to that?

Mr. KOZAKIEWICZ. We are stagnated with what we have. This

was designed to be a more efficient location, taking what is existing

and providing a more efficient operation; so certainly it has stagnated us and it is counter-productive to the growth and the spurt

that we are experiencing in Riverhead.

Chairman GRUCCI. What would you say the impact on the existing businesses are, not necessarily from the standpoint of walking

in traffic and having to deal with the eyesore, but the everyday operation of their businesses and dependency upon that post office?

Mr. KOZAKIEWICZ. It forces them to the current location on Second Street, which we have talked about, and we have had some

correspondence back and forth. The current location is not handicap accessible, and that is counter-productive to businesses and to

the community at large. I see that we need this new facility to be

opened. We need help and assistance to make it a reality.

What it is also doing is clearly hampering—again, I can’t emphasize this enough—hampering our efforts to just improve that area.

Chairman GRUCCI. Thank you very much.

I know that our time is closing, but I did offer the opportunity

to anyone who would like to make a comment or a question. I see

a hand raised, so we will take you first.

Mr. MCKNIGHT. Bob knows me, Judy McEvoy knows me. I guess

I’ve worked for BOCES as a consultant.

Chairman GRUCCI. If you would just put your name on the

record.

Mr. MCKNIGHT. Warren McKnight, Middle Road, Riverhead.

I worked for BOCES as a consultant, for the minority entrepreneurship program. Part of that program, I was privileged to assist

people on disability and handicapped people, to provide employment in the Town of Riverhead. Approximately ten percent of our

population receive some sort of disability checks from our Governments.

To get right to the point, these people have a real problem: They

want to participate. I have started a number of people in business,

sent them to Judy. Part of their problem is that they have temporary housing, rooming houses around here, they become self-employed sales people or they start their own craft business or their

own businesses, they work at home. Their problem is this: They

have not been able to get a post office box at Riverhead to use.

They have to go into hospitals for treatment and when they come

30

out, they have to live in Riverhead because of low rents, where are

they going to get their business checks, their other checks and all

their mail sent? They can’t get it sent to the rooming house. They

can’t get a post office box. They can’t get a post office box in Calverton. I mean, this is a clear violation of the handicapped rules.

This is why I have been calling your office, being a pain. This

is why I have been writing letters to the editors. This is why I am

saying, ‘‘Can they please, if they are not going to build a new post

office, rent a couple of stores and get post office boxes for people

with heart conditions and people who have wheelchairs down there,

so they can participate and become small business people, become

self-employed.’’ They want to pay their double social security. They

make anywhere from $5,000 to $30,000 a year.

You know, you want to know what’s wrong with the programs,

the other thing that I did when I worked for BOCES, as a minority

entrepreneurship, I went to soup kitchens, I stayed at the unemployment office there, I told people about these programs. I went

to work fairs, I went to job fairs. You need hands-on people. What

you really need is somebody in a wheelchair to reach out to people

who are in wheelchairs. Somebody who is on disability to reach out

to somebody on disability, if you want to get it moving here.

I am going to cut it real short now, but the only thing is that’s

why I am so upset about this, and that’s all we have to do, get

some post office boxes down there, get some real outreach workers

in this program, people one on one, maybe dedicated people in the

clergy. So basically that is I hope you really can do something. Just

get some post office boxes.

Chairman GRUCCI. I appreciate you bringing this to our attention. We have been moving forward on trying to help get this resolved. I guess it underscores the point that the Supervisor was

making that we really do need the completion of the post office

done so we can expand the service of the post office to do just what

you are saying, to provide more space, more boxes and more ability

for more entrepreneurs, more small businessses to grow and to become a small business. I appreciate your comments.

One of the things that we were just talking about, Congresswoman Kelly and I, is that at least on a temporary basis, places

like Mailboxes Et Cetera is a bone fide drop point that could be

used for the purposes of delivering mail, if there is any available,

but if they’re not available——

Mr. MCKNIGHT. It is not available, and what had happened over

the years, they go out of business. We are the poorest town on Long

Island.

Chairman GRUCCI. I am not suggesting that to be a permanent

fix, I was just trying to see if this might be a temporary fix while

we work on the Supervisor’s bigger problem.

Mr. MCKNIGHT. Only if they could be like Fed Ex, underwritten

by the Federal Government. We are the poorest town on Long Island. We have a disproportionate amount of people on disability.

We have a disproportionate amount of people who need these services, and that’s what really hurts. It hurts this town, it hurts the

pride of our Supervisor and everybody that lives here.

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We are the poorest town on Long Island, the lowest income. People who are poor have to live here because they are on disability

or partial disability, and they have this extra handicap.

Chairman GRUCCI. I am just going to have to ask you to sum up

so we can get a couple of more in before we have to close.

Mr. MCKNIGHT. I think I made my point and I want to thank you

for listening, and I want to thank the Supervisor and you and for

doing it, but please, let’s get something done. Thank you.

Chairman GRUCCI. Anyone else?

Yes, ma’am?

Ms. BLOSTEIN. My name is Anne Blostein, from Calverton.

I am very glad that you are going to take care of what is happening in our post office in Riverhead. I think right now it is a

blight for our town and it is stopping the economic development,

which we are very hard trying to do. Thank you.

Chairman GRUCCI. I appreciate that, but a lot of the credit belongs to the Supervisor for being on the forefront in bringing that

to my attention.

Any other questions?

Seeing none, I just wanted to sum up by saying I want to thank

our panelists for being here. I think the testimony today was a

good one and it will give the Congresswoman and I an opportunity

to go back to the full Committee and report what we have heard

here today, which is probably not going to be dissimilar to other

places throughout the country, the same kinds of problems that are

out there. Maybe those in Arizona may not have the fishing problem but I know that they enjoy eating our fish because I have spoken to a couple of them already.

We are going to continue to work on this. Small business is the

heart and soul of our economy. It is what has built this country.

It is where our giant entrepreneurs started; every one of them will

tell you the story, whether it’s Mr. Grumman or whether it’s Bill

Gates, their ideas started in their basement or their library or their

garage and grew, and with the help that we can provide from the

Federal Government—and, Mr. Rogers, I suspect that you will hear

the cries of the small business community and put a special emphasis on helping the Long Island region.

Mr. ROGERS. Yes.

Chairman GRUCCI. We will be able to continue to grow this economy, keep these jobs flourishing, and I thank you all for being here

today. Thank you, and God bless you all.

[Whereupon, at 3:50 p.m., the committee was adjourned.]

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