Building Prosperity in Rural Communities “Takes a Village”

By Monica Calzolari

Hartwick College hosted 14 experts from towns, cities, municipalities, counties, plus state and federal agencies to begin an on-going dialogue about how to build prosperity in rural communities, particularly in New York’s 19th congressional district (shown in picture). The distinguished panelists traveled from Washington, D.C., Albany, Utica, Sidney, and Red Hook to Oneonta on April 20, 2017.

Anne Hazlett, assistant to the secretary for Rural Development, US Department of Agriculture, moderated and framed the discussion around three keys to “increasing prosperity in rural New York.”

• infrastructure
• quality of life
• economic development

United States Representative John J. Faso, who represents the 19th district, recognized Hazlett, a native of Indiana, for her “deep passion for rural America and agriculture.” Faso moved to upstate New York‌ 1983 and was elected to the New York State Assembly for the first time in 1986. He is very familiar with the challenges facing the upstate New York community from his 34 years of service in this area.

Hartwick President Margaret L. Drugovich and Acting State Director USDA Rural Development Scott Collins each welcomed the audience. Drugovich introduced the College’s Center for Craft Food & Beverage as one example of how higher education can be a vital collaboration and innovation partner to help address economic development in the region.

This panel of experts also included three mayors, the presidents of several local businesses, two electric companies, two telecommunications companies, and one commercial bank that lends to rural businesses located in New York’s Hudson Valley and Catskills regions.

Infrastructure

E-connectivity was one major theme shared by many of the panelists. The USDA’s research states: “39% of rural America lack access to sufficient broadband access” and panelists agreed that “access to high-speed, high-capacity internet is essential” to growth and prosperity.

Jason Becker, president of Middleburgh Telephone Co., runs a 121 year-old, fourth-generation, family-owned business that employs 50 people. “Telecommunications is very capital intensive,” he pointed out. His company serves low to moderate income communities and “having access to capital is critical,” said Becker. Loan paperwork can take “9-12 months to process” and “small businesses need quicker turnaround times.” He shared first-hand accounts of school children who could not do their homework because they lack internet connectivity at home and are forced to use computers in the libraries or in the schools. Some residents, especially those who are on a fixed income, cannot afford $100/month for internet service. Becker is the father of four boys and values the education his children are receiving in his rural community. He gave teachers a lot of credit saying “teachers in rural communities wear many, many hats.” He pointed out another advantage to access to broadband: “the ability to work from home and stay in their communities.”

Quality of Life

The Honorable Edward Blundell, mayor of Red Hook, NY, described the “awesome public school system” that attracts residents to his town which is “90 miles north of New York City.” Parents with young children are moving to Red Hook for the quality of life it offers, working from home several days per week and commuting into NYC for their jobs. Blundell said the USDA has been vital” to providing his town of 11,319 residents with “long-term loans and grants” to build infrastructure necessary for businesses to thrive. The restaurant business is “surging” in the Hudson River region and “central sewers” are now a necessity.

Ryan Brooks, president of Brooks’ House of Bar-B-Q and Brooks’ Bottling Company, is an Oneonta small business success story. Brooks employs approximately 130 area residents and operates two businesses. Brooks commuted back to Oneonta from Rochester on weekends from college to work in the family restaurant business. At age 22, when his father had a medical issue, Brooks took over the restaurant. Brooks mentioned with pride that his father grew up on a chicken farm and started the restaurant which is now well-known in the region. Brooks said “small businesses are struggling” and “minimum wage affects us.”

Thomas Armao, owner of Country Club Motors, has run his business in the area for 40 years and has “employees who have been with the company for 30-40 years.” He told the audience that because “every day is a challenge,” he prefers to “start off each day on a positive note.” One quality of life advantage of living in this rural community is that “we have an abundance of clean, fresh water.” He also noted that the Walmart Supercenter brought many new jobs to the area. He said, “There are some well-paid people (at Walmart) and many part-time workers.” He sees upstate New York “transitioning to being a destination for tourists” and a region where residents of NYC have “second homes.” He noted that “in Delaware County, we lost a substantial number of dairy farms.”

According to Tim Johnson, CEO, Otsego Electric Cooperative, “Delaware County used to be 90% dairy farms and is now 2% diary and 98% residential.” His cooperative strung “750 miles of poles and wires” and provided broadband via satellite and noted that 40-50% of his rural community have children receiving free or reduced lunches due to “generational poverty.” Another local success story is Chobani, the yogurt company. Some Chobani employees are “willing to commute 30-50 miles” to work at its plant in New Berlin, New York.

The Honorable Andy Matviak, mayor of Sidney, NY, with a population of 3,900, reminded the audience that the Susquehanna River is a “great asset” and that his city is “still trying to recover from the flood of 2001.” It cost “$40 million to rebuild” after the flood and Sidney needs “the state and federal government to research the Susquehanna River” to prevent another flood. Residents and businesses are burdened with the high cost of flood insurance and some are still waiting for resolution from the Federal Emergency Management Agency (FEMA) on insurance claims to tear down structures ruined by the flood seven years ago.

Workforce Development

Amphenol Corporation, one of the largest manufacturers of products in the world for the military, commercial aerospace and industrial markets, employs 1,000 people in Sidney, NY at its 307,000 square foot facility. The city almost lost Amphenol, its largest employer, due to the costs of rebuilding after the flood.

Congressman Faso pointed out that there are “6.5 million unfilled jobs in the U.S.” due to a “skills gap.” He suggested that “any effort to enhance employment opportunities must recognize the skills gap issue.” Amphenol needs employees with highly technical skills to fabricate parts for aircrafts.

The Honorable Gary Herzig, mayor of Oneonta, NY, stated, “nothing adds more to our quality of life than two colleges with 7,000 students.” He credited the colleges with bringing innovation to the city. With a population of 14,000 and 50% being college students, the challenge is that Oneonta only has 10,000 taxpayers to help pay for infrastructure. Mayor Herzig appreciates “the generous help” the city receives from New York State. He asked the USDA to look into a cut-off policy of funding cities of 10,000.

Access to Capital

“Access to low-cost capital is so important to long-term costs,” said Schneider, who operates Delaware County Electric Cooperative.

Glen Faulkner, general manager of Margaretville Telephone Co., informed the audience just how hard it is for small businesses to compete with “giant companies like Spectrum, which serves 140,000 households.” New York State allowed Spectrum to merge with Time Warner and they monopolize the market. Faulkner said, “There are 19 independent telephone companies that provide service to 5% of the customers.”  Companies such as Delhi Telephone Company serve the rural communities and make “relatively low revenue” and have “high infrastructure needs.”

In Schneider’s opinion, huge telecommunications companies have “abused federal programs.” He said, phase one of “Connect America Fund was a colossal failure.” This Federal Communications Commission program was intended to help all consumers, rural and urban. The big telecommunications companies accepted federal money and found “the 10 easiest rural communities to serve” and left the other 90% harder to serve communities to be managed by the local telecommunications companies.

Anne Finnegan, vice president of commercial lending, said “National Union Bank of Kinderhook has a 160 year long history of rural lending.” She acknowledged that “there are communities 12 miles from Albany without broadband.” On a positive note, Finnegan remarked that “money is almost always the easy part of the solution.” Businesses need “water, power and a workforce to flourish.” Finnegan said, “Banks do not create jobs or string fiber. We provide money to help and have many entrepreneurial programs.” She was optimistic that a commercial loan to a business owner of one could turn into the next employer of 1,000 employees. The bank lends to businesses from “north of the Tappan Zee Bridge to Canada” and up to $100 million.

Jody Zakrevsky, CEO of Otsego NOW Hub for Economic Progress, says people assume that New York City must be where all the jobs are. Getting companies to consider relocating to upstate New York is challenging. Zakrevsky said, “We don’t have enough natural gas.” His agency is a two-person operation. He was in favor of “forming consortiums with colleges” because “it is difficult to address issues in rural communities without enough resources.” Building a new industrial park is capital intensive. Zakrevsky noted, “We’ll have $3-4 million invested in an industrial park before we see a tenant.”

President Drugovich and Congressman Faso shared concerns for New York State’s declining demographics and how higher education, the workforce, and the tax base are all affected. Faso recollected that “50 of the 57 counties in New York have lost population.” The USDA confirmed that “Poverty rates are disproportionately high in many rural communities.” Drugovich suggested that collaboration and innovation are one promising way to address the challenges facing the upstate New York community. As Finnegan concluded, “It takes a village” to solve some of the problems highlighted by the panelists.