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byline: Kate Andrews

Northam seeks to include part-time workers in state IRA fund

Virginia Gov. Ralph Northam has proposed a change to a bill to allow part-time employees to participate in a newly created state-administered retirement fund for workers without 401(k) access, the governor’s office announced Friday.

Northam also has signed legislation expanding an existing broadband pilot program to increase internet access in underserved areas of the state, and another measure codifying restaurants’ right to serve alcohol outside and during permitted events, which became policy during the COVID-19 pandemic. The governor also signed into law a measure creating an authority to support passenger rail expansion west of Roanoke.

Del. Luke Torian, D-Prince William, sponsored HB 2174, which directs the Virginia College Savings Plan to create the VirginiaSaves individual retirement account for eligible nongovernmental employees of small businesses who don’t have access to retirement plans. Under the current legislation, the program was available only to people employed at least 30 hours a week — a requirement the governor suggested striking. The House of Delegates will have to take up the recommended change when it reconvenes on April 7.

In response, Nicole Riley, director of the Virginia chapter of the National Federation of Independent Business, released a statement: “Small business owners across Virginia are deeply concerned with this move by the governor. Here’s why this bill is bad for small business: It would require our already struggling small business owners to participate in a government-mandated program at a time when they are already burdened with COVID-19 mandates and revenue losses.

“Our members ask legislators to reject the governor’s amendment and support employees’ choice as well as mitigate the administrative burden on small businesses,” Riley added.

Northam signed a measure that creates the New River Valley Passenger Rail Station Authority, which would support passenger rail expansion west of Roanoke in Planning District 4, legislation sponsored by Sen. John Edwards, D-Roanoke, and Del. Chris Hurst, D-Roanoke. He also signed legislation sponsored by Del. Hala Ayala, D-Prince William, and Edwards to expand the broadband pilot program authorizing Dominion Energy Inc. and Appalachian Power to make capacity available to internet service providers. The current program is restricted to nongovernmental internet service providers.

Finally, the governor signed into law a current pandemic policy allowing restaurants more leeway to serve alcohol outside, which was included in state policy to help restaurants suffering financially. Identical bills sponsored by Ayala and Sen. Siobhan Dunnavant, R-Henrico, allow the board of directors of the Virginia Alcoholic Beverage Control Authority to increase the number of events held by a business per year — currently limited to 16 — if a locality adopts an ordinance seeking expansion. The law also increases state and local license fees for such outdoor events.

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Va. wedding venue loses suit against governor

On Friday, a federal judge ruled against Franklin County wedding venue Belle Garden Estate and its owner Charles Russell, who sued Gov. Ralph Northam in an attempt to expand the number of people who could attend a wedding under the state’s COVID-19 restrictions.

Under current executive orders, businesses can host only 25 people outdoors if it’s a private booking, or 10 people indoors. Northam announced this week that the restrictions on weddings would be loosened April 1 to allow 100 people outdoors and 50 indoors, but Belle Garden Estate and Russell still pursued the suit, which sought to allow wedding venues to operate at 30% capacity, up to 1,000 people outdoors or 250 indoors, as allowed at baseball stadiums and other entertainment venues. With the April 1 policy changes, those caps will rise to up to 5,000 attendance in outdoor venues and 1,000 indoors.

Northam has said that weddings are riskier than other kinds of gatherings because of family members and friends hugging and dancing. On Tuesday, the governor said he will revisit lifting other restrictions on a monthly basis, as long as COVID-19 cases, hospitalizations and deaths continue to decline. He re-emphasized that outdoor wedding venues will continue to be limited to 100 attendees for the time being.

Judge Thomas T. Cullen of the U.S. District Court for the Western District of Virginia, ruled against a preliminary injunction, saying in his order that the governor is likely immune from a civil suit and that the wedding venue has not demonstrated a viable First Amendment claim or equal protection claim. Cullen also said that Belle Garden did not show “irreparable injury” to the business due to monetary losses. In terms of public health impact, the judge wrote, “If the court issues a preliminary injunction in this case, there is a reasonable likelihood that more people will become infected and/or die than if it does not.”

Tim Anderson, a Virginia Beach attorney who has represented other clients seeking injunctions against the governor’s executive orders, said in a statement that although the ruling was disappointing for his client, “Belle Garden Estate believes this suit helped move the needle in how wedding venues are being unfairly treated by the governor of Virginia.” He added that Russell will take the weekend to review the order and decide whether he wants to appeal to the Fourth Circuit Court of Appeals.

“Belle Garden fervently believes that allowing a concert venue to be capped at 30% occupancy and outdoor graduations to have as many as 5,000 attendees but restricting an outdoor wedding venue to 100 is a violation of the equal protection clause,” Anderson added. “Such restrictions serve no legitimate public interest and only prejudices the $8 billion wedding industry in Virginia, which has suffered tremendously with the COVID lockdowns.”

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Va. community clinics receive $79M in federal funding

U.S. Sens. Mark Warner and Tim Kaine announced Friday that 26 community clinics in Virginia will receive $79 million in funding through the $1.9 trillion American Rescue Plan federal stimulus package. Warner also introduced legislation this week to support other community clinics — most run by health systems in the state’s rural areas — by closing a Medicare payment loophole.

Warner and Sen. Roy Blunt, R-Missouri, are co-sponsoring Senate legislation that would fix a “sudden and unexpected Medicare payment rate change” included by mistake in the December 2020 COVID-19 relief bill, which excluded any clinics established after December 2019 in a freeze on Medicare payment rates. Nearly 30 clinics in Virginia are impacted, including 18 owned by Carilion Clinic.

“The language in question would have significantly reduced payments to rural health clinics across the country, potentially causing many to face financial uncertainty,” said Carilion Executive Vice President and Chief Financial Officer Don Halliwill in a statement. “This technical fix will allow us to better sustain, and even increase, access to health care in the rural communities we serve. For us and hundreds of other rural health providers, this change will make it easier for us to continue to invest in communities where access to care has been identified as a need.”

Sentara Healthcare and Valley Health also own impacted clinics and have given their support to the measure. The legislation, known as the Strengthening Rural Health Clinics Act of 2021, would amend existing law to grandfather clinics at their current Medicare payment rates if the clinics were in existence or in “mid-build” by Dec. 31, 2020, or if an organization had submitted an application or binding agreement for establishing a rural clinic by the end of 2020. 

Sen. Mark Warner. AP Photo/Steve Helber

“In the past year, rural health clinics have played an essential role in bringing urgent and lifesaving care to some of our most vulnerable communities. Unfortunately, this crisis has served to further throw these facilities into financial distress,” Warner said in a statement. “By fixing a legislative error, our bill will help avoid further financial volatility and allow rural health clinics in Virginia and across the country to continue serving the communities that need it the most.”

Under the American Rescue Plan, the following nonprofit community clinics and health services organizations will receive $79 million in federal funding for expanding COVID-19 vaccination and testing, as well as providing preventive and primary care for people at higher risk of becoming seriously ill. Health centers also can use the funds to expand operational capacity, such as improving infrastructure or adding mobile units.

  • Central Virginia Health Services Inc. (Buckingham County), $8.8 million
  • Neighborhood Health (Alexandria), $7.8 million
  • Eastern Shore Rural Health System Inc., $5.7 million
  • Greater Prince William Area Community Health Center Inc., $4.6 million
  • Peninsula Institute for Community Health Inc., $4.6 million
  • Johnson Health Center (Lynchburg), $4.3 million
  • Loudoun Community Health Center, $3.9 million
  • Piedmont Access to Health Services Inc. (Danville), $3.6 million
  • Healthy Community Health Centers (formerly Harrisonburg Community Health Center), $3.4 million
  • Southwest Virginia Community Health Systems Inc. (Smyth and Washington counties), $3 million
  • St. Charles Health Council Inc. (Lee County), $3 million
  • Portsmouth Community Health Center Inc., $2.7 million
  • Kuumba Community Health & Wellness Center Inc. (Roanoke), $2.4 million
  • Southern Dominion Health Systems Inc. (Lunenburg County), $2.3 million
  • Daily Planet Inc. (Richmond), $2.2 million
  • Tri-Area Community Health (Carroll County), $1.9 million
  • Blue Ridge Medical Center Inc., $1.8 million
  • Rockbridge Area Free Clinic, $1.6 million
  • Bland County Medical Center Inc., $1.5 million
  • Free Clinic of the New River Valley Inc., $1.4 million
  • Martinsville Henry County Coalition for Health and Wellness, $1.4 million
  • Horizon Health Services Inc. (Sussex County), $1.1 million
  • Clinch River Health Services Inc., $950,375
  • Stony Creek Community Health Center (Sussex County), $889,500
  • Highland Medical Center (Highland County), $822,750

The city of Richmond also received $2.9 million.

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Va. unemployment dropped slightly in Feb., continuing slow decline

Virginia’s unemployment rate continued to edge lower in February, dropping from 5.3% in January to 5.2% last month, Gov. Ralph Northam announced Friday. However, the state saw a decrease of 3,700 nonfarm payroll jobs and a decline in employed people during February.

The nation’s seasonally adjusted unemployment rate was 6.2% in February, and the state’s jobless rate last month was 2.7% higher than in February 2020, when it stood at 2.5%. The number of employed Virginians fell by 8,808 to 4 million in February.

According to Megan Healy, the state’s chief workforce development adviser, the last time the state saw an unemployment rate of 5.2% was in 2014, as Virginia’s economy was recovering from the 2008-09 Great Recession. “Looking ahead to our recovery in 2021, the Virginia Employment Commission will continue working to help people gain employment or enter training programs that match their skills and career goals, focusing resources to align with the emerging opportunities we are seeing in post-pandemic job market trends.”

“While our unemployment rate is moving in the right direction, the economic impacts of this pandemic continue to challenge workers and businesses in Virginia and across the country,” Northam said in a statement. “Our administration remains committed to providing additional relief to those most in need, helping Virginians return to the workforce, and making targeted investments to build back key sectors of our economy.”

From February 2020 to February 2021, the private sector lost 161,600 jobs, while the public sector lost 35,700 jobs.

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Peraton wins potential $360M Air Force contract

Herndon-based national security contractor Peraton Inc. has been awarded a potential $360.4 million contract to assess safety risks of the U.S. Air Force’s intercontinental ballistic missile software, an agreement that could extend 18 years.

According to the U.S. Department of Defense announcement Thursday, the company will support nuclear safety analysis and evaluation in Utah and California, with work set to be completed by March 2039. The first two task orders of $2.1 million in operation and maintenance funds and $5.4 million in missile procurement funds will be due at the time of the award from the Air Force Nuclear Weapons Center at Hill Air Force Base in Utah.

Peraton has made two major purchases in recent months, including its $7.1 billion acquisition of Chantilly-based federal contractor Perspecta Inc. and Northrop Grumman’s integrated mission support and IT solutions business for $3.4 billion, now known as Peraton Remotec, a Tennessee-based subsidiary.

In 2017, the former government services business Harris Corp. became Peraton after it was acquired by Veritas Capital. Peraton, through the U.S. federal contracts, provides systems development and mission capability integration.

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Newport News, Hampton launch Peninsula Cares Act Fund

The cities of Hampton and Newport News opened a new low-interest loan program for COVID-affected businesses on Thursday. Known as the Peninsula Cares Act Fund, it will lend a total of $1.5 million in amounts ranging from $7,500 to $375,000.

Eligible businesses can use the funds for purchase and installation of machinery and equipment, building rehabilitation costs, refinancing of certain existing loans, facility remediation and cleanup, gap financing, infrastructure, marketing, working capital and other costs contributing to the value of a project’s fixed assets.

The relief fund, with money provided through a federal CARES Act Recovery Assistance Grant, will be distributed through direct loans with flexible rates and terms. According to the city of Newport News, the fund makes fixed interest loans generally between 0% and 2% (only applicable until all funds have been disbursed or June 30, 2022, whichever occurs first). The maximum term is 10 years for fixed asset loans and four years for working capital loans.

For Hampton business owners, visit the city of Hampton’s website and for Newport News-based business owners, visit the city’s website.

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Pitch Preview lets Central Va. startup founders practice pitches

The Virginia Small Business Development Center, along with the Charlottesville Angel Network (CAN), is offering a new program geared toward Central Virginia startup founders who need practice pitching potential investors.

Pitch Preview’s first event is scheduled April 29 from 1-3 p.m. via Zoom. Participants commit to 30-minute time slots with a 15-minute pitch, and for those not ready to take that step, the Central Virginia SBDC will soon offer a preparation and practice session. Other Pitch Preview events are scheduled July 29 and Sept. 30 and may be virtual and in-person, hosted in Charlottesville. Five applicants will be selected for each event.

“The number of startups in America doubled from Q4 2019 to Q4 2020,” Rebecca Haydock, director of the CVSBDC, said in a statement. “That trend is clear in Virginia as we see more valuable innovation-based startups seeking funding. Unfortunately, too many don’t succeed because their pitches aren’t adequately prepared or delivered. Offering feedback from experienced angel investors is a win-win as CAN members get to meet bright entrepreneurs early in the process, while the entrepreneurs hone their skills for successful fundraising.”

For more information, visit CVSBDC’s website.

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Torc Robotics names chief transformation officer

Blacksburg-based Torc Robotics has hired Eddie Amos, a former Microsoft and GE Digital executive and software developer, as its chief transformation officer, the company announced Thursday.

In a statement, Amos said his new job is to “translate the lessons learned in 35 years of software disruption into best practices for commercializing self-driving trucks.” Torc is an independent subsidiary of Daimler Trucks, a division of Daimler Group, that is working toward bringing automated trucks to the commercial market. In August, Torc announced it was planning to invest $8.5 million and create 350 jobs in Montgomery County, near its Blacksburg Industrial Park location.

Amos, who came out of retirement to join Torc, has been part of the GO Virginia Region 2 Council since 2019, helping with their efforts to bring more high-tech jobs to Roanoke and the New River Valley region.

He previously served as chief technology officer at Meridium, a startup company later purchased by GE Digital. After its acquisition, Amos was named GE’s senior vice president of digital engineering.

“The Torc team is one of the smartest sets of people I’ve ever worked with in my life,” Amos said in a statement. “The world’s going to be amazed at what this group of individuals is going to do.”

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Va. new unemployment claims 60% lower than 1 year ago

The number of initial unemployment claims filed during the week ending March 20 were 60% lower than they were this week a year ago when the COVID-19 pandemic’s impact first began to be reflected in Virginia’s unemployment statistics.

The  Virginia Employment Commission reported Thursday that 17,560 people filed initial claims last week, an increase of 2,035 from the previous week. Continued claims totaled 58,233, a 2.9% decrease from the previous week but 36,605 higher than continued claims a year ago. People receiving unemployment benefits through the VEC must file weekly unemployment claims in order to continue receiving benefits.

U.S. Sen. Mark R. Warner wrote a letter to Gov. Ralph Northam on Thursday, urging him to speed up benefits to Virginia unemployment claimants now that the federal $1.9 trillion American Rescue Plan has been passed. The act includes compensation for long-term unemployed people, self-employed and gig workers, as well as a new category that targets people with mixed sources of income.

“It is my understanding that, following earlier passage of congressional legislation to extend these programs in December, constituents in Virginia faced many delays and communication problems with the Virginia Employment Commission (VEC),” Warner wrote. “With the knowledge that these benefit systems were originally set to expire on Dec. 26, I worked with a bipartisan and bicameral group of lawmakers in the U.S. Congress to pass a relief package shortly before Christmas because it was understood that loss of benefits at this time of the year would be particularly cruel. Now, several months later, I hope you can agree that for constituents still experiencing delays the lack of pandemic unemployment insurance is unconscionable.”

Citing constituents that have called his office with complaints, Warner asked in the letter for the VEC to report on its plans on how to disburse the new federal funding for unemployed Virginians, as well as how the commission plans to improve communication efforts with claimants and employers.

“From Newport News to Henrico to Alexandria, constituents are contacting my office from every corner of the commonwealth with desperate requests for relief,” Warner wrote. “Some of them have waited three months, others have waited 11 months, and many are struggling to feed their children and keep a roof over their heads.”

More than half of the claimants who filed for benefits last week (and the prior four weeks) reported being in the accommodation/food service, administrative and waste services, retail trade and health care and social assistance industries, according to the VEC.

The regions of the state that have been most impacted continue to be Northern Virginia, Richmond and Hampton Roads. 

Below are the top 10 localities, listed by number of initial unemployment claims, for the week ending March 20:

  • Alexandria, 1,478
  • Norfolk, 1,169
  • Richmond, 900
  • Virginia Beach, 699
  • Fairfax County, 689
  • Prince William County, 466
  • Hampton, 403
  • Lynchburg, 383
  • Chesterfield County, 337
  • Petersburg, 332

Nationwide, the advance figure for seasonally adjusted initial claims last week was 684,000, a decrease of 97,000 from the previous week’s revised level, according to the U.S. Department of Labor. There were 2,920,162 initial claims during the same week last year.

 

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Leonardo DRS pushes pause on IPO

Arlington-based Leonardo DRS Inc., a subsidiary of Italian defense contractor Leonardo SpA, is hitting the brakes on its initial public offering, its parent company announced Wednesday. No future IPO date was announced.

The company attributed its decision to “adverse market conditions” that “did not allow an adequate valuation of DRS,” according to a news release. “DRS remains a core part of Leonardo’s business portfolio and the IPO will potentially be revisited when market conditions are more favorable and a successful IPO at an appropriate valuation for this strategic business can be achieved.”

The company added that it has filed a registration statement with the Securities and Exchange Commission but that it has not yet become effective, meaning that the securities cannot be sold until it goes into effect.

Earlier this month, Leonardo announced it would list a minority stake of Leonardo DRS on the New York Stock Exchange, with the IPO valued at $2.54 billion. Leonardo US would remain the majority shareholder of Leonardo DRS, and the company was expected to enter a proxy agreement with the U.S. Department of Defense to allow Leonardo DRS to continue to compete and perform on classified programs.

Leonardo DRS is the largest U.S. subsidiary of the Italian defense/aerospace conglomerate and is a military defense tech contractor with $2 billion in annual revenue. The company works with customers including the U.S. Army, Navy and intelligence community. In 2020, the company won a $120 million U.S. Navy contract to provide engineering design and software testing for aircraft protection systems.

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