- By Sue Robinson --- Free Press Staff Writer


Chittenden Corp., the parent of Chittenden Bank, has acquired an average of one bank a year since 1996.

The financial firm's profits have gone from $49.8 million in 1998 to $63.6 million last year.

The parent company runs the largest Vermont-based bank with $3 billion in assets, 54 branches and 1,000 employees in Vermont alone. Its size is nearly double its nearest in-state competitor.

With $4.9 billion in total company assets, Chittenden Corp. is also a formidable corporation with banks in Maine, New Hampshire and Massachusetts, and investment and insurance subsidiaries.

Chittenden Corp.'s chief executive officer, Paul Perrault, said the company is now "big enough" to offer customers everything from investment help to insurance to on-line banking and still run community banks.

One national bank analyst said Chittenden Corp. must now decide: What's next?

"Institutions at this point typically confront a strategic fork in the road regarding how best to create value for shareholders," said John Carusone, president of the Bank Analysis Center Inc., a Hartford, Conn.-based bank consulting firm focused on New England.

"They have done a very excellent job to date," he said of Chittenden Corp. "Now they are approaching the issue of an encore problem, and that is a hard business calculus to make."

Perrault doesn't like the idea of following the banking industry's prevailing trend to get bigger or merge. He would not say if Chittenden is up for sale, nor if there were even any suitors. He also declined to say whether he is looking to acquire other banks.

Perrault did say the company would certainly entertain any offer, and would consider buying another bank if the circumstances were right.

Instead of focusing on more mergers and acquisitions, Perrault reorganized Chittenden Corp., keeping subsidiary banks independent and backing them up with a corporation's ability to provide technology, services and capital.

"I don't think you ever are taken out of that dilemma that all banks face, which is, 'Do you keep going or do you stay small?'" Perrault said. "Our answer has been to have this New-Age multi-bank holding company that can have the best of both worlds. I think we have found the solution for us."

Adding banks

Chittenden Corp. has been busy ever since it was founded in 1906.

The bank more than doubled in size when it bought Brattleboro-based Vermont National Bank for $400 million in stock in 1998. The next year the company reported a loss of $2.5 million because it had to write down some of Vermont National's liabilities.

However, it was that purchase, said the state's deputy banking commissioner, that propelled Chittenden into the top tier of Vermont banking. Once those liabilities were accounted for, the purchase helped increase corporate net income by 28 percent in three years.

"We started to think about how we wanted to get involved outside the state, how we wanted to get involved with like-minded banks," Perrault said.

The company wanted to stay focused on local communities, Perrault said, so it was careful about the banks it chose. Perrault looked at customer bases, trying to find banks that captured niche markets and that had brand recognition.

Chittenden found three more banks that met the criteria. The company bought Maine Bank & Trust Co. in Portland, Maine, in 2001, Ocean National Bank in Kennebunk, Maine, in 2002, and Granite Bank in Keene, N.H., in 2003.

These three added to the two banks in Massachusetts, bought early on in Chittenden's expansion mode during the mid-1990s.

Each bank kept its name and, usually, the management team.

Chittenden avoided debt by picking those banks it could pay for out of its income or by negotiating stock deals.

The plan seems to be working.

Carusone praised the bank's numbers, pointing out that Chittenden's ratio of net profits to assets -- 1.38 percent -- is better than the state average of 1.3, which is better than the national average of 1.2. This percentage shows the bank's profitability, and means that for every $100 of loans and investment, Chittenden earns $1.38.

A good number, said Carusone, is anything over 1 percent, showing that the bank is performing well.

"Their shareholders have got to be pleased with what has been taking place," Carusone said.

The bank's stock price, which has had several stock splits, has nearly doubled in value since it started its buying spree in 1996. The stock closed at $26.11 per share Friday.

Managing growth

As Perrault added bank after bank to the mix, the corporate structure became too cumbersome. For years, the company operated its main bank, Chittenden Trust Co. -- really a subsidiary -- as a holding company. The holding company handled all of the accounting and back-room functions for the business segments from one bank.

Perrault was running Chittenden Bank as well as its parent corporation, which had different needs and was more complex.

"We had outgrown the arrangement that we had," Perrault said, "so we reoriented."

In December, Perrault made Chittenden Bank a true subsidiary like the other acquired banks around New England.

He named Burlington native Lawrence W. DeShaw the new bank president, taking Perrault's place.

Then, Perrault organized all of the subsidiaries under Chittenden Corp., which had been merely a corporate shell. Each subsidiary bank makes its own decisions but has access to the corporation's products and is supported by a newly organized, separate group that handles the back-room functions.

It is an unusual structure for Vermont, where most banks have only a few branches and tend to merge with their acquisitions as opposed to trying to run them independently, said Deputy Commissioner Thomas Candon of the Banking, Insurance, Securities & Health Care Administration.

Banknorth operated several banks here independently, such as Franklin Lamoille and The Howard, until it merged with Peoples Bank of Maine.

"So far, ... (Chittenden) seems to be comfortable working within the structure they have today," Candon said.

What now?


Chittenden is at the stage where most banks either accumulate more banks, like the Maine-based Banknorth, or merge with a competitor -- perhaps Banknorth itself, Carusone said.

He called the crossroads a "high-class planning problem" for Chittenden Corp., and added that it is not a forgone conclusion that Chittenden will get bigger or be acquired by someone outside Vermont. But the company does need to decide what its next step will be, he said.

State regulators want Chittenden Corp. to stay local. Where 10 years ago Vermont had 18 local banks, today there are just 10, Candon said. The more banks -- and the more varied the banks -- the more competition.

Perrault just wants to stay successful.

Does that mean more banks?

"We don't set out to acquire banks," Perrault said. "Is it likely to happen again? Apparently. That seems to be the trend with us."

Does it mean Vermont will lose Chittenden to a larger chain based out of state? Not necessarily, Perrault said.

Success to Perrault means staying profitable while being able to take care of all the fi- nancial needs of customers under one corporate umbrella.

"We long ago decided that one does not need to be big to be valuable and to be successful. We don't buy into that," Perrault said. "But you do have to be big enough to do all the things that your customers expect you to do in this day and age. We feel we're big enough to do what we need to do now."
Contact Sue Robinson at 660-1852 or srobinso@bfp.burlingtonfree press.com
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A sex criminal police are calling "very violent, very aggressive, very dangerous" has been released from prison after serving 10 years for raping a Burlington woman in her apartment -- hours after the end of his jail term for attempting to kidnap another woman.

Douglas Bryant, 50, left the Southern State Correctional Facility in Springfield on March 18, and he is living in Burlington, said Walt Decker, deputy chief of the Burlington Police Department.

Bryant's release has prompted authorities to take the unusual step of warning the public about his presence in the community. People convicted of sex crimes in Vermont are required to register with the state, but names on the list rarely are available to the public. However, Decker said Bryant presents such a threat to the community that police are allowed to discuss his case.

Bryant has an extensive criminal record, which dates to 1970, when he was 17. His criminal history includes three charges or convictions for rape or attempted rape.

"This guy is an actual predator," Decker said. "He just chooses people at random and within hours is violently attacking them."

Bryant refused to participate in any treatment programs for sex offenders while in prison, Decker said.

Neither an address nor phone number for Bryant could be found Wednesday.

The state Department of Corrections warned Burlington police about Bryant three days before his release. According to a memo the department sent police, Bryant served the maximum amount of his 10-to-15-year sentence, and upon his release would no longer be under the department's supervision.

Notification

Upon his release, Bryant was required to register as a sex offender in Vermont, Decker said. If he changes addresses, he must update the list. The list in Vermont is not a public document.

Decker said two situations allow police to disclose registered sex offenders: when people need to know, such as neighbors who report someone has been acting strangely, and "if the police feel there's a general danger to the public." The second condition is applicable in Bryant's case, Decker said.

Bryant must remain on the sex-offender registry for 10 years, Decker said.

Corrections notified Bryant's victims of his release from prison, Decker said. Burlington police also have posted a color photograph of Bryant in their headquarters so officers know what he looks like, the deputy chief said.

Lengthy criminal history

Bryant has convictions in five Vermont counties, including an attempted rape in Rutland in 1974 and a sexual assault in Burlington in April 1994.

The more recent incident happened the day Bryant was released from jail on a 1990 conviction for attempted unlawful restraint. Decker and court records say Bryant struck up a conversation with a random woman, went with her to her Intervale Avenue apartment, and then raped her. Police rushed to the scene after a telephone operator heard a woman screaming over the line, according to a sworn statement written by Officer Roxanne Mesick of the Burlington police.

Bryant pleaded guilty to sexual assault and had been jailed since, according to court records.

Bryant was charged with an earlier sexual assault in Burlington, in March 1983. According to an affidavit, Bryant raped a woman in an alley outside the Cozy Nook Lounge on North Street. Two people who responded to the woman's screams pulled Bryant off her, according to the affidavit.

"Rape, huh, I must have been pretty drunk," Bryant told police at the scene, according to the affidavit.

The charge eventually was amended to simple assault, and Bryant received a sentence of 10 to 12 months, according to Burlington police records.

In December 1983, after being released, Bryant was convicted in Burlington of one charge of kidnapping, for pulling a knife on a woman outside a Burlington bar and demanding she drive him to Winooski. The woman leapt from the car near the Winooski police station and ran inside for help, according to an affidavit about that incident.

Bryant received a sentence of eight to 10 years, according to police records.

He was free by 1990, when, in November, he grabbed a woman as she walked on Grant Street in Burlington. The woman screamed, and Bryant let go, telling the woman, "I just wanted to be your friend," according to an affidavit. He pleaded guilty to attempted unlawful restraint and was sentenced to three to five years, according to court records.

Bryant's other convictions include simple assault, retail theft and probation violations.

"He is a very, very nasty, violent person," Decker said.

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After 30 years, Johnnie Turner has stopped smoking.

The 45-year-old extruder operator with Belden Wire and Cable in Essex kicked his habit with the help of his employer. Turner, who has been nicotine-free for more than a month, took part in a series of smoking cessation workshops at his worksite.

"I've tried to quit several times, but cigarettes are a drug and an addiction," he said.

The workshops are part of the Worksite Cessation Program begun last year by the Vermont Department of Health. The program places Workplace Smoking Cessation Kits in participating businesses.

The kits come in bright yellow plastic cases that resemble tool boxes and contain brochures on smoking-related topics, stress-reduction aids, stress-education audio tapes and other aids to stop smoking.

Last March the kits were distributed to Vermont's 14 hospital tobacco cessation coordinators, said Karen Garbarino, the tobacco control chief at the Health Department. The coordinators, in turn, distributed the kits to employers in their communities. More than 50 businesses in Chittenden County have participated in the program.
Workplace focus




In 2002, the Health Department spent about $600,000 on promoting cessation, which included television, radio and print advertising, and other events and venues to promote the quit-smoking message and availability of resources to help, Garbarino said. "The worksite cessation initiative represents a very small fraction of that cost," she said.

The department decided on the workplace approach because people spend a lot of time at work, Garbarino said.

"It's a good place for messages and people need support when they try to stop smoking, and during work is a good time," she said. "It's hard to go to a smoking cessation class after work with all we have to do and the extra cost of finding child care."

Health Department statistics show 22 percent of Vermont's adult population, about 96,000 people, smoke.

"There is an immediate cost-saving to a company through a cessation program," said Evelyn Sikorski, the tobacco specialist cessation coordinator at Fletcher Allen Health Care. "The costs incurred directly related to illnesses such as cancer, heart attack, and respiratory problems result in absenteeism and long-term disabilities."

Stopping smoking is difficult, said Sikorski, who conducts cessation classes at the workplace.

"Many people are apprehensive to think they can quit smoking after many years," she said. "Our message is that support is important when you quit."

Because more and more companies are instituting tobacco-free policies in the workplace, smokers will be affected, she said. The workplace kits and the cessation classes can help.

"Most businesses are taking a responsible approach to helping people stop smoking," Sikorski said. "It's the No. 1 thing you can do to improve your health status."
At Belden



Belden, a manufacturer of communication cable with 160 employees, joined the program after employees expressed interest in quitting smoking, said Luke Dowley in the human resources department.

Belden held a wellness event last fall and the Health Department brought smoking cessation information to the event.

Belden eventually held two smoking cessation classes with three participants each. Three employees have quit smoking as a result. While employees received no compensation to attend, Dowley said the company paid the $10 class fee and all out-of-pocket costs for the three people who completed the program and stopped smoking. This amounted to more than $300 per person.

It's money well-spent, Dowley said. "The company helped people quit. Our employees feel better and they are happier. That is the bottom line. You want your employees to feel good about where they work."
Only if asked




Gardener's Supply in Burlington has also used the smoking cessation kit, said Kit Howe in the human resources department. The garden supply company already maintains a smoke-free building.

"Non-smoking is not part of our policy and we don't target smokers in our wellness programs," she said. "We coach or counsel if they ask for help."

Howe said she keeps the kit in her office and uses it only when employees express interest in its contents.

"We have found that smokers quit when something in their lives tells them it's time to quit," she said. "I've handed out stress balls, chewing gum and Lifesavers, which are supplied in the kit."

Green Mountain Power Corp. in Colchester is gearing up to start a smoking cessation program that will use the kit in April. GMP, the state's second largest power company, has 200 employees statewide.

"We are working to be smoke-free in 2004," said Deidre Johnson, the human resources manager. "The bottom line is it's bad for them."

The company allows employees to smoke outside its buildings.

"Rather than telling them they can't smoke, this year we are doing everything we can to help them stop," she said. "We realize everyone is different. Some need counselors, some classes on site. We need to offer as broad a choice as we can for people to stop."

Johnson said she found out about the smoking cessation workshops and the kit from a news release and then contacted Sikorski at Fletcher Allen in February.

Johnson, like Dowley at Belden, is not concerned with the cost of the program or with the low percentage of employees who actually quit smoking.

"Anything we spend will more than pay for itself in savings on health-care costs down the road," she said.

GMP will reimburse its employees for whatever costs they incur for cessation-related medicines as long as they stay smoke-free for six months. The company will also pay a bonus of $150.

"If we have one person stop it will be a successful program," Johnson said. "We will have helped a person have better health. To me it's money well-spent."
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MONTPELIER -- The state saved $2.3 million in six months by switching many Vermonters from expensive, stomach-acid-reducing medications frequently advertised on television to cheaper alternatives.

The state began this initiative to move Medicaid clients to less expensive medications last March by providing doctors across the state with lists of preferred acid-reduction drugs, pain killers and anti-inflammatory medications. The goal is to rein in the skyrocketing expense of providing prescription drugs to the 130,000 Vermonters who rely on the state to help them pay for their medical needs. Drug costs grew by $40 million between 1999 and 2002.

State officials are banking on saving about $10 million a year with the preferred-drug-list program. Such savings could lessen the need to cut deeply into health care benefits during the current economic downturn.

No one expects any other class of drugs to provide the same big savings as the acid reducers, but Paul Wallace-Brodeur, director of the Office of Health Access, said, "We could be surprised."

The state has phased in the use of preferred drug lists for 32 classes of medications, which physicians are expected to consider first when they write prescriptions for Medicaid patients. For example, physicians are expected to prescribe an acid reducer such as Protonix at a cost of $89 for a one-month supply rather than Prisolec at $175.

The program allows physicians to select more expensive medications if those work better for particular patients.

"The major point of all this is prescriber education," explained Rep. Thomas Koch, R-Barre, who helped write the legislation that set in motion the new preferred-drug-list program. "It forces the prescriber to consider whether there are alternatives rather than prescribing based on the last free sample delivered to the office."

"I don't think we've been asked to prescribe anything inferior," said Dr. John Matthew, one of four physicians at The Health Center, a regional medical facility in Plainfield that serves about 6,300 patients. "I think that these lessons in economics are things that patients and doctors all need to take to heart."

Curbing drug costs


Vermont is one of 14 states implementing preferred drug programs to curb expenditures on drugs. This trend prompted the pharmaceutical manufacturer's trade association -- PhRMA -- to file a lawsuit in July to try to stop the federal government for approving these programs. PhRMA argued that preferred drug programs deny Medicaid patients the newest and most effective medicines.

Koch argues that in Vermont, at least, patients are assured the appropriate medication -- even if it isn't on the preferred list -- because physicians have the final say.

The safety feature works like this. If doctors choose to prescribe drugs that aren't on the state's preferred lists, they must request "prior authorization" for the more expensive drugs from the state's "benefit manager," a contractor called First Health Services Corp.

Prior authorization means that physicians must justify their choice in consultations with the benefit manager that take place by telephone or fax before they send patients out the door with prescriptions. The Legislature put into law that a doctor's choice of medication couldn't be overruled by the benefit manager.

Vermont advocates for the poor, disabled and elderly, the folks affected by the preferred drug lists, have supported the program from its inception because of this guarantee. "People who need exceptions can get them," said Michael Sirotkin, lobbyist for the Community of Vermont Elders.

Advocates for Medicaid recipients say the new preferred drug program is a tool to stave off cuts in health benefits. "It is in our best interest to control these costs," said Peter Youngbaer, executive director of the Vermont Coalition for Disability Rights. "If we can save a million here, there might not be cuts elsewhere."

The six-month savings generated by new prescribing patterns for just three classes of drugs totaled $2.8 million. In addition to the $2.3 million saved on acid reducers, the state saved $441,000 from switches in anti-inflammatory medications and $92,000 from the use of different pain killers.

Data on savings from other classes of drugs have yet to be collected as most of the drug lists went out this fall, with the last one taking effect this week.




Challenging change


State officials recognized that the transition to this new prescribing system would place enormous administrative burdens on physicians. Doctors have had to re-examine the charts for nearly every Vermonter whose care is covered by state programs and schedule visits with many patients to adjust medications. The state provided briefings, mailings and staff to assist doctors with the challenging changeover.

"We certainly have appreciated the effort that the physicians have made to respond to this," said Wallace-Brodeur. He expects the burden to diminish after the process becomes standard office procedure.

"It certainly has made more work for physicians," confirmed Paul Harrington, executive vice president of the Vermont Medical Society. "But I think physicians understand the need to control drug costs."

"Given the complexity of the whole thing, it certainly could have gone a lot worse," agreed Matthew at the health center in Plainfield. He also reported that his patients understood the need to look at less expensive medicines.

Donna Sutton Fay, state health care ombudsman, said her office received many worried calls when patients first received notices about the changes. "All the calls were really can you explain this notice to me."

"I don't have ongoing, serious concerns," Fay said. "I think it is working fairly well."


Contact Nancy Remsen at 229-9141 or nremsen@bfp.burlingtonfreepress.com

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- By Emily Stone --- Free Press Staff Writer

Anne Schmitt-Johnson was driving in Burlington with her two young daughters in the back seat Sunday afternoon when a chunk of ice flew off the roof of the car ahead of her.

The foot-long chunk hit the hood of her Honda Civic, then bounced onto the windshield. The glass shattered and fell into the car. Her daughters started screaming.

The other driver, who presumably had no idea what had happened, kept going along Vermont 127, Schmitt-Johnson said.

"It could have been much worse," she said.

The weekend storm brought some 17 inches of snow and a recurring wintertime problem -- drivers are at the mercy of how well their fellow motorists clear their cars of snow. At best, it can be annoying if it creates a small snowstorm in the car's wake. As was the case with Schmitt-Johnson, it can be dangerous.

"If you're going to be out driving, take the extra five, 10, 15 minutes necessary and clean off all the snow," said Lt. Jake Elovirta, chief of safety at the Department of Motor Vehicles.

This means cleaning snow off all the windows, mirrors and the roof of the car, as well as wiping off the lights and license plates.

There is no Vermont law that specifically deals with cleaning snow off a car, Elovirta said, but drivers can be ticketed under a couple ofbroader laws. Drivers who are dumping snow in the road as they go could be cited for violating the law that requires drivers to secure their loads.

Or, if the car is so snowy that the driver can't safely maneuver, he or she could be cited with careless and negligent driving.

Elovirta said he hears about one or two drivers a year who are pulled over for having too much snow on their vehicle. He stopped a truck driver last month because he was creating a "white-out" behind him.

Elovirta gave him and his company a warning, he said.

"He probably had a good 75 to hundred pounds of packed, wet snow up there," he said.

Flying snow and ice can also be costly.

The New England claims office for State Farm Insurance said that after snowstorms it can receive a few calls a week about vehicles damaged in such scenarios, company spokesman Doug Nadeau said. Those damages could be avoided if people spent a little extra time clearing off the snow.

"It's just common courtesy to clean your vehicle off," he said.
Contact Emily Stone at 660-1898 or estone@bfp.burlingtonfreepress.com
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