The Merit Shop Spokesman - ABC Keystone - July 2023

ABC Keystone Leadership

2023 Executive Committee:

CHAIR of the BOARD

Steve Conway

Pyramid Construction Services, Inc. A Quandel Company

CHAIR-ELECT

John Lehmann

Poole Anderson Construction, LLC

1st VICE CHAIR Guy Kingree, IMC Construction

2nd VICE CHAIR

Steven Kearns, James Craft & Son, Inc.

SECRETARY Ed Engle, Smucker Company

TREASURER

Timothy A. Kershner, CPA, Walz Group

2022 CHAIR Keith Eldredge, CPA, RKL

2023 Board of Directors:

Eli Ace, Nexen Construction, LLC

Robb Beiler, Quality Buildings, LLC

Jeff Bright, Saxton & Stump Lawyers and Consultants

Roger S. Brubaker, MVE Group

Scott Duke, The Witmer Group

Joe Finkey, Martin’s Flooring

Michael L. Fiore, Leonard S. Fiore, Inc.

Brian Floyd, EPIC Insurance Brokers & Consultants

Ken Funk, Arthur Funk & Sons, Inc.

John H. Hykes II, B&B Integrations

Anthony Leer, Leer Electric, Inc.

David H. Oblender, EHD

Matt Shehan, Benchmark Construction Company, Inc.

Jan L. Wagner, Wagman Construction, Inc.

Scott Wengrenovich, Murray

Jeff Witmer, Pathway Business Advisors

RCOS 2.0

Back in February, I wrote about the growing trend for RCOs (Responsible Contractor Ordinances) that are popping up in municipalities throughout the Central PA region. Though potentially damaging to those municipalities, they have been isolated to date. ABC Keystone continues to track these isolated incidents and respond accordingly by attending public meetings and providing suggested modifications to the RCOs to make it fair for local trades to compete on public works projects in their communities. Our voices are being heard and we will continue to push back against the unfair and unjustifiable requirements.

Just when we thought this was going to be unique to small pockets of the state, a new House bill, HB 1449, has been introduced that would place a statewide RCO on all “Public Works Projects”. A “Public Works Project” is defined as any aspect of construction, reconstruction, demolition, alteration, repair, or maintenance work completed under and contract or cooperative purchase agreement by a Commonwealth agency which costs at least $300,000. This legislation has a number of requirements, and while less restrictive than some of the recent RCOs, this RCO still requires all trades to have someone enrolled in a registered apprenticeship program. Unfortunately, a number of trades either don’t have a registered program available or if there is one it is hours away.

As non-joint (merit shop) contractors, we are all required to abide by the apprenticeship ratios approved by the Pennsylvania Apprenticeship and Training Council. The standard for most non-joint trades is a 4-to-1 ratio, meaning you can only have 1 apprentice for every 4 journeypersons. Otherwise stated, your number of apprentices cannot exceed 20% of your skilled workforce, while most joint trades are allowed a 1-to-1 ratio. On the one hand these RCOs look to force registered apprenticeship as the way to train our workforce. Conversely, the commonwealth hampers our members’ ability to add more registered apprentices and the contractors in rural areas of the state with limited access to apprenticeship programs will not be

allowed to participate in these opportunities in their backyards.

ABC Keystone is a proponent of the idea of an RCO. The idea of having a skilled and trained workforce with a strong understanding of their respective trade combined with knowledge of the safety practices set forth by OSHA is a good thing. As with any industry, we have unskilled and unsafe peers in our industry who should be forced to comply or not be allowed to participate. But the bill as written discriminates against a number of skilled workers that have gained their knowledge of the trades through avenues other than an apprenticeship program recognized by the Commonwealth. Consider the 30-year veteran mechanic that has honed his/her trade through years of hands-on experience working with other masters of the trade, or the individual who went through training at a post-secondary school (e.g., Thaddeus Stevens and Penn College of Technology). What about the small, disadvantaged business owners that will not be allowed to bid work in their communities?

ABC Keystone is currently finalizing a bill with the cooperation of our friends at the Capitol that would introduce a similar bill, but one that doesn’t discriminate against capable and qualified contractors that rely on this type of work as part of their business plan.

I encourage you to reach out to your local Senate and House representatives and encourage them to oppose this bill as it is currently written. This will forever change the landscape of how work is acquired and executed for the Commonwealth.

Steve Conway Pyramid Construction Services, LLC A Quandel Company

CELEBRATE FREEDOM!

This month we celebrate the July 4th holiday, or as the older generation knows it, "Independence Day." For some, this is just another day off from work. But to many, it truly celebrates our freedom, freedom from oppression and tyranny to create a more perfect government. This day is recognized yearly in honor of the formal adoption of the Declaration of Independence. Four months following that, our Constitution was produced. Both documents set us on a path to becoming the greatest country on earth.

A little over one month ago, we observed another momentous holiday, Memorial Day. Again, this is more than just another day off from work. Memorial Day is not a day of celebration but a day of remembrance. Memorial Day is when we remember all the men and women who have fought and given their lives to preserve the freedom we enjoy.

My daughter came home to visit for Memorial Day weekend. She has an affinity for the Naval Academy in Annapolis, so she asked if we could travel there on Memorial Day. As she wandered around the grounds taking pictures, I sat on a park bench under a big old tree watching the visitors pass by. The number of people struck me—both young and old—and the number of veterans spending their holiday at this historic, quiet place.

As with any trip to the Academy, we always end at the information center/gift shop. Not liking to shop, I parked on a padded bench in the information area. I watched an older gentleman using a cane for assistance stand and speak with the information host. You could tell by the hat he wore he was a veteran that had served on the USS Woodrow Wilson. He said with pride about his time in the Navy, the friendships he had formed, and the brethren he had lost.

A short time into his storytelling, a younger fellow walked up and listened intently. After a time, he interrupted and told the older gentleman, "Thank you for your service, and yes, I too have served in the Navy, having just recently completed my service." They were representatives of two different generations,

but both were proud to have served for the freedom of this great country. As I sat and listened, it became clear we have lost the fundamental reason we exist as a country. Every legislator and politician should have to visit one of our service academies and learn about our true roots. We are at a time where we need to return to teaching the history of this country, the good, the bad, and the ugly. I often say, "We cannot live in the past, but we must celebrate and learn from it."

As you celebrate this "Independence Day," remember the true meaning, the celebration of freedom. Let us continue to fight to ensure that our politicians and other radical groups do not destroy what this country was formed to do, providing a perfect union and freedom for all.

It’s Not Just for Boys!

All 'bout Construction Girls Camp educates and engages young girls so they can explore the industry through hands-on activities and learn from women in the industry. Nineteen local girls gathered at the Chapter facility June 19-22 for an opportunity to explore careers in construction through inspiration and mentoring from industry professionals.

As well as learning more about the trades, the girls visited local job sites hosted by Benchmark Construction Co., Inc., Flyway Excavating, Inc., and Warfel Construction Company.

In addition to building take-home projects, the girls participated in two-panel discussions featuring six women who shared how, and why they got into construction and why they love the industry.

Our mission is to educate, strengthen, and amplify the success of women in the construction industry. This event is made possible through funding from the Trimmer Construction Education Fund and The Lancaster County Workforce Development Board.

"Great opportunity to interact with and teach young women that have interest in the construction. The future generation of women in construction is so promising!"

Gina Bonafede Director of Marketing Warfel Construction Company

"The campers showed a real interest in the trades. With this being our third year of girl’s camp, I’m always amazed at how creative the girls are with their projects and how hard they work to put them together."

Randy Doxzon, Jr. Director of Plumbing & Pipefitting & Apprenticeship Resource Development, ABC Keystone

"Girl’s camp is a great way to show off our industry to the next generation. That there are other alternatives for them to explore, whether it’s carpentry, plumbing, construction management or even accounting."

Bill Lastinger

General Superintendent, Benchmark Construction, Inc.

2023 SAFETY RECOGNITION BREAKFAST August 15, 2023

7:30 am Breakfast

8:00 am Program Begins 9:30 am End of Program Presented by:

Celebrate ABC Keystone Members' Commitment to Safety!

Join us on Tuesday, August 15 as we celebrate the 2023 STEP award recipients and top safety cultures, presented by Cohen Seglias Pallas Greenhall & Furman PC.

• Congratulate the 2023 STEP Program Members

• Promote safety as your top priority!

• Network with ABC Safety Leaders

JIM WILLSHIER ABC KEYSTONE, DIRECTOR OF GOVERNMENT AFFAIRS

Being Responsible for Countering RCOs

Unfortunately, at the time of publication, there is the perfect storm of increased discussion for Responsible Contractor Ordinances (RCOs), little engagement with the construction community, and a rush to adopt them. While this has been happening in all aspects of local government, it is now happening at the state level with House Bill 1449 seeking to apply a less restrictive RCO on state-level projects, coincidentally sponsored by Representative Josh Siegel (D-Lehigh), who most recently was an Allentown City Council member and saw firsthand the problematic nature of RCOs through Allentown’s turbulent ordinance.

Quickly for anyone unfamiliar with RCOs, they are ordinances adopted by any government entity to restructure how public works projects will be bid moving forward – currently, this includes requirements for a percentage of registered apprentices and, more commonly, creating a new requirement for having prevailing wage apply to prefabricated materials. Proponents advocate this to increase safety and somehow impose accountability on contractors. As many ABC members would suspect, the outcome more often results in a few over-budget bids. This forces a decision to either bite the bullet for that higher cost, embrace the ineffective system, rebid the project outside the RCO, or repeal the ordinance entirely as a failed experiment. This is such a discriminatory and discouraging project for contractors and subcontractors that few bids are entertained.

In 2023, as the ink dried on the ordinance, the City of Reading had to skirt around its RCO due to few bids. This came after little public discussion in 2 weeks during the December holidays and no answers to public questions. In fact, Right To Know requests still need to be vetted to fully understand the decision process to circumvent the RCO and the bidder selection.

Centre County adopted its county-level RCO at the end of June. While they held three public meetings

over three months, they still refused to answer any questions in public meetings or respond to written requests for clarification to help understand how any interested bidder could comply if awarded a contract. There are two large projects on the horizon that we will be monitoring to see how they harm contractors and subcontractors that would have otherwise been able to bid on the project.

Rep. Siegel’s bill has followed a similar path so far: HB 1449 was made public on June 20, was not sunshined for a public meeting on June 21, yet democratic committee staff indicated the intent to meet on June 22 to vote the bill out of committee. They then, in fact did vote along party lines. This left little time for anyone inside the capitol or outside (including relevant state agencies) to understand the bill's impact.

There needs to be public engagement and a voice for the very contractors acting responsibly and wanting to comply with public projects. One key takeaway for these issues is ensuring you, the member are engaged with local, state, and federal lawmakers. Make sure they know about the successful projects you are doing at home, how many skilled professionals can support families through their job, that you are building safely and responsibly, and the already complicated system you are navigating daily. ABC will keep making statistical and legal arguments for how harmful RCOs are to the community. Please keep making sure public officials hear the moral argument for how you are already responsible and safe.

JAYNE KATHERMAN

ASSOCIATE ATTORNEY, BARLEY SNYDER

jkatherman@barley.com www.barley.com

Q:

What role do you play in your organization?

I am an attorney serving York and Lancaster counties in real estate, municipal, construction, and business law industries. I have experience working with landowners and developers in various real estate acquisition, operations, and land development stages. I also have a unique perspective as I have sat on the other side of the table, acting as Solicitor to several municipal authorities.

Q:

How has your involvement in ABC Keystone provided you value in your professional life?

My involvement with ABC Keystone has provided ample opportunities to expand my professional network. More specifically, my involvement with the Young Professionals committee has allowed me to connect with other similarly situated young professionals in the real estate and construction industries. The chance to communicate and work with like-minded peers will enable me to grow and further educate myself in these industries.

Q:

What are your hobbies?

My favorite roll in life is playing “Auntie Jay” to my five nieces and nephews. When I’m not goofing around with them, you can find me taking a nap (I’m a highly skilled power napper), cooking, taste-testing a new wine, taking HIIT classes, traveling, or listening to my mom’s old records.

Q:

Favorite or inspirational quote?

Not necessarily a quote, but I recently heard a story about a dying woman getting her affairs in order. One of her final wishes was for the pastor to put a fork in her casket with her. When he puzzlingly asked why, she responded, “Any time main dishes are cleared after a meal, and you hear someone say ‘Keep your fork,’ you know the best is yet to come [dessert].” I strive to live my life this way, fork in hand, knowing the best is always yet to come.

Jayne Katherman Associate Attorney

Would you like to be featured in the next Young Professional Spotlight?

Contact: Emily Winslow emily@abckeystone.org

GREG GOYDEN PROJECT MANAGER

ggoyden@carrollwater.com

443-536-6172

www.carrollwater.com

Tell us about your company?

Ron Smith founded Carroll Water in 1983 with the simple goal of making sure that people in Carroll County, Maryland had a reliable resource for clean drinking water in their homes.

Our number one priority is delivering safe water that meets or surpasses all local water regulations. Whether your home or business suffers from poor water quality, taste, or overall water pressure, our team of water professionals will correctly diagnose your water issues and install the correct system to ensure you always have access to consistent, quality water.

We are the area’s only authorized local distributor of EcoWater products, the industry leader in innovative, state-of-the-art water treatment systems for homes and businesses.

Because EcoWater products are highly efficient, they’re not only good for your home or business, they’re great for the environment. They reduce the amount of salt, energy and water consumed, lower greenhouse gas emissions and are carbon neutral.

We can also service all major brands of water softeners and conditioners.

Since day one, our founder, Ron Smith, created an atmosphere that values service and respect. He treated every customer and employee the way he wanted to be treated. That motivating force remains with all of us at Carroll Water to this day!

How long have you worked for Carroll Water?

I've been Carroll Water for over seven years. I started at the bottom as a water technician with Carroll Water. Then, I became a pump installer and worked to become Carroll Water's Project Manager.

Did you know?

We are the #1 Eco Water Dealership on the East Coast for Commercial and Residential Water Treatment. We provide Commercial and Residential Well Drilling and Geo-Thermal well wells, From Air Rotary Drilling to Mud Rotary Drilling. Carroll Water is the Largest Water Treatment, Pump Installation, and Well Drilling Company in the DMV.

For inclusion in future issues of the Merit Shop Spokesman, please send your Membership Spotlight to emily@abckeystone.org

DIAMOND SPONSOR SAPPHIRE SPONSOR

PREMIER SPONSORS

PLATINUM SPONSORS

GOLD SPONSORS

Acuity Advisors and CPAs, LLP

Barley Snyder

CB Construction Services, Inc.

CV Services, Inc.

EHD

Garrety Glass, Inc.

D.E. Gemmill, Inc.

Grudi Associates

Hess Auctioneers, LLC

High Construction Company

Horst Construction Co.

MVE Group

Martin's Flooring

M. Potteiger, Inc.

Providence Engineering

RKL

RSR Electrical LLC

Saul Ewing LLP

Smucker Company

Trout CPA

Wickersham Construction & Engineering, Inc.

SILVER SPONSORS

Associated Products Services, Inc.

Bertz, Hess & Co.

Broderick's Landscape Contracting, LLC

Brown Schultz Sheridan & Fritz

C Mechanical Services

C. S. Davidson, Inc.

ECS Mid-Atlantic, LLC

Harmon & Davies, P.C.

Hursh Painting Co., Inc.

Leer Electric, Inc.

GR Mitchell, Inc.

Paramount Contracting, Inc.

Remco Inc.

Silvertip, Inc.

Team Lewis Landscaping

R.A. Walton & Company, Inc.

Weaver Superior Walls

The Witmer Group

BRONZE SPONSORS

Commonwealth Fire Protection Co.

Fulton Bank

Haller Enterprises

ONYX Design and Consulting, LLC

Stonebridge Financial Group

ASK AN ACCOUNTANT

By: Daniel T. Massy, CPA

The Importance of Monitoring Overhead Rates During Inflation

Over the last couple of years, businesses across all industries - especially contractors - have dealt with rising employee and human capital costs and rapidly increasing input costs. Although inflation data is now below 5% for April 2023 and projected to decrease slightly in May 2023, those figures are still above the norms of the previous two or three decades.

For the most part, contractors have done a good job of passing along the increase in direct costs to their customers. However, ensuring that overhead is allocated appropriately during significant price changes is also a key factor in determining both the success of projects and the appropriate fees to charge to customers.

Allocating overhead to jobs requires determining the indirect job costs (such as payroll taxes), insurance, utilities, depreciation, some wages, and other costs that flow into a job secondarily from field labor, subcontractors, equipment, and materials. Most companies will use a standard overhead allocation rate throughout the year and true it up occasionally. But, with the atmosphere of price changes, it is vital to check overhead allocation more frequently than that.

Contractors may choose multiple ways to allocate overhead. They can divide the pool of indirect costs by direct labor to get an overhead rate to add to direct labor. Other companies may divide indirect costs by total direct costs to obtain an overhead rate that is tacked onto all direct job costs. Regardless of the methodology, it is likely that the indirect costs have not increased as drastically as the direct costs, which makes the numerator in our equation lower in comparison to the rapidly increasing denominator. Consequently, this may cause overhead to decrease as a percentage of direct costs.

The way to determine if indirect costs are accurately allocated to each job is to schedule all jobs performed during a period and add up all their direct costs, as well as the standard indirect costs allocated based on the percentage calculated. If at the end of this process - when all jobs for the period are added up - the gross profit is less than the gross profit on the income statement, then overhead has been overapplied on a job-by-job basis. If the gross profit on the job schedule is higher than on the income statement, then overhead has been under applied.

It is imperative to recognize if overhead is overapplied or under applied because an under application makes jobs look better than they were. Over application of overhead indicates that jobs are performing better than they appear.

Both under applied and overapplied overhead are also key indicators in bidding processes. Suppose the application of indirect costs is not appropriate. In that case, contractors may be bidding too high or too low on projects and either lose out on opportunities because bids are too high or lose out on profitability because bids are too low.

The more frequently overhead costs and indirect cost applications are reviewed internally, the better a contractor will stay competitive and profitable.

Dan Massey is Principal in Charge of Walz Group CPA’s Assurance Division. He performs audit services for clients in many industries, focusing on construction, entertainment production, and not-for-profit entities. Dan is a member of the American Institute of Certified Public Accountants (AICPA) and the Pennsylvania Institute of Certified Public Accountants (PICPA). He is also chairman of the C.O.R.E. Task Force for the Keystone Chapter of Associated Builders and Contractors. Connect with Dan on LinkedIn or contact our office to get in touch.

Career Development Education, Safety Training & Networking

WELCOME NEW MEMBERS!

Thank You for Your Support of the Merit Shop Mission!

Sherwin-Williams Co.

Eddie Garcia

District Manager

3540 North Progress Avenue Harrisburg, PA 17110

www.sherwin-williams.com

(717) 657-2584

Eduardo.Garcia@sherwin.com

Temporary Wall Systems Allentown-Lancaster

Randall M. Smith Owner

42 Diane Drive Honeybrook, PA 19344

www.tempwallsystems.com/ locations/allentown-lancaster/ (610) 562-0635

randall.smith@tempwallsystems.com

Mid-Atlantic Precast

Josh Temple Sales Representative

240 Arch Street York, PA 17403

www.maprecast.com

(717) 522-6009

josh@maprecast.com

Sponsored by:

Tom Roddy, Yoe Construction, Inc.

Kevin Eshleman, SLC Excavating

Bevanda

Jonathan Fisher CEO

48 Queen Road, Suite 2 Gordonville, PA 17529

www.bevandaproducts.com

(717) 687-7436

jonathan@bevandaproducts.com

Sponsored by:

Gary Nolt, Cassel

Reflections Window Washing, LLC

Christopher Carr Owner

827 Mount Vernon Avenue Huntingdon, PA 16652

www.reflectionsww.com

(814) 806-8020

reflectionww@gmail.com

Sponsored by:

Eli Ace, Nexen Construction, LLC

William S. Malany & Sons, Inc.

Chad Lease Vice President

24 Hagerty Boulevard, Suite 5 West Chester, PA 19382

www.malanyelectric.com

(610) 436-402

chad@malanyelectric.com

Sponsored by:

Greg Vietri, Greg A. Vietri, Inc.

#ABCMeritShopProud

Barley Snyder - Recognition

Fourteen Barley Snyder attorneys have been recognized by Super Lawyers as Pennsylvania Super Lawyers and Pennsylvania Rising Stars for 2023.

Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas. The prestigious, annual list highlights attorneys who have distinguished themselves in their legal practices. Attorneys are selected based on a high degree of peer recognition and professional achievement for their designations. A research committee makes the final determination through a rigorous process that includes independent research, peer nominations and peer evaluations.

The organization named five Barley Snyder attorneys to its 2023 Pennsylvania Super Lawyers list (their main office location is noted in parentheses):

Lauralee B. Baker (Lancaster)

Jennifer Craighead Carey (Lancaster)

Thomas A. French (Harrisburg)

Latisha Bernard Schuenemann (Wyomissing/Reading)

Jill Sebest Welch (Lancaster)

Super Lawyers named nine attorneys to its Pennsylvania Rising Stars list:

Lauren D. Berkowitz (Lancaster)

Derek P. Dissinger (Lancaster)

Matthew M. Hennesy (Lancaster)

Elizabeth L. Melamed (Lancaster)

Kevin C. Myhre (Malvern)

Reilly S. Noetzel (Lancaster)

Alexander Puskar (Lancaster)

Justin A. Tomevi (York)

Paul F. Troisi (Wyomissing)

Wagman Construction, Inc. - Award Winner

Wagman Heavy Civil, Inc. was recognized as one of America’s outstanding Navy Reserve employers for 2023 during the 2023 Navy Employer Recognition Event (NERE). This year’s event was held on Wednesday, June 7 in San Diego, CA. Greg Andricos, President and COO of Wagman Heavy Civil, Inc., and Jerry Whitlock, Design-Build Manager, Wagman Heavy Civil, Inc. accepted the award on the company’s behalf. Jerry is a Commander in the Reserve Navy Civil Engineer Corp and has served for the past 23 years (four years enlisted in the U.S. Marine Corp; two years enlisted in the U.S. Army; one year commissioned in the U.S. Army; and the remainder commissioned in the U.S. Navy). He deployed twice, for a total of three years.

“Wagman is extremely honored to receive this prestigious award,” comments Greg Andricos. He continues, “The infrastructure we build allows our great Nation to be prosperous in times of peace and strong in times of war. Wagman is proud to employ reservists and veterans in our workforce and leadership of our organization. We are proud of our Citizen Sailors, their critical mission, and understand that our support is vital to these team members, allowing them to thrive in both careers.”

In addition to the company award, Greg, along with Wagman Heavy Civil’s Vice President and General Manager for Virginia Operations, Glen Mays, each received an Employer Support of the Guard and Reserve certificate from the Office of the Secretary of Defense, acknowledging them as patriotic employers, supporting employee participation in America’s National Guard and Military Reserve Forces. Greg, Glen, and Jerry are all alumni of the Virginia Military Institute, whose mission is to produce citizen-soldiers, men and women educated for civilian life and also prepared to serve their country in armed forces.

For inclusion in future issues of the Merit Shop Spokesman, please send your press releases to: rebecca@abckeystone.org