ROBEX Spring 2017

Page 1

BUILDERS EXCHANGE OF ROCHESTER, NEW YORK • SINCE 1888

ROBEX SPRING 2017

Payment Fraud

Three ways to prevent illegal funds transfers

LeChase

Sets the Standard at the

University of Rochester Samson Fuel & Trucking An interview with Traci Adolph, President and CEO

The Power of Numbers Healthcare insurance from the ROBEX agency saves members money www.robex.com

Spring 2017 — ROBEX 1



SPRING 2017 Features

12 The Power of Numbers Healthcare insurance from the ROBEX agency saves members money 22

Managing Cyber Security in 2017

24

Best Practices to Mitigate Payment Fraud

38

Reform Failure

44

Additional Insured Agita

6

A Message from the President

8

A Letter from the Chairman

14

Protect your data by continuously monitoring your network

M&T Bank recommends three ways to prevent illegal funds transfers

New York State Workers’ Compensation system, and new strategies to control claim costs

Suffering from additional insured coverage issues? Take a look at these case studies.

10

Junior Builders Exchange

14

Safety Zone

16

Digital Networking

18

Member Spotlight

30

Government Relations

info@robex.com

OSHA’s new respirable silica rule

18

Have fun marketing your business on social media An interview with Traci Adolph, Samson Fuel & Trucking

Project profiles 26

LeChase Sets the Standard

at the University of Rochester

34

MCC’s New Theater

36

Be the Best Boss

50

Opinion

4

54

Upstate Needs Uber

ROBEX Staff and Board of Directors

26

Index of Advertisers

www.robex.com

Spring 2017 — ROBEX 3


ROBEX

SPRING 2017 Volume 1 No. 1

BX STAFF

BOARD OF DIRECTORS

President Aaron Hilger

Chairman Curtis Peterson Monroe Piping & Sheet Metal

Vice President, Marketing & Operations Kim Stewart-Gaylord Planroom Manager & Membership Director Corrine Taylor Accounting Manager Taryn Deinhart Research & Communication Manager Mariel Fedde Planroom Reporter Nicole Gissendanner Planroom Coordinator Courtney Phelps Administrative Assistant Annette Kelley

Builders Exchange of Rochester 180 Linden Oaks Suite 100 Rochester, NY 14625 P (585) 586-5460 F (585) 586-1580 info@robex.com robex.com

Vice Chairman Kevin Cannan A.A.C. Contracting Secretary Dominic Mancini Postler & Jaeckle Treasurer Victor E. Salerno O’Connell Electric

Mike D’Hont Western New York Floor Co.

Robert Morgan Upstate Roofing & Painting

Kevin Foy M&T Bank

Daniel Mossien Mossien Associate Architects

Melissa Geska U.S. Ceiling Corporation

Brian O’Shell Ajay Glass

Rick Kozyra Ark Glass & Glazing

Walter Parkes O’Connell Electric

Edward Kurowski Jr. The Pike Company

Timothy Pullis Brown & Brown of Rochester

Immediate Past Chair Richard Camping O’Connell Electric

Mike Mallon LeChase Construction Services

Richard Ash C.P. Ward, Inc

Mark Mancuso JBX Chairman Flower City Habitat for Humanity

Dave Cooper Rose & Kiernan

Norbert Rappl Retired

David Mehalick Harris Beach

The Builders Exchange of Rochester was founded in 1888 by visionaries dedicated to Rochester, New York’s commercial development market. Today, the exchange has more than 600 members and affiliates, and serves the commercial, industrial and governmental construction industry in Western and Central New York. ROBEX © 2017 is distributed twice each year to all members on a complimentary basis.

4 ROBEX — Spring 2017

Randy Sickler SWBR Architects Gary Squires Manning, Squires, Henning Co. Inc.

Publisher Fahy-Williams Publishing PO Box 1080, 171 Reed St. Geneva, NY 14456 P (800) 344-0559 F (315) 789-4263 To advertise contact Tim Braden at (800) 344-0559, tbraden@fwpi.com

www.robex.com


Our Rochester Construction Team

Our deeper foundation helps build long-term relationships. At Bonadio, we have been serving construction clients for more than 30 years— with a dedicated team of experts in every phase of your operations. Building financial success requires many of the same elements as building a structure: experience and expertise. The right people. A smart plan. And precise execution. We understand the unique challenges that construction firms face—and know how to turn them into opportunities. We’ve spent more than 30 years working with construction companies of all sizes—clients who stay and grow right along with us. Building value and delivering smart strategies: that’s the Bonadio blueprint for your success. To learn more, visit bonadio.com/construction.

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(585) 381-1000

Spring 2017 — ROBEX 5


A message from the PRESIDENT

F

or about 100 years, Builders Exchange sent out a printed weekly newsletter. Like many other associations, we moved to a digital publication about 10 years ago. Printing and mailing costs, as well as members’ interest in more timely information, made print less desirable. I am pleased that we have decided to return to print. Initially scheduled for publication two to three times per year, having another venue to spread information, highlight members, and dive into construction issues is good for our community. The last few years have been difficult for the construction community in Rochester. Public works funding dropped dramatically in 2013-2015 and recovered only partially in 2016. During 2013-2015, Rochester got about 65 percent of its typical public works allotment – ranging from a low of just over $350 million to a high of about $460 million. Despite some life in the private market, this has made margins tight and our members continue to seek work over a larger geographic area. Along with our supporters in the legislature, Builders Exchange will continue to focus advocacy work on getting projects in our region. We will also support parity in aid for other aspects of our community, especially AIM aid (to the city, and school funding). Our work to date has brought hundreds of millions in funding to Rochester over the last 10 years. In a positive development, we are finally seeing public works bidding activity increase to 2008 levels. During the first two weeks in February, the planroom contained a sustained 340-plus projects. Since 2008, we have rarely surpassed 260 projects. Peak months pre-2008 usually had between 320-350 projects on a weekly basis. This is positive news if the numbers are sustained! I hope that you find this publication full of useful information. We are very proud of some of our programs, including our long-standing partnership with Lovell and our 3-year-old health insurance purchasing group. We have also expanded our training offerings, some of which are included here. If there is a topic that you would like to learn about, a project that you are interested in getting profiled or an idea for a new training program, please do not hesitate to contact us. Thank you for being a member of Builders Exchange. We appreciate your support and hope that our efforts make the industry better.

Aaron Hilger President & CEO

6 ROBEX — Spring 2017

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(585) 924-5200

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Spring 2017 — ROBEX 7


A letter from the CHAIRMAN

A

Personalized quality service that is beyond comparison • Accounting Services • Audits, Reviews and Compilations • Bookkeeping/Write-Up • Cash Flow & Budgeting Analysis • Financial Statements • Forensic Accounting • Business Consulting • Business Entity Selection • Business Succession Planning • Business Valuations • Buying & Selling a Business

• Debt & Financing Services • Fraud Prevention & Detection • Retirement Planning • Asset Protection • Bankruptcies • Expert Witness Services • Litigation Support • Mergers & Acquisitions • Estate & Trust Tax Preparation • IRS Representation • Sales Tax Services

s Chairman of the Builders Exchange of Rochester, I am proud to stand with a long tradition of leaders who have supported, led and informed the industry. The launch of ROBEX magazine, the official publication of our organization, is in keeping with that mission. The Builders Exchange brings our diverse industry together, and has developed a strong reputation of advocating for the betterment of the construction community as a whole. That is the fundamental difference between Builders Exchange and other construction groups who represent only a narrow segment’s interests. As a longtime member of Builders Exchange, my company and I have benefited from the many services it provides. Highlights include the online planroom and advocacy work. In addition, the wide range of training programs, including OSHA, project management, blue print reading, estimating, legal issues and technology are valuable for all companies of all types and sizes. We have also enjoyed the networking events, including happy hours, golf tournaments and dinner functions. I encourage you to take full advantage of our offerings. Check out robex.com for more information, or call 585-586-5460 to speak to any of the Builders Exchange staff members. On behalf of the Board of Directors, I would like to thank you for being a member. The success of our association is due to the amazing support we receive from you.

Curtis Peterson Monroe Piping & Sheet Metal

Errol Jaufmann • Rick Centola Errol@j-ccpa.com • Rick@j-ccpa.com 585-248-3630

8 ROBEX — Spring 2017

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700 hours of training

Meet

David

34 years painting experience – 20 years as commercial painter Graduated from West Irondequoit High School Active cycler and snowboarder Supported hundreds of local construction projects Enjoys spending time at family cottage in Cape Cod Currently working on renovations at Three City Center Contributes a percentage of his wages to United Way and the Point Pleasant Fire Department Has worked at R.W. Dake for 20 Years

David is a proud member of Local 150 and happy to work for a union contractor that is a member of the Construction Industry Association of Rochester. When you hire a union contractor, you’re working with the industry’s most knowledgeable and highly skilled workforce that will deliver the highest level of quality workmanship, while ensuring your project will be completed on time and on budget. It all adds up to a contractor partner that is committed to providing the best return on your project investment. See what hiring a union contractor can do for your next project. Visit ciar.biz.

David Wood, R.W. Dake & Co., Inc. Member Local 150

www.robex.com

Spring 2017 — ROBEX 9


Junior Builders Exchange

BUILDING

Relationships

by Mark Mancuso, President, Junior Builders Exchange

W

hat exactly is the JBX?” Now there’s a question I’ve been asked more than a few times. As many of us already know, the Builders Exchange of Rochester does amazing things for the local construction industry. The more obvious contributions include offering affordable training programs, countless networking and educational opportunities, various member benefits, and of course, the much utilized plan room services. Behind the scenes is where the magic really happens. ROBEX tirelessly works to bring construction dollars to Upstate New York, to fight for Rochester-centric causes, and to keep us connected and informed on legislative advocacy news. “Okay, so that’s what the Builders Exchange does … got it. But what does the Junior Builders Exchange do?” We get involved! As any board member can tell you, the JBX is constantly striving to bring the people of our industry together. We encourage networking, cooperation and foster the kind of environment that those entering our industry WANT to be a part of! The

future of construction in Rochester is dependent on a continual influx of energy and talent, the growth and nurturing of innovative and creative thinking, and the encouragement of collaboration and teamwork. We stand for these principles and hence we extend our collective hand to those entering into and already immersed in the Rochester construction industry. Don’t most great collaborations begin with a handshake? A well-functioning construction industry is created through strong teamwork. Teamwork is more easily achieved where robust relationships exist. Relationships are difficult to forge simply through emotionless emails or faceless telephone communications. How JBX contributes to relationship building is easily summed up in a simple comment that I frequently overhear at JBX events: “It’s great to finally meet you!” Along with making connections and fostering cooperation in the industry, the JBX is also built upon a strong foundation of community involvement. Much of that is done through the dedication of charitable contributions through our various events. We also look to help in other ways. At this very time, the board is planning to cook a dinner at the Ronald McDonald house in the near future – helping the community while strengthening our ties to each other. I am proud to say that 2016 was an exciting and

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energizing year for the Junior Builders Exchange of Rochester. Attendance has been up and spirits have been high. We’ve welcomed a lot of new faces to our board and through their collective creative energy we continue to roll out events on a monthly basis. Here are some highlights of the year. • Our annual Volleyball and Bowling tournaments, held in February and April respectively, each saw tremendous turnout. • September saw the JBX Golf Tournament hit new heights of fundraising for the Mary Parkes Asthma Center, breaking the $200,000 mark! • Following yet another successful outing at the JBX Charity Kickball Tournament, the Bonadio Group won the honor of choosing the recipient of the proceeds, and chose to split the $3,500 donation between Flower City Habitat for Humanity and the ACE Mentorship Program. Other events included a tour of the MCC Downtown project, beer sampling at the brand new Three Heads Brewery, and our always popular Pig Roast. We hope that you will encourage your up-andcoming business leaders to get involved with the Junior Builders Exchange and start making connections! Please invite anyone who would like to receive monthly updates directly from the JBX to send an email to JBX@ robex.com. Still not sure what the JBX is? Why not whip together a team for one of our annual tournaments and find out! Or come have a drink with us at a happy hour! We’d love to shake your hand.

JBX Schedule 2017 February

Saturday, February 25th Volleyball Tournament at Hotshots, University Avenue

March

Happy Hour with ROBEX

April

Wednesday, April 26th – JBX Bowling Event at Bowl-a-Roll, Jefferson Road

May

Project Completion & Happy Hour TBD

www.robex.com/jbx

With a vested interest in your success, trust us to give you the best service possible! Tax Preparation • Full Service Accounting • Bookkeeping CFO/Controller Services • Business Valuations ROBEX members receive a complimentary, one-hour consultation.

June

Project Completion & Happy Hour Tour

August

Annual JBX Pig Roast

September JBX Golf Tournament

www.robex.com

Preparing the next generation of construction leaders!

Call (585)292-1041 to get started. 1200 Jefferson Road, Suite 300, Rochester, NY 14623 Spring 2017 — ROBEX 11


Healthcare

The Power of

Numbers by Aaron Hilger

A

side from the frustration over labor law and general liability insurance costs, healthcare costs are one of the single biggest problems that our members face. The cost of healthcare goes up every year, and it often seems the quality of coverage declines! The Affordable Care Act’s (ACA) taxes and mandates have driven costs over 20 percent higher than what medical and pharmacy trend reports would dictate in New York. Regulatory changes have also squeezed businesses and

have forced more to be in the “block rates” even though their covered populations are well below traditional thresholds. In order to combat the continued increases, Builders Exchange, with our partner Brown & Brown Insurance, built a health purchasing group (The ROBEX Agency) in 2013. The simple premise is that by banding together to Annual Renewal Comparison

20.0%

Annual Renewal Comparison

20.0% 15.1%

15.0%

13%

12.5%

15.1%

15.0% 10.0%

12.5%

13% 10.7%

10.0% 5.0%

7.8% 2%

5.0% 0.0% 0.0% -5.0%

2015 2%

2014 2014

2015

2016

2016

2017

-7.6%

-5.0% -10.0%

-7.6%

Community Increase

-10.0% Community Increase

12 ROBEX — Spring 2017

ROBEX Actual Renewal

ROBEX Actual Renewal

www.robex.com


Joining the Builders Exchange Consortium saved us almost $300,000 in the first year alone. We also improved and broadened our plan offerings. I encourage you to check it out.” Vic Salerno, CEO, O’Connell Electric

Eligibility Requirements

• Must be a member of the Builders Exchange of Rochester. • Have more than 50 employees. • Sign a Broker Letter with Brown & Brown. • Meet underwriting requirements and be approved by the insurer. purchase insurance, our members can secure more favorable rates over the long term than any one company individually. Starting with 13 firms and just under 1,900 covered lives, the group now has 24 firms and over 3,200 covered lives. Compared to the block rated increases, the purchasing group saved its members 36 percent between 2013 and 2016! We were also able to diversify plan offerings, and most participating firms now www.robex.com

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offer five plans to their employees. The plans range from rich co-pay plans to high deductible options, giving employees the ability to select the plan that best suits their needs. Prior to joining, participating firms offered one or two plans.

The success of our healthcare purchasing group shows the strength that our members possess when they choose to work together to create change. If you are interested in learning more, please contact any Builders Exchange staff member. Spring 2017 — ROBEX 13


SAFETY Zone

Need toKnow What You

OSHA’s New Respirable Crystalline Silica Rule

by Gordon J. DeLeys, U.S. Department of Labor, Buffalo Office

T

he Occupational Safety and Health Administration recently announced a new rule that will better protect workers from the harmful effects of breathing respirable crystalline silica dust. The new provisions begin to take effect in June 2017 for the construction industry and June 2018 for general industry and maritime. Approximately 2.3 million people in the U.S. are exposed to silica dust at work, including 2 million in the construction industry. Breathing the dust can cause silicosis, an incurable and sometimes fatal lung disease, as well as lung cancer, chronic obstructive pulmonary disease and kidney disease. The need for change OSHA adopted exposure limits for respirable crystalline silica shortly after the agency was established

The new rule.

The rule significantly reduces the amount of silica dust that workers can be exposed to on the job. The permissible exposure limit (PEL) for respirable crystalline silica is now 50 micrograms per cubic meter of air, averaged over an eight-hour shift. Employers will have to implement dust controls and work practices to limit workers’ exposure to the new PEL. This usually means using water to keep dust from getting into the air, or a ventilation system to capture dust where it is created. Employers will also be required to limit access to high exposure areas, provide training, provide respiratory

in 1971. However, these exposure limits were based on research from the 1960s and earlier. More recent scientific evidence shows that the old exposure limits do not adequately protect worker health. Workers are still dying and suffering from serious illnesses as a result of silica dust exposure. OSHA estimates that the new rule will save over 600 lives annually and will prevent over 900 cases of silicosis each year. The technology for most employers to meet the new standards is widely available and affordable, and many employers are already implementing these necessary measures. Flexibility for construction industry The rule provides commonsense, affordable and

protection when dust controls are not enough to limit exposure, develop written exposure control plans, and measure exposures in some cases. The rule also requires employers to offer medical examinations to highly-exposed workers. Workers who find out they have a related illness can use that information to make employment or lifestyle decisions to protect their health. This rule is based on extensive review of peer-reviewed scientific evidence, current industry consensus standards, an extensive public outreach effort, and nearly a year of public comment, including several weeks of public hearings.

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flexible strategies for employers to protect workers. Special flexibility is provided for the construction industry. For the most common tasks in construction, OSHA has spelled out exactly how to best protect workers. Table 1 in the construction standard matches common construction tasks with dust control methods, so employers know exactly what they need to do to limit worker exposures to silica. If employers follow those specifications, they can be sure that they are providing their workers with the required level of protection. Employers who follow Table 1 correctly are not required to measure workers’ exposure to silica and are not subject to the PEL. And if employers have better ideas about how to provide protection, they can do that, too, as long as they make sure that their methods effectively reduce their workers’ exposure to silica dust.

Help is available Visit OSHA’s silica rule web page at osha.gov/silica for a direct link to the standards, factsheets, answers to frequently asked questions, and to sign up for email updates on compliance dates and resources. OSHA provides help for employers, including technical www.robex.com

assistance about effective safety and health programs, training and education at osha.gov/employers. Resources specifically for small businesses, including information about OSHA’s free On-site Consultation program, can be found at OSHA.gov/ smallbusiness. Spring 2017 — ROBEX 15


Digital Networking

Have Fun Marketing Your Business on

Social Media

by Kim Stewart-Gaylord

S

ocial Media has become the norm and constant in today’s world. What began as a way for users to stay connected with family and friends throughout the world has transformed into a tool to keep up with the ever-changing world. People are using social media sites like Facebook, LinkedIn, Twitter, Snapchat and more than 200 others to share their funny animal videos, find jobs, share family news and, most importantly, market their business. Why should construction professionals use social media in their business? Because their customers are

starting to use it every day, multiple times a day. Social media allows companies to connect with their customers on a more personal level of engagement. With so many social media channels available, it can become overwhelming to decide which platforms to use, how often to post or simply how to get started. Here are some simple tips to help you get started in social media. Develop a plan Research which social media platforms your customers and target customers are using. Identify who

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in your organization will be responsible for posting content, creating graphics and maintaining your pages. This could be one or more people in your organization. Create a social media calendar and utilize an automated publishing tool like Hootsuite, SproutSocial or Sendible. Develop strong content The content you post to your social media sites must be well-written, relevant and of interest to your target market. This will position you and your company as an authority in your niche market. Pictures, links to articles, infographics, and links to other posts are great to share. The goal is to get your viewers to share what you say with others. Remember – it doesn’t always have to be informative and professional; it’s okay to sometimes be fun and entertaining. Determine success criteria (metrics) Why are your implementing social media? There are many reasons a business looks to market themselves on social media. Some realize that they need to get on social media to get their brand recognized, others are hoping to

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get leads from social media, some are looking to educate others. Identify your main reason and set attainable goals. Here are some examples of success criteria. • Number of fans for your LinkedIn page by a specific date • Number of re-tweets on Twitter • Number of registrations received for an event via social media channels • Number of hits from an ad on Facebook • Customer engagement on posts Measure, test, review and revise You can measure your success manually, or implement tracking software like Google Analytics. Look at the posts that had the most interaction and use them as a benchmark for your posts going forward. You will learn what works for your business and what doesn’t. The biggest rule with social media success is to not be afraid to tweak what’s not working! Social media is a necessary step to grow your construction business in 2017. If you are not having fun with social media, it’s not working for you.

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We look forward to working with the Builder’s Exchange and it’s members in 2017!

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Spring 2017 — ROBEX 17


Member Spotlight

amson FUEL & TRUCKING

F

or nearly 35 years, Traci’s mother Linda Fedele grew Greece-based Samson Fuel & Trucking using hard work, passion, and ingenuity. Equipped only with a used 300-gallon skid tank welded onto a beat-up Ford flatbed, she founded a firm in 1980 that has become one of the biggest onsite fuel providers in the Rochester area. Two years ago, when Linda died of cancer unexpectedly, her daughter inherited a company in need of a major turnaround – it was operating at a loss, in debt, and lines of credit were drying up. Drawing upon the same fortitude her mother was famous for, Traci restructured Samson Fuel and recommitted to its employees, its customers and the community. Last year was the most successful in the company’s history, with revenue up a whopping 43 percent. Traci expects double-digit growth to continue in 2017. Here’s her story. ROBEX: Tell us about your mom and the history of the company. Traci: In 1980, my mother Linda Fedele was a single mom struggling to make ends meet. At the time, a small kerosene heater heated the back room of our home. My mom got tired of filling 5-gallon cans of kerosene at the gas station every couple of days, so she called fuel delivery companies listed in the Yellow Pages. When she learned that every local company required a minimum delivery of 100 gallons or more of kerosene, she saw an opportunity. There was an untapped market of people just like her who only needed small amounts of kerosene for home heating. She traded in our brown Ford Cordoba for a used truck, and placed a small, $7.50 ad for her delivery services in the Greece Penny Saver. In the days that followed, delivery requests for 50 gallons or less of kerosene came rolling in. My mother had a high school diploma and had taken some business courses at RBI. She worked for TRW doing sales and marketing, a job that offered great benefits and

An interview with

Traci Adolph, President

the opportunity for advancement. She had her own office with a window, wore suits to work every day, and was also a traditional housewife. It was a very straightforward path that she traded in for a pair of work boots, coveralls, and the smell of diesel fuel – for the first five years she made all the deliveries herself. She was a true pioneer and an entrepreneur at heart. My mother always said, “Dream it, go do it.” She was a strong woman who found a niche and made her dream a reality. This company was founded from her heart. There were a lot of lean years, and personal sacrifices were made in the interest of Samson Fuel. She often told me she was doing it for me – she believed that the sacrifices were worth it to make life a little easier for women in my generation. What is your background? In 1998, after I graduated from SUNY Fredonia with a degree in business and economics, I started working at Samson Fuel. The plan was to help my mother with some administrative duties while I applied for other jobs. I never intended to stay, but I quickly felt connected to the company. I was learning real-world skills hands-on – skills that could never be taught at school. I remembered where my mother started and saw how far she had come. It was truly exciting to watch her work. I formally applied to be her administrative assistant.

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I became president of Samson Fuel two years ago when she died, and since then I have become known as someone who “burst onto the scene.” There was so much uncertainty about what the business would become after my mother passed. I had no choice but to dive in, work hard, and establish myself as the name and face of the business, just as she had. How did you do that? I spent the first year stabilizing the company and reassuring customers that we weren’t going anywhere. I replaced the entire team of drivers and brought qualified people into the office so I could focus on the bigger picture. I put in place strict financial systems and controls, and kept my fingers on the pulse of the company day and night. I also made it a priority to go back to what made Samson Fuel successful in the networking, grassroots marketing, and community involvement. It paid off. In my first year as president, we increased sales more than threefold and I completed my first acquisition with the purchase of Bisig Oil. Quickly, people realized that I had the drive and the ambition to reach big goals for this company. In 2014, I was known as Linda Fedele’s daughter, and by January of 2017 I had become known as Traci Adolph, president and CEO of Samson Fuel and Bisig Oil. Customers are excited about where Samson Fuel is going under my leadership. They see vast improvement within the company, the kind of work we are doing out in the field, and how well we are performing among our large competitors. They’re also pleased to see how dedicated we are to bettering our community, and our commitment to giving back. They say all of our hard work is paying off. What does the company do? Samson Fuel is a certified Woman’s Business

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NYS WBE #59660Union Contractor/Section 3 Employer Marci Muller, Owner/GM

Renewal Property Maintenance Services, LLC. 460 Buffalo Road Suite 70 Rochester, New York 14611 (585) 482-0469 mmuller@renewalpmservices.com

Enterprise that provides services in the areas of on-and off-road diesel fuel, gasoline, and residential heating oil to customers in the greater Rochester and Buffalo markets, including Monroe, Wayne, Ontario, Livingston, Wyoming, Genesee, Orleans, Niagara and Erie counties. Last year I purchased and renovated the company’s very first building at 160 Ling Road in Greece, where our offices and vehicles are located. We have 18 employees and are looking to grow. What is Samson Fuel’s biggest challenge today? One of the biggest factors is labor. With increases in the cost of living and healthcare, we had to evaluate our pay scale and benefits structure and make significant changes. I made a commitment to not only attract qualified individuals but to also retain them in order to grow as a company. We consider ourselves a family, and I believe in taking care of this family. In turn, they take care of mine. My drivers possess a trade skill, and their job is by no means easy. It’s tough out in the field, but in my opinion, my team ranks among the best. What do you like best about your job? That it never feels like a job to me. I love what I do and I have a passion for it. It has also become my legacy, and I take that very seriously.

www.robex.com

Spring 2017 — ROBEX 19


Delivering excellence for more than 70 years ®

A proud member of the Builders Exchange, LeChase continues its commitment to serve the Greater Rochester Community.

205 Indigo Creek Drive | Rochester, NY 14626 | www.lechase.com

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I wake up excited to see what the day holds – the sales call we have been waiting for, the ups and downs of the market, the price of fuel, the roar of the engines, a truck breaking down. Every day has its up and downs, and I wouldn’t have it any other way. I am also extremely proud of this company, the work that we do, and what we stand for. I feel honored, privileged, and humbled to be carrying the torch my mother passed to me. She was my own personal superhero and I was extremely proud of her. I hope someday my children will have that same feeling about me. Future plans? Our short-term goal is to be as competitive as we can without compromising service. I take pride in the fact that customers big and small can always reach me at the office or on my cell phone. Currently, I am looking to acquire a 10-thousand-gallon tanker so we can start aggressively competing with the larger, national companies in the area. It’s both a personal and professional goal of mine. Small business can do the same things as big business when given the opportunity. I will aggressively pursue those opportunities. I am extremely proud of this company, the work that we do, and what we stand for. For more information visit www.samsonfuel.com.

Water Treatment by Culligan

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WaterTreatmentbyCulligan.com 20 ROBEX — Spring 2017

In 2016, Traci was a finalist for the Small Business Council of Rochester’s Business Person of the Year, and a finalist for the Women’s Council ATHENA Young Professional Award. This year, she is an ATHENA Award finalist for the second time.

www.robex.com


www.robex.com

Spring 2017 — ROBEX 21


Technology

Managing

CYBER Security in 2017

by Tyler Ward, CISSP, Senior Technology Consultant, IV4

“Attackers had access to victims’ environments for 205 days before they were discovered.” FireEye Inc.

S

imply put, 205 days is too much time to not know what is happening on your network! Cybercriminals are not resting during the time gap between your assessments, so why should your security? Point-in-time security assessments have a time limit on the data analyzed. For example, a very small network consisting of a few workstations, servers, a single firewall, and a router or switch can produce more than 3 billion events per year. That is in excess of 10 million events per day. A human being is incapable of monitoring and analyzing the volume of events generated. This is where continuous monitoring comes into play. Unfortunately, the trend of pointin-time assessments is still widely observed. Organizations are pumping dollars into static assessments that offer little actionable intelligence over time. These assessments gather information from environments that are rapidly changing. What is true today may not be

true tomorrow. In fact, 300,000 new pieces of malware are released every month. This is what is known as the “Hamster Wheel of Pain.” Here’s the cycle as defined by Andrew Jaquith in the book Security Metrics. 1. Ignorance is bliss. 2. Am I hosed? 3. Yes, the vendor’s tools prove it. 4. Sheer panic. 5. “Fix” Problems New systems, switches, routers, desktops, servers, mobile devices and configurations are creating a moving target for security professionals. If a network is assessed on January 1, an attacker could potentially breach the environment on January 2 and remain undetected for 205 days or even indefinitely. “Organizations continue to fall victim to the common misconception that intrusions are noisy and obvious. This assumption is just that – an assumption – and far from the reality of cybercrime in 2017. Attackers are cognizant of the fact that the longer they remain undetected, the more they can exploit our resources and use them to their advantage. If attackers gain control

Your data is valuable! We must protect this data; for the foundations of our businesses rely on the confidentiality, integrity and availability of the data.

22 ROBEX — Spring 2017

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of a network and fly under the radar, the possibilities are endless. So where is true north from here? Continuous monitoring of our environments is the only true way to swiftly detect anomalies and malicious activity. Continuous monitoring can be described as the real-time analysis of networks using automation, machine learning, and event correlation. Continuous monitoring relays critical information such as vulnerabilities, network traffic analysis, and log monitoring. All of these items provide real-time intelligence about malicious activity on your network. Furthermore, it relays alerts when breaches are detected, reports, and metrics on the current state of the network. The right direction is one which some organizations are beginning to adopt. Financial institutions, nonprofits, federal agencies, universities, state entities, corporate enterprises and even small businesses have all come to the stark realization that periodic network assessments are just not enough. How can abnormal activity be identified if normal activity is unknown? To better protect our environments, our data, and the data of

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our customers, we must first understand what we have and possess the ability to identify changes within the environment. Without this foundational knowledge, security is fundamentally broken. The basis for attackers spending 205 days on our networks is due to the lack of continuous view. Continuous monitoring of our environments can yield exponential benefits if coupled with a solid remediation plan. Without the intent to correct or mitigate network vulnerabilities, continuous monitoring is comparable to a bystander watching a heist being planned and executed, and ignoring the crime. Organizations must realize that cyber-security is not just ones and zeros; rather it is the very barrier that separates companies from criminals. Those that adopt and execute a comprehensive program that is built upon continuous monitoring are in a better position to actively defend against cyber criminals Your data is valuable! We must protect this data; for the foundations of our businesses rely on the confidentiality, integrity and availability of the data. We all need an eye in the sky and this is obtainable through continuous monitoring.

Spring 2017 — ROBEX 23


Money

Best Practices to Mitigate

Payment

FRAUD by Kevin Foy, Vice President and Senior Relationship Manager, M&T Bank – Rochester Region

A

s we enter the New Year, ACH and wire payments fraud is a global and industry-wide issue affecting a large number of customers of financial institutions around the world. The fraud attackers are very sophisticated, understand the ACH and wire payment systems and are targeting customers

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with both small and large account balances. The significant increase in this type of funds transfer fraud involves the exploitation of valid internet banking credentials belonging to businesses and organizations of all sizes. Many payment fraud attacks begin with a “phishing” email, which contains either an infected file or a link to an infectious website. The email recipient is generally a person within an organization who can initiate funds transfers or payments on behalf of the organization. Once the email recipient opens the attachment or clicks the link to open the website, malware is installed on the recipient’s computer.

Here are some best practices.

1

First, it’s important to train staff to protect access to personal, financial and internet logon credentials. Everyone should be suspicious of emails, internet pages or telephone calls purporting to be from a financial institution requesting

24 ROBEX — Spring 2017

account information, account verification, or banking access credentials such as user names, passwords, PIN codes and similar information. Moreover, they should avoid opening email file attachments or clicking on Internet links in suspicious emails. Doing so could expose your system to malicious code that could hijack your computer. If you’re not sure if something is suspicious, call your bank using a phone number you trust (not one in an email) and confirm the validity of all requests for personal, financial or account information, even if they are routine in nature, but particularly if they seem urgent. It’s also important to prohibit the use of “shared” user names and passwords for online banking systems. Ensure your staff sets a different password for each website that is accessed, and that they avoid using automatic “save” log in features that remember user names and passwords in web browsers for online banking.

2

Second, be sure to secure your computer systems and tighten internal controls. Carry out all online banking activities

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– accessing bank Internet sites, sending online payments, etc. – from a standalone, hardened and completely locked-down computer (e.g. a PC that is not used for email or public internet browsing). • Install a dedicated, actively managed firewall, which limits the potential for unauthorized access to a network and computers, and use a secure session (https not http) in the browser for all online banking. • Activate an appropriate “popup” blocker on internet browsers to help prevent intrusions, and regularly update your antivirus software on your PCs and systems to help protect your information.

• It’s also important to reconcile banking transactions on a daily basis to identify and review any unknown payments.

3

Third and finally, make sure you tighten your ACH and wire controls.

You can do this by utilizing ACH and check payment blocks or filters to place appropriate limits on payments. ACH and wire payments should be initiated under dual control using two separate computers (e.g. one person creates the funds transfer and a second person approves the funds transfer from a different computer system). Implement dual approval of

all ACH and wire profiles (e.g. one person authorizes the creation of the ACH/wire profile template that contains payment instructions and a second person approves the template from a different computer system). Dual approval of profiles results in all new or modified ACH and wire-payment profiles requiring secondary approval prior to being activated. There are many solutions to help keep your payments and accounts safe. Talk to your local bank representative about fraud monitoring and review and account number masking, as well as services that compare payee names and dollar amounts. © 2017 M&T Bank. Member FDIC.

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Spring 2017 — ROBEX 25


Project Profile

LeChase Sets Standard December 2016: The building’s exterior

Builds First Building on University of Rochester South Campus

A

s one of the first structures on a newly masterplanned 100-acre south campus of the University of Rochester, the University of Rochester Medical Center’s imaging building on East River Road has special significance. It not only sets the look and quality standard for future development at the site, it will also provide valuable services and jobs in the Greater Rochester area for years to come. Those who built it appreciate that fact. “We all understood the importance of this project for the community as well as the owner,” said Lee Sommerman, regional operations manager for LeChase Construction, the design-builder for the project. “The people who will come here for care are friends, family and neighbors. It had to provide an environment that is inviting and comfortable as well as functional. We had to get this just right.” Now, within weeks of the building’s opening ceremony, Sommerman feels the team was successful in collaborating with the owner and architect to build a facility everyone can take pride in. Team effort from day one “The effort really started before LeChase was awarded the job,” said John Grande, LeChase project manager. “We worked with the owner and with Clark Patterson Lee (CPL) – the architect and engineer of record − to maximize the building’s potential. We wanted to make it as functional and aesthetic as possible.” The main change suggested involved a redesign of the floor plan which originally had imaging rooms and staffing areas segregated for each modality, like radiography and MRI. The team proposed an “X” configuration in which two modalities would share a staff area at the center, and

imaging rooms would be placed at each arm of the “X.” “It’s a more efficient design,” noted Todd Liebert, CEO of CPL. “It provides easier access and centralizes the staff to improve efficiency and collaboration.” Once selected, and while waiting for various site approvals, the team spent several weeks doing a complete constructibility review for all stages of the 18-month project. “We knew we were going to rely on Lean principles and apply some new technologies to complete the project on budget, on schedule and as the owner envisioned it,” Grande noted. “We collaborated with key subcontractors who were instrumental to the project’s success.” Two of the most impactful decisions that came out of the discussions were the use of 3-D modeling/GPS positioning and exterior closed cell spray foam insulation.

Navisworks coordination software was used to model the layout and coordination of all MEP systems. The data was then input into a GPS solution to produce the same layout in the field. It proved incredibly accurate, resulting in zero system location conflicts within the actual building.

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Building the job twice The project was designed in Revit, a CAD system that was used to create a 3-D model to help coordinate all aspects of the building. “In essence, we built the job twice − once on a computer and then in reality,” Grand said. Working with its subcontractors, LeChase used the modeling for layout and coordination of all mechanical, electrical and plumbing (MEP) systems in the building. “It was an iterative process,” he added. “We tackled portions of the building at a time. We used Navisworks coordination software to combine all the architectural, structural and MEP models together. That allowed us to detect and eliminate clashes and clearance conflicts. Even our framing subcontractor joined in, adopting the same method for the layout of studs within the building. All players attended meetings to resolve any conflicts the modeling identified.” Once complete, the data was input to a Total Station GPS system so the building could be laid out in the field exactly as modeled on the computer. “The GPS solutions proved to be unbelievably accurate,” Grande continued. “This process reduced to zero the number of design revisions needed to resolve location conflicts for any MEP systems.” The process also improved productivity. For example, GPS data was used to mark positions of the many hanging anchors needed to suspend ductwork and other MEP systems from ceilings on each level of the three-story building. Using the position marks, workers were able drill through the flooring structure above a ceiling to hang the anchors before concrete was poured for the higher floor. “Normally, workers would climb a ladder then reach up above to drill and install each hanger. They can install about 100 per day that way,” explained Grande. “Hanging them down from above, they were able to go much faster – installing 600 anchors each day.” The 3-D software also allowed the team to create lifelike renderings of the finished space. Essentially, they were able to take the owner on a virtual “walk through” of spaces before the building was built. URMC personnel could see the location of MEP systems and how they would be accessed for service, and they could change aspects of the finishes that were not in line with their vision. Being able to show the desired result also helped LeChase direct the work being done by subcontractors. As one example, painters working on the open lobby space were given a rendering so they could easily see where various colors cut in and out. No cracks to slip through On the building’s exterior, an important innovation www.robex.com

was the use of 3-inch closed cell spray foam to insulate the exterior walls and act as an all-in-one air/water barrier. “The foam provides quicker installation and a better building envelope. It created an effective thermal barrier to the interior of the building. Because there are no seams or cuts, it will improve building performance and eliminate cold spots inside,” Grande said. Details of flashing and continuity of the materials were worked out in the field. The architect verified that design requirements were met, LeChase and subcontractors provided input on constructibility, and the foam manufacturer’s representatives provided technical support. “We tested and refined a number of mock assemblies to mimic various configurations and details

software enabled the team to create lifelike renderings of the finished space. This enabled everyone to visualize the finished product before it was actually built.

Rendering of the building’s exterior

Image reading room

Training room

Nuclear medicine exam room

Lobby with two-story fireplace Spring 2017 — ROBEX 27


Pre-built exterior wall sections (green in photo) were constructed simultaneously with the building’s structural framework, saving time and money.

until we felt we had the optimal solutions,” Grande added. “We definitely used technology to our advantage,” Sommerman observed. “In fact, we’re now looking at future jobs to see where we might benefit from the technologies and techniques developed on this building.”

Efficient and effective Another important step in delivering a quality product on time was the use of Lean construction principles. Beginning with a pull-planning session, the team adopted use of six-week “look ahead” scheduling and conventions that included just-

in-time delivery and small batch work. So, instead of hanging all drywall before painting, the drywall contractor would complete a room and the painters would follow − working in that room while drywall was being hung in the next room, and so on. That provided consistency, as smaller teams repeated their work across each area. It also helped identify any problems or changes early so they could be resolved before being replicated across the entire building. The subcontractors even found the small-batch scheduling to be a benefit, as their work flow was more consistent. Surprisingly, with all the innovative technology and processes used on the project, Grande is quick to point out that the biggest factor in keeping on

28 ROBEX — Spring 2017

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Closed cell spray foam was used to insulate the exterior walls for an all-in-one air/water barrier.

track with the schedule and quality was, simply, communication. The team decided to have a dedicated engineering/quality representative onsite to do daily inspections, keep daily logs of site activity, and update documents and drawings as needed. All documents were shared via Dropbox. “With the extensive use of smart devices onsite, all team members had access to the most up-to-date information whenever they needed it – 24/7,” Grande said. The team also put a number of conventions in place to ensure all parties were actively involved in communicating. In addition to the constant update of documents and materials, LeChase held daily meetings with the architect and designers, weekly walkthroughs with URMC representatives, and a variety of safety touchpoints with the crews. Looking forward Today the team is moving smoothly and steadily toward completion. Upfront decisions on technology, staffing, and communications efforts avoided most rework and will ensure that the completed building will effectively serve the community for many years to come. The interior finishes will give patients and workers a more relaxing environment – from a fireplace in the two-story lobby area to soothing wall graphics spread around the second-floor imaging areas. Efficiencies in HVAC systems will reduce facilities costs, and the revised “X” layout of the exam rooms and staffing areas will provide better patient care. Demand is already growing from URMC units that want to occupy nonimaging space in the building. Given that, forward-looking accommodations that were made during the project – like a temporary roof and the structural support to add a fourth floor, or a thinly paved parking lot to the left of the building that can more easily be removed to make way for the next phase of the campus – should prove beneficial for expansion within the next several years. “It has been a great partnership,” said Sommerman. “From the owner through to the subcontractors, everyone has stepped up to make this first building on south campus a great standard to follow.” www.robex.com

Spring 2017 — ROBEX 29


Government Relations

Mandating

Pay Equity by State Contractors

by Denise Murphy McGraw

I

n conjunction with the State of the State, Governor Andrew Cuomo signed two Executive Orders mandating pay equity by State contractors. Executive Order #161 Executive Order No. 161 prohibits state entities from asking the salary history of prospective employees. A candidate for employment at any state entity does not

have to provide his or her current compensation, or any prior compensation history, until he or she is extended a conditional offer of employment with compensation. Once a conditional offer has been extended, a state entity may then request and verify compensation information. If a state entity is already in possession of an applicant’s prior compensation, the information may not be relied upon in determining the prospective employees salary, continued on page 32

Economic Outlook Q: What is the outlook for Uber in Upstate New York?

A: Transportation is a major issue for everyone both in terms of increasing convenience and improving public safety. I have been working for a number of years to help make ride sharing available in Upstate; it is something that I have heard a wide range of support for from people living in my district and throughout many Upstate communities. I do think we need to ensure that there are safety and background checks in place to protect drivers and riders alike, but it is my hope that we will be able to get this approved in Upstate New York in the near future.

Q: What else can we do to bring jobs into the Finger Lakes Region? A: Certainly last year’s budget agreement to obtain transportation parity between Upstate and downstate was a win for all Upstate communities, thanks in large part to the advocacy and input of local labor, and business and trade leaders in our region. The $27.1 billion commitment

by Senator Joe Robach

will improve our roads and bridges, help add good paying jobs for the hard working men and women of our state, and will improve safety for our families. Now it is on us to continue to advocate getting the Executive branch to release the funding so we can make those jobs a reality and get those projects out the door. New Yorkers depend on safe roads and bridges on a daily basis, especially in Upstate New York.

Q: What is the outlook for construction spending in Upstate NY?

A: Again, the $27.1 billion in transportation funding that we were able to help secure last year is a huge windfall for the construction industry. This commitment to improving our roads and bridges will help create thousands of good paying jobs for New York’s workforce. Additionally, we are always looking for increases in the state’s CHIPs funding program, which helps localities move forward with their own improvement projects. We have successfully negotiated three straight record-setting increases in this funding and will look to continue to ensure local governments continue to get the aid they need for their projects.

Senator Joseph Robach is the New York State Senate representative for the 56th Senatorial District which encompasses the Towns of Brighton, Clarkson, Gates, Greece, Hamlin, Parma, and parts of the City of Rochester, including Charlotte, Historic Maplewood and the University of Rochester. Before his election to the Senate, Robach served as an Assemblyman for 11 years filling the seat vacated by the unfortunate passing of his father, Roger Robach. In the Senate, he serves as Chairman of the Transportation Committee, Chairman of the Senate Majority Steering Committee and, and is a member of the standing committees on Commerce, Economic Development and Small Business; Consumer Protection; Education; Finance; Higher Education; Infrastructure and Capital Investment; Labor; Rules; and Science, Technology, Incubation and Entrepreneurship.

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RESTORING GREAT BUILDINGS IS A GREAT PRIVILEGE. The Sibley Building has been a Rochester landmark since 1906. So when Catenary Construction was asked to provide masonry and concrete restoration for this historic structure, we considered it an honor and a privilege. Sibley Square is one of the most innovative mixed-use projects in Rochester’s history—and one of a long line of noted structures that we have helped to restore. We appreciate the trust our customers place in us. And we appreciate the opportunity to make this historical building into a great part of Rochester’s future. CATENARY CONSTRUCTION Concrete and Masonry Contractors. Historical Restoration, Waterproofing & Sealants. catenaryconstruction.com 585-454-4140

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Spring 2017 — ROBEX 31


“Government Relations” (continued from page 30) unless required by law or collective bargaining agreement. The Governor’s Office of Employee Relations will monitor and oversee this process, and train relevant human resources staff from state entities on the requirements of the new measure. Executive Order #162 Executive Order No. 162 requires state contractors to disclose, in addition to data on gender, race, and ethnicity that is already required, job title and salary data for all of their employees working on state contracts (or their entire workforce if those working on state contracts cannot be identified). The Order mandates state contractors to disclose this data for all state contracts, agreements, and procurements issued and executed on or after June 1, 2017. The Order requires that the information be reported to state agencies and authorities quarterly for all prime contracts over $25,000; and monthly for all prime construction contracts over $100,000. Subcontractors

working on New York State contracts must also provide the same information for their employees. The Builders Exchange was not contacted prior to the signing of these Executive Orders. However, we plan to gain input from our members about the viability of them and contact the Governor’s Office as soon as possible. For more information about these Executive Orders, contact Denise Murphy McGraw of Hill, Gosdeck & McGraw at dmurphymcgraw@hgmlobby.com

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Spring 2017 — ROBEX 33


Project Profile

A l a r c c i t

s

Ellip

MCC’s New Theater

Splaying Lines

After

Photo by Popli Design Group

M

onroe Community College (MCC) now has a stateof-the-art theater for its students and the community to enjoy, thanks to a renovation project funded by the college and Monroe County. The 500-seat multiuse theater in Building 4 on the Brighton campus opened in February. There were many deficiencies within the original theater, which had not been renovated in more than 40 years. It was too acoustically absorptive, sound isolation from the corridors was poor, the lighting technologies were ineffective and outdated, there was a lack of handicap accessible seating (and worn seating), and the theater lacked adequate fire sprinklers and a standpipe system. The stage was quite worn and had areas of disrepair. Popli Design Group (PDG) was hired by Monroe County and MCC as the architect for the renovation of the theater,

Before Photo by Rochester Davis Fetch

along with sub-consultants M/E Engineering (mechanical, electrical and fire protection), Ravi Engineering & Land Surveying (asbestos abatement design), and Ostergaard Associates (acoustics). The construction team is comprised of Holdsworth Klimowski Construction (with subcontractor Rochester Davis Fetch), Blackmon-Farrell Electric, Pipitone Enterprises, Monroe Piping & Sheet Metal, and several other subcontractors. PDG’s team designed a state-ofthe-art theatrical venue to meet the acoustical requirements focused on “livening” the space, improving distribution of sound, eliminating echoes, and mitigating noise from outside the theater and mechanical systems. This required replacing all the existing acoustically absorbent

surfaces with acoustically-reflective surfaces, making mechanical systems quieter, and providing sound isolation from the exterior and adjacent interior spaces. While the default design of the theater provides for livening the acoustics for musical and theatrical performances, it also includes provisions for “variable acoustics” features such as motorized and manual sound-absorbing panels to “quieten” the space for lectures and speaking functions; thus making the space truly multipurpose. The shaping of the theater walls and ceilings was developed in close coordination between architectural designers and acousticians. Several options with revisions were created to derive

34 ROBEX — Spring 2017

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Spring 2017 — ROBEX 35


Be the Best Boss

The Challenge of by Gwen Mazza, enSpirit LLC

I

n my practice, I have had the unique opportunity to coach countless leaders, their executive teams and their direct reports. I have found that communicating a vision, while supporting it with credibility, is an ongoing challenge. I deeply appreciate the role leaders currently serve within an organization, and the impact that their thoughts, actions, and statements have on those they were commissioned to serve. This proves time and time again to be a tough road to traverse. Shakespeare is quoted as saying, “Some are born great, some achieve greatness and some have greatness thrust Jason Manufacturing designs, manufactures, and distributes casework for educational, business, and health facilities. We produce what you need, when you need it, and the way you want it.

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upon them.” When one accepts a leadership role, there are specific qualities that will either help you to succeed or lead you to failure. I do not intend for this article to be a fix all, but rather an opportunity to heighten awareness while, hopefully, creating an internal (and possibly external) conversation. How do I wish to be known? What are the impacts of my choices on others? When you accept a position of leadership, you are making a covenant to uphold and bring forth a vision, through a process of leading, guiding and developing those individuals who have been entrusted to you. Be awake! The task at hand is not entirely about you; you see, it never was and it never will be. Ego versus Spirit Let me posit: True leaders are not ego centered. They come from a deep place of spirit and realize that they are simply conduits for moving a vision forward. They are not negatively impacted by this self-awareness, nor are they faint of heart. In fact, if anything, they become very centered in their choices and solid in their footing and the steps that they must take. They possess a quality of knowing which far exceeds any belief or thinking process. They are mindful in a storm and do not let the raging waters of change deter them from the path they have chosen. They are tenacious to a fault, and would not ask of others what they would not do themselves. They realize

36 ROBEX — Spring 2017

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that they have been entrusted with the opportunity to allow others to grow into their greatest potential, while simultaneously growing into their own “personal best.” Life has a way of providing us experience when we are able to look beyond ourselves to the grander picture. This maturation allows us to be consciously aware of ourselves, others and our surroundings. This place also has a deep acceptance for the current state of being, with an eye on the ever-evolving experiences that lie ahead. It is not necessarily a process we are born into, but rather a place we arrive at after navigating life’s challenges and experiences. This is a place of spiritcentered living. It is a place of

conscious choice. It is a center of certainty within all else that may be uncertain. This place allows you to freely live and draw upon the wisdom that has blessed your life. It is a place that invites the wisdom of others and encourages sharing and mutual respect. It does not allow fear to inhibit, and provides opportunities to grow. From this place of center, we blossom into our authentic self, inclusive of spots, bruises and beauty. It allows room

for those around us to also grow while providing patience and grace for this process. You may find this way of living difficult to believe; I understand that you are skeptical. enSpirited Serving Leaders are not always born into the role for which they are called, but they can all develop the traits and attributes that make them successful. If we can remember that we are entrusted to be stewards, then we understand from the beginning that the company, business or organization is not ours but rather, entrusted to us, to watch over and attend to. How we lead and guide is ultimately a powerful and profound choice. To learn more about this topic, visit enspiritllc7.com.

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Spring 2017 — ROBEX 37


Insurance

Reform

Historic Worker’s Compensation

by Thomas Doddato, Director of Claims at Lovell Safety Management

I

n 2007, Governor Spitzer ushered in dramatic alterations to the workers’ compensation system. Most prominent were increases to the maximum wage replacement benefit rate and caps on the duration of benefits. By statute, the benefit rate is set at two-thirds of the worker’s average weekly wage subject to a maximum, which in 2007 was $400.00 per week. The maximum benefit is now $864.32 per week. Many business groups, including the Business Council and the Rochester Chamber of Commerce, supported the reforms and celebrated the “victory” that would lead to cost savings. Builders Exchange blasted the reform

package, and noted that costs would go up as the benefit rate increased. Today, New York State still has one of the top five most expensive worker’s compensation systems – 10 years after “reform” passed. In 2012, our premiums were the fifth highest in the country. In 2014, we took over fourth place – behind California, Connecticut and New Jersey. Rates in New York are 48.6 percent higher than the median rate, and 212.5 percent above the most cost effective state. Some details The 2007 legislation encompassed numerous changes, but the keystone was the durational

limitation of benefits for injured workers with permanent partial disabilities (PPD claims) paired with an increase in the weekly benefit. A bulletin released by the Business Council at that time summed it up, stating that the new law “limits the number of years during which benefits would be available in permanent partial disability cases, which now account for a high percentage of costs in New York’s comp system. The previous law allowed lifetime payment of cash benefits in all such cases. Now, based on current caseloads, it is estimated that benefits will be maxed at eight years or less for more than 90 percent of cases, and that

38 ROBEX — Spring 2017

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the average PPD claimant will get 344 weeks of benefits upon classification.” The new “cap” on benefits was to provide the cost savings to employers. Up until 2007, PPD rates were based upon a medically determined impairment; the broad parameters being a mild disability equating to a 25-percent rate, a moderate disability equating to a 50-percent rate, and a marked disability equating to a 75-percent rate. Litigation and negotiation would typically refine the rate to somewhere between 25 and 75 percent. The Workers’ Compensation Board attempted to ensure that claimants with similar medical conditions were classified with

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similar degrees of disability. This methodology is still in place for determinations of temporary partial disabilities. As part of the 2007 reforms, the Workers’ Compensation Board promulgated guidelines for determining permanent impairment, which fine-tuned the process for doctors who make these determinations for PPD

claims. The rationale remains that a percentage of disability is being determined on the basis of medical findings. To implement the PPD durational limits, referred to as “caps,” the legislation introduced a new facet to the law, Loss of Wage Earning Capacity (LWEC). LWEC is determined by combining the medical determination of disability

Spring 2017 — ROBEX 39


with vocational factors that impact the injured employee’s ability to obtain work. The minimal duration is 225 weeks for an LWEC of up to 15 percent. The maximum duration is 525 weeks for an LWEC of greater that 95 percent up to 99 percent. How are these determinations made? Let’s look at an actual decision in a typical claim for a back injury. In the case of Rosales v. Eugene J. Felice Landscaping, the judge found the claimant had a 66.6-percent causally related medical impairment based on the credible testimony of the claimant’s doctor. The claimant testified through an interpreter that: • he is 33 years old; • he completed the sixth grade in his native country; • he speaks very little English and cannot read or write in English; • he had no military experience; • he had no vocational training except learning to drive

the truck. The training was conducted in his native language; • he worked driving a cement truck for 10 years; • he previously worked in a restaurant for four years cooking pasta; • he is collecting Social Security Disability; • he can drive a car for short distances; • he has only lived and worked in non-English speaking communities; • he has no computer skills; • he did not attend any classes to improve his English skills; and • his wife tried to teach him to use the computer but he was not able to learn as his eyes hurt. The judge found that the claimant testified credibly and that he had an 85 percent LWEC. The carrier filed an appeal to the Workers’ Compensation Board arguing for both a lower medical impairment and a lower LWEC

based upon the findings of the carrier’s medical consultant, and vocational factors not considered by the judge. The Workers’ Compensation Board upheld the judge’s decision. The 85-percent LWEC entitles this claimant to 450 weeks of benefits, but that may not be the end of the story because the law also provides for a “safety net.” Where the LWEC exceeds 80 percent, a claimant may request a reclassification to permanent total disability due to extreme hardship. __________________________ On November 3, 2016, the Appellate Division of the New York Supreme Court issued a decision that resolved one remaining issue in dispute. In setting the benefit rate for PPD claims, the Workers’ Compensation Board includes the vocational factors. In the Rosales v. Eugene J. Felice Landscaping example, the PPD was awarded at (continued on page 42)

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“Workers’ Compensation” (continued from page 40)

an 85-percent benefit rate based on the LWEC finding. Many carriers and employers argued that this practice was not correct as the LWEC was intended to be used only for determining the PPD duration. What’s more, the benefit rate should be determined solely

on the basis of the medical finding of impairment. They would argue that the rate should have been 66 percent per the medical opinion. The court ruled in favor of the Workers’ Compensation Board, stating that the law authorized the board to take into account

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vocational impediments when fixing the rate of compensation. The promulgated guidelines for determining permanent medical impairment are extensive, detailed and objective. The guidelines for determining LWEC are far less detailed and objective. They include the statement: “There is no simple formula to determine loss of wage earning capacity.” LWEC is largely subjective and, in keeping with the societal objectives of the Workers’ Compensation Law, the board is mandated to view the evidence in a light most favorable to the claimant. Where the LWEC determination is then used to both determine the durational cap and inflate the rate of compensation, it effectively negates the intended benefit to the employer, especially where the “safety net” comes into play. There are now new strategies that employers can and must employ to help control the cost of claims. Keep copies of employment-related documentation. If the employee completed and signed his application form in English, then he can read, write and understand English. If he has a high-school diploma or vocational training, then he has fewer impediments to learning new skills. Every bit of information can be helpful. There have been several cases where such information has been successful in persuading judges to award a fair LWEC percentage. Contact Builders Exchange if you are experiencing a workers compensation problem that seems unfair. We can connect you to the most qualified experts that can assist with your defense.

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Legal

Additional Insured by Kevin Peartree, partner, Ernstrom & Dreste LLP

A ita

Three Case Studies

A

gita is a colorful Italian word meaning agitation, anxiety, even indigestion. Few contract risk management topics provide as much heartburn to contractors and subcontractors alike as the ongoing worry over the availability, scope and enforceability of additional insured coverage. Whether you are on the giving or receiving end of additional insured status, the evolving insurance forms, court decisions and administrative demands of managing this issue can sour the stomach of even the most vigilant contracts manager. You can’t spell “agita” without AI. Three court decisions illustrate the importance of understanding who and what your additional insured endorsement protects, whether you are the additional insured or the one contractually obligated to provide it. So you think you are an additional insured Gilbane Bldg. Co. /TDX Const. Corp. v. St. Paul Fire and Marine Insurance Company concerned a not-at-risk construction manager’s attempt to obtain coverage as an additional insured under the commercial general liability policy issued to a prime contractor. The construction manager’s agreement with the project owner, the Dormitory Authority of the State of New York (DASNY), obligated

DASNY to require its contractors to name the construction manager as an additional insured on their commercial general liability policies. DASNY did just this, and included DASNY, the State of New York and others as entities to be additional insureds. The certificate of insurance provided by the prime contractor did, in fact, name the construction manager and other required entities. Excavation and foundation work allegedly damaged neighboring property, leading to a lawsuit by DASNY against the project architect and prime contractor that performed that work. The architect in turn brought a claim against the construction manager, who tendered its defense to the prime contractor’s carrier as an additional insured. The carrier denied coverage to the construction manager.

As reported by the court, the particular blanket additional insured endorsement obtained by the prime contractor from its carrier appears to have been a manuscripted form, which provided:

WHO IS AN INSURED (Section II) is amended to include as an insured any person or organization with whom you have agreed to add as an additional insured by written contract but only with respect to liability arising out of your operations or premises owned by or rented to you. “You” in the endorsement refers to the named insured prime contractor. To a majority of judges deciding the case, the language of the endorsement was plain, ordinary and unambiguous.

44 ROBEX — Spring 2017

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Since the construction manager did not have a contract with the prime contractor, the construction manager was not an additional insured under the language of the policy. That the prime contractor was contractually obligated to provide additional insured coverage for the construction manager did not alter the court’s reading of the policy. While Gilbane involved a construction manager and a contractor without a direct contract, the rationale is equally applicable to any party requesting and obtaining additional insured coverage on a construction project. Owners often obligate contractors to require their subcontractors to name the owner as an additional insured. So, too, when a subsubcontractor is required to name the prime as an additional insured. If the right endorsement form is not obtained, the owner may not have the additional insured coverage it had planned on, and both the contractor and subcontractor will be in breach of their agreements. The same concerns will occur in other segments of the contractual chain on a project. The endorsement at issue in Gilbane was similar in intent to the 2013 version of ISO form CG 20 33, which provides in part:

WHO IS AN INSURED is amended to include as an additional insured any person or organization for whom you are performing operations when you and such person or organization have agreed in writing in a contract or agreement that such person or organization be added as an additional insured on your policy. www.robex.com

Several courts have previously ruled that language very similar to this requires a direct contract between the named insured and the additional insured, without which there is no coverage. The lessons of Gilbane are that courts will not hesitate to strictly construe and enforce the plain language of additional insured endorsements

and that blanket forms such as CG 20 33, though an appropriate tool in many circumstances, may not provide coverage to all of the parties you require or are required to provide. You must understand and continuously monitor the form and date of the additional insured endorsement you provide or are given. Spring 2017 — ROBEX 45


The 2013 revisions to the ISO additional insured endorsement forms sought to limit this coverage in a number of ways. These limitations are beyond the scope of this article, but broadly stated include restricting the availability of coverage to the extent of what is permitted by law, and restricting both the scope and limits of coverage to what is required by contract. Primary coverage for the additional insured A blanket additional insured endorsement was at issue in Mecca Contracting, Inc. v. Scottsdale Insurance Company. Subcontractor Salcora was contractually required to name prime contractor Mecca Contracting as an additional

insured. The subcontract also provided that Salcora’s policy would be primary. The endorsement at issue (though not specifically identified by the court) provided coverage for any entity that Salcora was required to carry as an additional insured pursuant to a written contract. The endorsement also provided that the additional insured coverage would be excess unless a written contract required it to be primary. Being a blanket additional insured endorsement, the policy made no specific mention of Mecca as an additional insured. An injured worker’s personal injury claim led to a demand by Mecca to Salcora’s carrier, Scottsdale Insurance, for defense and indemnification as an

additional insured. Scottsdale disclaimed coverage and refused to provide a defense, compelling Mecca to bring an action on the policy. Both the lower and appellate courts had little trouble determining that Mecca was an additional insured and entitled to coverage on a primary basis. AI’s getting coverage they do not “deserve” Most contractors and subcontractors do not realize that the additional insurance coverage they provide and pay for can apply even when the fault lies solely with the additional insured. In Burlington Ins. Co. v. New York City Transit Authority, Breaking Solutions supplied concrete-breaking excavation continued on page 48

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continued from page 46

machines and personnel for a subway construction project for the New York City Transit Authority (NYCTA) and the Metropolitan Transit Authority (MTA), and was required to name both entities and the City of New York as additional insureds via the latest ISO Form 20 10 additional insured endorsement or equivalent. When Breaking Solutions’ excavator struck an energized electrical cable buried below the concrete, an explosion occurred injuring a NYCTA employee. A personal injury lawsuit followed involving all parties. Burlington Insurance Company, Breaking Solutions’ carrier, provided a defense to the city, NYCTA and MTA subject to a reservation of rights on the issue of whether the explosion and injuries were caused by Breaking Solutions’ acts or omissions. The additional insured endorsement provided coverage only to the extent that the additional insured’s liability was caused in whole or in part by the acts or omissions of Breaking Solutions or those acting for it. Discovery showed that while Breaking Solutions’ excavator caused the explosion, there was no fault or negligence on the part of Breaking Solutions or its operator who were unaware of the electrical cable. Rather, NYCTA, which was required to identify any underground hazards, failed to identify, mark, protect or shut off the power to the buried cable, leading to the explosion. Burlington then disclaimed coverage for NYCTA and MTA, and commenced a declaratory judgment action seeking a determination that no coverage was owed to them because there was no evidence that the explosion resulted from

Takeaways

Whether you are providing or receiving additional insured coverage, vigilance is required when additional insured coverage is concerned.

• You must understand what your contract requires you to provide or be provided. • You must understand and continuously monitor what additional insured endorsement form, including the version date, is being provided, and who and what it will and will not cover. A blanket additional insured endorsement may not always provide the full extent of coverage you seek or must provide.

• If appropriate, you should seek to narrow the additional insured coverage you provide to require some demonstration of fault or negligence on the part of the named insured contractor or subcontractor. • You must work with both your attorney and your insurance consultant to make sure these issues are properly understood and addressed.

Ernstrom & Dreste focuses its practice in construction and surety law. For more information, contact Kevin at kpeartree@ed-llp.com.

any negligence or fault of Breaking Solutions. A lower court agreed, citing Crespo v. City of New York, which held that an additional insured’s right to indemnification could not be determined without first determining whether the loss was caused by negligence of the named insured. The appellate court reversed, finding that both NYCTA and MTA were additional insureds under Breaking Solutions’ policy. The Burlington court distinguished Crespo noting that the relevant policy there provided coverage “only to the extent that [the additional insured] is held liable for [the named insured’s] acts or omissions.” This language suggested that some wrongful conduct on the part of the named insured must provide a basis for imposing liability on the additional insured. In contrast, the policy language in Burlington required only that the loss was “caused, in

whole or in part,” by an act or omission of the named insured. Because Breaking Solutions’ act of striking the electrical cable caused the explosion, coverage was triggered, even though there was no negligence or wrongful conduct on its part. In the end, a risk that the owner was contractually required to identify, control and avoid – and did not – was borne by the contractor’s insurance carrier, with all the resulting impacts to the contractor’s insurance program and premiums. It is difficult to reconcile the seeming conflict between antiindemnification statutes, such as New York’s, that prohibit an owner from requiring a contractor to indemnify it against the owner’s own negligence, and the contractual obligation to obtain insurance, including additional insured coverage, that can effectively indemnify the owner for its own negligence. Short of legislation, that conflict will persist.

48 ROBEX — Spring 2017

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Spring 2017 — ROBEX 49


Opinion

Upstate Needs

UBER! “...Taxi services have had decades to come up with a good product. They have failed and it is time for a little creative destruction!”

by Aaron Hilger

W

hy is it so hard for New York to embrace change and embrace creative destruction? Uber has become a hot button of special-interest lobbying that defies common sense. The current debate pits Uber (and any other non-taxi) service against the taxi companies. The discussion should be framed around increasing transportation opportunities and employment opportunities. Most New Yorkers don’t care about Uber, other ride sharing services like Lyft, or taxis. They care about being able to get where they need to go, safely, cost effectively and on time. The taxi establishment is essentially an oligopoly – a few cab company owners control the market in a given city. The industry is highly regulated and the barriers to entry, because of the regulations and tightly controlled licensing schemes, are high. It is also a significant source of funding to cities (e.g. licensing fees) and to political candidates. Consequently,

service is expensive and in most of upstate, spotty at best. Like any industry, taxi services want to protect themselves and maintain a pricing advantage. A cab ride from the Rochester airport to Victor costs about $80, plus tip. The same ride in an Uber would run about 30- to 50-percent less, based on its pricing model that gets cheaper as speed increases. Uber drivers are also not tipped. The status quo, without ride sharing, is bad for Upstate New York, especially as we face a growing poverty problem. We know that transportation is one of the largest barriers to employment and access to services for people in poverty. Uber and the other services have the potential to solve these issues. You cannot cost effectively take a cab from the city to a construction jobsite in Webster, Henrietta, Gates, Victor, or Greece. The cab is unlikely to show up on time and the round trip will cost more than the day’s wages.

You could take an Uber, especially if you can share. You might even see companies or associations sponsoring cars to help solve employment needs. The Uber debate gives New Yorkers a chance to talk about regulations that matter, instead of keeping the status quo. Reasonable licensing requirements, safety inspections and vehicle standards can be applied to all services and offer consistency across the state. Expensive “medallions” and other fee gimmicks can be eliminated for all services. Reasonable insurance limits, not inflated limits that create a new pot of money for the trial bar to attack, can be put in place. All of these will serve to increase transportation options, help people get to work and help lift people out of poverty. The bottom line in this debate is that taxi services have had decades to come up with a good product. They have failed and it is time for a little creative destruction!

50 ROBEX — Spring 2017

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“MCC’s New Theater” (continued from page 34) an ideal acoustical solution for the space. The college provided regular input on their esthetic preferences. The result of several studies, including sophisticated computerized sound ray trace analyses – focusing ideal distribution of sound from the stage to the audience – led to a complex arrangement of reflective surfaces for the walls and ceilings. The geometries of these surfaces include transition elliptical arcs of the ceiling to splaying lines of the walls. The architectural designers were required to use a combination of two specialized 3-D modeling software to generate and plan out these complex geometries. The dramatic shapes were detailed to be constructed out of economical everyday construction materials in order to keep the project

within the budget. All exposed theater surfaces consist of walnut and cherry wood veneers and hardwood trim applied to multiple layers of gypsum board on light gauge steel framing. Flat areas of wall are accented by dividing the surface with extruded aluminum profiles to break up large expanses of wall, and to echo the dynamic sense of movement generated by the dimensional walls and ceiling clouds. The fast and precise construction of complex forms to meet a demanding six-month construction schedule required a highly talented and experienced group of framers, carpenters, and other construction professionals. The acoustical aspects of the design are augmented with contemporary HVAC, sprinkler,

carbon monoxide detection, sound (including a hearing assist system), and lighting systems to result in a state-of-the-art performance space. Rochester Davis Fetch (RDF) has served the Rochester and surrounding areas since 1955 as a commercial contractor specializing in interior/exterior framing, drywall, acoustical walls/ceilings and much more. They were tasked with updating the lobby aesthetics, corridors and completing the ceiling. The ceiling posed to be the more complex undertaking consisting of very intricate clouds and columns at various angles. It also had more than 70,000 square feet of drywall hung on light gauge metal framing with an integral suspension system of steel using threaded rod and heavy gauge clips.

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