NJLICA The Underground Winter 2023

UNDERGROUND THE

NJLICA’S QUARTERLY PUBLICATION

WINTER 2023

MEMBER SPOTLIGHT: Ted Brennan talks about running his business through a recession, how he empowers his team, and the secret to golf glory.

PLUS: Top contractor strategies for 2023, tips for finding a quality insurance program, and how to keep your team safe from noise hazards.

LETTERS

II want to wish everyone a happy, healthy, and prosperous new year! The winter is upon us, and so far it has been mostly mild and the con struction season has been extended. But the winter isn’t over yet! So, take this time to regroup and reorganize your operation and to keep up with the craziness, material cost, and supply chain issues.

I want to congratulate this year’s award recipients whom we recognized at our Holiday Awards Dinner in December: George and Debbie Vetter of Vetter Landscaping as our Contractor of the Year; Richard Dean of ICON Equipment as our Most Enthusiastic Member; and Steve Mazzarella of Jesco Equipment as our Associate of the Year. The recognition is well deserved!

IIn my seven years as executive director of NJLICA, we have tried many new initiatives: Outdoor beefsteak dinners during the pandemic, large volunteer projects, magicians, hypnotists, and comedians to name a few. But January 31 and February 1 marked the first Total Pro Expo, NJLICA’s Winter Conference.

Hosting a winter conference is nothing new for NJLICA. We have been having one for many years, providing one to two days of educational programming for our members. And although the programming has remained consistently high quality, the turnout has been spotty at times.

Thinking outside the box, NJLICA teamed up with New Jersey Nursery & Landscape Association and MAC Expos, and joined their existing tradeshow. Instantly, Total Pro Expo AND the NJLICA Winter Conference became bigger and better. Cost to the NJLICA member to attend: $30.00. This is what your $30.00 got you.

• Over 55 industry related classes

• The NJLICA Business Track which included presentations on state police federal roadside inspection review, Dirty Dirt legis-

We recently partnered with NJ Nursery and Landscape Association (NJNLA) to co-sponsor Total Pro Expo and Conference at the Raritan Expo Center. This event took place January 31 and February 1. NJLICA had a large exhibit area, and we made some great connections. The NJLICA Business Track was jam packed with informative classroom seminars.

If you missed this opportunity, mark your calendar for next year. It is a must-attend event with much to offer ALL NJLICA members.

We are gearing up for our National LICA meeting in Las Vegas, followed by CONEXPO. I hope to see many of you there.

Ron Garofalo NJLICA President

lation update, proper hiring and dismissal procedures, collection procedure and lien law review, risk management in snow and ice removal, OSHA 10 training (reduced cost), and CPR/emergency first aid (reduced cost)

• NJLICA members reception (free to NJLICA members)

• 130+ industry vendors

• Over 2000 industry attendees

All for $30.00. Think about what you get in return for $30.00 in your everyday life. My wife and I took our two grandsons to our favorite ice cream shop, and we spent $30.00. The two of us went to the movies and bought some popcorn and soda. Thirty dollars? That’s a joke! I bought four greeting cards for Valentine’s Day and my wife’s birthday (yes, they are back-toback days); the cost was over $28.00. And when was the last time you bought a couple of pepperoni pizzas? Holy cow! And for $30.00, you have the opportunity to change your business life.

Please mark your calendars for January of 2024 (dates TBD). It was, and will be, a can’t miss event.

Buddy Freund NJLICA Executive Director

NJLICA BOARD OF DIRECTORS

Ron Garofalo, President DAG Mobile Aggregate Recycling, Inc.

Dennis Mikula, Jr., Vice President Mikula Contracting, Inc.

William J. Esposito, Historian Espo's Tree and Crane Service

Frank C. Del Guercio Tilcon NY

Warren Gonzalez Foley, Inc.

Shelly Hewson Hewson Landscape, Inc.

Frank Horan Groff Tractor Mid Atlantic, LLC

Mark Krutis

Tom Krutis Excavating, Inc.

Bob Manis North American Aggregates

Joe Mayers Septic Experts, LLC

John Rothberg

L.N. Rothberg & Son

Dave Vander Groef Wantage Excavating Co., Inc.

Chris Wagner Twin Construction, LLC

Buddy Freund, Executive Director

COVER PHOTO BY KENNY ELIASON, UNSPLASH; PHOTO PAGE 5 BY FRANZ ROOS, UNSPLASH

Totowa, NJ: (973) 785-4900 | Freehold, NJ: (732) 780-4600

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TOP CONTRACTOR STRATEGIES FOR 2023

With 2023 well underway, there is still a lot of noise in the world today that detours business owners from charting a confident course through this new year.

For construction contractors, who are now feeling the real COVID-19 impact that most other industries experienced in 2020, that noise revolves around replacement of dwindling backlogs, material price increases, continued labor concerns, and the impact of interest rate hikes on capital expenditures. With no plans for additional governmental assistance programs, the potential to see a wave of contractor failures is real — and has already started.

While it is easy in the doom and gloom that comes with the shorter days and longer nights of winter to discuss inflationary concerns or debate if a recession is looming or already here, it is more productive to focus on the strategic planning techniques contractors can employ to capitalize on the opportunities we believe will emerge this year, like the first flowers of spring. Here are five of Grassi’s top contractor strategies for 2023:

Purchasing and Procurement

Take inventory regarding how you have been dealing with the price fluctuation of construction materials. To mitigate price fluctuation, consider purchasing and storing stock items in advance, in bulk, or secure a purchasing agreement for stock items in an effort to lock in prices and minimize overall cost. Review if change orders are being accepted for increased costs of construction materials or altered lead times for purchasing materials.

Revisit Your Prequalification Process

With so much talk in the industry around other construction contractors in distress and fear of failures, this is a good time to revisit and update your subcontractor prequalification process. When the contractor’s prequalification program relies on year-end information, the issue becomes the reliability of outdated financial statements on which you are making award decisions. In addition, 2021 saw the end of the government grant programs, such as PPP and ERC, so results may have been skewed. Asking for updated financial information, whether CPA-prepared or not, could give the qualifying contractor greater insight into the current financial health of a subcontractor before it is too late. Don’t be afraid to be more critical in your analysis and ask questions when warranted to show them you are looking.

Operations and Disaster Planning

Take note of increased costs this year due to inflation. If you implement new innovations to streamline operations, you may be eligible for R&D credits to help reduce any tax bite coming your

BY RONALD EAGAR

way. In the event of future disasters or slowdowns, have a plan in place and make sure your team knows the proper procedures to execute during a business crisis.

Project Performance Management

This is an ongoing review of the efficiency of your projects. It is essential to have a formal policy in place for communicating, reviewing, and documenting actual job performance in relation to the final buyout budget. Management should review job costing and profitability on a regular basis, and make changes in estimating and project management as required.

Internal Controls and Auditing

Reflect on whether your business has sufficient internal controls in place to deter the opportunity for someone to commit fraud, including your remote employees. Ensure job costs are being posted to the correct project. Also review how journal entries are originated, approved, and posted within your accounting environment. This becomes even more important in tough economic times as we head into the recession.

Every market condition presents opportunities, and this one is no different. So keep your eyes open. These may come in the form of labor or other talent, new customers as you step up and fill a market void, or accelerated investments in technology. Whatever it is, be open to it.

Your service providers and advisors are key sources of innovative ideas and strategies. Stay engaged in a continuous dialogue with them to understand what they are seeing across the industry. For example, a conversation with your bonding agent could reveal problems other contractors are experiencing and help you avoid them through proper planning. Keep in close contact with your audit and tax professionals, as their unique insights into your financial condition can yield valuable recommendations for greater efficiencies and cost savings. This discussion should extend to the bank and surety, making sure they are on board with any upcoming requests that will require your credit providers’ backing. In other words, leave no room for surprises.

If you have any questions on implementing these strategies, please contact Ronald Eagar, Construction Partner at Grassi Advisors & Accountants, at reagar@grassicpas.com or 516.336.2460.

PHOTO PAGE 8 BY DMITRY DEMIDKO, UNSPLASH; PHOTO PAGE 9 BY POP & ZEBRA, UNSPLASH

SAFETY PERSPECTIVES

WHO IS REQUIRED TO HAVE A DRIVER QUALIFICATION FILE?

A driver’s qualification (DQ) file is often thought to go handin-hand with the commercial driver’s license (CDL). This misperception has created confusion for many carriers. For interstate drivers, the need for a DQ file is based on the size and type of vehicle being driven. The applicable definition of commercial motor vehicle (per §390.5) includes both CDL and non-CDL drivers alike. Intrastate drivers would need to look at state-specific regulations to determine applicability.

Individuals operating the following vehicles in interstate commerce need to have a completed DQ file:

• Vehicles with a gross vehicle weight (GVW) or gross vehicle weight rating (GVWR), or gross combination weight (GCW), or gross combination weight rating (GCWR) of 10,001 pounds or more

• Vehicles designed to transport more than 15 people, or more than eight people when there is direct compensation involved

• Vehicles transporting hazardous materials that require the vehicle to be placarded

• The criterion in this definition that causes confusion is the vehicle weight. The general weight criterion for which a CDL is needed is 26,001 pounds. The weight criterion for which a file is needed is 10,001 pounds. So, interstate drivers of vehicles between 10,001 and 26,001 pounds (not hauling hazmat) need to have a DQ file but do not need to have a CDL.

NOISE HAZARD AWARNESS

Work around heavy equipment and power operated tools used in construction often generates excessive noise. This noise can often result in hearing loss. According to NIOSH, three out of four construction workers are exposed to noise levels above their recommended limit, which can result in moderate to severe hearing loss. Many construction workers will experience hearing loss at a young age. A young construction worker may have a hearing loss of a worker twice as old.

The loss of hearing for construction workers is often overlooked as a significant hazard, but in reality, hearing loss can cause many accidents and affect the workers’ safety and personal life. Feasible engineering or administration controls should be used to protect workers if employees are subjected to noise exceeding an eight-hour time-weighted average sound level of 90 decibels. In addition, whenever employee exposure equals or exceeds an eight-hour day, time-weighed average sound level or 85 decibels, the employer must administer a continuing, effective hearing conservation program a required by OSHA 1926.562(d)(1).

BY ANTHONY MORREALE

For intrastate drivers, it depends on what the state has adopted for the weight criterion. Several states use the same 10,001-pound criterion found in the Federal Motor Carrier Safety Regulations. Other states have increased the weight limit to anywhere from 12,000 pounds up to 26,001 pounds (which does coincide with the CDL requirements).

States that Require a USDOT Number

Apart from federal regulations, some states require intrastate commercial motor vehicle registrants to obtain a USDOT Number. These states include: Alabama, Alaska, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, South Carolina, Texas, Utah, Washington, West Virginia, Wisconsin, and Wyoming

Contact us for more information regarding your driver qualification files.

Anthony Morreale is the owner of Tri-State Safety Solutions, a provider of health, safety, and environmental compliance training and consulting as mandated by city and state agencies.

H.K. CARR

A hearing conservation program should include the following elements:

• Monitoring employee noise exposures

• Use of engineering controls, work practices, administrative controls, and personal protective equipment

• Fitting each potentially overexposed worker with the appropriate hearing protection

• Training employees in the effects of noise on their personal health and the appropriated protection measures

• This must be provided at

the time of hire and on an annual basis every year

• Explain procedures needed to prevent further hearing loss

• Provide an initial hearing (audiometric) test at the time of hiring with and annually after that

• Record keeping of all testing procedures and of all administered training provided must be maintained

Exposure to impulse or impact noise should not exceed 140 decibels, as described in 1926.52(E) Plain cotton was often used

as a protective hearing device. This is not permitted as specified in 1926.101(c). Ear protective devices inserted in the ear shall be fitted or determined individually by competent persons.

The content of the hearing conservation program must be in writing and available to employees and OSHA compliance officers.

The selection of appropriate hearing protection should be done based on the hazard and the job being completed. A further study of the job requirements needs to be done by a competent person to establish the type of hearing protection required and the noise reduction ration required to protect the exposed worker. These requirements are needed for the safety and health of your workforce.

H.K. “Skip” Carr and his wife, Judy, have operated H.K. Carr & Associates, a training company focused on OSHA compliance and construction safety, for over 30 years.

PRACTICAL TIPS FOR A QUALITY INSURANCE PROGRAM

Insurance products are like any other products you buy. To determine the nature or quality of a product, you can Google the reviews. However, for the contractor insurance buyer, insurance reviews are not available. If you Google insurance reviews, you will find many reviews on personal insurance. Not much is found on construction insurance programs.

As a buyer, you need to make sure that you have an insurance program that will be there for the catastrophic claim that could put you out of business or into severe debt if the claim is not covered. To achieve this, be sure to select an experienced insurance broker with a focus on designing and implementing comprehensive construction insurance programs. The program must be inclusive of all aspects of your operations. You will also have contractual obligations required by construction contracts that involve all lines of liability insurance and your program must interact seamlessly.

We picture the insurance component of construction losses as an inverted pyramid. The point of the pyramid is always on the contractor causing the loss. The weight of all of the upstream contractors and owners are pressing down on that point. When you are under all that pressure, it is not the time to worry if your insurance company can expertly handle the claim or whether they have the financial strength to pay the claim.

Insurance is not important today, but tomorrow it could be the only thing on your mind. Work with your insurance broker and ask questions before you buy the insurance product. What does the underwriter know about your operations? Is it part of the insurance company’s risk portfolio? Is the claim department familiar with the type of claims you might incur? Discuss your worst-case claim scenario. Run through the steps to settle the claim so there are no surprises if it does happen.

The financial strength of your insurance company is also important. New Jersey courts have declared insolvency on 104 insurance companies since 1970. As a safety net for claimants and policyholders, the Property and Liability Insurance Guaranty Association (PLIGA) Act was passed in 1974. The act provides the framework and rules for the guaranty association to settle the outstanding claims of the insolvent insurance company.

When an insurance company is declared insolvent, a liquidator is appointed. Their job is to review, assemble, and disburse the assets of the defunct insurance company which is now called an estate. The liquidator forwards all outstanding claims to PLIGA. The guaranty association then begins the claim settlement process utilizing a $300,000 cap for each claim. Claim loss adjustments and expenses are sent to the liquidator, who in turn provides the funds to PLIGA to pay the claims and expenses.

This process goes on until either all claims are settled or the assets are depleted. If there are assets remaining, then the unpaid claims exceeding $300,000 will be reviewed and additional dollars allocated. This is a simplified overview of the process. The

BY MICHAEL PUGACZEWSKI

actual process is far more detailed and can take years and even decades to complete.

The most obvious problem here is the short fall on the final claim value. For a catastrophic loss, $300,000 will not fill the ticket, and you will fall short on property reconstruction costs or there will be financial obligations for you to the third-party claimant going forward.

These are not the only problems you encounter. Occurrence policy forms respond to claims on the date the accident or loss happened. Down the road, if there is an incurred loss not reported to you of which you are unaware, and if it falls to a settled estate, you will not have any insurance to fall back on to defend or pay the claim.

For as long as you were insured by the defunct company, that period will leave you uninsured. The bankruptcy clause in your umbrella policy prohibits the drop-down clause from activating, which prevents the umbrella from covering claims up to the underlying policy’s limits.

Work with an experienced construction insurance broker and ask questions. Remember to ask for an A.M. best credit rating on the insurance company proposed. Over the long-term, quality always wins.

If you want to learn more about the Property and Liability Insurance Guaranty Association, check their website out at njguaranty.org. In addition to a list of the current New Jersey estates being liquidated, there is a list of companies in liquidation from all states.

Michael A. Pugaczewski is the chief executive officer at M. Adams & Associates, which provides insurance products and services to construction, commercial, and industrial companies.

TRANSPORTATION LEADERSHIP IN THE NEW CONGRESS

I have spoken with a few Hill insiders to see what they see as the challenges and opportunities that may or may not come out of the new Congress. Most agree that if there is disruption, it will be generated in the House. The Senate will continue to stay the course, as the election brought minimal changes. The administration will spend an increasing amount of time before the House in oversight hearings and most likely position President Biden for another campaign in 2024.

With control of the House of Representatives shifting to the Republican Party, the leadership of committees that impact the transportation industry is changing. Though Democrats still control the Senate, changes are being made by both parties to the leadership structure of several key transportation committees there as well. The transportation leader for the New Jersey delegation remains Senator Cory Booker who serves on key Senate transportation committees.

Rep. Sam Graves (R-MO) has been selected to serve as chairman of the House Transportation and Infrastructure Committee. He served as the committee’s ranking Republican for the last four years.

“One of my highest priorities is a bipartisan, long-term reauthorization of the Federal Aviation Administration and aviation programs,” he said in a statement. “Aviation is a major sector of our economy, and we must ensure our nation remains the world’s gold standard in safety and at the forefront of incorporating new technologies into the system,” Rep. Graves added. “I am also looking forward to working across the aisle to develop other key authorizations for our transportation and infrastructure systems, including a pipeline safety bill, a Coast Guard bill, and the next Water Resources Development Act.”

He is also focused on some of the long-term funding issues involved with the $1.2 trillion Infrastructure Investment and Jobs Act (IIJA) enacted in November 2021.

“The biggest criticism is that IIJA is not paid for, and that could be a huge problem,” he said. “We still have a lot of work to do in terms of funding the IIJA. Also, Congress’ biggest job over the next two to four years is oversight of how that money will eventually be spent.”

Meanwhile, Rep. Jason Smith (R-MO) will serve as the chairman of the House Committee on Ways and Means. The committee is expected to examine trade policy and the nation’s tax code to re-shore and strengthen the country’s supply chains, where products and services vital to national security are made at home using American labor.

Rep. Kay Granger (R-TX) will serve as chairwoman of the House Appropriations Committee, which she’s served on for most of the 20 years she’s spent as a member of Congress.

“As the committee responsible for federal funding, it’s our responsibility to reduce spending where we can and ensure that we prioritize resources on national security,” she noted in a statement.

In the Senate, Sen. Ted Cruz (R-TX) becomes the ranking member on the Commerce, Science, and Transportation Commit-

BY NICK YAKSICH

tee, replacing Sen. Roger Wicker (R-MS) who is moving over to the Committee on Armed Services.

For the Banking, Housing, and Urban Affairs Committee, which has jurisdiction over transit in the Senate, Sen. Tim Scott (R-SC) becomes the ranking member.

For the Committee on Appropriations, Sen. Patty Murray (D-WA) becomes the chair, replacing Sen. Patrick Leahy (D-VT) who retired. Concurrently, Sen. Susan Collins (R-ME) becomes ranking member as Sen. Richard Shelby (R-AL) is retiring.

These committee leaders collectively have the responsibility to meet the funding obligation of transportation programs enacted in the record 2021 bill. This investment will be critical to maintain and expand New Jersey’s critical transportation network.

Scheideler

Co.

Nick Yaksich serves as the director of government affairs for

Excavating

LEGALLY SPEAKING

PAY-IF-PAID PROVISIONS IN NEW JERSEY

Recently, the New Jersey Appellate Division affirmed the Superior Court’s decision in Jersey Precast v. Enterprises, Inc. et al. Particularly, the Dec. 7, 2022, decision affirmed the lower court’s finding that a “pay-if-paid” clause in a material supplier’s purchase order with a general contractor was binding and enforceable.The court in Jersey Precast acknowledged that New Jersey has no statute or published case law that addresses the enforceability of “pay-ifpaid” clauses. As such, the court relied upon the authorities and approaches of other jurisdictions. For example, various courts in other states require such a clause to include clear and unambiguous language in order for a “pay-if-paid” to be enforceable. For example, see Main Elec., Ltd. v. Printz Servs. Corp., which states “…the relevant contract terms must unequivocally state that the subcontractor will be paid only if the general contract is first paid by the owner and set forth the fact that the subcontractor bears the risk of the owner’s nonpayment”; and DEC Elec., Inc. v. Raphael Constr. Corp., which states that risk-shifting provisions of a pay-if-paid term must be clear and unambiguous or, if ambiguous, interpreted as setting a reasonable time for payment. Moreover, at the federal level pay-if-paid clauses are typically enforceable where there is express contractual language that clearly demonstrates the intention of the parties to shift the risk of payment from the contractor to the subcontractor. For example, see Fixture Specialists, Inc. v. Global Construction LLC.

Using the above standards as guidance, the Appellate Division in Jersey Precast critically pointed out that in New Jersey, freedom of contract is a “‘is a factor of importance” within “the framework of modern commercial life.” For example, see Whalen v. Schoor, DePalma & Canger Grp., Inc.. It is a “settled principle that parties bargaining at arm’s-length may generally contract as they wish.” To that end, the court held that “parties may make contractual liability dependent upon the performance of a condition precedent.” For example, see Duff v. Trenton Beverage Co. The Appellate Division further articulated that a prohibition against the use of pay-if-paid provisions as conditions precedent in construction contracts should come from the legislature rather than the courts, and as such, held that as long as the contract specifies a clear and unambiguous intent and agreement by the parties to shift the risk of nonpayment, a pay-if-paid provision is enforceable subject to the parties’ implied duty to not frustrate conditions precedent to their performance.

Key Takeaways

It is critical that contractors and subcontractors alike keep in mind that the terms of any such provision in a contract should be clear and unambiguous, particularly with respect to the shifting risk of owner nonpayment. The Jersey Precast case establishes a standard that will enforce contracts between sophisticated parties, including “pay-if-paid” provisions if the agreed upon terms are

BY ALEXANDER AVELLAN

unambiguous. Consequently, subcontractors should continue to be aware of the implications of consenting to a properly written “pay-if-paid” provision, and that by agreeing to the same, subcontractors are assuming the risk of owner nonpayment, which can result in significant financial harm. Importantly, the Appellate Division in Jersey Precast also provided that while a “pay-if-paid” clause may be enforced when the non-payment is solely due to the fault of the owner, if the provision is silent as to situations when non-payment is the fault of the general contractor, a court may rule that the entire provisions is unenforceable to the extent the general contractor is responsible for the owner’s non-payment. Finally, New Jersey’s approach to “pay-if-paid” clauses is distinguishable from New York’s legal standards, which prohibit these clauses as unenforceable waivers of a subcontractor’s statutory lien rights.

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If you don’t see the program you need, let us know and we will develop it specific to you needs

Alexander Avellan is an attorney with Lindabury, McCormick, Estabrook & Cooper. He can be reached at AAvellan@Lindabury. com or 908-233-6800.

RETIREMENT PLANS STARTUP COSTS TAX CREDIT: SECURE ACT 2.0

No 401k plan? Now is the time to start one! Secure Act 2.0 removes most all cost barriers for small businesses with 1 to 50 employees to start a 401(k) plan plus provides potentially much greater tax credits for those companies that provide an employer match (employer contribution). These tax credits are effective as of January 1, 2023.

Eligible employers may be able to claim a tax credit of up to $5,000, for the ordinary and necessary costs of starting a SEP, SIMPLE IRA or qualified plan (like a 401(k) plan.) A tax credit reduces the amount of taxes you may owe on a dollar-for-dollar basis.

Tax credit covers 100 percent of new plan costs for the first three years

This credit can be applied to 100 percent of your qualified business 401(k) costs such as plan setup and administration. That’s up to $15,000 in tax credits over the first three years to offset setup and administration charges for the maintenance of your plan. Most small businesses wouldn’t incur half of that to start and cover the plan administration costs.

Here’s how it works

Your business must have at least one employee, besides you as the owner, who earns less than $100,000 a year (a Non-Highly Compensated or NHC employee) to qualify for a tax credit. The tax credit received is the greater of $500 or $250 per NHC employee with a cap of $5,000 applied to 100 percent of the costs you incurred. So, if your 401k business cost is $1,200 annually and you have 10 or fewer eligible employees, your tax credit is $1,200 in year one or $3,600 in total over the first three years fully offsetting these costs.

Amount of the credit

The credit is 50 percent of your eligible startup costs, up to the greater of:

• $500; or

• The lesser of:

• $250 multiplied by the number of NHCEs (Non-Highly Compensated Employees under $100k/year) who are eligible to participate in the plan, or

• $5,000

Eligible startup costs

You may claim the credit for ordinary and necessary costs to:

• Set up and administer the plan (recordkeeping fees, plan admin cost etc.),

• Educate your employees about the plan

BY TRACY CARVER

Providing an employer match/contribution provides tax credits of $1,000 per employee

Employer contributions are typically 100 percent deductible already. But now businesses with 1-100 employees can receive tax credits, too. If you have less than 100 employees, you can qualify for tax credits of up to $1,000 per employee for your first 50 employees for your employer contributions. This applies for those employees earning less than $100,000 per year. The applicable percentage is 100 percent in the first (year plan begins) and second tax years up to $1,000 per employee, 75 percent in the third year, 50 percent in the fourth year, and 25 percent in the fifth year, and none for subsequent years. Note, there are some added tax credits for employees 51-100 as well, but a lesser percentage. There is no qualification for the credit if you have more than 100 employees. This includes prevailing wage contributions made to the plan per employee.

Lastly, for those contributions you receive a tax credit, those likely don’t qualify for tax deductions. However, the amount not covered by the credit should be deductible. You’ll want to review with your tax accountant.

Here’s how it works

In year one, let’s say your business contributes $15,000 to the plan and you have 10 employees who earn less than $100,000 and all received over $1,000 in employer contributions. You just qualified for $10,000 in tax credits in year one. Let’s keep things constant for this example, so your number of employees and contributions are the same throughout the next five years. You’d receive tax credits of $10,000 in year two, $7,500 in year three, $5,000 in year two, and $2,500 in year three for a total of $35,000 over the five years. That’s powerful stuff. 401(k) plans are truly more affordable than ever for businesses with 1-50 employees.

Over the past 15 years, Tracy Carver has worked for two of the largest national prevailing wage solutions providers in the country. For the past six years she has been providing the same compliant solutions and plans through her company, TLC4 Prevailing Wage. Tracy also works closely with the DOL doing seminars and making sure her clients are getting up to date and accurate prevailing wage information.

Carl Oliveri, CPA, CCIFP, CFE, MBA Partner, Construction Practice Leader

SPOTLIGHT TED BRENNAN / WALLKILL GROUP MEMBER

One day in February 1991 when Ted Brennan answered a phone call from his brother Tom, an HVAC contractor in New Jersey, he knew it was about something serious. How could he tell?

“Because he called me ‘Theodore,” Brennan says.

It turned out another family member was opening a clothing store and needed a carpenter. After spending a few years framing houses, Brennan was a pretty good one. So he headed to Vernon, N.J., and helped his brother with the job. When they were finished, the building’s owners asked them if they could renovate the conference rooms in the basement.

“We told them, ‘Sure, we can do that,’ when we really had no idea what they were talking about,” Brennan says. “It was a $200,000 job, but it might as well have been a $50 million job, it was so intimidating. But we just figured it out.”

Years later, Brennan has gone from “we just figured it out” to running a successful company. Today he is the director of operations and business development for Wallkill Group, a general contractor and construction management firm based in Hamburg, N.J., offering services such as additions, renovations, and new construction to commercial clients in the tri-state area

Wallkill Group will celebrate their 10th anniversary next year. But as a kid growing up in Massachusetts, Brennan was not thinking about the construction industry; he thought he wanted to be a physical education teacher. Brennan enrolled at Bridgewater State where he played football, but after a year, he realized college wasn’t for him. Instead, he went to work for a friend’s older brother framing houses on Cape Cod.

“I was never a great student, but I was good at math,” Brennan says. “When I jumped on the crew, I was just a sponge to all of it and inside a couple of years, I was running the house framing crew. I really enjoyed it. It was physical, at the end of the day you could walk away and see you had accomplished something.”

During the late 1980s and early 1990s, the country went through a recession that caused Brennan’s house framing work to slow. So when his brother picked up the phone and said, “Hey, Theodore,” in 1991, Brennan was happy to head down to New Jersey.

After figuring out how to renovate those conference rooms in Vernon, Brennan and his brother decided to join forces, forming T.M. Brennan Contractors in 1991. Brennan drove back to Massa-

chusetts to pack up and then moved to the Garden State. He says he didn’t have two nickels to scratch together—just four boxes of clothes and a pickup truck that he was five months behind in making payments on. Over the next few years, he and his brother built a successful business in the county featuring both general and mechanical contractors. But Brennan says they grew a bit too fast, and the next recession hit them hard from 2008 to 2012.

“We went through a lot of challenges, and it was a very stressful time,” Brennan says. “We were close to losing everything. The advice given to us was that we should declare bankruptcy. But instead, we downsized and went through a reorganization. And Wallkill Group evolved out of that.”

While Brennan’s brother Tom maintained the T.M. Brennan business name, Brennan created Wallkill Group. In his role as head of business development and operations, he oversees all estimating and approves any money going in and out of the business. Since the company launched in 2014, they’ve overseen a widerange of construction projects, including a three-story addition to Blair Academy’s Bogle Science Center, a renovation of Sussex City Tech’s science labs, and new construction of Premier Dialysis Center and several Lakeland Bank branches, among many other jobs in the tri-state area.

A recent project that stands out to Brennan is their work with Selective Insurance, a global company with a headquarters in Branchville, N.J. Wallkill Group completed a renovation project, which led to a much larger project building a boutique hotel for the company’s visiting executives. Selective Insurance was recognized in the county for the redevelopment of that property and putting an investment into a small town like Branchville, and for Brennan, it meant a lot that his business played such a significant role in Selective receiving such recognition.

Wallkill Group joined NJLICA a few

”years ago, mainly because of the organization’s Apprenticeship Program that would allow the company to continue to complete its public works projects. But while that was a major draw in the beginning, Brennan now appreciates the other benefits of being a member.

“I had never heard of LICA, but then I saw how long they had been around and how passionate they were for their members in so many different capacities,” he says. “We started participating in some of the events and seeing familiar faces or companies we could possibly partner with on some new work.”

As an avid golfer, one of the events Brennan enjoys most is NJLICA’s annual golf tournament. His team took home the firstplace trophy in 2021 and 2022.

“That first year when I heard the second-place score, I thought everyone was going to be throwing stuff at us when they heard our score, there was such a big gap,” Brennan says. “Year two, the joke was that I only brought my B team. But we won again.”

Brennan isn’t making any predictions for this year’s tournament, but facetiously says he hopes everyone else ups their game.

With four kids (three of them in college), Brennan jokes that he has to get them off the payroll before he can step back from the business to spend more time traveling and exploring with his wife, Tara. When he does, he hopes that his small, amazing team (consisting of Rob Gash, Michele Lucci, and Taylor Shortway) will be ready to take it on. In the meantime, Brennan has no plans to grow Wallkill Group, taking heed of a lesson he learned during the last recession.

“Just because you bring more people in, more projects in, doesn’t mean you’re going to be more profitable,” he says. “During that tough stretch with me and my brother, we were moving a lot of money through the business, but we weren’t making much. Running a successful business is all about finding the right people. Today, we have a niche crew, a phenomenal small team who make stuff happen every day.”

For Brennan, the best part of his job is that team. He enjoys mentoring them, empowering them to lead, and watching them grow.

“It was my brother Tom who had the vision that I could do more than just be a good carpenter. He saw something in me I did not know I had back in 1991. I am eternally grateful to him, and I try and pull that out of those close to me as much as I can.”

Over the years, Brennan has received many compliments from clients, saying both the crew on the jobs and the staff in the office are great.

“I follow up with a thank you because that’s always nice to hear,” he says. “But they’re supposed to be great. It’s like I tell my four kids: If you’re going to be a ditch digger, be the best ditch digger ever. Whatever you’re going to do, throw your ass into it 100 percent.” Kelley Freund

Photos previous page: Top photos, l-r: Selective Insurance hotel in Branchville, N.J.; Blair Academy Bogle Science Center addition and renovation; Selective Insurance hotel

Bottom photo: a high school media center renovation for Warwick Valley Central School District

Photos this page: L-r: Blair Academy Bogle Science Center addition and renovation; Selective Insurance hotel

“

RUNNING A SUCCESSFUL BUSINESS IS ALL ABOUT FINDING THE RIGHT PEOPLE. TODAY, WE HAVE A NICHE CREW, A PHENOMENAL SMALL TEAM WHO MAKE STUFF HAPPEN EVERY DAY.

NJLICA EXPANDS SCHOLARSHIP OPPORTUNITIES TO CONTRACTOR'S EMPLOYEES, ASSOCIATES, AND ASSOCIATE'S EMPLOYEES

NJLICA SCHOLARSHIP CRITERIA

Each year, NJLICA is proud to distribute scholarships to multiple applicants. This year, scholarships will be awarded to active NJLICA contractor and/or associate members who have been active in the association for at least two years. The following outlines the categories for who is eligible to be considered for a scholarship from NJLICA.

CATEGORY I - NJLICA Contractor Members

An active NJLICA contractor member may submit unlimited applications for their company for one of the following:

• NJLICA contractor member

• Spouse of contractor member

• Children of contractor member

• Stepchildren of contractor member

• Grandchildren of contractor member

• Step-grandchildren of contractor member

CATEGORY II - NJLICA Contractor Members Employees

An active NJLICA contractor member may submit one application for their company for one of the following:

• NJLICA contractor member employee

• Spouse of contractor employee

• Children of contractor employee

• Stepchildren of contractor employee

• Grandchildren of contractor employee

• Step-grandchildren of contractor employee

NJLICA SCHOLARSHIP PROCEDURE

As an NJLICA member, you, a family member, and/or employee may qualify for a scholarship for continuing education. I encourage you to review the qualifications and information listed below and submit your application postmarked by April 3, 2023.

Procedure:

• Student obtains a scholarship application from the NJLICA website, njlica.org.

• Student completes the application as per instructions.

• Student completes essay on a separate sheet of paper. Essay question found on application.

• Student sends the application to the executive director postmarked no later than April 3, 2023.

• Applications postmarked after April 3, 2023 will not be considered.

Scholarship recipients will be honored at our Scholarship Awards Dinner. This year’s event will be held at J.A. Neary Excavating in Hillsborough, N.J., along with the 2nd Annual NJLICA Truck Show, on Wednesday, May 17, 2023.

**The NJLICA contractor member has the responsibility of submitting ONE application for their company. NJLICA will only accept ONE application per company. If multiple applications from a company for this category are submitted, they will be returned to the NJLICA contractor member and then they will have to submit their ONE recommended application to NJLICA to be reviewed.**

CATEGORY III - NJLICA Associate Members and Employees

An active NJLICA associate member may submit one application for their company for one of the following:

• NJLICA associate member

• NJLICA associate member employee

• Spouse of associate member or employee

• Children of associate member or employee

• Stepchildren of associate member or employee

• Grandchildren of associate member or employee

• Step-grandchildren of associate member or employee

**The NJLICA associate member has the responsibility of submitting ONE application for their company. NJLICA will only accept ONE application per company. If multiple applications from a company for this category are submitted, they will be returned to the NJLICA associate member and then they will have to submit their ONE recommended application to NJLICA to be reviewed.**

NJLICA is proud to recognize its 2022 Safety Award recipients. These companies have demonstrated a positive safety record and an ongoing commitment to safety in the workplace. Congratulations on this welldeserved recognition.

Almasi Companies LLC

Caravella Contractors, Inc.

DAG Mobile Aggregate Recycling, Inc.

Halecon, Inc.

Liberty Lines & Sealcoating LLC

Mikula Contracting, Inc.

Quick Transport Co., Inc.

Renova Environmental Company

Robert More & Sons, Inc.

Tom Buske & Son Construction LLC

Vollers Excavating & Construction, Inc.

NJLICA SAFETY AWARD RECIPIENTS

NJLICA AWARD WINNERS

CONTRACTOR OF THE YEAR

As a child, George Vetter always cut the neighbors’ lawns. Today, he still does—just many more of them. Vetter has maintained lawns for over 40 years, establishing George Vetter Landscaping along the way.

Vetter earned a bachelor’s degree in marketing from Kean University and went on to get a certificate from Rutgers University in landscape design and plant identification. He also has an associate’s degree in firefighting. Vetter served as a firefighter for 15 years, running his landscaping business at the same time, before deciding to dedicate all his time and energy into building up George Vetter Landscaping.

Today, Vetter is married with two daughters. His wife, Debbie, runs the office. He still enjoys being on site for jobs with his three hardworking employees, especially those jobs that involve landscape design, excavating, and hardscaping. The fleet has many trucks, including two single-axle dump trucks and a four-wheel drive International which is used to haul the tractors, backhoe, excavator, and dozer on the many trailers to jobs.

Most of the work George Vetter Landscaping does is in Union and Somerset counties. Jobs vary anywhere from planting and mulching, to constructing walls and installing carports. Vetter is willing to try almost anything. Due to the changing of economics in the landscaping field, he is looking ahead to the future and has purchased a preserved farm in Hunterdon County along with Debbie and his parents.

MOST ENTHUSIASTIC CONTRACTOR

Richard Dean of ICON Equipment Distributors, Inc. in East Brunswick, N.J., is an accomplished sales professional with over 16 years in the trench safety shoring and shielding industry. Through team building, professional development, and company collaboration, Dean opens the line of communication between his clients and customers and sees projects through to completion while remaining customer focused. In his free time, Dean likes to travel, play golf, attend sporting events, and enjoy the company of family and friends.

ICON Equipment Distributors was incorporated in 1982. ICON has been a leader in design, manufacturing, and rental of trench shoring and shielding equipment for over 40 years. Their products include slide rail shoring systems, steel trench boxes, aluminum trench boxes, steel road plates, and a line of wood and composite access matting for temporary roadway and ground protection. ICON Equipment is a proud member of the UTCA of New Jersey, NJLICA, Meadowlands Chamber of Commerce, and many more associations.For more information, visit iconjds.com.

JESCO, originally named Jersey Equipment Sales Company, was founded in 1972 by Lou Robustelli and his wife, Terry. With a deep-seated knowledge of the construction industry, Robustelli was able to relate to the needs of contractors, and for the past 50 years, JESCO has been supplying the Northeast and Mid-Atlantic regions with quality construction equipment, parts, and service.

In 1972, JESCO forged a strategic partnership with John Deere, becoming an exclusive dealer of John Deere products. Over the years, JESCO has become the sole John Deere construction and forestry equipment dealer for New Jersey, New York, Delaware, and Maryland.

JESCO is now an award-winning John Deere dealer but remains true to its humble beginnings as a small, family-owned and operated company. In July 2005, Robustelli’s son Jon became president of JESCO and implemented an aggressive growth strategy, expanding JESCO’s territory. The business has enjoyed rapid growth during the last decade, expanding from three to 13 locations covering five states. Today, JESCO employs over 300 people representing world-class manufacturers such as John Deere, Wirtgen, Kleemann, Vogele, Hamm, Ditch Witch, and Topcon.

“The down-to-earth equipment people” highlights the commitment and dedication JESCO has made to their customers over the years. That commitment and dedication extends beyond their customers and into the surrounding communities of all their branches, as they employ residents in each area.

Top left photo: George and Debbie Vetter, George Vetter Landscapring

Right photos, top to bottom: Jerome Ferri, Steve Mazzarella, Mark Signorelli, JESCO

Bottom photo: Richard Dean, ICON Equipment Distributors, Inc.

CraigD@NJBobcat.com

Steve.Caputo@NJBobcat.com

Sean Kunkel 973-800-7109

Sean.Kunkel@NJBobcat.com

FOR MORE INFORMATION VISIT US AT

Digital apprenticeship in your pocket.

Putting the training room in the field for thousands of front line, blue collar workers

o 1year of free toolbox talk topics

o Free safety program audit

o 10% discount on software

LICA members get a free trial of our cutting edge software

NEW MEMBERS

GROWING BIGGER AND STRONGER EVERY DAY

Contractor Members

AKR Contractors, Inc.

Andrew Rusin

Lincoln Park, N.J.

Cabrera Transport LLC

Galo Cabrera Union, N.J.

Carlitos Transport LLC

Carlos Cordova Hillside, N.J.

Channel Marine Construction, Inc.

Frank Bowen

Clermont, N.J.

Charles J. Becker & Bros., Inc.

Louis Becker

Pennsauken, N.J.

Cravo Enterprises, Inc.

Joel Cravo

Old Bridge, N.J.

Custom Sign Source

Anthony Cretella Landing, N.J.

DeSantis Construction, Inc.

Dominick DeSantis

Somerset, N.J.

Enviroscience Solutions LLC

John Okafor Orange, N.J.

Frank A. Macchione Construction, Inc.

Mike Macchione

Rochelle Park, N.J.

Freshwater Well and Pump Service

Dan Bowen

Frenchtown, N.J.

FWBK LLC

Len Polichuk

Huntingdon Valley, Penn.

GenForce Power, Inc.

Jaroslaw Morko

Monsey, N.Y.

Hook Constructions LLC

Peter Halter, Jr.

Pennsville, N.J.

Joni Corp.

Joan Aljian Piscataway, N.J.

J & Q Trucking Co. LLC

Dale Manning Mays Landing, N.J.

James Cuneo Paving

Nicholas Cuneo Wharton, N.J.

THE NJLICA DUES YEAR RUNS FROM SEPT. 1-AUG. 31. DUES INVOICES WERE SENT IN SEPTEMBER AND NOVEMBER. IF YOU HAVE NOT PAID YOUR MEMBERSHIP DUES FOR 2022-23, PLEASE FORWARD TO THE ASSOCIATION OFFICE. YOUR CONTINUED SUPPORT IS APPRECIATED.

*34 NEW MEMBERS IN THE FOURTH QUARTER

Sand Castle Excavation LLC

Joseph Andrzejczak

Villas, N.J.

Total Site Improvements LLC

Thomas Chamberlain

Eastampton, N.J.

Associate Members

Cut Wright LLC

Joseph Wright Green Pond, N.J.

Jersey Tree Care of Ridgewood LLC

Kevin Doyle Ridgewood, N.J.

Ken Nagy, Jr. and Son Trucking LLC

Kenneth Nagy, Jr. Sayreville, N.J.

Liberty Lines & Sealcoating LLC

Mark Arnone

Red Bank, N.J.

Matthew J. Yuhas Trucking LLC

Matthew Yuhas

Martinsville, N.J.

Nehme Brothers, Inc.

Tony Nehmi

Edgewater, N.J.

NVN Paving LLC

Ron Attias

Fair Lawn, N.J.

Parkeast Contracting LLC

Ari Zwick

Toms River, N.J.

Premier Excavating LLC

Jeff Costa

Saddle River, N.J.

Quick Transport Co., Inc.

Nelson Santos

Howell, N.J.

Safe-T-Site LLC

Sonny Grosso

Toms River, N.J.

Salvato Construction LLC

Joseph Concepcion

Laurence Harbor, N.J.

Dean Frey Equipment Sales

Dean Frey

Sussex, N.J.

Earthbrain

Gary Miller

Philadelphia, Penn.

TS Safety Solutions

Terance Eldridge

Plainfield, N.J.

GET INVOLVED

THE NJLICA BOARD HAS POSITIONS AVAILABLE FOR THE FOLLOWING COMMITTEES:

Membership

Scholarship

Legislative

Communications and Marketing

Silent and Live Auction

Member Programming and Social

Member Networking/Education Monthly Meetings

Events:

State Conference

Golf Classic

Beefsteak Dinner

Holiday Awards Dinner

SAVE THE DATES

EVENTS

2023 TOTAL PRO EXPO/ NJLICA WINTER TRADE SHOW

NATIONAL LICA CONVENTION

March 12-13, 2023

Harrah's Las Vegas Hotal & Casino

Las Vegas, Nev.

CONEXPO-CON/AGG

March 14-18, 2023

Las Vegas, Nev.

SPRING DINNER MEETING

APRIL 19, 2023

6:30-8:30

Foley Caterpillar

855 Centennial Ave., Piscataway, NJ

2ND ANNUAL NJLICA TRUCK SHOW/ SCHOLARSHIP AWARDS

MAY 17, 2023

5:00-8:30

J.A. Neary Excavating

330 Roycefield Rd. Unit H, Hillsborough, NJ

SUMMER KICKOFF

JUNE 7, 2023

6:30-8:30

Stumpy's Hatchet House

159 Route 22 East, Green Brook, NJ

35TH ANNUAL NJLICA GOLF CLASSIC

AUG. 21, 2023

11:00 a.m.

Black Oak Golf Club

169 Bartley Road, Long Valley, NJ

FALL DINNER MEETING/THE MAHAN COLLECTION/SCHOLARSHIP FUNDRAISER

SEPT. 13, 2023

4:00-8:30

Antique Trucking Museum

53 Cross Rd., Basking Ridge, NJ

CLAY SHOOT

OCT. 30, 2023

8:00 a.m.

Lehigh Valley Sporting Clays

2750 Limestone Street, Coplay, PA

HOLIDAY AWARDS DINNER

DEC. 7, 2023

6:00-11:00

The Meadow Wood

461 Route 10, Randolph, NJ

PATRONS

VISION STRONG MANAGEMENT GROUP

Buddy Freund PO Box 166 Succasunna, NJ 07876 973-753-2800

buddy@govisionstrong.com govisionstrong.com

Vision Strong Management Group provides full-service association management services for associations, foundations, societies, and trade organizations. Add your company name to our Patron Directory. Contact NJLICA Executive Director Buddy Freund at 973-630-7600 or buddy@govisionstrong.com.

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At Highway Equipment, we are SOLUTION PARTNERS. We help you find the right equipment and features, like the Screen Machine 612W Trommel, to get YOUR job done productively and predictably.

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