K eystoneBuilder A publication of the Pennsylvania Builders Association • www.PaBuilders.org • March/April 2010
Help with the heavy lifting PBA’s Premier Partners provide financial support and much more
INSIDE THIS ISSUE } Where did the 55+ housing market go? } Builders find new income streams } Update on the 2009 building code
Volume 7 • Issue 2 • March/April 2010
5 President’s message
11 Excavate and save
When it comes to government, less is more
With the PA One Call benefit, PBA members dig for free
6 Premier Partners help with the heavy lifting
12 Member spotlight
Laying a foundation to strengthen PBA
9 Where did the 55-plus housing market go?
Cessna Construction Inc.: Growing with success
14 Homebuilders identify new income streams Housing market stimulates creative business solutions
As the economy faltered, this group of potential homebuyers got hit hard
Member Insider PBA shows support for homebuyers . . A Presidential jobs forum comes to Pennsylvania.. . . . . . . . . . . . . . B In my opinion: Surviving the recovery . . . . . . . . . . . . . . . . . . . . . . . . C On the hill. . . . . . . . . . . . . . . . . . . . . . . . . . . D
Cover designed by Chris Anderson
Keystone Builder
The Obama administration held a jobs forum in Harrisburg last December – one of several conducted around the country to collect ideas about how to boost job growth. Here PBA President Joseph Mackey makes a point to the group. See Member Insider for the full story.
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Associate Vice President Ron Agulnick, HBA of Chester/Deleware Secretary Warren Peter, Indiana-Armstrong BA Treasurer Joseph Harcum, Wayne County BA Immediate Past President Gene Kreitzer, Lebanon County BA Executive Vice President Doug Meshaw Editor Scott Elliott Associate Editor Laura Pyne
PrintComm Staff Publisher Kevin Naughton
President’s message
Vice President Ray Venema, West Branch Susquehanna BA
by Joseph Mackey • PBA President
President Joseph Mackey, Pocono BA
When it comes to government, less is more
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can’t help but notice that most Pennsylvanians I know – not just PBA members – are troubled by the growing reach of the government in their lives. From minor interference to burdensome regulations, concerns are mounting across the state, and especially in the building community. This came to my personal attention during a recent Obama Administration jobs forum in which I participated last December. You can read about this event on page B. While many of the politicians and bureaucrats who attended are wellintentioned, they just don’t seem to grasp the idea that government interference is part of the problem today, not part of the solution. Politicians claim they want to help get the economy back on track. To do this, they come up with additional programs that spend public money, ultimately raising our taxes. It’s easy to see what’s wrong with this picture.
Assistant Editor/Publication Director H.J. Hormel
The wisdom of past patriots
Graphic Design Jason Gabel
Wasn’t it one of our forefathers who said “That government is best which governs least”? We seem to have lost sight of that guiding principle. Case in point: Look at the latest round of bloated building codes. When Pennsylvania first made statewide building codes the law of the land, the regulations that guided new construction were contained in two modest books. Today, the codes have grown to fill a complete set of 13 books, costing more than $1,500. The cost of a new home – as a result – has been driven up at least $15,000. The part of these codes that is getting the most attention, of course, is government-mandated sprinklers. You know, I think I’m starting to see a theme here, because it’s not the sprinklers that are bad – it’s the government-mandated part. I don’t have all the answers, but I do know that many other Pennsylvanians are fed up with a “government that governs most.” We want to get back to a government that governs least. That is why our lawsuit opposing the 2009 building codes is so critical – not just for builders, but for all Pennsylvanians. s
Advertising Sales Manager Brenda Poe Advertising Sales Jeff Pinwar • 800-935-1592, ext. 118 Address correspondence to: Keystone Builder 600 North Twelfth Street Lemoyne, PA 17043 Phone: 800-692-7339 or 717-730-4380 Fax: 717-730-4396 Web: www.PaBuilders.org E-mail: selliott@PaBuilders.org Advertising does not imply acceptance or endorsement of the products contained in the publication. Publishing and advertising sales services provided by:
2929 Davison Rd. • Flint, MI 48506 Phone: 800-935-1592 • www.printcomm.com An Exclusive Publication of the PBA Keystone Builder magazine is published six times a year by the Pennsylvania Builders Association®, Editorial Offices, 600 North Twelfth Street, Lemoyne, PA 17043. With the exception of official association announcements, the statements of fact and opinion that are made herein are the responsibility of the authors alone and do not reflect an opinion or philosophy of the officers or the membership of the PBA. Materials may not be reproduced without written permission from the PBA headquarters. POSTMASTER: Send address changes to Pennsylvania Builders Association, 600 North Twelfth Street, Lemoyne, PA 17043. SUBSCRIPTIONS: Subscriptions available through membership to the Pennsylvania Builders Association.
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Premier Partners help with heavy lifting Laying a foundation to strengthen PBA by R.A. Bunty
The dictionary defines the word “partner” as “one that is united or associated with others in an activity of common interest.”
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hat definition holds especially true for those companies engaged in the Pennsylvania Builders Association’s Premier Partners sponsorship program, a simple, yet innovative initiative started in 2007 with the purpose of building mutually beneficial relationships among PBA’s diverse members. “Our Premier Partners are investing in protecting an industry through efforts and initiatives that we participate in through government affairs, protecting us from bad laws and regulations that would stifle competition,” said PBA President Joseph Mackey. “The second part is having a greater presence among PBA members, who need to recognize the commitment by these partners, putting their money forward to help the entire industry, and hopefully recognize and give opportunities to those businesses (partners) when in need of their products or services…” By helping each other, they are strengthening PBA and helping business and commerce to thrive in Pennsylvania,” he added.
Total Access is one of PBA’s newest Premier Partner sponsors. Here, Michael Dalzell helps a PBA member with a question during the PBA board meeting in November. The red ribbon identifies Dalzell’s company as a Premier Partner.
Getting a lift from a Premier Partner Sixteen-year PBA member Scott Durbin of Scott W. Durbin Construction, Altoona, Blair County, got just the lift he needed from a Premier Partner exactly when he needed it. It all started at a PBA board meeting. Durbin, past president of the 205-member Blair/Bedford Builders Association, is a PBA life director and member of the PBA board. He attends all board meetings, which are held three times a year across the state. While attending a recent meeting, he had a chance to peruse some of the Premier Partner information displays set up outside the meeting room as a service for PBA members in attendance. “I found literature on Total Access, which specializes in home installation of accessibility equipment, and realized I could get what I wanted from them,” said Durbin. He needed a custom installation of a Telecab. This small elevator could provide accessibility from a garage to a living space on a first floor.
Total Access & Mobility Inc., located in West Chester, has offered a full range of accessibility products and elevators for residential and commercial customers, helping elderly clients and individuals with disabilities in central and eastern Pennsylvania, central and south New Jersey, Delaware and northern Maryland to become more mobile and independent within their homes since 1985. Durbin sent Total Access an e-mail asking for a quote on the job he was bidding in Altoona, which called for installation of the Telecab. “They responded fast. I got what I needed in a short period of time, even during the holiday time, when a lot of people don’t answer their phone,” Durbin said, recalling his phone conversation with Mike Dalzell, representative with the Total Access office in Pittsburgh. “Scott and I went over the bid package, and we were able to develop a game plan that would meet code and install this model lift,” said Dalzell. “During our conversation, Scott mentioned that he saw that we were a PBA
One of the benefits provided to Premier Partners is access to members during the board meetings that are held three times a year around the state. Craig Ray (middle) with First National Bank, a silver-level sponsor, helps two members interested in financial information.
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Premier Partner and that he called, too, because of that reason.” Durbin added, “I think it supports our association and the idea of doing business with a member, member-to-member, or association Premier Partner-to-member, which benefits everybody.”
Banking on a Premier Partner Although from different geographic regions of the commonwealth, two longtime PBA members share a common, wholehearted endorsement of one Premier Partner – literally – all the way to the bank. Ed Sroka of Somerset County and Randy Rushton of Luzerne County are customers of First National Bank today because of its commitment to them and support of PBA through the Premier Partner program. “There are many local banks that I know the heads of the banks personally, and it was a hard decision to know which bank to go with. But the tipping point for me was that First National Bank is a Premier Partner with PBA,” said Sroka, a 17-year PBA member and owner of WS Edwards Building Systems in Somerset. When I see a bank that is willing to step up and be a Premier Partner, I know that they are seriously committed to the construction industry.” Rushton, a 23-year PBA associate member through his business, Randy’s Paint and Decorating, who recently started South Valley Custom Homes LLC in Wilkes-Barre, echoed similar sentiments about his experience. “We’ve built three houses in the last year … one financed through First National Bank. We have a good rapport with the bank, and they with us,” he said. Under continuous operation since its chartering in 1864, First National Bank, based in Hermitage, Mercer County, northwest of Pittsburgh, is the fifth largest bank headquartered in Pennsylvania, with total assets of $8.6 billion. It has been a silver-level Premier Partner since 2007.
Sponsorships offer relationship-building tool “We think of ourselves as a relationship driven bank, and encourage personnel at our branches to become involved in their community,” said J. Craig Ray, vice president of small business banking at First National Bank’s Pottsville Office. “Local builders’ organizations are made up of local residents. Where we really
see the greatest potential is making a connection at the local level, helping with business as well as personal needs, trying to be more compassionate, sympathetic, and understanding.” From a personal perspective, both Rushton and Sroka appreciate that personal touch, and see it as the essential quality that makes the Premier Partners program a good match for PBA. “To use an old phrase, Premier Partners is a tremendous win-win situation for everyone,” said Sroka. “For the Premier Partner, it far surpasses any other methods
of reaching the builders and me, personally, as a builder. Establishing a one-on-one relationship is a very powerful way to market their companies.” EDITOR’S NOTE: Interested companies can demonstrate their commitment to Pennsylvania’s housing industry by becoming a PBA Premier Partner through sponsorship at one of three tiers: gold at $25,000, silver at $15,000, and bronze at $10,000. Customizable sponsorships are also available. To learn more, please contact Bill Lapitsky at 800-692-7339, ext. 3030, or blapitsky@PaBuilders.org. s
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MemberInsider March/April 2010
Member briefs
PBA shows support for homebuyers
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he Pennsylvania Builders Association’s representatives attended a press conference on Dec. 23 during which Gov. Ed Rendell announced that more home financing funds will be made available to homebuyers through the Pennsylvania Housing Finance Agency. Regional Vice President for PBA’s Mideast Region Vicki Shannon spoke on behalf of PBA. The $1.2 billion statewide mortgage program “is important, because homebuilding is a large segment of our state’s economy,” she explained. “Plus it has a powerful ripple effect that helps other businesses, because every time a home goes up, it creates considerable demand for products and services.” Shannon is a member with the HBA of Metro Harrisburg. She also is an executive with McNaughton Homes, Harrisburg. While introducing the initiative, Gov. Rendell said, “The message to existing homeowners and first-time homebuyers alike is that now is a great time to buy a home in Pennsylvania.” The governor’s leadership, including clear public statements about the importance of homebuilding, can play a critical role boosting economic recovery within the residential construction industry in Pennsylvania.
Program to benefit builders, too As Shannon mentioned in her remarks to the press, the initiative will help builders as much as buyers. Under the program, $50 million will be set aside to provide 450 new-home construction loans to encourage new building activity – and, therefore, new jobs – across the state.
PBA officer Vicki Shannon spoke during a Rendell administration press conference in December. She expressed support for a new Pennsylvania Housing Finance Agency program that will make more home financing funds available to homebuyers in the state. PHFA is a PBA Premier Partner sponsor.
Additional elements of the program include $50 million toward 30-year, fixed-rate mortgages at a 4.5 percent interest rate, and expanding the Keystone First program to help eligible buyers borrow up to $6,000 interest-free to be used toward closing costs. For more information about the program, visit www.phfa. org, and check out “Builders: Alert customers to PHFA programs” below.
Builders: Alert customers to PHFA programs The Pennsylvania Housing Finance Agency can turn anticipated homebuyer tax credits into cash at the closing table. Eligible PHFA first-time homebuyers can receive up to $6,000 to use for closing costs and/or down payment on a newly constructed home. Eligible non-first time homebuyers can receive up to $4,000. In both cases, the funds are 0 percent, no fee loans to be repaid when homebuyers receive their federal tax refund. PHFA is also offering a special low rate of 4.5 percent to buyers purchasing new homes. Homebuilders should have their customers check with a PHFA participating lender for the APR and other details. PHFA is a PBA Premier Partner sponsor that works with PBA members to educate consumers about its beneficial financing programs. Those programs can help builders sell more homes. Visit www.phfa.org or call 800-822-1174 to learn more. Member Insider • Keystone Builder
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Presidential jobs forum comes PBA’s Joseph Mackey was one of 12 state leaders to weigh
PBA President Joseph Mackey makes a point to the audience during the December Obama jobs forum. Mackey was included in a panel of 12 government and industry experts.
About 60 government leaders, reporters and interested observers attended the jobs forum, held at the Farm Show Complex and Expo Center in Harrisburg. The event ran nearly four hours, and all comments were recorded and will be shared with the Obama administration.
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to Pennsylvania in on jobs, economic needs by M.H. Morrison oseph Mackey – then incoming president of the Pennsylvania Builders Association – was one of 12 panelists who participated in a jobs forum hosted by the U.S. Department of Agriculture’s Pennsylvania Farm Service Agency and Rural Development in December. The roundtable discussion on jobs and economic growth followed in the wake of the White House Jobs and Economic Growth Forum. The ideas collected at roundtables like these will be presented to President Obama. At the forum in Harrisburg, elected officials and leaders of statewide organizations had an opportunity to discuss ways to accelerate job growth, specifically in rural Pennsylvania, which is defined as fewer than 1,000 people per square mile.
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Housing concerns given a voice Mackey said that as a member of the panel, he wanted to first and foremost let the people who would present this data to the president know how important housing is to local and state economies. He made the point that while the stimulus monies were OK, what is needed is long-term reform of tax laws and streamlining of governmental and regulatory processes. He also brought up the danger of repealing small business tax cuts and the problem of estate taxes (sometimes called death taxes) that threaten to wipe out families. “We should not be penalizing people for being successful,” he said. Green initiatives/products/jobs were discussed with Mackey pointing out that sustainability – while worthy – should be determined by the market, rather than the government. Job growth is often held back by inadequate infrastructure in rural areas. To improve that situation, Mackey suggested there should be partnerships between the business community and local/state governments. The banking industry and its willingness to loan money were brought up at the roundtable. Mackey explained another key issue is the language that allows banks to pull back lines of credit arbitrarily.
Agreement on housing’s importance Fellow panelist Thomas Williams, state director of USDA Rural Development-Pennsylvania, agreed that housing is a core issue. He is responsible for the loans, grants and guarantees made, and technical assistance offered, through the rural development housing, utility and business programs. He said that this and other roundtables have gone well. “We got a great turn out of panel personnel and a good audience that had good input.” There is no better way to understand the problem and find solutions “than to talk to people who are on the street,” he added. While Mackey said that he usually represented the minority opinion on the panel, the four-hour meeting was absolutely worthwhile. “Simply to be heard was worthwhile,” he said and added that sometimes people have to hear an idea a few times before they think about implementing it.
In my opinion:
Surviving the recovery
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or more than 50 years, the Pennsylvania Builders Association has been an outspoken advocate for the residential building industry. Now the worst housing recession in memory has swept over the industry, and PBA has not been exempted from this event. PBA’s primary responsibility on behalf of its Robert Yanover members is lobbying for the building industry. As part of this effort, countless pages of data, articles, policy papers, documents and advertising pieces are produced by our Government Affairs Committee, aided by staff and PBA volunteers. But the GA division and all its associated task forces and committees don’t work in isolation. They are heavily supported by the communicators in the public relations division, who help them craft effective messages. They get assistance from other staff, too, who see that communications between the locals and the state association is a free exchange of information to better inform our decisions. Plus, let’s not forget the accounting division that handles the business end of keeping the association financially sound. Accounting also helps with the work of the Pennsylvania Committee for Affordable Housing, or PaCAH, which supports political candidates who support homebuilding. Today, times have changed, and all the departments at PBA are operating with fewer staff members and less funding. So let’s not forget, they can’t do this work alone. It’s our responsibility as members of PBA to take on tasks perhaps previously left to staff.
A member-driven association To our credit, PBA has never been a staff-run association. It has always been led and energized by the members If that leadership and energy were ever needed, now is the time for us to recommit ourselves to our state builders association and the goals for which we created it. A call to action is sounding across the state, reminding us of our pledge of service to PBA. We are the voice of the homebuilders in this state. We are the muscle that does the heavy lifting when there’s work to be done. We are the spirit of PBA that for more than half a century has never tired. It is no secret that our membership has declined. But those that remain are the core of our association and the heart of the building industry in Pennsylvania. We have the strength to rebuild our membership during the next several years and return PBA to its previous levels of member participation. But it now falls on us, and not the staff, to get the job done, as, in truth, it always has. Have no doubts, working together, we will survive this recovery and come out on the other side stronger and better for it. But to get there we must all share the work load, standing side-by-side. Column by Robert Yanover of Yanover & Sons Inc., York, which is a member of the York County Builders Association. March/April 2010 • Keystone Builder
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The code goes to court
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On the hill
he Pennsylvania Builders Association’s Executive Committee recently voted to file a complaint in Commonwealth Court over the implementation of the 2009 International Construction Codes, which took effect on Jan. 1. In addition to the complaint, PBA filed for an injunction Jan. 19 to stop the enforcement of the new 2009 codes across Pennsylvania. The outcome of this case was not available at press time. While executives of PBA were reluctant to initiate litigation, there was no alternative. Throughout 2009, PBA participated actively in the building code development process, including the Uniform Construction Code Review and Advisory Committee process in Pennsylvania. The association also presented testimony before the Independent Regulatory Review Commission to request a delay of the adoption of the codes. In the end, the state’s Review and Advisory Committee refused to exclude any provision of the 2009 codes, and the Independent Regulatory Review Commission said that its hands were tied under the law, and it was required to approve adoption. At the same time, PBA worked to pass legislation to extend the 2006 building codes. This was attempted to give all parties involved time to fully understand the implications and costs of the 2009 codes before they became law. When the legislation was not taken up and passed, PBA had to appeal to the court system to stop the 2009 code’s implementation. The bottom line for builders and members is that the 2009 codes have been adopted and are in force for now.
Price of the 2009 codes
Fire sprinklers: The national average size of a new home in 2009 was 2,271 square feet and the per square foot cost of installing sprinklers in Pennsylvania surveyed at $3.30 per square foot. Cost estimate – $7,494 Fire sprinkler design: While it is not required by code, many municipalities have already stated that they will require a design professional to submit sprinkler plans. Cost estimate – $600. Increased energy requirements: The following are being required: insulation and fenestration increases, air infiltration barriers, duct sealing, attic insulation, programmable thermostats, and blower door and duct blaster testing. Cost estimate – $3,800. Structural: PBA has found that there is no accurate estimate for the increased costs of the wall bracing requirements, since it will vary dramatically from one plan to another. Cost estimate – $1,800. Electrical and mechanical: The following are being required: makeup air for kitchen exhaust hoods over 400 cubic feet-per-minute and increased dryer duct requirements, arc fault breakers and tamper-proof receptacles. Cost estimate – $1,800 Total estimated cost of 2009 code requirements: $15,494 D
I Keystone Builder • Member Insider
This image shows the dramatic expansion of the building codes during the past decade. On the left are the 1999 BOCA and CABO code books, which represented the entire building code for that time. On the right, by comparison, are the greatly increased number of code books and expanded number of pages found in the 2009 set of International Construction Codes.
Big changes As many members already know, the biggest change in the 2009 codes is the sprinkler mandate. Under the code, all new townhouses need to have a sprinkler installed, effective Jan. 1. (Unless the builder has a contract that allows grandfathering – see ‘Grandfathering’ below.) The sprinkler mandate for one- and two-family homes does not go into effect until Jan. 1, 2011. Other high-impact changes are found within the energy provisions of the International Energy Conservation Code and the International Residential Code. Structurally, new design and construction requirements regarding wall bracing, as well as lateral deck supports, will add up quickly. See the “Price of the 2009 codes” side bar for the estimated costs associated with the highest impact changes.
2009 code books For those who have not purchased a 2009 code book, the various books available and prices are at www.iccsafe.org/Store/Pages/default.aspx. Your local executive officer can place your order for you. Because the 2009 codes bring a multitude of changes, PBA recommends that members attend one of the Pennsylvania Housing Research Center’s code training sessions. Local association offices can provide information on training programs in a member’s area, or members may go directly to the PHRC web page: www.engr. psu.edu/phrc/Training/Workshops.htm. For more information or any questions, contact Jerry Leach, PBA director of building codes, at 717-368-8850, or e-mail him at jleach@PaBuilders.org.
‘Grandfathering’ “Grandfathering,” or being able to build under the 2006 codes, is possible by utilizing design or construction contracts signed before Dec. 31, 2009. Information regarding this process and all of the details are at PaBuilders.org.
Where did the 55-plus housing market go?
by M.H. Morrison ust a few years ago, the market for 55-plus and 50-plus housing appeared to be endless. As a result, many builders in Pennsylvania and across the nation planned communities catering to this “active adult” market. As the economy faltered, this group of potential homebuyers got hit hard, drying up this once red-hot segment of the buying public. Pat Kelley, chair of the 50+ Housing Council of the National Association of Home Builders, wrote in his chair’s message that the Baby Boomers who made up the 50-plus market “have been hit hard by the current economic downturn and they won’t bounce back as quickly, or as far.”
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The big change
Kleger said that companies in the midst of building active adult communities changed their approach, and even their product, as the market disappeared almost overnight. While the 50-plus niche may not fully return for another decade, Kleger said that by this summer there will be some positive movement. She sees this movement as the result of increased Barbara Kleger, owner/ consumer confidence, along with the housing tax credit president of 55+ modification and expansion. Consulting and Senior The return of these buyers to the market does Living in Philadelphia, not mean that the consumers are going to want says that by summer the same features as those interested in 55-plus there will be positive housing previously. movement in this “People are much more value oriented today,” niche market. Oh, market, where for art thou? Kleger said. Barbara Kleger, owner/president of 55+ Consulting and Senior This means that the luxuries often included in the 50-plus properLiving in Philadelphia, explained that for many buyers in the 50-plus ties aren’t as important. For example, granite countertops will be market, the purchase of a new home in these active communities replaced by Corian or Formica. was “discretionary.” She explained that younger homebuyers often purchase a home to York County bubble burst accommodate a growing family or as part of a career move. This is unlike the older buyers who are looking at a new home as Perry Cisney, president/owner of Perry L. Cisney Custom Builders buying into a maintenance-free, active lifestyle with people of a similar and developer and builder of the Laurel Vista community, saw the age and with similar interests. transformation of the market firsthand. In the current economic times, this type of purchase was no longer When he proposed his 170-lot, 55-plus development in December as attractive or viable as home values dropped, buyers considered 2007, it generated a lot of excitement and he had more than 1,000 working longer than planned and retirement portfolios took a hit. Continued on page 10 March/April 2010 • Keystone Builder
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55-Plus housing market Continued from page 9
leads. Unfortunately, by the time he was ready to build homes in his first active-adult community, the housing and financial slump had hit. Interest dried up and he had eight contracts cancelled. “They bought reservations and couldn’t sell their homes,” he said. “When the financial/home industry crashed, that market niche disappeared.” He was able to build and sell six homes, but that was it. With his planned homes not selling, he had to explain to residents that he needed to change the development from an active-adult, maintenance-free community to market-rate homes for any age group. The residents agreed that they’d rather see homes built than stagnation and empty lots. Cisney is in the midst of changing the models and plans and can’t yet say how the new marketing strategy is working. The Baby Boomers “want their investments and housing values to come back” before they move, he said. “They’re a conservative group, so they’re staying put.”
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Cisney said that he got into the active adult-market based on information from the National Association of Home Builders and his own market research. But, of course, no one could have foreseen the drastic changes that would affect the market. “We did everything right” in planning our 55-plus community, Cisney said. “The timing of the market killed us.”
Waiting for the demand to return Kleger said that, as with other housing downturns, as the market turns around there will be pent up demand for homes. She added that as Baby Boomers feel more confident in the economy, they’ll consider getting back into the market before prices increase again. They’ll understand that it’s a great time to buy, and “they’ll be more realistic about selling their houses,” she said. s
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Excavate and save With the PA One Call benefit, PBA members dig for free
by M.H. Morrison o matter where in the state members dig, they must use PA One Call to locate underground utilities. The good news is that even with the fee increase to $100, the Pennsylvania Builders Association makes this a free service through its member benefits program. By law, all excavators must contact PA One Call at least three business days prior to excavation. The nonprofit was created to protect underground infrastructure, such as electric and natural gas lines. This service’s annual fee doubled to $100 on Jan. 1. It is due at the time of a builder’s first project of the year that uses mechanical excavation. With proof of PBA membership, the new $100 fee is waived. If a member does pay, PBA can verify membership and have the fee refunded. In this case, members should give their PA One Call invoice to the local builders association’s executive officer who, in turn, will validate and forward it to PBA. Last year alone, 825 members used this benefit for a total savings of $41,250. In 2010, the savings will be even greater. The PA One Call system goes into action after receiving requests from excavators, contractors, plumbers, builders, designers, and the general public to find out where underground lines are located. Then the nonprofit notifies member underground facility owners. From there, the member underground facility owner marks where their lines are located at the project site.
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The goal of the notification and the markings is to minimize utility service interruptions, reduce on-the-job injuries and deaths, promote a higher level of public safety and protect the environment.s
How to use PA One Call To place a dig or design notification in Pennsylvania, call 8-1-1 or 1-800-242-1776 (outside PA). To contact the agency’s administrative offices, call 1-800-248-1786 or e-mail general questions to contact@pa1call.org. PA One Call can also be contacted by mail: 925 Irwin Run Road West Mifflin, PA 15122
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March/April 2010 • Keystone Builder
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Member spotlight
Family still comes first with Glenn R. Cessna Jr., shown here with his children Jacob, Rachel, Levi, Samuel and Rebekah.
Cessna Construction Inc. Growing with success
by T.W. Burger lenn R. Cessna Jr. graduated from high school in Harborcreek, not far from Waterford, where he now lives and operates his business. There were not a lot of jobs around, so he signed up for a four-year partnership with Uncle Sam in the Army. At Ft. Bragg, he got into construction, and he fell in love with carpentry. “I found that I really enjoyed working with my hands and building things. I was working for a general contractor when I decided to start my own business in 1993,” he said. Cessna Construction Inc. focuses mostly on commercial and residential remodeling, though the company also does some new construction. “Like any small business, you grow with it,” he said. Cessna said his biggest challenge was learning how to “let go,” and make the transition from carpenter to business owner. “It is always tempting to fall back into that carpenter mentality, but you can’t do that. You have to look at things from a different
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Business quick facts: Cessna Construction Inc. • Owner: Glenn R. Cessna Jr. • Years in Business: 17 years • Business Focus: Commercial and residential remodeling; some new construction • Area of Operation: Northwestern Pennsylvania region • Association Involvement: President, Builders Association of Northwestern Pennsylvania • Key to Success: “Hiring guys to do the carpentry work, so I could focus on the business.” • Web Site: http://cessnaconstruction.com/wp/ 12
I Keystone Builder • March/April 2010
aspect,” he said. “Over the years, I have been able to grow the business by working hard and focusing on customer satisfaction.” One of his current projects is the renovation of a local Dairy Queen store. “This is our third time working with the owner. It’s part of the relationship we’ve developed. That’s rewarding,” he said.
Growing the business The transition from skilled craftsman to business owner was Cessna’s “graduate school” in the building trade. “It was different … hiring guys to do the carpentry work so I could focus on the business,” he said. “I wanted to do more jobs and see more clients, and obviously, there was only one of me. There was no way to be at three jobs at one time. It forced me to come out of my comfort level and let my guys take over and run the job.” He said he reached a turning point when one of the larger kitchen remodeling jobs came at a time when Cessna was very busy with the business end of things. “I walked in at the very end of the project. I walked in, looked around, and thought, wow, this is pretty cool.”
Challenges keep the work interesting There’s always something new, Cessna said. “This fellow called me up about remodeling his Victorian home,” he said. “He had already had some work done, but he wasn’t happy with it. He said the first contractor had made the roof too high on the addition, and it was out of proportion with the rest of the house.” After some measuring and head-scratching, Cessna made a proposal. The owner gave him the go-ahead.
“So, we cut the roof loose, jacked it up, and removed 18 inches of wall, and then eased the roof back down to where he wanted it,” he said. “I was in the 82nd Airborne Division, and we always thought we could do anything. I think that attitude sort of followed me into this business.”
Established 1946
MECHANICSBURG, PA CORPORATE OFFICE
800-360-0660 WWW.EICHELBERGERS.COM
Water Well Drilling Water Treatment Geothermal Drilling, Loops & Fusion A sunroom addition by Cessna Construction.
Always putting the customer first Treating customers with respect, even on the smaller jobs, is not only good professional “manners,” it can sometimes pay off in terms other than plain satisfaction. “A customer wanted a skylight. It was a small job and took my men half a day to complete. The customer liked us being on time and was satisfied with our work. She asked me if I would be interested in remodeling her kitchen. I said that I would, but she said that she needed a garage built first. After we built the garage, we remodeled the kitchen and then turned the old garage into a great room. What started as a small job turned into $150,000 worth of work!” he said.
Benefits of association membership Soon after Cessna started his own business, he joined his local builders association. “It was one of the first things I did,” he said. “I wanted to be part of a trade organization that was recognized by my community. I talked to another builder, a member of the association, and he sponsored me. “I’ve been a member of the Builders Association of Northwestern Pennsylvania ever since. After serving as a board member for many years, I am honored to be president this year.” Cessna said his PBA membership has been satisfying in a very deep sense, and it has been helpful to his business on many levels. “In recent times, the business has been pretty rough in our area. We’ve had some membership loss in the association. A lot of people quit. But the true winners stick through it, thick or thin. “When I hear somebody say ‘what’s in it for me?’ well, it’s tough to hear that kind of thing. I’m proud to be on the board. We don’t do it for us individually; we do it for the greater good. What’s the old saying? ‘A rising tide floats all boats.’ As Americans, we have to start thinking that way. I work for my employees and the successful jobs we turn out.” Best of all, he said, is that he really loves what he’s doing. “Sometimes I can’t believe I get paid for this,” he said. s
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Another commercial project by Cessna Construction was this medical building renovation.
For a location near you visit www.yaleelectricsupply.com. March/April 2010 • Keystone Builder
10 March Keystone Builder Pub Ad V2 .indd 1
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2/10/10 1:18:53 PM
Homebuilders identify new income streams
Housing market stimulates creative business solutions by M.H. Morrison o stay viable, builders from across the state are searching out ways to bring in additional revenue. Some of the sources that members of Pennsylvania Builders Association have found to augment their bottom line are outgrowths of their core business. Others have found new revenue streams that are unexpected. One drywall contractor, for example, returned to his musical roots and is supplementing his income by providing DJ services to parties, business events and clubs. In all cases, these business owners are doing what’s necessary to keep their companies operating and their employees working.
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Exploring new markets Property purchased a decade ago has become a revenue boost for Garman Builders. Mike Garman, president of the Ephrata company, explained that when the market got slow, he built rental units on his available land
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for two reasons: to provide work for his employees and for the income that the rentals could supply. Additionally, he was able to get good pricing from his subcontractors and vendors. To cut down on the headaches of owning rental properties, Garman uses a management company for this property and other rentals. For him, when the market turns around and selling makes more sense than renting, he will convert the property to condos and sell off the units. Garman said that just like everyone else, he has been looking for more ways to bring in money. He has branched out into remodeling by starting with leads from the list of customers of his custom-built homes. To maintain a competitive edge, the company is not subcontracting as much of its work. Other revenue generating strategies include a broad range of products in terms of price and traveling further for projects. Garman is not just thinking about the current market but also planning for the future by accumulating cash. He said that as soon as the economy takes a turn for the better, he’ll be ready to take advantage of it.
Tackling commercial projects Commercial projects are helping Pride Builders, in Swoyersville, to weather the current economic slowdown. Company President Ron Piccolotti said that there is a lot of work out there that is funded by government money, as well as strictly commercial projects. Recently, his company worked on a hotel in West Virginia. It was more than five hours from his home base, but it made good business sense. He said that in the past his company had never done anything like the hotel. “You do what you gotta do,” he said. He has had to adapt his business style to these new opportunities and has been steadily busy as a result. For example, on a big commercial job, it may take him up to two weeks to generate the proposals. However, once a builder has broken into the commercial building market, he or she should be able to get additional jobs, according to Piccolotti’s experience. “It’s a different set of rules in dealing with commercial jobs. It’s a big learning curve,” he said. Piccolotti added that he tells everybody to tighten the numbers, to aggressively go after work and get more involved in their builders association.
Learn more 8 Pa. Locations • 800.345.8175 14
I Keystone Builder • March/April 2010
For more information on ways to increase revenue and thrive in the current economic climate, visit PaBuilders.org and explore ideas available under the “Education and Resources” header. s
In the Northeast, propane tops fuel oil. a high-efficiency propane furnace costs $2,100 less to install and $100 less to operate annually than a high-efficiency fuel-oil furnace.
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29%
Price premium for fuel oil in Buffalo relative to propane.
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13%
In the West, propane has your back. a high-efficiency air-source heat pump with propane backup recoups installation costs 40% faster than a ground-source heat pump with electric backup.
Price premium for electricity in Florida and Texas compared to the national average.
Greenhouse Gas Emissions Natural gas: 0.8
12–18
Propane: 0.9
Years
average lifespan of a home heating system in the U.S.
Electricity: 2.4 0
0.5
1.0
1.5
2.0
Metric tons CO2 equivalent per unit per year
2.5
In the Midwest, propane is smarter than geothermal. In a retrofit replacement, a groundsource heat pump pays back the homeowner in fuel-cost savings in six years. a highefficiency propane furnace does it in less than 12 months.
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