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Winter 2021

CONTENTS 12

FEATURES 11

COVER

Golfing for a Cause: Bonn-J Golf Tournament Tees up FTBA Scholarship Fund

FLORIDA

FTBA’S OFFICIAL PUBLICATION Winter 2021

TRANSPORTATION BUILDER



12 More Hands on Deck: FDOT’s Workforce Development Program is Aimed at

Infrastructure Funding:

What it Means for Florida Transportation Builders

Addressing Contractors’ Labor Needs

By Nick Fortuna

19 Are You Approachable? By Todd Cohen, CSP

Infrastructure Funding: A Breakdown for Florida Transportation Builders By Neal I. Sklar, Esquire and Ryan A. Weiss, Esquire FDOT Workforce Development Program Update

Smart Solutions for Managing New Federal Funding

By Will McClave, President of Systems

Florida OSHA State Plan Moves Closer to Reality

By Phillip B. Russell, Esquire

Cautionary Tales of Workers’ Compensation Insurance through a PEO

Florida OSHA Plan Moves Closer to Reality

Understanding Workers’ Compensation Insurance through a PEO

Stories on page 23 and 29.

DEPARTMENTS 7

U pdate from the Chairman: Attracting Workers to Our Profession By Henry Mayfield, M of Tallahassee, Inc.

By Mike Shea, AAI

9 President’s Message:

Post-Pandemic Crossroads

Company Transition and Succession Planning

By Ananth Prasad, P.E.

By Peter Hilera, CPA

46 FDOT Insight: Interview with Matt Carlock, P.E.

Have a story idea? Best practices to share? Please email editor Jill Andreu at jandreu@thewymancompany.com.

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Chairman’s Update

Attracting Workers to Our Profession

HENRY MAYFIELD M OF TALLAHASSEE, INC.

FTBA will launch trade scholarships for students who want to participate in vocational training in industry-related trade programs. This firsttime opportunity will include trade programs such as welding, heavy equipment operator, diesel mechanic, carpentry, and commercial truck driving, just to name a few.

quote on mikeroweworks.com resonates now more than ever: “Pop culture has glorified the ‘corner office job’ while unintentionally belittling the jobs that helped build the corner office.”

The labor shortage has been a top priority for FTBA for as long as I’ve been involved with the association. While we have taken huge steps toward making a construction career more appealable – through Construction Career Days and partnerships with FDOT and other industry groups (see workforce development story on page 12) – we still fall short. In this somewhat post-Covid world, as the labor shortage continues to show its teeth throughout our state and throughout the country, our focus is on changing the narrative for our industry – for contractors and the suppliers that support us. A great opportunity sits in front of us, especially after the passing of the Infrastructure Investment and Jobs Act, which included more than $56 billion for post-high school education, including apprenticeship programs. I’ve been blessed to be part of a family business, so I understood early on how rewarding this career would be. It was an apprenticeship of sorts, and many of you have had the same type of experience. We are lucky in that respect. But think of high school students who have no idea what the future holds for them from a career standpoint. They just haven’t been exposed to something that they want to pursue long term, and that’s completely fine. However, at school, counselors are stressing the im-

portance of college and a four-year degree. Without a future career in mind, that student’s trip to college can be a big win or a big bust. We need more opportunities to advocate for construction as a career path at the early stages of a student’s decision-making process. As we know from our successful scholarship program (see story on page 11), there is no better way to make an impact on a career path than through financial support. In an effort to boost our workforce, and in addition to our traditional scholarship program, this year FTBA will launch trade scholarships for students who want to participate in vocational training in industry-related trade programs. This first-time opportunity will include trade programs such as welding, heavy equipment operator, diesel mechanic, carpentry and commercial truck driving, just to name a few. This is a great step in the right direction. There are many other avenues to bolster our labor force, but better awareness at the high school level is a solid road to pursue. We hope FTBA members make this opportunity known to individuals at all levels within their companies. Look for more information in the next issue of Florida Transportation Builder and on www.ftba.com. I look forward to seeing you all at the Construction Conference in Orlando.

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President’s Message

Post-Pandemic Crossroads

hat a year we faced in 2021. It sure flew by, and thanks to the great leadership of Gov. Ron DeSantis, our state continues to do very well. The summer Delta surge is in the rearview mirror, and although we continue to face COVID-19 variants, I sincerely hope that the worst of the pandemic, from a public health standpoint, is behind us.

ANANTH PRASAD, P.E.

Unfortunately, the worst impacts of the pandemic, from the standpoint of the economy, are still with us and will likely continue to manifest in 2022. I am referring specifically to the unprecedented price increases and supply chain disruptions that continue to hamper us. One doesn’t have to look further than what is happening with steel. Steel prices are two to three times what they were prepandemic, and delivery times have quadrupled from four to six weeks to 24 weeks in a best-case scenario. The key reason behind the increase in prices in the demand-supply imbalance. Supply remains restricted due to the idling of steel mills and disruptions associated with outages and labor shortages. These issues, coupled with lower steel im-

ports due to the pandemic and tariffs, have resulted in tightening of supplies. Some experts believe it could be 2023-24 before the market returns to normal. I sure hope that is not the case. Another commodity such as PVC (which most companies relied on the strategy of buying when needed due to the stability of pricing over recent history (2015-2020) and abundance of availability) has turned upside down with prices four to five times what they used to be and delivery times exceeding 20 weeks. All of this brings me to the point that we are at the post-pandemic crossroads. For contracts that were executed pre-pandemic and during the pandemic, there is no way imaginable for contractors to anticipate these sorts of price increases. These increases are catastrophic for most businesses to recover from, especially when they are having to manage around all the other costs that continue to rise. When you factor in delays in delivery of materials and the resulting delayed completion of projects, it adds more pressure on an already tenuous situation resulting in significant imbalance on cash flows for companies. Unlike the impacts of rising inflation, which affects every company doing business, these price increases are impacting specialty subcontractors and suppliers who often are small businesses, Disadvantaged Business Enterprises, and mid-sized companies. Timely relief on such price increases is paramount for these businesses to survive and preserve a vibrant free market environment. I welcome your thoughts on these topics or others. Stay safe!

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Golfing for a Cause

PHOTO COURTESY OF BRITTANY MORGAN PHOTOGRAPHY

Bonn-J Golf Tournament Tees up FTBA Scholarship Fund

he FTBA Scholarship Fund continues to grow, thanks to the generous support from members. In 2021, FTBA awarded 15 one-time scholarships and 16 four-year scholarships – a record year. One of the biggest contributors to the program is Bonnie Rimel and her company, Bonn-J Contracting, which also had a record year in 2021 with a $134,003 contribution to the fund. Over the course of 13 years, Rimel has raised $1,049,886 for FTBA student scholarships. To kick off 2022, Rimel’s 14th Bonn-J Contracting, Inc. Annual Charity Golf Invitational will be held January 19, 2022 – the day pri-

or to the FTBA Construction Conference – at Eagle Creek Golf Resort in Orlando. Individuals will support the tournament by playing on a team, sponsoring items, or through donations – regardless of whether they attend the event. All tournament proceeds benefit the FTBA Scholarship Fund, and those interested in making a donation can contact Bonn-J Contracting directly at 407-977-7666. Applications for FTBA scholarships are now open for 2022 high school seniors whose parent or legal guardian is employed by an FTBA member company. Scholarships are granted in varying amounts, as

long as the applicant is making satisfactory progress in his or her field of study. Verification of satisfactory progress is required from the school annually, and curriculum requirements are only that the student attend an accredited college or university. There are no geographic limitations on the student’s school of choice, but the student must be a Florida resident. Scholarship applications will be evaluated on (a) the student’s application; (b) school transcript and ACT or SAT scores; and (c) letters of recommendation. To apply, please go to: www.ftba.com/ scholarship-program. WWW.FTBA.COM

FDOT’s Workforce Development Program is Aimed at Addressing Contractors’ Labor Needs 12

FLORIDA TRANSPORTATION BUILDER

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More Hands on Deck

“By reaching out to our partners in the community, we’re making them aware that the transportation construction industry offers a lot of opportunity for hard workers. You may start out at the entry level, but if you have the desire to move up and increase your job skills, there’s a lot of money to be made, and you can become very successful.” Joseph B. Santos, P.E., FDOT Operations Program Engineer

By Nick Fortuna nyone who has watched a skilled construction crew hard at work knows that a lot can happen in just a few short months, a truism that applies to just about everything, including when the transportation construction industry and good statewide policy intersect. In Florida, that’s exactly what has happened, making the state a leader in transportation nationwide. Florida’s Statewide Workforce Development Program through the Florida Department of Transportation (FDOT) was authorized by the Florida Legislature in 2019 and reauthorized in 2021. The program has been tasked with engaging community partners to identify and connect qualified workers with contractors for gainful employment on road and bridge projects. To assist with bringing the program to fruition, the state has allocated $2.5 million annually. In addition, Gov. Ron DeSantis and the Florida Legislature also appropriated $2 billion dollars toward seaport recovery and highway infrastructure in 2021. That makes FDOT’s Statewide Workforce Development Program even more crucial as Florida works to recruit and train the construction workers necessary to support Florida’s bold transportation policies and priorities. Since the launch of the Workforce Development Program in March 2020, contractors in the state have hired more than a thousand workers through the initiative, including students seeking their first jobs, professionals wanting to change careers, and former prison inmates looking for a second chance. Joseph B. Santos, P.E., the FDOT Operations Program Engineer overseeing the initiative, said he’s proud of what the program has accomplished in its first two years, but he hopes to expand it, and quickly. Flori-

da contractors clearly need all the help they can get. During the pandemic, the FDOT took advantage of decreased traffic volume to accelerate many of its construction projects, prompting contractors to hire more workers. Key areas of the FDOT Work Program for Fiscal Year 2021-2022 include the following: $2.8 billion for highway construction to include 210 new lane miles; $1 billion for resurfacing 2,682 lane miles; $516 million for bridges including scheduled 89 repairs and 18 replacements; and $437 million for seaport, aviation and spaceport projects. And those numbers do not include funding from the federal infrastructure bill. “Any additional funding for infrastructure just means more projects, and that means contractors’ workforces need to grow,” Santos said. “This program is really focused on addressing the construction labor shortage, which is a challenge that we hear about from contractors all the time. Contractors are having a hard time recruiting and developing entry-level skilled workforce, so we are teaming up with them so that they’ll be able to successfully complete FDOT projects on time and within the budget.”

Building Partnerships Vital to Florida’s Workforce Development Program’s success is its collaboration with state and local agencies, contractors, nonprofits, community groups and schools. In its first year, 80 agency and community partners participated, and that number swelled to 145 in the second year. Contractors provide training and career opportunities for participants, and community groups introduce the program to their constituents, establishing a pipeline of recruits. “By reaching out to our partners in the community, we’re making them aware that

the transportation construction industry offers a lot of opportunity for hard workers,” Santos said. “You may start out at the entry level, but if you have the desire to move up and increase your job skills, there’s a lot of money to be made, and you can become very successful.” In addition to contractors, key partners include the Florida Transportation Builders Association (FTBA), Florida Department of Corrections (FDC), Florida Department of Economic Opportunity, CareerSource Florida, and Florida Commission for the Transportation Disadvantaged. “The workforce development program is a great way to help contractors offer new opportunities to disadvantaged jobseekers during a challenging time,” said Pete Kelley, Chief Operating Officer of Superior Construction, a program participant. “The program naturally welcomes those that have never worked in construction to find work and provide for their families when so many other industries were negatively impacted this past year.” The Statewide Workforce Development Program initially had included instructor-led training for adult jobseekers provided by the FDOT, but that component was paused due to the pandemic. Santos said it might be revisited when COVID-19 eventually abates. The contractor-led training component has continued uninterrupted, however. Participating contractors are reimbursed for recruiting, hiring, training and retaining new employees to work on FDOT construction projects. This initiative was created for contractors to provide tailored job readiness training to new workers, which helps to meet their multifaceted entry-level labor needs, Santos said. Contractors recruit workers directly or partner with program staff and community groups. New hires get up to 160 hours of individual training to prepare them for a career in WWW.FTBA.COM

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construction, and contractors must submit monthly reports tracking employees’ progress. During the last fiscal year, 438 people were hired through the contractor-led training initiative, bringing the total to 835 since its inception in March 2020, according to the FDOT. This year, the program is being enhanced to focus on incentivizing contractors to retain new hires. Participants now will get 320 hours of training, with the cost split evenly between contractors and the FDOT, Santos said.

Outreach to Inmates One of the goals of the program is to help inmates transition from correctional facilities to gainful employment, reducing the rate of recidivism. Last fiscal year, the FDOT continued to work with the FDC to advance the framework for the Statewide Workforce Development Correctional Transition Academy. The academy aims to identify inmates who are ready to enter the workforce and connect them with contractors, either through the contractor-led training initiative or via OnBoard4Jobs.com, the official website for the Workforce Development Program. The jobs board, which is managed by the FDOT and funded by the Federal Highway Administration, is free to use for both jobseekers and contractors. The website targets unemployed adults, graduating high school seniors and technical school graduates, with the goal of increasing the number of minorities, women and veterans on federal- and state-funded transportation construction projects. In fiscal year 2020-21, Florida contractors hired 45 workers through OnBoard4Jobs.com, with program staffers using Facetime and Microsoft Teams to screen candidates for contractors and expedite the hiring process. The academy also will develop a curriculum focusing on road construction that includes motivational and testimonial videos as well as job readiness training. The objective is to educate soon-to-be-released inmates about the many opportunities in the construction industry and to help them earn industry certifications. That educational component will support the FDC’s Shaping Success and Compass 100 programs, which focus on inmate rehabilitation and successful re-entry into their communities. So far, the academy has chosen to work with the Gadsden Correctional Facility, DeSoto Correctional Institution and Polk Correctional Institution to identify candidates. In time, the FDOT hopes to expand the academy to include other facilities, Santos said. Under the academy, contractors are incentivized to provide opportunities to transitioning inmates. To date, the program has established “meaningful relationships” with 20 FDOT-qualified contractors to assist these jobseekers, and last April alone, the FDC referred more than 40 candidates to participating contractors, Santos said.

Targeting Veterans and Students Over the summer, the Workforce Development Program launched its Military Veterans Recruitment Initiative. This effort centers on attracting veterans transitioning out of military infrastructure and civil engineering divisions such as the U.S. Naval Construction Battalions, better known as the Navy Seabees, and the U.S. Army Corps of Engineers. As a retired Naval Officer and SeaBee, Santos is proud to bring the SeaBee motto, “Can Do!” to every aspect of this important work. Staff members have conducted in-person and virtual meetings with nonprofits and community groups that assist veterans in finding jobs,

including CareerSource Tampa Bay, Amvets, Disabled American Veterans and the MacDill Airforce Base Transition Group. Staffers also have participated in outreach efforts such as U.S. Rep. Gus Bilirakis’s Veterans Virtual Employment Fair. So far, more than 60 service members have been referred to participating contractors, according to the FDOT. Over the next year, staffers will expand their work with employment specialists at the Florida Department of Veterans’ Affairs to increase candidate recruitment.

Training the Next Generation Florida contractors lose employees to retirement every day, so replacing them with young jobseekers is a major focus for the Statewide Workforce Development Program. Due to the pandemic, the FDOT’s Florida Construction Career Days were transformed from hands-on events to virtual career fairs and online training to educate students in high schools and technical schools about the career pathways available in the transportation construction industry. The Construction Career Days online portal at FloridaRoadJobs. com allows students to log in for a customized experience and to sign up for emails about scholarships and events. In addition, the FDOT is using social media platforms to conduct outreach to students, school counselors, and industry and community partners. Santos said he hopes the program can return to in-person events in the coming year, but the virtual experience will remain available, broadening opportunities for participation by students and schools located far from regional events. The FDOT also is considering holding smaller events in rural counties and areas where major construction projects are planned. The FDOT’s Student Construction Internship Program is another outreach tool effectively targeting young job candidates. In the 202021 fiscal year, 19 contractors hired 114 interns to gain work experience, exceeding the program’s goal of having 100 interns hired. Of those, 28 were hired full time by contractors after completing their internships. “That’s another success story,” Santos said. Internships are open to students and young adults ages 16-24. Participants work a minimum of 24 hours a week for Florida contractors and earn at least $12 an hour, with contractors getting reimbursed for up to eight weeks of training. Since the labor shortage affecting Florida contractors appears to be unrelenting, Santos said he’s hoping to continue to grow the Statewide Workforce Development Program with help from FTBA member companies. “This is really about the Department and the construction industry working together to meet the transportation needs of our growing state. To be truly successful, we really need active involvement from contractors,” he said. “The state of Florida is a unique place. More and more people choose to live and visit here every day. These people have come to rely on Florida’s outstanding transportation system. The Department’s Workforce Development Program is helping to meet their expectations today and tomorrow.”

About the Author Nick Fortuna is a freelance writer who has worked for Bloomberg News, Dow Jones Newswires, and the Ocala Star Banner. He has written about many different industries and the individuals who work in those industries. WWW.FTBA.COM

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Are You Approachable? By Todd Cohen, CSP

love to watch people. I enjoy trying to figure someone out by watching how they interact and engage people. I attempt to assess and measure if you are indeed someone people feel comfortable approaching and speaking with. Do you hold yourself in a way that people sense and feel that you are open? What is your “approachability score?” Approach or

avoid? It’s your call. The sales of you and, by extension, your company, begins before you say a word. It’s where the sale starts and, in some cases, can end. To achieve success, we must be approachable. There is no arguing that fact. We all know what it feels like to meet someone who sends the message that “I am friendly.” I want to challenge you and

ask if you are sending messages that indicate that you are someone people can safely approach? Please don’t miss my use of the word “safely.” That was not by accident. People watching has helped me aggregate some of the qualities and skills of people I have found to be the most approachable and thereby the most successful people I have observed. It starts with a smile. WWW.FTBA.COM

If you are smiling, this sends the incontrovertible message that you are not closed or unfriendly. It makes sense, right? No one wants to walk up to, talk to, or work with someone who frowns and looks like they are in pain. I have observed the following characteristics as I assess the approachability of someone:

“Excuse me, I’m standing right here.” Eye contact is crucial, and I can’t believe the people I have observed who are obviously engaged in everything else going on other than the person speaking in front of them. Put your phone away, and stop looking at your watch. Fifteen minutes of uninterrupted attention will yield a lifetime of good perception of your approachability. Moreover, it will build the kind of relationships that successful businesses need.

“It’s all about me.” Approachable people do not feel that they need to show everyone they are the smartest people in the room. They listen more than they talk, and a silent sense of confidence draws people closer to them.

Body language. I notice how people physically hold themselves, and body language is always a reliable and robust indicator of how comfortable people feel approaching you. What is your body language saying about you?

“Present and accounted for!” I often speak about the topic of being present in the context of my sales culture keynotes. Approachable and successful people are present. Approachable people are intensely mindful of what is going on around them and make sure that the relationship they are creating is the most important thing at that moment.

Getting defensive. This is a big deal. If you are getting defensive with people, you are not listening to what is happening, and it’s painfully apparent to everyone around you. You are not present, and your fight or flight mechanism is in full “on” mode. Defensiveness is a surefire way to quickly kill any chance of sending the message that you are reliably approachable. When people get defensive with me, I often wonder, “What are you afraid of,

or what are you hiding?” Approachable people do not need to be right. They want to be in a relationship.

Bias. You have biases. Everyone does. Your biases also show in how you show up and before that first word is spoken. It affects the message you send and if you are approachable. If you are aware of them, that’s a big step forward to being an emotionally intelligent business professional. If you are wondering why you may not be achieving some of the goals you have established for yourself, ask yourself if you are genuinely and consistently approachable. The most secure people are fundamentally approachable. Insecurity breeds non-approachability. People make value judgments on many variables, and it is essential that you do not discount how comfortable you make it to work with you. Being approachable is an intentional act, and only you are responsible for making that happen. Approachable people are focused on the relationship and being a credible and sincere presence. Approach or avoid? It’s your call. Approachability is profitability.

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The Profound Power of Presence 2022 Construction Conference Keynote

Todd Cohen, CSP, has inspired and motivated audiences for over 14 years, teaching them to sell themselves to achieve incredible success goals. His sales culture keynotes and workshops are in demand from audiences from every background, including salespeople. Cohen will present “The Profound Power of Presence” at the 2022 FTBA Construction Conference. “Everyone’s in sales,” Cohen said. “In organizations like the ones run by FTBA members, everyone has an influence on the customer. Everyone does something that helps the customer say, ‘Yes.’” Cohen’s keynote message will focus on changing the stereotype of salespeople. We all use sales tactics at different times in life, whether we realize it or not, he said. “People say they aren’t in sales because of the pushy-tactics stereotype,” he said. “If you’ve ever been in a job interview, you’re in sales. If you’ve ever asked someone on a date, you’re in sales.” Cohen works with organizations to help them understand the nuances of sales from a customer experience standpoint. It’s more about positive behavior and service than sales, he said, noting that if customers do not have a good experience, they likely will go to another company with their business.

“A sale begins before we ever say a word,” Cohen said. “Relationships begin and stay fertile based on our presence and how we show up. With the infrastructure funds flowing into this industry, companies can’t become complacent and assume they don’t have to work even harder to get the business.” Relationships grow business, he added. Companies can make the same product or do the same kind of work, but companies need a differentiator, and that differentiator is often based on relationships and “how you show up,” he said. “If 10 companies bid on the same bridge, only one is going to win, and not necessarily the cheapest one,” Cohen said. “The one who figures out how to show up and set their company apart is the one that will have the most longterm success.” Join us at the General Session on Thursday, Jan. 20, to learn more about your approachability and how relationship building will grow your business.

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Infrastructure Funding: A Breakdown for Florida Transportation Builders By Neal I. Sklar, Esquire and Ryan A. Weiss, Esquire Peckar & Abramson, P.C.

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he Infrastructure Investment and Jobs Act (“IIJA”) is intended to jumpstart the national effort to modernize the framework that supports almost every conceivable aspect of life in the United States, as well as strengthen the nation’s resiliency to extreme weather and climate change by reducing greenhouse gas emissions through repair, upgrade and modernization of the nation’s transit infrastructure. It also includes expansion of the transit and rail networks across the country, including Florida. The legislation seeks to address a broad range of critical needs in the U.S. by creating funding opportunities, including $550 billion in new spending over the next five years, that is to be divided between improving the surface-transportation network and

enhancing core infrastructure.1 In addition to funding opportunities, the bill will introduce regulatory process changes and material standards likely to impact the construction industry. For example, acceptance of IIJA funding can trigger “made-in-America” obligations that include iron, steel and other domestic component requirements for materials implemented on government projects.2 Builders and suppliers interested in accessing these funds should evaluate their supply chain and manufacturing materials/methods to ensure they have the ability to comply with IIJA’s requirements. Of the $1.2 trillion in funding authorized, some $300 billion in formula grants will be disbursed to states based on various factors (i.e., population size) and will

be dedicated to improvements and maintenance of bridges and roadways.3 For example, IIJA authorizes the use of Highway Trust Fund (HTF) capital for highways, roads and bridges for FY 2022 through FY 2026, apportioned to states through nine federal-aid highway formula programs including two new programs: the Carbon Reduction Program and the Promoting Resilient Operations for Transformative, Efficient, and Cost Saving Transportation (PROTECT) Program.

Investments in Florida Infrastructure Projects The benefits of such a significant investment in Florida infrastructure cannot be understated since, over the last decade, Floridians have relied on federal funding to support 36 percent of state highway and WWW.FTBA.COM

bridge capital improvements and 34 percent of transit capital outlays. In that same time, the federal transit investment has supported nearly 100 urban and rural transit agencies throughout Florida.4 With the historic migration of individuals entering Florida, the boost to infrastructure funding is needed now more than ever. Since 2011, the commute time for the average Floridian has risen by an average of 11.6%.5 Aside from the value of lost time, each driver incurs an estimated $425 per year due to driving on deteriorating roadways and bridges throughout the state. Id. According to the White House Fact Sheet (Florida), there are an estimated 408 bridges and over 3,564 miles of highway determined to be in “poor condition” throughout Florida. It should be no surprise that the American Society of Civil Engineers gave Florida a “C” grade on its infrastructure report card.6 In an effort to address dilapidated or neglected roadway infrastructure and reduce transit and freight costs, the American Association of State Highway and Transportation Officials (AASHTO) estimates that the IIJA will bring in more than $16.3 billion in transportation funds to Florida.7 That figure is expected to include an increase of over $600

million annually to Florida’s current level of federal formula highway funding. Many of the initiatives envisioned by the federal government for implementation through the IIJA will provide significant opportunities for individuals and companies throughout Florida engaged in the design, development and construction of both public and private transportation infrastructure. According to global forecasting leader IHS Markit’s September 2021 report, the initial outcome of the recently passed legislation will provide Floridians several immediate positive impacts from IIJA-related construction activity, including: • An additional $3.69 billion in state gross domestic product each year coming from the IIJA’s investment to fix Florida’s roads and transit system; • An overall increase to Floridians’ disposable income at nearly $1.42 billion per year; and • An average increase of $650 million per year in state and local tax receipts, representing income that may be reinvested in Florida without any increase in tax rates. The IIJA also calls for the implementation of the first-ever national network of electric vehicle chargers and charging stations in the

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U.S., and to provide funds to replace thousands of transit vehicles including buses, with “clean, zero-emission vehicles.”8 Based on the traditional state revolving fund formula used to calculate entitlement to federal funds, Florida is expected to receive $198 million over five years to support the expansion of an EV charging network within its borders. From 2022 to 2026, an additional $2.5 billion in grant funding dedicated to EV charging infrastructure also will be available to states upon application, based on various project-related eligibility requirements.

Promoting Accessibility to Federal Funding and Government Contracts Many municipalities throughout Florida rely on intergovernmental partners to support efforts to ensure the safety and effectiveness of off-system bridges (those on secondary or local roads) due to these structures’ location off the National Highway System.9 The IIJA also will make changes to the Surface Transportation Block Grant (STBG) that provides funding that may be used by states and localities for projects to preserve and improve conditions and performance on any federal-aid highway, bridge and tunnel projects on public road, pedestrian and bicycle infrastructure and transit capital projects (including intercity bus terminals). Florida builders should benefit from greater access to federal funds and government contracts by way of new categories of infrastructure-related projects eligible for funding under the IIJA including: • Installation of electrical vehicle charging infrastructure; • Installation of measures to protect a transportation facility from cyber threats; and • Projects to increase tourism, prevent wildlife collisions with vehicles, and resiliency improvements. Although each state will receive a share of the federal funds based on the current federal funding formula, additional funds will be made available by the IIJA to the extent that state projects can effectively be shown to promote the IIJA’s initiatives. For exam-

ple, the newly formed Carbon Reduction Program contained in the Act will permit the use of federal funds specifically for traffic management, transit systems, bike and pedestrian projects, energy-efficient street lighting, efforts to reduce peak travel, work to cut the environmental impact of hauling freight, and using zero emission vehicles throughout Florida.

Potential Avenue for Compromise of Competing Interests Certain aspects of the IIJA may revitalize support for projects previously opposed by environmentalists who pushed to defeat the Multi-Use Corridors of Regional Economic Significance project (M-CORES) during Florida’s 2021 legislative session. MCORES was proposed to create three new toll road systems throughout Florida to reduce congestion points, stimulate econom-

ic development in rural communities, and create more hurricane evacuation routes. For example, the IIJA may provide an opportunity for those on both sides of the MCORES debate to reach a compromise. One of the more significant aspects of the IIJA includes changes to the STBG, which calls for expedited environmental review processes, with the IIJA requiring federal agencies to schedule their environmental review processes within an average of two years and requiring agencies to complete all federal authorizations for a project within 90 days after issuance of the agency’s decision. These changes seek to streamline environmental review procedures for surface transportation projects that receive federal funding or financing or require approval of the U.S. Department of Transportation. To the extent that Floridians remain open to the underlying goals of the M-CORES project, the changes to the STBG may expedite en-

vironmental review procedures like those that the M-CORES opposition argued were missing from the original legislation.

Expanded Access to Business Development Resources for MinorityOwned Businesses10 The Minority Business Development Agency is the only federal agency solely dedicated to the growth and global competitiveness of minority business enterprises. To further promote diversity and assist Florida’s minority entrepreneurs to obtain access to government contracts and capital, the IIJA codifies the MBDA. In addition, the IIJA serves to allocate $110 million in annual funding to the MBDA through 2025, representing more than double the $48 million previously allocated by Congress in 2021. Most of the funds will go to the MBDA Business Center Program, whose programs offer

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About the Authors Neal Sklar is a partner with Peckar & Abramson, where he focuses primarily on the representation of general contractors, construction managers and infrastructure contractors in a variety of construction-related matters. These matters include providing counsel on state and federal government projects as well as Public Private Partnerships (P3s) involving transportation, commercial, heavy and social infrastructure, energy and multifamily residential projects. Neal can be reached at 305-358-2600. Ryan A. Weiss is an associate in Peckar & Abramson’s Miami office, where he concentrates his practice on commercial construction transactions, litigation and dispute resolution. Ryan has represented developers, general contractors, sub-contractors and design professionals in both commercial and residential construction defect matters, including numerous high-exposure cases involving high-rise condominiums, mix-use developments, and homeowner’s associations.

General Data on IIJA Expenditures Roadways, Bridges and Major Infrastructure: According to the White House, about 20 percent, or 173,000 miles, of the nation’s highways and major roads are in poor condition, as are some 45,000 bridges. To that end, the majority of IIJA funds will be put toward bridge repair, rehabilitation, and replacement, as well as approximately 20,000 miles of roadway. The White House reports that the $40 billion investment in bridge repair is the single largest investment of its kind since the construction of the interstate highway system, dating back to the 1950s.1 Massive investments in airports, ports and waterways are also included in the IIJA with $25 billion going toward the Airport Improvement Grant Program to maintain and enhance runways, gates and taxiways. Passengers will also benefit from the new Airport Terminal Improvement program that seeks to revitalize terminals, concessions and multimodal connections. Public Transportation: As recently as 2019, Amtrak reported that its backlog of maintenance projects, commonly referred to as Amtrak’s State of Good Repair backlog (SOGR), surpassed $33 billion. The IIJA calls for federal expenditures totaling approximately $66 billion to address maintenance of “assets that have been assessed as at or nearing the end of their useful lives.”2 These initiatives range from acquiring maintenance equipment designed to improve Amtrak’s ability to service the lifecycle of the track, to modernization of the Northeast Corridor and bringing world-class rail service to areas outside the northeast and mid-Atlantic. Of the $66 billion investment, nearly $28 billion will be put toward providing Floridians with more opportunities to develop and enhance passenger rail services, including access to $12 billion for the benefit of Florida’s intercity passenger rail.3 1. www.whitehouse.gov/briefing-room/statements-releases/2021/11/06/fact-sheet-thebipartisan-infrastructure-deal 2. www.rtands.com/passenger/intercity/amtrak-sogr-backlog-tops-33-3-billion/ www. amtrak.com/content/dam/projects/dotcom/english/public/documents/corporate/ businessplanning/Amtrak-Infrastructure-Asset-Line-Plan-FY20-24.pdf 3. https://policy.transportation.org/wp-content/uploads/sites/59/2021/08/IIJA-StateDOT-Benefits-2021-08-31-Update-PDF.pdf

References 1. w ww.mckinsey.com/industries/public-and-social-sector/our-insights/ the-us-infrastructure-investment-and-jobs-act-breaking-it-down 2. www.jdsupra.com/legalnews/build-american-buy-americastrong-7260401 3. w ww.mckinsey.com/industries/public-and-social-sector/our-insights/ the-us-infrastructure-investment-and-jobs-act-breaking-it-down 4. w ww.artba.org/wp-content/uploads/federal-investment/iija/FL.pdf 5. w ww.whitehouse.gov/wp-content/uploads/2021/08/FLORIDA_Infrastructure-Investment-and-Jobs-Act-State-Fact-Sheet.pdf 6. I d. 7. h ttps://policy.transportation.org/wp-content/uploads/sites/59/2021/08/ IIJA-State-DOT-Benefits-2021-08-31-Update-PDF.pdf 8. w ww.whitehouse.gov/briefing-room/statements-releases/2021/11/08/ fact-sheet-the-bipartisan-infrastructure-deal-boosts-clean-energy-jobsstrengthens-resilience-and-advances-environmental-justice/(Public Transit) 9. w ww.naco.org/resources/legislative-analysis-counties-infrastructure-investment-jobs-act 10. w ww.mbda.gov/business-center/miami-mbda-export-center 26

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Infrastructure Investment and Jobs Act Funding Breakdown 46% 11.5%

Highways and bridges ($387B) Transit ($96B)

Rail ($66B)

Broadband ($64B)

6.5%

Energy grid, tech, supply chains ($54B)

Drinking and wastewater ($48B)

Western water, wildfire management, dam safety ($31B)

Ports and waterways ($27B)

Aviation ($25B)

Economic development, public buildings, agency operations ($18B)

Mine/well cleanup, environmental remediation ($18B)

Represents spending over five years. Source: U.S. Chamber of Commerce

customized business development and industry-focused services to provide greater access to capital, contracts and markets. The Orlando MBDA has generated documented growth of minority-owned business enterprises through programs such as: Corporate Supplier Diversity Development, Small and Minority Business Coaching, Community and Public Relations Services, Student Entrepreneur Education Development (SEED) and Women Empowerment Wednesdays (a global initiative). Builders in the transportation industry do not have to reside in Orlando to reach MBDA’s services, as satellite offices are located throughout the State, including offices in Jacksonville, Tallahassee, Tampa, Sarasota and Miami. The IIJA will be a welcome investment in infrastructure throughout Florida impacting each of our diverse counties. Its impact will be transformational by helping to bridge the funding gaps that are needed to accommodate the transportation needs of our ever-growing population.

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Smart Solutions

for Managing New Federal Funding By Will McClave, President of Systems Infotech

ow that the Infrastructure and Investment Jobs Act (IIJA) has been signed by President Joe Biden, we turn our focus from the machinations of the federal government to how the passage of this historic bill will affect Florida roadbuilders and the suppliers that support them. We join those in our industry who would like to see greater resources dedicated to new road and bridge construction, more support for workforce development, and improvements to the structure of the Highway Trust Fund. That said, we are optimistic that Florida’s leaders in Tallahassee and in cities and counties around the state are already plan-

ning to apply for grants and other pools of funding that will be put to good use over the next five years. Much has been made of the pressing needs of America’s infrastructure, and Florida is no exception. The Florida Section of the American Society of Civil Engineers (ASCE) recently gave Florida’s infrastructure systems a cumulative “C” grade, meaning the state’s infrastructure is in “mediocre to good” condition. Similarly, the federal government estimates that more than 400 bridges and 3,500 miles of roadway in Florida are in poor condition. However, over the next five years, roadbuilders and others in the transportation sector will see significant benefits from the focus on

current transportation infrastructure through modernization and other improvements in field data capture, safety measures and automated inspections supported by AI, and vastly improved digital asset inventories, just to name a few. The bill as passed allows for $16.3 billion in transportation funds to Florida over the next five years. This is a welcome increase of $600 million per year. Larger municipalities that have seen major growth and increased tourism responsibilities in recent years will see a planned $180 million per year for airports and $2.6 billion for transit, and have access to rail funds that do not have specific earmarks for the state. WWW.FTBA.COM

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Funding and announced projects will roll out gradually, with earmarks somewhere around $20 billion for 2021-22, and the bulk of the spend between 2025 and 2027, as grants and planning are completed, and work actually begins. This timeline could benefit the already busy industry by allowing time to identify and expedite critical projects, secure personnel and equipment, and adapt to enhanced requirements for digital project delivery. Owners and contractors know that both the roll out of IIJA funds and a full transition to digital project delivery will be a marathon, not a sprint. Hopefully, however, this multi-year timeline will bring some stability to budgets and schedules. The bill prioritizes present-day infrastructure needs, focusing on improving and modernizing current assets, with less emphasis on the future of transportation networks or building a platform for future growth. Therefore, it will be up to private sector partners (including consultants and contractors) and construction technology providers to amplify the reach and impact of this funding by bringing innovation and efficiency to as many pieces of the traditional construction process and workflow as possible.

An encouraging takeaway we found in discussions with our partners was the overt nod to interstate construction – support for projects that cross state boundaries is often overlooked by federal funding. In this bill, there is specific language for funding projects that cross state lines. We anticipate state DOTs and municipalities partnering with agencies in bordering states to identify the types of projects that this bill will fund. This intersection between multiple funding sources and stakeholders will involve complex accounting, auditing and tracking of multiple data sources. Because the responsibility of caring for roads and bridges is spread among many parties, the variety of funding adds to the complexity of administering projects. Once a project begins, tracking the funding sources becomes particularly difficult as the actual payments move from owner to supplier or subcontractor. This tracking, however, is essential to maintaining compliance with federal oversight, including reporting by contractors on payroll and supplier payments. Federal funding of projects significantly increases the number of critical infrastructure issues addressed, but also increases re-

porting and auditing requirements for everyone involved, and specific grants will have their own reporting call-outs. The IIJA continues to place responsibility for setting the standard for reporting, compliance and tech usage on the United States Department of Transportation. Stakeholders, including DOTs and local governments, will need to follow USDOT to identify project requirements and overcome issues such as staffing and skills challenges. USDOT and the Federal Highway Administration will work together to determine specific technical, reporting and compliance requirements for projects supported by the bill. As the state becomes more involved with its own reporting and workforce issues resulting from the bill, the burden of thorough documentation becomes paramount. Accurate construction administration systems that include internet bidding and payment tracking capabilities enable organizations to eliminate waste, fraud and abuse, and provide for transparency in funding. These systems have been encouraged by FHWA through their Every Day Counts Innovations (EDC-3) initiative.

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Finally, we feel like one of the more interesting long-term results of this bill will be that it will significantly drive technology adoption in the transportation industry. While concepts such as Building Information Modeling (BIM) and other advanced technologies have seen wide adoption in other types of infrastructure construction, transportation and roadbuilding have continued to rely on older technologies like paper plans, spreadsheets and various other paper-based processes such as materials ticket submission. We have seen widespread adoption of models in planning and design, as well as significant improvements to digital project delivery with the transportation and other infrastructure agencies. What will spur this movement to digital delivery even more is the $100 million set aside in the bill for accelerated implementation and deployment of advanced digital construction management systems. While this is a relatively small percentage of the bill, it will lead to project-specific technical language in requirements for project management, and will necessitate interoperability between disparate data systems.

The specific goals of this earmark, to “promote…advanced digital construction management systems, practices performances and benefits” are very much in line with our work over the last several years to maximize interoperability and data sharing from disparate sources, manage the complexity inherent in the construction process, enhance safety, and provide owners with accurate digital models of their assets. Tangentially, all of the stakeholders will benefit from essential improvements to broadband and the utility grid. We are excited about improvements to broadband and utility grid infrastructure that will help improve owner-agencies’ ability to provide transparency during contract management and take steps toward realizing the dreams of digital twins. Improved access to broadband technology will improve field data collection, including inspection and geographic location data, as well as other initiatives such as e-ticketing that depend on robust and consistent data transfer. A clear commitment to cyber security will ensure that stakeholders can focus on the important work of building assets and not worry about data theft or ransomware attacks inhibiting progress.

The recurring theme is clear: Day-to-day managers of any project requiring federal funds will have to achieve more in less time and sometimes with fewer employees with experience managing complex and variable requirements. Five years may seem like a long time, but project owners, their construction managers, inspectors and other stakeholders will have urgent needs to complete projects quickly, with payments dependent on accurate reporting data, significant federal requirements for documentation, and an increasing need for accurate geospatial representation of assets. Cities, counties and state agencies like FDOT need smart solutions as they bid and manage construction and maintenance contracts that draw from multiple funding packages. These packages often include funds from the federal government that are augmented by state or local municipalities, toll money or occasional public/private partnerships. What’s unique about this round of funding? The federal government has placed an increased demand for digital project delivery solutions that allow stakeholders to track and monitor projects via a fully digital process, with fewer activities requiring paper

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or physical submissions on a typical project. These solutions provide the baseline for the future of asset management in our industry. Our industry is increasingly addressing areas like “digital twins” and “smart cities,” and the advances that artificial intelligence will bring to construction and management

Five years may seem like a long time, but project owners, their construction managers, inspectors and other stakeholders will have urgent needs to complete projects quickly, with payments dependent on accurate reporting data, significant federal requirements for documentation, and an increasing need for accurate geospatial representation of assets.

at industry events. Further, schools like the M.E. Rinker, Sr. School of Construction Management at the University of Florida are leading a significant amount of research in the field, expanding our understanding of what is possible, and validating the advantages of incorporating these advanced technologies. Trends such as these appear more and more in publications, webinars, conference presentations and the other sources of industry information we watch, and we fully believe that these digital environments and systems will be a major part of the way owners manage their assets, programs and portfolios. As we guide agencies through the successful adoption of these types of solutions, they consistently remind us that it is a journey and requires buy-in at all levels. This buy-in includes leadership at the

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agencies themselves all the way to the contractor on the job site, or even the supplier who is on the project for a very brief time. The escalating demand for digital environments that help manage the entire lifecycle of a project has reached levels that the transportation industry has never seen before, and there is no turning back.

About the Author As the President of Systems at Infotech, Will McClave serves and offers insights that drive the success of the Infotech family. Will ensures coordination throughout Infotech’s many teams to properly assess the industry landscape and make calculated decisions on Infotech’s next strategic initiative. He can be reached at will.mcclave@infotechinc.com.

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Florida OSHA State Plan Moves Closer to Reality By Phillip B. Russell, Esquire Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

lorida is moving closer to establishing its own workplace safety and health program instead of continuing to allow the federal Occupational Safety and Health Administration (federal OSHA) to have jurisdiction over Florida’s private and public workplaces. Under the federal Occupational Safety and Health Act of 1970 (the “OSH Act”), Florida can establish and maintain its own state plan and, as long it can demonstrate its state plan is “at least as effective” as federal OSHA standards and enforcement (29 USC § 667(c)2), Florida can minimize federal oversight. But, under the OSH Act, 29 USC § 667(b), no state plan can ever be entirely independent of federal OSHA if it has a robust oversight program for monitoring state plans.

Twenty-two states and jurisdictions operate complete state plans covering both private and public sector employees; six other states have state plans covering only public sector employees. Four are widely known to be overly harsh on employers while not necessarily being more effective in workplace safety and health than federal OSHA: California, Michigan, Oregon and Washington. On the other hand, state plans in South Carolina, Wyoming and Kentucky are generally considered by employers to be more responsive to the business community with standards and enforcement. This does not mean employers always lose in the former or win in the latter. But, there are clear differences in those states.

Is Having a Florida OSHA State Plan a Good Idea for Contractors? The primary reason contractors and other employers may want to have a state plan in Florida is responsiveness. In general, state plans are more responsive to local needs. For employers and employees, state plans are more accessible and are staffed by personnel appointed by state rather than federal officials. A state plan also would allow the state to explore alternative and innovate ways of addressing hazards rather than just doing what federal OSHA is doing. Workers and businesses will benefit from a more responsive local agency that protects Floridians from the particular hazards most likely presWWW.FTBA.COM

ent in Florida workplaces. Federal OSHA also does not cover public sector employees, but a Florida state plan would – extending workplace safety and health coverage to firefighters, law enforcement and emergency response workers. Another perceived benefit of state plans is they can be more innovative in addressing workplace safety and health issues with a more localized approach rather than relying solely upon a more universal approach from federal OSHA. One area in which that may benefit Florida is federal OSHA’s announced intent to promulgate a heat illness standard. With a state plan, Florida could establish its own approach – again, as long as it is at least as effective as what federal OSHA may promulgate.

The Downside: No State Plan is Entirely Independent from Federal OSHA There are a few downsides to consider. The most important is that OSHA would still have review authority over Florida’s state plan. Federal OSHA could seek to revoke Florida’s state plan authorization if it be-

lieves the state plan has failed to adopt a federal standard or adopt its own standard addressing the same hazard so it is at least as effective as the federal standard. Federal OSHA also could seek to revoke the state plan’s authorization if it was not enforcing workplace standards effectively as shown by data developed through federal oversight programs. Florida’s OSHA state plan could not, therefore, ever be entirely independent from OSHA without risking its state plan authorization status. Federal OSHA oversight of state plans is robust and measures outcome-level and activity-level data; quantitative and qualitative measures; baselines; and periodic reviews. Review tools include automated data reports and case file reviews, among other means. It is not an easy process, and many state plans spend considerable resources reporting to federal OSHA. Federal OSHA monitors and evaluates state plans annually through the Federal Annual Monitoring Evaluation (FAME) process, which determines: whether the state plan is continuing to operate at least as effectively as OSHA; track a state plan’s progress in achieving its strategic and

annual performance goals; and ensure the state plan is meeting its mandated responsibilities under the OSH Act and other relevant regulations. State plan FAME reports are published at OSHA’s website.

COVID-19 Impact If Florida had its own state plan, it could try different approaches than federal OSHA is attempting through its Emergency Temporary Standard (ETS) procedure in the OSH Act. If the federal ETS survives pending legal challenges, a Florida OSHA state plan would have to address COVID-19, but perhaps not in the same way as federal OSHA – as long as it was at least as effective as shown by results.

Heat Illness Impact Federal OSHA does not currently have a specific standard regulating heat illness as a workplace hazard. When it cites employers, it uses the Section 5(a)(1) of the Act, called the General Duty Clause, which requires employers to maintain workplaces free from “recognized hazards” and implement “feasible means of abatement.” Feder-

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al OSHA, however, has had a difficult time with heat illness cases and recently lost some key cases in contested citations. It is now starting the rulemaking process to implement a permanent rule. If Florida had its own state plan, it could try a more localized approach, as have other states. This could be a critical opportunity because one of the key reasons OSHA lost those heat stress cases is because it based its citations on questionable scientific evidence.

Why Did Other States Adopt Their Own State Plans? There are various reasons the 22 state plans were adopted over many years. But, the common reason is local control over workplace safety and health policy and enforcement. Most of those states that immediately adopted state plans under the OSH Act did so because they already had their own programs in place before the OSH Act was passed in 1970. Some of those and others wanted state plans so they could require state-specific, additional or more stringent requirements, or control the enforcement

and appeal process. Some arguments also were made that the power to regulate workplace safety and health rightly belongs to the states under the 10th Amendment.

What’s Next? The process of establishing a state plan takes time. The first step in the process is for Florida to have an OSHA-approved Developmental Plan. The full process is set forth in OSHA’s State Plan Policies and Procedures Manual (updated 5/6/20; available online.) During this process, Florida would need to assure OSHA that within three years it will have in place all the structural elements to be deemed effective: appropriate legislation; regulations and procedures for setting standards, enforcement, appeal of citations and penalties; and enough qualified enforcement personnel.

Summary Florida has the authority to establish its own state plan. Doing so would allow the state to have a more responsive workplace safety and health agency, but it would not be entirely independent of federal OSHA over-

sight. There is evidence that federal OSHA has not been as effective in Florida, and that should be the basis for Florida moving forward with establishing its own state plan. By doing so, the state could establish standards and enforcement strategies that may not be exactly the same as federal OSHA, but would be sustained if they are at least as effective when measured by their impact on workplace safety and health outcome, inspection, and enforcement metrics.

About the Author Phillip Russell is a Shareholder with Ogletree, Deakins, Nash, Smoak & Stewart, P.C., and he is board certified in labor and employment law by the Florida Bar. Phillip represents businesses in a wide range of labor and employment law matters, including workplace safety and health (OSHA), traditional labor relations (staying union-free), unfair competition and trade secrets litigation, employment litigation defense, and advising and counseling employers on workplace legal compliance issues. He can be reached at 813-221-7265.

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Cautionary Tales of Workers’ Compensation Insurance through a PEO By Mike Shea, AAI LassiterWare Insurance

he Certificate of Insurance you receive from your subcontractor indicates that the named insured is a Professional Employer Organization (PEO), and your subcontractor is noted as a covered client company. Workers’ compensation insurance is workers’ compensation insurance, right? Well, to quote College Gameday host Lee Corso, “Not so fast, my friend!” There are some notable and potentially very costly differences between a contractor’s own workers’ compensation coverage and what is obtained through a PEO. Most contactors understand that one objective of a sound risk management program is to ensure, through contractual provisions and insurance requirements, that they are not undertaking responsibility

for the acts or negligence of their subcontractors. However, few contractors understand that a subcontractor’s use of a PEO to satisfy a workers’ compensation insurance requirement can jeopardize and defeat that objective. Some key things to note: PEOs provide an employee leasing service arrangement (“coemployment”) for client organizations (“client company”) looking to obtain certain services such as human resources, payroll, compliance, risk management, workers’ compensation, employee benefits, etc. Under the arrangement, the client company leases its employees to the PEO to provide certain elected services, and the PEO leases the employees back to the client company to allow WWW.FTBA.COM

the client company to exercise direction and control over the leased employees. Under Florida law (Fla. Stat. 440.10(1)(b)), Florida construction contractors are statutorily responsible for all subcontractors and workers on their job sites unless the workers have other coverage. This means that all employees of lower-tier contractors on the job site are covered by the contractor’s workers’ compensation policy (“up-the-chain” requirement), unless the lower-tier contractors have secured workers’ compensation coverage for their employees. PEOs are only responsible to provide workers’ compensation for their recognized leased employees (i.e., those individuals the client company has formally submitted to the PEO to be covered and who have been processed in the PEO’s payroll system and accepted by the PEO.) If a client company’s employee laborer is injured on the jobsite but has not yet been submitted in the payroll system and accepted by the PEO, coverage for the injury will be denied by the PEO. Ultimate responsibility for the injured individual’s financial and medical care will then lay with the general contractor and their workers’ compensation carrier. Let’s look at a couple of problems that can arise. Problem: Client Company’s Employee is Not in the PEO’s Payroll System General Contractor (GC) hires Subcontractor (SUB) for work on a project. SUB has workers’ compensation coverage through a professional employer organization (PEO). SUB sends its crew (including a new employee) to the project site to perform the work, but SUB has not informed PEO of the new employee and they are not in PEO’s payroll system. The new employee gets hurt and needs medical attention and surgery. SUB informs the PEO of the new employee’s injury, but the PEO

declines responsibility since the new employee was not a direct employee of the PEO (i.e., in payroll system and accepted by the PEO). SUB advises GC and, pursuant to Florida Statute 440.10(1)(b), GC and GC’s workers’ compensation carrier assume the medical and financial care of the new employee’s injuries. Problem: Client Company Hires an Uninsured Subcontractor General Contractor (GC) hires Subcontractor (SUB) for work on a project. SUB has workers’ compensation coverage through the PEO. SUB hires a sub-subcontractor (SUB-SUB) to perform a portion of SUB’s work. SUB-SUB’s employee gets hurt. SUB-SUB informs its workers’ compensation carrier of the injured employee’s claim and finds out the policy was cancelled six days ago. The carrier for SUB-SUB denies the injured employee’s claim for lack of insurance at the time of injury. SUB-SUB informs SUB who, in turn, notifies the PEO. The PEO denies coverage since the uninsured sub-subcontractor’s employee was not a direct employee of the PEO. SUB then informs GC who, along with their workers’ compensation carrier, are left to assume the medical and financial care of the injured individual. Important Note: In both of these cases, had the GC’s hired subcontractor purchased its own workers’ compensation insurance coverage, the injured new employee and the injured uninsured subcontractor would have been covered under the subcontractor’s workers’ compensation insurance policy.

Is There a Solution? The obvious answer would be to not hire subcontractors who obtain insurance coverage through a PEO. (Note that most PEOs do not

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require that their client companies obtain workers’ compensation coverage through the PEO. It is possible for the client company to obtain its own workers’ compensation coverage while engaging the PEO for payroll and other desired services.) If that is not possible, subcontractor agreement insurance requirements could be written to require an “if any” coverage or policy be obtained by the client company. That may be difficult for the client company to procure, but it would serve as a “catch-all” policy to address the coverage gap situations noted above. That said, it would be important to make sure “flowthrough” provisions in the prime contract did not pose a problem to satisfy (e.g., A requirement that any subcontractor on the project have a personal experience mod less than “X” amount – something that is not always possible for a client company to obtain when in a PEO workers’ compensation arrangement.). Finally, it is important to note that PEOs are not bad. PEOs provide many valuable services, particularly for smaller companies that either don’t have access to these services for financial reasons or otherwise. However, while insulating one’s organization from responsibility for the acts or negligence of others, it is important to recognize that undesirable exposures and costs exist for contractors hiring subcontractors who obtain workers’ compensation coverage through a PEO.

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Florida Wetlands Update: EPA Proposes New ‘Old’ Wetland Rule The Clock is Ticking for Florida’s Roadbuilders By Jeff Littlejohn, Herschel Vinyard, Jr., and Jennifer C. Bergeron Adams and Reese, LLP

n Arizona District Court’s recent ruling has effectively eliminated the Trump-era Navigable Waters Protection Rule (NWPR) on a nationwide scale and could dramatically alter the Federal 404 wetland dredge-and-fill permit program. Judge Rosemary Marquez of the U.S. District Court for the District of Arizona ruled that the controversial NWPR, which redefined the waters of the United States protected by the Clean Water Act

(CWA), involved “fundamental, substantive flaws” that were in conflict with the purpose of the CWA. The definition of Waters of the United States, or WOTUS, which identifies the waters regulated under the CWA, has been an important point of debate in the environmental sector for decades. In 2015, the Obama administration enacted regulations that broadly expanded the definition of WOTUS to include nearly 60 percent of

the nation’s waterways, including many man-made ditches, drawing criticism from industry opponents that it was too expansive and cumbersome. The rules triggered the need to obtain a CWA 404 Permit from the U.S. Army Corps of Engineers to disturb wetlands where previously no permit was required. The Trump NWPR, enacted in 2020, eliminated the CWA protections for many man-made ditches, ephemeral streams, inWWW.FTBA.COM

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termittent streams, and certain wetlands, drawing criticism from environmental groups that it severely weakened the CWA. Judge Marquez’s ruling effectively returns the definition of WOTUS to the pre-2015 regulatory regime, often referred to as the Rapanos Rule. Consistent with Judge Marquez’s decision, the U.S. EPA and U.S. Army Corps of Engineers signed on November 18, 2021, a proposed rule that would officially re-establish the pre-2015 WOTUS rule for the country. This action begins a formal rule adoption process that begins with publication of the proposed rule in the Federal Register and the solicitation of public comments over a period of 60 days. Depending on the nature and significance of the comments received, revisions may be made, and ultimately a final rule will be published in the Federal Register. This last step is typically accompanied by a delayed effectiveness date of 30 days or less. Now that a final rule has been proposed, industry clients should consider participating in the public comment process. The rule change, once finalized by the federal agencies, also carries extra significance for Florida. In 2020, the EPA delegated much of the federal 404 wetland permitting program to the state of Florida, which has been issuing 404 permits based on the NWPR rule. Federal Rule 40 C.F.R. § 233.16(b) provides states with delegated federal programs, such as Florida’s recently approved 404 Wetlands Program, with up to 12 months to adopt changes in federal regulations. The 12-month countdown clock marking the end of NWPR in Florida may start as early as the Spring of 2022, depending on how quickly the new rule is finalized. Of course, the inevitable litigation that surely will follow may result in further delays to the effectiveness of the Rapanos Rule (and potentially grant extensions of life to NWPR in Florida). The advice to Florida roadbuilders and FDOT might be, if you already have a Florida 404 permit or you plan to obtain one in the near term, you’d better get started on the authorized activities.

About the Authors Herschel T. Vinyard Jr. is Special Council with Adams and Reese, LLP, where he works with clients on government affairs, environmental regulations, and permitting. Herschel has secured multiple innovative permits for waterfront, transportation, and industrial projects. He is one of Florida’s preeminent authorities on state environmental law and policy.

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Jeff Littlejohn utilizes his consulting engineer background as Senior Policy Advisor with Adams and Reese, LLP. Jeff’s professional practice experience includes structural design, environmental engineering, coastal engineering, and maritime transportation project design. Adams and Reese, LLP Associate Jennifer C. Bergeron focuses her practice in litigation. She has worked with clients in a wide range of areas including education, business and commercial, labor and employment, environmental and regulatory compliance, and energy law.

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Insight Getting to Know Matt Carlock, P.E. District Construction Engineer, District 4

District 4 comprises Broward County, Palm Beach County, and the Treasure Coast area (Martin County, St. Lucie County and Indian River County). You have a lot of work in progress with I-95 Express lanes. How are those projects progressing?

District 4 currently has close to 70 ongoing construction contracts totaling more than $1.5 billion. This work spans three Operations Centers (Treasure Coast, Palm Beach and Broward) and 31 different contracting partners. Our current I-95 express lane construction corridor is broken into five different segments throughout Broward and Palm Beach Counties. 95 Express Phase 3C (50% complete; original $457 million), from Hollywood Boulevard to Broward Boulevard started in January of 2019, and is currently on schedule to be completed in spring 2025. 95 Express Phase 3A-1 (90% complete; original $149 million), from Broward Boulevard to Commercial Boulevard started in October of 2015, and has an anticipated completion of spring 2023. 95 Express Phase 3A-2 (100% complete; original $153 million), from Commercial Boulevard to south of SW 10th Street, was completed ahead of schedule in October 2019. 95 Express Phase 3B-1 (100% complete; original $102 million), from SW 10th Street to south of Glades Road, was completed ahead of schedule in October 2021. 95 Express Phase 3B-2 (62% complete; original $149 million), from Glades Road to Linton Boulevard started in June of 2019 and has an estimated completion date of summer 2023. This project will install District 4’s first Diverging Diamond Interchange (DDI) at the I-95 and Glades Road Interchange.

What is a day in your work life like?

Matt spending time with his family at the Alligator Farm in St. Augustine in July 2021.

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I usually start my day around 7:30 a.m. by reviewing my calendar for what is scheduled for the day and setting up a daily log file to keep notes. Throughout the day, I spend a large portion of my time switching from meeting to meeting or from call to call. This could be calls from the Operations Center, project teams or contractors. The virtual platforms we use for communication now make it easier to reach someone, which means lots of time sitting at the desk.

What have been some of the most rewarding things to happen in your FDOT career? Seeing a project from the design phase through completion of construction is extremely rewarding. Building a roadway or bridge from the ground up is what I looked forward to when studying to become an engineer. The cumulation of time and effort spent from design staff, construction staff, department staff and contracting partners helps to deliver a project for the traveling public and drives the mission of FDOT. Many times, we get lost in the daily hustle and forget to recognize that construction is just a small portion of the lifecycle of a transportation system.

Matt and wife Suzanne enjoying the beach.

Whenever I get a break in meetings, I will scan my emails for any urgent items that need to be addressed and then do my best to respond as soon as possible. The real exciting days are when I can step out of the office and go visit the projects. Being able to talk with the Department, consultant and contracting staff about how construction is moving and what obstacles are in the way helps me to better focus the direction of the construction program within the district. One of the important things I strive to do is to reach out to our contracting partners to see how things are going within the district and how we can continue being successful in working together. This has led to good feedback on areas where the district can make process improvements and helps to foster the relationship for when issues arise. I also strive to attend the FTBA socials held around the district and make it a point to make myself available to our contracting partners.

Can you tell our members a little about the WrongWay Driving Safety Improvement Project? A major part of the Department’s mission is to provide a safe transportation system with a focus on the Secretary’s Vital Few initiatives, one of which is to improve safety. To reach our “target zero” of zero fatalities and zero serious injuries, the Department is implementing wrongway detection driving systems on interstate interchanges and arterial intersections. These detection systems will notify motorists of wrong-way drivers. In collaboration with our Traffic Operations department and our Traffic Management Center (TMC), the wrong-way system will integrate with our current SunGuide platform, alert drivers to potential hazardous situations, and notify the TMC of the need for emergency response. As part of this countermeasure, the district has developed an extensive plan to roll out the wrong-way driving detection systems throughout the district. The first locations identified to install these systems were on the I-95 express lane projects. As those are multi-year contracts and we could not add the work into active contracts, the Department created a separate design-build pushbutton contract for this purpose. The contract began in July of 2021 for three locations within Broward and Palm Beach Counties. These locations are at the I-75 exit ramps to Sheridan Street within Broward County and the I-95 southbound exit ramp to west Blue Heron Boulevard in Palm Beach County. The installation of these systems is expected to be completed in the fall of 2022 as part of District 4’s larger implementation of wrong-way driving measures.

Workforce was an issue for the industry long before infrastructure funding. What are some of the things your team does to attract new talent to the Department and construction overall? Workforce shortage is something that most industries are experiencing, and the Department is no exception. In response, the Department has focused on attracting, retaining, and training staff. I am part of our Fostering Talent team, which participates in recruiting events at local schools and career fairs, and posts advertisements through professional organizations. The Department is also attracting new talent by posting job openings on social media.

What is the best leadership advice you have received in your career? One of the best leadership tips I received from a mentor was to spend time in the development of my team, which involves making sure you have the correct members and including your team in the decision-making process. In construction, it is always important to make quick decisions to keep projects moving forward. Early in my career, as a leader, I would focus on making the decision when an issue arose, which benefited the project but failed to develop my team. This mentor stressed that the development of your team is key to your success as a leader. This not only includes ensuring your staff has the tools, training, and resources to be successful but also sharing information so they can be involved in the process. As engineers, you focus on solving a problem and developing solutions to that problem. As a leader, you give your team the support and trust to make those decisions autonomously. Building a strong team is not only key for your success but key to the success of your office/program.

I’m sure our readers would love to learn more about you from a personal perspective. What do you do for fun? I am married to Suzanne, my beautiful wife of almost 12 years, and have two amazing children, Addison (8) and Ethan (6). I like to start and end my day the same: spending time with the family. From the moment the kids get up until they go to bed, they are running around, having fun, and playing with their toys or reading books and we love every minute of it. One of my favorite things we do for fun is spend time at the beach and outdoors. Every year we get away for a family beach vacation during the summer. This past year we spent our trip in St. Augustine, checking out the alligator farm, historic downtown area and, of course, the beach. We had such a great time that when we asked Ethan what he wanted to do for his birthday in October he requested another trip to St. Augustine. We also love spending time with our extended family and our friends. WWW.FTBA.COM

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Company Transition and Succession Planning By Peter Hilera, CPA Withum

very business reaches a point where an owner, or owners, look around and ask: How do I transition this company? Who is the next me, and how to I monetize and diversify the value of my largest investment – my company – that I have built ˙over years through hard work and sacrifice? All business owners struggle with these questions, and the construction industry is no exception. Most businesses do not have a succession plan, and for a contractor the impact can be worse. Often the owners operate as charismatic entrepreneurs who drive the company, both in revenue and through contacts in the industry. How can succession planning mitigate the risks associated with a business transition?

Succession Planning The term succession planning leads many business owners to believe the process can be daunting, confusing, frustrating and time consuming. However, having a clear vision of what succession planning encompasses allows owners to take a step-by-step approach and reach their personal, company and current management goals effectively. The key components of succession planning are: Determining how the company will continue to operate when the current owners (or leaders) exit and relinquish control of the business. This is accomplished by creating a plan that:

Provides an exit strategy for the owners that includes the adequate financial resources for their retirement. This plan will consider not only the tax implications for the transition, but also the business challenges that the company may face as the leadership transition occurs. Allows owners to leave a legacy where they still have input into the future direction of the company considering the addition of a new leadership structure.

Options in Transition Plan A company can choose between various paths in transitioning their business. Each of the following paths has its own set of challenges, both financial and logistical. Each option depends on various factors and needs to be tailored to the needs of the owners, business, and family members for a closely held business. Family transition. Family dynamics play a key role in this path. Do all family members participate in the business, and if not, how will the active member be compensated versus non-active members? In simple terms, what will be fair and equitable for all involved? Further, owners will need to evaluate the need for continued cash flow vs. the ability to gift company ownership to family members who will continue managing the business, unless there is a decision to sell ownership to the family. Management buyout. As with any transition plan, financial considerations weigh heavily on this decision. Even if the financial and cash flow situation is favorable, having the right management team to continue with

the growth and success of the company will be more valuable and key. If the correct management team is in place, the finances usually can be settled. Company sale. For owners who would like to leave a legacy in place, this may not be an option, but often the lack for succession planning will leave the owners no other option to monetize their investment. Questions often arise related to the sale. Should the stock of the company be sold, or the assets? What are the tax implications if the selling entity is an S Corporation, C Corporation, or partnership? How should earn-outs be calculated and taxed? How are contracts in process transferred, valued and taxed? Employee Stock Ownership Program (ESOP). Using an ESOP can provide substantial tax savings that will allow the company to fund the owner notes and buyout. Depending on whether the company is an S Corporation or a C Corporation, tax benefits can be obtained as the ESOP and related note obligations are funded (company benefit) to a deferral of the gain from the sale (owner benefits) if the selling entity is a C Corp and the sale is structured properly. At the same time, not only are tax considerations key, but the culture of the company will play a pivotal role in making the ESOP a viable alternative. Human capital considerations will be just as important in an ESOP scenario. A final item to consider are bonding considerations for contractors, given that company value and equity will be affectcontinued on page 51 WWW.FTBA.COM

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continued from page 49 ed due to the debt, or cash flow drain, the company will experience in the ownership buyout. Management of company by third-party/absentee owner. This option solves the current problem of allowing the owners to take a step back from day-to-day operations, but it may not address the succession dilemma or allow the current owners to divest their largest investment (company ownership) to other assets. If the correct management team is not hired to manage the company, the owner(s) may be forced to be engaged again in the business to keep the concern afloat. Private equity. As a final option, owners may sell a portion of their business to a Pri-

vate Equity Group (PEG). This generally allows the owners to diversify their holdings and often provide them another bite at the apple by having the owners retain a remaining equity interest in the business and participate in the growth of the company as the PEG has an exit down the road. The owners will be able to participate in this second transition. It is common for owners to retain from 5 percent to 25 percent of their current ownership depending on the agreement between the owners and the PEG. With each option above there are human capital, tax, and family/partner issues and dynamics to balance. No option is bet-

ter than another, and the ultimate solution will depend on the facts and circumstances of each situation.

About the Author Peter Hilera, CPA, is Partner and Tax Team Leader, Construction Services, for Withum’s Orlando office. He has extensive experience helping contractors plan and execute succession plans, in addition to 23 years of providing tax, business and accounting compliance and advisory services across multiple industries. He can be reached at philera@withum.com or (407) 849-1569.

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PLANNING & DESIGN AIT Bridges ��31 Arcosa, Inc. ��24

SOIL IMPROVEMENT ASAP Group ��34

TRUCKING - DUMP TRUCKS Central Florida Transport, LLC ��42

PRECAST & READY MIX CONCRETE Mack Concrete Industries ��51

STEEL PIPE AND PILING SUPPLIER Consolidated Pipe & Supply Company, Inc. ��Back Cover

ULTRA-LIGHTWEIGHT FILL Aero Aggregates of North America LLC ��21

TRANSPORTATION - RAIL Port Consolidated, Inc. ��28

1-800-310-9462 WWW.FTBA.COM

Welcome, New Members

FTBA: Built on the Success of its Growing Membership

TBA is proud to serve its contractor, associate and affiliate members by providing one collective voice before the Florida Legislature. FTBA works with various agencies, including the Department of Transportation and Federal Highway Administration, as well as the executive branch, to keep them informed of the needs and concerns of the transportation construction industry. We are thankful for our members and the value they bring to the association and industry. We welcomed the following new members between September and December.

Contractor Members

Associate Members

Boh Bros. Construction Co., LLC Ferrovial Services Infrastructure, Inc. Ghella USA Corp. Webber, LLC

Affiliate Members

AE Engineering Inc. Ash Grove South Bidadoo Auctions Cherne Industries Colliers Engineering & Design Eland Engineering, Inc. Geveko Markings Knox Companies Wirtgen America

HeadLight Trimble, Inc.

Drilling solutions that add to your bottom line. ecanet.com/ftba 1 800 PILE USA

Sales | Rentals | Parts & Service | Training

WE ARE PREFERRED OUR AWARD-WINNING PROJECTS INCLUDE: • • • • • • • •

CALL US TODAY!

Interstate Highways Industrial Parking & Storage State Highways Railroad Yards Airports County Roads & City Streets Residential Subdivisions Commercial Parking Lots

Asphalt Oﬃces North Region

Jacksonville, FL 904-288-6300

Central Region

Preferred Materials is part of CRH Americas Materials, the largest asphalt producer in North America, Preferred Materials has been a proud member of FTBA for 60 years.

PreferredMaterials.com ASPHALT & PAVING

BLOCK & BUILDING MATERIALS

Orlando, FL 407-343-7445

South West Region Tampa, FL 813-612-5740

GUNITE & SHOTCRETE

READY MIXED CONCRETE

JOIN OUR TEAM CareersAtPMI.com MORE THAN MACHINES… SOLUTIONS. Preferred Materials, Inc., a CRH Company, is an Equal Opportunity Employer (EOE). Qualiﬁed applicants are considered for employment without regard to age, race, color, religion, sex, national origin, sexual orientation, disability, or veteran status. If you need assistance or an accommodation during the application process because of a disability, it is available upon request.

FLORIDA TRANSPORTATION BUILDER