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FEB | 2018 A PUBLICATION OF THE UTILITY CONTRACTORS’ ASSOCIATION OF NEW ENGLAND, INC.

UCANE Interview:

• Aging Infrastructure No Match for Mother Nature • R aw Sewage Discharges Still a Problem in Massachusetts • Provincetown Boards Consider Three Sewer E xpansion Options Photo: Nicole Harnishfeger/I&M Photo

Representative Jeff Sanchez


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Years of Excellence 1954-2018

FEBRUARY, 2018

IN THIS ISSUE

OFFICERS President RICHARD PACELLA, JR. R. M. Pacella, Inc.

President-Elect MARCELLA ALBANESE

Albanese Brothers, Inc.

Treasurer RYAN McCOURT

McCourt Construction Company

Secretary BRIAN COONEY

C. C.Construction Inc.

BOARD OF DIRECTORS GREG ANTONELLI GTA Co., Inc.

VINCENT BARLETTA

Barletta Heavy Division

TONY BORRELLI

Celco Construction Corp.

BEN CAVALLO

C&S Insurance Agency

ANDREW DANIELS J. Derenzo Co.

GREG FEENEY

Feeney Bros. Utility Services

JERRY GAGLIARDUCCI

Gagliarducci Construction, Inc.

NICK GAMACHE

Rain for Rent - New England

MARCO GIOIOSO

P. Gioioso & Sons, Inc.

MIKE GORMAN

E. J. Prescott, Inc.

BILL LEONARD

Aqua Line Utility, Inc.

AL MORTEO

FED. CORP.

JOHN OUR

Robert B. Our Co., Inc.

JOSEPH PACELLA

RJV Construction Corp.

PAUL SCENNA

Albanese D&S, Inc.

CHRIS VALENTI

GVC Construction, Inc.

KEN VOGEL

WES Construction Corp.

DAVID WALSH

Pawtucket Hot Mix Asphalt

ANNE KLAYMAN

Executive Director

3 President’s Message:

Aging Infrastructure No Match for Mother Nature

5 Legislative Update:

• Governor Begins Budget Process by Filing FY19 Budget Proposal • 495/MetroWest Suburban Edge Community Commission Releases Report; Identifies Water Infrastructure Needs • New Transportation Commission Formed to Review Commonwealth’s Transportation Needs • News in Brief

13 UCANE Interview:

Representative Jeff Sanchez, House Ways & Means Committee Chairman

17 UCANE’s January Dinner Meeting 23 Labor Issues:

Harvey Weinstein, #MeToo, and You

27 Under the Hard Hat with UCANE’s Officers & Board Members: Q&A with UCANE Board Member Greg Antonelli (GTA Co., Inc.)

29 UCANE’s 2018 Scholarship Applications Now Available 31 CWCC and US Water Alliance Join Forces 34 Nantucket Taps the Robert B. Our Co., Inc. for Emergency Sewer Repairs 39 UCANE’s 7th Annual Appreciation Night Trade Show 41 Raw Sewage Discharges Still a Problem in Massachusetts 43 Spotlight on Cape Cod:

• Provincetown Boards Consider Three Sewer Expansion Options • Major Infrastructure Needs Forecast for Green Pond

44 UCANE’s Calendar of Events 51 UCANE Members Testify on Beacon Hill in Support of Standardized Police Detail Payments 53 Technology in Construction:

Always Connected Laptops Could be the Next Generation of Hardware

55 UCANE’s Safety Corner:

How to Prepare for Safety Inside the Cab

61 Financial Management:

• Solving the Annuity Puzzle • Deducting Employee Business Expenses • Insuring Key People at Small Companies

Editor: Anne Klayman, Associate Editor: Suzanne Savage, Magazine Designer/Assistant Editor: Sherri Klayman Construction Outlook Chairman: Richard Pacella, Jr. Editorial Board: Richard Pacella, Jr., Marcella Albanese, Ryan McCourt, and Brian Cooney CONSTRUCTION OUTLOOK published monthly by the Utility Contractors’ Association of New England, Inc., 300 Congress Street, Suite 101, Quincy, MA 02169; Tel: 617.471.9955; Fax: 617.471.8939; Email: aklayman@ucane.com; Website: www.ucane.com. Statements of fact and opinion are those of the authors alone and not necessarily those of UCANE and the Construction Outlook editorial board and staff. Subscriptions are included in dues payments for UCANE members. Presorted Standard postage paid at Brockton, MA. POSTMASTER, please send form #3579 to Construction Outlook, Crown Colony Office Park, 300 Congress Street, Suite 101, Quincy, MA 02169.

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Aging Infrastructure No Match for Mother Nature Last month brought us the worst cold snap in 100 years. Since then, we have had some more “traditional” winter storms, and it’s inevitable that more cold and more storms are on the way. Also inevitable are water and sewer main breaks, which is proof once again that our aging water infrastructure is no match for Mother Nature.

N

ews reports of major water and sewer main breaks from all across the state have been an almost daily occurrence thus far in 2018. The UCANE staff tracks and archives these breaks, but even with their diligent efforts, I’m sure there are some that were missed. One recent sewer main break on Nantucket resulted in the release of raw sewage into Nantucket Harbor. This month’s Construction Outlook magazine includes an article detailing the great work by the Robert B. Our Co., Inc. responding to the break and containing the spill (see article on page 34). Like the Our Company, many UCANE members stay busy this time of year performing emergency repairs on water and sewer mains. But the truth is, many of these emergencies could have been averted if additional funds were available to replace old, outdated pipes that can crack during extreme winter weather conditions. These aging pipes are the cause of the vast majority of these breaks. The total cost of these breaks goes well beyond the money needed to pay for a small section of replacement pipe and emergency repair. The loss of local business revenue is never included in the cost, nor is the inconvenience to local residents. There is also the cost of the water itself. While FEBRUARY, 2018

there are no statewide statistics, the American Society of Civil Engineers (ASCE) estimated that there are 240,000 water main breaks per year, wasting over two trillion gallons of treated drinking water. The estimated cost of this unaccounted for drinking water is in the billions of dollars. Another article in this month’s magazine shows how our aging water infrastructure is not just a problem in the winter. The Boston Herald and other media outlets reported that the Lawrence and Lowell Wastewater Treatment Plants released millions of gallons of untreated sewage into the Merrimack River during a severe storm this past October. Officials in those areas acknowledge the problem, but lack the funding to adequately upgrade their facilities (see article on page 41). While local cities and towns are left to deal with these emergencies, the long-term solution will only come about if local, state, and federal officials work together to find solutions and also share the financial responsibility. Massachusetts and the other New England states need to increase funding to modernize their water infrastructure in order to protect public health, and build a foundation for future economic development. Otherwise, the “big breaks” will keep on coming, and the problem will become worse. n

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FEBRUARY, 2018


Mark Molloy, Esq., Lynch Associates, Inc.

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Governor Begins Budget Process by Filing FY19 Budget Proposal

overnor Charlie Baker officially started the FY19 budget process by filing his budget proposal by the end of January. Accordingly, the FY19 budget proposal, known as House 2, has now officially been filed. The FY19 budget relies on a consensus revenue tax estimate of $27.594 billion, which is 3.5% over the revised FY18 tax revenue projection. House 2 increases overall spending by 2.6% and keeps MassHealth growth to 0.5% over FY18 estimated spending. According to the BakerPolito Administration, House 2 relies on less than $100 million in non-recurring revenue, and anticipates a deposit of $96 million into the Stabilization Fund, which would bring total reserves to $1.463 billion, an increase of 30% since the Baker-Polito administration took office. In terms of specific line-items of interest to UCANE members, the Administration proposed the following appropriations: • Funding the Commonwealth Rate Relief Fund (1231-1000) at $500,000. Last year’s appropriation was $500,000. The rate relief program provides assistance to municipalities who have previously incurred debt to fund water infrastructure projects. Once funded at $62.5 million, the line-item has fallen out of favor among budget writers in recent years. • Appropriating $8 million for the underground storage tank program. This represents an increase of $2.5 million from the FY18 amount of $5.5 million. The Underground Storage Tank program is one of the Commonwealth’s unheralded public safety and environment programs. Unfortunately, recent funding for this program has led to a backlog of unpaid claims for funds from this program. The current funding gap is approximately $20 million, a large portion of which reflects projects already completed. • Increasing funding for the Clean Water Trust’s contract assistance line-item, 1599-0093, to $63,383,680. This represents an increase of $5,431,375 from the previous year’s funding of $57,952,305. The

FEBRUARY, 2018

contract assistance line-item allows the Clean Water Trust to manage their allocation of SRF projects. UCANE has been a strong advocate for increasing the contract assistance line-item since the passage of Chapter 259 of the Acts of 2014, which increased capacity for this fund from $88 million to $138 million. • Increasing funding from the FY18 appropriation for the Massachusetts Department of Environmental Protection (MassDEP) (2200-0100) by $328,404 to $24,737,344. UCANE has long supported increased funding for the MassDEP to ensure that the administration of water infrastructure programs remains consistent. Building on Executive Order 569, An Integrated Climate Change Strategy for the Commonwealth, the Governor’s budget proposal also includes $2 million in new funding for municipal technical support, climate science, and targeted investments in environmental justice. As well, House 2 includes $1.4 million to fund implementation costs of the proposed NPDES program. Within the outside sections, the Governor also filed language that would reallocate the first $30 million collected under the underground storage trust (UST) surcharge back into the fund. During previous budget shortfalls, the allocation of this surcharge was changed from the UST to the General Fund. Finally, the Governor’s budget proposal attempts to increase revenues by including an AirBNB excise tax for the DOR to collect from owners of short term rentals and allows the DOR and third party platforms to agree to voluntary collections. UCANE has been following this issue closely as a mechanism for increasing water infrastructure funding options. The House and Senate Committees on Ways and Means will now hold joint budget hearings. The House will then propose and consider its version of the FY19 budget in April. The Senate will do the same in May. The month of June will see the two branches resolve the differences in their versions and forward the same to the Governor. continued on page 7

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Legislative Update continued from page 5

495/MetroWest Suburban Edge Community Commission Releases Report; Identifies Water Infrastructure Needs

A

ccording to a press release issued by the offices of Co-Chairs Senator Karen Spilka, Representative Kate Hogan, and Assistant Secretary for Communities and Programs of the Executive Office of Economic Development and Housing, Juan Vega, the 495/MetroWest Suburban Edge Community Commission approved its report on findings for the 495/MetroWest region. This Commission was established by the Legislature in 2015 to examine the development challenges facing 33 suburban edge communities in the 495/MetroWest region and determine how the Commonwealth’s programs and initiatives can address their needs. The report is prepared in two sections. Section 1 is a narrative that provides a synopsis of the development challenges considered by the Commission, documents regional constraints to growth, and identifies key findings to address these issues. Section 2 is a detailed regional profile prepared by the Commission’s research partner, the UMass Dartmouth Public Policy Center (PPC), which systematically examines relevant conditions in the 495/MetroWest region. Beginning in July 2016, the Commission held 10 regular meetings in towns across the 495/MetroWest region. Each meeting examined one of the specific regional development challenges that the Commission seeks to address. In all, the development challenges examined include transportation, water, housing, downtown revitalization, commercial development, industry and employment, energy, educational attainment and skills, and telecommunications. At each meeting, appropriate experts from state, regional, and local agencies and organizations conducted briefings on the topic of the day and the UMass Dartmouth PPC presented the results of its extensive research and analysis to provide additional context and insights for the Commission. The Commission looked closely at water infrastructure and available resources at a special session January 27, 2017 where the MassDEP, Massachusetts Water Works Association, and MWRA Advisory Board presented before the panel. Among the UMass Dartmouth PPC’s findings: • 495/MetroWest is growing faster than the rest of the state: Between 2010 and 2015, the 495/MetroWest region saw a population increase of 5.6%, compared to 1.7% statewide. • 495/MetroWest residents are highly educated: 55% of 495/MetroWest residents ages 25+ have a Bachelor’s degree or higher, compared to 41% statewide. • 495/MetroWest is a major source of talent: Each day an estimated 32,899 workers commute from the region to the City of Boston with thousands more commuting to other locations in Greater Boston. • 495/MetroWest is a net labor importer: The 495/ MetroWest region is home to more jobs than employed residents; in 2014 there were 286,883 pri-

FEBRUARY, 2018

mary jobs located in the region and 269,336 employed residents. •

495/MetroWest is a major source of job opportunities for other regions: An estimated 14,775 residents of the City of Worcester commute to locations within the 495/MetroWest region daily.

495/MetroWest is not producing a sufficient supply of housing: Despite solid population growth, regional residential building permitting activity remains wellbelow 2005 levels. Moving forward, in the next phase of its work, the Commission will circulate its report to key constituencies and develop specific policy responses and recommendations to address the infrastructure issues laid forth in the report and ensure the 495/MetroWest region remains a major contributor to the state economy and a great place to live and work.

The 495/MetroWest Suburban Edge Community Commission’s report will be made available online at: http://www.mass.gov/hed/economic/initiatives/metrowest-suburban-edge-community-commission.html. Currently, the site contains relevant documents used by the Commission to study the variety of issues before it.

continued on page 9

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FEBRUARY, 2018


Legislative Update continued from page 7

New Transportation Commission Formed to Review Commonwealth’s Transportation Needs

A

fter announcing his intention to look more closely at the state of the Commonwealth’s transportation infrastructure, Governor Baker created a special commission to try to understand how transportation options and demand could change by 2040, and how the state can be ready to adapt to those changes. The Commission on the Future of Transportation in the Commonwealth (Commission), created by Executive Order 579, is comprised of 18 members, with Steve Kadish, former Baker Administration Chief of Staff, as the Chairman of the study group. The Commission is charged with developing a range of scenarios anticipated between 2020 and 2040 and advising the Administration on “how to ensure that transportation planning, forecasting, operations, and investments for the period from 2020 through 2040 can best account for likely demographic, technological, climate, and other changes in future mobility and transportation behaviors, needs, and options.” In particular, the Executive Order directs the Commission to “at a minimum, investigate the following topics that are critical to laying a foundation for understanding anticipated changes in population, employment, and demographics in Massachusetts as well as forthcoming developments in transportationrelated technologies, energy use, climate change, and other factors that may affect transportation: 1. Climate and Resiliency: What changes will be needed to reduce transportation greenhouse gas emissions consistent with Commonwealth targets for 2040? What kinds of investments will be needed to make transportation infrastructure more resilient? 2. Transportation Electrification: To what extent should the Commonwealth encourage or promote electrification of personal vehicles, transit systems and other transportation systems? What changes might be needed to energy infrastructure to support electrification? 3. Autonomous and Connected Vehicles: Over what timeframe will autonomous vehicles likely be deployed in Massachusetts and under what policy framework? What changes to policy and infrastructure might be needed to support deployment of autonomous and connected vehicles? 4. Transit and Mobility Services: To what extent will “mobility as a service” change transportation in Massachusetts? How will the role of public transportation evolve if on-demand and mobility-

FEBRUARY, 2018

as-a-service options become more widespread in the future? 5. Land Use and Demographics: What changes in land use and demographics could either drive or be driven by the types of disruptive climate, technology, and business model changes likely to occur in transportation? What other context issues should the Commonwealth consider when planning for its transportation future?” Of note, the Commission does not include a wide segment of traditional transportation interest groups or influencers. It is thought that the Administration may be seeking to create a “theoretical” transportation blueprint without focusing on the Commonwealth’s revenue needs during an election year. The Commission, which will meet monthly, is due to issue its report December 1, 2018. To view a copy of the Executive Order 579, please visit: https://www.mass.gov/executive-orders/no-579-establishing-the-commission-onthe-future-of-transportation-in-the-commonwealth. continued on page 11

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Legislative Update continued from page 9

News in Brief

• New Senate Chairman of the Joint Committee on Transportation Named. Senate President Harriette Chandler announced that Senator Joseph Boncore of Winthrop will replace now Mayor, former Senator, Tom McGee, as the Senate Chairman of the Joint Committee on Transportation. Boncore, who was previously the Senate Vice Chairman of the same committee, has a district that contains road, bridge, transit, maritime and aeronautic constituencies. Senator Boncore will retain his chairmanship of the Joint Committee on Housing. Senator Eric Lesser was also appointed the new Senate Vice Chairman of the Transportation Committee. • Senator Linda Dorcena-Forry Resigns. State Senator Linda DorcenaForry, the first woman of color to represent a district that includes South Boston, Mattapan, and Dorchester, announced her resignation to assume a position with Suffolk Construction. Forry, who was elected in 2013 in a hotly contested Senate race, was thought to be a potential candidate for the position of Senate President in the event Senator Stan Rosenberg is unable to return to the position. Respected by her colleagues, Senator Forry was a thoughtful legislator who worked with Republicans and Democrats alike. Her resignation came as a surprise to many fellow legislators. • Major State Office Building Closed to Repair Water Infrastructure. As reported by the State House News Service, a broken water pipe at One Ashburton Place forced the state office building to close so crews could make repairs. It was the second pipe problem the 22-story building had within one week. During the previous break, the Massachusetts Lottery – located in the building's basement – was unable to open due to water damage. • Paid Family Proposal May Cost $1 Billion. According to the Associated Industries of Massachusetts, the 2018 paid family and medical leave program ballot question will cost workers and employers $1 billion, with the state on the hook for $55 million for its workforce and another $70 million to cover the bureaucracy that will be needed to run the program. Employers under the proposed pro-

FEBRUARY, JANUARY, 2018 2018

gram would pay into a new trust fund 0.63% of each employee's annual wages, with employees seeing a new payroll deduction on their paychecks. • Joint Rule 10 Day. The Massachusetts legislature faces a deadline for reporting legislation referred to its committee of origin. Under a revised Joint Rules agreement reached last year, the Joint Committees within the legislature must report on all legislation before them by February 7. Stay tuned for more information in the next issue of Construction Outlook magazine for a summary of matters of interest to UCANE members. n

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FEBRUARY, 2018


Representative Jeff Sanchez (House Ways and Means Committee Chairman)

Q: A:

Please give our readers some insight into your background and how you got involved in politics.

Politics and activism have been a part of my life since my childhood. After working in banking and finance, I had an opportunity to work for Mayor Tom Menino, where I worked on a number of initiatives relative to development, infrastructure, and city finance.

Q:

As Chairman of the House Committee on Ways and Means, you are facing some unique fiscal issues this year with upcoming ballot questions, federal tax changes, and marijuana and gaming revenue. Please give your thoughts on how the state will continue to support local aid to cities and towns to help support basic municipal services, specifically water infrastructure.

A:

There is a cloud of uncertainty in Washington, so we continue to monitor actions at the federal level to understand how they affect us here in Massachusetts. In some cases, Massachusetts is able to weather the storm – the recent tax reform bill repealed the healthcare individual mandate, but Massachusetts has its own individual mandate in place. We continue to be thoughtful and monitor it to understand the full effects. At the end of the day, we invest 40% of the state budget into healthcare, and it drives 17% of the state’s GDP.

On the upcoming ballot questions, we would hope that all parties working on these ballot initiatives would come together to agreements that work to the benefit of the Commonwealth. How all of this fits into local aid to cities and towns is something that I keep in mind as I enter into the budget process.

Q:

Reports indicate that there is an $18-20 billion funding gap in water and sewer infrastructure over the next 20 years in the Commonwealth. Can you discuss some of the water and sewer infrastructure concerns your district has been addressing? FEBRUARY, 2018

A:

I am keenly aware of this funding gap, and that is why I sponsored and strongly supported language that created the Water Infrastructure Advisory Committee as part of the water infrastructure bill passed by the Legislature in 2014. I believe the Committee can play a vital role in monitoring our progress toward closing this funding gap. I’ve also had the pleasure of working with Henry Vitale at the Boston Water and Sewer Commission (BWSC) since I started with the city in the 90s. He is one of the nicest and most capable people I know – he’s a good person to have managing a water system with 1,018 linear miles of pipe for 90,000 active accounts!For every dollar the MRWA spends, the BWSC is responsible for an additional 33 cents. The BWSC system serves 1.2 million people on a daily basis. Henry understands how water is a public health issue, and has made sure BWSC’s capital plans maintain water and sewer systems that are efficient, safe, and up-to-date while protecting the environment. Under his leadership, BWSC has implemented aggressive leak detection and repair and progressive metering programs to reduce its unbilled and unaccounted-for-water. He implemented city-wide installation of SmartRead to allow BWSC instantaneous readings of meters. As a close friend, we’ve stayed in touch over the years. He’s continued on page 15

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Interview continued from page 13 helped me understand the importance of water systems, and I will continue to consult him and others as we think about water and sewer infrastructure.

Q:

A strong construction industry is a critical element to the state’s economic development. What do you believe can be done to assure that the construction industry and trades are able to fill these critical jobs in the coming years as the workforce ages?

A:

Massachusetts is booming right now. Cranes scatter Boston’s skyline, and we’re seeing development across the state. Economic growth and GDP continues to strengthen, and jobless rates are among the lowest in the country. These all make great talking points, but they present a number of issues. While the development is front and center in our downtowns, the skills gap is hidden in our neighborhoods. In Boston, in Gateway Cities, and in Western Mass., we have to find ways to address this gap. I think we have to create pipelines in order to address this. And I mean talent pipelines, not necessarily infrastructure. How do you, the engineering firm or construction company,

engage with non-traditional partners? In what way can we work with technical and vocational schools to prepare our youth for the difficult but well-compensated jobs in this field? How do local institutions fit into the picture? We have to continually ask these questions, and I think we’ll find ways to empower people to be prepared for these critical jobs.

Q: A:

What are some of your priorities for 2018?

In the first half of the session we focused on several important initiatives, such as criminal justice reform, healthcare, and women’s rights. My priority for 2018 is to focus on the budget. This will be my first time working on the budget as Chair of the House Committee on Ways and Means. I look forward to meeting with every representative to discuss their priorities and how the budget affects cities and towns across the Commonwealth. Aside from that, we recently took up two bond bills, which together authorize $5.4 billion worth of activity. The housing bond bill authorizes $1.7 billion in borrowing for programs like the Affordable Housing Trust Fund and the Capital Improvement and Preservation Fund, while extending the Brownfields Tax Credit and Low Income Housing Tax Credit. The Division of Capital Asset Management and Maintenance (DCAMM) bond bill authorized $3.7 billion in borrowing for capital facility repairs and improvements for the Commonwealth. n

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UCANE Executive Director Anne Klayman swearing in Officers & Board in attendance: (L-R): Ken Vogel, WES Construction Corp.; Chris Valenti, GVC Construction, Inc.; Paul Scenna, Albanese D&S, Inc.; John Our, Robert B. Our Co., Inc.; Bill Leonard, Aqua Line Utility, Inc.; Richard Pacella, Jr., R. M. Pacella, Inc.; Nick Gamache, Rain for Rent - New England; Andrew Daniels, J. Derenzo Co.; Tony Borrelli, Celco Construction Corp.; Ben Cavallo, C&S Insurance Agency; Greg Feeney, Feeney Brothers Utility Services; Brian Cooney, C.C. Construction, Inc.; and Marcella Albanese, Albanese Brothers, Inc. Officers & Board not in attendance: Greg Antonelli, GTA Co., Inc.; Vincent Barletta, Barletta Heavy Division; Jerry Gagliarducci, Gagliarducci Construction, Inc.; Marco Gioioso, P. Gioioso & Sons, Inc.; Mike Gorman, E. J. Prescott, Inc.; Ryan McCourt, McCourt Construction Company; Al Morteo, FED. CORP.; Joseph Pacella, RJV Construction Corp.; and David Walsh, Pawtucket Hot Mix Asphalt

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FEBRUARY, 2018


Massachusetts State Auditor Suzanne Bump Addressed UCANE Members at January Meeting Over the years, UCANE has worked diligently to get the message out to our elected officials and the public that water infrastructure is vital to our state’s public safety and our economic future. That is why UCANE was especially honored to have Massachusetts State Auditor Suzanne Bump as the featured guest speaker for our first dinner meeting of 2018, as she shares UCANE’s position that there needs to be additional investment in water infrastructure. The meeting also served as an opportunity to pay tribute to 2017 President Paul Scenna and to our members going off the Board and thank them for their service. Our 2018 Officers and Board of Directors were then installed, including newly elected UCANE President Richard Pacella, Jr. of R. M. Pacella, Inc.

U

CANE’s Executive Director Anne Klayman opened the meeting by welcoming the attendees and introducing Assistant Executive Director Jeff Mahoney, who provided the formal introduction of the evening’s keynote speaker State Auditor Suzanne Bump. She was sworn into office in January 2011 and is the first woman to serve in this role in the State’s history. As auditor, she has prioritized effective management of public resources to improve public trust in government. Her mission in the Auditor’s office is to make government work better by helping it to become more efficient, effective, accountable, and transparent in meeting its mission to serve the public. Since taking office, the auditor has established her office as a national leader in government accountability. Her office has received numerous national awards for excellence in conducting audits and innovations in the use of data analytics to identify root causes of over-spending and poor service delivery by state agencies. Jeff also noted that Auditor Bump has been a strong advocate for water infrastructure. In January of 2017, her office released a report titled “Costs, Regulation, and Financing of Massachusetts Water Infrastructure: Implications for Municipal Budgets.” The re-

FEBRUARY, 2018

Guest Speaker

Suzanne Bump

Massachusetts State Auditor

port, based on responses from public works officials across the state, found an $18 billion funding gap in water infrastructure over the next 20 years. The Auditor, to her credit, not only identified the problem, but also proposed solutions. She called for more collaboration and additional investment by the state to address the problem. Auditor Bump opened her remarks by commenting on the recent Massachusetts storms and how they highlighted the fact that our current infrastructure is inadequate. She said, “Government can do much good for us, but opportunity after opportunity is squandered because we seem incapable of setting and sticking with priorities, of providing the bureaucratic infrastructure that is necessary for the smooth and efficient running of programs, of monitoring performance, and of rewarding success.” She then spoke in detail about the report her office produced and of the solutions she proposed. One of her recommendations is to increase collaboration, saying “only 36 percent of communities report that they are members of regional collaboratives for water infrastructure planning and management. When communities pool their knowledge and resources, they have the continued on page 19

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Dinner Meeting continued from page 17

opportunity to reduce costs, bolster efficiencies, and create economies of scale.” Auditor Bump concluded by thanking UCANE for their ongoing advocacy. “I challenge you all to continue your efforts—both in the State House and in your local communities—to promote needed investments to meet our state’s water infrastructure needs and updates to the laws and regulations guiding such systems. You all have a powerful voice that can educate leaders and the general public on the challenges we face, provide guidance when they become overwhelmed with the scale of the task, and gentle but persistent prodding when action is stalled,” she said. Anne then honored outgoing 2017 Board Members, John Berksza (Eastern Insurance Group, LLC); Nick Biello (J. D’Amico, Inc.); Gerry Carney, Jr. (C. N. Wood Company, Inc.); Kevin Cole (J. F. White Contracting Co.); A. J. Lorusso (Lorusso Heavy Equipment, LLC); Brian Rawston (Jay Cashman, Inc.); and David Zoppo (R. Zoppo Corp.). Anne thanked them for their support to help make UCANE a stronger and more effective association. She then recognized outgoing President Paul Scenna (Albanese D&S, Inc.) for his contributions over the past year. Paul responded by saying that serving as President was a tremendously rewarding experience and encouraged other

FEBRUARY, 2018

UCANE members to get more involved. The 2018 Officers and Board Members in attendance were then introduced and administered the Oath of Office by Anne. Richard Pacella, Jr., UCANE’s 2018 President, thanked the membership for their support and pledged to continue the good work of those who served before him, noting that over the years, each of them did an outstanding job during their term as President. He especially thanked Paul Scenna for his service as President in 2017. Richard then noted how over the past 64 years, our members have given unselfishly of their continued on page 21

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Dinner Meeting continued from page 19

time, most times their personal time, to make our Association a potent force and a vocal advocate for clean water and drinking water issues. He said that he will continue the policy of inviting contractor members to attend board meetings so they can see and hear the decisions we make, the work we do, and the influence and impact these decisions have on all of our companies and the success of their businesses. Richard outlined some of his priorities for this year, including securing increased SRF funding to assure that a maximum number of projects are put out to bid; assisting cities and towns to obtain necessary funding for much needed water and sewer projects; and to continue to press for passage of our Dig Safe bill, as well as our bill to standardize police detail payments; and to continue to oppose and mitigate the impact of legislation and regulations that adversely affect our Industry. He also stated the importance of continuing to strengthen our Association by increasing membership, and he asked for our membership’s support in order to reach this goal. Richard concluded his remarks by again thanking the membership for their support and asking contractor members to do business with our associate members whenever possible. He said it is important that we support our associate members who so generously support UCANE.

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Anne closed the evening’s program by providing details about several upcoming seminars, including our Competent Person/Confined Space seminar conducted by nationally recognized instructor John Barrasso, as well as our Asbestos Cement Pipe certification classes (see page 44 for more information). She then offered a heartfelt thank you to attendees for their support and for making the evening a success. n

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Richard Wayne, Esq., Prince Lobel Tye LLC

Harvey Weinstein, #MeToo, and You Sexual harassment in the workplace has long been illegal under state and federal laws. Employers are responsible for preventing sexual harassment and eliminating its vestiges from the workplace. Most employers have implemented anti-harassment policies and training. Although, there have been no recent significant changes in the law of sexual harassment, recent events, the Womens Marches, the Harvey Weinstein scandal, and the #MeToo movement, demand employers take this moment to reexamine their sexual harassment policies, practices, and training. If unsuccessful, they may be subject to liability. Policies and practices should encourage reporting, prompt investigation, remediation, and prohibit retaliation.

​T

he Federal Equal Opportunity Commission (EEOC) defines unlawful sexual harassment in its regulation. Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature constitute sexual harassment when (1) submission to such conduct is made either explicitly or implicitly a term or condition of an individual’s employment, (2) submission to or rejection of such conduct by an individual is used as the basis for employment decisions affecting such individual, or (3) such conduct has the purpose or effect of unreasonably interfering with an individual’s work performance or creating an intimidating, hostile, or offensive working environment.” Federal law and state law recognize two (2) distinct types of conduct which may be labeled sexual harassment: 1. Quid pro quo harassment where submission to or rejection of advances, requests or conduct is used as a basis for employment decisions; and 2. Hostile environment harassment where the conduct of an individual(s) has the purpose or effect of unreasonably interfering with an individual’s job performance by creating an intimidating, hostile, humiliating, or offensive work environment.

FEBRUARY, 2018

In lay terms, sexual harassment refers to unwelcomed speech or conduct of a sexual nature which is offensive and fails to respect the rights of others. Absent egregious conduct, an isolated remark or act, likely does not violate the law or create a hostile work environment. Sexual harassment may involve relationships of unequal power, but may also involve relationships among “equals”. Sexual harassment may also involve employee speech or conduct directed at non-employees or non-employee speech or conduct directed at an employee. It is not limited to male speech or conduct directed towards a female or by a supervisory employee toward a non-supervisory employee. Sexual harassment may also be found in non-traditional situations: A man may be a victim; a women may be the harasser; The harasser may be the same sex as the victim and/or have the same sexual preference; supervisors may be the victim of abusive conduct of a subordinate. ​Employers are responsible for preventing sexual harassment in the workplace. The term “workplace” can be broadly defined to include, but not limited to, off-hour activities away from the workplace or social networking. The employer can be held liable for the sexual harassment committed by its supervisors, continued on page 25

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Risk starts even before you do. Before you break ground, there are risks that can threaten the success of your project ranging from contractual and surety needs to environmental exposures and site security. And once construction begins, even more risks arise. Now is the time to have a close working relationship with an insurer who understands the construction industry. We’ll leverage our expertise and knowledge and work with you to uncover potential pitfalls others might miss, and provide solutions that will help you get ahead of risk. By anticipating and preparing for it, you can avoid project disruptions, reduce loss costs and keep your projects running smoothly. Don’t start without us. For more information, please contact your Travelers agent.

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Labor Issues continued from page 23

7. Warn the accused not to retaliate.

workers or third parties. In addition, the employer must prevent retaliation against persons who allege sexual harassment or cooperate in the employer’s investigation of sexual harassment. Under Massachusetts law, individuals may have personal liability. Damages can include back pay, front pay, reinstatement, compensatory (e.g. emotional distress), punitive damages, the award of attorney’s fees, and injunctive relief. The plaintiff’s may demand a trial by jury. Evidence of sexual harassment may be verbal, non-verbal or physical. ​To protect your company, yourself and your employees from discrimination, harassment, or retaliations, it is recommended you review the following suggestions. 1. Promulgate and update your anti-harassment, anti-discrimination, and anti-retaliation policies and procedures. 2. Distribute the above upon hire and annually. 3. Provide employees and supervisors with timely training, including, but not limited to how to investigate a complaint. 4. Upon receipt of a complaint or constructive knowledge of wrongdoing, investigate promptly and thoroughly. 5. Document your efforts. 6. Try to protect the privacy of individuals involved.

8. Prevent Supervisory misconduct – there is strict liability in Massachusetts. 9. Take prompt action to halt any alleged discrimination, harassment, or retaliation. 10. Regardless of whether the investigation reveals discrimination, harassment or retaliation, re-affirm that discrimination, harassment, or retaliation violates the law. 11. Continue to monitor the situation to prevent future acts of discrimination, harassment, or retaliation – whether it occurs at work OR outside of work. 12. Train your employees that discrimination, harassment, or retaliation is against federal and state law. 13. Make sure managers, supervisors, and foremen know what to do when they identify or suspect discrimination, harassment, or retaliation. Don’t let them feel they must solve the problem themselves. Often times they are not good at it. Coordinate your response. Seek help from your attorney or HR consultant.

Good policies, practices and training will minimize the likelihood of litigation. A prompt, effective investigation, resulting in a fair outcome, resolves most complaints. n

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with UCANE’s Officers and Board Members How did you get started in the underground construction industry and what was your first job? You might say I started above ground and worked my way underground. I started GTA Co., Inc. in 1991 as a 13-year-old kid pushing a lawnmower around the neighborhood cutting grass and pulling weeds. At the age of 16, my mother gave me her station wagon to drive around the city and continue cutting lawns. My primary focus was on landscaping and maintaining properties. It wasn’t long before we started doing lawn sprinkler systems, which then led into doing water service replacements for residential customers. I started out by buying bobcats then we bought our first small excavator. I think it was in 2002 that one of my customers asked me to do a replacement water service. My first municipal job was for the City of Melrose in 2004 replacing lead water services and hydrants. What type of projects and services does GTA perform? We try to be diversified as much as possible. We bid a lot of water projects, but we can also compete on certain sewer projects as well. We provide support services and are on-call for emergency work for several cities and towns. Over the years, not only our excavators, but also our entire fleet has gotten larger. We have a large fleet of trucks and equipment that are also available for rental. Plowing and snow removal operations are a very important part of our work during the winters. We have done site development for quite a few local projects and I invest in my own real estate opportunities that can also create work for our crews. FEBRUARY, 2018

UCANE Board Member Greg Antonelli, President/Owner GTA Co., Inc.

How did you hear about UCANE and how long have you been involved? I have known Paul Scenna (Albanese D&S, Inc.) for quite a while and he told me a lot of good things about the Association. Like many growing contractors, I was running in 10 different directions all day long and needed a way to keep up with industry news and changes. I joined UCANE in 2011 and they have served that particular need and a lot more. It has been a good decision for GTA joining UCANE. There are a lot of resources that are available through UCANE that most contractors don’t have. It is an honor to have been elected to the Board of Directors and I am looking forward to getting more continued on page 28

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Burke Wicked HD 4.625 x 7.5 9-16:Dennis K. Burke

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involved and working alongside my peers in 2018. What is the nature of the industry as you currently see it? The local economy has been good for a couple of years now, with private work really being ramped up. This is mostly attributed to the booming real estate market and, in large part, to the favorable loan rates. I see this continuing for at least the next 18-24 months. Public work is out there, but the competition is fierce and the margins are slim. Ever increasing labor rates and equipment costs will push bid prices up in 2018 or push firms out of the public market. The public bid prices have come up in the last 18-24 months, but they are not close to where they should be. The utility industry has the capacity to address our State’s well-known infrastructure needs, but an increased financial commitment by our State and Federal government is desperately needed in order to improve the public marketplace. n

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2018 Scholarship Applications Now Available UCANE to Award Twelve $2,000 Scholarships WHO MAY APPLY? Any high school student who is the son or daughter of a UCANE member or an employee of a member who will be enrolling full time in an accredited four year academic institution for the year beginning in September 2018. IMPORTANT: In the event the applicant receives a full first year scholarship from the college of his/her choice, or from any organization, civic group, etc., the UCANE scholarship will be awarded to another applicant.

HOW WILL THE APPLICATION BE JUDGED? Selections for the awards will be based upon: 1. scholastic achievement 2. interest and effort in preparing for your vocation 3. extra-curricular activities at and away from school, including community service 4. personal recommendations 5. thoroughness of the completed application, particularly the essay 6. financial need

HOW WILL THE CONFIDENTIALITY OF THE APPLICATION BE PROTECTED? Each applicant is assigned a number. When completed, page 1 of the application with the name of the applicant must be detached and sealed in the accompanying envelope. The applicant’s name must not appear on pages 2-4 of the application or attached transcripts and recommendations. After the winning applications have been selected, the envelopes with corresponding numbers will be opened to identify the award recipient.

WHAT MUST ACCOMPANY THE APPLICATION? 1. A transcript of high school grades through the latest period prior to April 15 must accompany application. 2. A letter of recommendation from the principal or faculty advisor. The letter should include the number of students in the class and the standing of the applicant or equivalent must accompany application. 3. Additional recommendations from people familiar with the applicant’s ability and character, and from responsible members of the community (optional but recommended). 4. Please indicate the UCANE company by which you or your parent is employed. NOTE: The name of the applicant must be deleted entirely from pages 2 through 4 and all accompanying correspondence, and your application number must be inserted in its place.

WHEN MUST I APPLY? All applications must be submitted no later than April 16, 2018. When requesting an application, please include: UCANE member company name; employee’s name (must be parent, legal guardian, or graduating student); home address, phone number, and email.

FOR AN APPLICATION, PLEASE SEND YOUR WRITTEN REQUEST TO: Utility Contractors’ Association of New England, Inc. 300 Congress Street • Suite 101 • Quincy, MA 02169 Tel: 617.471.9955 • Fax: 617.471.8939 • Email: aklayman@ucane.com FEBRUARY, 2018

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CWCC and US Water Alliance Join Forces

T

he Clean Water Construction Coalition (CWCC) is UCANE’s eyes and ears in Washington, DC on all Clean Water and Drinking Water issues, especially when it comes to Federal Funding of infrastructure projects, which is so important for UCANE members. The coalition is made up of contractor associations similar to UCANE from 27 different states as well as 10 nationally recognized non-contractor associations that support CWCC goals. As one of the founding members of this group, which was established in 2005, UCANE maintains a representative on the important Steering Committee (currently Vin Barletta, Barletta Heavy Division). CWCC retains the services of Key Advocates, Inc, an influential lobbying firm with an office on Pennsylvania Avenue, to keep their ears to the ground and to advise all coalition members on the most up-to-date industry information making its way through the halls of Capitol Hill. Both CWCC and Sante Esposito from Key Advocates are well known by Senators and Congressmen alike, especially those legislators who serve on committees that make important decisions effecting federal funding for our nation’s ailing infrastructure. Our coalition members and staff make office visits, submit written position papers, and testify at Congressional and Senate hearings on bills of importance to CWCC members who build and supply materials for the infrastructure industry. The US Water Alliance, another coalition focused on water sustainability, has been gaining momentum since its start in 2008. Their membership is comprised of a wide range of both local and national associations, engineering firms, large metropolitan water and sewer authorities, and non-profit environmental groups. They have all come together to promote the importance of our nation’s most important resource – water. Whether it be drinking water, storm water, sewers, our oceans, or our lakes and streams, they are all connected in some way and the US Water Alliance promotes a “One Water “approach. The US Water Alliance has a broad based membership coming from every sector of the water industry and their hard working staff has produced

FEBRUARY, 2018

some of the most recognizable promotional material that you will see, not only in Washington DC, but nationally as well. They understand the importance of water in our daily lives and the role water plays in our economy and in the standard of living for all our citizens. They have become a well-spoken and effective voice on Capitol Hill and across the country in promoting policies and public investments that will ensure water sustainability for the future. Radhika Fox, CEO of the US Water Alliance, recently authored an excellent Op-Ed calling for additional investment in water infrastructure (see the following article on page 33). The CWCC announced this month that it joined the US Water Alliance and the coalition is looking forward to working together with them to inform the nation about the true value of water and the need for increased federal, state, and local investments in our water systems. continued on page 33

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Join Forces continued from page 31

O

Why We Need to Start Investing in Water Systems Now

ur drinking water and wastewater systems provide invaluable services that we often only think about when they’re gone. When recent disasters like hurricanes in Texas, Florida and Puerto Rico knock out drinking water and wastewater service, it quickly becomes clear how critical water is to our health, safety, and economy. But across the county, our drinking and wastewater infrastructure is aging, overtaxed and in need of repair. This puts all of us at risk.

A Common Cause The good news is that reinvestment is one of the few issues that can bring Americans together. And there are strong economic incentives to doing so. Value of Water Campaign polling shows that more than 80 percent of Americans agree that the federal government should prioritize investment in water infrastructure. This is a larger percentage than those that say we should invest in roads and bridges or other hot-button policy issues like immigration or tax reform.

Creating an Economic Incentive While these systems are invaluable, we have tried to quantify some the economic benefits of investment, or conversely, the cost of inaction. If we close the current gap and invest the billions our water systems need to be brought to a state of good repair, we can create over $220 billion in economic activity and 1.3 million jobs, sustained annually over a tenyear period. On the other hand, if we fail to act, we put our national economy at great risk. A one-day interruption of water service nationally would cost $22.5 billion in GDP. An eight-day interruption would amount to a one percent loss in annual GDP. This is why it is so critical to invest in these systems now. We cannot afford to risk our nation’s health and economic future. We must take action before the next natural disaster, before more systems fail, so we have strong resilient systems for generations to come. Written by Radhika Fox, CEO, U.S. Water Alliance. n

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Nantucket Taps the Robert B. Our Co., Inc. for Emergency Sewer Repair UCANE member responds under arctic conditions to repair catastrophic sewer break threatening Nantucket Harbor The end of 2017 and the start of 2018 saw an extended period of some of the coldest temperatures that New England has ever recorded, and the picturesque island of Nantucket was not spared this season from these brutal conditions. A serious Northeast storm pounded the region and the island on January 4, producing heavy rain and snow, pushed by sustained winds of 40 mph with gusts over 60 mph. The storm, aligned with the high tides, produced significant flooding over the frozen harbor and many streets on the island.

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A

t approximately 11:00 p.m. on January 4, as the storm and the flooded streets began to subside, Nantucket Police were evacuating some residents from their flooded homes and surveying the island for damage. They soon observed that portions of South Beach Street had collapsed with water bubbling up from several locations, and worse yet, there was water pouring into the harbor from a large pipe under the docks. Sewer Superintendent David Gray was immediately notified and quickly determined that the water dumping into the harbor was raw sewage coming from the nearby Sea Street Pumping Station. This could only mean that the 20-inch cast iron force main running down South Beach Street was broken or collapsed, in perhaps multiple locations, forcing activation of an emergency overflow. By midnight, Supt. Gray began making calls and DPW Director Bob McNeil was quickly brought into the action. They both alerted town Selectman of the situation and calls were made to MassDEP and other state and federal agencies with coastal and environmental jurisdiction, informing them of the emergency situation. Gray also called the Robert B. Our Co., Inc. based on Cape Cod (Harwich), to request crew and equipment, at once, to assist the town in repairing the pipe and stemming the sewage overflow into the harbor. The Our Company had performed many water and sewer projects on Nantucket and Gray knew that they had the capacity to react quickly with the manpower, equipment, and materials needed to make the repairs. Responding quickly, however, was going to take some ingenuity. Transportation to and from the island had been very limited over the previous week due to the harsh winter conditions. The harbors at both Nantucket and Hyannis were frozen solid. The high-speed ferry had abandoned operations over a week prior, and the standard ferry was operating intermittently during daylight hours only, and some days not at all. Coast guard cutters had been called in to break the ice in harbors up and down the Cape Cod coastline. Commercial air service in and out of the island was also limited. On Friday morning January 5, Nantucket officials contacted the Coast Guard for assistance due to the extreme emergency happening on the island. The Coast Guard wasted no time in responding to the island’s need and by mid-day the construction crew from Robert B. Our Co. made an impressive entrance onto the island via a U.S. Coast Guard Blackhawk Helicopter, saving valuable mobilization time. With an excavator already on the island, Superintendent Damon Burchill along with Foreman Peter Ledger and the rest of the Our crew began digging up the pipeline, while fighting through 30 inches of frost. Gray and McNeil, working with consultants Drew Patenaude (from UCANE member firm Weston and Sampson Engineers, Inc.) and Kevin Rafferty (from Hazen and Sawyer Engineers), scoured through old sewer records and came up with a game plan for temporarily redirecting (bypassing) the sewer flows into a nearby force main built

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A Robert B. Our Co. crew was flown in on a U.S. Coast Guard Blackhawk helicopter to save valuable mobilization time. in 1982. The Our crew worked through the bitterly cold night to uncover the pipeline. As fast as old piping was located and exposed, measurements were taken and a stock list was made for the mechanical parts that would be required to make the temporary connection. On Saturday morning January 6, the measurements and stock list were relayed to a waiting Teddy Barnicle and Matt Gravina, sales manager and branch manager of the UCANE member firm Ferguson Waterworks’ Harwich store. Through a combination of in-stock availability and area water department “connections”, Gravina and Barnicle were able to locate and load all of the odd sized parts and pieces onto a waiting Our truck. “We really owe a debt of gratitude to Teddy and Matt who gave up part of their weekend to open the store and chase down those parts for us,” said John Our. The Our crew loaded flat-bed truck left the Ferguson yard in Harwich at 2:00 p.m. and headed for Hyannis Harcontinued on page 37

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Nantucket continued from page 35 bor, where the Nantucket Steamship Authority had a dedicated ferry waiting along with a Coast Guard cutter. The truck was loaded onto the ferry by 4:00 p.m. and headed out on the 30-mile boat ride with the Coast Guard cutter breaking the ice in front of it all the way to Nantucket. Breaking the ice around the frozen docks is a very difficult and delicate procedure, but by 7:00 p.m. the truck and the parts were on the island. Burchill and Ledger and the rest of the Our crew worked throughout the night and had the old pipe out and the temporary bypass connection installed by Sunday afternoon, January 7. Temperatures on Sunday ranged from a low of 1 degree to 20 degrees with winds averaging 25-30 mph! Operation of the Sea Street Pumping Station resumed on Monday January 8, sewage flows into the harbor ceased, and the environmental crisis was finally stabilized. Considering the magnitude of the problem, the remote location, and the extreme weather conditions, it is truly amazing that the situation was brought under control within 72 hours. Truly a testament to the teamwork exhibited between the Town of Nantucket, their consultants, the Robert B. Our Company, Ferguson Waterworks, multiple state agencies, the Steamship Authority, and the U.S. Coast Guard. Kudos to all! The failure of the pipeline caused several million gallons of raw sewage to flow into the harbor, across the frozen ice, and into town streets. Shellfish areas are closed, and all harbor fishing is suspended while MassDEP and Marine Fisheries assess the impacts of the sewer spill and determine when the areas can reopen. On Monday, January 8 the Town’s Natural Resources Manager Jeff Carlson was busy coordinating cleanup and decontamination efforts working with contractor Clean Harbors, Inc. Crews were busily spreading booms, containing and collecting sewage debris, and vacuuming contaminated water off the affected streets. The temporary bypass connection to the 1982 ductile iron pipeline has stopped the immediate bleeding for Nantucket. Their next steps are to assess exactly what went wrong with the old force main, what the long-term repair solution might be for the critical pipeline, and how to fund this solution. To that extent, the Town has contracted with UCANE member, Environmental Partners Group, Inc. (EPG) to do a forensic analysis and to work with the other town consultants in recommending a permanent solution that will prevent another occurrence of this nature. EPG Engineers Ziad Kary and Paul Millett were instrumental in assisting the Town of Plymouth with a similar pipeline failure in Plymouth in 2016-2017. Historically, the old 20-inch force main that failed was constructed in 1931 and is made of cast iron, a product no longer manufactured for these type of installations. On the surface it appears that this is another case of aging infrastructure giving out at the worst possible time.

FEBRUARY, 2018

Robert B. Our Company cut into the pipe out front of the Sea Street Pump Station to attach a bypass fix for the failed sewer line. Photo: Nicole Harnishfeger/I&M Photo There has been an uptick in such incidents over the last several years throughout the Commonwealth, especially this winter due to the extreme cold, which traditionally plays havoc with cast iron pipes. Further investigation over the next couple of months in Nantucket will determine the actual cause of their pipeline failure. As of press time for Construction Outlook magazine, EPG was assembling bid documents for contractors to perform exploratory pits, pipeline assessment, and remote TV inspection of the nearly 17,000-foot old force main.* Although this incident was a serious assault on the environment surrounding Nantucket, the town can be thankful that it occurred during Winter months when the island’s population is at its lowest (about 10,000) and water usage/sewer flows are at its lowest. With population swelling to nearly 60,000 during the summer months, the environmental damage from the same incident would have been exponential; not to mention the economic damage to a community that depends so much on tourism. *LATE BREAKING NEWS: Bids were received by the town of Nantucket for the Force Main Assessment and Cleaning Project and the lowest bidder was the Robert B. Our Co., Inc. with a bid of $2.7M. EPG will monitor the investigative work that will proceed under an expedited construction schedule. n

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Raw Sewage Discharges Still a Problem in Massachusetts

A

recent Boston Herald article titled “The Big Stink” reported the stunning revelation that state records show some 2.8 billion gallons of untreated wastewater, including raw sewage, is pouring into Bay State rivers and streams annually during heavy rainfall. “Local government officials and clean-water advocates say they can’t believe they’re still talking about human waste in the river,” the report said. The Merrimack River is the largest recipient, and was ranked eighth in 2016 on a list of the nation’s most endangered rivers compiled by the conservation group American Rivers. The Merrimack is used as a public drinking water supply for several local communities including Lowell, Lawrence, Methuen, and Tewksbury. Billerica draws its drinking water from the Concord River, a tributary of the Merrimack. Other communities along the 117-mile river use it for boating and recreation. Amesbury Mayor Kenneth Gray was quoted in the Herald saying, “In 2017, I’m shocked that the levels of contamination in the outflows, and the amount of raw sewage flowing into the river is still at the magnitude it’s at.” The problem is so prevalent that State Senator Pat Jehlen (D-Somerville) has filed a bill to establish an alert system so that residents are notified when raw sewage spills happen. The bill, titled “An Act Promoting Awareness for State Recreation in Public Waterways,” would allow anyone to sign up for an email alert when incidents occur. The alert system

FEBRUARY, 2018

would be operated by MassDEP. Multiple media outlets reported that over Halloween weekend in 2017, a storm caused a power outage at the treatment plant in Lawrence that resulted in 8 million gallons of wastewater being poured into the Merrimack River. Records obtained by the Herald showed that on that same weekend at the nearby Lowell plant, nearly 32 million gallons of untreated wastewater also discharged into the river during the same storm because the volume overwhelmed the filtration system. Local government officials acknowledge that their pipes are outdated and that the plants are in need of significant upgrades, but say they lack the funding to tackle the problem. According to the Herald, “From 2003 to 2013, the Lowell Regional Wastewater Utility Plant spent $120 million updating its system. It will cost another $52 million to meet EPA standards next year.” But it is not nearly enough. “We need federal money,” said Mark Young, head of the Lowell plant, told the Herald. “However high it is, senators and representatives, we need big federal dollars.” Reports from the Massachusetts Water Infrastructure Finance Commission and State Auditor Suzanne Bump have identified an $18 to $21 billion funding gap in water infrastructure over the next 20 years. UCANE continues to strongly advocate for increased investment. Without it, these overflows will continue and put the public at risk. n

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Provincetown Boards Consider Three Sewer Expansion Options PROVINCETOWN — Options for expanding the town’s tightly constrained sewer system range in cost from $4 million to $50 million, officials learned at a joint meeting of three boards on Monday. Their wastewater expert appeared to favor the least expensive, simplest solution, at least at this early stage of discussions.

P

rovincetown’s system currently allows for twice the amount of flow that was anticipated when it was first approved by voters more than 15 years ago. “It was an important and long anticipated meeting,” Dept. of Public Works Director Rich Waldo said on Tuesday. “It’s a kickoff discussion about the existing sewer capacity and expansion. I think it was promising that we were able to present the three boards with options. The next step is to go out and work with the public and see how much interest is out there.” John Goodrich, the town’s wastewater facilitator, and Waldo presented three options to the board of selectmen, the board of health, and the water and sewer board. Option one includes adding a second pre-equalization tank that could immediately free up capacity during peak periods, such as Fourth of July week and Carnival week. Goodrich said he considers this option a “win-win,” because not only can it provide added capacity immediately without an amended Mass. Dept. of Environmental Protection (MassDEP) groundwater discharge permit, but it could also be used later with other options. Goodrich said this option could add over 150,000 “gallons” per day of Title

FEBRUARY, 2018 SEPTEMBER, 2016

5 design flow and would cost about $4 million. “The added capacity from a second tank could not only serve future priority needs, but also be used to serve abutters to the existing sewer system who are interested in connecting, thereby producing betterment revenue to help offset the cost of the tank,” Goodrich said. The second option, “a fallback for future needs,” would be to purchase either one or two stand-alone MBR (membrane bioreactor) treatment plants in conjunction with the second pre-equalization tank. This option would increase the capacity to 1 million gallons of maximum daily flow and serve all abutters to the existing sewer with a total of 1.5 million Title 5 continued on page 45

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Cape Cod continued from page 43 design flow gallons per day. Goodrich said the ballpark cost estimate is about $15 million for two MBRs. In either case, it would require a MassDEP groundwater discharge permit and would need other state agency and Cape Cod Commission permitting and approvals. The third option involves converting the existing treatment plant into an MBR treatment plant plus the addition of other equipment and modifications that are needed to increase the flow in two stages. The first stage would bring the permitted maximum daily flow to 1 million gallons (the same as option two) and the second stage would bring the permitted flow to 1.3 million gallons per day, which would ultimately provide for about 2 million gallons per day of Title 5 design flow capacity. This is the amount needed to serve the entire town including expected growth and additional flow from priority uses, plus parts of Truro. “There would not be any reason to pursue [option three] unless there was a lot of demand to sewer additional areas of town and possibly the Beach Point area of Truro,” Goodrich said, adding that it would cost about $50 million if the town went this route. “We’re not favoring a specific option,” Goodrich said. “Option one with the tank is a win-win in the sense it would solve near-term capacity issues and a second tank would be needed for any of the other options.” Water and sewer board member Jonathan Sinaiko said he thinks simplicity is the way to go. “If there’s a failure it’s going to be in a complex system,” he said. “That’s my argument for option one. But it still doesn’t eliminate the other options, if we can find funding.” The town, which declared a state of limited sewer capacity in 2015, allocates flow gallons to properties that fall in priority categories — public health, economic development and municipal use. “We have currently used 70 percent of the economic development allocation, 20 percent of which is used for employee housing, less than 40 percent is used by public health and none is used towards housing or municipal priority allocations,” Goodrich said, adding that there are 6,643 additional gallons available to allocate.

6,643 gallons to the economic development permit category, to be administered by the selectmen to enhance year-round uses and strengthen the shoulder season, because it is the category with the most demand and lowest balance. They also agreed to use gallons for employee housing from the housing category rather than the economic development category. Chuck Lagasse and his wife, Ann Lagasse, owners of Fisherman’s Wharf, said they fully support the expansion and contemplated improvements. “Provincetown Marina has been in the process of rehabilitating, improving and expanding the marina as well as planning the activation of the existing buildings and the building at the end of the wharf,” Chuck Lagasse wrote in a letter dated January 18. “The expansion and improvements of the water treatment facility would ensure that we can continue the rehabilitation of Fisherman’s Wharf.” Lenny Enos Jr., owner of the Surf Club Restaurant at 315 Commercial St., said he was happy to see the town looking into expanding its sewer system. “I think it’s important to plan for the short term and the long term and figure out what’s our goal,” Enos said. “We’ve expanded it twice already to serve three times the number of properties originally anticipated. If we choose a smaller expansion, we are likely to deal in the future with another expansion.” Another presentation on the need and options for sewer expansion was held at the winter town forum from 10 a.m. to noon on Saturday, February 3 at Town Hall. Written by Katy Ward. Reprinted from Wicked Local Provincetown. continued on page 47

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Cape Cod continued from page 45

E

Major Infrastructure Needs Forecast for Green Pond

ast Falmouth residents on the shores of Green Pond will likely face major wastewater infrastructure installments in the future, even if the town fully leverages alternative methods for nitrogen reduction in that area. The Falmouth Water Quality Management Committee met Thursday afternoon, January 18, to discuss a draft scenario for cleaning up the waters of Green Pond. The draft is part of the committee’s ongoing effort to forecast future infrastructure needs in Falmouth’s 15 estuaries. The Green Pond watershed stretches north of Route 28 and includes input from Backus River and Mill Pond, situated west of the East Falmouth branch of Falmouth Public Library. Green Pond itself is bordered by dense residential development, to the west off Acapesket Road and to the East off Davisville Road. According to the Massachusetts Estuaries Project, the town needs to remove about 4,500 kilograms of nitrogen per year from the watershed in order to restore water quality in Green Pond and meet state mandates. In order to meet that target, water quality management committee consultant Anastasia K. Karplus of Science Wares, Inc., proposed to use several “nontraditional approaches.” These include aquaculture, improved stormwater management, fertilizer reduction and a permeable reactive barrier to trap nitrogen output from East Falmouth Elementary School. Even after employing those alternative methods, however, the town would still be left with about 3,500 kilograms of nitrogen per year to be removed. Ms. Karplus said the majority of nitrogen removal would likely need to be achieved through a combination of sewer and installation of innovative/alternative septic systems in neighborhoods abutting Green Pond. She identified 535 houses off Acapesket Road that could be placed on town sewer, which consists of all the homes between the Menauhant Road bridge and Route 28. Placing those houses on sewer would remove about 2,600 kilograms of nitrogen per year, she estimated.

proposal for Green Pond could expand on that same sewer project. In addition, Ms. Karplus recommended installing I/A systems on 195 properties in neighborhoods east of Green Pond off Davisville Road. The properties in those neighborhoods have a larger average lot size than properties in the western neighborhoods, which better accommodates septic system installation. Through the combination of 195 I/A systems, 535 sewered parcels and the alternative reduction methods, Ms. Karplus estimated that the town could meet its total nitrogen reduction targets. As for which homeowners would be chosen to install the I/A systems, committee vice chairman Virginia Valiela said that would be a political decision the town would need to discuss down the road. However, the committee discussed some possible parameters, such as including all waterfront properties in the northernmost shores of the pond. Although mitigation efforts for Green Pond are expected to require significant town and taxpayer continued on page 49

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Ms. Karplus noted that the committee had already proposed placing many properties in those same neighborhoods on town sewer as part of the draft cleanup plan for neighboring Great Pond. The

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Cape Cod continued from page 47 investment, committee members noted that nitrogen pollution in Green Pond would be significantly worse without the existence of Mill Pond. Mill Pond provides attenuation for Green Pond by intercepting and storing nitrogen that flows into the watershed from the north through Backus River. As a result, Ms. Valiela said, there is no need to sewer north of Route 28 in the Green Pond watershed. “It’s all because of Mill Pond,” she said. “It’s very important that we know what’s going on in Mill Pond and that we preserve its health.” Mill Pond has experienced increasingly severe algal blooms in the last few summers, a point of concern for neighbors and members of the East Falmouth Village Association. As a result of their efforts, Brian L. Howes of the University of Massachusetts Dartmouth School for Marine Science & Technology is currently preparing a report to identify the cause of the blooms in Mill Pond and potential solutions. That report is scheduled to be completed by June 30. Written by Brittany Feldott. Reprinted from the Falmouth Enterprise. n Since 1962

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UCANE Members Testify on Beacon Hill in Support of Standardized Police Detail Payments

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CANE President Richard Pacella, Jr. and Consultant and former President Mike Lenihan recently testified in front of the Joint Committee on Public Service at the Massachusetts State House. They testified in strong support of Senate Bill 1477, An Act Relative to the Timely and Consistent Payment of Law Enforcement Personnel. The proposed legislation seeks to standardize among awarding authorities the payment of police details on public contracts bids under Chapter 30, §39M of the Mass. Gen. Laws, which includes water and sewer projects as well as other horizontal projects including roads and bridges. Both men spoke of the benefits of the legislation should it be adopted, including greater control for awarding authorities over project costs; reducing costs within bids submitted by contractors; and importantly, ensuring that police offi-

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Brian MacFee, Systems Support Corporation

Always Connected Laptops Could be the Next Generation of Hardware

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What's the next big thing for the PC world? If the industry's major players have anything to say about it, it will be the "always-on" PC.

orget about plugging into your company's network. Forget about free WiFi Hotspots. With an always-on PC, you won't have to worry about either. If they're not available, your PC can connect via the same cellular data network your smartphone uses, which means you'll always be just a few mouse clicks away from your data. It sounds fantastic, but there is, of course, one giant wrinkle in the equation: cost. More specifically, although several major hardware manufacturers are planning to sell always-on PCs soon, nobody knows how much the data plans will wind up costing in the longer term. A few telecommunications companies have already given some indications here. T-Mobile has announced that its ONE unlimited service will be available for $20 a month. AT&T's rates are significantly higher, charging $30 a month for 3GB of DataConnect data, and Verizon is charging $10 a month per gigabyte of data. Depending on how much data you're working with, that can get expensive very quickly. You could easily wind up paying more

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on your data plan than the PC itself set you back, and that's before taking into account what impact the recent reversal on the Net Neutrality policy may have going forward. One thing's for certain: carriers won't be able to get away with charging too much for the service, or customers will simply opt not to play the game, preferring to continue to flock to free WiFi hotspots as they're doing now. The first always-on PCs will start shipping in 2018, at which time we'll find out how anxious the market is to embrace the new feature, and what kind of premium they'll be willing to pay for it. Stay tuned. n

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How to Prepare for Safety Inside the Cab A ringing cell phone, family issues, the weekend fishing trip, text messages, ball game scores, funny pet videos, the glare of the sun—the list goes on and on. Sometimes, these distractions come from external sources, such as a phone call or text message. Other times, they are internal distractions, such as medical concerns, personal issues or plans for a future event. But it only takes a momentary distraction for one’s life to be permanently altered—meaning equipment operators have to be on their game 100 percent of the time.

External Distractions Cellphones are an excellent way to communicate, and are a very useful tool to have in one’s arsenal, but experience has shown that they also have a reputation for being abused. Any tool, no matter how useful, can be dangerous when not properly employed. Before technology became such an integral part of everyday life, equipment operators might have a radio in the cab, perhaps to listen to a ballgame or background music. Even this might be distracting, or it might prevent the operator from hearing something amiss with the machinery that could have been detected. Now, day in and day out, people are distracted by their phones. Cellphones have gone beyond the simple use of talking to another person. Now, they are minicomputers in our hands. Email can be checked by the minute and whole conversations take place via text, when a simple phone call would have worked. We can be plugged in 24/7 through social media. We might feel the need to be entertained through streaming videos, or reach the next level in a game. We might listen to music directly through earbuds to block out other noises or dim the hum of the engine. But when operating a crane or heavy machinery, this can have dangerous consequences. Don’t take the risk of bumping a lever in an effort to take the

FEBRUARY, 2018

phone out and answer a call or skip a song. Don’t ever take your eyes off the load or signal person to read a text. When safety standards are ignored, serious accidents can happen. Not only is this sound advice, but it is also the law. The Occupational Safety and Health Administration (OSHA) forbids the use of a cellphone while operating a crane in 1926 Subpart CC 1926.1417(d), which states; “The [crane or derrick] operator must not engage in any practice or activity that diverts his/ her attention while actually engaged in operating the equipment, such as the use of cellular phones (other than when used for signal communications).” And if the cellphone is used for receiving signals, OSHA continued on page 57

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Safety Corner continued from page 55 standard 1926.1420(c) requires that “the operator’s reception of signals must be by a hands-free system.” Due to the dangers associated with working on or around cranes, this must be enforced by all companies that own cranes, as well as the contractors and operators who use them. While these OSHA regulations are specific to crane operations, the use of a cellphone by other types of heavy equipment operators should be prohibited as well. Employees who are not operating heavy equipment, but are working around it, should make sure to work distraction free, too—keeping their mind on the task and the environment in which they are working. They should only use cellphones when they have stepped away from the active jobsite, keep their earbuds out and wear proper hearing protection when warranted.

Internal Distractions Another area where distractions occur, but cannot be as easily seen as a cellphone in the hand is the mind. Mental and emotional distractions are probably the most easily dismissed types of distractions, but they can make a big difference in the effectiveness of an operator and the safety on the jobsite.

Operators must learn to “put their junk in the trunk” every day when they come to work. They need to clear their head of all the emotional distractions, figuratively taking the related thoughts from their brain and putting them in their vehicle until the shift has ended. Mental distractions do not belong on the site or in the operator’s seat. For example, John is the best crane operator on the job. He made this lift yesterday, the day before and the day before that. But today, he seems off his game. It appears that everything is fine on the outside, but the way he is operating says there might be something else going on outside of the crane. What should be done? • Ignore it and let him keep operating, hoping no one gets hurt • Check in with him and see if he insists that he keep working • Ask him to tell you what is going on and ask him to push through • Wait to see if he says something • Take him out of the seat of the crane for an hour or two • Assign the lift to someone else While some of these options may seem a little continued on page 59

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Safety Corner continued from page 57

know to either step down and excuse himself/herself for a day or so, or to mentally put the distraction aside until the work is finished.

out of the ordinary, once a concern has been recognized, the site supervisor should approach the situPlanning for Success ation with a balance of managing risk and common sense to make the best decision for the safety of the In order to mitigate both external and entire jobsite. Maybe the supervisor should step in internal distractions, one must not only be and relieve John of his operating duties until he has able to recognize concerns, but also have the chance to clear his head by putting in a relief opa plan in place to address them when necerator for a couple of hours or a day. Once John is essary. Where does the organization stand back to normal, he can get back in the seat of the on the use of cellphones by operators and crane and continue with his work. The only wrong ancrews? Is there a policy against it? Do emswer is to ignore it and hope nothing happens. ployees abide by it? Does each worker Looking at it from another perspective: In a manage himself/herself, or is it seen as baseball game, when a pitcher is rocked by an opposing team or loses his edge, the manager comes a nonissue? What about emotionally disout and talks with him and, more often than not, the tracted employees, how are these situapitcher hands the ball to the manager and the relief tions handled? pitcher comes in. It doesn’t mean the original pitcher Preemptively talk to employees and opis a poor pitcher. It just means he lost his mojo for erators about the importance of keeping the day, or his head isn’t in the game. Sometimes their head in the game. A little preparation managers want to believe in their players so much before encountering these types of diverthat they leave them in too long, and the game is sions will help the jobsite run smoother and lost. stay a safer place. A site supervisor may need to take the same apAuthored by Katie Mackey, Crane Tech LLC. Reproach with an operator because he/she may have printed with permission. n lost his/her edge. Depending on how the situation is handled, the operator can come back strong, once his/her head is clear. A greater hazard can be created by intimidating, chastising or Water Works Specialist embarrassing him/her, especially John Hoadl in front of peers. Regardless, you Water Works Specialist Tel:781-878-8098 Fax:781-878-5298 Water Works Spe certainly don’t want an environTel:781-878-8098 Tel: 781-878-8098 Fax: 781-878-5298 ment where good operators fear for their job or a loss of pay be-Products Are the Most Trusted Names in the Industry” “Our “OurIndustry” Products Are the Most Trusted N “Our Products Are the Most Trusted Names in the � U.S. Pipe ● Cultec cause of external distractions � that U.S. Pipe ● Cultec Chambers � Mueller Fire Hydrants ● Nation • U.S. Pipe • Cultec Chambers create safety concerns. 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Client Bulletin

John E. Merchant, CPA IN THIS ISSUE

Cullen, Murphy & Co., P.C.

• Solving the Annuity Puzzle • Deducting Employee Business Expenses • Insuring Key People at Small Companies

Smart tax, business and planning ideas from your Tru

Solving the annuity puzzle

A

Solving the Annuity Puzzle

mericans hold billions of dollars in annuities, yet they are widely misunderstood. Used properly, an annuity can serve valuable purposes in personal financial planning. On the other hand, some types of annuities are widely criticized, even scorned, by some financial advisers. Lifelong Income

What might be considered the purest type of annuity is a contract with an issuer, often an insurance company, for a stream of cash flow. Such contracts have been called immediate annuities, although they now may be labeled income annuities or payout annuities because those labels may be more appealing to consumers. Example 1: Marie Jenkins pays $100,000 to an insurer for an income annuity. Every month thereafter the company sends Marie a check. That may sound simple, but complications soon arise. Does Marie want to receive those checks for her lifetime, no matter how long that might be? Does she want the checks to continue to her husband Tony if he outlives Marie? A joint annuity will pay less than a single life annuity because the insurer has more risk of an extended payout. This type of annuity has a great advantage: the promise of lifelong cash flow. More people are living into their 90s and beyond, so a lifetime annuity can help keep them from running short of money in very old age. At the same time, Marie may worry that she’ll pay $100,000 for this annuity and get run over by the proverbial truck the next month, ending her life and stopping the payments after a scant return. Even with a joint an-

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her husband T annuity will pa because the in extended payo

This type of an promise of life living into thei annuity can he of money in ve

At the same ti nuity, both Marie and Tony could die prematurely afterpay $100,000 by the proverb Americans of$100,000 dollars in annuities, receiving muchhold lessbillions than the outlay. her life and sto yet they are widely misunderstood. Used Adding return. Even w properly, an annuity canCertainty serve valuable purposes in personal On the ofTony could die Insurers have comefinancial up withplanning. various methods addressing these fears. methodare is widely the periodless than the $ other hand, some typesOne of annuities certain annuity. criticized, even scorned, by some financial Example 2: Marie pays $100,000 for a single lifeAdding certa advisers. income annuity that includes a 10-year period cer-Insurers have tain.Lifelong If Marieincome lives for 25 years, the insurer will keepof addressing sending her checks. However, if Marie dies after 3 period certain What might be considered the purest type of years of payments, the annuity will continue for anannuity is a contract with an issuer, often an other 7 years to a beneficiary named by Marie. Example 2: M insurance company, for a stream of cash flow. Again, an annuity with this type of guarantee willincome annuit Such contracts have been called immediate produce smaller checks than a straight life annuitycertain. If Mar annuities, they more now may beOther labeledfeatures because the although insurer has risk. will keep send annuities payoutannuity, annuities because mayincome be added to an or income such as accessdies after 3 ye those labels morevariations appealing will to reduce the to principal, but may all ofbethese continue for a amount of the checks paid to consumers. Annuity consumers. named by Mar taxation can also be complex. If this type of annuity Example 1: Marie Jenkins pays $100,000 to is held in a taxable account, part of each check toAgain, an annu an will insurer for an income annuity. monthreturn Marie be taxable, but part will beEvery a tax-free will produce s thereafter the company sendsAdvice Marie abox.) check. of her investment (see Trusted Eventu-life annuity be ally,That aftermay Marie hassimple, received full investment sound buther complications soontax-Other features free, ongoing checks will be fully taxable. annuity, such arise. Does Marie want to receive those checks continued on page 63 these variation for her lifetime, no matter how long that might checks paid to be? Does she want the checks to continue to

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Some annuities start distributing cash right away, as described, but others are deferred. The deferral could be a wait for some years until an income annuity starts. Alternatively, there may be some provision for the invested amount to grow untaxed until the payouts start. These annuities may peg growth to a promised interest rate or to results in the financial markets. Often, there is some type of guarantee from the insurer of a minimum return or protection against loss. The manner of future payouts can be left up to the consumer. Example 3: Marie invests her $100,000 in a deferred annuity taxable account. That $100,000 investment might grow over the years. At some point, Marie can “annuitize” the contract using her account balance to fund an income annuity. As mentioned, Marie’s payments then will be part taxable and part an untaxed return of her investment. As an alternative, Marie can avoid annuitizing the contract. Instead, she can withdraw money from her account balance for cash flow when she wants it. Some annuities guarantee certain withdrawal amounts. Annuity withdrawals may be fully taxable, and a 10% penalty also may apply before age 591⁄2. Critics charge that some annuities, especially deferred annuities, can be complex, illiquid, and burdened with high fees. Read the fine print of any annuity before making a commitment. continued on page 65

Trusted Advice Taxation of Annuity Payouts • Periodic annuity payments are amounts paid at regular intervals—weekly, monthly, or yearly— for a period of time greater than one year. • Between the simplified and general methods of computing income tax on such payments, you must use the general method if your annuity is paid under a nonqualified plan, rather than under a qualified plan such as a 401(k) or an IRA. • With the general method, you determine the tax-free part of each annuity payment based on the ratio of the cost of the contract to the total expected return. • The expected return is the total amount you and other eligible recipients can expect to receive under the contract, as per life expectancy tables from the IRS.

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Financial Management continued from page 63

Deducting Employee Business Expenses

I

f you work for a business, you might incur certain expenses that are related to your job. In some cases, those expenses can be substantial. As of this writing, in late 2017, Congress is considering legislation that would eliminate miscellaneous itemized deductions, but it appears that they will be available on 2017 returns. That said, you may be able to deduct such expenses incurred last year when you file your 2017 federal income tax return. The process of claiming this deduction for employee business expenses might not be simple. You must go through several steps, and you’ll need relevant records to substantiate the deduction if you’re challenged by the IRS.

The Broad Look In general terms, here is an explanation of how to arrive at an employee business expense deduction. First, you need to see how much you have spent on items that are ordinary and necessary for your role at work. These must be outlays that were not reimbursed in some manner. Therefore, the amounts you hope to deduct must be your actual out-of-pocket costs. Once you calculate this number, it is incorporated as a miscellaneous itemized deduction on Schedule A of your tax return. If you take the standard deduction instead of itemizing on Schedule A, you can’t deduct your employee business expenses. Other costs also go into the category of miscellaneous deductions. They might include tax preparation and investment fees. Once you have a total of miscellaneous items, that amount is deductible on Schedule A to the extent it exceeds 2% of adjusted gross income (AGI). continued on page 67

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Financial Management continued from page 65 Example: Al and Bonnie Carson are both employees at different companies. Al has no unreimbursed employee expenses, but Bonnie had $2,500 of such costs in 2017. Together, the Carsons’ miscellaneous items total $4,100 for last year. On their 2017 joint tax return, the Carsons report AGI of $110,500. In this example, 2% of AGI is $2,210. Subtracting $2,210 from $4,100 leaves $1,890, the amount of miscellaneous deductions they can claim on Schedule A.

What’s Allowed

Did You Know? Campus Costs he average total cost at private, nonprofit four-year institutions reached $46,950 in the 2017–2018 school year, up from $45,370 a year ago. Those are the published charges for tuition, fees, room, and board. For in-state students living on campus at public universities, comparable average costs this year are $20,770. Boston Area

T

The most common unreimbursed miscellaneous deductions may be vehicle costs, overnight travel, and business meals and entertainment. The deducLocations Source: The College Board tion for business meals and entertainment generally is 50% of their total cost. 2   Dexter Street Everett, MA 02149 Beyond those items, the IRS Boston Area Boston Area lists many others as acceptable Locations Locations 431 Second Street employee business expenses, from Everett, MA 02149 business liability insurance pre2     Dexter Street 2     Dexter Street   miums to work-related education. Everett, MA 02149 Everett, MA   02149 They must have a genuine business purpose and be unreimbursed.

431 Second Street 431 Second Street

What’s Not Allowed

Everett, MA 02149 Everett, MA 02149 BOSTON AREA LOCATIONS  

Along with a lengthy list of 2 Dexter Street 431   Second Street possible qualified deductions, the Everett, MA 02149 Everett, MA 02149 IRS also has a list of things that don’t belong in this category. Commuting costs are prominent on the do-not-deduct list, which also includes club dues, residential phones, and travel expenses for another individual. If you are going to claim business use of your car here, you’ll need good records to show how much the car was used for commuting to and from work Minichiello Bros./Scrap-It, Inc., versus its use for business trips. Minichiello Bros./Scrap-It, Inc. Serves over 2500 customers a week and is one of New England’s largest Serves over 2500 customers a week and is one New England's largest buyers, Preparing the Paperwork buyers, sellers, and processors of scrap metal. Forour overgoal 60 years goal sellers and processors of scrap metal. For over 60 years has our remained

remained the same - to in provide the best along prices in thetop industry along with the same - tohas provide the best prices the industry with notch Generally, employees who claim top notch customer service! Call Fred Rogers at 617-595-5505 this deduction use IRS Formcustomer 2106, service! Call Fred Rogers at 617-595-5505 Minichiello Bros./Scrap-It, Inc., “Employee Business Expenses,” Minichiello Bros./Scrap-It, Inc., to tabulate the total amount for the Serves over 2500 customers a week and is one New England's largest buyers, year, presented in several categosellers and processors of scrap metal. For overa60week years ourisgoal Serves over 2500 customers and onehas Newremained England's largest buyers ries. The total for this form the goes onto- to provide same the best in theof industry along with notch sellers and prices processors scrap metal. Fortop over 60 years our goal has remain Schedule A under miscellaneous customer service! the Callsame Fred -Rogers at 617-595-5505 to provide the best prices in the industry along with top notch deductions. A simpler version, Form   customer service! Call Fred Rogers at 617-595-5505 2106-EZ, may be used if you have   no employer reimbursements and if any vehicle expense claim uses the Turn your metal into money today! standard mileage rate—53.5 cents Turn your metal into money today! per business mile in 2017. Minichiello Bros. Inc./Scrap-It Inc. Minichiello Bros. Inc.,/Scrap-It Inc. continued on page 69  

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this category. Commuting costs are prominent on the do-not-deduct list, The most common unreimbursed which also includes club dues, residential miscellaneous deductions may be vehicle costs, overnight travel,continued and business Financial Management from page 67 phones, and travel expenses for another individual. If you are going to claim meals and entertainment. The deduction

What’s allowed

A

Insuring Key People at Insuring key people at small companies Small Companies

version, Form 2106-EZ, may be u you have no employer reimbursem and if any vehicle expense claim u the standard mileage rate—53.5 c per business mile in 2017.

corporation, the t Ataa multinational multinational corporation, the loss of any single employee may loss of any single employee may hardly cause a ripple in its ongoing hardly cause a ripple in its ongoing business. That’s often not true for a business. That’s often not true for a small small business. If you’re the prime business. you’re the prime mover, your mover,Ifyour inability to work could inability work could have conhavetosevere consequences. Thesevere same sequences. The same is true if you have is true if you have partners or other partners other who vitalcan personnel vitalor personnel no longer dowho can their jobs. no longer do their jobs. Building aastrong team can hedgecan hedge Building strong team Life Insurance for YourCoverage Business The typical structure of key employee against risk.Even Even so, your company choices against this this risk. so, your company life insurance is to have benefits paid As is the case with may want to acquire insurance that will Key employee coverage usually includes life in-any type of life may want to acquire insurance that will to the company in case of the insured insurance, some decisions must provide needed cashin in aaworst-case surance. The insured individual probably would be provide needed cash worst-case sceindividual’s The cash flow could Should key employee insur you,death. the business owner, if you’remade. actively involved policies have been nario. scenario. These These policies have been called in the operations. Partners or co-owners alsoorcould be help keep company viable while be term permanent? Term poli called “key man” insurance, but today a “key man” insurance, but today a more covered; the same is true for, say, a sales or produca replacement employee is sought tend to have much lower premium more apt description is “key person” or tion employee whose absence would create a huge apt description is “key person” or “key and installed. In another situation, key may make sense if the coverage w “key employee” coverage. employee” coverage. employee insurance can be part of a be needed continued ononly pagefor71a certain amo

Life insurance for your business

buy-sell agreement.

Key employee coverage usually Example: Diane Edwards and Frank ...IT’S ALWAYSThe A GOOD TO PROTECT YOUR BIGGEST includes life insurance. insured IDEA Grant are co-owners of EG Corp. The individual probably would be you, company buys life insurance on both the business owner, if you’re actively Diane and Frank. If Diane dies while her involved in operations. Partners or life is covered, the proceeds will go to co-owners also could be covered; EG, which can buy Diane’s shares from the same is true for, say, a sales or her heirs, leaving Frank as the principal production employee whose absence owner. The reverse will happen if Frank is would create a huge gap in profitability. the one to die.

time. A business owner who expe sell the company or retire within 1 ASSET might prefer a 10-year term policy example.

Permanent insurance (which mig known as whole life, universal life, variable life) generally has much h premiums. These policies usually have an investment account calle cash value. As the owner of the p

continued on ne

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Financial Management continued from page 69 gap in profitability. The typical structure of key employee life insurance is to have benefits paid to the company in case of the insured individual’s death. The cash flow could help keep the company viable while a replacement employee is sought and installed. In another situation, key employee insurance can be part of a buysell agreement. Example: Diane Edwards and Frank Grant are co-owners of EG Corp. The company buys life insurance on both Diane and Frank. If Diane dies while her life is covered, the proceeds will go to EG, which can buy Diane’s shares from her heirs, leaving Frank as the principal owner. The reverse will happen if Frank is the one to die.

Coverage Choices As is the case with any type of life insurance, some decisions must be made. Should key employee insurance be term or permanent? Term policies tend to have much lower premiums; they may make sense if the coverage will be needed only for a certain amount of time. A business owner who expects to sell the company or retire within 10 years might prefer a 10-year term policy, for example.

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Permanent insurance (which might be known as whole life, universal life, or variable life) generally has much higher premiums. These policies usually have an investment account called the cash value. As the owner of the policy, the company might be able to tap the cash value via loans or withdrawals, if necessary. As the label indicates, permanent life could be worth buying for long-lasting coverage. In addition to the type of policy, a small company buying key employee life insurance must decide how much coverage to acquire. Ideally, the amount should be sufficient to keep the company going until it recovers from the individual’s death, perhaps with a new hire or new owner. If such an amount is difficult to determine, you might go by a rule of thumb, such as buying coverage equal to 8 or 10 times the insured individual’s salary. The amount of insurance should be reviewed periodically and changed when appropriate.

Dealing with Disability If a key individual gets sick or injured and becomes unable to work, the impact on the company can be as serious as that person’s death. Therefore, key employee disability insurance also should be considered. Disability policies have many moving parts: the definition of disability, the waiting period before benefits begin, the length of time benefits will be paid, and so on. An experienced insurance professional may be able to help your company find effective disability coverage at an affordable price and also assist with key employee life insurance. For both life and disability key employee policies, the premiums your company pays probably will not be tax deductible. Any life insurance benefits on an employee’s death that are payable to the company may be taxable income to the extent the benefits exceed the premiums and other amounts paid by the company for the policy. On the other hand, because key employee disability premiums are not deductible, benefits received from a policy generally are tax-free. Reprinted from CPA Client Bulletin. n

Crushed Stone & State Specified Dense Graded Base Manufacturer & Installer of Bituminous Concrete Products:

M.B.S. Construction Services/Paving Holden Trap Rock Co. 2077 N. Main Street (Route 122 A) Holden, MA 01520 Tel: 508-829-5353 Fax: 508-829-9346

Berlin Stone Co. 332 Sawyer Hill Rd. (off Rt. 62 & 495) Berlin, MA 01503 Tel: 978-838-9999 Fax: 978-838-9916

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E.H. Perkins Construction, Inc. & Subsidiaries P.O. Box 301, Wayland, MA 01778 (508) 358-6161 • (781) 890-6505

-PLANT LOCATIONSQUINN-PERKINS S & G CO. Burlington (781) 272-0200 PANDOLF-PERKINS CO. Sterling (978) 422-8812 • (800) 339-3389 KANE-PERKINS CO. Hudson (978) 562-3436 • (800) 287-3436 GRAVEL • SAND • STONE FILL AND LOAM BITUMINOUS CONCRETE (PAVING) READY-MIX CONCRETE PRECAST CONCRETE PRODUCTS

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Equal Opportunity/Affirmative Action Employer

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Advertisers’ Index ATS Equipment, Inc. .............................................................40 Aggregate Industries - N.E. Region.......................................51 American Shoring, Inc........................................ Ins. Back Cvr. Aon Construction Services Group......................................... 11 AQUAREHAB USA Inc...........................................................15 B2W Software, Inc.................................................................60 Boro Sand & Stone Corp.........................................................7 Brennan Consulting...............................................................49 Dennis K. Burke, Inc..............................................................28 C&S Insurance Agency...........................................................4 Concrete Systems, Inc...........................................................10 Core & Main.............................................................................2 Dagle Electrical Construction Corp.......................................36 Darmody, Merlino & Co., LLP................................................28 Dedham Recycled Gravel......................................................62 DeSanctis Insurance Agency, Inc. ........................................66 Dig Safe System, Inc.............................................................64 The Driscoll Agency ..............................................................54 EJ...........................................................................................57 Eastern Insurance Group, LLC..............................................42 Eastern States Insurance Agency, Inc..................................62 Eastpoint Lasers, LLC...........................................................68 T. L. Edwards, Inc..................................................................56 Equipment4Rent....................................................................63 Ferguson Waterworks............................................................66 Gorilla Hydraulic Breakers.....................................................44 L. Guerini Group, Inc..............................................................44 HD Supply Const. & Industrial White Cap.............................38 A. H. Harris Construction Supplies........................................70 Hinckley Allen LLP...................................................................8 John Hoadley & Sons, Inc.....................................................59 JESCO...................................................................................64 Kenworth Northeast...............................................................56 P. A. Landers, Inc...................................................................48 Lawrence-Lynch Corp............................................................25 Lorusso Corp..........................................................................58 Lorusso Heavy Equipment, LLC............................................12 MBO Precast, Inc...................................................................45 Mabey, Inc..............................................................................33 Mass Broken Stone Company...............................................71 McGill Hose & Coupling, Inc..................................................49 Milton CAT..............................................................................30 Minuteman Trucks, Inc...........................................................68 Norfolk Power Equipment, Inc...............................................54 North American Crane & Rigging LLC..................................22 North East Shoring Equipment, LLC.....................................65 Ocean State Oil......................................................................70 Palmer Paving Corp...............................................................60 E. H. Perkins Construction Co., Inc.......................................72 Podgurski Corp......................................................................63 E. J. Prescott, Inc................................................Ins. Front Cvr. Rain For Rent-New England..................................................20 Read Custom Soils ...............................................................47 Ritchie Bros. Auctioneers......................................................68 Rogers & Gray Insurance......................................................14 Schmidt Equipment, Inc............................................. Back Cvr. Scituate Concrete Products Corp..........................................46 Scrap-It, Inc............................................................................67 Shea Concrete Products, Inc. ...............................................52 SITECH New England..............................................................6 Smith Print..............................................................................54 Starkweather & Shepley Ins. Brokerage, Inc.........................69 StormTrap, LLC........................................................................9 Systems Support Corporation...............................................71 Tonry Insurance Group, Inc...................................................70 Travelers.................................................................................24 United Concrete Products......................................................56 United Rentals Trench Safety................................................26 Webster One Source.............................................................32 C. N. Wood Co., Inc. .............................................................50 Woodco Machinery, Inc.........................................................18 Xylem Dewatering Solutions Inc............................................58

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Construction Outlook February 2018  
Construction Outlook February 2018