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President’s Message   With my last message to you as the President of UTCA I am filled with both gratitude and anger. First the anger. In all of my years in the construction industry and as a citizen of New Jersey I never thought that our legislators and Governor would fail to reach an agreement on a fully funded Transportation Trust Fund. As I write this message TTF funded NJDOT and local government road and bridge construction projects are shut down along with NJ Transit’s construction projects. Thousands of hard working men and women are either out of work or about to be laid off through no fault of their own. The impact on their families, our companies, the economy of New Jersey and our transportation networks is devastating. And while we are suffering I do not see any efforts in Trenton to bring a resolution to the problem. How is this possible? How can our elected leaders be enjoying their summer while our employees and the state suffer? Not only are we wasting great weather in which to rebuild New Jersey there are very few new projects to bid on. When this crisis is finally resolved we could have missed the entire remaining construction season which will see people out of work well into next spring. We need action and we need it now!   I want you to know that we have not sat by passively hoping for the passage of a new fully funded TTF. Over the past two years the Association Leadership, Board Members, staff and advisors have worked around the clock to prepare the analysis of the financial commitment needed to have a robust program for years to come. We have continually met with the legislature and the Governor to provide our financial analysis and answer any funding or construction questions they had. We have been a key founding member of the ForwardNJ campaign. Board members and UTCA staff have met not only with the legislative leadership but with every member of the Senate and the Assembly. Through these efforts a bi-partisan coalition of senators and assemblypersons developed a program to fund a $2Billion per year, 10-year program. Combined with the TTF program was legislation to ask for voter approval to “lock-up” the TTF funds so that they could not be used for non-transportation programs. There was also a sweeping reform of our estate tax and pension tax laws which are forcing many of our citizens to make the hard decision to move out of state. Each time someone leaves New Jersey it is bad for our economy and our families. Unfortunately, at the 11th

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hour a new proposal was put on the table by the Governor and embraced by the Assembly. It is now day 21 of the impasse and the Governor issued an emergency order stopping all TTF supported construction projects. If this is an emergency why is no one working on solving it? I have never seen an emergency situation where no one is in charge of fixing the emergency. We need action now!   Although the frustration of the TTF situation is all consuming, I can tell you that I will forever be grateful for the opportunity to have served you as President leading into the next 50 years of the UTCA. I appreciate all of the support the Board of Directors and Bobby and the staff have given me and the opportunity to meet so many people in the association and build new friendships and relationships cannot be overstated. I want to welcome all of the new members who have joined UTCA and I encourage them and all of you to increase your participation on our committees and at our membership events. It cannot be stated enough that without all of you who have sponsored our events and taken ads in our magazine our association could not exist and we would not be successful. In this issue of our magazine we pay tribute to our founding President Franklyn Grosso who was not only a great leader of our industry for over 50 years but a great counsel to me during my presidency. I want to congratulate Construction Risk Partners on their ten years in business during which they have been a fantastic supporter of the association and Trap Rock Industries on celebrating 50 years in business.   I hope to see all of you at the convention so that not only can I say hello and thank you for all of your support but to also welcome our new President, Jim Coddington, who I know will be a great President and leader of the Association.

Best regards,

Tino Garcia Utility and Transportation Contractor, AUGUST 2016


AUGUST 2016

Contents

Volume XLI, Number 4

Published Bimonthly During 2016 Office Address: 1670 Route 34 North Farmingdale, NJ 07727 Mailing Address: PO Box 728 Allenwood, NJ 08720 (732) 292-4300 FAX: (732) 292-4310 www.utcanj.org Publisher: Robert A. Briant, Jr. Editor: Helene Nasdeo Editorial Contributors: Anthony Attanasio Dennis Hart Dan Neville Advertising Manager: Helene Nasdeo

Features 5 Trap Rock Industries, Celebrating 50 Years of Family, Success & Quality Service 14 Tribute To Franklyn Grosso 24 Construction Risk Partners Celebrates 10th Anniversary 30 Jim Coddington - UTCA President - Elect 51 New Money Market Fund Rules 70 Feedback Is Critical for Improved Results 73 The College Tuition Benefit Program 77 Department of Labor Fiduciary Rule 87 A Blueprint For Tomorrow

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Photographer: Image Up Cover Photo: Image Up Production/Graphics: Lauren Hagan Helene Nasdeo Circulation: Helene Nasdeo Printed By: American Plus Printers

Departments 2 37 47 57 61 65 82 84

President’s Message Legal Dig Financial Overview Labor Relations Legislative News Safety Perspective The Pipeline Labor Relations

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Affiliations: ARTBA Clean Water Construction Coalition Water Infrastructure Network UTILITY AND TRANSPORTATION CONTRACTOR (ISSN 0192-4843) is published six times a year by the Utility and Transportation Contractors Association of New Jersey, 1670 Highway 34 North, Farmingdale, NJ 07727. Periodical postage paid at Farmingdale, NJ and additional mailing offices. POSTMASTER: Send address changes to UTILITY AND TRANSPORTATION CONTRACTOR, PO Box 728, Allenwood, NJ 08720.

Cover

Pictured on the Cover are Mike and Mary Stavola.

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Cover Story

TRAP ROCK INDUSTRIES, CELEBRATING 50 YEARS OF FAMILY, SUCCESS & QUALITY SERVICE

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By: Anthony Attanasio, Executive Director

  or the Stavola family, Trap Rock Industries’ 50 years of success in the construction industry have been defined by what they feel is a consistent delivery of quality service. Bill Stavola, along with his sons Chris and Jason, beam with pride as they talk about how much they enjoy working with their customers. They can’t emphasize enough that the greatest factor of their success is their ability to consistently deliver high quality materials and construction on every project, even in the face of enormous challenges.   For five decades and three generations, Trap Rock Industries has prospered and grown with the Stavola family, and they look forward to continuing that tradition for many years to come. The family is quick to point out that there are employees at the company today who have been with Trap Rock since the beginning in 1966! “My father really set the stage for what we’ve become all these years later. He was a great man.” Bill Stavola is proud that his father, Mike, founded a company that would still be successful

and run by the family 50 years later, but also one where the employees felt like they were family too.   Mike Stavola started out as a dairy farmer in Middletown, NJ but was always looking to do more with his life and career. His grandson Chris calls him a visionary, always moving at 100 MPH. One day Mike bought a bulldozer to clear parts of his property in order to expand his farm. He enjoyed working with his new bulldozer so much he went on to purchase additional equipment and began to do site and excavation work for other properties in the area. Mike became so enamored with construction that he brought along his four younger brothers, and Michael J. Stavola, Inc. was formed.   The company continued to grow and expanded into the field of road construction. Mike soon realized that the future success of his operation depended on the availability of materials and a few years into the business as a road contractor, he purchased his first asphalt plant in Tinton Falls. Mike Stavola was always taking risks and in 1966 sought to take on a major expansion of the operation with the purchase of the Kingston Quarry and several other businesses throughout NJ. As they grew, it became clear that the brothers didn’t share the same vision, and so an amicable spilt led Mike to create Trap Rock Industries. Mike continued to buy additional equipment and properties, setting up new asphalt operations in South River, Columbus and Bridgeton. He spent several more years expanding the operation into other fields beyond just construction and material production. He began new ventures in Florida including a thoroughbred and cattle farm, a lime stone quarry and much more.   In 1973, Mike’s sons Billy and Mickey purchased Trap Rock Industries from their father. Since early childhood, the brothers had been inseparable. Thick as thieves as the saying goes. Prior to purchasing Trap Rock, the brothers started their work together on the family farm and then went on to join their father in the const-

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ruction industry. Once they purchased the business, the two brothers even shared an office space. Like their father, they were hungry to expand and were able to achieve new levels of success that made him proud. The brothers expanded the company’s holdings, purchasing additional asphalt operations in Edison, South Brunswick, Trenton, Florence, Mount Holly, and Blackwood. They created Troil (Trap Rock Oil) and were instrumental in the research and development of new asphalt specifications including Superpave.   In addition to their professional success, the Stavola brothers’ philanthropic endeavors have made a tremendous impact in the community. In 1991, Mickey and Billy funded the construction of a new Pediatric wing at the Monmouth Medical Center in the memory of their mother. The Mary A. Stavola Pediatric Pavilion is a 26,000 square foot facility that provides comprehensive care for critically ill children and performs the second-highest number of pediatric surgeries in the state.   Trap Rock increased its presence in the field of construction under the leadership of the Stavola brothers as well. The firm performed work both as a general contractor and as a subcontractor to some of the other premier contractors throughout the State. Trap Rock has a storied history of resurfacing some of the State’s major interstate highways, county roads, local roads and even major airport work.   In 2001 the Stavola family’s world was rocked by the sudden passing of Mickey. Billy Stavola not only lost his business partner but also his best friend. However, he and the rest of the Trap Rock family didn’t let this tragedy slow them down, they rallied around the memory of Mickey and sought to honor his legacy by continuing to take the company to new heights. Part of that transition was the rise of Billy’s sons Chris and Jason which began the next phase of expansion and the third generation of Trap Rock’s future. In 2013, Chris and Jason purchased Trap Rock Industries from their father. The two brothers take great pride in embracing the philosophy and work ethic of their grandfather, father and uncle. One of the greatest accomplishments to date was adding the Keasbey Asphalt Plant to the company portfolio. “We’re always finding better ways to do things. We are constantly seeking new efficiencies and looking to improve upon our past successes.”   Today’s construction market proves to be one of the greatest challenges the company has faced in its 50 years of operation. According to Chris and Jason, the market has a tremendous amount of capacity, and competition has become very stiff. They are also gravely concerned about the lack of consistency from the public sector, specifically from NJDOT due to the Transportation Trust Fund crisis. In years past, NJDOT was the rock the industry could always count on for work. Over the last 6-7 years though, the NJDOT has become increasingly inconsistent with the level of capital construction it puts out into the market. Contractors have seen jumps in the market from the NJ Turnpike expansion and the recovery from Hurricane Sandy but both of those are temporary 6

drivers. Chris and Jason are concerned not only because the industry hasn’t been able to rely on NJDOT for a consistent program but also because, as residents, they recognize that needs are going unmet. “The state roads are in desperate need of improvements. However, the funding levels do not meet the needs. It’s also difficult for the industry because if the work from the public sector isn’t consistent it’s hard to keep regular crews. When we can’t keep regular crews it becomes harder to maintain the quality of our product.” The family does have hope that things will pick up in the public sector and point out that there has been a slight uptick in the private market, which they have been able to capitalize on. With all the difficulties in the market, Trap Rock is grateful for its membership in the UTCA and NJ Asphalt Pavement Association and appreciates the resources and expertise those Associations bring to the table. All in all, the future is indeed very bright for Trap Rock Industries. The company currently employs over 300 people and hopes to keep expanding its operations. According to the Stavolas, “We are looking to continue to grow over the next 10 years as we have done every decade since 1966. New Jersey is a great place to live and work and we want to continue to do our part to make it a better place. We want to hire more people and continue to foster our long standing relationships with our employees, vendors and our partners in labor.” They also look forward to continuing the Trap Rock way of doing business. “Relationships are so important. We love our interactions with all of the people that touch our company. Whether it’s the employees, labor unions or our customers, loyalty is very important which is why we have such strong relationships with all of these groups.”   Billy is proud of the company his Dad founded and that he and his brother continued to grow. In recent years, Trap Rock entered into a very successful Joint Venture with Old Castle and look forward to the years to come. The firm has expanded into new fields of construction and he believes the sky is the limit. Billy is proud of his two sons and knows they will continue to grow the business. One can only imagine where this company will be in another 50 years as the Stavola family continues to exhibit the same hunger that turned a dairy farmer into one of the pillars of the construction industry. UTCA can’t wait to tell the next chapter of the Trap Rock Industries story. Utility and Transportation Contractor, AUGUST 2016


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FRANKLYN GROSSO 1930 - 2016

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  he year was 1965. 51 years ago. Five gentlemen representing five different NJ Utility contractors wanted to create an association that could respond to the multiple issues involving onerous ordinances, regulations and agency actions that were creating undue hardship for many NJ contractors. They were Nicholas Corbiscello, Joseph D’Annunzio, Robert Hamilton, Gerald Malanka and Franklyn Grosso. They had their first meeting at the Robert Treet Hotel in Newark over coffee and sandwiches and began the hard work of forming the UCA/NJ or the Utility Contractors Association of NJ.

Franklyn Grosso, right, is pictured with UTCA Past President, Jim Johnston as he was inducted into the NJ Construction Industry Hall of Fame in 2005.

  This article is dedicated to one of those five founders, Franklyn M. Grosso who lost his battle to Lymphoma on May 25th 2016.   Frank was born in 1930, and grew up in Summit, NJ, but during World War II Frank’s father, Samuel, joined the US Signal Corps and was transferred to the Photographic Center in Long Island City creating training films and animated military shorts. When the war ended, the family moved back to Millburn. He graduated Seton Hall Prep in 1948 and attended Seton Hall College earning a Bachelor of Science degree.   Frank married his high school sweetheart, Marianne LaFera in 1953. Frank became the father to 6 children (3 boys and 3 girls boy girl boy girl) and 13 grandchildren and a Great-grand child (with another on the way).   Frank joined the NJ National Guard 2nd Battalion, 102nd Armored Cavalry Regiment, and he became the Battalion Communications Chief where he served for 12 years. This turned into a love for photography and radios, and he quickly became a licensed Amateur Radio Operator (HAM) and operated a radio station from his home in West Orange for over 50 years. He also had a home in Point Pleasant Beach where he developed a love of boating and fishing. Surf fishing the beach, and canal and inlet fishing were some of his enjoyable pastimes. As well as birding and target shooting. He also developed a love to fly, and eventually piloted his own Cessna 170.   When Frank joined the Family business at LaFera Contracting after college, he decided to take engineering courses at Newark

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College of Engineering and at Columbia University to further learn the industry, as well as receive personal tutelage from Joseph LaFera Sr. and a handful of very qualified engineers. Frank moved through the ranks and eventually became an officer and director of LaFera Contracting Company where he remained until he retired over 50 years later.   LaFera Contracting was a prominent utility contractor having been a joint venture partner in the construction of the Jersey City sewer system, which included the construction of sewer piping and sewage treatment plant facilities for the city, and which was at the time of its construction, the second largest single construction contract in the United States since the construction of the Hoover Dam. Although primarily based in New Jersey, LaFera performed sewer and tunnel work in the Pittsburgh area for the Allegheny County Sewer Authority; as well as subsidiary operations in the Washington DC/Maryland area for many years constructing water mains, sewer systems, highways, bridges, tunnels, and a section of the Washington Memorial area subway system.   Frank was very involved in construction industry activities, and the UTCA. Growing from the original 5 contractors to over 1,100 members today. Frank served as UTCA Board member for over 40 years and was chairman of the Legislative Committee for many years. He also served a term on the Board of Directors of the National Utility Contractors Association. Many of his business and UTCA relationships developed into life-long bonds of friendship, and even after he passed one could hear people say, “I bet he and Joe D’Annunzio are sitting on a curb in heaven trying to figure out the best way to do a certain sewer project.”

Franklyn is pictured with his wife, Marianne, as he accepts the President’s Achievement Award in 1995.

  Frank was awarded the William Feather Memorial Award in 1979, and was a two-time UTCA president, Legislative Committee co-chairman and association representative to state-wide labor and management industry groups. He also served for 30 years as a Trustee of the General and Highway Laborers Union 472/172 Pension and welfare Fund, representing over 8,000 construction workers and beneficiaries. He was a board member of the Construc-

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tion Industry Advancement Fund serving for many years on the education Committee interviewing engineering students for CIAP scholarships. The fund has established the Franklyn M. Grosso Scholarship and awards summer employment work intern scholarships each year to students in NJ engineering schools. In 2015 it awarded 42 scholarships to NJ bound engineering students in his name and both UTCA, and the children of the Grosso family will work actively together to continue and grow the Scholarship fund. Milestone after milestone, in business and organizations, show how Franklyn M. Grosso loved the construction industry and spent a good portion of his life working in it. However, it is the side of a man or woman that when they leave this earth in death that many people do not get to know. His love of family, friends, God, birds, dogs, flying, radios, fishing, golf, sport shooting and boating that we all can smile about and see in our own lives. He touched many people as a gentlemen and a businessman - a son, a husband for 63 years, a dad, a grandfather and even a great grandfather. He lived a full and rewarding, long life of 85 years.   To everyone in the UTCA and contracting industry, a heartfelt thank you for the years of reciprocating friendships and relationships, both professional and personal are due to you. Also, it is an excellent time for each and every one of us to pause a moment from our busy days and take a look out the window, or call someone we love and remember what is really important in life. Frank worked very hard and paused to do the things he loved as often as he could.

"We are like dwarfs sitting on the shoulders of giants. We see more, and things that are more distant, than they did, not because our sight is superior or because we are taller than they, but because they raise us up, and by their great stature add to ours." John of Salisbury, 12th Century

Without the vision, leadership and steady demeanor of Franklyn Grosso the Construction Industry and the UTCA could not have achieved our success, growth or influence. We will forever be grateful to Franklyn & express our sincere condolences to his wife, Marianne & their family.

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Featured Article

CONSTRUCTION RISK PARTNERS CELEBRATES 10th ANNIVERSARY

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  n 2006, we ran an article “Construction Risk Partners Open for Business”. A decade later, they are still “open for business” and growing strong.   In that 2006 article, Al Marquis, a former Larry Gardner Award recipient, and one of the founding partners of Construction Risk Partners, had said “Over many years, our association with the UTCA and its fine membership has been the cornerstone of our success”. Well, the same holds true for today.   Since 2006, Construction Risk Partners, which began with five partners, has expanded to over seventy employees with four locations in New Jersey, New York City, Philadelphia (King of Prussia) and most recently in Long Island. In addition, to meet all of the needs of their clients outside of construction, they have established another company, CRISP Insurance Advisors, which was formed to handle personal lines, non-construction commercial lines and life/health benefits programs. A remarkable accomplishment in just ten years!   “Our relationship with the UTCA, and its members, has been a major factor in building the foundation of Construction Risk Partners”, said Peter Forenza, Managing Partner. Pete further stated, “CRP’s participation in the annual convention and in the safety committee has only strengthened our commitment to the business that we love”.   Construction Risk Partners has been an active and influential member of the UTCA for the past ten years, yet the history is much longer. This same group, beginning as Marquis & Associates, has been members since 1984!   The founding partners, Al Marquis, Pete Forenza, Rob Pitts, Jay Sciortino and Bill Linney, are very active in the business. Over the past several years they have brought in new partners to perpetuate the outstanding service delivery platform of the company. Joe 24

Charczenko, Rob Rapp, Fred Nicholson, Joe Kent, Frank Mason, and Bill Harrison. Mary Bishop, Rich Nocella and Gary Rispoli are Associate Partners. Along with a dedicated staff, all are charged with the continuous purpose of keeping Construction Risk Partners as a firm that is committed and focused on construction risk solutions.   As the company has expanded so has the product delivery. In addition to the traditional construction insurance/surety products, Construction Risk Partners has expanded its offerings to Contractor/Owner Controlled Insurance (CCIP/OCIP) and Subcontractor Default Insurance (SDI). They also have a team of highly technical and sophisticated professionals, in Ray Master and Chris Merrifield, providing Loss Prevention Services and Risk Control. All

Insurance staff - left to right, top row: Jay Sciortino, Cynthia Castro, Darlene Best, George Decker, Melissa Fattori, Amanda Turowski, Casey Wislocki, Danny Ho. Bottom row: Margie Pierson, Lauren Bowman, Denise Spinella, Sarah Jarrell. Utility and Transportation Contractor, AUGUST 2016


of which round out the products and services necessary for today’s demanding construction environment.   Rob Pitts, who heads the surety operations for CRP, understands the importance of relationships. “We support the UTCA, not only for the business potential, but for understanding all the issues faced by contractors, which are many”, says Rob. He goes on to state, “what’s relevant to one contractor, is likely relevant to all”. Construction Risk Partners supports the surety needs of many UTCA members, and has a reputation with both the contractors and the surety companies as one of the finest in the business.   Jay Sciortino is the head of claims for Construction Risk Partners, and has been very active with the UTCA since 1992, and has been a member of the Safety Committee for much of that time. Well known to many of the members, Jay has been instrumental in helping to expand the attendance at the Annual Comprehensive Construction Safety Seminar by sponsoring great guest speakers. As a result, the attendance at this annual event has increased significantly. “The UTCA staff does a tremendous amount of work putting on programs for its membership, all of which provide great value” states Jay. “It’s our job, and that of all associate members, to support these efforts”.

  Most recently, Construction Risk Partners has enhanced their branding with a new logo and promotional material. Bill Linney states, “Change is good and it’s consistent with our company’s culture. It is important to keep things fresh as our environment changes. However, the change in CRP’s appearance will never change our laser focus on service delivery, and keeping ahead of the complex issues in our business”.   We congratulate Construction Risk Partners on their ten-year anniversary, along with our sincere thanks and appreciation for their high level of support of the UTCA over these many years. We wish them continued success!

Pictured left to right, front: Karen Alexander, Kaitlyn Zielenkievicz, Heather Rek, Ann Marie Keane, Jamie Krutz. Back: Jane Fedorczyk, Liz Riga, Drew Douglas.

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JIM CODDINGTON UTCA PRESIDENT ELECT By: Anthony Attanasio, Executive Director

  Jim Coddington, UTCA’s President-elect and Vice President of Tilcon, was elected at the UTCA June General Membership Meeting to serve the association. He will begin his service as the organization’s highest elected officer at the Annual Convention in Atlantic City this September/October.   Jim Coddington began his career with Mt. Hope Rock Products in 1994 and stayed with the firm through its acquisition by Tilcon, New York Inc. in 2001. Throughout the years, Jim has held numerous roles within both organizations that has given him an enormous breadth of knowledge about the construction industry. Jim have served as a job cost accountant, office engineer, superintendent, project manager, and vice president of construction. He has managed and participated in projects that have won national paving awards with the National Asphalt Paving Association for work performed at Newark Liberty Airport, the George Washington Bridge, and Lincoln Tunnel. He has also successfully delivered many projects for the New Jersey Department of Transportation, the New Jersey Turnpike Authority and countless county and municipal road projects. Jim recently took on a new challenge as Vice President of Sales for Tilcon’s New Jersey market.   Jim has proudly served as a member of the UTCA Board of Directors for seven years. He currently serves on the Executive Committee, Budget Committee and serves as Chairman of the Membership Development Committee. He is also a member of the UTCA Asphalt Pavement and Parkway/Turnpike Port Authority Subcommittees. Jim is excited for his term in office and is looking forward to leading the Association into its next chapter. One of Jim’s goals as President is to continue to work with the Association staff to strengthen the UTCA’s ties to both elected officials and the various governing agencies that either produce or regulate the industry’s work. He is also committed

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as President to remain focused on membership development. As the industry’s premier trade association, Jim recognizes that there are numerous potential members who could benefit from joining the UTCA and is focused on increasing the Association’s membership.   Jim received his undergraduate degree in business management from East Stroudsburg University and his master’s degree in construction management from Stevens Institute of Technology. Jim currently resides in Whitehouse Station, NJ with his wife Janet and their daughter Sloane.

Jim Coddington, left, is pictured with Bob Briant, Jr. at a recent Board of Directors meeting.

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Legal Dig

DOCUMENTING DAMAGE CLAIMS FOR THE SUSPENSION OF WORK OR TERMINATION OF A CONTRACT By Paul T. Fader, Esq., Association Legal Counsel

  On June 30, 2016, Governor Chris Christie issued Executive Order Number 210, which required the Commissioner of the New Jersey Department of Transportation (“NJDOT”) and Executive Director of the New Jersey Transit (“NJT”) to issue plans for the shutdown of non-essential Transportation Trust Fund Authority (“TTFA”) projects.   The New Jersey State Constitution provides the Governor with the authority to declare a State of Emergency and to take action, in the form of an executive order, when it is deemed necessary for the health, safety and welfare of the citizens of the State of New Jersey. While Executive Order 210 provides that TTFA projects must be shut down unless deemed “absolutely essential” it is important to note that absent a State of Emergency the NJDOT also has the authority to suspend work or terminate a contract for convenience.   §108.13.3 of the NJDOT Standard Specification provides, in part, that the Resident Engineer (“RE”) “has the right to suspend the work, wholly or in part, for such period of time as is deemed necessary. . . for the convenience of the [NJDOT].” §108.15 also provides that the NJDOT “has the right to, by written order, terminate the contract for convenience.”   Contractors are entitled to certain costs resulting from suspension or termination for convenience. Consequently, it is critical that contractors put in place procedures to document these costs. Costs Associated with Suspension of Work   Following a suspension of work a contractor may provide the RE with a written request for “payment for the costs and for modification of contract time for the number of days sought resulting from the suspension.” §108.13.   A contractor can recover field office overhead costs such as the rental of field trailers, utilities, small tool rentals, watchmen ser-

vices and the salaries of supervisory and administrative personnel as a part of its construction delay damages claim.   Home office overhead, which consists of costs such as rent, utilities, furnishings, office equipment, salaries for executives and clerical staff, professional trade licenses, advertising, etc., may be recoverable, although these costs may be difficult to allocate. Generally, contractors allocate these costs to the projects they perform in proportion to the duration and cost of each project. During a suspension of work, billing will decrease but home office overhead remains the same. This can result in unabsorbed home office overhead expenses.   A contractor can also make a claim for the cost of having to maintain an unutilized work force. The contractor should be compensated for all unavoidable direct labor costs resulting from suspension of work. These costs include wages and normal fringe benefits when it is not practical to lay off employees or discharge them.   The contractor is entitled to recover any unavoidable equipment costs during a suspension of work period. Contractors can recover the cost of equipment that is idle or the costs incurred as a result of extending the use of the equipment.   Suspension of work may lead to escalation costs for a contractor, i.e. higher labor and material costs. Some contracts contain an escalation clause, which protects the contractor from sharp increases in the cost of labor or materials. When the contract does not contain an escalation clause, the contractor should put in a claim for increased labor and material costs resulting from the suspension. Costs Associated with Termination of a Contract

Continued on Page 74

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Financial Overview

HOW CAN I DO MORE WITH LESS? By: Ryan Hayward, Provident Bank

  As we continue to move forward and away from The Great Recession, businesses have learned how to generate greater value with fewer resources. It’s part of the reason we continue to see confusing statistics in the news. “Economic Growth: Positive… Employment: Negative.” This may be part of the growth process as we hop back out of the nest and start to fly again, or it may just be the new norm. I’ll leave this topic for future economists to debate, but today, I have clients with real needs. “How do I reduce cost and improve efficiency when making payments?   I recently sat with a client for a relationship review. Like many businesses, he had a number of regular suppliers that he purchased from. My client would sit at his computer weekly and begin making payments. He’d generate laser checks from his A/P system, sign the checks and stuff them in envelopes. He’d apply postage and dump the checks in a bin to be mailed out. But THIS time our conversation was different. He had recently received a call from one of his suppliers about using electronic payments, and he was finally ready to discuss the benefits of ACH payments.   I started by explaining that an ACH is an electronic transfer of funds similar to a wire transfer. A business sending an ACH as a form of payment would need some information from him in order to make sure the payment went into his account. Although he has a long term, positive relationship with his customer, giving out that kind of information went against everything my client knew about fraud prevention. After a brief conversation about an account number masking service called UPIC, my client seemed to be much more comfortable with the idea of letting his customer pay him via ACH and in turn, he understood that many of his suppliers might feel the same way about him.   We moved the conversation back to his business and how

he might use ACH payments as a way to save him time, money and improve efficiency.   We discussed the various ways he could generate the ACH payment file and quickly found that his A/P system had the ability to generate a file that could be transmitted to the bank with a few simple clicks of the mouse. Time savings? Almost certainly.   Cost Comparison - for anyone that’s familiar with ACH, you know this can be fairly significant. We compared the cost of check stock, ink cartridges, envelopes, postage and more. Conversely, the cost of the ACH was pennies on the dollar. We identified hundreds of dollars in potential monthly savings from making the switch.   From an efficiency standpoint, we discussed a number of possibilities. Much of the process was web-based. He could make ACH payments from virtually anywhere and anytime that he had his laptop. We also discussed the possibility of him delegating the creation of the payment file to someone else in the office, while still offering him the security and peace of mind he required as the final approver to release the file to the bank.   For this client, it was a relatively easy decision. But whether he makes the switch or not, I continue to build our relationship and grow in my role as a trusted advisor. If you have questions, just ask. Any Provident Cash Management professional would be happy to walk you through the process and ease your concerns. It’s what we do! About The Author . . .Ryan is based in Provident’s Iselin office, Ryan’s daily routine includes consultative cash flow discussions with financial decision makers (Treasurer, Controller, CFO, etc…) to help improve the efficiency of internal financial process and make cost savings recommendations. Ryan also has an extensive knowledge of data security and financial fraud prevention.

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NEW MONEY MARKET FUND RULES REQUIRE REVIEW BY PLAN SPONSORS By: Kelly Kurtz & John Higgins, Patterson Smith Associates, LLC   Construction firms that sponsor 401(k) retirement plans should review their stable value investment options given the recent changes in non-government money market fund pricing and potential liquidity gates. In July 2014, the U.S. Securities and Exchange Commission (SEC)—the primary regulator of money market mutual funds—issued new rules for further regulation of money market mutual funds that are to be implemented by October 2016. The new rules will change how money market funds are invested, priced, operated, and acted upon when financial markets are under stress.   Given these revised rules, coupled with a low interest rate environment, plan trustees will need to consider other money market fund types or Guaranteed Investment Contracts (G.I.C.’s). We have put together this summary to help you understand how these changes will affect your plan options. What plan sponsors need to know The new SEC rules include the following changes:   • Money market funds can fall into three classifications: institutional, retail, or government funds.   • Institutional funds will be required to have a floating NAV and may impose redemption fees and gates.   • Retail funds will have a stable NAV but may impose redemption fees and gates.   • Government funds (retail or institutional) will have a stable NAV and are not subject to redemption fee or gate requirements. How does this affect your plan?   For retirement plan investors, the two most significant reforms are the requirement that institutional funds use a floating NAV and the option for institutional and retail mutual funds to impose liquidity fees and gates in times of market stress or low levels of fund liquidity.   Defined contribution plans are exempt from the new floatingrate NAV requirements; however, any non-government money market fund in the plan will be subject to potential liquidity fees and redemption gates. In addition, defined benefit plans that are considered institutional will need to consider whether the possibility of a gate or fee could reduce the liquidity to such an extent that the plan would not be able to make required pension payments in a timely fashion. Steps you can take now   Here are some steps that you can take now in order to prepare your plan in advance of the October 14, 2016, implementation deadline:   1. Understand the SEC amended rule for money market funds and its potential impact on your plan participants.   2. Explore alternatives to retail money market funds, including a shift to a government money market fund or a stable value collective trust.   3. Contemplate preferences for safety, liquidity, and return for this type of investment, then select a new investment, and match the preferences with that investment.   4. Implement a communication strategy to educate participants about any changes to your plan’s money market fund options.

Definitions A redemption gate is a temporary measure that may be implemented by a mutual fund that limits redemptions for a short period of time (e.g., 10 days). A liquidity fee is imposed upon a participant when he or she needs to access cash in times of market stress and wants to make a redemption from the fund. This fee may be levied in order to pay for liquidity (The fund charges this fee to manage the transactional costs of redemptions.). A retail money market fund is defined as a money market fund that has policies and procedures reasonably designed to limit beneficial owners of the fund to “natural persons,” which means that a retail money market fund’s shares can be held only by individual investors. “Natural persons” covers individuals, certain trusts, certain retirement accounts under IRC 408, and participant-directed defined contribution plan accounts, such as 401(k)/401(a), 403(b), and 457(b). Questions?   The current regulatory environment can be challenging for retirement plan sponsors. Our firm is ready to provide you with the ideas, guidance, and foresight to prepare for what lies ahead. If you would like to review any aspect of your retirement plan in light of the upcoming rule changes, we’re here to assist you. Figure 1. Money Market Reform Requirements by Type Money Market Fund Type

NAV

Temporary Fee or Gate on Redemptions

U.S. Treasury

Stable

No

Government

Stable

No

Retail Municipal/TaxExempt

Stable

Yes

Retail Prime

Stable

Yes

Institutional Municipal/ Tax-Exempt

Floating

Yes

Institutional Prime

Floating

Yes

Source: Putnam Investments, “Money market reform and its impact on plan sponsor”, Commonwealth

  This material has been provided for general informational purposes

only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer.   An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other governmental agency; although the fund seeks to preserve the value of the investment at $1 per share, it is possible to lose money. Non-bank deposit investments are not FDIC- or NCUA-insured, are not guaranteed by the

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Labor Relations

DOES YOUR EMPLOYEE HANDBOOK STAND UP TO SUPREME COURT’S LATEST DECISION ABOUT ACCOMMODATIONS FOR PREGNANT WORKERS? By: Shawn Farrell & George Pallas, Cohen Seglias Pallas Greenhall & Furman, PC

  All employers should have policies to ensure accommodation of disabled workers as well as those with temporary injuries or disabilities. That said, employers may be overlooking their legal obligations to accommodate another group of workers: pregnant women who have pregnancy-related work limitations.   In a recent U.S. Supreme Court case about pregnancy discrimination, Justice Breyer asked: “Why, when the employer accommodated so many, could it not accommodate pregnant women as well?” As an employer, you must ask this question when preparing, reviewing, or updating your company’s accommodation policies.   In Young v. United Parcel Service, the Court addressed whether UPS’s treatment of a pregnant employee constituted pregnancy discrimination. Its decision effectively broadens the range of accommodations employers must provide to a pregnant employee.   Peggy Young was a UPS delivery driver. When Young became pregnant, her medical providers instructed her not to lift more than 20 pounds. As a result, Young was unable to fulfill UPS’s standard 70-pound lifting requirement. Young was not assigned to light duty or an alternate position, but was required to take a leave of absence while the lifting restriction remained in place. She was forced to take unpaid leave and lost her medical coverage during that time. Several laws may offer protection for pregnant employees   In her lawsuit, Young claimed she had been the victim of gender- and disability-based discrimination under the Americans with Disabilities Act (ADA) and the Pregnancy Discrimination Act (PDA). The law requires employers to provide accommodations to protected classes of employees – the ADA relates to a person with a qualifying or perceived disability, while the PDA relates to pregnant women. Young claimed that UPS was required under both laws to accommodate her pregnancy-related lifting restriction but failed to do so.   UPS argued that it treated Young the same as any other similarly situated non-pregnant co-worker. Further, Young’s pregnancy did not constitute a disability because the ADA does not view a preg-

nancy without complications as a disability.   While Young’s claims arose under these two laws, at least a dozen other states, including New Jersey, have enacted laws that similarly require reasonable accommodations. Negative impact on the employee may matter more than the employer’s intent   So, did UPS do enough to accommodate Young? UPS allows employees with non-pregnancy related conditions, such as injuries, to perform temporary light duty or desk duty. This option was not given to Young. But that was not enough for the Court to rule completely in Young’s favor. Rather than give a clear cut answer on exactly what UPS was required to do, the Court sent the case back to the lower court with a set of instructions for evaluating claims of gender- and pregnancy-based discrimination. A plaintiff must show that: • She belongs to the protected class (i.e., is a pregnant woman); • She sought an accommodation; • The employer did not accommodate her; and • The employer accommodated non-pregnant employees with similar limitations at work.   As a defense, the employer can offer up its legitimate, nondiscriminatory reasons for denying accommodations. The Court warned that cost or convenience to the employer are not good enough reasons. In the final step of the inquiry, the plaintiff must show that the employer’s actions resulted in a “significant burden” on the employee. Policies and practices that categorically provide accommodations to certain employees, but not to pregnant women, will likely be found to impose a significant burden on pregnant employees.   The Court’s new reasoning means that the negative impact on the pregnant worker matters more than whether the bias was intentional. Thus, the Young decision makes it easier for a pregnant woman denied workplace accommodations to succeed in her legal claims.

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Legislative News

FEDERAL & STATE UPDATE By: Anthony Attanasio, Executive Director   At the time that this article is being written, there is really only one legislative item on everyone’s mind - the renewal of the Transportation Trust Fund. Unfortunately, a well thought out proposal with bipartisan sponsorship put forward by Senators Paul Sarlo (D-36) and Steve Oroho (R-24) was scuttled in the 11th hour in favor of a last minute substitute. A new bill emerged that increased TTF funding with the same $.23 increase to the Petroleum Gross Receipts tax as the original plan, but cut 1% from the sales tax instead of the package of tax cuts found in the original bill. While the State Assembly passed the new legislation, the Senate refused to act on the measure. Cutting the sales tax by 1% would create a more than $1.5 billion hole in the State’s General Fund by 2019, and the Senate did not consider that responsible or acceptable.   What is most frustrating is that compromise legislation was not stalled due to the level of transportation funding, but was in fact delayed by an impasse over which taxes to cut in order to meet the Governor’s call for tax fairness. The fiscal year came to an end on June 30th with no action. As a result, the Governor issued Executive Order 210, which shut down all non-essential TTF funded projects. The effects of the shutdown have been disastrous for our industry and our State. Without a final resolution to the TTF crisis, the negative effects of the shutdown will only escalate. UTCA staff, along with the rest of the Forward NJ coalition, have continued to advocate with the Governor and legislative leadership to end the unnecessary shutdown by renewing the TTF.   UTCA continues to seek progress on several bills previously written about in this column. UTCA staff is seeking to have A2863, legislation regarding fairness in the application of apprentice programs, posted for a vote by the full Assembly. This bill

passed out of the Assembly Labor Committee by a vote of 8-0-1 in May. UTCA is also working with Assemblyman Gary Schaer to have his legislation, A1649, introduced in the State Senate. A1649 would require municipalities, counties, and water/sewer utility authorities to seek a financing estimate from the NJ Environmental Infrastructure Trust (EIT) prior to advertising a project for bid. The measure recently passed out the full Assembly by a vote of 69-3.   Finally, UTCA was part of a coalition led by the NJ Business & Industry Association (NJBIA) that opposed S-982, a bill that would require related corporations to file a combined income report using an income reporting system. The bill passed out of the Senate Budget & Appropriations Committee along party lines; however, the Senate will not be posting the bill for a floor vote. After discussions with legislative leadership in the Assembly, we do not anticipate seeing this bill again in the near future. Special thanks go out to the NJBIA for their leadership on this issue. PLEASE CONSIDER SUPPORTING UTCA’S CONSTRUCTORS FOR GOOD GOVERNMENT PAC   UTCA continues to be the leading voice in Trenton and Washington D.C. for the construction industry. Whether it is providing expert testimony before business and legislative groups or positively effecting the legislative process, UTCA stands alone in its record of achievement for our industry. This success is only made possible by your support of the Association, and more importantly, with your support of the industry’s PAC: Constructors for Good Government. Please consider making a contribution in 2016 as UTCA plans to be very active in the upcoming legislative session and a robust PAC only strengthens our voice. Thank you for your continued support.

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Safety Perspective

WHAT ARE WE GOING TO DO ABOUT FATALITIES?

By: Ray Master, Construction Risk Partners & Rick Strycker, WhyNot Partnering

“For every complex problem there is an answer that is clear, simple and wrong.” – H.L. Mencken   In the past few years, a disturbing trend has appeared in workplace injury data across several industries and countries: the number of non-fatal injuries has continued to fall while the number of deaths and serious injuries has remained the same or increased. This alarming trend has led many to question some of the most long-held assumptions about the causes and remedies of workplace injuries.   For decades, vast improvements in our approach to safety have led to significant breakthroughs in safety results. In general, workers are safer now than at any time in recent history. However, what has worked in the past is not working to eliminate fatalities and other catastrophic failures. We are killing too many people while they are at work trying to make a living.   Our lack of progress with serious injuries and fatalities is not due to a lack of commitment. Even in tough times, companies continue to focus on safety, spending millions. However, all this time and attention is not eliminating the most serious types of injuries. We need a breakthrough. To accomplish this, we will need to examine the models and assumptions that drive our work. We need to develop new models, test them for their effectiveness, and quickly improve them.

The Safety Pyramid

  One of the most ubiquitous safety models across industries, nations and cultures has been the Safety Pyramid, originally proposed by H.W. Heinrich over 80 years ago. The pyramid model’s early success was due to the elegant display of simple statistical relationships between the types and severity of incidents and injuries—from near misses to fatalities. Although the model has been

seriously critiqued by many researchers over the years, it still persists as the primary mental model for explaining all kinds of safety problems, from manufacturing to health care, and from airlines to process industries to construction sites.

  To this day, the Pyramid Model suggests basic theoretical assumptions inherited from Heinrich’s original research. First, the model proposes that the probability of serious or fatal accidents (at the top of the pyramid) is correlated with less severe injuries or near misses (at the bottom). If true, then a remedy for serious accidents would be to reduce the number of less severe incidents. Up until recently, safety leaders have interpreted spikes in near misses or lost work days as an indicator that a more serious injury is more likely to occur. However, recent data across several types of industries contradicts this prediction. In fact, fatalities have remained constant, or, in some places, have increased, while minor injuries have continued to decline.   A second assumption very popular in safety centers is the mechanism of accident causation. Again, we see Heinrich having a significant influence in shaping our thinking in this area. In his Dom-

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ino Theory, Heinrich argued that injuries resulted from accidents; accidents from unsafe acts which in turn occurred from the faults of people which had their origin in the social environment. Injuries could be best prevented by stopping accidents from happening. As the immediate cause of accidents was unsafe acts then eliminating them was the most effective focus of injury prevention programs.   Together, these two assumptions have dominated the thinking of managers and safety professionals across the globe. The combined impact of probabilistic analysis and simple causality has been useful as a broad metaphor and has helped create broad improvements in safety across industries and geographies. Recently, however, the limitations of this approach have begun to outweigh its advantages. We cannot continue our attempts to address serious injuries by addressing all incidents equally. We must discover and then focus on the critical pathways that lead to failure, and to serious injury.   In the second edition of Safety Management: A Human Approach, the late and venerable Dan Petersen proposed that the types of accidents resulting in temporary disabilities are quite different from those resulting in permanent total disabilities or fatalities. “There are different sets of circumstances [and causes] surrounding severity.” Since Peterson’s remarks, there has been more and more focus on the various causal pathways that lead to fatalities.

Looking for New Models for Safety

  While our current thinking in safety was adequate for the first half of the 20th century, the increasingly complex and incomprehensible socio-technical environments that developed in the last half and beyond require more intricate and more powerful methodologies. We don’t want to throw away the good work that we have done. However, we must transcend our long standing models; recognizing they do not fully match the complexity of our current work environments. Fortunately, quite a lot of research and application work has already occurred, which will replace some of our most basic assumptions with improved models.   Some new thinking coming on line in safety with emphasis in fatal and catastrophic event prevention are built on the following perspectives:   • People are not a problem to control but a solution to harness   • Safety does not just occur because people follow rules. It occurs because people adapt   • Safety is not just the absence of negative outcomes; it is the presence of positive capabilities   • Safety is not something you have but something you do. People create safety   In the traditional approach to safety the common understanding follows a mechanical or Newtonian worldview – a linear model where cause and effect is visible and wherein the system can be broken down into its parts and rearranged again into a whole. This model is the way that most organizations describe safety. Although it is simple, coherent and intuitive, it ignores or denies human agency, values, creativity and evolution. Likewise, for complex systems, the linear model falls short.   The new models for safety will transcend the limitations of the traditional approach and will be more holistic in nature. In the remaining parts of this paper, we will suggest two areas of focus that are key to enriching our models for how to address the challenges of safety, especially the need to address fatalities and the infrequent, but catastrophic failures. We suggest that both complex systems theory and approaches to leadership point us toward a rich new set of tools and distinctions that will be necessary for making the next leap in safety performance.

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Complex Systems

  Complexity science is the scientific study of complex systems. This includes both human and nonhuman systems, but here we are mainly interested in human, or sociotechnical systems. For lots of reasons, project work is becoming more complex, and this is the primary reason our conventional models for managing safety are not as useful as they once were.   The behavior of sociotechnical systems cannot be explained or predicted based on analysis of performance of the parts. As our work environment becomes more complex, complexity theory tells us that we must avoid simplistic solutions to safety, such as pointing to “behavior” or “culture” or “rules and procedures” in isolation from each other and as the answer to safety problems. Our new models must be integrated, and more holistic.   In complex sociotechnical systems, safety outcomes are seen as emergent properties of the system, not as the result of simple “root” causes, or component failure. Small changes and variations in conditions can have disproportionately large effects. Cause-effect relations are complex and non-linear; the system is more than just the sum of its parts. Because variability and adaptation are necessary for system health, variability can cascade through the system and can combine in unexpected ways. Sometimes variability is the source of innovative behavior, a really good thing, and sometimes it is the source of catastrophic failure, a very bad thing. When certain kinds of variability interact with other hidden system features, system breakdowns catch us by surprise (EUROCONTROL 2013). This is at the source of fatal and catastrophic events. The current models in safety, by definition, could not detect the difference between good and bad variability, and thus could not make necessary corrections. Fortunately, there are a host of new concepts, models and practices that are now being introduced to help cut through complexity and provide better safety solutions.

Role of Leadership

Having new models to understand accident causation inside of complex sociotechnical systems is necessary, but is only part of the solution. Because the elimination of fatal and catastrophic events is a critical issue for business, the work should be treated as a total business transformation, not an isolated initiative delegated down the ranks. Bringing in a new model of safety is not a technical fix; it is an adaptive challenge, requiring a reexamination of beliefs, values and mindsets. It is a challenge for which bold leadership is needed.   As with any transformational effort, the work starts with a clear vision, created and shared as an expression of evolutionary leadership. The vision will include some of the best of the past, but will also transcend the past by putting it in a new context. The time is ripe for a new vision of safety that addresses the problem of fatal and catastrophic events, but also goes beyond it to embrace a whole safety solution. A new vision of safety can bring together many of the fragmented pieces in the world of safety, and breathe new life into both business and safety.   To be clear, we are talking about a paradigm change for safety, and we are not naïve about the magnitude of the change. It will not happen overnight. However, in our experience, there are a critical few practices that leaders need to put in place to support the kind of transformation we are pointing to. Once the vision is clear, and people are committed to the journey, we believe that building trust and capability building will create the necessary and sufficient conditions for the emergence of a new safety space. Utility and Transportation Contractor, AUGUST 2016


Next Steps

  As someone wise once said in response to the question “how do you eat an elephant?” The answer: “One bite at a time!” Here are a few suggestions based on our experience that could help you take the next step or maybe even the first step toward updating your approach to safety and addressing fatalities and major accidents at your company.   • Don’t throw the baby out with the bathwater. A lot of what you’re already doing is fine, and you should retain it.   • Do a self-examination of the current model in use at your company. Are you accepting the default safety models as true without reflection? Are you looking at new models, but don’t know what to do with them? Have you embraced some new thinking, but have not operationalized it? Just knowing where you’re at can be useful in planning out the next step.   • Consider the extent to which your approach to safety is holistic, makes sense, and supports your business, or if it seems piecemeal, fragmented, and seems to conflict with business goals. If it’s the latter, you most likely have hidden risks that are not being addressed.   • Take a pulse on your readiness to change. Many companies want the quick fix to safety and this will point them toward the traditional models. However, quick fixes and easy answers leave the big risks unaddressed. Solving the deeper systematic safety issues requires leadership commitment, resolve and some facility with the new tools of safety.   • The next time an incident occurs at your company, observe the automatic response. This will tell you more about what models are embedded in your culture than from reading corporate safety statements or speeches at annual events. These underlying models

become habits and habits aren’t easy to change. However, if we want to address the big risks, both habits and the assumptions that lie beneath them must change.   There is a lot of interest around the world to create the next paradigm in safety. Both complexity theory and new approaches to leadership have contributed to our emerging understanding of what is next. A few companies are beginning to take steps toward replacing outmoded models with new and better ones in service of creating workplaces where both safety and business performance are enhanced. About the Authors…. Ray Master is the Director of Loss Prevention/Safety Consulting with Construction Risk Partners. He is accountable for the design and delivery of the firm’s safety consulting services. The offering aspires to challenge conventional thinking in construction safety in providing both safety management system optimization and safety culture/ performance enhancement. He has over 25 years of experience in construction safety spanning a wide range of industries to include heavy, power, process, high-rise buildings, oil/gas, marine, transportation, hazardous material clean-up and emergency response. Rick Strycker is the co-founder of WhyNot Partnering, a global company committed to creating workplaces where people thrive, offering support for enabling Why-Based Organizations and Why-Based Safety. Rick has been working with organizations for 30 years to produce extraordinary results. He has developed unique approaches to leadership, safety, and high performance all over the world mainly in high risk industries.

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FEEDBACK IS CRITICAL FOR IMPROVED RESULTS By: PAUL ANOVICK

  Effective communication is essential for your success as a

leader. Giving and receiving feedback is the most important part of communication. Most people in the workplace suffer from a lack of performance feedback, which hinders their ability to grow.   If you ask people when feedback occurs, they will mention the annual performance review or a corrective action received after a mistake or wrongdoing. Effective feedback happens all the time. When you are listening, speaking and providing direction for a project all of this qualifies as feedback.   Think about it. When a person exceeds your expectations, or fails to measure up, would it be ideal to wait until the annual performance review? Of course not! Feedback should be part of your daily routine and your staff should know that it is not only welcome, but strongly encouraged.   Positive feedback is an opportunity to motivate. When you praise activity you will have employees repeat that action because now they know this is a job well done. When you thank people for a good job hopefully it will inspire greater commitment in those already performing well. Feedback can be energizing; there is a direct link to increased employee satisfaction and productivity.   Feedback is one of the most cost effective performance management tools available, yet most people tell us they don’t get enough feedback or worse, none at all. Employees prefer corrective feedback, 57%, to 43% for praise and recognition according to this HBR article. In the same HBR article it turns out most people like getting feedback more than giving it. In my opinion most managers don’t know how to provide effective feedback, and that is why it is avoided. Five steps in providing effective feedback. 1. Make feedback a positive process and experience. Take the time to gather information and evidence that will allow you to describe the following: Specific Behavior → Impact of the Behavior → What you suggest the person do differently 2. Make feedback a regular occurrence. If you give feedback on a regular basis, people will become more comfortable with your comments and observations. They will trust that you’re invested in their growth and development. 3. Be specific with your feedback. The more specific the feedback, the better the results. Prepare your comments, use effective language, and communicate the importance and consequences of their specific actions.

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4. Deliver feedback in a supportive climate. This is about their success. Be clear about what is right and what is wrong. You are there to provide help for them to achieve their goals and meet the company’s expectations. 5. Follow up with an action plan for performance improvement. Review progress against the goals; provide measurements and deadlines, and any training that is required. Help provide practice in improving the behavior or action. Turn specific feedback into actionable improvement. Feedback is a good thing!   In order to dramatically improve performance you must improve the performer. In your life think of the times you have experienced personal growth, no doubt there was a mentor, coach, parent or respected individual that gave you meaningful feedback. At the time it may not have been what you wanted to hear, possibly unpleasant, but it provided the opportunity for significant growth when you embraced the feedback. As a leader you are responsible for the growth and health of your company. In order to improve performance you must improve the performers, the most effective way to achieve this is with feedback.   When I was a sales manager early in my career the company had a consultant spend a week with my staff and I. At the end of the week he provided feedback, which was very helpful, and I was able to learn and grow from the process. One of his comments was that I had created a very performance driven culture which he described as “grow or go”, at the time I wasn’t certain if it was meant as a positive. Now I consider it a positive; feedback is critical for improved results. To grow your company you need improved results.   As a leader you are responsible for the growth and health of your company. In order to improve performance you must improve the performers. The most effective way to achieve this is with feedback. About the Author...Paul Anovick is an Executive Coach, facilitator and public speaker who partners with C-suite executives, industry leaders and entrepreneurs, to develop strategies, plans and processes that produce results for them and their organizations.

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THE COLLEGE TUITION BENEFIT PROGRAM Provide Your Employees With The Opportunity To Manage One Of Today’s Top Financial Concerns Assistance With Paying For College

By: Nancy Damato, Partner, RDA Benefit Services Consider these recent statistics, according to various sources:   • Nearly 60% of today’s students worry about having enough money to pay for college.   • 64% of students today use student loans to pay for college.   • The average class of 2015 graduate will have to pay back just over $35,000 in loans.   • More students are taking out loans today—about 71%, compared to just 36% a few years ago.   Imagine an employer telling a valued or prospective employee: “At our company, we now offer employees the opportunity to provide children, grandchildren, or even children of a friend with College Tuition REWARDS, as they save for retirement!”   Through an exclusive arrangement with RDA Benefit Services, LLC and Sage Scholarships, Inc., THE College Tuition Benefit REWARDS Program is available to UTCA member firms with at least 50 employees. And it can be offered to both Union and NonUnion employees. The College Tuition Benefit REWARDS Program   • Tuition Rewards is the nation’s 1st and largest college savings plan, devoted exclusively to private colleges and universities.   • This program gives up to one full year of FREE College Tuition.   • There are now over 350 colleges and universities in 46 states participating. Neither colleges nor families pay a fee to participate.   • About one-third of the schools that participate are in the National Association of Independent Colleges and Universities (NAICU).   • 80% of these colleges have earned an “America’s Best” ranking from U.S. News and World Reports.   • In 2015, $45.1 million of Tuition Rewards was redeemed at more than 345 participating colleges.

  • 300,000+ enrolled students in all 50 states.   • Assets saved by 280,000 participating families in all 50 states: approximately $8+ billion.   • Many assets are intergenerational (parents and grandparents).   As we approach the fourth quarter, when employers are reevaluating the benefit programs they offer to employees, we encourage you to consider offering this valuable program as an addition to your benefits portfolio. This program allows an employee to provide any child they know these College Tuition Rewards to help pay for college.   In order to offer the College Tuition Benefit Program, employers must also offer Voluntary Benefits. These include life and disability insurance, critical illness, cancer, accident and hospitalization gap insurance. These benefits provide strong supplemental coverage to the core benefits that are offered to employees.   Here’s how it works… if the employer offers a 401k plan or the union employees participate in the Union Annuity retirement plan, the employee gets an initial Scholarship REWARD of 500 tuition rewards. One tuition reward equals one dollar - and the rewards will grow each year in their account by an amount equal to 5% of the employee’s 401(k) or Annuity account balance.   Example: An employee has $40,000 in his 401(k) or Union Annuity account. The employee enrolls in the College REWARDS program and receives the initial $500. The following year, the employee’s college rewards account will grow by 5% of $40,000 = $2,000 college tuition rewards. And each year thereafter, the employee would get an additional 5% of their 401k account balance in tuition rewards.   While there is no maximum limit on what an employee can accumulate in REWARD credits, each student selected may redeem up to the current cost of ONE YEAR OF COLLEGE TUITION at

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the participating school of their choice. This one year savings will be deducted over the four year period that the student is in school. When the student is ready for the first year in a participating college, the selected college will be notified that this student will be redeeming College REWARD credits.   Simply, employees may sign up for The College Tuition REWARDS Program by meeting with an enrollment counselor for a few minutes. At the same time, they will have an opportunity to learn about the special voluntary benefits. These benefits are paid for by the employee through payroll deduction, are price-fixed and are fully portable. If your group currently has voluntary benefits in place, we are able to offer special conversion provisions to transfer the benefits. What are the Benefits for the Employer? 1. Cost to the employer is ZERO. By endorsing The College Tuition Benefits REWARDS Program, the employer is giving their employees the opportunity to send children to schools that they might otherwise not be able to attend, and have it cost the employer nothing. 2. Cost to the employee is also ZERO for participating in this program.

3. Retain and attract key skilled employees. As the market for skilled workers becomes tighter, this employee benefit allows a company to provide a valuable addition to its compensation package. 4. Reduce loans from employees. Loans from 401(k) plans may be reduced as employees now realize they lose out on their College REWARDS if they take loans from their plan. If their yearend balance is reduced, so are the amounts of their annual College REWARDS match.   So How Does Your Company Get Started? Contact Nancy Damato, RDA Benefit Services, LLC (855-693-0772 toll-free) and let us know of your interest to implement The College Tuition Benefit REWARDS Program. We will provide you with additional details about this program and the benefits to both the employer and the employees. We encourage you to consider adding this program to your benefits portfolio. And we look forward to having you join the many UTCA members firms that are already participating in this unique program!

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bank/financial institution, and are subject to risk, including loss of principal invested.

About the Authors…. John J. Higgins is an investment advisor representative of Commonwealth Financial Network and has over 20 years of experience in the financial services industry. John provides comprehensive financial planning and consulting services to individuals and closely held businesses, with a focus on retirement planning. John can be reached at john@ psabenefits.com Kelly A. Kurtz has over twenty years of experience designing and implementing Defined Contribution Plans, including managing overall plan operations and administration. She holds a B.A. degree from Montclair State College, and has earned the designations of Certified Pension Consultant (CPC), Qualified Plan Financial Consultant (QPFC) and Qualified Pension Administrator (QPA). She is also a member of the American Society of Pension Professionals & Actuaries and the National Association of Plan Advisors. Kelly can be reached at kelly@ psabenefits.com

  With respect to the termination of a contract the NJDOT “will make payment for the items completed” and for “the work in the order of termination, including work that was not in the Contract.”   “Payment for the items completed” seems straight forward enough. However, like costs associated with suspension of work, a contractor should be sure to consider a broad range of costs associated with additional work associated with terminating the contract including “work not in the contract”. These may include equipment and material costs for items rented or purchased; home office overhead for the shut down of the job; and costs which may be associated with termination of subcontracts. Financing costs may also be recoverable.   Contractors should be mindful of these issues and potential damages when faced with suspension or termination of a contract. Be sure to document costs, and develop a strategy that aims at avoiding or reducing exposure to many of the adverse consequences that can follow the suspension or termination of a contract. The information contained herein is for informational purposes only as a service to the public, and is not legal advice or a substitute for legal counsel, nor does it constitute advertising or a solicitation.

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What employers need to know   Even though the Court did not provide a bright line rule, it gave employers a number of prudent precautions to consider implementing: • Establishing and applying procedures for determining what accommodations are necessary and appropriate; • Training supervisors on how to recognize and respond to the accommodation needs of pregnant employees; and • Considering pregnant employees when discussing accommodation policies.   Take these factors into consideration when you create or modify your company policy for handling accommodations for employees. 74

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DEPARTMENT OF LABOR FIDUCIARY RULE Why CFO’s Need To Revisit 401k Service Providers By: Michael Meyers, Mountain Hill Investment Partners   Offering a retirement plan can be one of the most challenging, yet rewarding, decisions an employer can make. The employees participating in the plan, their beneficiaries, and the employer (plan sponsor), all benefit when a retirement plan is in place. Employees are given an opportunity to save for a secure retirement and plan sponsors enhance their own ability to attract and retain talent. Administering a plan and managing its assets, however, requires certain actions and involves specific fiduciary responsibilities, and the decisions you make can significantly impact employee engagement and savings behavior.   Plan sponsors will often use an internal administrative committee or human resources department to manage some or all of a plan’s day-to-day operations, and this group typically reports to the CFO. As the plan sponsor, you are considered a fiduciary to the plan under the Employee Retirement Income Security Act (ERISA), and as such, you are subject to strict standards of conduct. These standards of conduct are designed to provide protections for plan participants; the Department of Labor (DOL) has oversight and provides ongoing guidance and enforcement of the ERISA fiduciary rules.   Plan sponsors might work with an advisor as well. The advisor’s role is to assist in the selection of service providers, select and monitor investment options subject to the guidelines set forth in the investment policy statement (IPS), and provide ongoing advice and education to participants. Department of Labor Fiduciary Rule:   In April of this year, after six years of development and debate, the Department of Labor released the final version of its fiduciary rule with an applicability date of April 10, 2017. The rule requires that advisors who oversee retirement accounts (including 401k plans), put their clients’ best interest ahead of their own by mandating that they too follow a fiduciary standard. Specifically, it states any individual “receiving compensation for making investment recommendations that are individualized or specifically directed to a particular plan sponsor running a retirement plan, plan participant, or IRA owner for consideration in making a retirement investment decision” is a fiduciary. Many advisors associated with brokerage firms, insurance companies, and mutual fund companies, are held to a weaker “suitability standard”. The suitability standard only requires that a recommendation meet the needs of a client, not that it serves their best interest. Why is this important to UTCA Members?   With many 401k plan sponsors using an advisor, the DOL rule is likely an important issue for UTCA member firms. In the past, after a 401k plan was set up, plan documents were finalized, and investment options were selected, the plan was largely left alone. But with increasing scrutiny placed on the fiduciary role of the plan sponsor, and now the advisor, CFO’s are realizing that they can’t simply “set it and forget it”. As a plan sponsor, you have important fiduciary responsibilities when acting on behalf of your

plan participants. The DOL has made these very clear and they include:   • Acting solely in the interest of plan participants and their beneficiaries and with the exclusive purpose of providing benefits to them;   • Carrying out their duties prudently;   • Following the plan documents (unless inconsistent with ERISA);   • Diversifying plan investments; and   • Paying only reasonable plan expenses.   Carrying out your duties prudently requires expertise in many areas, particularly investments. Investment decisions are critical ones and could expose plan sponsors to risk if they do not meet the standard of care required by ERISA. For plan sponsors who don’t have the necessary expertise or resources in-house to make decisions regarding investments, working with an advisor who does is impertive. But is the advisor taking on fiduciary accountability and mitigating your risk? Many plan sponsors don’t have a clear understanding of whether or not their advisor has been acting as a fiduciary and now is a good time to clarify that relationship. About The Author . . .Michael Meyers is a Partner at Mountain Hill Investment Partners, an SEC registered investment advisor located in Atlantic Highlands, NJ. Mike is the lead relationship manager for the firm’s 401k services department. He can be reached by phone at 732291-3338, or via email at mikemeyers@mhipartners.com .

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The Pipeline

By: Dennis Hart, Director Of Utility Operations   All of you know the importance of the New Jersey Environmental Infrastructure Financing Program (EIFP) which is a joint funding effort of the New Jersey Department of Environmental Protection and the New Jersey Environmental Infrastructure Trust. Since issuing its first loan in 1987, the NJEIFP has issued approximately 1,300 long-term project loans totaling over $6.5 billion for water quality and public health related environmental infrastructure projects. In the past twenty-nine years, the NJEIFP has reduced total interest costs for municipalities, counties, authorities and public and private water utilities on average, thirty-five percent (35%) of each borrower’s original loan balance producing interest savings for taxpayers and ratepayers of $2.3 billion. The financial benefits of the Financing Program have spurred significant improvements to the State’s water quality through construction of clean water and drinking water infrastructure, and have served as a major catalyst for economic and job growth throughout the State.   As an industry it is important for each of us to be advocates for the program and in our encounters with municipal, county and utility authority officials to remind them of the substantial savings offered by the program. Along with this, the association is working in Trenton to develop legislation which would require all government borrowers to at least meet with the NJEIFP to review the financial savings offered by the Program prior to getting state approval to borrow money on their own. The significant savings can be used to reduce project costs to the taxpayers and ratepayers as well as allowing them to fund additional projects.   As the program begins its 30th year of funding it is important to know that there are many new features being implemented. New in SFY2017, the Financing Program is offering applicants the ability to submit loan applications throughout the year. In addition, the Financing Program is offering longer loan maturities and further assistance to borrowers in implementing an Asset Management Plan (AMP) at their respective facilities to maximize the re82

turn on investment of public funds. The Financing Program is now offering loan terms up to 30 years for qualified projects, lowering the annual repayment obligation for municipalities and systems, thereby making the Financing Program more affordable and attractive for local communities that are in need of environmental infrastructure. With the Program in compliance with new federal requirements enacted under the Water Resources Reform and Development Act (WRRDA), NJEIT will assist Borrowers with developing and implementing a Fiscal Sustainability (Asset Management) Plan. Certain costs associated with the design and construction of an AMP are eligible for funding through the NJEIFP.   The Base SFY2017 NJEIFP Financing Program will continue to offer twenty-five percent (25%) market rate loans to eligible participants due to DEP’s agreement to finance seventy-five percent (75%) of each project with its zero percent (0%) interest cost funds. Such loans to borrowers include a higher relative proportion of 0% interest funds from the DEP than in earlier Financing Program years when the DEP and the Trust each provided fifty percent (50%) of the funds for Financing Program. On a $1 million loan, zero percent (0%) interest funds for 75% of project costs, translates into additional interest savings over 20 years equal to $114,000, or 11.4% of a borrower’s loan amount above what NJEIFP’s low rates already save these borrowers. The SFY2017 Base NJEIFP Financing Program builds on other significant components of the SFY2016 NJEIFP Financing Program including:   • Dedicating $3 million of funds for Principal Forgiveness Loans (“PFLs”) for stormwater runoff mitigation infrastructure projects in the Barnegat Bay Watershed to continue addressing the critical water quality issues confronting this important State asset with the following funding terms:    1. Fifty percent (50%) Principal Forgiveness Loans (PFLs) from the DEP;

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A BLUEPRINT FOR TOMORROW By: Assemblyman Gary S. Schaer   Each time we tackle the state budget, we are reminded that it is

a living, breathing organic document that, at its core, fundamentally reflect our priorities. This year, that reminder was all the more potent.   Having recently finished crafting the FY 2017 Appropriations Act, it has become apparent that we are at a crossroads. While we have gradually lifted our state out of a recession, albeit more slowly than the rest of the nation, it’s time to start focusing on a strategic plan for our future.   We cannot expect to move forward as a state by leaving our most vulnerable residents behind. Providing people with the hand up they need is not incompatible with fiscal responsibility, indeed it is fundamentally necessary. In fact, both must be central to any plan for our state’s progress.   At the same time, we cannot expect to grow as a state without planting the proper seeds. One of the reasons New Jersey’s economy has lagged far behind most of the nation since the Great Recession is because we have failed to make the proper investments to facilitate our growth and capitalize on our strengths.   Much of the recent conversation in Trenton has focused on the impending bankruptcy of the Transportation Trust Fund and the projects that have been halted as a result of our failure to reach a consensus on how we replenish this fund moving forward.   While the current delay is unacceptable, I have no doubt that we will reach an agreement in the near future that will put people back to work and provide the funding for solid infrastructure improvements. There is no other option. We must because a strong transportation infrastructure is central in supporting the flow of commerce and growing our economy.   But when we talk about infrastructure investments, we must also look beyond our transportation network to our water and sewer infrastructure, our energy supply and our educational system, all of which are fundamental to growth and prosperity.   Our aging environmental infrastructure demands that we find ways to aid local governments in undertaking cost-effective upgrades and innovations, which is why I recently sponsored legislation (A-1649) that will enable them to do just that.   This bill would require local governments and authorities seeking to finance $1 million or more for an environmental infrastructure project to request an estimate of financing costs from the New Jersey Environmental Infrastructure Trust (NJEIT).   The NJEIT is an independent state financing authority responsible for providing and administering low interest rate loans to qualified municipalities, counties, regional authorities, and water purveyors in New Jersey for the purpose of financing water quality infrastructure projects that enhance ground and surface water resources, ensure the safety of drinking water supplies, protect the public health and make responsible and sustainable economic development possible.   Not only does the NJEIT offer extraordinarily competitive interest rates around, but by making financing estimates easily available

to local government units, they will be able to evaluate the potential savings of financing and interest costs offered through the Trust compared to other available methods of financing the project. Our goal is to save taxpayer dollars while protecting our water quality and putting people to work.   We need to adopt a similar approach when it comes to investing in our energy infrastructure, which is why I sponsored another piece of legislation (A-1672) that takes advantage of cutting edge technology to aid communities in investing in solar energy.   The legislation would establish the Neighborhood Solar Energy Investment Program to create new avenues for the average family to upgrade to more environmentally-friendly and cost-effective solar energy programs. A customer who invests in a solar energy project would also be credited on their electric utility bill for the amount of energy their solar investment produces.   The program will provide an opportunity for more families to reduce their monthly utility bills and their carbon footprint. With this legislation, many more residents will see firsthand the benefits of utilizing solar energy in their homes. This is smart, pro-consumer legislation that will also protect the environment. Making the change to solar energy is an investment in the future.   Another key element to growing our economy is recognizing our strengths and continuing to cultivate them. In New Jersey, one of our greatest strengths is our formidable pharmaceutical and biotechnology industry. It’s crucial that we partner with leaders in the industry and capitalize on our talent to further its growth, which is why I sponsored legislation (AJR-46) to create a biotechnology taskforce.   In the early ‘90’s, New Jersey had approximately 50 biotechnology companies located in the state. That number has since increased to 379, including many of the largest biotech companies in the world, in large part because of various task forces created by the Legislature that fostered initiatives to bolster the industry in our state. Today, our biotechnology industry plays a pivotal role in New Jersey’s economy, representing thousands of jobs and hundreds of companies, as well as billions of dollars in economic activity and tax revenue each year.   Due to the pivotal role this industry plays, it is important that we study ways to retain and attract new companies and, once again, increase communication between state government and the industry. The nine-member task force created under my legislation would be charged with doing just that. This measure recently received near unanimous approval from the Legislature and is now awaiting action from the Governor.

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   2. Twenty-five percent (25%) zero interest rate loan from the DEP; and    3. Twenty-five percent (25%) AAA-market rate loan from the Trust.   • Dedicating a maximum of $3 million of funds for PFLs for Combined Sewer Overflow (CSO) Abatement projects with a focus on utilizing green practices (such as green roofs, rain gardens, porous pavement, and other activities that maintain and restore natural hydrology through infiltration, evapotranspiration, the harvesting of stormwater). Funding terms are similar to the 50/25/25 financing terms above, and a project sponsor is limited to $1 million of principal forgiveness.   • Offering loans at an interest rate of zero percent (0%) financing to communities in a CSO sewer-shed sponsoring construction projects that reduce or eliminate excessive infiltration/inflow or extraneous flows (with loan terms up to 30 years).   • Removing the Financing Program’s existing caps for emergency, supplemental and short-term loans.   • Dedicating up to 30% of the Drinking Water capitalization grant in subsidized loans to small-system DW projects (those serving a population of 10,000 or less) by offering a loan package that consists of loan terms consistent with the 50/25/25 financing schedule discussed above as well as the waiver of certain administrative and underwriting fees associated with the base Financing Program. Larger water systems which are willing to take ownership of small water systems in the calendar year 2015 or later, and make needed capital improvements, will also be eligible for the same enhanced loan terms as the otherwise eligible small water system. A portion of these funds, up to $500,000, is dedicated for Very Small Water Systems (those serving a population of 500 or less) as 100% PFLs. 90

  These are only a few of the important changes being made to the program. Additional information can be found in the Program’s May 2017 report to the Legislature posted on www.njeit.org.

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  One of the reasons this industry has been attracted to New Jersey and has been met with much success is because of our highly educated workforce, which is perhaps our greatest asset as a state.   When it comes to planning for our future, the best investment we can make is in our people, which is why I have always been an advocate for increased educational investments. In the coming months, I will be introducing a comprehensive higher education legislative package in coordination with my Assembly colleagues focused on better preparing our high school students for college, making college more affordable once they get there, and tying higher education to the state’s economic need to ensure employment opportunities once they graduate. Ultimately, we need to make sure we are investing in the workforce of tomorrow and not just today.   Financial crises like the Great Recession often force us to narrow our vision until we mitigate the crisis. With the recession firmly behind us, we can no longer afford tunnel vision when it comes to investing in our future. We need a blueprint for tomorrow and we need it today.   Assemblyman Gary Schaer is Chair of the Assembly Budget Committee and represents the 36th legislative district in Bergen and Passaic counties. Utility and Transportation Contractor, AUGUST 2016


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