Utility & Transportation Contractor August 2024

Utility & Transportation

contracTOR

underground utilities corp. marks 30 years in business

AUGUST 2024

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de i s n

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s: year 0 5 s rate nce in b e l e e cell um c with cy of ex ervices a s a leg ruction t cons

president’s message

From the desk of: gerard burdi

A

s we reach the dog days of summer, the construction industry is in high gear with record amounts of funding being invested in infrastructure projects. One of the more noteworthy projects in the news recently is the $16 billion Gateway Project which has secured $6 billion in federal funding that will allow the project to move forward.

Gateway includes construction of a new Hudson River rail tunnel and extensive related projects to build what is often referred to as America’s most critical infrastructure project. UTCA is working hard to make sure New Jersey contractors have the opportunity to bid on the many jobs that make up this massive project. In fact, we had a very productive meeting with the Gateway Development Commission which has agreed to divide the work into smaller projects that could be bid on and performed by New Jersey contractors.

The state, too is investing record amounts in infrastructure. The New Jersey Water Bank surpassed $1 billion in project financing over the past year for clean water projects, including lead service line replacement, installation of PFAS treatment systems, improvements to stormwater and wastewater systems and flood mitigation. The Water Bank is a unique partnership between the New Jersey Department of Environmental Protection and the New Jersey Infrastructure Bank, which is chaired

by UTCA CEO Bob Briant.

Of course, all of this investment is meaningless if the projects are not put out to bid and UTCA has been leading the charge to expedite the design and permitting process. While there is still room for improvement in this regard, the New Jersey Department of Transportation (DOT) awarded a record $1.2 billion in projects over the past year which can be partially attributed to their decision to nearly double their investment in design consultant contracts.

As we are now into the warmest part of the year, the issue of heat stress has taken center stage with a bill moving quickly through the State Legislature that would set a heat standard in New Jersey that would require contractors to take certain actions, including delaying certain tasks and providing work breaks, during periods of high heat.

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While this bill stalled before the Legislature recessed in June, the US Occupational Safety and Health Administration (OSHA) released a draft rule that would set a national heat standard. UTCA staff engaged with lawmakers and the Governor’s Office as well as our federal partners to make it clear that our contractors are completely committed to protecting their employees from the dangers of heat stress but these approaches, while well-intentioned, could jeopardize critical infrastructure projects.

In some good news for the industry, UTCA’s Specifications Committee was able to schedule quarterly meetings with the DOT for the upcoming year. This will ensure key DOT staff are available to address issues related to specifications while providing continuity to our efforts.

In addition, UTCA’s Safety Committee met last month and is continuing to raise awareness of the New Jesey Workzone Safety Partnership’s accountability campaign which aims to promote personal accountability on job sites.

It may be hard to believe but the UTCA Convention is right around the corner.

Folks from across the industry will come together at the Borgata Hotel & Casino in Atlantic City from September 26-28. Per tradition, the Convention will kick-off with hundreds of golfers teeing it up at Atlantic City Country Club and Galloway National Golf Club.

Finally, I want to congratulate Underground Utilities Corporation on commemorating its 30th year in business, which is quite an achievement in this extremely competitive industry. Congratulations are also in order for Withum which is celebrating 50 years of success in accounting, tax, audit and advisory services.

Gerard L. Burdi

CONTENTS

Cover story 46 underground utilities corp. marks 30 years in business

46

DEPARTMENTS

features

2 President’s Message 7 Financial Overview 17 Legal Dig 25 Accounting Corner 33 Legislative News 59 Labor relations 79 safety perspective

67 withum celebrates 50 years:

a legacy of excellence in construction services

NEWS 89 children's eye health & safety

Published Bimonthly During 2024

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Publisher: Robert A. Briant, Jr. Editor: Helene Nasdeo Editorial Contributors: Ryan Sharpe, Dan Neville Advertising Manager: Helene Nasdeo Production/Graphics: Lauren Hagan, Helene Nasdeo Circulation: Helene Nasdeo Printed By: American Plus Printers 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.

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Utility & Transportation Contractor | august| 2024 3

by: william j. ruckert iii, senior vice president of middle marketing - provident bank

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anks can be the construction industry’s best friend when providing companies with strategic insight and creative financing solutions based on current and accurate financial information as well as active dialogue. These mutually beneficial relationships allow both parties to meet, or even exceed each other’s expectations. Unfortunately, many banks’ view of the industry, from contractors to subcontractors, suppliers and even surety agents, are still a riddle wrapped in a mystery inside an enigma.

I’d like to clear up some of the riddles about the lending process so that you’re ready to leverage your banking relationship when the time comes.

1. What does the bank consider to be the most important aspect of a lending relationship?

Banks continue to use the “5 C’s of Credit” to determine the credit worthiness of potential borrowers and their risk of default.

Of the 5 C’s—Character, Capacity, Capital, Collateral, and Conditions—Character carries the most weight as it does with your own customers. Banks want to ensure that borrowers are dependable and trustworthy, so loans are repaid in the agreed upon fashion. If borrowers don’t have the character to make good on the repayment of a loan, the rest of the C’s hardly matter.

2. What’s a major red flag for banks initiating or expanding a lending relationship?

Poor financial reporting. Banks use financial statements to assess borrowers’ ability to repay loans. If your statements don’t conform to the 3 T’s—Transparency (honesty and accessibility) Timeliness (relevance to the company, its supporting entities and the reporting period) and Typicality (follows prescribed reporting models and generally accepted accounting principles (GAAP)), banks will consider it a major red flag, which will be detrimental to your ability to borrow.

3. How much emphasis does a bank place on WIP and Back Log reports?

Work in Progress and Back Log reports are a critical determining factor in the lending process. It’s imperative that you keep accurate and updated reports on current jobs that include the original and revised contract amount, the original estimated cost and profit, actual cost incurred to date, and revised estimated

cost to complete. A bank’s lending decisions will weigh heavily on how you’re performing on current jobs and how much work you’ve secured in the future.

4. Why is a personal guarantee so important to banks?

A personal guarantee alone is an unsecured promise from an individual to make loan payments when a business is unable to do so. It’s another way for the bank to ensure recovery of its money.

By putting their personal finances—which are often tied up with the business anyway—on the line, business owners are more committed to repaying their debts. They have put skin in the game. A personal guarantee is also a reflection of the number one C: Character.

Financial overview

8 lending faqs you should know the answers to in 2024

5. Why don’t banks lend on retainage?

Banks will not take retainage into account when considering lending to your company because there is no guarantee when or if it will be paid in full. Banks can’t lend on such uncertainties. Projects can be delayed or unfinished for reasons outside the borrower’s control; that’s not reassuring to a bank risking its assets.

6. How does a capital expenditure line of credit work and what are the benefits?

A Capital Expenditure Line of Credit (CAPEX LOC) allows you to purchase fixed assets (like new or used equipment, real estate, or leasehold improvements) that add long-term value to the business without tying up working capital. After establishing a pre-approved CAPEX LOC, you may draw on it when necessary to fund those acquisitions and even take multiple advances of the line during the year. At some point later in the year, outstanding balances are converted into an agreed upon term loan at a competitive fixed or floating interest rate.

The benefits of CAPEX LOCs are numerous, including freeing up working capital, improving cash flow, streamlining the funding of fixed asset acquisitions and knowing you have financing in place when needed.

7. How do I increase my working capital line of credit, especially during early season start-up phase?

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Financial overview

This is a conundrum many seasonal companies face. The most common solution is a “seasonal over-ride” that is short term in nature (i.e. 90-120 days) to allow the borrower to rebuild cash flow. It can be added to the existing line of credit or extended as a ‘time’ note. Borrowers should obtain a formal commitment from their bank to ensure that financial support will be in place when it’s needed.

8. Can I borrow against the equity in my equipment?

Yes. If you own heavy construction equipment, you can use it as collateral to secure a working capital line of credit, or you can refinance it, providing a cash infusion. This is an easy, quick and unfettered way to recapitalize the balance sheet, gain cash flow relief and use the cash for other business purposes.

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When information from both the Bank and the company is pro-active and understood, then everyone can rely on John Hiatt’s words…’Have a little faith in me.’

About The Author . . .Wm. J. Ruckert III is Senior Vice President of Middle Market Lending at Provident Bank. Based in Provident’s Sea Girt office, Ruckert oversees commercial financing for privately held middle market companies in the Bank’s footprint. He holds a bachelor’s degree in business administration from Loyola College in Maryland.

U.S. district court blocks portions of the department of labor's new rule updating the davis-bacon act and related acts regulations

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n October 23, 2023, more than 50 significant changes to the Davis-Bacon and Related Acts Regulations (DBRA) regarding prevailing wages went into effect. One of the biggest changes is the ability of contracting officers to enforce the prevailing wage standards. The original act had no enforcement provisions in place, but the changes now permit withholding, terminating, or debarment as consequences for non-compliance.

Other significant changes include (1) a new requirement for contractors to provide weekly certified payroll records and maintain them for a three-year period; (2) a broader definition of “prime contractor” that now includes “any person that enters into a contract with an agency;” (3) more activities are defined as construction, including transportation; (4) new classes of workers were added including surveyors, truckers, prefabrication, and material suppliers; and (5) standards of determining wage rates are variable.

on construction sites. The Court reviewed the DBRA and found the it refers only to “mechanics and laborers employed directly on the site of the work,” and the plain language excludes truckers and employees who do not work directly on the project site from individuals covered under the DBRA.

Legal Dig

By: nicholas a. sullivan, esq.

The temporary injunction is effective nationwide pending the outcome of the Associated General Contractors lawsuit. All contractors must be mindful of the October 2023 Rule changes and the ongoing litigation that could change the scope and effectiveness of the Rule changes.

Following the enactment of the October 2023 Rule changes to the DBRA, in November 2023, the Associated General Contractors of America filed a lawsuit in the U.S. District Court for the Northern District of Texas challenging the changes. The Associated General Contractors argued the DBRA only applies to mechanics and laborers employed directly upon the site of the work and the October 2023 Rule changes seek to impermissibly extend coverage to delivery truck drivers.

Further, the Associated General Contractors argued that the DBRA should not be retroactively applied to qualifying contracts that did not include requirements for application of the DBRA because the DBRA expressly requires public contracts contain DBRA provisions for the requirements to be applied.

On June 24, 2024, a federal judge issued a temporary injunction blocking the enforcement of certain portions of the October 2023 Rule changes to the DBRA. The U.S. District Court noted the United States Department of Labor (Department) lacks the power to impose prevailing wage requirements when government agencies do not explicitly include such requirements in contracts.

The Court determined these requirements conflict with basic contract construction and due process requirements. The Court noted the retroactive application of DBRA requirements to qualifying contracts does not give sufficient notice to contractors of the applicability of the DBRA requirements after the contractors have entered into such contracts and commenced work on the projects. Further, the Court determined the Department lacks the authority to extend such requirements to truck drivers who work

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the sour taste of taxes By: william c. Mcnamara, cpa, ccifp

Without sounding overly dramatic, tax planning is going to be critical, a life-or-death consequence for your business. Wait, that is too much drama. Let us apply a little common sense. We know better than to ignore the expiration date on the milk carton in the fridge. If you ignore the TCJA sunset provisions, yes, the same sour taste will stay around for quite a while.

Tax experts anticipate that the retiring tax provisions will impact 60% of American tax filers. In 2010, the Bush era tax cuts were scheduled to expire. Congress unable to reach consensus, voted to extend those cuts to 2012 and then two years later voted to keep them in place permanently.

The TCJA was passed under a process known as reconciliation in the Senate chambers. Reconciliation allows for a bill to pass under a simple majority and not the required sixty votes. So yes, it is an easier way to pass a bill, but it does come with some rules. The bill must be budget related and not include non-budget changes. It cannot expand the nation’s deficit outside a 10-year budget window. These rules required the necessary compromises from what the original bill contained, so each side saved face. Today the two campaigns for President have positions in opposite directions. One side will only allow cuts that benefit the working class, the other side is looking to cut even more.

Good news first: Before we dive into some of the key individual tax provisions, let us identify some key Corporate Tax benefits under TCJA that do not sunset.

1. The corporate business tax rate of 21% was a permanent change. So, unless a new law is passed to repeal it, and there are considerations to do so, we keep the old fashion “C” corporation earnings taxed at a flat 21%.

2. The corporate alternative minimum tax (AMT) rate was eliminated. Thankfully, it too will not be resurrected without a new tax law being passed.

3. Net operating loss (NOL) carrybacks were eliminated, but NOLs were given endurance, by being pushed forward with

no expiration dates.

With the popularity of the pass-through-entity, like the “S” Corporation and the Limited Liability Company, we find our focus on individual tax savings and long-term strategies. With the exhaustion of the TCJA, we find ourselves looking at tax rates for individuals returning to taxable incomes above $426,700 taxed at 39.6% compared to the TCJA structure of 37% above $500,00.

Even the tax rates themselves slide backwards at sunset with existing rates at 10%-12%-22%-24%-32%-35%-37% compared to the old range of 10%-15%-25%-28%-33%-35%-39.6% The dollar thresholds to which the rates apply change, and the higher rates kick in on lower dollars.

Taxpayers should be aware the TCJA expanded the individual’s ability to use a higher standard deduction for federal reporting but that came at a cost. The TCJA reduced the amount of deductible itemized deductions on Schedule A for 1) mortgage interest and 2) state and local taxes (SALT). A work-around for the SALT tax limitation in states like New Jersey was the start-up of a Pass-Through-Entity tax provision. This provided some relief for “S” Corporation shareholders and LLC members on taxes paid at the pass-through-entity level for business earnings. This brings the two entity types into alignment with the flat 21% tax levels being charged to the “C” Corporations earnings.

Accounting Corner

T

he year 2025 has been looming on our tax calendar’s for quite a while now. The Tax Cuts and Job Act (TCJA) provisions will sunset and many of the current tax tools you have been using will no longer apply. What to do with the expiration of these laws is a challenging question. How we got here and why is an equally important discussion.

With the changing tax rate structures present, we need to think in terms of very simple tax strategies. An individual who can control the earnings being received should think in terms of effective timing. Taxes in many eyes are unavoidable. But the timing of both deductions and income are key factors. If the individual rates are going up, accelerating income into the time periods which remain under TCJA is one such strategy.

The opposite can be said for deductions, which become more valuable in periods in which we see higher rates. If the lower standard deduction returns, taxpayers may want to bundle their charitable giving to periods in which they will be deductible on their itemized Schedule A. The headline grabbing estate and gift tax exclusion catches the eye of most individuals. In 2017, an individual could exclude $5,490,000 of his/her assets from taxation. That amount was raised by TCJA and now sits at $13,600,000. Should the decedent not utilize the full exclusion, the unused portion can be claimed by the spouse and added to their exclusion base. These exclusion levels allow for an extraordinary amount of net worth to be

Utility & Transportation Contractor | august| 2024 25

sheltered and saved for future generations. So effectively utilizing these amounts becomes tricky. I would never advocate planning a client’s departure too early, but before the changes occur, gifting and the establishment of some trusts are all very real and very important considerations.

Accounting Corner

If you can and if you have not considered a gifting plan, the sun going down should be a strong influence. In 2024, you can give $18,000 to anyone, tax free. So, 529 Plans for grandchildren are one easy method. As your child works his/her summer job and earns a W-2 with $6,000 in box one, parents can give $6,000 to fund their child’s individual Roth IRA. Cash flow aside, these approaches offer easy tax pickings.

Long-term planning that will transcend a generation or two will require a bigger team. If you have significant net worth and have not yet begun serious conversations centering on an estate plan, now is the time. You and your team of advisors should be exploring a host of trusts to preserve some of the estate exclusion before it is reduced.

If you own a closely held business, the transfer of some ownership to a spouse or child needs to be considered. By transferring some of the value built into the family-owned business you can reduce the amount that is charged against your exclusion, and preserve enough to shelter your spouse as well.

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The urgency of course is to ensure proper planning and execution of key steps in an orderly manner. Business valuations may need to be obtained and they cannot be assembled in an abbreviated period. The pros and cons of different trusts should be examined and easy to understand models developed, so you can identify the positives and negatives of each. No one’s business or family is the same, so a tailored approach is required.

How the tax law will be shaped after the November Presidential election is too widely speculative and uncertain. The first one hundred days of a presidency is often a barometer for the remaining term, so action may occur quickly or not at all. The overlapping elements of good government, shared by the Republican and Democratic parties, are dwindling. The path forward will require compromise. How that can be achieved is the question. Solutions will need to be found that are fair, practical, and balanced.

About The Author . . . William C. McNamara, CPA, CCIFP is a founding partner at Woolston, Jensen & McNamara, LLC. For thirty-five years, Bill’s focus has centered on the dynamics of the family-owned business in the construction industry. Questions? You can reach Bill at bmcnamara@ wjmcpas.com or 732-542-0444.

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new corporate transit tax, pork spending lead to passage of state budget By: ryan sharpe, director of government affairs and communications

W

e have again reached that time of year when the Legislature has recessed after passage of the state budget, a period which often culminates in a flurry of legislative activity on scores of bills.

While some had advocated for an increase in the sales tax, the Legislature and Gov. Murphy ultimately agreed to establish a new tax on businesses with annual net profits exceeding $10 million. This Corporate Transit Fee is expected to produce revenues of about $800 million a year that are to be used to support NJ Transit which is facing a fiscal shortfall of around $767 million.

While business leaders assailed this new tax as making the state more unaffordable, some were pleased that it is scheduled to sunset after five years.

Additional legislation considered in recent months included bills to advance Gov. Murphy’s electrification mandates, require geotechnical testing on state transportation contracts and establish new qualifications for those who work on public works projects.

Also advancing was a measure that offers financial rewards for employees who report tax law violations committed by employers in the construction industry. While UTCA was opposing this and other bad polices, there was some positive news coming from Trenton.

In addition to passing the budget, the Legislature was extraordinarily active throughout the spring and right up until they recessed for the summer. One of the bills that was considered would establish a workplace heat standard which would trigger multiple employer requirements, including limiting work, when the temperature reaches 80 degrees.

A bill that would have imposed new requirements on surety companies--likely increasing the cost of surety bonds--has not moved forward since it advanced through a committee in March. In addition, a bill was introduced that would eliminate the requirement that public works contractors participate in an apprenticeship program.

Enacting these heat restrictions would negatively impact the industry by adding to project delays and increasing the cost of critical construction projects. In addition, it would likely result in limiting employment opportunities for New Jersey workers who are protected from heat stress by OSHA rules, contract language and through collective bargaining agreements.

There have also been positive developments in the utility sector of the industry, including the announcement from the US Environmental Protection Agency that New Jersey will receive $123 million to replace lead service lines. In addition, State Senator Vin Gopal introduced legislation that would provide $100 million to municipal water systems for planning and design grants for water infrastructure projects.

UTCA strongly opposed this legislation and engaged with the bill sponsor, legislative leaders and the Governor’s office to request an exemption for entities that engage in and support public works construction, including contractors, subcontractors and suppliers. Additionally, UTCA worked with its labor partners to seek other targeted amendments to the bill. As of this writing, the bill has not moved forward since its initial committee hearings.

Legislative News

As in years past, this year’s budget process saw lawmakers approve the annual state spending plan just ahead of the constitutionally mandated June 30 deadline. However, unlike in recent years, the state coffers were not flush with cash and the state faced a structural deficit. As such, lawmakers utilized more than $2 billion in deficit spending to craft the $56 billion budget which also included an additional $700 million for lawmakers’ pet projects.

Another bill UTCA opposed would change the definition of public highways to include boardwalks, thus allowing transportation local aid funding to be utilized for boardwalk construction projects. This bill would reduce funding for vital transportation needs, like road paving, bridge construction or mass transit improvements, in counties and municipalities throughout the state. In addition, including “boardwalk miles” in the local aid funding formula would benefit the handful of communities with boardwalks at the expense of the vast majority of communities without a boardwalk.

UTCA has also been forcefully opposing proposed federal funding cuts that would jeopardize critical water projects, including drinking water, stormwater and wastewater projects.

In a letter to members of Congress, UTCA called for additional funding for Clean Water and Safe Drinking Water State Revolving Funds (SRFs) which help finance water infrastructure projects in New Jersey and across the country. In addition, to advo-

Utility & Transportation Contractor | august| 2024 33

cating for additional, sustainable funding for SRFs, UTCA also urged lawmakers to halt the practice of reducing SRF funding through the earmark process.

UTCA also continues to advocate for funding for critical water projects as a member of the Clean Water, Healthy Families, Good Jobs Campaign which is a coalition of business, labor and environmental groups that aim to expand investment in New Jersey’s clean water infrastructure.

Legislative News

Also of note is the continuing effort to reform New Jersey’s soil hauling industry which resulted in what is often referred to as the “Dirty Dirt” law. While this bill passed and was signed into law over four years ago, the regulations governing soil hauling through A-901 licenses have yet to be issued. However, it is expected that proposed rules will be released this summer. The rules would go into effect 30 days after they have been adopted.

While the Legislature has slowed its pace, the political world which affects various aspects of the industry, is in a constant state of flux. In fact, we are already well into an unprecedented campaign season which saw President Biden drop out of the race. It is also important to note that control of the House and Senate— currently split between Republicans and Democrats-could flip this November.

Of course, one of those Senate seats was most recently held by New Jersey’s US Senator Bob Menendez who resigned after being convicted on charges of corruption, bribery and acting as a foreign agent. Democrat Congressman Andy Kim is considered the frontrunner to succeed Menendez in the Senate.

Despite the Senator’s legal woes, his son, Congressman Rob Menendez successfully fended off a primary challenge for his seat.

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Despite the elimination of the “county line” in the Democratic primaries, all of New Jersey’s Congressional delegation were successful in securing their party’s nomination. Another notable result from the June primary election was the victory by South Jersey businessman Curtis Bashaw who captured the Republican nomination and will take on Andy Kim for a US Senate seat that has been held by Democrats since 1972.

At the same time as the sordid details were emerging from the Menendez trial, another political bombshell dropped in New Jersey with the indictment of South Jersey political boss, George Norcross. While not an elected official, Norcross is a major figure in New Jersey politics and is closely aligned with former Senate President Steve Sweeney who is also a candidate for Governor.

In the indictment, Norcross is alleged to have used his substantial political influence to benefit his business interests.

While the effects of this indictment on next year’s race for New Jersey Governor are still unknown, the jockeying to replace the term-limited Phil Murphy continues unabated. Radio host Bill Spadea recently joined the Republican field which includes 2021 candidate Jack Ciattarelli and State Senator Jon Bramnick.

In addition to Sweeney, declared Democrat candidates include Jersey City Mayor Steve Fulop, Newark Mayor Ras Baraka and NJEA President Sean Spiller, while Congress members Mikie Sherrill and Josh Gottheimer are also said to be considering gubernatorial runs.

While the political world seems to be in a constant state of upheaval, we will be watching closely and will continue engaging with policymakers of all political stripes as we advocate for the infrastructure construction industry.

Cover Story

underground utilities corp.

marks 30 years in business with no plan to slow down By: Ryan Sharpe Director of Government Affairs and Communications

W

hen you turn onto the road leading to Underground Utilities Corporation you pass a number of older industrial buildings as you arrive at a 1960’s style, brick warehouse that serves as the company’s headquarters. However, instead of entering a dingy, cramped warehouse, visitors quickly find themselves in a spacious, modern office space, complete with a glass-windowed conference room and various pieces of state-of-the-art technology.

This stark change from the outside appearance provides a real-life example of the extensive history of Underground Utilities Corporation and how it has evolved into one of the premier underground utility contractors in and around New Jersey.

In 1971, newly arrived immigrant, Jose Gomes started learning the construction trade with an eye toward someday running his own company. 20 years of learning the construction business

through various roles culminated in Jose founding Underground Utilities Corporation in 1994. In the early years, Jose and the company’s handful of employees worked out of a basement in Newark before moving to their current location in Linden in 1996.

Underground Utilities Corporation initially performed mostly site work for both residential and commercial developments.

Soon they were awarded their first public contract; a sewer project for the Monroe Municipal Utility Authority which involved the installation of sewer pipes 52 feet underground.

Soon they began doing even more public work, including treatment plants, pump stations, and lead service line replacement.

After graduating from college, Jose’s son, Richard began working at Underground Utilities Corporation in 1995 and now runs the day-to-day operations which involves overseeing a division focusing on site work and a utility division. In addition, they have also expanded into the real estate sector.

While most of their work takes place in New Jersey, they will work anywhere in the tri-state area and have completed projects in both New York and Delaware. Services they now offer include water treatment plants and pump stations, site development, earthwork, underground utility construction, culverts, sewer line and water main construction, and storm drainage.

Among their many projects either in progress or completed include constructing a 30-foot-deep pump station in Metuchen and Edison, hanging water mains on Route 280 in Newark, and implementing the Port Reading Odor Control Project which involves replacing more than 2,000 feet of sewer line that, at one point, had to be routed underneath a New Jersey Turnpike sound

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wall. One of their upcoming projects will take place in Hoboken which, because of the loose and moist soil, will require driving deep pilings and the installation of concrete caps to set the pipes.

Another area in which they have experienced tremendous growth is the warehouse sector where their site work has proven extremely valuable to developers. Their “soup to nuts” service, which includes everything from excavation to curbing and line striping, has made them the “go-to” contractor for several major developers. In fact, they recently completed a 600,000 square foot warehouse in Mount Olive which required moving over 200,000 feet of earth.

“Being on the job site lets me see firsthand how a project is progressing and helps ensure that we are delivering a quality work product that meets the client’s needs,” said Richard. “While Underground Utilities Corporation has achieved great success, every member of our team remains fully committed to performing top-quality work for our customers.”

When asked what has allowed Underground Utilities Corporation to thrive in this industry for 30 years, Richard cites a number of factors. He notes the firm’s diversity of services and, in partic-

“The comprehensive services and quality work we provide is valuable to project owners and has allowed Underground Utilities Corporation to thrive in the construction industry,” said Richard. “Our relationships, reputation, and exceptional work product ensure that clients utilize the firm’s services over and over.”

While they have continued to grow over these many years, that growth has been fueled by focusing on the superior services they provide, and they have no plans to change their service offerings which continue to be in high demand.

Richard continues to be heavily involved in all aspects of the company operations, noting that he opens the office every day at 5am and has a hand in nearly every decision, including scheduling, equipment issues, bidding, change orders, and any of the other challenges that can come up on a daily basis.

He also tries to visit at least one job site every day which gives him unique insight into the projects that can’t be gained in the office. It is clear this hands-on approach, combined with Richard’s

Cover Story

In addition to their vast portfolio of public work, Underground Utilities Corporation has continued to provide site work in the private sector, mostly working with a few valued clients. Their relationships with a handful of developers provides them with a steady stream of work in residential and commercial development.

unsurpassed work ethic, has helped drive the firm’s incredible success.

ular its ability to perform both sitework and public and private construction. He feels this “hybrid model” has been key to their success in the industry.

He also mentions that Underground Utilities Corporation offers 24-7 service to their clients and often performs emergency work, noting that the night before this interview Underground crews were working late into the night to repair a broken water line in Jersey City. Richard also credits his staff for much of Underground’s success.

“My staff at Underground Utilities Corporation truly is a team and that is a huge part of why we are successful,” he said. “I’m only as good as they are, and I am so grateful for their hard work which has resulted in some remarkable achievements over the past 30 years.”

He takes pride in pointing out that a number of employees have been with the company for over 20 years and cites the excellent relationships that Underground Utilities Corporation has with its union partners.

Like others in the industry, Underground Utilities Corporation continues to contend with increased material costs that have remained high since the COVID-19 pandemic. However, they are optimistic about the future of the infrastructure construction

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industry and foresee continued growth, especially in the water sector.

Cover Story

Likewise, Richard is bullish on the future of Underground Utilities Corporation which he expects to continue to grow. In fact, while they plan to maintain their core service offerings, they expect to continue increasing their sales.

They also will continue to use their success to give back to their community, especially in Newark where the company was founded. Among the causes they continue to support are the Portuguese School, the Portuguese Sport Club, the Portugal Day Race, and various youth sports programs, including baseball, lacrosse, and flag football teams.

As for the future of Underground Utilities Corporation, Richard is hopeful that his teenaged children, Nicholas and Samantha and his niece Deanna, the daughter of his late sister, Sandra, will get involved in the business but has no plan to turn over the reins any time soon.

In the meantime, Richard and his team will continue to provide the high quality and vast array of services that have allowed them to embark on an unprecedented run of success over the last three decades. Congratulations to Underground Utilities Corporation on celebrating 30 years in business and we look forward to what the future holds.

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will new laws and regulations chill the construction industry's busiest season?

By: Othiamba n. lovelace, esq. and neesha mallavarapu, esq.

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he summer construction semester is now officially in session, and the New Jersey Department of Labor and Workforce Development (“NJDOL”) is, yet again, reminding those in the construction industry to ensure full compliance with New Jersey’s strict wage and hour laws.

The New Jersey Prevailing Wage Act (“NJ Wage Act”) sets the prevailing wages for workers engaged in public works and requires that laborers, apprentices, and other workers be paid the applicable prevailing wage rate for their specific craft, which is determined by the Commissioner of Labor and Workforce Development. The NJ Wage Act applies to all public works contracts awarded by the state, any political subdivision of the state or a regional school board, including those for the construction, demolition, repair and maintenance of schools, roads, water and sewer systems, airports, dams, and public buildings.

Under the NJ Wage Act, contractors are required to pay prevailing wage rates (including hourly, overtime, and applicable fringe benefit rates) on all public works projects valued above the applicable threshold, which is currently $19,375 for contracts awarded by municipalities and $2,000 for contracts awarded by other public entities, such as county agencies, municipal board of education, and utility authorities.

The new municipal prevailing wage threshold recently took effect on July 1, 2024, and reflects an increase from the prior $16,263 level. The threshold adjustment, which occurs every five years and is keyed to the Consumer Price Index, is intended to keep pace with inflation and the changing economic environment.

Contracts below the applicable thresholds will not be subject to the NJ Wage Act. New Jersey has also introduced a new statewide requirement for electronic payroll reports as part of its efforts to ensure compliance with prevailing wage laws, which could signal the state’s

In a surprising development earlier this year, even unions have been enlisted to aid in the government’s wage enforcement efforts. On January 8, 2024, Governor Phil Murphy signed S1438/ A5794 into law, amending the NJ Wage Act to permit unions to bring prevailing wage lawsuits on behalf of union and nonunion workers alike. The law took effect immediately. While New Jersey law previously allowed labor organizations to sue on behalf of the members they represent, the January amendment now gives unions standing to sue contractors and subcontractors for unpaid wages owed to any worker on a covered public project, including not only union- represented workers but also nonunion workers. Nonunion workers need only give their written consent to the labor organization prior to such representation.

The new law serves as a sobering reminder to our New Jersey contractors and subcontractors hard at work this summer season: NJ Wage Act violations may leave you liable not only for unpaid wages plus interest (for union and nonunion workers), but also penalties, liquidated damages, and/or additional fees and litigation costs. Make sure to double-check your pay practices and consult with experienced legal counsel if necessary.

At the federal level, the U.S. Department of Labor (“DOL”) recently issued a final rule upping the minimum salary employers must pay their employees to maintain their exemption from overtime pay obligations under the Fair Labor Standards Act (“FLSA”). Under the DOL rule, which applies to “white collar exemptions” under the FLSA, covered workers are eligible for overtime if their annual salary is less than $43,888 starting July 1, 2024, and less than $58,656 starting January 1, 2025.

Labor Relations

“Just because the school year is behind us, doesn’t mean the laws get a summer break,” said Labor Commissioner Robert Asaro-Angelo. Indeed, these laws are becoming an increasingly heavier haul for contractors to manage this summer, from prevailing wage increases at the state level, to salary threshold increases for exempt employees at the federal level, and proposed heat standards at both federal and state levels that could chill the industry’s busiest season. Here’s what you need to know:

desire to step up enforcement efforts for noncompliance. Beginning on August 15, 2024, contractors engaged in public works projects will be required to submit their certified payroll records electronically through the NJ Wage Hub portal. We strongly encourage all contractors to create accounts now and familiarize themselves with the portal, if they have not already done so; going forward, electronic payroll submissions will be mandatory.

The new rule and corresponding exemption cover workers employed in an “executive, administrative, or professional capacity.”

The change reflects a notable increase from the $35,568 threshold previously in effect, and the rule also increased the annual salary threshold for “highly compensated” exempt employees from $107,432 to $132,964 starting July 1, 2024, which again increases to a whopping $151,164 on January 1, 2025.

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Employers must now reassess whether to reclassify applicable employees as non-exempt and pay them overtime wages or raise their salaries to the July 2024 and January 2025 thresholds to remain exempt. Two lawsuits have already been filed in Texas, where a similar DOL rule was struck down in 2017, and a Texas federal court has granted a preliminary injunction blocking enforcement of the new DOL rule against the state of Texas. The injunction, however, is limited: for the rest of the country, the new DOL thresholds remain valid with full force and effect, and employers in New Jersey ought to remain compliant with this rule.

Labor Relations

Other regulations getting us heated are the recently proposed laws for workplace heat standards at both federal and state levels.

On July 2, 2024, the Occupational Safety and Health Administration (“OSHA”), a division of the DOL, released a proposed rule for the first ever federal workplace heat standards, requiring employers to create evacuation plans and control heat hazards in the workplace. The heat standards, if adopted, would apply to all employers engaged in both indoor and outdoor work in general industry, construction, maritime and agriculture sectors.

The proposed regulations would require employers to do the following, among other things, at no cost to employees: (1) implement a written work site heat injury and illness prevention plan, (2) when temperatures reach 80°F, provide workers with drinking water, break areas, and paid rest breaks, and (3) when temperatures reach 90°F, also provide workers with mandatory 15-minute paid rest breaks every two hours, implement a super-

visor or buddy system to monitor for heat-related symptoms, and maintain written records of indoor monitoring data for at least six months.

As though OSHA’s proposed rule weren’t enough, New Jersey has also proposed its own heat stress legislation, S2422/A3521 (Cryan/Quijano), which creates a second set of duplicative obligations for employers but goes several steps further. Under the proposed NJ bill, once temperatures reach a heat index of 80°F, employers must, among other things, postpone all non- essential tasks and limit the time workers are exposed to heat during the workday. Employers who fail to comply could be subject to monetary fines and stop-work orders.

Our contractor and construction industry clients already have countless years of on-the-ground expertise in getting the job done, while keeping their workers safe. These federal and state babysitting proposals represent an attempt to micromanage our established industry experts and would be practically impossible to implement during the peak construction summer months. As such, we are encouraging all of our contractors to reach out to OSHA and the NJ Legislature to let them know how destructive these heat bills are going to be to your construction business.

If you have any questions about the topics raised in this article, or about any other labor relations matter, please do not hesitate to contact the attorneys at Tobia & Lovelace Esq., LLC at 973-7466000 for further information.

Feature Story

withum celebrates 50 years: A legacy of excellence in construction services By: louis sandor III, CPA, CCIFP and Alexandra Perrine, marketing manager

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ince its inception, Withum has achieved remarkable success through its team of expert accountants and advisors.

On March 21, 2024, the public accounting firm commemorated 50 years of delivering world-class accounting, tax and advisory services. This significant milestone is attributed to Withum’s unwavering commitment to building strong relationships with clients, team members, and the communities it serves.

The year-long celebration of this milestone kicked off this January at Withum’s annual State of the Firm event at NJPAC in Newark, NJ. Withum team members were flown in from all over the world to celebrate the past, bask in the present, and plan for the future of the Firm.

The Withum story traces back to 1974, when Frederick Withum, Leonard Smith, and Ivan Brown launched the firm with just six team members in a small New Jersey office. In the years following, Withum’s clientele and reach expanded, bringing its unique philosophy and culture to communities across the country and overseas. Today, Withum boasts an impressive workforce of near-

Pictured from left to right at the Red Bank office, Don Foster, Joe Boccia, Ron Martino, Lou Sandor III, Joe Malfettano and Andrew Schoenemann.

play hard attitude, all while upholding the highest standards of integrity and quality.

Withum’s Construction practice has deep historical roots within the Firm, being one of its first industry-focused practices. Remarkably, some of Withum’s longest-standing clients are companies in the construction sector. The Construction Services Team (CST) is under the leadership of Lou Sandor III, CPA, CCIFP ®.

With an impressive 34-year career at Withum, Lou oversees a dedicated team of over 50 professionals who service clients in all aspects of the construction industry. Beyond the CST’s strong presence in New Jersey, Withum has 14 key leaders who contribute to the practice’s geographic footprint in New York, Pennsylvania, Massachusetts, Rhode Island, Florida, DC, Maryland, and California. Together, they play a pivotal role in advancing Withum’s commitment to world-class service nationwide.

Withum’s CST is active in many industry organizations as an advocate aiming to improve, protect and educate the construction community. Withum is proud to sponsor trade organization events and conferences to promote industry growth. The CST serves many UTCA members, among others, and has since its inception.

Withum team members at the UTCA Annual Convention in 2023.

ly 2,500 team members across 24 offices, spanning both coasts and internationally. Despite this extensive geographic presence and growth, the “Withum Way” culture permeates every office.

This unique culture fosters innovation, passion, and a work hard/

Withum serves the needs of both small and large contractors, subcontractors, suppliers, builders, distributors, demolishers, and the like within the construction field. The CST specializes in advisory, audit, state and local tax regulations, technology-based solutions and business process optimization, helping clients be more profitable, efficient, and productive in the modern business landscape. On the pulse of today’s most pressing needs for construction businesses, the team provides succession, estate and

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Feature Story

trust planning, business valuations, buy or sell strategies, wealth and retirement management, and more.

Over the past 50 years, Withum has seen tremendous growth and continues to rank among the best accounting firms in the country. During this past year, Withum ranked 16th on Construction Executive’s Top 50 Construction Accounting Firms list™ and was named a Top 25 accounting firm by Inside Public Accounting.

These accolades are a reflection of Withum’s intentional effort to bring in and retain the best and brightest to expand its knowledge and service capabilities for construction-based businesses, among other industries.

Withum’s Construction Services Team has long been an integral part of the construction community, surpassing conventional advisory and accounting roles to serve as a trusted advisor and strategic partner. The key to the firm’s achievements lies in its exceptional team members—individuals selected for their innovative, entrepreneurial mindset, and commitment to client service.

“At Withum, we believe in the power of a team,” said Lou Sandor, Practice Leader of Withum’s CST. “It’s about collective resilience, driven by a shared interest in the success of the services we provide and the satisfaction of our clients. Our team is dedicated to understanding and empathizing with management’s needs, ensuring that we deliver value in every relationship. It’s the team that turns challenges into victories, and clients into partners.”

Looking ahead, Withum remains dedicated to educating, coaching and supporting the construction community for many more

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Withum's annual fishing trip at the Atlantic Highlands Harbor.

years. Their mission is to empower and uplift the industry, ensuring sustained growth and excellence.

“Our constant goal is to be a little bit better tomorrow than we are today,” said Pat Walsh, Withum’s Managing Partner and CEO. “We live the Withum Way – it’s a genuine authenticity to who we are. By continuing to put people at the heart of what we do, we create opportunities for our team members, our clients and our communities, ensuring that Withum’s continued success will never be just about us.”

key performance indicators: the metrics designed to keep your employees safe By: frank baxter and anthony krake, CSP I construction risk partners

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s a safety-minded professional, what’s your response when asked, “How are your KPIs looking?”

Key Performance Indicators (KPIs) are quantifiable measurements used to evaluate an organization's or employee's success in meeting performance objectives. They offer a simple way to set data-backed goals to drive change.

The first step to creating a successful KPI program is to set a specific, measurable, and attainable goal. Specific means clearly defined with boundaries instead of a vague statement. A goal such as “lower our total incident count by 20%” is better defined than “I want to have fewer incidents.”

Measurable means you have a means to determine success quantifiably. Using the same example of an incident count, we know our previous incident data, and therefore, we can measure our current data against it to determine if we’re meeting our goals.

The zero-incident metric concept and the subsequent under-reporting of incidents brings up another critical part of a KPI program – the potential to game or distort metrics for positive gain. Charles Goodhart, a British economist, is credited with “Goodhart’s Law,” which essentially says, “When a measure becomes a target, it ceases to be a good measure.” In terms of safety, if you set a specific target, such as zero incidents, and that target can be used for positive or negative reinforcement, your teams will game the metric in their favor, effectively making the measurement worthless. A way to avoid this scenario is to use multiple measures for a performance goal. Rather than your target being zero incidents and using that as your single metric for safety performance, measure items such as incident severity, reporting timeliness, and reduction of incident rates.

When determining what KPIs will be most effective for your organization, you must consider leading and lagging indicators.

Lagging indicator metrics would include incident counts, incident severity, type and cause of the incident, etc. When reviewing lagging indicator metrics, you must emphasize context and use your judgement to determine their meaning. For instance, many companies had a severe dip in hours in 2020. If you compare incidents in 2019 and 2020, solely on the count, you will have a skewed look on your performance.

When evaluating metrics that involve quantity, you want to create rates that can normalize these variations to give a better understanding of your performance. This is commonly seen with incident rates, but this can easily be applied to other metrics.

Many times, in insurance, you may hear dollar cost per man hour to describe the worker's compensation losses compared to the amount of hours worked. This type of rate normalizes a company year over year, but also allows for comparison to peer companies. Always try to create rates when your outcome may be skewed by external factors.

Another important factor is whether your goal is attainable.

If you set unrealistic goals, your team will not be motivated to achieve them since they feel it is out of their grasp. Safety professionals have chased a zero-incident, an often-unattainable metric, for many years. This zero-incident metric resulted in project

Safety Perspective

Setting up a KPI program for safety performance is simple because most companies use KPIs in their annual financial calculations. Examples of those calculations include metrics related to Earnings Before Interest and Taxes (EBIT), revenue growth, and client retention.

teams underreporting or hiding incidents, so they were not the ones to ruin the streak.

Setting goals using KPIs for safety using lagging indicators is a must, but it does not necessarily drive change; it only gives insight into how you did in the past. Using KPIs to set goals for proactive activities is an effective way to control your lagging indicators. An example of a leading indicator would be setting a goal for each project team member to conduct a safety inspection at least once weekly. This KPI will measure how well the

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team members meet the goal individually or as a group. However, to ensure the data is not skewed, you should also track the quality of those inspections by using other measurements, such as the number of findings, severity of findings, etc.

Safety Perspective

Another critical component of a successful KPI program is visibility and collaboration. Your metrics cannot be viewed in a vacuum and must be shared with the entire leadership team, from the top down to the field-level crews. If you ask your field crews to submit information that is turned into metrics and potentially used to judge their performance, you must regularly share the metrics with them and ask for feedback. This can be done by providing reports in multiple ways, such as a software platform or safety committee meetings. You must also be willing to adjust KPIs based on feedback and experience. Not every metric will bring good insights, so be willing to listen to those whose performance may be judged on those outcomes.

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Lastly, you must use these metrics to drive change in your organization. If you’re collecting data simply to have it, you are wasting precious time and information. All KPIs should be directly related to affecting a goal, and the goal should reflect an important improvement for your business. Measuring something that does not matter and cannot effect change will discredit metrics crucial to your business. Always review your metrics on a regular basis and readjust as you progress.

Monitoring safety program performance isn’t as demanding as one may think. It can be as simple as collecting data points for each of your KPIs and presenting it in a simple format such a dashboard or spreadsheet. Relying on OSHA 300 logs is not enough of a foundation to improve your safety performance.

There are many ways to set up KPIs for your company, so defining which program works best for your organization is imperative.

children's eye health & safety

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any parents are careful to apply sunscreen on their children but, one risk that is often overlooked is damage to the eyes from UV rays. As the weather continues to heat up, parents should keep in mind that sun exposure can be dangerous for the eyes, especially for children.

Sun damage can occur in as little as fifteen minutes and can build over time. Chronic sun exposure can lead to severe eye issues later in life, such as cataracts, macular degeneration or skin cancer around the eyelids. Children can be especially vulnerable to UV rays because of the amount of time spent outside.

If you want to see your kids have fun in the sun, but are not sure how to keep their eyes safe, below are a few tips provided by VSP: Start UV Protection Habits Early Begin good eye protection habits and start early. Educate your kids on the importance of eye health, so they can foster those habits as adults.

One practice that typically works for kids is making sure they wear sunglasses whenever they head outdoors, no matter the time of year. Like wearing a helmet when riding a bike—wearing sunglasses should become second nature when you step outside.

Creating the foundation for healthy eye habits at an early age helps establish a lifestyle that keeps eye and vision health top-ofmind for a lifetime.

Wear Sunglasses Labeled 100 Percent UV Protection

One easy mistake that parents make is assuming all sunglasses are created equal. It’s crucial that sunglasses offer 100 percent protection from UVA and UVB rays from the sun, but unfortunately, not all frames are trustworthy. Make sure you go to a reputable source like your eye doctor where you can be confident the sunglasses you’re getting will properly protect your eyes.

There are sunglasses especially catered to kids which come in a range of fun colors and are perfect for kids that are on the go. For additional coverage, choose sunglasses in a “wrap around” style to help block UV rays from the sides of the frames too.

NEWS

By: karen walsh, senior sales consultant – Employee Benefits, IOA

glasses. Sometimes, it can be difficult to get your little ones to keep their hats on. Provide a few options to get them involved in the process and let them choose their favorite so they’ll feel good about wearing it. Everyone wins. Plus, they look so cute!

Protect Your Eyes While Swimming The summer season means more time in the pool, but swimming with contact lenses has some associated risks. Swimming pools can contain Acanthamoeba, a type of amoeba that lives in the water, which can get trapped under contact lenses. This can result in serious eye infections for contact lens wearers and can cause irritation, corneal issues, and even permanent vision loss.

That's why eye doctors advise against swimming while wearing contacts. If your child can’t avoid the situation, use daily disposable contacts.

September is National Preparedness Month Since 2004, the Federal Emergency Management Agency and the Ready Campaign have promoted National Preparedness Month (NPM) every September.

In honor of NPM, take some time to prepare your household for an emergency today: MAKE A PLAN Because it’s almost impossible to know when disaster will strike, it’s important to make an emergency plan for a variety of disasters. Your plan should cover how you’ll receive emergency alerts, where you’ll go for shelter in case of an evacuation order, and how you will contact loved ones.

BUILD A KIT You should have a fully stocked emergency supply kit that’s stored in a portable bag or tote so that it’s ready to go if you need to evacuate. A basic kit should include: * Water (1 gallon per person per day for at least three days, for drinking and sanitation)

Wear a Hat When Outdoors

* Food (at least a three-day supply of nonperishable food)

In addition to wearing sunglasses, wide-brimmed hats help shield the entire face and provide further sun protection. They can also limit UV rays that hit the eyes from above or around

* Battery-powered or hand-crank radio and a NOAA Weather Radio * First-aid kit, which should include cold and flu medicine

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* Flashlight

PREPARE FOR DISASTERS

NEWS

* Extra batteries

To limit the effects that disasters have on you or your family, review the common disasters in your area. You should also review * Whistle your insurance coverage to make sure you’re covered for common disasters. Consider running practice drills at home so you’re com* Moist towelettes, garbage bags, and plastic ties (for personal fortable acting fast when disaster strikes. sanitation) * Manual can opener (for food) * Cellphone with chargers and a backup battery

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COMMUNICATE YOUR PLAN WITH CHILDREN If you have children, be sure to talk to them about disasters and your emergency plan. The more they know, the more they’ll be prepared.