Utility and Transportation Contractor August 2017

Utility & Transportation

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Traffic Lines Celebrates 65 Years In Construction

August 2017

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president’s message

From the desk of: Jim Coddington

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s I write my final President’s message, it’s hard to believe that the end of my term is approaching so quickly. I would like to extend my appreciation to our membership for their continued support of our association efforts and to the UTCA staff who fight to make conditions for our industry better every day.

When I look back at my term in office, I am proud of the many accomplishments the UTCA has achieved and the implementation of several key initiatives that will most assuredly lead to future success for the industry. A mere seven days into my Presidency, the New Jersey Legislature passed the long sought-after Transportation Trust Fund (TTF) renewal. I would be remiss if I didn’t point out that UTCA’s immediate past President, Tino Garcia, really loosened the lid on the jar! The renewal effort was only possible through the work of several administrations, and that should not be forgotten.

There were two major legislative victories that I am very proud of during my tenure in office. UTCA was a driving force in passing a supplemental TTF appropriation bill this past Spring, which immediately put $400 million dollars from the Trust Fund’s renewal into action. After the unnecessary and destructive shutdown of TTF funded projects in the Summer of 2016, this acceleration of capital project spending was an important start to help the industry begin its climb back to some sense of normalcy. On the water/sewer side of the house, UTCA was the key advocate that saw our signature Environmental Infrastructure Trust (NJEIT) legislation become law. Thanks to our efforts and those of our partners, the Laborers and Operating Engineers, the law now requires that all entities governed by Local Public Contracts Law must seek a cost estimate from the NJEIT prior to financing the project through any other means. This law will guarantee increased utilization of the NJEIT, which in turn will save local governments money and yield more projects for the same level of investment.

Over the last year, UTCA also began several new and exciting initiatives that have already yielded tremendous results. The Association formed a new Asphalt Paving Committee which successfully lobbied the NJ Department of Transportation (NJDOT) to change how it allows contractors to bid the mobilization item on all oper-

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ations/maintenance projects. This was accomplished after only one meeting with the Department. The Association also began a proactive Disadvantaged Business Enterprise (DBE) initiative which has garnered praise from the Federal Highway Administration, NJDOT, NJ TRANSIT, and more. The FHWA and the American Road and Transportation Builders Association (ARTBA) have both recognized the initiative as the first of its kind in the country. Finally, UTCA continues to build on its relationships with the NJ Utilities Association (NJUA) and the American Council of Engineering Companies (ACEC). These partnerships helped our organizations successfully defeat an initiative that would have required 30 graduate level credits in addition to a Bachelor’s of Science Degree prior to being eligible to sit for a Professional Engineers License. These success stories are just a few examples of the great work our industry Association is doing on behalf of its members and I’m proud to have played a role in their progress.

Congratulations to our friends at Traffic Lines for 65 very successful years in business. Mark Sergeant has done great work for the industry and his father would be proud of where he is taking the family business. I would also like to recognize fellow UTCA Board Member Gerard Burdi, his brother Nick, and the entire Union Paving team for their progress on the NJ Turnpike Authority’s Interchange 14A project. Finally, I want to congratulate Tom Hardell of George Harms Construction on his upcoming induction as UTCA President. Our Association will be in good hands as we continue to move forward under Tom’s leadership.

I am looking forward to seeing all of you at the Annual Convention at the Borgata in Atlantic City from September 28th to October 1st. There are some great speakers and events planned for this year’s Convention - you won’t want to miss it!

In closing, I want to once again thank my fellow members of the Board of Directors for placing their trust in me to lead the industry’s premier Association. It is truly an honor and privilege to serve our industry as UTCA President.

Best regards,

Jim Coddington

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CONTENTS

Cover story 50 Traffic lines

celebrates 65 years in construction

DEPARTMENTS

FEATURES

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82 union paving interchange 14a 88 williams gas pipeline expansion

President’s Message Financial Overview Legal Dig Accounting Corner Legislative News Safety Perspective Labor Relations The pipeline

NEWS 93 tom hardell utca president elect 97 understanding land & earth movement exclusions 99 why business owners need a buy-sell agreement

Engineering Exchange

Published Bimonthly During 2017

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By: Kevin ellman, wealth preservation solutions

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he basic rule with 401(k)s is that you must take particular care of the three “F Words,” Funds, Fees, and Fiduciary Responsibilities, in order to avoid the real and troublesome fourth “F Word,” FINES! In Part One, we talked about the first of the “F Words,” Funds, and how to select a line up of compliance-proof Funds. In Part Two, we will present the recommended, best practices to keep the second “F Word,” Fees, in line.

Know The Players!

5. Third Party Plan Administrator: A Third Party Administrator creates and maintains the plan documents, performs annual compliance testing, and files the required annual Tax Form 5500.

Know The Fees!

We see that there are a number of players involved in the proper design and administration of a 401(k) plan, whose functions will have associated fees. Often, a Plan Sponsor will request quotes from a number of potential 401(k) Advisors, and just as often, these quotes will combine fees in such a way that it is very hard to understand who is charging what. I recommend demanding FULL DISCLOSURE. It is critical to understand what each party is charging within the quote, so that the quotes can be compared and evaluated on an “apples to apples” basis. The right Advisor will describe exactly what services are being provided by whom, and break out all the fees.

Financial overview

401(k) part 2: the 2nd “F word,” fees

The Importance of Benchmarking!

Often, we see that firms neglect to actively monitor their 401(k) plan Fees, because they are understandably focused on the dayto-day needs of the business. Also, firms don’t realize the potential fines or lawsuits that are lurking until it is too late.

Let’s begin by examining each of the players, and their roles, in the proper management and administration of a 401(k) program.

1. Plan Sponsor: A Firm’s Plan Sponsor selects, works with, and supervises a professional 401(k) Advisor.

2. Plan Advisor: The Advisor provides a well-designed and cost effective program for the firm’s employees. This includes creating and providing a comprehensive menu of Mutual Funds from which employees can choose, according to their investment preferences. The Advisor also monitors all activities on an ongoing basis, and supervises the Record Keeper, Mutual Funds, and Third Party Administrator.

A firm must be aware that almost all plan Fees are borne by the employees. If the plan costs too much, the employees are paying too much, and this significantly retards their portfolio growth.

Firms can be sued for failure to Review and Benchmark the fees of a plan on a regular basis. The recommended best practice is to “benchmark” a plan every other year, and absolutely not less than every three years.

According to estimates provided by The Vanguard Group, reducing annual fees by just 0.50% can increase a retiree’s nest egg by 10% over a 30-year career.

3. Plan Record Keeper: The Record Keeper ensures that payroll contributions are allocated to the correct employee account, tracks all activity, provides contribution statements, and provides online access.

4. Mutual Funds: Each Mutual Fund provides its selection of actual stocks and bonds in which to invest.

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Financial overview

What do I mean by “benchmark?” Ask your Advisor to create and send out a Request for Proposal (RFP) for the purpose of obtaining and comparing FEE quotes from no fewer than three providers, with the individual fees broken out for the Advisor, Record Keeper, Mutual Fund, and Third Party Administrator.

Case Study - As A Plan’s Size Grows, the Fees Should Come Down!

We recently reviewed a construction company’s 401(k) plan. We sat down with the Owners, the CFO and the HR director and talked through what they were looking for. Among other things, we discovered that they had not “benchmarked” their plan in more than seven years. They had been paying 2.24% of total plan assets, each year, “all in.” During that time, the company, and their plan’s balances, had grown dramatically.

We developed and recommended some plan design improvements. We then put the plan out for bid. We received quotes from four major 401(k) Record Keepers. All quotes were significantly lower, ranging, from 1.15% down to .85%, “all in,” per year!

Needless to say, the Company was pleased, as the extra savings from lower fees went directly into each participant’s account, including the owners, who had a very large balance. This move also provided plan compliance support, by documenting the diligent focus of the company to protect the financial interest of its employees.

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The Only Way To Know If You Are Over Paying Is To “Benchmark” Your Plan.

As part of our service to UTCA members, we offer a full, no-cost, no obligation review of their existing 401(k) plans to help: - Uncover opportunities to lower costs, - Improve compliance, - Reduce employer liability, and - Improve employee retention Call Kevin Ellman at 201-632-2022 to arrange for a complete review of your current plan and to find out how the UTCA 401(k) program might be a cost effective alternative.

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By: Paul t. fader, association legal counsel & adrienne isacoff, Florio, perrucci steinhardt & Fader, LLC

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here are many aspects of public bidding for which contractors reasonably expect there to be uniformity throughout local governmental agencies. The lack of uniform specifications is one of the causes for regular litigation of bid disputes.

But even something as seemingly simple as the treatment of the bid opening process is not consistent. Most counties and municipalities allow bidders present at the bid opening to review the bid of the apparent low bidder right at the bid table. And most local governmental units promptly provide a copy of the apparent low bid to a bidder who is contemplating filing a bid protest. Unfortunately, those reasonable procedures are not always followed.

Some municipalities do not allow bidders to review the bid proposals at the bid opening. Bidders are advised that they have to make an appointment at the office of the business administrator or municipal clerk in order to look through the numerically low bid. With respect to being provided with a copy of the apparent low bid, some municipalities require that the bidder file an Open Public Records Act ( N.J.S.A. 47:1A–1 et seq.) request, which allows the governmental agency seven business days to respond.

There is virtually no statutory or regulatory guidance with respect to the required protocol. The Local Public Contracts Law only provides that bids must be “unsealed and announced” at the advertised time and place and the contracting agent must “publically announce the contents” in the presence of any parties who are submitting bids. (N.J.S.A. 40A:11-23.) Generally, the municipalities discharge this obligation by stating the name of the bidder and the total amount bid. The other bidders do not know the unit prices bid, whether each line item was properly filled in, whether the bid was signed, whether the required documents

were submitted, or any other information that may render the bid deficient.

“The speed with which a bid protest is filed is critical”

Legal Dig

it’s time to reexamine the opening of public bids

The speed with which a bid protest is filed is criti- Paul Fader cal. The challenger should attempt to file its protest prior to any municipal action awarding the bid. This early action affords the best chance of persuading the contracting unit that it should not award to the apparent low bidder, before the agency commits to the award, which it may then be reluctant to rescind. The bidder may also want to file an action in court seeking temporary restraints against award and execution of a contract. Of course, a court challenge is impossible without having the actual bid proposal in hand.

There is no case law on this topic, although a case in which the Association submitted an amicus brief held that subcontractors are not entitled to learn the identity of general contractors who are considering bidding on a project, even though such information would foster competition by enabling the subcontractors to compete for those jobs. O’Neill Electric Co. v. Board of Chosen Freeholders of the County of Warren, 297 N.J. Super. 473 (App. Div. 1997). The court held that the danger of bid-rigging outweighed the interests of the subcontractors.

There is no such danger in the bidding procedures that occasionally plague contractors who have submitted bids. Since the bids have already been submitted, there cannot be any ill effect on the integrity of the bidding system by allowing bidders to take measures to promptly review the bids of their competitors. Even review at the bid table does not endanger the bidding process, since it would be done under the careful eye of the purchasing agent who is managing the bid opening and procedures can be developed to make sure that nothing untoward takes place.

New York City has implemented bid opening procedures that allow for easier and more prompt access to bid proposals. At the bid opening, the name of each bidder, the bid price and other

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Legal Dig

information that is deemed appropriate is read aloud, and that information is also accessible by a computer terminal at the bid opening location. Opened bids are available for public inspection at a “reasonable time” after bid opening, but in any case before vender selection. That last protocol is essential to providing competitors a prompt opportunity to challenge a bid, and is sometimes hampered by the delay encountered in certain municipalities.

Sensible handling of the bid opening and evaluation process serves the public policy underlying the public bidding system, which has been described by our courts as “advancement of the public interest in securing the most economical result by inviting competition in which all bidders are placed on an equal basis.” Meadowbrook Carting Company, Inc. v. Borough of Island Heights, 138 N.J. 307, 313 (S.Ct. 1994). Bidders cannot be certain that they have been placed on an “equal basis” until they have had an opportunity to review their competitor’s bids. In addition, our courts have emphasized that the statutes authorizing competitive bidding are designed to guard against “favoritism, improvidence, extravagance and corruption.” Terminal Constr. Corp. v. Atlantic Cty. Sew. Auth., 67 N.J. 403, 410 (S.Ct. 1975). While a municipal agent’s decision not to allow contemporaneous review of the numerical low bidder at the bid opening and/or not to provide a copy of that bid promptly upon request is unlikely to be borne out of any willful determination to show favoritism to the low bidder, that possibility cannot be ruled out in the minds of the bidders or the public. Confidence in the public bidding system would best be served by the adoption of a uniform policy of permitting bid review at the bid table and of a quick turn-around of providing a copy of the low bid at the request of a competitor.

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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Ad Space

doing more with the same By: bill mcnamara, Cpa, ccifp, the curchin group, llc indicator could be weekly payroll costs period to period and year over year. These items are more easily summarized and distributed at the end of a given period and can be highlighted in a onepage summary for management to digest. These quick feedback reports shrink the timing gap and allow management to implement change in the very following reporting period. Spreadsheets today can easily be created that allow for the importing of data from the general ledger software and then polished into timely snapshots focused on management’s specific areas of concern.

Timely reporting of financial data is a key to better bottom line results. Most companies have timelines of reporting which can be measured by calendar weeks, months, quarters or years. Often however, those documents can be bogged down in both assembly and comprehension of what is being delivered. For financial reporting to provide current beneficial data, companies must be able to shrink the number of days between the period being reported on and when the actual data is disseminated. If management is reviewing internally prepared monthly financial statements 10 days after the previous month end, then they have 20 days to change direction and achieve new monthly results.

However, if the reporting delivery timeline is longer, say 45 days, then that following month has already been lost.

The development of these reports and their implementation will allow management to monitor and modify their business plans.

The smaller time periods between reporting will allow for a greater impact on the bottom line. However, management can do more than just shrink the timeline, we can populate those reports with data that is captured simultaneously but not normally included in the company’s general ledger. By cross-pollinating financial data with non-financial data, we will build benchmarking tools which can drive better operational efficiency, as well as reducing overall company costs or prolonging asset benefits.

One option for management to shrink that timeline is to prepare reports which summarize key individual financial components. They do not reflect the financial position of a company as-a-whole, but rather report on accounts or relationships that impact financial statement elements. They can focus on assets like receivables and how quickly they are collected. Another key

Accounting Corner

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oing more with the same is one of the fastest ways to improve efficiency and profitability. In some form or fashion every contractor understands this premise as it relates to the job site. But the same principle can easily be applied to a company’s financial reporting. Internally and externally droves of data are assembled. This data can be easily compiled into practical and useful tools to correctly improve your profitability. It can also provide the timely insight traditional financial reporting like financial statements or tax returns deliver but in a much more “real-time” manner.

Many general ledger accounts maintained by a contractor have measurable items that can create valid economic indicators.

Payroll costs are a universal expense to most contractors and an account in the general ledger. Labor hours is a non-financial number which is closely tracked and reconciled simultaneously. A well-managed company understands its costs of payroll and how an extra job hour impacts the overall profitability of the project. Management could dive deeper and can cross reference those numbers to units of production. Then we would have a tool for management to evaluate tangible output results with actual costs and compare to other company-wide labor production areas.

Let’s assume we have two masonry crews. The two crews have an unequal number of members, do not necessarily work on the same projects, but each member’s pay rate is in a close range to the other. If we monitor the number of cement blocks each crew consumes (installs), we can create a block per man per hour rate.

This rate can then be used by management to evaluate the two crew’s efficiencies and level the playing field. The numbers required for the analysis are all assembled for other reasons, now we just need to gather and apply to the desired task at hand. Using an Excel table, management can build by reporting periods these production numbers and costs to compare from one period

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When bidding detailed and more complicated job projects, we see contractors using a variety of overhead rates to capture those expenses above and beyond direct costs. Those overhead rates are normally detailed to capture many of the “shared” costs a company incurs to keep the lights on and running. However, While the example above is rather basic, it highlights how data we also see quotes going out for “time & material” type of work. from different areas can be pooled for a more impactful finan- The overhead rate quoted in a project bid may not be competicial tool while adding very little cost or retive enough in these smaller yet profitable porting burden to the accounting system opportunities. The development of a pay of a company. Actually, it has the reverse envelope rate may provide the trick. We impact as it highlights the power and valshould break out the various costs associue of the accounting system which is often ated with paying an employee their weekly viewed as an overhead burden and not a salary. We should know the direct labor revenue generator. The investment in the cost, related payroll tax cost, insurance, accounting software can be measured here especially workers compensation, fringe in the ability to access and track these rabenefits like retirement or health coverage, tios. uniform allowances, meal money etc. That envelope rate should be tracked by pay peDeveloping ratios to supplement the reguriod and used for those quick quotes. By lar financial reporting of the company will tracking regularly, we know we quote with - William McNamara require a solid understanding of your busisolid costs to make the work as profitable ness operations and goals. When building as possible. such ratios, pulling data from three sources or more will have the greater impact and provide deeper results. Optimizing the data already captured will allow contractors to Those sources should include the accounting numbers, employee have deeper understandings of their costs structures and imcosts in dollars and hours, project materials & consumables like prove their chances to increase profitability. It will also demonfuel in a quantity format like tonnage, gallons or pounds. Often, strate the need for regularly evaluating the results and looking we incur shop costs for the fabrication of small parts consumed at what the trends identify. To discuss further, contact Bill Mcon the project or for repairs and maintenance to equipment and Namara at bmcnamara@curchin.com or call 732-747-0500. The vehicles. This is sometimes a much-missed area where efficiency Curchin Group, LLC is committed to providing a broad range of can be gained. Understanding the on-going maintenance costs financial services to meet the needs of the construction industry, of equipment may eventually lead to a better capital equipment today, tomorrow and even 30 years down the road. Our clients purchase plan as we identify the tipping point for equipment to benefit from the seamless delivery of financial services by a cobe replaced. hesive team of professionals working together.

Accounting Corner

to the next. As the spreadsheet is populated, a reliable trend and history that will assist management in evaluating performance will develop. Watching the trend of payroll to blocks consumed can identify early in a job’s life operational inefficiencies.

“Doing more with the same is one of the fastest ways to improve efficiency & profitability”

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state & federal update By: zoe baldwin, director of government relations

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At the heart of the issue was healthcare, and on the heels of the 2016 TTF shutdown, our industry couldn’t afford another work stoppage. Governor Christie had called for Horizon to give to the state $300 million from its reserves in order to fund an opioid treatment program. In return, he promised not to use his line-item veto to cut Democratic priorities from the proposed $34.7 billion state budget. Senate President Sweeney wanted to go along with Christie’s demands to protect the budget, but Assembly Speaker Vincent Prieto balked. After failing to pass a budget by the June 30 deadline, Governor Christie ordered a shutdown of non-essential services. The three-day closure came to an end in the wee hours of the morning July 4th, when both houses of the legislature passed, and the Governor signed, the state budget and a compromise on the Horizon issue that sparked the shutdown.

slow-moving progress of the Gateway Tunnel for a glimmer of hope.

The morass in Congress over a host of issues including health care and tax reform have left some concerned that transportation projects will be pushed to the backburner, and the Trump Administration’s budget proposals didn’t offer much solace. The President’s initial spending plan for the fiscal year beginning Oct. 1 limits the Federal Transit Administration’s Capital Investment Program to projects with contracts already in place. The Gateway Tunnel is not one of them.

However, in early July, House GOP appropriators - led by New Jersey’s own Appropriations Committee Chairman Rodney Frelinghuysen - released a draft bill that would give USDOT $17.8 billion in FY18 discretionary funding, a $646 million decrease from current spending that is still $1.5 billion more than what President Trump proposed. Germane to our region is $900 million in grant money spread across two programs that are geared toward funding projects housed under the Gateway Project umbrella.

Specifically, the language directs USDOT to “first give preference to eligible projects for which the environmental impact statement required under the National Environmental Policy Act and design work is already complete at the time of the grant application review, or to projects that address major critical assets which have conditions that pose a substantial risk now or in the future to the reliability of train service.” Also included is an additional $400 million for Capital Investment grants that specifically fund joint Amtrak-public transit projects - another hat-tip to Gateway. Our federal delegation as well has remained steadfast in their efforts to move the project forward, and as recently as May, USDOT Secretary Chao referred to the tunnel project as “an absolute priority.”

Legislative News

et the H-E-double hockey sticks off the beach Thanks to the now infamous photos of the Christie family sunbathing on a public beach closed to the public, the whole world is acutely aware of New Jersey’s three-day government shutdown of nonessential services. Working with both NJDOT and NJ Transit, UTCA was thankfully able to ensure that construction work was classified as essential, allowing projects to continue through the shutdown.

IN THE STATE HOUSE

Will you fund me? __Y or __N? As commuters into Manhattan and the agencies that bring them there reel from the impacts of massive Penn Station repairs, many in the region shake their empty fist at the sky and cry “ARC Tunnel, why?!” Cancelled by Governor Christie in 2010, the original trans-Hudson tunnel would have been almost complete by now, creating additional capacity and redundancy. Commuters across the region now look to the

Changed conditions After several months of stakeholder outreach including a very productive collaboration with the NJ Society of Municipal Engineers, our changed conditions bill has been introduced in both the Assembly and the Senate. Assemblywoman Valerie Vainieri Huttle and Senator Bob Gordon, Transportation Committee Vice-Chairs in their respective houses, introduced A5071 and S3409 just before the July Fourth weekend. We have requested technical amendments to the current language, and are aiming to amend and move the bills through both houses by the end of this year. This effort is our number one priority for the lame duck session of the State Legislature.

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Legislative News

NJDOL Contractor Registration As previously reported, UTCA has been working to move legislation to address the lack of consistency in contractor registration triggers on state projects. Sponsored by Assemblyman Singleton, A3597 ensures that contractors on all prevailing wage work are registered with the Department.

After speaking with the sponsor, we expect the bill to progress during lame duck.

• $200B infrastructure funding

Wage Theft As previously reported, recent legislation aimed at stopping wage theft would’ve been bad news for even the best contractors. Introduced by Assemblywoman Annette Quijano in the Assembly and Senator Loretta Weinberg in the Senate, A862/ S1396 intended to punish employers who knowingly withhold wages or benefits from employees. However, the original language made no acknowledgement of existing protections within the prevailing wage system, enabled court proceedings for first time violations, and sought to impose exorbitant disciplinary fees and fines to such an extent that an honest mistake could criminalize a contractor. UTCA worked behind the scenes with allies in the building trades to amend S1396, which now exempts workers under the Prevailing Wage Act and construction industry employers and workers who have collective bargaining agreements.

• $100B for local prioritization of infrastructure needs (it is not clear what this money will be used for)

Electronic Bidding Introduced just before summer recess, A4932 / S3374, sponsored by Assemblyman Greenwald and Senate President Sweeney, would require public contracting agencies that contract for the construction of public works to use electronic procurement technologies for public works construction projects when a project’s value exceeds $5,000,000. UTCA has begun conversations on technical amendments that would phase in a lower trigger so that the mandate would cover smaller projects, as well as clarifying language to encourage uniformity of process instead of enabling municipalities to each procure different e-bidding systems.

ON THE HILL On the upside The overarching theme of the President’s 2017 Infrastructure Week address was that the current environmental process is cumbersome, and often makes things worse by unnecessarily delaying and even blocking projects from getting built. In response, his administration will create several new government entities, such as a new permitting Council, an on-line project delivery dashboard, and a new permit reform office in the Council on Environmental Quality (CEQ).

In addition to relaxing the regulatory framework, the President looked to accountability as a tool in his reform effort. Taking aim at Federal agencies and industry consultants, Trump stated that his administration will institute tough penalties on Federal government agencies that unnecessarily delay projects. He went on to emphasize the role of consultants in the industry, claiming that they intentionally exploit the process to make it more complex.

The Administration principal strategy is to lower the average permit time from 10 years to two years, leverage private sector capital and expertise, invest in rural infrastructure, and develop a workforce training initiative focused on skill-based apprenticeship education. While details are still scant, the President has also suggested the following funding:

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• $25B for rural infrastructure • $15B for transformative projects (it is not clear how ‘transformative” will be defined or if actual proper name projects will be identified by the Administration)

• $1M apprentices in 2 years That leaves approximately $60B out of the total of $200B undefined. The $200B in new direct federal funding over ten years will be used to leverage additional funding from the private sector, states, and local governments to total $1T. A description of what types of projects (beyond transportation, water, and energy) would be eligible for this funding has not yet been provided. It is still unclear when the Administration will release a formal legislative proposal to Congress, although DOT Secretary Chao has said to expect something in the third quarter.

Earmarks Federal advocates for the UTCA-led Clean Water Construction Coalition met with the House Rules Committee staff, who are now targeting the fall for consideration of the earmark issue. The House Freedom Caucus has expressed concerns about bringing earmarks back, however Democrats are supportive and the indications are that if the issue were brought up today, an overwhelming majority of the House would approve. In the meeting, when asked about the future of earmarks given the current ban, staff said there is a lot of support for earmarks returning, and that without them it is difficult for Congress to govern. Staff noted that the House Leadership is concerned about the optics of overturning the earmark ban but, staff argued, Congress could do so for programs that operate on a project-by-project basis. They believe that with restrictions earmarks will be rolled back slowly.

It’s not shameless if it’s true - It’s an election year, and the entire Legislature and the Governor’s seat are on the ballot. Now more than ever, it is critical that we support our TTF champions, as many are now facing primaries for their votes in favor of responsible funding.

If we lose even one friend in the Legislature due to their vote for the TTF, we greatly endanger future renewal efforts.

We sincerely hope that you’ll consider supporting the UTCA PAC, CONSTRUCTORS FOR GOOD GOVERNMENT UTCA continues to be the leading voice for the construction industry in Trenton and Washington DC. 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 possible with your support of the Association, and more importantly, with your support of the industry’s PAC: Constructors for Good Government. Please consider contributing in 2017 as UTCA will continue 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 committees should we have one?

By: Jay Sciortino, construction risk partners

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et’s just start with the simple answer. . .yes, you should have a safety committee!

Why have a safety committee? There are many good reasons, but let’s start with insurance premium credits. Take Pennsylvania for instance. For years, the Pennsylvania Worker’s Compensation Rating Bureau has provided a scheduled 5% credit for having a “certified safety committee”. Being “certified” means that you must keep documented meeting agendas, minutes and attendance lists. Here is the website that provides the full detail of what is needed/required, http://www.dli.pa.gov/Businesses/swif/ Safety/Pages/Certified-Safety-Committee-Information.aspx. It’s obvious that Pennsylvania believes that safety committees provide benefits, but what about New Jersey?

Having good qualitative arguments are not limited to just obtaining worker’s compensation credits. The same benefits apply when it comes to negotiating general liability and automobile premiums. In fact, the safety committee should spend equal time in addressing loss prevention issues relating not only to employee injuries, but also to the risks and exposures associated with general liability, equipment and fleet.

While premium credits provide the “dollars”, other qualitative issues provide the “sense”. I (and others) have written many times in this column about indirect costs of claims, so I’m not going to rehash that here. However, the benefits of a well managed corporate safety program, complete with a safety committee, will provide your company with benefits that exist beyond the potential premium savings. Consider some of these: • Increased employee involvement in the management and implementation of your safety program (management and field people).

• Keeping your safety program fresh (I’ve seen some of the most creative ideas flow from some of the most unlikely sources).

• Creation of training or mentor programs for new employees.

Safety Perspective

Whether you are big or small, size shouldn’t enter into the equation. There are many good reasons why you should have a safety committee. If you haven’t created one, at the very least you should consider it. Hopefully, this article will give you some food for thought. If you already have a safety committee in place… great, then use this information as a way to benchmark what you are doing, or to fine-tune your process.

ciently broad to allow for credits to contractors that have safety committees as part of a well-managed safety program. This not a “slam dunk” for the credits, but having a safety committee will provide your agent/broker with good qualitative arguments to present to the carrier for granting the credits.

• Keeping your field people in the loop about loss trends and financial impact of claims (while you may know the impact of one claim on your experience mod, shouldn’t everyone know?).

The main focus is providing a safe and productive workplace, and a key element is employee involvement.

Safety Committee Guidelines New Jersey has never granted a specific scheduled credit like Pennsylvania, yet New Jersey provides insurance carriers the ability to apply scheduled credits based upon the underwriters evaluation of special characteristics of a risk not reflected in the experience modifier. Look it up! Part Three, Section 10C, page one, Schedule Rating Plan, outlines the various categories of the credits (and debits) based upon “Risk Characteristics”. I will not quote them all here, but the NJ Bureau Manual wording is suffi-

Ideally, the chairman of the safety committee should be the top ranking, rather than a staff officer, at the company, whether his or her title is CEO, president or senior manager. Having this high level person as the chairperson sends a clear message throughout the organization that safety is a top priority with senior management, which is demonstrated by their taking an active leadership role.

Utility & Transportation Contractor | august| 2017 47

There will be situations where the senior officer delegates the responsibility of chairing the safety committee to someone below him/her. In the more effective safety organizations, the chairperson is - Jay Sciortino normally the next highest ranking officer of the line organization. Chairmanship is important to the committee and normally should not be delegated to the corporate safety director. However, the corporate safety director does have a vital and active role in the committee. He or she can serve as the secretary, consultant and adviser on safety matters.

knowing what their particular role is and spend the meeting being proactive to situations as the meeting unfolds, rather than reactive.

The committee should include company management and representatives from the labor force (either union officials or line employees) to enhance the committee’s credibility and acceptance throughout the company. Committee membership should normally be limited to between five to 12 members. Groups larger than this tend to be less effective in their decision-making processes. The committee’s role is to make recommendations to management for safety and health program improvements.

About the Author. . . Jay Sciortino is one of the founding partners of Construction Risk Partners, a company providing Insurance & Surety solutions exclusively to the construction industry. Construction Risk Partners is a long-time associate member of the UTCA, and Jay is a long-time member of the UTCA safety committee. He has over 35 years of experience in risk management and insurance. For more information, check out their website at www.constructionriskpartners. com, or call them at 908-566-1010.

Safety Perspective

“Let’s just start with a simple answer...YES, you should have a safety committee!”

For the most part, you don’t need this article to explain how to organize your safety committee. There are plenty of online resources, not to mention your insurance carrier, whose loss prevention reps would be more than happy to provide guidance. In fact, it would be an excellent way to foster and build a stronger relationship with your insurance company.

These are just very general guidelines. Every contractor is different, so you should tailor your safety committee to what suits your culture and management style. In fact, I’ve been involved in many of our client’s safety committees, and found them all to be different, but all to be effective.

One other piece of important advice….take notes and document all your activities, especially if you want to take advantage of the potential premium savings and the other qualitative benefits.

Having a safety committee is just one element of a well-managed health and safety plan. However, I believe that it goes hand-inhand with an effective program, and in many instances keeps your overall program fresh and in-line with company safety objectives.

I hope these ideas have helped. It’s well worth the effort!

A M E M B E R O F T H E P H O E N I X G R O U P O F C O M PA N I E S

WBE/SBE CERTIFIED

Best Practices for Safety Committees A. Mission Statement The safety committee should initially develop a mission statement that reflects a consensus of opinion of what it hopes to accomplish.

B. Policies and Procedures When a committee is formed, certain policies and procedures should be set forth in writing to cover: 1. Scope of the safety committee activities 2. Extent/level of the committee’s authority 3. Committee membership and service length 4. Procedures for accomplishing committee work (i.e. Agenda, meeting minutes, meeting schedule, etc.)

C. Roles and Responsibilities Successful safety committees have clearly defined roles and responsibilities of their members. People come to the meetings

48 Utility & Transportation Contractor | august | 2017

As a proud member of the C.W.A Local 14156, American Plus Printers is a WBE/SBE certified, employee owned, full service Union print company.

We proudly offer straightforward, customer-oriented service in the highly competitive market of commercial printing.

American Plus Printers is committed to the highest union standards of integrity, quality, and service to the community.

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11601 Caroline Road • Philadelphia, PA 19154 Tel: 215-698-6628 E-Mail: americanplus@mac.com • www.amplusprinters.com

Utility & Transportation Contractor | august| 2017 49

traffic lines

Cover Story

completes 65 years in business By: anthony attanasio, executive director

I

n 2016, Traffic Lines celebrated its 65th year in business.

When Ray Sergeant began the business in 1951, he never envisioned that he, and now his son Mark, would take the company to the heights it has achieved. What’s even more exciting, is that Ray’s grandson Matt has also joined the company full time-bringing the third generation of the Sergeants into the family business.

Ray’s career began in the Navy, where he served in World War II in both the Pacific and European Theaters. When he returned from the war, he took up any work he could get including house painting, putting up wallpaper, and other handyman jobs until the 1940s, when he found full time employment as a police officer in Red Bank, NJ. By 1951, Officer Ray Sergeant decided to start a part-time pavement marking business.

As a police officer, Ray was constantly concerned about safety.

So naturally, when he decided to start a side business, he was focused on improving safety and hopefully saving lives. He began Traffic Lines hoping to contribute to the business of high visibility cross walks, bike lanes, and of course traffic lines. In 1963, after more than 10 years of continued growth and success, Ray decided it was time to take the business full time and added a sign production element to the company. 3M had just introduced retroreflective sheeting for signs, and Ray got in at the ground floor.

Mark joined the company part-time in 1971 and was learning the business from the ground up. He worked during the summers in high school, and then in 1978 at the age of nineteen he went full time with the company and never looked back. When working in the field, Ray taught Mark everything he knew about paint and pavement markings. If Mark painted a stripe too light, his father made him do it again. Mark recalls his father saying, “The man paid us for paint. Make sure he gets what he paid for!”

Ray and Mark proved to be a great team. Ray made sure Mark learned every aspect of the company by doing the work himself there would be no anointing of his son as the heir apparent. Mark continued to work in the field until 1999 when he went into the front office to begin the transition of taking over the company from his father. After twenty-eight years operating as a father and son team, Ray finally retired in 2006. Even taking over ownership of the company wasn’t handed to Mark. Ray made his son buy the company which served to further hone Mark’s skills as a businessman.

As a company, Traffic Lines has completed projects for all of the major state and bi-state transportation agencies, multiple counties, hundreds of municipalities, and dozens of private clients including major pharmaceutical and technology corporations.

They proudly work for many UTCA members including George Harms Construction, Northeast Remsco, Earle Asphalt, IEW Construction Group, D’Annunzio & Sons, PKF-Mark III, CJ Hesse, Stavola, and many more. Their work can be seen on such high profile roadways and bridges as the NJ Turnpike, Garden State Parkway, Pulaski Skyway, and the Route 72 Manahawkin Bridge, to name a few. They are currently working on the New Jersey Turnpike’s Interchange 14A project for Union Paving.

Under Mark’s leadership, the company has continued to make great strides in the field and has expanded operations up and down the East Coast. Over the last 15 years, the firm has completed projects in New York, Washington D.C., Virginia, Pennsylvania, Delaware, and the City of Baltimore.

Decorative Crosswalks

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In addition to adding new markets, they have also become very active with the UTCA and specifically, with the Association’s work in modifying NJDOT specifications to benefit the industry

and ultimately the taxpayer. UTCA’s ongoing NJDOT Standard Specifications for Road and Bridge Construction Outstanding Critical Industry Issues Resolution Phase 5 included a critical item provided by Traffic Lines. Mark and his team made note that “Proposal Item Descriptions” for traffic lines and traffic markings had been inconsistent across projects, causing confusion among the various contractors bidding the projects.

“ My father would say you always have to take care of the employees, then they’ll take care of you.”

On most major road projects, these items are of relatively minor significance compared to the major structural items, allowing the issue to go unresolved. The original 2007 Standard Specifications included Items for new striping and markings as follows: Traffic Stripes, Long Life, and Epoxy Resin___” paid by the Linear Foot. Traffic Markings, Thermoplastic paid by the Square Foot. The revised version of the 2007 Standard Specifications changed these items to: Traffic Stripes___” paid by the Linear Foot. Traffic Markings paid by the Square Foot.

Traffic Lines, like so many other companies, was forced to find ways to protect its business during the TTF crisis of 2016. As work continued to slow in the State due to the dwindling Transportation Trust Fund (TTF), Traffic Lines was forced to fight - Mark Sergeant harder to find more work outside New Jersey’s borders. When Governor Christie imposed the statewide shutdown of TTF projects, he also imposed a shutdown on millions of dollars of work that Traffic Lines was Neither version of the specifications was/is precise on how to poised to perform. As a result, the firm had to pivot quickly to measure each item or what the item includes. Some projects had find work in Virginia and other states down the I-95 corridor. included payment for thermoplastic lines, such as hash marks, under the “Traffic Markings” item paid by the square foot for Traffic Lines is a family business with family values, and Mark the same item as thermoplastic symbols. The work required for made that clear during the shutdown by refusing to cut his workthermoplastic lines and symbols was very different, causing the ers’ pay. Traffic Lines employees enjoyed the New Jersey prevailing wage rate wherever they worked, even though many states are Contractor to bid an average price for this work. lower. He felt that since they would be away from their families Lastly, both versions of the Specifications include items for the for extended periods of time, it was the least he could do. Traffic removal of traffic stripes, measured by the Linear Foot, and the Lines supported the UTCA efforts that led to the TTF renewal, removal of markings, measured by the Square Foot. The removal and thankfully, are reaping the benefits as NJDOT is putting out of traffic stripes item did not differentiate the width of the stripe, record numbers of resurfacing contracts. causing the Contractor to have to make a best estimate of the various widths of striping to be removed at bid time, which was Mark believes there are two main reasons for Traffic Line’s 65 years of success. First, it’s they’ve stuck to what they do best, unfair, time consuming and unnecessarily costly. pavement markings. “We haven’t veered out of our lane,” says UTCA staff was successful in working with NJDOT to remedy Mark. “We’ve had the discipline to build on our success by fothe issue. The Department agreed with the Association’s position, cusing on what we do best. The only thing we want to do is find and rewrote the specifications to recognize the significant cost better ways to do what we do. There’s always a better way to build difference between applying thermoplastic symbols and thermo- the mousetrap”. The company is so serious about improving their plastic lines. The Department also amended the specifications operations that they began building some of their own equipto standardize the sizing of symbols, which will allow for the ment. Mark takes great pride in the fact that his company builds several of its own trucks and continues to find new efficiencies and improvements to their technologies.

Hydroblaster and PT 200

Cover Story

breakout of work into separate pay items. Temporary markings (up to 14 days) will be latex paint. Markings required for more than 14 days will require specifications of permanent markings and these markings will be epoxy and thermoplastic. The definitions of “temporary” and “permanent” were also clarified in the rewritten specs. All of these changes can be found in NJDOT BDC 16MR-O4. The industry is grateful for Traffic Line’s contribution to this effort, the results of which will benefit the industry for many years to come.

The other key to their success is that they treat their employees like family and with the utmost respect. As a result, they have retained institutional knowledge and garnered a strong and loyal workforce – several of whom have been with the company for more than three decades. Always one to give credit where credit is due, Mark is quick to point out that several of his key employees are just as responsible for the company’s success as the Sergeants. Namely, Operations Manager Gene Boyle who has been with the company for 35 years. Francisco Castineira, Antonio Castro, Jimmy Hasner, Robert McGowan, Dave Cuje, and Dan Adams are all foremen who have been with the firm for over two decades. Shop Manager Kevin Coolahan and Chief Mechanic

Utility & Transportation Contractor | august| 2017 51

Cover Story

Mitch Mclean have both been with the firm for a quarter century.

Brian Ostering (20 years) and Lori Berry (16 years) also make the team what it is today.

Similarly, Mark’s right hand man, company Vice President Stephen Fitzpatrick, joined Traffic Lines in 1999. Steve had been Traffic Line’s banker prior to joining the firm, but was so impressed with the business, he decided to join it. According to Mark, “My father would say you always have to take care of the employees. Then they’ll take care of you.” And 65 years later, so they have.

The company veterans don’t see Matt as a silver spoon kid and have happily taken him under their wing.

The future is bright for a once-small company from Red Bank that has grown to become one of the east coast’s premier striping companies. Everyone at UTCA would like to congratulate Mark and the entire team at Traffic Lines for 65 years of success in business, and look forward to following their great story for many years to come.

One new employee Mark is very happy to talk about is his son Matt. Just like his Dad, Matt began working part-time for the company as a teenager. He started working in the family business in 2004 when he was only 12 years old, charged with organizing the warehouse, sweeping floors, and after paying his dues, eventually made it out into the field. For a brief time between 2004 and 2006, all three generations of Sergeants were working for Traffic Lines at the same time. Matt graduated from Penn State University in 2014 and joined the company full-time shortly after. He has worked his way up over the last several years and is now running a few jobs of his own. Mark is extremely proud of his son and the way he has earned the respect of his coworkers.

PNC Bank Art Center in Holmdel, New Jersey

Congratulations to Traffic Lines On 65 Years in Business Best Wishes for Continued Success! from your friends at

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what every contractor needs to know about withdrawal liability By: jonanthan landesman, esq., Cohen seglias pallas greenhall & furman

I

f you are a union contractor, you are probably making contributions into one or more union pension funds every month. These pension funds, known as multi-employer pension plans (MEPs), rely on a number of employers paying their share toward a common fund. Notably, because of the nature of these pension plans, many (if not all) of them are underfunded and do not presently have enough assets to cover their expectant liabilities. However, despite underfunding, employees are still entitled to their full pension benefits. But who is responsible for this unfunded amount, and what happens if you exit the fund?

1. What is Withdrawal Liability?

Withdrawal liability exists for all employers who contribute to underfunded MEPs. Under withdrawal liability rules and federal law, an employer who experiences a “triggering event” (such as a ceasing to contribute to the MEP due to leaving the fund, clos-

2. When Do You Need to Worry?

Withdrawal liability can be triggered when an employer shuts down or has a substantial reduction in business operations. Unfortunately, this is true even when the reasons for closing are primarily financial. A pension fund can even assess withdrawal liability when employees vote to change or decertify their union.

Common events that can trigger some form of withdrawal liability include, but are not limited to, the sale of the business, a sale of assets, substantially downsizing, going non-union, moving the business, closing the business, or the termination of the Collective Bargaining Agreement (CBA). Typically, a withdrawal is classified into one of two types: A. Complete Withdrawal A complete withdrawal from a plan is when the contractor permanently ceases to have a current financial duty to the fund. This can occur when (1) the employer permanently ceases all covered operations under the plan (i.e., closing up shop) or (2) the employer permanently ceases to have an obligation to contribute (i.e., terminating the CBA).

B. Partial Withdrawal

ing down, going out of business, etc.) has to continue to make payments to the fund to cover their proportionate share of the unfunded liability. Withdrawal liability essentially acts as an exit fee, which requires you, the employer, to pay a share of the pension plan’s future benefits which have not already been funded by previous contributions or investments. This way, the fund is

Labor Relations

You may be surprised to learn that the contributing employers are liable for all of the vested benefits that must be paid, even if they leave the pension plan altogether. Put another way, the responsibility, or liability, for benefits that the fund cannot cover actually belongs to the employers paying into the fund. Each employer owns a proportionate share of the unfunded liability, and that share is referred to as “withdrawal liability”.

covered for the benefits that need to be paid out. Thus, even if you end your relationship with the fund and you are “current” in your monthly contributions, you may still be on the hook for your proportionate share of the unfunded amount. Upon withdrawal, the plan determines the amount of an employer’s liability, notifies the employer of that amount, and collects it from the employer.

Partial withdrawal can occur when there is a substantial decline in the obligation to contribute, including layoffs, plant or warehouse closures, sales, or even changes in the CBA. In the building and construction industry, a 70% base unit decline in contribution will be considered a partial withdrawal. Partial withdrawal may also occur when an employer no longer has contractual obligations under one or more, but not all of the CBA’s, and continues to perform the same type of work within the jurisdiction of the CBA. Additionally, a “facility take-out” may also trigger partial withdrawal liability, where the employer no longer has an obligation to contribute for the work at some, but not all, of its locations but the employer con-

Utility & Transportation Contractor | august| 2017 59

tinues to perform work in at least one location where the contractual obligation to contribute exists.

3. The Construction Industry Exemption There is a special rule applicable to “building and construction industry” employers. Under the exemption, if 1) the employer does not perform the same work in the same geographic jurisdiction; or 2) resumes such work within five (5) years; there is no withdrawal liability when the employer’s contributions end. Thus, if a contractor ceases operations for a full five years, they can avoid paying the withdrawal liability. This can be useful when going out of business.

4. Conclusion

Labor Relations

Unfortunately, if you contribute to an MEP the actual amount of withdrawal liability you are responsible for may be out of your control. However, there are steps employers can take to have a better sense of their potential liability, and to be aware of any changes to that amount.

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As an employer, you have a legal right to request from the plan an estimate of your potential withdrawal liability. Sending a letter to each MEP in which you contribute requesting an estimate or assessment of your potential liability can keep you aware of what you might owe.

It is important to be aware of your obligations under your pension plan, and what can trigger your withdrawal liability, in order to make financially sound business decisions going forward.

About the Author. . . Jonathan Landesman is Co-Chair of the Labor & Employment Group of Cohen Seglias Pallas Greenhall & Furman PC and a member of the Firm’s Executive Committee. He aggressively represents his clients in all areas of labor and employment law. For nearly twenty years, Jon has focused his practice almost exclusively on representing contractors and subcontractors in the construction industry. Jon can be reached at 215.564.1700 or jlandesman@cohenseglias.com.

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Congratulations to Tom Hardell

UTCA President-Elect Best wishes for a successful year leading the Association It’s an honor to be serving on the Board together.

--Phil Schifano

out of sight, out of time By: zoe baldwin, director of government relations

T

he problem with pipes is that they’re underground, where no one can see them rust. Most people never give them a second thought so long as there is water flowing from the tap and a properly flushing toilet; but in a state as old as New Jersey, where the water fuels large swaths of the economy, the out-of-sight-out-ofmind mentality is no longer an option.

In 2016, the nation became acutely aware of an underground crisis that the utility construction industry has been fighting for years: America’s water systems are crumbling and in many places, toxic.

Contamination from the toxic metal causes serious developmental problems in children, and where communities around the country have taken significant steps to address lead issues, New Jersey has failed to do anything meaningful to mitigate the problem.

Unlike many other problems facing the state, we know how to fix this - but we still need our elected officials and state agencies to commit the time and money necessary to address the mounting capital needs.

So what’s the plan? In order to make real and sustained progress toward a state of good repair, the state will need to develop a consolidated capital plan for public water and sewerage systems that works in concert with the NJ Environmental Infrastructure Trust funding.

This means compiling a centralized capital program that accounts for asset management after the initial investment, and allows the ratepaying public to track their water systems’ progress.

Without a coordinated, statewide effort, NJ ratepayers will continue to literally throw money at a problem that will never be solved. As with most things in life there is no silver bullet, but we cannot afford to let this issue languish. We also cannot ask ratepayers alone to bear the brunt of the cost of repair. We look forward to working with our all of our partners in the utility community and the governing bodies that oversee them so that collectively, we develop a holistic solution that spreads the responsibility of repair across several sectors.

The Pipeline

Public outcry following the revelation that high levels of lead lurk in water systems across the state has woke a vast network of concerned citizens and organizations, but the issue goes far deeper than that.

In addition to slowly poisoning our communities, NJ’s aging pipe networks are hemorrhaging water (and money) right back into the ground. For example, a recent audit showed that the 76 NJ water utilities under the Delaware River Basin Commission, an interstate agency headquartered in West Trenton, are losing about 15 million gallons per day of treated water, which equates to a loss of about 21 gallons per customer connection, per day. The report puts a conservative estimate on the losses at just under $8 million per year.

Combined sewer overflows were developed by the Romans and functionally obsolete by middle of the last century, yet twenty-one municipalities in New Jersey still rely on them. Individuals, businesses, and industry all produce sewage, and on a dry day in communities with a combined overflow, all of it is treated. However, when it rains, stormwater mixes with the sewage, and when it rains hard, the system is overwhelmed and raw sewage flows directly into our rivers and streams. It is critical that we keep both systems in mind as we begin to examine the policies and funding mechanisms that will bring our infrastructure into the 21st Century.

Luckily, New Jersey will have a new Governor in January of 2018.

UTCA has been developing a policy platform to help guide the incoming administration toward policies that get us on the right track financially and structurally. We’ve laid groundwork with the Legislature, and have been working with a wide swath of allied organizations so we can hit the ground running when the new Governor takes office.

And it’s not just the clean water infrastructure in dire straits: where there’s a pipe leading in, there’s a pipe leading out. Drinking water issues are easily humanized, easily engaging – but our sewer infrastructure, while perhaps less sympathetic, is just as important, and unfortunately, in just as bad repair.

In the meantime, your Association needs your help. As we prepare to launch this multi-year initiative, we ask you to send any and all bad pipe pictures, videos, or “slices” that we can use as visual aids in our campaign. NJ residents and lawmakers need to see just how bad this crisis really is, and since we can’t bring everyone to a jobsite, your documentation is the next best thing. Please contact Zoe Baldwin for more information on the effort: zoe@utcanj.org or 732.292.4300.

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TraďŹƒc Lines started out as a small line striper in the early days of the

company. It grew and evolved into one of the pioneer companies in the modern striping era. The multi-state striping contractor applies striping materials mainly in the mid-Atlantic region.

Congratulations on 65 years of service in this industry!

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Congratulations to Tom Hardell from your friends at

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$1 trillion infrastructure program outlined in president’s 2018 budget By: joe fiordaliso, acecnj

A

CEC is not only working to advocate for the business interests of the engineering profession in Trenton, we’re also hard at work on infrastructure policy in Washington. Funding for investment in the repair and rehabilitation of our nation’s infrastructure is chief among those policy issues for ACEC.

For New Jersey and New York these shortsighted cuts directly jeopardize the Gateway Program, arguably the most important infrastructure program in the nation. We’ve expressed our dismay to Washington through our own Congressional delegation and don’t understand why some of our leaders have gone out of their way to torpedo this vital project.

President Trump’s 2018 budget blueprint envisions a 10-year, $1 trillion infrastructure program, including $200 billion in new federal funding, private investment, and regulatory reforms to expedite projects.

Department of Defense programs are slated for $52.3 billion in additional funding, which would include facilities construction, while the Corps of Engineers budget would be cut by $1 billion.

The President’s budget also proposes significant cuts to foreign assistance programs, as well as embassy construction.

The document states that “the Administration’s goal is to seek long-term reforms on how infrastructure projects are regulated, funded, delivered, and maintained.” A range of market sectors are expected to be targeted, including surface transportation, airports, waterways, ports, drinking and waste water, broadband, and key federal facilities. There are no details specified for how the $200 billion in funding would be allocated across infrastructure modes or programs.

For transportation in the 2018 fiscal year, the President’s budget requests full funding for FAST Act programs funded through the Highway Trust Fund, including $44.3 billion for highways and $9.7 billion for transit formula grants. It also includes $3.35 billion for the Airport Improvement Program, consistent with current funding.

However, what’s concerning to ACEC and other infrastructure groups are the significant cuts proposed in the budget. For example, U.S. DOT discretionary programs, would be reduced by 12 percent, including proposed cuts to transit capital investment grants and the elimination of the TIGER multimodal grant program. The budget would also eliminate the $3 billion Community Development Block Grant program as well as rural water programs.

Many of the same proposed cuts were rejected by Congress in the recently enacted spending bill for Fiscal Year 2017, and it appears that lawmakers in both parties have serious concerns over the Administration’s 2018 budget proposal. Nevertheless, ACEC, its stakeholders and allies will all work to protect key federal infrastructure programs as the House and Senate proceed with the FY2018 appropriations process.

We received some good news this past week when we learned that our own Rodney Frelinghuysen, Chairman of the powerful House Appropriations Committee, included $900 million for Gateway in the FY2018 T-HUD spending bill. We’re hopeful this funding remains in place.

Engineering Exchange

The plan would expand existing financing programs supported

by ACEC and other stakeholder groups, including the Transportation Infrastructure Finance and Innovation Act (TIFIA) program to finance transportation projects, as well as a similar program (WIFIA) to support water projects. It also includes tolling options for projects on the Interstate system and wider use of Private Activity Bonds (PABs) for infrastructure projects. The Administration also wants to create a non-governmental entity to manage the nation’s air traffic control system.

The State Revolving Fund (SRF) programs for water and wastewater would see a modest increase in spending in 2018, while Department of Energy programs would face significant cuts.

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Congratulations to

Union Paving for a job well done on the Bayonne Project.

Good Luck to Tom Hardell in his role as UTCA President.

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Feature Story

Union paving shines on the new jersey turnpike authority’s interchange 14a project By: anthony attanasio, executive director

G

erard and Nick Burdi, owners of Union Paving & Construction Co., have never shied away from challenging projects - all one has to do to see their impressive legacy is to drive arond New Jersey. Their current work on the New Jersey Turnpike Authority’s (NJTA) Interchange 14A project continues this proud tradition of delivering world class infrastructure on time and on budget.

The NJTA 14A project is designed to reduce traffic delays on the Newark Bay-Hudson County Extension, which traverses Bayonne and Jersey City. The spur is regularly plagued by significant congestion, and projections show future traffic volumes increasing dramatically due to planned expansions at the port and residential and commercial development in Hudson County.

The 14A project seeks to relieve congestion on the spur by reconfiguring and widening the existing interchange to accommodate projected growth. Several key features include increasing the toll plaza capacity from 11-lanes to 13-lanes; increasing the ramp from Interchange 14A to westbound Hudson County Extension to 2-lanes; replacing the existing 2-lane connector bridge with a new 4-lane structure to Routes 440, 185, and Port Jersey Boulevard; and building a new flyover ramp from the interchange and Port Jersey Boulevard to Route 440 south. The existing traffic signal at E 53rd Street will be eliminated and the new Roundabout will maintain permanent access to the NJ Turnpike Interchange

Aerial view of Union Paving’s Interchange 14A project

14A. Through these improvements, the 14A project will reduce travel times for commuters, encourage economic development, and improve air quality for communities along the spur.

Union Paving project managers Dan Crum and Travis Carey point out that the key to success on such a complicated job is proper project staging. Like so many other projects in New Jersey, but even more glaring in a place like Hudson County, is how small the available space is for staging a project of this magnitude. Located in the most densely populated portion of the most densely populated state in the country, building a $160 million infrastructure project on what feels like a postage stamp sized construction site presents tremendous challenges. So far, the focus of the Union Paving team has been on the staging between the bridge and road work, and most importantly, how to make them mesh.

Fortunately for Union Paving, this is exactly the type of project they enjoy building because it requires a multitude of expertise and several different construction disciplines. The variety of work required on the project has allowed Dan and Travis to combine staging to maximize time efficiencies. At most times, eight different areas are going at once, which affords the Company the flexibility to pivot when certain parts of the job experience problems or unforeseen issues slow them down. This ability to toggle between segments of work has been key to their success on this and other complex jobs.

The project calls for seven bridges before you even get to the road work, toll plaza, and other components. Of those bridges, three needed to be widened, one is being reconstructed, and three were

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brand new structures. Utility relocation, reconstruction of several toll plazas while maintaining traffic flow, and many more challenges make this project a real nail biter.

One significant issue that Union Paving faced along the way required some real finesse in their staging. As anyone in our industry knows, regardless of how good a set of design plans are, they can never truly account for what a contractor will find under the surface. Twenty five drilled shafts were included in the project, of which twelve needed to be nine feet in diameter.

“We put in place very difficult milestone dates that we need to meet. By challenging ourselves, we have more time to deal with complications that arise.”

To date, Union Paving’s 14A project is slightly ahead of schedule and within budget. Feedback from the local com- Dan Crum & munity and elected officials has been Travis Carey very positive, and the project is well on its way to meeting its completion date in the fall of 2018. We look forward to Specifically, Union Paving was unable to sharing the completed project with our readers and wish the enidentify the hardness of the rock or any other unforeseen conditire Union Paving team the best of luck as they complete this tions until the ground was open. Fortunately, along with propproject of regional significance! er planning, Dan and Travis point to the excellent work of their drilling subcontractor 3C Drilling.

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Travis and Dan feel one of the keys to the project’s current success has been keeping to a very aggressive schedule. “We put in place very difficult milestone dates that we need to meet. By challenging ourselves, we have more time to deal with complications that arise.”

A project of this magnitude could not be possible without topnotch staff and strong project partners. Dan and Travis rely heavily on their team of superintendents and project engineers such as John Paquet and Dan Barwicki among others. Union Paving is also happy to share that the design work by Gannett Fleming, and the Construction Inspection work

by AECOM have been great. The team has also been able to rely on some of the highest quality subcontracting work by firms such as 3C Drilling (which, the team points out, invested in new equipment at its own cost to meet the needs of the project), DMJ Industrial Services, Structural Services and Schifano Construction.

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Feature Story

gas pipeline expansion creates economic opportunity for nj contractors By: chris stockton, williams

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ew Jersey construction contractors understand the importance of infrastructure projects.

While much attention is given to the need to upgrade our country’s existing infrastructure – roads, bridges, airports, water and sewer systems – another vital piece of infrastructure that is often overlooked is our nation’s 300,000 miles of underground transmission natural gas pipelines.

New Jersey hosts about 1,500 miles of underground transmission natural gas pipelines. One of the largest operators of natural gas pipelines in New Jersey is Williams, owner of the massive 10,000mile Transco pipeline system.

Constructed in the 1950s, the Transco pipeline stretches from South Texas and New York City and includes about 500 miles of pipe in New Jersey. The system delivers about half of the state’s natural gas, providing service to utility companies like New Jersey Natural Gas, PSE&G, and South Jersey Gas. Buried underground, transmission pipelines are generally out of sight, out of mind. However, construction contractors who support the installation or maintenance of these underground pipelines understand just how far-reaching the scope of new pipeline infrastructure investments can be.

Last year, energy analyst ICF International released an infrastructure report forecasting between $290 billion and $376 bil-

lion in new natural gas infrastructure investments from 20152035 to keep up with growing natural gas demand. In New Jersey, one such investment is the nearly $1 billion Northeast Supply Enhancement Project proposed by Williams.

The Northeast Supply Enhancement project is designed to expand existing Transco energy infrastructure in New Jersey, Pennsylvania, and New York in order to increase natural gas deliveries by about 400 million cubic feet per day, or enough natural gas to serve the daily needs of about 2.3 million homes.

Energy infrastructure investments present numerous opportunities for construction contractors, creating an economic ripple that is felt by construction contractors, as well as a wide variety of material and professional service providers, ultimately resulting in significant benefits for state and local economies.

In May 2017, Williams released the results of a comprehensive study authored by researchers at Rutgers University analyzing the economic impact of the proposed Northeast Supply Enhancement project. According to researchers at the Edward J. Bloustein School of Planning and Public Policy, the design and construction of the Northeast Supply Enhancement project will generate approximately $327 million in additional economic activity (GDP) in Pennsylvania, New Jersey and New York. In addition, the project will directly and indirectly generate 3,186 jobs during the one-year construction period, resulting in an estimated $234 million in labor income.

The economic modeling exercise uses the R/ECON Input-Output Model, which was developed at the Bloustein School to measure

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the economic and fiscal impacts of infrastructure investments, business operations, and other economic events. The Bloustein School is one of the nation’s leading centers for the theory and practice of planning and public policy scholarship and analysis.

The full scope of the Northeast Supply Enhancement Project comprises about three miles of new pipe loop in Middlesex County, a new 32,000-horsepower gas turbine compressor station in Somerset County, and sections of a 23-mile offshore loop extending from Middlesex County, the Raritan Bay and into New York. The total expenditures on labor, material, equipment and related items for all components of the project in New Jersey are estimated at $184 million, with more than $102 million of that total paid to construction companies.

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In New Jersey, the design and construction of the Northeast Supply Enhancement project is forecast to generate $239.9 million in additional economic activity, including 2,411 direct and indirect jobs lasting one year. The project is also forecast to generate $171.9 million in labor income.

Williams is hoping to obtain all necessary regulatory approvals to start construction on the project in the summer of 2018. To learn more about the project, visit www.northeastsupplyenhancement. com.

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NEWS

utca president elect tom hardell By: Anthony attanasio, executive director

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TCA is proud to announce that at its June General Membership Meeting, Tom Hardell, President and Chief Operating Officer of George Harms Construction, was officially voted in as the UTCA President-Elect. He will begin his service as the organization’s highest-ranking elected officer after being sworn in at the Annual Convention in Atlantic City this fall.

Tom got his start with George Harms Construction forty-seven years ago, running errands during summer vacations while he finished high school. Though he spent those early days just doing odds and ends for George and the crew, Tom knew he had found his calling. Upon graduating from high school, he immediately went to work full time with the company working in the field. From there, he steadily climbed the company ladder, becoming a Foreman and then Superintendent. Never shy of hard work--or when necessary, a tough battle--Tom continued his climb to become the GHC President and Chief Operating Officer.

All of GHC’s projects are a source of pride for Tom, but there are several which he feels truly define the company’s success during his tenure. The Route 35 Victory Bridge for NJDOT stands out in particular, as it was the first ever precast segmental bridge in NJ that involved cofferdams, piles, large diameter drilled shafts, post tensioning, and water operations. Upon completion, the company celebrated the magnificent new piece of infrastructure with a parade and ribbon cutting that included classic cars and, believe it or not, two elephants and a rooster crossing the bridge!

Tom, and the entire Harms Team, have completed many other NJDOT projects of significance to New Jersey’s transportation safety, mobility and efficiency, including: Route 24 Missing Link

to I-287; I-295/I-195 Interconnect; Route 52 Causeway Contract A-1; Route 35 Sandy Restoration Contract 2; and the Route 1 & 9 St. Paul’s Avenue Bridge. In addition to Tom’s experience with the NJDOT, he and the Harms team have constructed many NJ Turnpike Authority projects including Interchange 6 of the highly successful widening program, NJ TRANSIT projects including a major portion of the Hudson-Bergen Light Rail Expansion and the Woodbridge and Red Bank Train Stations, as well as countless projects for private utility companies, counties, and municipal governments. Most recently, the company completed several unique projects including the NJ Turnpike Authority Central Inventory Building/Maintenance Facility as well as the Long Branch Boardwalk.

For seven years, Tom has proudly served as a member of the UTCA Board of Directors. He is currently a member of the Executive Committee, a member of Budget Committee, Chair of the Membership Development Committee, and is Co-Chair of the Legislative Committee. He is also concluding a very successful term as Chair of the Executive Seminar Committee. Tom is excited for his term in office and is looking forward to leading the Association for the next year. His goals as President include building upon the Association’s already strong relationships with the State Transportation agencies, continuing to improve the Association’s success on behalf of its members, and to grow the Association’s membership, specifically with new contractor members.

Tom and his wife Janice reside in Manchester and have several grown children. Tom is particularly proud of his son Jason, who is following in his father’s footsteps and has risen to the level of Vice President of Operations at George Harms Construction.

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By: Carl bloomfield, the graham company

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ver two decades ago, subsidence exclusions became an increasingly popular item included in Commercial General Liability and Umbrella Liability policies purchased within the construction industry. After a series of costly defect insurance claims against homebuilders in California – and other areas where creating a stable foundation can be difficult due to subsurface conditions – many insurers began utilizing these restrictive endorsements to reduce costs associated with claims.

According to the International Risk Management Institute, subsidence is defined as, “A sinking of filled, graded, or undermined earth or soil to its original or natural elevation.” Subsidence exclusions were initially limited to property damage arising from completed operations. However, over the past 20 years, these exclusions have further evolved to include both bodily injury and property damage resulting from ongoing and completed operations.

A typical subsidence exclusion could read, “Property damage caused by, resulting from, attributable or contributed to, or aggravated by the subsidence of land as a result of landslide, mudflow, earth sinking or shifting, resulting from operations of the named insured or any subcontractor of the named insured.” By using strategically broad language and purposefully limiting coverage, contractors were often left exposed by their insurer, and in the event of alleged damage, could end up paying exorbitant settlement fees.

As insurance brokers and industry executives caught onto the devastating effects of the subsidence exclusion and began moving coverage to carriers without this type of exclusionary language, many insurers began repackaging the subsidence exclusion as a land and earth movement exclusion. The land and earth movement exclusion often reads, “This insurance does not apply to ‘bodily injury’, ‘property damage’ or ‘personal or advertising injury’ directly or indirectly caused by, arising out of, relating to, resulting from, attributable to, contributing to, or aggravated by any actual or alleged ‘land or earth movement’.” This could mean anything from mudslides and earthquakes to volcanic eruptions and any other movement of land or earth, which is the same premise as the previously referenced subsidence exclusion.

Currently, many insurance company versions of this exclusion go on to say that bodily injury and property damage is excluded because of land or earth movement, “regardless of the cause, manmade or natural.” With this plain written language, it is not difficult to understand how these exclusions are a significant limitation of coverage for companies in the construction industry that make a living moving earth on every jobsite they work on. In fact, sev-

NEWS

understanding land & earth movement exclusions eral state Supreme Courts have recently affirmed that the language in the most common land and earth movement exclusions in the marketplace today are clear and unambiguous, and the courts have granted summary judgements in favor of the insurance companies to that effect. These exclusions are here to stay.

It’s important to note that land and earth movement endorsements often sound remarkably similar to common earthquake exclusions on a Property Policy. Therefore, if you’re in a geographical area where earthquakes are not a common threat – such as in the Northeast – it isn’t surprising you might not pay a great deal of attention to this item. Unfortunately, there are several common scenarios where this exclusion could create holes in your policy’s coverage. According to a 2011 OSHA report, nine percent of fatalities in 2008 in private-industry construction were a result of “caught-in or -between” hazards such as trenching cave-ins. If a third-party such as an inspector, engineer or subcontractor is injured in this type of cave-in, insurance coverage could be denied under the land and earth exclusion.

In addition to accidents related to trenching, when a property damage or bodily injury claim arises from the settlement of any structure – such as a foundation, bridge abutment, or even roadway – coverage may not apply due to the land and earth clause.

Construction vibration-related claims could also be uncovered given the broad nature of the exclusion. Another potential hazard on many construction sites is bodily injury or property damage resulting from the overturn of equipment. While creating work zone safety protocols can help to reduce the probability of an accident, there is no way to completely mitigate risk on any jobsite.

In the event that overturned equipment injured or killed a third party or damaged third party property, the General Liability policy might not be triggered as the overturn may be attributable to land or earth movement, whether manmade or natural.

Because land and earth exclusions negatively alter the scope of an insurance policy to omit bodily injury and property damage claims resulting from all types of land or earth movement, arising from both ongoing operations and completed operations, contractors who are involved in any type of earthwork should avoid purchasing policies featuring this altogether. If you will be working with subcontractors, their exclusionary endorsements should also be evaluated during the bidding process. It’s important for construction executives to work closely with their insurance broker to identify the specific risks that apply to their individual operation, and to ensure they are adequately covered in the event of a claim.

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By: Bob damato, partner, rda benefit services

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uy-sell agreements, also known as business continuation plans, are legal contracts that spell out the terms and conditions under which a partner can sell his/her interest in the business. These agreements are an efficient means for ensuring the smooth continuation of a business after a potentially disruptive event; such as an owner’s retirement, incapacity (disability) or death.

Buy-sell agreements can also minimize the possibility that the business will fall into the hands of outsiders. The agreement requires one party to sell, and gives another party the right to buy a particular ownership interest (in a business) in the event of death, disability, retirement; or even other life events such as a divorce, loss of professional license, and resignation of one of the business owners.

Active owners typically focus on the tangible, day-to-day operations of the business; such as sales and service, vendor costs, employee issues, long-term receivables and earnings. The loss of any of the business owners or partners creates a void in management, operations, sales—everything critical to business continuation. A properly designed and funded buy-sell agreement can help address this issue. It can provide liquidity for purchase of the departing owner’s interest, as well as establishing a fair price for that interest.

Buy-sell agreements are often between owners or between owners and the business entity itself. It is also possible that individuals who are not currently owners (such as an employee, an outsider or a family member) may be parties to this agreement.

There are THREE types of buy-sell agreements: Cross-Purchase, Entity and Trusteed Cross-Purchase Agreements. Each is a binding legal agreement between the owners.

Entity Purchase Agreement: This agreement is between a business entity and its owners. Assume a business is owned by the partners at different percentages. They enter into an agreement with the business for the purchase and sale from their partners.

Once the departing owner’s beneficiaries receive the cash, the business interest is transferred back to the business. Using life and disability insurance, the company owns the policies, and if a partner passes or becomes disabled, the policy will provide cash value (tax-free) to the company to provide the other partners the ability to purchase the departed partner’s interest.

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why business owners need a buy-sell agreement Cross-Purchase Agreement. This agreement is very similar, but it is usually between two partners, providing for the purchase and the sale of each other’s interests. The “A” partner has to purchase the interest of the “B” partner, and vice versa. They usually purchase life insurance on each other to have the money available to purchase the departed owner’s interest. If more than two stockholders are involved, a cross purchase plan may be too cumbersome due to the number of policies required.

Trusteed Cross-Purchase Agreement: This legal agreement is between a third party trustee and the partners or stockholders. The trustee or escrow agent acts to carry out the obligation of the partners or stockholders.

What is a “FUNDED” Buy-Sell Agreement? When a partner leaves or passes away, the other partners have several options to pay that person or his/her beneficiaries. They can use a variety of funding methods: Cash, borrow the money, deferred compensation, or most effectively, life insurance or disability insurance.

Factors that generally influence the choice of the funding method include business structure and size, number of owners and their ages, tax implications, ownership percentages, and the amount of cash or credit available to the business or its owners.

Life insurance and disability insurance are generally the most cost-efficient ways to fund a buy-sell agreement. The death benefit or the disability benefit is tax-free. And the tax-free cash from the policy is available immediately for the partners to purchase the deceased or disabled partner’s stock. Disability insurance cannot be overlooked as a key component for funding buy-sell agreements. Statistics show that a person is far more likely to become disabled than to pass away during their working years.

Insurance provides the following benefits: guaranteed, immediate tax-free cash and cost efficiency--premiums can be significantly lower than the cost of a loan.

It is critical to work closely with your lawyer and your CPA to determine the best type of buy-sell agreement for your company, and to ensure that the business is protected for any type of situation. In addition, proper funding of the buy-sell agreement is critical to the continuation of the business you and your partners have made so successful. For more information, please feel free to contact Bob Damato at 609-693-0772 or bob@rdabenefits. com.

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