Utility and Transportation Contractor April 2019

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Utility & Transportation

Carbro Constructors Completes 35 Years

april 2019

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president’s message

From the desk of: joe walsh The message I want to share with you is best expressed in an op-ed I recently penned on behalf of the UTCA and featured in NJ Spotlight on February 28, 2019.

INVESTMENT (AND PLANNING) URGENTLY NEEDED FOR WATER INFRASTRCTURE Public works contractors see the problems first-hand — and the potential costs if New Jersey doesn’t get to grips with one of its most vital systems Public works contractors play an essential role in maintaining, and too often repairing, the unseen structures that make modern life possible. In this role, we work directly with one of our most neglected, yet most vital systems: water infrastructure.

We fix water main and sewer lines that break routinely and disrupt the everyday life of residents and businesses, including ours. We see first-hand how these events shut down roads and transit, shutter business operations, and create public health hazards. In older communities, we are increasingly working with municipalities and utilities to replace lead service lines and other insufficient system components that turn otherwise clean, treated drinking water into a risk to our children’s health and development. We track potential projects and stand by as bureaucratic delays stymie viable projects sponsored by responsible water system operators.

Funding in the state budget To overcome the most immediate challenges, it is critical for the governor and the Legislature to add into the state budget enough funding to meet the immediate needs of communities that have invested time and money into proposing projects with the expectation that the Infrastructure Bank would support them.

UTCA’s broader solutions can be viewed on our website, utcanj.org/water.

The operative term here is “investment,” and the benefits extend far beyond the construction industry. Investment in water infrastructure at the local, state, and federal level will foster healthier communities and a stronger economy, will spur new job growth and will increase our economic competitiveness as a state. According to a recently published study from American Road and Transportation Builders Association, a $1 billion increase in annual investment in water infrastructure over the next 20 years will result in broader economic gains: • Sales and output by businesses in all sectors is expected to increase by $2.1B. These investments will contribute $1.2B to the state’s GDP; • 13,787 jobs would be supported or created throughout the state economy;

Every day, my crews work to repair and replace the underground network of pipes meant to ensure the quality of our drinking water and the effectiveness of sewer systems. The stories and images brought back from the field are alarming to me and they should be to you, no matter where you live in New Jersey.

• These workers will earn a cumulative $739.5 million and will generate $143.1 million in additional state and local tax revenues, including $62.8 million in state and federal payroll taxes, $61.1 million in state income tax and corporate business tax revenues, and $19.3 million in state and local sales and use tax revenues.

It is common for my crews to be working on 100-plus-year-old pipes — sometimes made of wood — that are held together by only earth and that crumble when surrounding soil is removed. What is most alarming is the lack of a plan by those responsible for this issue at the federal and state level. Despite the constant news coverage on the severity of the issue and a strong push from a range of advocacy groups, we have no long-term strategy and are flying by the seat of our pants in hopes that something big doesn’t break at the wrong time. This is inexcusable.

Funding is, of course, part of the solution but by no means the only part.

We must avoid the trap of being either dissuaded by or led by the cumulative price tag of the work. Increasing capital investment is an unavoidable aspect of fixing this problem; but without a structured process to ensure accountability and fairness, new money will do little to address the root cause.

The Utility and Transportation Contractors Association (UTCA) is thankful for the state’s Infrastructure Bank and the programs it offers to support water systems as they work to upgrade and maintain our aging infrastructure. Funding for these programs (especially for critical drinking water projects) is oversubscribed, and recently the Department of Environmental Protection proposed deprioritizing important projects that it just doesn’t have the funding to support.

As the Board President of the UTCA I can assure you that our industry is not interested in throwing stones. We have invested time and energy in a proactive set of actions that avoid stopgap measures and offer the federal and state government the best path forward toward comprehensive reform.

A coordinated state effort must include several components: longer-term statewide capital planning; increased requirements and oversight of utility-lead asset management planning; a reduction in project review times and costs; and a concerted focus from the DEP and project sponsors to accelerate significant projects to completion.

When water systems don’t properly maintain their underground assets, all of us pay the price either through wasted rate dollars literally leaking treated water through pipes, or with something even greater — our health.

The time for talk is over. Now we must get to work.

CONGRATULATIONS to Carbro Constructors and the Caruso family on 35 years in construction. Congratulations to Garden State Precast on 20 years in business. I wish you continued success in the future.

Best regards,

Joe Walsh 2 Utility & Transportation Contractor | april| 2019

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carbro constructors completes 35 years

DEPARTMENTS 2 7 13 21 29 35 47 51

Cover 40

CONTENTS

Cover story President’s Message

FEATURES 56 garden state precast celebrates 20 years in business

financial overview legal dig accounting corner legislative news

NEWS 67 elevate your employee benefit retention strategy

safety perspective labor relations the pipeline

Published Bimonthly During 2019

1670 Route 34 North Farmingdale, NJ 07727 PO Box 728 Allenwood, NJ 08720 PH: (732) 292-4300 FAX: (732) 292-4310 www.utcanj.org

Publisher: Robert A. Briant, Jr. Editor: Helene Nasdeo Editorial Contributors: Zoe Baldwin, Dan Neville, Dan Kennedy Advertising Manager: Helene Nasdeo Production/Graphics: Helene Nasdeo, Lauren Hagan Circulation: Helene Nasdeo Printed By: American Plus Printers $௻OLDWLRQV ARTBA, Clean Water Construction Coalition UTILITY AND TRANSPORTATION CONTRACTOR (ISSN 0192-4843) is published six times a year by the Utility and Transportation Contractors Association of New Jersey, 1670 Highway 34 North, )DUPLQJGDOH 1- 3HULRGLFDO SRVWDJH SDLG DW )DUPLQJGDOH 1- DQG DGGLWLRQDO PDLOLQJ RI¿FHV POSTMASTER: Send address changes to UTILITY AND TRANSPORTATION CONTRACTOR, PO Box 728, Allenwood, NJ 08720.

Utility & Transportation Contractor | april| 2019 3

By: bill ruckert, provident bank

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he Financial Accounting Standards Board (“FASB”) has introduced two material changes to financial reporting that will impact many, if not all, businesses. The first went into effect on January 1, 2018 for public companies, and on January 1, 2019 for privately held companies, and deals with the treatment of revenue recognition. The second goes into effect January 1, 2019 for public companies and changes the accounting treatment of operating leases; privately held companies are required to adopt the lease accounting change by January 1, 2020.

The new revenue recognition accounting standard was a joint effort between FASB and the International Accounting Standards Board (“IASB”), and is intended to improve financial reporting.

Its adoption will likely cause some changes to a company’s balance sheet with expanded contract assets and contract liabilities.

The guidance should remove inconsistencies and weaknesses in existing revenue requirements according to FASB. Many contractors recognize revenue on a percentage of completion basis already, which in its most basic form, is a methodology the new standard embraces. Contractors that provide multiple services, such as engineering, procurement and construction are more likely to have a change in how they recognize revenue. Others that have contracts with bonus or penalty clauses will also be impacted.

In 2006, FASB and IASB began to search for an improved method for reporting leasing activities. Together they conducted extensive outreach with diverse groups of stakeholders for public comment. A decade later, an Accounting Standard Update (ASU), was released requiring companies to report all operating leasing activities with terms greater than 12 months on their balance sheets. As mentioned, public companies must implement the new standard effective January 1, 2019, private companies will follow one year later.

Adoption of the revenue recognition accounting standard will cause some disruption for accountants, bankers and other financial analysts, on a year over year basis. However, the new lease accounting standard will create significantly more headaches for financial statement preparers and users for a variety of reasons, as the heretofore off-balance sheet disclosure will now be reflected as both an asset and a liability.

ception of the lease, ABC Co. will record a liability on its balance sheet at the present value of the lease payments, with a corresponding “right to use” asset of the same value. The liability will be treated similar to other debt with a portion classified as a current maturity of long-term leases, and the balance will be long term leases payable. The “right to use” asset will be a noncurrent asset. Therefore, the current portion of the lease payable will not be offset by the creation of a current asset, and therefore will negatively impact a company’s liquidity measurements.

In its most severe form, the lease accounting standard adoption can cause a company’s financial condition to appear illiquid, undercapitalized and potentially bankrupt, on paper. Moving to the income statement, the change is less impactful as the lease payments will continue to be accounted for in operating expenses as rent expense, consistent with current accounting standards.

Cash flow measurements are however impacted, as the current liability associated with the lease payments will increase a company’s debt service load, implying a company’s cash flow may be insufficient to support on-going operations.

Financial overview

fasb pronouncements are noteworthy

Loan covenants are surely to come into play as the above changes will trigger defaults. Whether a company’s loan agreement includes basic negative covenants like current ratio, working capital, leverage, fixed charge and debt service to name a few, the calculation currently does not include the changes in lease accounting. Failure to adjust covenants accordingly will strain relationships between the bank and borrower and most certainly disrupt the availability of capital.

Provident Bank is well aware of these accounting pronouncements and their impact on a company’s financial results. We are having open dialogue with our customers and their accounting firms to proactively adjust covenants and other measurements to ensure financing needs of our borrowers are met. I encourage you to discuss these issues with your business partners to ensure your company is well positioned for the future as well, or perhaps, call me at 732-800-0544.

I’d like to congratulate our friends, the Caruso’s at Carbro Constructors on 35 years in construction. Congratulations to Garden State Precast on celebrating 20 years in business.

In a very simplistic example, assume ABC Co. has a 10-year operating lease with annual lease payments of $100,000. At the in-

Utility & Transportation Contractor | april| 2019 7

releases - does yours bring you back to the future?

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ou’ve probably read and signed release language in a settlement agreement that appears to release claims from the beginning of the universe to the end of time without really knowing how a court would interpret those terms that seem so clear. If so, you’re not alone and the problem can come back to bite you years later.

A recent New Jersey case brought the issue to stark relief. In County of Hudson v. PMK Group, Inc., 2019 WL 993336 (N.J. Sup. Ct., App. Div.) involved two separate road construction projects where the County retained PMK and CME Associates to serve as design engineers and to perform geotechnical evaluations for both projects. Each project involved extending and connecting 14th and 15th Streets with Sinatra Drive North at different points. After the first project was completed, a bridge collapsed and the County sued to recover the repair costs. A settlement was reached and the parties executed a release prepared by the County which provided: We release and give up any and all claims and rights which we may have against you. This releases all claims, including those of which we are not aware and those not mentioned in this Release. This Release applies to claims resulting from anything which has happened to now.

Less than three months later, an entirely different portion of Sinatra Drive collapsed and the County again initiated suit.

PMK and CME moved for summary judgment seeking to relieve themselves from liability based on the release, arguing that the settlement was intended to cover all existing claims, whether or not such claims were known to the County. The County argued that the settlement covered the first collapse and the intent of the

parties was not to enter general releases with respect to potential future claims stemming from the Sinatra Drive project.

The motion judge granted summary judgment in favor of PMK and CME, holding that the release “clearly encompassed future claims growing out of this four block project” since CME’s alleged wrongdoing took place before the release was prepared and that the inclusion of claims which the County “may have” is “necessarily future oriented.” The Appellate Division overruled the motion judge, emphasizing that the two projects were separate and distinct, two blocks apart, and built on two different types of platforms; each project had a separate design contract. Most significantly, the Appellate Division accepted the County’s assertion that the inclusion of the phrase “which has happened up to now” applied to existing or accrued claims at the time the release was executed. That was precisely the opposite interpretation that the motions judge derived from this language. Although a trial court could be persuaded that the parties did intend to release the claims being raised by the parties, the Appellate Division ruled that further discovery was needed and PMK and CME were not entitled to summary judgment as a matter of law.

Legal Dig

By: adrienne l. isacoff, florio, perrucci, steinhardt & cappelli

A similar issue was raised in a matter decided by the Connecticut Superior Court, in Great American Assurance Co. v. Varco Pruden Buildings. The Court held that a broad general release has the effect of releasing claims based on a breach of contract occurring prior to the signing of the release, but unknown or unobservable at the time. The dispute arose out of the erection and collapse of a pre-engineered metal building. After disputes arose between the owner, supplier and fabricator, the parties resolved the lawsuits and executed a general release with the expansive type of language that parties tend to think is so foolproof that no litigation would be needed to settle the intent of the parties: This release provides that [the owner] has remised, released and forever discharged . . . all manner of action and suits . . . which it ever had, now has or which its successors or assigns hereafter can, shall or may have for, upon or by reasons of any matter, cause of thing whatsoever from the beginning of the world to the day of these presents.

Nevertheless, the release specifically exempted the warranty rights contained in the materials contract and any associated warranty documents for any defects unknown at this time in workmanship or material.

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Legal Dig

Several years later the building collapsed under the weight of accumulated snowfall. The owner again sued the supplier and fabricator alleging that the damages arose out of defectively designed and supplied commercial steel. Defendants filed motions for summary judgment contending that the owner’s claims arose out of events that occurred before the signing of the release and were, therefore, barred. The owner claimed that the release did not bar its claims because the events leading to its damages did not occur at the time the release was executed, and that the building’s collapse was not foreseeable when it executed the release.

The Court found that the release language concerning “future claims” or “unknown claims” is generally construed to cover claims that are unknown, but are “in being” at the time the release was signed, although they have not yet manifested themselves. In this situation, because all of the contractor’s and supplier’s conduct relating to the fabrication and erection of the building occurred before the general release was signed, the owner’s claims were barred.

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TAKEAWAY Parties should carefully consider whether to tailor a release narrowly or to expressly carve out warranties, latent defects, or other sources of potential future claims. The Court in Varco Pruden Buildings noted that the defendants could have exempted a design defect based on the products liability cause of action from the coverage of the release, as they did with the breach of warranty claims. Admittedly, it would have been unlikely that the owner would have accepted such a carve out in the release. But it’s worth keeping these options in mind. If such exceptions are not expressly noted, by signing a release, you may be barred from holding another party responsible for claims as yet unknown and not anticipated at the time of the release.

revenue recognition - construction contractors under generally accepted accounting principles By: robert matticola, cpa, lawson, rescinio, schibell & associates, PC

Criteria for Recognizing Revenue Under New GAAP (ASU 2014-9) Revenue recognition under the new GAAP is based on the principle that revenue from contracts with customers should be recognized when an entity transfers goods or services to the customer at the amount the entity expects to be entitled to receive from the customer. In applying the new guidance, the terms of each contract and all relevant facts and circumstances should be considered. Additionally, the guidance should be applied consistently to contracts with similar characteristics and in similar circumstances.

Under the new GAAP, the revenue recognition guidance only applies to contracts with customers that meet certain criteria. If the criteria are not met, it is questionable whether the contract creates enforceable rights and obligations. Therefore, to recognize

revenue from a contract, the contract must meet the following conditions: • The contract has been approved by the parties to the contract.

The approval may be written, oral, or in another form that is a customary business practice.

• Each party is committed to perform its obligation(s) under the contract (such as an obligation to provide a good or service or an obligation to pay consideration). However, in the Basis for Conclusions, the FASB (Financial Accounting Standards Board) indicated that the parties do not necessarily have to be committed to fulfill all of their respective obligations, as long as they are substantially committed to the contract.

• Each party's rights to the goods or services to be transferred can be identified in the contract.

• The payment terms can be identified in the contract. However, the price does not have to be fixed or explicitly stated as long as the right to payment is enforceable and the transaction price can be estimated.

Accounting Corner

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henever one thinks about accounting for the construction industry, two accounting concepts normally come immediately to mind—the percentage-of-completion (PC) method and the completed-contract (CC) method. The accounting profession has accepted and used these two accounting methods for many years. Confusion often exists regarding whether the PC method and the CC method are alternatives or whether their use is dictated by the unique economic, industry, and accounting circumstances of each contractor. Perhaps one reason that contract accounting is difficult to master is because it is difficult to explain in a logical and concise manner. This has been all changed for financial reporting effective commencing 2018 for public entities and 2019 for nonpublic entities, earlier adoption is permitted.

• The contract has commercial substance. To have commercial substance, the risk, timing, or amount of an entity's cash flows must be likely to change as a result of the contract.

• It is probable that all or substantially all of the consideration will be collected from the customer for the goods and services promised in the contract. To determine if this condition is met, the customer's ability and intent to pay the consideration when it is due must be considered. Also, whether the entity will receive the amount of consideration to which it is entitled must be considered; that amount might be lower than the price stated in the contract if the customer is expected to receive a price concession (such as a discount, rebate, refund, or credit).

If a contract meets those conditions at contract inception, it is not necessary to reassess whether the contract continues to meet those conditions unless the entity becomes aware of a significant change in facts and circumstances. Most contracts of construction contractors should meet these conditions based on the nature of the construction industry.

A Five-Step Approach The key principles applied when accounting for revenue are—

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• Revenue should be recognized in a way that reflects the transfer of promised goods or services to customers, and • The amount of revenue recognized should equal the consideration to which an entity expects to be entitled for those promised goods or services.

GAAP establishes a five-step approach for recognizing and measuring revenue. The five steps are intended as guidelines to help adhere to the key principles established by the new guidance. Entities should recognize revenue from contracts by applying the following five-step process:

Accounting Corner

• a. Identify the contract with the customer.

• b. Identify the separate performance obligations in the contract.

• c. Determine the transaction price.

• d. Allocate the transaction price to the separate performance obligations.

• e. Recognize revenue when (or as) each performance obligation is satisfied.

Note the percent of completion method will be used utilizing the afore referenced approach criteria.

Step 1—Identify Customer Contracts The determination of what is a “contract” is important because it affects subsequent decisions about the transaction price, costs to acquire or fulfill the contract, and contract modifications. A contract does not have to be in writing. It can be a verbal agreement, or an arrangement implied by normal business practices. A contract must have commercial substance and identify the rights of the parties, the payment terms, and commitment of the parties. The scope of the revenue guidance does not apply to promises to provide goods and services that are not associated with a contract. A contract does not exist if each party to the contract has the unilateral enforceable right to terminate a wholly unperformed contract (no goods or services have been transferred, and no consideration has been received) without compensation to the other party.

Step 2—Identify Performance Obligations After identifying customer contracts, each distinct promise of goods and/or services within the contract should be identified.

The concept of a performance obligation is similar to the concept of a deliverable in GAAP. However, determining distinct goods or services requires judgment. A good, service, or bundle is distinct, and should be treated as an individual performance obligation or unit of account, only if both of the following are true: • The good, service, or bundle is capable of being distinct. In other words, the customer can benefit from the item alone, or together with other resources readily available to the customer.

• The promise to transfer the good, service, or bundle is distinct within the context of the particular contract; that is, the promise to transfer the good or service can be separately identified from the other promises in the contract.

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Goods or services that are not distinct should be combined with other goods and services into a group, or bundle, that is distinct.

It is possible to conclude that all goods and services in a contract are part of one performance obligation. Before reaching that conclusion, however, the individual goods and services in the contract need to be evaluated to determine whether the contract contains multiple performance obligations.

Step 3—Determine the Transaction Price The third step of the five-step approach to recognizing revenue is to determine the total consideration the contractor is entitled to receive under the contract. The revenue guidance refers to that amount as the transaction price, defined as the amount of consideration that an entity receives or expects to receive in exchange for the transfer of goods or services promised in a contract. The transaction price can be fixed, include variable consideration, and/or may be adjusted for the time value of money. In addition, the consideration can be cash or noncash. Any noncash consideration is generally measured at fair value. Variable consideration includes discounts, rebates, incentives for completing a contract early or on time, penalties for not completing a contract on time, price concessions, and other contingencies. Nonrefundable fees can be a component of the transaction price charged by contractors at the beginning of a contract. If a nonrefundable upfront fee relates to a performance obligation satisfied over time, the fee revenue should be recognized over time as the performance obligation is satisfied; not when the fee is received.

Step 4—Allocate the Transaction Price to the Performance Obligations This step requires an allocation of the transaction price to the performance obligations based on the standalone selling prices of the goods or services. The standalone selling price of a good or service may be directly observed when that item is sold separately to similar customers in similar circumstances. However, if there is only one performance obligation for a bundle of goods and services, the total transaction price is allocated to the single performance obligation and there is no need to determine standalone selling prices. If standalone selling prices are not directly observable, they should be estimated using one of the following acceptable methods: • Adjusted market assessment approach, which is based on what a customer would pay for the good or service.

• Expected cost plus margin approach, which is based on the cost of providing the good or service plus a profit margin.

• Residual approach, which is the total contract transaction price less observable prices of other goods and services in the contract.

This approach may only be used if the selling price is highly variable or uncertain.

Step 5—Recognize Revenue When (or as) Performance Obligations Are Satisfied In the final step of the five-step approach, revenue is recognized equal to the amount of the transaction price allocated to the performance obligations. A performance obligation may be satisfied at a point in time or over time, and this determination must be

made for each performance obligation at the inception of the contract. For those performance obligations satisfied over time, revenue is recognized at the end of each reporting period by selecting an appropriate method for measuring the progress toward complete satisfaction of that performance obligation. That concept is similar to the percentage-of-completion method.

Completed Contract Method

Appropriate methods that may be used for measuring progress in completing performance obligations include input or output methods. Input methods include costs incurred as compared to total expected costs (cost-to-cost method), resources used, and labor or machine hours. Costs of inefficiencies or wasted resources (materials or labor) are excluded when measuring progress and are expensed as incurred. Output methods include contract milestones achieved and physical progress, such as units produced or delivered. The same method must be used to measure progress for similar performance obligations and in similar circumstances, and the method must be consistently applied. As circumstances change over time, measures of progress are to be updated and accounted for as a change in accounting estimate. If an entity does not have reliable information to reasonably measure progress, it may recognize revenue equal to the amount of costs incurred if it expects to recover those costs. The entity may not, however, recognize any profit until it can reasonably measure its progress.

Disclosures

The completed contract method is not an option under the new GAAP. Thus, for the rare contractors who might have been using the completed contract method an accounting method change will be necessary when adopting the new GAAP.

Accounting Corner

The new GAAP states broad objectives for disclosures and it also defines some detailed guidance toward fulfilling the broader objectives. The financial statement disclosures required under the new revenue recognition guidance include comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows that result from contracts with customers. Both quantitative and qualitative information are required to be disclosed for contracts with customers, significant judgments made and any changes in those judgments, and any assets recorded that are associated with the costs to obtain or fulfill a contract.

Some of the disclosure requirements are optional for nonpublic entities.

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in the lobby: government affairs & legislation By: zoe baldwin

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UDGET Governor Murphy last month proposed his second State Budget to a joint session of the Legislature. The $38.6 billion FY2020 budget contains a projected surplus of $1.16 billion and represents a 3.2 percent increase in spending over FY19.

Currently, New Jersey’s top gross income tax rate--10.75 percent-has only been applicable to income over $5 million; Murphy’s new proposal expands that to all income over $1 million, with the expectation that it will generate $447 million in additional revenue. Unlike last year, the FY20 budget proposal is free of other major tax hikes and also includes more than a billion dollars in savings.

Based on the Budget In Brief (the full budget text is forthcoming at the time of this writing), the proposal maintains funding for a $2 billion State Transportation Capital Program that includes over $1.2 billion for state and local highway and bridge projects.

The program will also be supported with $729 million in pay-asyou-go funding.

DRBA TOLL INCREASE Governor Murphy and Delaware Governor John Carney have signed off on on a modified toll increase to pay for infrastructure improvements on Delaware Memorial Bridge, which connects two of the most heavily trafficked highways in the Northeast. The proposed toll increase increases the user fee by one dollar, meaning drivers will now pay $5 starting on May 1, 2019.

A statement from the Governor’s office said the proposal will generate $32 million in increased annual toll revenue. This is the first increase since 2011.The funding will go to the following major capital projects planned at Delaware Memorial Bridge and Cape May – Lewes Ferry: • bridge paint removal and recoating ($48.2 million) • suspension rope replacement ($24.5 million) • bridge steelwork repairs ($40.5 million)

• ship collision protection system ($45.2 million) • bridge deck repair ($21.5 million) • transfer bridge repairs at the Cape May – Lewes Ferry ($4.3 million) • ferry-repowering program ($9.5 million) BIDDERS LIST We have been working with our friends at the Electrical Contractors Association in support of s2947 (Singleton) /a4580 (Mazzeo), which would require the release of bid list prior to the bid date. We are pleased to announce that the measure has passed the full Senate and is expected to move through the Assembly this spring.

LOCAL AID As previously mentioned, we have been working on legislation that would tighten up the way the New Jersey Department of Transportation allocates local aid funding to local governments. We are pleased to announce that after ongoing negotiations with the Society of Municipal Engineers and the NJ Association of Counties, S2863 (Sarlo/Sweeney) was passed unanimously through committee and with a resounding majority on the Senate floor. We expect the measure to be heard in the Assembly this spring.

Legislative News

Overall, this budget is a good starting point for negotiations and represents a palatable option for legislators – especially when compared with last year’s highly contentious proposal that brought the state to the brink of shutdown. The main sticking point in the Governor’s sophomore attempt is once again the millionaire’s tax.

• pin and link rehabilitation on both bridge structures ($19.7 million)

SHOW ME THE MONEY UTCA has been working with Assembly Transportation Committee Chair, Dan Benson as well as Assemblyman Wimberly and Senator Ron Rice to pass legislation that will increase agency accountability for transportation capital dollars. The TTF reauthorization of 2016 included a provision that mandated a searchable capital plan website; this legislation will add categories of required information including a breakdown of the mix of federal, state and local funds to be used on each project, as well as the status of project and, if project does not advance as planned, a reason for delay. This new accountability will paint a much clearer picture of how our state agencies are spending the monies they collect. The measure has passed the full Assembly as well as the Senate Transportation Committee and is expected to head to the governor’s desk by summer.

E-BIDDING a3137, sponsored by Senate President Sweeney and Senator Oroho, requires public agencies that contract for the construction of public works to use electronic procurement technologies for projects over $5 million. The bill has passed senate committee and at the time of this writing, is expected to pass

Utility & Transportation Contractor | april| 2019 29

the full Senate by March. UTCA worked on amendments with our partners at ACC to ensure that to ensure that DOT prequalification would be included as an accepted credential

Legislative News

STORMWATER UTILITIES A bill that would allow counties and municipalities to better address flooding and water pollution caused by heavy rains was passed by both houses and is now awaiting signature from Governor Murphy. During periods of heavy rain, many New Jersey towns are frequently exposed to stormwater runoff, which occurs when rain falls over impervious structures, such as parking lots, where it picks up contamination that can be introduced into nearby water sources. The runoff is also a frequent source of flooding in neighborhoods.

The legislation would allow communities to create "stormwater utilities" that could impose fees on owners of large impervious areas. The municipalities could then use the fees for upgrades to stormwater infrastructure. Murphy has not indicated whether he will sign the measure.

JOINT BASE OVERPASS Joint Base McGuire-Dix-Lakehurst (JB MDL) is New Jersey’s largest employer, is the only tri-service military base in the country, and includes active installations of the Air Force, Army, and Navy. The joint base is essential to the health of our state, but without investment JB MDL could face closure actions once again. One key area in which JB MDL can remain nationally competitive is in its training operations.

However, access to training space on JB MDL is limited due to the presence of County Route 539, which bisects the base from North to South in Ocean County and is a major artery for shore traffic, especially in warmer weather and on weekends when many Reserve component units train at JB MDL. It is therefore difficult and dangerous for units to access the portion of JB MDL which lies east of the 539 roadway. This is especially true for long convoys of slow-moving military vehicles.

UTCA’s advocacy has secured tentative financial commitments from Monmouth and Ocean Counties and is in the process of getting the same from Burlington County and NJDOT. Ultimately, we are looking to secure half of the expected $16 million price tag from local and state sources in order to leverage the balance from a minor military construction grant.

SIGNED INTO LAW Dam Projects: Last month, the Governor signed legislation approving $29M for dam and inland water projects, as well as two Infrastructure Bank bills that authorize the use of funds and amend the I-Bank project list.

Minimum wage: A15/S15 (Coughlin/Sweeney), which increases the minimum wage to $15/hour by 2024 is now on the Governor’s desk. The legislation provides that, except for certain workers specified by the bill, the general minimum wage rate will be increased to $10.00 per hour on July 1, 2019, to $11.00 per hour on January 1, 2020, followed by $1.00 increases each year until the rate reaches a level of $15.00 per hour in 2024.

Paid Family Leave: Governor Phil Murphy has signed into law a bill expanding the state's paid family leave program by doubling the time workers can take off to care for a new child or sick rel-

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ative from six weeks to 12 and increasing their pay during this period from 67 percent to 85 percent. The maximum take-home pay will be capped at 70 percent of the statewide average weekly wage. According to the governor's office, that amount will increase from about $650 to $860.

APPRENTICESHIP As previously reported, legislation that mandates participation in a DOL-approved apprentice program as a condition of contractor registration has been signed into law by Governor Murphy. The original draft of the bill would have made compliance all but impossible for any contractor – union or not – because it did not account for the existing workforce. That draft would have required contractors to certify that every worker had completed or was actively participating in an apprenticeship program in order to obtain their registration.

UTCA was able to thwart that version of the bill, which stalled for two months before advancing with amendments.

Unfortunately the amended version, while better than the original, still leaves questions about compliance. At the time of this writing, UTCA is actively working with the Department and the Administration on the regulations for the new law and will share guidance for compliance once details are solidified.

FEDERAL BUDGET President Donald Trump released his FY20 budget in mid-March. According to ARTBA CEO Dave Bauer, there are five key takeaways as the budget relates to transportation: Prioritizes for the third straight year increasing spending for defense accounts while cutting domestic discretionary programs including those administered by U.S. DOT; assumes no renewal of the previous two-year budget agreement that previously provided at least $10 billion in FY 2018 & 2019 in additional infrastructure investment, which means all infrastructure programs that benefited from that agreement would see investment levels return to their previous modest trajectories; fully funds the FY 2020 FAST Act authorization at levels currently supported by Highway Trust Fund (HTF) revenues but would cut transit capital investment grants significantly; explicitly calls for fixing the Highway Trust Fund’s structural revenue deficit “in a fiscally responsible manner, and; proposes a $1 trillion, 10-year infrastructure package, which could be achieved with passage of a new multi-year surface transportation reauthorization bill and by reserving an additional $200 billion in federal funds for other infrastructure priorities. Last year’s administration plan to incentivize state and local governments and the private sector to step up their infrastructure improvement efforts has been replaced with pledges to work with Congress.

Separately, UTCA has been working with Senator Booker’s office to ensure that toll credit legislative language was included in their FAST Act requests to Senator Barrasso, Chair of the Senate Environment and Public Works Committee.

insurance company loss control... friend or foe?

By: jay sciortino, construction risk partners

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Thankfully, things have changed for the better…much better.

The reasons for the change are many. However, I think the biggest reason has to do with the overall approach to safety by everyone…carriers, owners and contractors alike. The consensus is that “everyone should work together to accomplish the ultimate goal of providing a safe work environment”. The insurance companies have latched onto this feeling of cooperation, and rightfully so. It has become very clear that a cooperative effort stood a much better chance of achieving the ultimate goal of preventing accidents and injuries in the workplace.

The insurance carriers have continued the momentum over the years and have increased their service offerings to their customers. The emphasis is on more training and more resources versus more inspections. Most carriers have open access to their websites to obtain training materials, including tool box talks and even sample programs. It’s all part of the cooperative effort and the feeling that sharing safety information is the right thing to do…SAFETY IS NOT PROPRIETARY! Am I saying that insurance companies no longer care about site inspections? I’m not that naïve. Your carrier must still perform site inspections, but the approach is different. Believe me, if your loss control representative saw your employees dangling off a bridge, or in an un-shored trench, it would be firmly discussed.

However, today, due to everyone’s emphasis on safety you’re less likely to find extremely poor conditions, so the loss control people can focus on evaluating exposures and operations with an eye toward the creation of proactive plans and programs.

potential. Your agent/broker should assist and help you foster the relationship. Whether you have a full time safety person or not, the carrier loss control people can assist you by being a resource for training and research. The carriers have a tremendous amount of talent and information available to them, and they’re willing to share it with you.

To recap, to get the most out of your carrier's loss control service: • Allow your agent/broker to facilitate the carrier loss control process.

• Meet with your rep at renewal, and come up with a formal service plan for the year that includes site inspections, training and program review (including contractual risk transfer).

• Make the loss control person part of your company safety committee, or allow them to help you establish one.

• Use the carrier’s loss control website, there's a ton of information there.

• Develop the relationship, not only with the loss control person, but with the underwriter. Let the underwriter see that you have embraced the carrier's loss control service delivery.

In summary, develop a mutual trust with your loss control representative. The payoff is that you'll get the service you are paying for, improve both your program and your results and put yourself in a much better position with your underwriter. All these things will help with your renewal, and most importantly help you to provide a safer workplace.

Safety Perspective

one are the days when the insurance carrier loss control representative was viewed as the “policeman.” One who came out “looking for things” with an eye towards writing a scathing report that could ultimately end up in a premium increase upon renewal. Back then it was all about the inspections, and what was done, or what wasn’t done by the contractor.

Frankly, there was a feeling of skepticism, and to some extent mistrust of the carrier loss control person. Certainly, there were some exceptions, but generally, this was the rule. I have vivid recollections of loss control visits that many times included confrontations, and were far from what I considered a productive relationship. I’m sure some of you will recall these days.

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 40 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.

My point is this: put your insurance carrier loss control people to work! Embrace them and find out all that they have to offer.

Make them a part of your team, and you will maximize their

Utility & Transportation Contractor | april| 2019 35

carbro constructors Cover Story

completes 35 years

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arbro completes 35 years of construction, a momentous accomplishment in its own right. This achievement is reflective of deep-rooted commitment and passion to this industry. We felt compelled to recognize that the Caruso family name in our industry is beginning the third generation of owners. Anthony Jr., Michael, and Domenick Caruso have now taken complete control of all operations to propel Carbro into the future. We need to dig deeper to discover the genesis of these roots.

The nearly 70 years of rich history has forged the path for their future endeavors.

Ours is an industry of family – both the ones we are born into and the ones we form as we build and enhance the face of our great state. In the beginning, it was a handful of families that laid down the framework for our communities – installing the underground infrastructures that facilitate our everyday lives. Near completing seven decades, the Caruso family has been there, dedicated to a family tradition of excellence in utility and transportation construction.

The Caruso family tradition began with Domenick Caruso who, at 22 years old, emigrated from Calabria, Italy and began a career in construction that would transcend decades and generations.

By 1952 – just five years after coming to America – Domenick had secured a job in construction, moved up to management, and struck out on his own to form Caruso Brothers/DA&L Caruso, Inc. with his brothers. A true visionary and the embodiment of the American dream. The firm was among New Jersey’s first utility contractors, laying the literal groundwork for our industry, as well as the Caruso family’s longevity in construction.

The Caruso family tradition continued when brothers Joseph and Anthony Caruso – determined to foster the excellent reputation established by their father Domenick - continued forward with Carbro Constructors Corporation in 1982. Under the direction of Anthony and Joseph the company focused on tackling the toughest and most difficult projects. Through the 1980s into 2015 they were completing major utility projects throughout the tri-state area. Within a matter of years, the firm expanded into highways, bridges, concrete structures and environmental work.

They quickly earned a reputation for being the go-to firm for the toughest, most difficult jobs.

40 Utility & Transportation Contractor | april| 2019

Construction of Pier 4W cap and columns on pile supported footings on NJDOT Route 7 Wittpenn Bridge.

When UTCA last interviewed Carbro in 1993, the firm was in its first stage of growth and had just begun its expansion in to heavy highway work. At the time, Anthony Caruso, Sr. had just completed his term as UTCA Board President, the firm had just started up the Kearny Connection bridges that enabled Midtown Direct service on NJ Transit, projects for the N.Y.C. DEP, and projects in Pennsylvania.

Presently the third generation of the Caruso family has taken the helm at Carbro Constructors. Anthony Caruso Sr.’s three sons, Anthony Jr., Michael, and Domenick have solidified control, ownership and the future direction of Carbro.

As each one of Anthony’s sons ventured off on their own individual paths, they soon began to recognize that something was missing. Without much hesitation, in 2011, Anthony Jr., Michael, and Domenick came together with a vision for the future.

As they put it, “I mean, you don’t get into this business because you’re looking for a sedentary life. You want to wake up every morning, get out there and face something different. Living life like a lion instead of a lamb every day, you run out there and you face the challenges, and we realized it’s what we love.”

Growing up, all three brothers did the typical summer stints working for the family firm while attending school. Anthony Jr. continued his education receiving a Ph.D. in Organic Chemistry and Materials Engineering from Johns Hopkins University. Michael continued his education to earn his J.D. degree from Weidner Law School. Domenick completed his educational training with a Business Administration degree from Drew University.

Garnering their individual experience, educational excellence, and love of family, they came together in unity to set the goals, milestones, and action items to achieve a successful business

transition from the second to third generation and for the future.

In their words “It had to be done with a succinct vision in front of us of what we want and how it was going to look, how it was going to be, what the company was going to do.” This is the new generation of Caruso brothers to propel Carbro into the future.

The rapport between the brothers and their father is immediately evident, painting a clear picture of the company culture. It became obvious that Carbro is, at its core, just an extension of the Caruso family.

nel - Special shout-out goes to Sal, Christine, Pino, Scott, Jimmy, James, Rich, Mike, Jorge, and Rui for your combined service of over 250 years we are astonished and blessed.”

The brothers made an interesting observation about the extent of their family’s impact on the industry, noting that back in the early days of utility contracting there were only a handful of firms doing most of the work as our state grew and developed into its modern form, meaning that they are likely replacing and repairing some of the very pipes that their grandfather installed.

Amwell Road Bridge construction on NJDOT Route 206 Bypass.

“We care about each other so deeply and truly want the best for each other,” they all elaborated. “But we also want the best for whoever comes to work for us, and we want them to succeed.

But we don’t just want them to succeed at Carbro. We want them to succeed in life. We’re the descendants of immigrants, so, you know, generations before came here and had opportunity. We want to make sure people have that opportunity at Carbro to chase the American dream. One thing we say to anybody we hire is that there’s no ceiling over your head here. As high as you want to climb is as high as we'll let you go. We put a ladder in front of you, you make the choice. So that's it, they're all family. One thing is for certain, Carbro wouldn’t be where it is today without the hard work and dedication of our employees, and for that we are forever grateful. Although we would not be able to name every employee, here are some of the special long-term person-

Demolition of Ridge Road Bridge on NJDOT Route 3 project.

Carbro’s experience, talents and abilities have continued to grow it into the wildly capable firm it is today. By way of example they comment, “Working for the Army Corps (of Engineers) is very technical work and very difficult work. They’re a very organized owner, very structured; and we as a company must excel at responding to all of the paperwork and the quality control levels, executing everything on time and with precision. These Army Corps projects are in people’s backyards, installing 50-foot deep piles, sheeting, excavating and constructing 18-foot tall, 2,100foot long flood walls of reinforced concrete.”

Cover Story

Their grandfather’s company was a main firm working throughout the East Coast in that heyday of utility construction. But for Carbro, the focus has been on controlled growth and mastery of capability as opposed to company size and geographic region.

“The diversification of the services wasn't meant to be a jack of all trades and a master of none. It was to master before you move on to the next trade. So, they mastered each thing that they did and made sure that the quality of service that we had in utility was applied to heavy civil and then to environmental. It's all about offering quality of service.”

Environmental remediation is the firm’s most recently added capability, greatly enhanced by Anthony’s science background.

As Michael puts it, “You know, it's really helpful that we have somebody who speaks that language. Anthony has his advanced degree in organic chemistry and engineering. When you have someone who can speak LSRP language, it's just one of those things where we offer something a little different. It's a benefit to owners because there's no need for calling an outside source no matter the level of contamination that we're dealing with.”

While Carbro exclusively handles the subsurface contaminants, the brothers noted that the recent trend in public demand to see things cleaner and greener actually helps facilitate that side of the business.

One thing is clear when the Caruso brothers start talking about work: their passion for the industry goes far deeper than an interest in the family business, it’s in their blood. Carbro is currently working on projects with tens of millions of dollars’ worth of value. Among these projects are the Green Brook Flood Control Segment C-2 for the US Army Corps of Engineers and the Ridge Road and Orient Way Bridges over Route 3 for the NJDOT which are under construction, and the Route 79 Pump Station and Force Main project for the Western Monmouth Utilities Authority that will be starting this month.

Utility & Transportation Contractor | april| 2019 41

Cover Story

When asked about favorite projects, Anthony, Michael and Domenick light up. The recently completed Rodney Avenue Pump Station designed by CME Associates was definitely a favorite.

This Project involved excavating over 10,000 cubic yards of soil and rock over 50’ deep in a residential neighborhood between houses, building a reinforced concrete sewerage pump station that contained nearly 2,000 CY of concrete, as well as the installation of all mechanical equipment, pump systems, controls and appurtenances. In addition to the pump station, Carbro also installed over 6,000 linear feet of gravity and force main sanitary sewer on the Project at depths of up to 30’ deep. Anthony Sr., adds that “the successful completion of the Rodney Avenue Pump Station Project exemplifies and reinforces the long-standing belief that Carbro excels at the most difficult projects.”

The aforementioned Army Corps of Engineers Green Brook Flood Control Project was a favorite as well. Segment B-2, which was completed last year, required the firm to construct a new levee, a combination wall composed of 50-65’ long 20-inch pipe piles and 30’ long sheet piles and a sheeting cutoff wall in the Green Brook to move the river back to its original location. All of this work was performed in the backyards of homeowners, within 40’ of their homes. Domenick explains adding, “we are in people's backyards putting in 60-foot deep piles, steel sheeting, excavating and pouring concrete walls...it's real exciting work, but knowing that you're protecting people is incredible.”

“See it. Own it. Solve it. Do it.” is a refrain familiar to anyone in the Carbro Constructors family. As Anthony Jr., explains it, his father felt strongly that it is everyone’s responsibility to, “recognize problems, make them your own regardless of who caused them, solve the problem and then just do it by implementing the solution.” “Growing up our parents helped us to understand that with hard work and faith in God all things are possible. They engrained in us all that ‘The choices are mine, I must choose wisely.’”

Clearly, the senior Caruso’s earnest mottos emphasizing personal responsibility and hard work are evident in Anthony Jr., Michael, and Domenick, and have served as a guide for this third generation and their company. Since purchasing the company from the second generation in 2015, Carbro has enjoyed continued

50' deep dry well with mechanical at Rodney Avenue Pump Station.

growth, has been awarded two UTCA safety awards and two Leading Infrastructure awards from the NJ Alliance for Action.

“Our success we can attribute to God, family, and country in that order,” Michael says. “God, because obviously we would have nothing without Him. Family - not just the families we all go home to, but the family we work with. The Carbro employees are also our family, and that's why it's so easy for us to work together as a team because when we face obstacles, we band together. And country, because there's no other country in the world where we would have had the opportunities that we have here. America is still the greatest country in the world. It's amazing what you can accomplish here because of our freedoms, hard work and determination.”

When asked about any other contributing factors that attribute to the success besides the above, their shared response was resonant with their father’s sentiment. “In our opinion, it is always critical to have the best professionals surrounding you, such as Jack and Mike from Cohn Reznick, John from The Ceacon Group, Dan and Rob from C&H Agency, Scott and Steve from Liberty Mutual, Bill from Provident, Ron from Chiesa Shahinian & Giantomasi and Greg from O’Toole & Scrivo. It is equally important to maintain strong relationships with the best suppliers and subcontractors. We would like to take this chance to thank each and every one of them. It would be too numerous to name them all, but they know who they are, and they should know we appreciate all they have done.

Based on the past three and a half decades of growth and success, it seems Carbro Constructors is built to last. We wish them all the best on this important milestone, and even more in the decades to come.

Sempre Avanti. Always Forward.

Sheeting and micropiles for reinforced concrete floodwall on USACE Segment C-2.

42 Utility & Transportation Contractor | april| 2019

cannibis in the heavy construction workplace By: ronald l. tobia, esq. & Lindsay a. dischley, esq.*

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he heavy construction industry has another pressing issue to be concerned about: marijuana’s impact on the safety of the workplace. Even though the use/possession/ sale of marijuana is not legal under federal law, it seems the federal government has decided not to interfere with state efforts to legalize medical and recreational marijuana. New Jersey has already legalized medical marijuana through the Compassionate Use of Medical Marijuana Act (“CUMMA”). Now, the State of New Jersey is about to enact a recreational marijuana law.

Employers must understand their rights and obligations related to medical marijuana and recreational marijuana to adequately protect their businesses. No employer is obligated to tolerate an employee who shows up to work impaired or uses marijuana during hours or on work premises. It should be noted that there is also no legal requirement to accommodate medical marijuana use under the Americans With Disabilities Act because marijuana remains illegal under federal law. While the CUMMA states that “nothing requires an employer to accommodate the medical use of marijuana in any workplace,” it is not clear what this means for an employee’s off duty medical marijuana use. It would seem that an employer may be required to reasonably accommodate an employee’s off duty medical marijuana use so long as doing so would not impact workplace safety or place the employer out of compliance with federal law. However, at this time, there is no express law or regulation on the issue.

Employers on federal projects remain able to prohibit marijuana in the workplace in order to comply with federal law requiring drug free workplaces. Moreover, for employees engaging in heavy construction work, or who are otherwise in safety sensitive job positions, an employer is also justified in maintaining a drug free workplace. Therefore, employers in the heavy construction industry may continue to drug test employees and may have a zero tolerance policy for those who test positive for THC in safety sensitive positions or in order to comply with federal law.

It is important for all employers to assess their drug policies and to ensure that proper management training is given to managers who enforce the policies. It should be noted that most construction trade union collective bargaining agreements (CBAs) mandate drug testing so these CBAs must be renegotiated to include specific state law changes. This includes policies and procedures relating to not only drug testing, including post-accident testing, but also relating to support programs and local resources to be offered and how the company will handle an employee’s arrest or conviction for marijuana use. Maintaining drug policies and procedures – and utilizing and applying such policies consistently – will help minimize injuries in the workplace as well as the risks of running afoul of applicable anti-discrimination laws.

These policies and procedures should be provided to employees, and employees should acknowledge in writing that they have received, read, and understand the policies.

Labor Relations

Many questions are left to be answered regarding how this legalization will impact employers and employees in the heavy construction industry. Is a New Jersey employer required to accommodate the use of medical marijuana on a construction project?

What changes, if any, should employers make to their drug testing policies? Do employers have legal rights to discipline employees who test positive for THC, marijuana’s active ingredient?

Due to the inherent nature of dangerous work processes, safety concerns are the main reason for prohibiting the use of marijuana on a jobsite and are a good reason to ban the drug altogether.

Heavy construction workers need to use their skills and faculties to safely perform their work processes safely, preventing job accidents and injuries. The active ingredient, THC, gives marijuana negative effects, which can include alteration of sensory perception, confused thoughts and expression, memory problems and impaired learning and thinking. The physical effects can result in negative motor performance, loss of coordination, loss of balance, altered alertness, impaired attentiveness, prolonged responses to dangerous situations, decreased ability to judge distance and space, and inability to perform complex tasks. Studies have reported that construction employees who use marijuana had 55% more accidents, 85% more injuries, and 75% greater absenteeism. [See National Institute on Drug Abuse Study] The employers experienced decreased worker productivity, increased worker claims, both compensation and unemployment, high turnover of employees, and increased lawsuits. Because heavy construction involves the use of equipment and tools that are inherently dangerous, the use of marijuana could exacerbate the potential damage to person and property.

*Ronald L. Tobia is a Member and Lindsay Dischley is Counsel with Chiesa Shahinian and Giantomasi PC. Mr. Tobia has been Labor Counsel to UTCA for over 40 years.

Utility & Transportation Contractor | april| 2019 47

superfunds & brownfields: bipartisan priorities By: dan kennedy, director of environmental & utility operations

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rue bipartisan issues that check boxes at the Federal and State levels are hard to come by. Although environment and public health advocates talk a lot about community health and ecosystems (as they should) when it comes to cleaning up contaminated sites, they often fail to appreciate that these outcomes are only realized through construction-related cleanup efforts. Prioritizing Superfund and other brownfields projects means more than just funding and lists. It’s about getting remediation plans approved quickly so that projects can be scoped, bid and under construction with an eye on readiness for redevelopment.

opportunities exist to act quickly and comprehensively.

Once sites have a selected cleanup plan, they are taken off the list. The list is intended to be dynamic, with a focus on getting sites back to productive use(s) as soon as feasible.

It appears that the moon and stars have aligned as we have a public policy priority that is shared between President Trump and Governor Murphy. Governor Murphy has made brownfields redevelopment advocacy a key part of his policy platform and getting sites cleaned up and ready is something he has charged state agencies like the EDA, DEP, DCA, the Business Action Center, and the NJ Redevelopment Authority to focus on. Governor Murphy has also been working with outside groups like NJ Future and Choose NJ to focus on this effort in concert with advocacy around implementing Opportunity Zones and other tax credit programs.

A practical goal has been set to get all the sites on this list to the point of receiving a Record of Decision (ROD), achieved when the final cleanup plan has been approved for the site. This includes investigating alternatives and choosing the remedy or remedies for each site. After the ROD is issued, designs are undertaken to implement the ROD. This could take as little as one year or up to many. During this time, the responsible parties are in charge and the EPA is in the position to review the designs. A summary of the selected remedy is included in ROD, including estimates for capital costs and construction timeframes.

sites nationwide for high level priority and “direct engagement” of the EPA Administrator. This focus on the “Administrator’s Emphasis List” has been embraced by Pruitt’s successor, Administrator Wheeler. The list is designed to spur action at sites where

- Dan Kennedy

All of the sites have identified potentially responsible parties (PRPs), with full or partial liability being resolved in most cases.

The PRPs (one or all) will be responsible for funding the remedies, including procurement and decisions on contractors. This will be based on the ROD and designs approved by EPA Region 2 with assistance from DEP’s Site Remediation Program. Many of these clean ups of these sites will be privately funded and not be bid through FEDBIZ or any government-sponsored service. The approach to bidding will be established by the responsible parties and the scale of the work will undoubtedly draw contractor interest from outside of the region.

The Pipeline

In response to a Task Force set up by former EPA Administrator Scott Pruitt, in 2017 the EPA has identified over 20 Superfund

"All of this works needs to translate into publicly or privately funded construction RU WKH EHQHÀWV ZLOO QRW EH realized."

Three of the original sites identified for this priority are in New Jersey, the most of any other state, with a fourth recently added.

Each will have its own schedule and costs but in total, hundreds of millions of dollars of work will be required over the next decade or more to clean up these sites and ready them for some productive future use.

Utility & Transportation Contractor | april| 2019 51

These sites include: • American Cyanamid Site in Bridgewater • Berry’s Creek Study Area (including the six-mile Berry’s Creek waterway) • Diamond Alkali Site (including the 17 miles of the lower Passaic River, and the Newark Bay Study Area) • Universal Oil Products in East Rutherford UTCA has researched these sites and has information available to any UTCA member who is interested in future work around these projects. So if you do the following work, you should be paying attention: • Excavation and dewatering of contaminated sediment and other materials • Backfilling and capping where materials are removed • Installation of emission and odor control measures to protect workers and the surrounding community • Treatment of materials on site • Creating berms and backfilling the excavated areas • Installing thin layer covers and /or protective covers

The Pipeline

• Implementing institutional controls, monitoring, and periodic reviews In addition to these New Jersey sites, a lot of work will be coming from projects in adjacent states as we are in a corridor that

52 Utility & Transportation Contractor | april| 2019

was very active in commerce and industry before there were any environmental laws or rules that constrained such uses. As such, for better or worse, there is a lot of clean up to be done in this region.

The EPA focus on getting sites ready for redevelopment then conducting and completing construction work really stands out.

We encourage New Jersey to follow suit as it focuses on tax credit reforms in the coming months.

In FY 2018, EPA and other project leads started 73 new remedial construction projects, including 34 government-led projects, 18 PRP-led projects, one Superfund Alternative Approach project, and 20 federal facility-led projects. EPA and other project leads conducted construction or provided oversight at 479 remedial construction projects started in prior fiscal years, including 128 government-led projects, 196 PRP-led projects (190 NPL sites and six SAA sites) and 155 federal facility-led projects.

All of this work needs to translate into publicly or privately funded construction or the benefits will not be realized. This is work UTCA members are equipped to compete for, if they have the opportunity to do so. The challenge is that this work will be privately funded by larger companies that may have existing relationships with remediation contractors from out of state. UTCA will be working on building relationships between the PRPs and UTCA members as soon as possible.

Please reach out to me at kennedy@utcanj.org if you are interested in learning more about these efforts.

Feature Story

garden state precast 20 years in business By: dan kennedy

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t’s easy these days to by cynical about business in New Jersey.

On a snowy day in February, UTCA staff sat down with the owners of Garden State Precast in Farmingdale. I, for one, left feeling optimistic. Owners Gene O’Malley and Dan Morris welcomed us into their unassuming offices and we experienced what those in the industry have come to expect from them and co-owner Kirby O’Malley. Friendly people that have spent their working years building lasting relationships in a tough business.

Though they have been in the industry their entire careers and experienced many challenges along the way, they remain optimistic and innovative driven largely by providing their employees a good living.

Huddled in a simple conference room in a concrete block building, you can feel the buzz of work picking up even as the winter winds on. This year, orders for both custom and standard form concrete products are picking up early. All see this as a good sign for a better year to come. That’s a good thing for a company that has built lasting relationships with many of the titans of civil construction. Their customers are a “who’s who” of UTCA’s founding contractor members and its current leaders. They take pride in working with companies big and small. “They are all great customers and most remember when you take care of them” says Dan, making sure I don’t start a detailed list knowing the inherent risk of an incomplete list published in this article.

In a down moment, Gene adds “We had talked about building a new office and we decided that we would rather put the money into equipment that we can see and put to use.” That sensibility is a thread that extended through the discussion that ensued.

AND SO IT BEGINS Though the company was officially formed in 1999, their story starts much earlier. Kirby, Gene and Dan each spent time traveling throughout the country to support their families working as employees for various related companies from the early ‘70s thru the mid ‘90s. Though they all started in New Jersey, they cut their teeth in the business working in the states of Wisconsin, Minnesota, New York, Maryland, Virginia, Florida, California and Missouri to name a few. Dan remembers “If you wanted to step

56 Utility & Transportation Contractor | april| 2019

Skewed Culvert Route 206 Hillsborough, New Jersey

up you had to move to where the work was. We moved to where the paycheck was.”

In the mid ‘90s, growing tired of working for a large corporation and the constant moves, the three future owners found themselves considering alternatives to build on their collective experience back home in New Jersey. Gene knew the owner of a local dry cast plant in Farmingdale, Duncan Thecker, who was ready to sell his plant as he was getting up in years. The O’Malley’s and Morris worked with him and were able to strike a deal even though the three were collectively fiscally challenged. The owners all credit Thecker with helping them get on their feet, since he wanted local people that would continue the small business approach to the operation. When asked what gave them the confidence to take the leap from employees to owners, Dan quipped “They could only take our houses once.”

Digging deeper, the owners had the confidence to take this chance because they saw an opportunity based on the relationships they had built over years. They assumed that if they could perform at a high level, their established relationships would get them into the door. They could build from that base of customers over time, never forgetting those that helped them get off the ground. These early, established relationships gave them the confidence to take the leap. They bet right and credit the value of being a UTCA member from the start as part of their recipe for success.

The book of customers they inherited from Thecker was approximately 80% private in nature. They had no illusions that this book was going to keep them in business. They viewed competing solely on standard products as a losing proposition. Bidding on and performing custom precast work was the future they saw for themselves. They saw their competitors as cast-in-place

The stage was set for the shift in focus from generic commodity to custom work.

THE BUSINESS MODEL EVOLVES – FUNDAMENTALS REMAIN Custom jobs come with higher profit margins when things go right. That’s the business assumption that drove the transition.

Starting with a successful bid on a custom box job in Newark in 2003, Garden State Precast jumped into the custom niche and haven’t looked back. While it’s true that custom work can come with higher profits it’s also higher risk and can be nerve-wracking. Custom fabrication can be a big plus for contactors and project owners as the risks and true costs can be less. It can be the only option in unique environments where pouring in place isn’t safe or cost effective. “If we can save the customers money, liability and time we can help them be successful” adds Gene when asked how they can survive in an environment when they are often not the lowest upfront cost option.

They have not turned their back on producing commodity products and feel diversification is key, especially when economic downturns come about. They aspire to be diversified and are constantly seeking business efficiencies to be more success-

ful in a competitive environment. “We analyze everything to be more efficient” adds Gene.

When asked about their growth, they cite relationships and not technology as the primary driver. Next up, they talk about the fundamentals that got them there, customer service and flexibility. “You can call us personally and we know the big contractors and likely their fathers. We do our best to turn on a dime when we have to. We feel that our flexibility is unmatched” adds Dan. They take on the mantra of “fix it first” when problems come up and figure out the details later. That is an aspect of their operation that the pair feels can’t be matched.

So as much as things have changed in their product offerings, the fundamentals of how they approach their work have not.

TAKING PRIDE IN THEIR WORK First and foremost, Dan and Gene talk about their employees and safety. They invest heavily in training and certification, recently earning a national award for hours without a lost-time accident.

They talk about the respect their managers have for the staff and how in turn, that results in the entire team taking tremendous pride in the quality of the product the company manufactures.

Their “family first” approach is evident in the interactions with

Feature Story

producers and not other precasters. They inherited "If we can save customers a great team of employees and brought most of them money, liability and time into the fold - some of we can help them be which are still with them today. The land and locasuccessful" tion were suited for the - Gene O'Malley transition they were planning but they had to step up their game in terms of equipment. They made investments as they could in new equipment and other on-site infrastructure. The big shift came when they invested in and transitioned to a wet cast plant.

Equipment Foundation Newark Airport

staff during the interview as the work of the yard doesn’t stop.

At the current time, they average 75 total employees and are looking for people now for a range of positions to help their thriving plant. “It’s getting harder to recruit new, good people.

We offer incentives to current employees to bring in and retain new employees. I guess that’s a good problem to have” adds Dan. The owners speak very highly of team of employees. Employees like Paul Heidt, who recently was promoted to VP of Special Projects, works closely with all the related governmental agencies and promotes the opportunities to precast more jobs. Mike Verona manages the plant and is in charge of producing all the products while Sean O’Malley oversees quality control. Bill Morris manages production and schedules and dispatches all the products while Rob Romanow gets products designed and drawn.

Precast Box Culvert Manahawkin, NJ

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Feature Story

When you hear the owners talk about the projects they have been involved with, you can’t miss the sense of pride they take in the outcomes of the projects they are involved with. With their base of operations within the outer ring of the Jersey Shore, projects that helped communities rebound from Super Storm Sandy are high on their list. Partnering with UTCA contractors, they were brought in to fabricate custom solutions for high-profile road projects and the associated stormwater infrastructure that hadn’t been addressed in the decades since the roads were originally constructed.

Other projects include working closer to their home base also come up. Fabricating new culverts for Wreck Pond’s (Sea Girt / Spring Lake) to address notoriously challenging outfalls that created a situation where the beaches were closed after rain events because of poor water quality. The projects were completed and the local issue was fundamentally resolved. Now the local beaches stay open after rain events. That’s a public value add that they understand. “Those are the type of projects you remember” adds the duo. Even after the recovery funding was spent, these successful projects created new relationships that have continued with new projects in Monmouth and Ocean counties.

In addition, they understand that their products are helping keep garbage out of New Jersey’s urban waterways. They are custom fabricating many screened outfall structures as a part of the solution for several urban communities with combined sewer overflow systems (CSOs) in New Jersey. They hope to do more work in this area as federal / state regulations push the 27 municipalities left in the state with CSOs to reduce and/or eliminate them in the coming decades. Working on road projects, many of the culverts they produce are three sided and minimize disruption to streams. Their products are often specified to deal with historic aspects of transportation infrastructure. With each town having its own ideas when it comes to the look and feel of the public facing infrastructure, custom solutions need to be engineered to resolve the design elements to meet unique criteria.

LOOKING FORWARD “We had an opportunity to start the company because our competition didn’t have the relationship with owners of the construction companies that we did. We can react quickly and be nimble.

That is what we look to continue in the future.” That is how Gene responded (and Dan nodded in agreement) when asked about the future. They go through a process to assess annually their succession plan, which is challenging because their sons are both involved in the day to day operations and are busy.

They talk about business growth like the gentleman they are.

They respect customer loyalty on both sides and say they don’t pursue a lot of new relationships. They do however respond to many unsolicited inquiries based on their vast network of relationships and when someone asks for a quote, they give it to them. Dan adds a concise, direct statement that makes it very clear where they stand. “We don’t try and buy jobs.”

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Precast Arch Culvert Clifton, New Jersey

Dan is a mainstay at UTCA events, especially the annual convention and at our executive seminars. He uses these events to maintain and build business relationships that feel more like friendships than anything else at this point. He also dedicates time to committee work and invests time in improving the business climate for all in the industry. His son Bill Morris (Production Manager) is actively involved in the newly formed Young Professionals Committee and is continuing the tradition of maintaining / building relationships through the UTCA. They see the rising insurance costs and the indirect impacts of minimum wage requirements and the disparity with the business climate in Pennsylvania, home of many of their competitors.

As they continue to invest in their operations and increase their capacity for custom work, they see opportunity in working more with MUAs and all transportation agencies, especially the Port Authority. They are still seeing opportunity in the private side, with mixed use development projects, retail chains and convenience stores noting that those smaller projects have a lot of underground infrastructure to deal with the higher density vertical development. “It doesn’t have to be a massive highway to make money” adds Gene. They are working more and more on custom and commodity-based projects with private utilities like NJ American Water, Middlesex Water, PSEG and JCP&L. From valve pits to pump stations and chambers for gas pipelines or precast slabs, working with utilities appears to be a big part of their future.

These owners are as unique as their product line. Congratulations on the first 20 years in business and we wish the best of luck in the future to one of UTCA’s prominent members, Garden State Precast.

By: nancy damato, rda benefit services

V

oluntary Benefits have become an important part of a comprehensive Employee Benefits package and are designed to address the variety of individual needs employees have. According to a recent survey done by Willis Towers Watson, 80% of employers today feel that Voluntary Benefits are an important benefit to offer and that number will increase over the next few years. These benefits are typically only available through the employer and provide additional coverages to employees, at a lower group rate.

Why Offer Voluntary Benefits?

• Offering an enhanced benefit package is key to attracting and retaining quality employees.

• Voluntary Benefits allow employers to offer additional benefits to employees at no cost to the company.

• These benefits provide a way to help control the rising cost of healthcare, by covering-out-of-pocket expenses.

• Benefit counselors meet with employees one-on-one and are an added resource to communicate benefit details and answer questions.

• These benefits are also portable, so an employee can take the benefits with them at the same price, if they leave the company.

What types of Voluntary Benefits are available?

• Critical Illness Insurance • Cancer insurance • Accident insurance • Short-Term Disability • Life Insurance—Term and Universal Life • Dental Insurance • Vision Insurance • Identity Theft protection & Legal Plans • Hospital Indemnity Plans

Best in Class Product Suite Customized for your Company In order to provide the best value for your company, an analysis is done to determine the best product selections from major carriers, to be offered to the employees. Various factors, including demographics, location, SIC code, number of employees, are used to determine which carrier’s products best meet the needs of your group. If you already have voluntary benefits in place, this is also taken into consideration as part of the analysis process.

In addition, whether you are offering voluntary benefits for the

NEWS

elevate your employee benefit retention strategy: a fresh approach to voluntary benefits first time or replacing existing benefits, our program provides Exclusive Underwriting offers for your company. Examples of this include Guaranteed Issue amounts for certain products (no medical questions asked), as well as Simplified Issue products, with limited number of questions asked. This is especially attractive to employees who have medical issues and pre-existing conditions.

Voluntary Benefits Billing Options There are two ways employees can pay for the voluntary benefits they select. The first is the traditional method—the employer reconciles and pays a monthly group bill, while deducting the appropriate amounts from each employee’s paycheck.

An alternate billing solution allows a third-party company to handle all billing and reconciliation, at no cost to the employer! The deduction from the employee’s paycheck goes directly to this company to cover the costs of the employees’ policies. This eliminates the many hours spent by your firm’s accounting or HR department handling the bills!

Customized Enrollment Strategy We are able to offer the Voluntary Benefits to employees during open enrollment for the core benefits or during a separate benefit enrollment time frame. Paperless enrollment options are available for both core and voluntary selections. Customized communication materials are distributed as well.

Group meetings provide employees with an overview of the benefits being offered. Then, our enrollment platform allows employees to sign up for a one-on-one meeting through an online scheduling calendar. Employees meet with a professional benefits counselor to discuss all benefits and determine what best fits their needs. Our call center is also available for those employees that are always on the jobsite, or work in other states, and are unable to attend a meeting.

Customer Service We also offer the highest level of customer service, as a part of our Comprehensive Voluntary Benefit Solutions—for both you and your employees. We handle all ongoing service, as well as claims and billing issues. Administration of your benefit programs should not be a burden to your staff and our team approach insures your complete satisfaction.

There are many benefits to offering a Voluntary Benefits portfolio of products and we welcome the opportunity to show you what this exclusive program can offer to your firm. Please feel free to contact us at 855-693-0772.

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Recently Adopted by the UTca board of directors

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