Utility & Transportation
contracTOR
Berto Construction Completes 50 Years
June 2019
I
de i s n
:
g ltin nsu g o n C ser Stro Ma ears Y 35
:
president’s message
From the desk of: joe walsh
W
here’s the work, what happened to the money? I am asked this question far too often, and every time I find myself questioning my answer.
In October 2016, former Governor Christie signed the Transportation Trust Fund Reauthorization providing an 8-year, $16 billion-dollar capital program. We campaigned, educated, supported, and fought to convince legislators and taxpayers of the need for this legislation that would increase the gas tax. We said a gas tax would reduce the burden on the general budget, would increase our capital programs, increase local aid, create a state transportation bank, and overall create a $2 Billion recurring program which would improve the infrastructure and the quality of life for New Jerseyans. The funding was constitutionally dedicated in the November 2016 general election. Great Joe, appreciate the history lesson; where is the work, what happened to the money? In 2019 the DOT received $800 million, Transit received $760 million and local aid received $440 million. DOT has committed to getting the work in the market before the end of fiscal year 2019, but that some of these funds will be kept in house for a pilot program that would allow DOT employees to do work that contractors are currently performing. Transit once again converted some of the capital funding to operating budget and State Transportation officials keep reiterating that Local Aid is trying to get the work out the door, but…Seems like we still don’t have the details on where’s the work and what happened to the money? We recently received great news from the leadership of the new Transportation Bank within the NJ Infrastructure Bank (NJIB). With the initial seed funding, the Bank has two projects in the bidding phase, seven projects that are funded and ready to go out for bids, and another eight projects under consideration for funding and should be out to bid this calendar year. That is $83 M of new work available to the industry through the NJIB. We may want to find more funding for this program since they are getting the work out the door. Additionally, the NJIB Water Bank has just over $450 M of projects bidding this fiscal year. Given increased program interest, the
2 Utility & Transportation Contractor | june| 2019
Water Bank is experiencing funding shortfalls for projects eligible and ready to be funded under the Drinking Water SRF. What is happening now, is lesser-ranked projects that have applied for Drinking Water SRF support are being denied funding, and projects sponsored by investor-owned utilities are being offered far less attractive terms. UTCA is engaged in the FY2020 budget process and is advocating that near-term shortfalls be addressed through a new line-item in the State Budget. We are also pushing the federal government to step up its fiscal support of this important program. In addition to funding-related hurdles, the Murphy Administration has allowed leadership in the DEP to block augmentation of the engineering review process. It has been well documented that DEP staff cannot keep up with the reviews and that outside engineering services would reduce review times and minimize delays getting work on the streets, especially on the Clean Water SRF side. In this case we have the funding but can’t get the work out the door. This Association can no longer sit back and listen to the excuses. We worked tirelessly with other industry leaders to educate and advocate for a constitutionally dedicated gas tax but, have yet to see the healthy capital program that revenue should have produced. We are not alone in this, and there is strength in numbers. We have reconvened with our industry partners to take concrete and proactive measures to investigate where the taxpayers’ funding is going, and how we can get this funding back where it belongs: improving the quality of our roads and bridges. Our legislation initiative for holding Local Aid accountable for infrastructure improvements moves through the state house while we continue to work with the leadership of the Murphy Administration and DEP to create more opportunity for all eligible Water Bank projects through new legislation. I would like to congratulate two great member companies, Berto Construction company on 50 years as well as Maser Consulting with 35 years in business.
Best regards,
Joe Walsh
46
Cover 47
67
54
91
CONTENTS
Cover story berto construction completes 50 years
DEPARTMENTS
FEATURES
2 7 13 21 29 39
54 maser consulting: 35 years strong 67 flanagan's turn a parking lot into a park 91 utca's 2019 executive seminar
President’s Message financial overview legal dig accounting corner legislative news
NEWS 71 employee benefits: planning & implementation for success 73 building strategic alliances for a better new jersey 79 workers compensation costs savings strategies 87 three fundamentals you need to know to grow your company
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 Affiliations: 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, Farmingdale, NJ 07727. Periodical postage paid at Farmingdale, NJ and additional mailing offices. POSTMASTER: Send address changes to UTILITY AND TRANSPORTATION CONTRACTOR, PO Box 728, Allenwood, NJ 08720.
Utility & Transportation Contractor | june| 2019 3
By: kevin ellman, wealth preservation solutions
A
s I sit here in March 2019, the world economy and market outlook look pretty uncertain and cloudy. We still do not have a resolution of the trade conflict with China. The Brexit deal is very much in jeopardy. Planes are falling out of the sky. Interest rates are going down not up, and there is no clear direction to the stock market.
In this case, you have a floor of 0% and a cap of +6.65%.
What is an investor to do? This cloudy market might be an excellent time to play DEFENSE.
But you might be willing to be exposed to a little more downside risk in exchange for more upside potential. You could pick option B. Here you have a floor of -5% and a cap of +11.6%. Your money is invested in an underlying index like the S&P 500(2). If the index goes down 20%, you will only be down -5%. On the other hand, if the index goes up 20%, you are capped out at +11.6%.
Here are two defensive investment strategies for a volatile market environment for you to consider for your investment portfolio.
In column C you have the final option that offers a floor of -10% with an increased cap of +16.55%.
* Fixed Indexed Annuities
What is interesting is that there are no separate fees charged by the insurance company. They make their money when the market goes up higher than your cap (3).
* Short Term Bonds Let’s take them one at a time. I like to think of the Fixed Indexed Annuity as “the poor man’s collar.” A collar is an investment tool you can use to limit your downside risk while giving up some upside potential. In effect, you are buying insurance for your portfolio. The chart below shows basically how a Fixed Indexed Annuity works.
Financial overview
defensive strategies for a volatile environment
For somebody who wants to invest in the stock market and take advantage of the upside but is concerned about losing money in a declining market – this may be a viable solution. Although they are pretty straightforward, please discuss these in detail with your financial advisor, so you understand exactly how they work BEFORE you invest. Another option that is even more defensive is to park money in short and ultra-short term bonds. Right now, interest rates are very low. Now is a great time to lock in a low rate for a mortgage, but a lousy time to lock in low rates for a bond portfolio. Also the longer the maturities of the bonds in your portfolio, the more the value of those bonds will change when interest rates move up or down. Look at the chart below.
For investment option A, the insurance company guarantees that your investment can never go below zero. In other words, you can’t lose any of your money. However, you can only experience up to a 6.65% profit if your underlying investment in goes up.
Utility & Transportation Contractor | june| 2019 7
The value of 30-year bonds will go up or down much more for every change in current interest rates than 5-year bonds. There are several ways to accomplish this.
Financial overview
• You can buy a mutual fund consisting of all short term bonds • You could create your ladder of 1, 2, or 3-year bonds • You could buy a variety of CDs maturing over three years. Whether you use a fund or individual bonds, you also have the option of buying municipal, government or corporate bonds. As market conditions change, you can gradually move back into stocks or higher interest intermediate and long term bonds as it suits your risk tolerance. For most investors, it makes sense to enlist the services of a financial advisor to help them create and monitor this kind of bond strategy. A short term bond portfolio is a temporary solution, not a permanent one. 2-Returns are based on the performance of an underlying index, such as the S&P 500, a collection of 500 stocks intended to provide an opportunity for diversification and represent a broad segment of the market. You cannot invest directly in an index. 3- Indexed annuities typically do not have an up-front sales charge, but there are often significant surrender fees. Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Wealth Preservation Solutions, LLC is not affiliated with Kestra IS or Kestra AS.
8 Utility & Transportation Contractor | june| 2019
By: adrienne l. isacoff, florio, perrucci, steinhardt & cappelli
W
hen you submit a bid to any State or local governmental agency, it will be reviewed on multiple grounds, only one of which is price. Many governmental agencies mandate that bids must be awarded to the lowest responsible bidder, while some agencies, such as the Division of Purchase and Property in the Department of the Treasury, provide discretion to award the contract to the bid determined to be “most advantageous to the State, price and other factors considered.” N.J.S.A. 52:34-12(d). But in either case, bidders must be determined to be “responsible” in order to be eligible to bid. Responsibility may be determined initially through prequalification. Responsibility may also be based on additional factors required by a particular governmental unit, through elements identified in bid documents, such as experience providing the work set forth in the particular project, current financial status and references. For procurements solicited through a request for proposal, the evaluation process will include an evaluation of the technical merit of the proposal. The evaluation of these types of bid requirements is far more subjective than the review of a bid for price or for relatively easily determined responsiveness of material bid elements such as whether a bid bond, a consent of surety, a business registration certificate, and other similar submissions were included in the bid proposal. The manner in which governmental units must evaluate subjective criteria such as experience has been the subject of extensive case law for many decades. Although many of these cases do not involve construction projects, the general principles are instructive. In Commercial Cleaning Corp. v. Sullivan, 47 N.J. 539 (1966), the Supreme Court of New Jersey enunciated one of the principals that underlies the manner in which both State and local governmental units should engage in the bid and award process involving factors other than price. The bid documents required that bidders for a janitorial services contract for multiple buildings in Trenton must provide evidence of experience in supplying such services during the previous five years, and other proof of qualifications. Since the State had the discretion to award based on price and other factors, the Division of Purchase & Property’s staff interviewed several bidders following bid opening and made on-site tours. Ultimately, DPP determined not to award to Commercial, even though it had submitted the lowest bid, based on the belief that another bidder had superior necessary experience.
Significantly, the Court noted that, other than the interviews conducted by staff, DPP did not offer Commercial a hearing prior to rejection of its bid, but Commercial also did not request a hearing after its bid was rejected. Once the contract was awarded to a competitor, Commercial filed its appeal. Commercial contended that since it was the lowest bidder, it was entitled to a hearing and a factual finding that its bid was invalid. The Court opined that a low bidder is entitled to a hearing for municipal contracts where award must go to the low bidder but, is not absolutely required for DPP contracts that may be awarded on a basis other than price. Nevertheless, the Court stressed the following:
Legal Dig
when to demand an informal hearing and a stay!
In our view, however, as a matter of good practice and fair procedure, an informal hearing or conference should be granted, if requested by a dissatisfied bidder, particularly if he is the low bidder, prior to the execution of the contract with another bidder. Id. at 550. The Court further opined that the bid opening “ought in fairness to be sufficiently in advance of the projected contract date to give a rejected bidder, upon timely request, a conference or informal hearing at which his protest can be presented.” Id. at 552. Those pronouncements have guided our courts in the decades that followed the Commercial Cleaning case: (1) a bidder must timely request a hearing in order to preserve its right to appeal the rejection of its bid; and (2) the governmental unit should afford the bidder an informal hearing, if requested, prior to execution of the contract with a competitor. Bidders should not only seek an informal hearing promptly, they should seek a stay of any further contractual action as quickly as possible. An example of the risks inherent in waiting too long to seek a stay was the subject of In re Denial of Prequalification of Johnson Specialized Transportation, 2015 WL 6456226 (App. Div.). The New Jersey Turnpike Authority denied Johnson’s requests to be prequalified to bid on contracts for towing services. Although Johnson filed a timely appeal, it did not seek a stay from the Turnpike Authority until after briefs on the appeal were already filed and contracts were awarded to other bidders. The Appellate Division dismissed the appeal as moot. This was particularly unfortunate because the Court opined that an informal hearing on the rejection of Johnson’s bids should have been afforded to it and, if the stay had been sought earlier in the proceedings, the Court would have sent the matter back for an informal hearing before the agency. Since the other companies
Utility & Transportation Contractor | june| 2019 13
Legal Dig
had the right to rely upon the contracts awarded to them, this relief was too late. Id. at *3. There are circumstances where a Court will remand a matter back to the agency for an appropriate hearing to be afforded to an aggrieved bidder. In the recent case In re B&C Towing, Inc. (decided May 6, 2019, App. Div.), B&C Towing appealed a decision of the New Jersey Turnpike Authority to reject its request to be prequalified for certain contracts. Following an inspection of site facilities, the Turnpike Authority determined that B&C did not meet the prequalification criteria on the grounds that it lacked sufficient lighting, fencing and security. B&C promptly filed a protest and an informal hearing was held. After B&C testified at the hearing that it only provides self-repairs of its own vehicles at its facilities and does not provide repairs to publicly owned vehicles, the Turnpike Authority upheld the rejection of the prequalification application, reasoning that towing often occurs due to the need for a minor repair issue, and the public should expect such repairs to be able to be performed at the site where their vehicles were towed. The Court rejected the Turnpike Authority’s reasoning. B&C admitted that it does not presently provide repairs to the public, but insists that it is ready, willing and able to do so. If it had been provided notice in advance that this would be a subject of the hearing and the potential basis for rejection of its prequalification application, it would have been prepared to present such evidence at the hearing.
14 Utility & Transportation Contractor | june| 2019
The Court was persuaded that B&C was not afforded “a fair opportunity” to present its case. Specifically, “an agency is never free to act on undisclosed evidence that parties have had no opportunity to rebut.” Id. at *6. The Turnpike Authority failed to provide notice to B&C that it was dissatisfied with the bidder’s ability to repair the vehicles of its patrons. The Court held that B&C be provided a new hearing wherein it could provide evidence of its ability to provide repairs to its patrons. TAKEAWAY This line of cases provides a roadmap for what a dissatisfied bidder should do and what process a public agency is required to provide when it rejects a bid or rejects a prequalified application: the public owner should clearly identify the basis for rejection of a bid or prequalification application; if unsatisfied with that explanation, the bidder should protest promptly and request a hearing; the public owner should provide an informal hearing if the bidder has provided any basis for substantiating its claim that its bid or prequalification application was improperly rejected; that hearing should, if at all possible, be held before a contract is awarded to another bidder; if the public owner still rejects the bid or prequalification application, the bidder should promptly seek a stay of further proceedings. None of these actions will guarantee success. But if you don’t engage in them, you are guaranteed to lose.
understand the depreciation rules under tax reform By: richard higgins, mccarthy & company, PC
IRS Code Sections 179 The maximum annual Section 179 deduction increased from $500,000 to $1 million for qualified property placed in service after December 31, 2017 and the annual phase-out threshold increased from $2 million to $2.5 million. The Section 179 deduction begins to phase out dollar-for-dollar after $2.5 million is spent on qualified property. TCJA expanded the definition of qualified real property eligible under Section 179. Improvements to nonresidential real property (roofs, HVAC systems, fire protection and alarm systems; and other security systems) may qualify to be included after the date such property was first placed in service. Real Property Trade or Business Rules A real property trade or business (RPTB) can elect out of the business interest limitation rules and deduct all its business interest expenses. RPTB includes any real property development, redevelopment, construction, reconstruction, acquisition, conversion, rental, operation, management, leasing, or brokerage trade or business. A RPTB could take 100 percent bonus depreciation on its QIP plus land improvements or other personal property building components. Property on the modified accelerated cost recovery system (MACRS) must have a recovery period of 20 years or less.
A RPTB can elect out of the business interest limitation rules and deduct all its business interest expenses. In this case, the RPTB is generally required to depreciate any residential rental property, nonresidential rental property, and QIP using the alternative depreciation system (ADS), with lives of 30 years, 40 years, and 20 years, respectively. The ADS method of depreciation prohibits the use of bonus depreciation. Business interest deductions after December 31, 2017, are limited to the sum of business interest income plus 30 percent of adjusted taxable income (computed before allowable deductions for interest, depreciation, amortization, depletion, net operating losses, and the pass-through entity deduction). Definition of QIP Class Lives The class lives of QIP should have been defined under TCJA to determine its bonus depreciation eligibility. Most experts assume that Congress intended to make QIP eligible for a 15-year MACRS class life and 20-year ADS class life. However, that connection was omitted. The treatment of the QIP class life directly affects anyone with average gross receipts of $25 million over the prior three years. This is because of the rules on 100 percent bonus depreciation and business interest limitations.
Accounting Corner
C
ertain assets need to be depreciated or expensed differently under the Tax Cuts and Jobs ACT (TCJA). Three categories of qualified real property (qualified leasehold improvements, qualified restaurant property, and qualified retail improvement property) have been consolidated into one qualified improvement property (QIP) under TCJA. Contractors have to classify property placed in service after December 31, 2017, as QIP.
Since Congress did not clearly define how QIP should be depreciated, 100 percent bonus depreciation is not an option. Instead QIP must be depreciated over 39 years. The deduction for bonus depreciation increased under TCJA from 50 percent to 100 percent. A 100 percent first year deduction is allowed for qualified property placed in service after September 27, 2017, and before January 1, 2024. Bonus depreciation allows for the faster deprecation of assets with class lives of 20 years or less. The bonus depreciation deduction will start phasing out in 2024, going down to 80 percent, with a decrease of 20 percent for each year after that, until it phases out completely in 2026. Even though the House passed a bill last December allowing for the 100 percent depreciation allowance, it has not been passed by the Senate. Clarification from the IRS The IRS issued Rev Proc 2019-08: Expansion of Depreciation on December 21, 2018, to clarify expensing rules under Section 179 and depreciation under Section
Utility & Transportation Contractor | june| 2019 21
168(g). These changes are effective as of December 21, 2018.
Accounting Corner
Rev Proc 2019-08 allows for accelerated deprecation under Section 179 for QIP such as leasehold improvements, qualified restaurant equipment, and qualified retail improvement property. The Rev Proc does not allow the 100 percent depreciation deduction for these properties. Even so, Rev Proc 2019-08 says that a company whose main activities are RPTB can elect Section 163(j) limitation rules. Contractors that make this election must use the ADS system for non-residential real property, residential real property, and QIP. For tax years beginning after 2017, the ADS recovery period under Section 168(g) decreased from 40 to 30 years.
22 Utility & Transportation Contractor | june| 2019
Losses not taken in the current tax year must be carried forward and company profits cannot go below zero. Taxpayers may elect to expense some or all of the cost of qualified real property placed in service after 2017 by filing or amending a tax return. The IRS is expected to issue further guidance when the House and the Senate clearly define the class lives of QIP. Until then, contractors are advised to discuss how they depreciate or expense QIP with their accountant to ensure they are in compliance. About the Author. . . Richard P. Higgins, CPA, is a principal with McCarthy & Company, PC, a leader in construction accounting. He can be contacted at 732.341.3893 ext. 17 or Richard.Higgins@MCC-CPAs.com.
in the lobby: budget edition
By: zoe baldwin, DIRECTOR OF GOVERNMENT AFFAIRS & COMMUNICATIONS
B
Initially, this budget was a good starting point for negotiations and presented a seemingly more palatable option for legislators. However, the Governor’s sophomore attempt presumes revenue from two contentious sources that may not materialize: the millionaire’s tax and legal marijuana. The already-precarious negotiations on these pay-fors, along with other differences of opinion on funding levels for agencies like NJ Transit, are exacerbated by a contentious relationship with the legislature. There was also an unexpected windfall in May when Treasurer Muoio announced mid-month that State revenue collections surged in April and are now expected to come in $705 million ahead of initial projections for the current fiscal year. This windfall is largely due to last year's budget deal, which included a temporary 2.5% surcharge on the corporate business tax that will sunset in December 2021. The surcharge was initially Senator Sweeney’s counterproposal to last year’s attempt to levy a millionaire’s tax – a point not lost on the Gloucester County legislator. In short, this seemingly good news is actually complicating negotiations, emphasizing policy divides where neither camp seems likely to acquiesce. Here’s an overview of the battlefield: the Governor's proposed budget anticipates $536 million in revenue from the millionaire’s tax, but Senate President Sweeney and Assembly Speaker Coughlin both oppose that tax and seem unlikely to yield; the Governor’s proposed budget also assumes $60 million from the legalization of recreational marijuana, which is officially stalled at this point due to significant opposition from rank-and-file legislators in both parties; and finally, in mid-May Senate President Sweeney introduced his own surprise, a slate of 27 bi-partisan bills called the Path to Progress that he believes will save the State billions by reducing the cost of government, but triggered an im-
mediate and vehement backlash with public-employee unions who will see their pension and benefits slashed again. For his part, Governor Murphy has stated in reference to the millionaire’s tax that he’s, “trying to set the state up for the long haul,” while Senator Sweeney said of his legislative package, “'We need to have the courage to make the right decisions that are best for New Jersey’s future.” So, no matter which banner you’re riding under, battle lines are being drawn. The question for 2019 is less about whether or not the State will shutdown again – when the beaches are open, voters barely feel the impact of a shutdown-and much more about whether a longer-term truce can be drawn in the name of the greater good. TAKE THE MONEY AND RUN? One interesting situation that arose during the NJDOT/NJ Transit budget hearing in early May was when Senator Weinberg called for more operations funding for NJ Transit in response to the Governor’s proposed net increase of $25 million for an agency that has a $35 million increase in contractual obligations to employees. NJDOT Commissioner Scaccetti balked in response replying, “Will $25 million more make a difference to New Jersey Transit? Not really.” It was a surprising response given the beleaguered agency’s reliance on capital-to-operating transfers, escalating labor costs, and lackluster (to say the least) capital program in recent years.
Legislative News
UDGET IS COMING By the time you read this, HBO’s blockbuster hit Game of Thrones will have tied up its loose ends, bringing to a close one of the most popular television series of all time. The State Budget, on the other hand, still has a few weeks to go with a future far less certain and much less popular. Down in Trenton, our elected officials may not be communicating by raven or hanging out with dragons, but there is a seat of power at stake with plenty of factions vying for control around a political fault line that bisects the state. The North falls into camp Murphy and the South in camp Sweeney, but regardless of allegiance, all are engaged in modern-day blood-sport that is the State Budget.
To the Commissioner’s credit, however, she immediately opposed the idea of diverting funding from the NJ Turnpike Authority, stating that “There’s still work to do,” referencing as examples projects in South Jersey and bridge repairs. “If I felt the Turnpike was in the position to provide that money to Transit,” the Commissioner stated, “I would say ‘no issue.’” She went on to say that the agency will continue to find other revenue streams and to capture the value of its real estate assets. During his campaign Governor Murphy made improving the agency a top priority, even considering a new dedicated tax before pivoting in the face of voter backlash. Commuter transportation agencies in other states have avoided NJ Transit’s operating woes thanks to dedicated funding sources, an option NJ advocates have sought for years. For its part, the Murphy Administration along with Transit Director Corbett have promised to greatly increase the capital program in fiscal 2020, but we will have to keep an eye on how this budget season plays out before taking that promise at face value, especially before we see how the capital-to-operating transfer escalates this year.
Utility & Transportation Contractor | june| 2019 29
84087_2019 June UTCA.indd 29
6/5/19 1:42 PM
Legislative News
CURB YOUR INCENTIVIZATION Cue the womp-womp of a brass tuba and a mocking slide whistle, because sometimes it feels like New Jersey just can’t get out of its own way. There is another tier to the state’s North/South political divide, this time over the legality of economic incentive programs granted to Camden businesses under the Christie administration. Recent years have seen a great push toward urban redevelopment, bringing with it a boon for our industry in the form of increased transportation, utility and site remediation work. Much of the recent renaissance in cities like Newark and Camden has materialized largely because of programs run by the New Jersey Economic Development Authority (EDA). However, those programs are facing intense scrutiny following a series of hearings in Trenton focused on whether private sector forces had undue influence in crafting the 2013 Economic Opportunity Act. Compared with earlier programs, the bill favored South Jersey development projects and is credited as the tipping point for Camden’s much-needed revitalization. Although there has been no resolution or action yet from the legislature or administration, UTCA is keeping a close eye on proceedings. Incentive programs are certainly in need of reform and increased oversight – we can scarcely afford to lose more of the public trust – but our elected officials must be careful not to throw the baby out with the bathwater on this one. Before these incentives, Camden was struggling mightily to reverse decades of decay, and now it shows clear signs of development and growth. Urban redevelopment is good for our state and helps ensure that businesses will continue to invest in our most troubled cities and help create jobs and work where they’re needed most. TALKING ‘BOUT OUR DELEGATION UTCA CEO Bob Briant, Jr., Board of Directors Member Glenn Ely of PKF Mark III, and staff made the annual trek down to Washington DC for the TCC/ARTBA Federal Issues fly-in, where we met with senior staff from four members of the New Jersey congressional delegation to discuss state and national issues of importance to our industry. Congressmen Malinowski, Pascrell, Norcross, and Kim’s offices were glad to hear from us regarding our priorities for national transportation and utility funding and were especially receptive regarding issues such as breaking up mega contracts to ensure NJ contractor’s have a chance to compete, creating a source of long-term funding for the Highway Trust Fund, and the need to expedite the permitting and environmental review process for replacing aged infrastructure. Another highlight of the fly-in were the remarks by House Speaker Nancy Pelosi, who told an eager crowd that America is at “a pivotal moment” to pass broad and historic infrastructure legislation. The remaining challenge, as always, is how to pay for the package. The Speaker did not address that key issue at the meeting, but congressional leaders and the president are tentatively scheduled to meet again in late May. CREDIT WHERE CREDIT’S DUE New Jersey is what’s called a donor state, meaning we get back about 82 cents for every $1 paid in federal taxes – and that calculation was made before the recent elimination of federal SALT deductions. It’s a difficult po-
30 Utility & Transportation Contractor | june| 2019
sition for a densely populated state overburdened by fiscal needs of our own, but a draft provision in the federal transportation legislation may offer some respite on the transportation side of the ledger. Toll credits are a federal transportation funding tool that states can use as a means of meeting local and state matching requirements for federal funding. States earn credits by making capital investments on tolled federal facilities such as I-95 (NJ Turnpike) in New Jersey. Although they do not represent an actual source of funding, these credits can then be used as a soft match to reduce the amount of funding a state or local entity must contribute to a given project. In some cases, these credits enable states like NJ to use 100 percent federal funding as opposed to the traditional 80/20 percent split between federal and state funding sources. One major advantage of this is that it frees local matching funds for other projects, but a disadvantage is that New Jersey has more credits than it could possibly use. UTCA has been working for several years to enable through federal statute, a marketplace where New Jersey could sell these commodities to other states. This year, Senator Booker plans to insert this language into the surface bill reauthorization that is currently in the drafting process. The new version of the language would establish a pilot program that admits ten states, one of which would be NJ. If passed, this could be transformative to our state as it would mean a new source of direct transportation revenue that would not be borne by our state’s traveling public.
The next energy master plan a storm on the horizon By: dan kennedy, director of environmental & utility operations
T
he overhaul of New Jersey’s existing Energy Master Plan (EMP) was an initiative that Governor Murphy campaigned on, convinced that the existing EMP adopted by the Christie Administration does not serve the public interest. As such, he issued Executive Order 28 which directs the Energy Master Plan Committee--a team of state employees from various departments led by the Board of Public Utilities--to take stakeholder input and then propose a new EMP. At the heart of the 2019 draft EMP will be the Administration’s goal for New Jersey to be 100% reliant on renewable energy sources by 2050, a concept also supported by a majority in the Legislature.
Regardless of your opinion, if this goal is to be met or even approached, an immense departure from the existing Energy Master Plan will be necessary. Meanwhile a coalition of environmen-
tal groups have begun pushing the Murphy Administration to declare a moratorium on all non-renewable energy infrastructure (production and transmission). While its hard to see the Murphy Administration taking this hard of a line, it is within range of what is being considered.
UTCA does not oppose goals related to increasing the portfolio on renewable energy. UTCA members build utility scale renewable energy projects and want to build more of them, including offshore wind projects. We also build natural gas pipelines, energy plants and the transmission networks that bring the energy produced to where it’s needed. As such, UTCA supports a diverse portfolio of energy resources and investments in associated infrastructure.
The Pipeline
The usual suspects have lined up to voice their opinions: some support this goal and are pushing hard for the next EMP to take a hard-line approach to any new or replacement of existing non-renewable infrastructure; there are those that support the state transitioning to more renewable resources but scoff at the 2050 timeline and the conclusion that 100% of any one energy source is a good idea; others oppose this goal on its face with no wiggle room.
A draft of the new EMP is expected this summer and UTCA is "UTCA supports a diverse focused on its impact to the construction portfolio of energy resources industry and the overand investments in associated all business climate. infrastructure." Though New Jersey can rightfully be classified as a pro-envi- Dan Kennedy ronment state, it also is filled with residents and businesses that expect the lights will turn on when the switch is flipped and that energy bills are reasonable. Herein lies the rub. The costs to ratepayers / taxpayers to implement actions proposed in the new EMP will be in addition to the new statewide fees to implement the Regional Greenhouse Gas Initiative (RGGI) as well as the massive subsidy to support in-state nuclear energy production. Most observers expect the release of the draft EMP to kick start a clash of priorities that will pit staunch environmentalists with the business community and ratepayers.
UTCA believes that implementation of clean energy goals should be staged incrementally. Progress should not be measured in a binary, “clean vs. dirty” metric. Progress should be viewed as a transition to energy sources that will make a measurable improvement to public health along the way to the stated goal of a 100% renewable energy future. As such, natural gas should be considered a key component of any state strategy to transition away from “dirtier” alternatives and to “cleaner” ones. UTCA believes the following should be prioritized in the revised EMP to facilitate the incremental transition to a cleaner energy future:
Utility & Transportation Contractor | june| 2019 39
• New in-state “cleaner” energy production should be expanded, including offshore wind, utility scale solar and natural gas • In-state and interstate pipeline capacity should be carefully expanded to capitalize on the abundant and affordable supply of natural gas in the region • A portion of discretionary spending from reentry into RGGI, environmental settlements, and other funding areas should be dedicated to support the development of innovative energy technologies, especially utility-scale energy storage • The state should provide technical assistance, funding and permit coordination to owners of water and wastewater treatment plants to help them minimize the use (especially during peak periods) of less clean energy from out-of-state sources. Savings from these investments can be added to existing budgets of water utilities to assist in the repair and replacement of crumbling water infrastructure assets • Support the utility, construction and transportation sector achieve energy goals by providing programs that support the voluntary replacement of equipment and vehicles that are more energy efficient and use cleaner fuels • Empower the NJ Infrastructure Bank to be responsible for the administration of programs related to utility investments
The Pipeline
In the coming months we will be working with partners to push the Murphy Administration to adopt a final EMP that is balanced and based in economic reality. The Engineers Labor-Employer Cooperative (ELEC 825) recently launched an educational cam-
40 Utility & Transportation Contractor | june| 2019
paign branded “Energy Reality Check.” This campaign will include educating the general public and pushing back on the narrative and false claims from special interest groups that say only renewable energy has a place in New Jersey. It is clear that New Jersey needs natural gas and nuclear power for the common goal of transitioning to a cleaner energy future. UTCA commends ELEC 825 for its efforts. UTCA is also working to position our members to compete for new opportunities that will likely come from New Jersey meeting its renewable energy goals. A prime opportunity for New Jersey to increase the renewable energy portfolio lies in the construction of offshore wind energy projects and related infrastructure on and offshore. We are actively helping UTCA members meet developers of offshore wind energy projects and associated infrastructure. These long-anticipated projects are more likely than ever to be built thanks to advancements in technology and ratepayer-backed subsidies. UTCA is also engaging with the Offshore Wind Business Network, a national advocacy group working to build the US offshore wind market and its supply chain. Through this collaboration we are learning about other contractors’ experiences with this new construction opportunity in the more-mature European markets, including review of onshore and offshore approvals, solicitation, O&M contracts, and more. Please stay tuned to this issue and reach out to me at kennedy@ utcanj.org if you are interested in new opportunities in the offshore wind market.
berto construction Cover Story
completes 50 years By: zoe baldwin
I
n the Beginning
Hanging prominently on the wall of the conference room of Berto Construction is a photo of the house where Antonio Vazquez was raised. It’s an overhead view, and the reddish-orange tile roof of the Galician-country home stands out brilliantly against the lush green farmland on which it sits. We sat with Antonio and his son, Tony Jr. to talk about their half-century of success in construction, and it came up almost immediately. “When I came to this country,” Antonio starts, “Coming from that farm, my family - my father, my grandpa - we always worked for ourselves, not somebody else. So that’s how I’ve always pictured myself. As soon as I learned the trade, I knew I wanted to be out on my own.” Just 24 years old when he arrived in Newark, NJ, it took less than four years for Antonio to learn the trade, find a partner and incorporate as an independent contracting firm. That was 1969, and his partner, Bernie, was in his late fifties already. After a few years Antonio was able to buy him out, and began expanding the three-crew, curb and sidewalk company almost immediately. He moved his family to Fords, NJ in 1972 and the office was in the house. His wife Maria ran the office, teaching their children the business along the way. Their early projects, such as the run-
Equipment enclosure walls at N. Hudson Sewerage Authority in Weehawken.
ways at Lakehurst Naval Base subcontracting for Manzo Contracting, and concrete work for Mountaineer Construction and other contractors, showed off the young firm’s capabilities. By the early 1980s they started taking on increasingly difficult projects, such as removing the Eatontown Circle as a subcontractor for Stavola Contracting, I-295 for PKF-Mark III, and considerable concrete construction at the Woodbridge Center, Freehold Raceway Mall, and Meadowlands Arena. By the late 1980s it was clear Berto needed a new home. Antonio was running nine crews by then and the business needed its own space. “I used to come to this place to buy pins and clamps and things,” Antonio begins. “Rahway Ironworks it was called. I was friendly with the owner and one day I said, ‘If you ever want to sell this place, I’ll buy it from you.’ And he says, ‘Really? Do you want to buy the whole thing? Because we’ve been thinking of selling.’ And that’s just how it happened. I bought the whole thing with the machines and everything – even their little brother! He said, ‘You can buy the business, but you have to keep me.’ And I thought that’s fair, so we made a deal and I bought this place in ’88.” “And it even came with the guard dog too!” Tony Jr. adds jokingly. The yard was originally just 2 acres, but it grew through the years just like business – organically and with a careful eye for opportunity. “It seems like our expansion in the past hasn’t been intentional. It kind of happened naturally – it’s more like, an opportunity comes to us, and we’re going to take that on. We were just in the right position, with the right people at the right time.”
Bridge replacement at Pattenburg Road over Route 78 in Union Township.
46 Utility & Transportation Contractor | june| 2019
“When we started, we had a pickup and a flatbed truck. Then we bought a small backhoe and drove our personal cars to go back
and forth, for the first year. And then we started slowly buying a little bit of equipment or some more trucks. We had about three crews then, now we have 18 or 19.” Antonio adds. Starting in the Middle With their steady development over time, Berto grew to be known for competence on difficult projects. Most recently, the firm completed major work on the Goethals Bridge design-build project in NY where everything – including trucks -had to be
hoisted by crane onto the bridge deck and crews had to climb up to 14 stories of stairs daily to access the jobsite. “It’s the first time I’ve built a bridge from the middle out,” says Tony Jr. The father and son light up as they describe their time on the bridge. It was a KWM design-build project for Porth Authority, but in the end there were issues with the design of the approaches and they had to redesign parts of the bridge. “So, they just built the center of the bridge before they had the access points so they could keep up the schedule.” Antonio says. “It was a really dangerous job. It was so high up that you had to secure your hard hat real tight or the wind would take it right off.” Safety was a must for obvious reasons. “Lots of harnesses, you’re so high up… I didn’t look down very often during that job.” Tony
Hoisting the agitator truck onto the Goethels Bridge.
I asked if they knew what they were getting into when they took the job, and both men laughed. “We had a general idea,” Antonio says, “but you have to think about the timing of everything. Like when the concrete is down here and it’s running late, and you have to get it all the way up there. So, there was a lot of good teamwork that needed to be there to make sure it ran smoothly. It was a great learning experience and the bridge came out beautiful.” So exactly how does one end up taking on a sky-high project with unique logistics? “KWM actually came to us and at first we were hesitant,” Tony Jr says. “But they finally convinced us. They had tight deadlines and we had to help accelerate the project, but they knew we could handle it for them. When they first came to us, even they didn’t know they’d have to hoist everything. When we were negotiating the contract is when that came out and we were like, okay…we can do that. So, it’s definitely not something we were looking for at first, but it’s something that came up, and we just said we’re not just going to walk away from this one, let’s see if we can tackle this.”
Cover Story
Concrete parapets on the Goethals Bridge.
Jr. recalled with a nervous laugh. “It was a good experience, though. The work wasn’t the problem it was just a difficult job. It’s work we’ve done a million times, it’s just how you’re going to do it. And there were so many people working up there as well, and keeping to their build schedule, it was interesting.”
Quality Control There’s a definite pride that comes from completing such prominent projects, and it’s clear from both Antonio and his son that there is a true joy in building. From their recent bridge work on the Pulaski, to the finish work on the gleaming new Harrison PATH station, and the roadways, ramps, barriers, curbs, sidewalks on the Bayonne Bridge, Berto has truly made their mark on the landscape of New Jersey. They credit much of their success to Antonio’s management style and meticulous list keeping. Every night before leaving his shop, Antonio Vazquez does a full walk through, making notes on everything large and small. “We don’t have a philosophy, but I talk to my employees a lot.” He tells me. “A simple ‘Hey good morning how are you’ can get you some idea of what’s really going on. If one of my guys says ‘Oh, well, you know…’ I tell him to speak up - I want to know! Sometimes its just a little tiny thing but if they can’t let it go it can just explode one day. You have to be able to tell and to hear both the good things and the bad things. Communication is very important, just talking can help make sure you have the right guys on the right job.” “Every week I pass by my jobs. That way you know if there’s a problem right away. It also helps make sure the men have good equipment and tools. Crews that feel happy and have the right tools can really speed up a job. Sometimes I’ll even put the guy’s name on the machine - pride produces better work! And on the other side, if a machine’s not greased or something – you know who did it!”
Utility & Transportation Contractor | june| 2019 47
Cover Story
“Every day I make lists in this notebook,” he holds up a small pad that fits in his breast "As soon as I learned the pocket and taps it trade, I knew I wanted to be lightly. It is filled with neatly written notes out on my own." that Antonio informs me are just from to- Antonio Vazquez day. “This morning I made all these notes. Tonight, I will go over them and make sure I know what’s getting done and what’s not getting done. It’s also important that your people know that you know what’s going on.” Tony Jr. interjects “Everybody know that if Tony Sr. writes something in his book, you better get it done. Everyone knows he’s got that notebook and pencil in his pocket, every day, on every job. It’s kind of a system of checks and balances. Something is always going to happen, but you have to be able to rein it in some way. Otherwise things go missing, left laying around on a job site or whatever, and you can lose a lot of money that way.” Antonio smiles approvingly adding, “You know I talk to the operator, and I say ‘I think this machine needs some grease,’ and he’s says ‘Yeah, yeah I’ll do it this afternoon,’ and I’m like ‘you better’. I’m smiling, but I tell them. It’s important because if you forget a tiny thing, it keeps happening and just goes on and on. It’s such a big company with so many people, I really have to have my arms around it.” Looking Toward the future Berto Construction is a family operated firm in the truest sense. Extended family members are involved in the daily management of the firm, and Antonio and Tony Jr. consider their non-relative employees to be an extension of that. Many personnel have been with the firm several decades and some have even brought their families into the fold as well. Antonio Lopes serves as Vice President and Tony Sr’s daughter Maria has a construction company of her own. Tony Jr’s son is thirteen years old and is starting to help out around the shop. Tony Jr jokes that when he was that age, “I could practically run a backhoe, but it was less illegal back then. Someone would come around and say you’re working hard and you’re only thirteen?! Good job!’ It’s a different world now, but that’s a good thing!” Neither Tony Sr nor Junior can predict the future – where the industry will head next, whether the next generation of Vazquezes will feel the call to construction – but Tony Jr., has a good perspective on the industry, even when the work slows down: “This industry is interesting because it’s continuous. Until we have flying cars, the roads are going to keep getting beat up, and it’s really just a cycle. We’ve been around long enough where we’ve redone
48 Utility & Transportation Contractor | june| 2019
Granite steps and pavers at the new Harrison Path Station.
the same project three or four times, just years apart. Between the traffic and the weather and the salt, it’s just a rough area for roadways. It’s kind of perfect though; it keeps us going.” Antonio and his family realize that Berto Construction could not have achieved the accomplishment of reaching 50 years in business without the hard work of its dedicated staff. The estimators, project managers, office staff and field employees are an integral part of their success. Working as both a general contractor and subcontractor, they realize the importance of having good communication and maintaining a good relationship with customers and vendors. “The people we work for and work with are so important in our ability to perform our work quickly, efficiently and with the quality people have come to expect from us. There are contractors we have worked with for decades and are grateful for their continued faith in us.” As we began wrapping up, the conversation meandered back to the farmhouse in Spain, and to the Spanish community in Newark that remains a major part of life for Antonio and Maria. “I go to Newark one day a week, on Saturdays. If I don’t go it’s not a weekend for me or my wife. I have a lot of friends there. All the restaurant owners – Spanish Tavern, Casa Vasca – we’re all from the same place!” Aristotle once wrote that, “Quality is not an act. It is a habit.” After a half-century of accomplishment in the construction industry and in life, it’s clear that the thoughtful and personable management and quality control Antonio Vazquez has applied to Berto over the years is intrinsic to his character and a key to his success. We wish Antonio, Tony Jr., and the rest of the Berto family all the best for this tremendous anniversary and look forward to celebrating the decades to come.
Feature Story
maser consulting: 35 years strong M
aser Consulting P.A. is a privately owned, multi-disciplined, engineering firm with a unique balance of public and private sector experience. Headquartered in Red Bank, NJ, Richard M. Maser, PE, PP, CME, Chairman & CEO started the firm in Matawan, NJ with a handful of services. Thirty-five years later the company has grown to include eight core disciplines serving 12 states through 31 offices nationwide. Still heavily vested in the northeast, the company followed a pattern of growth that lead it from the NJ/NY metro area, down the coast, throughout Florida, then west into Tennessee, Texas, New Mexico and most recently, Colorado. Each state the firm set roots in began with providing services to address the needs of that region. From there, support service lines have grown exponentially. Leadership Richard M. Maser
Richard Maser received his BS in Civil Engineering at Newark College of Engineering which is now NJ Institute of Technology (NJIT). He took graduate courses for Traffic Engineering and related courses at NJIT, the Institute of Transportation Engineers, Northwestern University, and Brooklyn Polytechnical Institute.
Mobile LiDAR Highway Scan
After working for two engineering firms, Richard took on the challenge of forming his own engineering and consulting firm by surrounding himself with talented people who would maintain the high standards he was looking for and created an environment in which they could thrive. Many of the firm’s initial Division Directors are still with the firm. To this day, Maser Consulting invests deeply in its employee base knowing that people are the company’s great asset. Offices naturally grew and so did services in the states geographically surrounding the central hub (New Jersey, New York & Pennsylvania). After increasing his staff to fill the gaps in expertise, Richard expanded his existing civil/site development, municipal, and traffic services to include a bigger mix of public and private work and land surveying. Kevin L. Haney In 2013, the company’s growth warranted the creation of two new executive positions: Chief Operations Officer (COO) and Chief Administrative Officer (CAO). Kevin Haney was hired as COO. With a background in commercial civil/site engineering, his expertise focused on managing business operations and development, profitability, and coordinating affiliate companies and branch offices throughout the firm. Leonardo E. Ponzio
Maser Leadership left to right, Kevin Haney, Richard Maser and Leonardo Ponzio.
54 Utility & Transportation Contractor | june| 2019
Leonardo E. Ponzio, PLS, a 31-year company veteran, was appointed Chief Administrative Officer (CAO). Starting his career as a surveyor, he joined Maser Consulting in 1987 as field rodman and worked his way up the ladder to becoming Director of Survey Services. During that time, he spearheaded one of the
In 2016, the firm made a second strategic change in its leadership in which Richard migrated from President/CEO to Chairman & CEO. Kevin became President/COO where his responsibilities became more strategically focused on growth and new hires. Leo became Executive Vice President/CAO with responsibilities focused on overseeing the firm’s internal operations while continuing to manage the survey operations. This is the current leadership configuration.
In 2011, when the economy began to improve, Maser Consulting was able to make significant efforts to add new services and grow them geographically through a series of acquisitions and strategic hires. The firm acquired leaders in the field who helped establish services regionally and nationally. The firm launched new telecommunication and infrastructure divisions, while also majorly investing in new survey technology, specifically mobile LiDAR Hi-Definition scanning equipment. This survey technology alone created 17 project manager roles within the firm. The company’s investment in technology and additional services has expanded its presence, picking up work in a nationwide arena and increasing revenue 98% from 2011 to 2014. As a result of the firm’s philosophy and business strategies, it has never had to resort to downsizing staff as a measure to survive. Technology and Strategies Services like Mobile LiDAR and Unmanned Aerial Systems (UAS/drone) capabilities have helped the company expand nationally because of the mobility of these service lines. Combining these with other existing geospatial services like GIS asset management and Subsurface Utility Engineering (SUE) is a natural pairing of services which has created more comprehensive service packages to meet clients’ specific needs.
Feature Story
firm’s largest technological equipment acquisitions to date, purchasing To this day, Maser Consulting several millions of invests deeply in its employee dollars worth of highly advanced base knowing that people are geospatial survey instrumentation, the company's great asset. including Mobile LiDAR units, ahead of the industry which expanded the firm’s presence nationwide and doubled survey revenue over the next four years.
Philosophy Maser Consulting’s business philosophy is strongly rooted in the diversification of services. This strategy provides a cushion in a fluctuating market which has enabled the firm to withstand the decline of the housing market in the late 1990s, again in early 2000 and once more in 2008. Throughout the 2008 crash, the firm secured commercial and industrial clients, while focusing on the public/municipal arena where work was more consistent and maintained a safer balance of revenue for the firm. Rather than sitting back and being reactive in the face of economic adversity, the firm utilized these diversification strategies to navigate through a poor economy while maintaining the health of the company.
Rendering of Subsurface Utility Engineering
UAS and Subsurface Utility Engineering (SUE) are two technologies that are changing the design and construction process. Having the ability to collect and accurately integrate data from the air using UAS in addition to ground collection gives us enormous location and project-type versatility, in less time which equates to quicker decision-making ability to clients. SUE combines a unique mixture of geophysical methods, civil engineering, survey mapping and nondestructive excavation technologies to verify and map the location of existing underground utilities. Performing this prior to the design process can save clients costly utility relocation expenses and increases job safety. We see this as a trend since we anticipate that more work will be created as more states adopt regulatory compliance regarding the means by which data is collected. South Grand Avenue Condominiums Asbury Park, New Jersey
Utility & Transportation Contractor | june| 2019 55
Feature Story
The People The important thing to know is that Richard Maser believes the key to maintaining the kind of strategic growth the company has experienced, is by making it a priority to hire people who are also a good fit within the firm’s internal culture. His genuine passion for the people he works with is evidenced by his philosophy that ensures all employees have everything they need to find success within the company and to be leaders within the industry. Conclusion Over its history, Maser Consulting has consistently been recognized nationally by Engineering News Record as one of its Top 500 Design Firms, placed on NJBiz’s 50 Fastest Growing Companies and ranked on The Zweig Group Hot Firm List of fastest growing companies. Maser Consulting is committed to providing its employees with a positive and enjoyable work environment to achieve personal and professional goals, continues to hire expertise and has no notion of slowing down growth.
56 Utility & Transportation Contractor | june| 2019
Subsurface Utility Engineering
Feature Story
flanagan's turns a parking lot into a park By: dan kennedy
A
fter more than a decade of planning, design and securing funding, Newark’s long-awaited Mulberry Commons opened in May. Previously branded as Triangle Park, this 22-acre public space will create a multi-use park central to the City’s redevelopment plan from existing surface parking lots. Mulberry Commons will be the link between Newark's Ironbound neighborhood, Penn Station and the Prudential Center. Newark is emerging from several challenging decades and is becoming a magnet for investment as it creates a more pedestrian-friendly downtown centered around new office space, bars, restaurants and other entertainment options.
Long-time UTCA member Flanagan’s Contracting Group, Inc. is the general contractor for the first phase of this project, including the Arena Yard and the Warehouse Terraces. These new park areas abut an existing warehouse undergoing a transformative rebuild to mixed use development lead by Edison Properties. On the periphery of the new park, private developers with the support of public agencies plan to erect mixed-use development including both residential and commercial space for restaurants and retail shops. Flanagan’s is generally equipped to handle all phases of a project as a general contractor from basic site work to project completion. They specialize in projects of this nature and other park improvements. Projects like this give this family-owned and operated business, along with their dedicated employees, a great sense of pride, according to Bob Flanagan, Jr on behalf of their company. Given the amount of time, attention and the expense of getting this project ready for this transformation, there were not a lot of surprises during construction related to subsurface conditions. This project required less underground stormwater retention compared to others Flanagan’s has completed in the area, although there were two good sized retention systems built onsite to deal with runoff from the site. Working in this busy area of Newark had its challenges. The project schedule had to be adjusted due to added scope
Mulberry Commons near completion.
from adjacent vertical projects but in the end, Flanagan’s was able to work with all involved to meet the City’s goals for a ribbon-cutting in May attended by Newark’s Mayor and other dignitaries. Officials estimate that over the next few years total construction costs for all phases of the park will be approximately $30 million, funded through a combination of bonding, state funding and private development dollars. Future phases of the project will include more greenspace adjacent to McCarter Highway, as well as a halfmile footbridge from the Prudential Center to the Ironbound's Peter Francisco Park. The city expects the project to return over $500 million after development, including the first phase constructed by Flanagan’s. “This project represents another step toward showing the best of what our city has to offer. The 22-acre site will not only enhance our tax base and boost our economy, but it will also bring jobs, commerce, housing and green space for all Newarkers to enjoy,” Mayor Baraka said in a news release. Founded in 1979, Flanagan’s serves the tri-state area as a general contractor. Bob Flanagan, Jr is active on the UTCA Young Professionals Committee and is a new member to the Legislative Committee. UTCA commends Flanagan’s for delivering on this transformative project for the City of Newark
Utility & Transportation Contractor | june| 2019 67
By: nancy damato, rda benefit services
B
usinesses face many challenges today and Employee Benefits is near the top of the list. Statistics have shown that quality Employee Benefits contribute to the success of any company. Offering a high-quality benefits package is key to attracting and retaining the right employees, especially in today’s tight job market. Add to that, the challenge of meeting the needs of as many as five generations of employees in your workforce. So how can you accomplish these goals and contain the costs of a high-quality benefit program? Flexibility and creativity in your benefit offerings is key to reaching these objectives. Think outside the box in order to offer Best-in-Class benefits to your employees. CREATIVE HEALTH PLAN SOLUTIONS One of the strategies that can be used to enhance the health benefits program is the use of a fully integrated health management program, that can be paired with any health insurance carrier and any insurance plan. It allows the employer to customize the benefit features, as well as offer more than one health plan to the employees. It includes a proprietary medical reimbursement program and guarantees that your group’s claim exposure will be limited and that your group will realize a pre-determined amount of savings, by using this program. Imagine paying less and getting more from your health plan! While remaining HIPAA compliant, this program also provides the employer with claims data, which is a valuable tool in managing future costs and benefit plan designs. Wellness integration is also important to the success of this program. Onsite wellness screenings, monthly webinars, and onsite seminars for employees are provided, as well as incentives for employees to be engaged in wellness activities. Access to a wellness portal is provided and can track the progress of an employee and their family. ANCILLARY AND VOLUNTARY BENEFITS ENHANCE THE BENEFITS PORTFOLIO Including dental, vision and group life and disability benefits are also key to a robust benefits package and can make a difference when someone is selecting a new employer. Adding in Voluntary Benefits, which can range from additional disability and life insurance, as well as include critical illness, cancer and accident insurance—all owned and paid for by the employee, an employee can customize their own benefit selections. The Benefits Enrollment Team can assist in the enrollment process, providing educated guidance to every employee and provide the employer with
NEWS
employee benefits: planning & implementation for success paperless enrollment files for each carrier. Continuous communication and education throughout the year is also effective in helping employees get the most from their benefits, by helping them have a better understanding of all that the plans have to offer. Often, employees are not aware of what is available to them until they experience a traumatic event. ADDITIONAL BENEFITS Happier employees tend to be healthier, more engaged and productive employees. So, employers may also want to consider adding other benefits to their portfolio, as one way to stay ahead of the competition. Promoting wellness through company-wide events, offering student loan assistance programs to employees, and other on-site amenities are just a few suggestions for additional perks that can help to attract and retain employees. BENEFITS ADMINISTRATION If you think that adding these benefits will require additional administrative assistance, there are programs that can assist in the enrollment process and the day to day management of your employees and their benefits. These technology solutions offer time-saving solutions and eliminate errors in the management of HR tasks. An analysis of your current administration processes can show what tasks can be automated in order to streamline daily activities and provide substantial cost-savings. VALUE OF A TOTAL COMPENSATION PACKAGE Very often, employees need to be reminded of the value of the benefits package as part of their total compensation. The value of health insurance, dental and vision benefits, retirement savings, company training benefit costs, paid time off and any other additional benefits, in addition to salary, should be communicated to employees on an annual basis. Employee benefit programs should be reviewed throughout the year, as the needs and interests of employees, as well as job candidates, continue to change and evolve. Engaging with employees and being in tune with their needs and challenges, will provide valuable information to employers. These efforts will certainly enhance your benefits portfolio and put your company in the forefront as a leader in the industry.
Utility & Transportation Contractor | june| 2019 71
By: michele n. siekerka, esq., president & ceo, new jersey business & industry association
B
usiness owners belong to associations, such as the UTCA or the New Jersey Business & Industry Association (NJBIA), because job-creators are thinkers and doers. They know we must engage actively with state policymakers on initiatives that build job skills, upgrade vital infrastructure systems, and expand our economy in order to make New Jersey a better place to work and do business. Collectively, NJBIA businesses provide more than 1 million jobs in this state. Most of our members are smaller companies who share the same concerns UTCA’s contractors and small businesses have about high taxes; costly labor, environmental and energy mandates; and the need to invest in transportation and other infrastructure systems that are essential to sustain a 21st century economy. Our two nonprofit associations worked successfully together a few years ago to secure final legislative approval of the $16 billion reauthorization of the Transportation Trust Fund. This $2 billion per year, eight-year investment in highway and bridge construction projects is expected to generate $4.7 billion in economic output, while also creating and sustaining 34,165 jobs. Our mutual focus now is on the 2016 law’s implementation to ensure that funding for approved transportation projects is provided expeditiously so contracts are awarded and shovels are put in the ground as fast as possible. UTCA and NJBIA have also been vocal advocates in the ongoing fight to secure federal funding for the 109-year-old Portal Bridge over the Hackensack River in Kearny, and the companion project to build a new two-tube rail tunnel beneath the Hudson River as part of the Gateway Project. These are without a doubt the most urgent infrastructure projects in the nation right now, which is why NJBIA and UTCA are working in tandem with New Jersey’s Congressional representatives and other business groups to break the political logjam in Washington, D.C. that has held back federal dollars for the initiative. No area of the U.S. is as dependent on mass transportation as the New York-New Jersey region where more than 200,000 rail
NEWS
building strategic alliances for a better new jersey commuters travel between Newark and New York through an existing 110-year-old, two-track tunnel beneath the Hudson River that was damaged by Superstorm Sandy. And because the Northeast Corridor connecting Boston to Washington, D.C. that runs through this tunnel is the most heavily used intercity rail line in the nation, a shutdown would have a national impact as well. In fact, a recent report from the Regional Plan Association found that if just one of the deteriorating Trans-Hudson rail tunnel’s two tubes had to be closed, the shutdown would cost the national economy $16 billion over the four years it would take to make emergency repairs. The closure would lead to significant highway congestion; delays and increased costs to ship freight by trucks; higher air fares in the Northeast as more Amtrak riders have to take planes; and a $22 billion drop in property values in New Jersey communities located near rail stations, the report said. Road and rail transportation isn’t this state’s only critical infrastructure need. Comprehensive, long-term planning is also needed to modernize our drinking water and wastewater systems. Phased-in water infrastructure investments are needed over the next three decades in order to support sustainable economic growth and give New Jersey businesses the confidence to expand operations here. Before joining NJBIA in 2014, I served as Assistant Commissioner for Water Resources at the state Department of Environmental Protection where I supported efforts by towns and utilities to develop 30-year prioritized capital investment plans. This allows time for controlled logical spending that addresses the need to repair, upgrade and replace systems so that taxpayers and ratepayers are not footing the bill for more costly emergency repairs. Beyond infrastructure, NJBIA continues advocating in Trenton for pro-business policies and legislation. Recent state mandates, such as the expansion of Paid Family Leave and the approval of millions of dollars in ratepayer subsidies, have increased labor and energy costs and made it much more challenging to run a
Utility & Transportation Contractor | june| 2019 73
NEWS
business in New Jersey. This is why NJBIA is fighting hard to stop another anti-business proposal that would expand the state’s top 10.75% marginal income tax rate to income over $1 million (instead of the current $5 million threshold) because that would require more small businesses that flow income through owners’ personal tax returns to pay the top rate. A recent Rutgers-Eagleton survey, done in conjunction with NJBIA, overwhelmingly found most New Jerseyans say they are overtaxed (82%) and the state is unaffordable (81%). The finding is not surprising considering that New Jersey residents are paying the region’s highest income, corporate, property and sales taxes. Unsustainable state spending that outstrips revenues is at the root of this, and by far the biggest driver is New Jersey’s public pension and retiree benefits system, which as of 2017 had a combined net pension liability and post-employment benefit obligation of $151.6 billion. NJBIA strongly supports legislative efforts to follow the lead of 10 other states that have already adopted hybrid pension plans
74 Utility & Transportation Contractor | june| 2019
that combine elements of a traditional defined benefit and defined contribution plan with an individual retirement savings account to which both government employers and public employees contribute. We also support shifting government workers from their current platinum-level health plans to gold-level plans comparable to what the best private sector employers offer their workforce. Without these changes, the cost of this unsustainable system will continue diverting revenues away from essential state services and programs, including workforce development initiatives, transportation, and the other infrastructure improvements needed to grow the state’s economy. Strong partners build strategic alliances in order to achieve their mutual goals. I invite UTCA members to share with me your concerns and ideas for enacting pro-business changes that will make New Jersey a better place to work and do business. Go to NJBIA’s website, www.njbia.org, and click on the “Tell Michele” box to share your thoughts. I look forward to hearing from you.
By: matt dawes, gallagher
I
nsurance is expensive. Within the construction industry, the insurance coverage that an organization needs to carry in order to conduct business is likely one of their largest expenses. Fortunately, there are a few ways to control insurance costs and create efficiencies at the same time. Has your organization ever considered implementing some strategies to reduce premium costs, without reducing levels of coverage? Here we share the following for your consideration: 1. Implement or Enhance a Safety Policy A safety policy in this industry is critical to the success of your business. It will help keep your employees healthy and create a manageable structure within an organization. We recommend assigning a safety advocate on each job site that can respond to employee questions, lead tool box talks and promote the right behaviors. If this is something you have not yet considered, your broker and/or carrier are also a resource when it comes to safety. They can provide services such as conducting site visits to assess the environment and provide recommendations to improve conditions as well as lead training seminars. Your broker or carrier may also provide safety policy templates and supporting educational materials available to you as you build out your strategy. Safety reduces injuries which results in jobs being completed on time and reducing claims that can also impact your experience modification rate = less premium. 2. Create a Return to Work Program A Return to Work program is a process for allowing injured, ill, or disabled workers to return to their job duties as soon as they are able, as defined by their physician. The worker's original job
NEWS
workers compensation costs savings strategies duties may be modified through light duty or accommodations, or even a temporary position elsewhere within the company. A return to work program benefits an employer and the employees a few different ways: Benefits for Employers • Workers' compensation costs are significantly reduced when Temporary Income Benefits (TIBs) cease to be paid or are reduced when an injured employee works during their recovery; • Medical and disability costs may be lower and recovery time may be shortened; • Decreased loss ratios and experience modifiers help reduce premiums; • Retain trained workforce and reduce turn over; • Avoid recruiting and training costs of hiring replacement employees; • Pay wages for work instead of your insurance carrier paying benefits. • Recovery time may be shortened; • Concerns about continued employment may be eliminated; • Loss of physical fitness due to inactivity may be averted; • Full or partial wages are earned bringing the injured employee's income closer to pre-injury wages; • May help retain job skills; • Less likely to experience secondary complications such as depression that may delay or complicate recovery; • Permanent disability associated with the injury is more likely to be reduced; • Maintain company benefits and seniority; • May require less medical care and medication; • Family and social lifestyles may be better maintained; and
Utility & Transportation Contractor | june| 2019 79
• May better avoid financial difficulties.
NEWS
3. Leverage Your Insurance Broker Leverage your relationship with our insurance broker, they can be a great resource. Many skilled brokers can help you focus on your total cost of risk (TCOR) rather than just assist with the marketing of your insurance programs for a better rate. They have access to resources such as safety departments, claim advocacy teams, industry related information and practices that can review your business and work with your carriers to implement programs to address all of these strategies outlined above. A claim team can often advocate on your behalf with the carrier to move a claim along more quickly and/or negotiate to lower reserves. A safety department can help write a Safety Policy based on your particular needs and work with carriers to provide resources to conduct training and educate your employees. 4. Review your Experience Modification The Experience Modifier Rate, or EMR, is a numeric representation of a business’s claims history and safety record as compared to other businesses in the same industry, within the same state. Experience Modification Rate (EMR) has strong impact upon a business and can impact your insurance costs and gain more bid work. It is a number used by insurance companies to gauge both past cost of injuries and future chances of risk. The lower the EMR of your business, the lower your worker compensation in-
80 Utility & Transportation Contractor | june| 2019
surance premiums will be. The more injuries that you experience the higher the rate so it is important to not only monitor the rate but consider the strategies above to manage it. Monitoring claims can result in EMR improvements. Two ways to address claims are: 1. Work with your broker or carrier to confirm that claims are being updated accurately and timely. Longer claim period result in higher costs. 2. Negotiated carrier reserves that may be inflated. Reducing the reserves will reduce the total costs associated with claims and impact your EMR. These are just a few ways to address some of the challenges of a costly Workers Compensation program. Creating formal processes related to employee training, safety and return to work programs can have a positive impact on your business in many ways including lowering your experience modification rate and reducing workers compensation premiums. About the Author. . . Matt Dawes is an Account Executive on Gallagher’s Construction Practice team which is responsible for premiums exceeding $1.5B and relationships with many ENR top 400/top 600 contractors as clients. He has over 14 years of experience in insurance and is committed to delivering solutions that align with his client’s business objectives and making their premium dollars go further.
By: matt rosenthal, president & founder of mindcore
M
them to onboard prospective clients, let alone keep their current ones happy. On top of that, their IT Director had just put in their two-week notice and they just found out that their security system was outdated, leaving them exposed to outside threats.
But, what if it didn’t have to be that way?
Remember that proverbial monkey on the back? This was a 500-pound gorilla.
ost companies see IT as a necessary evil. As someone who spends thousands of hours each year developing technology solutions for business leaders, I get it. For them, IT problems can often feel like the proverbial monkey on your back that you’re never able to get rid of.
What if instead of technology being an obstacle you had to overcome–it was actually the key to unlocking your company’s full potential? At Mindcore, we work with some of the leading and fastest-growing utility and transportation contractors across America by empowering them with the IT solutions they need to perform at their best. With dozens of years of experience and thousands of hours of coaching under our collective belt, here are the top three fundamentals that separate industry-leading companies from the rest. Before I give these to you, know that these fundamentals have nothing to do with the size of your company or budget. They have nothing to do with your current IT set-up or the size of your IT team. They don’t even need you to have a background in IT. That’s the beauty of technology today and it’s why your company may be on the brink of it’s biggest quarter yet. FUNDAMENTAL ONE: Recognize The Importance Of Technology In Your Workplace It doesn’t matter what phase of heavy, highway, utility or marine construction your company specializes in, technology is already at the center of everything you do.
NEWS
3 fundamentals you need to know to grow your company
I sat across the table from their executive team and listened to them walk me through the questions they were asking. How do they solve their technology problems? What do they need to be doing now so they don’t run into these issues again down the road? How do they need to be leveraging their technology if they want to continue to be the best in their field? To help answer their questions, my team and I put together a comprehensive IT assessment for them in a matter of days. The assessment didn’t cost them a dime and it gave them a comprehensive view of their entire IT infrastructure, from top to bottom. It showed them what they were doing well, what needed to be fixed and how they could take their company to the next level. Our assessment didn't just show them how to overcome each one of their challenges. It also served as a roadmap that could help reach their goals as a company. The truth is, no company reaches their potential while on autopilot. It takes intention and for a lot of companies, that starts by recognizing the important role that technology is already playing in their workplace. From there, it’s just a question of what you’re going to do about it. FUNDAMENTAL TWO: Don’t Be Afraid To Ask The Tough Questions
I recently had the opportunity to sit down with UTCA member, Trevcon Construction, New Jersey’s leading provider of economical, up-to-date solutions for waterfront construction projects. Whether they’re tracking multiple projects in real-time or trying to communicate to their teams off-site, technology is at the core of their day-to-day operations.
When Trevcon’s IT Director put in their two-week notice, it took everybody by surprise. Their immediate reaction was to start interviewing replacements the next business day. To them, that seemed like the only rational response.
So, when their computers started to get sluggish and their phones started to lose coverage, they noticed an immediate impact on their efficiency as a company. Dropped calls and slow response times put a strain on their team and made it more difficult for
It today’s fast-paced work environment, having an in-house IT director always seems like the right decision. But, if you were to ask most business leaders why they thought that, they don’t always have an answer.
But, was it?
Utility & Transportation Contractor | june| 2019 87
NEWS
To find out if an in-house IT Director was the right decision for them, we took an even deeper dive into their company with an in-depth analysis of their entire IT department. Then we organized all of our findings into a pros and cons list that we reviewed with them in-person. It turned out, they weren’t benefitting nearly as much as they thought they were by having a full-time IT Director on-site. In fact, it led to headaches every time their director went on vacation or called in sick and at the end of the day, it ended up costing them way more than they had originally thought. For them, having an IT Director on-site wasn’t the best choice after all. But, they still needed someone to help them navigate all of their IT issues. That’s when we introduced outsourcing. For less money, Trevcon was able to bring on our entire team of IT specialists at Mindcore so that they had access to real-time support and on-demand coaching 24/7, 365 days a year. The best part is that they didn’t have to deal with the hassle of hiring, on-boarding new staff, offering benefits or worrying about staff retention. Outsourcing also allowed them to streamline their entire company, which immediately made them more efficient and responsive. Thanks to our monthly virtual CIO meetings, they even got way more face-to-face time with our team than they were getting with their past IT Director. If they had rushed into hiring their next IT Director, they would have missed out on the opportunity to enhance the way they did business. They also would have ended up paying a lot more money in the process.
I’m a tech-consultant but at the end of the day, I’m still a CEO, which means that I know technology is only as good as where it takes you. I can talk to you for hours about how our cloud services are the most secure on the marketplace but what’s the point if those same cloud services don’t help you protect and scale your business? That’s why we never present a single IT solution without first understanding where you’re headed as a company. Do you want to become the best in your field? We have technology solutions that can help you do that. Do you want to expand and grow your capacity so that you can take on more projects simultaneously? There’s technology for that. Are you tired of the revolving door of IT consultants who don’t take the time to understand your business needs? That’s why I founded Mindcore.
Once we finished our free assessment and in-depth analysis, we started to help Trevcon implement the right technology that would help them reach each and every one of their business goals. Within two weeks, every one of their IT problems went away– this time for good. Within two months, they called me up to say “Wow! This was a great decision. This is transforming how we do business!” This is why we do what we do. We’re not in the technology business. We’re in the business of transformative solutions. Technology is absolutely critical but it’s just a means to get your company where it needs to go.
It all started by being willing to ask the tough questions.
As a UTCA member, we know that you’re in the business of building but to build effectively, you need the right IT solutions. Give me a call today and let’s find out what Mindcore can do for you. I’ll even offer you a free no-risk IT assessment to help you get started.
FUNDAMENTAL THREE: Start to Leverage Technology to Scale Your Business
You can reach me at (123) 456-7890 or by writing me at matt. rosental@mind-core.com.
88 Utility & Transportation Contractor | june| 2019
2019 Annual Convention September 26-29, 2019 Tropicana Hotel & Casino Atlantic City
Featuring: Commander Mark Nutsch
Green Beret Commander Portrayed in the Movie "12 Strong" & New York Times Best Seller, "Horse Soldiers"
out ab y l at Ju rly ning a in e ppe tion es ha on! a g ti rm nfo chan nven i e o r new 9 C mo for iting 's 201 k Loo e exc UTCA th
Feature Story
utca's 2019 executive seminar The lodge at torrey pines, san diego california
A
large crowd of approximately 100 members and their families traveled to The Lodge at Torrey Pines in La Jolla, California for this year’s Executive Seminar. Dave Smith, Executive Seminar Committee Chair, organized a fantastic trip filled with group activities and lots of golf that truly left attendees in awe of the California coast.
Upon arrival at this AAA Five Diamond resort that overlooks the world-renowned Torrey Pines Golf Course with sweeping views of the Pacific Ocean, guests were treated to a lovely lunch and drinks courtesy of True & Associates and Stone Hill Contracting. A perfect treat after a long day of travel from the East Coast. With the busy week ahead, travelers checked into their rooms to relax and unwind. The first full day started us off right, with business meeting presentations on two issues critical to our industry. First, UTCA attorney Adrienne Isacoff of Florio Perrucci Steinhardt & Cappelli provided us with information regarding public bidding for different contracting units, before Frank Purdue and Logan True of True & Associates spoke about Cyber Security and its impact on the industry. Afterwards, guests had several hours of downtime to explore the property or downtown LaJolla, with a large portion of the group venturing to the famous San Diego Zoo for an afternoon of viewing the animals.
Dave Smith, Lou Cappelli and Rob Beechler enjoy a day of golf at the internationally acclaimed Torrey Pines Golf Course.
The Welcome Reception was a great way for long-time friends and colleagues to rehash good times, while welcoming some new-comers to the group, and everyone looked forward to a week of golf, sightseeing, and industry events. Special thanks are offered to our sponsors for the evening, Florio, Perrucci, Steinhardt & Cappelli, Brent Material Co., Connell Foley, Garden State Precast, Northeast Remsco, RDA Benefit Services, Ritacco Construction, Taylor Oil and Weldon Materials; our delicious dinner would not have been possible without your support. This night was also the first opportunity for the group to gather in our private “hospitality suite” that overlooked the Pacific Ocean. The group was treated nightly to a patio with fireplace and private bar, a perfect opportunity for guests to connect and discuss business. Thanks to Lisa Ballerini for providing the nightly music to our group! Monday started off with a group golf outing at Torrey Pines. Over 45 golfers were anxious to play the internationally acclaimed golf course. With Mike McKenna winning the “Closest to The Pin” contest and Joe Walsh taking home the “Longest Drive” award. The Course did not disappoint, and all the golfers had an amazing day! The rest of the week, attendees golfed some more, relaxed at the pool, traveled to the beaches of La Jolla to visit the adorable Sea Lions, hiked the Torrey Pines National Park, explored the many areas of San Diego including Little Italy and Gaslamp District and, of course, toured the USS Midway with a private docent.
A portion of the group enjoying a tour of the Gaslamp District in Downtown San Diego.
In addition to the team building and networking, the business meetings provided insight and perspectives to the work our members do each day. Jeff Merle and Eric Paterno of Foley, Inc.
Utility & Transportation Contractor | june| 2019 91
Feature Story
gave a comprehensive presentation on Foley’s new fleet and what the future holds regarding construction equipment and vehicles. Nancy Damato of RDA Benefits Services provided us with a fresh approach to employee benefits. On our final day of business meetings Kevin Ellman gave his guidance on defensive investment strategy in a volatile market and best practices for managing your portfolio. Last but, not least, the group was treated to a presentation on differing site conditions claims and the impact to such claims--should the Governor sign pending legislation--by long-time UTCA supporters Mike McKenna, Shawn Farrell and George Pallas of Cohen Seglias Pallas Greenhall and Furman.
Next year, we’re heading Hawaii! The Kahala Resort in Honolulu and The Four Seasons Resort in Maui will host the UTCA Group in 2020. We will be spending three nights at The Kahala which will give us a chance to tour Pearl Harbor as a group and five nights at the Four Season in Maui, where the group will have the opportunity to snorkel, whale watch and experience the famous “Road To Hana”.
As the week came to an end, the setting for our Farewell Reception treated the group to one of the most spectacular sunsets in the country. Great food, drinks and many laughs were a perfect way to end an amazing week on the California coast. Special thanks to our Farewell Sponsors Cohen Seglias Pallas Greenhall & Furman and Wealth Preservation Solutions for making our evening such a memorable one. All in all, San Diego was a wonderful experience. The group returned to the East Coast with enjoyable memories of friends and business associates.
92 Utility & Transportation Contractor | june| 2019
As it was time to say goodbye..a portion of the group enjoying the spectacular sunset at the Farewell Reception.