Utility & Transportation
contracTOR
2019 UTCA Convention
october 2019
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president’s message
From the desk of: dave smith
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econd time is the charm? As I begin my second term as President I reflect on our industry, an industry that affects so many as an economic hub for not only the state but the entire country. The people who we depend on to drive our businesses rely on our industry to provide their families with home, health insurance, education and all of the basics required to support a family. I think about the number of municipalities, cities and counties along with the state, that rely on us for support in maintaining their infrastructure, responding to the needs of the public and assisting with disasters. It is no surprise with such vast responsibility we are an industry with many challenges. Month after month the UTCA staff addresses hundreds of issues, many of which involve policing already resolved matters, matters that are looked past by many who chose to ignore the previous resolution. At the top of our heap of issues we always find funding. The sun is already setting on the current vehicles we use to acquire funding for our industry and five years from now these methods will seem archaic by comparison to the future. We are challenged to find user-based methods of collecting fees to continue to grow and maintain our infrastructure. Other significant issues include an onslaught of legislation, with some bad bills being pushed at an unprecedented pace. This creates a major exposure and concern that requires an exceptional level of policing. Bid specifications that are not fair or often even non-compliant with Local Public Contracts Law are released almost daily. The UTCA works diligently to negotiate fair rules that govern our industry and it is imperative that we defend those positions when they are challenged. A crisis level issue plaguing our industry is a shortage of people. We are of a society that has created generations of people who were taught to believe anything short of a college education and a three-piece suit is a failure. Although there is nothing wrong with a college education and I respect those who worked so hard to get one, there is also nothing wrong with
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the trades. In fact, in most cases people entering the trades at an early age have tremendous potential to exceed those who attended college. Respect for the blue-collar workers of our industry must be restored among society. We need to put vocational schools back in business and ensure they have the resources to educate our workers for the industry of tomorrow. I recently saw a group of high school seniors that participated in a National Signing Day event for those entering the trades, much like athletes do when going to college. We need more of this and fast. I challenge everyone with the task of finding ways to go to your local high schools to speak to the students regarding the career opportunities our industry can provide. Making our employee shortage worse is the national opioid crisis. I recently read that our industry is amongst the hardest hit. This is an unfortunate and troubling statistic. More needs to be done to educate the employees of our business as to the impact of opioid use and help those who need it. There are many things I look forward to this year, including visiting more of our members, working with our young professionals, promoting support of our industry, strengthening our relationship with the Trades and furthering our relationship with the legislature and administration. I want to acknowledge our past President Joe Walsh, he did a great job with the UTCA representing our industry and we will all continue to benefit from Joe’s efforts for years to come. I would like to also acknowledge Bob Briant and our staff at the UTCA. We are fortunate to have such a great team looking out for our industry. Best regards,
Dave Smith
CONTENTS
Cover story 44
UTCA 2019 Convention
DEPARTMENTS
FEATURES
2 7 15 23 31 65
56 cohen seglias celebrates 30 years
President’s Message legal dig accounting corner legislative news safety perspective the pipeline
NEWS 77 pre-tax commuter benefits 83 new delta dental program
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 Photographer: Stokes Creative Group 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.
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By: adrienne l. isacoff, florio, perrucci, steinhardt & cappelli
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hen projects receive federal funding, the consequences of acting in a fraudulent manner may be far more severe than similar wrong activities in the private sphere. Federal funding allows the federal government, through the U.S. Department of Justice, to prosecute actions involving fraudulent conduct. Several recent cases illustrate the consequences of falsifying records. In May 2019, the U.S. Attorney’s Office for the Northern District of New York announced the conviction and sentencing of Nathaniel Lorenz, CEO of Acme Powerwashing, Inc., of Holly New York, for defrauding the New York Department of Transportation. Lorenz was convicted of eight counts of wire fraud and one count of mail fraud. Acme had bridge maintenance contracts with the state, which required cleaning and sealing segments of concrete bridge decks using a specified sealant product that extends the useful life of the concrete and prevents the formation of potholes. The state claimed that Acme billed DOT for the sealant, even though it did not actually purchase or apply it. Moreover, Acme falsified records by identifying another company owned by Lorenz as the material supplier, even though that company actually did not sell any products. Acme saved $500,000 in material costs on approximately $1 million of work since 2012. The U.S. Department of Justice came down hard, sentencing Lorenz to 18 months in federal prison, two years of supervised release, and $600,000 in restitution. There have been several other recent cases brought by the U.S. DOJ. A whistleblower filed a complaint under the federal False
Claims Act, which raised concerns about the manufacturing process of Universal Concrete Products Corp. After the suit was unsealed in May, the state of Virginia and DOJ filed a joint complaint against Universal alleging that it falsified test results regarding the air content of concrete panels it built for the Phase 2 of Silver Line Metro extension. USDOT has provided nearly $2 billion in loans to pay for construction of the Silver Line’s second phase, and Virginia has provided more than $300 million in funding. Approximately 20% of 1,500 precast panels may need to be replaced. One of Universal’s employees, a former manager at Universal, pleaded guilty to falsifying the results and must pay a $700,000 judgment. Universal’s owner claims not to have known about the falsification of records and has not been charged.
Legal Dig
the heavy price to pay for violations of false claims act and other fraud on public contracts
The federal government has also recently filed suit against CB&I AREVA MOX Services, LLC under the False Claims Act and the Anti-Kickback Act in connection with a contract between MOX and the National Nuclear Security Administration relating to the design and operation of the MOX Fuel Fabrication Facility in South Carolina. MOX Services entered into a design-build-operate agreement, which required that Wise Services provide the majority of subcontracting trade work. The government’s complaint alleges that Wise Services falsely claimed reimbursement under its subcontracts with MOX for construction materials that did not exist, and that in turn MOX knowingly submitted $6.4 million in claims to NNSA for the fraudulent charges submitted by Wise. The complaint further alleges that Wise Service’s senior site representative, Philip Thompson, paid kickbacks to a MOX official with responsibility for the subcontracts to improperly obtain favorable treatment from MOX. Thompson entered into a guilty plea on charges of conspiring to commit theft of government funds. “Government contractors who line their bank accounts by receiving kickbacks or submitting fraudulent claims undermine the public’s trust in government programs and operations,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “We will continue to pursue those who misuse taxpayer funds.” Contractors who perform work on jobs that receive federal funding must remain vigilant about not only their own conduct, but that of their employees and subcontractors.
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prepare now for what many experts predict will happen in 2020 By: rich higgins, cpa, mccarthy & company
Warning Signs
U.S. spending growth in 2019 will be led by public investment across both nonresidential buildings and nonresidential structures per FMI’s Second Quarter North American Forecast. The 2019 forecasted top-performing industry segments are: conservation and development (+9%), transportation (+8%), water supply (+8%), public safety (+7%), office (+6%), and highway and street (+6%). Sewage and waste disposal are categorized by FMI as growing while educational and manufacturing have both been downgraded from growth to stable.
Anirban Basu, chairman and CEO of Sage Policy Group, claims that the leading cause of concern for contractors is the emerging weakness in business investment. Basu points out in his article entitled “2019 Mid-Year Economy Outlook: Somehow it Endures” (Construction Executive, August 1, 2019) that there was a 10.6% decline in private investment in nonresidential structures on an annualized basis. Investment in residential structures is down 1.5%. Yet spending by state and local governments on infrastructure and various other projects increased by 3%.
Even though the above statistics indicate that the construction industry is continuing to expand, experts are expressing concern about the economy in 2020. A leading indicator of economic health in the construction industry is the level of housing starts to the level of permits. As reported in Monthly New Residential Construction, June 2019 by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development,
Engineering News Record reported that many construction executives are worried about the market climate in 2020. Drops in business confidence scores are red flags that we may be heading toward a downturn in the economy and some experts agree that there could be a decline in 2020. The National Association of Business Economics thinks there is a 60% chance that we will experience a downturn by mid-year 2020.
Macro-economic factors are in play that could cause a change in the economy next year. These include the ever-increasing U.S. debt, uncertain monetary policies, labor shortages, political instability, tariffs, and trade wars.
Accounting Corner
E
conomists forecast 4.4% growth in the construction industry in 2019. Construction spending has been holding up reasonably well at a moderate growth pace, according to the American Institute of Architects (AIA). Spending on nonresidential building is expected to increase almost 4% this year and an additional 2.4% next year.
Be Proactive It is important to plan now for a possible downturn in the economy. Talk to your banker and make certain you have an adequate line of credit. Expand your bonding capacity, if appropriate. Assess the need for new long-term debt carefully so that your company is not highly leveraged. Talk to your insurance broker and look to make sure you do not have unnecessary coverages. Review pending projects and bids. Decide which projects will produce the highest return on investment and carefully assess all others to maximize profits on projects with tighter margins. Avoid taking unnecessary risks and focus on projects that are feasible and you have the capacity to complete. privately-owned building permits in June were at a seasonally adjustment annual rate of 1,220,000. This is 6.6% below the revised May rate and 6% below June 2018. Privately-owned housing starts in June were at a seasonally adjusted rate of 1,253,000 which is 0.9% below the revised May estimate but 6.2% above the June 2018 rate.
Perform a cash flow analysis to determine when and how money moves into and out of your business, Tighten your credit policies, enforce late fees, and start collection efforts 30 days after an invoice is sent. Examine every contract you have with vendors and try to renegotiate the terms. Take advantage of discounts for paying early. Analyze leasing equipment instead of buying.
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Whenever possible, have a clause in your contracts requiring customers to pay upon completion of certain milestones so you are using their money instead of yours. Bill according to the terms of your contracts. Sharpen your pencil when estimating job costs and apply lean construction principles to projects to improve profitability and productivity.
Accounting Corner
Improve Job Cost Estimates Estimating job costs can be a daunting task. There are so many variables and different items that must be included in a job estimate. For example, contractors need to consider if construction is going to take place over the winter months and if they need to factor in snow removal costs. Then there are the costs that are not directly related to the job, but necessary to complete the project such as having a trailer on site, the cost of technology, office overhead costs, and labor. Estimators should visit the jobsite to see if there will be extra costs for excavating the land, removing trees, avoiding wetlands, or any other challenge that needs to be taken into consideration. An estimator should outline the scope of work (SOW) and define every aspect of the job. This should include: • Purpose statement to explain how the structure will be used. • Project execution requirements such as standards on what you expect from subcontractors, the quality of the materials used, regulations that must be followed, as well as special requirements that must be met. • Project timeline that must be adhered to including milestones and the final delivery date. • Contract payment schedules and reporting on deliverables. • Standards of quality control which would include expectations on the type of workers needed and estimated labor costs. • List of contractor responsibilities so subcontractors have a clear understanding of your expectations and requirements. • List of owner responsibilities to explain how and when plans will be approved, how disputes will be resolved, what needs written prior approval, how overruns will be dealt with, and change orders. • List of related tasks and other details required to complete the project. • Key performance indicators to determine if the project is on target. Once the SOW is completed, the estimator can share it with subcontractors bidding on the job. Establishing standards and requirements bids will help to ensure the estimator is comparing apples to apples once the bids are submitted. The estimator will need to prepare a quantity takeoff to determine how much of each item will be required to build the structure. A good rule of thumb is to mentally construct the building
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starting with the footing and ending with the roof. Use a spreadsheet or job estimating software to list every item in columns by category, the quantity needed, and estimated cost. Use the appropriate measurement unit for the material such as cubic feet (CF) or cubic yard (CY) for concrete. Avoid converting units such as CF into CY until all the items in the column are totaled. The categories you use should be related to a certain part of the project. For example, the cost items associated with footings include structural excavation, concrete, formwork, backfill, and disposal, as well as machinery and labor. Consider everything that is needed to produce each item and how much of the material is needed. Going back to the earlier example on footings, you will need to know how much concrete is required to lay the basement floor. Make sure that you account for waste. Direct costs (bare or unburdened costs) are those associated with building the structure. These include material, labor, equipment, and subcontractor costs. Indirect costs (overhead) are not associated with a specific job or task such as management, insurance, temporary facilities, and professional services. Indirect costs are divided into two categories job site overhead and main office overhead. Job site overhead costs are typically calculated as a percentage of direct costs associated with the actual job. Main office overhead costs are calculated as a percentage of the total project costs and are added at the end of the estimate. Fees for professional service providers can be considered job site overhead costs or main office overhead costs depending on what is done and why. Estimators can find cost information from various resources such as past projects, quotes from subcontractors and suppliers, and published cost data. Apply Lean Construction Principles Lean is the process of standardizing workflow, decentralizing process improvements, implementing just-in-time inventory systems, and working in collaboration as a team. Lean production principles typically result in increases in productivity, improvements in operations, better quality control, and less waste. The five principles of lean were first introduced in the book “The Machine That Changed the World: The Story of Lean Production Item Condition,” by James P. Womack, Daniel T. Jones, and Daniel Roos. The intention of these principles is to create a better flow in work processes and develop a culture of continuous improvement. Principle 1: Define Value – Determine what the customer wants and needs, as well as how much they are willing to pay for the finished product. Principle 2: Map the Value System – Once you know the value of your structure to the customer, you can identify all the activities to take a project from raw materials to the final delivered product. Activities that do not add value to the customer are waste. Waste is broken down into two categories: non-value added but necessary, and non-value added and unnecessary.
All activities in the non-value added and unnecessary category should be eliminated. Principle 3: Create Flow – After waste is removed, you must create a smooth workflow. This will involve breaking down all the steps required to build a structure, reconfiguring production processes, leveling out the workload, creating cross-functional teams, and training.
Principle 5: Pursue Perfection – Make the lean principles and process improvements part of your company’s culture. Encourage everyone on the job site to strive for perfection to deliver a structure that your customer will be extremely satisfied with. If done correctly, incorporating lean construction principles into your construction company can deliver many lasting benefits. PlanGrid and FMI reported in “Construction Disconnected” (2018), that construction teams in the U.S. lose $177 billion in non-productive labor activities and $31 billion in rework caused by poor data and communications. Lean can help break down silos, so subcontractors work together as a team. This will improve communications, increase employee and subcontractor
Don’t be taken by surprise this time around. Do everything you can now to prepare for a possible downturn. Implementing some or all of the strategies mentioned above will certainly help you to “recession-proof ” your company. Disclaimer: This article is for informational purposes only and does not constitute professional advice. Information contained in this article is not intended or written to be used as tax advice and cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s). About the Author. . . Richard Higgins, CPA, is the managing principal – New Jersey office for McCarthy & Company, PC. Contractors trust Rich to assist them with a strategy to achieve their goals by looking at key indicators such as productivity, job costing, profit margins and cash flow. Rich helps contractors to establish realistic benchmarks to assess how well they are doing or to alert them to issues that need to be addressed. He can be contacted at 732.341.3893 or Richard.Higgins@MCC-CPAs.com.
Accounting Corner
Principle 4: Establish Pull – The fourth principle requires that inventory and in-progress work items are well managed so that the materials and information are available when needed. A pullbased system allows for just-in-time delivery and manufacturing. The exact number of materials are delivered so that work is completed on time and when the next step needs to start.
collaboration, and make everyone accountable. In addition, lean will help build brand loyalty, increase customer satisfaction, and improve employee engagement. Workers who are engaged in their work are more likely to focus on delivering a high-quality product with minimal waste. You should also realize a higher return of your investment on projects, improved margins, as well as increased profits.
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in the lobby By: zoe baldwin
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EGISLATURE TAKES A DIVE (into water policy)
The response in Newark was swift and necessary, but as anyone in our industry will tell you, the real crisis extends far beyond city limits and NJ will need much more than money to bring its water systems up to date. While the Murphy Administration has been seemingly focused behind the scenes on the triage in Newark, Senate President Sweeney was quick to announce a series of hearings regarding the implementation of his “Water Quality Accountability Act,” (WQAA). The WQAA requires water companies to annually assess their infrastructure and develop a plan to identify and fund the most needed improvements. Although not yet fully implemented, this pivotal law was the first step toward granting state agencies the regulatory oversight they need to compel water systems to modernize their physical infrastructure. UTCA was invigorated by the announcement of hearings, and even more so to be included as an invited speaker. As previously reported, in 2017 UTCA developed a policy platform to serve as a blueprint for revamping the way that New Jersey plans for, pays for, and builds water infrastructure (www.utcanj.org/water). The investment strategy was borne from a comprehensive analysis of our state's water systems and regulatory structures and, offers a variety of actions at each level of governance to ensure all water systems are reinvesting, repairing, and upgrading. One of the main vehicles we cite to better regulate this critical process is an expansion of the WQAA to wastewater as well as the addition of an enforcement mechanism.
UTCA has been invited as an official panelist for the September 19th hearing, and will continue the call for coordinated planning and oversight, increased funding, and faster project reviews. In a statement to the press, CEO Bob Briant Jr. stated that, “We must strengthen this critical measure to make sure we stay on track to meet the needs of tomorrow. No one wants to talk about planning in the midst of a crisis, but expanding and strengthening statewide accountability for this critical infrastructure is exactly the kind of work that will protect our communities – not only from lead and the myriad issues we face today, but for all of the treatment upgrades, repairs, and replacements we’ll need to make tomorrow.” For his part, when Senator Sweeney announced the hearings, he remarked that the WQAA, “is a good law, but we may need to put more teeth in it.” And that’s good news for every single one of us - as residents and builders. We’ll keep you updated as the hearings progress and, look forward to sharing with you as we get closer to our vision of a statewide water investment strategy and ongoing capital program.
Legislative News
The spotlight has been glaring on Newark in recent weeks as reports of elevated lead levels, failed filters, and expired water made headlines across the region. The resulting community outrage (rightly) brought the issue to the fore, forcing the federal, state, and local governments to take immediate action. In response, Essex County stepped in with an additional $120M bond to expand and accelerate the eight year, $75M lead service line replacement in the works. The Essex County Improvement Authority action, already approved by the state’s Local Finance Board, will increase the replacement project to include about 18,000 homes and bring the expected completion date down to two years.
Senator Troy Singleton held the first of the Senate Committee on Community and Urban Affairs hearings on September 10th and featured testimony from NJDEP and BPU, as well as a national water expert. Prior data from NJDEP indicated that more than half of the state’s public water systems have not fully complied with its requirements and while on the dais, the agency committed to updating the legislature as soon as this year’s timeframes have closed in late-October.
PLEASE, SIR, I-BANK WOULD LIKE SOME MORE (federal funding) By Jove, it’s happening again. As reported in the August magazine, the NJ Infrastructure Bank gained the ability to apply directly for federal transportation funds thanks to an amendment to its enabling statute last Spring. Following the ongoing high-profile lead concerns in Newark the State is looking to replicate that language, this time for federal water funds such as the Water Infrastructure Finance and Innovation Act (WIFIA). In order to get to a good statewide state of repair, NJ water systems need to be investing about a billion more dollars per year than they are right now, and efforts like this help our state marshal every available public dollar. While the WQAA hearings are progressing in special legislative sessions throughout September, we don’t expect to see many measures introduced and advanced until the Lame Duck session.
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Legislative News
I-BANK CAN MOVE-IT, MOVE-IT The stars are aligning at every level to help address the Newark water crisis. The United States Senate unanimously voted on September 9 to pass the Water Infrastructure Funding Transfer Act, a measure that could help communities across the country remove lead from drinking water. Authored by NJ Senators Cory Booker and Bob Menendez, the bill would give states facing public health crises from lead in drinking water the flexibility to make a one-time transfer from their Clean Water SRF to their Drinking Water SRF for projects that will remove lead from drinking water. Transfers are capped at $100 million, but this flexibility would better prepare our state for a meaningful response to communities in crisis. LAYING THE GROUNDWORK This summer, NJ approved a new law updating NJ’s Site Remediation Reform Act (SRRA) in an effort to streamline the process and increase the pace of projects statewide. These are the first major amendments to the program since its original enactment in 2009 and represent the result of a two-year stakeholder process spearheaded by Senate Environment Chair, Bob Smith. The new law (L. 2019, c. 263), which sailed unanimously through both chambers, makes a number of changes to the Licensed Site Remediation Professional (LSRP) program and to the persons responsible for conducting remediations (PRCRs). Amendments Affecting LSRPs: Removes unoccupied structures from list of areas that must be addressed as an “immediate environmental concern”; expands LSRP duties to report immediate environmental concerns and previously unreported discharges; slight relaxation of licensing requirements for individuals who may have temporarily left the work force for personal reasons;
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clarifies that prior punishments will disqualify a person from obtaining an LSRP license; tightens LSRPs’ oversight responsibilities to ensure that non-LSRPs do not effectively perform work reserved for LSRPs; and requires an affidavit of merit from any party who sues an LSRP for malpractice or negligence. Amendments Affecting PRCRs: Clarifies that an LSRP need not be retained to oversee due diligence activities that are not required by remediation rules or address a known or suspected discharge; confirms the availability of a defense to Spill Act liability for certain post-1993 “innocent purchasers”; authorizes the Superior and Municipal Courts to impose civil penalties for Spill Act violations; tightens disclosure requirements to the public; adds surety bonds as a new funding option for remediation; adds a requirement to retain an LSRP to manage, supervise, or perform the requirements of a remedial action permit for the duration of the permit; and changes requirements involving when a remediation will come under direct oversight by DEP. Please consider supporting the UTCA PAC, Constructors for Good Government UTCA continues to be the leading voice for the infrastructure construction industry in Trenton and Washington DC. Whether it is providing expert testimony before business and legislative groups or positively effecting the legislative process, UTCA stands alone in its record of achievement for our industry. This success is only possible with your support and more importantly, with your support of the industry’s PAC: Constructors for Good Government. Please consider contributing as a robust PAC greatly strengthens our voice. Thank you for your continued support.
the why of safety By: ray master, director of loss prevention and risk control, construction risk partners, llc Board Room Conversation Board Member 1: “How do we convince our project teams to really take safety seriously? I care about people and don’t want to see anyone get hurt.” Board Member 2: “Exactly. And I don’t care what the costs. We need to give our people in the field everything they need to work safely. These workers have families.” Crew of Workers Standing in a Lane Closure on a Busy Highway
Worker 2: “Yea, they are just covering their butts so we can’t sue them. They really don’t care about us.” Worker 3: “No kidding –when there is an accident, they blame it on us anyway.” Worker 4: “Sure they care – just look at the schedule. Minimum three days of work compressed into one shift.”
If you have spent any time dealing with safety in the construction industry, you may have come across the debate regarding the justification for safety. Why do we put safety measures in place? Is it right thing to do (we care about people) or the smart thing to do (it’s good for the business)? In taking either positions, who is right? Which position is the more powerful position to come from when trying to gain commitment for a safety initiative from management or when seeking to increase worker safety buy-in at the field level? The purpose of this article is to offer the perspective that both positions are equally important and both can be used regardless of who you are or who you are having a conversation with. In fact, the justification for safety becomes a stronger proposition when you can articulate both perspectives to workers AND management alike. Likewise, as many companies migrate toward popular notions of sustainability and corporate social responsibility, doing the right thing starts to sound like the smart thing and vice versa. The author offers that this conflict of opinion can best be addressed by viewing the situation as a polarity. In other words, it is not an “either/or” argument but a “both/and” phenomena. The concepts are interdependent. This article draws directly from the work of polarity management popularized by Barry Johnson and applied to safety by JMJ Associates, Rosa Carrillo and others.
Fig. 1: The Polarity of Breathing (Source: Barry Johnson, PhD – Polarity Management: A Sumarry Introduction, 2005)
The phenomena of interdependent opposites (dilemmas, paradoxes, polarities) is very important. There is significant competitive advantage for those leaders, teams, or organizations that can distinguish between a problem to solve (“Either/Or” thinking) and a polarity to manage (“Both/And” thinking) and are effective with both.
Safety Perspective
Worker 1: “These people don’t care about us. They just say they want us to be safe so their insurance premiums don’t go up.”
unsolvable. Attempting to address them with traditional problem solving skills only makes things worse (i.e., there is only one right answer). Some examples of polarities in organizations include the following: decision to decentralize or centralize decision making; focus on the task or the individual; maintaining continuity or pushing for change. A classic metaphor for polarity is breathing (see Fig 1: The Polarity of Breathing). The questions as to whether inhaling or exhaling is more important in breathing illustrates the concept beautifully: both are important – it just becomes a matter of timing.
The Right Thing vs. the Smart Thing Breaking down this debate as a polarity is a matter of understanding the upside (values) and downside (fears) of both arguments. Although it might seem obvious, writing them down is a great way to help clarify each position. Start with the upside: Right Thing – Upside • Allows for the expression of care and concern for people • Builds on a collective value of the organization
Background on Polarity Management
• Employees feel good about the work they are doing
Polarities are ongoing, chronic issues that are unavoidable and
• Safety expressed as a core value
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• Workers see their intrinsic value to the organization Smart Thing – Upside • Appeals to management’s commercial instincts • Builds a strong business case for safety • Safety staff viewed as strategic partners • Facilitates safety as an integrated aspect of company business • Workers see their intrinsic value to the organization As these two debates are interdependent, one must learn to manage the tension between the two arguments rather than seeing them as opposing sides. This is all great when only just looking at the upside. The downside of each position cannot be ignored as these are real perceptions of people. Perceptions that are rooted in fears – fears which breed resistance. Right Thing – Downside • Perceived as management speak – shallow words • “Talking the Talk”
Safety Perspective
• All companies are saying this these days • Flavor of the Month Smart Thing – Downside • Reducing people to numbers • It’s a cold way of looking at safety • Safety will be threatened in the face of competing business commitments • Perception that we don’t care about people – it is strictly business around here As mentioned, preference to either side of the debate is a combination of values and fears. The reasons a person or group prefers one argument over another is they value the upside of their preferred position and/or they fear the downside of the opposite. When individuals or groups are in conflict over opposite positions, it is important to recognize that there are conflicting values and fears that are in tension. Both sides will naturally want to move toward their values and away from their fears. With a polarity to manage, the focus on either side of the debate alone is not sustainable. Any effort to move from the down side of one to the upside of the other with the assumption that the upside of the other is the “right answer” will generate its own resistance (Johnson 2005). As managers, why do we perceive that workers are the problem to control? Often, much of the effort at upper management to “do the right thing” gets lost as that effort migrates down through the organization and lands in the realities of the front line. In construction, where projects operate with slim margins and resource constraints, it is easy to see how “they don’t care” can become the mantra of the workforce. To add to the difficulty, there still exists a strong blame culture in the construction industry. Hindsight bias creeps into our incident investigation process and inevitably points the blame at workers who obviously should
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have just followed the procedure – procedures often created by office-bound people, who might never do the work but get to dictate the best methods to others who will (Dekker 2014). This oversimplification of incident cause often leaves a bad taste in the mouths of those closest to the incident scene who’s main fault was to inherit the work planned by managers - work that managers reinforce as having been perfectly planned when they blame those that execute it and things go wrong. As workers, why do we perceive management really doesn’t care about us? Often, workers don’t speak up when issues about the safety of the work surface in the field. In one study, the perception that “safety rules that do not make sense” was identified as the second largest issue undermining safety (Carrillo 2011). Trades people describe such rules as “knee-jerk” reactions and a “dumbing down” of their knowledge and experience (Sardone & Wong 2010). I am always amazed at hearing the opinion of workers from surveys and studies. Yet, in almost every pre-start or tool box meeting I have attended, very few if any workers have anything to say. Wouldn’t the “smart thing to do” be to actively voice one’s opinion in real-time so as to have a direct influence on the work at hand? Management is constantly drilling workers use “Stop Work Authority” yet most workers do not. Rather, they tend to internalize risk taking and schedule pressure as if they are rites of passage or test of courage for new workers to be indoctrinated into. Down from 50,000 feet Bringing it down to the reality of the day-to-day, here are some practical things that can be done to bridge the gap: For managers: • On your next site visit, attend a pre-start or tool box meeting and express why safety matters to you • Have 1:1 conversations with workers about how they perceive management’s efforts in safety • Make human error the starting point of your next incident investigation rather than the conclusion For Project Teams: • Get input from the workforce when planning the next safety-critical activity • Focus your safety efforts as a responsibility to the workforce rather than an accountability to upper management • Promote a just culture on site (responsibility and accountability without blame) For Workers: • Speak up at the next pre-start or tool box meeting by sharing a personal story about safety • Take a new guy under your wing. Veterans are encouraged to share their knowledge • Offer to participate in incident investigation teams • Use Stop Work Authority to pause the work when there are safety questions or uncertainty
As safety leaders, our job is to shape perception. Whether you are a crew foreman, project manager, ironworker, safety director, COO or shop steward, the opportunities to influence those around you are constantly in front of you. Maximizing those opportunities by having impactful conversations is key. Your impact may be a function of your ability to articulate the “why” of safety as it occurs for you and to listen and understand the “why” of others. Is safety the right thing to do? Is it the smart thing to do? Managing polarities is essential for one generation to pass key, socialization elements of its culture on to the next generation (Johnson 2005). If we ever expect to pass this industry on to the next generation in a safer state then we received it, it critical that we realize that we are all saying the same thing.
About the Author.....Ray Master is the Director of Loss Prevention & Risk Control with Construction Risk Partners. He is accountable for the design and delivery of the firm’s safety consulting service offering which aspires to challenge the conventional thinking in construction safety. His 28 years of experience in construction safety span a wide range of industries to include heavy, power, process, high-rise buildings, oil/gas, marine, transportation, hazardous material clean-up and emergency response. Prior employers have included JMJ Associates, CH2M Hill, and Stone & Webster Engineering Corporation. He has held adjunct positions at both NYU and Columbia University. He works out of the firm’s New York City office.
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Cover Story
UTCA's 2019 annual Convention By: zoe baldwin
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he 2019 UTCA Convention can be summed up in a single word: electric. More than 1,200 people representing 300+ companies converged at the Tropicana Casino & Resort for three days of networking and festivities. This was our first year back at the “Trop,” which provided a world class experience with its revamped rooms and convention space. Each year the Convention draws new attendees and long-time members, forging a stronger industry for us all. One of the main hubs of activity is of course the exhibit floor, this year featuring 100 companies representing all of the goods and services that help keep you in the business of building. Kicking off the Convention was of course the annual Fall Golf Outing at the Atlantic City Country Club in Northfield. This event has grown exponentially in recent years, this time selling out nearly two months before the event. More than 100 golfers turned up for a friendly game and lunch. Thanks to our golf sponsor, Tenna, and everyone who participated, the Fall Outing was an absolute success and set the bar for the weekend to come. Later that evening came the ever-popular Opening Reception and Dinner, sponsored by Foley, Inc. This year’s opening program paid tribute to outgoing President Joe Walsh, with the traditional presentation of the personalized manhole cover provided by Campbell Foundry. Joe’s second term as president was a resounding success, and his leadership
Keynote Speaker Mark Nutsch is flanked by Roly Acosta and Joe Walsh.
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Over 725 convention attendees turned out for the Friday Luncheon Program to listen to Keynote Speaker Mark Nutsch.
over the past year brought the advancement of several key industry priorities. During his tenure, Joe led negotiations with PBA leaders and State agencies to create a standardized structure and process for Uniformed Traffic control; was relentless in his efforts to question and criticize the state’s continued diversion of constitutionally dedicated gas tax revenue to Transit operations; and led the charge for increased statewide planning and investment in water infrastructure. His leadership also brought to fruition several key pieces of legislation and kept at bay many of the statehouse’s worst ideas. From legislation that holds both NJDOT and local aid funding recipients accountable for spending TTF dollars in a timely manner, to bills empowering the Infrastructure bank to directly access federal funding, to the first advancement of design-build in the last decade, Walsh’s second term as President proved his mettle once again and we cannot thank him enough. Also at the Opening Reception, Tom Hardell of George Harms Construction was awarded the 2019 Robert A. Briant, Sr. Award for being an outspoken leader and advocate for the construction industry. Everyone enjoyed food, drinks, and networking as day one of the Convention came to a close. On Friday, the Luncheon began with a welcome from President Joe Walsh followed by the presentation of the 2019 Larry Gardner Memorial Award to Tim Watters for his consistent support of our industry, Association and our members. The Premier Sponsor of this enjoyable event was Williams, our amazing friends in energy and in the State House. After the award ceremony, the crowd was riveted by keynote-speaker Mark Nutsch, the Green Beret Commander portrayed by Chris Hemsworth in the movie "12 Strong" and referred to as Captain Mitch Nelson in the New York Times Best-Seller, "Horse Soldiers." This informative guest was thanks to our gracious sponsors, Kivvit.
One of the more entertaining highlights of the exhibit floor is always the Money Booth, where the lucky winner gets 20 seconds to grab as much cash as possible as it swirls in the air around them. This year, we had four cash-catchers that managed to snatch, clutch, and stuff a cumulative $607.00 out of the air and into their pockets as other attendees cheered them on.
With the exhibit floor closed and prepped for the evening events, some attendees enjoyed the beautiful weather with a stroll on the boardwalk while others spent Saturday afternoon straight-faced, trying their hand at the Sixth Annual UTCA Poker Tournament sponsored by Montana Construction. Michael Renda and Sean Hagan tied for first and took home the purse of $750.00. Later in the evening, members took a roll of the dice at the first ever Casino Night, sponsored by Komatsu Northeast and our game table sponsors. Attendees had a blast gambling with fake money, but the grand prize no joke. Saturday night Lady Luck showed her favor to Jason Lumish of Crisdel, who took home the grand prize of a 3-night stay at the Huntting Inn. Dave Smith presents Tim Watters with the Larry Gardner Memorial Award
That evening, the 2019 President’s Reception and PAC Auction proved a great success by all accounts, thanks in part to our amazing sponsor, C & H Agency. This year, attendees bid on nearly 100 items to benefit the UTCA Constructors for Good Government Political Action Committee. Professional auctioneering by Ritchie Brothers energized the room as always and, helped to raise more than $30,000. Our industry PAC is one of the most important tools we have in the fight for legislative and regulatory change. Many thanks to all of our donors and bidders, your generosity is critical to strengthening our industry’s voice in Trenton. We would also like to thank the corporate sponsors of our PAC Auction Party, without whom, none of this would be possible: Atlantic Concrete Products, Cohen Seglias Pallas Greenhall & Furman PC, Earle Asphalt, EIC Associates, JESCO, M.L. Ruberton Construction, Northeast Remsco Construction, South State and Tilcon NY. And the networking continued late in the evening for some, with a cocktail party hosted by the UTCA Young Professionals Committee. The Committee, now in its second year, did a great job organizing and ultimately drew 75 emerging leaders from all parts of our industry. The Young Professionals in attendance were able to get acquainted and hopefully get some business at the Convention’s newest party. Many thanks to our sponsors for their continued generosity: D’Annunzio & Sons, New Prince Concrete Construction, Northeast Remsco, Provident Bank, USI, CohnReznick, and Triff Law LLC.
Cover Story
The Saturday morning breakfast kept the action on the exhibit floor this year, with scrumptious fare and a prize drawing both sponsored by our Premier Sponsor, Construction Risk Partners. Congratulations to Jennifer Solewski of Bayshore Recycling who won the Microsoft Surface Pro Bundle and Antonio Lopes of Berto Construction who took home the designer watches. And with that, the exhibit floor came to a close with a grand prize drawing sponsored by Hoffman Equipment. Congratulations to Rita Ritacco, the lucky winner of a 6 day/6 night stay in St. Marten.
However, the real star of the night was the newly minted UTCA President, Dave Smith of Mount Construction. Association attorney Brian Tipton of Florio, Perrucci, Steinhardt, & Cappelli gave the Oath of Office, officially swearing him in as UTCA’s new chief. Following his induction, Dave thanked everyone for their support and presented his agenda for the upcoming year. We look forward to Dave’s Presidency as he leads the industry charge for increased funding in both the transportation and utility sectors, for a renewed focus on workforce development, and toward a better business climate for everyone in the business of building. As always, we would like to thank everyone who attended – your participation keeps our industry strong and united. We would also like to applaud the UTCA staff and Convention Committee for doing the yeomen’s work to make this – and every year – such a great success. We look forward to seeing everyone next year, as we head back to the Borgata!
Brian Tipton inducts Dave Smith as UTCA President.
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Feature Story
cohen seglias celebrates 30 years in the construction industry becoming a thriving national law firm By: George Pallas Shawn Farrell, Michael McKenna and George Pallas
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ohen Seglias Pallas Greenhall & Furman PC was founded in 1988 by three attorneys and has grown to 70 attorneys in nine offices; practicing not only all over the country but throughout the world. From its inception, the business philosophy of the firm has not changed; namely, to provide exceptional legal services with a unique business acumen of knowing that, even in the legal world, “time is money.” Therefore, the firm has endeavored to create meaningful relationships with many different trade organizations like the UTCA, to promote the advancement of the best construction practices; as well as public agencies and dispute resolution administrators. The result of these focused efforts has been to facilitate early resolution of disputes (usually at the project level) or, when necessary, to better guarantee a positive outcome through litigation. This business philosophy inspired George Pallas to join the firm in 1993, Shawn Farrell in 1998 and, most recently, Michael McKenna in 2018. The firm accredits this business oriented approach as the reason for the firm’s expansion of its footprint from New Jersey/ New York area down through Delaware and Washington, DC. In addition, the dedicated efforts have earned Cohen Seglias a reputation for understanding the business needs of the construction industry and the significance of speed and timing in construction projects. As a result, the firm quickly grew to be known as a top construction law and litigation firm with hundreds of
construction and construction industry-related companies as clients. Typical projects include: bridges, water treatment plants, petrochemical plants, dams, highways, major office buildings, stadiums, hospitals, shopping centers, condominiums, government buildings, airports, factories, and schools. The firm and its attorneys are consistently recognized as leaders in legal rankings such as Chambers USA, The Top 50 Construction Law Firms, Best Lawyers, Super Lawyers, and Martindale-Hubbell. Cohen Seglias attorneys are heavily involved and hold leadership positions in industry trade associations across the country including the Utility and Transportation Contractors Association (UTCA – Special Counsel), the American Institute of Steel Construction (AISC – General Counsel), the Construction Industry Advancement Program (CIAP – General Counsel), the Mechanical Contractors Association (MCA), the National Electrical Contractors Association (NECA), and the Associated Builders and Contractors (ABC NJ - Labor Counsel). What Makes Cohen Seglias A Different Kind of Law Firm While Cohen Seglias recognizes the importance of the broader industry concerns that impact all construction companies, what separates Cohen Seglias is the commitment to act as an indefatigable advocate for the individual client; the individual clients’ financial problems; to obtain justice and payment to those individual clients. In New Jersey, this has put Cohen Seglias on the front line of clarifying the rights and obligations of contractors. For example: • George Pallas has won some of the seminal cases in New Jersey that define public bidding laws concerning such issues as the requirements to name subcontractors under local public contracts law;
Cohen Seglias office at One Newark Center
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• Shawn Farrell has recently won cases that clarified the common law requirement to provide a New Jersey contractor with an opportunity to cure before the owner can terminate a contractor for cause; and that New Jersey has adopted federal common law on the enforcement and interpretation of a Differing Site Conditions clause; and
• Michael McKenna, continuing his proven track record of trial victories, recently won the largest jury verdict ever rendered for a contractor against the NJ DOT.
Supporting UTCA Mike, Shawn, and George have been active members of UTCA for many years. In fact, George and Shawn received the Larry Gardner Memorial Award in recognition of the firm’s service to UTCA and the construction industry in 2014, and have been Special Counsel to UTCA since 2017. Mike also received the Larry Gardner Memorial Award in 2010. At the time, he was the first lawyer to ever receive that honor. As Special Counsel to UTCA, George, Shawn, and Michael support the organization’s focus on improving working conditions for the construction industry through legislative efforts. They help UTCA have a voice in regulatory hearings for safety training, labor relations, and specifications development. Cohen Seglias closely works with the UTCA not only assisting with legal needs, but also providing legal presentations that benefit the entire membership on issues such as liquidated damages, claims procedures, liens, OSHA, and other legal issues that are common to the Industry.
George Pallas and Shawn Farrell accepted the prestigious 2014 Larry Gardner Memorial Award on behalf of Cohen Seglias in recognition of the firm's exemplary service to UTCA and the construction industry.
“We are excited to continue growing our geographical footprint,” said George, “and strengthening our commitment to the New Jersey construction industry. This is a region where we have always had a large client base, and we are expanding the services we provide to the construction industry and beyond.”
Feature Story
To assist the efforts of representing clients in New Jersey, earlier this year the firm opened an office in a new space at One Newark Center, located in the heart of Newark. George Pallas, the firm’s Managing Partner, said, “We have been fortunate to work with so many great clients who operate their businesses in New Jersey, and we wanted to make sure our new office location was easily accessible to them.”
Further Evolution As Cohen Seglias celebrates its 30th anniversary, the firm is unique in that the senior leadership has remained intact for more than 20 years. The firm’s vision includes growth beyond the core New Jersey/New York/Pennsylvania area, more collaboration among the attorneys, and continued focus on client service. “We strive to make delivery of legal services as efficient as possible,” George explained. “Technology has changed the way we practice law. We routinely handle construction matters where millions of pages of documents are exchanged.” The firm invests heavily in document retention and innovative search platforms and is now utilizing artificial intelligence to help attorneys digest, review, and analyze various documents that are produced in litigation. For its construction industry clients, this means both cost savings and the ability to analyze what would otherwise be a morass of information. The firm recognized the need to efficiently cull through and analyze what can be hundreds of thousands, if not more, emails, correspondence, reports, and other electronic documentation that are inherent to the modern construction project. The firm has made significant investment and forethought in this area to stay on the cutting-edge and successfully handle complex construction cases for its clients.
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utca comments on murphy administration draft energy master plan By: dan kennedy, director of environmental & utility operations
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n June, the NJ Board of Public Utilities released a Draft of the Murphy Administration’s version of the Energy Master Plan (EMP). NJ State law was amended in the 1970s to require this document to be adopted and updated periodically. What is being proposed is a large departure from the two EMPs adopted during the Christie Administration, which focused on the transition away from dirtier options like coal to cleaner options like natural gas and solar. The Murphy EMP provides an initial blueprint for the total conversion of New Jersey’s energy profile to 100 percent clean energy by 2050, as directed by his Executive Order 28. This is an issue he campaigned on and has obviously focused a large amount of his administrative attention on since taking office. The proposed EMP can be found at: www.nj.gov/emp
ministration and the Legislature related to clean and renewable energy, and is supportive of a diverse portfolio of energy sources and investments in associated infrastructure. However, we also believe that the wider environmental aspects of clean energy goals (including air quality) are best measured incrementally as opposed to relying on a binary, “clean vs. dirty” metric. Progress is, by definition, transitory, and the state strategy to reach any goals should reflect that fact. Energy sources that make a measurable improvement to public health are a viable and necessary step towards a cleaner energy future and should not be dismissed.
Over the summer and early part of the fall, there has been opportunity to participate in large stakeholder meetings, which ended up being just typical public hearings with opposing sides expressing their views into a microphone. Recently UTCA submitted formal comments to BPU President Fiordaliso, which we are sharing with you through this article.
Strategy 1 – Electrify the Transportation Sector
UTCA submitted comments on the Draft EMP through two avenues. First, we joined other leaders in the business community in signing onto a group letter led by the NJ Business and Industry Association that addressed our general concerns related to business matters and processes. That letter states that the EMP’s implementation cost and the long-term impacts are not adequately addressed in the draft plan. These costs should be estimated prior to the finalization of this document. As such, UTCA and others recommended that final adoption be delayed until after the public and private costs of the recommended strategies are better understood, and the public is afforded an opportunity to comment with that information in hand. In addition, UTCA submitted independent comments focused on the Draft EMP’s impacts to our industry, as detailed below. UTCA certainly understands the ambitious goals set by the Murphy Ad-
• The State of New Jersey and local governments rely heavily on one or more types of motor fuel taxes to generate funding for transportation improvements and repairs. The EMP should include recognition of the current and future loss of this revenue in a state that is 100% electrified, as the Draft EMP suggests is possible. The Final EMP should acknowledge this issue and include a discussion of policy options to offset lost revenue from electric-car drivers resulting from the new light-duty electric vehicles that the EMP plans to be on the road by 2050. • The transition of the NJ Transit fleet and other public fleets to electrified motors should not come at the expense of necessary surface transportation improvements and repairs. The EMP should clarify what non-Transportation Trust Fund sources of funding will be brought to bear to fund the equipment-related goals being recommended and if the transition will occur through an existing replacement schedule identified in existing capital plans.
The Pipeline
In its comment letter, UTCA recognized the energy policy concerns expressed in the Draft Energy Master Plan (EMP) and encouraged the Murphy Administration to consider our comments prior to finalizing the Draft EMP. UTCA has overall concerns regarding the lack of consideration paid to reductions in state revenue as we move away from gas powered vehicles, a departure from utilizing the existing I-Bank to perform some of the key functions of state government recommended for the future, and other areas highlighted in detail below.
These are the detailed comments on the Draft EMP related to strategies most relevant to the UTCA:
• UTCA and its members are willing to partner with the state to investigate options related to electrify the medium-and-heavy-duty fleets that are critical to the successful delivery of infrastructure projects statewide. However, we caution that these technologies do not currently exist in the marketplace. Recognition of current federal standards for nonroad diesel engines should be included in the Final EMP. These rules govern New Jersey’s infrastructure contractors today. Mandating the uses of electric heavy equipment, which is still in the experimental prototype stages, is not a realistic approach. However, there may be ways to incentivize the industry to voluntarily update to the cleanest engines currently available in the marketplace. Those options should be explored and prioritized. In the meantime, we recommend that the Final EMP include the following actions:
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1. Continue to apply for Federal DERA State Clean Diesel Grant Programs to assist in replacing engines/vehicles past their useful lives 2. Create tax credit incentives for NJ construction companies to invest in clean diesel engines 3. Track progress of electric technology as it becomes available in the marketplace for high horsepower engines. If technology becomes available, consider state tax incentives for companies to upgrade their equipment voluntarily Strategy 2 – Accelerate the Deployment of Renewable Energy and Distributed Energy Resources • UTCA supports strategies to accelerate utility scale renewable and cleaner energy generation and storage, including but not limited to solar and offshore wind. New, in-state cleaner energy production should be expanded, including offshore wind, utility scale solar, nuclear and natural gas. UTCA would strongly oppose any moratorium on fossil fuel infrastructure in the foreseeable future.
The Pipeline
• Water utilities and other major industrial manufacturers are the State’s largest energy users. Many have led by example and have greatly increased their clean power portfolio and reduced their greenhouse gas emissions and other air pollutants. The goals related to clean power are more likely to be met by working with these large energy users on specific manageable actions and not through draconian measures to meet arbitrary clean power reduction schedules. Costs pushed onto these groups are paid by the residents and businesses of New Jersey, one way or another. • Goals related to “exploring regulatory authority” to achieve 100% clean energy by 2050 should be clarified with more details. All policy interventions being considered should be out in the open. • Goals related to renewable energy, especially offshore wind, should go past “coordination” and include a stated objective to accelerate the process to get these critical projects into construction faster. Strategy 3 – Maximize Energy Efficiency and Conservation and Reduce Peak Demand • UTCA supports New Jersey’s Clean Energy Program, as well as measures proposed to improve program administration and performance. The term “equitable” should be defined so that current users of that fund that would be de-prioritized can comment on the implications of those actions. • Goals related to requiring “net zero new construction” are premature as costs, constructability and other implications have not been fully explored in the Draft EMP. Strategy 4 – Reduce Energy Consumption and Emissions from the Building Sector • The goals within this strategy suppose that electrified heat pumps, water heaters and other appliances are viable in every type of building. The work buildings owned and operated by UTCA members often cannot be heated or cooled with this technology,
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regardless of cost. The viability and costs need to be further explored before this strategy is finalized. • The costs associated with requirements for “net zero buildings” should be studied carefully before any actions are taken as this requirement is likely to have unintended consequences related to redevelopment in areas of the state that are in dire need of reinvestment. Strategy 5 – Modernize the Grid and Utility Infrastructure • UTCA supports planning for and constructing the necessary distribution infrastructure to handle increased electrification. We also support necessary transmission upgrades for other cleaner energy options such as natural gas. • Goals related to “exercising regulatory jurisdiction” to review and approve transmission projects are arbitrary. If current regulatory jurisdiction is insufficient to protect the environment, this document should say so and be clear about the policy interventions being considered to upgrade the jurisdiction. Setting up a defacto moratorium on natural gas transmission projects using arbitrary language from a policy document like the EMP serves only to confuse regulators and the regulated community. • UTCA supports the goal of having all gas utilities being made to identify, prioritize and replace pipelines known to be leaking or otherwise a threat to public health and safety. Strategy 6 – Support Community Energy Planning and Action in Low-and-Moderate Income and EJ Communities • UTCA supports the goals within this strategy, in general but repeats the concern expressed under Strategy 1. The transition of the NJ Transit fleet and other public fleets to electrified motors should not come at the expense of necessary surface transportation improvements and repairs. The EMP should clarify what non-Transportation Trust Fund sources of funding will be brought to bear to fund the equipment-related goals being recommended for these communities and if the transition will occur through an existing replacement schedule identified in existing capital plans. Strategy 7 – Expand the Clean Energy Innovation Economy • UTCA supports the goal of providing innovative financing and low-cost loans to support in-state clean energy projects and technology development but sees no reason to establish another level of state government for this function that would operate independently of other critical state infrastructure funding functions. Therefore, we recommend the existing NJ Infrastructure Bank have their enabling statute expanded to serve the role contemplated by the Draft EMP so that clean energy investments can be better coordinated with water and transportation investments. None of the strategies in the EMP are self-implementing. Although we hope the EMP process will proceed as UTCA and others in the business community are recommending, UTCA will remain engaged after this plan is adopted to ensure the interests of our members are represented in the difficult policy discussions that are likely to ensue. Please reach out to me at kennedy@utcanj.org if you are interested in learning more about these efforts.
pre-tax commuter benefits: NEWS
what new jersey employers need to know to comply with this new law By: nancy damato, rda benefit services
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ew Jersey Governor Phil Murphy signed S.1567 into law earlier this year, making New Jersey the first state to require employers to offer pre-tax commuter benefits to their employees. Similar laws are already in effect in large metropolitan areas, such as San Francisco and New York City. While the law went into effect on March 1, 2019, employers are required to implement this program no later than March 1, 2020, or the effective date of New Jersey Department of Labor and Workforce regulations, whichever occurs first. DOES THIS NEW LAW APPLY TO MY COMPANY, SINCE WE HAVE UNION EMPLOYEES? The following excerpt is taken directly from the bill itself: a. Every employer in the State of New Jersey that employs at least 20 persons shall offer to all of that employer’s employees, that are not covered by a collective bargaining agreement, the opportunity to utilize a pre-tax transportation fringe benefit. b. If an employer employs persons covered by a collective bargaining agreement and employs less than 20 employees who are not covered by the collective bargaining agreement, the employer shall not be required to provide the opportunity to utilize a pretax transportation fringe benefit. Notwithstanding the provisions of subsection a. of this section, an employer shall not be required to offer the opportunity to utilize a pre-tax transportation fringe benefit to employees covered by a collective bargaining agreement until the expiration of any collective bargaining agreement covering those employees… WHAT BENEFITS ARE COVERED UNDER THIS NEW LAW?
Transportation costs consistent with the provisions of Internal Revenue Code Section 132(f) are covered under this new law. Qualified mass transit expenses for buses, ferries and trains, van-pooling and qualified parking expenses (such as parking costs at a park & ride facility) are included. Benefits may not be used for gas, mileage and tolls or other personal commuting expenses.
company. Employees can start and stop elections at any time during the year and can even change their election amount from one month to the next. WHY WOULD EMPLOYEES PARTICIPATE? Contributions to a commuter benefits account are deducted from an employee’s paycheck on a pre-tax basis, reducing their taxable income. It is estimated that employees can save an average of 30% on eligible transit and parking expenses. However, these expenses are limited to the employee only. Reimbursement is not allowed for spouse or dependent transit and parking expenses. WHAT ARE THE PENALTIES FOR BUSINESSES FAILING TO COMPLY WITH THIS LAW? Employers are required to comply with this new law or will be liable for a civil penalty of not less than $100 and not more than $250 for a first violation. According to the provisions of the law, “an employer will have 90 days to offer a pre-tax transportation fringe benefit before the civil penalty is imposed. After 90 days, each additional 30 day period in which an employer fails to offer a pre-tax transportation fringe benefit shall constitute a subsequent violation and a civil penalty of $250 shall be imposed for each subsequent violation. A civil penalty shall not be imposed on any individual employer more than once in a 30 day period.” CONCLUSION New Jersey employers should begin the process of implementing a commuter benefit program. Open enrollment is the perfect time to introduce this new benefit program and educate employees about the new law and its benefits. Benefit administration firms that currently offer benefits, such as FSAs and HRAs, will be offering this new benefit, so now is the time to find out what the different vendors have to offer. Your employees will definitely appreciate the benefits of this new law, as they will be able to use pre-tax money for these predictable expenses and bring home a little more of their paycheck.
WHAT ARE THE CONTRIBUTION LIMITS? The IRS sets maximum monthly pre-tax limits annually, that apply to both pre-tax contributions and reimbursement amounts. The 2019 maximum limits are $265 per month for transit passes or commuter highway vehicle benefits and $265 per month for qualified parking expenses. Unused amounts will carry-over from month to month, as long as the employee is active with the
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By: john depalma, the vanpalmer group
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he UTCA, through a partnership with The VanPalmer Group, has offered special dental programs to our members since the late 1980s. Gente, upon acquiring the VanPalmer Group last year, began negotiation efforts to further improve the programs offered to UTCA members and they are proud to announce exciting enhancements to the program.
gente will also provide association members with a free Human Resource assessment – a $250 value. This self-administered survey with a comprehensive review and follow up by gente’s HR staff identifies risks and gives employers the information needed to proactively mitigate risks and comply with state and federal regulations.
Most recently Delta Dental added coverage for implants and coverage for students up to age 26 with no rate increase! Effective October 1, 2019 Delta Dental will be offering three new programs for our members. These new programs will be known as; Bronze, Silver and Gold and will offer enhanced benefits at a competitive cost. Current dental plan members will be pleasantly surprised to find that the cost of the program will go down and the benefits will increase. While the new plans offer significant improvements, the old plans will remain available as an option for any employer currently enrolled.
In addition to these services, gente can also help association members with:
Additionally, the renewal for the current plans has been extended from April 2020 to January 2021. This means that current plan rates would remain in effect for 21 months without an increase in premium. These program enhancements will benefit the UTCA’s members now and in the future.
* Transit Benefits
Gente, by way of the VanPalmer Group, has had a long partnership with the UTCA. Dutch Vanderhoof began the dental program in the late 1980’s while at the Tribus Organization. When the Tribus Organization was purchased by Wachovia bank in 2000, Dutch ran the program within the bank until 2004 when the program was spun off to Dutch and John DePalma, who formed the VanPalmer Group. In 2017 gente acquired the business with John DePalma still at the helm. gente brings with it a robust Employer Services portfolio that will enhance the operations of UTCA member companies.
NEWS
exciting news from the vanpalmer group on new delta dental programs!
* Payroll Administration * Flexible Spending Accounts (FSA) * Health Spending Accounts (HSA) * Health Reimbursement Accounts (HRA) * Dependent Care Accounts * Human Resource Consulting and Outsourcing * ACA Reporting * ERISA Compliance Other gente services will be discounted for UTCA members whenever possible. We encourage you to contact gente for their expertise and opportunity to provide a superior dental program for your employees. Please contact John DePalma at 973-646-1202 or jdepalma@ gente.solutions or Patrick Grant at 973-646-1201 or pgrant@ gente.solutions
Gente and the UTCA have partnered to bring more value to association members through special offerings of a free Premium-Only Plan Document and HR Assessment. The IRS requires that all employers taking pre-tax deductions for employee benefits such as medical, dental, and vision plans have a formal Premium-Only Plan cafeteria document in effect. gente will provide association members, at no cost, the documentation needed to protect these deductions – a $300 value. With this document, employers and employees are protected from significant tax consequences.
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