Utility & Transportation
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Campbell Foundry Celebrates Its First 100 Years In Business
december 2021 Bes Do
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y The t a h ion g W porat Years n i Do Cor s 30 e EUC ebrat l e C
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president’s message
From the desk of: roly acosta “Don’t complain. Eighty percent of the people you complain to don’t care and 20 percent are glad you have problems.” ~Coach Lou Holz
• We are grateful to the UTCA staff and all they do for our industry.
A few years ago, our companies implemented a “NO COMPLAINING RULE” when we recognized an opportunity to alter the thinking of our employees. The rule derives from the Jon Gordon book, “The New Complaining Rule: Positive Ways to Deal with Negativity at Work.” The goal is an increase in the number of positive solutions with a reduction on the impact of negative complaining. It is not easy to alter old habits, but the journey towards positivity is worth the effort.
• Congratulations to Campbell Foundry for achieving their incredible 100-year anniversary milestone! If you know the Campbell family, you know they bring their positive vibes everywhere they go.
Ninety percent of doctor visits are stress related and the #1 cause of office stress is coworkers and their complaining. The negative emotions of complaining creates greater stress, decreases longevity, increases the risk of heart attack, and alienates our friends. As the holiday season approaches, and during a time when mental health is reaching a crisis level, we must find the positive path forward and deliver positive energy to our daily dose of challenging and difficult problems—at the office, in the field, and at home. The RULE outlines five things to do instead of complaining: 1. Practice Gratitude: Count three blessings a day. 2. Praise Others: Make sure you give three times as much praise as criticism. 3. Focus on Success: Each night write down the one great thing about your day. 4. Let Go: Let go of the things that are beyond your control. 5. Pray/Meditate/Clarity Break: Stop, be still, plug-in, and recharge.
Praise Others
• Congratulations to EUC Corp for reaching 30-years in construction! Do your research and find out how many family-owned companies reach this number? Focus on Success • I am honored to lead this great organization and earn your confidence. Let Go • November 2nd is behind us. The people of NJ have spoken and we expect the politicians to listen. • The industry lost an advocate; however, the UTCA’s relationship with the Governor and Cabinet members remains strong. Pray/Mediate/Clarity Break • I will talk to my guy, you will talk to your guy, and we will get through the challenges together. Every Association member had to overcome adversity and challenges to define their success. It is easy to be positive when you are not being knocked down and kicked around. The concept of an “overnight success” is a myth. We must remain optimistic, live with hope, and have faith. We appreciate our success when we overcome obstacles and struggles. Never give up, never let your goals and dreams die, and always play to win.
In keeping with the RULE, let us celebrate the good news!
You have the ability to bring positivity to your company and our industry. I look forward to our journey together during my tenure.
Practice Gratitude
Happy Holidays for you and your love ones!
• Thank you to New Jersey’s entire Congressional delegation for supporting the Infrastructure Investment and Jobs Act. • The Federal funding, coupled with last year’s NJ Turnpike toll increase, will positively affect our industry for at least the next seven years.
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Roly
CONTENTS
Cover story 42 campbell foundry celebrates 100 years in business
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DEPARTMENTS
FEATURES
2 7 15 25 35 53 73
62 euc corporation celebrates 30 years
President’s Message Financial Overview Legal Dig Accounting Corner
NEWS
Legislative News
81 2021 aca reporting season brings new challenges
labor relations the pipeline
Published Bimonthly During 2021
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: Dan Kennedy, Zoe Baldwin, Dan Neville Advertising Manager: Helene Nasdeo Production/Graphics: Lauren Hagan, Helene Nasdeo Circulation: Helene Nasdeo Printed By: American Plus Printers Affiliations: ARTBA, Clean Water Construction Coalition, Water Infrastructure Network UTILITY AND TRANSPORTATION CONTRACTOR (ISSN 0192-4843) is published six times a year by the Utility and Transportation Contractors Association of New Jersey, 1670 Highway 34 North, Farmingdale, NJ 07727. Periodical postage paid at Farmingdale, NJ and additional mailing offices. POSTMASTER: Send address changes to UTILITY AND TRANSPORTATION CONTRACTOR, PO Box 728, Allenwood, NJ 08720.
Utility & Transportation Contractor | december | 2021 3
By: kevin ellman, wealth preservation solutions
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am asked this question by clients at least weekly. The question has been hotly debated across kitchen tables, institutional boardrooms, and even among financial advisors and their clients. As might be expected, there are divergent opinions on the issue and a wide range of potential outcomes for investors. For many investors, the world of cryptocurrency remains, well, cryptic. So, what exactly are cryptocurrencies or cryptos, and what’s all the fuss about? • Bitcoin and other digital currencies have several unique features that differentiate them from other forms of currency: o Cryptos are not associated with a government or financial institution. o They can be transferred from one individual to another without the help of a central organization (i.e., bank). o The supply of the Bitcoin is governed by a fixed formula, in contrast with a central bank that increases and decreases the supply of money to help smooth out economic cycles. • Cryptos can still be used to buy traditional currencies, goods, or services – usually online and with some anonymity despite their digital nature. • Bitcoin, the oldest and largest crypto by market cap, was developed in 2008 by an unknown person or group using the pseudonym Satoshi Nakamoto. In the white paper that founded the currency, it was described as a “peer-to-peer electronic cash system.”
• Bitcoin now has plenty of (much smaller) competition. By some accounts, there are roughly 6,000 brands of cryptocurrencies and counting. Bitcoin has seen tremendous gains, benefiting from increased demand from individual and institutional investors alike. • During the financial crisis, cryptos began to attract investors seeking a safe haven from currency devaluation, higher inflation, and other economic challenges across the globe. • Investors large and small have moved into the space over the last several years, driving assets under management in digital-asset funds to $50 billion in late September, reports digital-asset manager CoinShares.
Financial overview
should i invest in bitcoin?
Despite this newfound attention, Bitcoin and other cryptos lack some of the qualities that more-established asset classes exhibit: • Unlike bonds, for instance, cryptos don’t generate steady, reliable cash flow on a contractual basis. Unlike stocks of companies that benefit from economic tailwinds, cryptos don’t generate earnings through exposure to economic growth. • The price of cryptos tends to be highly volatile. This year, Bitcoin hit a new all-time high above $63,000 in mid-April, only to lose more than half its value by late July, before climbing to about $49,000 in early October. • As a result, cryptos have not offered consistent or reliable diversification for portfolios. In fact, Bitcoin’s correlation to traditional asset classes has risen during recent periods, possibly because of increasing adoption. Cryptocurrencies lack the infrastructure and regulatory oversight of more traditional financial assets. • According to a Federal Trade Commission alert released in May, since October 2020, consumers have lost more than $80 million in cryptocurrency investment scams. • That represented an increase of more than ten-fold on a yearover-year basis. • The FTC also notes that cryptos don’t come with important legal protections for consumers. For instance, crypto accounts (unlike U.S. dollars deposited in banks) are not insured by the
Utility & Transportation Contractor | december | 2021 7
Financial overview
federal government. So, if you store cryptos with a third-party company, and the company goes out of business or is hacked, the federal government has “no obligation to step in and help get your money back,” the FTC warns. • In September, El Salvador’s adoption of bitcoin as a legal currency highlights some of the opportunities and pitfalls of digital currencies. While bitcoin itself has appreciated in value since the introduction, only a small fraction of small businesses have used it and the government’s cryptocurrency app has faced technical problems. Regulators appear to be gearing up to increase their oversight of the popular new vehicles: • SEC Chairman Gary Gensler recently told the Washington Post that his agency has “robust” authority to regulate the crypto industry. He has also compared the market to the Wild West. Cryptos, he said, haven’t been used much as “a medium of exchange.” Instead, he added, they’re often used to “skirt” laws related to money laundering, sanctions, and tax collection and may enable extortion via ransomware, as Colonial Pipeline recently learned. • The White House is also weighing greater oversight of the market in order to combat the growing threat of cybercrime. There remains little consensus on these emerging assets. Even high-profile investors who generally adhere to the same strategy are coming down on different sides of the crypto debate. Value investor Charlie Munger, for instance, has reportedly called Bitcoin "disgusting and contrary to the interests of civilization." Yet Bill Miller, another well-known value investor, is reportedly a Bitcoin bull and Bitcoin billionaire, owing to early investments in the currency.
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With that lack of consensus comes both opportunity and risk. It’s important for individual investors not to confuse trading in ultra-risky assets, such as cryptocurrencies, with more triedand-true approaches to investing. For individuals with a longtime horizon, a high tolerance for risk, and the discipline to keep wagers very small, there can be a place for buying assets that swing wildly from day to day, sometimes hour to hour. Investing, though, is more about growing and/or protecting your wealth to meet specific goals, whether a vacation or safe retirement. To meet those goals, investors are well-served to continue to rely primarily on assets such as stocks and bonds that have reliable track records and safeguards. There may be a place for cryptocurrency investing within the aggressive part of your portfolio. Recently ProShares created their first Bitcoin ETF. This may be a good place for you to start. If you'd like to learn more, please contact me directly at kellman@wpsllc.net or via cell phone (201) 618-8818.
The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Advisor Services Holdings C, Inc., d/b/a Kestra Holdings, and its subsidiaries, including, but not limited to, Kestra Advisory Services, LLC, Kestra Private Wealth Services, LLC, Kestra Investment Services, LLC, Bluespring Wealth Partners, LLC, and Grove Point Financial, LLC. The material is for informational purposes only. It represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. It is not guaranteed by any entity for accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was created to provide accurate and reliable information on the subjects covered but should not be regarded as a complete analysis of these subjects. It is not intended to provide specific legal, tax or other professional advice. The services of an appropriate professional should be sought regarding your individual situation. Kestra Advisor Services Holdings C, Inc., d/b/a Kestra Holdings, and its subsidiaries, including, but not limited to, Kestra Advisory Services, LLC, Kestra Private Wealth Services, LLC, Kestra Investment Services, LLC, Bluespring Wealth Partners, LLC, and Grove Point Financial, LLC does not offer tax or legal advice. 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.
be wary of an assessment of attorney's fees under the prompt payment act
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ontractors are generally familiar with the provisions of the Prompt Payment Act, N.J.S.A. 2A:30A-1, as they apply to payments owed to subcontractors. The Act requires that if a subcontractor has performed in accordance with the provisions of its contract, the work has been accepted by the owner, and the parties have not otherwise agreed in writing, the prime contractor must pay to its subcontractor within 10 calendar days of the receipt of each periodic payment or final payment the full amount received for the work of the subcontractor. Prime contractors are also generally aware that if payment is not made in a timely manner, it will be liable for the amount of money owed under the contract, plus interest at a rate equal to the prime rate plus 1%.
What may not be well known is that the Prompt Payment Act has what is known as a “fee-shifting position.” While the parties to most contracts must bear their own attorney’s fees even if successful at trial, under the Act the prevailing party “shall be awarded reasonable costs and attorney fees.” N.J.S.A. 2A:30A-2(f). A recent case focused on the amount of “reasonable attorney fees” that may be awarded to a subcontractor who was vindicated every step of the way along a protracted litigation. The subcontractor, JHC Industrial Services, sued Centurion Companies, Inc., a contractor on a project for Alfred Sanzari Construction, Inc., alleging that JHC performed its work satisfactorily, Centurion was paid for it, but did not pay JHC in full. JHC was only owed $30,500. Although JHC prevailed at trial, the Superior Court, Law Division, Bergen County, refused its application for $104,670.51 in reasonable costs and attorney fees, instead awarding it $12,250.40 in fees and $4,125.33 in costs for a total award of $16,375.73. JHC appealed. In a precedential holding, the Superior Court, Appellate Division, held that the trial court erred in reading a proportionality requirement into the attorney's fee provision of the Prompt Payment Act. The trial court had rejected counsel’s certification in support of the amount of attorney fees requested, emphasizing that “the damages awarded were only $30,500 and it was unreasonable to spend triple the amount on litigation costs than it is possible to obtain from the judgment.” JHS Industrial Services, LLC. V. Centurion Companies, Inc., 2021 WL 4232081 *3 (App. Div., September 17, 2021). The Appellate Division reversed, although it acknowledged that fee determinations are discretionary decisions by trial courts which will rarely be disturbed. In this case, the Appellate Division believed that the trial court’s decision was based on a clear error of law and remanded the case to the trial court to determine the appropriate fee
to be determined by a review of the number of hours expended by plaintiff ’s counsel, rather than on the proportionality of the damage award to the fees expended. The Court opined that “as the entire thrust of the statute is to ensure that contractors and subcontractors receive full payment for their work promptly on completion, it is patently clear that the Legislature intended the attorney’s fee provision as one of the deterrent aspects of the legislation.” JHS Industrial Services at *3.
Legal Dig
By: adrienne l. isacoff, esq., florio, perrucci, steinhardt, cappelli, Tipton & Taylor LLC
In addition to bearing in mind that attorney’s fees may be awarded to the prevailing party in a suit under the Prompt Payment Act, the very apparent annoyance with the game of hardball played by Centurion that the Court expressed is worth noting. Parties, of course, take strategic action to make it difficult for the adverse party to proceed with litigation, even if their own defenses are not airtight. But this case took that strategy to such an extreme, that the expenditure by plaintiff of three times the amount in legal fees more than the underlying damages was found by the Appellate Court to be completely justified. In a rare explicit castigation of the legal maneuvers by Centurion, the Court explained its views at length: When Glen Poppe testified at his deposition that he told JHC “right up front if you put a lien on the job, I'm going to bond it, and I'm not going to pay you,” plaintiff 's counsel followed up by asking why Centurion refused to pay JHC, notwithstanding that Sanzari had paid Centurion for the work. Poppe responded, “Because I told him not to lien the job.” When plaintiff 's counsel pressed, asking “now that you've been paid, why not pay [JHC],” Poppe replied, “It's just not going to happen until someone tells me I have to pay him. That's all I can tell you.” From our [the Court’s] perspective, that comment epitomized Centurion's litigation posture in this matter. After not bothering to advise plaintiff it had secured a bond in response to its lien, thereby forcing plaintiff to file amended pleadings, Centurion first tried to dismiss plaintiff 's complaint and compel it to go to arbitration, although the court found there had been no agreement to arbitrate. Centurion then filed counterclaims on which plaintiff took discovery, only to have Centurion dismiss all of those claims on the first day of trial. Centurion ignored plaintiff 's discovery requests, forcing plaintiff to engage in repeated motion practice to obtain answers to interrogatories and document requests and to schedule the deposition of its principals. Centurion took no discovery itself. And it backed out of mediation after having agreed on a mediator, necessitating yet anoth-
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Legal Dig
er motion on plaintiff 's part to compel compliance with a clear order of the court. Then Centurion opposed plaintiff 's motion for summary judgment, raising defenses to plaintiff 's Prompt Payment Act claim it had no ability to prove at trial according to the trial judge. Centurion took these steps notwithstanding repeated warnings from plaintiff 's counsel that this was a fee-shifting case. Centurion should certainly not be forced to pay for “prolix or repetitious legal maneuvering,” . . . but neither should it be allowed to evade responsibility for running up plaintiff 's fees by its own legal maneuvering and obdurate approach to the litigation, forcing plaintiff to trial on claims to which Centurion had no defense. On remand, the trial court must consider all of these facts in assessing “what legal services reasonably competent counsel would consider as required to vindicate” plaintiff 's rights under the Prompt Payment Act . . . mindful that plaintiff 's counsel obtained not merely a “satisfactory result for the client,” but complete success on all of plaintiff 's claims after two years of litigation and trial in this matter. Clearly, the Court’s exasperation with the way the game was played by Centurion was a factor in its decision.
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TAKEAWAY Contractors are free to extend the time by which they must pay their subcontractors beyond the tight 10-day turnaround provided in the Prompt Payment Act, by including a longer payment period in the subcontract. But, they cannot avoid the strictures of the Act altogether. Once payment has been received, other than applicable retainage provisions in the subcontract, it must be released. Trying to game the system can lead to severe financial consequences. And those costs may go up significantly if your attorney plays the game in a way that the court finds unconscionable. Adrienne L. Isacoff, Esq., serves Of Counsel to the firm Florio, Perrucci, Steinhardt, Cappelli, Tipton & Taylor, LLC. She also serves as arbitrator and mediator for the American Arbitration Association and by private engagement. She may be contacted at aisacoff@floriolaw.com.
year-end tax & financial planning strategies for contractors By: rich higgins, cpa, mccarthy & company
There are many tax and financial planning strategies to consider. What you decide to do depends on your situation and the timing of transactions under consideration. Most tax strategies strive to accelerate income in the current tax year and defer expenses to the next year. Strategic tax planning takes into consideration many other factors such as how reducing income for tax purposes will affect your financial statements, cash position, working capital, and financial ratios. Key tax considerations from recent tax legislation Many tax provisions were implemented under the American Rescue Plan Act (ARPA) and other COVID relief legislation and its ongoing economic disruption. The following is a summary of the highlights in recent tax law changes. • Employee Retention Credit (ERC) —The ERC encourages businesses to keep employees on their payroll during the pandemic. It is a refundable payroll tax credit that may be claimed by eligible employers who pay qualified wages to qualifying employees. Certain businesses can qualify for both Paycheck Protection Program (PPP) loans and ERC. ERC was supposed to expire on December 31, 2021. However, President Biden signed the Infrastructure Investment and Jobs Act (IIJA) into law on November 15, 2021. IIJA changed the ERC termination date to September 30, 2021. There is an exception for recovery startup businesses that began operating after February 15, 2020, and have annual gross receipts for the three previous tax years of less than or equal to $1 million. Recovery startup businesses can still claim ERC for up to $50,000 in total per quarter for the third and fourth quarters of 2021, without showing suspended operations or reduced receipts. • Family and sick leave credits — ARPA extended the family and sick leave credits to September 30, 2021. These credits are intended to compensate employers and self-employed people for coronavirus-related paid sick and family and medical leave.
• Small Business Administration (SBA) loans — Though the PPP ended on May 31, 2021, existing borrowers may be eligible for PPP loan forgiveness. Even though the PPP loan forgiveness is not taxable for federal purposes, there may be state implications. There are also other COVID-19 relief measures offered through the SBA. Partnership audit and adjustment rules New audit and adjustment rules are in effect. Careful planning today will help mitigate any unfavorable consequences on both the entity and the partners themselves. Be aware that even if your business isn’t a partnership, you’ll want to evaluate the effect these new rules could have if you’ve invested in any partnership. Virtual currency/cryptocurrency Virtual currency transactions are becoming more common. There are many different types of virtual currencies, such as Bitcoin, Ethereum and non-fungible tokens (NFTs). The sale or exchange of virtual currencies, the use of such currencies to pay for goods or services, or holding such currencies as an investment, generally has tax impacts. IIJA requires individuals and firms acting as digital asset brokers to report transaction information to the IRS for tax purposes, beginning for tax year 2023. It also requires businesses to report any cryptocurrency payments worth more than $10,000 (like cash transactions).
Accounting Corner
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t is important to review your tax and financial plans on an annual basis. Even with the pandemic, inflation, supply shortages, and all the other challenges we face, it is advisable to review your plan now to ensure that your current tax and financial strategies meet your needs. You may find it necessary to take additional steps to save money on your taxes and strengthen your financial position.
Other tax matters to note • Business meals — There is a 100% deduction (rather than the prior 50%) for expenses paid for food or beverages provided by a restaurant. This provision is effective for expenses incurred after December 31, 2020, and expires at the end of 2022. • Purchases of property and equipment — With tax-favorable options available to businesses, many purchases can be completely written off in the year they are placed in service. Plus, there are tax-favorable rules that permit qualified improvement property to qualify for 15-year depreciation and, therefore, also be eligible for 100% first-year bonus depreciation. • Net operating losses — If you have significant losses from 2018 to 2020, you may be able to carry those losses back up to five years, which can significantly impact a prior year where there
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Accounting Corner
was a tax liability. Recent legislation now permits net operating losses (NOLs) to be carried back to obtain refunds of prior year’s taxes. While this may sound appealing, contractors should assess the implications of this tax provision before deciding to take a NOL carryback or carryforward. President Biden has stated that he intends to raise income taxes. Therefore, it is important to determine if it is more advantageous to the take a carryback and refund in a year with a lower tax rate or have the NOL available for future years when income tax rates are expected to be higher. Evaluate current working capital needs along with the company’s long term financial stability before deciding. • Methods of accounting — Contractors should ensure that the tax reporting method for each contract is appropriate by determining which projects are not considered long-term (more than one year). Most contractors use the percentage-of-completion method (PCM) for long-term contracts. Other elections should be considered if contractors have paid if paid language, unit price contracts and retainage receivable. They are among the items that may qualify for a different tax reporting method. • Qualify for a R&D tax credit — Contractors may qualify for a research and development (R&D) tax credit if new processes to improve efficiencies or reduce/eliminate uncertainty in the business are developed in the U.S. A R&D tax credit is generally taken on a dollar-for-dollar basis on either the entire qualified project or the portion of the project that meets the criteria of the IRS. If the R&D tax credit is not fully utilized, it may be carried back to the previous year, and carried forward for 20 years. Qualified start-up and small businesses that may not have an income tax liability can offset payroll taxes with the credit. • Assess opportunities for deductions on pass-through entities — Contractors that are owners or invest in pass-through entities (sole proprietorships, partnerships, most LLCs, and S corporations), can deduct their allocated share of losses to the extent of their basis (debt and equity). Contractors should have a
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sufficient basis to deduct allocable losses instead of carrying losses to a future year when their income may be lower. In addition, contractors should look for ways to reduce taxable income such as making retirement plan contributions and developing an exit strategy. There are several factors that affect basis and knowing those items could reduce your tax obligation or change the entity structure. • Change your corporate structure — Contractors that retain earnings in the company instead of distributing profits to shareholders may benefit from changing their corporate structure to a C corporation. Under the Tax Cuts and Jobs Act (TCJA) the highest effective tax rates of C corporation net income is 21% (plus 15% or 23.8% on dividend distributions). For S‐Corp, the highest rate is 37% (29.6% with full section 199A deduction). Contractors electing to make this change must remain a C corporation for five years. • Establish a self-directed IRA account — Holders of a self-directed IRA may fund real estate purchases from their IRA. There is no penalty for being under age 65. The non-financed portion of the purchase is sheltered from taxes by the IRA. A custodian or trust company must administer the self-directed IRA. Other rules apply. Year-end planning equals fewer surprises There are many other opportunities to discuss as year-end approaches. Taking a strategic yet holistic approach to tax planning can provide many benefits. There is a fine balance in what makes sense for any company. Implementing one strategy may offset the benefits of another. Contractors should weigh the costs versus the benefits before implementing any tax planning strategy. About the Author... Richard P. Higgins, CPA, is the partner-in-charge of McCarthy & Company’s New Jersey office. Construction Executive named McCarthy & Company one of the Top 50 Construction Accounting Firms™ in the country. Rich can be contacted at 732.341.3893 ext. 17 or Richard. Higgins@McCarthy.CPA.
legislative news By: dave rible
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What do the election results mean for the New Jersey taxpayer and business owner? The answer should be compromise and patience. There was a clear mandate in a very blue state that the average voter is not happy with New Jersey business as usual which brought the “Red Wave” into NJ. They don’t want to see New Jersey as the next California. A clear message was sent to all the people in Trenton to wake up and pay attention to the people you are representing. I do think that our statewide elected officials will think twice, if not three times, before voting on legislation that is raising taxes, burdening business owners, and making unfair mandates. The Democrats control the Governor’s office and both
As for the new leadership of the Senate we welcome the new Senate President Senator Nick Scutari. I have known Senator Scutari for many years while serving in the legislature. I believe that he is someone who will take the time to understand our issues and help us in our efforts to construct a better New Jersey. The new Senate Minority Leader is a friend to the UTCA but more so for infrastructure and that is Senator Steve Oroho. Senator Oroho and I worked very closely on the last TTF renewal and I’m sure he will be with us on the upcoming renewal. The General Assembly leadership did not change much. Assemblyman Craig Coughlin was re-elected as the Speaker of the Assembly and Assemblyman John DiMaio was elected as the Minority Leader. Both are former colleagues of mine in the assembly are very reasonable people and I look forward to working with them on behalf of the UTCA and the industry. So, as we watched the dust of the election disappear, we saw the much-anticipated Federal Infrastructure Bill pass in DC and signed by President Biden on November 15th. This was much welcomed news as New Jersey will be receiving $13.5 billion over the next five years to support all aspects of our infrastructure. This is great news for our industry as well as UTCA members. But its very important to note that while we are receiving a generous amount of money for infrastructure it means nothing if we are not getting projects out for bid. Please know that the UTCA is working very closely with the Governor’s office and all state agency leaders to promote ways to get the jobs shovel ready. The Governor’s office has been very receptive to working with us on this critical achievement. Its very important now more than ever that we are working together with all of our Association partners as well as labor partners to educate the Governor’s office and agency leaders of their ability to get the much-needed projects out for bid large and small.
Legislative News
ovember proved to be an unexpected month between statewide elections and a Federal Infrastructure Bill. First off, the race for New Jersey Governor was much closer than all pollsters predicted. In a race between former Assemblyman Jack Ciattarelli and Governor Phil Murphy most polls had Governor Murphy winning re-election by eight to ten points. In the end Governor Murphy won by two points becoming the first democratic governor to win re election since 1977. As a result of the two-point win came a surge of Republicans being elected statewide which also caused the industry to lose a strong ally in Senate President Steve Sweeney. The Democrats now hold a 24-16 advantage in the senate and a 46-34 advantage in the assembly.
While we wait for the new session for the Governor and the Legislature to start in January of 2022, we will be watching the current legislature through the upcoming lame duck session which has already started with legislative committee hearings. The staff here at the UTCA will continue to monitor legislation and advocate for our membership on the issues that are important for the industry. legislative chambers but not by large margins which I hope will be bring careful deliberations on statewide policy and a true spirit of bipartisanship. It’s been said that elections have consequences. Let’s hope that for all taxpayers and business owners here in New Jersey the consequences bring long awaited relief.
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Cover Story
campbell foundry celebrates its first 100 years in business By: dan kennedy
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TCA leaders through our history have received a ceremonial manhole cover commemorating service to our Association as President. This “heavy” honor has been delivered by one of UTCA’s most valued and long-standing associate members, Campbell Foundry. This UTCA stalwart was incorporated in Harrison, New Jersey in 1921 by John Campbell, Anton Hierwarter and William Campbell. They are now celebrating their 100-year business anniversary with 4th and 5th generation Campbells firmly engaged in the operations. The original business plan was to build a foundry to produce municipal castings to supply local and state road building programs then underway to accommodate the huge growth in the US automobile industry. At the time there were many municipal casting foundries operating in the State. Campbell Foundry would be the last to manufacture in NJ before eventually closing the Harrison Foundry in late 2003. John Campbell ran the business from 1921 until his death in 1936. The Foundry was then run by his two sons, John Robert Campbell, Sr. and James Forrester Campbell. The Harrison Foundry was expanded and at its peak manufactured 100 tons
Pictured left to right are Gina Butler, George Campbell, John Campbell, III, Greg Campbell, Chris Campbell and Leon Thodoreou.
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per day with a workforce of 150. Working with the State of NJ, Campbell helped with the manhole and inlet designs still in use today. Sales grew in the post WWII years and Bridgestate Foundry, Atco NJ, was added in the early 1950’s. Bridgestate didn’t manufacture iron under Campbell ownership but has been servicing the South NJ construction market for almost 70 years with Castings and now the full line of Construction Materials. In the early 1960’s J. Robert, Sr. and James F. Campbell turned the operation over to their sons; J. Robert Campbell, Jr. and John F. Campbell. John and Rob continued to grow market share here in New Jersey and opened satellite sales offices in Syracuse, NY and North Haven, CT. A second Foundry was built in Emporia, VA with the intention of servicing the mid-Atlantic states. Operational in 1966, Emporia Foundry would see most of its production coming to the NJ/NY metro area as tri-State markets boomed and regulatory forces brought the demise of many of the small NJ Municipal Casting Foundries. New molding and casting technology were prohibitively expensive for small manufacturers, as was the required investments in smokestack scrubbers to conform to anti-pollution regulations imposed by the EPA throughout the 1970’s and 1980’s. John and Rob ran the business into the early 2000’s before turning over day to day operations to Chris, Greg and John Campbell, III. The Campbell Materials Division was started in 2003 to offer customers a complete line for all their underground construction needs. Started out of a trailer in Campbell’s Kearny yard; it has become an integral part of the whole business and operates out of the Kearny Yard Office, as well as the Berlin (Bridgestate) Office.
that no individual company can overcome, it goes to show how valuable companies like Campbell are to our Industry’s efforts to upgrade infrastructure systems in New Jersey and beyond.
Pictured left from right is Chris McCoy, Diane Taylor, Greg Ciel & Krystal Crawford.
The entire Campbell Team considers it an honor to work with the greatest customers. It is estimated Campbell has employed nearly 3,000 people in its first 100 years in business, and considers the current group to be the best it has assembled. Each of the 63 current Team Members is working to make the operation the best it can be and to service customers at the highest level. A fifth generation, George Campbell, has been with the company since 2015 and Chris, Greg and John look forward to fresh insights and ideas on ways to improve how Campbell Foundry serves the market. Current construction material supply chain issues have been very challenging. Campbell had the foresight to get out in front of material availability challenges by increasing outdoor storage space and by investing in more inventory. Full Yards have allowed Campbell to continue to service their customer’s project schedule needs. While there are challenges with product availability
Campbell Team in the Kearny storage yard.
Cover Story
It’s estimated that only a half a percent (0.5%) of businesses make it to the century mark. That makes Campbell Foundry an exception. Chris, Greg, John and George feel it is their exceptional team that has made it possible for the last 100 years. UTCA is grateful to this company for its support over the years that can be measured, in part, by thousands of pounds of manhole covers. Congratulations to Team Campbell!
Pictured left to right are Kris Szura, Charles Fiskio & Ken Farrelly.
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important takeaways for contractors from the $137 million racial harassment verdict against tesla By: Kevin s. brotspies & greg trif, trif & modugno LLC
I
n October 2021, a federal jury in California reached a landmark verdict, finding that a Black employee of a Tesla subcontractor was subjected to a racially hostile work environment and awarding him nearly $137 million. Contractors should be cognizant of this verdict and its potential application to the construction industry.
In defense of Diaz’s claim, Tesla argued that it was not Diaz’s employer, and that the company expected its subcontractors – such as the staffing agency – to perform sufficient investigations of discrimination and harassment complaints and take corrective action where appropriate. Tesla also contended that Diaz, as a direct employee of a subcontractor and not of Tesla, was not an employee entitled to bring a discrimination claim. The jury, however, discounted the fact that Tesla did not employ Diaz directly, and awarded him $6.9 million in emotional distress damages and a staggering $130 million in punitive damages. It is believed to be among the highest single-plaintiff punitive damages awards in a racial discrimination case in this country’s history. Tesla was held liable as Diaz’s “joint employer” – meaning that even though Tesla did not employ Diaz in the traditional sense, it exercised sufficient control over him to be considered an “employer” under relevant employment laws. It bears note that Tesla did not seek the dismissal of Diaz’s discrimination claims on the ground that it was not his employer. Notwithstanding the potential legal defenses, the verdict against Tesla sends a plain mes-
There are several steps contractors can take to mitigate against possible liability for a discrimination claim by a subcontractor’s employee. First, contractors should implement, and regularly update, a company-wide policy, applicable to all of the contractor’s employees, which: (i) prohibits discrimination and harassment; (ii) sets forth reporting and complaint procedures; and (iii) includes an anti-retaliation policy. The comprehensive policy should carry forward the company’s anti-discrimination, anti-harassment, and anti-retaliation policies to its subcontractors and other persons (non-employees) who may be present at worksites. Next, contractors should require that all subcontractors implement, maintain, and enforce equal employment opportunity policies, including policies regarding anti-harassment, anti-discrimination, and anti-retaliation. In furtherance of taking this step, contractors should ensure that their subcontracts specifically require subcontractors to adhere to these important policies. The third step is to regularly conduct anti-harassment and anti-discrimination training for all of the contractor’s employees. Contractors should also require that their subcontractors conduct similar training and certify that they have done so.
Labor Relations
In the California case, the plaintiff, Owen Diaz, was an elevator operator at Tesla’s Fremont, California factory. He was not employed directly by Tesla, but rather worked for a staffing agency contracted by Tesla. In his complaint, Diaz alleged that he was subjected to a hostile work environment based upon his race, and that Tesla failed to adequately prevent such racial harassment. Diaz and other witnesses testified at trial that other employees frequently and openly used racial epithets, while another employee of the Tesla subcontractor drew racially offensive images in the workplace. Upon Diaz’s filing of an internal complaint, the staffing agency terminated two employees, but merely suspended and warned the employee who drew the racist cartoon. Shortly thereafter, the suspended coworker was hired as a direct employee of Tesla, while Diaz was not offered a position by Tesla.
sage – contractors may be held responsible for ensuring a safe and inclusive culture not only at their own offices and facilities, but also at their jobsites. Contractors may not be able to shield themselves from liability by contending that the plaintiff is an employee of a subcontractor, and not the contractor itself.
Fourth, contractors should ensure that all complaints of harassment and discrimination are taken seriously and investigated thoroughly. In the event that a violation of an anti-harassment or anti-discrimination policy is determined to have occurred, it is imperative that the contractor take immediate, decisive, and appropriate action to ensure that the conduct is put to a stop. The fifth step is to document, then document, and then document again. Document all records of any complaint of harassment or discrimination, including notes of witness interviews and findings. Also document all measures taken by the company to prevent harassment and discrimination, including any proactive steps (such as regular required trainings) and actions taken in response to an investigation (such as requiring additional sen-
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sitivity training for an employee involved in a hostile work environment incident). The final step is to ensure that there is absolutely no retaliation against any employee – either of the contractor or the subcontractor – in response to that employee’s good faith assertion of a complaint of harassment or discrimination, or an employee’s participation in an investigation of same. Employees must feel safe to complain of hostile work conditions without fear of retaliation.
Labor Relations
Implementing the foregoing recommended policies can help contractors prevent harassment and discrimination in their workplaces and on their worksites, avert an internal complaint
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from snowballing into a legal nightmare, and, in the event a claim is filed, provide the foundation for asserting and supporting viable defenses thereto. About the Authors.... Kevin S. Brotspies, a member of Trif & Modugno LLC, represents businesses, including contractors and subcontractors, in all areas affecting the construction industry, including in employment and labor matters. Greg Trif, a member of Trif & Modugno LLC, represents developers, general contractors, subcontractors, and suppliers in all areas of law affecting the construction industry including contract claims, project crisis management, labor and employment disputes, and business torts.
Feature Story
doing what they do best euc corporation celebrates 30 years By: dan kennedy
I
t’s the early 1990s and the nation is in an economic slump. With our nation in an economic recession, featuring sluggish employment and slow economic growth, most saw risk and uncertainty. Others, John R. Wallace and Bruce Wayne, saw opportunity. In 1991, with years of experience under their belts, these two formed EUC Corporation of New Jersey. Since then, they have been building a solid reputation in New Jersey as a family-run business focusing on their strengths - excavation and utility contracting services for commercial and industrial clients throughout New Jersey. With Wallace and Wayne at the helm, they started a relationship-based company that strives to give every project personal attention from the planning phase through completion. They set a standard of having highly qualified personnel who understand construction operations and the design process for large and small projects. 30 years later EUC is a strong company delivering on critical projects throughout New Jersey.
Site work at Phillipsburg High School
pride themselves on superior communication. Wallace believes that EUC’s success is attributed to strong relationships, dedicated and knowledgeable staff, well-maintained equipment, safety record, and their distinguished clientele. Projects that Matter Examples of projects that EUC is especially proud of include the Rutgers Athletic Performance Center. This three-year project included extensive deep foundations with basement, the utilities including storm, sanitary sewer, water, electrical, and gas. In addition to the tight schedule and complicated project, the work was performed during one of the wettest years on record.
Building a Strong Foundation Joining Wallace and Wayne, shortly after EUC’s founding, was Thomas Nadolsky who came aboard after graduating NJIT in Civil Engineering. Followed by Joan Aljain and Peter Adamcewicz in 2000. Joan handling administrative responsibilities and Peter as the trucking liaison. EUC’s company also consists of several field foreman including Ryan Sibilia, Paulo Jeorge, Michael McHose, Timothy Anderson, and Robert Mabie, all of who have been part of the team for several years. This team is critical in completing the company’s projects – such as warehouses, renewable energy, roads, airports, parks, hospitals, office buildings and schools. EUC’s experience ranges from working on sites located in urban cities to sites in large rural communities for many sectors. EUC’s services include full site development – from tree clearing to final pavement, conceptual estimates for the design to turnkey budget. Whether the project consists of a deep shored foundation on a confined site, a large tract of land or a site with a Green/LEEDS Rating, they have developed the knowledge and experience to bring the projects ahead of schedule and under budget. They also
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The Mansion at Natirar, Peapack & Gladstone
Another project they are very proud to have delivered is the Mount Arlington Landfill Solar Field Conversion. This 2,275.5 KW project included regrading of 10 acres to accommodate the solar racks and reduce the amount of shade on the panels. In ad-
dition, this project also consisted of a new half mile access road, solar racking and foundation blocks. Despite a tight schedule and challenging weather conditions, the project was completed on time and under budget.
Looking to the Future
Solar field on a landfill in Mt. Arlington
Other projects include the 3 year Berkeley Heights Municipal Complex project, the Amazon DJ23 project, and the RWJ East Wing Parking Lot in Livingston.
Through the challenges they have faced, whether they be economic or mother nature, EUC has become a stronger company every year. Today’s challenges, including but not limited to supply chain challenges, public health emergencies, and the ever-changing business climate for public and private work, are being faced with the same approach from the start: hire and retain great employees, good teamwork and being a good partner.
Feature Story
Preparing future site of Rutgers Athletic Performance Center in Piscataway.
EUC is well positioned to push into the next 30 years of business and see opportunities for growth, especially in the renewable energy (solar) sector. UTCA wishes to congratulate EUC Corporation on its first 30 years.
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infrastructure bill's historic investment shouldn't be overshadowed by myths By: dan kennedy, director of environmental & utility operations
T
he bipartisan Infrastructure Investment and Jobs Act (IIJA) approved by Congress last month is one of the most significant pieces of legislation in the last 50 years. It provides a long-term, properly funded plan to rebuild America’s infrastructure. That means safer more reliable roads, bridges and water infrastructure while creating thousands of good paying jobs. Like any groundbreaking bill, however, several myths are emerging to try and discredit those who supported it. We cannot let these falsehoods persist.
First and foremost, full credit must be given to New Jersey’s entire federal delegation. Senators Cory Booker and Robert Menendez and every New Jersey representative in the House voted in favor the IIJA. Of particular note are New Jersey’s two Republican Congressmen, Chris Smith and Jeff Van Drew, who joined in bipartisan support of the legislation. Like all members of our delegation, they did the right thing for their state.
Even a basic understanding of the IIJA would show how critical it is to our state and nation’s future. Despite this, the toxic environment of Washington has allowed myths to fester around the bill. They are meant to confuse, to anger and to misinform the public. Their true intention is to discredit those who deserve full credit for supporting this milestone legislation. So let’s set the record straight. The IIJA is not part of the larger legislation more commonly known as Build Back Better. This is a completely different bill with a different focus. While there was much debate over the summer and fall months that connected both bills to each other, even a casual observer of events knows they were not the same thing. To that end, there has been an effort to tie the IIJA with the so-called Green New Deal. Again, these are two totally separate things. There are elements of the IIJA that look to address climate change, but not to the degree that advocates of the Green New Deal are pushing for. Connecting the two is simply disingenuous.
Cost is always a key factor with any bill. Unfortunately, that also makes it the most likely way to scare people into believing the worst about it. The IIJA, however, does not include any tax increases. Instead, the infrastructure investment is made through a variety of different measures, including the reallocation of already existing funds. While there were organizations advocating for it, the IIJA does not include an increase in the federal gas tax. Lastly, somehow, the idea that the IIJA is not entirely about infrastructure continues to fester. Again, this is simply not true. The Act invests billions in numerous forms of infrastructure, from transportation and rail to drinking water and wastewater. There are dollars for modernizing our electric grid and providing more electric charging stations. Perhaps the issue is not that the Act funds non-infrastructure, but that it makes such significant investments in areas of infrastructure we have not focused on before. The bipartisan IIJA represents the best possible kind of investment we can make in our country’s future. It was an opportunity we could not let pass us by. The myths growing out of Washington do nothing but try and discredit members of Congress who did the right thing by voting yes. We thank New Jersey’s Congressional delegation for not letting the falsehoods shape their decision-making. This is especially true of Congressmen Smith and Van Drew, who did what was best for New Jersey despite intensive, misguided opposition from within their own party. In the meantime, our members, along with our partners in labor, stand ready, willing and able to get started
The Pipeline
The IIJA provides billions of dollars for New Jersey’s infrastructure. There is nearly $7 billion for highways, over $1 billion for bridges and $4.2 billion for transit, all over a five-year period. These are huge, game changing investments for our state. Over one third of New Jersey’s bridges are considered structurally deficient, meaning they need significant repair. Our bridges, roads and rail system are consistently ranked among the worst in the nation in terms of condition. Moreover, the IIJA will finally get the much-needed Gateway Tunnel across the finish line.
At the federal level, we have heard a lot of talk on both sides of the aisle in terms of more work for water infrastructure. At the state level, we have seen some improvement…but not enough. Residents clearly want improved infrastructure. The primary way to achieve this end is through funding construction projects and streamlining the approval of projects so that our members can bid on these opportunities on an even playing field. Talk without action will not get the residents what they are seeking nor garner results for UTCA members. No one wins.
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By: Christopher Vanderwolk, V.P. Strategy and Business Development, Gente Employee Benefits and HR Solutions and Tim Fitzpatrick, Senior Vice President – Employee Benefits, IOA
A
s the end of 2021 approaches, we have asked a guest contributor, Christopher Vanderwolk, to help us better understand an important and dynamic topic that is on the minds of most employers these days – ACA Reporting to the IRS. Christopher is the Vice President of Strategy and Business Development for Gente Employee Benefits and HR Solutions. His firm works with small to mid-sized companies helping them to manage their business and remain compliant, by supporting and filling voids in the areas of employee benefits, compliance and human resources administration. Christopher has extensive experience in the area of ACA reporting and helps to detail the upcoming changes below:
the Claims Administrator.
In 2015, Applicable Large Employers filed Forms 1094-C and 1095C for the first time, explaining the offer of coverage to their employees. Since 2015, the IRS gave an automatic extension to allow employers some time to gather the mountains of data required to complete the forms, process them, and distribute them to employees, and file with the IRS. The IRS also allowed for “good faith” efforts to permit employers to avoid penalties if they took reasonable steps to complete the forms and fixed any errors promptly. As of now, that relief is over. It seems unlikely that the IRS will issue any further relief this year.
How do employers prepare? First, employers should check their past years’ filings to see if they were adequate. Were the codes correct? Did the IRS reach out about any errors? Were there penalties assessed that could have been avoided with proper reporting?
Applicable Large Employers, those with 50 or more full-time-equivalent employees on a controlled-group basis, will be required to issue their forms 1095-C to employees by January 31st, just like W-2s. Employers will also lose the “good faith” relief, so errors or delays can mean penalties of $560 per employee. The forms must be delivered earlier and must be accurate to avoid penalties – two massive changes from how many employers (and service providers) handled the forms in years past. The IRS is getting better at finding employers who failed to file their forms as well. Employers are currently receiving six-figure penalty notices for failing to file their 2018 forms. The IRS has been cross-referencing the number of W-2s filed with ACA reports. If an employer has not filed their 1094-C and 1095-Cs for 2018, they are subject to penalties of more than $500 per employee, and that’s before getting to the “play-or-pay” penalties in the Employer Mandate. Further, the IRS is trying to move all forms to electronic filing. With a pending rule change, all employers filing 100 or more forms will have to file electronically, down from the current 250 form threshold. If the rule is enacted before the end of the year, it could impact this reporting cycle.
NEWS
the 2021 aca reporting season brings new challenges
What does all this mean? This reporting cycle is going to be the most important and challenging yet. The IRS will almost certainly identify employers who fail to file and is continuously improving at identifying mistakes. Employers will want to be ahead of the process and should begin gathering their information now. The ACA reports require employee payroll, demographic, and coverage information. The 1095-C has 65 fields on just the first page and another 18 for each individual covered under a self-funded form. Reporting is not a task to leave until the end of January.
Then, employers should contact their reporting vendor to find out what information will be needed this year and if there are any changes. Employers should confirm that the vendor will meet the January 31st deadline and what internal deadlines the vendor may require to meet that date. Once that is locked in, employers should reach out to their benefits broker to get coverage information and their payroll department to identify who was eligible for coverage. From there, the data will have to be provided to the reporting vendor with enough time to get the forms finalized. Ideally, vendors will be able to save you the work of calculating codes and months of coverage with simplified data requirements. They will have hit their deadlines in past years and have a plan to hit their deadlines this year.
These forms are complicated, and the burden on employers is only getting harder. Make sure you’re ready to tackle them now, so you’re not surprised at the end of January, or worse, when the IRS comes knocking. About the author… Chris Vanderwolk is the V.P. of Strategy and Business Development at gente Employee Benefits and HR Solutions, where he works to bring employer easy solutions to complicated benefits compliance issues. He holds a number of benefits certifications, including CEBS, CFC, and GBDS, and is currently pursuing his JD at Seton Hall Law. When he’s not working or studying, he’s enjoying time with his wife and daughters, or playing guitar with his band. He speaks Spanish fluently, and is a proud Army veteran.
Self-insured employers have additional obligations to employees and must file with the State of New Jersey. The filing must be done electronically, and for self-funded employers, usually isn’t done by
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