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Flanagan's Contracting Group Completes 40 Years
AUGUST 2020
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president’s message
From the desk of: dave smith
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hat does it take to keep an industry moving, what are we doing, and what can you do to help?
Funding – The box we can never consider checked. How much is enough for an industry starved for so many years and with such incredible capacity? What you can do – The funding initiatives that the UTCA works on daily are forever growing. Support these initiatives when called upon and rally your networks at every chance possible to support UTCA’s efforts for increased funding on the state and federal levels.
Safety – We have a continued commitment to safety, the development of programs, training, and educating our membership. What you can do – Participate and bring your best practices to the table for the Association. Help us determine the needs of the industry while providing solutions. Set your own standards high, set expectations for your teams to be the best in class, and make our industry better as a whole. PAC – The unified financial voice and strength of an industry can be one of the greatest tools to allow our leadership to suport those who see the value in our industry.
Legislation – Most of which is bad, comes at us like anti-aircraft artillery.
What you can do – Strength in a PAC is driven by numbers, and your participation is as important as anything you can do. I can only hope in this year — another challenging one — we can boost the highest level of PAC participation ever across UTCA’s membership.
What you can do – Participate in a committee, folllow our alerts and notices, and know your representatives. Make sure you have a relationship that will get them to take a call and act on it. When we allow bad laws, we all suffer. Protecting the integrity of a fair and level playing field – Fighting several poorly crafted bids every month, many of which do not even comply legally with local public contracts law. What you can do – Bring these bids to the attention of UTCA early on in the bid process. Help us with the owners and get the staff up to speed. Every time we allow a bad bid format to move forward, we promote this continued behavior.
Please remember to remain vigilant and safe and, regardless of your personal beliefs, continue to adhere to COVID regulations. Our industry has been fortunate to remain as strong as it has during this pandemic. The need for it is supported by our administration and agencies. We cannot fall short and open their choices up for public scrutiny. Best regards,
Dave Smith 2 Utility & Transportation Contractor | AUGUST | 2020
CONTENTS
Cover story 46 Flanagan's contracting group completes 40 years
DEPARTMENTS 2 7 13 19 27 35 57 73
President’s Message
46
FEATURES 62 newark lead service lines replacement
Financial Overview Legal Dig
NEWS
Accounting Corner
67 a message from nj turnpike authority executive director
Legislative News
81 leveraging employee benefits technology
safety perspective labor relations
91 in memoriam
The pipeline
Published Bimonthly During 2020
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Utility & Transportation Contractor | august| 2020 3
By: kevin ellman, wealth preservation solutions
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hirty-three years ago, my wife and I decided to move out of New York City as we began to plan for starting a family. We wanted to live within a reasonable commuting distance, as we were both working in the city at the time. Our real estate agent showed us a modest house in Montclair, NJ (14 miles west of the Lincoln Tunnel) built into the side of a steep mountain. One full wall of picture windows made up for the modest house by offering breath-taking views of New York City. “We’ll take it,” we both exclaimed in unison! The house needed some work, but our main project, given our wall of windows, was to plant some strategically placed saplings and young bushes to provide some privacy from the street. Why do I mention this? Because landscaping provides a terrific metaphor for investing. When you plant young trees and bushes, you must have patience, as it will take them years to grow and mature enough to provide the kind of privacy, protection, and beauty you originally envisioned. Along the way, they will experience and withstand storms that may down some branches, they will require trimming from time to time, and, of course, they will need the regular nurturing of water and sunlight.
Tending to an investment portfolio is like the caring and nurturing of trees and bushes. Over time, the market will experience good and bad years. However, history has shown us that over the long haul, stocks will average about 10% growth per year. At this rate, a three-foot baby tree will grow to be a six-foot tree in roughly seven years and so on. Investment portfolios, like trees, need patience, tending, and time to develop and grow. Still, many people feel the pull and allure of what is almost an impossible thing to do — trying to time the market. In my opinion, this is a faulty approach.
Financial overview
gardeners make great investors
The 10% long-term average growth rate of the stock market occurs in bursts. It does not happen in tiny bits of growth every day. If you happen to miss the few growth spurts that occur during the up periods, then your long-term average will go way down. It is like saying, "Every time there is a storm, I will pull up my trees, store them in the garage, and replant them when the storm is over." Surely you recognize that this would stunt the growth of your trees just as it would your investment portfolio. The only way to capture every last bit of market growth over time is to stay invested through thick and thin. The secret to success is not timing the market but TIME IN THE MARKET.
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policies and practices to protect employees during the covid-19 pandemic s the summer progresses and attempts are made to return to the pre-COVID-19 normal, the long-term impact of the virus on the utility and transportation industry remains to be seen. Although the industry was spared from the shutdowns and closures, the health of employees has been at the immediate forefront of the industry’s concerns. Particularly, as construction projects continue and the number of reported cases of COVID-19 is back on the rise, employers are facing challenging times in keeping up with the ever-evolving laws and guidance to protect the health of employees while remaining in compliance with federal and state laws.
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health plans. The guidance specifically recommends that employers conduct a job hazard analysis to determine whether a specific activity is high, medium, or low risk. The guidance categorizes high risk as tasks that require employees to enter indoor work sites occupied by other workers, customers, or residents suspected of having or known to have COVID-19 or symptoms thereof. OSHA encourages employers to delay work that is considered high risk. Comparatively, medium risk tasks include those that require close contact (within 6 feet) between employees. Low risk tasks are those that require little contact, permitting employees to remain 6 feet apart.
OSHA Guidance
The guidance also encourages employers to train employees on COVID-19-related matters, including recognizing the signs and symptoms of the disease and knowing how the virus may be spread, and to emphasize compliance with all policies and procedures that are applicable to the employee’s duties as they relate to COVID-19. These policies include social distancing; avoiding physical contact with others; hygiene practices such as implementing appropriate cleaning practices and sanitizing all surfaces workers will touch; and learning the proper use, limitations, removal, and disposal of any personal protective equipment. OSHA has also clarified that cloth face coverings are not PPE and are not “appropriate substitutes for PPE” such as N95 respirators. As such, when a respiratory hazard exists, employers must continue to comply with OSHA’s Respiratory Protection Standard, 29 C.F.R. § 1910.134.
Over the past several months, OSHA has made it a top priority to work with employers to eliminate the hazards of COVID-19 in the workplace. Reminding employers of the general duty to provide “a place of employment which [is] free from recognized hazards that are causing or are likely to cause death or serious physical harm,” OSHA, in conjunction with the Centers for Disease Control (“CDC”), has highly encouraged employers to implement preventative measure policies to curb the spread of COVID-19 in the workplace. These preventative measures include the frequent promotion of handwashing, use of personal protective equipment, and social distancing. On May 27, 2020, in addressing the specific concerns of the construction industry, OSHA updated its guidance for employers and employees performing construction work. Although the guidance is not legally binding, Association members should consider the guidance in updating workplace safety and
Legal Dig
By: katharine a. fina, esq., florio, perrucci, steinhardt, cappelli, Tipton & Taylor LLC
EEOC Guidance Another source of guidance for employers in implementing policies and strategies to prevent the spread of COVID-19 in the workplace is provided by the Equal Employment Opportunity Commission (“EEOC”). The EEOC, a federal agency, is tasked with enforcing numerous anti-discrimination laws including the Americans’ with Disability Act (“ADA”) and Rehabilitation Act. The EEOC’s guidance is particularly relevant in determining what steps an employer may implement to protect its employees and the spread of the virus at the workplace. Specifically, the ADA prohibits an ADA-covered employer (15 or more employees) from excluding individuals with disabilities from the workplace for health or safety reasons, regulates an employer’s disability-related inquiries, and regulates the medical examinations of employees. As such, the ADA governs the types of health questions an employer may ask its employees, the types of tests an employer may perform to ensure the health
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Legal Dig
of its workforce during the pandemic, and whether an employer may exclude an employee from the workplace. In assisting employers during these uncertain times, the EEOC issued guidance for ADA-covered employers stating that COVID-19 poses a direct threat to the health and safety of a workforce. As such, an individual who reports having symptoms of COVID-19, which may include a fever, chills, cough, shortness of breath, or sore throat, can, and should, be sent home and requested to self-quarantine in accordance with CDC guidelines. Upon an employee’s return to work, an employer may require a doctor’s note certifying that the employee is fit-for-duty. At the time this article is being written, the EEOC has also provided guidance that employers may implement various policies to determine whether an employee has COVID-19. Most simply, an employer is permitted to ask its employees whether they have COVID-19-related symptoms. Employers may also measure an employee’s temperature and administer a COVID-19 test. In furtherance of this authority, the EEOC has advised that employers should ensure that any COVID-19 test is accurate and reliable. To determine what is accurate and reliable, an
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employer may look at guidance from the U.S. Food and Drug Administration (“FDA”), the CDC, and other public health authorities. The EEOC has also advised that employers should be mindful that tests may provide false-positives or false-negatives, as well as only revealing whether an employee presently has the virus. Recently, the EEOC determined that an antibody test is different from a test to determine whether an employee has COVID-19 and, therefore, an employer cannot require antibody testing of employees. In implementing these policies, the EEOC reminds employers that any health information it obtains from employees shall remain confidential. Takeaway Lastly, it is important to note that there are still many unanswered questions. As the pandemic continues and new information emerges each and every day, it is important to keep up to date on the guidance being issued by the CDC, EEOC, DOL and other agencies in protecting the healthcare of employees. As such, you should regularly speak with your legal counsel regarding updates to the ever-evolving laws
how does a ppp loan affect my firm's financials? By: Bill mcnamara, the curchin group
Working with volunteer members and staff from the Financial Accounting Standards Board (FASB), the American Institute of Certified Public Accountants (AICPA) has issued some helpful guidance in its Technical Question and Answer (TQA) 3200.18, Borrower Accounting for a Forgivable Loan Received Under the Small Business Administration Paycheck Protection Program. The TQA outlines a series of steps for the contractor to account for a forgivable PPP loan. Using this document and following FASB ASC 470 on debt, let’s look at two practical impacts of a forgivable loan on our financial statements, followed by a few other footnote requirements. The Balance Sheet A company that received a PPP loan would see a new liability recorded to account for those proceeds. This amount would receive the same considerations as other note payables the company would record. That means we would have both a short-term and long-term liability component to record. We would do so by calculating the amount, if any, of the loan to be repaid in the next 12 months of operations. There is a chance that amount could be $0.00 or the entire balance. Once the short-term piece is properly recorded, we would include the remaining balance in our longterm debt section according to FASB ASC 470. A provision of the loans under PPP is a six-month interest waiver. Upon expiration of the waiver, we need to accrue for interest under the interest
method in accordance with ASC 835-30. The accrued interest would be an additional short-term liability. We need to think about deferred taxes and timing differences between book income and taxable income as well. IRS Notice 2020-32 determined that loan amounts forgiven under Section 1106(i) of the CARES Act are tax exempt income under Section 265 of the Code and the accompanying treasury regulations. Under Section 265(a)(1) of the Code, a taxpayer is not allowed to deduct amounts allocable to income that is wholly exempt from taxes. As a result, any PPP loan amounts used for Covered Expenses will not be deductible to the extent such loan amounts are forgiven. The tax consequences to a loan recipient will be the same as if the PPP loan amounts received were included in gross income and subject to tax. This guidance is unexpected considering that Congress expressly excluded the PPP loan amounts from gross income; if amounts were not excluded from gross income, the tax result would be the same. Initial understanding and language in the Coronavirus Aid, Relief, and Economic Security (CARES) Act led borrowers to believe that even though loan proceeds would be forgiven, expenses would still be deductible. Now, that is not the case. There have been discussions by lawmakers to provide relief under an exception to the IRS rules, but that has not yet been passed into law.
Accounting Corner
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Paycheck Protection Program (PPP) loan presents contractors with unique presentation and disclosure considerations, starting with any mid-year interim reporting requirements and most certainly during year-end reporting.
At year end, we will need to consider the portion of debt forgiveness in calculating taxes to be paid. For interim financial statements, the tax calculation will need to include an estimate by management of the portion of the loan proceeds they will seek to have forgiven. This, too, will need to be tax effected into the lability account. The Statement of Income Once forgiveness has been granted, the contractor will recognize a gain on the extinguishment of debt, which is a below-the-line item from Income or Loss from Operations. Similarly, we would see the impact of current and deferred taxes for the non-deductible payroll costs included in a company’s bottom line number of Net Income.
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Alternatively, FASB guidance makes the comparison of the PPP loan program with the characterization of government contributions as a revenue source under FASB ASC 958-065. In this approach, the contribution received depends on whether the contribution is conditional or unconditional. If the contribution is conditional, then it is not recognized until the conditions are substantially met or explicitly waived. This would mean classification on the balance sheet similar to deferred revenue, as funds received in advance of conditions. Once the conditions are met, the proceeds would be recorded in the income statement as grants or government advances received.
Accounting Corner
The tax impacts under IRS Notice 2020-32 remain the same with the selection of either treatment. Disclosure in the Notes to Our Financial Statements Several other items will also reflect PPP loan forgiveness. A company’s accounting policy should clearly highlight the company's treatment of the loan proceeds under either ASC 470 or ASC 958-065. The Note Payable footnotes should disclose the monthly payment interest rate, term length, and maturity date of the loan. The recording of the PPP loan proceeds as a lability could also impact a contractor's ability to meet debt covenant imposed by its lenders. In the Income Taxes disclosures, we will want to highlight the timing differences and their effective tax calculations for the recognition of the loan forgiveness in the period that forgiveness is received or can be reasonably estimated by management.
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We must also make an evaluation of an entity’s ability to continue as a going concern. The overall financial health of the company should be measured, and the accountant should consider how the performance of the company moving forward for the next twelve months will be impacted by the COVID-19 pandemic. Does the company have enough liquidity, backlog, and staffing to continue to perform on its contracts? These are tough questions that need to be asked. Applying for Loan Forgiveness The PPP loan forgiveness period has been extended to 24 weeks, meaning forgiveness is calculated from the date the first dollar was received forward 24 weeks. Borrowers who used at least 60% of their PPP funds on payroll and the rest for other eligible expenses such as rent should consult an accountant for guidance on applying for loan forgiveness and properly preparing upcoming financial statements. Similar to the application process, lenders will open online portals for applications in connection with loan forgiveness requests. As the rollout of PPP loan program clearly demonstrated, change is inevitable. Staying vigilant in the monitoring of modifications to the requirements under this program is critical for financial statement issuer.
in the lobby By: zoe baldwin
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As we’ve previously reported, Governor Murphy has furloughed much of the state workforce in an effort to recoup savings from the vast state workforce. UTCA CEO Bob Briant and President Dave Smith worked diligently with the Department of Labor and the Administration to ensure that furloughs would not affect the progress of ongoing construction projects. However, furloughs alone will not recoup the needed funding and the state is now advancing a bill that would authorize increased bonding to make up the difference. Citing the worst economic conditions since the Great Depression, the Assembly voted along party lines in favor of the COVID-19 Emergency Bond Act, which authorizes the issuance of $5 billion in State general obligation bonds to be used in response to the fiscal impact of the pandemic. The Senate version has passed committee, but at the time of this writing has not yet been scheduled for a vote on the floor. ON THE WATER FRONT We are very pleased to report that water infrastructure is one of the issues that has seen some movement since our last writing.
In the Senate, one of the first bills of our water policy platform has gained momentum in recent weeks. S647 cleared another hurdle as it was passed by the full Senate and now moves to the lower House for hearing. Sponsored by Senators Greenstein and Singleton, S647 increases asset management planning requirements for drinking water systems and enables DEP to develop a penalty system for non-compliance. If signed into law, this bill will create a three-year capital plan for every drinking water system in the state, as well as funding plans to ensure those capital projects advance. That means more work with greater predictability for contractors. UTCA has been working on this and other legislative initiatives related to water since 2016 and are very glad to see our efforts come to fruition. We expect to see this trend continue and will keep you informed as more developments advance. COMMUNITY CONCERN S232, sponsored by Senator Singleton, will require certain facilities applying for new permits, expansion permits, or permit renewals to produce an “environmental justice impact statement” and hold public hearings if located in what the bill defines as an environmentally overburdened community. The bill also gives NJDEP full discretion to deny permits based on the findings of that process.
Legislative News
ust as contractors and owners have had to navigate the ins and outs of virtual business meetings, procurements, and everything in between, lawmakers have also been working through the challenges of conducting the business of State remotely. Since we last wrote, the legislature has begun to pick up the pace again, holding legislative hearings most days of the week and careening toward an uncertain budget process with a $7 billion revenue shortfall projected for the next fiscal budget year (FY21).
As defined, an overburdened community is one where 35% of households qualify as low-income according to the US Census; 40% of households are minority; or 40% of households have limited English proficiency. The full list or map of affected areas has not yet been released.
In the Assembly, the Assembly Infrastructure and Natural Resources Committee held its inaugural hearing which featured UTCA staff Zoe Baldwin and Dan Kennedy presenting the opening testimony on the need for state investment and accountability for water infrastructure. The hearing featured invited speakers only, and we were glad for the opportunity to present our ideas.
Currently included facilities: resource recovery facilities or incinerators; sewage treatment plants with a capacity of more than 50 million gallons per day; transfer stations or solid waste facilities; recycling facilities that receive at least 100 tons of recyclable material per day; scrap metal facilities; landfills; major sources of air pollution such as gas-fired power plants and cogeneration facilities and medical waste incinerators.
The committee has also scheduled its second hearing for late July, set to focus on the economic benefits of water work. The underpinnings for the discussion are framed upon a study by the American Road and Transportation Builders Association that was commissioned by UTCA and will again prominently feature association staff.
The bill rocketed through the upper house — it was heard in committee on a Friday and passed by the full Senate on a Monday with votes falling clearly into party lines. It is also worth noting that Governor Murphy announced his support for S232 at a June 19 press conference touting this newer, stronger bill. It has
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been posted in Assembly Environment Committee for a vote on July 20.
as it would mean a new source of direct transportation revenue that would not be borne by our state’s traveling public.
We have been engaged with the sponsors regarding amendments, as well as with NJDEP and other stakeholders who have shown some early openness to our suggestions. We will keep you updated on any developments.
Gateway provision - Also included in the bill was the Malinowski amendment, which would require the U.S. Department of Transportation to promptly issue Records of Decision for Environmental Impact Statements in the New Starts grant program and to increase transparency in the Capital Investment Grant Program. These provisions would help expedite the stalled Gateway Tunnel project, whose draft EIS has been languishing at DOT for nearly three years.
FULL DISCLOSURE A bill moving through the legislature that would require contractors to disclose the past two years of legal violations has been passed by the Assembly.
Legislative News
A801 would allow a department to evaluate the seriousness of bidders’ violations and to disqualify from bidding any bidder whose "violations that represent a significant threat to the health or safety of employees or that demonstrate a disregard for the law." We reached out to the sponsors to amend the bill so that de minimis violations would be excluded, but they felt the language was clear in that regard. They did however state that they would accept any changes to that effect should they be made in Senate committee. There is not yet a Senate sponsor, and we will reach out immediately should it be introduced in the upper house. LOWER HOUSE UPS THE ANTE This has certainly been the summer of infrastructure in the House of Representatives as Democrats unveiled and quickly passed a $1.5 Trillion infrastructure plan known as the Moving Forward Act. The measure calls for a huge increase in funding to repair roads and bridges as well as water infrastructure, in addition to addressing broadband, housing, schools, and more. Although unlikely to be taken up in the Senate, the House has referred to the bill as the “opening salvo” of a conversation about how to pay for infrastructure, a debate that will dominate surface transportation negotiations going forward. The measure was passed by a party-line vote and would authorize critical funding for infrastructure construction including: • Highways: $309 billion (42% increase over current levels) • Public Transit: $105 billion (72% increase) • Clean Water SRF: $40B ($8B annually for 5 years) • Safe Drinking Water SRF: $4.140B for FY22; $4.8B for FY23; and $5.5B for FY 2024 and 2025 UTCA provision - Included in the bill was the UTCA-driven language that would establish a marketplace pilot program for states to buy and sell unused federal toll credits. States like New Jersey earn credit from the federal government by making capital investments on tolled federal facilities such as I-95 (NJ Turnpike), that can in turn be used as a soft match for projects receiving federal funding. UTCA has been working for several years to pass this provision, which was also included in the Senate surface transportation bill passed by the Senate Committee on Environment and Public Works in July of last year. If passed, this could be transformative
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So, what comes next? While we are very excited about the advancement of the surface bill and announcement of the broader infrastructure investment, its ultimate success is in the hands of Senate Majority Leader Mitch McConnell. If the upper House passes their own legislation, the two measures will be put into conference committee and a deal will be reached. Alternatively, the Senate could stall until after the election, perhaps passing a clean extension in the interim. Finally, but least likely, major infrastructure investment could be included in the next round of stimulus relief, which is expected to pass before the August recess. No matter how it plays out, we are very encouraged to see tangible change being put forth by Congress. Infrastructure has been a hot button issue since the start of the Trump Administration, yet our industry has not seen the promised uptick in infrastructure spending. As the economy begins to heal from wounds of the COVID-19 pandemic, we remain hopeful that Congress will look to infrastructure construction as an essential part of our national recovery and pass a reauthorization of the surface bill.
worker safety for covid-19 and the insurance impact By: Jay sciortino, construction risk partners
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hile I realize that this is predominately a safety article, I think that we have all been maxed-out on COVID-19 preparation protocols as employees return to work. Read further to learn about the potential insurance and experience mod impact of operating during the pandemic. First, here is a refresher on some protective measures recommended by the Construction Industry Safety Coalition (CISC):
• Safety meetings will be by telephone if possible. If safety meetings are conducted in-person, attendance will be collected verbally, and the foreman/superintendent will sign-in each attendee. Attendance will not be tracked through passed-around sign-in sheets or mobile devices. During any in-person safety meetings, avoid gathering in groups of more than 10 people and keep participants at least six feet apart. • Employees must avoid physical contact with others and shall direct others (coworkers, contractors, and visitors) to increase personal space to at least six feet when possible. Where work trailers are used, only necessary employees should enter the trailers and all employees should maintain social distancing while inside. • All in-person meetings will be limited. To the extent possible, meetings will be conducted by telephone. • Employees will be encouraged to stagger breaks and lunches, if practicable, to reduce the size of any group at any time to fewer than ten people. • The company understands that due to the nature of our work, access to running water for hand washing may be impracticable. In these situations, the company will provide, if available, alcohol-based hand sanitizers and/or wipes. • Employees should limit the use of co-workers’ tools and equipment. To the extent tools must be shared, the company will provide alcohol-based wipes to clean tools before and after use. When cleaning tools and equipment, consult manufacturing recommendations for proper cleaning techniques and restrictions.
• The company will divide crews and staff into two groups where possible so that projects can continue working effectively if one of the divided teams is required to quarantine. • As part of the division of crews and staff, the company will divide employees into dedicated shifts, and employees will remain with their dedicated shifts for the reminder of the project. If there is a legitimate reason for an employee to change shifts, the company will have sole discretion in making that alteration. • Employees are encouraged to minimize ridesharing. While in vehicles, employees must ensure adequate ventilation. • If practicable, each employee should use/drive the same truck or piece of equipment every shift. • In lieu of using a common source of drinking water such as a cooler, employees should use individual water bottles. Frankly, you have no choice but to follow these protocols, and I am sure you have all seen these many times already. That said, the protocols are worth repeating. As workers come back under these guidelines, there are still concerns about the pandemic. Is it over? Will there be a relapse? As of this writing, spikes in new cases are happening in other states. As far as a relapse in New Jersey and New York, no one knows for certain, but it is still a concern and should be.
Safety Perspective
• Any employee, contractor, or visitor showing symptoms of COVID-19 will be asked to leave the jobsite and return home.
dust. Such controls include the use of water delivery and dust collection systems as well as limiting exposure time.
All that said, what is the impact if one of your employees comes down with the virus? Further, will they make a workers’ compensation claim against you, the employer? At this point, I have not seen a workers’ compensation claim for COVID-19, but I expect to see them. First, let us look at workers’ comp insurance in general. The standard policy published by the National Council on Compensation Insurance (NCCI) specifies that “workers compensation insurance applies to bodily injury by accident or bodily injury by disease. Bodily injury includes resulting death.” Enough said there. If a worker claims COVID-19, it is clearly a disease as defined and covered under the workers’ compensation policy.
• Employees are encouraged to limit the need for N95 respirator use by using engineering and work practice controls to minimize
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Second, did the illness arise in the course of employment? That is the key to determining whether your workers’ compensation insurance company will pay. Although the workers’ comp policy covers the claim itself and the carrier should defend you for the claim, the question remains: should they pay the claim?
Safety Perspective
Let’s talk about this second point for a minute. It is one thing for an employee to make a claim; it is another to prove that the claim was work-related. For workers’ comp in New Jersey (and in most states), the burden of proof is on the employee. Thus, the employee must demonstrate that any injury or illness, including COVID-19, is directly related to the function of their work. Even the most liberal workers’ comp courts, New Jersey included, say that a causal relationship is a condition precedent to having an accepted workers’ compensation claim by an employee. Even for those deemed essential in the healthcare profession, the burden of proof still exists, although causality is much more easily proven by virtue of what they do and to whom they are exposed. Still, the question of proving a “causal relationship to employment” still exists. The key questions is: how can we be certain that the employee’s job function was the cause of the virus? Could someone at home have been the source? Could they have been exposed at the grocery store? The list of potential pathways of exposure is long in the absence of a known outbreak or epidemiological investigation such as contact tracing. This holds true for all essential employees, including construction workers. When it comes to construction workers, the questions are even more hazy, and
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the burden of proof becomes even more difficult, especially since they are not as clearly exposed as healthcare employees or even as retail employees in essential businesses. In addition to all this, there’s legislation pending that would allow a rebuttable presumption of compensability for essential workers’ COVID-19 claims under workers’ compensation insurance regardless of the worker’s ability to prove a causal relationship between contracting the virus and their work for you. However, this initial presumption can be overturned by showing a preponderance of evidence that they did not contract COVID-19 in the workplace. In essence, this legislation would shift the burden of proof from the employee to the employer. In April, the New Jersey Compensation Rating and Inspection Bureau (NJCRIB) set down a rule that COVID-19 claims would not count against an employer’s experience mod factor (EMR) because they are “unlikely to be a strong predictor of future claim costs incurred by an employer.” This is the rule and not subject to legislation. No COVID-19 claims will affect your EMR. That is good thing! If you get one of these claims, make sure you are not being charged against your EMR. In summary, keep an eye out for any claims related to COVID-19 and make sure they do not count against your loss experience or end up in your experience mod calculation. Be very careful and follow all the COVID-19 protocols.
Cover Story
flanagan's contracting group completes 40 years By: zoe baldwin
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n 1978, Bob Flanagan was just a young man with a healthy drive and a good head for business. He had worked a few jobs throughout high school but knew that owning his own business and being his own boss was what he truly wanted in life. He started a small business while still a student, and right away knew that he had a good thing going. As soon as he graduated in 1979, Bob jumped in with both feet and formed Flanagan’s Lawn and Garden Service. I sat with Bob Sr, his brother Roger, and son Bob Jr., to talk about the past four decades of success, and a clear picture emerged of a firm that found its niche building projects that enhance communities across the state. “I started out doing landscape design-builds, retaining walls, sidewalks, the whole nine yards,” Bob tells me. “From there, my wife Christine and a lifelong friend worked together to add a maintenance division that maintained seventy-five accounts a week, both commercial and residential, while still running the construction division. We were known for developing great work and providing good service, but if we were going to continue to grow the business, we needed to make some investments. So after our wedding, we used the wedding gifts to purchase our first backhoe and trucks to do just that.”
"In progress" Dundee Island Park Passaic, New Jersey
A few years after its founding, Flanagan’s rounded out its capabilities with the addition of Bob’s brother Roger. When he came on board in the late 1980s, the firm updated their competencies and their name, adopting the new moniker Flanagan’s Landscape-Irrigation Inc. “Roger was a machinist and decided he wanted to get out of the machine shop, so he brought a tandem dump truck and eventually expressed an interest in formally coming into the company,“ Bob says. Roger brought to the firm his own specialties, taking on the role of Chief Estimator. Initially, Roger was out in the field running projects before transitioning to the office full time. As Roger explains, “I was an operator and I worked directly with the crews building the projects while also handling cost estimations” Flanagan’s Contracting Group started out as many in our industry with a home office and a small yard. “We worked out of our home in Bound Brook for a long time,“ Bob says of the early days working with his brother and his wife, Christine. “We started out in one room and eventually took over the whole basement. It was good for a while and worked well for everyone.” As for the yard, “A friend of ours had a farm in Warren and we started there. Then we moved to a small garage next to the Chimney Rock Inn on Chimney Rock Road in Bound Brook, which we outgrew quickly. We knew we needed to find a place where we could store our quickly growing inventory of equipment, so we purchased our current location in Hillsborough in 1994.”
Liberty Field Athletic Complex North Caldwell, New Jersey
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Early on, the firm focused on projects in the residential and commercial sectors, but like any industry construction is not immune to the broader economic climate. “The economy really drove where we were going,” Bob tells me. “Residential construction in the 1980s was booming, and then it just went to nothing.”
As Roger puts it, “the recession in the early 1990s really changed the direction of what we were doing.” “We knew we had to adapt,” Bob adds, “so we pivoted into the public sector and started bidding public work. In the beginning we worked into smaller jobs to get our feet wet, but eventually we knew we were ready to take on the next challenge and go for bigger jobs with several different specialties. That is what makes us unique”
first paving equipment, building mostly tennis courts, basketball courts, and running tracks. As Roger puts it “We’re the odd ones out in that way. If we were paving, we dove right into it, we weren’t getting into any roads or parking lots, just kept it to finetuned paving projects.”
By the early 2000s, Flanagan’s Landscape-Irrigation, Inc had grown again to become the more robust Flanagan’s Contracting Group, Inc. Bob and Christine’s son, Bob Jr., joined his family full time in 2011, just after graduating from Penn State with a degree in Civil Engineering. Much like his uncle Roger, the family didn’t ease him in either – his first project was a tricky one, even if it didn’t find him grabbing gabions in icy waterway. This was the 32nd Street Pedestrian Bridge over JFK Boulevard in Union City, an intricate project in a densely populated area with very little room for error.
Mulberry Commons Park - Fountain Newark, New Jersey
“There were a lot of unforeseen items,” Bob Jr. recalls. “It was an enclosed bridge that had two elevator towers inside a brick façade with cast all masonry. It was a really unique project, but we learned a lot, in a good way.”
The first public project, however, was no walk in the park. The brothers won a bid to build a retaining wall on a small brook between houses in Garfield, NJ. At one point, Roger found himself standing knee deep in icy winter waters, loading gabion baskets with stone. But Flanagans aren’t easily deterred; Roger and Bob finished the job and knew they had found a new market for their growing capabilities.
The addition of Bob Jr. as Project Manager not only brought the second generation into the firm, it brought the firm into the 21st Century. “It just seemed to me that we didn’t have to do it the way we had always been doing it,” he starts “I met with vendors, looked through social media and watched videos, and realized it was worth taking the risk.”
“We grew throughout the nineties and it was fun again” Bob remembers. “Back then you would bid three jobs and get one, now you bid twenty jobs just to get one. The playing field was a lot smaller at the time, especially for companies like us that have many specialties. We’ve built some really neat projects throughout the years, like Southwest Block 12 Park, Berry Lane Park, Peter’s Brook Pedestrian Bridge, Picatinny Arsenal Golf Course Irrigation, Shoreline Stabilization and Colgate Clock Rehabilitation, Woodcliff Lake JJ Braddock Park Wall Replacement, Millburn streetscapes, North Caldwell Athletic Complex, and Mulberry Commons Park, just to name a few.”
Cover Story
“That’s the way we learned,“ Bob adds. “We are where we are today because we know how to build, and at this point, we’ve built it all. Our work is constantly shifting and diversifying from parks, streetscapes, and small bridges, etcetera - that is what makes our days exciting and the projects interesting for the crews.”
Bob Jr.’s efforts to update the firm’s technology started with the office. “Roger’s software interfaces with the GPS machine control, and I saw a real value in having the connectivity. Over the past several years we have been leveraging the power of GPS equip-
Roger shows a quick flash of pride as he notes, “We watch something done once, and then we teach ourselves to do it. For example, on an early job we had a sub that was going to do some paving for us, but then they backed out, so we did it ourselves. From that point on we decided that we were going to be in control of our own destiny and do all of our own work.” That incident in the early nineties spurred the purchase of the
Mulberry Commons Park Newark, New Jersey
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Cover Story
ment on all of our site work projects. It just makes everything so much more efficient, especially as our projects get more complex. There’s a lot more that goes into a full park project compared to a single athletic field. We’re now utilizing technology in all aspects of our workflow to increase quality and productivity.” As part of this effort, Bob Jr. also worked to update all reporting to an electronic format and to streamline many processes to make the company more efficient. Flanagan’s Contracting Group has a true passion for projects that give back to the community, including a current one for the City of Passaic on Dundee Island. “It was an existing park that was pretty run down,” Bob Jr explains. “We went in and stripped everything out, put in a new road, soccer field, amphitheater, and Analemmatic Sundial” What is an Analemmatic Sundial you ask? “It is a human sundial where every month has a tile and when you stand on it, the numbers are around you, so your shadow goes to the correct time. “It’s also going to have a large playground, small spray park, and concession stand with bathrooms. The field house is pretty intricate — it’s actually on an elevated platform so it’s kept out of the floodway. There is stamped concrete around it and a brick façade.” After about a year of work, Flanagan’s expects to complete the project by the end of this summer.
"In progress" Dundee Island Park Passaic, New Jersey
Flanagan’s Contracting Group isn’t just a family run operation; it prides itself on extending that atmosphere to the workplace. “We’re a very family-oriented business,” says Bob. “We see the whole person not just the employee and we run the business accordingly. We really value that, especially recently with the difficulty of COVID-19. We spent much time and effort to keep the crews safe during this tough time. We’re very appreciative of all of our dedicated employees and we want to make sure they feel that.” Bob’s wife and company CFO, Christine, walked into the conference room with a project list adding, “We have a lot of long-standing people who have been with us for a long time, some for twenty or twenty-five years! I feel blessed to be able to work with my husband, brother in law, and son. We continue to learn through the years with the challenges we face.”
Flanagan's Annual Fishing Trip, check out their latest projects on Instagram @flanagans_inc
When it comes down to it, Bob is humbled and proud of the legacy built over the past 40 years and that shows as he reflects on the familial bonds of the firm. “Family business is not a simple dynamic to navigate; it’s great some times and tough at others, but it’s all the best parts of my life. I enjoy coming to work every day, and there are not too many people who get to work with their wife, brother, and son, and my father is retired so we get to see him every day too. And although Bob Jr. formally joined the business, we can always count on our children, my daughter Kelly, Roger’s daughter and son Kristi and Josh, Roger’s wife Candy, and our parents to jump in to help whenever needed.”
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Christine herself has been with the company from the beginning. She and Bob are high school sweethearts and she started working with him early on. “I was actually out there working with him in the field in the beginning. I started with running the maintenance division and then took over the Landscape Design Division. It was a big part of our lives, but after I had our children I transitioned into the office. I was out in the field for almost ten years — I loved that side of it!” “She still does!” Bob Jr. adds. “She landscapes like you wouldn’t believe!” Looking to the future, Bob and Roger have much to be proud of and hopeful for. For the past 40 years Flanagan’s Contracting Group has shaped communities across our state and has no intention of slowing anytime soon. “We never know where Roger is going to take us next,” Bob Jr. jokes as our conversation comes to a close. UTCA would like to congratulate Bob, Roger, and the whole Flanagan’s Contracting Group team on this incredible accomplishment.
what's hot in management - labor relations The nj department of labor's aggressive enforcement of prevailing wage violations By: ron tobia & othiamba lovelace, tobia & lovelace esqs, llc
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A5839 (P.L. 2019, c. 373), the Commissioner of New Jersey’s Labor and Workforce Development ("Commissioner" or "LWD") may assess an administrative misclassification penalty against employers in the amount of $250 per misclassified worker for first time violations and $1,000 per misclassified worker for subsequent violations.
The most notable addition to the New Jersey Department of Labor and Workforce Development’s (“NJDOL”) enforcement arsenal is that its Commissioner now has the ability to issue a stop-work order at any site where it concludes a violation of New Jersey’s wage and hour laws has occurred. Specifically, according to A5838 (P.L. 2019, c. 372), which became effective in January, if the Commissioner concludes that an employer violated any state wage, benefit, or tax law, the Commissioner may issue stop-work orders, which suspend the employer’s operations. The Commissioner must serve notification of its intent to issue a stop-work order at least seven days prior to its issuance, and impacted contractors may file an appeal to the Commissioner within 72 hours of receipt of the notification. Within seven business days of receipt of a notice of appeal, the Commissioner must hold a hearing on the contested stop-work order and a written decision must follow within five business days. If an employer conducts business in violation of the stop-work order, the Commissioner may assess civil penalties of up to $5,000 per day of violation.
The Commissioner may also assess a penalty providing for a misclassified worker to receive up to 5 percent of the worker’s gross earnings over the past 12 months. It is in the Commissioner's discretion to determine if the penalty should be paid directly to the worker or if the penalty should be paid to the Commissioner to be held in trust for the worker. Additionally, the Commissioner now has the power to post the name of any person or entity (including, but not limited to, a company corporate officer or principal, corporations, contractors, and subcontractors) found to be in violation of any state wage, benefit, or tax law on the internet for public inspection.
Obviously, this is a powerful enforcement tool, and we have learned that the NJDOL has already started issuing stop-work orders. The power to shut down a contractor’s job site with only seven days’ notice is a tool that can be devastating to any contractor trying to complete a public project during the height of the busy construction season. Accordingly, contractors should be mindful of New Jersey’s wage and hour laws and should immediately contact their legal counsel for guidance in the event they are served with a stop-work order by the Commissioner. The NJDOL Has New Enforcement Tools to Punish Contractors for Employee Wage Misclassification Offenses The NJDOL also has new tools that it will use this year to ensure that contractors are properly classifying their employees as required by New Jersey law. Pursuant to A5843 (P.L. 2019, c. 375), employers must conspicuously post notifications for their employees explaining 1) New Jersey’s prohibition against employers misclassifying employees; 2) the benefits and protections to which an employee is entitled under state wage, benefit and tax laws; and 3) the available remedies for suspected violations. According to
New Jersey also expanded the reach of its wage and hour enforcement in January by enacting A5840 (P.L. 2019, c. 374). While the Wage Theft Act already provides that employers and staffing agencies shall be jointly and severally liable for violations of New Jersey wage laws, this new law expands such joint and several liability to violations of New Jersey tax laws. Now, the law explicitly imposes liability on owners, directors, officers, and managers who violate New Jersey wage or tax laws on behalf of an employer or a staffing agency. These changes are designed to take aim at companies that routinely misclassify workers as independent contractors when they really are employees. Since 2015, when the New Jersey Supreme Court decided Hargrove v. Sleepy’s LLC, all employers in New Jersey have been required to use the “ABC” test to determine whether a worker is an employee or an independent contractor for purposes of resolving wage payment or wage and hour related issues. Pursuant to the ABC test, an employer is required to presume that a worker is an employee unless the employer can show that (A) the employer neither exercised control over the worker nor had the ability to exercise control in terms of the completion of the work; (B) the services provided were either outside the usual course of business or performed outside of all the places of business of the enterprise; and (C) the individual is customarily engaged in an independently-established trade, occupation, profession or business. All contractors should periodically examine their worker classifications to ensure they satisfy the ABC test.
Labor Relations
his year, the State of New Jersey introduced a number of new employment laws focused on cracking down on prevailing wage violations and independent contractor misclassification claims, which include a new law imposing joint and personal liability on owners, directors, officers, and managers who violate New Jersey’s wage and hour laws.
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Recently, there has been a movement by certain states (such as California) to classify workers for well-known ridesharing companies as employees rather than independent contractors. As a result, some states have modified the ABC test so that the “B” portion of the test reads a little differently than the test currently recognized by New Jersey. Typically, states will remove the words after the “or” in the “B” section of the ABC test. For example, the “B” section typically requires employers to demonstrate that “the services provided were either outside the usual course of business or performed outside of all the places of business of the enterprise.” Most ridesharing companies say that their workers are independent contractors because their workers perform their duties using their own cars and do not report to any place of business owned by the employer. That allows them to satisfy the “B” prong of the ABC test because their workers are performing their services outside of the physical buildings owned by the employer. By removing the language after the “or” in section “B” of the ABC test, states are able to argue that drivers for popular ridesharing companies are employees because the duties they perform are not outside the ridesharing companies usual course of business. This year, New Jersey’s legislature proposed new laws similar to the one implemented in California. However, New Jersey’s legislature refused to approve the proposed law. While it is unclear if New Jersey is going to follow the lead of California and pass a similar law changing the ABC test, there is clearly some support for the change. As a result, contractors should keep an eye out for any new legislation that is passed concerning independent contractor designations over the next year. New Jersey’s Apprenticeship Law Is Now Active and May Force Smaller Contractors to Unionize Last year, New Jersey passed P.L.2019, c.21., which requires public contractors to certify that they have an apprenticeship program for each trade they use on a public project. Although this law was passed last year, it is relevant now because the law had a builtin transition period and only became fully enforceable on May 1,
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2020. Notably, contractors cannot rely on internal training programs and tool box talks to satisfy this training requirement since the term “apprenticeship program” is defined as one that is approved by the United States Department of Labor and provides the trainee with combined classroom and on-the-job training. The expected result is that smaller contractors will be harmed since it is difficult to set up and manage an apprenticeship program, and some business will need to set up multiple programs to cover all their trades. As a result, the law heavily favors large unionized contractors who can satisfy the requirements of P.L.2019, c.21 through their use of union employees, since the unions already have federally approved apprenticeship programs. Currently, even contractors with just one person must be part of registered apprenticeship programs for each trade that person utilizes while working. This could be a huge financial problem for a one- or two-man company that performs work covered by a variety of trades. Such a company would need to have multiple apprenticeship programs for all their trades. Small non-union shops will likely suffer the most because they will not be allowed to renew their registration and bid on upcoming projects in New Jersey until they are participating in a certified apprenticeship program. At this point, contractors must determine whether they are going to provide their own apprenticeship programs, join a union, or join an organization that offers federally approved apprenticeship programs. An unintended consequence of the law is that certain contractors will be pressured into joining a federally approved apprenticeship program. Nonetheless, I expect a number of trade unions to use this new requirement as a means to expand the number of union shops in New Jersey since membership would bring delinquent contractors back into compliance and make them eligible to bid on upcoming government projects. If you have any questions about the topics raised herein or about any other labor relations matter, please do not hesitate to contact the attorneys at Tobia & Lovelace Esqs., LLC at 973-746-6000 for further information.
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Congratulations to Flanagan’s Contracting Group!
Feature Story
newark hits halfway mark on replacing lead service lines citywide By: dan Kennedy, Utca
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he City of Newark has moved past the halfway mark of a 30-month, $120 million lead water service line replacement (LSLR) Program, completing more than 9,100 of an expected 18,000 individual lines. The general contractors for the multiple phases of this work include UTCA members Montana Construction, Underground Utilities Corp., and Roman E&G Corp. This work involves careful coordination and frequent communication between our contractors, the City of Newark, the Newark Department of Water and Sewer, the project engineer CDM Smith, residents, and state and federal representatives. UTCA commends our contractors, subcontractors, and associates involved in this project and our partners in labor for their role in the success of this program to date. According to the project engineer, CDM Smith, at the start of the project, lines were being replaced at an estimated pace of 10 to 15 per day. Due in large part to aggressive actions taken by the City of Newark and an impressive data system created by CDM Smith for this project, lines are now estimated to be replaced at a rate of about 100 per day. Work continues at an 1,100-per-month pace amid the coronavirus outbreak with UTCA members putting in the hard work to keep pace. In a recent press release, Kareem Adeem, Director of Newark’s Department of Water and Sewer said that “With this project,
Work continues at an 1,100-per-month pace amid the coronavirus outbreak with UTCA members putting in the hard work to keep pace.
we are improving the quality of the drinking water for our residents living in older homes with lead service lines. The City of Newark’s progress helps to ensure residents feel safe when they are drinking water from their tap.” UTCA agrees with Director Adeem and commends the City of Newark on the progress made to date. We will continue to work with Newark on this and other critical projects and pledge any assistance UTCA can offer to accelerate necessary capital investment on time and on budget. Newark serves as a model for other water systems and is a great example of what UTCA has been arguing for in its wider advocacy for water infrastructure. Though it’s true that increasing capital investment is an unavoidable aspect of fixing this problem, state and local governments must get more aggressive and creative. Newark got creative and secured the funds necessary to fix the issue with lead service lines. It chose to stop talking about the issue and got to work. As a result, the City is seeing real health benefits, creating good jobs, and accelerating economic development opportunities by taking away the stigma associated with not meeting standards for drinking water. In addition to steady investments from several investor-owned utilities, Trenton Water Works started its lead service line replacement program earlier this year after initial challenges in getting started. Trenton Water’s program is now proceeding with UTCA contractors South State, Inc. and Spiniello Companies, Inc., working in the City of Trenton as well as Hamilton, Ewing, and Lawrence Townships. UTCA’s Water Infrastructure Investment Strategy set a goal to accelerate more projects of statewide and regional significance to construction. LSLR projects are cited as an example of the many projects that meet clear needs of local water systems that should be prioritized. LSLR projects are accelerating statewide thanks to focus by the NJDEP and the NJ Infrastructure Bank. For more information on UTCA’s focus on water infrastructure go to https://www.utcanj.org/water/ or contact Dan Kennedy at kennedy@utcanj.org.
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NEWS
a message from nj turnpike authority executive director By: john m. keller, p.e., pmp
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he New Jersey Turnpike Authority has adopted a toll plan and long-range capital program that will provide for the capital needs of the Garden State Parkway and New Jersey Turnpike for many years to come. That’s good news if you want New Jersey to remain competitive in the regional, national, and global economies. It’s good news if you care about the mobility of those who live in and travel through New Jersey. And it’s good news if you earn your living in the construction industry. Let me start by placing credit for this good news where it belongs — with the Murphy Administration. There is no greater advocate for the New Jersey Turnpike and Garden State Parkway than NJDOT Commissioner Diane Gutierrez-Scaccetti. Commissioner Gutierrez-Scaccetti, who chairs the NJTA Board of Commissioners, recognized the importance of establishing a long-term source of funding for the capital needs of the Turnpike and Parkway and other transportation purposes. Commissioner Gutierrez-Scaccetti developed the toll plan and worked with the NJTA professional staff and consultants to identify a long-term program of capital improvements consistent with the NJTA Strategic Plan and the New Jersey Energy Master Plan. She led the effort to explain the proposal to the public. The public embraced the plan. The vast majority of the more than 2,500 comments submitted during the public comment period were supportive. The Turnpike Authority Commissioners embraced the plan too. They voted unanimously on May 27th to adopt the new toll schedules and the long-term capital program. Commissioner Gutierrez-Scaccetti sent the plan along to a Governor who recognizes the role transportation infrastructure and mobility improvements will play in building a stronger and fairer New Jersey economy. Once the NJTA Commissioners voted in favor of the plan, the last step to final approval was Governor Murphy’s sign off. He gave his formal approval just hours after the Commissioners’ vote, and NJTA’s future course was set. The plan raises enough revenue to support approximately $1 billion a year in spending on design and construction activities on the Turnpike and Parkway. That spending will have an enormous impact on the New Jersey economy. It is estimated that $1 billion spent on transportation infrastructure creates up to 30,000 direct and indirect jobs and spins off more than $2 billion in additional business activity.
The long-range plan looks ahead at least 20 years and identifies about $24 billion worth of projects. Those projects are necessary to maintain the existing infrastructure of the Parkway and Turnpike in a state of good repair. The projects also target capacity improvements in critical areas where drivers face congestion on a regular basis. The long-range plan includes about a dozen statewide, state-ofgood-repair projects with a value of about $4.6 billion. These include contracts for bridge rehabilitation and replacement; drainage improvements; median barrier improvements; lighting improvements (upgrades to LED fixtures and circuit replacements); and technology upgrades. The bulk of spending in the plan will be on projects that are characterized as capacity enhancements. Not all of these capacity enhancements will be traditional widenings as there are areas where adding lanes will not be feasible and the Authority will have to develop other solutions for persistent congestion. The areas identified in the long-range plan as in need of additional capacity include the Parkway between mileposts 98 and 163; the Parkway between mileposts 80 and 83; the Turnpike between Interchanges 1 and 4; the Newark Bay-Hudson County Extension; the Turnpike Westerly Alignment; and the Turnpike mainline at Interchange 13. The capacity enhancement projects in the plan also include the replacement of the Delaware River bridge that connects the New Jersey and Pennsylvania Turnpikes. In value, the capacity enhancement projects in the longrange plan account for about two-thirds of the overall Capital Program at $16.4 billion. Several large interchange improvement projects on the Parkway and Turnpike were completed under the last capital program, but some interchanges remain in need of improvements. This longrange plan includes interchange projects valued at approximately $265 million. The plan also includes a large flood zone remediation project on the Parkway between the Bass River and Great Egg Harbor that is valued at $1.4 billion. Of course, these projects are not going to be built at the same time. From the long-range plan, the NJTA will create a rolling five-year Capital Improvement Program. That program is being developed now. It will include a mix of projects with the high-
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est priority and projects that are ready to be built immediately. I expect the initial five-year program to be completed by late summer or early fall of this year. You can expect construction contracts to go out to bid next year on a lot of the state-of-good-repair items. Those are contracts that will not require significant design work, permitting, utility relocation, or right-of-way acquisition. That includes median barrier repairs, lighting upgrades, signage upgrades, drainage improvements, and bridge deck repairs. The Turnpike Authority typically repairs about 40 bridge decks a year. We expect to significantly increase that annual number next year. As the new long-range Capital Plan is ramping up, the Turnpike Authority is winding down the final few contracts under the $7 billion capital program adopted in 2008. That program has been a great success. It included the Turnpike 6 to 9 Widening, the widening of the Parkway between the Atlantic City Expressway and South Toms River, major interchange and bridge improvements, facilities improvements, and other upgrades. When that program was introduced and approved, it included 34 projects. Without increasing the $7 billion cost, we were able to stretch the program to build 39. Most of those were completed on time. All of them provided value for the hundreds of
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thousands of drivers who depend on the Parkway and Turnpike every day. The success of the 2008 program owed a lot to the relationship between the Turnpike Authority and the contractor community. I personally worked with UTCA to develop construction contract strategies for the 6 to 9 Widening. The Turnpike Authority and the contractor community kept an open line of communication by meeting regularly through the process. We had clear expectations and an understanding of the challenges each of us faced. I’m not saying there weren’t bumps in the road along the way, but because of the strong and enduring relationship between UTCA and the Turnpike Authority, each side was willing to make an honest effort to work through any issues that came up during construction to get the job done right. I am confident we’ll be able to build on that relationship as work begins under this new program of capital improvements. Let’s keep the lines of communication open. Let’s work to understand what each of us needs to make this program as successful as the last one. We have a lot of work to be done and the resources to do it. I am confident that together we will make the new Capital Program a success.
raising the focus on infrastructure By: dan kennedy, director of environmental & utility operations
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nfrastructure systems and other critical assets are on the front lines of myriad threats, hazards, and vulnerabilities. Hazard mitigation describes actions taken to help reduce or eliminate long-term risks caused by hazards or disasters such as flooding, earthquakes, wildfires, landslides, or dam failure. As the frequency and cost of disasters continue to rise, governments and citizens must attempt to find ways to reduce hazard risks despite the fact that eliminating all risk is a fool’s errand. Our systems and assets (existing and new) must be designed, constructed, and upgraded to meet or exceed design tolerances for all these risks, including the increased hazards predicted due to climate change. There is little disagreement in the engineering or construction community on this approach. But what design parameters should be we be designing to? That’s where the disagreement comes in.
NJDEP recently released a scientific report on climate change that draws on existing research. The report summarizes, through the political lens of the Murphy Administration, the current state of knowledge regarding the effects of climate change on New Jersey’s environment. NJDEP conducted this report to “inform state and local decision-makers as they seek to understand and
This column has previously discussed the Energy Master Plan and the policy platform that was released by Executive and NJDEP Administrative Order to “modernize environmental laws” to address climate change, branded as “Protecting Against Climate Threats” (NJPACT). This report is simply another step as the State drives planning and policy actions related to climate change. In a recent meeting with NJDEP Commissioner McCabe, UTCA expressed concerns that the use of sea level rise standards based on projections for the year 2100 could be too aggressive and prohibit flexibility in modifying standards should sea level rise projections rise or fall in the future. UTCA and other partner associations recommended a graduated approach that would allow NJDEP to periodically reevaluate based on the latest projections and science. We also noted concerns with the timeframe for publication of the PACT regulations given the impact of COVID-19 and the inability to hold more frequent stakeholder meetings. We requested that the Department convene more stakeholder sessions to focus on the more technical details of the PACT proposal, including a focus on infrastructure.
The Pipeline
States have different standards. Agencies within states have different standards. Programs within the same agencies have difference standards. And forget any national approach to supersede local deviations. There is a clear lack of consistency in standards that creates an uneven playing field from an economic perspective and an inconsistent approach in terms of hazard mitigation.
respond to the impacts of climate change.” Essentially, this report lays out risks related to predicted changes in temperature, precipitation, sea levels, fresh and saltwater water resources, air quality, and nature resource systems including agriculture. The degree of uncertainty in predicting future conditions is acknowledged. However, the report relies on three greenhouse gas emission scenarios of global carbon emissions ranging from low, moderate, to high. Policy choices being made are essentially guessing which scenario will play out over the next 100 years.
The absence of any assessment on infrastructure in this report and as a theme in the PACT stakeholder sessions is noteworthy. Water and wastewater, transportation, ports, airports, and our region’s power generating capacity, among other assets, are in danger due to increased flooding projected in the coming decades. Smart policy along with increased public investment is necessary to bring the interests and needs of infrastructure deeper into the discussion being led by NJDEP. Our policymakers must realize that a program for climate change that focuses
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only on the conventional paradigm of land use regulation is doomed for failure. We need other agencies and authorities to step up and play a role in this process from the inside. To date, we have not seen that happen. Mitigating the costs of extreme storms — power outages, train and road closures, flood damage and repairs, rising insurance premiums, and limits to where we can live and work — needs to be viewed above the interests of any individual state. UTCA was invited and has joined the steering committee of a diverse new coalition working in our region. Our role on the Steering Committee of the Rise to Resilience coalition will allow UTCA to bring the perspectives of the construction industry to forefront. We plan to work closely with construction interests from the State and City of New York. UTCA will push for federal, state, and local policy solutions such as including feasible resilience standards on state-funded infrastructure and increasing funding for United States Army Corps of Engineers projects that protect people, places, and infrastructure. We will also work to ensure that the NJPACT effectively incorporates climate resilience into statewide policy without foreclosing opportunities to support a strong regional economy through necessary infrastructure investment.
The Pipeline
Please keep an eye out for updates on this matter in the coming year. If you would like to discuss this matter and provide any input from your company, please contact me at kennedy@utcanj. org
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By: tim fitzpatrick, senior vice president, employee benefits, ioa & nancy damato, rda benefit services
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n the June edition of the UTCA Magazine, we wrote an article titled “Leveraging Employee Benefits Technology to Improve Your Company’s Bottom Line.” This article focused on the overall advantages for employers who use a benefits administration or “Ben Admin” system to manage their employee benefits program. The key points concentrated on the day-to-day considerations of installing a technology solution: compliance, communication, time, and money. In this issue, we will drill down a bit further and examine the strategy of using this type of technology to maximize a company’s annual open enrollment for all their employee benefits. This is especially advantageous now considering the new and evolving protocols resulting from the COVID-19 crisis.
Typically, an employer will facilitate their open enrollment through a series of in-person meetings hosted in partnership with their consultant and/or insurance carrier. These meetings are often short educational sessions intended to inform employees in a group setting about the company-sponsored benefits offered to them and the procedure for enrolling in or making changes to those benefits. Benefit guides and applications for coverage are usually provided in paper form with instructions to return completed paperwork to their internal HR team. Although many businesses find this method to be effective, there are a few potential disadvantages, particularly during the COVID crisis: • Engagement – because these meetings are typically held in a group setting, they provide less opportunity for one-on-one interaction with employees. This makes it harder for individuals to ask questions specific to their unique situation, especially if they are personal in nature. Lack of education can lead to less informed benefit elections. • Efficiency – group meetings can be time-consuming, typically on the company clock. Many times, meetings are scheduled during lunch breaks to avoid loss of production. This can have a negative impact on employee morale. An increase in employees working from home can also make this more difficult. Employers will need to coordinate carefully to avoid scheduling burdens. • Errors - the collection of paper applications en masse can prove to be an overwhelming process for HR personnel, particularly if being done remotely. It can lead to a number of costly errors including misplaced applications, misread data due to handwriting, and missed implementation deadlines due to the increased workload. SOLUTION: Virtual Open Enrollment
NEWS
leveraging employee benefits technology part 2: virtual open enrollment More employers are now leveraging the flexibility of a benefits administration system and conducting their open enrollment virtually. Most technology solutions will offer employers the ability to customize their benefits portal to fit the company’s culture and benefits. This can include detailed descriptions of each benefit plan, including cost, and even a recorded video from internal leadership or the consultant/carrier team. This strategy can be even more effective when it is paired with a third-party enrollment team. These specialized vendors deploy knowledgeable benefits counselors who will engage with each employee and walk him or her through their options. These enrollment teams can manage this process onsite or accommodate virtually using a call center model. Jeff Newman, worksite specialist at Savoy explains, “Ben Admin systems and call center enrollments have finally found their place during these COVID-19 times. The option for companies to give their employees remote access to open enrollment has offered a contactless solution to the administrative hassles of enrolling in benefits. Furthermore, adding a call center component can provide employees with the ability to ask unresolved questions to an insurance professional.” This approach can result in a high level of engagement and education amongst employees. It provides them with the flexibility to review the benefits on their own time with their dependents, and then offers employees the opportunity to speak one-on-one with a benefits counselor. The counselor can then update the employer’s benefits administration system to reflect the employee’s plan elections. This can lead to fewer administrative errors for the HR team while potentially alleviating a significant workload. With businesses now shifting more towards a remote working environment, these advantages have become even more impactful. Jeff Newman continues, “It is great to see technology, which was predominantly designed for larger clients, now being maximized by everyday businesses at a time when they need to effectively communicate the most.” Ben Admin solutions are becoming a necessity in today’s business environment, and every size employer now has access to this type of open enrollment solution. Employers should enlist the help of a trusted advisor such as their insurance broker when evaluating their options. As noted in our prior article, many brokers have established relationships with vendors in this space and can offer their clients product and pricing advantages over the open market. When implemented correctly, this strategy can add tremendous value to a company’s culture and bottom line. Contributions from Jeff Newman, Worksite Marketing Specialist, Savoy
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TCA mourns the passing of Roger Parkhurst. Pumping Services Incorporated became a member in 1989, and Roger was a familiar face at UTCA’s Convention Exhibits for many years. Roger Dean Parkhurst was born in Huron, South Dakota to Martha and Lyman Parkhurst. Roger's siblings include Dee, Marlys, Marion, Diane, and his younger brothers, Dale and Dennis. It was here that Roger developed his love for God and his country. Roger and Dale moved to New Jersey in the early 1970's to work alongside their older brother, Dee, at Pumping Services Incorporated in Middlesex, NJ. These three brothers could build, fix, and repurpose anything. Afterall, they were from the Wild West! This adventure was the beginning of Roger's longstanding career of over 50 years with the company. Roger was a top-level sales engineer, where he had vast experience in pump systems and treatment of water and wastewater systems. In June 1975, he married Lynn Karla Wahland and went on to raise three beautiful, successful children: Jessica, Elizabeth, and Karl. Roger moved to Lakewood, NJ in 1979 and throughout the years served his community by leading Boy Scouts, coaching basketball, serving his PTA and PTO, and advising the youth group of Christ United Methodist Church. Roger also served as a member of the Lakewood Blackhawks for 28 years, a philanthropic
NEWS
in memoriam group helping the youth of Lakewood, where he also served as president. The Lakewood Elks Lodge #1432 was also an important part of Roger's community service. He served as Exalted Ruler and served in all charitable stations over the last 26 years. Community service was important to Roger, as he served on the Veterans Committee and the South East District John Sentner Polar Plunge committee, which grants special needs children the opportunity to attend a specialized camp free of charge. Roger loved his family, friends, and community. These past few years he began RVing and boating on his pontoon with his family, which he greatly enjoyed. Roger leaves behind an amazing legacy to his wife, Lynn; his children, Jessica and Karl Parkhurst and Elizabeth and Anthony Sernotti; his grandchildren, Evelynn, Ava, Abigail, and James; and a host of extended family. Roger was an active member in the NJWEA for fifty years. He served the Association in many capacities including as President of the Central Section (1990–1992), chairing Central Section holiday parties, and organizing Central Section golf outings for years. Roger received the NJWEA Central Service Award in 1993.
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