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President’s Message As we move into our summer workloads, which as we all know is our busiest time of year, the industry is still feeling the effects of the lack of work. Unfortunately, the NJ taxpayer and commuters are paying for poor road conditions and the 2nd worst in the nation commuting times. With the present Transportation Trust Fund broke, the need for corrective action grows greater by the day. With $330 million having to come from the State’s general fund just to cover debt service, everyone is starting to realize just how critical this problem has become. For the next twenty years, NJ taxpayers will be paying approximately $1.2 billion annually just to pay off debt service. That’s twenty years of payments for loan costs before they start paying off the last twenty of construction! With Bridgegate and other distractions from the media and his political opponents, we hope that Governor Christie will use this crisis to his advantage. The NJ economy needs a working and long lasting infrastructure that is safe, modern and will grow in the future in order to spur economic growth in our state. For this to become a reality we need funding mechanisms that also are modern and forward thinking. Simply raising the gas tax is not the solution; we cannot expect a silver bullet approach to work. To truly solve the current crisis will require a multifaceted approach that introduces new revenue and reforms the current system. All new revenue must be constitutionally dedicated to protect the money so there can be a future. This new funding must also be designed to grow with the state’s needs in what will hopefully be a growing economy.

Your UTCA Leadership has met with numerous state representatives this quarter on the issues related to the TTF, I-Bank bill and Utility Relocation amongst other initiatives.

We recently met with Assembly Speaker Vincent Prieto, Assembly Majority Leader Lou Greenwald, Senate Minority Leader Tom Kean Jr., Senator Kevin O’Toole, Assembly Republican Budget Officer Declan Scanlon, Assemblyman

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Jack Ciattarelli, Assemblywoman Donna Simon and Assemblyman Michael Patrick Carroll. Educating our elected representatives has been one of our biggest goals. Our IBank Bill has been reintroduced and has passed unanimously through the Senate Transportation Committee. The UTCA’s Evan Piscitelli and Dennis Hart are working on technical changes with DOT regarding language and recently had a very productive meeting with the NJDOT on the bill.

We would also like to welcome a new addition to the UTCA staff. Anthony Attanasio has joined the UTCA as our new Managing Director. Prior to joining the UTCA, Anthony served as the Assistant Commissioner for Government and Community Relations of the NJ Department of Transportation. As Assistant Commissioner, Anthony was responsible for maintaining communication and positive relationships with elected officials, the news media and the community at large. He was responsible for the examination of both state and federal legislation to identify any potential impacts on the NJDOT and the State. Anthony was also responsible for the maintenance and adherence of both state and federal regulations and coordination with various transportation authorities. Prior to joining the Department, Anthony served as Deputy Chief of Staff to James Weinstein, Executive Director of NJ TRANSIT. Anthony is a graduate of Saint Joseph’s University, Philadelphia, PA, with a Bachelor of Arts in Political Science and a Minor in Public Administration.

I would also like to congratulate some of our membership firms for significant milestones in business. Creamer Environmental will celebrating 20 years in business. Mr. John/ Russell Reid is celebrating 50 years in business.

Best regards,

Harry Chowansky

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JUNE 2014 Volume XXXIX, Number 3

Contents Features

Published Bimonthly During 2014

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

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Publisher: Robert A. Briant, Jr. Editor: Michael DeVito

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Creamer Environmental Completes Twenty Years In Construction Greystone Park Psychiatric Hospital Slated To Be Demolished Executive Disability Insurance: Essential Paycheck Protection Mr. John/Russell Reid Celebrates 50 Year Anniversary UTCA Members Volunteer And Construct Vietnam Veteran’s Memorial Plaza For Huey Helicopter Two Doors Of Protection - Part 1

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Editorial Contributors: Michael DeVito Evan Piscitelli Dan Neville

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Advertising Manager: Helene Nasdeo Photographer: Michael DeVito Cover Photo: Image Up Production/Graphics: Lauren Hagan Helene Nasdeo Circulation: Helene Nasdeo

Departments 2 21 27 30 34 54 77

President’s Message Labor Relations Legislative News Safety Perspective Legal Dig Accounting Corner Financial Overview

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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.

Cover Pictured on the cover left to right are Thomas Cawley, PE, Tracy Straka and Thomas LaViano.

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Cover Story

Creamer Environmental Completes Twenty Years In Construction Contractor Has Become A Leader In Remediation Work Contractor Excels In Multiple Areas Of Construction

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n the past few decades, our society has learned to become more environmentally conscious in protecting the quality of air, water and soil. Prior to these efforts, the means and methods of disposing of hazardous materials, was often to simply bury them.

With a need to clean water and soil, firms that dealt with environmental cleanup and remediation became even more vital.

One such firm, Creamer Environmental, is celebrating 20 years in business in 2014.

was employed in the environmental consulting/engineering field for approximately ten years.

Creamer Environmental’s scope of business is primarily the implementation of soil, sediment and groundwater remediation services in the private construction market. In the early days of the company, remediation work was performed on industrial, commercial and residential sites in North Jersey with a staff of only five people.

These early projects included soil excavation and the construction of air sparge and soil vapor extraction systems as well as tank removals. As the firm grew, its expertise advanced to also include capping and containment systems which include installation of sheeting, retaining walls, slurry walls, vapor barriers and soil, clay, stone and asphalt caps. The firm’s first substantial project was at a former manufactured gas plant in South Amboy, NJ. Creamer performed soil remediation on this site which had already been redeveloped for housing. In fact, the company has

Creamer crews load hazardous waste into gondola railroad cars for offsite disposal.

Creamer Environmental was founded in June of 1994 in Hackensack, NJ. Since its inception, the firm continues to be managed by Thomas J. Cawley, P.E. and Tracy Straka. Tom Cawley is the president of the firm and holds undergraduate and graduate degrees in civil engineering from Rutgers and NJIT. He was previously employed by J. Fletcher Creamer & Son and the U.S. Army Corps of Engineers, where he managed heavy, highway construction projects. Tracy Straka serves as executive vice president for Creamer Environmental and holds a science degree from George Washington University. Prior to joining the firm, she 4

Contractor backfills sculpted excavation using GPS technology on heavy equipment.

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Temporary activated carbon groundwater treatment system.

completed more than 50 projects at former manufactured gas plants in the tri-state area through the years.

The company has successfully performed numerous other projects during its twenty year history. One such project was on a 17 acre site for the Jersey City Redevelopment Authority. On this job, Creamer’s services were enlisted to deal with chromium-tainted soil that originated from an old manufacturing facility. To complete the tasks necessary for the remediation, the crew sheeted a section of the Morris Canal and excavated approximately 25,000 yards of green/gray mud which is chromium laced soil. This material was shipped to a hazardous waste facility.

The firm then graded the site and placed a two foot cap of clean fill. Aspen Landscaping Contracting installed new sod and an

irrigation system and the final product of these efforts resulted in the completion of a new baseball field. During the excavation activities on this project, the Creamer team uncovered some World War II cannon balls, projectiles and miscellaneous historical items which had somehow made their way into the canal.

Another project that had been completed was at a Superfund site in the Meadowlands. On this project, the firm installed a temporary tide gate to manage the surface water that mounded on the site during high tides, installed sheeting along an industrial process lagoon and placed timber mats for access roads and work platforms in the wetlands areas. Creamer performed hydraulic dredging and dewatering of the removed sediments. The contractor also excavated, removed and disposed of approximately 3000 tons of PCB soil which contained mercury and volatile organic compounds. An additional 11,000 tons of non-hazardous contaminated soil and sediment was also removed on this site which was located along side of the Pascack Valley Rail Line. The original specifications for this project planned for dewatering and excavation of the lagoon. However, Creamer Environmental recommended a more cost-effective solution of dredging of the lagoon. The dredged material was pumped into geo-tubes which were placed on the banks so water could be returned to the lagoon.

Wetlands restoration takes place at a former MGP site.

Several vertical excavators work on a coffer dam.

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On four projects for a major Brownfields redeveloper, Creamer Environmental was contracted to perform numerous remediation activities for the redevelopment of the Weehawken waterfront.

The company completed remediation of soil which contained high levels of chromium and placed a cap to contain areas which had lower levels of chromium laced soil. Underground tanks containing petroleum products and coal tar were removed as well as coal tar impacted soils which had leaked from these storage units. Coal tar is a byproduct that was created when coal was processed to produce natural gas. This remediation allowed for the construction of new high-end townhouses and a nearby ferry terminal.

Creamer Environmental has worked on many other brownfields projects. The contaminants that the firm had faced on these jobs included chromium, PCBs, arsenic, lead, solvents and petroleum.

At an old paper mill in New Jersey, the company removed dyes, solvents and buried drums and also completed excavation of soil that had been tainted by hazardous materials. The result of this work cleared the way for redevelopment to a mixed use property.

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In the past ten years, Creamer has expanded its services to perform sediment remediation in waterways. These types of projects involved the removal and disposal of contaminated sediments in such waterways as the Passaic River, creeks leading into Sandy Hook Bay and the Arthur Kill watershed. They have also added additional capabilities in the areas of groundwater treatment, deep soil excavation, in-situ soil remediation including soil mixing, stabilization and chemical and biological treatment.

Today, the contractor employs 76 people and has performed work in Georgia, Pennsylvania, New York, Connecticut, Rhode Island, Delaware, West Virginia, Florida, Ohio, Maryland and New Jersey.

The largest contract completed was for approximately $35 million.

In December of 2013, Creamer Environmental moved from Hackensack into its new headquarters in Cedar Grove, NJ. Tom Cawley and Tracy Straka have developed and lead a team of seasoned employees allowing them to service their clientele throughout the region. Thomas LaViano serves as the vice president of field operations for the company and many of Creamer’s superintendents, project managers and safety professionals have had long careers with the Creamer firm. The company has received numerous awards for safety in recent years and has become one of

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the best-known environmental firms in New Jersey. We can expect to see this company on the environmental remediation scene for many years to come.

HDPE liner installation is completed on a project.

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GREYSTONE PARK PSYCHIATRIC HOSPITAL SLATED TO BE DEMOLISHED State To Choose Qualified DMPC Contractors For The Job By: Chris Colabella, Construction Information Systems You may not know it by name, but you’ve seen this building before. You may have driven by its Parsippany location. Or, you may have read about its alleged paranormal history in Weird NJ! You may even have caught a glimpse of the impressive gothic structure on TV’s House or one of the many ghost story shows that have filmed on the grounds of the now-closed Greystone Park Psychiatric Hospital. Regardless, memories, tales and images will soon be all that remain of the architectural marvel known as the Kirkbride Building, the longstanding centerpiece of the state’s second mental institution.

Kirkbride, built in the Second Empire Victorian style, was constructed in 1876 and closed in 2008.

The NJ State Department of Treasury announced its plans on March 28 to demolish the massively impressive almost 675,000 sq. foot Kirkbride Building along with 60 other former hospital structures. A $50 million bond will cover the vast majority of the $50.7 million project, which includes site remediation, demolition and restoration.

Planners expect the job to be completed sometime in 2016. At that time, the site will be turned over to Morris County, categorized as preserved open space, and used for public recreation activities.

In April, the NJ Department of Property Management and Construction (DPMC) solicited construction companies who were interested in getting prequalified as Project Qualified Contractors.

Inquiries were only accepted from contractors with substantial experience in the demolition of multi-building sites, including onsite recycling operations, hazardous building materials removal and disposal, environmental clean-up and landfill closure work. Going forward, to be considered a prime contractor on this job, a construction company must be prequalified and classified as a Project Qualified Contractor by the DPMC. Further, only contractors qualified by the DPMC will be able to work as subcontractors on the job. All bids for this project, which will be completed under a Project Labor Agreement (PLA), must

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include subs classified in both the plumbing and electrical trades.

For information on getting qualified and classified by the DPMC, visit http://www.state.nj.us/treasury/dpmc/.

However, before the demolition can even begin, the state is calling for a thorough “environmental remediation process.” Asbestos, lead paint and other hazardous materials must be removed from the site. This work is expected to begin this summer.

Despite protests from historic preservation groups that pleaded with the state to invest in rehabilitating the property, the state has deemed tearing down the structures will cost far less than the estimated costs of rehab. Approximately $30 million is slated for demolition and restoration, a fraction of the estimated cost of restoring all the buildings to be used as a mental health museum or other historical site.

According to a report commissioned by the state at the request of historical preservation groups, adequate property restoration would cost between $110 million and $125 million. NJ officials invited proposals from private organizations willing to fund restoration, but the six inquiries received all required some public financial investment. Government officials have maintained the state’s current financial struggles prohibit investing in restoring Greystone.

Instead, the state announced that once the buildings are demolished and the 165-acre site remediated, the property will be converted to public open space managed by Morris County. The property will be in addition to more than 400 acres of Greystone property obtained in 2002 by Morris County for $1. That acreage is currently used by local athletic teams and houses office space for non-profit organizations.

About The Author: Chris Colabella is the president of CIS, Inc., New Jersey’s only local construction lead service. For more information, visit www.cisleads.com or call 800-247-1727 to arrange for a free demo of CIS leads.

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Labor Relations

WHO ARE YOU GONNA CALL? STOP AND THINK ABOUT EMPLOYER LIABILITY FOR CELL PHONE USE By: Jill Tobia Sorger, Esq., Partner, Tobia & Sorger Cell phone use while driving for both personal and business reasons is the norm despite being against the law in New Jersey. Although enacted in 2008, the law prohibiting cell phone use in New Jersey hasn’t proved to be an effective deterrent. Effective July 1, 2014, fines for talking or texting on a cell phone are as follows: $200 to $400 for the first offense, $400 to $600 for the second offense, and up to $800, three points against the driver’s license and a possible 90 day license suspension for third and subsequent offenses.

These fines are just the tip of the proverbial iceberg.

The real threat comes from the recent court decision in Kubert v. Best, 432 N.J. Super 495 (App. Div. 2013).

There, the Superior Court of New Jersey, Appellate Division, held that texting an individual who is driving, with knowledge that he or she is driving, could be grounds for imposing liability on both the driver and the individual who sent the text message. This liability is now superimposed on the traditional tort theory of Respondeat Superior. Under Respondeat Superior, the employer may be liable for injuries causally resulting from the negligence of its employees if the employee was acting within the scope of the employee’s employment.

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Therefore, a UTCA employer who texts his or her employee who he or she knows is operating a motor vehicle may be subject to unintended liability resulting from that employee’s actions while driving. UTCA employers should take certain precautions to ensure that they aren’t exposed to this liberally construed liability.

UTCA employers should have a detailed policy on the use of cell phones or mobile devices during working hours while employees are performing their duties. This policy should be in writing, published by the employer, signed by every employee, apply to both personal or company issued cell phones or mobile devices and, most importantly, be enforced by the UTCA employer. Company policies that are written, signed by the employees but aren’t enforced will not protect you in litigation.

Accordingly, it is prudent for UTCA Contractors to once again take the time to prepare or review their existing cell phone use policy to ensure it is both comprehensive and current mindful of the constant technological improvements and the dynamic legal environment involving this matter.

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Legislative News

FEDERAL & STATE UPDATE By: Evan Piscitelli, UTCA Consultant In recent weeks, the U.S. Senate Environment and Public Works (EPW) Committee unanimously approved legislation to reauthorize the nation’s surface transportation program. The current transportation program, MAP-21, expires on September 30th of this year. However, deficit spending will cause the Highway Trust Fund to run out of funds sometime during August of this year.The Senate EPW Committee’s proposed bill would fund a six-year, $260 billion program which equates to current construction funding with increases built in for inflation.

Other provisions in the bill call for funds used for nonconstruction costs to be directed to infrastructure construction activities. Additional significant elements of the measure include $6 billion for a National Freight Program and a $2.4 billion setaside for Projects of Regional and National Significance.The bill will eventually be combined with legislation from the Senate Finance Committee. Those Senators will be tasked to identify the funding mechanism to finance the six-year bill. The Finance Committee Chairman, Ron Wyden (D-Ore.), and Ranking Republican Senator Orrin Hatch (R-Utah) have both stated support to identify $100 billion in new revenue to support a long term highway bill. The Senate Commerce Committee also has several areas of jurisdiction and will develop its own language to be added to the final measure.

On the House side, the Transportation and Infrastructure Committee Chairman, Bill Shuster (R-PA), plans to markup a transportation reauthorization bill in the month of June.

However, the Chairman has indicated that he does not support raising the federal gas tax at this time and it is anticipated that the House may look to move a short term bill with the highway Utility and Transportation Contractor, JUNE 2014

trust fund about to run out of money, even before September 30th. Of note, UTCA representatives have been working directly with Senator Booker’s staff relative to the association’s request for State Infrastructure Bank funding language to be included in the Senate bill which will act as a compliment to state legislation that the Association is also pursuing.

In the utility world, a Congressional Conference Committee has recently reached agreement on the Water Resources Reform and Development Act (WRRDA). Senator Barbara Boxer (DCA), Chairman of the Senate Environment and PublicWorks Committee, Rep. Bill Shuster (R-PA), Chairman of the House Transportation and Infrastructure Committee, Senator David Vitter (R-LA), EPW Committee Ranking Member, and Rep. Nick Rahall (D-WV), Transportation Committee Ranking Member, issued a joint statement on the bicameral agreement that has been reached on the conference report, a significant display of bipartisanship on this issue.

Right now committee staff will be working through the process of getting signatures from Members in both the House and Senate, and hopes to complete that effort very soon. While some summary materials are available, the Conference Committee plans to file the actual bill in the coming weeks, at which point the text will be publicly available. Once the text is public, the Committee will have a stakeholder’s meeting to address any questions. UTCA and the National Clean Water Construction Coalition plan to have a major presence in those discussions, as we have learned that many of the key changes sought by the industry have yet to be dealt with.

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Safety Perspective

SUBCONTRACTOR COORDINATION KEY TO PROJECT SUCCESS By: Kevin Monaco, Leading Edge Safety & Health While many contractors focus enormous amounts of time, money and energy on developing their own effective safety and health program, they too often leave themselves open to huge liability by failing to make sure their various subcontractors maintain the same standards.

In a competitive bid environment, getting the lowest cost proposal from various subcontractors is critical to winning the job. However failing to properly prequalify subcontractors, failing to ensure that they fully understand your safety requirements and the safety requirements of the project owner can be much more expensive in the long term.

Under OSHA’s multi-employer workplace rule, OSHA can potentially issue citations to the Controlling Employer, the Correcting Employer, Creating Employer and the Exposing Employer.

In many cases the General Contractor serves as both the Controlling and Correcting Employer and can be cited, even if your subcontractor is the one who creates the hazard and exposes their employee to the hazard. This situation also causes problems for you with the project owner, they are relying on you to manage the entire project safely. A problem created by a subcontractor becomes your problem very quickly in a variety of detrimental ways.

There are a number of proven steps, however than can help make sure you have all contractors on a given project working cooperatively when it comes to safety. Some of the best construction safety and health programs include some combination of these best practices.

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Prequalify your subcontractors- Review their OSHA 300 logs, check the OSHA website for past citations, check their experience modification rating and ask questions about anything which causes you concern.

Make sure your subcontractors have a written safety and health program- You don’t need to certify or formally accept it, but do a brief review to make sure they have a program which is current, comprehensive and reflects their typical scope of work. If they don’t have a program, you can have them agree to follow yours.

Provide Formal Safety Training- Check that your subcontractors have all necessary licenses, certifications andqualifications to perform their work. Ask about safety training credentials and either make certain training, such as the OSHA 10 Hour Class, a requirement to work on your project or provide the training to your subcontractors directly. Many general contractors schedule OSHA training, require their subcontractors to attend, and then either pay for the training themselves knowing that expenditure is an investment in the success of the project, or some firms also charge the subcontractors for the cost of the program. This effort guarantees that all subs on site are on the same page with the general contractor and everyone on site has the same baseline understanding of safety issues and OSHA compliance. This also helps you craft the training to be more site specific.

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Include Subcontractors in Tool Box Talks- Make sure your subcontractors either do their own tool box talks or participate in yours. If you have them do their own, it’s still a good idea to have project wide tool box talks on occasion with every trade required to attend.

Pre-Plan the Work- Make sure you communicate with your subcontractors regarding the schedule for upcoming work so that you and they have an opportunity to plan for safety. Some projects require very detailed job hazard analysis, others just make sure that safety is the primary consideration when planning upcoming work.

Review and Report- Conduct regular job site safety inspections and make your subcontractors aware of any potential areas of concern or non-compliance.

Maintain Accountability- Hold subcontractors responsible if they are not complying with the project terms and conditions as they relate to safety. If a subcontractor performed poor quality work or did work contrary to the plans and specifications, there is no question you would hold them accountable. The safety requirements of the

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job are no different than the construction materials and workmanship provisions and must be treated with the same level of seriousness. General Contractors cannot look the other way if their subcontractors is doing so called “Good Work” while creating a potentially hazardous condition.

Like most areas of business and life, open communication and clearly defined expectations are key to success. Implementation of the above outlined concepts may take some additional time and money initially but will no doubt reap tremendous dividends in the long term.

About The Author: Kevin Monaco is President of Leading Edge Safety & Health. Leading Edge Safety & Health is a professional safety consulting firm specializing in OSHA Compliance, Safety Training and Site Safety Management for the construction industry. The firm has performed work for nearly 150 clients in more than 20 states and includes several former senior level OSHA officials on their staff.

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Legal Dig

CHALLENGE UNCLEAR BID SPECIFICATIONS PRE-BID OR RISK FINANCIAL LOSSES AS A CONTRACTOR By: Steven Brawer, Association Legal Counsel (NOTE: The following article is excerpted from a Lowenstein Sandler LLP CLIENT ALERT prepared by Adrienne L. Isacoff, Esq., UTCA Co-Counsel) Contractors and vendors bidding on public sector jobs generally understand that any request for a clarification of bid specifications arising from a technical question, payment terms or any other concern about the nature of the project or contract must be raised pre-bid. If a potential bidder fails to ask for a clarification and/or challenge bid specifications, it loses the opportunity to file a bid protest once bids have been opened.

Bidders typically consider this requirement solely in the context of seeking to overturn a bid awarded to a competitor. What is often overlooked is that you may wind up being the low bidder, and once the contract is awarded it may prove more difficult than expected to convince an owner and the courts that you are entitled to a change order or an equitable adjustment despite an ambiguity or irregularity if you failed to bring the term to the owner’s attention pre-bid. Two recent cases in different contexts illustrate the risks involved.

Failure to raise patent ambiguity in bid specifications results in denial of change order request In Aspen Landscaping Contracting, Inc. v. A. Juliano & Sons Contractors, Inc. and County of Union, (N.J. Super. App. Div. 2013), the Court found that the general contractor’s request for a change order for borrow excavation material was based on a patent ambiguity in the bid documents that was not brought to the attention of the County pre-bid. Consequently, the Court agreed with the County’s position that it was entitled to deny the request for a change order.

The Court noted that a patent ambiguity in a publicly bid contract is one that “either (1) would have been apparent to reasonable prospective bidders from the facts available, or (2) was in fact known to the contractor before submitting its bid.” The Court found that the County’s bid specifications contained a blatant conflict because the bid price form only provided an item for borrow excavation, 34

select material. There was no price item on the bid form for zone 3 borrow excavation, although the technical specifications provided that zone 3 material shall be placed as shown on the plans or as directed by the Engineer. The contractor, who had used a composite bid to deal with the conflict between the bid price form and the technical specifications, but did not bring the conflict to the attention of the County, lost its bet that it would get paid for the costs of the actual materials being furnished via a change order.

Cooperative pricing contracts are not required to include asphalt price index adjustments A different type of failure to protest bid specifications also resulted in a significant loss to the vendors. In Tilcon New York, Inc. and Kelly Excavating & Paving, Inc. v. Morris County Cooperative Pricing Council, (N.J. Super. App. Div. 2014), the successful bidders lost their opportunity to limit the scope of financial losses flowing from a dramatic increase in the price of asphalt cement because they failed to challenge bid specifications that were not drafted in accordance with applicable regulations.

The case arose out of two publicly bid local cooperative pricing agreements for asphalt paving materials and services awarded by the Morris County Cooperative Pricing Council (MCCPC) to Tilcon and Kelly.

MCCPC was established to provide a “cooperative pricing system” for its members, whereby a local contracting unit (referred to as a “lead agency”) advertises for bids and awards a master contract to a successful vendor for its own quantities of the specified goods and services, as well as the estimated quantities submitted by the individual registered members. Each member may choose to purchase from the master contract on its own account. Before seeking bids, State regulations require that the lead agency shall obtain from registered members “the estimated quantities that each Utility and Transportation Contractor, JUNE 2014

registered member proposes to contract for during the life of the master contract.” In order to fully comply with those requirements, the pricing system’s specifications “shall list the registered members who have submitted estimates . . . , their estimated quantities, and other relevant information to permit the bidder to understand what is potentially involved.”

MCCPC did not adhere to those regulations. The bid specifications provided an overall estimate but did not provide the detail required to enable the bidders to reasonably predict the estimated quantities that would be required throughout the contract period. Neither Tilcon nor Kelly objected to the bid specifications.The MCCPC Master Contracts required the vendors to furnish the quantity of materials required by the co-op members for the prices quoted in their bid proposals for the remainder of the contract periods.

Notwithstanding a dramatic increase in the price of asphalt cement – from around $350 a ton in December 2007 to as high as $822 a ton in August 2008 – the Court denied the vendors’ claims for an equitable adjustment because the bidders did not challenge the failure of the MCCPC to adhere to the requirement to provide details of its members’ pre-bid estimates. In addition, neither bidder objected to the Master Contracts despite the fact that they did not include an asphalt price adjustment.

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For these reasons, the Court denied all claims for legal or equitable relief under theories ranging from mutual mistake to breach of the implied covenant of good faith and fair dealing. In short, the vendors had undertaken the risk of having to perform the contract as written, despite the unforeseen price hike.

Practice Tips When you are preparing a bid estimate, it is critical to consider the bid specifications as terms of a potential contract, not just as terms governing the bid and award process. Are the technical specifications and plans clear? Are the payment terms clear? If your bid estimate is based on an assumption that you will be able to make your profit on change orders, what is the likelihood that the change order request will be granted? If you know that the bidding terms are not in conformance with applicable law but are willing to overlook that irregularity at the time of bid, can you foresee circumstances in the future that may make the performance of the contract under those terms unprofitable? If so, evaluate whether you should challenge the irregularity pre-bid.

The take-away from these cases is: if you don’t challenge an ambiguity or irregularity pre-bid, the chances are slim that you will be successful in doing so once you’ve been awarded the job.

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WITHUMSMITH+BROWN CELEBRATES 40 YEARS IN BUSINESS Successful CPA Firm Maintains Commitment to Clients, Employees & Communities

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EXECUTIVE DISABILITY INSURANCE: ESSENTIAL PAYCHECK PROTECTION

By: Nancy Damato, Partner, RDA Benefit Services Stop and think. How long could you sustain your present lifestyle if your paycheck stopped? If you’re like most Americans, your answer is probably “six months or less.” So why haven’t you secured paycheck protection? Most Americans insure their homes, jewelry, vehicles, etc., but forget to insure their paychecks. Yet, without a paycheck, homes, vehicles and other basic elements of living become unaffordable. Likewise, many Americans remember to buy life insurance to provide for their loved ones in the event of death, but they forget to secure paycheck protection to provide for their loved ones in the event of a disability. These are critical financial planning mistakes.

Simply put, individual disability insurance protects your income.

An individual Disability Insurance policy pays 60 percent of your salary, according to policy guidelines, if you become sick, ill or disabled. These policies can also be customized to meet your needs.

You choose: *

The amount of coverage (the percentage of your income that the policy will pay)

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Disability is the leading cause of personal bankruptcy and foreclosure?

75 percent of disabilities are caused by illnesses, such as cancer or heart disease, rather than accidents?

Only 10% of disabling accidents and illnesses are workrelated?

RDA Benefit Services offers a comprehensive Executive Disability Program to UTCA members at an association discount of 10% off registered rates. And for business owners, an additional 15% discount applies. Highlights of this association benefit include: *

Own occupation definition of disability

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Total disability and partial disability benefit

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Lifetime Benefit for presumptive disability

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Compassionate disability benefit

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Automatic increase benefit

*

The length of coverage (how long benefits will continue)

*

Survivor benefit

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The elimination (waiting) period (how soon benefits will start)

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Recovery benefit

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Unlimited coverage for mental disorder and/or substance abuse

This coverage is essential, even if your employer offers disability insurance. Employer-provided plans are often limited and they usually don’t travel with you when you change jobs. Therefore, it’s smart to secure individual protection to supplement any coverage that you receive at work.

Did you know... *

One in eight people suffer a disability each year?

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Don’t make the most common and critical mistake in financial planning! Now that you know the facts, can you afford to go without paycheck protection? Protect your most important asset with individual Disability Insurance – premier paycheck protection!

Contact RDA Benefit Services at 609-693-0772 for more detailed information and to get a quote today.

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Featured Article

MR. JOHN/RUSSELL REID CELEBRATES 50 YEAR ANNIVERSARY Full Service Company Grows To Meet Clients Needs

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n 1964, Morton Weiner responded to a rising construction market by establishing a new company to provide portable restroom facilities on jobsites. Working in conjunction with a carpenter, the very first temporary restroom in the fleet was constructed using a steel drum and plywood. The restrooms were rented to contractors and developers in the Monmouth County area. The plywood units were constructed in Morton Weiner’s first small operation in Long Branch, NJ and Mr. John Company was born.

As the demand continued to increase, Mr. Weiner purchased vehicles to service the restrooms on routine service schedules. By the early 1970s, Mr. John had expanded its geographical reach into Northern and Southern New Jersey, New York City and Philadelphia.

In 1971, the Company relocated its operations to a much larger facility in Raritan Center in Edison, NJ.

Morton Wiener is pictured on the right with the first wooden unit produced by the firm.

Pictured are standard portable units on flatbed trains in a rail tunnel.

The idea of portable sanitation on jobsites quickly gained popularity, which allowed for Morton to produce additional restrooms to keep up with the demand for the service. Mr. Weiner also enlisted the services of John Oswald to assist in evacuating the wastewater from the restrooms. As the company grew, Morton opened a new facility in Ocean Township, NJ which allowed Mr. John to expand its service area to include both Middlesex and Ocean Counties.

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In 1979, Morton Weiner’s son, Mitchell, came on board to assist his father. Mitchell continues to serve as Chief Executive Officer for the Company. In 1981, a local septic pumping firm, Russell Reid was acquired to expand the services of the Company. Another son, Gary, joined the firm in 1986 and is the current President and Chief Operating Officer for the firm. Unfortunately, Morton passed away from cancer in 1989. Today, Mitchell and Gary run the operation with the assistance of a third partner, David Dam, who is the Executive Vice President for the organization. Mitchell, Gary, and David oversee a Senior Management Team which consists of Howard Utility and Transportation Contractor, JUNE 2014

Mr. John units on the site of the World Trade Center.

Steinman, Vice President of Operations, Jordan Serenkin Vice President of Sales & Marketing, Richard Gross, Vice President of Human Resources, and Steve Stefanski, Vice President of Finance.

Mr. Steinman is the most senior member of the team; he has worked for the Company since 1988.

By the turn of the century the company expanded its offerings to include Solid Waste Services/Roll-Off Containers, Storm Sewer and Catch Basin Cleaning, Video Pipe Inspections, and other nonhazardous waste management services. Today, the company serves customers in the Commercial, Industrial, Municipal and Residential markets.

The Mr. John/Russell Reid Company was one of the companies that quickly responded to the September 11, 2001 tragedy. The organization provided daily service on over 650 temporary restrooms at the World Trade Center site, working in conjunction with the New York Office of Emergency Management and countless other public and private organizations. Company employees worked around the clock for several months to serve the needs of the emergency responders and contractors who worked on the site.

Mr. John/Russell Reid also supported the emergency response and cleanup efforts associated with Hurricane Katrina in 2005, the Gulf Oil Spill in 2010 and Hurricane Irene in 2011. Most recently, the Mr. John/Russell Reid team was “front and center” after the 2012 destruction caused by Superstorm Sandy. Vacuum trucks and portable restrooms were in unusually high demand as people worked tirelessly to respond to the disaster. The Company worked closely with FEMA, the American Red Cross, as well as several other relief agencies, local officials and UTCA members.

The Russell Reid fleet of vacuum trucks, shown above, are ready for dispatch.

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Mr. John/Russell Reid has served many UTCA member companies over the years including, but not limited to The Creamer Companies, The Crisdel Group, Ferreira Construction Company, George Harms Construction, Henkels & McCoy, IEW Construction Group, Joseph Jingoli & Son, Kiewit Infrastructure, Lucas Brothers, MBE Mark III Electric, Midlantic Construction LLC, Northeast Remsco Construction, PKF-Mark III, Richard E. Pierson Construction Company, Posillico Civil Inc., Prismatic Development, Louis N. Rothberg & Son, Joseph M. Sanzari, Inc., Schiavone Construction Company, Skanska USA Civil Northeast, Inc., and Tutor-Perini Corporation.

Mr. John/Russell Reid also provides temporary restroom facilities for special events. Their services are called on for backyard parties, weddings and other residential small gatherings. On a larger scale, the Company has supplied large volumes of temporary restroom equipment at events such as festivals, fairs, tournaments, etc. The Company also offers luxury restroom trailers for VIP events/areas,

Russell Reid’s Jet Vac equipment in action on a project.

Wheelchair Accessible Restrooms, as well as trash boxes and roll off containers for bulk trash disposal. Mr. John/Russell Reid has certainly proven to be a full service company!

In the last ten years, the Company has made significant investments in technology to help better serve its customers and increase efficiency. The firm’s Field Service Technicians are equipped with industrial grade smart phones which provide them with their daily work assignments. The device is also used to manage hours of service, vehicle inspection reports and fuel tax reporting.

The majority of the fleet is also equipped with electronic “Drive Cams” which monitor driver behavior and road conditions.

Considering the company’s technicians were on the road for over four million miles in 2013, the Mr. John/Russell Reid management team understands the importance of well-maintained vehicles and effective reporting tools.

The Mr. John/Russell Reid safety initiatives are coordinated by its safety director John Nelson. As part of the overall safety culture, the company created its own acronym called S.T.O.P. These initials stand for Safety, Training, Operations and Professionalism.

In fact, regular S.T.O.P. meetings are conducted at every Service Center on a monthly basis Currently, the Company is headquartered in Keasbey, NJ with satellite offices in Deptford, NJ, Glen Gardner, NJ, Jackson, NJ, as well as Lindenhurst, NY. Their service area includes the entire state of New Jersey, New York City, Long Island, Westchester & Rockland counties, Eastern Pennsylvania and Northern Delaware.

The Mr. John/Russell Reid Company has achieved dramatic growth since its inception 50 years ago. This was accomplished from an idea that germinated from a small operation in Long Branch, NJ.

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Accounting Corner

ESTATE PLANNING MISTAKES & TIPS TO AVOID THEM By: William McNamara, CPA, CCIFP, Cowan, Gunteski & Co. Young or old, rich or poor...it is important for all individuals to dedicate time to prepare an estate plan which effectively satisfies their own, unique circumstances and situations. However, preparing a suitable plan is often easier said than done. Let’s take a look at some common estate planning mistakes and tips on how to avoid them.

Mistake #1. Failing to have an estate plan If you do not carefully plan for the distribution of your assets upon your death, the state will determine what happens for you.

This could result in substantial costs and tax liabilities that will significantly reduce the assets that you had intended for your heirs. A lack of a plan may leave your loved ones in the dark in an already difficult time, and often leads to conflict among them.

Mistake #2. Assuming you are too young for estate planning We all would like to think that we will live to a ripe, old age, but, unfortunately unexpected things do happen. Anyone over the age of 18 should consider having an estate plan. This is particularly important for families so that children can be protected in the case of a parent’s premature death.

Mistake #3. Not keeping your plan up to date While it is a great feeling to have a plan in place, it is important to revisit your plan occasionally as many things can impact its effectiveness. Changes in tax laws, your family structure (births, deaths, marriages, divorces), your financial situation, your health or simply a change of heart could all influence your plan. You should review your estate plan no less than every five years, or as circumstances warrant.

Mistake #4. Losing documents/inability to access assets It is critical that your spouse or fiduciary is aware of the estate plan and is able to locate the important documents such as wills, tax returns, asset ownership forms, trust documents, deeds, etc. when 54

needed. In the case of online accounts, this information should include all user names and passwords needed to access the accounts. Failure to be properly organized could prevent your plans from being carried out and also create conflict among your heirs.

Mistake #5. Considering only your financial assets Estate plans cover far more than just the distribution of your assets. Estate plans should also include medical directives and living wills as well as a power of attorney to ensure that your finances are handled if you become incapacitated. Your will is also used to appoint guardians for your minor children.

Mistake #6. Improperly handling IRA distributions IRA distributions are treated differently for spouse and nonspouse beneficiaries. A significant difference is that non-spouse beneficiaries of inherited IRA’s must make a trustee-to-trustee transfer of the assets. The 60-day rollover rule does not apply. If the asset is not transferred directly, it becomes a taxable event for the beneficiary in the year of the distribution.

Mistake #7. Incorrectly titling assets Individuals own assets in a variety of ways: sole ownership, joint tenancy, joint with right of survivorship, etc. How these assets are owned as well as beneficiary designations on IRAs, life insurance plans and annuities may take precedence over the will or trust. These differences may lead to distributions that conflict with the owners’ or intended heirs’ wishes.

Mistake #8. Lack of life insurance The number of households that have life insurance has decreased steadily over the last few decades. It is now estimated that less than 50% of American households have life insurance policies.

This lack of insurance jeopardizes the financial security of your loved ones after your passing.

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Mistake #9. Carrying inappropriate amounts of life insurance Based on the type of insurance you chose, the benefits and costs vary significantly. For example, whole life insurance covers the policyholder for their entire life, while term life Insurance provides coverage for a certain amount of time. Term life is very inexpensive and can be used to cover expenses in the event of premature death. A decision to secure more costly whole life policies could interfere with your overall estate planning as these funds could be better utilized in other investment options.

Mistake #10. Not relying on the professionals With all of the variables to consider in your estate planning process, it is important that you understand the whole picture. The best way to do this is to trust your attorneys, accountants, and financial planners to determine the best legal strategy to meet all of your goals while minimizing your estate tax liability. These professionals have the expertise to explore available options and alternatives and to take action that is appropriate for your own situation.

About The Author: Cowan, Gunteski & Co. is one of the leading accounting and consulting firms for the construction industry and, therefore, truly understands the daily challenges and keys to success for builders. We are committed to being an active partner in our builder-clients’ growth by delivering consistent exceptional service, value beyond accounting and innovative solutions focused on their financial goals. To find out more about the services available to meet the unique needs of the construction industry, contact Bill McNamara, CPA, CCIFP Ž , shareholder-in-charge of the Construction Services Group at 732-349-6880 or bmcnamara@cgteam.com.

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UTCA MEMBERS VOLUNTEER AND CONSTRUCT VIETNAM VETERAN’S MEMORIAL PLAZA FOR HUEY HELICOPTER In May of 1995, construction on the NJ Vietnam Veteran’s Memorial was completed in honor of those New Jersey men and women who gave their lives or were listed as missing in action during the Vietnam War. The memorial was designed in 1988 by Hien Nguyen, a native of Vietnam, and is an open-air circular

Textron Company) produced 16,000 Hueys, more than 7,000 of these served in Vietnam. In February 2013, a group of veteran volunteers, many of them Vietnam Era helicopter pilots and maintenance technicians, began the restoration of the Huey to be displayed outside the Memorial’s museum. The crew donated 8,000 hours of service time to restore the Huey!

J. Fletcher Creamer & Son begins excavation activities on the site.

pavilion, 200 feet in diameter. Around the entire outside are 366 eight foot-tall black granite panels, each one representing one day of the year. An educational center and museum were also completed on the grounds of the PNC Arts Center in Holmdel, NJ. Many UTCA members donated time and materials in the original construction of the Memorial. Louis Vlahakes of C & H Agency, a VietnamVeteran, was heavily involved in the original construction activities.

In January 2013, the NJ Vietnam Veterans Memorial Foundation took possession of a 1964 Bell UH-1D, Iroquois helicopter, also known as the Huey. During the Vietnam Era, Bell Helicopter (A

Concrete is poured for the foundation which was completed by HC Constructors.

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Pavement blocks are installed at the plaza by Aspen Landscaping.

Representatives of the Foundation then contacted UTCA for assistance in the construction of the foundation and support system for the display of the Huey. As with the original Memorial, association members responded immediately to aid in the project.

J. Fletcher Creamer & Son was first on the scene, and the firm completed excavation activities under the direction of Anthony Izzo. HC Constructors then began foundation work for the project.

In fact, Harry Chowansky of HC Constructors served as the

Steel support structure, fabricated by IEW Construction Group, is installed.

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The Huey helicopter on display at the May 7th dedication ceremony.

unofficial general contractor for all the construction activities. United Crane set the steel structure in place that would support the weight of the Huey and IEW Construction Group fabricated and supplied the steel structure for this endeavor.

Once the underground work was completed, Aspen Landscaping Contracting installed pavement blocks supplied by EP Henry. Berto Construction followed by pouring the concrete curbing during the Spring of 2014. On April 16 of this year, the restored Huey helicopter was transported to the site and set into place by W.J. Casey Rigging.

Black Rock Enterprises milled the parking lot and Renda Roads

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then repaved the lot with asphalt furnished by Stavola Contracting.

Aspen then returned to complete additional landscaping. Forest Electric completed all electrical work and also installed lighting which will illuminate the Huey.

The memorial received an enormous amount of assistance from the Heavy & General Construction Laborers Union Local 472.

Through the leadership of Anthony Oliveira, Don Hibbs and Joe Scerbo, nearly three dozen union members donated their time to help construct this plaza. These union members included William Scofield, Tyson Lawler, Dan Salvatore, Glen Mercado, Brandon Fenton, Antonio Rosado, Robert Harvey, Rob Harper, Dave Brink, Jr., Dan Orriolas, Dave Ferreira, Ed Boasci, Andrew Unger, Joe Magrino, Chad Crosby, Jose Diaz, Ahmadja Jackson, Donovan Marvin, Charles McMicke, Ed Mendez, Sean Malloy, Devin Morales, Daniel Orriols, Luis Pillcorema, Matthew Richards, Daniel Rojas, Flavio Salvador, Jonathan Sanchez, Charles Covolus, Malcolm Shell, Steven Smith, Ahmed Wright and instructors Rich Busco, James Giammarino and Augie Vagueiro.

On May 7, 2014, a dedication ceremony was conducted on the site of the project in front of a capacity crowd of volunteers, Vietnam veterans, public officials and media members. Former Pittsburgh Steeler running back Rocky Bleier was the guest speaker for the event which also featured remarks by Lieutenant Governor Kim Guadagno, whose son is currently a student at the United States Air Force Academy in Colorado, and UTCA’s CEO Robert Briant, Jr. whose son recently graduated from the United States Military Academy at West Point.

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TWO DOORS OF PROTECTION PART 1 By: Carl Bloomfield, The Graham Company One of the most confusing and misunderstood concepts in insurance and risk management is contractual risk transfer. However, it is one of the most important aspects of a sound risk management program. Every contract you sign likely contains some level of risk transfer, although there is no standard language to accomplish this feat. Courts are continually ruling on issues related to contractual risk transfer, which makes it very difficult to keep up-to-date on the appropriate language to use and what is allowable in each state in order toaffect the risk transfer. Some contracts are one-sided and all the risk transfers to the party with the least amount of leverage.

Some contracts are more balanced and attempt to assign liability squarely onto the responsible party. And some contracts accomplish nothing in the way of risk transfer despite having an exorbitant amount of words related to that topic. Knowing what risk is being transferred to you and what risk you are transferring to others is a critical consideration when negotiating a contract. It may be the deciding factor to enter into the contract or to walk away. That’s why I intend to dedicate this and the next two articles to this topic.

The purpose of this article is to provide a broad overview of contractual risk transfer. I will talk about the two separate doors of accomplishing this feat: indemnification and additional insured status.In subsequent articles I will go into great detail on each and lay out some of the important considerations contractors need to be aware of.

Door 1 - Indemnification The word “indemnify”means to make compensation to another for hurt, loss or damage. In other words, it means to make that person or organization whole or return them to the status in which they were prior to the event triggering the indemnity. One of the biggest misconceptions about indemnification is that it is insurance.

Indemnification is not insurance at all. Indemnity is an obligation that is placed purely onto another party through a contractual relationship. It is, however, likely that your insurance program will 66

provide coverage for your indemnity obligation, but there are definite pitfalls related to this kind of insurance coverage. If required by contract, the obligation to indemnify another party exists even if insurance is available or not, so it is important to make sure that your insurance program backs up the indemnity obligations being placed upon you. This also requires striking the indemnity obligations from contracts in which insurance coverage is not available.

There are three levels of indemnification: Broad, Intermediate and Limited Form. Broad indemnification requires one party (indemnitor – party providing the indemnity) to assume the obligation to pay for another party’s liability even if that other party (indemnitee – party receiving the indemnity) is 100% at fault.

For example, Contractor A subcontracts work to Contractor B. There is an accident on the jobsite as a direct result of Contractor A’s Safety and Project Plan, but arose due to work performed by Contractor B. Contractor A gets sued by the injured party and tenders the claim to Contractor B even though the allegations are that Contractor A was completely at fault. If Broad Indemnification is required in the contract between Contractor A and B, B would have to indemnify A, even if they are solely negligent. As result, many states have adopted Anti-Indemnity Statutes that prohibit Broad Form Indemnification.New Jersey, for example, prohibits Broad Form Indemnification for construction contracts only, but Pennsylvania does not.

Intermediate Form indemnification requires one party (indemnitor) to indemnify another party (indemnitee) for their negligence if the indemnitor is liable. For example, the same scenario as before, but this time Contractor A is 99.999% liable for the loss and Contractor B has the remaining liability. With these facts, Contractor B would have to indemnify Contractor A for their 99.999% liability. This form of indemnification is allowed in most states and is allowed in New Jersey as well.

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The last form of indemnification, Limited Form, is not really indemnification at all, meaning it is the liability you would assume in the absence of any contract. Using the same example, but this time Contractor B is 100% at fault, Contractor B would be responsible for indemnifying Contractor A for any loss they suffer as a result of Contractor B’s negligence.

If you are in the position of power, the most advantageous form of indemnification you can receive from another party is Broad Form. If you are in the weaker position and required to provide indemnification to another party, you should attempt to limit your obligation to Limited Form.However, as you can imagine, nothing in the real world is as clear cut as the examples I have laid out. There are several other nuances to consider regarding indemnification.

We will address these issues in much more detail in Part II of this article, which will appear in the next edition.

Door 2 – Additional Insured Status Completely separate and independent from indemnification is something called Additional Insured Coverage. Unlike indemnification, this is in fact insurance. If you provide a third party Additional Insured status, you are giving them direct access to your insurance policies. Most often, Additional Insured Coverage must be endorsed onto the standard insurance policy because it is otherwise not included in the base form. Many years ago there used to be just a handful of endorsements that were needed to add a third party as an Additional Insured. Many people may remember, or still see in their contracts today, the requirement to use the General Liability form CG 20 10 11 85. In the insurance business we refer to this as the “Holy Grail” because this one endorsement satisfied most requests to add another party as an Additional Insured.

Unfortunately today, it has gotten much more complicated to add another party as an Additional Insured. There are literally hundreds of Additional Insured endorsements, each with their own problems or shortcomings. In Part III of this article, we will go into greater detail on the specific issues related to Additional Insured Coverage.

There are many similarities between Additional Insured Coverage and Indemnification. Just like indemnification, there are three levels

of Additional Insured Coverage: Broad, Intermediate and Limited.

However, you may recall that most states have adopted AntiIndemnity Statutes which prohibit Broad Form Indemnity, but most often, these statutes don’t affect the level of Additional Insured Coverage that is required from one party to provide another. For example, in New Jersey, Broad Form indemnity is not permitted, but there is no prohibition against requiring one of your subcontractors to provide you with Broad Form Additional Insured Coverage. In other words, coverage for your own sole negligence. This concept is often misunderstood by insureds and brokers alike.

Which Door is Better?

I often get asked by parties that are in the position of leverage, which is better – Indemnification or Additional Insured Coverage, and I am hesitant to provide an answer because the truth is you absolutely need both. In fact, a “belts and suspenders” approach is recommended. There was a time that Additional Insured Coverage was preferred over indemnification, because it gave an injured party direct access to an insurance policy instead on having to rely on being paid (indemnified). Because this has become so complicated to craft Additional Insured Coverage correctly, I no longer think that preference exists. The possibility that the Additional Insured Coverage is inadequate is too great with all the various endorsements that exist today.

As mentioned, Parts II and III of this article will expand upon each of these topics and go into detail on the pitfalls and issues to be aware of.

About The Author: Carl Bloomfield is a Producer at The Graham Company, the largest property and casualty insurance brokerage in the Mid-Atlantic region. As a leader of the Construction Division, Bloomfield spearheads The Graham Company’s involvement in several construction industry organizations, including the Utility & Transportation Contractors Association, Associated General Contractors, General Contractors Association of New York, New Jersey Asphalt Pavement Association, the Contractors Association of Eastern Pennsylvania and the General Building Contractors Association of Pennsylvania. Carl can be reached at cbloomfield@grahamco.com or 215-701-5420.

Continued from Page 77 *

Streamlined Equipment Purchasing: Because a line stands ready for your use, you don’t have to worry about filling out tedious paperwork every time you make a purchase. Simply send an invoice and the bank will credit your account. No muss, no fuss.

CAPEX Lines and You CAPEX LOCs—and the financial institution that provides them— offer the flexibility you need. Provident Bank can help devise the CAPEX LOC that’s right for you. We’ll consider your unique needs—seasonal fluctuations, business cycles, special equipment—and structure a flexible solution that makes purchasing equipment easy, efficient and economical. You’ll never need to choose another equipment financing option again! To learn more about CAPEX LOCs, please contact the author.

About The Author . . .Wm. J. Ruckert III is senior vice president of middle market lending at the Provident Bank. Based in Provident’s Iselin office, Ruckert oversees commercial financing for companies with sales of $15 million or more. He holds a bachelor’s degree in business administration from Loyola College in Maryland.

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Financial Overview

CAPITAL EXPENDITURE LINES OF CREDIT: MAKING EQUIPMENT PURCHASES “CAPITAL” By: William J. Ruckert, Provident Bank 2008 is the year we can’t forget: The housing bubble burst, Lehman Brothers fell and the U.S. was on the verge of Financial Armageddon. It’s no wonder that you’ve tightened your belt and roosted on your idle cash. But now that the economy is finally emerging from its slump, it may be time to leave the coop.

You should consider investing in your business again. And you may want to start with upgrading your fleet, especially since peak season is here. Those cranes, scrapers, dozers and loaders are probably pretty worn, broken or obsolete, and sound equipment is critical to expanding operations, increasing productivity and improving the overall success of your business.

But let’s face it: Heavy equipment comes at a hefty price. And most construction companies don’t have the liquidity to pay in cash. So what do you do?

Finance it. Zero percent interest offers from equipment manufacturers may be enticing, but financial institutions can provide you with something even better: Capital Expenditure Lines of Credit (CAPEX LOC).

Tapping into the CAPEX Line A capital expenditure is a fixed—usually physical—purchased asset, such as new or used equipment, real estate or a leasehold improvement, that adds long-term value to the business. Because of its high-ticket price, a capital expenditure usually constitutes a major financial decision for the company and can put a chokehold on cash flow.

That’s where a Capital Expenditure Line of Credit comes in. A CAPEX LOC allows you to purchase what you need, when you need it, without tying up working capital. After you establish a preapproved CAPEX LOC with your financial institution, you may tap into it whenever necessary and make multiple advances over the life of the line.

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Once the term ends, your outstanding balance is converted to a predetermined term loan with a competitive fixed or “floating” interest rate and an amortization period based upon your cash flow.

Capital Benefits Purchasing brand new (or new to you) equipment is probably benefit enough. The additional advantages of Capital Expenditure Lines of Credit just sweeten the deal: *

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Leveraged Working Capital: While your financial institution is putting its money into depreciating assets (i.e. your purchased equipment), your working capital is freed up to work for you, covering a number of cash flow needs, including accounts receivable turnover and seasonal fluctuations in income and inventory. It can also fund investments with a more lucrative return.

Improved Cash Flow: Interest-only components at term inception, repayment based on your cash flow, tax benefits, and a 100%financing qualification can provide cash flow benefits, reduce your cash outlays and eliminate a cash down payment.

Controlled Infrastructure Costs: With its flexible terms, a CAPEX LOC allows you to plan ahead, and/or restructure your debt to accommodate current and future requirements.

Mitigated Equipment Obsolescence: With the lightning speed of technological pace, the life-span of heavy equipment has been cut off prematurely. With a CAPEX LOC, you can upgrade and replace old machinery frequently. This is particularly important when considering new emission standards for your equipment.

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