Utility & Transportation
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Montana Construction Celebrates 25 Years
June 2018
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president’s message
From the desk of: tom hardell IT’S NEVER TOO EARLY TO START FINDING YOUR NEXT EMPLOYEE As the Baby Boomer generation quickly moves toward retirement, many businesses are confronted with a significant dilemma – how are they going to replace the retirees? The employment landscape for businesses has changed dramatically over the last 25 years, with many young adults graduating high school without a clear idea of what they are interested in or what they want to pursue as a career. More often than not, students are shepherded to college or another form of higher education – regardless of whether they’re ready or even interested in working toward a career that necessitates a college degree. Yet despite the growing evidence that four-year college programs serve fewer and fewer of our students, states continue to deemphasize vocational programs.
this clearer: businesses need new young, energetic employees, and teenagers and young adults need direction, guidance, and an introduction to work environments to help them find their individual path to success. If you haven’t gotten it yet – let me just come right out and say it. Businesses need to actively engage, participate, and support local high schools and their students. It’s more than just going to “Career Days” - its meeting with school administrators and creating meaningful interactive experiences for high school students. Programs that might help students fully understand what a profession is, or that might make students understand why their Math class is important or maybe most simply helps them in finding their path to success. I realize that this is an ambitious plan and one that not every business can undertake at the same size and scope, but you can start small. For instance, start by reaching out to your local high school and find out if they have a vocational program or specialty academy for their students. If they do, maybe you could take a tour of the facility or speak with the supervisors as a way to start the process. From there you can decide how far to take your participation. Who knows, your company might really enjoy the experience, and better yet find some really great employees at the same time!
As a result, these students can become disinterested in college coursework for a number of reasons - perhaps their courses don’t excite them or they’re just not classroom-focused learners – and often drop out. Even worse in the long run, are the students that graduate with significant student loan debt and still don’t have formal training or a clear idea of what they want to do with their career. Just a few decades ago, our public education system provided ample opportunities for young people to learn about careers in dozens of vocational trades. Yet, today, high schoolers are hardly aware of the many doors that vocational education can open. The “college-for-everyone” mentality has caused an imbalance in our system by forcing other career paths into the margins. But just like schools, businesses have been slow to adapt to this changing employment landscape – and look, no one likes change, but sometimes you need to look behind the proverbial curtain to see the “golden opportunity” that lies behind. Let me try to say
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Finally, I would like to commend Montana Construction on their 25th Anniversary, and JESCO, Inc on their 45th. Congratulations to you both, we look forward to celebrating your continued success. If you have any comments or suggestions, please feel free to contact me at thardellutca@ghcci.com
Best regards,
Tom Hardell
Cover 43
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CONTENTS
Cover story 42 montana construction celebrates 25 years
DEPARTMENTS
FEATURES
2 7 13 21 29 37 51 61
66 JESCO, Inc. completes 45 years in business 72 utca 2018 executive seminar: chandler, Arizona
President’s Message Financial Overview Legal Dig Accounting Corner Legislative News Safety Perspective Labor Relations
NEWS 81 the disability coverage crisis in the u.s. 87 there is no bad project - only bad risk management
The pipeline
Published Bimonthly During 2018
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Publisher: Robert A. Briant, Jr. Editor: Helene Nasdeo Editorial Contributors: Zoe Baldwin, Dan Neville, Dan Kennedy Advertising Manager: Helene Nasdeo Photographer: Image Up Cover Photo: Image Up Production/Graphics: Helene Nasdeo, Lauren Hagan Circulation: Helene Nasdeo Printed By: American Plus Printers Affiliations: ARTBA, Clean Water Construction Coalition UTILITY AND TRANSPORTATION CONTRACTOR (ISSN 0192-4843) is published six times a year by the Utility and Transportation Contractors Association of New Jersey, 1670 Highway 34 North, Farmingdale, NJ 07727. Periodical postage paid at Farmingdale, NJ and additional mailing offices. POSTMASTER: Send address changes to UTILITY AND TRANSPORTATION CONTRACTOR, PO Box 728, Allenwood, NJ 08720.
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By: Bill Ruckert, Provident Bank “How’s business?” is a typical conversation starter.
It’s apolitical, noncommittal, not overly intrusive and usually serves as a common ground for easy discussion. The answer however, can touch on all the sensitive issues mentioned above, leading to more meaningful and/or in some cases difficult conversation. First, a historical perspective is needed when answering the question. If you don’t have an understanding of where you’ve been, you cannot have a clear picture of where you are going. Business has been highly volatile for over 10 years and while some experts tell us the economy has been chugging along in a positive direction, many can and will argue the point. Extremely low interest rates did not spur capital spending across the board as intended and rates are beginning to creep up. Historically low interest rates have now reached 5% for certain lending activity, and there is a whole generation in the workforce today who have never experienced rates this high. The experiences of the past should benefit you as plans for the future unfold. Weak capital spending has most likely caused the useful life of your equipment to near its end, and replacing it will soon be needed. Government spending on infrastructure is expected to grow and at some point, the NJDOT should release long awaited work given the Transportation Trust Fund’s growing cash balance. The state’s recent creation of the New Jersey Transportation Infrastructure Bank should also provide new business opportunities.
money. Large pharmaceutical companies are investing in their infrastructure and creating opportunities for many contractors. Privately held water companies are under growing pressure to ensure safe drinking water as well as effective disposal of waste water. Utilities are also investing heavily given the disruption of services due to storms over the past few years. With all this work on the horizon, business owners should look to leverage their assets to capture desired market share. Working capital, plant and equipment, and the workforce comprise the majority of the assets to be leveraged and need to be adequately positioned to maximize their potential. All come with limitations, but the shortfall can be mitigated in a variety of ways.
Financial overview
how's business?
If your projections suggest a weakness in your cash flow, an increased working capital line of credit is the solution. This problem is generally caused by growth and to some degree, the timing difference between paying your bills versus your client paying theirs. While the answer can be a simple one, beware of your growth rate as it has the potential to grow you right out of business. Investing in plant and equipment to support growth can come from both internal and external sources. Financing capital expenditures is a viable option when investing in your company; however, increasing interest rates must be considered when forecasting future results. If weaknesses are evident, consider leasing equipment to minimize the cash flow drain from idle assets and/ or increasing interest rates. Growth, in and of itself, is a positive for any company but it needs to be effectively managed which includes considering both internal and external factors. Many issues companies face can be controlled, but many are outside management’s influence. Be cognizant of both sides of the equation and measure your results along the way. Use the expertise of your valued business partners as well, to help identify, act upon and monitor your company’s results. Using these tools that should be readily available, will position you to answer “How’s Business?” with a resounding-GREAT!
Private sector spending is also on the rise and should not be overlooked as you plan for the future. Diversifying your customer base is always a prudent idea, but be certain that you know the sponsors, because if you don’t get paid, you don’t make
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By: adrienne l. isacoff, florio, perrucci, steinhardt & cappelli
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ontractors may make mistakes when they become familiar with the laws of one state or the requirements that are applicable to one type of project – public, commercial or residential – and assume that the law is the same in other situations. In order to know your rights and take the steps necessary to protect them, it is critical that you focus on the laws applicable to the state in which the project is situated and the particular type of project you are working on. PAY WHEN PAID CLAUSES Contractors and subcontractors are generally familiar with what is commonly known as a “pay-when-paid” clause. The intent of such clauses is to shift the risk of nonpayment by the owner of the project from the contractor to the subcontractor. Such clauses state that the contractor only has to make payment to its subcontractor if it receives payment from the owner for the subcontractor’s work. The enforceability of such clauses depends on the law of the state in which the project is being performed, as well as on careful drafting of the clause, assuming it is enforceable at all. In New York, in the case West-Fair Electric Contr. v. Aetna Cas. & Sur. Co., 87 N.Y.2d 148 (Ct. App. 1995) the State’s highest court determined that pay-when-paid clauses violate New York’s public policy that prohibits a contractor from demanding that subcontractors waive their mechanic’s lien rights. The Court reasoned that if a pay-when-paid clause was in effect and the owner never makes payment to the contractor, then the subcontractor would technically not be owed any monies from the contractor. Under that scenario, the subcontractor would not be entitled to file a lien because no money would be due to it. Whether you are negotiating a contract in New York or are involved in a payment dispute on an existing project, it is important to bear in mind that pay-when-paid clauses are not enforceable in that state, regardless of how carefully they are worded. New Jersey and Pennsylvania have approached this issue in a different manner. In these jurisdictions, courts allow such clauses to be enforced, but focus on the exact language in the contract. Courts in these states also distinguish between what they call “pay-when-paid” and “pay-if-paid” clauses A typical pay-whenpaid clause might read: Contractor shall pay subcontractor within ten days of con-
tractor’s receipt of payment from the owner. Under New Jersey law, the courts will likely interpret this clause to require payment within a reasonable period of time from when the subcontractor’s work was performed and invoiced, even if payment is not received from the owner. In Seal Tite Corp. v. Ehret, Inc. 589 F. Supp. 701 (D.N.J. 1984), the Court refused to interpret a pay-when-paid clause as allowing the contractor to shift the risk of non-payment to the subcontractor, reasoning that the solvency of an owner is a credit risk incurred by the contractor. The subcontractor should only bear that risk if the language of the subcontract clearly identifies it and the subcontractor knowingly assumes it.
Legal Dig
contractor rights & responsibilities depend on the state & project type
By contrast, in Fixture Specialists, Inc. v. Global Construction, L.L.C., 2009 WL 904031 (D.N.J. 2009), the Court found the following language to be enforceable, calling it a “pay-if-paid” clause: Subcontractor agrees that Contractor shall never be obligated to pay Subcontractor under any circumstances, unless and until funds are in hand received by Contractor in full, less any applicable retainage, covering the Work or material for which Subcontractor has submitted an Application for Payment. This is a condition precedent to any obligation of Contractor, and shall not be construed as a time of payment clause. The Court found that by virtue of the unequivocal language used in the subcontract, the parties clearly acknowledged and agreed to shift all risk of owner’s nonpayment to the subcontractor. Importantly, the Court emphasized that it is not the use of “when” or “if ” in the clause itself, or any subheading of the subcontract, that is dispositive of the enforceability of the clause, but whether the language used evidences the clear intent of the parties. The same distinction between “pay-when-paid” – interpreted as meaning that the contractor must pay the subcontractor within a reasonable time period from when payment was due – and “pay-if-paid” – interpreted as a strict condition precedent to payment – was upheld by the Court of Appeals for the Third Circuit (which includes Pennsylvania, New Jersey and Delaware) in the case Sloan v. Liberty Mutual Insurance Co., 653 F.3d 175 (3rd Cir. 2011). The Court parsed the language of the subcontract and found that it clearly shifted the risk of nonpayment to the subcontractor.
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Legal Dig
PRE-LIEN NOTICE REQUIREMENTS With regard to lien rights and protocols, there are differences depending on the nature of the project: public, commercial or residential. Under the New Jersey Construction Lien Law, which governs non-public projects, a lien claimant does not have an obligation to file a pre-lien notice prior to filing its lien claim. Lien claims must be filed within 90 days of the last date of work. The owner will be liable for any payments that remain due and owing to the contractor from the date the lien is served on the owner. N.J.S.A. 2A:44A-9. If the project is residential, including condominiums or townhouse developments, a pre-lien filing called a “Notice of Unpaid Balance and Right to File Lien” (“NUB”) must be filed within 60 days of the last date of work, followed by a mini-arbitration hearing to determine that the procedures of the CLL have been strictly followed. If so, then the lien claimant may file its lien claim, with the last date of filing being 120 days from the last date of work. N.J.S.A. 2A:44A-21. If the project is public and the owner is a municipality or school board, contractors and subcontractors do not need to file any
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pre-lien notice. (There are no lien rights on State contracts). However, in order to fully protect their lien rights, within 20 days of the first performance of work sub-subcontractors or suppliers to subcontractors must file a notice with the municipal clerk or chief financial officer that it has furnished labor or materials on the project. If such pre-lien notice is filed, the municipality will be fully liable for any amounts due and owing from the subcontractor to its sub-subcontractor/supplier, because the public owner should have taken all steps necessary to ascertain that payment had properly flowed down the construction chain before releasing more payment to the contractor. If the pre-lien notice is not filed within 20 days of the first performance of work, the third-tier subcontractor/supplier may still file a lien, but the municipality will only be liable for whatever remains owing to the contractor at the point that the lien was filed. TAKEAWAY Bear in mind that construction law is heavily dependent on the location of the project, as well as the type of project you are working on. If you are unsure are your rights and responsibilities, it is worth a call to your counsel to avoid costly mistakes.
position your company for sale By: william C. mcnamara, CPA, CCIFP, The curchin group
A number of positive situations can develop. From teaming with a strategic investor to the outright sale of the business, planning by the management/ownership of the builder will be a key to success. Like any venture, those that are planned tend to succeed at a higher rate. Companies who strategically plan, can incorporate a number of items which will enhance their appeal to an M&A suitor and also improve current period operations and results. Since contractors come in many shapes and sizes, looking at some common threads will get management focused and rolling in a good direction.
interested party the start of an understanding. Demonstrating how you are staying engaged in your craft is important too. The company’s story needs to be balanced to include its history and the steps taken to be relevant in 2018. Millennials today look at employment practices very differently. So young talent will be attracted to companies who can demonstrate that balance of old and new. By sharing the successes of a contractors practice, you can strengthen the reason a new employee comes on board or why an investor is willing to “pay up” for a company. Reviewing the content of that message and evaluating how its delivered to a new hire or a potential investor, is how good companies leverage their efforts. Every item should have a few purposes. Its acceptable to be done for a primary reason but having additional uses creates internal value for the owner. Another item that can lend to telling a story is a company’s organizational chart. It shows the many facets and business lines of a company. Identifying the key team members and showing the depth of talent the company has assembled is a proof of knowledge, skill and expertise. All of those qualities are sought after by an investor or a new recruit. A risk that is often measured in the due diligence process of an M&A deal is how will the company continue to operate if senior management is no longer in place? A well-established chain of command allows for the processes to be replicated even under a change in leadership.
Accounting Corner
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nfrastructure spending in on the rise. Construction forecasts reflect confidence that our industry will see capital improvement budgets growing at both the State and Federal level. As project bid specifications begin to be posted, contractors will also see an influx in the merger and acquisition market. Investors looking to diversify their holdings, will look favorably at companies positioned to capitalize on these new and growing opportunities. For the contractors positioned correctly, the next two to three years should lead to opportunities to maximize the value of their business.
At the heart of the due diligence process is the evaluation of a company’s financial performance. Many key factors are identified and then benchmarked for risk and reward. By nature, the due diligence process is a way for either the buyer or seller to influence the purchase price of a business. Often the side which can best document its position creates favorable leverage for the business terms of the deal. Ownership will need to establish a strategy to highlight its strengths and prepare to defend its weaknesses. When a willing seller and a willing buyer meet, information about the size, history and finances of a company are a launching point for discussion. These discussions become critical in establishing the motivation of both parties to get a deal done. As such, maintaining your story is almost required to gain that interest and create the reason to continue. Having information either in the form of printed marketing materials, blogs posted on a web site or news clippings arranged into a scrap book, will allow an
Most contractor’s financial statements are routinely and timely issued, up to date technically and disclose valuable knowledge for the reader. Compliance requirements imposed by our professionals in surety and banking have put us through the test of underwriting and we have been faithfully insuring that the financial statements issued paint our operations in the best light possible. A potential investor will have strong confidence in the financial position of a company as its financial statements will
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Accounting Corner
have answered many of the same risks that will be identified in the evaluation process. Ongoing maintenance of the company’s books becomes critical in establishing a business value. Many contractors fight every day to reduce retainage receivables. These efforts will not go unrewarded in a due diligence review. Remember the seller is motivated to reduce the purchase price. Retainage values carried on the books can be an easy value discount if management has not been actively attacking their collection. The use and demonstration of credit facilities are also a valuable commodity in a company’s financial valuation. Being able to mange cash flow and have access to capital in case of unexpected needs, reduces risks for a new investor. Management should review these facilities and, where applicable, look to expand or request reductions in interest rates. Many times, at renewal, owners can improve their terms by simply looking to have their credit reevaluated. After all, a year may have passed and the business has answered or reduced some of its underwriting risks. If successful, requesting the release of some collateral, or the modification of a loan covenant is warranted. If the credit facility wants you to renew, they like you and your business, so look to leverage that positive experience. Another strength inside the industry is the value of its hard equipment. The underlying value of equipment is often under-
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stated on the books and tax returns. Current tax rules have us depreciating and writing off equipment values at purchase. However, when we walk outside, there is a yard full of equipment. Updating equipment values by use of a third-party appraisal is money well spent. Not only can we justify fair value, we have a strong basis for insurance coverage and needs. Compiling titles and ensuring liens have been released are also general business practices that should be conducted periodically by a company. In most cases when a lien has not been released it’s discovered at an impromptu time and the process to untangle the record becomes an exercise of futility and expense. Positioning your company for sale is not an onerous exercise. It’s a combination of planning and best business practices that are incorporated in everyday routines. As you move through your operations, do so with a mindset of how it will appear to an outsider. Will that direction improve the appearance and value of your company? Rarely does a business owner move in a direction to reduce, entrepreneurs by nature look to build. That same mindset will lend itself to developing the best strategy possible to extract the fair value your company is worth. Bill McNamara is a partner with The Curchin Group, LLC. If you have any questions regarding the above information, Bill can be reached at (732) 747-0500.
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legislative update By: zoe baldwin
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All kidding aside, revenue raisers in the proposed budget are deeply dividing the Democratic caucus and making negotiations difficult, despite the party’s control of both the Executive and Legislative branches. The Governor’s proposed budget included plans to raise $1.5 billion in additional revenue through a number of new or expanded taxes on retail sales, millionaires, yet-to-be legalized marijuana, electronic cigarettes, corporations, shared economy services such as Uber and Airbnb, sports betting, and get ready for this one – the gas tax. Senate President Sweeney and Assembly Speaker Coughlin have offered counter-proposals, but as of yet no compromises have been reached. MY SO-CALLED POISON PILL With most of the state focused on the topline sticking points like the millionaires’ tax, little fanfare has been made over two line-items close to our industry: small increases in the sales and gas taxes. Both Sweeney and Coughlin have reportedly made it clear to the Governor that they are not open to raising the sales tax, which was cut in 2016 as part of the deal to reauthorize the Transportation Trust Fund. The 2016 decrease was miniscule to shoppers – decreasing by less than one-half percent over the past two years – and Governor Murphy has derided it as a gimmick; however, many lawmakers see danger in reneging on a deal negotiated just two years ago and point to the so-called poison pill language included in the gas tax legislation whereby the loss of the negotiated reduction in state sales tax would trigger the loss of the negotiated increase in the gas tax. The poison pill option is unlikely to be activated anytime soon, but worth noting. According to statute, the decision to activate the measure requires a vote by a three-member panel: the State Treasurer, the head of the Office of Legislative Services, and a mutually appointed third person. Treasurer Elizabeth Maher Muoio is a Murphy appointee and thus would not vote to put the poison pill into play, however, Frank Haines of OLS has said that he would
trigger that provision. Since the third person would have to get sign-off from each of the disagreeing parties, the whole process is basically a nonstarter. Separately, New Jersey residents are likely to see an increase in the gas tax again this Fall as collections have fallen behind expectations. Tracking back again to 2016, the 23-cent gas tax legislation gave the state the authority to raise it incrementally as needed to maintain a predictable level of revenue - $1.16 billion. This time, OLS’s Haines and Treasurer Muoio agree, both citing the need for a two or three-cent increase to cover the shortfall. In what State Treasurer Elizabeth Muoio referred to as a “May reality check,” she stated that there is no choice but to look for new revenue. “There is nowhere else to kick the proverbial can,” she said at the dais during a recent budget hearing. Democrats currently have a 54-26 seat advantage over Republicans, but this is an inner-party fight; with a divided majority it is difficult to tell whether compromises will be made or whether we’re heading for yet another shutdown. USE IT OR LOSE IT In the April magazine, we updated you on our effort to tighten up the way NJDOT doles out local aid funding. In the past two months, UTCA has produced a draft and submitted it to Senate President Sweeney. In its current form, the bill would: require all projects receiving grants to start construction within one year or face rescission of funds; require that local government units will not self-perform and that successful contractors are prequalified with NJDOT; require grant recipients to bid construction projects in accordance with Local Public Contracts Law; and allow 10% of funds to be used for design purposes for the first two years after enactment. We expect the bill to be introduced this summer.
Legislative News
N THIS, THE DAY OF MY GOVERNOR’S BUDGET Not that NJ politicians are much known for wearing kid gloves, but this budget season has lawmakers preparing for what’s shaping up to be a bareknuckle brawl. During the annual NJ Correspondents’ Dinner in May, Governor Murphy himself compared relations with Senate President Steve Sweeney to the infamous scene in the Godfather, joking that "Steve has already shown himself to be a great gifter. He sent me, as a surprise, everything I need to make my own life-size, great seal of New Jersey right at home. So, I want to thank him... Thank you, Steve, for the horse's head. When can I expect a second package?"
COME TOGETHER, RIGHT NOW, FORM A P3 The Assembly in late May moved legislation that would enable public-private-partnerships on transportation and building projects around the state. UTCA has been working with industry partners for several years on P3 legislation, and the lower house’s action brings NJ one step closer to another tool for financing infrastructure. During the previous administration, a similar bill was vetoed by Governor Christie. However, that was eleven credit downgrades ago and state leaders are once again poised to move forward. Sponsored in the Assembly by Majority Leader Lou Greenwald and in the Senate by Senate President Sweeney, the proposal is expected to clear both houses before July. TALKING ‘BOUT OUR DELEGATION UTCA CEO Bob Briant, Jr. and staff made the annual trek down to Washington DC for the
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Legislative News
TCC/ARTBA Federal Issues fly-in, where we met with four members of the New Jersey congressional delegation to discuss state and national issues of importance to our industry. Senator Booker and Congressmen MacArthur, Pallone, and Pascrell were glad to hear from us regarding our priorities for national transportation and utility funding and were especially receptive regarding issues such as Portal Bridge, Gateway Tunnel, and the need to expedite the permitting and environmental review process for replacing aged infrastructure. PICTURE WRDA ‘ROUND TOWN In addition to the fly-in meetings held last month, Sante Esposito, our Federal lobbyist for the Clean Water Construction Coalition, has been meeting with Republican and Democratic committee staff in both houses to discuss their WRDA reauthorization efforts. Discussions with House staff centered on the Committee’s recent markup of its version of WRDA reauthorization - H.R. 8, the “Water Resources Development Act of 2018.” The bill, as reported is a “pure” Army Corps of Engineers bill - no extraneous matters such as water programs that provide resources to states in need. The measure received bipartisan support in the House Transportation and Infrastructure Committee, which is disappointing and made worse by the fact that committee members failed to offer amendments along those lines. After markup, staff said that the Chairman is still committed to a Corps-only bill and that other water issues should be the subject of an independent infrastructure bill. When asked what the Committee’s majority position is on the Senate bill (which includes the extra water programs) staff pointed to the last reauthorization when the House held firm to a Corps-only bill: the Senate caved. In the end, none of the other issues - voluntary fee labeling, watersense, etc. were included. Conversely, the minority staff said that their Members like many of the add-ons in the Senate bill and that conference will be “interesting.” FINGERS CROSSED It’s been over a year now that our industry has been waiting for some sort of federal infrastructure package to be introduced, but up to this point, we’ve seen little more than policy concepts released, and no tangible discussion. Toward the end of May, lawmakers on both sides of the Capitol made some reassurances that they hadn’t forgotten their promises. In the House, Transportation Chairman Bill Shuster (R-PA) is reportedly gearing up to introduce an infrastructure package this summer sometime before the August recess. Meanwhile, Rep. Sam Graves (R-MO) said that majority party members would be working on a framework of transportation infrastructure “concepts” to put forward later in the year, but that Republicans wouldn’t start that process until after the August break – meaning even in the best-case scenario, hearings are unlikely until after the midterm elections. GATEWAY As we’ve previously reported, the Trump administration considers the Obama-era Gateway funding arrangement nonbinding, and the administration’s lack of support has set off alarm bells at home. Most recently, a group of 27 GOP congressional representatives has publicly called on their colleagues to use the parliamentary procedure of “rescission” to reclaim the $541 million from the spending bill passed in late March. It is unlikely to work as a successful rescission requires majority votes in both the Senate and the House of Representatives within 45 days of the request being made, but local officials are taking it seriously. Representatives Gottheimer and Lance have stressed the issue of
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Pictured left to right in Washington DC, Dan Kennedy, Glenn Ely, Bob Briant, Jr. Joe Walsh, Congressman MacArthur, Tom Hardell and George Lobman.
fairness, as NJ residents get back just 74 cents from the federal government for every dollar we pay in federal taxes. By contrast, residents of North Carolina, where the rescission effort began, get back $1.41 for every dollar paid in federal taxes. Please consider supporting the UTCA PAC, Constructors for Good Government UTCA continues to be the leading voice for the infrastructure construction industry in Trenton and Washington DC. Whether it is providing expert testimony before business and legislative groups or positively effecting the legislative process, UTCA stands alone in its record of achievement for our industry. This success is only possible with your support and more importantly, with your support of the industry’s PAC: Constructors for Good Government. Please consider contributing as a robust PAC greatly strengthens our voice. Thank you for your continued support.
the importance of injury illness and prevention programs By: debra coyle mcfadden, wec acting director
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Right here in New Jersey, twenty-six workers were killed on the job in 2017. Many of these workers were killed due to falls and some could have been prevented with simple adherence to scaffolding and other safety laws. The New Jersey worker fatality data reflects findings by the US Occupational Safety and Health Administration (OSHA). Annually, OSHA releases the top ten most frequently cited standards. Two of the top three were related to falls. For fiscal year 2017, the top three most cited standards included 1. Fall protection (construction), 2. Hazard communication standard (general industry) and 3. Scaffolding, general requirements (construction). Significant causes of death—such as slips, trips and falls are often preventable by following documented and entirely effective safety protocols. OSHA’s fall protection rule, for example, is first on the list of safety standards most frequently violated by U.S. employers. A 2013 report, Temporary Work, Lasting Harm written by workers and safety experts, highlighted the results of accident and fatality investigations, and found that contract and temporary workers are frequently assigned to the most hazardous jobs on many worksites. Temporary and contract workers are more at risk to experience high injury and illness rates and fatalities. One example was the tragic and preventable death of Jamie Hoyt. Jamie’s family spoke at a past Workers’ Memorial Day event in New Jersey. The death or injury of a worker does not only affect the worker, it affects their family, friends, co-workers and communities. Jamie’s brother Mike explained that Jamie and two or three other temp workers were part of an operation to load heavy (approximately 2,800 pounds) parts onto trucks. The parts were tall and unstable by nature and the workers were working with an improper loading dock. Mike said, “the load shifted somewhat, they adjusted one of their lift gates. It began to roll, the adjustment had created a gap. Jamie’s foot got caught. His leg got caught and the thing just rolled inex-
orably toward him and fell on him. You know, crushed him. They couldn’t. They tried to rescue him. They couldn’t lift it off. They tried to use jacks. They tried to push it, but the cardboard casing would rip off. They just weren’t able to help him.” Worker deaths like these are preventable. Part of the solution is a strong safety culture and employee training, including contractors. Every employer should have an overall injury and illness prevention program. Prevention programs improve health and safety conditions for both large and small employers, reduce workplace injuries and illnesses, improve compliance with laws and regulations, and reduce workers’ compensation premiums. The key elements of an effective prevention program include: management leadership, worker participation, hazard identification and assessment, hazard prevention and control, education and training, and program evaluation and improvement. The NJ Work Environment Council (WEC) is an independent, nonprofit organization working for safe, secure jobs and a healthy, sustainable environment. WEC has a long history of providing worker training and education, technical and organizational consultation, and coordinating policy campaigns. WEC is an affiliate of the National Council for Occupational Safety and Health. For more than 30 years, WEC has been educating workers and communities on numerous health and safety topics. Since our founding in 1986, WEC has provided training to approximately 23,000 workers and managers. WEC’s experience and success as a training organization has helped build the skills of workers and their employers to identify locate and most importantly prevent hazards. WEC’s participatory training methodology has also facilitated workers and employers working together to improve their site-specific safety programs.
Safety Perspective
pril 28 is Workers’ Memorial Day. It is a time to remember those who died on the job or suffered workplace injuries and illnesses. It’s also a time to raise awareness on the importance of preventing future illnesses, injuries and deaths. According to a report released in April by the AFL-CIO, Death on the Job: The Toll of Neglect, 5,190 American workers died on the job in 2016, the most recently available data. This is a 7 percent increase from 2015. In addition, 50,000 to 60,000 die annually from occupational diseases, many diseases are not detected for years after workers are exposed to toxic chemicals and other hazards. In total, on average at least 150 workers die each day.
WEC can provide customizable training onsite on multiple health and safety topics for nominal or no cost. Topics include: lock-out tag-out, an introduction to workplace violence prevention programs, preventing chemical exposures, understanding safety data sheets/NJ hazardous substance fact sheets, NJ Chemical Right to Know Act, OSHA record-keeping, and employer and employee rights and responsibilities under OSHA. For more information on available training topics, please contact Cecelia Gilligan Leto at 609-882-6100 Ext. 308 or cgilliganleto@ njwec.org.
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montana Cover Story
construction celebrates 25 years By: zoe baldwin “Always be prepared to start.” Words to live by from Joe Montana, the three-time Super Bowl MVP and namesake to Montana Construction, that continue to ring true to the firm now celebrating its 25th year. Speaking with President Lisa Ballerini and Vice President Vincent Santaite on a sunny afternoon near their office in Lodi, the siblings laughed as they looked back on the early days Montana. Dominic Jr. was unavailable for the interview, as he was overseeing the kickoff of a $30 million water project - the largest in the company’s history. “We started with a desk in our parents’ kitchen - a phone, a fax, that’s all it was. And a fleet...” Lisa began. “There wasn’t any fleet,” Vin interjected jokingly. “Oh come on,” She continued, “We had an old utility truck, an old excavator, and an old backhoe we bought with a note. That was it.” The camaraderie between the two is immediately apparent, and it is easy to see how their dynamic spurred Montana Construction to grow from a five-person, three vehicle home office into the $60 million operation it is today. Currently employing a staff of 145 people with a fleet surpassing 300 pieces, Lisa and Vincent stress how hard of a climb it truly was. “One thing about this business is that it’s a lot of luck. Those first ten years were hard and filled with growing pains” Vin remembers.
Vincent Santaite started the firm back in 1993 when he was just 19 years old with some guidance from his father, industry veteran Dominic Santaite, Sr. They landed their first contract that year doing emergency repairs on manhole covers and catch basins in Fort Lee before landing a sanitary sewer job in Jersey City. “We built a reputation for emergency work in the early days,” Vin says. “No one wanted to do it. It’s hard to service, hard to get your people to come in on Christmas, leave birthday parties, etcetera. Back then, Dad would still hop on a machine if he needed to.” As the fledgling firm eked out its niche in the industry, it wasn’t long before Dominic Sr. turned to Lisa – a fashion major in college at the time – and asked if she knew how to prepare a bid. “I didn’t,” she jokes. “But I figured it out.” Lisa attributes much of the firm’s stability and early success to family, and to knowing how to play to each person’s strengths. Vin grew up working alongside his dad and knew the industry from every angle, but when Lisa officially joined the firm in 1994 to handle office operations, it freed him up to concentrate on the field - most importantly on bidding. “That changed our company dramatically.” She emphasized. “But then, Dominic Jr. came on board and he’s an organizational genius. He saved us so much money.” Vin jumped in, “Rent one extra truck at $1,000/day, you lose $300,000 by the end of the year. He oversees the managers, the fleet, all the core logistics. We really became a trifecta, but it was a slow and steady progression.”
Montana Construction truck at their Lodi, New Jersey headquarters.
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Now 25 years into the venture, the Montana Construction workforce includes all five Santaite siblings, four in-laws, and three cousins. For the Santaite siblings, having a family member running each aspect of the business sharpens their competitive edge.
In addition to the external competition inherent to any contractor, they challenge each other in their respective roles.
folded, so did the basis of this philosophy.
"Our youth gave us the ability to be lean"
Two recurring themes seem to have become governing principles for Montana Construction: that everything happens for a reason, and that without risk, there is no reward. Early in our conversation, Vincent said in passing that “Some of the jobs you don’t get are the best jobs, believe it or not,” and as the story un-
Cover Story
After losing the $3 million project, the very next job they landed pulled them back into the black – but only As the firm grew in financial and physical because they didn’t land the Bayonne project. capacity they stuck with the strategy, often It was a New York job that they fully did not turning to family like cousins Jen and Mike expect to win. “Everyone was telling us to be Mariano. At the time Jen was working in a careful,” Lisa said. “NY has different laws, diflaw office and was by nature, incredibly orgaferent processes – so Vin bid it very high. Acnized. At first Jen didn’t want to leave the law tually, when I asked him what we bid, and he firm gig, but Lisa can be convincing, and Jen just said, ‘We’re not going to get it.’ But then I started helping with bids and contracts. Her got the call, and literally everyone could hear brother Mike took on one of the most chalme screaming ‘WE GOT IT!’ and that one job lenging responsibilities in the firm - Operabailed us out of our rough patch.” Vin reitertions Coordinator, where he fields the calls - Lisa Ballerini ated, “The risk we took on that one job really for all emergency work. The Santaite sisters paid off.” have also joined the team, Theresa as a fleet assistant and Amanda as marketing assistant As Lisa mentioned earlier in the conversaand project manager. Soon after, their brother-in-law Mike left the major auditing firm KPMG to handle new tion, there is a lesson in every loss. The firm had maxed out its credit lines during that rough patch, and Lisa wanted to make technology for Montana. sure that never happened again. “The lesson I learned there was: “Let me tell you, those first ten years were painful. You had a always ask for an increase. Even if you think you don’t need it 24-year-old, a 23-year-old, and a 19-year-old running the busi- - because when you need it you’re not going to get it. Now we ness. We weren’t taking paychecks for those first few years, but I have a line that’s huge but I rarely use it. If I do, its just to show think our youth gave us the ability to be lean,” Lisa reminisces. activity because when everything hits the fan, no one’s lending “We learned as we went, and my biggest mistakes were also my you money.” biggest educational moments.” The balance created by Lisa’s prudent financial planning paired The most pivotal of those teaching moments arrived a few years with Vincent’s risk/reward bidding philosophy and Dominic’s into Montana’s history at a point when they had split into two inherent ability to minimize costs and efficiency in logistics has crews and were seriously overextended. The firm had lost money paid off over the decades. The Rockland County job enabled the on a job earlier in the year and on top of that, they had a munic- firm to not only regain its footing, but to expand. During that ipal client that just wasn’t paying. “It was stretching us thin,” Lisa rocky year, the Santaites had identified a property in Lodi that recalled. “Then we landed the job of a lifetime in Bayonne for $3 they wanted to purchase as a permanent yard and office location. million… and we didn’t get it. We were low bidder but we didn’t Montana was still using the home office and had been renting get it.” The young firm was out of credit and reaching a breaking two yards in Hackensack. They knew this property would be perfect, but the owner didn’t want to sell…until he met Dom Sr. point. “It was an old man named Gerry that owned the property, and when he met my dad, they just hit it off. It was like father and son – he even gave us money for renovations to the office,” Lisa recalled fondly. The only caveat was that Gerry’s son had to be able to keep his garbage truck in the yard. The previous interested buyers were looking to build condos on the site and wouldn’t agree to the condition. The Santaites did, and Gerry became part of the Montana family. The firm now has satellite yards around the state, and Gerry’s picture still hangs prominently on the wall in the office. In a sweet twist of fate, the Lodi purchase expanded the business and the family. When they first bought the property money was still tight, so they sectioned it off and rented it out. One of those tenants was a contractor named Steven Ballerini. The stars aligned, he met she, and if you have seen Lisa and Steven together you know about the fairytale ending… but that’s a story for another time. Rio Tinto - 50,000 LF of Water Main
With every job and every milestone, Montana grew in capacity and capability. Leading these successes is a tightknit team of
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Cover Story
seasoned industry legends who enabled the firm to take on increasingly challenging projects. Roger Setya, Chief Estimator and Senior Project Managers Robert Hopken and Armando Veguez bring with them decades of experience and provide the strategic guidance necessary to produce bigger and better work. Outside the office, Armando Veguez - Senior Project Manager Pedro Lousado and Scott Houlihan ensure field operations run smoothly and efficiently. Risk can be big but should always be calculated. Once the team was fully in place, their stability formed the foundation of Montana’s next big step forward. Around 2008, Montana won a highly technical US Army Corps of Engineers project. It entailed everything: a levy, a bridge, pump stations, all in a unique location for a tough client. “It was crazy challenging, but ultimately enabled us to grow because the challenge attracted the talent to us - people wanted to work on it.” Lisa credits that project with Montana’s core personnel growth, as the firm was able to retain those talented people after the job was complete. “It catapulted us,” adds Vincent. “We then had an excellent management and supervisory team in place to handle the new challenges as we grew.” Extending well beyond blood relatives, Montana Construction
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Pictured at the Montana Office are Lisa Ballerini, Vincent & Dominic Santaite, Bob Hopken - Senior Project Manager, Roger Setya - Chief Estimator and Scott Houlihan - General Superintendent
truly is a family. They pride themselves on being known as great employers who produce solid work for utilities across the state. The three-story office you see today was built in 2013. Complete with an elevator, the photo of Gerry, and warm personal touches, it’s clear that while it may not be their parents’ kitchen, Montana will always be home for the Santaites. “Winners, I am convinced, imagine their dreams first. They want it with all their heart and expect it to come true. There is, I believe, no other way to live.” -- Joe Montana
equal pay for everyone, everywhere By: greg trif & nicole m. demuro, o'toole scrivo
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n April 24, 2018, Governor Phil Murphy signed into law the broadest equal pay bill in the nation. Effective July 1, 2018, the Diane B. Allen Equal Pay Act (“Equal Pay Act”) will transform the New Jersey Law Against Discrimination (“NJLAD”). The far-reaching language of the amendment will affect all New Jersey employers, but only time will tell how far our courts will allow it to go. No matter where the boundary is drawn, it is clear that the Equal Pay Act will have significant impacts across our State.
Once effective, the new Equal Pay Act will make a number of changes to the NJLAD. Out of all of the changes, two in particular will greatly expand the NJLAD’s prohibitions against discrimination. First, the Equal Pay Act will extend the per se (unintentional) equal pay protections, previously afforded based on sex only, to all protected classes of individuals. Second, and even more significantly, the amended statute expands the scope of those protections. Currently, an employer violates the law when it pays a female employee less for “equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions.” Under the new law, it will be unlawful to pay (including benefits) an employee in any protected class less than the amount paid to another employee, who is not in the same protected class, for performing “substantially similar work, when viewed as a composite of skill, effort, and responsibility.” The statute is not violated if the employer can show that the wage difference is due to a seniority or merit system or a bona fide factor (e.g., training, education, experience, or the quantity or quality of production) based on business necessity.
The new obligation to compare employee compensation company wide may become particularly problematic in the construction industry. Negotiated collective bargaining agreements (“CBAs”) and/or statutory prevailing wage rates often dictate employees’ rates of pay. Both CBAs and prevailing wage rates, however, vary between local units, counties, municipalities and territories. Notwithstanding those concerns, the existence of a CBA will not necessarily be an automatic defense to a violation of the new Equal Pay Act. The Supreme Court of the United States has long recognized that wage discrimination can still exist even where the rate structure is negotiated through a CBA. Similarly, federal regulations related to the federal Equal Pay Act specifically state that the inclusion of unequal rates of pay in a CBA is not a defense in litigation and any such provisions “are null and void and of no effect.” In other words, wage discrimination may exist even if an employer has negotiated a pay structure with the union representing its employees. This is especially so where the CBA only provides a minimum rate structure, leaving the employer with discretion to decide the actual rate of pay for an individual employee.
Labor Relations
As most employers are aware, the NJLAD prohibits employers from discriminating in job-related matters, including compensation, on the basis of an individual’s inclusion in a protected class. In New Jersey, protected classes include, but are not limited to, sex, race, disability, national origin, familial status, and religion. Importantly, the protections are not limited to minority members within each protected class. Rather, the law protects any individual who experiences discrimination based on any of the protected classes. In the context of equal pay, however, sex was the only protected class eligible for per se (unintentional) wage discrimination claims.
Importantly, the new Equal Pay Act will mandate that employers compare and equalize employee pay rates across all of their operations and facilities. Previously, courts have recognized that, when determining whether wage discrimination exists, differences in geographical location may result in differences in pay. Thus, historically, employers, especially in the construction industry where employees perform work all over the State, were comfortable paying different rates for different projects. The plain language of the new Equal Pay Act, however, makes no allowances for work done in different geographical locations. To the contrary, the law expressly states that, “[c]omparisons of wage rates shall be based on wage rates in all of an employer’s operations or facilities.” The new language is strikingly broad, and contractors may have to look at work completed at all work sites to determine whether they are providing equal pay for “substantially similar work.”
Similarly, payment of prevailing wages may not be an automatic defense to a per se wage discrimination claim under the new law. The Prevailing Wage Act merely mandates a minimum wage that employers must pay to all employees on covered public works
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projects. In fact, the Prevailing Wage Act expressly states that, “[n]othing in this act . . . shall prohibit the payment of more than the prevailing wage to any worker employed on a public work.” Because of the discretion given to them, employers who work on public work projects across the State with different prevailing wage requirements for substantially similarly work may unknowingly violate the broad language of the Equal Pay Act. How courts will apply the new Equal Pay Act and interpret its interplay with CBAs and the Prevailing Wage Act cannot be predicted with complete certainty. But one thing is certain: violating this this new law will result in significant financial exposure. The remedies for violations of the law include three times actual damages and up to six years of back pay to aggrieved employees. To avoid and minimize exposure to liability under the new Equal Pay Act, employers should continue to monitor their workforce, maintain records reflecting their employees’ job responsibilities, and be mindful of rates of pay company wide and for all projects.
Labor Relations
About the Authors. . . Greg Trif, a partner at O’Toole Scrivo, represents developers, general contractors, subcontractors and suppliers in all areas of law affecting the construction industry including contract claims, project crisis management, labor and employment disputes and business torts. Nicole M. DeMuro, Of Counsel at O’Toole Scrivo, represents employers in a wide range of labor and employment matters, including New Jersey Law Against Discrimination litigation.
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putting water infrastructure goals to work By: dan kennedy, director of environmental & utility operations
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tions are visible and on the street level. The “green” option opens the discussion for broader solutions, which almost always include “grey” solutions to fix the problems in a community.
UTCA is working closely with a Jersey-focused group named Jersey Water Works. I personally sit on the Steering Committee for this effort and serve as a co-chair of its Asset Management and Finance Subcommittee. In addition, through the Clean Water Construction Coalition (which UTCA leads) we are working closely with a national group named the US Water Alliance. By collaborating with many diverse groups who also embrace the need for investing in solutions that provide communities with safe drinking water and clean waterways, we generate support for increased funding, streamlined review and approvals and support for individual projects of regional and statewide significance.
The diversity of JWW is unique. It brings together people and organizations that do not always see eye to eye. Contractors, utility leaders, regional planners, environmental groups, and others in the room are together working on common goals, but JWW has an action plan that purposefully avoids direct lobbying in favor of education. That said, the educational materials, polling data, and academic studies released since 2015, and more coming forward, lay the ground work for groups like UTCA to do the heavy lift of changing laws, increasing funding, reforming regulations, etc.
TCA is leading the way to accelerate the pace of (re) investment in our State’s aged water infrastructure systems. We face serious challenges in meeting this mission and we know that we cannot do this on our own. One of the ways we are planning on succeeding in the future is through collaboration. This month’s article features two collaborative efforts we are now actively engaged in at the state and national levels.
Jersey Water Works (JWW) is a collaborative effort started in 2015 made up of many diverse organizations and individuals who embrace the common purpose of transforming New Jersey’s inadequate water infrastructure by investing in sustainable, cost-effective solutions that provide communities with clean water and waterways; healthier, safer neighborhoods; local jobs; flood and climate resilience; and economic growth. In addition to prioritizing funding for water infrastructure in New Jersey, it has established the following goals: - Effective and Financially Sustainable Systems: Pushing utility managers to have operating budgets and capital investment strategies that reflect the true needs of their systems. - Empowering Stakeholders: Well-informed citizens and policy makers are essential at solving our “underground” challenges. - Successful and Beneficial Green Infrastructure: Green solu-
On of the most meaningful work products to come out of JWW is polling that clearly demonstrates that people in New Jersey care about water infrastructure. Residents surveyed in November of 2017 voiced that they want investment in water infrastructure, with 90 percent saying that it should be important or a top priority for the governor and legislature. These results are a critical building block to UTCA’s success in our work on water infrastructure. For more information on Jersey Water Works see: http://www. jerseywaterworks.org/
The Pipeline
Jersey Water Works
- Smart Combined Sewer Overflow Control Plans: These plans will form the basis for being the generation that eliminates CSO outfalls from New Jersey and must be well-conceived and based in fiscal reality.
US Water Alliance The US Water Alliance is a similar construct to JWW but working at the national level. Through the UTCA-lead Clean Water Construction Coalition we have joined the US Water Alliance and are already gaining access and benefits previously out of our reach. The US Water Alliance has a diverse mix of members. A key to their work is education, and they have launched what they have branded the “Value of Water Campaign”. This campaign is focused on building public and political will for investment in
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sustainable water infrastructure and water resources. Through education and advocacy campaigns, strategic communications and media activities, high-impact events, and publications, they are helping educate the nation that water is essential, invaluable, and in need of investment. This is perfectly aligned with UTCA’s mission and we are capitalizing on the work product coming from this effort. I have been asked to speak at the US Water Alliance conference this summer on our work in New Jersey. I plan to attend with others in the utility field with several goals. First, to learn from national leaders on how UTCA can better meet its mission around water infrastructure. Second, to ensure that the discussion is balanced with the perspective and experience of contractors and utility professionals. Lastly, I plan to represent UTCA and the great tradition that our members and staff have built of getting beyond just talking about problems and getting to the business of solving them.
The Pipeline
For more information on the US Water Alliance see: http://uswateralliance.org/
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Why Collaborate? In order for collaborations to be successful, there need to be groups that want to solve a common problem, proven techniques to solve the problem, and the problem needs to be important and really matter. For the common problems caused by the historic lack of investment and attention to water infrastructure in New Jersey, I believe all these conditions are met. I personally believe that UTCA has a lot to both give and gain in these discussions. UTCA members understand that the solutions lie greatly in (re) construction of our water systems based on a long-term capital investment strategy. My job will be to use these collaborative efforts to ensure that this thinking is shared by others who will influence these future efforts.
Feature Story
JESCO completes 45 years in business
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ncorporated in 1972, we have grown from a small construction contracting company, “Jersey Equipment Sales Company” (JESCO), to one of New Jersey's leading construction equipment dealers. Today, we have one of the broadest equipment offerings and largest rental fleets in the Northeast region. Our massive parts inventory and full-service fleet vehicles ensure that we are available to meet our customers’ changing needs. As an authorized dealer of well-known brands such as: John Deere, Hitachi, Ditch Witch and Topcon, to name a few, we are equipped to deliver quality construction equipment to municipalities and contractors throughout the Northeast and Mid-Atlantic regions. Additionally, we offer Wirtgen Group products at our Northeast branches; located in South Plainfield, Lumberton and Fairfield, New Jersey; as well as Beacon and Deer Park, New York. In addition, we have a branch located in Shrewsbury, Massachusetts. Furthermore, there are five branches throughout the Mid-Atlantic region; Waldorf, Baltimore, Frederick, Delmar, Maryland and Middletown, Delaware. What’s New: Our company is growing, and with growth comes the demand to have a cohesive brand identity amongst our branches. This year we closed our White Plains location and relocated it to Waldorf, MD where we built a brand-new full-service “Leadership in Energy and Environmental Design” (LEED), certified building. LEED is a national certification system developed by the U.S. Green Building Council (USGBC) to encourage the construction of energy and resource-efficient buildings. Additionally, In March 2018 we opened a new ultramodern facility in Lumberton, NJ located adjacent to our pre-existing Lumberton location exclusively for Topcon and Ditch Witch brands. At JESCO, we know that technology is ever changing in the construction industry, as such, in 2017 we broadened our brand offerings by teaming up with Topcon / Sokkia as a distributor of positioning and machine control solutions. With our new
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Waldorf, MD service area
sales team and certified technicians on board, this brand compliments our portfolio by adding precise geo-positiong equipment construction solutions for accuracy and efficiency. In May 2018, we acquired our newest brand, “Wirtgen Group” where we will be representing Wirtgen, Vogele, Hamm and Kleeman brands. The Wirtgen Group is a customer solution for road construction and repair, for mining and processing pay minerals and recycling construction materials.
State-of-the-art machines and cutting-edge technologies for road construction. With its innovative, high-performance and cost-efficient products and technologies for cold milling, soil stabilization, cold recycling, concrete paving and surface mining, WIRTGEN leads the world market in road construction and repair, as well as in mining natural rock and minerals.
Innovative solutions for paving asphalt and sub-base materials
crushers and cone crushers, as well as screening plants for processing minerals and recycling construction materials. The mobile tracked machines are produced at the brand headquarters in Göppingen, Germany. The world's leading crushing and screening technologies are also continuously developed there.
The pavers, screeds with multiple compaction methods, mobile feeders and various special-purpose machines from VÖGELE, the world market leader, make up a complete range of innovative machines for road construction. They are developed and built in the industry's largest, specialized factory in Ludwigshafen, Germany. The name VÖGELE stands for top quality in all products and services.
KLEEMANN owes its outstanding position in mineral technologies and in the market for mobile machines to its great competence in process engineering. The mobile machines are characterized above all by painstakingly designed solutions which always embrace the complete process and maximize the benefit for the customer. Dependable machine availability means that customers can rely on their machines 24/7. All these brands can be found at our New Jersey and New York branches.
First-class technology for soil and asphalt compaction HAMM offers a wide range of products for all aspects of soil and asphalt compaction, utilizing leading machine and compaction technology. Along with the technical requirements, ergonomic design and simple operation are prime concerns. And thus, HAMM finds a perfect balance of technology and ergonomic design. In 1911, Hans Hamm set a milestone when he designed and built the world's first diesel engine driven road roller. At its headquarters in Tirschenreuth, Germany, HAMM continues to set new standards, even today, with regards to the design and ergonomics of its compactors, tandem and rubber-tired rollers as well as compaction with oscillation.
Plant technology for processing natural stone and recycling KLEEMANN supplies a large range of jaw crushers, impact
Our customers deserve the best service, as such, we increase our service truck fleet every year. By adding new service trucks, we see an increase in responses and a decrease in machine issues that result in increased uptime. Being able to supply that type of one-on-one roadside field support service is important to us.
Feature Story
Asphalt pavers have a long history featuring technical and technological innovations which were greatly influenced by VÖGELE – from the first paver with hydraulic drive and ultramodern high-compaction technology in screeds to a uniform, easy-tolearn concept for paver operation.
Lastly, we have added a new parts ordering system to our website called “My Dealer”. My Dealer is a parts ordering and invoice reporting tool for customers. Benefits of this service include; placing parts orders on site, access to your JESCO invoices, and quick and easy tracking of your transactions Company Culture: We are proud of our accomplishments over the past 45 years. As the “Down To Earth Equipment People”, we believe honesty is the best policy when it comes to our customers. Building trusting relationships is our top priority and understanding your business needs is our specialty. We value the opportunity to create a long-term relationship with our customers, and we do that by giving you our best! Our core values create a thriving family oriented environment. We have programs in place to motivate employees and express appreciation to them for their continued efforts and support on behalf of the company. Our continued growth demonstrates that this new formula combined with the existing corporate philosophy is a successful approach. With a strategic plan in place for future growth of the company and a talented dedicated staff with a firm knowledge of the construction industry, JESCO is poised to continue its growth and market share in the upcoming years.
The JESCO team and members of the local 37, the Operating Engineers, Baltimore, MD
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Feature Story
2018 Executive seminar: Chandler, Arizona By: zoe baldwin
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ver 100 members and their families converged at the Sheraton Grand at Wild Horse Pass for this year’s Executive Seminar in Chandler, Arizona. UTCA President and Seminar Chair Tom Hardell organized a fantastic trip filled with group activities that truly let attendees get to know the rich culture of the American Southwest, and a little more about each other. The group arrived early afternoon on April 7, ready for a week of fun and productivity. Upon walking into the hotel, guests were immediately awed by the gorgeous, 2-story panoramic view of the Sonoran Desert stretching before them – a treat only made sweeter thanks to welcome drinks, finger food, and a really great hat courtesy of Hoffman Equipment. As the buzz of travel and the activities to come died down, travelers headed to their rooms to prepare for the evening festivities. The weather was perfect for the arrival night Welcome Reception, and the relaxing desert sunset set a perfect tone for the week ahead. Long-time friends and colleagues rehashed good times, new-comers mixed and mingled, and everyone looked forward to week of golf, sightseeing, and industry events. Special thanks are due to our sponsors for the evening, Florio Perrucci Steinhardt & Cappelli, Brent Material, Connell Foley, Northwestern Mutual, Edward Post Co., Garden State Precast, Taylor Oil Com-
"Holy Constructamole" showing off their award winning presentation at the Chef Challenge.
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Tom Hardell and friends enjoying Rawhide.
pany, UCIAF, Vollers, and Weldon Materials; our delicious dinner would not have been possible without your support. The first full day started us off right, with business meeting presentations on two issues critical to our industry. First, UTCA attorney Adrienne Isacoff of Florio Perrucci Steinhardt & Cappelli spoke about D/M/S/W/BE certification and compliance requirements before Assemblywoman BettyLou DeCroce delivered an in-depth update on what to expect during the current legislative session in Trenton. Afterwards, guests had several hours of downtime to explore the expansive property, relax by the pool, and steel their nerves for the challenge ahead. If there’s one thing every contractor loves, it’s a good competition - and the teams participating in the Chef Challenge did not disappoint. The premise was simple: divide the group into teams, judges, and hecklers; whip up a specialty salsa and guacamole using fresh local ingredients along with a margarita to wash it down; and pick winners for the categories of best food, best margarita, and best presentation. The outcome… hilarious: every team planned ahead and arrived in branded uniforms; following the lead of Ruth Harms, teams began swiping décor and ingredients from each other; Association CEO Bob Briant Jr.’s Arizona trivia knowledge was so on point, he won extra ingredients left and right; and Beth Rotella led a pack of hecklers who stoked the competition and kept everyone on edge. In the end, three teams reigned supreme. The title for best food with their stellar salsa and guacamole went to team Top Dis’h, Team 82nd Airborne took the win for best margarita, and the distinction of best buffet presentation went to the aesthetic sensibilities of the Holy Constructamole team. As anyone on the trip can now tell you, there’s nothing like going head to head in culin-
ery combat to build bonds and camaraderie. Thank you as always to our sponsors, Stone Hill Contracting and EIC Associates.
In addition to the team building and networking, the business meetings provided insight and perspectives to the work our members do each day. Kevin Ellman of Wealth Preservation Solutions provided guidance on an issue of such great importance no one likes to think about it – succession planning. Running the gamut from how to know you’re ready to how to go about the process, Kevin’s presentation covered all the bases. Tim Watters once again used his expansive network to bring in a guest speaker Chad Kurle, the Training Site Manager at Doosan’s Real Operation Center (ROC), the heavy equipment training and testing facility for Doosan North America. Perennial Seminar attendees Bill Harrison and Rob Pitts of Construction Risk Partners spoke on their area of expertise – bonding and insurance. They provided some sage advice on making sure your firm is covered. Wrapping it up were Michael McBride and Peter Smith of Connell Foley, who spoke about PLAs and indemnity, respectively. When it came time to wind down and say our goodbyes at the Farewell Reception, Mother Nature had other plans. Despite being forced to move the event inside, the group had a fun and tasty time shielded from the whipping desert winds. We even had our
In the end, the desert excursion was an invigorating experience for all. From informative business meetings to relationship building and the tons of fun in between, everyone went home relaxed and ready to head into a new construction season. Next year, we’re heading out to the Lodge at Torrey Pines in San Diego, a luxury lodge and resort that features two internationally acclaimed 18-hole golf courses, stunning views of the Pacific, and easy access to several downtown areas of the large west coast city. We hope you’ll join us March 23 through 30, 2019, and keep an eye out for more information to come.
Feature Story
Throughout the week, attendees golfed, relaxed at the pool, flew down the 111-foot waterslide, visited Sedona, and rode 4x4s through the desert before gathering for the big event on Wednesday. With many members dressed in their best duds, the group took a trip down the road and back in time to Rawhide Western Town. This excursion was an instant hit, where folks took hilarious group photos, threw tomahawks, and rode the mechanical bull in this authentically recreated 1880s Old West town. The highlight of the night however, was the “arrest” of Tom Hardell by the local sheriff, who sentenced Tom to a public penance singing children’s songs in front of the group. The evening was a blast, and between the sumptuous BBQ, cowboy games, and oldtimey charm, everyone was left with a little bit of that old west spirit and a satisfied smile on their face thanks to our generous sponsor, George Harms Construction.
local association partners in attendance – Connie Peretz, executive director of the Arizona Utility Contractors Association, and BJ Cordova, executive director of the Arizona Transportation Builders Association. In addition to the great food and friends, a highlight of the evening was the 50th birthday celebration for Pete Hutchinson of Selco Manufacturing. The group shared memories, cocktails, and a unified sense of industry as we readied for the trip home. Special thanks to Farewell Reception sponsors Wealth Preservation Solutions and Cohen, Seglias, Pallas, Greenhall & Furman for a relaxing evening.
Tim Watters of Hoffman Equipment hosted a group of attendees at the Doosan plant in Tuscon, AZ.
UTCA's 2019 executive seminar san diego, ca March 23-30, 2019 The Lodge at torrey pines
Tom Hardell being "arrested" at Rawhide Western Town.
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By: nancy damato, rda benefit services
M
ay 2018 marks the 12th annual Disability Insurance Awareness Month, a joint campaign sponsored by the Council for Disability Awareness and the insurance industry to highlight the importance of protecting your income in the event of a debilitating condition. The goals of this campaign are to help Americans understand that disabilities occur far more often than any of us would like to believe, and to identify steps they can take to ensure that they are covered for this possibility. The Growing Disability Coverage Gap
Today, more and more U.S. workers are living paycheck to paycheck. CNBC reports that 57 million Americans have no emergency savings, and only 39% have enough in savings to handle a $1,000 emergency. At the same time, medical costs are rising rapidly, and a growing percentage of workers have high-deductible health plans that would incur large out-of-pocket expenses, if they suffered a catastrophic illness or injury. With a lack of savings and higher medical costs, American workers rely on their income more than ever to stay afloat. Unfortunately, millions do not have adequate protection in case they are out of work. Statistics from the Council for Disability Awareness show that more than 51 million U.S. households are without disability insurance, other than the basic coverage that Social Security provides. With so much at stake, it is reasonable to ask why so many Americans choose to go without disability insurance. Some of the primary reasons include: • They believe they will never need disability coverage; • They believe disability insurance is too expensive;
NEWS
disability insurance awareness month the disability coverage crisis in the u.s.
• They believe they are already covered through Worker’s Comp and/or Social Security Disability Insurance (SSDI). The Chances of American Workers Becoming Disabled While the majority of workers in the U.S. believe their chances of becoming disabled are minimal, the statistics show that the odds are much higher than most people believe. For example, more than one out of four 20-year-old workers can expect to be out of work for at least a year due to a long-term disability before they reach retirement age. Short-term disabilities are even more frequent. Each year, roughly 6% of working Americans will experience a short-term disability (due to injury, illness, or pregnancy) lasting six months or less. This means that over a four to five decade working career, there is a very good chance you will suffer from at least one short-term disability. Do not count on Worker’s Compensation or SSDI to cover you if you become disabled. Forbes reports that fewer than 5% of disabling injuries or illnesses are work-related. In addition, less than 25% of SSDI claimants have their applications initially approved. Most claimants are only approved after a complex and protracted appeals process that can take up to 18 months or longer. Why Employers Should Offer Disability Coverage A large percentage of American workers are not financially prepared to deal with a debilitating injury or illness. Without income protection in place, they are at risk of severe financial hardship, including bankruptcy. The cost to purchase disability coverage is a legitimate concern, but the more important question is “can I afford not to protect my income?” Disability insurance rates vary widely depending on if the employee purchases the insurance privately or through an employer-sponsored group plan. Group coverage through an employer is typically more affordable with fewer underwriting requirements. Employers who offer disability coverage provide easier access to the income protection a growing number of their employees need. Individual disability policies are more comprehensive and offer additional benefits and can be customized for each person’s needs. And the cost for this protection is about 2-3% of your current income. Typically, a carrier will offer a discount when 3 or more policies are purchased by employees at the same company. Whether you choose group or individual disability insurance, you are choosing to protect your most valuable asset—your ability to earn a living! It is one of the smartest investments you can make.
Utility & Transportation Contractor | JUNE| 2018 81
By: james m. hanrahan, senior vice president, construction & development practice, conner strong & buckelew
W
ouldn’t it be nice to avoid a bad construction project before it starts? Nobody wants to waste time, lose money, ruin their reputation, or have workers injured during a difficult job. One of the key differences between a good project and a bad project is solid risk management – taking the appropriate steps at the appropriate times to set yourself up for success. Unfortunately, some contractors wait until problems arise, then try to find ad hoc, immediate solutions. The trouble with this approach is that solutions are almost always more expensive and less effective. Instead, contractors need to think about risks and opportunities early and often. It creates more leeway for creative, cost-effective solutions. Whether through contingencies, contracts, or insurance, you can much more easily deal with potential issues with a risk-first point of view. This is a two-step process: properly identifying risks, then making strategic plans for managing them. But how do you define risk, and how should you develop those strategies for managing it? REDEFINING PROJECT RISK When contractors think of risk, they typically think of all the physical dangers of the work. In reality, the risks that most frequently disrupt projects aren’t related to the actual construction activity. Beyond safety, some critical project risks include:
• Cost management
• Time management
• Scope and change management
• Procurement and contracts
• People management
• Information management
While every contractor wants to avoid these issues, they still remain prevalent. A study by McGraw-Hill Construction found that scope and budget creep were the top risks facing the construction industry. Similarly, a study from the Surety & Fidelity Association of America found that management-related issues like scoping and accounting were the most common reasons that contractors failed.
NEWS
there is no bad project only bad risk management This means that the most common assumption of what entails risk management is far too narrow. Risk, and the opportunities that arise from avoiding or mitigating it, can relate to any aspect of a construction project. Expanding that definition to the fullest perspective is the first step to understanding the factors that lead to a successful project. PROPERLY MANAGING RISK Once you’ve reframed the way you think about risk, you need a framework for approaching it. Here are some general, easy-to-remember risk management guidelines. List Risk Sources Take the previous list of risks categories and build upon it with others relevant to your project. Is weather a risk? Suppliers? Politics? Rank Risk Importance This can be a complicated process, because it will vary from project to project, and quantifying risks can be difficult. Remember that while safety risks may be most visceral, it’s often the softer risks, like scheduling and budgeting, that tend to disrupt businesses the most. Manage the Risks For each risk, approach your plan of action using the acronym RISK: Reduce it. Take steps to lessen the likelihood of the risk. Insure it. Get insurance to cover the financial impact of the risk Sidestep it. This might require saying no to something or finding another way to do something that doesn’t face the same risk. Keep it. Sometimes a risk may be worth taking, keeping the current situation as is. However, this doesn’t necessarily mean that you do nothing about it; have a response ready if something goes wrong. Thinking in these terms before a project begins will give you a leg up on competitors that wait to react to risks rather than to proactively plan for them. The more you plan for risk, the more consistently you’ll realize reward. James M. Hanrahan is Senior Vice President – Construction & Development Practice at Conner Strong & Buckelew. He can be reached at (856) 552-4946 or jhanrahan@connerstrong.com.
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