Utility & Transportation
contracTOR
Northeast Remsco Celebrates 40 Years In Construction
august 2018
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president’s message
From the desk of: tom hardell
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early one year ago, I wrote my first President’s Message for the October magazine. I was excited and honored to assume my new role as President of UTCA and as I sit here now to write my last, I cannot help but reflect on all that we have accomplished over the past twelve months. I was sworn in by my dear friend Paul Fader on September 30, 2017 after seven years of service to the Board, and on September 29th of this year, I will pass the torch to Joe Walsh and work to help him in my role as immediate Past President. Those are big bookends around my tenure, and I am confident that the momentum we have been building will only continue to grow. In many ways 2018 was, for the most part, a fighting year. We pushed back on DOT and secured changes to the DBE program so that they’re not required to be listed at time of bid. We began tackling in earnest the lack of work out on the street – turning up the pressure on DOT and NJ Transit to put our hard-won gas tax dollars to good use. In the State House, we passed legislation that created a standardized statewide process for addressing differing site conditions; we ironed out kinks in the Infrastructure Bank; and we secured important amendments to the legislation enabling P3s and the RAP program. Despite our progress it’s still hard to believe that the year went by so quickly. However, there is plenty of work still to be done to prepare our industry for the future. At the State level, we must keep working to institute a CPI for the motor fuel tax. The fight to renew the TTF was fierce and decades long - pegging funding to inflation will ensure that as the cost of doing business incrementally rises, so will the gas tax. In the community, we must actively engage, participate, and support local high schools and their students by going to Career Days, meeting with school administrators, and creating meaningful interactive experiences for high school students. Programs that provide students with a real understanding of our industry and the opportunities it can offer will ensure that our workforce is prepared for the challenges of tomorrow.
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Another focus of the Association is the doubling of Local Aid funding. We need to make sure the County and Municipal project money is spent in a timely manner; that contractors bidding on these projects must have a pre-qualification from the NJDOT in order to bid on and build the project; that the projects are bid to our industry contractors and not self-performed by the Counties or Municipalities. Another issue that is costing taxpayers, toll payers and household utility bills is that million of dollars intended for capital investment is diverted every year for uniform traffic control. Our industry has set the highest job site safety standards, and quite often, our employees are better trained in work zone safety and traffic control than the officers assigned to their projects. It is time to identify sensible reforms that keep our employees safe while minimizing additional and unnecessary costs. Last, but certainly not least, we need to continue to focus on generating new members to increase our strength as an industry. Additionally, we must engage our current members and encourage them to be more active in the Association. In closing, I would like to extend huge congratulations to my friends Scott Lattimer for being awarded the 2018 Robert A. Briant, Sr. Memorial Award, and Construction Risk Partners for being awarded the 2018 Larry Gardner Memorial Award. I would also like to congratulate Northeast Remsco celebrating 40 years in construction, and Raritan Group which is celebrating 75 years in business. It has been an honor and a pleasure to serve as your President, and I look forward to seeing all of you September 27th thru 30th at Borgata in Atlantic City for the 2018 Annual Convention.
Best regards,
Tom Hardell
Cover 53
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CONTENTS
Cover story 53 northeast remsco
construction celebrates 40 years
DEPARTMENTS
FEATURES
2 7 13 21 29 37 45 65
72 raritan group celebrates 75 years over 4 generations 98 cleaning the hudson river with precast concrete
President’s Message Financial Overview Legal Dig Accounting Corner Legislative News Safety Perspective Labor Relations
NEWS 83 joseph t. walsh to be inducted as utca president 91 sage college tuition rewards program
The pipeline
Published Bimonthly During 2018
1670 Route 34 North Farmingdale, NJ 07727 PO Box 728 Allenwood, NJ 08720 PH: (732) 292-4300 FAX: (732) 292-4310 www.utcanj.org
Publisher: Robert A. Briant, Jr. Editor: Helene Nasdeo Editorial Contributors: Zoe Baldwin, Dan Neville, Dan Kennedy Advertising Manager: Helene Nasdeo Photographer: 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
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arvin Gaye’s song was as pertinent in 1971 as it is today. Business owners constantly ask this question, and while the answers may change over time, the issues generally remain the same. Our economy is in constant flux, and the more recent volatility makes it even more difficult to provide definitive answers that can be relied on. With that in mind, below are a few other questions routinely asked of bankers and hopefully, the answers will be of benefit to you and your business. Where are interest rates going? While I am no economist, it is not hard to predict an upward trajectory in interest rates. The recent increases in the prime rate have outpaced higher long term rates; however, the 10+ year low interest rate environment is clearly ending and the market is returning to more historic levels. What are high interest rates going to do to my business and how do I protect myself? Financing costs are most assuredly going up which will inevitably have a negative impact on your bottom line. While you may be able to offset some of these costs with new work, existing contracts will not allow it. To be certain borrowing money for equipment makes economic sense, be sure to “sensitize” what higher interest rates will do to profitability. If this exercise demonstrates tight cash flow, consider leasing the equipment rather than buying it. Will banks lend in a higher interest rate environment? Banks lend money in any, and all, interest rate environments. It was not that long ago when businesses operated and were successful with double digit interest rates. Rates at this level are generally the result of high inflation. Nevertheless, business is done and banks will lend; inflation on the other hand is another issue. How can I reduce my borrowing costs? The simplest answer here is to de-lever your company which will inherently reduce interest expense. Another solution is to fix interest rates where/when appropriate so that financing costs will be a fixed, rather than a variable expense. This tool will also make financial projections easier. Lastly, ensure your treasury management services are effectively used so that idle deposit balances can be used to pay-down lines of credit, daily, in an automated and cost effective manner.
Are government regulations constraining banks from lending? Yes. Without providing exhaustive and boring detail, legislation like Dodd-Frank among others, have unnecessarily burdened all banks with huge amounts of administrative due diligence. While only a few mega-banks were largely responsible for the industry’s recent financial meltdown, most regulations apply to all. The recent enactment of “Beneficial Ownership” and “Customer Due Diligence” documentation are examples of how on-going, increasing, legislation is bogging down banks from doing business.
Financial overview
"What's going on?"
Why is it so difficult to borrow money from a bank? Borrowing money should not be hard for credit worthy customers who demonstrate a strong and stable record of cash flow to support their debt repayment, among other things. While this sounds easy, no loan or company is the same, and all have had issues to contend with at some point in time. That is to say, no two loans are alike and that is even more prevalent in the heavy construction industry. Most banks have money to lend and want to leverage that asset to create better returns for their shareholders. The synergies between companies looking to borrow and banks eager to lend should be effectively leveraged by both parties to forge a mutually rewarding relationship. What should I expect from my banker? A banker’s role is to effectively serve as an ambassador between the bank and the customer, and vice versa. While some bankers have more delegated authority than others, experience dictates how certain situations are handled and solutions provided. Communication should always be open between the business owner and the banker, and conversation should be valuable for both parties. Your banker should be well aware of how their company is performing, as well as yours, and be able to provide meaningful dialogue about your market, industry and the impact of evolving economic factors. Business owners should rely on several business partners and your banker is one of them. Hopefully these questions and answers provide you with some insight as you look to grow profits during the second half of the year. If you are uncertain where you bank stands regarding some of these topics, please feel free to contact me. I would also like to congratulate the Northeast Remsco on 40 years in construction, and the Raritan Group on 75 years in business.
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By: adrienne l. isacoff, florio, perrucci, steinhardt & cappelli
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ypically, the time by which suit must be filed is governed by statute. For claims based on breach of contract and “tortious injury to real or personal property,”i the statute of limitations is six years. N.J.S.A. 2A:14-1 et seq. However, contracts may shorten those statutory time periods and such limitations periods are enforceable. A recent case decided by the Appellate Division of the Superior Court of New Jersey highlights the attention that contractors must pay to contractual limitations periods. In E&H Steel Corporation v. PSEG Fossil, LLC, 2018 WL 2292995 (App. Div. 2018), the Court ruled on multiple trial issues, including an argument by the Defendant that Plaintiff ’s claim against PSEG was untimely in light of a one-year contractual limitations period. E&H Steel was the successful bidder for a proposal to fabricate sixteen types of structural steel items to be used for equipment in a power station owned and operated by Defendant PSEG. E&H Steel based its unit prices on documents and specifications submitted with the bid solicitation. Following award of the bid, the parties met to execute the contract. After the execution of the agreement, Defendant placed a CD in the contract binder containing the drawings for the required steel components. E&H Steel discovered that the CD contained forty-seven new drawings not previously provided that differed significantly from the drawings supplied in the bid package, upon which the contract price was based. PSEG denied Plaintiff ’s requests for a revision and re-pricing of the units. E&H Steel determined to fabricate the steel according to the new drawings and submitted change orders for its increased time and labor needed to construct the steel in conformity with the drawings. PSEG contended that the contract only permitted change orders for increased tonnage, not for expenses of more time or labor. Accordingly, it issued a change order increasing the tonnage amount of the contract but refused additional change order requests. Plaintiff filed a complaint alleging that PSEG breached the contract when it presented new drawings which required additional time and labor than that previously provided for in the bid drawings and failed to approve change order requests necessitated by the additional drawings. Following a trial, both sides appealed various of the lower court rulings. PSEG argued on appeal that the complaint should have been dismissed because it was filed after the expiration of the one-year contractual limitations period specified under the contract. The Appellate Division ruled against Defendant, focusing on the issue of when a cause of action accrues. The contract specified that
E&H must file any cause of action against PSEG “not later than one year after the cause of action accrued.” Defendant contended that Plaintiff ’s claim accrued on the day of the meeting to sign the contract and the receipt of additional drawings. The Court rejected that position, observing that the contract had a framework for the request for and issuance of change orders, which was utilized by the parties for several years following the execution of the contract. Plaintiff was not damaged until it was notified by Defendant that PSEG refused to pay for change orders based on additional time and labor. It was only when the change order refusal was received that the limitations clock began to tick. Consequently, Plaintiff ’s complaint was timely filed.
Legal Dig
pay attention to contractual limitations period
To understand the contours of this ruling, it should be compared with P.T. & L. Constr. Co., Inc. v. Madigan and Hyland, Inc., 245 N.J. Super. 201 (App. Div. 1991). PT&L brought suit against the New Jersey Department of Transportation in 1979, alleging that the State’s nondisclosure of material facts concerning working conditions constituted misrepresentation. It prevailed at the trial court, although the amount of its damages was significantly reduced on appeal. In 1981, PT&L then sued Madigan-Hyland, which had acted as the designer of the project, seeking certain costs that it was unable to recoup against NJDOT in the previous case. The Appellate Division ruled that the complaint against the engineer was not filed within the six-year statute of limitations period because PT&L was aware that it had a cause of action against Madigan-Hyland at the same point that it was aware that it had a cause of action against NJDOT. The Court noted that “once a party knows that it has been injured and that the injury is the fault of another, it has the requisite knowledge for the applicable period of limitations to commence running.” Id. at 209. The fact that another case was proceeding that may have affected PT&L’s decision about whether it wanted to proceed against the engineer did not toll the running of the statute of limitations. It could have sued both defendants at the same time. TAKEAWAY It is always important to bear in mind when a cause of action begins to “accrue” so as not to be stopped by the running of the clock. But, it is also important to read your contract carefully to see whether the owner has slipped in a contractual limitations period that may significantly shorten your right to sue. i
Note that personal injuries that arise our of negligence have a 2-year statute of limitations. N.J.S.A. 2A:14-2
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prepare now to adopt the revenue recognition standard By: richard higgins, cpa, principal, mccarthy & company, pc
This ASU will significantly affect the current revenue recognition practices of most contractors. It could also impact the timing and amount of revenue reported, key performance indicators, debt covenant ratios, bond programs, contract negotiations, business activities, and budgets. Contractors need to consider how adopting the ASU will impact their businesses.
Variable considerations like discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, or late payment penalties need to be included in the transaction price.
Although contractors have had several years to prepare for adopting the new standard, most have put off doing so. A survey conducted by Robert Half International, Inc (link to: https:// www.roberthalf.com/blog/management-tips/your-companyand-the-new-lease-accounting-standard-data-tables-by-industry) found that less than half (44 percent) of the survey participants have begun the transition to the new lease accounting standard. Among companies that have moved to adopt the standard, only 48 percent of the respondents reported completing an assessment of how much needs to be done. Furthermore, only 37 percent of the smallest companies (between 20 and 49 employees) surveyed have started the lease accounting adoption process. Adopting the standard ranks among the top three issues for the smallest companies. Here is the five-step implementation model recommend by FASB: Step 1: Identify the Contract with the Customer. A contract is defined as “an agreement between two or more parties that creates enforceable rights and obligations.” In certain situations, contracts can be combined into a single contract for accounting purposes under the ASU. Contract modifications must be accounted for either as a separate contract or an adjustment to the original contract. Step 2: Identify the Performance Obligation in the Contract. A performance obligation is defined as “a promise in a contract with a customer to transfer a good or service to the customer.”
Step 3: Determine the Transaction Price. The transaction price is “the amount of consideration to which an entity expects to be entitled in exchange for transferring the goods or services.” Numerous factors must be taken into consideration when determining the transaction price, such as the terms of the contract, the contractor’s business practices, the time value of money, as well as noncash and other variables.
Step 4: Allocate the Transaction Price to the Performance Obligations in the Contract. Depending on the circumstances, the transaction price would be allocated to all performance obligations that require separate accounting based on the standalone selling price, or the price for which the contractor sells the good or service for separately. If the contractor does not have a standard standalone price, it can be estimated.
Accounting Corner
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A contract may have one or more performance obligations or deliverables under the multiple element arrangement revenue guidance.
ime is running out for construction contractors to adopt the new revenue recognition standard. The Financial Accounting Standards Board (FASB) introduced the Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606) in 2014. The standard became effective for public companies for the first interim period beginning after December 15, 2017. Nonpublic companies have until the first interim period after December 15, 2018, to adopt the standard.
Step 5: Recognize Revenue When or As the Performance Obligation is Satisfied. The ASU requires that revenue is recognized when the good or service is transferred, or as control over the good or service is transferred. It can be done over time (services) or at a point in time (goods). A contractor must meet one of two conditions to recognize revenue incrementally. The customer must have control of the asset as it is built or improved, or the asset has to be identified as having no use to the contractor who has the right to be paid. Recognizing revenue at a point in time involves recording revenue for each performance obligation as it is completed or when the customer takes control of the asset. - Richard Higgins Control of the good or service is defined as
"Contractors need to consider how adopting the ASU will impact their businesses"
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“when the customer has the ability to direct the use of or can benefit from the transferred good or service.�
Accounting Corner
This revenue recognition standard applies to all contracts with customers unless the contract is within the scope of another standard (leases, insurance, financial instruments, etc.). Contractors can apply the new revenue recognition standard retrospectively or elect to recognize the cumulative effect of applying the new standard to existing contracts in the opening balance of retained earnings on the effective date (with proper disclosures). Regardless, time is of the essence and it is time to prepare to adopt this standard. Disclaimer: This article is for informational purposes only and it does not constitute professional advice. Information contained in this article is not intended or written to be used as tax advice, and cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s). About the Author. . . Richard P. Higgins, CPA, is a principal with McCarthy & Company, PC’s office in Beachwood, NJ. A long time UTCA member, Rich is a thought leader in construction accounting. He can be contacted at 732. 341.3893 ext. 17 or Richard.Higgins@ MCC-CPAs.com.
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legislative update By: zoe baldwin
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The $37.4 billion state budget raises taxes on multi-millionaires, corporations, ride-sharing services, and internet-based home rentals such as AirBnB. The two major tax hikes the Governor requested – a tax on millionaires and the restoration of the sales tax to an even 7% – were rejected and replaced with a package of temporary hikes that will be phased out within four years. While the final agreement avoided the troubled sales tax increase we outlined in the last magazine article, it did include three notable changes: a new 10.75 percent tax on multi-millionaire incomes over $5 million, projected to raise $280 million annually; a “temporary” corporate tax surcharge averaging 2 percent, projected to raise $425 million; and a general tax amnesty estimated to generate $200 million. During the brief truce, formerly warring parties touted the benefits of the budget, calling it a win for the middle class. Wall Street, however, remains unimpressed. Credit-rating analysts want to see other signs of financial stability including recurring revenue, fulfilled obligations, and a sizable surplus. Until then, New Jersey’s once high rating will remain second-worst in the nation, behind Illinois. In a press conference after the deal was signed, Governor Murphy referred to the 2019 budget as, “one step back from the abyss.” Breakdown by Department - NJDOT: FY18 Actual $1.58B FY19 $1.8B This represents a change of +13.4% * Transportation Capital Program: includes $1.24 billion for State and local highway and bridge projects, and another $760 million for mass transportation projects - NJ Transit: General Fund appropriation of $383 million—a $242 million increase from fiscal 2018 This represents a change of +63% - NJDEP: FY18 Actual $321M FY19 $275M This represents a change of -14.3% CAPITAL PUNISHMENT As previously reported, one of Governor Murphy’s topline goals has been to reform NJ Tran-
sit – a big part of which entails straightening out the funding morass that has hobbled the agency for over a decade. As noted above, Transit received a healthy boost to operations this year, originally part of a larger effort to curtail the capital to operating transfers. However, the morning of the planned vote on a $2.3 billion operating budget, Transportation Commissioner and Transit Board Chair Diane Gutierrez-Scaccetti, pulled the plug after news began reporting on a $511 million capital-to-operating transfer stating she needed more time to review the plan to ensure it was "consistent with the governor's mandate." This practice was one of the most criticized budget tricks of the last few administrations, and one that has plagued our industry for years. There is no word yet on what the agency or administration will do to rectify the issue, but if advanced the FY19 proposal will increase the transfer by $50 million as compared to the previous fiscal year. PUTTING THE ACCOUNTABILITY IN THE WATER QUALITY ACCOUNTABILITY ACT UTCA has developed a Comprehensive Water Infrastructure Investment Program, outlined in detail on page 65. We are pleased to announce that legislation to enable and implement the planning process and capital program are underway. The current strategy initially translates into four different bills, three of which are in the drafting stage, and one that is already introduced.
Legislative News
UDGET OVER TROUBLED WATERS Last month New Jersey came within hours of shutting down the government due to an impasse on budget spending and revenue projections. Thankfully, lawmakers were able to reach an agreement in the morning hours of July 1, narrowly avoiding what would have been the second shutdown in two years, and only the third in state history.
First, at the suggestion of the Senate President, is an expansion of the Water Quality Accountability Act which will require all drinking water systems adhere to and enforce asset management plans. The existing Water Quality Accountability Act simply required development and submittal to state agencies with no enforcement mechanisms. The second bill takes this exact process and applies it to wastewater systems. At present, only wastewater systems with a CSO are required to prepare and submit asset management plans. The third bill will come in the form of a procedural amendment to the Infrastructure Bank (formerly NJEIT). This legislation will enable the Infrastructure Bank to prepare a statewide Comprehensive Water Infrastructure Investment Strategy, including a structure for accountability and an annual capital program obligation to the Legislature. The last bill was introduced by Senator Greenstein and Assemblyman McKeon and would enable wastewater utilities to impose a Distribution Service Improvement Charge, also known as DSIC. Currently, DSIC is a great tool for drinking water systems regulated by BPU, and S1772/
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A2896 would extend this much-needed funding mechanism to wastewater systems.
Legislative News
USE IT OR LOSE IT In the June issue of the Utility & Transportation Contractor, we updated you on the Association’s effort to tighten up the way the New Jersey Department of Transportation allocates local aid funding to local governments. Over the past two months, UTCA drafted legislation and met with Senate President Steve Sweeney and Senator Paul Sarlo to discuss the Association’s draft bill. Both leaders agree that the bill is necessary, and Senator Paul Sarlo will introduce the measure this summer. In its current form the bill would: require all projects receiving grants to start construction within one year or face rescission of funds; ban local government units from self-performing the construction; require that successful contractors are prequalified with NJDOT if the project is over a certain dollar amount; 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 have a committee hearing in the Fall. HOWDY, PARDNER(ship agreements) Throughout the scrum of the budget session, the Legislature passed a measure 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 thanks to that successful effort, New Jersey has 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 had a vested interest in moving the program forward. During the Legislative hearings, UTCA was successful in obtaining important amendments to the bill that safeguarded the interests of the industry. The Association worked closely with our industry partner ACCNJ as the measure moved through the Legislature. Sponsored in the Assembly by Majority Leader Lou Greenwald and in the Senate by Senate President Sweeney, the proposal passed both houses on June 25 and is now on the Governor’s desk awaiting signature. RIDERS ON THE STORM(WATER UTILITY) Just before the start of budget season, legislation sponsored by Senate Environment and Energy Committee Chairman Bob Smith that would authorize municipalities, counties, and certain authorities to establish stormwater utilities passed the full State Senate. In its current form, S-1073 is an enabling statute that establishes the framework for the creation of stormwater utilities including the construction, operation, and maintenance of stormwater infrastructure through the imposition of user fees and the issuance of bonds. The bill would also allow interested entities to contract with private firms for the operation or improvement of stormwater infrastructure. UTCA supported the legislation as the measure moved through the upper house and will continue to advocate in the State Assembly for final passage of this bill. ALL THE WAY TO THE BANK As we’ve previously reported, UTCA was successful in passing its Infrastructure Bank language as part of the gas tax increase that passed in 2016. Since that time, there have been several appropriation and correction
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bills that were needed to get the transportation side of the Bank up and running and able to begin making loans to Local government entities for transportation projects. UTCA is pleased to report that the New Jersey Infrastructure Bank (NJIB) is now accepting and processing loans for transportation projects. During the Budget process, UTCA supported the annual appropriations measure funding the NJIB as it moved through both houses of the legislature. For State Fiscal Year 2019, I-Bank is now authorized to expend up to $810.6 million as well as any unexpended balances from previous authorizations to provide loans for a portion of the total costs of 119 eligible environmental infrastructure projects. ON THE HILL The Administration’s advocacy efforts for a mega infrastructure bill are now being led by Department of Transportation Secretary Elaine Chao. Sante Esposito, lobbyist for the UTCA-led Clean Water Construction Coalition, met with the Secretary’s staff on June 6 to support efforts toward a mega infrastructure initiative. The meeting focused on two points: that it be multimodal but limited to core infrastructure items – highways, bridges, transit, rail, aviation, and water – and that the Administration propose a specific funding mechanism as seed money. Regarding the latter, Congress has been reluctant to put forth a funding source because the Administration has not done so to date. Also in the House, Transportation Committee leaders are asking Members what they'd like to see in a potential infrastructure bill - even though no one expects such a thing to come together before the November election. Ranking Member Defazio (D-OR) said the outline could provide a template for the future, and Representative Graves (R-GA) acknowledged that whatever the Committee comes up with it won't be a big, trillion-dollar spending bill like the President has requested. 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.
what is safety? By: Ray Master, construction risk partners
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So, what is safety then? Given the above, we seem to be pretty clear on what it is not. In my view, safety is more of a process or activity (or series of activities) conducted to address risk as a means to avoid harm or loss producing events, a.k.a., accidents or failures - something an organization does, rather than something it has. If we buy that, the challenge becomes how to design and deploy said processes or activities inside of organizations (i.e., systems) and have it be effective at preventing accidents. I think one answer to this deployment challenge lies in how one frames the situation. The process or activity of safety (i.e., preventing accidents or failures) occurs as more than just a technical problem in my opinion. If it was just a technical problem, technical solutions would be deployed, and failures would be prevented – end of story. An example of a technical solution is the deployment of safety management system (SMS). The questions becomes, are they working? If they are not (i.e., people are still getting hurt or killed), is it a matter of implementation? Are we not working hard enough? Should we do more training of people? Are SMS’s enough? Maybe we should approach it differently?
What if safety where not viewed as just a technical problem? In The Practice of Adaptive Leadership, the authors suggest a common failure among leadership occurs when adaptive challenges are treated as technical problems (Heifitz, Grashow and Linsky, 2009). A technical problem is one where known solutions can be deployed to resolve issues. So, what is an adaptive challenge? Adaptive challenges refer to situations where there are no known solutions to the problem or cases where there are too many solutions but no clear choices. Adaptive challenges are by nature, adaptive, which also means they are fluid and change with circumstances. Adaptive challenges are volatile, unpredictable, complex and ambiguous in nature. Solutions to this type of challenge usually require people to learn new ways of doing things, change their attitudes, values and norms and adopt an experimental mindset. For example, a machine breaks down once every couple of months, despite regular maintenance. The adaptive challenge here is the lack of ownership and care towards the machine because staff members see the machine as company’s property or rather, the company’s problem (Ng, 2016). This sounds a lot like how safety occurs in many companies I work for and within the construction industry – an industry where a fatal accident occurs every 9 minutes globally. Please refer to the chart at the end of this article to further sums up the differences between technical and adaptive challenges. Other examples of adaptive challenges include things like improving the education system, beating cancer, addressing climate change, etc. More specific examples to organizations include things like the use and acceptance of technology, maintaining company culture during periods of rapid growth and retaining talent in competitive markets.
Safety Perspective
n most organizations, the measurement of safety is represented as a negative. Specifically, we see indices like recordable or lost time cases or incident rates. Some go further to measure incidents of non-compliance, near misses and unsafe acts. These are, in fact, a measure of how unsafe a situation or system is. Therefore, safety is defined and measured more by its absence than its presence (Reason, 2000). In a way, we are trying to learn more about safety by studying situations where we acknowledge that there was no safety (Hollnagel, 2014). It is interesting to note that safety is one of the few areas were this is done.
If we could agree that safety was an adaptive challenge, learning amongst all system stakeholders (i.e., employees at every level of an organization) would be required and this could be a pathway toward effective resolution. In fact, when companies approach safety work this way, remarkable things can occur. One possibility is engagement of people at all levels. A key component of adaptive work is the notion of “giving the work back to the people.” This requires a specific type of leadership approach. I think a big part of the way we approach safety is relative to our preoccupation with defining and measuring it by the absence of
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Safety Perspective
safety. The types of solutions we develop tend to emerge from this perspective. So, shifting our frame from that of a technical problem to an adaptive challenge can open up many possibilities for breakthrough safety performance. Considering safety as the presence of something (i.e., certain processes or activities) lends itself more to something that people can engage with rather than wait for – something to be done rather than something to have. Using adaptive leadership can be a means that gets organizations to a different end in safety - one where everyone feels empowered to contribute. This fits in nicely with the notion that people can be the solution in safety rather than a problem to control. In other words, people create safety (Dekker, 2006). Now that would be an interesting thing to try to measure.
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About the Author. . .Ray Master is the Director of Loss Prevention & Risk Control Services with Construction Risk Partners, a full service insurance brokerage firm and part of the JLT Group - one of the world’s leading providers of insurance, reinsurance and employee benefits related advice, brokerage and associated services. He is accountable for the design and delivery of the firm’s safety consulting service. The offering aspires to challenge conventional thinking in construction safety in providing both safety management system optimization and safety culture/performance enhancement. He works out of the firm’s New York City office
osha project site inspections: better safe than sorry - tips for survival By: joseph m. boyan, esq., hedinger & lawless l.l.C.
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In the event of a significant safety and/or health issue, an OSHA inspector may go to the project site and conduct a formal inspection. If an inspection does occur, the date and time of such typically is not announced to the employer in advance. The OSHA compliance officer will likely just show up at the project site during regular business hours. During the initial phase of any project site investigation, the compliance officer will most likely introduce himself or herself to the general contractor’s project manager and/or highest ranking representative on the project site at the time. The introduction will include presentation of the compliance officer’s credentials and the specific reason for his or her project site visit. At this time, and before an “opening conference” or a walk-through of the project site takes place, the employer has the right to request that its safety consultant and/ or counsel be present during the inspection process. Most often, the compliance officer will honor this request if it does not result in prolonged delay. However, if the compliance officer presses for an immediate inspection, the employer, under established case law, may refuse access without a court order (i.e., an inspection warrant).
Under OSHA guidelines and applicable case law, OSHA may not conduct warrantless inspections without the employer granting consent. While consent to have OSHA inspect may be refused, if OSHA is forced to get an inspection warrant, the inspection will likely be much more thorough than if consent to inspect had been given. Assuming employer consent and/or consultant/counsel participation, the next step after introductions is an “opening conference” on-site at which the compliance officer discusses the OSHA inspection process and requests documents and information. The employer should have available all safety manuals and records, including: employees’ safety certificates, such as those confirming OSHA 10 or 30 hour training; documentation of “toolbox talks,” (i.e., regular on-site safety training); and OSHA 300 Logs (i.e., records of reportable accidents). If these records are not readily available, the compliance officer will request that they be produced in short order, often within a couple of days. After the opening conference, the OSHA compliance officer will ask to conduct a “walk-through” of the project site and will seek specifics from the accompanying employee representative concerning the items which are the subject of the investigation. At this juncture, the OSHA inspection could be limited to the items identified or could be expanded to include additional items, such as any “plain view hazards” (i.e., other visible safety issues). During the walk-through, the compliance officer will likely take photographs of observed conditions. The employer representative should also take photographs of these conditions, concurrently and preferably from the same angles as the compliance officer’s photographs. These photographs may be important during the latter stages of the investigation, as OSHA is not required to and typically will not provide the employer with copies of OSHA’s photographs until the investigation has been completed and only through a Freedom of Information Act request or through discovery, if the matter is litigated. Thus, the employer’s photographs may be integral to defending against citations later issued. Also, during the walk-through, the compliance officer may ask to speak with employees on the project site. These interviews are typically brief in nature and for all non-supervisory employees (i.e., those who do not have the power to hire or fire, among other factors) are conducted privately between the compliance officer and the employee. Project supervisors and other management personnel may also be interviewed, but they can insist on the presence of other management personnel and/or counsel of their choosing. Also, in the event a trade union is in-
Labor Relations
his article provides a brief roadmap to handling an OSHA project site inspection. The primary legislation which governs safety inspections and overall worksite safety throughout the country is the Occupational Safety and Health Act of 1970 (the “Act”). There are several means by which an OSHA inspection may arise, including: 1) the presence of imminent danger; 2) the occurrence of a severe injury and/or illness; 3) a worker complaint; 4) referral to OSHA from another safety program watchdog; 5) a targeted inspection; and 6) a follow-up inspection. Each of the above paths to OSHA involvement is subject to similar but distinct OSHA inspection methods. Also, the severity of the perceived project site danger typically dictates what type of inspection will take place. For example, if the OSHA Area Office does not consider the danger severe, the Office may contact the employer and conduct a simple phone and/or facsimile (i.e., document only) investigation. After investigating, OSHA would typically issue an informal complaint letter setting forth the alleged complaint items, and the employer would be afforded five (5) business days to investigate the alleged complaint items and correct them within that five (5) day period. If the employer, after investigating, illustrates to OSHA’s satisfaction that the corrections to the items of concern were made, the phone and/or facsimile investigation will be closed and no further action will be taken by OSHA.
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volved, all employees, non-supervisory and supervisory, have the right to have a union representative present during interviews.
Labor Relations
After the walk-through, the compliance officer will conduct a “closing conference” to discuss any violative conduct/practices and the courses of action the employer should take to correct the alleged violations. The compliance officer will also review the employer’s rights and responsibilities relevant to the OSHA inspection, as well as the applicable procedures if OSHA citations should follow. Preparation for the OSHA inspection and understanding the steps to take in the event OSHA citations are issued are equally important to understanding the actual inspection process. First and foremost, all employers should be well aware of their project site safety requirements and take measures to ensure that OSHA safety guidelines are followed. Project managers and/or supervisors should continually survey their project sites for potential safety hazards and, if hazards are found, address them promptly and completely (e.g., removal and replacement of a broken ladder). Employers may also choose to retain a safety consultant to assist proactively with safety assessment and compliance. Under the Act, employers must designate a “competent person” (defined in the Act as the person in control of regulating project site safety) to address safety compliance on the project site, including for example, trenching and excavation, fall protection and road side work zone safety, all of which are primary targets of OSHA inspectors. The safety consultant could be designated as the employer’s “competent person,” thus justifying his presence at any walk-through inspection. Employers faced with an OSHA inspection should be courteous, respectful, and honest to the compliance officer. That said, there is no requirement to divulge information not specifically requested. Employers should be aware that during the OSHA inspection process all information discussed may be used against the employer to assess violations of the applicable OSHA standards and support related citations. Employers should only respond to document and other information requests with answers directly responsive to the requests - - avoid production of extraneous information. If an OSHA inspection results in citations, the employer will be notified in writing of same and requested to either abate the alleged safety violations which resulted in the citations and pay assessed penalties, or, within fifteen (15) business days request an “informal conference” with the Area Office to discuss and, hopefully, resolve the citations. Depending on the severity of the citations, as well as the company’s recent violation history, it may be strategically advantageous to engage OSHA in negotiations early on in an attempt to resolve all issues involving the citations. Importantly, prior to the “informal conference,” the employer should interview its own involved employees and should gather relevant documents, including photographs pertinent to the alleged violations. When an employer interviews its own employees, it is recommended that counsel be present and involved in the process to ensure that all details of the alleged violations are explored and properly analyzed, mindful of all relevant OSHA standards. The employer should also be well versed in the OSHA
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standards that are at issue, know the corrective measure required to comply with the Act, and be prepared to articulate to OSHA what abatement measures have already been implemented. This informal conference is not intended to be adversarial, but rather to facilitate a dialogue between OSHA and the employer regarding the issued citations before the citations become an OSHA final order. If a resolution is not reached at the conference, the employer has the right to contest the citations and penalties by filing a Notice of Contest. Once a Notice of Contest is filed by the employer, the matter is transferred to Washington, D.C. and the process used to dispute the citations is similar to litigation and is beyond the scope of this article. Thus, it is critical for employers to be proactive in project site safety monitoring and the correction of any observed safety concerns. Project managers and/or supervisors should remain vigilant of employee and subcontractor conduct which could have adverse safety implications and must ensure adherence to applicable safety standards. Importantly, the employer should not be hesitant to reprimand and even discharge employees and subcontractors who violate such standards. About the Authors. . .Joseph M. Boyan, Esq. is an attorney with Hedinger & Lawless L.L.C., a full service construction and labor law firm serving clients primarily in New Jersey and New York. Mr. Boyan has over 20 years of experience in the areas of construction and labor law and has counseled clients in matters before state and federal departments of labor and concerning prevailing wage and union audits, OSHA investigations and litigation and other labor matters. Mr. Boyan can be reached at (973) 301-9100 or jboyan@hedlaw.com
northeast remsco Cover Story
construction celebrates 40 years By: zoe baldwin
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ucked away in a treelined plaza in the heart of Monmouth County sits the office of JAG Companies, Inc., the parent company of Northeast Remsco Construction, Inc.
Much has been written in these pages about Northeast Remsco over the past forty years. We’ve covered its founding in 1978 and early days as Northeast Utilities, its continued expansion through the 1990s, and its transformation into the diverse juggernaut it is today. Now, as the firm celebrates 40 years in the industry, a new chapter is being written; it’s the story of the second generation, forging its own path forward beyond the footprints of the first. Walking into the office of President and CEO Rolando “Roly” Acosta, one gets the immediate sense that this is a home away from home. Much like the man who works inside, the office is warm and inviting –classy and casual yet clearly designed for productivity. The furniture, open-concept layout, and even the décor come together, presenting a snapshot of how the firm itself operates. In addition to the expected executive desk and workspace, there are two more distinct areas in the large office: a living room-style seating area with soft, overstuffed couches; and the conference table where we sit and conduct our interview. Quite in line with the layout of the office, openness seems to be the recurring theme of our conversation. Northeast Remsco’s growth
ECI Drilling, Block Island Wind Farm
and acquisitions were possible because the firm was open to opportunity – no matter how unexpected; its dynamic nature is a direct result of an open-door policy between the family, management, and staff; and its stability seems due – at least in part – to an openness to introspection and outside input. A wide receiver from Pop Warner through Princeton University, Roly attributes his management style to his time on the football field. “The experience you have in a team where one day you need to be a leader, the next day you need to be a follower, but the entire time you need to be a teammate – that is our experience here, and the word team means a lot to me. We operate as a team; we use ‘we’ not ‘I’.” “My dad’s management style is much different than mine. He commands the room where I tend to work a room. But I understand that I don’t have to be him and vice versa. They’re different companies too,” he adds. “My dad had his own challenges trying to start and run a company, but mine are going to be a bit different as the second generation trying to come in and grow an existing operation.”
Northeast Remsco Construction, Ridgefield, New Jersey
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When Juan Gutierrez founded Northeast Remsco – then called Northeast Utilities – he was looking to carve out his own piece of the American Dream, fueling his fledgling company with pure entrepreneurial work ethic and a very supportive family. “The office was downstairs,” Roly remembers. “The dining room was my dad's office, in the living room was Julie the receptionist, and Carmine the estimator was in the family room. I had breakfast with them before school every day. “
Earlier in our conversation, Roly had mentioned that his management teams read books as part of professional development. One recently contained the concept of “firing bullets before cannonballs,” essentially using a nautical metaphor to say that rather than using significant resources on one risky idea, businesses should test new ideas in small increments, making adjustments until the strategy is certain.
"Are we shooting a cannonball or are we shooting a bullet here?"
“I’d say we’ve shot cannonballs a few times, and we had to learn from that. Sometimes it works out, but sometimes that cannonball explodes in your face. My dad shot cannonballs, had failures, and learned from them. “But you don’t forget that early stuff. I did my I had to shoot my own cannonballs and fail homework on Carmine’s plan table. I loved - Roly Acosta and then learn from that. We’re not perfect that it had the overhead light and there was but we’ve learned from it, and that becomes an electric eraser. The vendors we still work part of our strategy. We remind each other: with today, back then they were walking into are we shooting a cannonball or are we shooting a bullet here? the house while I was walking out for elementary school.” It grounds us and says maybe we’ll do this project, or just this Decades later, those early memories provided a visual remind- portion of this project. When we look at some of these bigger er for a lesson learned by many second-generation owners: your projects, we say let’s pick off these portions, let’s build a team – challenges will be your own. not just take the largest project there is and try to figure it out. And it’s worked out for us when we keep that frame of reference. “My dad had trouble making payroll sometimes in the early days It doesn’t mean we don’t shoot the cannonball every now and because you only have so much money on the books to build, again – because we do – it just helps keep us in check.” and jobs were stopped. But fast forward to when I walk in, and we’ve built this machine and have to keep feeding it. So we’ll defi- One arena where Northeast Remsco could not afford the cannitely make payroll; the problem now is that we need to build nonball is one many are familiar with – succession planning. The more projects to make profit.” transition of power in a family business is a delicate process that often presents a very specific challenge: how do you seamlessly With 27 active projects across 10 states, 340 employees, 5 operattransition not only ownership, but management style and strucing equipment yards, and over 700 pieces of equipment, Northture in a mature firm? east Remsco now faces the challenges of a large, national firm. “When you take a class in college, they don’t teach you how to For Northeast Remsco, it meant bringing in outside help. Unforrun a $150-million-dollar company with growth opportunity,” tunately, Juan was forced to start planning for succession earlier Roly jokes. than intended when he was diagnosed with cancer in 2008. If something were to happen, they needed to be certain that evBut it’s a point worth noting. “When my dad started out, he was erything was in place. Like all companies, Northeast Remsco like, ‘Well what do I have to lose?’ Because you really don’t have provides a livelihood not only for the owner’s family, but for the a lot to lose starting up. But we have a lot to lose now and that’s families of all of their employees. It is a stewardship and a serious going to interplay in our decision making. It doesn’t mean we’re responsibility and needs to be as planned as possible. conservative, you just go back to bullets vs. cannonballs.” Fortunately Juan had a steady recovery, but the ordeal pushed the family to take beginning steps. They engaged consultants to help move the company into a family trust and began the process of advancing Roly into a leadership position.
Pictured left to right are Roly, Juan, John and Brian
Cover Story
The firm eventually moved out of the home office, mainly working on central Jersey sewer projects. By the early eighties they were taking on increasingly larger projects and expanding into Delaware and Connecticut. In the nineties, Juan shifted focus toward microtunneling to complete more complicated underground construction, and eventually purchased Remsco Associates, pump station contractors. By the 2000s they were in full swing, separately acquiring Caldwell Marine International, Huxted Tunneling, and ECI International by 2014.
“It allowed us to ask the big questions within the family – where are we going? How do we structure this? How do my brothers fit in? John and Brian work here, Angel doesn’t. Then there’s my sister Patty who has special needs – it’s a lot to account for. There are still some big questions to answer, and it’s helpful to have a consultant to help continue that conversation and that process. I mean that was ten years ago – I was only 34. I remember getting a call from an uncle and he said, ‘We trust you.’ Was I ready? I’ll look you in the eye and tell you yes, but was I really ready? I didn’t know!"
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Cover Story
During the succession planning process Roly and the family began to work with additional business consultants to help with the overall structure of operations for the organization. “I’ve learned some things from my dad, I’ve learned some things from the people that work here, I absorb some from seminars and the people I meet, but at the same time I still have to be honest that I don’t know everything. I don’t know all those components and having a third-party consultant – it’s not a bad thing. It doesn’t mean you’re not smart enough or that you need to work harder. We’re focused on working smarter – it’s not about working a 16-hour day. It’s about making the most of the time you have without burning out. I think our managers really appreciate that, and they’re really a part of that process.” Transitioning to the boss role can have its perks too. A few years ago, Huxted Tunneling had a large diameter microtunnel project adjacent to the White House. In order to access the project, Roly had to be cleared at the entrance. “I had to walk up Executive Drive to get to the job and I had this moment like, WOW!. A Cuban immigrant started this company, I’m a first generation American, and I’m in the White House driveway walking to our project! It was unreal. I don’t have a favorite project, but that was a favorite moment. For us as a family, and for the company, this was a big deal.” Juan and his wife Marta built a legacy for their family and in the process, developed a lifelong extended family of people across the industry. Early in our conversation Roly commented in passing that, “the story of my career – the story of our family – is chronicled in the UTCA magazine.” And he’s not exaggerating. Roly’s first Convention was in 1987. His first Executive Seminar: Acapulco in ‘88. “So, when I tell you that UTCA raised us… Bobby [Briant, Jr.] and his wife Debbie even babysat us at the beach in Bradley Beach one time. All four boys, and I think they were like, ‘what did we sign up for?!’ So on some level or another we were literally raised by the Association. It’s like our extended family – the D’Annunzios, the Harms, the Creamers, the Pillaris, the Cruzes… we’ve been in the mix for a very long time.” “There’s a certain understanding that when your father is in the Construction Hall of Fame, those are some big shoes to fill [but] it’s pretty neat to be in these meetings now, knowing that I always wondered what it would be like at that table...I enjoy hearing stories from other contractors about climbing the ranks of their companies, because I could tell you that for us, our dad encouraged us to work in other industries.” And that, they did. Two of Roly’s three brothers work for the company, both taking wide turns before circling back home. John Gutierrez, Vice President & Equipment Manager, started working for the family business as a laborer at the age of 17 then became a heavy machine operator. He decided to move out west where he worked in the golf industry and did a short stint in computer software sales before coming back to the company. Upon his return, he jumped back in the operator seat and earned a Bachelor’s Degree in Busi-
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The JAG Companies
ness Management from Georgian Court University. During that period, his role in the company transitioned from Machine Operator to the Equipment Manager position he currently holds. Brian Gutierrez is the Property Manager, and recently graduated college. He started out in architecture school, before attending the Culinary Institute of America to become a working chef. He then went on to attempt life as an actor in Hollywood before coming home to work for the family business. He re-enrolled in school and has since graduated and took on the role of Property Manager for the many family/company owned properties. After graduating Princeton, Roly worked in sports marketing for several years before coming home to join the family business and ultimately go to law school. “It was funny because the company was called the Gazelle Group, but the group was my boss and me. So, I was exposed right away to what – for our firm – were some very high-level meetings. I gained a sense of confidence at a meeting table at a very young age – I was asked to lead meetings with executives for NBA, NFL, MLB teams. I can enter a room, I don’t find a corner, I learned to walk into a room and engage people. I learned it at work and I learned it from my dad who always said that a room full of people is a room full of opportunity.” As for the third generation, it’s too early to tell. “Just like me, they’ll either come to the family business naturally or they won’t. I think it’s the same for my siblings: we’ll expose them to what we can, and they either like it or they don’t. This may not be the business for everybody and that’s okay.” As the interview winds down, Roly tells me that he shares a quote with the entire company every Friday. “I’ll quote from a Rocky movie, a book, a bathroom partition...I do it to say, ‘Hey take 5 minutes to reflect on this, even if you don’t like it.’ I think it helps continue our message as a family business.” So in following with the new tradition, I leave you with words from Biggie Smalls that seem in line with the Northeast Remsco philosophy, “Stay far from timid, only make moves when your heart is in it, and live the phrase the sky’s the limit.”
utca leads nj business, labor groups toward solutions to fix broken water infrastructure By: dan kennedy, director of environmental & utility operations
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he overall condition of New Jersey’s water infrastructure (drinking water, wastewater, and stormwater) can be summed up in one phrase: grossly inadequate. This is an accepted fact, ably documented by countless others and largely unchallenged. Consistent failure to invest and perform proper maintenance over decades, coupled with a startling absence of public awareness, has led much of our country into a similar predicament. At the same time, diminishing federal support has led states to largely fend for themselves. The lack of action on this issue has for years been a cause for concern – and not just for contractors. The question now is, what are we as a state going to do about it.
structure projects, and we will be issuing a report later this year on possible funding options to create the kinds of improvements we need. But we must avoid the trap of being either dissuaded by the cumulative price tag of the work. Increasing capital investment is an unavoidable aspect of fixing this problem; but without a structured process to ensure accountability and fairness, new money will do little to address the root cause.
"The time for talk is over. Now we must get to work"
Up to this point, the mounting needs of our drinking water, wastewater, and stormwater systems have largely been addressed in public discourse through the lens of symptoms such as unsafe drinking water or desired outcomes such as fewer flood events. However, defining a problem in terms of its symptoms obscures the real cause, and in turn, proposed solutions fail to truly address the underlying issue: the lack of a statewide capital investment strategy, and the lack of adequate funding. Funding is certainly a primary driver in advancing water infra-
When residents and businesses are educated on these issues they are willing to pay more to modernize water infrastructure assets. In fact, a 2018 poll by Jersey Water Works showed an overwhelming percentage of New Jerseyans prioritize water supply over many other pressing public policy matters. The time for talk is over. Now we must get to work. Beyond the health and environmental benefits, this work will create good jobs for the long-term, will accelerate economic development opportunities, and will increase opportunities for outdoor recreation. UTCA staff has spent significant time engaging with business and labor leaders on this matter as well as participating in existing collaborative efforts and technical organizations that generally support the same ends – having New Jersey’s water infrastructure assets rehabilitated and maintained in a state of good repair and ready to meet the challenges of tomorrow in a cost-effective manner. We have developed the relationships necessary for the big challenges ahead of us. We are ready to act and hope to achieve outcomes that are not only positive for the construction industry but for the communities that we work and live in.
The Pipeline
UTCA, NJ business leaders, and organized Labor are coming together (again) to advocate for a set of actions to answer that question. This comprehensive strategy, which can be viewed on our website, presents an efficient and sensible approach to improving our water infrastructure systems in a transparent and cost-effective manner. More than just money, it includes four goals: a statewide capital planning program; capacity building for utilities; project prioritization; and a reduction in project review times and costs. A summary of the initial bills that UTCA will advance this fall is included in the Legislative Update on page 29. UTCA estimates that there is more than $1B annually of unmet need for water infrastructure investment. In order for New Jersey to have water infrastructure assets that are upgraded and maintained in a state of good repair, the current rate of investment must be doubled. This can be achieved overtime through the actions presented in our strategy in a cost-effective manner.
Public support for fixing this issue has been further constrained by a general lack of confidence in federal, state, or local government to spend money wisely. This lack of confidence must be overcome – which is why we must lead with efficiency and a structure of transparency and accountability.
Over the next several months, the Association will be working with leaders in the business and labor communities to advance this critical conversation with the legislature, the Governor, and his cabinet. We look forward to keeping you informed as this initiative progresses.
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Feature Story
Raritan group celebrates 75 years over 4 generations... and is only getting started! By: bill richardson, Jr., raritan group
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uch has changed over the span of 75 years from when Raritan Supply was formed in 1943 by Harry A. Richardson Sr. From a plumbing and heating supply house located initially in New Brunswick, NJ, to present day facilities in Edison, NJ and Gloucester City, NJ. The vision of Harry Richardson from the outset was to help support his mechanical contracting firm as well as take advantage of the inevitable business boom expected in central New Jersey in the post WWII era. Seventy Five years later with the stewardship of his son Bill Richardson, Sr., his company would undergo several transformations, becoming one of the largest pipe, valve and fitting wholesalers in the tri-state area. Raritan Supply (now Raritan Group), consists of three divisions; Raritan Pipe & Supply, Raritan Valve & Automation and R3 Machine. A family owned and operated business, Raritan now includes its fourth generation, with several great-grandchildren having joined the firm. 2nd GENERATION: INDUSTRIAL TRANSFORMATION In 1958, Bill Richardson, Sr. (son of Harry) joined the company as a graduate of Notre Dame and having served in U.S. Navy on the U.S.S. Forrestal as a supply officer, Bill soon began to transform Raritan Supply into an industrial pipe, valve and fitting
RVA technicians commission 60" gate valve
wholesaler. New Jersey had become one of the largest chemical and pharmaceutical producers in the country and like his father, Bill saw opportunity in the process industries. The company grew largely by bringing engineered products to market. In the 1960’s, Raritan was one of the first distributors to introduce ball valves and thermoplastic piping, eventually adding thermoset (FRP) and lined steel piping and valves to their standard product mix. Valve automation also became a service to complement several of the valve lines. In 1968, Raritan installed an IBM 360/20 computer and IMPACT inventory control system. This system enabled Raritan’s promotion of “Systems Contracting” and integrated supply management system, with customers from New York to Maryland. From 1943 through the early 1980s, industrial sales in the tri-state region was an expanding and profitable business. However, the tristate and region as a whole (NY, NJ, PA, DE, MD) began to experience a decline in industrial output. Industry began to move to other regions of the country or overseas, or closed completely. Mostly with little forewarning. Consequently, Raritan needed to address the growing concern of sustainability in a stressed and diminishing market. While there was still a substantial industrial customer base, the market was undoubtedly shrinking. 3rd GENERATION: VALVE AUTOMATION & INFRASTRUCTURE GROWTH
Pictured left to right are Tom, Jim, Bill, Jr. and Bill Richardson, Sr. at the Gloucester City Branch.
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In 1980, Bill Richardson Jr. joined the company as a graduate of Boston College. Beginning in inside sales, moving into outside sales as an engineered product specialist, Bill eventually became VP of the company prior to venturing into the business of control valves and automation. In an effort to preserve and expand the valve and actuator side of the business, Raritan Valve & Au-
tomation was founded as a separate company. Joined from the beginning by Joel Cook (V.P.-RVA), he and Bill Richardson Jr. grew that business by adding multi turn automation capability, control valves, field service and in-house machining of custom hardware. RVA would be dedicated in sales and service, to offering quality valves, actuators and controls, automated valves and field service.
In 1991, Jim Richardson (Bill Jr.’s brother) became a full-time employee at Raritan Supply, having graduated from St. Joseph’s University, as did their youngest brother Tom in 1994 who had earned a degree at Belmont Abbey. The two joined Raritan at a time when change was needed for the company to grow. Together with Bill Sr., and at the request of several mechanical contractors loyal to Raritan over the years, they set out on yet another transformation, entering into the municipal/utility market. While infrastructure spending was on the rise, Raritan began to invest in brands specifically in the water filtration and wastewater markets. Manufacturers of AWWA products were not that plentiful but Raritan began to build brand identity and a reputation for stock and service in the municipal market.
EVOLUTION: DEVELOPING A MUNICIPAL PRESENCE Over the past 25 years, Raritan has been developing a presence in the municipal market. Through efforts including soliciting municipalities and the contractors that support them, to the engineering firms that provide specs, design and construction management services, both RPSC and RVA worked to provide as many products and services as the market demands. Tom Richardson began to build the RPS brands that would best address the municipal market, specifically the water/wastewater plant construction and maintenance market. The manufacturers that RPS stocks and sells is impressive. Two developments stand out: American Cast Iron Pipe Co. (ACIPCO) offered Raritan exclusive distribution rights in New Jersey as well as the five-county Greater Philadelphia area (this was significant since their previous relationship with U.S. Pipe was compromised due to the amount of distribution in the region); and Mueller Company signed Raritan on as a full line distributor, Mueller being one of the most widely specified, quality brands in the municipal market.
Feature Story
Manufacturers began to look for representation and stocking distributors with the resources and experience to promote the technical aspects of valves and actuators. RVA experienced steady growth in the traditional pharma, power, oil and gas, chem-process industries, however there was a need to grow into the water, wastewater infrastructure market.
tan Valve & Automation, and is owned and operated by Bill Richardson Sr., and his three sons; Bill Richardson Jr., James Richardson and Thomas Richardson.
Plant work became the primary focus and because Raritan was historically an industrial distributor, the process piping requirements became a natural fit when combined with underground and fabricated piping, restraints, fittings and accessories. Simultaneously, Raritan Valve & Automation was also being asked by manufacturers and customers to become more involved in municipal and infrastructure work. RVA and Raritan Supply began to share valve manufacturers and customers alike, pursuing largely the water/wastewater market. Eventually, the companies merged to form Raritan Group Inc. The company is comprised of Raritan Pipe & Supply and Rari-
Pictured left to right are Miro Gietka, Spencer Richardson, Patrick Richardson, Bill Curtis and Zachary Ghizzone represent part of the next generation.
RVA followed suit, and in order to package valves and automated valve packages with RPS, Bill Richardson Jr. set out to evolve the company’s product offerings to include AWWA products including Mueller. One of RVA’s primary actuator brands is AUMA, one of the largest electric actuator manufacturers in the world. To supplement these AWWA compliant products, RVA added service staff to satisfy the retrofit, maintenance and project commissioning requirements the utility business demands.
Raritan Supply vintage 1960's
No less important is the internal coordination of RPS and RVA, including logistics on inventory and movement of over 20,000 line items of inventory, from two location, over a five state territory. That responsibility is handled by Jim Richardson on a daily basis. Jim also is largely responsible for Raritan Group joining Affiliated Distributors (AD), a $37B buying group that provides the company with commodity procurement advantages that
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Feature Story
keep Raritan competitive with larger national chain distributors. INVESTING IN THE FUTURE: R3 MACHINE & GLOUCESTER CITY In an effort for Raritan to broaden its fabrication capabilities and help alleviate the need for a local source for ductile iron pipe and fitting fabrication, the company formed R3 Machine. R3 is a full service pipe and structural steel supplier, in addition to being an ASME section 9 certified weld shop for both carbon and stainless steel. Raritan invested in the equipment to flange ductile pipe, tap fittings and flanges, fabricate custom dutchman spacers, etc. R3 Machine also provides Victaulic grooving, threading, cutting, welding, drilling, tapping, punching, and grinding, etc. The fabrication capability services both Raritan Pipe and Raritan Valve & Automation. To better service its customers in southern New Jersey, Metro Philadelphia, Delaware and Maryland, Raritan opened a branch in Gloucester City, NJ in June 2017. The branch carries complete inventories of pipe, valves, fittings and accessories to service both industrial and municipal customers, with room to continue expanding. The branch is ideally situated to support contractors servicing the greater Philadelphia and Camden market. Raritan prides itself in its history, its employees and in its motivation to remain forward thinking. A recent addition to Raritan’s staff is Michael Weller, joining the company in 2016. Formerly the Northeast Regional Sales Manager for U.S. Pipe & Foundry, Mike became the V.P. of Sales and Marketing and responsible for both RPS and RVA, industrial and municipal. With Raritan’s growth in staff and territory, Mike brings welcome experience and knowledge to the company. The company not only has invested in people, but also in technology. Having recently purchased EPICOR/P21 Wholesale Distribution ERP Software to continue improving order, inventory and warehouse management, purchasing and financial reporting and analysis. Some 50 years after the initial IBM system was installed by Bill Richardson Sr., Raritan remains committed to self-improvement in the efforts to better service the customer.
Bill Richardson, Jr. inspecting delivery of a 60" RW gate valve. (5) more 60", (2) 84" and (1) 132" gate valves to be commissioned at the MCUA Sayreville PS with NE Remsco.
Another ongoing requirement from the customer is fabrication capability. Raritan formed R3 Machine, a full service pipe and structural steel fabricator and supplier, providing Victaulic grooving, threading, cutting, drilling, tapping, punching, grinding etc. Supporting both RPS and RVA. PROJECT HIGHLIGHTS: INFRASTRUCTURE SPENDING Much of Raritan’s UTCA related business is tied to infrastructure spending. The American Water Works Assoc. (AWWA) has estimated that the repair and rehabilitation of below ground infrastructure nationwide could cost nearly $1 trillion over the next 25 years. With the water/wastewater market in 2018 in the Nation is estimated to be a $45 billion industry. In New Jersey, the state enacted the “Water Quality Accountability Act” which requires municipalities to test, repair/replace all hydrant and valves within a present system. In addition, the N.J Environmental Financing Program (NJEIFP) aka "I Bank" has projected a future spend of $3.7B for drinking water and $2.7B on clean water. Some highlighted projects that Raritan has been involved with include: • Newark Liberty International Airport (D’Annunzio & Sons): 5,000 ft. 16” ACIPCO DI Pipe and (23) 16” Gate Valves • Route 7 Hackensack River Wittpenn Br. (Union Paving): 700ft 48” ACIPCO DI Pipe • Hartford Road Force Main (Montana Construction): 2500ft 24” ACIPCO DI Pipe • Middlesex Water Transmission Main (J. Fletcher Creamer & Pact Construction): 12,000ft 42” ACIPCO DI Pipe, 42” & 48” Butterfly Valves • Six Flags Great Adventure (Coppola Services) Pipe & Valves • Catskill Aqueduct Connection (Coppola Services) Pipe & Valves
36" RW gate valve with EBAA split tandem megalugs
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• NJAW Swimming River WTP Emergency (J. Fletcher Creamer) 30”, 36”, 42” Pipe & Fittings on July 4th
Raritan would also not be successful without the support of several primary manufacturers; American Cast Iron Pipe Co (ACIPCO), Mueller Co., EBAA Iron, Tyler, Star, Victaulic, Apollo and AUMA Actuators. Teamwork includes solid partnerships with quality manufacturers. Raritan has some of the finest manufacturers in the industry and are grateful for their support. TEAM WORK: SALES AND SERVICES The story at Raritan would not be complete without bringing us current and mentioning several key people who are responsible for managing much of the day-to-day operations in sales and services. The management of the inside sales team at RPS falls on the shoulders of Miro Gietka. From end-users, OEMs and contractors, Miro divides his day managing both the industrial and municipal sales groups. Many on his team are dedicated to a given market to allow for better customer relations and product knowledge. His team includes Diane McGovern, Industrial Team Leader for RPS, who has been with the company for nearly 20 years. George
Zamouzakis manages the estimating department, responsible for specification reviews, take-offs, budget estimates and quotations. George also oversees much of the technology at Raritan. Joel Cook, Miro’s counterpart at RVA, has been with the company for over 30 years. Joel is largely responsible for RVA’s project estimates, quotes, and submittals. He is also in part, the architect behind much of RVA’s success. One of Joel’s key people would be Spencer Richardson (son of Bill Jr and a fourth generation) Spencer manages the inside team at RVA and until recently also managed the service department and is largely responsible for the recent implementation of Raritan’s Epicor/P21 software. Two additional key employees are Rob Ruckert who currently manages the branch in Gloucester City and Dave Krosnowski, the warehouse manager in Edison. Both are responsible for the logistics of moving material between New York and Philadelphia metro areas. 4TH GENERATION AND BEYOND Harry Richardson would be extremely proud to know that his family is still at work. His son of 84, Bill Richardson, is still at the helm every day. His sons (Harry’s Grandsons) Bill Jr, Jim, and Tom are currently orchestrating the business at hand with a tremendous staff of over 65 dedicated employees including Bill’s grandchildren (Harry’s great grandchildren) Spencer, Patrick, and Zachary, who are preparing to help see Raritan reach its 100th anniversary in 2043.
Feature Story
When Raritan Pipe and Supply and Raritan Valve & Automation merged to form Raritan Group, the company’s focus was to be able to package plants. To offer the expertise to review specs, strip plans & perform a take-off, quote a bill of material, furnish the product, fabricate the product when required, and commission the job when applicable. To accomplish this RPS and RVA need to work as a team. While not always successful (the competition is tough), the effort is always there and the desire to outperform is at the forefront.
Raritan extends its thanks to all of the UTCA members that have helped the company reach this milestone, and to the UTCA for providing an opportunity to share our story.
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J
oseph T. Walsh, UTCA’s president-elect and President/COO of J. Fletcher Creamer & Son, will be inducted as the organization’s highest elected officer at the 2018 Annual Convention in Atlantic City.
Walsh got his start in construction 40 years ago while attending Northeastern University where he was enrolled in the COOP program in Civil Engineering. Following graduation, Joe found employment with a contractor active in marine construction building docks, piers, bulkheads, sea walls and pile foundations. A second firm that Walsh worked with early on provided him with the opportunity to handle a variety of utility work of wastewater and water pump stations, treatment plants, ducts, banks, and water main construction. In 1995, Joe Walsh joined J. Fletcher Creamer & Son as a General Superintendent for Utilities. He was elected to Vice President of Utilities after only two years at the firm and in 2006, Joe was named President of the company. During his tenure with the Creamer firm, the company has grown from a $50 million to over $500 million enterprise with the firm currently ranked 163 on the ENR top 400 contractor list. Joe Walsh has been a member of the UTCA Board of Directors for 16 years, having served his first term as President from 2012-
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joseph t. walsh to be inducted as utca president 2013. Currently serving as Senior Vice President, Joe is also the long-standing Co-Chairman of the Association’s Legislative Committee. Over the years, he has served on many other committees in numerous roles. Joe and his wife Dawn reside in Shrewsbury, NJ and are the parents of two adult sons, JT (29) and Andrew (28). Joe served on the Shrewsbury zoning board, Recreation committee, and Youth Athletic Association. The Walsh family supports Holiday Express, a non-profit organization which provides music, food, gifts, financial support and friendship to those in need during the holiday season and throughout the year.
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the sage coLlege tuition rewards program: By: nancy damato, rda benefit services
C
onsider these statistics:
• Outstanding student loan debt topped $1.48 trillion last year. • Student loan debt is the second largest household debt behind home mortgages. • 44.2 million Americans have student loan debt. • The average student loan debt for 2017 graduates was $39,400, up six percent from the previous year. • The Consumer Financial Protection Bureau reports that 2.8 million Americans, over the age of 60, have outstanding student loans, averaging $23,000. The SAGE College Tuition Rewards Program provides a unique opportunity for employees to provide guaranteed college scholarships to their children, grandchildren, nieces, nephews and any other child they know, that can be used at private colleges and universities nationwide. Imagine telling a valued or prospective employee: “At our company we now provide your children, grandchildren, or even children of a friend with College Tuition Rewards as you save for your retirement”! Updated information on the SAGE College Tuition Rewards Program • SAGE College Tuition Rewards is the nation’s 1st and largest college savings plan, devoted exclusively to private colleges and universities. • There are now almost 400 colleges and universities in 45 states participating in the program. • Neither colleges nor families pay a fee to join. • Almost 40% of National Association of Independent Colleges & Universities participate in this program. • There are over 250,000 enrolled students in all 50 states. • Assets saved by 250,000 participating families in all 50 states: approximately $8+ billion. • Many assets are intergenerational (parents and grandparents). Companies are now starting to review their Benefit Portfolios for the upcoming calendar year and Financial Wellness programs need to be considered, as part of a well-rounded benefits package. The SAGE College Tuition Rewards program is available to groups with more than 50 employees (both union and non-union) and is packaged with the offering of Voluntary Benefits. These types of benefits include critical illness, cancer, accident, disability and life insurance. These plans are paid for by the employees through payroll deduction, are fully portable and price fixed. So how does The Sage College Tuition Rewards program work? Employees earn points, similar to frequent flyer points, that accumulate in their college tuition account. Initially, at the first meeting,
NEWS
a key component of a company's financial wellness program
each employee received 500 points. (1 point equals $1 of College Tuition.) But that’s just the beginning… if the employer offers a 401k plan or the union employees participate in the Union Annuity retirement plan, their account will grow each year by an amount equal to 5% of the employee’s 401(k) or Annuity account balance. Example: An employee has $40,000 in his 401(k) or Union Annuity account. The employee enrolls in the College Rewards program and receives the initial $500. At the end of the year, the employee’s college awards account will grow by 5% of $40,000 (401k account) = $2,000 college tuition awards. Every year thereafter, the employee receives a 5% match of their current retirement account balance. While there is no maximum limit on what an employee can accumulate in Reward points, each student selected may redeem up to the current cost of ONE YEAR OF COLLEGE TUITION from the participating school of his/her choice. This one-year savings will be deducted over the four-year period the student is in school. When the student is ready for the first year in a participating college, the selected college will be notified that this student will be redeeming College reward credits. What are the Benefits for the Employer? The employer who offers Voluntary Benefits to their employees receives many benefits. 1. The cost to the employer is ZERO. By offering the SAGE College Tuition Rewards Program, the employer is giving their employees’ children the opportunity to go to schools that they might otherwise not be able to attend, and have it cost the employer nothing. 2. Retain and attract key skilled employees. As the market for skilled workers becomes tighter, this employee benefit allows a company to provide a valuable addition to its compensation package. 3. Reduce loans from employees. Loans from 401(k) plans tend to be reduced as employees now realize they lose out on their College Rewards, if they take loans from their plan. If their year-end balance is reduced, so are the amounts of their annual College Rewards match. So How Does YOUR Company Get Started? Contact Nancy Damato at 855-693-0772 or ndamato@rdabenefits. com to learn more about this program and how it can become a part of your Employee Benefits package. Financial wellness programs and their importance are in the news every day, so why not consider a program that can benefit both you and your employees, now and in the future. Based on the current success of this program, we believe that this benefit will have a positive impact for every UTCA member firm.
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A M E M BE R O F T H E P H O E N I X G R O U P O F C O M PA N I E S
WBE/SBE CERTIFIED
As a proud member of the C.W.A Local 14156, American Plus Printers is a WBE/SBE certified, employee owned, full service Union print company. We proudly offer straightforward, customer-oriented service in the highly competitive market of commercial printing. American Plus Printers is committed to the highest union standards of integrity, quality, and service to the community. NEW JERSEY
2604 Atlantic Ave • Wall, New Jersey 07719 Tel: 732-528-2170
PENNSYLVANIA
11601 Caroline Road • Philadelphia, PA 19154 Tel: 215-698-6628 E-Mail: americanplus@mac.com • www.amplusprinters.com
Feature Story
cleaning the hudson river with precast concrete for a better tomorrow Barge in transit from Jersey City to Weehawken job site.
By: Paul Heidt, Garden State Precast
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arden State Precast was approached in the fall of 2017 to participate in a precast design-build proposal for the ongoing construction of a new Weehawken W1234 Solids/ Floatables Screening Facility. The screening facilities act as a water filtering system to catch floatable materials and solids in the combined effluent flow before discharge into the Hudson River. Due to the existing outfall pipes measuring six feet and eight feet in diameter, the facility had to be large enough to handle the capacity of both pipes and to provide means to bypass effluent flow for scheduled maintenance. The initial step was to provide a concept sketch for the design engineer showing means and methods for the proposed precast facility. A precast twin chamber station built from twenty-two precast segments was detailed and proposed. During a meeting with the General Contractor, Weeks Marine Inc., and the design engineer, Mott McDonald, the concept was presented, along with photographs of similar work previously deployed by Garden State Precast. Sustainable building elements were the primary factor in the approval to proceed with the concept. The Sustainable building elements included reduction of job site footprint, reduced closures of waterfront pedestrian and car routes, marine deployment/shipment of material at the site, precast concrete production with a controlled environment, and a
View of structure prior to installation of final two sections.
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reduction in the disturbance of tenants in nearby condominium complexes. Another crucial item was the ability of precast concrete to be designed to an elevation with provisions for Greenspace development on top of the units. The precast chambers were designed and detailed by Delta Specialty Precast Services for project loads. The 16’ wide by 41’ long by 16’ high inside dimensional precast units were also checked and designed for lifting and handling stresses. Each precast chamber weighs more than 600,000 lbs. and therefore is poured in eleven match cast segments. Provisions were made for stop log gates, required vertical and horizontal baffles, and chamber maintenance cross connections. Additional design features included precast pile caps and balcony slabs to provide maintenance access to external Tideflex check valves. Production was at Garden State Precast’s Farmingdale, NJ facility. During a six week production period, all eleven sections of the first unit were cast. The units were matched cast into the same arrangement as would be required in the field. The unit was then disassembled, and shipped by truck to Weeks Marine’s Jersey City yard. Jersey Specialized Hauling & Rigging of Old Bridge, NJ handled the road shipment. At the Jersey City yard, all eleven units are loaded onto a single barge for transportation to the project site. This allowed for efficient on-site storage and quick delivery to coincide with tidal conditions. The start of July marked another milestone on the W1234 Solids/ Floatables Screening Facility in Weehawken, NJ. During a 3-day period, Weeks Marine completed the installation of the first precast netting and regulator chamber. The project site was a cofferdam on the Weehawken waterfront, just south of the Lincoln Tunnel crossing. The first six bottom pieces were installed using a barge crane, and then partially post-tensioned to hold the shape of the lower unit. This initial step also provided a setting template for the top five sections. The opportunity was also taken to stage the preassembled netting units into the base. The top five pieces were then installed and post-tensioned. Finally, the six bottom pieces were full stressed completing the installation. Work will continue throughout the summer with an anticipated August shipment of the second chamber.