Utility and Transportation Contractor February 2018

Utility & Transportation

contracTOR

Crisdel Group Celebrates 50 Years In Construction

february 2018

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ly upp s S t e en let ipm omp u q C E ss y log nco sine Bre chno In Bu e r & T Yea e n O

president’s message

From the desk of: tom hardell

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s we begin 2018, we do so with hope that better days are ahead for our industry. Governor Phil Murphy was sworn in on January 16th and with him comes a new Administration that touted infrastructure as one of its three main policy platforms during last year’s campaign. During the previous eight years under the Christie Administration, our industry suffered through one of the worst periods in its history. The cancellation of the ARC project, record-low levels of investment in the transportation agencies, an unnecessary shut down of all TTF projects, and in essence no capital spending at NJ TRANSIT are just a few of the major crises NJDOT and NJ TRANSIT experienced. Governor Murphy has started off on the right foot with his selections of Diane Scaccetti for DOT Commissioner and Kevin Corbett for Executive Director of NJ TRANSIT. Both are experienced transportation professionals and hopefully indicate the Administration’s commitment to turning around NJ’s transportation network.

One major issue that we as an industry should be very concerned about is the rate of work being produced by the New Jersey DOT and NJ TRANSIT. After a long and punishing campaign to raise the gas tax, the State’s transportation agencies are not getting projects on the street. We are more than seven months into the fiscal year, and NJDOT has yet to award $300 million worth of contracts and NJ TRANSIT has barely reached the $40 million mark. Our industry fought too hard to renew the Transportation Trust Fund to watch work trickle out at a rate that prevents a true recovery in our sector. It’s time to explore new avenues for project delivery like increased utilization of consultants for construction management. NJDOT and NJ TRANSIT lack the necessary staff to produce the promised $2 billion annual capital plan that was promised by Governor Christie. Governor Murphy should empower Commissioner Scaccetti to explore

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new ways to engage the engineering and construction communities to allow the private sector to handle more functions currently handled by less efficient state employees.

Another issue that is costing taxpayers millions of dollars in waste is Uniform Traffic Control. The current system lacks any sense of uniformity from one municipality to the next. As a result, not only do rates differ from town to town, but so do the minimum hour requirements and what types of jobs trigger uniform traffic control. Millions of dollars intended for capital investment are diverted every year into police coffers on jobs that do not require 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, but provide relief to the taxpayers by eliminating additional and unnecessary costs from projects.

Finally, I would like to congratulate The Criscola family and everyone at the Crisdel Group on celebrating the impressive milestone of 50 years in business. It is a pleasure serving with Frank Criscola on the UTCA Board of Directors. I would also like to congratulate Brendan Binder on his new business venture with Brenco Equipment Supply & Technology. Congratulations on your first successful year in business and best wishes for continued growth.

If you have any comments or suggestions please feel free to contact me at thardellutca@ghcci.com

Best regards,

Tom Hardell

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CONTENTS

Cover story 46 crisdel group

celebrates 50 years in construction

DEPARTMENTS

FEATURES

2 7 17 29 35 55 59 63 71

78 brenco equipment supply & technology completes one

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

year in busines

NEWS 83 risk financing options manage costly exposures 87 changes impacting your business

Labor Relations The pipeline Engineering Exchange

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: Anthony Attanasio, 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.

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Utility & Transportation Contractor | february| 2018 3

By: kevin ellman, cfp, ceo

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f you have been reading about retirement plans in the business news lately, you know that the word of the day is “FIDUCIARY.”

Technically this is not really news, Plan Sponsors have always been considered Fiduciaries. What is news is the extra attention being focused on this area and that Companies who provide services to the 401(k) market may now be held to the Fiduciary Standard.

Being a Fiduciary basically means that you must put the interest of your client or employee ahead of your own. In this case, to make sure that you are doing everything reasonable to preserve their retirement savings and help them save in effective ways.

I encourage you to immediately put a Fiduciary Liability Protection Plan (FliP) in place. The cornerstone of your “FLiP” will be the Fiduciary Binder. I want you to have a large binder with several sections. Imagine that a DOL auditor comes into your office, you want to be in the position to hand them your Fiduciary Binder that addresses this major concern so they may review and then go away.

Investment Policy Statement (IPS) If you don’t have one, get one. Create and follow a simple statement of how you select the investments for your Plan. It will also describe your process for tracking performance and when you will replace under-performing funds. Your Record Keeper or Advisor can provide you with a sample. A good practice is to update your IPS each year at your annual meeting.

Investment Committee Your IPS should be reviewed by your Investment Committee.

Most companies have an Investment Committee of one person, usually the owner. Why take on this risk all by yourself? A much better practice is to have a Committee consisting of three people.

Perhaps the owner, the CFO or HR person and a non-executive employee. This way the various investments decisions reflect the interests of the owner(s), executives and employees.

Plan Document It is essential to understand and follow your Plan Document.

This document spells out who is eligible to participate and when, how your matching policy works (if any), whether you allow loans and all the other details of your Plan. It is a good idea to review the Plan features at your annual meeting.

Meeting Notes All of the documents that you create, review and maintain should be the focus of your regularly scheduled meetings. Annual or semi-annual meetings should do the trick. If you do have meetings the key is to have meeting notes to record the actions and decisions that you undertook. The key to inoculating yourself from DOL troubles is to maintain a regular paper trail to demonstrate that you are following best practices when managing your retirement plan.

Financial overview

the four “f” words of 401(k) - part three fiduciary responsibilities

Specially Discounted 401(k) Program for UTCA members Wealth Preservation Solutions has designed a turn-key program that can help you meet your Fiduciary Obligations in a very cost effective fashion.

Please call Kevin Ellman at (201) 632-2022 to request more information. <disclosure> Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment Advisory Services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Wealth Preservation Solutions, LLC is not affiliated with Kestra IS or Kestra AS.

Education Policy Statement This document spells out exactly what your plan is to educate your participants about the Plan in general, best practices for retirement saving, their specific investment choices and tips on how to use the available online tools.

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By: adrienne l. isacoff, florio, perrucci, steinhardt & fader, llc

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ederal construction projects in excess of $100,000 are governed by the Miller Act, 40 U.S.C. Section 3131 – 3134.

This law requires a contractor on a federal project to post two bonds: a performance bond and a labor and material payment bond. The surety company issuing the bonds must be listed as a qualified surety on the Treasury List, which the U.S. Department of the Treasury issues each year.

Miller Act Payment Bond Requirements The Miller Act payment bond covers subcontractors and suppliers of material who have direct contracts with the prime contractor, which are the first-tier claimants. Subcontractors and suppliers who have contracts with a subcontractor are second-tier claimants. Suppliers and others who have contracts with suppliers are not covered, nor is anyone further down the contract chain.

Many states, including New Jersey (N.J.S.A. 2A:44-141 et seq.), have adapted the Miller Act for use at the state level. These are generally referred to as “Little Miller Acts.”

Although the terms of the surety agreement must be complied with by claimants seeking to enforce claims against either the performance or the payment bond, well-settled authority makes clear that the Miller Act trumps conflicting suretyship principles such that a surety can only enforce contract terms to limit its Miller Act liability if those terms are consistent with the Act. See, e.g., United States ex rel. Walton Tech., Inc. v. Westar Eng’g, Inc., 290 F.3d 1199, 2015 (9th Cir. 2002).

Courts Favor Protecting Subcontractors and Suppliers on Miller Bond Claims That underlying principle was at the heart of a recent dispute in which the court had to consider the impact of a no-damage-fordelay clause on a Miller Act claim. The Miller Act allows claimants to file a cause of action on the payment bond “90 days after the day on which the person did or performed the last of the labor . . . for which the claim is made.” 40 U.S.C. §3131(b)(1).

Legal Dig

contract terms will not undermine the protections afforded by the miller act

In United States o/b/o Kitchens to Go v. John C. Grimberg Co., Inc., 2017 WL 4698217 (E.D. Virginia 2017) (“Grimberg”), the Court ruled in favor of the plaintiff-subcontractor despite several defenses raised by the prime contractor’s surety on a federal construction project. The prime contractor paid for basic work performed, but not for the costs incurred by the subcontractor relating to delay. The subcontract included a no-damages-for-delay provision, which provided that the subcontractor is “entitled only to reimbursement for any damages for delay actually recovered from the Owner.” The surety argued that because the government-owner had thus far rejected the prime contractor’s request for payment related to the delay claim, that the subcontractor had not established an amount due under the subcontract and, therefore, had not stated a Miller Act claim. In addition, the surety argued that the case should be stayed pending completion of the dispute resolution proceedings between the prime contractor and the government-owner. The Court rejected both these defenses by strictly construing the provisions of the Miller Act. The Court emphasized that the Miller Act is “highly remedial” and represents an effort to protect persons supplying labor and material on federal jobs where lien rights are unavailable.

In order to effectuate that legislative purpose, “the Miller Act trumps conflicting suretyship principles such that a surety can only enforce contract terms to limit its Miller Act liability if those terms are consistent with the Act.” With respect to the no-damages-for-delay claim, that contract clause contravenes both the text and the purpose of the Miller Act which provides that a subcontractor’s cause of action arises 90 days after the subcontractor provides the last labor or materials for which the claim is made – not after the occurrence of some other condition such as payment by an owner. See 40 U.S.C. §3133(b)(1). The Court held that the 90-day provision is the only condition for an action on the payment bond, and no contract clause may undermine the subcontractor’s rights under the Miller Act.

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Legal Dig

Similarly, the Court held that “the dispute resolution provision would impose an additional condition on the Subcontractor’s right to bring a Miller Act suit in contravention of the statutory text which plainly requires only the passage of 90 days before a subcontractor can bring a suit on the payment bond.” The Court rejected the surety’s request that the subcontractor’s claim be stayed.

The court’s protection of the subcontractor in Grimberg is consistent with other cases that have read the Miller Act in a manner that enables subcontractors to enforce payment bond claims. In U.S. ex rel. E & H Steel Corp. v. C. Pyramid Enterprises, Inc., 509 F.3d 184 (3d. Cir. 2007), a subcontractor brought an action against the prime contractor for air hangar construction, seeking to recover on a Miller Act bond due to the default by the contractor’s steel fabricator. The issue before the Court was whether the steel fabricator was a “subcontractor” under the Act. If so, the steel supplier would be a covered second tier claimant. If not, the supplier would not have an enforceable payment bond claim.

The District Court held that the steel fabricator furnished standard work in a manner analogous to that of a supplier of precut wooden beams for residential construction. Since the District Court found that the steel fabricator was a “supplier” to the prime contractor, not a “subcontractor,” the steel supplier’s claim was denied. The Court of Appeals reversed, holding that the steel fabricator was a subcontractor since it arranged for manufacture and delivery of a substantial amount of structural steel, prepared

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shop drawings and erection drawings, designed connectors and performed design-assist engineering.

In a delightful footnote, the appellate opinion quoted from a verse included by Benjamin Franklin in his Poor Richard’s Almanac: For want of a nail the shoe was lost. For want of shoe the horse was lost. For want of a horse the rider was lost. For want of a rider the battle was lost. For want of a battle the kingdom was lost. And all for the want of a horseshoe nail.

As the Court observed, “although a kingdom may be lost for lack of a nail, a vendor who supplied a box of nails is unlikely to be protected by the Miller Act.” Id. at 191. Still, the Court went out of its way to provide Miller Act protection to the steel supplier.

Courts generally will try to find protection for subcontractors and suppliers if that is consistent with a reasonable interpretation of the law.

Takeaway Subcontractors on federal projects have strong protections provided by the Miller Act and need not be cowed by defenses premised on contractual terms that undermine the legislative intent of the Act.

tax cuts and job act: top 10 focus areas for contractors By: jack callahan, cohnreznick

The timeline on the Act – from a start date of October 2017, to signing on December 22,2017 – was certainly impressive. The legislation moved at a record pace for such comprehensive reform. As a result of the speed at which the Act was passed, there are portions of the Act that need to be corrected through the technical corrections process. Without these changes, there could be unintended consequences.

One interesting note: the words “tax simplification” were dropped from the title of the legislation; as you will see, for many contractors, there will be nothing simple about the new tax law.

Below are 10 key items related to the new legislation we identified as having the greatest impact on engineering and construction companies and their employees. These are high visibility items that may have significant impact and should be carefully considered when assessing positive actions to take in order to maximize the benefits of the Act. The changes to international tax and the details on executive compensation are too detailed to cover in this article. As with any new tax law, the IRS and Treasury Department will need to chime in to clarify important “gray areas.” It could take months for the IRS and Treasury to provide such guidance. However, for further analysis and the latest developments around the new tax legislation, visit www. cohnreznick.com/taxreform.

1) Whether or not to be a C corporation C corporations are clearly the big winners in the tax act. Corporate tax rates have been cut from 35% to 21%, effective for tax years beginning after December 31, 2017. This 14% reduction is the largest single cut, and it is compounded by numerous other significant wins for C corporations, including: • The repeal of the corporate alternative minimum tax (AMT) • Increased ability to expense acquisitions and capital improvements (see discussion below)

There are some other provisions that temper the big benefits above. While most of our engineering and construction clients have organized as S corporations or LLCs, there are still a number that operate as C corporations. You and your tax advisor must look at your specific facts to decide whether your company would benefit from converting to a C corporation. There may be some good reasons to consider a change; however, we must caution that the double taxation concerns that drove our original entity selection decision still exists. Any changes in entity need to be made with careful thought and discussion.

2) Reduced tax rates are not all created equal While corporate tax rates were dropped to a 21% flat rate, the trust and personal rates cut were not that generous or as simple.

For trusts, we now have four tax rates: 10%, 24%, 35%, and 37%.

Individual rates are 10%, 12%, 22%, 24%, 32%, 35%, and 37%.

The highest individual rate had previously been 39.6%.

Capital gain tax rates have remained at 0%, 15%, and 20%, with new inflation indexes added for the determination of the phase in rates. These rate reductions did not come without offsets, such as the elimination of the personal exemptions and the elimination of other itemized deductions, discussed below.

Accounting Corner

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n December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into law. The most sweeping tax change since 1986, the Act is intended to encourage economic growth and bring back jobs and profits from overseas by reducing corporate tax rates and providing other incentives.

It is too soon to analyze the entire Act and to determine if it will achieve the desired results. Early signs have been very positive, with a surge in the stock market and growth in stocks of home builders and infrastructure companies.

3) Pass-through deductions may – or may not – provide significant relief For tax years beginning in 2018, the Act adds a new deduction for taxpayers that earn qualified business income (QBI). We call the deduction the “pass-through deduction.” The pass-through deduction is generally 20% of a taxpayer’s QBI from partnerships, S Corporations, or sole proprietorships (there are quite a few defined terms contained in the Act). The calculations and the eligibility will be very fact-specific. The good news for UTCA member firms that have labor and equipment is that they should qualify for the 20% deduction. For surety agents, attorneys, and accountants, it depends. The rules are somewhat complex. It will take a detailed analysis of your specific facts and circumstances to determine the benefits, and you should get used to hearing the term, “it depends.”

4) Small contractors get some significant relief In keeping with goal of the Act to benefit businesses and create jobs, the small contractor may well benefit here. Additionally, the small business provisions might simplify tax filings for qualified

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businesses. A small business is one with average annual gross receipts of $25 million or less. While specific rules are not available, it is likely that the IRS will require a company to aggregate revenues from related companies to determine if the businesses meet the $25 million test. Those contractors that meet the $25 million gross receipts test will have the following advantages: • They can utilize the cash method.

7) Equipment purchases and capital improvements provide new opportunities

These are all very beneficial and will provide tax benefits; however, it is important to caution the need to plan carefully around the timing differences and be certain that cash for taxes will be available when the timing differences turn around.

The Act provides for 100% expensing (bonus depreciation) in connection with qualified property acquired and placed in service after September 27, 2017. Bonus depreciation now applies to used equipment, as well as new. The new bonus depreciation rules, combined with an increase in the Code section 179 expensing (increased from $500,000 to $1,000,000), will provide a real opportunity to maximize the amount of deductions related to fixed asset acquisitions and construction. These new rules could make cost segregation studies even more beneficial.

Lives for certain assets have been shortened, however, Congress needs to provide a technical correction as it relates to Qualified Improvement Property. It is critical to remember that depreciation is only a timing item that will turn around quickly. The Act changes section 1031 to allow like-kind exchanges of real property only for exchanges occurring on or after January 1, 2018.

5) SALT in the wounds

8) Where did the net operating loss carryback go?

This was one of the more controversial matters in the Act. Beginning in 2018, individual deductions for state, local, and foreign property taxes and state and local income and sales taxes are limited to $5,000 (for individual filers), or $10,000 (for joint filers).

This will certainly impact taxpayers in New Jersey and other high tax states. The deduction for such taxes is not limited if the taxes were paid or incurred in carrying on a trade or business. There is no way around the fact that this will impact all of us doing business here. Very interestingly, we heard New Jersey politicians talking about the need to restructure their tax system so that individual taxpayers might be able to deduct more. We are not certain what any states might do in response to the new limitations, but we will update you if there are any interesting developments.

The new Act eliminates the ability to carry back net operating losses. However, you will have the opportunity to carry those losses forward indefinitely. There are also limitations in place that cap the amount of net operating loss utilized to 80% of taxable income. Given the recent hurricanes and wildfires, a provision was built in to allow property and casualty companies to carry back two years and carryforward 20 years and offset 100% of taxable income. This had been available to contractors, and in the past, a troubled contractor often relied on the quick cash infusion from a loss carryback refund to get them through a tough time. That remedy will no longer be available. Be certain to have adequate cash reserves.

• They are not required to account for inventories (though inventories would be treated as supplies).

• They are exempt from applying UNICAP rules.

• They do not have to use percentage of completion.

Accounting Corner

Floor plan interest for auto dealers and “certain” equipment dealers will continue to be deductible; the qualification of types of dealers will likely be challenged. And again, the small business exclusion will exempt small contractors from this limitation.

• They face no limits on the deductibility of interest expense.

• They do not need to worry about conformity to financial statements.

6) Interest expense deduction gets interesting Residential home mortgage interest will now be limited to interest on a first and secondary residence with a principal amount capped at $750,000. This amount is a reduction from the prior $1 million, but better than what had been proposed initially. Interest on home equity lines of credit will no longer be deductible.

On the business side, starting in 2018, the deduction for business interest will be limited to 30% of the business’s adjusted taxable income. In simplest terms, if a company has EBITDA of $1 million, its interest expense deduction will be limited to $300,000. Real property trades or business can get around the limitation by electing to be a “qualified real property trade or business.” However, doing so will subject them to less favorable depreciation methods. Once made, the election is irrevocable.

The definition of a “qualified real property trade or business” is broad and includes construction companies. Companies – potentially subject to the interest deduction limits – should weigh the long-term cost of interest deductibility versus the effect on depreciation.

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9) Deductions: Then you had them, now you don’t While there are several attractive elements in the Act, most notably, the near doubling of the standard deduction for individuals to $12,000 (individual filer) and $24,000 (joint filer), there are some long-valued deductions that will no longer be allowed.

These include: • Domestic production activity Code Sec 199 • Unreimbursed employee expenses form 2106 • Personal casualty and theft losses, expect for federally declared disasters • College athletic seat licenses • Entertainment expenses • Alimony paid for separation agreements dated after December 31, 2018 • Moving and relocation expense deduction • Deduction for living expenses of members of congress

• Fines and penalties • Settlement of sexual harassment claims • Limitations on deductibility of employee meals These are some of the more relevant and interesting deductions.

As they impact your business, it is recommended you begin discussions with your tax advisor to account and plan accordingly.

10) Time is now to revisit estate, gift, and trust planning

The taxability of trusts also may present some interesting tax planning opportunities. Revisit your plans.

This saga promises a sequel The Act provides a roadmap to where we are going in the future.

However, there are many details that still need to be worked out

We recommend contacting your tax advisor for clarification around the “it depends” questions that many of these issues raise.

As mentioned above, visit www.cohnreznick.com/taxreform for deeper analysis of the nuances of the Act and up-to-date developments. We will continue to stay on top of the impact of the new tax legislation and assist clients in taking positive action to maximize the benefits of the Act. Contact For more information, please contact Jack Callahan, CohnReznick Partner and Construction Industry Practice Leader, at jack. callahan@cohnreznick.com or 732-380-8685. To learn more about CohnReznick’s Construction Industry practice, visit our webpage.

Accounting Corner

Estate and gift taxes have been substantially impacted by the Act. While not delivering on the elimination of estate and gift taxes, the Act did double the basic exclusion to approximately $11,000,000. We recommend revisiting with your estate and trust professionals and looking at your gifting and inheritance strategies to be certain you maximize your family’s estate tax deductions. Not all of us can be as prudent a planner as George Steinbrenner was to die in the short window of time when the United States had repealed estate taxes. The rest of us must be certain to react to the laws in place each time they adjust and be certain that our estate plan is appropriately adjusted.

and many areas that need to be clarified or fixed. There is no set timetable for IRS guidance or for the necessary technical corrections. We recommend taking the time to absorb all the changes and determine how they impact your business. There is still time to analyze these changes in each of our personal and business cases and take appropriate, informed action. CohnReznick’s early look at several returns shows mostly positive results. Every individual case will have a different outcome, but it does look like tax cuts may be a reality for a majority of our clients.

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legislative update By: zoe baldwin, director of government relations

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ONE PROCESS TO UNITE THEM ALL As we have previously reported, UTCA’s main legislative priority for the lame duck session was to pass changed conditions legislation. As such, we are very proud to report that Governor Christie has signed our bill into law. Going forward, contracting units are required to include changed conditions provisions in all construction contracts governed by Local Public Contracts Law. Several years ago, UTCA Board Member Frank Renda identified a problem, marshalled the collective industry voice of our Legislative Committee, and began to develop the bones of what would ultimately become our changed conditions legislation. Despite the hurdles, Frank kept up the drumbeat and now, thanks to those early efforts, a very productive collaboration with the Society of Municipal Engineers, and the support of labor and our allies in the broader construction community, all projects governed by Local Public Contracts Law will be subject to a single, state-wide process for handling differing site conditions found in the field.

model to local transportation projects. However, an oversight in the appropriations bill failed to authorize the Trust to expend the administrative funding needed to pay for the staff, vendors, and administrative costs needed to run this expanded program. Now adopted, it is anticipated that the transportation bank will be able to provide approximately $200 million annually for local projects.

NJ, NOW DOWN WITH OPP (OTHER PEOPLE’S PAVEMENT) During the harried legislative session, UTCA also supported legislation developed by the NJ Asphalt Pavement Association that enables NJDEP to establish guidelines for the use of recycled asphalt pavement. Sponsored by Senators Gordon and Oroho in the Senate and Assemblymen Eustace and Rooney in the Assembly, the new law is a great step forward for asphalt and pavement contractors, giving them new options for repurposing their waste materials.

BACK IN THE SADDLE AGAIN Governor Phil Murphy took the oath of office in mid-January, and we look forward to working with the new administration on a variety of issues important to our members, including an overhaul of the state’s water infrastructure, updating state bidding procedures, and securing the future of a new trans-Hudson rail tunnel.

Legislative News

or our industry, lame duck sessions of the Legislature became anathema after a decade or so of unfulfilled promises - a curse uttered so many times it became just another way of saying no. But not this time dear reader; this time, UTCA broke the cycle and brought two important bills over the goal line for contractors and supported another as it made its way through to the Governor’s desk.

Of utmost importance to contractors however, are the cabinet appointments. Their handling of the day-to-day operations of our state departments, agencies, and authorities directly effects the day-to-day operations of our member firms. From the way in which capital projects are developed, bid, and built, to the efficiency of state permitting processes, the true test of this administration’s success will be found in the way they will handle the minutia of everyday governance.

DOT & DEP UP, TRANSIT ON DECK, TURNPIKE IN THE HOLE So far, the new administration has only named two heads of the “Big 4” of our industry – NJDOT, NJDEP, NJ Transit, and NJ Turnpike Authority.

BANKING ON IT The second UTCA victory was tucked inside a procedural bill for the New Jersey Environmental Infrastructure Trust. Our amendment will provide the NJEIT with the administrative authorization it needs to begin funding local transportation projects. Within the TTF reauthorization was language developed

by UTCA that enabled the Trust to expand the NJEIT finance

Early on, Governor Murphy named Dianne Gutierrez-Scaccetti to head the New Jersey Department of Transportation. Most recently the Executive Director & CEO of the Florida Turnpike Enterprise, Diane spent over two decades with the New Jersey Turnpike Authority, eventually becoming the Authority’s Executive Director.

Diane has always been known for fairness and deliberation in decision making. She was instrumental in advancing the NJ Turnpike widening project, and has spent her career making New Jersey a better place to live, work, and build.

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Legislative News

Shortly after, Murphy named Catherine McCabe as the next Commissioner of Environmental Protection. Previously, McCabe has served as acting administrator of the federal Environmental Protection Agency for an interim period, as Deputy Assistant Administrator of the Office of Enforcement and Compliance Assurance in EPA, as a judge on the EPA's Court of Appeals, and as both deputy and acting regional administrator of the Agency’s Region 2.

MUSICAL CHAIRS As mentioned in our last legislative update, the 2017 election brought with it a shake up in Assembly leadership and a slew of new members in both houses. Senate President Steve Sweeney remains the unchallenged leader of his house, while Middlesex Assemblyman Craig Coughlin unseated Hudson Assemblyman Vincent Prieto as Assembly Speaker. Both houses have new committee assignments, our most frequented are listed below.

We look forward to working with both Commissioner Scaccetti and Commissioner McCabe in their new roles.

Assembly Environment: Nancy Pinkin (Chair), Reed Gusciora (Vice-Chair), Joseph Lagana, John McKeon, Kevin Rooney, David Wolf

As of this writing, there is no official word on who will head NJ Transit, although the rumor mill and the press have reported Kevin Corbett of AECOM as the presumptive nominee. Corbett currently serves as Vice President of strategic development in the U.S. Northeast Region of AECOM, and has a long history of working with and for transportation, shipping, and infrastructure organizations. No matter who takes the reins, once confirmed the new Executive Director will have their work cut out for them. Murphy criticized NJ Transit both during the campaign and after winning the election and in his 5th Executive Order, ordered a comprehensive strategic, financial, and operational assessment of the agency.

Despite the challenges, Corbett comes well-suited for this undertaking, as his corporate background aligns with the Administration’s intent to use this audit not as an evaluation of the agency’s role as a service provider, but as a corporate entity in need of structural reform.

Assembly Labor: Joseph Egan (Chair), Valerie Vainieri Huttle (Vice-Chair), Robert Auth, Reed Gusciora, Paul Moriarty, Eric Houghtaling, Parker Space, Shavonda Sumter, Harold Worths Assembly State & Local Government: Vincent Mazzeo (Chair), Shavonda Sumter (Vice-Chair), Michael Patrick Carroll, Mila Jasey, Ryan Peters Assembly Transportation: Dan Benson (Chair), Patricia EganJones (Vice-Chair), Anthony Bucco, Robert Clifton, BettyLou DeCroce, Roy Freiman, Tom Goblin, Robert Karabinchak, James Kennedy, Yvonne Lopez, Gregory McGuckin, Benjie Wimberly Senate Environment & Energy: Bob Smith (Chair), Linda Greenstein (Vice-Chair), Christopher “Kip” Bateman, Richard Codey, Steve Oroho

There has been no word yet on an Executive Director for the NJ Turnpike Authority.

Senate Labor: Fred Madden (Chair), Joseph Vitale (Vice-Chair), Dawn Marie Addiego, Anthony Bucco, Sandra Cunningham

Other appointments and nominations relevant to our industry include: Rob Asaro-Angelo as Department of Labor commissioner; Joseph Fiordaliso, Sr. as President of the BPU; and Lieutenant Governor Sheila Oliver as Department of Community Affairs commissioner.

Senate State Government: James Beach (Chair), Shirley Turner (Vice-Chair), Chris Brown, Nilsa Cruz-Perez, Sam Thompson

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Senate Transportation: Bob Gordon (Chair), Vin Gopal (ViceChair), Nia Gill, James Holzapfel, Nicholas Sacco, Robert Singer

crisdel group Cover Story

celebrates 50 years in construction By: anthony attanasio, executive director

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elebrating 50 years in business, the Criscola family is proud of the company they run and the time honored core principles and traditions that have allowed them to survive and succeed for half a century. If you ask Frank Sr., Frank Jr., or Michael Criscola, the main key to their success is the strength of their relationships with customers and employees.

Crisdel prides itself on working tirelessly to never disappoint a customer while also going to great lengths to support and foster their employees. “Our customers always come first” says Michael. “Our goal is to treat our relationship with our customers as a partnership. Their success is our success.” Frank Jr. is quick to emphasize the importance of the firm’s employees, “We are only successful because of our people. Our employees take great pride in working for the company. Many constantly give 110%.

We wouldn’t be where we are without our team.” These two principals have led to incredible growth and success for a firm with humble beginnings.

Frank Criscola Sr. spent several years working in the asphalt paving industry while attending Newark College of Engineering at night, and in 1968 he and two partners took a leap of faith and began Crisdel Construction. The company began working small private jobs primarily as a subcontractor for several builders and

Frank Criscola, Sr (2nd from left), Michael Criscola (5th from left), and Frank Criscola, Jr. (far right) pictured alongside Crisdel's Project Team at LG Electronics North American Headquarters site in Englewood Cliffs, NJ.

46 Utility & Transportation Contractor | february| 2018

Bristol-Myers Squibb - Princeton Pike Campus

developers in northern New Jersey. The firm very quickly developed a solid reputation as a go-to paving subcontractor ready to take on complex projects in order to meet the client’s needs.

In 1977, just prior to the firm’s 10th anniversary, Frank bought out his partners and expanded Crisdel into public sector projects. At the time, Crisdel was already one of the main players in asphalt paving for a variety of industrial and commercial clients, but Frank felt the firm was ready to take on the challenges that came along with publicly owned and maintained infrastructure.

As the years went on, Frank continued to pursue new markets, including municipal and county projects. By the end of the 1980s, Crisdel was successfully performing work on the Garden State Parkway for the NJ Highway Authority. As the private market began to slow down in the early 1990s, Frank Sr. continued to forge ahead, taking on new challenges in the public sector. The growing company successfully completed its first $10,000,000 job, and began to work for the Port Authority of New York and New Jersey.

In 1995, upon graduation from the Boston University School of Management, Frank Criscola, Jr. joined the family business and dove head first into learning every aspect of company operations from the ground up. Today, Frank has risen to President and Chief Operating Officer. Frank Sr.’s other son Michael, a graduate of Rollins College, joined the business full-time in 2000, and currently serves as the company’s Executive Vice President. With all three Criscolas involved, the company continued to diversify and expand their construction disciplines and portfolio of work.

As the three men look back at the last two decades, they all

"We take great pride in how we build, not just what we build"

The company’s focus on customer service and satisfaction has led to projects for an impressive roster of high profile private sector clients. The company successfully performed major site work on Bristol-Myers Squibb’s Princeton Pike Campus. The firm was awarded the site preparation and the public roadway widening contracts for the development of the new 650,000-square foot office building complex located on a 134-acre tract of undeveloped property at the intersection of Princeton Pike and Interstate 95 in Lawrence Township, NJ. The firm is currently performing all of the excavation and site preparation work for LG Electronics’ North American Headquarters in Englewood Cliffs. Major work items on the project include but are not limited to: soil erosion control, clearing and grubbing, rock blasting, excavation, grading, storm drainage, sanitary sewer construction, waterline construction, retaining walls, site concrete, asphalt paving and intersection improvements on Hudson Terrace including a new

Newark Airport - Rehabilitation of Runway 4L-22R and Delay Reduction Initiative

Cover Story

agree that the industry has changed far more than the company. signalized intersection.

Adapting to this ever-changing marketplace has not been easy, In addition to this incredibly successful work in the private secbut it has allowed Crisdel to take on new tor, the Criscolas also boast an impressive construction techniques while continuing portfolio of award winning major regional to improve their already stellar work in transportation and crucial local projects. the asphalt paving industry. Through it all, Crisdel has delivered construction projects while taking on major projects as a generat international airports like the rehabilitaal contractor and through joint ventures, tion of runway 4L-22R and Delay ReducCrisdel continues to grow and thrive. They tion Initiatives at Newark Liberty Internarelish working for other major general contional Airport for the Port Authority. Their tractors performing the paving work on work at Newark Airport included milling major capital projects. This pride in deliverexcavation, asphalt paving, concrete pavFrank Criscola, Jr. ing for owners as a prime contractor, or for ing, Federal Aviation Administration (FAA) prime contractors as a subcontractor, is the aeronautical lighting and electrical systems, first constant that the Criscolas repeat as a concrete slab stabilization, boring/drilling, mantra. Michael emphatically states “It’s not storm drainage, fire protection systems, disa job, it’s a client. We take great pride in our posal of contaminated soils, pavement markings, safety grooving reputation as a contractor that always delivers for its customers.” and landscaping.

Frank Jr. reiterates that customer service has always been and will always be Crisdel’s number one priority. Whether it is a private Crisdel has also delivered for the New Jersey Turnpike Authoror public client, Crisdel seeks to have every client 100% satisfied ity, the nation’s largest tolling Authority, on the Interchange 6-9 with how a project is ran and the final outcome. “We take great Widening Program – NSI and SNI Roadway Rehabilitation from pride in how we build, not just what we build. We strive to ensure milepost 47.4 to 61.0. The firm’s work included milling, paving, that we have the safest, cleanest and most efficiently operating barrier repairs, bridge repairs and reforestation for the New Jerprojects that finish on time and within budget.” sey Turnpike Authority. Finally, the firm’s work also included im-

NJ Turnpike - NSI and SNI Roadway Rehabilitation - Paving, Barrier & Bridge Repair, Milepost 47.4 to 61.0

proving our State’s economy through major new development at the Garden Homes Main Street North Brunswick Project. Main Street North Brunswick is a 1-million (+) square foot, mixed-use transit village development constructed on 200 acres located on Route 1 in North Brunswick, NJ in the heart of Central New Jersey. Crisdel’s construction contract consisted of the grading and installation of asphalt pavements for the on-site paving associated with the new site roadways, parking lots for Costco Wholesale, parking lots for Target and parking lots for the commuter parking.

Delivering complex and large scale projects is not possible without a top flight staff and the Criscolas feel their team is exactly that. Many members of the Crisdel Group have worked there for 10, 20 and in some case more than 30 years. The firm has grown from a handful of employees to more than 200 when in

Utility & Transportation Contractor | february| 2018 47

Cover Story

peak construction season. The Criscolas have always put an empha“Our goal is to treat our sis on cultivating and growing their staff from relationship with our within, with a major customers as a emphasis on training.

Most of all, the employpartnership. Their ees are made to feel that success is our success” they are part of a family - Michael Criscola more so than a company. Even during down markets, the Criscolas have avoided layoffs in order to protect their staff and retain their experience. It is because of this familial atmosphere that has led to the employees adopting and owning the same approach to customer service as the firm’s owners.

“Absolutely everyone here is like family and genuinely cares about each other. The doors are always open, and your ideas, thoughts, and questions are always heard. Everyone takes the time to discuss our projects and we strategize each one, no matter how big or small, in order to surpass the client’s expectations,” said Kimberly Marchetti, the firm’s first female project manager.

Barry Hill has been estimating for Crisdel for just under 9 years and shares Kimberly’s enthusiasm, “Although Crisdel is a large company, the family personalization of the business is ever present in all aspects. Frank Sr., Frank and Michael are here and available at all times. Always with a greeting, asking how things are going, caring not just about work but each individual as a

Main Street North Brunswick

person, which makes you feel like more than just an employee here to do a job. It was nice to know that I found not just my next job; but a home.” However, the employee passion for the Criscola family is best captured by 30 year veteran Bill Weaver, Crisdel’s VP of Operations, “The success of the company is a result of the foundation Frank has built, and that foundation is based on ethics, values, and hard work. As a result of Frank’s decision making abilities, Crisdel welcomes the challenges of the most difficult and time sensitive projects. Even with continuing great growth, Crisdel has not lost focus and continues to consider each and every employee as family. I consider myself most fortunate to have been given the opportunity to be a part of such an outstanding organization.”

Looking ahead to the next 50 years, Frank Criscola Sr. has great confidence in his sons to continue to grow the family business regardless of what challenges they face.

“It wasn’t hard to turn the reins over. It was a smooth transition.” New technology, laws and regulations lead to a never ending need to adjust and improve the operation. He knows his sons will continually seek to adapt to the changes in the industry by remaining progressive while always adhering to the family’s values and principles. UTCA would like to congratulate the Criscola family on 50 very successful years in the construction industry and wish them the best of Members of Crisdel's Accounting, Administrative, Estimating, Equipment Maintenance, Executive, Logistics and Project Management luck in the next half cenStaff pictured at Crisdel's Corporate Headquarters in South Plainfield. tury.

48 Utility & Transportation Contractor | february| 2018

shortcuts never pay By: dina pomarico, phoenix safety & associates, llc

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coworkers. It was 8 AM on a Monday morning and they were behind schedule. While they were rushing around to try to make up time, the first worker set up a six-foot ladder in a room. The second worker was in the hallway feeding the cable to him.

Worker one did not set the ladder properly in the open position, he climbed up the ladder about 5 feet and started to pull the cable, the ladder folded and he fell on the ladder hitting his back.

The second worker came running when he heard the screams.

He was rushed to the hospital and x-rays where performed, which showed that he had broken two ribs. The doctor told him that if he was any higher with more of an impact the rib would have punctured his lung. This accident put him out of work for six weeks. Six weeks of pain, six weeks of loss of wages, and even worse he could have died. His wife and children were upset, his family was upset and his coworkers who he worked with for so many years were upset. This was a preventable accident, if he had taken more time to set up the ladder, this would not have happened and all the people involved would have been spared the pain and heartache.

According to OSHA, each accident which results in a fatality or the hospitalization of three or more employees shall be investigated to determine the causal factors involved, except to the extent necessary to protect employees and the public, evidence at the scene of an accident shall be left untouched until inspectors have an opportunity to examine it. When someone gets injured or a death occurs this not only affects the person, it also affects the family, loved ones and also coworkers. Statistics show that most families live at or above their means, when an injury comes into play, most of us can not afford it. Workmanâ&#x20AC;&#x2122;s compensation usually does not cover the family bills and they accrue more and more debt. If that person is out of work for a long period of time they could lose their house and other valuables. This can also put a strain on a marriage and on the family as well. Most companies maintain a crew, who often become very close, like family and when one of their friends get injured or killed on the job, they may never be the same.

Phoenix Safety & Associates, LLC is a Small Business Enterprise (SBE), and a Woman Business Enterprise (WBE). What does this mean for you? This could be potentially a great deal. If your organization is the winning bidder on a public works job such as one from the NJ DOT, NJ Transit or the Port Authority, you are required to use up to 12% SBE and 5% WBE as subcontractors in order to be considered in compliance. Consider this, using the safety programs and services from Phoenix Safety will fulfill your contractual obligation and provides your workers with safety training that can minimize workplace accidents.

An electrician for a New Jersey based electrical contractor, was pulling cable on the second floor of a building with two other

Please take the time to work safely, it only takes a few more minutes and it could save you from an accident. Please do not always depend on your company to keep you safe, you need to keep you and your coworkers safe. If you see something unsafe say something.

Safety Perspective

hoenix Safety & Associates, LLC performs many near miss and injury investigations for construction contractors all over the tristate area. OSHA defines a near miss as an incident in which no property was damaged and no personal injury was sustained, but where, given a slight shift in time or position, damage or injury easily could have occurred.

It is important for employers to develop a near miss program which identifies and reports unsafe conditions. These programs must be implemented throughout the organization from the top down, which means that everyone in the company should take them seriously. When a near miss occurs the competent person on the project should stop work in that area and fill out all the proper paper work and interview everyone involved. Although no one got hurt, this is a great learning tool for other workers on various sites to gain knowledge. After the paperwork is filled out it is sent to the safety department in your company, where it is reviewed by the safety director. At this point they will determine the cause of the near miss and take corrective actions. He or she will then make comments and send it out as an official report to all workers in that company. At the other locations the supervisor will review the near miss with the employees and ask for comments. What we are trying to accomplish is that we spread the word about what has happened on another site to make sure a similar incident doesnâ&#x20AC;&#x2122;t happen again. This may very well save a life in the future.

Avoiding accidents saves you money and helps you maximize your profits while you utilize your subcontractors to the best advantage. What it all comes down to is your bottom line because safety training can dramatically reduce workers compensation insurance premiums. Training of managers and supervisors helps prevent accidents, injuries, and fatalities. Safety training helps relieve lost productivity, and workdays from injuries and can help stop OSHA fines.

Utility & Transportation Contractor | february| 2018 55

a shifting landscape in our nation’s labor law 2017 went out with a bang By: jonathan landesman, esq, cohen seglias pallas greenhall & furman pc

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The scope of Section 7 and the other provisions of the NLRA are interpreted by the Board. The Board’s members are appointed by the President of the United States. A Democrat in office generally translates to appointees more favorable to unions. A Republican in office generally means the opposite, that is, appointees with a

greater inclination toward employers and the business community. As we know, the political climate has changed over the last year with the election of President Donald Trump. With that change, employers have begun to see significant changes in the Board’s interpretation and enforcement of the NLRA. The week of December 11, 2017 was one of the most significant weeks in recent years. The Board overturned four (4) key rulings handed down over the previous ten (10) years that were widely viewed as favorable to labor unions and a thorn in the side of employers.

Here is a snapshot of the activity that we saw: • Browning-Ferris Joint-Employer Standard: In a 3-2 decision, the Board overruled Browning-Ferris Industries, 362 NLRB No. 186 (2015), which relaxed the standards for when an entity may be deemed a joint employer under the National Labor Relations Act (“NLRA”). Under the Browning-Ferris standard, one entity could be held jointly liable for another entity’s violations of the NLRA if there was proof the entity had indirect control over the entity’s employees or a contractually reserved right of control even if the entity never actually exercised that control. With its recent decision in Hy-Brand Industrial Contractors, 365 NLRB No. 156 (December 14, 2017), the Board announced a return to the pre-Browning Ferris standard. Moving forward, an entity may be found jointly liable for another entity’s violations of the NLRA if there is proof the entity actually exercised control over essential employment terms over another entity’s employees and did so directly and immediately in a manner that is not limited and routine.

• Employer Rules, Policies, and Handbook Provisions: In another 3-2 decision, the NLRB overruled its prior decision in Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004), which held that employers could be found liable under the NLRA by maintaining workplace policies that were facially neutral but could be “reasonably construed” by an employee to prohibit the exercise of NLRA rights. The Board articulated a new test in The Boeing Company, 365 NLRB No. 154 (December 14, 2017).

Now, the legality of a facially neutral workplace rule, policy, or handbook provision will be evaluated by the Board through two lenses: (1) the nature and extent of the potential impact on an employee’s NLRA rights; and (2) the employer’s legitimate justification associated with the rule.

Labor Relations

n my 20 years representing contractors – union and nonunion alike – I feel the pain that many have felt, especially in recent years, over decisions that have been handed down by the National Labor Relations Board (“NLRB”). Before we go any further, let’s take a moment to review the functions of the NLRB. For those familiar, skip ahead. For those unfamiliar, the NLRB enforces federal labor law, and specifically the National Labor Relations Act of 1935 (“NLRA”). The adjudicative arm of the NLRB is the Board. It is comprised of five (5) members (each a political appointee) who sit in Washington D.C. and decide issues ranging from “unfair labor practice” charges to union election cases. There are other administrative layers of the NLRB, but we’ll leave that for another day. A common misconception that I often encounter in my practice is that the NLRA applies only to union contractors. If I’m a merit-shop contractor, who cares what five (5) politically appointed bureaucrats do every day? Right? Wrong. Section 7 of the NLRA protects the rights of employees in both union and non-union environments to engage in protected concerted activities for the purposes of collective bargaining. What does that mean? Basically, employees have a right to “band together” and challenge the terms and conditions of their workplace, such as wages, hours, and benefits. An employer who interferes with its employees’ Section 7 rights may find itself subject to an unfair labor practice charge and a knock on the door from their “friendly” NLRB investigator.

• Employers’ Duty to Bargain with Unions: In another 3-2 decision (noticing a trend?), the NLRB restored its 50-year old precedent that limited an employer’s ability to unilaterally make

Utility & Transportation Contractor | february| 2018 59

certain changes to terms and conditions in the workplace. In Raytheon Network Centric Systems, 365 NLRB No. 161 (December 15, 2017), the Board reversed its prior ruling that an employer must bargain with the union before implementing changes to employment conditions, even if the change was consistent with the employer’s past practice of making similar changes. Now, an employer may change terms and conditions of employment if its doing so is consistent with a past practice of making similar changes. In Raytheon, the issue involved the employer’s modification to its union employees’ health care benefits, which the Board held could be made without bargaining with the union because the employer had a past practice of making similar unilateral changes every year from 2001 through 2012.

Labor Relations

• Micro-Unit Organizing: In another 3-2 decision (Yes. 3-2), the Board reversed its 2011 ruling in Specialty Healthcare, 357 NLRB 934 (2011), which allowed “micro-units” of workers to unionize by placing a burden on employers to show that the workers included in a bargaining unit share an “overwhelming” community of interest with the union’s proposed organizing group. The Board reversed that rule with its decision in PCC Structurals, Inc., 365 NLRB No. 160 (December 15, 2017) and announced a return to its standard pre-Specialty Healthcare: the Board will consider whether the petitioned-for workers belong to an organizing unit with the excluded workers by evaluating whether those workers share a community of interest “sufficiently distinct” from excluded employees to warrant their own unit. The bottom line: this

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decision will make it easier for employers to expand a union’s proposed organizing unit.

So what does it all mean for contractors? In some instances, these decisions carry significant weight. For example, the reversal of the Board’s Browning-Ferris decision significantly limits the potential for a contractor’s liability for a violation of the NLRA that is alleged against a subcontractor. A reversal of Lutheran Heritage means less scrutiny and probing from the NLRB into your employee handbook. Gone are the days (at least for the next few years) where the NLRB will hold an employer liable for its implementation of an otherwise facially neutral handbook policy based upon a “reasonable construction” of the policy by an employee. The next few years should bring even more change from the NLRB and the Department of Labor who, for its part, has recently rescinded various Obama-era policies on joint-employer status and other important wage and hour issues. Here’s to a prosperous 2018!

About the Author. . . Jonathan Landesman, Esquire is the Co-Chair of the Labor and Employment Group at Cohen Seglias Pallas Greenhall & Furman, PC. He is also a member of the Firm’s Executive Committee. Jonathan represents general contractors, subcontractors, and other businesses in the construction industry in all areas of labor and employment law, including discrimination litigation, union and fund related matters, non-compete agreements, and day-to-day human resources counseling.

the water - energy - waste connection By: dan kennedy, director of environmental & utility operations

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f you read the last Pipeline article, you heard about how a new law (the “Water Quality Accountability Act”) is now in effect and will force necessary long-term capital investments in drinking water infrastructure. This comes with the normal Jersey caveat of “if all goes as planned.” UTCA is engaged in early stages of implementation of this new law and will report on progress and challenges along the way.

“Options for meeting unmet investment needs must go past the conventional ask for new/additional revenue. We believe that operational efficiency measures must also be on the table.”

This funding (raised through efficiency measures) can offset rate increases and lower reliance on Federal/ State resources for necessary capital improvements. In - Dan Kennedy addition, having more options for energy sources and waste management can preserve utility operations from the risks of being taken offline during emergencies (weather related or otherwise). For those thinking about the bigger picture, some of the energy/waste projects that utilities can put in place may result in lessening the draw on water resources from surface/ground water and free up allocations for water for other more pressing needs.

Examples of “Spend Money to Save Money” Water Utility Projects Energy/Waste Efficiency Audits – Low costs audits can uncover energy/waste-saving measures in existing facilities. Efforts like this are cheap and require no higher-level approvals to identify and implement measures to save money in “day to day” operations.

One water utility inefficiency in most New Jersey water systems is fixed costs related to energy. EPA reports that some water utilities have up to 40% of their operational budgets fixed on energy costs.

As NJ is reported to have the 10th highest electricity costs in the nation, these bills add up to a meaningful fixed cost in most water utilities. Another draw on operational budgets is the disposal of waste from various water treatment processes. If less (or cheaper) energy is used and costs associated with disposal of waste (think, less tipping fees) are minimized, a meaningful amount of funding can be

The Pipeline

UTCA understands that the Water Quality Accountability Act is a longer-term play. While implementation rolls out, there is much work to be done to accelerate (re)investment in water infrastructure. That is why UTCA is at the final stages of developing a “Water Infrastructure Investment Program” that focuses on increasing the amount of funding available to assist NJ’s water utilities better meet their unmet investment needs. Options for meeting unmet investment needs must go past the conventional ask for new/additional revenue. We believe that operational efficiency measures must also be on the table. That is why you will see UTCA’s advocacy efforts also focused on helping water utilities lower their operating costs with the assumption that the freed-up capital would be redirected to maintaining, replacing and/or upgrading outdated water infrastructure.

“freed-up” for water infrastructure investments in each water utility.

Combined Heat and Power Projects – Known as cogeneration projects, these refer to the simultaneous production of electricity or thermal energy from a single source. One example of this is a wastewater treatment plant installing anaerobic digesters that generate methane, which can be used on or offsite to create power for the facility or the grid.

Renewable Energy – Onsite renewable energy projects (solar, wind) can make sense for facilities with land or roof area for these components. If situated near a landfill, water utilities may partner with landfills in gas-to-energy projects from methane coming off their facilities.

Capital projects like these associated with water utilities are eligible to apply to the NJ Environmental Infrastructure Financing Program

Utility & Transportation Contractor | february| 2018 63

(EIFP) for access to low/no interest funding. This program is co-administered by the NJ Infrastructure Trust (formerly NJEIT) and the NJDEP. Trust staff report that the EIFP is reviewing or has already funded $220 million in cogeneration projects alone…with more projects in the works.

Early Leader - Camden County MUA’s “Net Zero” Program CCMUA is one of several major utilities statewide leading the way for cost-savings. According to the NJDEP, the Camden County MUA (CCMUA) is on target to be a “net zero” energy use system by 2020. The CCMUA is making strides in maintaining/replacing their aged water infrastructure in no small part due to their ability to better control their operating costs related to energy and waste.

They did not accomplish this overnight and it required them to have a solid strategy (assisted by a BPU grant) and a willingness to spend money to save money. The CCMUA has sponsored and/or is in design for the following infrastructure projects in support of their “net zero” goals: * With the help of the EIFP, upgrades to its main sedimentation tank and aeration system have been completed to enable their WWTP to remove and treat more solids through gravity and rely less on their energy-intensive aeration system. These improvements reduced the WWTP’s energy consumption by 25%.

The Pipeline

* A new solar array was installed onsite, providing approximately 10% of the energy required to run the WWTP. * With the help of the EIFP, a project is heading to construction to install a sludge digestion facility that will reduce the sludge generated by the WWTP by approximately 50% and use it to produce biogas. This biogas will be converted to electricity by a new cogeneration facility to provide at least 50% of the WWTP’s energy requirements. Northeast Remsco construction was the successful bidder for this project that includes the construction of a new Sludge Storage and Anaerobic Digestion Facilities, including sitework, yard piping, structural, architectural, process piping and equipment, plumbing, HVAC, electrical, fire detection and suppression and all instrumentation and

64 Utility & Transportation Contractor | february| 2018

controls. In addition, the project included modifications to the existing Sludge Thickening Facility, including process piping and equipment, plumbing, electrical and new instrumentation and controls. * The final project needed to meet CCMUA’s ambitious goals are under design and will essentially take treated effluent and transfer the water to a neighboring energy produced to be used for cooling water. The project will generate nearly 15 megawatts (MW) of energy and save 1 million gallons of water from being withdrawn from the aquifer system by Covanta Camden.

Water Utilities Partnering with the EIFP The EIFP is well positioned to assist utilities like the CCMUA meet its challenges with loans, grants and technical assistance. CCMUA’s goal is to become a clean water "Utility of the Future" which optimizes environmental performance, economic efficiency and community service. It needs the fiscal and administrative support of relevant arms of federal and state government to meet that goal. To its credit, NJDEP has provided improved permitting guidance and has maintained a close working relationship with CCMUA and the City of Camden. UTCA will advocate that this approach to solving complicated utility issues over the long-term is maintained moving forward. The alternatives (burying heads in the sand or engaging in adversarial tactics) have proven to be wildly ineffective.

UTCA will work with utilities statewide to be supportive of projects that exemplify this “spend money to save money” approach. In addition to increasing funding and utility efficiency, we will seek to improve the design, review, and permitting processes to accelerate the pace of water infrastructure investments statewide. UTCA will also be working with the newly-seated Murphy Administration and leaders in the Legislature to see a reasonable portion of any new revenue coming from NJ’s anticipated re-entry into the Regional Greenhouse Gas Initiative (RGGI) be dedicated to water infrastructure projects that have a nexus to energy savings or “hardening” of utility infrastructure.

new jersey's engineering excellence awards results announced By: joe fiordaliso, acecnj president

A

CECNJ has announced the results of its Engineering Excellence Awards (EEA) competition. This annual competition, now in its 47th year, determines the top engineering works of the past year.

Join us on March 14th to find out which three companies will be our Grand Honor Award recipients. In the running for the Grand Honor Large Project is HNTB Corporation for their work on Delaware River Turnpike Bridge Emergency Repair and HDR, Inc. for their work on Bayonne Bridge Raise the Roadway Milestone 1 Completion. In the running for Grand Honor Small Project is Gannett Fleming for their work on U.S. Route Nos. 1&9 and 46 Bridge Over Jones Road and Michael Baker International for their work on NJDOT Route 33/34 EB over Southern Division Railroad. In the running for Grand Honor Non-Transportation is Dewberry Engineers for their work on Rebuild

by Design Hudson River (RBDH) Feasibility Study and Langan Engineering for their work on Cranbury Logistics Center.

and private works of these accomplished professionals is one of the most important and meaningful things ACECNJ does each year.”

For more information regarding attendance and sponsorship of the EEA banquet, contact Gabrielle Liguori at (609) 571-9958 or info@ acecnj.org.

Grand Honor & Honor Awards – 2018 Engineering Excellence Awards In the Running for Grand Honor Award – Large Project: HNTB Corporation NJ Turnpike Authority Cornell & Company Inc. “Delaware River Turnpike Bridge Emergency Repair” HDR, Inc. Port Authority of New York and New Jersey Skanska-Koch/Kiewit “Bayonne Bridge Raise the Roadway Milestone 1 Completion”

Gannett Fleming NJ Department of Transportation J.F. Creamer & Sons and Joseph M. Sanzari, Inc. “U.S. Route Nos. 1&9 and 46 Bridge Over Jones Road” Bayonne Bridge Raise the Roadway Milestone 1 Completion

Michael Baker International NJ Department of Transportation

New Jersey firms enter their top projects which are then scored by an expert panel of judges based on a number of criteria. New Jersey’s top projects advance to the national EEA competition where they will go head to head against the top projects in the country and from around the world. This year ACECNJ will also recognize 28 projects with Distinguished Awards.

South State, Inc.

EEA project awards, along with individual awards for service to New Jersey’s engineering profession will be given at ACECNJ’s EEA banquet on Wednesday March 14, 2018 at Forsgate Country Club in Monroe. “Firms and their clients take this competition very seriously and take a significant amount of pride in the recognition,” said ACECNJ President Joe Fiordaliso. “Highlighting the important public

Dewberry Engineers

“NJDOT Route 33/34 EB over Southern Division Railroad” In the Running for Grand Honor Award – Non-Transportation Project: NJ Department of Environmental Protection “Rebuild by Design Hudson River (RBDH) Feasibility Study” Langan Engineering

Engineering Exchange

In the Running for Grand Honor Award – Small Project:

Utility & Transportation Contractor | february| 2018 71

Clarion Partners, LLC “Cranbury Logistics Center” Honor Award – Large Project: AECOM-Arup Joint Venture Mass Transit Authority “Second Avenue Subway Phase I” Arora and Associates, P.C. NJ Department of Transportation South State, Inc. “Route 206 Bridges over Stony Brook” Boswell Engineering NY State Department of Transportation Halmar Int’l/A. Servidone “New York State Department of Transportation Patroon Island Bridge Rehabilitation Project” SJH Engineering

Route 37 EB Mathis Bridge Rehabilitation

Port Authority of New York and New Jersey Kiewit Constructions / Weeks Marine and Massman “Travis Spur Rail Bridge Replacement”

Urban Engineers WSP, USA

County of Atlantic, NJ

NJ Department of Transportation

MidLantic Construction

Schiavone Construction Co., LLC

“The Replacement of Catawba Bridge over Miry Run”

“Route 37 EB Mathis Bridge Rehabilitation”

Engineering Exchange

McCormick Taylor NJ Turnpike Authority Rencor, Inc. “GSP Cheesequake Culvert Rehabilitation” Honor Award – Non-Transportation Project: H2M Associates, Inc. NJ American Water J. Fletcher Creamer & Sons, Inc. “Rapid Deployment Treatment Capacity Expansion”

Travis Spur Rail Bridge Replacement

Langan Engineering Accurate Box Company “Accurate Box”

Honor Award – Small Project: Mott MacDonald

Langan Engineering

County of Passaic, Department of Pubic Works, Division of Engineering

Dwight-Englewood School

Ritacco Construction, Inc. “Replacement of Clinton Road Bridge”

72 Utility & Transportation Contractor | february| 2018

“Dwight-Englewood School Improvements”

Feature Story

brenco equipment supply & technology (B.E.S.T) Completes one year in business By: anthony attanasio, executive director

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017 was truly a milestone year in Brendan Binder’s life, but not in the way many would have thought. Binder Machinery, the business started by his family in 1957, would have celebrated its 60th anniversary, but was instead bought by Komatsu American Corporation. Brendan grew up in the family business and wanted to remain in a family business, so he took a note from his forebears and founded his own firm, Brenco Equipment Supply & Technology (B.E.S.T.). The new firm, commonly referred to as Brenco, incorporated in February of 2017, and as you read this article, Brendan and the firm are celebrating their very successful first year in business.

Brendan’s career in the construction equipment industry began in 1989 when he was a part time employee in Binder Machinery’s parts warehouse while still in high school. Brendan would work summers throughout high school and college in both the parts and service divisions of the company, learning the products and the company business from the ground up.

In 1995, Brendan went full time at the company and spent the next 22 years working in every department other than accounting and finance, which by his own admission was best for everyone. As Brendan rose to Vice President of Operations and eventually President and Chief Operating Officer, he took great pride in still being able to help his customers with every aspect

Brenco’s technicians Sean Early (L) and Connor Dubasak (R) work on a large excavator undercarriage in their Hillsborough shop.

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Brendan Binder at Brenco’s part counter.

of the business. As Brendan fondly recalls, “Through my various departmental experiences, I always had the ability to pick up any ringing phone in our facility and actually assist the person on the other end. This is the level of interest in supporting our customers that runs throughout the culture at Brenco.”

This hands on training and experience is what Brendan credits for the successful launch of Brenco. This new endeavor was built on his institutional knowledge and framed around a service model built on that experience, but Brendan is quick to point out that there are several differentiators that set Brenco apart. Brenco is not a rental house or contractor supply store. Instead, the new model is focused on small equipment sales and technology upgrades with a targeted rent-to-sell division. Brendan has a team of sales representatives that are experts in the firm’s products and how they fit the needs of the customer. He also has four mechanics in service trucks traversing the state to service Brenco products or any other product a customer may need. The company’s markets include highway and bridge construction, site development and the utilities. While his equipment is finding its way into additional markets it’s his focus on these three that Brendan believes makes Brenco ideal for his UTCA customers.

Brendan has been humbled by the support he has received from the industry. While Brenco is a new company, Brendan is not new to the industry. This allowed him to bypass the typical introductions and relationship building most new firms must achieve to succeed. Instead, his reputation allowed Brendan to sell his ability to perform, and many UTCA members have given him the chance to display the new company’s abilities. First and foremost, was Kyle Conti of Kyle Conti Construction, who reached out and offered a helping hand as Brendan was searching for a home base of operations. Brenco currently utilizes property at the Kyle Conti Construction headquarters in Hillsborough. Brendan went on to make his first sale to the Crisdel Group, which was quickly followed by sales to Ferreira, Vollers, and South State, to name a few.

2017 was also a Conexpo year, and Brendan points to the world’s premier construction equipment convention as a key to Brenco’s fast start as a new company. The timing couldn’t have been better

for a start-up equipment provider to network and forge key business alliances, and that’s exactly what Brendan did. Along with Mike Finnegan, VP of Product Support, the two excited and optimistic professionals ventured into Conexpo with the hopes of walking out a better company with new relationships, and that is exactly what they did.

timeframe, bringing small and medium size contractors to the forefront of the technological opportunities that can help grow their business. Over the next three to five years, Brendan wants to expand Brenco’s services to include consultation, educational and training programs in this area.

The future is bright for Brenco. While BrenAt the time, Brendan was still trying to decide dan is most focused on expanding his sales what exactly Brenco would be. “I knew that I and customer service in the New Jersey rewanted to assemble the best mix of the highgion, he is also excited about a new opportuest quality products that I could stand behind nity he and Kyle Conti are embarking on in with integrity.” While Brenco now enjoys repHeber City, Utah. One of the fastest growing resenting 25 different manufacturers includmarkets in the nation, Utah has booming - Brendan Binder ing Yanmar compact construction equipment markets in all sectors and a high demand for Brenco and utility vehicles, Husqvarna construction construction services and equipment. The and lawn care products, Allen Engineering state currently has a real void in the equipconcrete products (screeds, trowels, mixers), ment distribution market and Brenco aims TecnoGen and Rotair generators and air compressors, HKD Blue to be the solution to that shortage. The company is opening a Dust Suppression, ITR ground engaging tools and undercar- world class facility with a storefront, warehouse, and shop on riage, none stand out more than the relationship he has formed an eight acre parcel and is extremely optimistic about the venwith Leica Geosystems, which began at their Conexpo booth. ture. Having a western base of operations in addition to the main Leica specializes in technology upgrades to existing equipment, with a focus on survey equipment, GPS and robotic machine control. The initial discussions and continued dialogue led to Brenco’s first job with Leica, working on a drilling and foundation excavation job in Manhattan’s Hudson Yards development project. This project opened the door to a national opportunity with one of the largest civil construction companies in north America who was looking to expand their use of machine control on their drill rigs. Brenco completed a project in Huntington Beach California that led to more projects in Nebraska, Iowa, Florida, and Delaware. Brendan is excited to continue to work with Leica around the United States as their products continue to gain traction in markets such as; site development, milling & paving and material production.

In addition to his current clientele, locally Brendan is seeking to delve deeper into the ranks of small, but growing contractors.

Brendan recognizes that many of these firms are aware of advances in technology but aren’t necessarily sure they are ready for it. Brendan wants Brenco to be a company that shortens that

Feature Story

“I knew that I wanted to assemble the best mix of highest quality products that I could stand behind with integrity.”

Pictured left to right, Brendan Binder (President), Danielle Savage (Director of Sales & Marketing), Tim Walsh (north Jersey sales), Shawn Mulvenna (south Jersey sales), Mike Finnegan (VP Product Support).

headquarters in New Jersey will allow Brenco to continue building upon the national relationships it has already developed.

With all Brendan Binder has accomplished in one short year, the sky seems to be the limit for Brenco. UTCA congratulates Brendan and the Brenco team on their first year in business, and looks forward to following the continued success of the company.

Brenco’s lube truck and Leica support van are just two of their six field service vehicles.

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By: Michael culnen & joseph schaedel, usi insurance services

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ith the rise in cost and abundance of market-changing events such as natural catastrophes, cyberattacks, NY Labor law challenges and terrorism, contractors are constantly exploring creative ways to finance their exposure to unexpected losses.

The array of risk financing strategies enables contractors to self-insure, share risks with industry peers, assume greater control over claims processing and loss drivers, or opt to have insurance costs tied more closely to loss experience.

Depending on risk appetite, financial strength and loss history, companies can select risk financing alternatives such as guaranteed cost plans, dividend programs, pooling arrangements or captive insurance, to name a few.

All of these choices make the management of your risk program a complex project that can be viewed as an opportunity instead of simply an expense.

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a continuum of risk financing options helps contractors thrive & manage costly exposures Based on an organization’s risk profile, there are benefits and considerations to be made along the continuum. For example, employers can opt for a Dividend Program to reduce the cost of Workers’ Compensation as well as improve loss experience and workplace safety. Dividend programs are not common across all geographies or industries. However, depending on the insurance carrier and state, employers participating in a dividend plan can recover up to 45% of the profits and administration fees associated with their Workers’ Comp program. Generally, employers with good loss experience, strong safety culture and a record of managing claims are ideal candidates for a Dividend Program.

A Guaranteed Cost plan, on the other hand, is a common risk financing option. Premiums are customarily higher with this type of program but the total cost of risk or TCOR is fixed for a defined period of time and with that comes financial certainty and stability for that period of time.

Pooling arrangements are another option contractors can consider participating in. Pooling Arrangements enable a group of firms to join together to secure better insurance rates and coverage plans by virtue of their increased buying power as a block. Risk Retention Groups (RRGs), Risk Purchasing Groups (RPGs) and Group Self-Insurance for workers’ compensation are among the common types of pooling arrangements.

Key Benefits of Pooling Arrangements • Enables greater program control over scope of coverage, available limits and claims • Provides a stable market for coverage and rates • Grants insureds customized loss control and risk management practices Risk Financing Continuum Risk financing can be seen as a continuum between total risk transfer and total risk retention.

At one end of the risk continuum is total risk transfer, which yields the greatest amount of cost certainty while relinquishing cost efficiency and control. At the other end is total risk retention, which renders the lowest cost certainty but greater cost efficiency and control.

• Improves loss control attentiveness due to positive peer pressure from group members • Provides dividends for good loss experience Captives today have started to take a lead in the risk management planning space. They can be an effective tool geared toward managing the enterprise risk at multiple levels from a finance perspective through the overall risk transfer strategy. Technology advancements combined with changes in the legal environment have driven activity up in this space over the last 10 years. There was a time when a captive was thought to be reserved for the fortune 100 organization

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whereas today we have been able to implement the strategy at almost all levels depending on where the organization is on the risk financing continuum.

Determining the Best Option The decision over whether to transfer rather than retain risk and determine the most suitable risk financing program begins with a thorough analysis of an organization’s risk management profile.

There are a number of significant factors an organization must consider when deciding where it fits on the risk financing continuum.

Critical Factors to Consider • The size and type of operation • The organization’s financing strength, resources, risk taking philosophy and risk appetite • The overall efficiency of the organization’s risk management and loss control program • Claims history and predictability of losses A complete and thorough analysis will help to determine where an organization falls on the continuum and what financing options are most consistent with its risk profile. USI’s proprietary, in-house actuarial based analysis can help contractor’s select

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cost-effective program structures and designs, and save upwards of 40% in total cost of risk (TCOR) in some cases. Your TCOR is also known as your total cost of risk. This is a factor that should be known, tracked, monitored and used as a tool. Having the data from your TCOR year over year is one of the critical factors a good broker should be bringing to the table. When you know and understand that trend, you are able to steer and guide your company more clearly when it comes time to evaluate the choices available on the Risk Financing Continuum.

The right program ensures that an organization’s losses are paid in a cost efficient manner and its assets and reputation are properly protected, granting management the peace of mind to concentrate on running their business.

About the Authors. . . Michael Culnen is Senior Vice President and Construction Practice Leader for USI Insurance Services. Mr. Culnen oversees business development, client relations, market relations and key account strategies. Mike received a B.S. in General Business from the Daniels college of Business at the University of Denver with a minor in Finance, Marketing, Accounting and Economics. Mike can be reached at 973-965-3161 or Michael.Culnen@usi.com Joseph Schaedel is a Vice President at USI’S Construction Practice, specializing in building and retaining value for contractors through business and risk management strategies. Joe received a B.A. in Political Science with a minor in Law Studies from Marquette University and an Executive MBA from the School of Management at NJIT. Joe can be reached at 732-908-5564 or Joe.Schaedel@usi.com

the result of the new tax laws and other regulatory issues By: nancy damato, rda benefit services

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hanges to the current tax laws were met with a great deal of anticipation, but what does this really mean for your business? What other regulatory issues could have an impact on your business in 2018? Here is an overview of some of the pertinent issues.

Qualified moving expenses paid for by the employer, previously tax-free to the employee, will now be included in an employee’s gross pay.

INDIVIDUAL MANDATE PENALTY REPEAL:

The new tax laws allow 529 plans to be used to pay for elementary and high school tuition, in addition to college tuition and related expenses. 529 accounts are funded with post-tax dollars, grow tax-free and withdrawals are tax-free when used for eligible expenses. While this may seem like a positive change, there is concern that these assets may impact financial aid assistance decisions.

One of the major results of the tax bill was the repeal of the individual mandate penalty, beginning in 2019. However, this does not change the filing requirements for the individual mandate by employers. The IRS still requires employers and insurers to report individuals covered by their plan; otherwise, they will be subject to penalties. Applicable large employers (ALEs—those with 50 or more full-time equivalents) and self-insured employers (with fewer than 50 employees) must file the appropriate 1094 and 1095 forms. The deadline for filing these forms with the IRS is April 2, 2018 if filing electronically (or February 28 if you are not.) The forms must be furnished to the employees no later than March 2, 2018.

It is also important to note that no changes have been made to the tax treatment of employer-provided health insurance, at this time.

TAX REFORM’S IMPACT ON 401(K) LOANS AND OTHER EXPENSES:

529 EDUCATIONAL SAVINGS PLANS:

PAID LEAVE LAWS: Currently, federal law provides employees at larger companies up to 12 weeks of leave every year, although employers do not have to pay for that leave. Beginning in 2018, employers that offer paid family and medical leave (FMLA) to their employees are eligible for a federal tax credit. In order for employers to receive the credit—of up to 25% of annual wages, employers must provide at least 2 weeks of leave and give employees a minimum of 50% of their regular earnings. The paid leave is for both full and part-time workers, who have been with their employer at least a year. And it applies to employees who earn less than $72,000 a year.

Currently, employees who have an outstanding loan from their 401(K) must pay back that loan within 60 days of leaving their employer. If they do not, that amount gets deducted from your account balance and it is treated as a taxable distribution. Under the new tax law, they will have until their tax due date in the following year to put that loan amount into a rollover account without it getting treated as a distribution.

EMPLOYER VERIFICATION:

Employees can continue to use pre-tax dollars to pay for transit or parking expenses, but employers will no longer get a deduction for any contributions they make towards these expenses.

OVERTIME REGULATIONS:

Current tax law allows employees to deduct unreimbursed expenses related to their jobs if they’re more than 2 percent of income. Beginning in January 2018, if an employer does not reimburse the employee’s business expenses, the employee is no longer able to claim a tax deduction for that expense. However, employers can continue to reimburse employees for business expenses and they are tax-free to the employee.

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changes impacting your business & your employees in 2018:

A revised I-9 form was issued in 2017, with minor changes. In addition, the Legal Workforce Act introduced in 2017 could eventually phase out the I-9 form as we know it today. In its place, the proposed legislation would require the mandatory use of an E-verify system being used by all private employers.

While the new overtime standards did not go into effect last year, there is still a lot of discussion around changes to federal overtime regulations. And the Department of Labor is expected to come out with a new ruling in October 2018.

DATA SECURITY STANDARDS: In light of the multitude of data breaches in 2017, employers should develop and maintain strong data security policies and

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procedures. Cyber liability insurance is also necessary in todayâ&#x20AC;&#x2122;s business environment. Consider these statistics: 70% of attacks target small businesses and 75% of employees leave their computers unsecured. Educating employees on the importance of data security is paramount to your business. Increased regulation and enforcement of data security standards are an expected trend on the state and federal levels.

RDA Benefit Services, LLC is a benefits consulting firm that offers comprehensive employee benefit programs.

Disclaimer: This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

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