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President’s Message   If there was a Mount Rushmore featuring the giants in the New Jersey Construction Industry Joe D’Annunzio would definitely be a prominent member. His legacy of leadership in the industry, the UCA and UTCA and to the companies he founded and led will live on. Everyone was very happy and excited that he was able to join us for the 50th Anniversary of UTCA celebration and enter with his son Michael as the only father-and-son Presidents of UTCA. I was very honored to get to meet him during the convention. It is with both great sadness and pride that we remember him in this issue. “Little Joe” will be greatly missed by all who knew him.   The work of securing a fully funded Transportation Trust Fund continues. While the governor continues his campaigning for the republican presidential nomination, the Board and staff of UTCA continues to meet with the Senate and Assembly leadership to work out the details of funding the TTF. A very important measure was passed by the Senate and the Assembly that places on the November ballot a proposal to restrict all Transportation Trust Fund revenue to be dedicated only to transportation projects. This “lock box” will assure the public that future revenues cannot be diverted for non-transportation infrastructure purposes. We continue to work hard to avert the crisis of not having a funded TTF after June 30th.   The 2016 UTCA Executive Seminar to Casa de Campo in the Dominican Republic turned out to be wildly successful. While it is hard not to have a good time on a trip to the Caribbean it got me to thinking about the strength of this association and we will only be as good as the continued participation and interaction of all of the members. On this trip 140 people representing contractor, subcontractor and associate members had a week of various opportunities to talk about the industry and make business connections. The business seminars were highly informational and the conversations during the dinners and other activities discussed issues facing all of us as well as created friendships that will last forever. This building of the membership is key to our future successes and none of it could have been possible without 2

the generous support of the following sponsors: Florio Perrucci Steinhardt & Fader LLC; Construction Risk Partners, the C&H Agency, Cohen Seglias Pallas Greenhall & Furman PC; Hoffman Equipment; EIC Associates; True & Associates; Stone Hill Contracting; and The Edward J. Post Company. And a special thank you from everyone goes out to Marta and Juan Gutierrez who opened their home to us and hosted a very special evening that no one will ever forget.   The January General Membership was well attended as we were addressed by Assembly Majority Leader Lou Greenwald and NJDOT Commissioner Rick Hammer. One of my goals as President of the Association is to see an increase in attendance at all of our events and committee meetings. We need everyone’s participation to build for the future.   There are a number of very good articles containing information you need to know to keep up with evolving industry issues. I want to Congratulate Kyle Conti Construction for 15 years in the business and also congratulate the Mazur Krieghbaum and Higgins Organization for 35 years in business. We are also spotlighting “The Beast” at the Rutgers Center for Advanced Infrastructure and Transportation.   Thank you again to everyone in the membership who has given their time and efforts and those who have sponsored and participated in UTCA activities over the year. Your involvement is greatly appreciated and without your participation we cannot succeed.

Best regards,

Tino Garcia Utility and Transportation Contractor, FEBRUARY 2016


FEBRUARY 2016

Contents

Volume XLI, Number 1

Published Bimonthly During 2016 Office Address: 1670 Route 34 North Farmingdale, NJ 07727 Mailing Address: PO Box 728 Allenwood, NJ 08720 (732) 292-4300 FAX: (732) 292-4310 www.utcanj.org Publisher: Robert A. Briant, Jr. Editor: Helene Nasdeo Editorial Contributors: Anthony Attanasio Dennis Hart Dan Neville Advertising Manager: Helene Nasdeo Photographer: Image Up Cover Photo: Image Up Production/Graphics: Lauren Hagan Helene Nasdeo Circulation: Helene Nasdeo Printed By: Regal Printing

Features 5 Kyle Conti Construction Completes 15 Years In Business 19 Mazur Krieghbaum Higgins Celebrates 35 Years In Business 25 Remembering “Little Joe” D’Annunzio 45 Affordable Care Act 48 A Message From Congressman Pascrell 53 The BEAST 78 Mega Projects And Wrap-Up Exclusions

Departments 2 38 59 62 67 70 81 84

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

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Affiliations: ARTBA Clean Water Construction Coalition Water Infrastructure Network UTILITY AND TRANSPORTATION CONTRACTOR (ISSN 0192-4843) is published six times a year by the Utility and Transportation Contractors Association of New Jersey, 1670 Highway 34 North, Farmingdale, NJ 07727. Periodical postage paid at Farmingdale, NJ and additional mailing offices. POSTMASTER: Send address changes to UTILITY AND TRANSPORTATION CONTRACTOR, PO Box 728, Allenwood, NJ 08720.

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Cover Story

KYLE CONTI CONSTRUCTION COMPLETES 15 YEARS IN BUSINESS Continuing the Conti Family Tradition

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By: Anthony Attanasio, Executive Director

  yle Conti is proud of his family’s reputation and traditions. Since 1906 the Conti family has been synonymous with honesty, integrity, fair value and an eye for detail. Four generations of Conti’s have been succeeding in the construction industry in New Jersey and beyond and in 2000 Kyle began a new chapter in the Conti story when he founded Kyle Conti Construction, LLC (KCC). Kyle was eager to leave his own mark on the construction world while carrying forward the values of his great-grandfather, Tony N. Conti, whose creed was “Give a bag of cement before you steal one”. Today Kyle is committed to carrying forward the “Conti Way” by being 100% client driven and exceeding the project owner’s expectations on every job.   The origin of Kyle Conti Construction LLC began very humbly. After working for many years with his father, Nat, and his brother, Kurt, at the Conti Group, Kyle decided he wanted to start a company that was smaller and got back to the roots of the Conti family origins. Kyle began the company as a one man operation out of his

basement. He went door to door and began to earn work one job at a time. His first successful public bid was for a $40,000 job and as Kyle put it “I was scared”. However, from these very modest beginnings Kyle has grown the company into an award winning operation that has completed hundreds of millions of dollars worth of work for both private and public clients all over the Tri-State area. Public owners have included the United States Army Corps of Engineers, New Jersey Department of Transportation, the New Jersey Turnpike Authority, AMTRAK Corporation, the Port Authority of New York and New Jersey (PANYNJ), New Jersey TRANSIT, the Delaware River Port Authority and many more. KCC prides itself on the diversity of its abilities, the quality of its staff and their ability to meet and beat client’s goals and expectations.   Kyle Conti can’t emphasize enough that the focus of the company is based on the values passed down through the generations of the Conti family. The company believes in teamwork, communication, planning & scheduling, goal setting, honesty, quality, integrity, safety, innovation, training, understanding, efficiency, sustainability and reputation. According to Kyle, the growth and success of the company points right to these values.   Adhering to these values has allowed Kyle Conti to form a top notch team of professionals that are able to deliver an incredible array of services for their clients. Kyle quoted his father Nat when he said that “the goal is not to be the smartest man in the room, but be smart enough to hire and surround yourself with the right people.” Kyle hasn’t looked for staff that identify problems, he has surrounded himself with a staff that finds solutions. This has led the company to look for challenging jobs, not cookie cutter projects. The company strives to outperform expectations and provide public owners with the same level of service as private owners.   Kyle’s team uses several approaches to achieve their goals on every project. They focus on partnering, teaming and working to-

Kyle Conti Construction crew unloads prefabricated platforms for Amtrak Design-Build. Utility and Transportation Contractor, FEBRUARY 2016

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Kyle Conti Construction is pictured setting the repositioned Reefer Rack at PNCT.

gether to set goals. Formulating the correct mixture of staff with the know how to build a flawless project and make it appear seamless to the client. The team focuses on getting into the details through brain storming, thinking outside the box and embracing value engineering where appropriate. The team gives special attention to planning, scheduling, safety, communication and quality control.   These core values and drivers have allowed a company that began in a basement with one employee to now be able to deliver a wide array of services to its clients. KCC has delivered projects in the form of traditional design-bid-build as well as design-build and is capable of delivering in the following areas: road & highway construction, bridge construction & rehabilitation, environmental services, site-work, ports & marine, dam construction & rehabilitation, concrete, masonry, railroad, asphalt & concrete paving, energy & utilities, buildings, site clearing, removal of structures & demolition, sheeting, shoring & pile driving, dredging, stabilization & dewatering, waterway & wetlands restoration, emergency response services, construction consulting and sustainability.   Several projects completed by Kyle Conti Construction exemplify the success of the company and prove that they can deliver successful projects even when facing daunting challenges.

hydrants, concrete-encased underground electrical and communication duct-banks, storm sewers, lighting and security fencing. Due to the soft underlying soil strata, all of the five new 110 foot tall light towers required 70 foot deep pile-supported reinforced concrete foundations to overcome the wind loads and up-lift force. The project also involved the relocation of an existing 36’ x 360’ long Reefer Rack which the company achieved by picking up and transporting the Rack rather than dismantling it. The most impressive fact is that the company had to achieve this complex project without disrupting PNCT’s current operations, and they succeeded in doing so.   In addition to the expansion project, KCC was hired again by PNCT which is located on 259 acres of property leased from PANYNJ. PNCT handles more than 600,000 container units annually and they hired KCC to deliver a fast-tracked construction of PNCT’s Light Duty Straddle Carrier Shop (LDSS). The LDSS was specifically designed for the maintenance and repair of PNCT’s new “one over three” straddle carrier fleet. The new maintenance building needed to be completed in record time because the existing straddle carrier maintenance building was not high enough to accommodate the new straddle carriers which require a 55’ tall entrance. The new 70’ tall structure had to be constructed under this very tight schedule in an operating container terminal which could not have its 24/7 operations interrupted. KCC was able to complete the job to the owner’s satisfaction by accommodating the demanding timeframe.

Kyle Conti Construction team finishing up Phase One of Princeton’s Carnegie Lake Dam.

  One example of their success is the 33 acre expansion project for the Port Newark Container Terminal (PNCT). In early 2012 KCC was the successful low bidder on a project that was a key component of the Port’s preparations for the new generation of larger container ships that will enter the Port after the completion of the widening of the Panama Canal and in anticipation of the raising of the Bayonne Bridge. The company constructed 150,000 square yards of heavy duty, paved asphalt container storage areas and 9,000 square yards of 12” thick to 15” thick reinforced concrete pavement. They constructed new underground utilities and infrastructure improvements that included new water mains, fire

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  Another project that KCC points to with pride is the successful design-build project of AMTRAK’s raised platforms & cable tray walkways. The company won the bid for this major component of AMTRAK’s New Jersey High Speed Rail Improvement Project on the Northeast Corridor from Trenton to New Brunswick. This was a very complex project that required extremely nimble flexibility when scheduling and rescheduling crews due to the varying changes to allowed track outages. The work was spread over a length of 18 miles, much of which required the use of hi-rail equipment to access most work areas. KCC designed the project and implemented techniques that maximized off-site fabrication in order to minimize the amount of assembly work at the site. As a result, KCC installed 23 raised platforms to support new signal houses and transformers. More than 780 lineal feet of new cable tray walkways were installed through rocky areas. In addition, special stairways, a special cable chute system and a heavy duty

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security fence system were installed. For this design-build contract KCC performed all conceptual, final design and construction services for the raised platforms, cable tray walkways and related accessories.   Finally, KCC points to the successful completion of Phase One of the Carnegie Lake Dam Structural Repairs as a highlight of their CV. Not only was the project itself challenging and rewarding, but the project owner was Princeton University, a name that has become synonymous with excellence. KCC was the winning bidder on this fixed-price contract to perform the first phase of structural repairs to the historically significant Carnegie Lake Dam. The 600 foot long concrete dam was built across the Millstone River in 1906 with a generous donation from Andrew Carnegie. Lake Carnegie was formed by the dam and has become an incredible asset for the local community as well as the home of the Princeton University rowing team. The project was very complex due to the age of the infrastructure and the amount of work in the water and included strict guidelines that were set out through the permitting process by both the New Jersey Department of Environmental Protection and the New Jersey State Historic Preservation Office. Upon the successful completion of Phase One Princeton University was so pleased with KCC’s work they awarded them the second phase which will begin shortly.   Kyle Conti Construction is proud of the fine tradition that comes with the Conti name. After 15 successful years in business the future looks bright. Kyle’s 10 year old son Nathaniel has already said that he too wants to continue on in the family business. If that were to be the case, his father would want him to carry on the mission of KCC which says: “Our mission at Kyle Conti Construction is to

Three generations of Conti’s pictured - father Nat, son Nathaniel and Kyle.

continue to be a reputable, reliable and high quality construction company. We strive to exceed expectations, gain trust, and be recognized as a leader in our industry. Our team is built of highly dedicated, innovative and experienced people who are devoted to the company’s growth and development. Through assertiveness and attention to detail, we operate a safe and productive jobsite with the attitude of ‘getting the job done yesterday’. We hope to continue developing with the industry while always focusing on our core values.”

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Featured Article

MAZUR, KRIEGHBAUM & HIGGINS, CPAs, LLC CELEBRATING 35 YEARS OF SERVING THE CONSTRUCTION INDUSTRY

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  ichael Mazur, CPA, CFF began his accounting career working with small businesses and municipalities after graduating from Trenton State College (now known as The College of New Jersey). At the time Mike audited major sewer projects for municipalities which gave him the opportunity to work with contractors.   In 1981 Mike decided that he wanted to make a change, one that would bridge his business wisdom and interest in construction. He liked the business side of construction and was determined to start an accounting and consulting firm focused on working with heavy construction contractors. Joseph Krieghbaum, CPA, decided to join him. Together they set out to build one of the most respected accounting and consulting firms in the industry – Mazur, Krieghbaum & Higgins, CPAs, LLC (MK). Mike serves as managing member of the firm. Sadly, Joe died several years ago. In honor of his substantial contribution to the firm’s success, Joe is still a named partner.

  As a long-time UTCA member, MK keeps abreast of industry developments so it can be proactive and advise clients on issues that could impact their business. “For 35 years MK has provided our clients with the highest level of service backed by in-depth industry knowledge,” explains Mike.

Pictured from left to right is Don Kaiser, Mike Mazur, Joe Abreu with Green Construction and Rich Higgins.

Pictured left to right is Rich Higgins, Mike Mazur and Don Kaiser.

  Mike learned early in his career the value of building strong relationships with clients and the business community. “We know that it is important for us to be there when you need us and make it a point to be available for you,” continues Mike. “As trusted advisors to entrepreneurs, family-owned businesses, and executives of multimillion dollar corporations, we want you to experience the MK difference every day and feel confident in our ability to deliver answers.”   Well-respected as a business strategist, the true value that Mike brings to a relationship comes from his insight on the key metrics

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Pictured left to right is Don Kaiser, Joe Abreu with Green Construction, Rich Higgins and Mike Mazur.

that business decisions should be based. Entrepreneurs and seasoned business owners look to Mike to provide them with the tools to enhance and grow their business.   Richard Higgins, CPA, joined Mike and Joe in 1986 after graduating from Stockton University. He was named member (partner) in 1998. With extensive experience working with clients in the construction industry, Rich works to expand their bonding capacity or obtain the financing needed to grow their business.   “MK is highly respected among the leading surety companies, bonding agents and banks for the quality of its financial statements,” states Rich. “A majority of our clients are referred to us by these institutions which is a testament to the quality and value of our work.”   Business owners trust Rich to assist them with a strategy to achieve their goals. He helps them to establish realistic benchmarks to assess how well they are doing or to alert them to issues that need to be addressed. By looking at key indicators such as productivity, job costing, profit margins and cash flow, Rich is able to help clients to reach or exceed their expectations.

“For 35 years MK has provided our clients with the highest level of service backed by in-depth industry knowledge.” - Mike Mazur   A graduate of William Paterson University, Donald Kaiser, CPA, joined MK in 1997 after a successful career in private accounting. He was named principal in 2016. Don’s work goes beyond what is provided by the typical accountant. He is always looking for innovative ways to improve operations and enhance profitability. A wizard in information technology, Don helps clients establish the necessary systems to produce meaningful reports on the financial well-being of their business. He is also instrumental in bringing state-of-the art technology to MK including its paperless work environment, client portal, web-based applications and contact management systems.   “Since the foundation of the firm is built on serving clients in the construction industry, our clients range from large heavy construction companies to home builders, general contractors, sub20

contractors, as well as marine and other niche specific contractors,” explains Don. “We have in-depth experience helping our construction clients become more profitable by working with them to manage their business, operate more efficiently, sharpen job cost estimates, control operating costs, improve cash flow, obtain financing and meet surety bond requirements.”   In addition to traditional accounting, audit and tax services, MK’s construction services include: bank financing, benchmarking, bonding advisory, cash flow management, financial reporting, forensic accounting, job costing, litigation support, internal control, merger and acquisition, operational review, profit enhancement and valuation.   “We believe that the experience you have working with MK is as important as the services we deliver,” adds Mike. “This is why we are so focused on our clients and their success. These are more than just words to MK’s team. It is a way of life – doing above

Mazur, Krieghbaum & Higgins’ Construction Services Team.

and beyond what is expected by developing a deep understanding of the internal operations of each client’s business and industry. When you work with MK you will immediately experience the difference.”   MK’s accountants are well-trained in accounting, tax, business and global issues. “We make sure that we stay on top of changes in audit procedures, tax law, new regulations and other factors that could impact your business,” explains Rich. “It is our job to provide you with the advice and guidance needed to protect your assets. We take this job very seriously.”   “Knowing your business and industry is also essential to our job,” adds Don. “We cannot help you if we are not aware of the internal and external challenges you face. We make it our business to thoroughly know what’s important to you so we can provide you with solutions. The bottom line is that we are focused on our clients and dedicated to their success.”

Photography by Austin Higgins

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REMEMBERING “LITTLE JOE” D’ANNUNZIO 1929 - 2015   Late last year, UTCA lost one of its founding members when

team to construct airfield runways and railroads in Morocco for Joseph D. D’Annunzio passed away on November 2, 2015. Joe the Army Corps of Engineers. In 1954, he returned to the Unitwas one of five men who founded the Utility Contractors As- ed States and joined a joint-venture construction team called sociation of New Jersey which eventually became the Utility & Garden State Constructors as an engineer on the Jersey City Transportation Contractors Association of New Jersey. “Little Sewer Project which built a complete sewer system for the city. Joe” was also an initial founder of the National Utility Contrac- It was the second largest single contract in America since the tors Association and initiated the Construction Unity Dinner construction of Hoover Dam and in today’s dollars would have during the recession in the mid 70’s to improve the working cost well in excess of $1 billion. relationships between engineers and   In 1956, he joined his father’s contractors. The Association joins small construction business and bethe D’Annunzio family in honoring came President & CEO until 1981. Joe’s legacy. During his tenure as President and   Joseph D. D’Annunzio, fondly partner, Joe was instrumental in known among his peers as “Little growing the firm into a northeast Joe”, was a remarkably accomplished powerhouse in utility and heavy conman in both his business and personstruction. Notable projects included al life. He was passionate and most the construction of the largest United enjoyed spending time with his wife States sewage treatment plant in 1977 Viola and their family, often watchin Waterville, Maine, construction of ing his grandchildren obtain high aca Washington Metro Subway station, colades in both academics and athletconstruction of the infrastructure for ics. His grandchildren affectionately the Blue Plains Sewage Treatment referred him to as “Papa Joe” and it Plant in DC, construction of dual was rare that he missed any of their 10 ft. diameter water mains through sporting events. the center of the City of Patterson   As an avid reader, he had a thirst and construction of over 70% of the for knowledge and loved to travel the Elizabethtown Water trunk main inglobe meeting new people and expefrastructure in North Jersey. In 1981 riencing their cultures. Joe traveled his firm was called in on an emergenthroughout his life touring every concy project to replace a large section tinent except Antarctica. He loved of two vandalized water mains that fine foods, traveling, fishing, golfing, fed the City of Newark. Immediately tennis and reading. He had a deep after that project, Joe left the firm to sense of responsibility to his comstart D’Annunzio & Sons, Inc. with munity constantly giving his time, his four sons; Jim, Joe, Michael and energy, and financial support to orga- Pictured from the left, “Little Joe”, Governor Tom Kean and Franklyn Grosso. Stephen and shortly thereafter, he nize events and raise funds for various groups and charitable also started DMD trucking company with two of his daughters causes. His favorite charitable cause was to assist autistic or Denise and Maria. otherwise handicapped children. This passion led to his orga-   In 1986 the construction firm was involved with a contract nizing and running an annual fundraising event for the Special for the cleanup of NJ’s first Superfund Project which was below Olympics and other charities in Florida that raised hundreds the Pulaski Skyway in Jersey City. Soon after that, Joe develof thousands of dollars. Additionally, the D’Annunzio Family oped health problems and retired from day-to-day activities but Foundation’s contribution helped build the Newmark School remained as the firm’s Chairman until his death. Through his located in Scotch Plains for autistic children. leadership his four sons took charge of the business in 1987   After graduating from MIT in 1950, Joe took a job with and grew the company into one of the most respected HeavyBrewster Contracting as a field engineer on the new construc- Highway/Utility contractors in the NYC Metro area. Notable tion of the New Jersey Turnpike. Then in 1951 he decided to projects include runways at Newark Liberty Airport, foundawork overseas for Morrison Knudsen Corporation as part of a tions for the control tower at LaGuardia, Interchange 12 on the

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NJ Turnpike, two large viaducts approaching the Holland Tunnel and work on the 2nd Avenue Subway project.   Joe was highly accomplished in the construction field and beyond running a successful construction company he held leadership positions in National Utility Contractors Association, the American Road Transportations Builders Association, the American Society of Civil Engineers, the American Water Works Association, NJ Transportation Trust Fund Authority, Management Advisory Group USEPA Construction Grants Program, NJDEP Governor’s Task Force Sewer on Construction and the NJPEC. Joe was also a member of the Moles, the most prestigious tunneling and heavy contracting organization in America.   Along with being one of the founding fathers of the Utility and Transportation Contractors Association of New Jersey, Joe served as President of the association in 1984.   Throughout his career he received several leadership awards including: Ditch Digger of the Year Award in 1973 and Engineer of the Year Award in 1982. In 1992 he was inducted into the National Utility Contractors Association Hall of Fame.

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  UTCA was honored to present Joe with the William Feather Memorial Award in 1987 followed by his induction into the New Jersey Construction Industry Hall Of Fame in 1995, the Association’s most prestigious award. Throughout all these accomplishments, Joe was passionate for the love he had for his wife Viola and he was blessed further with 20 grandchildren and 3 great grandchildren.   He is survived by his wife Viola, his children and their spouses Camille & Bill Szymczak, Denise and Campbell Klockner, James & Christine D’Annunzio, Joseph P. D’Annunzio, Michael & Kim D’Annunzio, Stephen & Donna D’Annunzio, Maria & Thomas DeVizio, 20 grandchildren, and 3 great grandchildren. His love of life and the values he taught will be forever instilled in his family.   Those of us that knew him were proud to call him “friend”. On behalf of the UTCA Officers, Directors, Membership and Staff, we offer a heartfelt tribute to this incredible man.

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Legislative News

FEDERAL & STATE UPDATE By: Anthony Attanasio, Executive Director   Happy New Year everyone. This edition of the legislative news brings good news from the Federal government for the first time in several years.   Several years and dozens of short term patches later the Federal government finally passed a five year transportation capital funding bill. The F.A.S.T. Act (Fixing America’s Surface Transportation Act) was approved with overwhelming bi-partisan support receiving 359 votes in the house and 83 in the Senate. It was quite a relief to see Republicans and Democrats come together on a policy matter of this magnitude considering how bitterly partisan Washington has become over the last 10-15 years. UTCA staff has worked closely with ARTBA and our Congressional delegation and is grateful for the leadership exhibited by many of New Jersey’s Congressional representatives especially Frank LoBiondo (R-2), Tom MacArthur (R-3), Bill Pascrell (D-9) and U.S. Senator Cory Booker (D-NJ). The FAST Act is a five year capital spending bill that brings with it moderate increases in overall spending, new programs including a new focus on freight rail investment, regulatory changes that will improve project delivery and most importantly increases to New Jersey’s federal formula funds.   The F.A.S.T. Act grows highway investment from the current annual level of $40.3 billion to $46.4 billion. Public transportation funding will increase from $10.7 billion to $12.6 billion. The measure also delivers a “National Highway Freight Program” that creates a $1.26 billion annual fund to support highway-related freight improvements and $900 million for a new “Nationally Significant Freight and Highway Projects Program”. In addition to these funding increases the bill included regulatory changes that will aid in project delivery. The F.A.S.T. Act strengthens the role of USDOT in the environmental review process and reduces duplicative efforts during the environmental and planning process of projects. 38

The Act also closes a loophole on how highway safety funds can be spent, limiting these funds to actual infrastructure improvements and no longer allowing the money to be spent on behavioral and educational activities.   For New Jersey the F.A.S.T. Act delivers increases in our formula funding all five years of the plan. In the first year NJ will receive a 5% increase from current funding levels followed by a 2% increase every year after that. In FY2015 NJ will receive $963,682,664 million in federal funds. In FY2016 that number jumps to $1,012,792,050 billion and then grows to $1,033,706,218 in FY2017, $1,056,045,847 in FY2018, $1,079,881,265 in FY2019 and finally $1,105,743,762 in FY 2020. UTCA staff and Board members will be meeting with NJDOT Commissioner Rick Hammer to discuss the Department’s plans to ensure that this money is spent efficiently.   While the Federal government finally passed a five year capital spending plan at the time this article is being written we still do not have a TTF renewal in New Jersey. With each passing day the consequences of no action are starting to be felt throughout the industry. The Senate President and Assembly Speaker continue to iron out the details of legislation to renew the fund and are having discussions with the Governor but, June 30th is rapidly approaching and time is running out to pass a renewal without it effecting the beginning of the new fiscal year.   There have been some positive developments in regards to our efforts to renew the TTF. Senate President Sweeney unveiled several of the elements of his plan to reauthorize the TTF and one of the items he supports is the UTCA’s transportation infrastructure bank (I-Bank) concept. After meeting with the Administration, the Senate President and the Speaker of the General Assembly, we anticipate that UTCA’s I-Bank proposal will be included in the Utility and Transportation Contractor, FEBRUARY 2016


final TTF legislation that will be sent to Governor Christie for his approval. UTCA’s I-Bank measure will provide municipal and county governments with a new and affordable funding source to increase their transportation capital programs.   In addition, Assembly Speaker Vincent Prieto successfully championed ACR-1, a constitutional amendment to create a lockbox for transportation funding. If passed by the voters the constitutional amendment would dedicate all State revenues from the motor fuels and petroleum products gross receipts tax to the Transportation Trust Fund. New Jersey currently imposes a 10.5 cents per gallon tax on the sale of gasoline and a 13.5 cents per gallon tax on diesel fuel. If approved by the voters, this dedication would recapture approximately $40 million that is currently diverted from the TTF to the State’s General Fund. More importantly, this amendment will give taxpayers greater confidence that all current and future gas tax revenue will go to its intended purpose which is New Jersey’s infrastructure. UTCA testified in support of the resolution before the Assembly Judiciary Committee prior to its passage in both houses of the legislature with supermajorities. The measure will now be placed on the November ballot for voter approval.   UTCA staff and Board members remain engaged with the Christie administration and legislative leaders from throughout the State to ensure that the TTF is renewed in a robust and sustainable fashion. UTCA hosted a very successful reception at this year’s League of Municipalities Conference that attracted hundreds of guests including legislative leadership from both parties. In the coming months UTCA CEO Bob Briant and I are both scheduled to sit on policy panels discussing transportation funding and planning and will continue to advance this critical issue for our State.   In other legislative news, after many months of hard work by UTCA staff and the association’s Public Private Partnership (P3) Task Force, a thoroughly amended version of P3 legislation was passed by the General Assembly and Senate and sent to Governor Christie. Unfortunately, Governor Christie chose to conditionally veto (CV) the P3 legislation. The UTCA team was able to strike project bundling, which is crippling Pennsylvania contractors,

from the bill and secure several other key amendments pertaining to the transportation portion of the legislation. With his CV the Governor sought to make many structural changes concerning how the P3 program would operate which made it problematic for many of the bill’s supporters and legislative sponsors. He also went a step further by removing prevailing wage requirements from the legislation. At this point it appears that it is back to the drawing board for supporters of P3 projects as the changes the Governor suggested through his CV are nonstarters for many of the bill’s advocates. UTCA will continue to advance the industry’s best interests by ensuring all of the amendments that UTCA obtained in the legislation are included in any new version on P3 legislation that is introduced.   Finally, six years after UTCA was successful in passing legislation amending Local Public Contracts Law to include “asphalt and fuel price adjustment clauses” in public works contracts, the association recently supported the NJ Asphalt Pavement Association’s efforts to clarify UTCA’s law to prevent certain public owners from circumventing the intent of the law. The legislation, A-2229, clarifies that the existing Asphalt and Fuel Price Index law applies to every construction contract under Local Public Contracts law, which includes contracts for paving, roadway construction, and asphalt supply contracts. Some public owners were interpreting the law to only apply to contracts for construction of buildings. The bill passed through the State Senate 40-0 and the State Assembly 77-1 and was signed into law by the Governor.   UTCA continues to be the leading voice in Trenton and Washington D.C. for our industry. Whether it is providing expert testimony before business and legislative groups or positively effecting the legislative process, UTCA stands alone in its record of achievement for our industry. This can only be made possible by your support of the Association and more importantly with your support of the industry’s PAC: Constructors for Good Government. Please consider making a contribution in 2016 as UTCA plans to be very active in the upcoming legislative session and a robust PAC only strengthens our voice. Thank you for your continued support.

Pictured left to right are Anthony Attanasio, Dave Smith, Assemblyman Dave Rible, Bob Briant, Jr., Senator Kip Bateman, Assemblyman Scott Rumana, Assemblyman Rob Clifton and Tino Garcia. 39

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THE AFFORDABLE CARE ACT:

IMPORTANT CHANGES & UPDATES FOR 2016

By: Nancy Damato, Partner, RDA Benefit Services   The Affordable Care Act has had a significant impact on group and individual health insurance plans since its inception and as we begin 2016, there are additional updates that you need to be made aware. Definition of an Applicable Large Employer   •  On Oct. 7, 2015, the PACE Act was enacted and it permanently defined a small business as one with 50 or fewer employees. But it also gave the states the option of expanding the definition of a Small Employer, as long as it didn’t exceed 100 employees.   •  So, for 2016, New Jersey chose to adhere to the definition of 50 or fewer employees as a small employer, while New York chose to expand that definition and include up to 100 employees as a small employer in that state. Delay of Employer Reporting   •  All Applicable large employers, as well as small employers offering a self-funded health plan, have been granted an automatic extension for furnishing 1095 B and C forms to employees from February 1, 2016 to March 31, 2016.   •  If not filing electronically with the IRS, there is an automatic delay from February 29, 2016 to May 31, 2016.   •  The extension to file electronically with IRS has been changed from March 31, 2016 to June 30, 2016. Expiration of 2015 Transitional Relief from Employer Shared Responsibility (Pay or Play)   •  All employers with at least 50 full-time employees, including full time equivalents, will be subject to Employer Shared responsibility in 2016.   •  The potential employer penalties for 2016 are $2,160 for Penalty A (for not offering Minimum Essential Coverage) and

$3,240 for Penalty B (offering coverage that is not Minimum Value or considered to be unaffordable to the employee.) The 2015 penalties were $2,080 for A and $3,120 for B. Penalties are assessed by the IRS on a monthly basis.   •  The affordability factor will be increasing from 9.5% of an employee’s income for the lowest tier single premium to 9.66%, beginning January 1, 2016.   •  Employers will also need to offer coverage to 95% of fulltime employees in 2016. The 2015 relief of only offering coverage to 70% of employees has expired.   •  In 2015, employers were only required to offer coverage to employees, but beginning in 2016, dependent coverage must be offered as well. There is no mandate to offer coverage to spouses at this time. Delay of the Cadillac Tax, Health Insurance Tax and Medical Device Tax   •  There has been a 2 year delay of the Cadillac Tax on highcost health plans. In addition, the tax will then be tax deductible to the employer.   •  There has also been a 1 year suspension of the Health Insurance Tax (penalty for not having health insurance). The penalty for 2016 is 2.5% of your income; then the tax is suspended for 2017 and returns again in 2018.   •  There has also been a suspension of the medical devices tax from Jan. 1, 2106 until Dec. 31, 2017.   For more information about these changes and to receive updates as they occur, please contact us to be placed on our mailing list: ndamato@rdabenefits.com or 855-693-0772. RDA Benefit Services, LLC is an employee benefits firm that offers group health, dental, vision and voluntary benefits, as well as individual and executive life, disability and long term care insurance.

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A Message from Congressman Bill Pascrell   Whether you are coming or going in New Jersey, one thing is clear: our state suffers from massive congestion problems. Traffic gridlock stifles our economy, decreases productivity, and significantly alters the quality of life of New Jersey families. As the most densely populated state in the union, New Jersey deserves infrastructure that reflects its constant growth. During my time in Washington D.C. serving the 9th Congressional District, I have worked tirelessly to implement my vision for a system of internal improvements that maintains a balance between the dual goals of improving our quality of life and ensuring economic development. New Jersey deserves a first-rate transportation system. America deserves the same.   In New Jersey, many of our bridges are structurally deficient and more are functionally obsolete. More than half of our roads are in poor or mediocre condition. We quite simply can't compete when we are relying on hundred year old roads, bridges, and tunnels that are literally crumbling beneath our feet. Both Congress and the State of New Jersey have ignored this problem for far too long, and it’s past time we found a long-term solution to this crisis.   I commend the Utility and Transportation Contractors Association for sharing my vision of an improved roadway system that caters to our state’s needs. Infrastructure investment has always been a top priority for me. From 1997 to 2006, I served on the House Committee on Transportation and Infrastructure to modernize our region’s roads, bridges, airports, and mass transit system. And I currently serve on the House Ways and Means Committee which has jurisdiction over revenues to the federal Highway and Aviation Trust Funds.   In December, President Obama signed the Fixing America’s Surface Transportation Act, or FAST Act, into law. The FAST Act provides five years of funding for our federal transportation program and is the first long-term bill in more than a decade. This is a welcome change from the debilitating cycle of short term extensions and transfers of funding from the general fund to the Highway Trust Fund.   The FAST Act provides $305 billion for our nation to build and rebuild - $299 billion for highways, $49 billion for mass transit, and $10 billion for federal passenger rail. Highway funding will be increased by 14.9 percent and transit funding by 18.1 percent over current law. For New Jersey, we estimate that our state will receive $5.29 billion for federal-aid highway funding and $3.1 billion for transit formula program funding over the next five years. These increased funds will certainly help modernize New Jersey’s transportation network, and the fact that we finished a long term bill puts us far ahead of the State of New Jersey, which despite the best efforts of many leaders in the legislature has been struggling mightily with renewing the state trust fund.   Congressional passage of a five year highway reauthorization is an important accomplishment. However, in this law, I am concerned that the Congress moves farther away from a system where the highway user pays for the Highway Trust Fund. Using revenue raisers unrelated to transportation and continuing to transfer general funds into the Highway Trust Fund is not the right way to fund our system. The major offsets in the bill are derived not from 48

users, but from the Federal Reserve. The first offset minimizes the 6 percent annual dividend paid to banks on Federal Reserve stocks that are granted when becoming part of the Federal Reserve System. The second and largest offset deals with the Federal Reserve surplus accounts.   This is not the right way to fund our system. In Spring 2015, I was proud to join with my Ways and Means Committee colleague, Mr. Jim Renacci (R-OH), along with a diverse group of bipartisan colleagues in introducing H.R. 1846, the Bridge to Sustainable Infrastructure Act. We tried to offer our bill as an amendment on the House floor but were rebuffed by the House leadership. Our goal is to keep the trust fund solvent long term. While a five year bill is important, the Highway Trust Fund is not sustainable and in five years, it will be even harder to return to a ‘user pays’ system. Continuity can ensure that construction projects and the jobs they provide don’t come to a grinding halt when Congress fails to act. Our plan creates a bipartisan, bicameral task force charged with determining a plan for sustainable funding for ten years. If the Task Force is able to reach agreement, its recommendations would receive an up-or-down vote in both the House and Senate, and if the plan is passed, we will have sustainable financing. If Congress fails to act, current user fees would be indexed, and would increase to a level that would sustain the trust fund.   It was a plan that made sense, and I believe we were denied a vote because our plan could have gotten a majority vote. For those who support sustainable funding for the Highway Trust Fund using the conservative principle that those who use our highways should be the ones to pay for them, this amendment worked. Or for members who trust that Speaker Paul Ryan and the Ways and Means Committee can accomplish international tax reform and pay for highways through repatriation, our amendment laid out a path for that to happen as well. We had a diverse coalition of our colleagues cosponsoring our amendment and the underlying bill, and our proposal has been endorsed by a broad coalition of business, labor, construction, engineering, and transit advocates.   Under Democratic or Republican control, the Congress has been unable to make the tough choices needed on the issue of transportation funding. While the FAST Act is important, again, Congress took the easy way out. I strongly believe that the only way to solve this problem is to have Democrats and Republicans work in a bipartisan manner. Congress has kicked the can down the road on transportation funding in the past. I’ll continue working hard to make sure that doesn't happen again. Not only does investing in infrastructure create good paying jobs for our construction industry, it lays the foundation for economic growth for generations to come. It's especially important in New Jersey, which requires a well maintained transportation network to power our regional economy.

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Article and photos courtesy of Rutgers Center for Advanced Infrastructure and Transportation (CAIT)

RUTGER’S CAIT UNVEILS THE BEAST,

The World’s First Accelerated Testing Lab for Full-Scale Bridges

  T

he Bridge Evaluation and Accelerated Structural Testing lab—a.k.a., the BEAST—is hard to miss. Affectionately referred to as a big yellow bridge eater, its massive stature is apropos to the huge and incontrovertibly critical issue it was created to tackle: decaying bridges. The BEAST epitomizes CAIT’s commitment to maintaining and improving the condition of infrastructure and finding ways to reduce costs.   The USDOT Office of the Assistant Secretary of Transportation-Research and Technology profiled the BEAST in its March 2015 UTC Spotlight, and by August, the Senate Committee on Commerce, Science, and Transportation came to see it firsthand. Most who have heard about the BEAST agree it could be the next breakthrough in the fight to reduce bridge life-cycle costs, extend their life spans, and save billions of dollars in the long run.   It is a truly unique facility that can quantitatively measure stresses caused by the environment, traffic, and winter maintenance treatments like de-icing chemicals using full-scale bridge specimens for testing. The BEAST will give us real data from real bridges regarding how materials, preservation techniques, and rehabilitation treatments stand the test of time by compressing decades of the wear and tear our highway bridges endure into a just a few short months.   CAIT unveiled the BEAST at an October 14th ribbon cutting ceremony. Guest of honor New Jersey Assemblyman John S. Wisniewski, chair of the assembly Transportation and Independent Authorities Committee said: “Having this kind of tool to help us understand how to allocate what are admittedly scarce dollars is one the most important things we can do, not only for the longterm safety of our transportation infrastructure, but also when we are convincing our constituents and colleagues of the need for investment. Here in New Jersey at Rutgers University we have the tools necessary to make sure our investments are wise, prudent,

and will last a long time … now we can make [an even more] convincing argument that investing is the right thing to do,” Wisniewski told the crowd. Current state of affairs   The average age of bridges in America is 42 years and already nearly one in four is deemed functionally obsolete or structurally deficient. The current U.S. bridge inventory comprises more than 610,700 structures and, in just 10 years, 44 percent of them could be 55 years old or older. Furthermore, FHWA calculates that presently more than 30 percent of bridges have already exceeded their 50-year design life. That means the dilemma we face now will become ever more daunting in the future.   Rebuilding all the U.S. bridges rated structurally deficient— more than 63,300 in all—is impossible in both practical and financial terms, so, we need to extend the service life and performance of the bridges we’ve got now. That means we have to identify and quantify the best rehabilitation and preservation techniques, materials, and management strategies that will maximize the lifespan of existing assets—and make sure the new bridges we build last 100 years or more.   “A key challenge bridge owners contend with daily is the question of how to upgrade and extend the life of our assets, and just as importantly, how to prioritize their choices,” said Patrick J. Natale, who recently retired from his position as executive director of the American Society of Civil Engineers and is now vice president for business strategies at Hatch Mott MacDonald.   “With the BEAST, CAIT and its partners have created a way to scientifically project future performance based on reliable, real data, providing engineers and managers with much-needed information on which they can base these crucial decisions,” Natale said in an interview for the BEAST documentary.

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First concrete pour for the BEAST foundation. Photo courtesy Rutgers CAIT/©Allison Thomas

Genesis of the BEAST   The concept for the BEAST was born from CAIT’s involvement as principal investigator of FHWA’s Long-Term Bridge Performance (LTBP) Program. “As a part of our responsibilities as PI on LTBP, we interacted with state DOTs, bridge experts, and researchers across the country to assess priorities and knowledge gaps. During the course of our investigations it became apparent that we had to accelerate deterioration to get the answers quickly and, in order to accurately represent what would happen to in-service structures, testing on full-scale samples was key,” explains CAIT director Ali Maher.   “Another given from the start was that the device had to subject test specimens to both environmental and traffic loading simultaneously if it was to replicate real-world effects, but do so in months instead of years. Before the BEAST, the bridge community didn’t have the capability to measure the combined effects of physical and environmental stresses relating to complex deterioration processes without waiting decades. We knew we had to close that gap,” says Maher.   FHWA–New Jersey Division Administrator Robert Clark echoed that when he addressed the audience at the dedication. He said of the current paradigm in the transportation industry, “To be frank, in the past the bridge community didn’t have the ability to—and this is key—accurately predict performance of these structures. Engineers can only infer or take very educated guesses on the anticipated life of the bridges they design. The good news is that was yesterday; today, we have the BEAST.   “This facility is a critical part of establishing a successful longterm bridge program and it will significantly improve the state of practice nationally and internationally,” Clark said. Compressing time: Science fact, not science fiction   The BEAST’s relentless traffic loading—up to 60,000 pounds total applied through two closely spaced axles—runs 24-7 and inflicts stresses roughly equal to a dump truck rolling over the deck 17,500 each day. Its “freeze-thaw” rapid-cycling temperature fluctuations from 0 to 104 degrees Fahrenheit, and salt brine application put the test sample through 15 years worth of seasonal changes in just six months. Extensive calculations indicated the frequency and intensity of these environmental and load inputs could induce and fast-forward aging as much as 30 times.   Dr. Franklin Moon, a respected bridge expert who joined Rutgers’ civil engineering faculty in January 2016, reiterated the importance of compressing time so we can get answers almost im54

mediately compared to field testing.   “Many bridge owners are increasingly frustrated by the slow progress toward more durable bridges. The fundamental challenge relates to the many years required to understand and evaluate the durability of materials within bridge systems,” Moon explained. “The current approach to this kind of research is to do trial implementations and observe in-service performance over decades. This slow feedback loop means that the enormous advances in new materials that have emerged over recent years can’t be effectively harnessed.”   “For example, let’s say a DOT implements a new type of deck overlay that really out-performs conventional approaches,” Moon added. “By the time this superior performance becomes clear— perhaps decades later—the company that produced it may be out of business or they may have changed the mix, and meanwhile several generations of potentially superior materials would have been ignored. Given the current state of our bridges, and their rates of deterioration, we simply don’t have the luxury to take a ‘wait and see’ approach.”   Moon has collaborated with CAIT on many large-scale projects including LTBP, the International Bridge Study, the Bridge Resource Program, and development of new technologies for bridge assessment and repair. He will be the technical director for the BEAST.

The BEAST rigging and assembly day. Photo courtesy Rutgers CAIT/©Drew Noel Photography

Building a first   Kevin Womak, director of the USDOT Office of Research, Development, and Technology said at the October gathering, “In research, it’s not often you get to go from concept all the way through to seeing something get built. That’s the research pinnacle—to see an idea put into practice.” In his former position at Utah State University, Womak worked closely with CAIT on LTBP and other research. He now heads up the USDOT University Transportation Centers program.   After years of examining the theory and triple-checking calculations for the BEAST, CAIT embarked on finding a company with the engineering experience, capabilities, and facilities to build it. That’s when Applied Research Associates (ARA), an international scientific research and engineering firm, joined the team. The problem with making something that’s never been built before is, obviously, the lack of precedent. ARA’s Vertek Division based in Randolph, Vermont, was hired to help CAIT work through the countless engineering questions involved in creating the BEAST. For example, what was the most efficient and consistent way

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to apply the moving load and how could we move it end-to-end stantly beating on them,” said Andrés Roda, CAIT research engiand laterally across the deck? How could we build a chamber big neer in charge of the BEAST construction and now its operations enough to enclose a bridge and maintain stringent environmen- manager. tal parameters without blowing the budget for the whole project?   “Our country’s infrastructure is incredibly important. It’s what How could the device be flexible enough to accommodate a vari- carries us from place to place, transports goods, and keeps businesses moving. The interstate system built in the 1950s allowed us ety of superstructures and work equally well for all of them?   The BEAST’s sheer size alone was, literally, a big issue. David to see the beauty of America coast to coast. Now, here we are, 60 to Timian, ARA senior vice president and manager of their Automa- 80 years later, and we need to take care of it,” Roda says. tion and Geosciences Sector, said it was the biggest machine the   Moon agrees. “The U.S spends about $5 billion per year on company has ever built, as well as the first environmental chamber bridge deck deterioration and other rehabilitation. But if you look at the total cost of those bridge assets, it’s north of $2 trillion dolon that scale.   “This project took up our entire 67,000 square-foot design, fab- lars. So, $5 billion might sound like a lot, but it’s less than one rication, and assembly shop,” said Timian. “We had a core team of percent of the value of those assets.” five people working on it full time plus consultants and subcon-   “The BEAST will allow us to look at the materials and methods tractors at various stages. We had to move our HVAC systems and we’re using and make smarter decisions about how we build our build a section of driveway behind the building so trucks could new bridges, how we take care of the bridges that are here, and maneuver these huge components,” Timian explained. “After the how we move forward with creating 21st century infrastructure,” beams were put together with bracing, we knew they would be too Roda explained. wide to get back out of the building, so we had to widen the open-   “The data we get from it will provide insight, help manage exing of our 17-foot existing bay doors to 19 feet just to get it out of pectations, and give bridge owners empirical evidence to optimize their decisions and maximize the life cycle of bridges throughout the shop,” Timian said.   The main assembly for the loading device consists of two the country—all sooner than ever imagined,” he added. parallel steel “hollow-tube” beams 120 feet long by 7 feet tall.   “The American Society of Civil Engineers’ Industry Leaders The beams rest on support towers that are affixed to rail carts, al- Council not long ago put forth the challenge to reduce infrastruclowing operators to lift and roll it out of the way when lowering ture life-cycle costs 50 percent by 2025. We need a lot of creativity test specimens into the chamber. The beams and support towers in order to meet that goal. We believe there are several ways to weigh 112,000 pounds. The rolling carriage, which hangs from the address this, including innovation, resilience, performance-based beams, can exert a load up to 60,000 pounds on the test specimens; standards, and life-cycle analysis. Innovations CAIT has develit weighs 10,000 pounds and the winch that pulls the apparatus oped, like the BEAST and RABIT [bridge assessment robot], are the tools we need to do business,” Natale said. weighs about another 15,000 pounds.   After 17 months creating the BEAST, Timian and his team also   Ultimately, what the BEAST can teach us will significantly had to figure out the best way to move the massive components improve public safety, facilitate U.S. commerce and economic from ARA’s plant in Vermont to the BEAST’s permanent home on growth, and potentially save billions of dollars in infrastructure Rutgers Livingston Campus in Piscataway. Moving the BEAST costs. involved a heavy-hauling operation with several complicated   More on the web: Watch the mini-documentary “Meet the BEAST” on YouTube. Just search “cait meet the beast” or go to moves and special equipment, not to mention know-how.   The moving operation for all the BEAST components took 11 cait.rutgers.edu/beast for the link and ongoing updates. trucks, special rigging, and a four-axle rear-steerable dolly as part   For more information on the BEAST and inquiries regarding of a 10-axle combination for the 120-foot beams. 85 tons of steel testing, contact Dr. Ali Maher, mmaher@rutgers.edu. components were transported more than 300 miles and along with 17 tons of ancillary equipment. The beam assembly load required state police escorts and special permitting in every state it traveled through. Once it arrived on site, a 120-ton crane and another 100-ton crane wer used to rig the BEAST’s support towers onto its specially designed rail carts, then lift the 100,000-pound beam assembly from the truck and place it on the support towers with absolute precision. A BEAST that bridge owners can harness   “The BEAST beats up on bridge samples so we can make bridges in our transportation network better endure the forces that are con- The BEAST rigging and assembly day. Photo courtesy Rutgers CAIT/©Drew Noel Photography Utility and Transportation Contractor, FEBRUARY 2016

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Financial Overview

WHAT’S TROUBLING FOR 2016: A BANKER’S PERSPECTIVE By: William J. Ruckert, Provident Bank

  Typically, a new year brings hope, enthusiasm, and a positive attitude for success (similar to how a baseball fan feels about his team when spring training starts.) As an eternal optimist, I generally share these feelings at this time of year, but unfortunately, 2016 brings some troubling issues that will impact all of our businesses.   Many economists point to the recession ending some seven years ago; however, their findings are disputable. Has revenue grown, profits? What about your workforce? Have wages kept pace with the cost of living? Are you better off now than you were pre-Great Recession? Health care costs have and will certainly continue to climb, and increasing the minimum wage will impact your company’s bottom line as well as your household. The significant decline in oil prices has helped us all over the past 18 months, yet some experts feel it creates general instability in the market.   These points can be argued; but what can’t be argued is that an unstable economy negatively affects business—locally and globally. In NJ, uncertain funding for the Transportation Trust Fund impedes business for contractors, suppliers, and the professionals supporting the industry as a whole. On the Federal front, the passing of the Highway Trust Fund is certainly welcome news; but does it do enough to offset the uncertainty associated with the aforementioned minimum wage or mandated employee familyleave time? On an international scale, refugees seeking asylum, the Chinese economy, and continued strife in the Middle East all impact the global economy.   The political landscape is equally troubling as we enter a presidential election year with little clarity on the efficacy of our leadership. All of the candidates, as well as current legislators, tout their successes, but have any of them demonstrated an attitude of collaboration and compromise? Partisan politics simply do not work, a fact that has been thoroughly demonstrated in recent history. Our country was built on bringing differing positions together and finding a middle ground that serves the majority. Contemporary divisive politics hinder our ability to do business.   Lastly, government regulation continues to grow for all industries, but has any of this legislation improved business, truly pro-

tected the consumer, or increased bottom lines? Clearly, government oversight is important. Business needs to be mandated and unethical parties penalized. However, the pendulum has swung too far in one direction, causing consolidation, bankruptcy, and, disincentives for those who help grow the economy with integrity.   And then there are interest rates, whose uncertainty impacts bottom lines and capital spending. The Fed’s decision to increase rates by 25 basis points was long anticipated… but for what reason? Inflation is low, wages are essentially flat, and economic growth is anemic, domestically and globally. Historically low interest rates have not bolstered capital investment, despite the on-going reenactment of Bonus Depreciation and the increase in the depreciation limitation, a.k.a Section 179. The recent passage of these provisions through 2017 should bolster capital spending, which will certainly spur economic growth.   Moreover, volatility in commodity prices wreaks havoc with bottom lines. The decline in the cost of crude oil has helped many businesses, especially contractors, but some experts believe that the price drop will be short lived. How can a company manage its expenses if it has no idea what the cost of raw materials is, whether it’s copper, oil, iron, etc.? With such capriciousness, business owners are reluctant to invest, dampening economic activity.   But what’s the good news? Congress recently passed its budget in a bi-partisan agreement with no government shut down. While this event wasn’t newsworthy according to the pundits, it certainly demonstrates an attitude of compromise that is welcomed by the business community. Interest rates are expected to remain very low and oil prices continue to decline, providing a good opportunity to invest in your company and its future.   And when it comes to banking, the environment is rife with opportunity. Now is the time to act. Banks are awash with cash and aggressively seeking new financing opportunities. The lackluster economy has significantly reduced loan demand and banks need to grow. If you are considering investing in inventory, equipment, real estate, or just recapitalizing your balance sheet, I encourage you to reach out to your banker— as it is truly a borrower’s market.

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Legal Dig

PROVIDE TIMELY NOTICE UNDER THE MUNICIPAL MECHANIC’S LIEN ACT AND THE PUBLIC WORKS BOND ACT OR RISK LOSING BENEFITS By Paul T. Fader, Esq., Association Legal Counsel & Adrienne L. Isacoff, Esq.

  Contractors and subcontractors who work on public jobs are generally aware that they have rights and responsibilities under the New Jersey Municipal Mechanic’s Lien Law, N.J.S.A. 2A:44125 (“MMLL”), and the Public Works Bond Act, N.J.S.A. 2A:44143 (collectively, the “Acts”). But even those experienced in the public arena often lose track of the notice requirements, which can be fatal to successfully filing a lien or making a claim against the performance or payment bonds. Parties to public contracts should pay careful attention to the differing notice requirements that apply under the Acts, depending on whether the claim is against the performance bond or the payment bond and whether the claimant is a contractor, subcontractor or sub-subcontractor.   Since the adoption of statutory amendments in 1996, both Acts impose advance notice requirements upon third tier claimants: sub-subcontractors or suppliers to subcontractors. Since the contractor and owner may not be aware of the identity of third tier subcontractors and suppliers, these notice requirements afford those at the top of the contracting chain an opportunity to ascertain that payment is being made by the subcontractor to its third tier subcontractors and suppliers.   Notwithstanding that two decades have passed since the Acts were amended, there remains confusion about when notice must be provided and the effect of failure to provide timely notice. As further explained in this article, it is critical to keep in mind that the notice requirements applicable to the different tiers do not depend upon whether the work is being performed by a subcontractor or supplier. The notice provisions depend strictly upon whether the claimant has a contract or purchase order with the general contractor or with a subcontractor. 62

MMLL Notice and Claim Provisions   The MMLL applies to counties, cities, public commissions and boards or other municipalities. It does not apply to the State or State agencies. Lien claims filed under the MMLL attach to the unpaid funds in the hands of the public owner when the lien is filed. Liens may not attach to any real property owned by a municipality.   Third tier subcontractors and suppliers must adhere to the advance notice requirements imposed by N.J.S.A. 2A:44-128(b) in order to be fully protected under the MMLL. That provision requires that any third tier claimant must file with the municipal agency a written notice that it has or will furnish labor or materials to the subcontractor within twenty days of the first performance of work or delivery of materials to a subcontractor. If notice is filed after the 20-day period, the lien will be limited to the amount due for any labor or material provided after the notice was filed. Moreover, the lien will be limited to an amount not greater than the money remaining owing from the contractor to the subcontractor.   Both second and third tier subcontractors and suppliers may file a notice of lien claim with the municipality at any time before the whole work to be performed by the contractor is completed or accepted by a resolution of the public agency or within 60 days thereafter. N.J.S.A. 2A:44-132. The lien claim will be limited to the amount of moneys due or to grow due under the prime contract that remain in the control of the public agency. N.J.S.A. 2A:44128. Once a notice of lien claim has been filed, the municipality may require the contractor to respond why the lien claim should not be paid. If the contractor fails to respond to such a demand, the municipality, in its sole discretion, may pay the amount claimed directly to the lien claimant without the order of a court and deduct the amount paid from any contract balance owed to the contractor. N.J.S.A. 2A:44-136. Utility and Transportation Contractor, FEBRUARY 2016  


An action to enforce a lien claim in court must be brought within 60 days from the time when the whole work to be performed by the contractor is either completed or accepted by resolution of the public agency. N.J.S.A. 2A:44-138. Payment Bonds   The Bond Act applies to both State and local public projects. It requires that contractors on public works projects must furnish the public agency a payment bond in an amount equal to 100% of the contract price to secure payment for labor or materials supplied to the contractor or its subcontractors. N.J.S.A. 2A:44-144. “Beneficiaries” of the Act include any person or firm that has furnished any labor, materials or machinery used or consumed in the job.   As is the case with the MMLL, the notice requirements for beneficiaries of payment bonds under the Bond Act depend on whether the entity providing labor or materials is a second tier or third tier subcontractor. Subcontractors and suppliers to general contractors do not have any advance notice requirement. However, prior to commencing work (or as early as possible after commencing work), a third tier sub-subcontractor or supplier to a subcontractor must provide written notice to the contractor that it is a beneficiary under the payment bond. N.J.S.A. 2A:44-145. This notice is not a claim against the bond, since no payment is due at the time the advance notice is filed. The purpose of the notice is simply to let the contractor know that the third tier subcontractor or supplier is performing work so that, hopefully, the contractor will be taking steps to ensure that payment is appropriately trickling down through the contract chain. This is generally accomplished by having the third tier subcontractors/suppliers file lien releases as a condition precedent to releasing payment to the subcontractor.   The advance notice should be sent to the contractor by certified mail or other service that provides proof of delivery. The notice does not have to take any particular form, but should identify the name of the public owner, project, general contractor, subcontractor, and beneficiary (third tier subcontractor/supplier), with a brief description of the work to be provided, and address and other contact information. The notice does not need to be served on the subcontractor, public owner or surety, but those entities may be copied.   If a third tier beneficiary under the payment bond fails to provide the early notice, it still retains bond rights. However, its rights will be limited to benefits available from the date the notice is provided. A third tier claimant cannot assert a claim under the payment bond for payment of any labor or materials provided prior to the date that the written notice required under the Act is given to the contractor.   Both second and third tier bond claimants may file a statement of claim against the payment bond with the surety company within one year from the last date upon which the beneficiary performed work or delivered materials to the project. N.J.S.A. 2A:44-145. Significantly, claimants must wait 90 days after providing such notice to bring suit to enforce a bond claim. Effectively, claimants have nine months to bring suit, because an action cannot be filed until 90 days have elapsed from filing notice with the surety, but must be filed no later than one year from the last date of work. Bond claimants must be careful not to wait too long until after their last date of work to file a notice of claim with the surety in order to ensure that they preserve their right to file suit before they are time-barred. Performance Bonds A performance bond on a public works project is furnished by the

contractor for the benefit of the contracting unit. The performance bond guarantees that if the contractor does not complete performance in a timely and satisfactory manner, then the governmental agency may be entitled to damages against the surety.   The key concept to bear in mind with respect to bond claims is that sureties may assert all defenses to bond claims that may be asserted by their principles and, in addition, may assert defenses that are peculiar to their role as surety. For example, if the contractor in a delay claim can assert that the owner was responsible for the delay, that defense can also be raised by the surety. The surety may also assert as a defense that notice was not properly or timely provided to it as required by statutory law or the terms of the bond.   The Bond Act does not impose any specific limitations period by which a governmental unit may file a claim against the performance bond. A surety that guarantees a contractor’s performance is subject to suit for the same period of time and under the same conditions as its principal (the contractor). The statute of limitations for contract claims is six years.   It is important to note that the bond furnished by contractors on public jobs must be in substantial conformance with the form set forth in the Bond Act. N.J.S.A. 2A:44-147. A surety may not include preconditions for the filing of a claim by a public owner or by subcontractors that are not included in the statutory form of bond. For example, in Gloucester City Board of Educ. v. American Arbitration Association and J & L Plumbing, 333 N.J. super. 511 (App. Div. 2000), the court ruled that the surety could not raise a defense against a performance bond claim by requiring the contracting agency to declare a default and terminate the contract or to file a claim within a specified period of time, since none of those preconditions are specified by the Bond Act.   However, public owners (and commercial owners who may require their contractors to furnish non-statutory performance bonds) must be careful to keep the surety timely apprised of deficient performance that may result in default and termination. If the surety is not provided this information in sufficient advance of a declaration of default, it may be able to take the position that it was deprived of the opportunity to implement corrective action before the damage was irreversible, by applying pressure to its principle to adhere to the contract schedule or negotiating a takeover agreement to substitute another contractor. At a minimum, public and commercial owners must provide a copy of the notice of default to the surety prior to the date of termination in order to safeguard their performance bond rights. PRACTICE TIPS Public and Commercial Owners   Keep sureties apprised of any significant deficiencies or delays in performance by the contractor even before a formal claim is filed. Review the default and termination clauses of the contract to make certain that you have provided an opportunity to cure in conformance with the contract provisions. Copy the surety on the notice of default prior to effectuating termination of the contract. Contractors   Keep tabs on your subcontractors to make certain they are paying their subcontractors and suppliers out of their own requisition payments. Ask for a list of all sub-subcontractors and suppliers at the commencement of the job, so that you can monitor the project. Implement and follow-up on a lien release protocol. Second Tier Subcontractors and Suppliers   File lien and bond claims within the time limits required by the statute. Provide copies to the other contract entities, as applicable.

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Notice should be sent by certified mail or in another manner that will provide proof of service. Third Tier Sub-Subcontractors and Suppliers   If you routinely enter into sub-subcontracts or act as a supplier to a subcontractor on public jobs, have a form ready to be filled in and filed with the municipality and contractor. The same form can be used to identify your firm as a potential lien claimant under the MMLL and as a beneficiary under the Bond Act. Specify that the notice is being provided under only the Bond Act (for State projects) or both the MMLL and the Bond Act (for municipal projects). The form should identify the owner, name of the public project, contractor and subcontractor. It should identify your name, address and other contact information and briefly describe the nature of the work to be provided. For municipal projects, file the form with the municipality (the municipal clerk, or the CFO of the commission or board), as well as with the contractor, on or before the first date of work. For State jobs, file the form with the contractor, and copy the State agency. In the event that you did not file the advance notice prior to or as soon as possible after the commencement of your work on the job, file the notice anyway in order to preserve any remaining lien or bond rights. You will then have to obtain financial information regarding what amounts remain in the control of the public body that are owed the general contractor, and whether any payments remain owing from the contractor to the subcontractor for work performed subsequent to the date that the notice was filed.

The information contained herein is for informational purposes only as a service to the public, and is not legal advice or a substitute for legal counsel, nor does it constitute advertising or a solicitation.

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Accounting Corner

WHAT EVERY BUSINESS CAN LEARN FROM THE UTCA

By: Michael Mazur, CPA, CFF, PSA; Mazur, Krieghbaum & Higgins CPA’s LLC   Trade associations, like the UTCA, have an annual succession plan in place to transition leadership. In most cases, it is a five year “ladder” where leaders progress from one key position to another until they are president. Along the way, these leaders learn what is necessary to transition to the next step and are well-prepared to lead the organization when they become president.   Generally speaking, most businesses do not have a formal succession plan in place. According to the 2014 Report on Senior Executive Succession Planning and Talent Development published by The Institute of Executive Development and the Rock Center for Corporate Governance at Stanford University: “Companies recognize the importance of a thorough and rigorous succession process for both the CEO and senior executive positions; however, most fail to create one.” Only 50 percent of the companies that participated in its study have an effective succession plan in place, less than 46 percent are in the process of grooming the next CEO or have a formal process for developing successor candidates for key executive positions and only 25 percent agree that they have an adequate pool of ready successor candidates for key C-suite positions.   At issue is what is going to happen when the current CEO and key executives want to retire or what if something happens to the CEO and/or other leaders? How will retirement plans be funded? Who will lead the company? It could take 12 to 18 months to find the right person to transition into a key leadership position. Can your company sustain, grow or be profitable without a strong leader in place?

  Strategic companies identify talented and capable leaders years before they are needed to serve. It could take five to ten years to prepare the right person for the job. A formal development program is recommended to ensure that the person is ready when the time comes. This could include:   •  Formal leadership training   •  SMART (specific, measurable, achievable, realistic and     time sensitive) career advancement goals  • Mentoring   •  Executive coaching   •  Talent assessment   •  Customer/client transition plan   •  On-the-job training   Of critical importance is the development of a strategic plan that clearly identifies the capabilities, roles and talent needed to lead your company. Without a good understanding of what traits are desired in a future leader you could invest in the wrong person. This is more common in family owned businesses who want to transition leadership to the next generation. Unfortunately, family members might not have the right skills to take over the company. Another person inside of the business might prove to be a better option. Or, if the right talent is not in-house, it could be prudent to hire someone or look for a like-minded company to merge with well in advance.

Continued on Page 71

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Safety Perspective

PERMIT REQUIRED CONFINED SPACE: YOU CAN’T JUST CALL 911! By: Ken Bogdan, CSP

  Last May, OSHA released it’s long awaited Permit Required Confined Space Standard specifically for construction. 29 CFR 1926 Subpart AA specifically applies to construction work however, it excludes excavations (Subpart P), underground construction (Subpart S) and Diving (Subpart Y).   The General Industry Standard, 29 CFR 1910.146 did not address construction work, leaving contractors without any real guidance. The new standard is geared specifically towards construction work and includes mechanisms for contractors to safely perform the work.   Included in both standards are requirements for a rescue team for work that involves entry into a Permit Required Confined Space:  1926.1204(i) Develop and implement procedures for summoning rescue and emergency services (including procedures for summoning emergency assistance in the event of a failed nonentry rescue), for rescuing entrants from permit spaces, for providing necessary emergency services to rescued employees, and for preventing unauthorized personnel from attempting a rescue;     This part of the standard has been misunderstood and a point of confusion for those performing permit entries outside of a controlled facility. Many contractors unwittingly believe that they can rely on a local fire department to act as a rescue team and simply write “Call 911” for rescue procedures on their Entry Permit. This mistake could prove to be deadly.   The fact is, most fire departments and first aid squads are not 70

equipped or trained to perform confined space rescue. In addition, their response time would not be sufficient for work performed within a permit space where the conditions are Immediately Dangerous to Life and Health (IDLH).   To fully understand the requirements, you will need to review all parts of Subpart AA, specifically section 1926.1211, Rescue and Emergency Services. This section provides details about what is required for the rescue team. It is important to remember is that each situation may require something different.   First and foremost you must evaluate the hazards that may be contained within the space. to ensure that the rescue team/service ….Has the capability to reach the victim(s) within a time frame that is appropriate for the permit space hazard(s) identified….This will determine if you must have a rescue team/service on site. Again, for IDLH conditions such as oxygen deficiency, the rescue team will need to be onsite AND standing by ready to enter the space. Most local fire departments will not provide this service, or will give other emergencies (such as a fire) that occur at the same time, preference. For these situations, you will probably need to retain the services of a qualified rescue contractor or train your own employees.   Once you have evaluated and fully understand the hazards, then you can begin to evaluate, and choose your rescue team/service. In addition to being able to respond in a timely manner, you will need to make sure that the Rescue Service/Team….Is equipped for, and proficient in, performing the needed rescue services.   In other words, they will need to be trained and provided with the proper equipment. The training must be the same that was provided to Authorized Entrants and will include, at a minimum, Utility and Transportation Contractor, FEBRUARY 2016


information about the hazards to be faced during entry. The team must also perform simulated rescue drills on the actual space or a similar representative space at least once every 12 months. In addition, you must ensure that at least one member of the rescue team who holds a certification in first aid and CPR is available.   Non-entry rescue, using a tripod or similar retrieval device, is preferred (and required) …. unless the retrieval equipment would increase the overall risk or entry or would not contribute to the rescue of an entrant. Remember, a retrieval device can only be relied upon for rescue for vertical entry where there are no obstructions. Where non-entry rescue is used, you must ensure that rescue services are available to respond in the event that non-entry efforts fail.   Where non-entry rescue is used, all entrants must wear a full body harness attached to a retrieval line. The retrieval line must be attached to a mechanical device or fixed point outside the permit space. A mechanical device, such as a tripod with a hand operated winch, is required for vertical entry of 5 feet or deeper.   In many cases you will likely use a retrieval device to aid in rescue operations and it should be set prior to any entry. In summary, you will need to do the following:   1.  Determine if the spaces to be entered are “Permit Spaces. Note that you may want to establish rescue procedures for NonPermit Entry as well. This may be as simple as establishing communication with local emergency medical services (EMS) and ensuring that they can be effectively contacted and reach your site.   2.  Once you have determined that you are going to perform a Permit Entry, evaluate the hazards to be faced by the entrants.

  3.  Determine if non-entry rescue will be sufficient. If it is, ensure that rescue services and EMS will be available in the event that non-entry rescue fails.   4.  Evaluate the resources that are available to you. You may find that your internal staff will have the skills and experience to perform rescue work. Call the local fire department to determine what, if any role, they might play in rescue efforts. This may be limited to providing you with support. You may also look into using a contractor that specializes in permit space rescue.   5.  Provide the necessary training and equipment that is required to perform rescue operations. The training must include a simulated drill and a review of all the hazards that will be faced by entrants. The equipment that you will need shall depend on the hazards associated with the entry. This may include self contained breathing apparatus, ventilation equipment, additional lifelines, a back board and other first aid equipment.   6.  Develop a written plan for entry work that includes rescue procedures. The plan should be reviewed by all members of the entry and rescue teams and approved by the Entry Supervisor.   No matter what type of work you are performing, it’s important to be prepared for an emergency. For more information about this topic, go to www.osha.gov/confinedspaces/. Or call your insurance broker’s risk control department. About the Author…. Ken Bogdan is the Director of Private Sector services for JA Montgomery Risk Control, a Division of Conner Strong & Buckelew. JA Montgomery Risk Control is a safety and loss control consulting firm based in Marlton NJ..

Continued from Page 67   Succession plans need to be documented. Make sure to include every detail of how company leadership should be transitioned. This could include deciding on insurance options to fund the transition, having a valuation done on the company at least five years prior to a planned transition and putting a buy-sell agreement in place.   Succession plans are important for every business. In the case of a closely-owned entity, it also provides the means to retire and/ or provide financial security for the owner’s family in case of the untimely death of a partner. Evaluating alternatives with professionals such as your lawyer, accountant, insurance provider and financial advisor is key to ensuring that your succession plan will carry out your wishes and be executed properly. Disclaimer: This article is general information and not tax advice.

About the Author…. Michael A. Mazur, CPA, CFF, PSA and managing member of Mazur, Krieghbaum & Higgins CPA’s, LLC specializes in working with construction contractors. Mike can be contacted at (732) 341-3893 or MMazur@M-KCPA.com to answer your questions on succession planning.

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MEGA PROJECTS AND WRAP-UP EXCLUSIONS By: Carl Bloomfield & Shane Riccio, The Graham Company   Owner Controlled Insurance Programs, or wrap-ups, have been an effective way to insure large infrastructure projects for decades. This is when the owner, or sponsor, of the project procures the insurance for all, or almost all, of the contractors set to work on the project. When well-run--in other words--claims are kept to a minimum, Wrap-up insurance programs can save the project owner or sponsor 1%-2% of the total construction costs on the job. On very large infrastructure projects that’s a substantial amount of money, so it should be of no surprise to you when you encounter a wrap-up on some of the large projects you are bidding. For example, most of the members of the UTCA are very familiar with the NJ Turnpike OCIP which covered the widening project. However, we are not going to focus on the actual “wrap-up” insurance purchased by the NJTP in this article. Instead, we will focus on the “wrap-around” coverage needed and the typical “wrap-up exclusions” found on most, if not all, of the contractors’ traditional insurance programs.   Let’s set a scenario, ABC Contracting works on a $50,000,000 project on the New Jersey Turnpike which is insured under a “Wrapup” insurance program. The project is completed in 2015, and ABC Contracting is off to start other projects. Throughout the course of construction on the “wrap-up” project and the years after, insurance claims begin rolling into the program by the dozens with significant dollar figures. It’s now 2020, the wrap-up program has since expired because it only covered completed ops for 5 years after the completion of the project. The statute of repose in New Jersey is 10 years, so the contractor is “on the hook” for at least a few more years after the wrap-up has expired. In addition, the wrap-up limits are depleted because of the costly claims that came in over the years. Where do I turn to if the next claim is, or is alleged to be, as a result of my own work? Would you receive coverage from your own practice policy? Maybe, or maybe not. It depends on how closely you have reviewed the “wrap-up exclusion” which is likely found 78

in your practice policy, how broad your “wrap-around” coverage is (if you purchased this) and how much excess limits you purchased to sit on top of the wrap-up project.   There are many variations of “wrap-up exclusion” endorsements used throughout the insurance marketplace. Some are better than others. When you are reviewing your specific wrap-up exclusion, there are a number of razor blades to look out for. A few examples are 1) does the exclusion provide a giveback in coverage for completed operations when the wrap-up is no longer in force; 2) does the exclusion provide a giveback in coverage in the case you are not an enrolled contractor in the wrap-up; and, 3) is there coverage for offsite work? These exclusions are worded very carefully by a team of lawyers who are looking to insulate the insurance company from paying claims. Insurance companies feel they shouldn’t pay any claims related to wrap-ups because they didn’t collect any premium associated with the risk. You will recall through your own experience that ABC Contracting did not pay any insurance premiums for Workers Compensation and General Liability/Excess Liability associated with the $50,000,000 New Jersey Turnpike job they worked on because those costs were deducted from the bid since the wrap-up provided the coverage. So, when you review a wrap-up endorsement, keep in mind this mindset when interpreting the coverage. If it seems like there is no coverage being provided by the endorsement, there probably isn’t even though many insurance company underwriters will try to say that is not the true “intent” of the endorsement.   When negotiating your insurance program, be sure your policy provides coverage for:  • Extended Completed Operations Coverage – This coverage will provide insurance for when the wrap-up completed operations coverage expires but the statute of repose still exists. (PA Utility and Transportation Contractor, FEBRUARY 2016


– 12 years, NJ - 10 Years, NY - Unlimited but incidents need to be reported within 10 years)  • Offsite Work – This would provide coverage for work that you perform outside of the project site but will ultimately end up in the project. (prefab work)  • Warranty work or Punch list work – This would provide coverage for after the wrap-up’s regularly scheduled operations have completed but there is some additional punch list or warranty work still to be done.  • Difference in Conditions – When enrolled in a wrap-up, the wrap-up policy will only cover the contractors for claims that are not excluded by the terms, conditions and exclusions of the wrap-up coverage. If a claim doesn’t fit within the wrap-up policy, a Difference in condition provision in a General Liability wrap-up exclusion endorsement could apply.  • Coverage for non-enrolled contractors – Make sure your wrap-up exclusion clearly states that coverage exists unless you are “enrolled” in a wrap-up program. Often times, demolition or EFIS contractors will not be enrolled into the wrap-up and therefore will have to rely on their own practice policy for coverage. Also, contractors that don’t meet some minimum payroll threshold on the project will also likely not be enrolled.

 • Coverage excess of in force wrap-ups for ongoing operations and completed operations – Often, the enrolled contractors don’t have much say in the limits purchased for the wrap-up. In some cases, the wrap-up policy owner may be buying too small of a limit or simply run an unsuccessful wrap-up project resulting in the exhaustion of limits. Purchasing a layer of excess insurance to “wrap around” the policy may be a worthwhile investment to protect your company.   Contractors working on large projects insured under a wrap-up program need to be conscious of their own wrap-up exclusions found on their general liability program. As the New Jersey Turnpike OCIP winds down, there are going to be many contractors who are surprised to learn they no longer have any completed operations insurance coverage for the work they performed on that project. Don’t let this be you. About the Authors: Carl Bloomfield, AAI is a Vice President at The Graham Company and can be reached at cbloomfield@grahamco.com; Shane Riccio is a Producer at The Graham Company and can be reached at sriccio@grahamco.com.

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The Pipeline

By: Dennis Hart, Director Of Utility Operations   It is typical in most communities across America for rain water to enter the storm drain systems and be discharged into local water bodies or infiltration basins. The main concern is not only to control street flooding but to also trap litter from entering the water ways. In many older industrial areas the storm water systems are connected to the sewerage collection systems. The initial flush of storm water is treated along with the sewage at the waste water treatment plant, however, without a relief system the treatment plant would be overloaded and washed out and the sewage and rainwater mixture would back up into homes and streets. The relief systems are called combined sewer overflows (CSOs) and there are over two hundred of these points in New Jersey. Under USEPA and NJDEP orders and programs, the owners and operators of such systems need to develop long term control plans to address the discharge of untreated sewage into the state’s waterways.   The correction of this problem in New Jersey is a huge undertaking which ultimately will cost billions of dollars. Currently, there are 213 Combined Sewer Overflow outfalls in New Jersey. These outfalls are located in a total of 21 municipalities. Some municipalities, such as the City of New Brunswick, chose to address the problem by separating the two systems. For most municipalities this is not economically feasible. The City of Trenton is able to use a large basin at the wastewater treatment plant to hold the increased rainwater/sewage and then direct it back into the system for treatment when the storm waters subside.   In 1994 the US Environmental Protection Agency established the National CSO Policy to bring all wet weather CSO discharge points into full compliance with the technology-based and water quality-based requirements of the Clean Water Act. The National CSO Control Policy requires permittees to implement Nine Minimum Controls and to develop and implement a Long Term Control Plan. The National CSO Policy promotes a phased approach to the control of CSOs through a series of permits that include progressively more stringent requirements.

The New Jersey Department of Environmental Protection issued the first Master General Permit (MGP) on January 27, 1995 which became effective on March 1, 1995. Under the 1995 MGP, permittees which owned and/or operated any portion of a combined sewer system were required to develop and implement technology-based control measures including the Nine Minimum Controls. Additionally, the permittees were required to initiate the first element of the Long Term Control Plan, by requiring the development of Combined Sewer System Characterization Studies to demonstrate the relationship between rainfall, runoff and sewer system responses. In 2004, the Department revoked and reissued the MGP. Under the 2004 MGP, existing requirements remained in place and the Department added several new provisions to require permittees to address four additional elements of the CSO Long Term Control Plan. The permit required permittees to develop, with Department oversight, a Public Participation Plan, evaluate a specific set of alternatives, develop appropriate cost and performance curves, and maximize conveyance for treatment at the existing treatment plant for wet weather flows. Permittees with CSO outfalls were required to develop and evaluate a variety of disinfection control alternatives.   In 2015, the Department issued Individual CSO permits which build upon the previous permit requirements. Permittees should consider what work has already been performed and how past achievements may be incorporated into additional efforts to satisfy the new individual CSO permits. The individual permits address site specific conditions and promote coordination of a Long Term Control Plan among all permittees within hydraulically connected sewer systems.   Since the issuance of the first NJPDES permits to regulate CSOs, the total number of CSO outfalls in New Jersey has been reduced from 281 to 213; a reduction of more than 20%. Additionally, solids and floatables controls have been installed at nearly every CSO outfall to prevent solids that are greater than one half

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inch from entering the waterway. Under the initial phase of solids and floatables construction projects, a tremendous amount of trash has been and continues to be removed and we do not see the massive amounts of trash floating up on river banks and ocean beaches after rainstorms.   The UTCA is a founding member of the Clean Water Construction Coalition. The Coalition consists of nearly 30 utility construction organizations from across the country. The Clean Water Construction Coalition focuses its efforts on seeking federal funding for sewer, drinking water and other water resources related projects. By working closely with the Chairs of the Senate and House Infrastructure Committees and Sub-Committees we have been very successful in securing funding for these programs. In particular, New Jersey Congressman William Pascrell has been a tireless advocate for these issues and was successful in having $100 Million of federal grant money dedicated to the correction of CSO problems.   The New Jersey Environmental Infrastructure Financing Program (NJEIFP) provides loans to local government for gray and green infrastructure projects. From 2000-2010 the NJEIFP awarded over $1.3 Billion to CSO projects. New Jersey has expanded

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the NJEIFP to not only continue to fund opportunities for green and gray infrastructure projects, but to fund the development and implementation of Long Term Control Plans as well. Applications for LTCP planning and design loans have no due date. Planning and Design loans will be 100% interest free for terms of up to 10 years with the expectation that the studies will result in a capital improvement project for the LTCP.   Principal forgiveness and interest-free financing will also be made available to projects in a CSO sewershed through the Proposed Priority System, Intended Use Plan, and Project Priority List for Federal Fiscal Year 2016, issued by the Department on August 28, 2015. Construction projects sponsored by permittees or membership municipalities in the CSO sewershed that reduce or eliminate excessive infiltration/inflow or extraneous flow would qualify for DEP interest-free financing for 100% of the allowable project cost for a loan term of up to 30 years. Up to $3M in principal forgiveness ($1M per sponsor) will be awarded to CSO abatement projects utilizing green infrastructure.   For more information of Combined Sewer Systems and the plan to address them in New Jersey please refer to http://www.nj.gov/ dep/dwq/cso.htm

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Labor Relations

NATIONAL LABOR RELATIONS BOARD REVISES ITS JOINT-EMPLOYER CRITERIA By: Jill Tobia, Esq., Tobia & Sorger

In a recent decision, the National Labor Relations Board (“NLRB”) revised its standard for determining “joint-employer” status. According to the NLRB, the fact that a significant number of workers today are employed by staffing companies and subcontractors necessitated a broader definition of “joint employer.” Accordingly, the new standard will undoubtedly result in more findings of joint employer relationships. UTCA Contractors, therefore, should evaluate their employment relationships in light of the revised NLRB standard. Revised Standard:   In the decision, the NLRB stated that two or more entities are joint employers if: (1) they are both employers within the meaning of the common law; and (2) the employers share or codetermine those matters governing the essential terms and conditions of employment. The NLRB’s evaluation criteria as to whether an employer possesses control over employees is extremely broad and

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considers not only whether an employer has exercised control over terms and conditions of employment directly but also indirectly through another party or entity. The NLRB will further inquire as to whether the employer has reserved the authority to control the terms and conditions of employment even if it has not actually done so. Advice for UTCA Contractors:   Joint employer status is an important issue for UTCA Contractors to keep an eye on since it expands an employer’s responsibility beyond just the employees on its payroll. Accordingly, every employer should evaluate the types of employment relationships that it maintains in order to determine whether any “joint employer” relationship may exist. The fact that the NLRB has recently broadened its definition will almost certainly ensure that allegations of “joint employer” status will rise in the upcoming months.

Utility and Transportation Contractor, FEBRUARY 2016


Utility and Transportation Contractor, FEBRUARY 2016

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Utility and Transportation Contractor, FEBRUARY 2016

Utility and Transportation Contractor February 2016  
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