Robex Fall 2017

BUILDERS EXCHANGE OF ROCHESTER, NEW YORK • SINCE 1888

ROBEX FALL 2017

Manning Squires Hennig

Build Rochester Helping

BRICK BY BRICK

Rochester’s Henry Hudson School #28

Depreciation and Your Business

Paid Family Leave Coming Soon to New York

The Pike Company DELIVERS The challenge of an accelerated schedule is overcome, thanks to an innovative and efficient design-build process

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FALL 2017 Features 12

Paid Family Leave

22

Renovation Write-Offs

24

TeleMedicine

48

Depreciation and Your Business

52

Builder’s Risk Insurance

54

The Online ROBEX Planroom

18

is Coming to a Jurisdiction Near You

Law Changes that Benefit You

Changing the Face of Healthcare

Tax changes for 2017

A brief overview of builder’s risk insurance, including who and what it covers, how long it lasts, and whose responsibility it is to procure it What You Need to Know

6

A Message from the President

8

A Letter from the Chairman

18

Member Spotlight

38

Manning Squires Hennig: Helping Build Rochester

Brick by Brick 38 Safety Zone O’Connell Electric’s Annual Safety Picnic 58

Government Relations

An Update from Assemplymember Harry B. Bronson

Project profile 42

34

30

The Pike Company

Project: American Packaging Corporation

Be the Best Boss

Drowning in Puffer Fish Leadership? Try a Breath of Fresh Air

Bad Weather

Being prepared when project payments aren’t paid on time

4

ROBEX Staff and Board of Directors

62

Index of Advertisers

42

Cover photo provided by Manning Squires Henning www.robex.com

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ROBEX

FALL 2017 Volume 1 No. 2

BX STAFF

BOARD OF DIRECTORS

President Aaron Hilger

Chairman Kevin Cannan A.A.C. Contracting

Vice President, Marketing & Operations Kim Gaylord Planroom Manager & Membership Director Corrine Taylor Accounting Manager Taryn Deinhart Research & Communication Manager Mariel Fedde Planroom Reporter Nicole Gissendanner Planroom Coordinator Courtney Phelps Administrative Assistant Annette Kelley

Vice Chairman Dominic Mancini Postler & Jackle Secretary Robert Morgan Upstate Roofing & Painting Treasurer Victor E. Salerno O’Connell Electric Immediate Past Chair Curtis Peterson Monroe Piping & Sheet Metal, Inc.

Traci Adolph Samson Fuel Richard Ash C.P. Ward, Inc

Builders Exchange of Rochester 180 Linden Oaks Suite 100 Rochester, NY 14625 P (585) 586-5460 F (585) 586-1580 info@robex.com robex.com

Dave Cooper Rose & Kiernan Mike D’Hont Western New York Floor, Co.

Brian O’Shell Ajay Glass

Kevin Foy M&T Bank

Walter Parkes O’Connell Electric

Melissa Geska U.S. Ceiling Corporation

Timothy Pullis Brown & Brown of Rochester

Ed Korowski The Pike Company

Norbert Rappl Retired 2 Star General Comac Building Supply

Rick Kozyra Ark Glass & Glazing Mark Mancuso JBX Chairman Flower City Habitat for Humanity

Randy Sickler SWBR Architects Gary Squires Manning, Squires, Henning Co. Inc.

David Mehalick Harris Beach Robert Morgan Upstate Roofing & Painting

The Builders Exchange of Rochester was founded in 1888 by visionaries dedicated to Rochester, New York’s commercial development market.

Today, the exchange has more than 600 members and affiliates, and serves the commercial, industrial and governmental construction industry in Western and Central New York. ROBEX © 2017 is distributed twice each year to all members on a complimentary basis.

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Daniel Mossien Mossein Associate Architects

Publisher Fahy-Williams Publishing PO Box 1080, 171 Reed St. Geneva, NY 14456 P (800) 344-0559 F (315) 789-4263 To advertise contact Tim Braden at (800) 344-0559, tbraden@fwpi.com

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Union Carpenters & Contractors

ONE UNION, MANY FACES

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Raritan Plaza II 91 Fieldcrest Ave, 1st Floor, Edison, NJ 08837 www.cctnynj.org | info@cctnynj.org Phone: 732-225-1300

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A message from the PRESIDENT

H

ard to believe that it is September already! Seems like only yesterday that we were putting the first ROBEX issue together. I would like to take a moment to thank my staff members who put the first issue, and now this issue, together. The Builders Exchange Board and I were blown away by the positive feedback that we got from you! Thank you for reading and for offering suggestions to us!

The most common question that I get from our members and community leaders is this: “How is construction in Rochester?” It is a simple question, but often has a more complex answer.

We can break the market into remodeling, residential (single family home starts), private commercial and public commercial. To answer the question well, you must look at each sector. Remodeling is the most difficult to track, but has generally improved over the last two to three years. Single family home starts are generally improving, although we are not close to the levels of the early 2000s. Private commercial work, especially projects in the City of Rochester, is also in good shape. We have more activity in the city than we have had in a long time, although that will likely trail off as projects are completed and items – like a performing arts center – remain unfunded.

Overshadowing the entire conversation about markets is the public works’ spend. Builders Exchange has a robust data set that includes bidding results for about 10 years. While not perfect, bidding results provide a strong measure of public works activity in the region. Historically, the Rochester MSA received about $600 to $650 million in public works funding. This is less than other communities typically receive on various measures, including Buffalo and Albany, and often more than Syracuse. In any event, that is the floor in the market for public commercial construction.

Despite the generally good news in the private market, over the last four years our construction market has likely gotten smaller. For 2013 to 2016, we averaged $427 million per year in public funding. By contrast 2007-2012 averaged just under $639 million per year. The difference, $212 million per year and $848 million over the period, represents a large volume of work that expansion in the private sector likely did not exceed.

Even though 2016 was better than the prior three years, and the number of projects bidding is up in 2017, it is likely that 2017 will end below the target of $600-650 million. We also know that bidders’ lists remain packed, and competition for local projects is intense. We hope that the 2016 increase starts a gradual return to “normal” and we are not adjusting to a new reality with consistent spending between $400 million to $500 million.

Builders Exchange has long been a leader in efforts to fund projects in Rochester, and this work will continue to be a focus for us. While we are not interested in taking funding away from other regions, it is time for Governor Cuomo and the legislature to deal with the structural deficiencies that lead to this type of disparity. This is also not limited to construction. We find the same results in data analysis for School Aid and AIM Aid (funding for cities). We will look to engage our membership on these issues in for the 2017-2018 legislative session.

Thank you for supporting our efforts.

Aaron Hilger President Builders Exchange

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A letter from the CHAIRMAN

O

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n behalf of the Rochester Builders Exchange Board of Directors, President, and staff, I would like to thank all our members for their continued support of this fine construction organization. Aaron Hilger, our President, has served our organization for the past 14 years, and our past chairman, Curt Peterson, has set the “standard of care” at a very high level. I would like to thank Curt for the governance and direction he has set for the past two years and I look forward to his tutelage as he serves as Past Chairman on the Executive Board.

I am excited and look forward to serving as the incoming Chairman for the next two years.

In the past, ROBEX has had many accomplishments.

• Helped to secure over $200 million for Rochester area construction projects.

• Year after year, ROBEX has provided support or opposition to bills that would be a benefit or a detriment to the New York State construction community, including our hometown.

• Negotiated the compromises for the updated Wicks Law. • Helped pass industry approved buy American Requirements • Negotiated independent contractor rules.

• Worked with the Governor’s office, Majority Leader Morelle and Senator Robach, to create commonsense legislation for New York.

• Improving direct member services to include training on a variety of topics, such as OSHA regulations, project management, blueprint reading, estimating, legal issues and up-to-date technologies.

These are just a few of the many achievements of ROBEX. Furthermore, our social activities – like the cookouts, happy hours, golf tournaments and our famous clam bake – are the events of the year. Not only are they full of fun, they are great networking opportunities. With more than 750 people in attendance, the ROBEX clam bake is a must if you are working in Western New York.

In the past we have organized and sponsored dinners to recognize craftsmen in construction.

Recognized individuals are judged by a panel of noted industry experts and leaders in the construction

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Laborers’ International Union of North America

Local 435 Daniel Kuntz / Business Manager & Secretary-Treasurer William Steve Jr. / President Robert Picardo / Vice President Carmen Serrett / Recording Secretary Michael Gay / E-Board Member Ace Roundtree / E-Board Member Clint Dunn / E-Board Member

www.Local435.org www.robex.com

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High deductible health plans help manage health care costs, but can leave employees financially vulnerable. Aflac plans can help them better manage higher out-of-pocket costs.

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industry. We even support and administer other constructionrelated associations. We look forward to hosting this event again in early 2018!

The Board of Directors, the management, staff and our President are as strong and experienced as any in the past years. The future looks promising – we have many events planned, and there are plenty of opportunities to help create a direction in this community and New York State to help construction at all levels. As a member of the ROBEX, please do not hesitate to contact us and use our resources. Our expertise in the industry is an invaluable part of doing business in this modern age of rules and regulations.

We look forward to supporting our members, and having our members take an active role in the organization. This will have an immeasurable return on your investment of time and participation. While the goal of increasing the activity of our current members is a necessity, so, too, must we work to grow our membership. Please contact our staff, our board members and other members about membership, our programs or our events. I look forward to my next two years serving as your chair of the finest Builders Exchange in the State.

Kevin Canaan A.A.C. Contracting

90 Ro

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Insurance

EMPLOYERS, GET READY

Paid Family Leave

is Coming to a Jurisdiction Near You

by Cindy Lapoff, Esquire Trevett Cristo, P.C., Rochester Partner, Labor and Employee Benefits

H

istorically in the United States, paid-leave time has been a discretionary benefit that employers could choose to offer, or not. In most states and at the federal level, sick leave and other forms of paid time off were matters of employer policy and/ or collective bargaining, not state and federal law. On the one hand, employers had the flexibility to design a benefit system that was appropriate for their business; on the other, employees who needed time off for serious illness or to care for a family member had little

no legal protection.

In 1993, President Clinton signed the Family Medical Leave Act (FMLA), which provides a maximum of 12 weeks of unpaid job-protected leave annually to an employee who is absent because of his or her own serious health condition or that of a family member. The FMLA applies to employers with 50 or more employees. States are free to enact their own, more expansive standards, and many have done so over the years.

Now in 2017, paid-leave programs of various kinds are popping up in cities and states throughout the country. Some of these programs are targeted

at providing paid sick leave to employees; others address both paid sick leave and family medical leave. As more and more states enact their own paid leave laws, employers with employees in multiple jurisdictions may find themselves subject to a variety of requirements with little rhyme or reason.

This past spring, the White House expressed interest in enacting some form of federal paid family leave, and a rumor is circulating that House Republicans may introduce a bill to exempt employers who provide a certain amount of paid-leave time from the growing patchwork of city and state laws. continued on page 14

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Local Presence, National Strength

We Provide a Full Array of Employee Benefits & Risk Management Services Including: • Commercial • Personal Insurance • Professional Liability • Surety Bonds • Executive Risk Liability Brown & Brown Insurance 45 East Avenue Rochester, NY 14604 www.robex.com 2017 ROBEX_02_Fall.indd 13

Phone: (585) 232-4424 Fax: (585-232-7802) www.bbnyinsurance.com Fall 2017 — ROBEX 13 9/19/17 12:37 PM

Insurance from page 12

This article will review in depth the provisions of the New York Paid Family Leave Law, which is scheduled to take effect January 1, 2018.

New York joins the ranks of states offering mandatory paid family leave

As of January 1, 2018, New York will join California, New Jersey and Rhode Island in implementing a comprehensive paid family leave benefit covering most private-sector employees. This employee-funded, job protected, paid-leave benefit will be mandatory for private sector employees (unless they opt-out [see below]), while public-sector employers will be able to opt their employees in if they choose.

Collectively-bargained employees can only be excluded if they have access

What can leave time be used for?

PFL is NOT a paid sick-leave program. Under the PFLL, leave time can be used only for a family illness or other specified situations including these.

• Providing care for close family members with serious health conditions • Bonding with a newborn during the first 12 months following birth or adoption (even if the child was born or placed for adoption before January 1, 2018) • Meeting birth, adoption, or foster care obligations • Attending to a qualifying exigency (as defined under the federal Family Medical Leave Act) arising from the service of a family member in the Armed Forces of the United States “Family members” are defined as spouse, domestic partner, child, parent, parent-in-law, grandparent, or grandchild. to a benefit that is at least as favorable as the state-mandated paid family leave law (PFLL).

Employers who are accustomed to administering leave under the FMLA will find many of the PFLL provisions familiar. Smaller employers may be more challenged by aspects of this law. Employees will need education regarding this new benefit and how it can be used. Aligning

existing leave laws and benefits with the new PFLL will present challenges to all.

The PFLL will be administered by the Workers Compensation Board, which issued proposed regulations on February 22, 2017. Revisions to the proposed regulations, with an additional 30-day comment period, were issued in May, and the regulations were finalized July 10.

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Contractor Storage Who is eligible?

Full-time employees who work 26 weeks for a covered employer are eligible to file a claim for leave. Part-timers (defined in the proposed regulations as those who work less than 20 hours per week) are eligible after working 175 days for a covered employer within a 52-week period. Claims will be filed with the insurance carrier and must be supported with medical or other relevant proof.

What is the timeline and how much is the benefit?

PFL is to be phased in over four years. In 2018, qualifying employees will be eligible for eight weeks of PFL; this will increase by one week per year and by 2021, the benefit will reach its maximum of 12 weeks.

The benefit amount will start at 50 percent of the employee’s average weekly wage, and will rise each year until it equals 67 percent of the employee’s average weekly wage. Benefits are capped by the statewide average weekly wage published by the state Department of Labor each year.

Who pays for it?

The leave benefit will be paid for with post-tax employee payroll deductions that will fund premiums for an insurance policy purchased by the employer www.robex.com

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Employers may also choose to self-insure.

The initial payroll deduction is .126 percent of an employee’s average weekly wage, and is capped at .126 percent of the statewide average weekly wage, which is calculated each year by the New York State Department of Labor.

In 2017, the state average weekly wage is $1305.92, so the maximum

deduction per week will be $1.64.

Employers may, but are not required to, begin withholding contributions after July 1, 2017 for coverage to begin effective January 1, 2018.

What are employers required to do?

The proposed regulations require employers to continue health insurance coverage (the employee is still liable for his portion of the premium) and to Fall 2017 — ROBEX 15

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restore the employee to the same or a comparable position without loss of benefits that would have accrued while he was on leave.

Employers are also required under the proposed regulations to post notices and provide information to employees about PFL in handbooks or other written policy

documents, including information about how to file a claim.

Almost all employees are required to participate in the program, including part-timers.

Employees who are not expected at the time of hire to work for 26 weeks or 175 days (such as seasonal workers) must be

provided the opportunity to file an opt-out form and be exempt from the deductions.

The employer will likewise be exempt from providing leave to these workers.

The proposed regulations provide that disputes related to eligibility, benefit rates, and duration of paid leave will be resolved via arbitration.

Discrimination and retaliation is prohibited and will be actionable under Section 120 of the Workers Compensation Law.

The proposed regulations provide significant penalties for employers who fail to obtain coverage, including fines based on weekly payroll, direct liability to employees for payment of benefits, and direct liability for the employee’s health costs if the employer fails to continue medical coverage as required.

Next steps

Employers with employees in New York need to be alert to the requirements of the PFLL. Employers who choose to insure this benefit will do so through their statutory disability policy.

Employers may also choose to self-insure the benefit or offer more favorable benefits to their employees. Any policy changes should be reviewed by counsel knowledgeable about the PFLL.

A new informational website, ny.gov/programs/new-yorkstate-paid-family-leave, has been launched to provide guidance about the PFL to employers, employees, medical providers, and unions. The proposed regulations are published on the website, along with a hotline for questions. Employers should anticipate questions from employees as the implementation date approaches, and revise and update leave policies to reflect the new requirements.

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Member Spotlight

Helping Build Rochester

Brick by Brick A

t nearly 60 years old, Manning Squires Hennig is very well known as a concrete and masonry contractor. In fact, the company’s original founders, Duane Squires and Richard Manning, were both skilled masons. But over the years, MSH has grown to encompass much more than that. For almost 50 years, it has also supplied full general construction services,

and for well over a decade, has also provided construction management services.

“We believe that we’re the best of both worlds: organized and polished enough for the CM role while still maintaining our builder roots,” said Gary Squires, company president, in a recent interview. He discussed the company’s evolution, its challenges and rewards, and what it’s like doing business in upstate New York.

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ROBEX: Your father was one of the founding partners.

Gary Squires: Yes. He and Richard Manning were masonry subcontractors who saw opportunity in the K-12 publicschool building boom of the late ’50s and early ’60s. They became general contractors, and their success with those projects led to additional general contract work with private commercial and industrial clients, predominantly www.robex.com

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Left: Irondequoit Library Below: Rochester Institute of Technology – Rosica Hall

Manning Squires Hennig in the Genesee County area. We were fortunate enough to land some masonry work with Kodak in the 1970s and for the next 25 years, Kodak was at least 50 percent of our sales volume.

Richard Hennig came on board in 1962. A year later, Richard Manning died. Then, in 1972, my father bought out Richard Hennig, and I joined the firm at about the same time. In the mid-1980s, I became president.

Today, we are transitioning the leadership to the third generation – my son Matthew – and a new level of excitement and opportunity.

We are positioning the company for its continued

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long-term success.

Matt studied mathematics and economics undergrad and attended the University of Rochester’s Simon School Executive MBA program.

While the industry and economy have experienced significant changes, our mission remains the same: build with quality, act with integrity and treat people well.

What have been the biggest challenges MSH has faced over the years?

The company grew and learned alongside local industry, which led us to develop a strong culture based on safety and quality.

As large industry declined, we were faced with the challenge of replacing our largest and

most loyal customers.

The transition from negotiated work with 30-year repeat customers to the hard bid market was not without its challenges. Our great reputation and fantastic team of tradespeople helped carry us while we learned the commercial, institutional and educational marketplace that we operate in today.

Today, what’s the one single factor having the biggest impact on how you do business?

As a growing company, we’re constantly looking to recruit and retain the most talented people. To that end, we go to great

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Member Spotlight

lengths to make people happy to come to work each day.

We believe that happy employees do the best work.

Our offices and warehouse spaces were recently renovated to provide a fresh, modern home for our employees to serve our customers and community. We employ between 75 and 200 people, depending on our project mix, including 25 office staff.

Our headquarters remains right where it was founded in Batavia, perfectly located between Rochester and Buffalo, where most of our work is focused. We have successfully completed projects outside of those areas, too, for select customers.

How’s business?

Business is good! We are excited about what is happening in Upstate NY. There has been an uptick in capital spending budgets in the markets in which we

participate. We have added significant talent to our team to address this promising opportunity.

Upstate New York is a special place. We have an amazing group of local architects, engineers, subcontractors and tradespeople. Getting to work with such talented and hardworking people is an honor.

We also enjoy touching so many different businesses across the region. Construction projects can be a scary endeavor if you don’t do them every day. It’s fun to help guide an owner through that process from groundbreaking to ribbon cutting.

How do your customers feel about your company?

The say we put them first, and that our quality is second to none. Here are some of the testimonials we’ve received.

“We were so pleased with our experience with Manning Squires Hennig,” said Chris Mannelli, Executive Director of Geva Theatre Center. “We found them to be innovative and collaborative partners in our renovation project. From the planning to the execution of the work there was not one detail missed.”

“I would just like to say how much we appreciate all MSH did to make our Buffalo Office project a success, from the quality of the construction to your team

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leadership,” said Brad Keatley, Buffalo General Manager of O’Connell Electric Co. “Your team created a collaborative project and met every challenge with a positive and creative approach.”

“We look forward to every project we do with MSH,” said Gwen Howard, Foit-Albert Associates. “With them we truly feel that we are working on a team that always puts client needs and design intent before the bottom line. Their attention to detail

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makes for quality projects we are all proud of.”

What will we see from MSH in the future?

We’re experiencing steady growth and expect that to continue.

A new leadership team has been assembled, the offices have been renovated and systems are being updated. The future is bright. Only one thing remains unchanged: our commitment to building with quality and acting with integrity.

Left: Henry Hudson School 28 Above: Geva Theater Center

Manning Squires Hennig Co Phone: 585-343-5365 Email: info@mshco.com

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Money

Renovation Write-Offs

By Roger Upton, CPA, Partner MS Consultants LLC

S

ince 2014, the IRS has made several major tax law changes that actually help both commercial and residential property owners who renovate their properties. Prior to these changes, most renovation costs that builders performed for real estate owners had to be capitalized as “building,” and then depreciated over as long as 39 years. Not a great return on investment (ROI) for the owner.

Thanks to the changes, many renovation costs can now be written off immediately, allowing the building owner to receive an immediate tax savings instead of spreading the costs over 39 years.

How do you, the builder, benefit from these tax law changes? The quicker real estate owners can recover their construction costs, the better their ROI – making your construction costs less expensive to the owner!

This article will discuss these four tax law changes.

1. The IRS redefined what a “repair” is, and the answer is terrific

Many costs that keep a building in ordinary operating

condition can be written off as a repair. The cost of the repair is not relevant, so expensive items can be written off immediately.

For instance, the IRS has ruled that solely replacing a building’s roof membrane is a repair, and should not be capitalized. This deduction can easily exceed $100k – and has the IRS’s approval. Here’s another example: the IRS has ruled that replacing 30 percent or less of a building’s HVAC system with a similar system is a repair. This is a huge benefit to hotel and apartment owners who are constantly replacing PTACs and similar individual unit items.

2. There is money in the dumpster

Starting in 2014, the IRS began allowing real estate owners to write off building items that are demolished due to a capitalized renovation. So, if the construction project requires a demolition of a building’s interior space all the way “to the studs,” all of the old drywall, ceiling tiles, lighting, etc. that is being thrown out is a potential write-off for the building owner.

This deduction is based on an approved IRS method that determines the historic costs of the items being removed and applying this method to the building owner’s depreciation records for the building. Take, for instance, a taxpayer who has owned his auto dealership building for 10 years who now must totally renovate the showroom, including the storefront windows and doors. Since these new renovation costs will have to be capitalized for tax purposes, the owner can now write off the costs of his original showroom floor, lighting, windows, etc. that were removed.

The IRS’s name for this tax deduction is a “partial disposition.”

3. Removal and demolition costs can generate immediate tax savings

This idea goes hand in hand with #2. If taxpayers have taken the “partial disposition” deduction discussed previously, then they are also allowed to write off the removal and demolition costs they incurred.

To perform all the showroom “gutting” discussed

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above, the contractor’s demolition costs were $40,000. Since the owner took a partial disposition for their old showroom costs, he is allowed to write off the current year demo costs (even though the rest of the improvement costs need to be capitalized for up to 39 years).

4. Qualified Improvement Property

Starting in 2016, taxpayers are now allowed to take bonus depreciation on any improvements made to the interior of an existing commercial building, as long as the improvements are not for an expansion, or not structurally related (i.e. support beams, weight bearing walls, etc.)

The interior-only improvements made to the auto showroom qualify for bonus depreciation in the current year. (This amount is 50 percent for 2016 and 2017!) So the dealership’s owners can write off half of the costs of the new tiled floor, ceiling tiles, drywall, etc. that they just paid for!

The new storefront does not qualify, since the doors and windows are not solely for the interior.

To summarize, this showroom project has generated a partial disposition of the original building costs, while writing off 100 percent of the removal costs and 50 percent of the interior improvements. That is a tremendous amount of tax savings.

So how does the construction contractor take advantage of these changes? By making sure that their customers, the real estate owners, are aware that their project can generate terrific tax results, and that they should discuss their project with an income tax expert.

This article is just a general discussion of law changes. You should discuss your specific situation with an income tax expert before taking the tax deduction. www.robex.com

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Healthcare

Telemedicine Changing the Face of Healthcare

T

elemedicine is not some practice of the future – it’s here today. Technology has been changing the way consumers receive information for years; now it’s changing how we receive our healthcare. continued on page 26

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Healthcare from page 24

The danger of delaying necessary healthcare

A survey conducted in early 2017 by telehealth company American Well revealed that 67 percent of consumers have delayed seeking care for a health problem. Here are their reasons.

• It costs too much (23 percent).

• It takes too long to get in to see a doctor or nurse (23 percent).

• They thought the problem would go away on its own (36 percent).

• They are too busy (13 percent).

What’s more, they aren’t delaying treatment of minor issues. Out of the 67 percent who say they delay, nearly one-third were facing a serious health issue.

Leading healthcare companies are recognizing the cost and care advantages of virtual doctor visits and

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remote patient monitoring.

This is not just an add-on form of healthcare; it’s a necessary component moving forward.

Analysts predict that the telehealth market will grow from $2.78 billion in 2016 to $9.35 billion in 2021, a 333 percent increase over five years.

Telemedicine is built around the mission of delivering quality care when and where patients need it most, and providing service in the most timely and cost-effective way.

Here’s a list of the benefits telemedicine can provide consumers: • lower costs for routine care, • immediate access to credible care 24/7/365, • fewer hospital admissions, and • engagement with doctors, even in rural areas.

Video provides a viable solution

The fastest-growing services in telemedicine are connecting consumers with doctors they have never met for a one-time phone, video or email visit for non-emergency conditions such as colds, flus, earaches, and skin rashes. The cost for a telemedicine appointment is around $45 compared to approximately $100 for a traditional doctor’s-office visit, $150 for an urgent-care center visit, and more than $500 for an emergency room visit.

With these rates, consumers are going to rethink what it means to go to the doctor. And, as high-deductible healthcare plans become increasingly common, virtual visits offer consumers a way to save on out-of-pocket expenses.

Another factor that drives consumers to use telemedicine is the length of time it typically takes to have a brick-and-mortar doctor’s visit. In most U.S. cities, the average time from making the appointment to seeing the doctor is around 18 days. What’s more, time spent by most consumers at the appointment itself is more than an hour. Of that hour, 20 minutes is spent with the doctor. The rest of the time is spent in the waiting room, or traveling to and from the appointment.

Compare those times to a typical video visit – five minutes, on average, waiting for the doctor via telemedicine, and eight to 10 minutes, on average, spent with the doctor.

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continued on page 28

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Healthcare from page 26

Growth in Specialty Service Offerings

While most virtual visits involve primary-care services, there is incredible opportunity in specialty care. Here’s an example: DermatologistsOnCall. com, a virtual-care site, provides consumers with 24/7 access to more than 250 online dermatologists. A patient simply creates an online profile, completes a questionnaire, and uploads photos of the affected area. Within minutes, the patient receives a diagnosis and care plan from a board-certified dermatologist (unless additional examination is required).

Care for chronic conditions is another area for telemedicine growth. Today, one in two adults have a chronic condition.

Considering the excessive cost to treat them, it’s easy to see how telemedicine could have a significant impact on solving the challenge. Telemedicine could encourage more visits, allowing doctors to make adjustments to the patient’s quality of life, and save the consumer money and time traveling to the office.

In addition to directto-consumer services, rural hospitals are looking to outsource diagnostic analysis and telepharmacy services to improve access to care and bring

in new revenue. Interactive teleconferencing – between staff in rural emergency rooms and remote specialists at larger urban hospitals – not only improves patient outcomes, it also adds to the bottom line of the rural hospitals. It enables them to treat patients who otherwise would have to be transferred.

Telemedicine is the way of the future and here to stay.

All the medical plans offered through The Builders Exchange provide benefits for telemedicine.

For more information about medical plans or the Builders Exchange Health Insurance Purchasing Consortium, please contact Brian Hart at Brown & Brown Insurance.

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Technology

Bad Weather

by Steven Wightman, CEO, BuildPay

W

inter means there are dozens of important construction trade shows that host a panel of experts talking about the industry’s top problems.

I’ve been to most, multiple times, and never once heard anyone list payment issues as one of the top problems facing our industry. It’s just something we manage when it occurs – like unexpected bad weather.

Globally, the construction industry ranks near the bottom for access to working capital, long account receivables, and inadequate credit. Experts say these problems are only going to get worse.

Maybe the payment we’re already owed just needs to flow faster.

Ironically, there are more and more ways to efficiently zap money instantly between a buyer and seller over the Internet or with the latest smart-phone app. They call these solutions “FinTech” – short for Financial Technology – and it’s a red-hot area of investment for

venture capitalists these days. So why, with all this FinTech, is it still sometimes so hard to get paid for delivered construction? As they say, “It’s complicated.”

Most construction payments today chug along via the “check-in-the-mail express” with no FinTech whatsoever.

Some sophisticated construction owners may utilize electronic funds transfer, like automated clearing house (ACH). While that beats a check via US Postal to the first link in the project payment delivery chain, it falls far short of getting subcontractors and material distributors paid more timely.

Payment distribution issues are complex, with many independent forces tugging for reasonable (or unreasonable) control over payment on each project, at each level. Enter any form of payment problem anywhere in the project hierarchy and the already stressed chain starts failing. Slow project payment on one important job can even ruin many small

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construction companies in the U.S. – and it routinely does. (The construction segment is among the leaders in business defaults in the U.S.) All this payment chaos has to be costing someone … or is it costing everyone?

A good project requires a complex linked chain with up to dozens of success-interdependent stakeholders.

Their collaboration is critical and schedule-sensitive.

Besides project delivery, they share one thing in common: they all want to get paid as fast as possible. If stakeholders lower in the chain are waiting too long to get paid, they can be forced to withdraw earnest project support. That means work placed slows.

It’s easy to see the ultimate importance of payment on end-to-end project collaboration. Rapidly paid projects tend to perform better as long as everyone in the chain is getting paid. Even without extraordinary delays it takes more than 45 days from work placement to money in the bank in the U.S. Strong collaboration also requires advanced information sharing. The ability for multiple parties to share, view, and control information freely is critical.

Being assured of payment, without pitting the payment chain against itself, should be the norm – yet it is not.

The cost of payment chaos goes far beyond the price of credit, receivable factoring, and damaged relationships that hurt collaboration. Pushing expensive payrolls and materials across multiple trades through a steadily progressing project is also linked directly to the all information required for project-delivery supply chain collaboration. When interests become disjointed at the points of payment, advanced technologies and processes for information sharing become an enormous challenge.

BuildPay provides FinTech designed only for construction. Its online platform assures rapid payment is released to all of the project delivery chain so the goals of all participants remain aligned. BuildPay thus enables collaboration to flourish and captures procurement and progress payment data in real time to better forecast “bad weather” ahead.

www.robex.com

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Be the Best Boss

Drowning in

Puffer Fish Leadership?

A

Try a Breath of Fresh Air

s I entered the room this morning, my colleagues were expressing – once again – their frustration, sadness and shock centered around individuals who profess their serving leadership roles within the varying communities in which we reside. The hope of this article is to help you identify individuals who are truly enSpirited serving leaders and to recognize those who are simply “pufferfish.”

Traits of the Pufferfish

There are 120 species of pufferfish worldwide. They come in many assorted colors with many different markings. Pufferfish are full of toxins – just one can kill up to 30 human adults with their toxin, and there is no anti-venom for pufferfish poisoning.

Their eyes move independently from one another. Their spines create even more space around

them. They are among the 10 deadliest foods. The only animal that can ingest a pufferfish without dying is the shark.

So, how might this look within the variety of places we work, live and play?

Signs that you may be a Pufferfish leader (PFL)

The qualities that a PFL exhibits include, but are not limited to, smooth language and attractiveness. They are observant, strategic and fit proportionally within a group, until they don’t. They swim with the school, participate with the team, and are notorious for – at an opportune moment – the ability to demonstrate the following techniques.

• They can most efficiently and effectively throw others under the bus • They can create slanted stories

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discounting those around them • They can exonerate themselves.

You may recognize these folks on your team, or what’s even more important, you may be one yourself.

The emotional impact to the members of any group in which a PFL exists include shock, disbelief and uncertainty, which in turn leads to mistrust, disillusionment and a breakdown of the team as we know it. The vision that the organization was striving toward gets set aside, and all eyes are focused on the one and only selfserving leader/pufferfish.

Impact of the pufferfish to the bottom line

Because they co-create a disengaged environment, team members find it difficult to adhere to the tasks at hand. They are distracted by the disillusionment created by the pufferfish element in www.robex.com

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the organization.

Second, the culture of a healthy, high-functioning team (whose members also may have been highly invested) now has an element of decay. Turnover within the group increases through selfde-selection and firings. The talent walks out the door wounded, taking with them experience, as well as a knowledge base that is priceless.

What can you do with a pufferfish?

Put them in their own tank; the “dark side” says to spear them!

If you put a mirror up to a PFL and give him an audience, he will puff up even more. Much like the male beta fish who sees his own reflection, a pufferfish’s fins expand.

Put two in a tank and someone will be eaten.

The pufferfish, by nature, can expand his size to take up the space his peers would typically reside in. It leaves little room for anyone other than himself.

I would like to believe that the pufferfish doesn’t realize that this, too, is an illusion.

Traits of EnSpirited Serving Leader

EnSpirited Serving Leaders (eSLs) are those individuals who consistently progress through their days in a way that moves the focus of the vision forward with minimal regard to self. I say “minimal regard” because EnSpirited serving leaders do know how to care for their own physical, emotional and spiritual health, and modify their days to manage this. They can tap the talent around them, invest into the team on numerous levels, and appreciate the environment in which they work, play and live.

They understand the bottomline needs of the team and are focused on a mindful ROI. www.robex.com

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Where you will find eSLs

eSLs will be engaged in the co-creation of value alignments and the vision for the group they serve; all while creating the space and supplying (to the best of their ability) all of that which is needed to carry out the mission.

eSLs will be seen empowering, assisting and leading the marches needed move the group forward. eSLs move with the focus of co-creating high-function teams, families and groupings in most areas of their lives.

They can see themselves within

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the wheel of the group, appreciate their position and carry out the responsibilities of that position with the highest regard for the participants around them. They tend to be keenly aware that the value is the group, not themselves, and will do all they can to develop, preserve and protect the group they have been called to lead.

eSLs have the capacity to guide the group through the strategic plan, no matter how elaborate or simple, with an understanding that progress is made up of steps. eSls have the capacity to sense and respond to the needs within the arenas they occupy, and have an ability to balance intention with altruism. They can find freedom in accountability and teach others about this freedom. Being human,

they will fumble, and know that within their humanity, there is grace; grace for themselves and others.

eSLs most likely possess a form of humility that appreciates the feeling of failure and can then view the experience as a challenge or an opportunity. They are comfortable with their own discomfort and accept that this is a sign of growing.

They can do this for themselves because they are passionate about developing and growing those around them. This becomes so infectious that it will take root in the culture and climate of any organization.

No matter what the external threats to the group, this enSpirited Serving Leader will find ways to traverse the rough waters and the storms, and do the right things! They

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will rid the organization/group of the unmanageable pufferfishes. You are not going to find too manypufferfish in their “school.” If you notice, pufferfish tend to swim together.

So how about it? Do you recognize yourself or others within this writing? If so, what can you do?

Well, you can simply toss this article out … or maybe you don’t. You have the option to share this article, learn from this information and begin to examine your own sets of behaviors.

If you believe that the PFL is the right way to lead, please know that you are co-creating a group destined for implosion. If you are or wish to be an enSpirited Serving Leader, continue forward. This is a big ocean, who do you want to swim with?

For more information, email gwen@enspirit7.net.

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SAFETY Zone

On Track with

afety

by John Miller, O’Connell Electric Company

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O’Connell Electric’s

I

Annual Safety Picnic

t started off as an idea generated during one of the company’s corporate safety meetings four years ago and then evolved into a tradeshowstyle barbecue/picnic. It is designed to bring all O’Connell Electric employees together for a day solely dedicated to being a safer company. Now in its fifth year, the annual event is a

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resounding success.

We typically organize two separate picnics and host them regionally (one in Rochester and one in Syracuse) to accommodate all O’Connell employees. This year, however, we decided to bring the entire company under one roof on July 27 at the Pinnacle Athletic Campus, just down the road

from our corporate headquarters in Victor. The format of the new location was very well received.

The picnic took seven months of planning and involved a volunteer committee of more than 25 employees. In attendance at the event were more than 600 employees from all five of our office locations.

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SAFETY Zone

we estimate that a total of nearly 800 people were there.

More than 35 vendors were present to display new tooling and equipment, safety supplies, and new technology. Several vendors hosted small safety and training demonstrations including Vertex’s CadWeld Exothermic Welding, Klein Tools’ High Visibility tool line, ADMAR’s Boom & Scissor Lift Refresher; and Dival Safety’s Fall Protection, Tick Awareness,

and Heat Stress & Prevention demos. Hilti demonstrated its Cordless (dust removal) Measuring & Detection, Firestop, and Diamond

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Drilling tools; Dewalt offered OSHA Silica Training; and Blue Collar Workwear brought its mobile shoe truck so that employees could purchase new boots right at the picnic.

The Field Safety Committee presented safety awards to two electricians that went above and beyond to exemplify O’Connell’s core value of safety, and presented Mark Valerio, our Safety Manager for the Power Group, with an award for safety

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leadership.

In addition to the vendor demos and the open tradeshow were a Safety Moment and opening remarks from Tom Parkes, COO, and a presentation of safety statistics and updates from Bill Sandvik, Corporate Safety Manager. Mick Ford from ADTS delivered the keynote presentation on Distracted Driving and O’Connell employee speakers

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provided first-hand accounts of injuries they suffered during work accidents due to unsafe conditions. Closing remarks were delivered by Victor Salerno, CEO.

Activities included a Stretch & Flex session developed by Lattimore Physical Therapy, a participating vendor at the picnic, in partnership with O’Connell Electric. For the second year in a row, its

therapists talked everyone through the stretching session.

Senior Management dedicates an unbelievable amount of time, money, and resources to hosting these picnics, but it’s been well worth our efforts. Employees are more engaged with our safety programs, collaborate more on job sites, and even motivate our customers and sub-contractors to work more safely.

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Project Profile

A

s part of a progressive corporate strategy, American Packaging Corporation is positioning itself for growth by increasing its manufacturing capacity with a new 215,000-square-foot flexographic packaging facility in Chili, New York. The company will invest nearly $170 million in this new facility, which is expected to create more than 260 full-time jobs in Rochester over the next five years. This design-build project will help American Packaging align more closely with prevailing trends in flexible packaging.

According to American Packaging executives, packaging in North America is currently 80 percent rigid and 20 percent flexible. In the rest of the world, the percentages are converse, with 80 percent flexible and 20 percent rigid.

“As the tide of flexible packaging rises and catches up with the rest of the world, the environmental impact will be immense,” said Brendan O’Hara, American Packaging Facility Manager. Flexible packaging is becoming more and more sustainable – it’s 30- to 50-percent more environmental friendly based on weight and waste alone. With the benefit of weighing less, a greater quantity can be transported at one time, which helps to reduce fuel costs, CO2 emissions and carbon footprint.

American Packaging President & CEO Peter Schottland spoke warmly about the excitement of expanding operations in Rochester, where his family and their corporate offices are located. Although original plans were to construct this new facility on land near its Iowa plant, American

Packaging opted to build in Rochester for a number of reasons, including incentives from Empire State Development, Upstate Revitalization, and the Finger Lakes Forward strategic plan. The Chili site was one of only two in New York with available acreage and rail-siding capabilities; both of which are must-haves for the new manufacturing plant.

The design-build team

The Pike Company, in association with SWBR Architects, EC4B Engineering and Marathon Engineering, was honored to lead the development of the new American Packaging Corporation Flexographic Center. Pike and its team of architects and engineers were given the assignment to design, construct and deliver this facility in 12 months.

American Packaging Corporation

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Timeline of Project Milestones:

Contract Award............................................................. 11/11/2016 Construction Start.........................................................03/22/2017 Structural Steel Released for Fabrication ....................04/18/2017 Design Documents Complete .....................................04/28/2017 Structural Steel and Metal Building Delivery................05/15/2017 Concrete Building Foundations Completion.................06/03/2017 Building Steel Erection Complete ................................07/21/2017 Building Roof Weathertight...........................................07/28/2017 Building Siding Complete ............................................ 08/11/2017 Laminator and Press Equipment Delivery date ...........08/24/2017 Concrete Slab-on-grade Complete .............................09/01/2017 Building Scheduled Completion...................................10/27/2017

Pike was excited to begin the designbuild process.

The design-build process gave the team the ability to combine the design needs of the project with the input of the key subcontractors, their experience in constructability and construction speed during the design phase. This coordination maximized efforts to streamline cost and the schedule.

SWBR took American Packaging’s original plan and maximized the use of space to generate greater efficiencies. They enhanced the front elevation of the building to provide architectural articulation to a mass front building, creating a more profound entrance. Decisions were made and communicated promptly to keep the project moving forward.

The design process was smooth and organized with everyone knowing exactly what they had to do. The design-build team charted a course outlining Lean

design principals to make certain our accelerated schedule would be successful.

Time efficiencies

The structural steel was purchased and released prior to design completion. The structural steel fabricator performed all steel design and detailing that was required to support 17 large rooftop air handling units and 250 lbs. /per square foot mezzanine floor loading.

During construction, the lean principle of working in “small batches” (work areas) was implemented to ensure a quick “handoff” to trades. This allowed all trades including concrete floor finishers, mechanicals, electrical and painters to work side-by-side.

Additionally, many items were prefabricated off-site, including concrete reinforcement, structural steel, steel stairs, fire protection piping and HVAC ductwork. It resulted in a shortened duration for installation of

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Project Profile these products, thus accelerating the construction schedule.

This project has moved full steam ahead thanks to the team working together over many long hours.

Safety considerations

Along with a steady focus on design, deliverables and schedule, each workday and project meeting begins with a safety discussion. With a total of 53,220 man hours worked to date, no accidents or incidents have been reported. Teams plan for safety on-site and manage it every day.

When constructing a facility that will house state-of-the-art laminators, presses, processing equipment, ink blending areas and a quality-assurance laboratory, safety is an ongoing consideration. Varieties of solvents are used in the printing process. It requires the solvents to be collected and routed to a regenerative thermal oxidizer to burn so they become inert. EC4B Engineers and Pike’s HVAC, electrical, and fire protection subcontractors worked to equip the plant with specialized solvent piping specific to the printing and laminating process. Solvents and inks by nature can be highly flammable liquids so the team installed a foaming fire protection system into the building in the NEC Class 1 Div. 1 rooms. In addition, these classified rooms are being built with an explosion relief wall system, an exterior wall panel and roofing system that is designed to release and detach at a certain pressure if there is an emergency.

Pike held weekly on-screen design meetings with project team members from all over, including Iowa, Wisconsin, and Rochester.

Senior management of all firms entrusted the project team to make immediate decisions. Choices and challenging circumstances were continued on page 46

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Meet

Lisa

Veterinary assistant turned carpenter apprentice Originally from Pennsylvania Intensive on-site training since February 2017 Donates time to supporting local animal shelters Supported construction of the new Rochester train station Enjoys spending time with her two cats and Brazilian Rainbow Boa

Lisa is a proud member of Local 276 and happy to work for a union contractor that is a member of the Construction Industry Association of Rochester.

When you hire a union contractor, you’re working with the industry’s most knowledgeable and highly skilled workforce that will deliver the highest level of quality workmanship, while ensuring your project will be completed on time and on budget. It all adds up to a contractor partner that is committed to providing the best return on your project investment.

See what hiring a union contractor can do for your next project.

Visit ciar.biz.

Lisa Holland Accurate Acoustical Member Local 276

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Project Profile from page 44

presented, debated and resolved in real time to move the project design along and keep on schedule.

Communication and coordination

To manage critical communications collaboratively the project team used cloud-based collaboration platforms for design and construction documents.

Revit and 3D Modeling was used to coordinate all mechanical, electrical, and plumbing systems in the building, and to communicate the various specifications and expectations with team members.

Civil engineering partner Marathon Engineering was invaluable when it came to site plan design, and working with the town and

appropriate agencies for necessary approvals. They coordinated parking lot and truck access for construction, as well as shipping and receiving, lighting, landscaping, sewers and utilities. They also coordinated with architect and construction personnel to make sure the design worked for the end user and fit into the budget.

“Our expedited timeframe was accomplished with a lot of hard work and coordination from the people at the Town of Chili, who were committed to helping out,” said Matt Tomlinson, Civil Engineering Project Manager for Marathon Engineering.

“We didn’t have a lot of time to go back and forth with approvals. Our schedule was a challenge for sure and given the size of the project, a lot of work had to get done in short amount

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of time.”

The sheer size of the facility caused the county to flag the current sewer system as potentially insufficient. Marathon was able to show that, based on the actual activity planned on-site and documented through the usage in American Packaging’s Iowa facility, this plant would not have the implications the county anticipated, keeping our timeline on track.

Each subcontractor was aware of the criticality of the schedule, is committed, and is all performing exceptionally well. American Packaging Corporation, Pike, SWBR, EC4B, Marathon Engineering and all subcontractors were 110-percent committed to safety, design, quality, construction schedule and the

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success of the project. This project is truly a team effort and is a pleasure for everyone to work on.

“You have to see it to believe it,” said Jeff LaDue, Senior Project Manager at SWBR. “The trust throughout this entire team is amazing. To witness how the subcontractors are honoring their commitment and schedule in real collaboration to deliver on their word is truly impressive. Just watching the speed of construction, how everyone believes in the process of getting to the finish line, and witnessing how we are getting there together, is truly inspiring.” LaDue credits Pike with having the right people and the right process in place to deliver on such an accelerated design-build schedule.

When design-build is done

correctly owners end up feeling that they got exactly what they were looking for, but with much more innovative delivery methods and value engineering opportunities. Here are some examples.

• Windows were added in the production area to add natural light and reduce electrical energy consumption.

• Large air-handling units were used as opposed to a greater quantity of smaller units, which reduced initial and operating costs.

• The north elevation of the building was designed without cross bracing to allow for future expansion with the addition of laminators and presses.

With the project nearing completion, the entire project

team feels that design-build was the absolute best decision for this facility. In spite of a significant amount of rainfall in both spring and summer, the unusual weather pattern did not slow progress.

To accommodate the weather, additional man-hours were worked, additional earthwork equipment was brought in, and construction letdown areas were increased.

“The entire project team has been exceptional; it’s been an excellent project outside the challenges of rain. It’s been smooth running and I trust it will continue through the Certificate of Occupancy,” said Lee Foerster, Senior Plant Engineer for American Packaging Corporation.

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Money

De

pr

ecia

by Christopher L. Welker, CPA Partner Welker, Mojsej & Delvecchio

t io

n

I

t is most likely that you have heard the term “depreciation” over the years, but perhaps still aren’t sure how it works or how it affects your business. You probably rely on your accountant to recommend the best course of action, as many business owners do.

Deprecation is defined as “A reduction in the value of an asset with the passage of time, due in particular to wear and tear.” Most times, when a business makes a large purchase, the item becomes an asset of the business. The business then depreciates (writes off) the initial cost of this asset over the course of several years.

Traditionally, when depreciation is taken, the accounting or “book value” of the asset is eventually reduced to zero when the asset is considered fully depreciated. This is not to say the asset has no value or worth; it simply means the cost has been completely written off on the business’ books.

and Your Business There are many different methods to record depreciation for both tax and financial reporting.

The most common methods are straight-line and declining balance. For tax purposes, there are enhanced depreciation deductions to allow a business to accelerate the depreciation it can take on an asset in the year the asset is purchased. The most common enhanced depreciation deductions are called “Section 179” and

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“Bonus” depreciation.

I want to address the tax benefits of depreciation in effect for 2017. Back on December 18, 2015, the PATH (Protecting Americans from Tax Hikes) Act was signed into law. With the signing of this bill, the Section 179 deduction limit was set to $500,000, where it will be permanent until further notice. What this means is that a business can purchase $500,000 or continued on page 50 www.robex.com

9/19/17 12:54 PM

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Money from page 48

more in business assets and claim depreciation expense for $500,000 in the year the assets are purchased.

This provision in the tax code was created to help small businesses and, because of this, the opportunity to claim Section 179 is capped with an annual limitation.

If the business purchases more than $2 million of equipment in a year, the Section 179 limit is reduced dollar-for-dollar by the amount exceeding $2 million, with the total deduction being eliminated at the $2.5 million mark.

A company cannot take Section 179 if it does not have taxable income. If your company is operating at a tax loss you cannot claim Section 179 depreciation and thus create a larger loss for the business.

In addition to the Section 179 deduction, a business also has the opportunity to utilize the Bonus depreciation method. It currently allows for a deduction of 50 percent of the cost of the equipment, with no dollar limitation as with the Section 179 deduction. The one stipulation to using the Bonus depreciation method is that the equipment’s original use must be with the business

claiming the deduction; oftentimes this means the equipment must be new in order to claim the deduction.

One of the great benefits of bonus depreciation is that it can still be claimed even if the business is operating at a loss for the year.

Now that you know the methods, you may be asking, “What types of purchases qualify for these deductions?”

First, it should be noted that in order to claim a deduction for depreciation, whether it be Section 179, Bonus, or a combination of both, you must have completed the purchase of the equipment by December 31st. This does not mean you have to have paid for the equipment by then. If the business financed the equipment, it still qualifies as a purchase and is eligible for these depreciation deductions. The purchased equipment must also be placed in service, or put into use, as of December 31st.

As for what types of purchases qualify, here is a short list. Any of these items must be used in the trade or business claiming the depreciation deduction.

• Computers and peripheral equipment

Dave Hood 630-675-1785 dhood@stub-ease.com

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• Equipment • Leasehold Improvements (Remolding or renovating costs to business offices/ property) • Machinery • Office Equipment • Office Furniture • Property attached to your building that is not a structural component of the building • Signs • Software • Vehicles As I stated earlier, there are significant benefits when it comes to claiming accelerated depreciation on your business taxes but, as with any tax benefit, it is important to establish a strategy before the end of the tax year to maximize the benefit(s) that may be available to you. The Section 179 and Bonus depreciation are great tools to use for reducing the taxable income of a business in the year the equipment is purchased, but consideration must be given to other factors such as the current year projected profit, suspected profit in future years, cash available, or creditworthiness for financing, age and condition of current equipment in use, etc.

Ultimately, these provisions were created to incentivize small business to invest in the equipment needed to successfully grow and expand. Hopefully, the information provided here will enable you to grow and expand your business. www.robex.com

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© Gene Avallone 2017

All photos © 2017 Tim Wilkes Photography

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Legal

Builder’s

Risk Insurance

by Guy A. Talia, Esquire Reeve Brown Attorneys

I

n the allocation of property damage risk in construction projects, builder’s risk insurance, also called “course of construction” insurance, is an area where issues often arise. Who and what does it cover?

Should coverage extensions be purchased? What is the duration of the coverage?

Here is a brief overview of answers to those questions, as well as tips to avoid problems with this firstparty coverage.

Builder’s Risk insurance insures against the risks of property damage during the course of a construction project. Although there are standard forms for such coverage, it is commonly written on custom manuscript forms and thus, coverage terms may vary greatly.

Who is responsible for procuring the builder’s risk policy?

The first issue that may arise is who is responsible for procuring such coverage. Standard contract forms typically place responsibility with the owner or general contractor. These provisions may change, however, so it is important to review the contract documents to determine where the responsibility lies.

All risk versus named perils

Builder’s Risk policies are usually “all risk” policies, which means that they insure against all risks of direct physical loss or damage to insured property, except those risks that are specifically excluded. Named peril coverage, as one may expect, insures against direct physical loss or damage to covered property that is caused by one of the specifically named perils. Under an all risk policy, once a fortuitous loss to covered property is shown, the burden is on the insurer to show that the loss is excluded, whereas the insured bears the burden under a named peril policy to show that a fortuitous loss to covered property was caused by a named peril.

Common exclusion for defective or faulty workmanship

Whether a loss results from defective or faulty workmanship and is this excluded from coverage is the subject of much litigation. For purposes of this article, it is important to know whether the faulty workmanship exclusion contains an exception for ensuing loss. If there is an ensuing loss provision, and the faulty work causes damage to other property, the resulting damage to other

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What and who is covered?

Builder’s risk insurance is usually project specific, meaning that it covers only one project. The description of

the project should be broad enough to cover all areas related to the construction. It typically covers the structure under construction, materials, fixtures, and the equipment to be used in the construction or renovation of a structure or building. Coverage is typically extended to all owners, all contractors and subcontractors of every tier. Whether an entity is entitled to coverage, however, is usually governed by whether they have an “insurable interest” in the damaged property. Whether one has an insurable interest in the subject property is often disputed, but it generally means that they have a financial interest in the property.

If a contractor is deemed not to have insurable interest in the subject property and it bears responsibility for the loss, it may face a subrogation claim for the loss, even though it was “insured” under the policy as a project participant.

property should be covered. In the absence of an ensuing loss provision, however, both the cost of repairing the faulty workmanship and the resulting damage to other property would not be covered.

Coverage extensions

Depending on the nature of the project and what the particular needs are, it may be worthwhile to purchase coverage extensions. Descriptions of some of the more common coverage extensions are discussed here. Coverage extensions may be subject to sublimits, and may be excess to other coverage on the property, if any.

completed its work on the project, care should be taken to prevent termination of coverage before the parties intend it to be terminated.

Guy has over 16 years of litigation experience, primarily in the areas of insurance coverage, appeals and employment law. Please understand that this column provides general information only, and should not be construed as legal advice.

Transit extension: The transit extension will cover property materials from the point of shipment to unloading at the project.

Debris removal: This extension will cover the cost of removing debris resulting from a covered loss.

Soft Costs – Delay due to a covered loss: When a covered loss results in a delay, soft costs coverage will provide coverage for additional expenses that are incurred as a result. These are usually specifically defined in the policy and may include interest, professional fees and advertising costs.

Duration of the coverage

Because they are project specific, builder’s risk policies are temporary in nature. They usually begin at a specified date or upon their issuance. They typically end when the project is completed, which could occur on different dates or upon the occurrence of different events. For example, the end date may be when the owner accepts the structure as complete, when the owner occupies it or rents it to others, or when it is put to its intended use. If the project is completed in parts or the owner occupies a structure before the contractor has

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Digital Networking

w

The Online

ROBEX Planroom What you need to know

T

he online plan room is a secure website where plans and specifications are housed for projects bidding across New York State and northern Pennsylvania. Our goal is to provide you with continuous up-to-date information on projects out to bid. The information is gathered from local, state, and federal agencies, architects, engineers, private owners, general contractors and construction managers.

Here are some points you may not know about the planroom and our services.

post private jobs. Once the plans are uploaded, members can invite specific contractors to view the plans.

Send us the plans and request to have them put in your private planroom. Please note that projects that are already in the public side of the planroom will not be placed in the private planroom.

Private planroom

Upgraded ROBEX members can create a private planroom.

This is a secure area where you can

Search capabilities

The online planroom has powerful search features. You can search for specific jobs

Posting plans is free

There is no cost to members and nonmembers to have jobs posted in the planroom. Simply email the plans to projects@robex. com and the job will be uploaded within 24 hours.

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using keywords, companies you do business with and even competitors. Note: when searching for a specific project using the project name search field, be as specific as possible. For instance, if you are looking for a project for James Monroe High School, enter “James Monroe.” Entering just “James” will pull up jobs in Jamestown New York.

Visit the ROBEX physical planroom

We welcome members and nonmembers to visit the planroom located in our office.

You have access to physical plans (if available) and the use of computers. You can obtain support from planroom staff or just stop in continued on page 56 www.robex.com

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Digital from page 54

to say hi and get a piece of candy. We are here Monday through Thursday from 8 a.m. to 4 p.m., and Friday from 7:30 a.m. to 4:30 p.m. Pets are welcome, too!

Printing of blueprints

Need a set of hard copy prints? No problem, we can print them for you. We will print anything from a full set to a specific set of pages. We will print projects that are not in our planroom, too. They are sold per page and the cost depends on the size and quantity. Email us at printorders@robex.com and we will have your prints ready for pickup within an hour.

Blueprint scanning

We can scan any blueprints, even projects not hosted in our planroom, to an electronic file. Simply visit us with the plans and we will scan them in for you.

Bidding results

After a job bids, our planroom coordinators will post the bidding results for everyone to see. We do our best to post results on all jobs, some take longer than others.

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Past job plans

If we are in possession of physical plans, we will store these plans for 90 days. If members have a need for these documents, we can give them to you at no charge.

A skillful use of past plans is to train your staff on the project or bidding process.

Individual logins

When your company becomes a member of ROBEX, the company can have logins for as many employees as they want. We HIGHLY encourage individual logins. To get the process started, provide our planroom manager with first name, last name and email address. We will take care of the rest.

We also offer training on how to best use the planroom. This hands-on training is to be done in front of a computer. Training is provided quarterly at our office at no charge. Dates for upcoming trainings are 11/28/17, 2/27/18, and 5/22/2018.

If you have any other questions about the online planroom, please contact Corrine Taylor at Corrine@ robex.com, or call 585-586-5460.

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We look forward to working with the Builder’s Exchange and it’s members in 2017!

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Government Relations Assemblymember

Harry B. Bronson Assembly District 138

An Update from Assemblymember

Harry B. Bronson

W

ith the needs of our families in mind, this year’s legislative session included legislation and budget priorities that will provide the necessary services and funding to advance the needs of our families.

Budget funding, which was a priority of our Assembly majority upstate caucus, also provides much needed investment into infrastructure that will provide jobs immediately for our trades.

Investing in Infrastructure

Included in this year’s budget is $2.5 billion for water infrastructure to help ensure clean drinking water by repairing and replacing old pipes and water mains, as well as preventive measures, such as source water land acquisition, to keep water from becoming polluted. The budget also provides $300 million for the Environmental Protection Fund, with dedicated funding for environmental justice programs aimed at helping low-income communities impacted by pollution.

We should never have to worry that the water coming out of our

faucets and drinking fountains is anything but safe for our children.

Contaminated, dirty water can have devastating long-term effects, causing illnesses and hurting development, and we need to prevent that. We have to be proactive on something this important.

Clean water is absolutely essential to our health and safety.

New York is full of communities that have outdated water infrastructures. It’s important that we make robust investments in replacing old pipes and water mains.

Additionally, the state budget releases the long-awaited and hard-fought $2.5 billion to combat homelessness across the state and fund programs for the creation and preservation of affordable housing.

A secure, affordable place to live is vital to every family’s health and stability – particularly for children.

The budget provides $2.5 billion for affordable housing and anti-homelessness initiatives, much of which was appropriated last year but could only be released once a memorandum of understanding (MOU) was agreed to. The budget releases this money and provides additional funding for many projects in

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the Rochester area to help with people with disabilities, our seniors and families needing temporary assistance.

Protecting taxpayers with debarment bill

Under current statute, contractors who have been debarred on the federal level and found violating the rights of their employees, under the DavisBacon Act and other federal laws, are still allowed to bid for and obtain public works contracts in New York State. I authored and passed legislation that would use the federal debarment list as an indicator, to hold these dishonest contractors accountable and ensure they’re unable to participate in public works projects in the state.

This measure will level the playing field among those contractors who play by the rules and will not allow unscrupulous contractors to get an advantage by not following the rules. The legislation passed both Assembly and Senate and will be sent to the Governor, with hopefully, a favorable passage into law. continued on page 60 www.robex.com

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Government from page 58

It is my belief that we should not be giving our taxpayer dollars to contractors who have violated the prevailing wage payment requirements. Workers deserve prevailing wage and we ought to insist that only good contractors are provided with state contracts.

Being prudent and economical on how we’re spending taxpayer money is the right thing to do. If a contractor has been debarred at the federal level, New Yorkers should not foot the bill by rewarding their crooked behavior with state contracts.

Public Works Definition and Prevailing Wage Requirement

This legislative session, the Assembly passed a bill I authored that defines public work. The bill

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did not make it through the Senate, but we are hoping to move it to full passage and to the Governor in next session. I would ask you to take a look at the legislation and if you have comments or suggested changes please do not hesitate to contact me (A5498).

The Labor Law does not include a clear definition of “public work” which triggers the prevailing wage requirement and imposes a level of transparency and accountability in construction contracts. Over the years, the DOL interpretations and court cases, in cases challenging the public works status of projects, have chipped away at covered projects resulting in narrowing a worker’s basic constitutional right to receive the prevailing wage when working on governmentfunded projects. Workers on state-financed projects have been getting shortchanged because of ambiguity in current law.

We as a State have moved more and more toward reliance on “private-public” partnerships in the economic development arena.

We’re expending taxpayer dollars, but workers on those projects are not getting paid prevailing wage.

To attract private investments, we are leveraging State funds – taxpayer funds. These economic development initiatives are likely familiar to you: Regional Economic Development Councils, Solar City’s Buffalo Project, Upstate Revitalization, SUNY 2020, SUNY Poly and the many industrial development agencies. My legislation ensures workers earn a fair prevailing wage on any project where taxpayer dollars are spent, or a tax-break is given.

Economic development is important, but also must ensure good wages so that residents

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have more disposable income to spend in our communities.

This measure will also help to keep local contractors and local workers on these public works projects. Local jobs for local people so our taxpayer dollars are spent on main street to support our local businesses and economy. AndIn addition, so ensuring workers are receiving decent health and pension benefits so that there is less of a strain on our public safety nets.

This legislation is about supporting policies that promote workforce training and diversification and making sure the State does not use economic development as a “race to the bottom” by allowing contractors to compete for work by undercutting wages.

As contractors, your input on how to make this legislative measure fair and beneficial for both worker and contractor is very much welcome. My goal is to make this legislation a reality, based on the policy goals stated above; consistent with the spirit of our State Constitution.

Investing in Future Jobs

This past year, as chair of the legislative Commission on Skills and Development and Career Education and as a member of the Assembly’s labor committee, I’ve been working on several measures to help match workers with good jobs, provide training programs and ensure fair wages. The legislation I authored to establish three wage data clearinghouses and to analyze and evaluate the labor market in New York State has passed the Assembly (A.2164-A).

Every year, New York spends enormous amounts of money to educate and train future workers www.robex.com

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for the job market without knowing which of these state-funded programs actually work. Assessing wage data and workforce programs will ensure that taxpayers’ money is spent wisely, while helping pinpoint how to strengthen the workforce.

The bill designates the state Department of Labor (DOL) to partner with academic institutions across the state to analyze labor data and report on the effectiveness of workforce preparation programs. The clearinghouses would issue reports on wage data and how beneficial public education, public colleges, workforce development and preparation programs and adult literacy programs truly are in preparing future workers for particular career paths and a living wage.

Investing in American Workers

To continue with strengthening New York’s investments, I was proud to co-sponsor the New York Buy American Act to support both the New York and national iron and steel manufacturing industries. The measure builds upon current law to ensure American-made steel and iron are utilized in state road and bridge projects. This will help to ensure taxpayer money is being used to boost the economy and create good jobs.

Manufacturing has long been emblematic of what we do best – create and innovate. Times change, but we will always need to build and repair roads and bridges. So, when it comes to the companies we do business with, it’s only right that we partner with the American manufacturers of iron and steel, www.robex.com

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who will invest in jobs and help grow our economy.

The New York Buy American Act requires that contracts over $1 million awarded by the Department of Transportation (DOT), the Office of General Services (OGS), the Dormitory Authority (DASNY), the Metropolitan Transportation Authority (MTA), the Bridge Authority, the Thruway Authority and the State University of New York (SUNY) Construction Fund, for the construction or reconstruction of surface roads and bridges, utilize American steel and iron, unless certain conditions justify an exemption. By supporting state and national manufacturers, the bill ensures that taxpayerfunded projects reinvest in our economy to create more decentpaying jobs.

We need to do more to create good jobs that people can count on. It used to be that a manufacturing job meant you and your family had a ticket to the American Dream. The New York Buy American Act helps reinvigorate our economy so iron and steel manufacturers can hire more workers and help make that a reality again.

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As you can see from my priorities in both the legislature and in my legislation, I want to develop policies that will create opportunities for our families to succeed by making investments that will create a chance for them to be part of the middle class. This can only be done if businesses can earn a good profit and workers are paid well with benefits. I see it as a partnership.

I will continue to fight for and invest in you, our families and our great state.

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