Construction Outlook August 2017

AUGUST | 2017

A PUBLICATION OF THE UTILITY CONTRACTORS’ ASSOCIATION OF NEW ENGLAND, INC.

UCANE Interview:

Senator Jason Lewis (D-Winchester)

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W H AT E V E R Y O U N E E D , W H E N E V E R Y O U N E E D I T, N O M AT T E R W H AT.

Years of Excellence 1954-2017

OFFICERS President PAUL SCENNA

Albanese D&S, Inc.

President-Elect RICHARD PACELLA, JR. R. M. Pacella, Inc.

Treasurer MARCELLA ALBANESE

Albanese Brothers, Inc.

Secretary RYAN McCOURT

McCourt Construction Company

BOARD OF DIRECTORS VINCENT BARLETTA

Barletta Heavy Division

JOHN BERKSZA

Eastern Insurance Group, LLC

NICK BIELLO

J. D’Amico, Inc.

TONY BORRELLI

Celco Construction Corp.

GERRY CARNEY, JR.

C. N. Wood Company, Inc.

KEVIN COLE

J. F. White Contracting Co.

BRIAN COONEY

C. C. Construction, Inc.

GREG FEENEY

Feeney Bros. Excavation, LLC

JERRY GAGLIARDUCCI

Gagliarducci Construction, Inc.

MARCO GIOIOSO

P. Gioioso & Sons, Inc.

A. J. LORUSSO

Lorusso Heavy Equipment, LLC

AL MORTEO

FED. CORP.

JOHN OUR

Robert B. Our Co., Inc.

JOSEPH PACELLA

RJV Construction Corp.

BRIAN RAWSTON

Jay Cashman, Inc.

CHRIS VALENTI

GVC Construction, Inc.

KEN VOGEL

WES Construction Corp.

DAVID ZOPPO

R. Zoppo Corp.

ANNE KLAYMAN

Executive Director

AUGUST, 2017 3 President’s Message:

IN THIS ISSUE

We All Can Do Our Part

5 Legislative Update:

• Governor Signs FY18 Budget; Sends Health Insurance Assessment Language Back to Legislature • Revenue Committee Holds Public Hearing on AirBNB Water Infrastructure Measure • Governor Baker Signs Massachusetts Pregnant Workers Fairness Act • Representative Jeff Sanchez to Head House Ways and Means Committee • Friedman Elected to Massachusetts Senate; Senate President Rejiggers Leadership Team • With Chief of Staff Retiring, Governor Looks Within for a Replacement

17 UCANE Interview:

Senator Jason Lewis (D-Winchester)

23 Under the Hard Hat with UCANE’s Officers & Board Members: Q&A with UCANE Secretary Ryan McCourt (McCourt Construction Company)

27 Save the Date: UCANE’s 63rd Annual Banquet 29 Legal Corner: Post-Bid Change Orders

31 House Committee Advances Drinking Water System Improvement Act of 2017 32 UCANE’s 38th Annual Golf Classic 47 Champions Circle: Joe Andruzzi Foundation 49 OSHA Launches Application to Electronically Submit Injury and Illness on August 1 51 Technology in Construction:

New Survey Shows Alarming Trends in Cybersecurity for Businesses

53 EPA Delays MS4 Stormwater Permit for One Year 55 Software Solutions:

Specialized Construction Scheduling Software Delivers Visibility, Communication, and Collaboration Advantages

57 The McCourt Foundation’s 2017 Tour De South Shore 59 UCANE’s Safety Corner:

• OSHA’s Peter Barletta Meets with UCANE Safety Committee to Discuss New Silica Rules • Keene State College in Partnership with OSHA Region 1

62 OSHA’s Crystalline Silica Rule: Construction 67 Financial Management: • • • • •

College Costs Really are Increasing Again Start FAFSA Planning Earlier Asset Allocation in 529 Plans Outlining the Trump Tax Plan How Small Business Retirement Plans Compare

Editor: Anne Klayman, Associate Editor: Suzanne Savage, Magazine Designer: Sherri Klayman Construction Outlook Chairman: Paul Scenna Editorial Board: Paul Scenna, Richard Pacella, Jr., Marcella Albanese, and Ryan McCourt CONSTRUCTION OUTLOOK published monthly by the Utility Contractors’ Association of New England, Inc., 300 Congress Street, Suite 101, Quincy, MA 02169; Tel: 617.471.9955; Fax: 617.471.8939; Email: aklayman@ucane.com; Website: www.ucane.com. Statements of fact and opinion are those of the authors alone and not necessarily those of UCANE and the Construction Outlook editorial board and staff. Subscriptions are included in dues payments for UCANE members. Presorted Standard postage paid at Brockton, MA. POSTMASTER, please send form #3579 to Construction Outlook, Crown Colony Office Park, 300 Congress Street, Suite 101, Quincy, MA 02169.

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We All Can Do Our Part Over the years, this space has often been used to update readers about the advocacy efforts undertaken by UCANE at the federal, state, and local levels. Fighting for our common interests is part of UCANE’s core mission and one of the main reasons why our Association was created back in 1954.

W

e have had many successes over the years. There have been large ones like the passage of the Clean Water Act, the creation of the MWRA, and more recently, the passage of the Water Infrastructure Act. There have also been smaller, but no less important, victories for our industry including the successful passage of the Cost Adjustment Law, and working to mitigate the impact of diesel retrofits and soil regulations. No matter their scope or impact, one thing all of these issues had in common: UCANE’s voice was heard.

Our advocacy is as vital today as it has ever been. We need to continue to fight for increased funding for water infrastructure at the state and federal levels, as the state deals with a budget deficit and gridlock continues to hinder any action in Washington. We will continue to make the case that additional funding will not only begin to address the $21 billion funding gap in water infrastructure that Massachusetts faces, but that this investment will more than pay for itself in job creation and economic development. We will also continue to protect our members and the construction industry from overly burdensome regulations and oversight.

We must make our elected officials at the State House aware that proposed legislation

AUGUST, 2017

on wage theft, paid family leave, and other issues, while well-intentioned, will have unintended consequences on our companies and will do severe harm to our industry and the economy. We also need to monitor how the newly passed marijuana legalization law will affect our businesses.

What makes UCANE so effective is that it is a member run and member driven association. While UCANE’s Officers, Board of Directors, and staff do their part, we are at our best when every single member uses their voice.

In the coming weeks and months as these issues arise, I ask that our members become even more involved. When requested, please use the information that UCANE provides and reach out to your Senator, Congressperson, and state legislators. That is the most effective form of advocacy, because as we all know “all politics is local.” Our elected officials need to hear from their constituents, as that is the only way they can make a truly informed decision on an issue. Your voice is an important one, and it needs to be heard.

I hope everyone is enjoying a safe, happy, and prosperous summer, and thank you for your continued support of UCANE. n

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Risk starts even before you do.

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AUGUST, 2017

Mark Molloy, Esq., Lynch Associates, Inc.

T

Governor Signs FY18 Budget; Sends Health Insurance Assessment Language Back to Legislature

he Massachusetts Legislature passed its Conference Committee report on the FY18 budget at the beginning of July. The budget, which was a little later than usual, reflected legislators concerns about uncertain revenue projections.

The Governor, who had 10 days to review the legislation and the authority to offer line-item vetoes, availed himself of that authority.

Of interest to UCANE members, the Conference Committee report provided $24,733,484 for the administration of the Massachusetts Department of Environmental Protection. The Governor reduced this amount by $140,671. The Contract Assistance line-item, which assists the Clean Water Trust in maintaining its drinking and clean water funding obligations, was set at $55,452,305.

The Underground Storage Tank Program, which must balance an August 7 single lined tank to double lined tank deadline, was funded by the legislature at $5.5 million and then reduced by $2.5 million. The Commonwealth Rate Relief line item, once funded at $63.7 MILLION to address project debt service, was funded at $1.1 million, but eliminated by veto.

Finally, as well documented in various media outlets, the Massachusetts Legislature and Governor have been going back and forth with various proposals to address the rising the costs of MassHealth and other state insurance programs.

As you may recall, the Governor originally filed a $2,000 per employee, employer mandate on health insurance to his FY18 budget proposal for companies not offering health insurance to employees.

AUGUST, 2017

The House rejected his proposal and delegated the authority back to the Massachusetts Department of Revenue (DOR) for their annual review and surcharge rate recommendation. The Senate proposed two options: the DOR annual review/ recommendation and an increase to the Employer Medical Assistance Contribution (EMAC).

The Conference Committee on the FY18 budget agreed to an increase in EMAC for employers while, at the same time, freezing the unemployment insurance rates for next year. The view was that this essentially shifts $200 million from the UI program to the EMAC program without reducing the UI fund. The Governor objected and sent back a variety of MassHealth reforms that the Legislature committed to further review for the time being.

Accordingly, the Governor is now in the process of determining whether he will approve of this new EMAC increase or reject it. Note: This proposal increases the EMAC contribution rate for all employees, statewide. (i.e., $51 to $77 per employee). An additional annual two-tiered assessment on any employees receiving health insurance through public programs will also be assessed (>$750 per employee). Despite the business community’s opposition, the Governor recently stated that he will sign the new health assessment language.

With that in mind, the Massachusetts Legislature is expected to return to formal session in September. It is anticipated that they will undertake consideration of a variety of the Governor’s vetoes depending on the state’s revenue projections. continued on page 7

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Legislative Update continued from page 5

Revenue Committee Holds Public Hearing on AirBNB Water Infrastructure Measure

T

he Joint Committee on Revenue held a public hearing on UCANE’s legislation (HB2586) to regulate the short term rental of properties and charge an occupancy tax on the same. The legislation, a first-time filing, attempts to address the Commonwealth’s $21 billion water infrastructure funding gap.

ers must partner with the local, state, and federal government in financing needed maintenance. As people are coming to recognize, investing in water infrastructure not only creates the basis for economic development in the future, but creates jobs and improves public health and the environment today.

The time to create a dedicated revenue mechanism for closing the water infrastructure funding gap is now.”

To that end, HB2586 recognizes that short termrental transactions benefit from, and in fact are only possible with, a properly maintained water infrastrucThe regulation of short term rentals is a hot topic ture system. As such, the legislation creates a regison Beacon Hill. While the Massachusetts Senate tration system for the lodging marketplace that then passed one version of such regulation in its FY18 allows for the imposition of an occupancy tax at a rate budget, the Massachusetts House of Representatives has expressed an interest in passing such legisof five percent of the total amount of rent for each such lation as a stand alone matter. The Joint Committee occupancy. The occupancy tax is then deposited into on Revenue and the Joint Committee on Financial a Lodging Marketplace Trust Fund with 50 percent of Services, where other short term rental legislation rethe amount received from the fund to a city or town sides, have until February of 2018 to issue a report based on the number of short-term or vacation rentals on the matter. within a city or town from the previous calendar year for the improvement of road and water infrastructure; continued on page 9 40 percent of the amount collected to the Massachusetts Clean Water Trust established in chapter 29C of the General Laws to provide fiWater Works Specialist nancial assistance in the funding of John Hoadl water infrastructure projects or any Water Works Specialist Tel:781-878-8098 Fax:781-878-5298 Water Works Spe other purpose authorized under Tel:781-878-8098 Tel: 781-878-8098 Fax: 781-878-5298 chapter 29C; and 10 percent of the “Our Products the Most Trusted NamesNames in theinIndustry” amount collected to the Massachu“OurIndustry” Products Are the Most Trusted N “OurAre Products Are the Most Trusted the � U.S. Pipe ● Cultec setts Department of Revenue for Pipe � U.S. ● Cultec Chambers � Mueller Fire Hydrants ● Nation • U.S. Pipe • Cultec Chambers administration and enforcement of Mueller Tapping Sleeves & Valves ● ADS P � Mueller Fire Pipe & Plastics • Hydrants Mueller Fire Hydrants ● National • National Pipe�� &Smith Plastics Blair Clamps & Couplings ● Genera this act. � Mueller Tapping Sleeves & Valves ● Valves ADS Pipe Chambers • Mueller Tapping Sleeves & • &ADS Pipe & Chambers Mechanical Services Jeff Mahoney, Assistant � Tapping Sleeves & Gates Installed • Clamps Smith & Blair Clamps & Couplings • General Foundry Castings � ExSmith Blair Couplings ● General Foundry Castings � Line Stop / EZ Valves ecutive Director of UCANE, testiMechanical Services � Cutting of Chilled Water Lines & fied before the Joint Committee Mechanical Services � Pressure Testing & Disinfection o � Tapping Sleeves & Gates Installed / Cut � Installation & Testing of Backflow on Revenue. In oral and written • Tapping Sleeves & Gates Installed / Cut � Large Diameter Hydraulic Pipe C � Line Stop / EZ Valves testimony, Mr. Mahoney testified, • Line Stop / EZ Valves � Hydrant Installation & Repair � Cutting ChilledWater WaterLines Lines&&Steam SteamLines Lines among other things, that: � Electronic Leak Detection • Cutting of of Chilled “Water-Sewer-Drain Supplies at a Com • Pressure Testing &&Disinfection � Pressure Testing DisinfectionofofNew NewMains Mains “To continue the work started www.hoadleyandsons.com • Installation && Testing ofof Backflow

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Legislative Update continued from page 7

G

Governor Baker Signs Massachusetts Pregnant Workers Fairness Act

overnor Charlie Baker, at the end of July, signed HB3816 An Act Establishing the Massachusetts Pregnant Workers Fairness Act. The legislation requires that employers provide pregnant women reasonable accommodations including "more frequent or longer paid or unpaid breaks, time off to recover from childbirth with or without pay, acquisition or modification of equipment, seating, temporary transfer to a less strenuous or hazardous position, job restructuring, light duty, break time and private non-bathroom space for expressing breast milk, assistance with manual labor, or modified work schedules."

Again, among the provisions in the legislation, the employer and employee shall engage in a timely, good faith, and interactive process to determine effective reasonable accommodations to enable the employee to perform the essential functions of the employee’s job. An employer may require that the documentation about the need for reasonable

accommodation come from an appropriate health care or rehabilitation professional. An employee shall not be required to obtain documentation from an appropriate health care or rehabilitation professional for the following accommodations: 1. more frequent restroom, food, and water breaks; 2. seating; and 3. limits on lifting over 20 pounds.

Written notice of the right to be free from discrimination in relation to pregnancy and related conditions, including the right to reasonable accommodations for conditions related to pregnancy or related conditions, pursuant to this subsection shall be distributed in a handbook or other means.

To review the recently passed legislation, please visit: https://malegislature.gov/Bills/190/ H3816. continued on page 11

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Legislative Update continued from page 9

Representative Jeff Sanchez to Head House Ways and Means Committee

I

n a surprise announcement that shook up Beacon Hill, House Ways and Means Chairman Brian Dempsey announced, in the middle of July, his intention to leave the House of Representatives and return to the private sector. Dempsey, long thought to be the leading candidate for Speaker in the event Speaker Bob DeLeo retired, was a longtime member of the legislature. After the announcement that Chairman Dempsey was leaving to join the firm of ML Strategies, Representative Jeff Sanchez was elevated to the role of Chairman for the House Committee on Ways and Means.

The move places Representative Sanchez, a 47-year-old state representative from Jamaica Plain, at the helm of one of the most powerful committees on Beacon Hill. Most recently, the House Chairman of the Joint Committee on Health Care Financing Committee and previously co-chair of the Joint Committee on Public Health, Chairman Sanchez is known for his fact-based decision-making and collaborative process.

He has been active on economic justice issues and

legislation aimed at addressing racial and ethnic health disparities, and recently co-chaired a special commission that examined price disparities in the health care sector. Of interest to UCANE members, he was also instrumental in achieving passage of legislation creating the Water Infrastructure Financing Commission. With ongoing debates about increasing health care costs on the federal and state levels, Chairman Sanchez’s health care expertise is considered a tremendous asset.

Speaker DeLeo also announced several other leadership moves including the appointment of Representative Peter Kocot as the new House Chairman of the Joint Committee on Health Care Financing; Representative Jen Benson as the new House Chairwoman of the Joint Committee on State Administration; Representative Tackey Chan as the new House Chairman of the Joint Committee on Consumer Protection and Professional Licensure; and, finally, Representative Smitty Pignatelli as the new House Chairman of the Joint Committee on the Environment and Natural Resources. continued on page 13

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Legislative Update continued from page 11

Friedman Elected to Massachusetts Senate; Senate President Rejiggers Leadership Team

A

s reported by various media outlets, Cindy Friedman, chief of staff to the late Senator Kenneth Donnelly, won the July 25 special election to replace him. Senator Friedman, who was sworn in the day after the election, is a Democrat from Arlington. In winning the Senate seat, Senator Friedman took over 7,700 votes to her opponent’s less than 1,000 votes. The district, which includes the Towns of Billerica, Burlington, Woburn, Arlington, and parts of Lexington, became vacant when former Senator Donnelly passed away in April.

Friedman, who won the primary in June, defeated Representative Sean Garballey of Arlington and Mary Ann Stewart of Lexington. During her campaign, Friedman had identified her focus as health care, the environment and education. The special election had an extremely low voter turnout of 7.6 percent across the district.

With the election of Senator Friedman, Senate President Stan Rosenberg announced a series of leadership changes to the Massachusetts Senate. Senator Patricia Jehlen, who has served in the Senate since 2005, was appointed one of the Senate's three assis-

tant majority leaders. Senator Joan Lovely moves into the assistant vice chair position on Ways and Means, which was previously occupied by Senator Jehlen.

Senator Friedman was appointed as Senate Chairwoman of the Joint Committee on Public Service. She was also appointed as a member to the Joint Committee on Labor and Workforce Development as well as the Joint Committee on Mental Health, Substance Use and Recovery.

Senator Michael Moore was appointed the permanent Senate Chairman of the Joint Committee on Public Safety where he will be joined by Senator Michael Rush as the Senate Vice Chairman.

To fill out membership needs on various committees, Senate President Rosenberg appointed Senator Michael Brady to the Senate Committee on Bills in Third Reading; Senator Sal DiDomenico to the Senate Committee on Redistricting; Senator Julian Cyr to the Joint Committee on the Environment, Natural Resources and Agriculture; and Senator Michael Barrett and Senator Jim Welch to the Senate Committee on Ways and Means. continued on page 15

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Legislative Update continued from page 13

With Chief of Staff Retiring, Governor Looks Within for a Replacement

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overnor Charlie Baker announced in mid-July that his Chief of Staff, Steven Kadish, will be leaving the Administration and will be succeeded by Secretary of Administration and Finance Kristen Lepore. Governor Baker also announced the appointment of Michael J. Heffernan, the current Commissioner of the Department of Revenue, to be the next Secretary of Administration and Finance.

According to a press release from the Governor’s office, Kadish, joined the Baker-Polito Administration during the 2015 transition and served as Chief of Staff for two and a half years. During his tenure, Kadish was recognized for his strong leadership skills and deep knowledge of state government.

Secretary Kristen Lepore joined the Administration in 2015 as Secretary. Since that time, she has led the Administration through the development of three budgets. Prior to joining the Administration, Secretary Lepore was Vice President of Government Affairs at Associated Industries of Massachusetts (AIM). As Vice President, she was responsible for AIM’s health care agenda and advocated for policies

to lower the cost of health care in Massachusetts.

She also worked on education and workforce development issues on behalf of the association. Immediately prior to joining AIM, she served as Policy Director on Charlie Baker’s 2010 gubernatorial campaign.

New Administration and Finance Secretary Mike Heffernan, before his current government service, spent nearly two decades at Citigroup and its predecessor firm, Salomon Brothers as a managing director in its markets and banking division. He co-founded the tech startup Mobiquity in 2011, and previously worked with NatWest Markets and EF Hutton & Co. Chris Harding, the current Chief of Staff at the Department of Revenue, will become the Department’s Commissioner. He is the former Executive Vice President of Sales, Marketing and Business Development for Mobiquity, Inc, a Massachusetts based professional services firm focused on providing Enterprise Digital Consulting services to Fortune 1000 organizations.

All leadership changes will be effective August 14, 2017. n

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Senator Jason Lewis (D-Winchester) Senator Lewis was born in South Africa and came to the United States with his family when he was 12 years old. His experience growing up in a segregated society — as South Africa was under the racist apartheid system at the time — grounded him with a deep sense of social and economic justice, and he has been outspoken on issues of racial, gender, and LGBTQ equality. Senator Lewis attended public schools, and, with the help of merit scholarships, graduated from Harvard College with a degree in Economics. He also earned a MBA degree from Harvard University.

Prior to entering public service, Senator Lewis worked in the private sector, having helped build two successful software companies. He began his career with McKinsey & Company, a global management consulting firm. He held a number of senior management roles with RSA Security, a Bedford-based software company that is now part of EMC, and later was the Senior Vice President of Marketing at Endeca Technologies, a venture capital-backed software company in Cambridge that is now owned by Oracle.

Senator Lewis is an elected member of Winchester Town Meeting. He previously served on the Winchester Finance Committee, the Winchester Master Plan Steering Committee, and the Board of Trustees of the Winchester Foundation for Educational Excellence.

Q:

Massachusetts, along with the rest of the country, continues its rebound from the previous economic downturn. Please give your thoughts on how the state will continue to support local aid to cities and towns to help support basic municipal services, specifically water infrastructure.

A:

There is no question that we have an aging infrastructure. Repairing and improving infrastructure is a key government function, and I believe it is vital to strengthening the economy here in Massachusetts. From the Commonwealth’s perspective, it is cheaper to repair infrastructure rather than to let it crumble and then rebuild it. In 2010, a key water pipe carrying clean water from the Commonwealth’s largest reservoirs ruptured resulting in unsanitary water conditions in the Greater Boston area. While great work was done to fix the problem as soon as possible, we have to be more vigilant in protecting pipes that carry clean water into our homes. That isn’t just a workforce development issue; it’s a public health issue as well.

AUGUST, 2017

As it relates to local aid from the state to cities and towns, I recognize that municipal budgets are perennially stretched to the max, which is why I have advocated every year for increasing local aid.

Additionally, I am the sponsor of S. 1562, An Act to Promote Healthy Alternatives to Sugary Drinks, legislation that would use some of the projected $368 million in revenue generated to establish a grant program to provide funding for the creation and improvement of water fountains and water quality in public schools, parks, and other public facilities, as well as establish a Special Commission on Access to Drinking Water in Public Places.

Q:

The Massachusetts Water Infrastructure Finance Commission found that there is a $21 billion gap in water and sewer infrastructure over the next 20 years in the Commonwealth. Can you discuss some of the water and sewer infrastructure concerns your district has been addressing? continued on page 19

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Interview continued from page 17

In my district, and across the Commonwealth, it is vital that we invest in our water and sewer infrastructure as a matter of public health and public safety, and these critical investments have the added benefits of enhancing the quality of life in our communities as well as creating jobs.

A:

Water and sewer infrastructure issues have been very much on my radar screen as several of the communities I represent are encountering related issues. Malden is working hard to replace water service lines. Winchester is working hard to alleviate the impacts of flooding from the Aberjona River, for which I’ve successfully advocated for mitigation funds. And, of course, all of the communities I represent are serviced by the MWRA, so I remain keenly attentive to water and sewer rates in our cities and towns. In my district, and across the Commonwealth, it is vital that we invest in our water and sewer infrastructure as a matter of public health and public safety, and these critical investments have the added benefits of enhancing the quality of life in our communities as well as creating jobs. That is why I have been and remain a strong supporter and co-sponsor of S. 423, An Act Improving Municipal Water Infrastructure, in the Senate, and H. 2116, An Act Providing for the Establishment of Sustainable Water Resource Funds, and H. 2117, An Act Relative to Municipal Assistance for Clean Water and Economic Development Infrastructure, in the House.

Q:

As Senate Chairman of the Joint Committee on Labor and Workforce Development, you are ware that a strong construction industry is a critical element to the state’s economic development.

Can you discuss your thoughts relative to the importance of making sure that the construction industry and trades are able to fill these much needed jobs in the coming years?

A:

According to the Bureau of Labor Statistics, the construction industry employs about 150,000 Massachusetts workers, roughly equivalent to the entire population of Springfield. I see vibrant local economic development and a bustling construction industry operating hand-in-hand. Bolstering local economic growth and development has always been one of my highest priorities.

One of my priorities as the new Senate chair of the Comcontinued on page 21

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Interview continued from page 19 mittee on Labor and Workforce Development is to grow and expand the workforce pipeline for the building trades.

We must increase our focus on and investments in schoolto-career pipeline activities through vocational/technical high schools and college, and through STEM initiatives.

We must invest in the Community College Performance Fund and the Workforce Competitiveness Trust Fund that targets the “middle skills gap.” We must expand the Youth Pathways, YouthWorks, and School-To-Career programs.

We’ve found that for every year a youth works, their income during their twenties rises 14-20%.

Q: A:

What are some of your priorities for the (2017-2018) session?

My first priority will continue to be promoting local economic development opportunities and securing resources for important needs in our communities. My focus is on advocating for critical resources for our communities, including funding for our schools, local aid, elder services, veterans programs, healthcare, affordable housing, and other essential programs and services upon which our communities depend. I will also continue to focus on investments in local infrastructure, including water and sewer, and the revitalization of our downtown business districts, working collaboratively with our municipal leaders to address needs in these areas.

legislative session. Our focus is on improving health and containing healthcare costs by strengthening prevention and public health efforts, reducing rates of preventable chronic diseases, and increasing funding for mental health and substance abuse treatment and recovery. We are facing great uncertainty regarding healthcare policy in Washington given the new administration and Congress, and we will need to be prepared to take action at the state level to protect access to high quality, affordable healthcare for all residents of Massachusetts.

Other key issues that I focus on include: improving MBTA and commuter rail service; building on our past efforts to fight climate change and promote clean energy jobs and economic growth; and championing policies that can help Boston Area poor and working families, such as job training. n Locations

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with UCANE’s Officers and Board Members How did you get started in the underground construction industry and what was your first job?

Since 1893, my family has been working in the underground/utility construction industry from gas work in 1893, to cable television in the 1980s, to large design build projects today. At 14 years old my father would drive me into work as a laborer during summers.

Throughout school I labored and eventually became a labor foreman. Immediately after college, I joined McCourt full time as an office engineer on a streetscape project in Brighton, and have been here ever since.

How long have you been with the company?

I started full time on November 1, 1999, so I am approaching my 18-year anniversary.

How long have you been involved with UCANE? Since very early in my career, my father included me in his involvement with UCANE. My first inclusion with the board of directors was in 2012.

How and why did you decide to get involved with UCANE? My father encouraged me to become involved in both UCANE and CIM from an early age, as they were the advocates for our industry. But, not until I started coming to board meetings in 2012, did I truly realize the AUGUST, 2017

UCANE Secretary Ryan McCourt President of McCourt Construction Company

impact UCANE had on McCourt Construction. At Board Meetings you can see the amazing scope of issues that UCANE monitors and actively advocates for. Beyond just advocating for improvements to our deteriorating utility infrastructure, they also advocate with major rule making and enforcement agencies we deal with every day such as OSHA, Dig Safe, Department of Public Utility, Department of Public Safety, the Department of Labor, etc. In addition, each bill in front of the legislature is reviewed, monitored, and brought to the board for a vote of action if necessary. If anyone ever doubts the value of their membership, I highly recommend they reach out to Anne Klayman or Jeff Mahoney and attend a Board of Director’s Meeting. You will be astonished by the amazing work the staff at UCANE does.

What is the nature of the industry as you currently see it? continued on page 25

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Under the Hard Hat continued from page 23 The infrastructure of this country is in disrepair and special attention needs to be paid to it. Clean drinking water and wastewater is in especially bad shape. In addition, every day new legislation and regulations make our jobs installing this much-needed infrastructure more and more difficult. Despite all of this, infrastructure is being built as efficiently and as safely as ever before.

Being President of McCourt Construction Company is certainly a tremendous responsibility. Why do you find it important to take the time to be involved with UCANE and serve as part of its leadership?

While being a board member is a significant commitment, the experience in understanding where our funding comes from, the various agencies that impact our business and the sharing of ideas and information between the various board members is invaluable. n Untitled-6 1

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Post-Bid Change Orders Awarding authorities routinely make changes to publicly-bid projects. Sometimes, those changes come shortly after bid opening. There might be legitimate reasons for these types of changes. But almost always, the question arises: does the change need to be bid as a new project, or can it be procured through the change order process? The Bid Unit of the Massachusetts Attorney General’s Office (the “AG”) discussed this issue in a recent bid protest decision.

​T

he case arose out of a municipal project for the replacement of 12,000 linear feet of water main pipe and other water main improvements. The city advertised bids on April 20, 2017. The lowest bid was $2,876,550. The city awarded the contract to the lowest bidder and executed a contract on May 23, 2017.

Sixteen days later – before construction began – the city issued a $980,813.71 change order which: (1) required installation of an additional 2,700 linear feet of water main on a different street; and (2) allowed additional contract time. This change order would have increased the original contract price by 34% and prompted the third low bidder to file a bid protest.

According to the protestor, the city should have put the additional “change order” work out to bid given its value, and the fact that it materially changed the scope of work. In addition, the protester argued that the city knew that the “change order” work was required when it put the original project out to bid. The AG agreed.

The AG recited well-established law recognizing that substantial modifications to a public contract defeat the purposes of the competitive bidding laws when they are not put out for bid. Allowing such modifications could also open the door to manipulation of bids. That said, post-bid modifications are not always prohibited, and the AG recognized that these types of issues are resolved on a case-by-case basis. In other words, “[t]here is no absolute monetary formula for determining whether a given scope of work needs to be bid as a new project rather than procedure through the change order process.”

AUGUST, 2017

The AG looked at two main factors: (1) whether the change order has a substantial effect on the scope or price of the originally bid work; and (2) whether the proposed change order work arises out of and is “intrinsically related” to the original scope of work. The AG concluded that the 34% price increase equated to an altogether new contract. In addition, the AG cited prior decisions stating that change orders are intended to deal with unexpected changes during the progress of the project. In this case, the City knew the change order work was necessary before putting the original project out to bid. As a result, the AG concluded that the City could have added the change order work pre-bid in an addendum or as part of a new procurement. Upholding the protest, the AG concluded that the change order was “impermissible” and ordered a rebid of the change order work.

The decision reaffirms established prohibitions against substantial post-bid, pre-construction changes. Each case will be different, with different results, but bidders benefit from knowing the critical factors in the analysis. If the post-bid change substantially impacts the original price and scope, and does not arise out of unexpected conditions during the course of the project, there is a good chance it will be invalid. n

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AUGUST, 2017

House Committee Advances Drinking Water System Improvement Act of 2017

O

n July 27, by a bipartisan voice vote, the House Committee on Energy and Commerce favorably reported to the House H.R.3387, the “Drinking Water System Improvement Act,” which, in part, reauthorizes the Safe Drinking Water SRF. The reauthorization measure substantially increases the Drinking Water SRF program. The bill authorizes $8 billion over a five-year period. Current funding for the Drinking Water program is approximately $950 million annually.

UCANE, and our partners on Capitol Hill, the Clean Water Construction Coalition have been lobbying hard for increases to SRF Funding and the release of this bill is a major step towards that goal.

The bill could be a candidate for inclusion in any comprehensive infrastructure legislation Congress may attempt to assemble later this year or it could move forward on its own through the House and Senate to legislation.

Of greatest interest to the construction industry, the bill reauthorizes the Drinking Water State Revolving Loan Fund (DWSRF) and boosts it’s funding level to $8 billion for FY18 through FY22. Specifically, it proposes $1.2 billion in FY18, $1.4 billion in FY19, $1.6 billion in FY20, $1.8 billion in FY21, and $2 billion in FY22. The current Safe Drinking Water SRF program is funded at approximately $980 million.

In addition to increased funding levels, the bill also revises sections of the SRF loan rules as well as parts of the Safe Drinking Water Act: 1. Expands the allowable use of loans to include siting, associated preconstruction activities, and replacing or rehabilitating aging treatment, storage, or distribution facilities of public water systems.

2. Increases the amount of loan subsidies available for disadvantaged communities to 35 percent

AUGUST, 2017

and extends the repayment schedule for DWSRF loans for disadvantaged communities from 30 years to 40 years.

3. Allows States to use a portion of their DWSRF allocation to delineate, assess, and update their source water protection plans. The section also prohibits the use of those funds for Clean Water Act compliance.

4. Extends for five years the current “Buy American” provisions that require the use of domestic iron and steel on DWSRF projects, along with provisions that allow EPA to waive the requirement if domestic products would increase overall project costs by more than 25 percent.

5. Directs EPA to study and report to the public on existing and potential technologies for the treatment and distribution of drinking water.

6. Includes the cost of lead service line replacements in future EPA Drinking Water Needs Surveys, and authorizes $25 million over five years for grants to help schools replace drinking water fountains tainted with lead.

7. Permanently applies Davis-Bacon wage controls to DWSRF-funded projects.

The American Water Works Association (AWWA) commended members of the subcommittee, ultimately noting it as an improvement for the Safe Drinking Water Act. “The Drinking Water State Revolving Loan program remains an important water finance tool,” said Tracy Mehan, AWWA executive director for government affairs. “Reauthorization of the SRF program is overdue, and drinking water providers are pleased to see a substantial increase in authorized funding.”

UCANE will continue to follow the bill as it moves ahead. n

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31 00

It takes months of planning to make UCANE’s annual golf tournament a sold-out, must attend event every year. Every detail is covered to ensure that members and guests enjoy an exceptional day out on the links. The one detail out of UCANE’s control?

The weather. So, when the day of the tournament brings picture perfect summer conditions, it makes the event that much more special. And, that’s exactly what happened at UCANE’s 38th Annual Golf Classic at Brookmeadow Country Club in Canton, MA. However, it takes more than planning and weather to make this one of UCANE’s most popular events. Our members’ generous sponsorships are critical to the tournament’s success. A very special thanks to our Corporate Sponsor, Taylor Oil Company and our Lobster Clambake Sponsor, E. J. Prescott, Inc. The parking lot began to fill long before the 8 a.m. registration time, with golfer’s eager to begin the day by enjoying the Continental Breakfast sponsored by ATS Equipment, Inc. Golfers also collected “Goody Bags,” sponsored by P. Gioioso and Sons, Inc., which were again the popular coolers, fully packed with everything from golf balls to frisbees to towels and more.

Golfers were able to see our members tremendous support as the putting green, tees, and the clubhouse were filled with sponsor signs, which were generously provided by Roadsafe Traffic Systems, Inc. The Par 3-6th hole served as the spot for our “Closest to the Pin” 50/50 contest sponsored by HD Supply Waterworks against our celebrity golfer, former New England Patriots Offensive Lineman Joe Andruzzi. Joe is a longtime friend of UCANE and spent the day on the hole getting reacquainted with many of the members. UCANE is also proud of its continued support of the Joe Andruzzi Foundation and the tireless work that Joe and his wife Jen do for cancer patients and their families. Also, at the 6th hole, each foresome had their pictures professionally taken with Joe, thanks to Ritchie Brothers Auctioneers. continued on page 35

AUGUST, 2017

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Golf Tournament continued from page 33 At the 16th hole, McCourt Construction Co. sponsored the $25,000 Hole-in-One Contest. Additional hole-in-one prizes were available on the other par 3s, including a 3-year lease of a Ford F-150 provided by Rodman Ford Sales, Inc.; a Kobelco SK-30 Excavator provided by ATS Equipment, Inc.; and a Gorrilla GXS120 Hydraulic Hammer provided

by Tech Hydraulics/Gorilla Hammer. While there were a few close calls, for the 38th consecutive year, no one was able to get an ace and collect the prize. The same held true for the $10,000 Putting Contest sponsored by Dagle Electrical Construction Corp. Unfortunately, no one was able to hit the big putt for the ten grand, but there’s always next year!

During the round, golfers enjoyed a Barbecue Lunch sponsored by Schmidt Equipment, Inc. They were able to wash down the food throughout the day at the Cold Drink Carts sponsored

by Citrin Cooperman & Company, LLC, Ferguson Waterworks, and United Rentals Trench Safety. continued on page 37

AUGUST, 2017

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Golf Tournament continued from page 35 After turning in their scorecards, golfers came to the clubhouse for the Social Hour sponsored by A. H. Harris Construction Supplies, Hub International New England, National Trench Safety, and T-Quip Sales & Rentals, Inc. The end of the social hour was capped off by the Helicopter Ball Drop sponsored by HD Supply Construction & Industrial White Cap. Golfers who had purchased a ticket anxiously watched as 500 golf balls were dropped from the chopper onto the 18th hole. Tony Lorusso of S. M. Lorusso & Sons, Inc. held the lucky ticket number that corresponded with the number on the golf ball that was in or closest to the hole and he took home the 50/50 prize.

Following the helicopter drop, golfers enjoyed the first-class Lobster Clambake Dinner featuring 2-lb lobsters, and all the clam chowder, pulled pork, corn-onthe-cob, roasted potatoes, and garden salad that one could eat. After that “light meal,” golfers enjoyed the Ice Cream Sundae Bar sponsored by USI Insurance Services, LLC. Awards were given out to the top four teams, as well as for the “Closest to the Pin” 50/50 raffle. Closing out the festivities was the raffle drawing for the more than 50 amazing prizes, highlighted by a set of golf clubs donated by EJ, a 40-inch Sanyo TV donated by American Shoring, Inc., and Red Sox tickets galore!

What makes this tournament a truly special day are the members and friends who support the event by golfing, sponsoring tee and putting green signs, and donating incredible raffle prizes. On behalf of the UCANE staff, we would like to thank all of you who made this tournament another success. We greatly appreciate your generosity, and we are already excitedly counting down the days until next year’s tournament! (A complete list of sponsors can be found starting on page 38.) n

AUGUST, 2017

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37

A special thank you to our sponsors for their continued support of UCANE’s Annual Golf Tournament Corporate Sponsor

TAYLOR OIL COMPANY Lobster Clambake Sponsor

E. J. PRESCOTT, INC. $25,000 “Hole in One”

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PUTTING GREEN SPONSORS: APJ Equipment Corp.

Aggregate Industries - N.E. Region Barletta Heavy Division Biszko Contracting Corp.

Jay Cashman, Inc. Desanctis Insurance Agency, Inc. Doering Equipment Co. Equipment Corp. of America (ECA) GVC Construction, Inc. Green Environmental, Inc. Hilb New England Hinckley Allen LLP Lorusso Heavy Equipment, LLC S. M. Lorusso & Sons, Inc. Mabey, Inc. McWane Ductile Northeast Traffic Control Services, Inc. Daniel O’Connell’s Sons Pawtucket Hot Mix Asphalt (2) E. J. Prescott, Inc. Riley Brothers, Inc. SPS New England, Inc. Taylor Oil Company R. H. White Construction Co., Inc. C. N. Wood Company, Inc. World Diamond Source Zurich Surety

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®

Triumph, a leading provider of mobile offices and modular buildings, is pleased to introduce the 12 X 60 mobile office BIG ROOM. This innovative space fosters collaboration and productivity.

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Call 978-431-1000 or visit triumphmodular.com for more information Triumph Modular | 194 Ayer Rd. | Littleton, MA 01460

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“BUY FROM THE ADVERTISERS IN CONSTRUCTION OUTLOOK”

AUGUST, 2017

TEE SPONSORS: A. F. Amorello & Sons, Inc. AQUAREHAB USA Inc. (3) Baltazar Contractors, Inc. A. R. Belli, Inc. (2) Dennis K. Burke, Inc. C. C. Construction, Inc. C.J.P. & Sons Const. Co., Inc. P. Caliacco Corp.

Celco Construction Corp. (2) N. Cibotti, Inc. (2) CleanBasins, Inc. ConConn (2) Cullen, Murphy & Co., P.C. (2) Dagle Electrical Const. Corp. (2) J. D’Amico, Inc. (2) Darmody, Merlino & Co., LLP (2) Eastern Insurance Group, LLC Eastern States Ins. Agency, Inc. (2) eRisk Services, Inc. Equipment East LLC (5) FED. CORP. (2) Feeney Bros. Excavation, LLC (2) Ferguson Waterworks (2) GTA Co., Inc. (2) Gagliarducci Const., Inc. (2)

Genalco Inc. L. Guerini Group Inc. (2) HD Supply Construction & Industrial White Cap (2) HD Waterworks Haluch Water Contracting, Inc. I. W. Harding Const. Co., Inc. A. H. Harris Construction Supplies Iron Haulers LLC (3) K & K Excavation Co., Inc. (2) P. T. Kelley, Inc. Kistler & Knapp Builders P. A. Landers, Inc. Lawrence-Lynch Corp.

Liddell Brothers, Inc. (5) Lockton Companies G. Lopes Construction Inc. Lorusso Corp.

MBO Precast, Inc. J. F. McDonald Ins. Company, Inc. Metro Equipment Corp. (2) Milton CAT (2) National Trench Safety (2) Ocean State Oil (2) Robert B. Our Co., Inc. (2)

R. M. Pacella, Inc. (2) Palmer Paving Corporation Podgurski Corp.

J. A. Polito & Sons Co., Inc. (2) E. J. Prescott, Inc. H. R. Prescott & Sons, Inc. (2) Rain for Rent - New England Rodman Ford Sales, Inc. (2) Scituate Concrete Products Corp. (2) Shea Concrete Products (2) Starkweather & Shepley Insurance Brokerage, Inc. (2) Stiles Company, Inc. StormTrap, LLC Sunbelt Rentals/Pump & Power (2) Taylor Oil Company Tonry Insurance Group, Inc. (2) Travelers (2) Triumph Modular Inc. United Concrete Products, Inc. (2) Vacuum Excavation, Inc./Rapid Flow (5) WES Construction Corp.

J. F. White Contracting Co. (3) Woodco Machinery, Inc. (2) R. Zoppo Corp. (2)

GOODY BAG SPONSORS: P. GIOIOSO & SONS, INC. Goody Bags

PUTNAM PIPE CORP. Bottle Openers

AQUA LINE UTILITY, INC. Golf Balls

RITCHIE BROTHERS AUCTIONEERS Koozies

DAGLE ELECTRICAL CONST. CORP. Frisbees

SCRAP-IT, INC./MINICHIELLO BROS., INC. Magnets

DIG SAFE SYSTEMS, INC. Hats, Pens, & Key Chains

SHEA CONCRETE PRODUCTS, INC. Golf Tees

EQUIPMENT4RENT Golf Towels & Koozies

STILES COMPANY, INC. Note Pads & Pens

IRON HAULERS Pens

SWANK CONST. COMPANY, LLC Golf Tee Packets

KISTLER & KNAPP BUILDERS Candy Filled Pouches

TAYLOR OIL COMPANY Hot/Cold Packs & Koozies

MILTON CAT Golf Balls

TECH HYDRAULICS/GORILLA HAMMERS Note Pads

NORFOLK POWER EQUIPMENT, INC. Golf Balls

TONRY INSURANCE GROUP, INC. Koozies

ROBERT B. OUR CO., INC. Travel Mugs

UNITED CONCRETE PRODUCTS, INC. Key Chains

AUGUST, 2017

“BUY FROM THE ADVERTISERS IN CONSTRUCTION OUTLOOK”

41

Photos by Sabrina Baloun, sabrinacolequinnphoto.com

Photos by Sabrina Baloun, sabrinacolequinnphoto.com

72 72?

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Any down payment?

No. Zero. Zilch. Nada.

What’s included?

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And all machines come with an Equipment Protection Plan.

And the catch?

Three months to act – July, August, September.

Talk to your salesperson, call us at 888-702-0073 and visit us at www.miltoncat.com/72 for a complete list of models and monthly payments. And yes, we’ll take your old equipment in trade, also – any make or model. .

www.miltoncat.com Financing through CAT Financial based on credit approval.

Photos by Sabrina Baloun, sabrinacolequinnphoto.com

Strategic legal counsel.

Unmatched industry experience.

Hinckley Allen is one of the most experienced construction law practices in the nation.

Our ability to provide value and deliver results through strong relationships, practical legal advice and counsel has earned us a first-tier national ranking in U.S. News and World Report’s “Best Law Firms” for the LitigationConstruction category.

We specialize in solving complex issues and provide a full range of construction law and dispute resolution expertise including Compliance, Crisis Response & Management, Dispute Resolution, Government & Internal Investigations, Procurement, Risk Management & Surety and Transactions.

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Timothy T. Corey | Hartford | 860-725-6200 Joel Lewin | Boston | 617-345-9000

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FactSheet

T

OSHA Application Penalty Adjustments To Take Effect Submit OSHA Launches to Electronically After August 1, 2016 Injury and Illness Data on August 1 In November 2015, Congress enacted legislation requiring federal agencies to

adjust their civil penalties to account for inflation. The Department of Labor is he Occupational Safety and Health Adminiscure website offers three options for data submisadjusting penalties for its agencies, including the Occupational Safety and Health tration launched on August 1, 2017, the Injury sion. One option will enable users to manually enAdministration (OSHA).

Tracking Application (ITA). The Web-based ter data into a web form. Another option will give OSHA’s maximum penalties, which were last adjusted in 1990, will increase by 78%. Going forward, the form allows employers to electronically re- for inflation users thebased ability to upload a CSV file to process agency will continue tosubmit adjust its penalties each year on the Consumer Price Index. quired injury and illness data from their completed single or multiple establishments at the same time.

The new penalties will take effect after August 1, 2016.

Any citations issued by OSHA on or after that date will be subject to the new penalties if the related violations occurred after November 2, 2015.

2016 OSHA Form 300A. The application will be acA third option will allow users of automated recordcessible from the ITA webpage. keeping systems to transmit data electronically via Type of Violation Current Maximum Penalty New Maximum Penalty an application programming interface.

Last month, OSHA published a notice of proSerious posed rulemaking to extendOther-Than-Serious the deadline for subThe ITA webpage also includes information on $7,000 per violation $12,471 per violation mitting 2016 Form 300A to Posting December 1, 2017, to reporting requirements, a list of frequently asked Requirements allow affected entities sufficient time to familiarize questions and a link to request assistance with Failure to Abate $7,000 per day beyond the $12,471 per day beyond the abatement date date themselves with the electronic reporting system; completing abatement the form. and to provide the new administration Willful or Repeatedan opportu$70,000 per violationUnder the $124,709 per violation Occupational Safety and Health Act of nity to review the new electronic reporting require1970, employers are responsible for providing safe and Adjustments to Penalties ments prior to their implementation. healthful workplaces for their employees. OSHA’s role To provide guidance to field staff on the implementation of the new penalties, OSHA will issue to its Field Operations Manual To address the impact of these penalty increases The data submission revisions process involves fourby August is 1.to ensure these conditions for America’s working on smaller businesses, OSHA will continue to provide penalty reductions based on the size of the steps: (1) Creating an establishment; (2) adding men and women by setting and enforcing standards, employer and other factors.

300A summary data; (3) submitting data to OSHA; and providing training, education and assistance. For State Plan States States that operate their own Occupational and Health Plans are required to adopt maximum and (4) reviewing the confirmation email.

The se- Safety more information, visit www.osha.gov. n penalty levels that are at least as effective as Federal OSHA’s.

Workers’ Rights Workers have the right to: • Working conditions that do not pose a risk of serious harm.

• Receive information and training (in a language and vocabulary the worker understands) about workplace hazards, methods to prevent them, and the OSHA standards that apply to their workplace.

• Review records of work-related injuries and illnesses.

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Palmer Paving Corporation, Inc — palmerpaving.com 25 Blanchard Street Palmer, MA 01069 413-283-8354

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Protect your crew and a whole lot more.

From training your crew on safety regulations to helping you choose the right equipment for the job, our innovative Trench Safety Solutions help increase productivity and lower costs. Next time you’re underground, count on us to help keep your crew, and your project, safe.

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AUGUST, 2017

Brian MacFee, Systems Support Corporation

New Survey Shows Alarming Trends in Cybersecurity for Businesses A new survey released by Guidance Software reveals some disturbing trends about the state of cyber security. The survey asked 330 IT and digital security professionals questions about cyber-attacks and their impact on the organizations they serve.

T

he biggest news was how many organizations reported that they had been the victims of a malware attack so far this year, with fully 65 percent reporting in the affirmative. That’s up from 56 percent the same time last year.

Worse, nearly a quarter (23 percent) of respondents indicated that they had been the victim of a ransomware attack, with nine percent admitting to having paid the ransom to get their files restored. This is significant, because in last year’s survey, none of the respondents indicated having paid a ransom. What’s worse is that nearly half (48 percent) indicated certainty that they would be hit by a ransomware attack sometime in 2017.

In terms of losses, a quarter of those surveyed indicated that their firms had suffered financially as a direct result of successful attacks over the past year.

Of those, 20 percent indicated losses in excess of a million dollars.

Also of interest were the things IT professionals listed as their biggest challenges, with 35 percent citing proper risk assessment, 34 percent citing policy enforcement, and 31 percent citing managing the complexity of digital security in general.

To anyone in IT, all three of these challenges will ring familiar. They are persistent hobgoblins that have plagued the industry for years; and unfortunately, that doesn’t show any sign of changing soon.

AUGUST, 2017

The silver lining for you as a business owner is knowing that these are the most often cited challenges faced by IT staff. You can assess your own department and begin making the changes necessary to help reduce the impact of all three.

Budgetary constraints may prevent you from solving them outright, but armed with these survey results, you can certainly begin making steady, incremental improvements.

Contact your IT professional and make sure you are both on the same page regarding Risk Assessment. n

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51

We know you face many risks above and below ground.

Rogers & Gray Insurance, a proud UCANE member, can help keep your business and employees safe.

Nationwide “Best of the Best” Award MarshBerry Largest Insurance Brokers in Massachusetts Boston Business Journal Top 100 Independent Property & Casualty Agencies in the Nation Insurance Journal Magazine

Robert Bizak Executive Vice President UCANE Member & Construction Insurance Specialist Direct: 508.747.4385 rbizak@rogersgray.com

Business

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www.RogersGray.com 52

“BUY FROM THE ADVERTISERS IN CONSTRUCTION OUTLOOK”

AUGUST, 2017

EPA Delays MS4 Stormwater Permit for One Year

D

ue to ongoing litigation, the U.S. Environmental Protection Agency has postponed the effective date of the MS4 stormwater permit by one year.

in Washington, D.C. The groups supporting the appeal contend that the MS4 permit exceeds the EPA’s authority under the federal Clean Water Act.

The EPA agreed to a request that was filed jointly by the Massachusetts Coalition for Water Resources Stewardship, the town of Franklin and the city of Lowell asking EPA Region 1 to delay the permit for one year pending judicial review.

The final general permit for stormwater discharges from small Municipal Separate Storm Sewer Systems in Massachusetts was published in the Federal Register in April 2016.

In its notice, the EPA wrote that it would like to explore the use of alternative dispute resolution to engage with petitioners, and that the postponement will give the EPA time to determine if any changes to the permit for small Municipal Separate Storm Sewer Systems are appropriate.

The MS4 permit, which will regulate stormwater in more than 250 municipalities in Massachusetts, was scheduled to take effect on July 1, 2017, with the first action item for municipalities to comply due in September.

The stay delays permit implementation until July 1, 2018, and postpones the due date for communities to file their Notice of Intent as well.

The stay of the permit comes after a number of parties filed appeals of the MS4 permit. The consolidated appeals will be heard by the federal circuit court

Under the MS4 permit, municipalities must develop, implement and enforce a stormwater management program that controls pollutants to the maximum extent practicable, protects water quality, and satisfies appropriate requirements of the federal Clean Water Act. The MS4 permit requires implementation of six minimum control measures.

Updated permit requirements include the need to address identified water quality problems, including stormwater discharges to water bodies with approved total maximum daily loads for bacteria, phosphorus and nitrogen.

For more information, including the notice of postponement, visit www3.epa.gov/region1/npdes/stormwater/MS4_MA.html.

Written by Massachusetts Municipal Association Legislative Analyst Victoria Sclafani. n McGill Hose Inc. McGill Hose McGill & Coupling, Hose & Coupling, Inc.& Coupling, Inc.

Connecting people with piping.

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Products and Services for Safe Fluid Handling Western Massachusetts McGill Hose & Coupling, Inc. 41 Benton Drive, P.O. Box 408 East Longmeadow, MA 01028 Toll-Free: 800-669-1467 Tel: 413-525-3977 • Fax: 413-525-3175 Email: sales@mcgillhose.com

Eastern Massachusetts Industrial Equipment Supply, div. of McGill Hose & Coupling, Inc. 35 Industrial Parkway, Unit F Woburn, MA 01801 Toll-Free: 800-346-9391 Tel: 781-933-3300 • Fax: 781-933-3320 Email: info@IEShose.com

www.mcgillhose.com

Rhode Island McGill Hose & Coupling, Inc. 920 Broadway East Providence, RI 02914 Toll-Free: 800-669-1467 Tel: 401-438-0639 • Fax: 401-438-4682 Email: sales@mcgillhose.com

We accept all major credit cards.

www.mcgillhose.com www.mcgillhose.com AUGUST, 2017

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53

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201 Jones Road, Suite 645 Waltham, MA 02451 Phone: (781) 398-9840 Cell: (508) 400-3679 exitstrategiesgroup.net

Business Planning Tips & Tricks

Michael Arnheiter, Exit Strategies Group LLC

Business Owners Success When TheyThey CarveCarve Out Time Business OwnersFind Find Success When Out Operations on an Basis Basis Time to to Evaluate Evaluate Operations onAnnual an Annual

M

Most business become so immersed in immersed the these obligations? Are the terms still favorable? ost owners business owners become so in ofproperty Business Financials daily operation and management of their business that of their • Review Leases – real and equipment the daily operation and management • Contracts with other third parties – purchase agreements they don’t set aside time to evaluate its operations. An anbusiness that they don’t set aside time to 6. Business Projected insurance Income Tax Liability nual gathering of a business owner and his or her close evaluate its operations. An annual gathering of a busi☐ Has new real property been acquired? Was this property advisors—including a trusted attorney, accountant, inValuation • Succession Planning ness owner and his or her close advisors—including Business added to the company’s insurance policy? surance professional, and other financial advisors—is ☐ Is all equipment covered? a trusted attorney, accountant, insurance professional, Contractual • Business Insurance an excellent opportunity to review the business as well as ☐ Are thereObligations any new exposures that should be mitigated and other financial advisors—is an excellent opportuniaccomplishments or setbacks that might shape the overall through insurance? ty to review the business as well as accomplishments Banking Considerations • Business Legal Documents 7. Banking considerations future plan for the company.

or setbacks that might shape the overall future plan for

☐ A company’s success or failure may be contingent upon its

Although not exhaustive, the following is a list of poAgreements relationship Buy-Sell with a financial institution that provides funding for the company. tential agenda items to include in an annual review session. business operations.

Although not exhaustive, the following is aEmployee list of Non-Competition Agreements This meeting is an opportunity for the business advisors to ☐ Agreements Consider a review& of the following: potential agenda items to include in an annual review • Loans communicate with each other, encouraging open dialogue session. This meeting is an opportunity for the busiEmployee Incentives • Employee Considerations • Lines of credit and cooperation throughout the planning process.

ness advisors to communicate with each other, encouraging open dialogue and cooperation throughout the planning process.

• How does the bank view your business and your industry?

What might be the bank’s biggest concerns to future funding of the business? What financial ratios does the bank watch?

• Who are authorized signatories on behalf of the company?

Confirm that those persons should still have authority.

1. Review of business financials 8. Business legal documents ☐ Annual budget ☐ Minutes – have annual minutes been completed? ☐ Balance sheet ☐ Proper documentation of all major changes in the business ☐ Cash flow update 9. Buy-sell agreements 3 Belcher Street, Plainville, MA 02762 2. Projected income tax liability ☐ Has the price been properly adjusted for the transfer of in☐ Brainstorm potential measures which may be taken to reTel: 508-695-3252 Fax: 508-699-2387 terests? duce the tax exposure before end of year. ☐ Is there sufficient insurance or other funding mechanism in 3. Business valuationEmail: sales@lorussocorp.com place in the event a buy-out was triggered? ☐ Is the business valuation on target for projected growth?

10. Employment agreements and non-competition agreements 4. Succession planning 11. Employee incentives QUARRY & RECYCLYNG PRODUCTS ☐ Has the company created a 5-year plan (or if more appropri☐ Retirement plans ate, a 10-year plan)?

40 Cross Street • Plainville, MA ☐ Health insurance • Bituminous Concrete ☐ Long-term plans should be adjusted annually to take into ac125inTiffany Street • Attleboro, MA ☐ Life insurance• Sand & Gravel count progress made the prior year. ☐ Nonqualified plans for key personnel ☐ The company’s 1-year plan should also be reviewed from 12. Employee considerations • Crushed Stone the prior year, andASPHALT a new plan forPLANT the upcoming year should be ☐ Is the employee handbook up to date? created.

635 Pleasant Street • Screened Loam & Compost ☐ Have employee annual reviews been completed?

• What specific tasks were completed? ☐ Has there been an annual review of the compensation strucNorwood, MA • Recycled Aggregate Products • Which operational and financial goals were met? ture for employees?

5. Contractual obligations ☐ Employee files updated and organized • –Rip Rap & Armor Stone ☐ Often a company may not review a lease after the day it is ☐ I-9 (Employment Eligibility Form for immigration purposes), signed.

W-4, contact information, training records, other important data ☐ Does the company continue to comply with the terms of SERVICES

Exit Strategies Group LLC does not provide tax, legal or accounting advice.

LORUSSO CORPORATION

• Paving & Roadway Construction

Michael Arnheiter, Member Agent of The Nautilus Group®, a Service of New York Life Insurance Company. Registered Representative offering securities through NYLIFE Securities LLC (Member FINRA/SIPC), a Licensed Insurance Agency. 201 Jones Road, 5th Floor, Waltham, MA 02451, (781) 647• Utility Trench Preparation 4100. This material reflects an understanding of generally applicable rules and is for informational purposes only. New York Life Insurance Company, its • Utility Trench Paving agents or employees may not give legal, tax or accounting advice.

• Organic Material Recycling • Construction Material Recycling • Roll Off Containers

www.lorussocorp.com

54

“BUY FROM THE ADVERTISERS IN CONSTRUCTION OUTLOOK”

AUGUST, 2017

Greg Norris, B2W Software

Specialized Construction Scheduling Software Delivers Visibility, Communication, and Collaboration Advantages When it comes to sticking to deadlines and budgets, one of the most critical processes for a utility construction project – or any heavy civil construction project – is the scheduling of resources.

A

t any given point, contractors must manage a long and overlapping list of tasks requiring careful coordination of people, equipment, and materials. Unplanned factors ranging from weather and equipment breakdowns to late deliveries and change orders keep the situation fluid and add complexity.

Unfortunately, many companies continue to rely on paper forms, whiteboards, and phone calls to keep all of these moving pieces moving cohesively and efficiently. These outdated, “status quo” systems are a liability when it comes to optimizing resources.

They also put contractors at a disadvantage against competitors that are utilizing specialized software for scheduling and dispatching.

The Problems with Paper-Based and Traditional Processes The heavy construction sector has relied on paper, along with whiteboards, and phone calls for decades, but systems based on these tools are no longer the most efficient solution for scheduling and dispatching. The main problem is that they are analog, asynchronous, and disconnected. Those are big words that essentially mean that they can’t be kept up to date and viewed across the enterprise in real time.

A paper equipment inspection form identifying a broken-down machine in the field, for example, must be delivered to the shop or the office before a sched-

AUGUST, 2017

uler or dispatcher knows the status of the machine or its availability. Similarly, the reassignment of a crew or a piece of equipment on a whiteboard then requires separate steps to actually notify the people that are impacted. That opens the door for delays, errors, or misinterpretations.

Offline paper or analog processes also force employees to spend unnecessary time and effort managing and communicating about scheduling and dispatching issues. That unnecessary manual effort and redundancy takes them away from core tasks.

Going forward, in a fast-paced and margin-pressured environment defined by increasingly large and complex projects, these are barriers to productivity and profitability that any contractor will find difficult to overcome. continued on page 56

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55

Software Solutions continued from page 55

The Benefits of Specialized Software for Scheduling and Dispatching A centralized, online software solution is increasingly essential for companies striving for more coordinated analysis, planning, scheduling, and dispatching of resources across job locations and over time.

The right application gives employees with varying roles and responsibilities across the organization the ability to communicate and collaborate in real time, rather than trying to make sense of a disconnected jumble of whiteboards, spreadsheets, and messages. Digitizing the scheduling process makes it easier and faster to make and fulfill requests and to identify and resolve conflicts and it can introduce important new features and functionality ranging from GPS-driven map views to powerful reporting and dashboards.

Modern software applications for scheduling and dispatching are also easy and intuitive to use, making it relatively easy to win over even construction veterans with a die-hard commitment to offline processes.

The vital advantages of a strong software solution include: • Real-time Visibility: Users across the enterprise can see the status of resources in real time, making it easier to analyze, coordinate, and optimize all of the moving pieces critical to the success of a project.

• Resource Optimization: Based on specific roles and responsibilities, employees can utilize the software to make and fulfill requests. Assigning resources is as simple as dragging and dropping to put employees, equipment, and materials in the right place at the right time to maximize efficiency and reduce downtime.

• Conflict Resolution: Software can recognize instantly and automatically when resource con-

flicts arise. Users can view an organized list and access all the information and alternative options they need on the spot to make the best decision as to how to resolve them. They can even rely on the software to make recommendations about resolutions.

• Customizable Views: Users toggle to view and manage scheduling information for a day, multiple days, a week or two weeks. They can also apply filters for a user-defined perspective – such as one that emphasizes crews, equipment, job sites, time periods, or a combination of variables.

• Unified Workflows: Scheduling software can be unified with equipment maintenance software, giving schedulers and dispatchers the vital, upto-date information they need on equipment status. A connection with the field tracking software can take scheduling information directly to the field log, give managers in the field real-time status of resources and streamline the process for requesting resources.

• High-Value Reporting: Built-in reporting, dashboard and data export capabilities allow contractors to drill down into their data. They can analyze moves, view crew availability, track targets, and gain the insights they need to boost productivity.

• Mobile Capabilities: Tablet as well as desktop functionality is essential for scheduling and dispatching. From resolving conflicts and creating needs to filling assignments and generating moves, mobile connectivity keeps everyone in touch and up to date, no matter where they are.

Complacency and inertia are profit killers in an industry like heavy civil construction that still lags when it comes to digitization. Stepping up to the right online application to manage resource scheduling and dispatching, however, can keep a contractor ahead of the technology curve and the competition. n

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AUGUST, 2017

OSHA’s Peter Barletta Meets with UCANE’s Safety Committee to Discuss New Silica Rules

O

n July 13, a full complement of UCANE Safety Committee members had the opportunity to meet with OSHA Compliance Assistance Specialist Peter Barletta at the UCANE office in Quincy.

UCANE had reached out to OSHA’s Braintree office to see if an OSHA representative could make a presentation to the committee on the new silica standards that have been in discussion for more than a year and that will begin to be enforced by OSHA on September 23, 2017. Mr. Barletta was ready and willing to accommodate UCANE. Through a newly created Power Point presentation and an excellent interactive session, the Committee members received a thorough update on all things silica containing both technical information and common sense advice. Stressing the real health dangers of inhaling respirable silica dust, the program explained the need for site and task specific Dust Control Plans and the need to have a trained (in silica) competent person on the site. Mr. Barletta emphasized the importance of using Table 1 from OSHA Standard 1926.1153 to create engineering controls whenever possible as the preferred alternative to the use of respirators.

For some tasks, new tools have come to market or existing tools can be retrofitted to collect or contain concrete and masonry dust that the tools normally create. Employees need to have some basic training in the effects of silica dust, the operation and maintenance of the tool to minimize dust, and be able to identify the role of site competent person, should an OSHA inspector ask. The old days of cut-off saws or hammer drills spewing a cloud of smoke are gone with the new regulation that establishes a safe silica dust level that is only 20% of the previous OSHA allowable standard. OSHA has estimated that implementation of the new Silica Rule could ultimately reduce deaths from silicosis and other lung related diseases by 600 workers per year.

AUGUST, 2017

Mr. Barletta also reminded the committee that he and the other Compliance Assistance Specialists covering Region 1 (New England) are available to help contractors and employers to understand all the OSHA regulations so that their field crews can avoid unsafe and finable conditions. The State consultation services are free and reflect an increased OSHA investment in employer compliance training. Mr. Barletta also reminded those in attendance of the extensive safety programs offered by the OSHA training center in conjunction with Keene State College in Manchester New Hampshire (see page 61). With the newly increased OSHA fine structure, it behooves all contractors to increase their annual safety budget.

For more information on Silica in construction operations visit: https://www.osha.gov/silica/SilicaConstructionRegText.pdf UCANE wants to thank Peter Barletta for his great presentation on Silica and for his sincere efforts to assist contractors in creating a safer continued on page 61 workplace.

Peter Barletta is the current “Compliance Assistance Specialist” from the Boston South OSHA Office in Braintree MA, providing technical assistance, outreach, and training to OSHA stakeholders and the public through the development of alliances, partnerships, and cooperative programs. From 2004 to 2014 he was the Assistant Area Director for the OSHA Braintree Office, supervising OSHA Compliance Officers. He also spent 14 years in the field as an OSHA Compliance Officer conducting inspections and accident investigations on various construction and general industry sites including Boston Central Artery Construction Projects and Deer Island Tunnel Projects.

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Safety Corner continued from page 59

Keene State College in Partnership with OSHA Region 1

A

s the official provider of OSHA’s safety and health training in Region 1, Keene State College is authorized by OSHA to provide innovative and effective safety and health training to improve safety culture and performance in the workplace.

Keene has a course for every OSHA training requirement. You can even become an OSHA-authorized Outreach Trainer, and earn the authority to award official Department of Labor cards (10 & 30 hours). You cannot get that anywhere else. For a list of training courses offered visit https://www.osha.gov/dte/edcenters/course_description.html.

As a partner with OSHA since 1994, Keene State College’s OSHA Education Center provides premier educational and professional development opportunities within the New England region and beyond. Keene was an early adopter of OSHA’s mission to situate convenient, accessible, and affordable OSHA education in each region of the United State through a contractual, unfunded relationship with academic institutions.

The OTI Education Center strives to support the New England workforce and employers by providing class-

room locations in over 25 comfortable classrooms in six states on an “open enrollment” basis as well as offering on-site customized training to meet the needs of your work force. There is even a special training program available for public sector employees.

In keeping with OSHA’s mission statement “to assure, so far as possible, that every working man and woman in the Nation has safe and healthful working conditions,” Keene offers a broad selection of Safety Training programs for employers and employees. By providing OSHA education through a cohesive community of safety and health professionals, Keene and OSHA strive to strengthen safe operations and safe workers through knowledge.

For more information visit http://oshaedne.com/ or call the OSHA Education Center at Keene State College, Manchester, New Hampshire at 800-449-6742. n

AUGUST, 2017

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61

FactSheet FactSheet

OSHA’s Crystalline Silica Rule: OSHA’s Crystalline Silica Rule: OSHA’s Crystalline SilicaSilica Rule: Rule: OSHA’s Crystalline Construction Construction Construction Construction

OSHA issuing standards to workers protectfrom workers from exposure to respirable OSHA isis issuing twotwo standards to protect exposure to respirable OSHA is issuing two standards to protect workers from exposure to respirable crystalline silica—one for construction, and the other for general industry and OSHA is issuing two standards to protect workers from exposure to respirable crystalline silica—one for construction, and the other for general industry and crystalline silica—one for construction, and the other for general industry and maritime—in order to allow employers to tailor solutions to the specific conditions crystalline silica—one for construction, and the solutions other for to general industry and maritime—in order to allow employers to tailor the specific conditions maritime—in order to allow employers to tailor solutions to the specific conditions in their workplaces. maritime—in order to allow employers to tailor solutions to the specific conditions in their workplaces. in their workplaces. in their workplaces.

Who is affected by the construction The construction standard does not apply where standard? remain low under any foreseeable Who is affected by the construction exposures will The construction standard does not apply where Who is affected by the construction The construction conditions; for example, when onlystandard performingdoes not apply where About two million construction workers are standard? exposures will remain low under anyapply foreseeable Who is affected by the construction construction standard does not where tasks such asThe mixing mortar; pouring concrete exposed to respirable crystalline silica in over standard? exposures will remain low under any foreseeable conditions; for example, when only performing standard?

About millionOSHA construction workers will remain low under any foreseeable foundation and foundation walls; 600,000two workplaces. estimates that more arefooters, slab exposures

Photo: NIOSH Photo: NIOSH Photo: NIOSH

Photo: NIOSH

conditions; for example, when only performing About two million construction workers areand removingtasks concrete formwork. such as mortar; concrete than 840,000 of these workers are exposed to inare exposed tomillion respirable crystalline silica over conditions; formixing example, whenpouring only performing About two construction workers tasks such as mixing mortar; pouring concrete exposed to respirable crystalline silica in over silica levels that exceed the new permissible footers, slab foundation and foundation walls; 600,000 workplaces.

OSHA estimates that more tasks such as mixing mortar; pouring concrete exposed to respirable crystalline silica in over What does footers, the standard require? slab foundation and foundation walls; 600,000 workplaces.

OSHA estimates that more exposure limit (PEL). and removing concrete formwork. than 840,000 of theseOSHA workers are exposed to standardfooters, slab foundation and foundation walls; 600,000 workplaces. estimates that more requires employers to limit worker and removing concrete formwork. than 840,000 of these workers are exposedThe to Exposure to respirable crystalline can silica levels that exceed thesilica new permissible toand respirable crystalline silica and to removing concrete formwork. than 840,000 of these workers are exposed exposures to silica levels that exceed therespiratory new permissible cause silicosis, lung cancer, other What does the standard require? take other steps to protect workers. exposure limit (PEL). silica levels that exceed the new permissible What does the standard require? diseases, and kidney disease. Exposure can occur exposure limit (PEL). does standard require?

The standard requires employers to limit worker The standardWhat provides flexiblethe alternatives, exposure limitconstruction (PEL). during common tasks such as using The standard requires employers to limit worker Exposure to respirable crystalline silica can especially useful exposures to respirable crystalline silica to for small employers.

Employers The standard requires employers to limitand worker masonry saws, grinders, drills, jackhammers Exposure to respirable crystalline silica can exposures to respirable crystalline silica and to cause silicosis, lungchipping cancer, other respiratory Exposure topowered respirable crystalline silica can can either useexposures a control method laid out in Table 1 and handheld tools; operating take other steps to protect workers. to respirable crystalline silica and to cause silicosis, lung cancer, other respiratory take other steps to can protect workers. the construction standard, or they measure diseases, and kidney disease.

Exposure can of occur vehicle-mounted drilling rigs; milling; operating cause silicosis, lung cancer, other respiratory take other steps to protect workers. diseases, and kidney disease.

Exposure canworkers’ occur exposure to silica and independently The standard provides flexible alternatives, crushing machines; and using heavy equipment during common construction suchcan as using diseases, and kidney disease. tasks Exposure occur provides flexible alternatives, decide whichThe dust standard controls work best to limit during common construction for demolition or certain other tasks. tasks such as using especially useful for small employers.

Employers The standard provides flexible alternatives, masonry saws, grinders, drills,tasks jackhammers during common construction such as using exposures to especially the PEL in their workplaces. useful for small employers. Employers masonry saws, grinders, drills, jackhammers can either useful use a control method laid out in Table 1 especially for small employers.

Employers and handheld tools; operating masonry saws,powered grinders,chipping drills, jackhammers can either use a control method laid out in Table 1 Regardless ofof which exposure control method is or they and handheld powered chipping tools; operating the construction standard, can measure can either use a control method laid out in Table 1 vehicle-mounted drillingchipping rigs; milling; and handheld powered tools;operating operating used, all construction employers covered by the or they can measure of the construction standard, vehicle-mounted drilling rigs; milling; operating workers’ exposure to silica and independently of the construction standard, or they can measure crushing machines; and using heavy equipment vehicle-mounted drilling rigs; milling; operating standard are workers’ required to:exposure to silica and independently crushing machines; and using heavy equipment decide which dust controls workindependently best to limit workers’ exposure to silica and for demolition or certain other heavy tasks. equipment crushing machines; and using • Establish and implement a written exposure work best to limit decide which dust controls for demolition or certain other tasks. exposures totasks the in their workplaces. decide which dustPEL controls work best to limit for demolition or certain other tasks. control plan that identifies exposures to the that PELinvolve in their workplaces. exposures to the PEL inworkers, their workplaces. exposure and methods used to protect Regardless of which exposure control method is including procedures to restrict accessexposure to work Regardless of which control method is used, all construction employers covered by the Regardless of may which exposure control method is areas where high exposures occur. used, all construction employers covered by the standard are required to: • Designateused, a competent person to implement all construction employers covered by the standard are required to: the writtenstandard exposure control plan. are required to: • Establishpractices and implement • Restrict housekeeping that exposea written exposure • Establish and implement a written exposure workers to• silica whereplan feasible alternatives control identifies that involve Establish andthat implement a tasks written exposure control plan that identifies tasks that involve are available. exposure and methods used to protect workers, control plan that identifies tasks that involve • Offer medicalexposure exams – including chest X-rays and methods used to protect workers, including procedures to restrict access to work exposure and methods used to protect workers, and lung function tests – every three years for including procedures to restrict access to work areas where exposures may occur.to work workers who including are required byhigh the standard to procedures to restrict access Without dust controls, using a handheld power saw to cut concrete areas where high exposures may occur. wear a respirator forwhere 30 or more days per year.

• areas Designate a high competent person implement can expose workers to high levels of respirable crystalline silica. exposures mayto occur.

• Designate a competent person to implement the writtenaexposure control plan.

• Designate competent person to implement the written exposure control plan.

• the Restrict housekeeping practices that expose written exposure control plan.

• Restrict housekeeping practices that expose workershousekeeping to silica wherepractices feasible alternatives • Restrict that expose workers to silica where feasible alternatives are available. workers to silica where feasible alternatives are available.

• are Offer medical exams – including chest X-rays available.

• Offer medical exams – including chest X-rays and lung function tests – every three years for • Offer medical exams – including chest X-rays and lung function tests – every three years for workers are required by the standard and lungwho function tests – every three years to for Without dust controls, using a handheld power saw to cut concrete workers who are required by the standard to wear a respirator for 30 or by more per year.

Without dustworkers controls, a handheld power crystalline saw to cut concrete workers who are required the days standard to can expose to using high levels of respirable silica. wear a respirator for 30 or more days on perpage year.

Without dust controls, using a handheld power saw to cut concrete can expose workers to high levels of respirable crystalline silica. continued 63 wear a respirator for 30 or more days per year. can expose workers to high levels of respirable crystalline silica.

62

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AUGUST, 2017

OSHA Fact Sheet continued from page 62 • Train workers on work operations that result silica exposure and ways to limit • inTrain workers on work operations thatexposure. result • Keep records of workers’ silica exposure and in silica exposure and ways to limit exposure. medical exams.

• Keep records of workers’ silica exposure and

In this example, if a worker uses the saw outdoors foriffour hours or less per day, no In this example, a worker uses the saw respirator would be needed.

If a uses the outdoors for four hours or less per day,worker no saw for more than four hours per day or any time respirator would be needed. If a worker uses the indoors, he or she would need to use a respirator saw for more than four hours per day or any time medical exams.

What is Table 1? with an protection factor (APF) of at indoors, he assigned or she would need to use a respirator What is Table common 1?

Table 1 matches construction tasks with with least 10. In this case, a NIOSH-certified an assigned protection factor (APF) of at filtering Table 1 matches common constructionknow tasks exactly with dust control methods, so employers least 10. In thisrespirator case, a NIOSH-certified filtering facepiece that covers the nose and dust they control methods, solimit employers exactly what need to do to workerknow exposures facepiece thatreferred covers the mouthrespirator (sometimes tonose as a and dust mask) they need to control do to limit worker exposures mouth (sometimes to as a dusttomask) towhat silica.

The dust measures listed in the could be used. referred If a worker needs use a to silica.

The dust control measures in the like could be used.on If a30 worker needs to use a he or she table include methods known to belisted effective, respirator or more days a year, table water includetomethods known be effective, like respirator 30 or days aayear, he orexam. she using keep dust fromtogetting into the would on need to more be offered medical using waterventilation to keep dusttofrom getting intoInthe would need to be offered a medical exam. air or using capture dust. some air or using ventilation to capture dust. In some Alternative exposure control methods operations, respirators may also be needed.

Alternative exposure control methods operations, respirators may also be needed.

Employers who do not use control methods on Employers who do not use control methods on Employers who follow Table 1 correctly are not Table 1 must: Employers who follow Table 1 correctly are not required to measure workers’ exposure to silica Table 1 must: required to measure workers’ exposure to silica • Measure the amount of silica that workers are and are not subject to the PEL. • Measure the amount of silica that workers are and are not subject to the PEL. exposed if it may at or above an action exposed to if to it may be atbe or above an action Table HandheldPower PowerSaws Saws 3 Table11Example: Example: Handheld (micrograms of silica per level of 25 μg/m 3 level of 25 μg/m (micrograms of silica per IfIfworkers are sawing silica-containing materials, cubic meter of air), averaged over an eightworkers are sawing silica-containing materials, cubic meter of air), averaged over an eightthey withaabuilt-in built-insystem system that theycan canuse use aa saw saw with that hour hour day.day. applies the saw sawblade. blade.The Thewater water limits • Protect applieswater water to to the limits • Protect workers respirable crystalline workers fromfrom respirable crystalline the crystallinesilica silica that theamount amount of of respirable respirable crystalline that silica exposures above the permissible silica exposures above the permissible 3 3 gets getsinto intothe the air. air. , averaged exposure 50 μg/m exposure limitlimit of 50of μg/m , averaged over anover an eight-hour day. day. eight-hour dustdust controls to protect workers from from Table1: 1: Specified Specified Exposure Methods • Use controls to protect workers Table ExposureControl Control Methods • Use silica exposures above the PEL. When Working with Materials Containing silica exposures above the PEL. When Working with Materials Containing • Provide respirators to workers when when dust dust Crystalline Silica Silica • Provide respirators to workers Crystalline controls cannot limit exposures to the PEL. controls cannot limit exposures to the PEL. Equipment/

Equipment/ Task Task

Engineering and

Engineering and Work Practice Work Practice Control Methods Control Methods

Required Required Respiratory Respiratory Protection and Protection Minimum and Minimum Assigned Assigned Protection Protection Factor (APF)

Factor (APF)

≤ 4 hrs/ > 4 hrs/ ≤ 4 hrs/ shift > 4 hrs/ shift

shift

Handheld power saws Handheld (any blade power saws diameter) (any blade

diameter)

shift

Use saw equipped with saw integrated Use equipped waterintegrated delivery with systemdelivery that water continuously system that feeds water to the blade. continuously feeds

outdoors.

AUGUST, 2017

exposure samples, which begin on June 23, 2018.

Additional information

Additional information Additional information on OSHA’s silica rule can Additional information on OSHA’s silica rule can be found at www.osha.gov/silica. be found at www.osha.gov/silica.

maintain tool in

• When Whenused used outdoors. indoors or in an area.

• enclosed When used indoors or in an enclosed area.

with the standard?

Construction employers must comply with all Construction employers must comply with all requirements of the standard by June 23, 2017, requirements of the standard by June 23, 2017, except requirements for laboratory evaluation of exceptsamples, requirements for laboratory evaluation of exposure which begin on June 23, 2018.

OSHA can provide extensive help through a variety of programs, about OSHA canincluding provide technical extensiveassistance help through a variety effective safety and health programs, of programs, including technicalworkplace assistance about consultations, and training and education. effective safety and health programs, workplace

water toand the blade.

Operate Operate and accordance with maintain tool in manufacturer’s accordance with instructions to manufacturer’s minimize dust instructions emissions. to minimize dust • When used emissions.

When areare employers required to comply When employers required to comply with the standard?

None

None APF 10

APF 10

APF 10

APF 10 APF 10

APF 10

consultations, and training and education.

OSHA’s On-site Consultation Program offers free andOSHA’s confidential occupational safety and health On-site Consultation Program offers free services to small and medium-sized businesses in and confidential occupational safety and health all states and several territories across the country, services to small and medium-sized businesses in with priority given to high-hazard worksites. all states and several territories across the country, On-site consultation services are separate from with priority given to high-hazard worksites. enforcement and do not result in penalties or On-site consultation services are separate from citations. Consultants from state agencies or enforcement and do not result incontinued penaltiesonorpage 65 universities work with employers to identify citations. Consultants from state agencies or universities work with employers to identify

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OSHA Fact Sheet continued page 63 from On-site consultation services from are separate enforcement and do not result in penalties or citations. Consultants from state agencies or universities work with employers to identify workplace hazards, provide advice on compliance with OSHA standards, and assist in establishing and improving safety and health management systems. To locate the OSHA On-site Consultation Program nearest you, call 1-800-321-OSHA (6742) or visit www.osha.gov/dcsp/smallbusiness.

For more information on this and other healthrelated issues impacting workers, to report an emergency, fatality, inpatient hospitalization, or to file a confidential complaint, contact your nearest OSHA office, visit www.osha.gov, or call OSHA at 1-800-321-OSHA (6742), TTY 1-877-889-5627.

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AUGUST, 2017

IN THIS ISSUE • • • • •

John E. Merchant, CPA Smart Tax, Business & Planning Ideas from yo Cullen, Murphy & Co., P.C.

College Costs Really are Increasing Again Start FAFSA Planning Earlier Asset Allocation in 529 Plans Outlining the Trump Tax Plan How Small Business Retirement Plans Compare

T

The College Board reports that the average published charges for tuition, fees, room, and board at private, nonprofit, four-year schools were over $45,000 in the 2016–17 academic year.

At public universities, the average charge was around $20,000 for state residents.

Both numbers are the highest on record.

2016 dollars. Even as publ continued to rise, the aver at private colleges fell from $23,620.

Since then, however, ne have begun to move up. In the average figure at four-y colleges reached $26,080. students at p universities net prices ho the $11,000 range from 2 to 2010–11 to $14,210 i In recent yea in grants hav up with risin prices, creat expensive ne higher educa For paren in the range from 2006– Such $11,000–$12,000 expenses for higher education collegians and younger stu 07 2010–11, but shoot $14,210 are to daunting, but the reality may be lessup to message is that they may Many collegians receive some increases inonerous.

2016–17.

In recent years, more effort in into competin form of financial aid that brings down grants.

Some grants have not kept up with rising pub-strategies fo the actual cost. Thecreating College Board also expensive the Free Application for F lished prices, more net reports “net” prices, estimating the true Aid (FAFSA) can be foun prices cost of afor yearhigher in collegeeducation. after recognizing of this issue of the CPA C financial aid and the of savings from certainand Savvy investing of college For parents collegians younger education-related tax benefits. help; on page 3, you’ll fin students, the message is that they may For the 2006–07 academic year to on how to manage 529 co have to put more effort into competing for 2010–11, net prices declined in constant accounts. g

College Costs Really are Increasing Again

he College Board reports that the average published charges for tuition, fees, room, and board at private, nonprofit, four-year schools were over $45,000 in the 2016–17 academic year. At public universities, the average charge was around $20,000 for state residents. Both numbers are the highest on record.

Such expenses for higher education are daunting, but the reality may be less onerous. Many collegians receive some form of financial aid that brings down the actual cost. The College Board also reports “net” prices, estimating the true cost of a year in college after recognizing financial aid and the savings from certain education-related tax benefits.

For the 2006–07 academic year to 2010– 11, net prices declined in constant 2016 dollars. Even as published prices continued to rise, the average net price at private colleges fell from $24,580 to $23,620.

Since then, however, net prices have begun to move up. In 2016–17, the average figure at four-year private colleges reached $26,080. In-state students at public universities saw average net prices hold steady AUGUST, 2017

College Costs Really Are Increasing

college grants. Some strategies for dealing with the Free Application for Federal Student Aid (FAFSA) can be found on page 68 of this article. Savvy investing of college funds can also help; on page 70, you’ll find suggestions on how to manage 529 college savings accounts. continued on page 68

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Financial Management continued from page 67

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Start FAFSA Planning Earlier

he “new” FAFSA schedule (introduced in 2016) makes summer the time for FAFSA prep. On October 1, 2017, financial aid applications for the 2018- 19 school year can be filed. In prior years, students had to wait until January 1 to request financial aid for the coming academic year.

Why is this important? Some observers believe that financial aid may be granted on a first come, first served basis, so the early filer may have more of a chance to receive aid. Also, filing a FAFSA early may increase the chance for merit (not need-based) aid because some colleges require the FAFSA for such grants.

In addition, FAFSA will now have real family income numbers from federal income tax returns, rather than estimates.

Example 1: Mark Thompson will start college in the fall of 2020. In October 2019, Mark can file the FAFSA. He’ll use his family’s income from 2018

based on the tax return filed in 2019. (Even if Mark’s family gets a filing extension from April 15, 2019, the return must still be filed by October 15 of that year, so the 2018 income numbers will be available for a FAFSA filing in October 2019.)

Under the previous FAFSA schedule, Mark would have filed the FAFSA in early 2020, using estimated income numbers for 2019. Then, he would have amended the FAFSA, if necessary, to conform with the actual 2019 numbers. That won’t be necessary now that the Thompsons’ 2018 income will help determine Mark’s need-based aid in the 2020-21 school year.

Planning Far Ahead Under the new FAFSA schedule, planning for college funding should begin much earlier, probably in the ninth or tenth grade. Income from the calendar year that includes the student’s sophomore and junior years of high school will be the income that shows up on the first annual FAFSA filing.

Example 2: Mark Thompson, who will start colcontinued on page 69

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Financial Management continued from page 68

plans can hold onto their assets until January of the student’s sophomore year. Tax-free distributions for educational expenses may be able to begin then without showing up on a FAFSA to affect financial aid. continued on page 70

lege in the second half of 2020, will be a tenth grader in the first half of 2018, and a high school junior in the second half of the year. The family’s income from that year will be the income reported on Mark’s first annual FAFSA and, thus, will determine financial aid when Mark goes to college.

Therefore, if Mark’s parents are planning acFAFSA Facts tions that would increase income, they might want • There is no upper limit on family income to do so in 2017, when Mark goes from the ninth to the tenth grade. Such actions could include taking to qualify for federal student aid. capital gains, taking retirement plan distributions, or • Eligibility for aid is determined by a converting traditional IRA dollars to a Roth IRA. Actmathematical formula, not by family ing before January 1 of the sophomore year of high income alone. Besides income, many school will keep the resulting income from the FAFSA. Alternatively, such actions might be postponed factors (such as family size and parents’ until January of the student’s sophomore year of colage) are taken into account. lege, or later, when the income may no longer show • The higher the cost of attendance at the up on a FAFSA filing. chosen college, the more aid that may be Reducing the assets reported on a FAFSA also offered. may increase aid. Parents might fund an IRA in the current year, moving cash into retirement accounts • Having more than one child in college at that are not counted in determining the expected the same time will increase the chance for family contribution to college costs. IRA contributions financial aid. for 2018 can be made until April 15, 2019, but contributing in early 2018 can reduce reported assets on a • A student who fills out the FAFSA subsequent filing. automatically applies for funds from his or her In some cases, a business owner might want to state as well as from the federal government, consider changing the choice of entity during the FAFand possibly from the school as well.

SA years. Many small businesses are S corporations, • Some schools won’t consider students which avoid the corporate income tax. However, an S for any of their scholarships (including corporation passes through all income to the company’s owner, and a high income could reduce financial academic scholarships) until they have aid. With a regular C corporation, the company’s insubmitted a FAFSA. come doesn’t pass through to the owner. Your accountant can help you weigh all the pros and cons of C corporation versus S corporation status, including the impact on college aid.

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Grandparent Strategy The new FAFSA schedule also affects planning for 529 college savings plans that are owned by grandparents, with a grandson or granddaughter as the beneficiary.

The assets of such a 529 plan are not reported on a FAFSA, so they don’t reduce possible financial aid. However, when grandparentowned 529 plans distribute funds to cover college costs, the payouts count as untaxed income to the student on a FAFSA, which can reduce aid eligibility substantially.

Now, grandparent-owned 529

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with young children have two offset, all 529 withdrawals can be taxof college admission, minimizing risk, hoices when investing for higher free, whereas 401(k) distributions are whereas others suggest a somewhat Financial Management continued from page 69 on. One is to invest as you did taxable. To qualify for tax exclusion, larger position in stocks for continuing you had children, with assets 529 withdrawals must not exceed the growth potential. ble and tax deferred accounts, amount spent on qualified higher our own names. This will givewith education which generally arents young costs, children have ximum flexibility intwo termsbroad of include tuition, fees, room, and choices when investing ent choices and taxfor planning. board. higher education.

One is to inhe time comes, you can peel off vest as you did before you had children, Age-old o pay college with bills. (Financial assets in taxable andquestion tax deferred The holders 529 accounts may advise against tapping accounts, under your own of names.

This face a dilemma when it comes ent accounts will to paygive for college.) you maximum flexibility in terms to investing.

To make the other approach is to have a of investment choices and tax planning. most ofyou the benefit of tax-free ed college fund, or onethe college When time comes, can peel off distributions, 529 plans r each student.

One advantage of assets to pay college bills. (Financial should adinvestedtapping for growth.

The thod is psychological; you may the child is in his or her late teens and visers may advise be against retirePackaged portfolios tax savings from an account that early has twenties, tant to use higher the money will be needed. menteducation accounts to pay for college.)

Parents who like the idea of a glide gained, say, 2% a year will be much for a cruise or a luxury car lease.

If the portfolio value has dropped sharply The other approach is to have a dedipathduring can choose fromyears, a 529 plan’s less than the tax savings from a 529 ddition, a dedicated college before and those there may cated college fund, or one college fund menu. Every year or so, move money account in which growth has beennot 7%be enough s a compressed time horizon. time to recover losses, let each student. or One of this from aggressive to more conservative 8% advantage a year. he child is infor his or her late alone continue to grow. method is psychological; investment options.

On theyou othermay hand,be forrea 529 nd early twenties, the money use higher education money thefeel Magic youis don’t up toNumber such account to grow rapidly, investors must WhyIf529 needed. If theluctant portfolio to value for a cruise or a luxury car lease. maneuvers, or just prefer notprefer to bea dediput money into volatile assets, such For parents pped sharply before and during and grandparents who Inbeaddition, college fund bothered, don’t fret.

“Age-based” as stock funds.

That brings the risk of ears, there may not enough a dedicated cated college fund, 529 plans—named after a section continued page 71 has a compressed time horizon.

When portfolios usually are offered toon 529 timing; your student might enter recover losses, let alone continue poor college after a bear market has depleted investors. Essentially, these portfolios . are on autopilot so that your child’s the 529 account, which could leave 529 is the magic number your student with a smaller college 529 account will become more ents and grandparents who conservative over time. fund. dedicated college fund, 529 Nevertheless, an age-based Investment professionals may named after a section of the tax portfolio in one state’s 529 plan may suggest a “glide path” strategy to are increasingly appealing. Over be much different from another state’s. address such concerns. For a young llion is invested in these plans, Before signing up, look at the details child who is 10, 15, or even 18 years in college savings plans that away from high school graduation, 529 carefully. Are you comfortable with lar to 401(k) retirement plans the underlying asset allocation and the money might be invested mostly in account holders choose from a equities with a hope for strong growth. way that allocation will shift? There nd enjoy untaxed investment may be multiple options to consider As college nears, the asset allocation (Some 529 plans are prepaid within one state’s plan, as well as from can shift from stocks to bonds and plans, which operate differently.) cash. Some observers assert that a 529 different states. Make sure you know ke 401(k)s, 529 plans are largely account should be very light (perhaps just how your college fund will be with after-tax dollars. As an managed.g less than 10%) in equities by the time

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Asset Allocation in 529 Plans

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Financial Management continued from page 70

Age-Old Question

The holders of 529 accounts face a dilemma when it comes to investing. To make the most of the benefit of tax-free distributions, 529 plans should be invested for growth. The tax savings from an account that has gained, say, 2% a year will be much less than the tax savings from a 529 account in which growth has been 7% or 8% a year.

On the other hand, for a 529 account to grow rapidly, investors must put money into volatile assets, such as stock funds. That brings the risk of poor timing; your student might enter college after a bear market has depleted the 529 account, which could leave your student with a smaller college fund.

Investment professionals may suggest a “glide path” strategy to address such concerns. For a young child who is Aon Risk Solutions 10, 15, or even 18 years away from high Construction Services Group school graduation, 529 money might be invested mostly in equities with a hope for strong growth. As college nears, the asset allocation can shift from stocks to bonds and cash. Some observers assert that a 529 account should be very light (perhaps less than 10%) in equities As the leading provider of risk solutions to the construction industry, Aon by the time of college admission, miniConstruction Services Group partners with clients to provide insighful mizing risk, whereas others suggest a somewhat larger position in stocks for analysis, strategic direction and creative solutions backed by our dedicated continuing growth potential. team of construction experts and the strength of Aon’s global network.

of the tax code—are increasingly appealing. Over $275 billion is invested in these plans, mainly in college savings plans that are similar to 401(k) retirement plans in that account holders choose from a menu and enjoy untaxed investment income. (Some 529 plans are prepaid tuition plans, which operate differently.)

Unlike 401(k)s, 529 plans are largely funded with after-tax dollars. As an offset, all 529 withdrawals can be tax-free, whereas 401(k) distributions are taxable.

To qualify for tax exclusion, 529 withdrawals must not exceed the amount spent on qualified higher education costs, which generally include tuition, fees, room, and board.

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Packaged Portfolios Parents who like the idea of a glide path can choose from a 529 plan’s menu. Every year or so, move money from aggressive to more conservative investment options.

If you don’t feel up to such maneuvers, or just prefer not to be bothered, don’t fret. “Age-based” portfolios usually are offered to 529 investors. Essentially, these portfolios are on autopilot so that your child’s 529 account will become more conservative over time.

Nevertheless, an age-based portfolio in one state’s 529 plan may be much different from another state’s.

Before signing up, look at the details carefully. Are you comfortable with the underlying asset allocation and the way that allocation will shift? There may be multiple options to consider within one state’s plan, as well as from different states. Make sure you know just how your college fund will be managed. continued on page 73

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Financial Management continued from page 71

Outlining the Trump Tax Plan

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s a candidate in 2016, Donald Trump promised significant tax reform. A few months after becoming President, Trump released a one-page outline of his goals in that area. As the year goes on, we may see details added to his plan and eventually learn whether major tax legislation is enacted. Here are the major areas that will be addressed.

Taxes on Business

Trump wants to cap the corporate income tax rate at 15%. Currently, the top rate is 35%. Such a reduction, he asserts, would make American companies more competitive worldwide.

The outline also includes a one-time tax on “trillions of dollars” held overseas. Previously, Trump indicated that he favors a 10% tax on corporate offshore profits brought into the United States.

In addition, the plan would eliminate tax breaks for unspecified “special interests” and implement a “territorial tax system” to level the playing field for American companies. Generally, in a territorial tax system, domestic profits are taxed at the full rate, whereas profits from abroad are not subject to domestic income tax.

bracket would have a 10% marginal tax rate under this plan. Those in the 28%, 33%, and perhaps the 35% bracket could be in the 25% bracket, whereas the top rate would fall from 39.6% to 35%.

The tax plan also calls for doubling the standard deduction, which is available to individual taxpayers.

That standard deduction is now $6,350 for single taxpayers, $9,350 for heads of households, and $12,700 for couples filing joint returns. Doubling those numbers would produce standard deductions of $12,700 for single filers, $18,700 for household heads, and $25,400 for married couples filing jointly.

In addition, the outline calls for tax relief for families with child and dependent care expenses without giving details. Press reports hint that one approach could be an increase in the child and dependent care tax credit, which now allows people with care-related outlays to reduce their tax bill by up to $2,100.

Tax Simplification Under this heading, the outline would “protect” the home ownership and charitable gift tax deduccontinued on page 75

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Taxes on Individuals The Trump plan calls for reducing the number of tax brackets from seven to three. Today, individual taxpayers start with a 10% income tax rate and move into the 15%, 25%, 28%, 33%, 35%, and 39.6% brackets, as their taxable income increases. The three proposed tax rates would be 10%, 25%, and 35%.

Depending on the cut-off points for these tax rates, it’s possible that taxpayers now in the 15%

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The next item on the list—repeal the alternative minimum tax (AMT)— would possibly make the intions. In other words, many itemized deductions, teraction between the standard deduction and itemsuch as medical expenses as well as state and local ized deductions more thought- provoking. As mentaxes paid, would be eliminated, but the deductions tioned, state and local income and property tax no for home mortgage interest and charitable contribulonger would be deductible. However, some people tions would be spared. who now pay large amounts of those taxes owe the Assuming the preceding proposals are enacted, AMT and don’t get the benefit of deducting such more taxpayers would take the larger standard detaxes. Would the repeal of the AMT make up for the duction rather than itemizing deductions. The only loss of deducting state and local tax payments? Your ones still itemizing would be taxpayers with mortgage accountant can go over the numbers for you in your interest and charitable deductions that exceed the specific circumstances.

Burke Wicked HD 4.625 x 7.5 9-16:Dennis K. Burke 10/24/16 2:18 PM Page 1 standard deduction amounts.

The Trump outline also calls for repeal of the 3.8% surtax on net investment income, a tax that applies to taxpayers with high incomes.

Currently high-income taxpayers can be subjected to a 43.4% marginal tax rate on some income, if they are in the 39.6% bracket and have ordinary investment income subject to the 3.8% tax. Long-term capital gains can be taxed at a rate as high as 23.8%, with the surtax included.

Also on the outline’s “to repeal” list is the federal estate tax.

This tax now has an exemption of $5.49 million, which can be $10.98 million for married couples, so relatively few estates owe this tax anyway. Still, owners of valuable small companies and investment Just behind the Green property might get some relief Monster in Fenway Park, when those assets pass to youngBostonʼs iconic CITGO Some days, it’s just one tough sign has become a weller generations, if the estate tax is job after another.

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I

tax deferred contributions from their earnings.

However, 401(k)s have drawbacks, too. One key issue is the requirement that they don’t discriminate in favor of highly-compensated employees.

Testing is required, and failing such tests may result in limiting the retirement contributions of owneremployees.

by the company, as well as part-tim workers who are paid for less than 1,000 hours a year, can be exclude Solo 401(k)s allow business ow and their employed spouses to ma relatively large contributions. Wit standard 401(k), the 2017 maxim is $18,000 a year, or $24,000 for t 50 or older. Solo 401(k)s permit b employee and employer contribut so the maximu this year can be $54,000 or $60,000.

Bottom lin If your compa qualifies, these plans can allow you (and your employed spouse) to ma substantial retirement pla contributions.

How Small Business Retirement Plans Compare

n recent Financial Management articles, various small business retirement plans were described. If your company does not have a retirement plan, or if you’re not pleased with the one you have, this summary can help you see how these choices stack up.

Safe Harbor 401(k)s As 401(k) plans have gained popularity, many employees or prospective employees expect to have such a plan at the company where they work. Therefore, offering a 401(k) may help your business attract and retain talented people. Employers commonly like the fact that 401(k) plans are largely self-funded from employees’ tax deferred contributions from their earnings.

However, 401(k)s have drawbacks, too. One key issue is the requirement that they don’t discriminate in favor of highly-compensated employees. Testing is required, and failing such tests may result in limiting the retirement contributions of owner-employees.

401(k)s permit both employee contriSIMPLE IRAs With the safe harbor versions of and employer with other retirement a 401(k), so employers make certain butions, the maximums this year Compared can be $54,000 plans, savings incentive match pla orcontributions $60,000. to employees’ accounts. for employees (SIMPLE) IRAs Anti-discrimination testing isn’t Bottom line: If your company qualifies, these allow relatively low contributions required, and owner-employees can plans can allow you (and your employed spouse) to make substantial retirement plan contributions. continued on page 78

With the safe harbor versions of a 401(k), employers make certain contributions to employees’ accounts. Anti-discrimination testing isn’t required, and owner-employees can maximize contributions to their own retirement funds if they wish. The downside to such plans is that the required employer contributions can be expensive.

Bottom line: These plans can appeal to business owners who want to offer a 401(k) retirement plan yet avoid nondiscrimination testing.

Solo 401(k)s Yet another variety of a 401(k) is available to companies without any common-law employees. If the only people working at the firm are owners, business partners, shareholders, and their spouses, a solo 401(k) can be used. (Independent contractors hired by the company, as well as part-time workers who are paid for less than 1,000 hours a year, can be excluded.)

Solo 401(k)s allow business owners and their employed spouses to make relatively large contributions. With a standard 401(k), the 2017 maximum is $18,000 a year, or $24,000 for those 50 or older. Solo

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Profit-Sharing Plans

Financial Management continued from page 77 SIMPLE IRAs Compared with other retirement plans, savings incentive match plan for employees (SIMPLE) IRAs allow relatively low contributions: no more than $31,000 a year. That number is for participants 50 or older receiving both employer and employee contributions, so the maximum is much lower for many participants.

On the other hand, SIMPLE IRAs are designed to be easy on the paperwork. Companies fill out a short form to establish the plan and ensure that IRAs are set up for each employee. To be eligible, your company must have no more than 100 employees and must not sponsor another retirement plan.

Going forward, there is no annual filing requirement and nondiscrimination testing is not necessary.

Administrative costs usually are low. However, certain contributions to employees’ SIMPLE IRAs are required.

Bottom line: If you want to offer a retirement plan that requires little administration and you are content with the contribution limits to your own account, a SIMPLE IRA can be a viable choice.

The name of these plans might help motivate employees. They may believe that if they help the company do well (make significant profits), the company will make a meaningful contribution to their retirement accounts.

Actually, your company has no obligation to give a certain percentage of any profits to its employees.

As an employer, you can raise or lower annual contributions as you wish or even skip them altogether.

Still, companies with profit-sharing plans may peg their contributions to the firm’s results, so employees will learn that their successful efforts will produce tangible rewards.

In addition, profit-sharing plans come in different forms. Some will contribute a certain percentage of compensation to all participants, and other plan designs may skew contributions to certain individuals, according to various formulas. Such sophisticated profit-sharing plans can be expensive to create and administer.

Bottom line: If your company can afford substantial tax-deductible contributions to employees’ retirement accounts, a well-publicized profit-sharing plan can be a potent motivator. continued on page 79

Dave Pateuk / Owner Email: dave@northeastshoring.com Website: www.northeastshoring.com

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Financial Management continued from page 78 ESOPs As the name indicates, employee stock ownership plans (ESOPs) are designed to transfer some, or sometimes all, of company ownership to employees. Shares are transferred to the ESOP, valuations are implemented, and departing participants receive a cash payout equal to the value of the shares allocated to their accounts.

Again, employees are motivated to perform well.

Higher profits generally equal higher share values and a larger buyback when they retire or change jobs. For business owners, ESOPs may offer tax advantages that go beyond deductible contributions as well as an appealing exit strategy.

That said, it can be expensive to comply with regulatory requirements for ESOPs. Some companies offer an additional retirement plan because a reliance on an ESOP means a lack of investment diversification.

Bottom line: Adopting an ESOP should not be taken lightly because these plans can be complex, but they may offer an attractive mix of employee appeal, unique tax benefits, and company continuity.

Defined Benefit Plans Traditional pension plans are defined benefit plans. They commit employers to certain contributions each year and to certain payouts to retirees.

They may be too costly to administer and too inflexible for most small companies.

Nevertheless, they can appeal to companies whose owners want the largest possible contributions to their retirement funds. In some circumstances, annual contributions to the principal’s account can reach well into six figures and are tax deductible.

Large contributions must be made to the plan to provide a sizable pension to participants.

Bottom line: Defined benefit plans may work well for companies when the owner or owners are planning to retire in 5–10 years. Assuming that there are other employees who are younger and modestly paid, the owners might build up a large pension fund in a few years while relatively few dollars go to fund other employees’ retirements.

Final Thought The preceding list is not exhaustive, as other retirement plans may be adopted by small businesses and professional practices.

Reprinted from CPA Client Bulletin. n

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E.H. Perkins Construction, Inc. & Subsidiaries P.O. Box 301, Wayland, MA 01778 (508) 358-6161 • (781) 890-6505

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Advertisers’ Index APJ Equipment Corp..............................................................70 ATS Equipment, Inc. .............................................................36 Acme Shorey Precast Co., Inc.................................................8 Aggregate Industries - N.E. Region.......................................58 American Shoring, Inc........................................ Ins. Back Cvr. Aon Construction Services Group.........................................71 AQUAREHAB USA Inc...........................................................65 Boro Sand & Stone Corp....................................................... 74 Brennan Consulting...............................................................58 Dennis K. Burke, Inc..............................................................75 C&S Insurance Agency.........................................................18 Concrete Systems, Inc...........................................................12 Dagle Electrical Construction Corp.......................................14 Darmody, Merlino & Co., LLP................................................60 Dedham Recycled Gravel......................................................76 DeSanctis Insurance Agency, Inc. ........................................ 11 Dig Safe System, Inc...............................................................9 The Driscoll Agency .............................................................. 74 EJ...........................................................................................25 Eastern Insurance Group, LLC..............................................34 Eastern States Insurance Agency, Inc..................................15 Eastpoint Lasers, LLC........................................................... 74 T. L. Edwards, Inc..................................................................60 Equipment4Rent....................................................................66 Exit Strategies Group LLC.....................................................54 Ferguson Waterworks............................................................72 Gorilla Hydraulic Breakers.....................................................25 L. Guerini Group, Inc..............................................................66 HD Supply Const. & Industrial White Cap.............................22 HD Supply Waterworks............................................................2 A. H. Harris Construction Supplies........................................19 Hinckley Allen LLP.................................................................46 John Hoadley & Sons, Inc.......................................................7 JESCO...................................................................................60 Kenworth Northeast...............................................................56 P. A. Landers, Inc...................................................................28 Lawrence-Lynch Corp............................................................68 Lorusso Corp..........................................................................54 Lorusso Heavy Equipment, LLC..............................................6 MBO Precast, Inc...................................................................69 Mabey, Inc..............................................................................64 Mass Broken Stone Company...............................................73 McGill Hose & Coupling, Inc..................................................53 Milton CAT..............................................................................44 Minuteman Trucks, Inc...........................................................58 Norfolk Power Equipment, Inc...............................................76 North American Crane & Rigging LLC..................................20 North East Shoring Equipment, LLC.....................................78 Ocean State Oil......................................................................76 Palmer Paving Corp...............................................................49 E. H. Perkins Construction Co., Inc.......................................80 Podgurski Corp......................................................................77 E. J. Prescott, Inc................................................Ins. Front Cvr. Rain For Rent-New England..................................................10 Read Custom Soils ...............................................................72 Ritchie Bros. Auctioneers......................................................66 Rogers & Gray Insurance......................................................52 Schmidt Equipment, Inc............................................. Back Cvr. Scituate Concrete Products Corp..........................................48 Scrap-It, Inc............................................................................21 Shea Concrete Products, Inc. ...............................................30 Smith Print..............................................................................72 Starkweather & Shepley Ins. Brokerage, Inc.........................13 Systems Support Corporation...............................................65 Tonry Insurance Group, Inc...................................................73 Travelers...................................................................................4 Triumph Modular....................................................................40 TruckTap.................................................................................61 United Concrete Products......................................................64 United Rentals Trench Safety................................................50 Webster One Source.............................................................24 C. N. Wood Co., Inc. .............................................................16 Woodco Machinery, Inc.........................................................26 Xylem Dewatering Solutions Inc............................................79

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