Construction Outlook May 2019

MAY | 2019

Photo Credit: J.W. Gilbert

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MAY, 2019

Years of Excellence 1954-2019

MAY, 2019

IN THIS ISSUE

OFFICERS President RICHARD PACELLA, JR. R. M. Pacella, Inc.

President-Elect MARCELLA ALBANESE

Albanese Brothers, Inc.

Treasurer RYAN McCOURT

McCourt Construction Company

Secretary BRIAN COONEY

C. C.Construction Inc.

BOARD OF DIRECTORS GREG ANTONELLI GTA Co., Inc.

VINCENT BARLETTA

Barletta Heavy Division

NICK BIELLO

5 President’s Message:

Water Infrastructure is Vital for Economic Development

7 Legislative Update: • • • • • •

Massachusetts House of Representatives Passes FY’20 Budget New Secretary of Executive Office of Environmental Affairs Appointed MassCOSH: Workforce Injuries and Violence on the Rise Senate Passes Traffic Safety Legislation; Construction Zone Safety Initiative Included Baker-Polito Administration Awards Funding to Protect Drinking Water Resources Department of Family and Medical Leave Makes Workplace Poster Available

21 Labor Issues:

Trump Administration’s Proposed Overtime Rules

23 Under the Hard Hat with UCANE’s Officers & Board Members: Q&A with UCANE Board Member Brian Rawston, Jay Cashman, Inc.

27 New Poll Finds Voters Overwhelmingly Support Increasing Federal Investment in Water Infrastructure 31 Legal Corner:

J. D’Amico, Inc.

The Bid Unit v. The Superior Court

TONY BORRELLI

33 UCANE Travels to Washington D.C. to Participate in Water Week 37 Construction Safety & Compliance:

Celco Construction Corp.

BEN CAVALLO

C&S Insurance Agency

ANDREW DANIELS J. Derenzo Co.

GEORGE DeFELICE

DeFelice Corporation

JERRY GAGLIARDUCCI

Gagliarducci Construction, Inc.

NICK GAMACHE

Rain for Rent - New England

MARCO GIOIOSO

P. Gioioso & Sons, Inc.

MIKE GORMAN

E. J. Prescott, Inc.

DAN HORGAN

R. H. White Const. Co., Inc.

BILL LEONARD

Aqua Line Utility, Inc.

JOHN OUR

Robert B. Our Co., Inc.

QUERINO PACELLA

RJV Construction Corp.

BRIAN RAWSTON

Jay Cashman, Inc.

PAUL SCENNA

Albanese D&S, Inc.

DAVID WALSH

Pawtucket Hot Mix Asphalt

ANNE KLAYMAN

Executive Director

JEFF MAHONEY

Assistant Executive Director

An Interview with Bill Cove, Regional Safety, Health and Environmental Manager, Sunbelt Rentals

41 UCANE’s 40th Annual Golf Classic 42 Contractor Member of the Month: W. L. French Excavating Corporation

49 UCANE Welcomes New Members 51 To End Sewer Overflows, Federal Dollars Needed 53 Safety Corner: How Competent is Your Competent Person?

55 UCANE’s Updated Employee Safety Manuals Now Available 57 Spotlight on Cape Cod: • Downtown Sewer Estimate Tops $47M • Economic Development Hinges on Wastewater Support

61 The McCourt Foundation Boston Waterfront 5K 63 Massachusetts Municipal Association News: Think Blue Honored for Stormwater Campaign

65 Financial Management:

• Using the 0% Tax Rate • Working Around the New “Kiddie Tax” • Final Regulations Clarify IRC Section 199A

Editor: Anne Klayman, Associate Editor: Suzanne Hatch, Magazine Designer/Assistant Editor: Sherri Klayman Construction Outlook Chairman: Richard Pacella, Jr. Editorial Board: Richard Pacella, Jr., Marcella Albanese, Ryan McCourt, and Brian Cooney 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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Water Infrastructure is Vital for Economic Development “If you build it, they will come…”

One thing we promote loudly and often at UCANE is the value of clean water. We highlight how it is the forgotten infrastructure, and how most people do not think about it unless no water comes out of their faucets, or their toilet doesn’t flush. There is a universal awareness of the impact clean water has on our health and our day to day lives. What is often overlooked is the critical role water infrastructure has on economic development. While roads, bridges, and transportation all play important roles in the economic growth of our cities and towns, none of it can happen without water.

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he Boston Harbor cleanup is certainly the most prominent example of the benefits of investing in water infrastructure. It is not an overstatement to say the work UCANE members have done on behalf of the MWRA over the past 25 years has transformed the City of Boston.

One need only visit the Seaport District to get a sense of what the cleanup of the Harbor has done, but that is not the totality of it. The ancillary benefits for other areas of Boston that are being developed, and for the region as a whole, are immeasurable and will be felt for years to come.

The cost of the cleanup was substantial ($4.7 billion), but certainly worth the investment. One recent study by the Woods Hole Oceanographic Institution put the return on that $4.7 billion investment at anywhere between $30 billion and $100 billion dollars.

Those numbers are backed up by other studies. A report by the Collins Center at UMass Boston, sponsored by the MWRA Advisory Board, found that for every dollar invested in water/ wastewater infrastructure, $2 - $14 in new taxes as well as $2.62 - $6.77 in the private economy would be generated. Five of the case studies MAY, 2019

they examined in Massachusetts showed that 20,000 jobs and more than $106 million/year in state and local revenues would be generated.

In addition, towns on Cape Cod are under court order to address their water quality issues. But rather than view this as a costly burden, some local officials are wisely seeing this as an investment for the economic future of their communities, attracting new businesses, as well as retaining and drawing new residents.

Postponing investment in water infrastructure now will not only increase the price tag later, but it also hinders the ability to address the economic challenges facing the region. Many towns are moving forward now, and hopefully, more will follow.

Everyone remembers the saying “if you build it, they will come” from the movie Field of Dreams. While in the movie that refers to a baseball field, our elected officials would be wise to apply that saying when deciding to invest in water infrastructure. If you build it, they will come… and we will all benefit from it. n

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Mark Molloy, Esq., Lynch Associates, Inc.

Massachusetts House of Representatives Passes FY’20 Budget

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partment of Environmental Protection (MassDEP) to approximately $31.5 million – a continuing and positive trend for the agency that will allow it to continue to add staff resources. The House FY’20 budget proposal also level-funded the state’s contract assistance line item at slightly over $63 million. The funding assists the Massachusetts Clean Water Trust in its efforts to service the variety and numerous awards it makes under the State Revolving Loan Fund Program. Finally, the Massachusetts House of Representatives funded the Commonwealth’s rate relief program at $1.1 million. The program, which once saw appropriations as high as $63 million, continues in a limited function to provide local aid to municipalities that have previously invested in their water inCall Your Nearest GENALCO Warehouse frastructure systems.

For These Supplies The Massachusetts Senate HYDRAULIC GRADE 8 STROBE LIGHTS OIL NUTS & BOLTS will release their FY’20 budWEATHER CAPS AIR CLEANERS get proposal in early May with GREASE FITTINGS BUCKET TEETH debate slated for the week beHYDRAULIC HOSE BUCKET LIPS fore the Memorial Day weekEQUIPMENT PAINT end. The House and Senate BUCKETS will then work to reconcile their CUTTING EDGES CHAIN budget differences to present SLINGS the Governor with a Conference BACKUP BELLS AIR, OIL & FUEL AND ALARMS Committee report on the FY’20 FILTERS EXTREME ROTARY PRESSURE GREASE ASPHALT CUTTERS budget in mid-June. The ComGENALCO inc. 1-877-436-2526 monwealth’s fiscal year begins 70 years of service to New England Industry www.genalco.com July 1.

he Massachusetts House of Representatives passed a $42.7 billion budget during the last full week of April. The budget, which was passed on a 154-1 vote, included significant new investments in elementary and secondary education as well as changes to MassHealth’s ability to negotiate better prices for drugs. The budget proposal contained no new significant tax increases.

Over the course of four days of discussion and negotiation, House lawmakers added approximately $71 million in amendments. Of note to UCANE, the House FY’20 budget proposes to increase funding for the Massachusetts De-

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Legislative Update continued from page 7

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New Secretary of Executive Office of Environmental Affairs Appointed

t the end of April, the Baker-Polito Administration announced the departure of Executive Office of Energy and Environmental Affairs (EEA) Secretary Matthew Beaton, and introduced current EEA Undersecretary of Climate Change, Kathleen Theoharides, as incoming Secretary. According to a press release from the Governor’s Office, Secretary Beaton will become the Senior Vice President of Renewable Energy and Emerging Technology at TRC Companies, Inc. Secretary Theoharides was officially sworn in May 3, 2019.

As reported by the Baker-Polito Administration, Secretary Beaton is credited with implementing a number of key initiatives, including, but not limited to: • Diversifying the Commonwealth’s energy portfolio and stabilizing electric rates through comprehensive energy diversification legislation, leading to the largest renewable energy

procurements of hydropower and offshore wind in state history.

• Leading the country as the most energy efficient state, including nation-leading goals for energy savings, investing over $220 million in grid modernization technologies, and over $60 million in funding through the Green Communities program.

• Launching the Municipal Vulnerability Preparedness program to provide funding to cities and towns to complete a community-driven process to identify hazards and develop strategies to improve resilience, and enrolled over half of Massachusetts’ communities in the initiative.

• Creating the first State Hazard Mitigation and Climate Adaptation Plan, a blueprint for Massachusetts’ efforts to prepare for natural hazards and adapt to the impacts of climate continued on page 11

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Legislative Update continued from page 9 change over the next five years.

• Authoring a $2.4 billion Environmental Bond Bill, which authorized capital investments to safeguard residents, municipalities and businesses from the impacts of climate change, protect environmental resources, and improve recreational opportunities.

The incoming Secretary, Katie Theoharides, joined the Baker-Polito Administration as Director of Climate and Global Warming Solutions in the Executive Office of Energy and Environmental Affairs in 2016. As Director and later Assistant Secretary, Theoharides guided the development and implementation of the Administration’s efforts to safeguard Massachusetts from the impacts of climate change, support cities and towns, and coordinate efforts across state government to reduce emissions and adapt to the impacts of climate change. She worked to implement Executive Order 569, led the development of the State Hazard Mitigation and Climate Adaptation Plan and created the Municipal Vulnerability Preparedness program, working to grow the program to reach 50 percent of cities and towns in the Commonwealth in less than three years. Theoharides was promoted to Undersecretary in 2019,

and continued to lead the Commonwealth’s efforts on climate change, including working to strengthen regional and national coalitions focused on bipartisan state climate leadership including the United States Climate Alliance and the Transportation Climate Initiative.

Trained as a field biologist, Theoharides began her policy career working in Washington, D.C. at the National Sustainable Agriculture Coalition and Defenders of Wildlife. During her time in D.C., Theoharides worked on the Federal Farm Bill and conservation policy, and helped establish a national program that partnered with federal and state agencies to incorporate climate change adaptation into policy, budgets, and planning. After returning to Massachusetts, Theoharides served as the Executive Director of the Hilltown Land Trust, and founded Theoharides Consulting, which provided climate and environmental policy analysis, strategic planning, and facilitation to universities, government agencies and non-profits.

Theoharides received a B.A. in Ecology and Evolutionary Biology from Dartmouth College and a Masters of Science in Ecology and Environmental Biology from the University of Massachusetts-Boston. continued on page 13

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Legislative Update continued from page 11

MassCOSH: Workforce Injuries and Violence on the Rise

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he Massachusetts Coalition for Occupational Safety and Health (MassCOSH) released a new report documenting the loss of life taking place at worksites across Massachusetts. Titled Dying for Work in Massachusetts: Loss of Life and Limb in Massachusetts Workplaces, the 28-page report details how 69 workers in Massachusetts died of documented occupational injuries or disease sustained on the job in 2018. Nine of these workers died as a result of workplace violence. This figure is almost double the number of those who died from workplace violence in 2017, which was double the number of workers killed by violence in 2016.

The report highlights several findings, including:

•

Worker deaths in Massachusetts were once again concentrated in the construction industry (21 lives lost), with construction deaths accounting for 36% of workers fatally injured on the job.

•

17 fatal transportation incidents, which includes motor vehicle crashes and workers struck by vehicles or moving equipment, were the leading cause of death from dangerous work, contributing to 29% of all worker deaths.

•

Since 2011, 35 workers were killed as a result of violence in the workplace in Massachusetts.

•

10 firefighters died from work-related disease.

•

In the most recent year for which data sets are available, there were more than 73,300 recordable incidents of nonfatal occupational injuries and illnesses in Massachusetts.

After Massachusetts experienced an 11-year high in its worker fatality rate last year (74), work-related deaths are down but not by much. In 2017, 2.1 workers suffered fatal injuries per 100,000 workers, in 2018 that figure is 1.9.

The report continues to investigate the effects the opioid epidemic is having on workplace safety. The most recent and complete data available shows that in 2017, fatal overdoses and suicides claimed 39 workers. Emerging research supports the fact that workers who have higher risk of pain because of workplace injury are also at higher risk of opioid misuse and overdose. Construction has an injury rate that is 77% higher than the national average. According to the report, Massachusetts’ construction workers die from overdose at six times the average of other industries.

The opioid overdose rate is also found to be higher among lower-wage workers.

To review a copy of the MassCOSH report, please visit: www.mediafire.com/file/9atia38h64oh4o3/DFW_april19_ web_4.25.pdf/file

continued on page 15

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Senate Passes Traffic Safety Legislation; Construction Zone Safety Initiative Included

he final full week of April saw the Massachusetts Senate pass Senate Bill 2214, An Act to Reduce Traffic Fatalities, a bill designed to further enhance the state’s best-in-nation status for lowest rate of accident fatalities. The legislation, which provides a variety of initiatives aimed at the safety of vulnerable road users such as bicyclists, pedestrians and other road users, was passed by the Senate last session as well.

The legislation is notable to the construction industry for two reasons: the mandate to install sideguards or lateral protective devices for those contractors with state contracts and the inclusion of construction safety zone improvements. With respect to the issue of mandated equipment, the legislation specifically provides that: “A motor vehicle, trailer, semi-trailer or semitrailer unit classified as a class 3 or above by the Federal Highway Administration, with a gross vehicle weight rating of 10,000 pounds or more, that is leased or purchased by the Commonwealth or operated under a contract with the Commonwealth shall be equipped with a lateral protective device, convex mirrors and crossover mirrors. This paragraph shall not apply to ambulances, firefighting apparatus, low-speed vehicles, agricultural tractors or any other classes or types of vehicles as determined by the registrar. The registrar shall adopt regulations establishing standards, consistent with the United States Department of Transportation Volpe Center’s side guard standard DOT-VNTSCOSTR-16-05, and specifications for the size, design, and mounting of lateral protective devices, convex mirrors and crossover mirrors. The registrar may provide alternative means of compliance with the convex mirror, crossover mirror and lateral protective device requirements. A contractor’s failure to comply with this paragraph may be grounds for termination of the contract and may be punished by a fine of not more than $500 for the first offense and not more than $1,000 for a second or subsequent offense.”

The mandated equipment requirement shall not apply to a motor vehicle, trailer, semi-trailer or semitrailer unit that is operated under a contract with the Commonwealth that was entered into before JanuMAY, 2019

ary 1, 2024, but will apply to all qualifying vehicles after that date.

In passing the traffic safety legislation, Senate Minority Leader Bruce Tarr successfully attached an amendment to improve safety in areas designated as construction zones, so-defined as places along public highways or adjacent rights of way where construction, repair, maintenance, or survey work is being performed. The language grants MassDOT the authority to implement reduced speed limits and increased construction zone fines. Existing law does not currently allow for applicable fines to be doubled in the work zone.

This legislation, having passed the Senate, moved to the Massachusetts House of Representatives where it was assigned to the House Committee on Ways and Means. continued on page 17

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Legislative Update continued from page 15

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Baker-Polito Administration Awards Funding to Protect Drinking Water Resources

arly April saw the Massachusetts Department of Environmental Protection (MassDEP) award $1,119,362 to six Massachusetts public water suppliers through the Drinking Water Supply Protection Grant Program (DWSP).

The grant awards, administered by the Executive Office of Energy and Environmental Affairs’ (EEA) Division of Conservation Services, will enable water suppliers to protect existing or new wells and surface drinking water supply systems, such as reservoirs and other bodies of water.

Since 2004, the DWSP Grant Program has offered grants to municipal and public water systems to be used for water supply protection and land conservation purposes, such as the acquisition of land, the placing of a conservation restriction, or the assignment of a watershed preservation restriction. Land acquired through the program must be located within existing MassDEP-approved drinking water supply areas, in estimated protection areas for new sources, or in an area identified through an appropriate planning process as suitable for groundwater recharge to an aquifer. Projects funded under this grant program should also provide appropriate public recreational opportunities to the residents of the Commonwealth.

According to the MassDEP’s release announcing the awards, the 2019 DWSP grant awardees are: • Amherst Water Department – Kruczek Property: $41,300 grant award to preserve two parcels in the Pelham watershed for water supply protection; • Charlton Water and Sewer Commission – Buffumville Public Water Supply: $61,900 grant award to acquire a 20-acre parcel for the development of a well for the town’s public water supply; • Fall River Department of Community Utilities – Copicut Reservoir Watershed Protection Project: $200,000 grant award to acquire 16 acres of woodland to provide an additional buffer to the Copicut Reservoir; • Southampton Water Commission – Pomeroy Meadow Protection Project: $216,162 MAY, 2019

grant award to preserve 15 acres of forested land to protect the town’s critical drinking water source. This project will also serve as a catalyst for preserving the surrounding 132 acres; • Springfield Water and Sewer Commission – Fontaine Parcel Project: $300,000 grant award to preserve a 527-acre parcel that will protect the water quality in the Cobble Reservoir watershed; • Town of Gosnold – Cuttyhunk Island Wellhead Project: $300,000 grant award to conserve 20 acres of the town’s sole aquifer.

For more information regarding the program, please visit the Drinking Water Supply Protection Grant Program at: https://www.mass.gov/servicedetails/drinking-water-supply-protection-grant-program continued on page 19 Est. 1926

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Legislative Update continued from page 17

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Department of Family and Medical Leave Makes Workplace Poster Available

he Massachusetts Department of Family and Medical Leave recently announced that it has finalized its mandatory workplace poster. All Massachusetts employers must display the Paid Family and Medical Leave (PFML) mandatory workplace poster prepared or approved by the Department of Family and Medical Leave (DFML) that explains the benefits available to your workforce under the PFML law. This poster must be placed at an employer’s workplace in a location where it can be easily read.

The poster must be available in English and each language, which is the primary language of five or more individuals in your workforce, if such translations are made available from DFML. As recently reported by the agency, the deadline for employer notice to employees has been extended from May 31 to June 30, 2019. The notice, which may be provided electronically, must include the opportunity for an employee or self-employed individual to acknowledge receipt or decline to acknowledge

receipt of the information.

Employers need to notify each of their Massachusetts W-2 employees in writing about available PFML benefits. You must issue this notice to each employee within 30 days of their first day of employment. The notice must be written in the employee's primary language. Employers will also need to notify each Massachusetts 1099-MISC contractor who provides services to them, in writing, about available benefits when entering into a contract for services.

The notice must be written in the contractor's primary language.

You must obtain from each employee a written statement acknowledging receipt of the notice or a statement indicating the employee's refusal to acknowledge the notice.

To download a copy of the required workplace notice as created by DFML, please visit: https://www. mass.gov/files/documents/2019/03/21/20190321_ DFML%20Notice_FINAL.pdf n

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Trump Administration’s Proposed Overtime Rules On March 7, 2019, the United States Department of Labor (USDOL) released a Notice of Proposed Rule Making revising the overtime rules applicable to persons who meet the regulatory definition of executive, administrative, professional, or highly compensated employee.

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he proposed rule supersedes the 2016 Obama administration overtime rule, which was declared invalid by the United States District Court for the Eastern District of Texas and held in abeyance by the Fifth Circuit Court of Appeals. But for the highly compensated employee exception, the newly proposed salary thresholds are significantly lower than the enjoined Obama rules. The proposed rule would increase the standard minimum salary requirement to $679 per week (or the equivalent of $35,308 per year) from the current $455 per week (or $23,660 per year) and would also increase the total annual contribution minimum requirement for “highly compensated” employees from the current $100,000 to $147,414 per year.

The Obama rule would have increased the minimum weekly salary from $455 per week to $913 per week (or $47,476 per year) and set the highly compensated employee at $100,000. The proposed rule also eliminates automatic increases in the minimum salary threshold and replaces it with a commitment to periodically review the salary thresholds through notice and comment rulemaking.

In addition, the proposed rule liberalizes the use of non-discretionary bonuses and incentive

MAY, 2019

payments to meet the highly compensated employee threshold provided they are paid annually and don’t exceed 10% of the new standard salary threshold of $679 per week.

The proposed rule makes no changes to the duties test for executive, administrative, and professional employees.

The proposed new minimums are scheduled to take place on January 1, 2020. Employers with salaried employees who meet the statutory definitions and are earning under $35,308 annually, should closely monitor the proposed rule and be prepared to make upward pay adjustments if they want to enjoy the statutory overtime exemption. n

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MAY, 2019

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

During my college summers, I worked as a laborer for the Water/Highway Departments of a small town on the North Shore, which served as a bit of an introduction to the construction industry. After graduating from college with a civil engineering degree, I worked for six months as a laborer for a small sitework/utility contractor while contemplating my career path. I decided to pursue a career in the contracting business rather than the engineering field. I began this career with Perini Corporation of Framingham, working in the main office as a junior Engineer/Estimator.

My first project with Perini was one of the early Central Artery/Tunnel jobs – the Logan Airport Egress Ramps.

How long have you been with the company you currently work for and what is your role there?

I currently work as the Chief Estimator for Jay Cashman, Inc. Prior to this current role, I worked as a Project Engineer/Manager on two large projects – the CA/T North Station Portal and the Greenbush Commuter Rail line. I have been with Cashman for almost 22 years.

UCANE? MAY, 2019

How long have you been involved with UCANE? How and why did you decide to get involved with

UCANE Board Member Brian Rawston Jay Cashman, Inc.

As one of the larger local heavy/civil contractors, Cashman is a long-standing member of UCANE, with our President/CEO (Dale Pyatt) once serving as President of UCANE. Dale eventually stepped down and asked if I would represent Cashman on the board. With the exception of two off-years, I have served on the board since 2009.

What is the nature of the industry as you currently see it?

The nation’s infrastructure, both roads/ bridges and underground utilities, is in dire need of repair. This certainly applies to the greater Boston area and the entire New England area. So, there is plenty of work to do, but two key hurdles for accomplishing this

continued on page 25

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Under the Hard Hat continued from page 23 work are adequate funding for the work and attracting young talent to work in the construction industry, in both management and craft positions.

UCANE has worked consistently to address the funding issue for many years, targeting all levels of government from Federal to Municipal. The workforce issue is a relatively new issue that has become increasingly critical in recent years.

What would you like our membership to know about being a Board Member?

Serving on the UCANE board provides a unique perspective on the underground construction industry. It gives us the opportunity to pursue the best interests of the entire industry, as opposed to our daily pursuits at a particular project and/or our individual companies. It has been extremely interesting and rewarding to serve on the board, as well as participate in the Government Relations meetings. n

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MAY, 2019

New Poll Finds Voters Overwhelmingly Support Increasing Federal Investment in Water Infrastructure The Value of Water Campaign recently released the results of its fourth annual national poll. The poll once again found bipartisan support for water infrastructure investments: 85 percent of American voters support increasing federal water infrastructure investment. The need for capital water infrastructure improvements continues to rise, but federal investment is not keeping pace putting both local communities and the greater economy at risk. The poll found most voters are willing to pay more for improved water service, but overwhelmingly want the federal government to step up and address the issue.

•

•

•

•

•

Key poll findings include: Americans support rebuilding our nation's infrastructure more than any other issue facing the current administration, including building a border wall, repealing or replacing Obamacare, providing permanent status for Dreamers, or increasing military defense spending. Over three-fourths of voters (79 percent) say rebuilding America's infrastructure is extremely or very important.

More than two-thirds of Americans (68 percent) support investment in water infrastructure at the national, state, and local levels – even when told that investment carries a $1.2 trillion price tag.

Also, two-thirds of voters support a proactive program of water infrastructure upgrades, rather than fixing problems as they arise (67 percent).

Four in five (80 percent) American voters say what they pay for water service is affordable, and more than three in five voters would be willing to pay a modest increase in local water rates to fund improved service.

No other issue has nearly as much broad and bipartisan support. Support for investing in water infrastructure cuts across age, gender, party, geography, and ideology. More than three in four Democrats and Republicans agree rebuilding America's infrastructure should be a top priority for the President and Congress this year.

Water quality concerns emphasize the need for investment and innovation. Seventy-four percent of Americans – living in both urban and rural areas – are concerned about contaminants affecting their

MAY, 2019

water quality. More than five in eight Americans support local water agencies increasing the use of potable recycled water in their community.

"Water is essential to everything we do, and our drinking and wastewater systems are incredible achievements. But after operating 24/7/365 for decades or even a century, these systems are in need of repair," states Radhika Fox, CEO of the US Water Alliance.

"Federal appropriations for key water infrastructure loan programs have decreased in recent years, and overall federal support for water infrastructure is a fraction of what it was in the past. Policymakers need to listen to Americans, who overwhelmingly want their government to focus on issues like investing in infrastructure."

The poll release coincided with Water Week, a national effort led by water professionals from across the country, including UCANE and its national partner, the Clean Water Construction Coalition (CWCC).

This poll measured responses from 1,000 registered voters and was conducted by the bipartisan research team of Fairbank, Maslin, Maullin, Metz, and Associates and New Bridge Strategy.

About the Value of Water Campaign The Value of Water Campaign educates and inspires the nation about how water is essential, invaluable, and in need of investment. Spearheaded by top leaders in the water industry, the Value of Water Campaign is building public and political will for investment in America's water infrastructure. For more information, visit www.thevalueofwater.org.

continued on page 28

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27

Value of Water continued from page 27

Fourth Annual Value of Water Index Over the past four years, the Value of Water Campaign has polled American voters to better understand their opinions about the state of our nation’s water infrastructure and what they view as priorities for action and potential solutions.

CAMPAIGN

The Value of Water Campaign is pleased to share the results of our fourth annual national poll of over 1,000 American voters, conducted by the bipartisan research team of Fairbank, Maslin, Maullin, Metz, and Associates (D) and New Bridge Strategy (R).

Water infrastructure is a TOP PRIORITY. Americans support rebuilding our nation’s infrastructure more than any other issue facing the current administration, including building a border wall, repealing or replacing Obamacare, providing permanent status for Dreamers, or increasing military defense spending.

79%

of voters say rebuilding America’s infrastructure is extremely or very important.

Americans support INVESTING NOW, before our nation’s water infrastructure fails.

American’s support rebuilding our nation’s infrastructure more than any other top issue facing the current administration: Rebuilding America’s infrastructure Increasing military defense spending 56% Providing permanent status for Dreamers 53% Repealing or replacing Obamacare 39% Building a border wall

85%

68%

67%

80%

of Americans support (with 52 percent strongly supporting) increasing federal investment to rebuild our water infrastructure.

of voters support a proactive program of water infrastructure upgrades, rather than fixing problems as they arise.

79%

35%

continue to support capital investments at the national, state, and local levels—even when told that investment carries a $1.2 trillion price tag.

of American voters say what they pay for water service is affordable and more than three in five voters would be willing to pay a modest increase in local water rates to fund improved service.

continued on page 29

28

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MAY, 2019

Agreement across party lines and Value of Water continued page 28 demographics: waterfrom infrastructure is essential to across all.

Agreement party lines and demographics: water infrastructure is Support for investing in water infrastructure cuts across age, essential to all. and ideology. gender, party, geography, Support for investing in water infrastructure cuts across age, Democrats Republicans gender, party, geography, and ideology.

Democrats

Republicans

More than three in four Democrats and Republicans agree rebuilding America’s infrastructure should be a top priority for the President and Congress this year.

More than three in four Democrats and Republicans agree rebuilding America’s infrastructure should be a top priority for the President and Congress this year.

Water quality concerns emphasize need for investment and innovation.

Water quality concerns emphasize need for investment and innovation.

74% 74%

of Americans—living in both urban and rural areas—are concerned about contaminants affecting their water quality.

More than five in eight Americans support local water agencies increasing the use of potable recycled water in their community.

of Americans—living in both urban and rural areas—are concerned about contaminants affecting their water quality.

More than five in eight Americans support local water agencies increasing the use of potable recycled water in their community.

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About the Value of Water Campaign • In MA, ME, NH and RI, notify Dig Safe® at least 72 hours The Value of Water Campaign educates and inspires thein advance - not including weekends and holidays. nation about how water is essential, invaluable, and in need • In Vermont, notify Dig Safe® About the Value of Water Campaign of investment.

Spearheaded by top leaders in the water at least 48 hours in advance - not The Valueand of Water Campaign educates and Alliance, inspires the industry, coordinated by the US Water the and holidays. including weekends nation about how water is essential, in need Value of Water Campaign is buildinginvaluable, public andand political • Notify non-member facility owners. of investment.

Spearheaded by top leaders in the water will for investment in America’s water and wastewater • Maintain the marks industry, and coordinated by the UScommunications Water Alliance, the placed by infrastructure through best-in-class tools, underground facility owners.

Value of Water Campaign buildingand public andresearch political high-impact events, mediaisactivities, robust will publications. for investment in America’s water and wastewater and More at thevalueofwater.org. infrastructure through best-in-class communications tools, high-impact events, media activities, and robust research and publications. at thevalueofwater.org. ©2019 Value of WaterMore Campaign.

All rights reserved.

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Construction & Public Contracts Group, Hinckley Allen, LLP

Christopher Morog Partner

Robert T. Ferguson Partner

The Bid Unit v. The Superior Court When a bid issue arises, disappointed bidders usually have a few options. Sometimes, raising an issue directly with the awarding authority can lead to resolution of the issue.

UCANE is also a valuable resource when it comes to bid issues. But more often than not, bidders will have to decide whether to pursue a bid protest in the Massachusetts Superior Court or before the Bid Unit of the Massachusetts Office of the Attorney General (“Bid Unit”). While this decision will depend on a host of factors in each given case, bidders should know that the Bid Unit is an excellent resource for speedy and cost-effective resolution of bid protest issues before a knowledgeable and experienced hearing officer.

A

ggrieved bidders can always go to court with a bid protest issue. After all, the Bid Unit’s decisions are not binding, and parties are not legally obligated to follow them. Subject to rights of appeal, parties are bound to follow court decisions. But going to court can often be significantly more expensive than pursuing a bid protest in the Bid Unit. And Superior Court judges do not always have a working knowledge of the lay of the land when it comes to the competitive bidding laws. As a result, parties in court may find themselves spending time – and money – educating the court regarding foundational legal principles applicable to bid protest disputes.

The situation is different in the Bid Unit. The hearing officer in the Bid Unit is very experienced, and has access to the Bid Unit’s searchable database of decisions spanning more than 20 years. The Bid Unit is well-versed in the competitive bidding laws and has a comprehensive understanding of a wide spectrum of legal principles applicable to bid protest disputes. Parties are often able to obtain the equivalent of injunctive relief in the Bid Unit and while the Bid Unit’s decisions are not binding, parties frequently abide by them. In this regard, the Bid Unit reviews briefs and other written decisions, holds a live hearing, and issues thoughtful decisions vetted in an internal review process.

MAY, 2019

In light of these and other factors, parties often choose to pursue their bid protests in the Bid Unit instead of in court. Of course, this decision will depend on the specific facts of each case; in some cases, there may be no realistic option but to proceed in court.

It is also possible for a bid protest to land in court even after the Bid Unit has heard the parties and issued a decision. In any event, when considering where to pursue a bid protest, the Bid Unit remains an extremely unique and valuable resource to bidders on Massachusetts’ public projects. n

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31

Corporate Headquarters 22 N. Maple St. Woburn, MA 01801 781.935.3377 60 Shun Pike Johnston, RI 02919 401.942.9191 140 Wales Ave. Avon, MA 02322 508.584.8484

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UCANE Travels to Washington D.C. to Participate in Water Week

UCANE recently traveled to Washington, D.C. to participate in Water Week, as part of the Clean Water Construction Coalition (CWCC), to discuss local and national water infrastructure issues with members of the Massachusetts Congressional delegation, as well as fellow CWCC members from around the country. UCANE President Richard Pacella, Jr. of R. M. Pacella, Inc., Mike Lenihan, former Vice-President and General Manager of J. D’Amico, Inc. and current UCANE consultant, and Jeff Mahoney, Assistant Executive Director, represented UCANE in D.C. Also in attendance were representatives from other state agencies and groups, such as the Boston Water & Sewer Commission, the MWRA, Springfield Water & Sewer Commission, and the New England Water Environment Association.

S

ome of the issues UCANE advocated for and discussed with members of our Congressional delegation included: • Authorizing and appropriating Clean Water SRF Program Funds at $4 billion per year and Safe Drinking Water SRF Program Funds at $2 billion per year while improving/enhancing the WIFIA program to compliment, and not replace or add competition to State SRF Programs; • Reauthorizing the Water Infrastructure Improvements for the Nation Act (WIIN) with an increased program authorization; • Streamlining the permit approval process for all water infrastructure projects that repair/replace existing assets to no more than one year, and eliminating regulatory duplication for SRF and WIFIA projects; • Authorizing the Alternative Water Source Program at $375 million with up to 80% Federal share; • Establishing a voluntary fee water labeling program (estimated to generate $7 billion per year equally divided between the CWSRF and DWSRF) and; • Enacting Private Activity Bond changes including the removal of a state volume cap, allowing broader categories of eligibility, etc.

UCANE participated in events including a briefing on U.S. EPA priorities related to water, and discussions related to infrastructure funding, water reuse/security, CSOs, and PFAS and other CWA/DWA issues, a separate briefing on the Hill with Senator Ben Cardin (D-MD), Ranking Member, Senate Subcommittee on Transportation and Infrastructure and Congressman Bruce Westerman (R-AR), Ranking Member, Water Resources & Environment Subcom-

MAY, 2019

UCANE President Richard Pacella, Jr. of R. M. Pacella, Inc. and UCANE Consultant Mike Lenihan at the CWCC Fly-In in Washington D.C. mittee of the House Transportation & Infrastructure Committee. UCANE also attended a reception at the Library of Congress featuring Senator Tom Carper (D-DE), Ranking Member of the U.S. Senate Envicontinued on page 35

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CWCC Fly-In continued from page 33 ronment Public Works Committee.

The Clean Water Construction Coalition (CWCC) was formed in 2006 by several large construction associations that came together to promote federal legislation that would improve water and wastewater infrastructure nationally. CWCC includes 27 dedicated associations from across the country representing over 11,000 firms and several other associated groups. The states represented in the Coalition account for approximately 72 percent of the total annual funding for the Wastewater and Drinking Water SRF programs nationally.

The CWCC is a member of the US Water Alliance and is working within that framework with partners to ensure that clean, reliable water is available for all, now and in the future. n

(L-R) UCANE Assistant Executive Director Jeff Mahoney; UCANE President Richard Pacella, Jr. (R. M. Pacella, Inc.); Massachusetts Congressman Stephen Lynch; and UCANE Consultant Mike Lenihan

(L-R) Josh Schimmel, Executive Director, Springfield Water & Sewer Commission; Beth Card, MWRA Director of Environmental & Regulatory Affairs; UCANE President Richard Pacella, Jr. (R. M. Pacella, Inc.); UCANE Consultant Mike Lenihan; and Justin deMello, Project Manager, Woodard & Curran

(L-R) UCANE Consultant Mike Lenihan; BWSC Chief Engineer John Sullivan; UCANE President Richard Pacella, Jr. (R. M. Pacella, Inc.); and UCANE Assistant Executive Director Jeff Mahoney

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Construction Safety & Compliance: An Interview with Bill Cove Regional Safety, Health and Environmental Manager Sunbelt Rentals

UCANE’s Construction Outlook editors recently caught up with Bill Cove at the Sunbelt Rentals location in Shrewsbury, MA. Bill is the Regional Safety, Health and Environmental Manager covering New England and Upstate New York with UCANE member firm Sunbelt Rentals. We were able to get a few minutes of Bill’s time to discuss the importance of Safety in today’s heavy construction industry.

What is your background in Construction Safety?

My career started back in the mid 1970s as a mechanic with a national equipment manufacturer shortly after OSHA came into existence.

Over time, I moved up to a management position with safety being one part of the job. In 2003, I saw an opportunity to make a change and accepted the position of Regional Safety Manager with Sunbelt because I believe safety is vital to any successful operation. Currently there are 32 branch stores within my region with nearly 400 employees of multiple disciplines.

Each day, every Sunbelt branch starts the day with a Flex and Stretch to get ready for work. During this time, the safety coordinator or an employee will lead a presentation about a safety topic to start the day with safety prominent on every employee’s mind.

Throughout the day, this is reinforced with pre-task planning and hazard identification programs. In addition, each employee has been trained and empowered to stop any job if there is a perceived hazard. IF YOU SEE SOMETHING, SAY SOMETHING. All employees have access to my cell phone number continued on page 39

Tell us about the culture of safety that exists at Sunbelt Rentals.

The culture of safety at Sunbelt Rentals starts at the top with senior leadership paving the way with safety as a core value. Safety managers like myself are tasked with reinforcing this core value to the Branch Managers who, in turn, are expected to demonstrate this each and every day by how business is conducted at their branch. Additionally, I work with the Branch Safety Coordinators to reinforce the corporate expectation that each employee must actively participate in safety awareness throughout the entire work day, not only for his or her own benefit, but for the benefit of fellow employees. In my role, I provide support and safety education for the 32 store managers, the store safety coordinators, as well as the employees at those locations.

MAY, 2019

Bill Cove says, “Every day, every Sunbelt branch starts the day with ‘Flex and Stretch’ and a presentation about a safety topic.”

“BUY FROM THE ADVERTISERS IN CONSTRUCTION OUTLOOK”

37

Risk starts even before you do.

Before you break ground, there are risks that can threaten the success of your project ranging from contractual and surety needs to environmental exposures and site security. And once construction begins, even more risks arise.

Now is the time to have a close working relationship with an insurer who understands the construction industry.

We’ll leverage our expertise and knowledge and work with you to uncover potential pitfalls others might miss, and provide solutions that will help you get ahead of risk. By anticipating and preparing for it, you can avoid project disruptions, reduce loss costs and keep your projects running smoothly. Don’t start without us.

For more information, please contact your Travelers agent.

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Safety & Compliance continued from page 37 and are encouraged to notify me whether they have a complaint about safety in our operations, or if they have an idea on how to improve our operations or a work task when it comes to safety.

What are some of the biggest challenges you face as a safety manager?

There are many challenges, but one of the biggest challenges is employees becoming complacent working around the hazards in a construction environment and not always recognizing exposures to the risks that are there every day. This problem is only compounded with all the distractions of the digital age.

Another challenge is having a largely mobile workforce who is constantly traveling and with that comes risk. We employ Outside Sales Representatives, Road Service Technicans and Delivery Drivers. In my region, 150 trucks are on the roads every day.

As we all know (and experience), traffic congestion and other road hazards present ongoing safety challenges.

One final challenge is being able to understand, reach and connect all employees to our training. Today, there are five generations in the workforce, from Traditionalists (born before 1946) to Generation Z (born after 1997). It is critical to communicate in a way that ensures the importance of safety resonates with everyone.

stand all of the factors that play a part in the situation.

Only then can you work towards a safe resolution that works for all parties.

Also, take time to get to know your fellow employees so you understand personal situations that may be on their mind at work. By knowing your employees, you will be able to see the signs when something is not right before there is an incident.

Lastly, celebrate the positive. We all like to know we are doing a good job and that our work is appreciated.

How do you think contractors as well as their workers can benefit from organized and OSHA endorsed events like Safety Week and the National Safety Stand-Downs?

I have found taking part in these events helps the contractors to share areas of concern to the workforce, which may not be known to all trades on the jobsite otherwise. Anytime we are bringing workers together and talking about safety can only help. If one person looks out for a co-worker, we have made a difference. If one person takes the time to use the proper PPE for the task, we have made difference. n

What advice do you have for new Safety Directors, specifically pertaining to the current construction climate/current jobsite risks?

For any new safety professional, it is important to listen, watch and ask questions before acting. In order to correct problems, you need to under-

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E. J. PRESCOTT, INC. $25,000 “Hole in One” McCOURT CONSTRUCTION COMPANY $10,000 Putting Contest DAGLE ELECTRICAL CONST. CORP. Golf Ball Cannon Shoot C&S INSURANCE “Closest to the Pin” against a Sports Celebrity CORE & MAIN Photo’s with Sports Celebrity RITCHIE BROTHERS AUCTIONEERS Kobelco Excavator “Hole in One” & Continental Breakfast ATS EQUIPMENT, INC.

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Cold Drink Carts CITRIN COOPERMAN & CO., LLP FERGUSON WATERWORKS UNITED RENTALS TRENCH SAFETY

Ford F-150 2-Year Lease “Hole in One” RODMAN FORD SALES, INC.

Golf Prizes ALBANESE D&S, INC. BARLETTA HEAVY DIVISION RJV CONSTRUCTION CORP.

Barbecue Lunch MABBETT & ASSOCIATES. INC.

Goody Bags P. GIOIOSO & SONS, INC.

Social Hour HUB INT. NEW ENGLAND McLAUGHLIN CHEVEROLET

Guest Sponsors JAY CASHMAN, INC. (4) TAYLOR OIL COMPANY (2)

Ice Cream Sundae Bar USI INSURANCE SERVICES, LLC

All Signage ROADSAFE TRAFFIC SYSTEMS

For sponsorships or reservations call the UCANE office at 617.471.9955 A complete list of sponsors can be found at www.ucane.com

W. L. French Cat # 110 at Wentworth Institute of Technology performing the Mass Excavation and Site Work package for their new dormitory. The General Contractor, Gilbane Building Company this past Summer 2018.

42

“BUY FROM THE ADVERTISERS IN CONSTRUCTION OUTLOOK”

MAY, 2019

CONTRACTOR MEMBER OF THE MONTH

MAY, 2019

THE EARLY YEARS It all started in 1972 when 18-year-old Bill French (Sr.) bought a Mack 10 wheel dump and set off to earn a living as an independent truck driver. Bill chased his work around the Boston area and soon became known for not only his dependable truck rental but for his knack of being able to find dump sites for surplus soils. It didn’t take Bill long to see what the market needs were and he soon doubled down on his truck investment. Within a few years Bill was known to many general contractors and site developers inside Route 128 as a “go-to” guy when it came to trucking and hauling of surplus site excavation. Between his own trucks and the network he developed with other independents, Bill could move the dirt. He knew how to move it, where to move it, and his hard and honest work ethic was attracting more and more clients.

It wasn’t long before Bill decided he didn’t just want to haul dirt, he wanted to dig it too. In the mid-1970s, Bill purchased some heavy equipment and began taking on some small site projects.

In the 1980s, the company began to attract some great talent in the site business and started to tackle larger and increasingly complex site jobs – all the while increasing the truck fleet and growing that side of the business.

By 1984 W. L. French had outgrown its first yard in Watertown and purchased a contractor’s yard in North Billerica with lots of room to grow not only their truck and heavy equipment fleet, but also a management staff. Bill recalls a couple of key projects during the 80s that helped him solidify a reputation as not only the “go-to” guy, but the “can-do” guy as well. “We had a couple of jobs with UCANE member J. F. White Contracting Co. and the MBTA that pushed our capabilities to the limit,” said Bill. “On one job at Alewife Station we proved we could respond to emergency work at a moment’s notice with lots of trucks, equipment, and manpower. On the other one we proved we could produce for the long term by loading and hauling track ballast out of South Boston six days a week for 2½ years. Since then we have continued a great relationship with J. F. White that’s approaching 40 years.”

Another challenging project during this period included the NOKIA site in Burlington that required moving 150,000 yards of material in three months, compacted fills over 50 feet, and construction of retaining walls up to 55 feet high.

Being able to find homes for surplus dirt continued to be something that set W. L. French apart from other haulers. They became more and more involved in managing and operating some of the scarce landfill locations around the Greater Boston area. At one point French managed a landfill site in Winthrop and oversaw the disposal of 800,000 tons over a six year period.

During the 90s Boston’s “Big Dig” was in full swing and W. L. French continued to get the calls for soil trucking and disposal.

Though the Big Dig had some tempting opportunities, the company actually made a conscious decision at that time to build up their client base outside of the Big Dig so that when the project was over, they were not at a loss for work. It proved to be a wise decision and though French did haul dirt off the Big Dig – when it was over they were ready to go and not searching for work. Their continued on page 44

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43

W. L. French continued from page 43 expertise in managing soils, including urban fill and contaminated fill, was in demand. More and more site jobs were beginning to come their way and the company’s capacity was being tested.

The Second Generation Bill French and his wife Nancy had a son (Bill Jr.) and two daughters (Jessica and Lisa). Bill Jr. had been following his father around to construction sites since he was a toddler and was sitting in the trucks and equipment before he could walk. Jessica and Lisa also got their fair share of exposure to the family business as they were growing up.

As a teenager Bill Jr. was already operating equipment and had his CDL and was working in the business during summers and on weekends. There was nothing Bill wanted to do but be part of the business. After High School Bill studied Construction Management at the University of New Hampshire and became a full-time company employee in 1996. Jessica and Lisa both attended UMass Amherst and also started working in the family business in the late 90s.

In 1997, Bill Sr. hired Tom Dion, a Wentworth Institute grad with some “Big Dig” experience – having worked with several large area general contractors.

By 2000, with this young, but very committed management team in place, Bill, Sr. and W. L. French Corporation were well positioned to bring the company to the next level.

With Bill Sr’s guidance the new management team continued the company’s steady growth while at the same time carrying on the business morals and philosophy of honesty and dependability that was the French trademark. Long term relationships with Boston area developers and general contractors were strengthened and new clients were added. French was soon doing work for almost every Massachusetts public agency involved with construction and was being contracted by more and more municipalities on an annual basis for soil/debris disposal and landfill operational services.

Bill Jr. and the rest of the management team were actively stepping up their presence in the Massachusetts site development market. In addition to moving dirt and installing site utilities, they were now offering earth support systems, tiebacks, soil mixing, and deep excavation capabilities. Their fleet of clean CAT equipment and Kenworth trucks custom painted with the familiar W. L. French logos could be found at some of the premier building sites in the area. Clients like Walsh Brothers, Consigli Construction, and Cranshaw Construction were adding to their already strong resume.

More excavation meant more surplus soils to get rid of – particularly contaminated soils on urban sites.

In 2008, the company became licensed as a hazardous waste disposal contractor and added staff with expertise

44

Bill Sr. at his first garage in Watertown, MA with one of his first pieces of excavating equipment.

(L-R) Second generation owners of W. L. French: Jessica French Goyette, Vice President; Tom Dion, Vice President; Lisa French Kelley, Principal; and Bill French Jr., President

WLF performing the Site Enabling Package at Boston Art Academy for G.C. Lee Kenney Co. Inc., Spring 2019.

“BUY FROM THE ADVERTISERS IN CONSTRUCTION OUTLOOK”

MAY, 2019

WLF pipe crew installing an underground stormwater detention system in Beverly MA.

in soil testing, environmental engineering, and permitting.

The growing fleet of owned and managed trailer dumps, and their partnerships with a growing list of landfills across the country, gave French the ability to dispose of large quantities of all types of soils both in and out of state.

In the 2000s, snow removal operations ramped up as a larger part of French’s business in order to keep his growing number of employees working during the winter months. By 2010, French was rated #35 in the country for snow billings by Snow Magazine. The company made national headlines after it sent 50 pieces of snow equipment to Washington DC to help the city dig out from an historic snowstorm. In 2011, Bill French Jr. was nominated as CEO of the year by Snow Magazine.

In 2009 Boston Business Journal recognized W. L. French as one of the top 100 fastest growing companies in Massachusetts. The company made the Engineering News Record’s Top 600 Contractor list and by 2012 the company was ranked in the top 25 largest family owned businesses in the state with revenues of $40 million.

The French Family Continues to Keep Their Eyes on the Ball

WLF performing the Mass Excavation and Soil Management package at Harvard University for the Harvard Klarman Convening Center, Summer 2018.

WLF excavators hard at work making progress on the Mass Excavation at Binney St., Cambridge, MA.

MAY, 2019

Today the W. L. French Excavating Corporation has come a long way from Bill Sr.’s first dump truck purchase in 1972. The second-generation owners have stepped up the game and now oversee an extensive fleet of over 250 pieces of highly specialized heavy equipment and tractor trailers. All equipment is meticulously maintained and equipped with the latest GPS technology and on-board scales to insure accuracy, accountability, and maximum productivity. The customization, aftermarket accessories, and hand painted lettering all contribute to making each piece of equipment a recognizable part of the WLF Fleet.

The company continues to increase its client list and their presence on high visibility and challenging site and foundation projects in the region. Crushing and recycling equipment has been added to the fleet to reduce the cost of imported materials for their clients.

Trucking services, hauling, and disposing of all types of soils (including contaminated and hazardous) continue to be major components of the French businesses. French was the first company (a pioneer) in the State of Massachusetts to be granted an Administrative Consent Order (ACO) with the MassDEP to open a Soil Reclamation Facility in Tewksbury, MA and in 2016 opened their Dudley, MA Soil Reclamation facility, with over 4+ million tons of airspace accepting < RCS – and < RCS -2 soils. French also has contracts with over 50 municipalities throughout Massachusetts to transport their waste streams. For 2019 the company is on track to coordinate and supervise the transport of over one million tons of soils.

The snow removal division fluctuates with Mother continued on page 47

“BUY FROM THE ADVERTISERS IN CONSTRUCTION OUTLOOK”

45

W.L. French continued from page 45 Nature, but French continues to expand its client list. It now has multiple municipal clients, including the City of Boston, that count on WLF to provide over 100 pieces of snow-fighting equipment ready to go when a storm hits.

To support their extensive operations, W. L. French proudly employees a team of 200 construction, engineering, and environmental professionals working throughout the various divisions. The company is on its way to its first $100 million revenue season in 2019. The company has again outgrown its headquarters and recently purchased additional land in Billerica and are in the process of building their new corporate offices and maintenance facility, with a grand opening planned for later this year.

Keys to Success President Bill French Jr. is quick to give credit to his employees for the success of the company. “We have a solid team of people here, people who are committed to their craft, to the company, and to the projects they are on,” says Bill. “There is a lot of depth here and we have a talented group of people who care about the results of their work as much as I do.” Bill also credits his external partners including his bank, his accountants, and his attorneys for helping the company to grow.

Vice President Jessica French Goyette looks forward to the future and sees positive results from the company’s investments in technology. “Having information in real time has allowed us to make increasingly better and more informed decisions. Automating processes has freed up valuable time across every department so our teams can devote time to more important tasks. From our field staff to our internal departments, there is a marked change in our output, our accuracy, and our ability to perform.”

Principal Lisa French Kelly echoes company sentiment when she says, “A strong safety program is a key element of any successful company and we work hard at educating our employees, making sure they watch out for each other, and providing them all the tools for a safe workday. Knowing that our company cares about its people has helped us retain loyal employees in tough market conditions.”

Bill French Sr. has stepped back in recent years, but is always available for advice when needed. He looks at the current operation with a great sense of pride. “We have come a long way as a family and as a business,” reflected Bill. “I’m so blessed that my kids all wanted to be in this business, that I got to work with them, and they all believe in the same principals of ethics, honesty, and hard work that got this company started in 1972. What parent could ask for more than that?”

UCANE is proud to count W. L. French Excavating Corporation among its members and wishes the company and the French family continued growth and success. n

WLF trucks in action on a live runway at Massport's Logan International Airport performing one of two phases of the Soil Management and Site Excavation package for the construction of the new centerfield taxiway. This project involved a complex scope including geogrid soil stabilization of 160,000 square yards of runway that French had a 99.9% spec and successfully completed. The General Contractor was J. F. White Contracting Company and the owner was Massport. Work was performed back in the summer of 2010.

MAY, 2019

“BUY FROM THE ADVERTISERS IN CONSTRUCTION OUTLOOK”

47

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MAY, 2019

Years of Excellence 1954-2019

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9 Faunbar Avenue #2 Winthrop, MA 02152 Rep: Nancy Hughes Tel: (617) 959-4414 Fax: (617) 663-6677 Email: nancy.ohstc@gmail.com Website: www.ohstrainconsult.com ASSOCIATE

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MAY, 2019

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“BUY FROM THE ADVERTISERS IN CONSTRUCTION OUTLOOK”

MAY, 2019

To End Sewer Overflows, Federal Dollars Needed A combination of old, inadequate sewer systems and increasingly intense rainfall has stymied efforts by the state and municipalities to clean up the Merrimack River.

L

awmakers have tried to come up with a permanent solution; in the interim, they've also pursued legislation that would require treatment plants to warn the public about water quality issues.

A 125-mile river that winds through New Hampshire and Massachusetts, the Merrimack serves more than 200 communities and provides drinking water to 600,000 people, but it's constantly in danger of contamination. Last year, about 800 million gallons of sewage went into the river, John Macone, a Merrimack River Watershed Council spokesman, told the newspaper.

As Macone noted, older cities along the Merrimack like Lowell have single-sewerage designs.

Groundwater and raw sewage flow into one system, overwhelming the treatment plant during high-volume events.

However, converting to a modern system would be costly.

Since Massachusetts doesn't require sewertreatment plants to notify the public when a sewage overflow occurs, lawmakers have pursued legislation to at least give residents downriver of a spill that safety courtesy. One bill, proposed by Rep. Linda Campbell, D-Methuen, would require plants to issue a public advisory within two hours of a discharge.

According to Macone, the Manchester, N.H. treatment plant generally sends the most sewage into the Merrimack, with Lowell's plant second, dumping nearly 200 million gallons of wastewater annually into the river. They combine for about 75 percent of the effluent.

Lowell has made strides to reduce raw-sewage discharges into the waterway.

Mark Young, executive director of Lowell's wastewater utility, told city councilors in November that close to $150 million has been invested in recent years to that end, efforts that have reduced discharges by 80 percent.

But that comes at a price. A $40 million loan order associated with a combined sewer overflow project left the city paying approximately $2.5 million an-

MAY, 2019

nually for the next three decades to retire the debt.

Since the water treatment and wastewater utility plants operate as a self-sustaining, enterprise fund, that's a cost primarily paid by water and sewer ratepayers, who have seen their bills rise significantly.

It's obvious raising rates alone can't supply the resources required to address this overflow problem.

Young had previously said that only federal dollars will enable the city to make the additional improvements necessary. Even then, it will take years to remedy the problem.

The ultimate solution for the Manchester and Lowell plants lies in following the lead of Fitchburg, another old industrial city, and implement a dual sewerage system, which separates groundwater and raw sewage.

That's helped keep sewage overflows into the Nashua River – a Merrimack tributary – to a minimum. It's a big reason why the Nashua recently was designated by Congress as a Wild and Scenic River.

We view any bills providing public notification of sewage overflows as well-intentioned Band Aids that fail to address the financial commitment Lowell and other cities must make to stem this environmental and public-health problem.

Reprinted with permission from “The Sun of Lowell.” n

“BUY FROM THE ADVERTISERS IN CONSTRUCTION OUTLOOK”

51

Patrick W. Saltmarsh Corporate Safety Director J. Derenzo Companies

How Competent Is Your Competent Person?

“Everybody’s got a different circle of COMPETENCE. The important thing is not how big the circle is. The important thing is staying inside the circle.” ~ Warren Buffet

H

ow does your company recognize and designate its competent person? Do your employees in leadership roles (Foremen/Supervisors) possess competent management skills, or did they end up in charge because they knew the most about the task they were performing? In some companies, there appears to be a disconnect between how they view leadership on their job sites and the true competency of their managers.

In the construction industry, it is too dangerous to fake it ‘til you make it. When designating an employee to act as a competent person, the employee must first possess the safety knowledge, as well as experience to oversee the work being performed and to protect fellow employees by identifying current or foreseeable hazards in the workplace.

These managers must be willing to take immediate action to mitigate hazards, along with an understanding of their responsibility and legal obligation to do so.

Designating an employee as a competent person should not be chosen lightly. Companies must pay closer attention to how they choose their Foremen and Supervisors. Selection must be chosen for their competency, and cannot be based on political connections, persuasiveness or their longevity within a company. Some of those traits can be useful, but competency must come first.

So let me ask you, “How competent is your competent person?” Assessment and analysis of an MAY, 2019

J. Derenzo Co. Foremen Hildberto Matos providing hands-on training and instruction within the excavation.

employee’s competence is a vital component in the designation of title and the training of a competent person. Through the measurement of employee performance, an organization can evaluate the knowledge and effectiveness of its competent person and develop strategies for improvement. Based on the industry your employees work in, your evaluation tool should be geared towards the OSHA standards and policies of that particular industry and the knowledge of your competent person.

Objectively measuring employee performance is a valuable diagnostic process, which will identify your competent person’s knowledge of safety stancontinued on page 54

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53

Safety Corner continued from page 53 dards and presents the gap between what is and what ought to be. This process involves collecting information through practical and written performance evaluations/exams, and drawing conclusions. Upon review of the results, you will clearly see areas for improvement in your company’s training and educational programs, as well as, which competent person requires additional support.

The subject of performance evaluations is sure to produce apprehension amongst some of your staff, especially among Foremen and Supervisors.

However, if approached correctly and explained that this “evaluation tool” is looking at both the performance of the company, as well as the employee, the response will be stronger. Nonethe-less, companies must continually seek to improve the safety and performance of their organization, by striving to work safer today than they did yesterday. n

54

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“BUY FROM THE ADVERTISERS IN CONSTRUCTION OUTLOOK”

MAY, 2019

Your Company Must Have A Comprehensive Safety Program!

This year’s Safety Manual includes information on: • OSHA’s Updated Crane & Derrick Rule (1926.47) • OSHA’s Final Rule on Silica Exposure Limits • OSHA’s Final Rule on Improved Tracking of Workplace Injuries and Illnesses • OSHA’s Final Rule on Confined Space in Construction • OSHA’s New Requirements for Reporting Severe Injuries • OSHA’s Updated Trenching & Excavation Safety • Updated State & Federal Posting Requirements

Promote A Safe Working Environment It should be your company’s policy to provide a safe place to work, with the prevention of accidents being your ultimate goal.

Your Insurance/Bonding carrier requires a Safety Program.

State and Federal Agencies require a Safety Program.

OSHA Inspectors Will Be Enforcing: • Overall Construction Safety (29 CFR 1926) • Excavating Standards • Written Safety and Health Plans

• Hazard Communications Programs • Drug Free Workplace • OSHA 10-Hour Training Requirements

Examine The UCANE Pocket Directory When ordering Company Safety Manuals, the Safety Manual section only, in the back of UCANE’s Pocket Directory, will be made up into an individual Employee Pocket Safety Manual with Your Company Name & Logo printed on the cover. Employee signature cards verifying compliance with safety manual procedures are included. When signed, these cards should be placed in each employee’s file.

Employee Pocket Safety Manual Order Form

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“BUY FROM THE ADVERTISERS IN CONSTRUCTION OUTLOOK”

12/11/09 3:13:09 PM PM 12/11/09 3:13:09

MAY, 2019

Downtown Sewer Estimate Tops $47M ORLEANS — The town received an estimated bill for the first phase of the downtown sewer project: It’s $47,276,200.

T

hat tab came from Ian Catlow of Tighe and Bond, the engineering firm looking at the design work by AE Com for the collection system and treatment plant. The sewer system design is on schedule; the treatment plant is on a slight lag.

Catlow said he anticipates a 60 percent design by the end of the month.

“In general the project is on schedule,” he recently told the selectmen.

The application to the State Revolving Fund (SRF) for a loan will be submitted on time. If the project is approved at town meeting (it’s Article 16) it will be followed by a ballot question for a debt exclusion override on May 21.

The bid documents will be ready for the state Department of Environmental Protection in October and the bidding phase will be under way by January 2020.

Construction will start in spring 2020 and continue until 2023.

The wastewater treatment plant and disposal wells are expected to cost $22,349,600; the pipes and collection system $13,969,600; construction services $5 million; police traffic details $1,125,000; other costs $800,000; land right-of-ways $400,000, and there is a 10 percent contingency of $3.6 million added on.

The total cost for all of the actual construction is $36,319,200. Catlow estimated $46.8 million of the total cost would be eligible for the SRF low interest loan.

Selectman Alan McClennen said the actual project costs could be less if the town receives grants that it will apply for.

He said the project cost could be reduced to

MAY, 2019 SEPTEMBER, 2016

$29,250,000, assuming the town gets the grants.

Downtown properties will pay total betterment fees of an estimated $13 million, and that number also could be reduced by the grants.

Additionally, “If we get a 25 percent principal (from the new Cape and Islands Water Protection Fund funded by the new short term rental tax) the betterment cost would be reduced to $9,750,000,” he said.

McClennen noted that Orleans’ new hotel and motel tax increase from 4 to 6 percent (if approved at town meeting; it’s Article 19) could produce more funding ($340,000 a year) to reduce sewer costs, as it is earmarked for water quality issues.

“So it is possible the entire project could be paid for,” he concluded with great optimism.

More good news is that the sewer work, when it happens, won’t go on during the summer. The treatment plant construction will continue.

Orleans’ proposed project is currently 11th on a list of 44 projects in the SRF pipeline. But town meeting first has to approve it.

Reprinted from Wicked Local Orleans. Written by continued on page 58 Rich Eldred.

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57 00

Spotlight on Cape Cod continued from page 57

Economic Development Hinges Wastewater Support

on

The road to Sandwich economic development lies along Route 130.

T

hat bright future dims dramatically, however, if voters reject the proposed $86 million Wastewater Infrastructure Improvement Fund (WIIF) on the May 9 town election ballot.

The Sandwich Economic Initiative Corp. (SEIC) agrees with both notions, But there is no certainty that the WIIF request will prevail.

“Wastewater is the crucial element here,” said Selectman Michael Miller, a liaison to the SEIC. “If we’re going to have economic development, we need to get that in the bank.”

SEIC Chairman Richard Johnson concurs.

“Nothing happens without wastewater,” he said, referring to the latest South Sandwich Village development efforts.

The SEIC’s April 22 discussion about how Sandwich will achieve the elusive goal of greater economic development and new jobs was freeflowing, wide-ranging, and filled with bureaucratic explanations about how grant applications should be handled.

Johnson recommends Sandwich consider Bourne’s path to securing state and federal grant funding for a long-proposed waste water treatment plant off the Buzzards Bay Bypass.

But that Bourne project also faces a critical juncture at the May 6 Special Town Meeting, where an additional $2.8 million will be requested for the $6.6 million treatment facility that is touted as a key infrastructure investment in Buzzards Bay economic development.

Sandwich wastewater effort is practical, but it is also already multifaceted.

Miller, in that respect, says ongoing efforts to secure operational control of the Joint Base Cape Cod waste plant are also a key element in South Sandwich Village planning and sewers one day for Forestdale. The base facility is yet another factor in a wastewater/development mosaic.

There are unsteadying aspects of that picture.

Miller says economic development grant applications and their preparation are complicated, and that an expert likely would be needed to collect, sort, and submit requested background information.

Just reading guidelines for what information needs to be collected can be confusing, he said.

Johnson says the effort involving public/private partnerships is worthwhile.

“This is the future of this community,” he said of planning for Route 130 and for South Sandwich Village. “It really is.”

Johnson said he recently met with retired U.S. Rep. Bill Delahunt and learned that within two years, continued on page 59

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If the Bourne Town Meeting vote is negative, project advocates say the plant project won’t proceed and economic development in Buzzards Bay will be dealt a severe blow.

The Sandwich ballot WIIF request is similarly crucial. The 58

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Spotlight on Cape Cod continued from page 58 infrastructure legislation will be reported out of Congress and will head to the White House.

“We have to be shovel ready with grants and try to get a jump on these things,” Johnson said.

letic fieldhouse that could accommodate tournaments and prompt family overnight stays in town.

Financing again did not evolve, and rumors that the planning also involved introduction of a minor league baseball franchise did not sit well with Cape Cod Baseball League followers.

SEIC members agree the town is poised on the economic development front, given privately owned tracts in South Sandwich that could be developed and the town’s geographic presence near the canal bridges and highways to Providence and Boston. Then there are the 56 town-owned acres that are part of the mix.

Union Studios has local experience, having conducted Sandwich Marina master planning.

But members also agree townspeople will have to want “to put economic development in place” with attention directed to needed zoning changes and a roadmap of sorts for expedited permits.

Written by Paul Gately. Reprinted from Wicked Boston Area Local Sandwich. n

Within that trajectory framework, the SEIC is relying on a pending $35,000 District Local Technical Assistance (DLTA) grant via the Cape Cod Commission. Requested by the Sandwich Planning Department, the grant funds would underwrite a Route 130 corridor development study.

The May 9 election ballot, meanwhile, included two questions. One seeks WIIF financing via a two-percent surtax. The other asks voters to reduce the Community Preservation Act surtax on property taxes from three to two percent.

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Think Blue Honored for Stormwater Campaign The Massachusetts Municipal Statewide Stormwater Coalition will be honored with a Stormy Award for its Think Blue Massachusetts campaign, a statewide effort to educate Massachusetts residents on the importance of combating stormwater pollution.

T

he award, given by the New England Stormwater Collaborative to recognize achievements in stormwater management, will be presented at a June meeting of the New England Water Environment Association in New Hampshire.

The Think Blue campaign officially launched at an event last October at an elementary school in Stoughton with Massachusetts Department of Environmmental Protection Commissioner Martin Suuberg and other state and local officials. (For more information about Think Blue, visit www.thinkbluemassachusetts.org.)

The Massachusetts stormwater coalition is chaired by Charlton Town Administrator Robin Craver, who also chairs the MMA Policy Committee on Energy and the Environment.

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include public education. The $170,375 award will be used to expand the reach of Think Blue through video production, a statewide social media campaign, and print materials.

Stephanie Cooper, MassDEP’s deputy commissioner for policy and planning, discussed the agency’s stormwater-related grants and initiatives at the April 9 meeting of the Local Government Advisory Commission. She described the need for focused attention on stormwater management throughout the state, recognized Craver and the statewide stormwater coalition, and highlighted the $300,000 distributed by the department in March to multi-community stormwater groups.

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Cullen, Murphy & Co., P.C.

IN THIS ISSUE

• Using the 0% Tax Rate • Working Around the New “Kiddie Tax” • Final Regulations Clarify IRC Section 199A

G

Client Bulletin

John E. Merchant, CPA

Smart tax, business and planning ideas from your Tr

0% tax rate Using the 0% Using Taxthe Rate

enerally, profits from selling assets such as securities and real estate held in taxable accounts are classed as long-term if the holding period was longer than one year. Tax rates on longterm capital gains are 0%, 15%, or 20%, depending on the seller’s income.

had bought sev generating a $1 in a taxable ac

Assuming the capital gains o expected to bri the year from $ this scenario, t To maximize use of the 0% rate, your taxable intax on their $15 come (after all deductions) in 2019 must be no more because their t than $39,375 for single filers and married individuals under the $78,7 filing separately, $52,750 for heads of household, or taxedGenerally, at 15%. Ifprofits Ryanfrom and Ellie have taxable selling assets such income $78,750 on a joint tax return. (Inflation adjustments of $80,000 — $1,250 above the threshold What would ha as securities and real estate held in taxable— that may increase those numbers in the future.) $1,250 would be at 15% ($187.50),ifthe and wind up 20 accounts aretaxed classed as long-term thenext capital gains rate, and the of their $80,000, includ holding period wasbalance longer than onegain year.($13,750) Example 1: Ryan and Ellie Ford have income over wouldTax berates taxed 0%. So,capital this couple would owe capital gain? D on at long-term gains are $100,000 on their 2018 tax return, reporting $60,000 of only $187.50 $15,000 long-term gain, which they using the 0% c 0%, 15%,on or a20%, depending on the seller’s taxable income. (That’s after taking the standard deducmightincome. consider a savvy move. tion and deducting pre-tax contributions to retirement No, the Fords w plans.) The Fords expect to have similar income in 2019.

Qualified Dividends completely tax To maximize use of the 0% rate, your taxable Suppose Ryan and Ellie sell $50,000 of shares have taxable in income (after all deductions) in 2019 must Income from stock dividends may be taxed at orin a U.S. stock fund, which they had bought several above the thres be no more than $39,375 for single filers dinary income tax rates of up to 37% this year. Howyears ago for $35,000, generating a $15,000 longbe taxed at 15% and married individuals filing separately, ever, on some dividends (subsequently discussed), term capital gain in a taxable account. gains rate, and $52,750 for heads of household, or $78,750 taxpayers may owe 0%. Again, the cut-off points are Assuming the Fords will have no other capital gains ($13,750) woul on a joint tax return.

(Inflation adjustments the same as they are for 0% long-term capital gains: or losses in 2019, this gain is expected to bring their taxcouple would o may increase those numbers in the future.) taxable income under $39,375 for single filers, for exable income for the year from $60,000 up to $75,000. In $15,000 long-t ample, and $78,750 on a joint tax return. this scenario, the Fords will owe 0% income tax on their Example 1: Ryan and Ellie Ford have income consider a sav Example 2: George Drake is retired, with $55,000 $15,000 long-term capital gain because their taxable inover $100,000 on their 2018 tax return, in annual income, including $10,000 of income from come would be under the $78,750 threshold. reporting $60,000 of taxable income.

Qualified divid stocks and stock funds that he holds in taxable acWhat would happen if the Fords misjudge and (That’s after taking the standard deduction Income from s counts. George itemizes deductions, and his taxable wind up 2019 with taxable income of $80,000, includand deducting pre-tax contributions to at ordinary inco income is well under $40,000 each year. As a result, ing their $15,000 long-term capital gain? Does this preretirement plans.) The Fords expect to have this year. Howe George owes 0% tax on his dividend income this year. vent them from using the 0% capital gains tax rate? similar income in 2019. (subsequently owe 0%. Again No, the Fords won’t have their gain completely continued on page 67 Suppose Ryan and Ellie sell $50,000 of same as they a shares in a U.S. stock fund, which they gains: taxable i 2019 “BUY FROM THE ADVERTISERS IN CONSTRUCTION OUTLOOK”

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Financial Management continued from page 65

Trusted Advice

Most dividends, including dividends passed through from stock funds, are qualified dividends that receive favorable tax treatment, although some conditions apply. (See Trusted advice box.) Qualified dividends are taxed at the same rates as long-term capital gains, so if your income is too high for the 0% rate, you’ll owe tax at 15% or 20%.

It’s a truism, for good reason, that you shouldn’t let the tax tail wag the investment dog. That said, if you expect to be in the 0% bracket, you might consider holding some dividend-paying stocks or stock funds in a taxable account for untaxed income. continued on page 69

Qualified Dividends

Qualified dividends must pass all these tests: • They must be paid by a U.S. corporation or a qualified foreign corporation.

• They must not be specifically excluded by the IRS as not eligible as qualified dividends (see IRS Publication 550, p. 20). That list includes capital gains distributions and payouts that are really interest income.

• You must have held the stock paying the dividends for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date.

(The ex-dividend date is the first day of trading on which the buyer of a security is no longer entitled to the most recently announced dividend.)

Did You Know?

H

ome sellers in 2018 realized an average home price gain of $61,000 since purchase, a 12-year high. That average profit represented an average 32.6% return on investment, the highest since 2006.

Individual markets with the leading returns were mainly in the west, topped by San Jose (108.8%), San Francisco (78.6%), and Seattle (70.7%).

Source: attomdata.com

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Financial Management continued from page 67

T

Working Around the New “Kiddie Tax”

he previous article of this issue explains that single taxpayers with taxable income up to $39,375 ($78,750 on joint returns) can pay 0% tax on longterm capital gains. That may suggest some income-shifting strategies.

Example 1: Suppose that Fred and Grace Holden plan to switch from XYZ Stock Fund to another fund. If the Holdens sell all their shares of XYZ, which has been held in a taxable account for more than one year, they would have a $30,000 long-term capital gain. With their income, in this example, Fred and Grace will owe 15% on longterm gains, so they would give $4,500 to the IRS: 15% of $30,000.

Instead, the Holdens could give their shares to their daughter Hope, a 20-year old college student who otherwise would have no taxable income this year. If Hope receives the shares in a gift from her parents, she’ll pick up her parents’ basis (cost for tax purposes) and holding period (long term).

Then, Hope could sell the shares immediately, realize the $30,000 longterm gain, and stay below the taxable income threshold, so she’d be in the 0% tax bracket for the gain on the sale. In this scenario, Hope’s parents would have avoided a $4,500 tax bill. Wouldn’t that be a great idea? continued on page 71

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Financial Management continued from page 69 Kid Stuff Unfortunately, the 0% tax rate is not that easy to use. For one thing, there is a “tax on certain children who have unearned income,” known as the “kiddie tax.” This rule is designed to prevent the type of income shifting the Holdens have in mind.

A “kiddie,” for this purpose, can be a youngster who was • under age 18 at year-end; • age 18 at year-end, with earned income no more than half of his or her support; or • a full-time student age 19-23 at year-end, with earned income no more than half of his or her support.

Some exceptions are possible. A married individual filing a joint tax return would not be included, for instance. In our example, though, the last bullet point describes Hope, so the kiddie tax would apply.

Math Lesson In 2019, kiddies can have up to $2,200 of unearned income without owing tax. Above that amount, unearned income would be taxed according to the tax rules for trusts and estates. (This step was introduced in 2018, replacing a formula based on parents’ tax rates.)

Example 2: Here, Hope Holden has a $30,000 long-term gain, of which she can exclude $2,200. Using the tax rates for trusts and estates in 2019, the next $2,650 of Hope’s long-term capital gain would qualify for the 0% tax rate. Thus, each “kiddie” possibly could have up to $4,850 ($2,200 + $2,650) of long-term gains in 2019, taxed at 0%.

Larger gains, up to $12,950, would be taxed at 15%. On Hope’s $30,000 long-term gain, the remainder (nearly $15,000) would be taxed at 20%, the top long-term capital gains rate.

Giving to Grown-Ups If the kiddie tax doesn’t apply, income shifting to use the 0% tax rate becomes much easier. Suppose that Hope is a 24-year-old graduate student, instead of a 20-year-old undergraduate. Then, the kiddie tax wouldn’t apply, and giving Hope the appreciated shares to sell would, indeed, save the Holden family thousands of dollars in tax. The same could be true if Hope were married, reporting modest income on a joint return, or if the Holdens were helping Fred’s parents, for instance, who might be retirees living on a modest income.

Moreover, avoiding the kiddie tax is only one factor to consider in such planning. The annual gift tax exclusion amount is $15,000 in 2019. Larger gifts probably won’t trigger gift tax because the federal estate and gift tax exemption is $11.4 million per individual in 2019.

On the other hand, if any individual gives assets worth more than $15,000 to a recipient in 2019, a gift tax return must be filed. For the Holdens to give Hope shares with a $30,000 built-in gain, the value of the shares probably would be well over $30,000, requiring a gift tax return.

Let’s say Fred and Grace wanted to help support Fred’s parents. They could give a total of $60,000 worth of assets, such as appreciated shares. (Fred would give $15,000 of such assets to each of his parents; Grace would do the same.) Similarly, if Fred and Grace had two children beyond the kiddie tax age, they each could give $30,000 to the kids without having to worry about a gift tax return.

However, for income-shifting gifts over the $15,000 annual exclusion, pros and cons should be weighed.

Are the tax savings worth the effort of transferring shares and the costs of gift tax preparation? You also must be willing to part with the relinquished assets.

Another possible benefit: Transferring shares to children for a subsequent sale can be a good way of teaching them something about investing, gains, and tax consequences. continued on page 73

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Financial Management continued from page 71

T

Final Regulations Clarify IRC Section 199A

he IRS recently published final regulations regarding Section 199A of the IRC. That section, created by the Tax Cuts and Jobs Act of 2017, offers a 20% deduction for qualified business income (QBI). This deduction may be available to non-C-corporation taxpayers such as sole proprietors, business partners, certain LLC members, S corporation shareholders, and some others reporting business income.

As explained in the March 2019 Financial Management, taxable income affects the ability to take the QBI deduction. The annual thresholds, which are indexed for inflation, are taxable income of $321,400 on joint returns in 2019, $160,725 for mar-

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ried individuals filing separately, and $160,700 for single taxpayers as well as heads of household.

Below the Thresholds If your taxable income is below those thresholds, taking the QBI deduction might be relatively simple.

You would calculate your QBI and possibly deduct 20%.

Example 1: Jane and Keith Larsen, who file a joint tax return, wind up with $250,000 of taxable income in 2019. Keith has $90,000 of QBI from his sole proprietorship. Thus, this couple can take an $18,000 (20% of $90,000) QBI deduction.

The situation is different, though, if the Larsens have $90,000 of QBI from Keith but only $60,000 of taxable income, after deductions. Now their QBI deduction is the lesser of 20% of QBI or 20% of taxcontinued on page 75

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Financial Management continued from page 73 able income: 20% of $60,000, or $12,000, rather than $18,000.

Above the Thresholds With taxable income above the thresholds, limitations arise. One limitation is based on a formula involving employee wages or the taxpayer’s unadjusted basis in qualified property, or both; the other limitation applies to specified service trades or business, an extensive list ranging from accounting to trading securities. In any case, reducing taxable income that’s over the threshold may permit a larger QBI deduction.

Contributing to a retirement plan can reduce taxable income. However, the final regulations confirm that a pretax deduction for retirement plan contributions is included in the calculation of QBI. Therefore, reducing taxable income also may reduce the QBI deduction. If possible, it’s better to avoid this offset.

Example 2: Suppose that Jane and Keith Larsen expect their taxable income in 2019 to be around $350,000, which would put them over the $321,400 threshold for joint filers. Reducing their taxable income by contributing $30,000 to a retirement could bring them under the threshold and increase their

QBI deduction. It would be better if the retirement contribution is made by Jane, a salaried employee. Then, Keith’s QBI deduction would not be decreased.

In this example, Jane may have maxed out her retirement plan contribution for the year already, so Keith would have to be the one reducing income with a retirement plan contribution. If Keith stands to lose a 20-cent QBI deduction for every $1 deferred in a retirement plan, he is only getting an 80% net benefit from his retirement plan contribution. When he withdraws money from his retirement plan in the future, Keith will owe tax at his full tax rate, with no QBI savings.

Nevertheless, Keith may be getting a double-tax saving: Contributing to his retirement plan might reduce the couple’s taxable income in 2019 and also increase his QBI deduction. Your specific circumstances will determine the potential payoff from this type of planning.

Your accountant can go over the numbers with you to project the tax savings from such maneuvering to affect QBI. In general, the more years you’ll have until required minimum distributions start after age 70½, the greater the advantage of increasing contributions to tax-deferred retirement accounts.

Reprinted from CPA Client Bulletin. n

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

• • • •

Any Size Trench Box; Standard & Custom Fully Stocked Sales & Rental Fleet The Best Source for Road Plate Rentals Two Trucks for FAST RELIABLE DELIVERY!

MAY, 2019

“BUY FROM THE ADVERTISERS IN CONSTRUCTION OUTLOOK”

75

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

-PLANT LOCATIONSQUINN-PERKINS S & G CO. Burlington (781) 272-0200 PANDOLF-PERKINS CO. Sterling (978) 422-8812 • (800) 339-3389 KANE-PERKINS CO. Hudson (978) 562-3436 • (800) 287-3436 GRAVEL • SAND • STONE FILL AND LOAM BITUMINOUS CONCRETE (PAVING) READY-MIX CONCRETE PRECAST CONCRETE PRODUCTS

E

H

P

Equal Opportunity/Affirmative Action Employer 76

Advertisers’ Index ATS Equipment, Inc. ...............................................................8 American Shoring, Inc........................................ Ins. Back Cvr. B2W Software, Inc.................................................................54 BakerCorp..............................................................................66 Benevento Companies..........................................................26 Boro Sand & Stone Corp.......................................................56 Brennan Consulting...............................................................25 Dennis K. Burke, Inc..............................................................49 C&S Insurance Agency............................................................2 Concrete Systems, Inc...........................................................52 Core & Main.............................................................................4 Dagle Electrical Construction Corp.......................................34 Darmody, Merlino & Co., LLP................................................71 Dedham Recycled Gravel...................................................... 74 DeSanctis Insurance Agency, Inc. .......................................72 Dig Safe System, Inc.............................................................29 The Driscoll Agency...............................................................68 EJ...........................................................................................19 Eastern Pipe Service, LLC..................................................... 74 Eastern States Insurance Agency, Inc..................................56 Eastpoint Lasers, LLC...........................................................72 T. L. Edwards, Inc..................................................................35 Ferguson Waterworks............................................................25 Genalco, Inc.............................................................................7 Gorilla Hydraulic Breakers.....................................................39 L. Guerini Group, Inc..............................................................54 Hinckley Allen LLP.................................................................24 Hydrograss Technologies Inc................................................73 Industrial Safety & Rescue....................................................60 JESCO...................................................................................66 P.J. Keating Company............................................................50 P. A. Landers, Inc...................................................................30 Lawrence-Lynch Corp............................................................64 Lorusso Corp.........................................................................15 Lorusso Heavy Equipment, LLC............................................18 MBO Precast, Inc...................................................................58 MJ-Hammer........................................................................... 14 Mass Broken Stone Company...............................................39 Milton CAT...............................................................Back Cover NSI Contracting ....................................................................70 National Trench Safety............................................................9 Norfolk Power Equipment, Inc...............................................62 North American Crane & Rigging LLC....................................6 North East Shoring Equipment, LLC.....................................75 Northland JCB........................................................................56 Ocean State Oil......................................................................60 Palmer Paving Corp...............................................................62 Pawtucket Hot Mix Asphalt....................................................69 E. H. Perkins Construction Co., Inc.......................................76 Podgurski Corp......................................................................62 E. J. Prescott, Inc................................................Ins. Front Cvr. Putnam Pipe Corporation......................................................67 Rain For Rent-New England..................................................36 Ritchie Bros. Auctioneers...................................................... 11 Rodman Ford Sales, Inc........................................................16 Rogers & Gray Insurance......................................................12 Schmidt Equipment, Inc...........................................................1 Scituate Concrete Products Corp..........................................46 Scrap-It, Inc............................................................................59 Shea Concrete Products, Inc. . .............................................22 SITECH New England............................................................40 Starkweather & Shepley Ins. Brokerage, Inc........................20 Taylor Oil Company...............................................................70 Tonry Insurance Group, Inc................................................... 17 T-Quip Sales & Rentals, Inc..................................................13 Travelers.................................................................................38 United Concrete Products.....................................................64 United Rentals Trench Safety................................................48 Webster One Source.............................................................72 C. N. Wood Co., Inc. .............................................................10 Woodco Machinery, Inc.........................................................32 Xylem Dewatering Solutions Inc............................................68

“BUY FROM THE ADVERTISERS IN CONSTRUCTION OUTLOOK”

MAY, 2019

• We can provide you with the world’s largest or smallest trench box or shoring system • Get high production numbers while keeping your workers safe • We will show you how with our on-site supervision.

• Contact us for the world’s very best shoring

SALES RENTALS SERVICE REPAIRS TRADE-INS RECERTIFICATION

• We will deliver on time, every time.

We’ll bring it with our fleet of trucks; where you want it, E when you want it, EVERYTIM • We have been told by our customers that “no one beats our service” So don’t take our word for it, just ask the people who use our product

See Our Entire Line Call for Catalogs

Factory & Corporate Office: 207 LAKE STREET (Route 32) NEWBURGH, NY, 12550

1.845.562.4477

Call us for local Metropolitan New York, New Jersey and Connecticut Inquiries.

Factory Direct Stores: For New England: Maine, Vermont, New Hampshire and Western NY State

Call our Boston area location: 283 E Cherry Street Shrewsbury, MA 01545

1.508.842.2822

For the Mid- Atlantic Region: Eastern Pa, So. Jersey, Delaware, Maryland and Virginia

Slide System with Portable Safety Rail Installed

Call our Baltimore area location: 506 Pulaski Highway Joppa, MD 21085

1.443.313.3461

Or Phone us Toll Free from anywhere:

1-800-407-4674

GET MORE EVEN ON THE NEW CAT® WHEEL LOADERS THAT SET THE STANDARD FOR RELIABILITY, PRODUCTIVITY, FUEL EFFICIENCY, VERSATILITY AND OPERATOR COMFORT. You’ve got budgets to meet and expectations to exceed. Milton CAT is here to help. Our industry-leading equipment is designed with the power, versatility, efficiency, ease of operation and reliability you need to cut costs, not corners.

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0% FOR 48 MONTHS WITH ZERO DOWN ON ANY NEW WHEEL LOADER (938 AND SMALLER), SMALL DOZER (D5 AND SMALLER), BACKHOE LOADER OR TELEHANDLER. Milford 100 Quarry Drive (508) 634-3400

North Reading 84 Concord Street (978) 276-2400

miltoncat.com

Financing offer valid from February 1, 2019 to June 30, 2019 on select models of new machines manufactured by Caterpillar Inc. Building Construction Products Division. To be eligible, a sales contract must be signed during the offer period. Offer cannot be combined with any other offers. Prior purchases do not qualify. Offer subject to machine availability. To receive the financing offer, all balances must be financed through Cat Financial, subject to credit approval through Cat Financial. Financing rate is subject to approval and not all buyers will qualify. Higher rates apply for buyers with lower credit ratings. Payments are based on an installment sales contract with 48 monthly payments and $0 down. Payments may vary. Offer is subject to change without prior notice and additional terms and conditions may apply. ©2019 Caterpillar. All Rights Reserved.