Construction Outlook October 2014

A publication of the Utility Contractors’ Association of New England, Inc.

OCTOBER, 2014

Safety First • DLS On-Site Consultation Program • Q&A from DPU Pipeline and Safety Division • OSHA’s New Reporting Requirements Commence January 1, 2015 • DLS and DPS: Prevent Trench and E xcavation Collapses

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IN THIS ISSUE

OFFICERS President AL MORTEO FED. CORP. President Elect TONY BORRELLI Celco Construction Corp.

Treasurer JOHN OUR Robert B. Our Co., Inc. Secretary PAUL SCENNA Albanese D&S, Inc.

BOARD OF DIRECTORS MARCELLA ALBANESE Albanese Bros., Inc. JEFF BARDELL Daniel O’Connell’s Sons, Inc. VINCENT BARLETTA Barletta Heavy Division NICK BIELLO J. D’Amico, Inc. KEVIN COLE J. F. White Contracting Co. STEVE COMOLETTI P. Caliacco Corp.

STEPHEN J. CONNOLLY ATS Equipment, Inc. MAUREEN DAGLE Dagle Electrical Const., Corp.

THOMAS DESCOTEAUX R. H. White Const. Co., Inc. ALEX DUNN Travelers JERRY GAGLIARDUCCI Gagliarducci Construction, Inc. MARCO GIOIOSO P. Gioioso & Sons, Inc. BILL IRWIN C.J.P. & Sons Const. Co., Inc. PHIL JASSET Honorary Board Member RICHARD PACELLA, JR. R. M. Pacella, Inc. BRIAN RAWSTON Jay Cashman, Inc. KENNETH STEVENS A. H. Harris & Sons, Inc. DAVID ZOPPO R. Zoppo Corp.

KLAYMAN ANNE Executive Director

3 President’s Message:

No Resting on Laurels When it Comes to Safety

5 Legislative Update:

• DEP to Hold Listening Session Relative to Soil Management • EPA Releases Draft Storm Sewer General Permit for 200+ Small Massachusetts Municipalities • Patrick Administration Begins to Implement Transition to Next Administration • Local Communities Look to Rate Increases to Meet Growing Water Infrastructure Needs • Tax Collections Fall Short of Budget Benchmarks

15 UCANE Interview:

Representative Carolyn Dykema (D-Holliston)

21 Executive Office of Labor and Workforce Development: Department of Labor Standard’s On-Site Consultation Program

25 Q&A from DPU Pipeline and Safety Division 33 Labor Issues:

OSHA’s New Reporting Requirements Commence January 1, 2015

37 Department of Labor Standards and Department of Public Safety: Prevent Trench and Excavation Collapses 39 UCANE Welcomes New Members 41 Massachusetts Municipal Association News 45 UCANE’s Annual Christmas Party & Scholarship Auction 46 UCANE’s 2014-2015 Employee Safety Manuals Now Available 47 Environmental Viewpoint: EPA’s Clean Power Plan

49 New England Experienced Fewer Unhealthy Air Quality Days During Summer Ozone Season 51 Financial Management:

• Planning for Retirement Income • As Collectibles Boom, Selling Can Be Taxing • S Corporation or LLC?

Editor: Anne Klayman, Associate Editor: Suzanne Savage, Graphic Designer: Sherri Klayman Construction Outlook Chairman: Al Morteo Editorial Board: Al Morteo, Tony Borrelli, John Our, and Paul Scenna 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; E-mail: 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 Abington, 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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No Resting on Laurels When it Comes to Safety As the underground construction season starts to wind down, I hope all of our members are enjoying a busy and productive year. More importantly, I hope all of you are having a SAFE YEAR up to this point and I want to remind everyone not to take your eye off the “safety ball” for the remaining months of 2014.

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s business owners, managers, and foremen we all want to make sure that every one of our workers comes home safely each night.

To this end it is management’s responsibility to NOT RELAX when it comes to safety, and to make sure every worker maintains jobsite awareness and continues to follow all of the safety rules and continues to apply all of the safety training that your company (and/or the Union) has invested in them.

The heavy construction business is not a walk in the park when it comes to potential for jobsite injury. There is no room on the site for workers who are indifferent, who tend to lose focus on the work, or who are cavalier when it comes to safety. I don’t believe that anyone working in this business meets the definition of an “unskilled worker”. This business demands professional employees at every level from top management to all of the trades. A professional employee knows how important safety is—not only for his own well-being, but for the well-being of his fellow workers and for that of his company. A professional crew remains alert all day long, they are focused on the job at hand, and they keep a constant eye on safety and on taking care of each other.

Massachusetts historically has a safety rating above the national average in the heavy OCTOBER, 2014

civil industry, despite working around some of the nation’s oldest infrastructure and in some of the most congested urban settings. I like to attribute some of that success to the fact that most of the Massachusetts heavy civil contractors are UCANE members who take advantage of UCANE sponsored safety seminars and who do business with many of our Associate members who sell and rent the most up-to-date safety equipment in the industry.

I want to remind our members that another safety resource is available to them through the Massachusetts Department of Labor Standards (DLS). The On-Site Consultant Program at DLS offers a free safety program or workplace assessments to contractors. They will assist you in making sure that your program, or your workplace, is keeping current and in compliance with all the latest OSHA standards. Sometimes it’s good to let a fresh pair of eyes look at your program. Please see page 21 for more information about the DSL programs that are available.

Keep pushing the safety message and finish out 2014 as a GREAT SAFETY YEAR for your company and for our industry! n

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Mark Molloy, Esq., Lynch Associates, Inc.

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DEP to Hold Listening Session Relative to Soil Management

n response to Section 277 of the fiscal year 2015 budget, the Massachusetts Department of Environmental Protection (“DEP”) recently announced that it has scheduled an October meeting to discuss soil management issues related to the implementation of that section.

According to the DEP, the meeting is for the agency to receive and discuss comments, suggestions, data, and examples that will help inform the DEP about the issues and assist in the development of regulations, standards, and policies pursuant to Section 277. As you may recall, Section 277 provides: “Not later than June 30, 2015, the department of environmental protection shall establish regulations, guidelines, standards or procedures for determining the suitability of soil used as fill material for the reclamation of quarries, sand pits and gravel pits. The regulations, standards or procedures shall ensure the reuse of soil poses no significant risk of harm to health, safety, public welfare or the environment considering the transport, filling operations and the foreseeable future use of the filled land. The department may adopt, amend or repeal regulations establishing: (i) classes or categories of fill or reclamation activities requiring prior issuance of a permit issued by the department; (ii) classes or categories of fill or reclamation activities that may be carried out without prior issuance of a permit issued by the department; and (iii) classes or categories of fill that shall require local approval based on the size, scope and location of a project; provided, however, that local approval shall not be required for projects involving less than 100,000 cubic yards of soil.”

UCANE and other contractor associations weighed in against the original version of Section 277. As a result, the legislature amended the language to reduce its

OCTOBER, 2014

impact. However, as written, the new law still presents significant concern to the construction and real estate development industries. Governor Deval Patrick vetoed Section 277 when it came before him for his approval out of concern about these potential impacts. Unfortunately, the legislature overrode the Governor’s objections before the end of formal sessions in July.

In particular, the DEP plans to discuss the following five topic areas to further educate itself about the potential impacts of this law: 1. What are the exposures of concern that must be considered to ensure that the reclamation soil poses “no significant risk”?

2. In addition to quantifiable human exposure concerns, what other factors would be considered or a suitability determination?

3. What procedures are necessary to establish confidence that the reclamation soil meets applicable standards?

4. What would a Reclamation Project Permit look like?

5. What reclamation projects would require local approval, and what is the nature/form of that approval?

While the DEP will not be presenting their strategy for handling soil management issues, it did refer stakeholders to visit www.reclamationsoil.org to view a DEP PowerPoint presentation on the same topic.

For those seeking to be added to the DEP’s listserver for notice on this issue, please contact Paul.

Locke@state.ma.us to insure that you receive future soil management-specific emails. According to the DEP, agendas and soil management-related material will also be posted at www.reclamationsoil.org. A brief summary of the meeting will be provided in next month’s legislative report. continued on page 7

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Legislative Update continued from page 5

EPA Releases Draft Storm Sewer General Permit for 200+ Small Massachusetts Municipalities

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he United States Environmental Protection Agency (“EPA”) recently announced that it is releasing its draft general permit for small “Municipal Separate Storm Sewer Systems” (“MS4”) located in Massachusetts for public comment. The new permits, when finalized, will update efforts in up to 260 municipalities, better protecting rivers, streams, ponds, lakes, and wetlands across Massachusetts.

According to an EPA press release, the EPA previously released draft general permits for small MS4s in North Coastal Watersheds in 2010 and in the In-

terstate, Merrimack, and South Coastal Watersheds in 2011. In response to many of the public comments submitted then and the availability of new technical and census information, EPA has revised the two general permits into one document and is now releasing the revised draft general permits for public input.

EPA has also made changes to the newly proposed draft permit in response to public comments seeking more clarity, guidance, and flexibility in meeting permit requirements.

Regulated MS4s include traditional cities and towns, state and federally owned facilities such as universities and military bases, and state transporAon Risk Solutions tation agencies. The general perConstruction Services Group mits will apply to all MS4s located in an urbanized area as defined by the 2010 census. The previous permit applied to MS4s located in an urbanized area based on the 2000 census.

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The draft general permits require regulated small MS4s to develop, implement, and enforce a “Stormwater Management Program” designed to control pollutants to the maximum extent practicable, protect water quality, and satisfy appropriate requirements Risk. Reinsurance. Human Resources. of the federal Clean Water Act.

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OCTOBER, 2014

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Legislative Update continued from page 7 The draft permit requires implementation of six minimum control measures, which include illicit discharge detection and elimination, public education and outreach, public participation, management of construction site runoff, management of runoff from new development and redevelopment, and good housekeeping in municipal operations. The draft permit also includes requirements that address waste load allocations associated with approved total maximum daily loads (TMDLs) for bacteria, phosphorus, and nitrogen and requirements that address discharges to impaired waters without an approved TMDL. The requirements contained in this draft permit build on the requirements of the previous general permit issued in 2003. The draft permit identifies four target audiences for public education, details specific procedures to locate and remove illicit connections, encourages low impact development practices, and identifies practices to address nutrients, bacteria, chloride, sediment, metals, and oil and grease. EPA has provided a suggested format for the notice of intent information, which can be submitted electronically. EPA will provide templates for the Stormwater Management Program and the annual reports.

EPA has estimated the costs associated with implementation of the minimum control measures, but does not have sufficient information to reasonably

estimate those associated with achievement of water quality based limitations. Actual municipality costs will vary depending on a number of factors including, but not limited to, population (1,000 to 150,000), resources, infrastructure (number of catch basins, road miles), size of the urbanized area, and work completed during previous permit term. As drafted, EPA estimates the cost to meet the requirements associated with implementation of the six minimum control measures to be between $78,000 and $829,000 per year averaged over the permit term.

EPA received over 500 comments on the draft permits first issued in 2010 and 2011, and EPA has modified the current draft permit in response to many of the submitted comments. Some changes include (1) additional time for completion of required tasks; (2) provides opportunities for optimization of activities such as catch basin cleaning rather than mandating a set frequency; (3) reduced the required frequency of street sweeping; (4) reduces costs associated with monitoring by allowing the use of field test kits; (5) includes provisions to address approved total maximum daily loads (TMDLs); and (6) clarified requirements for discharges to impaired waters.

The notice of availability of the general permit is expected to be published in the Federal Register on September 30, 2014. The public comment period is 90 days, ending on December 29, 2014. For information about the draft general permit, a detailed fact sheet, and information on public meetings and public hearing, please visit: www. epa.gov/region1/npdes/stormwater/MS4_MA.html.

Patrick Administration Begins to Implement Transition to Next Administration

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he State House News Service recently reported that Governor Patrick has tabbed two individuals within his Administration to lead efforts to transition to the next gubernatorial administration.

To that end, Brian Gosselin, the transition director, is being assisted by Pat Johnson, who is transition coordinator. At the outset, the Patrick transition team is focused on preparing briefing materials and policy memoranda aimed at providing timely information to whoever succeeds in winning the November election.

In addition, the transition team has created a “series of guidance documents for the entire executive branch, the secretariats and the agency staff, to use” in an effort to complete the Patrick Administration’s remaining policy goals and objectives. The general election to decide the next occupant of the corner office as Governor will be November 4. The next Governor will be sworn in on January 1, 2015. continued on page 11

OCTOBER, 2014

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Legislative Update continued from page 9

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Local Communities Look to Rate Increases to Meet Growing Water Infrastructure Needs

he Cape Cod Times recently reported that the Town of Onset would see a 19 percent increase in its water rates after a recent vote. After three years where costs exceeded the revenue collected from water users, the Onset Water Department Commissioners voted to increase the rates.

Under the new rates, a customer using up to 3,500 cubic feet of water per year will see the semiannual water bill rise from $126 to $150. A customer using 3,501 to 7,000 cubic feet of water will be charged $4.38 per 100 cubic feet, up from $3.68.

In the Town of Lexington, the Water and Sewer Department is proposing an approximately 2 percent rate increase across the board for all water and sewer customers. According to the Lexington Minuteman, water and sewer users in Lex-

ington are divided into three tiers based on how much water they use and how much wastewater they produce, and those tiers pay different rates.

The average family of four falls into the middle tier, and last fiscal year they were paying $24.72 per hundred cubic foot (HCF) for water and sewer services.

This year, the proposal made to selectmen is to increase that middle tier rate to $31.74 per HCF. If the proposed rates are adopted then high-end users will pay approximately $447 per HCF. Rate increases are based on assessments completed by the Massachusetts Water Resource Authority (MWRA), the agency that treats and disposes town sewage.

The Town of Lexington purchases 2 billion gallons of water a year from the MWRA, and sells some of the water at a wholesale price to Bedford. continued on page 13

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Tax Collections Fall Short of Budget Benchmarks

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ccording to a press release by the Massachusetts Department of Revenue, preliminary revenue collections for September totaled $2.467 billion, $53 million, or 2.2 percent more than the state took in last September. However, withholding payments that were anticipated to be paid in September and were instead paid in August, combined with third quarter corporate and business estimated payments that were below what was expected, resulted in revenues of $108 million below the monthly benchmark based on the fiscal year 2015 revenue estimate of $24.387 billion.

In particular, tax collections for the first quarter of the fiscal year total $5.693 billion, $150 million, or 2.7 percent more than at this time last year and $43 million below the year-to-date benchmark. Total income payments for September were $1.364 billion, $26 million, or 1.9 percent over last September and $33 million below the monthly benchmark. Year-to-date income tax collections were $3.165 billion, $106 million, or 3.5 percent over this time last year and $31 million over the yearly benchmark.

Estimated income payments brought in $524 million for the month, $38 million, or 7.7 percent more than last September and $21 million over the monthly benchmark. Income tax payments with returns/bills totaled $34 million for the month, $4 million or 11.1 percent less

than the same period last year and $14 million below the September benchmark. Withholding collections totaled $825 million, $13 million, or 1.6 percent below last September and $46 million under the September benchmark. Almost all of the September weakness is due to a timing-related withholding shift of roughly $40$60 million from September to August.

Corporate and business collections for September were $446 million, $7 million, or 1.6 percent less than last September and $66 million below the monthly benchmark. Sales and use tax collections for September totaled $469 million, up $24 million, or 5.4 percent from last September and $11 million below the monthly benchmark. Collections through the first quarter totaled $1.465 billion, $68 million, or 4.9 percent over the same period last year and $18 million below the year-to-date benchmark. Regular sales and use tax collections fell $14 million below benchmark in September and meals and motor vehicle sales tax collections came in just slightly ahead of benchmark.

Tax amnesty collections for the month of September totaled just over $13 million with approximately 20 thousand taxpayers participating to date. The twomonth tax amnesty period will be open through October 31 to taxpayers who received a notice. n

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Representative Carolyn Dykema (D-Holliston) Elected to the House of Representatives in the fall of 2008, Carolyn Dykema represents the 8th Middlesex District of the Metrowest region and includes the towns of Holliston, Hopkinton, Southborough, and precinct 2 of Westborough.

Prior to entering the legislature, Representative Dykema worked professionally in the fields of financial services and environmental consulting. Since 1999 she has served on local boards and committees including serving on the Holliston Sewer Action Committtee, as Chair of the Holliston Planning Board, Executive Committee member of the Metropolitan Area Planning Council ,and a Steering Committee Member of the SuAsCo Watershed Community Council. In 2007, she was appointed by the Governor to the Massachusetts Energy Facilities Siting Board.

Since joining the legislature, she has worked tirelessly to support the communities she represents, focusing on issues related to small business, healthcare, water infrastructure, local agriculture, and veterans.

A fourth-generation Massachusetts resident, Representative Dykema is a graduate of Wellesley College and holds an MBA from Indiana University. She was raised in Massachusetts and now lives in Holliston with her husband Bill and their three children.

Q: A:

Please give our readers some insight into your background and how you got involved in state government.

I’m a big fan of Tip O’Neill, and he said it best when he said “all politics is local.” My first involvement in politics was serving on a local committee to evaluate a proposal to sewer my hometown.

The project would have had a direct and lasting impact on my neighbors, my family, and my community. I wanted to have a voice in how the decision was made.

When serving in local government you quickly realize, however, that state and federal policy sets the stage for what can be accomplished locally. If local, state, and federal officials don’t communicate or aren’t on the same page, it hampers progress. That’s why I ran for state office. I saw the need to forge stronger connections between our communities and the state so that we could accomplish more for our residents. The most exciting part of my job is seeing what can be achieved

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when government at all levels is working toward the same goal, when everyone is “rowing in the same direction”. What we were able to accomplish with the Water Infrastructure Finance Commission and resulting legislation is a great example of what’s possible.

Q:

You played a major role in bringing water infrastructure legislation to fruition during this session. Can you discuss your thoughts on the recently passed law?

A:

The most important outcome of the water bill is that the legislature has a much better understanding of the water needs of our communities than it did when we started. The bill itself includes many important provisions for cities and towns including more funding, tools to help with planning, and incentives for innovative and green technologies. But there is still more work to be done if we’re going to provide the water services that residents expect and that continued on page 17

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Interview continued from page 15 a growing economy requires. We need to continue to educate the public about the value and cost to maintain the systems that bring water to their taps. Today, we seem willing to pay much more for cellular phone service than we do for water, yet water is a much more fundamental and crucial utility.

Q:

The importance of maintaining water and wastewater infrastructure must be an ongoing effort. In addition to your work on Chapter 259 of the Acts of 2014, you also pushed for another source of funding for water infrastructure projects. Can you share your thoughts on funding our water infrastructure needs in the future?

A:

The Water Infrastructure Finance Commission identified a gap of $20 billion dollars over the next 20 years. This number doubles to $40 billion if storm water management is included. The legislation that we passed provides needed new funding, but it will still cover only a fraction of what’s necessary. Several possible new sources of funding were discussed during the Commission’s work, but none has garnered broad enough support.

One funding possibility that I would like to explore is the internet sales tax which is expected to pass at the federal level in coming years. My hope would be that at least some of these new funds could be dedicated to water infrastructure needs.

We need to continue to educate the public about the value and cost to maintain the systems that bring water to their taps. Today, we seem willing to pay much more for cellular phone service than we do for water, yet water is a much more fundamental and crucial utility.

Q:

Massachusetts, along with the rest of the country, continues to rebound from difficult economic times. Please give your thoughts on how the state will continue to address these difficult financial times and the importance of finding novel ways to drive local aid to cities and towns to help support basic municipal services, specifically maintenance and needed improvements to water infrastructure.

A:

Government at every level is learning to live with the “new normal” economy, which means finding new ways to do more with the same or less funding and running programs more efficiently. One of the silver linings of the economic downturn is that it has underscored the importance of economic development and, continued on page 19

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Interview continued from page 17 consequently, the infrastructure that supports economic growth. There is a compelling case to be made for infrastructure investment at the state and local level, because it is crucial groundwork for economic expansion. In fact, given water restrictions in other parts of the country, investments that ensure robust water management systems can be a competitive advantage for Massachusetts. This is especially true for industries like biotech that are heavy water users.

By providing more funding to cities and towns for water systems, the state is investing in our future economic prosperity in addition to protecting the health of our residents.

Q:

Massachusetts is a leader in technological development. Can you provide your insights on innovation and water infra-

structure?

A:

There are huge opportunities for technological advances in water management, which is an industry sector that has seen relatively little innovation, especially when compared with other sectors like communications. There is a large market for low-cost, low-energy use solutions across the world. These needs will only grow as we see the impacts of a changing climate.

Massachusetts already has a large number of tech companies and startups with an interest in water innovation. The state is now partnering with them to establish a more formal “water innovation cluster” that can find solutions to local and global water needs while also creating Massachusetts jobs. Funding for this partnership is another exciting element of the legislation that we passed this session.

Q:

You have been a strong advocate for the towns of Holliston, Hopkinton, Southborough, and Westborough. Please describe the challenges you see facing municipalities in the near future.

perfect storm of aging infrastructure, increasing regulation, and declining state and federal funding. Back in the 1970’s, it was not uncommon for federal and state funding to cover 90% of the cost of a water infrastructure project, but today most of that cost is borne by the towns through local taxes and water rates. The result has been lack of investment. We need to move back to a partnership model in which state and local contributions are more balanced.

Government at all levels must also be more cognizant of the impacts of regulation at the local level, striving to limit regulation only to that which has practical, material benefits. We also need to spend more time looking at how new regulations are implemented and work more closely with towns to make implementation as streamlined and efficient as possible. This can only happen when cities and towns are in close communication.

Q:

Both the Water Pollution Abatement Trust Contract Assistance Line-Item (1599-0093) and the Commonwealth Sewer Rate Relief Fund (1231-0100) are important pieces of the state budget.

Please share your thoughts about these two programs and how they assist the Commonwealth in addressing its water infrastructure needs.

A:

Contract Assistance and the Rate Relief Fund are two of the primary sources of state funding for water infrastructure. Both of these sources offset the amount our residents pay in local water rates.

Unfortunately, as the cost of maintaining our infrastructure has grown over the years, these funds have not kept pace.

Looking ahead, there needs to be more focused advocacy during the annual state budget process for allocating more funding to these line items. The new advisory commission, set up through the recently passed legislation, will play an important role by keeping water infrastructure needs on the legislative “radar.” However, industry groups and water advocates also have a crucial role to play. A powerful coalition has been established through the Water Infrastructure Finance Commission and that coalition needs to continue to actively engage the legislature. n

A: P.A. Landers, Inc. The Water Infrastructure Finance Commission confirmed what municipalities have known for a long time; towns are facing the

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Executive Office of Labor and Workforce Development Department of Labor Standards On-Site Consultation Program

T

he Department of Labor Standards (DLS) offers a free consultation service designed to help employers recognize and control potential safety and health hazards at their worksites, improve their safety and health program, assist in training employees, and possibly qualify for a one-year exemption from routine OSHA inspections. This service, which is jointly funded by the DLS and the U.S. Department of Labor, Occupational Safety and Health Administration (OSHA), is primarily targeted for smaller businesses (less than 250 employees per establishment or 500 employees nationwide) in high hazard industries; such as manufacturing, healthcare, and construction. It is a confidential service in which your firm's name, and any other information you provide and any unsafe or unhealthy working conditions found, will not be reported routinely to the OSHA inspection staff.

T

On-Site Surveys

he primary objective of the Consultation Program is to help employers recognize and control potential safety and health hazards in their workplace. Consultative surveys usually consist of on-site safety and health visits; although the Program also offers assistance in other areas (refer to Technical Support). Employers can request a comprehensive (wall-to-wall) safety and health survey, or may limit the survey to specific operations.

Since this service is voluntary, you must request a consultative visit. Your request sets the consultative process in motion; refer to Requesting A Visit.

The Consultation Program prioritizes each request received and schedules on-site inspections accordingly. The Program gives priority to smaller businesses (less than 250 employees per establishment or 500 employees nationwide) in high hazard industries.

On-site consultative visits include the following general components: 1. Opening Conference - review of the consultant's role and the employer's obligations.

2. Walk-Through Survey - consultant(s) examines conditions at your workplace, points out potential safety or health hazards, discusses applicable OSHA standards or interpretations, and recommends possible control measures. Areas of consultation include machine guarding, electrical safety, flammable storage, fall protection, trenching and excavation safety.

OCTOBER, 2014

The Consultation Program strongly encourages employee participation in the walk-through survey.

3. Written Programs Evaluation - consultant(s) will evaluate the adequacy of all OSHA-required written programs; such as hazard communication, lockout/tagout, confined space entry, bloodborne pathogens, forklift and forktruck, respirator program and respirator fit tests, and offer recommendations for improvement. Consultants can also help you establish or strengthen your safety and health program.

4. Monitoring - health consultants can perform air testing, noise testing and ventilation testing as necessary at your worksite.

5. Closing Conference - the consultant(s) reviews findings, offers possible solutions, and schedules abatement periods to eliminate or control any "serious" or "imminent danger" hazards.

6. Written Report - following the closing conference, the consultant(s) will send you a detailed written report explaining all findings, possible control measures, and confirming abatement periods discussed in the closing conference.

7. Abatement Verification - employers are obligated to submit written confirmation to the Consultation Program verifying that all "serious" hazards have been abated. All "imminent hazards" must be corrected the day of the visit. continued on page 23

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DLS continued from page 21

Relationship with OSHA

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he Federal Occupational Safety and Health Act of 1970 allows for Cooperative Agreements between States and the Federal Occupational Safety and Health Administration (OSHA) to provide consultative services to employers. This service is made available at no cost to employers to assist them in establishing effective occupational safety and health programs.

The overall goal is to prevent the occurrence of injuries and illnesses which may result from exposure to hazardous workplace conditions and from hazardous work practices. The principal assistance will be provided at the employer's worksite, but offsite assistance may also be provided.

The Department of Labor Standards (DLS) and U.S. Department of Labor, Occupational Safety and Health Administration (OSHA) have had Cooperative Consultation Agreements since 1975.

The Consultation Program is a confidential service in which your firm's name, and any other information you provide and any unsafe or unhealthy working conditions found, will not be reported routinely to the OSHA inspection staff. If you fail to eliminate or control identified "serious" or "imminent danger" hazards, according to the plan discussed during the closing conference, it may result in a referral from consultation to an OSHA enforcement office. However, OSHA referrals from consultation are very rare.

For additional information and services provided by the U.S. Department of Labor, Occupational Safety and Health Administration (OSHA), visit the OSHA Home Page at http://www. osha.gov. n

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DPU

Pipeline and Safety Division Bob Hayden, Esq., Dig Safe Compliance Officer

Despite the best efforts of public and private utility owners and the underground construction industry to comply with all the Dig Safe laws, it is inevitable that on occasion a utility strike will occur. Questions that may arise about when and how to file a Dig Safe Violation Report, and how the process works are answered below:

Q:

How long does a contractor (reporting a Utility Company) or a Utility Company (reporting a contractor) have to file a report form to your office at DPU?

A:

The Dig Safe law in Massachusetts does not require contractors to report Dig Safe violations to the DPU, however we encourage contractors to submit reports. As such, there is no specific reporting deadline, but the sooner the better to maintain current information. If a contractor does damage an underground facility, they must notify the utility company who is impacted “as soon as possible” 220 CMR 99.06(2). Utility Companies shall report all suspected violations of the Dig Safe law to the DPU within 30 days of learning of the circumstances constituting the suspected violation 220 CMR 99.01(2).

Q: A: Q:

Is there any kind of statute of limitation to file with DPU after the incident?

There is not a statute of limitations included in the Dig Safe law.

Q:

Does DPU have the option to dismiss the violation on review of the report (or reports) if there is insufficient information or does every report result in a hearing date?

A:

Not all reports received are reported as violations. Some reports are written up as “damages only” and due to certain circumstances, a violation of the law is not being alleged. In other instances, we receive reports that may lack the necessary level of evidence to support the alleged violation. If this happens, we contact the reporting party and ask for any and all evidence to support the alleged violation.

Q: A:

Is there always a hearing prior to DPU issuing a fine?

When a violation letter is issued by the DPU, the alleged violator is given the opportunity to:

1. Attend an informal conference (hearing) and provide a defense to the allegation.

What is the normal turn around time from when DPU receives a report of violation to when you send a hearing notice to the parties?

2. Submit a written response in defense of the alleged violation instead of attending the informal conference.

There is no specific statutory time frame for this, but we aim to record the alleged violations, review them, and turn them around as quickly as possible.

3. May admit to fault and send in a payment for the civil penalty accompanied by a signed “consent order”. Some choose to send in the letter in defense of the allegation. Some will simply pay the continued on page 26

A:

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DPU continued from page 25 fine. But all are entitled to an informal conference.

However, they must respond using one of the three options mentioned above.

Q:

Is the accused and the reporting party both required to attend a DPU hearing?

Will written testimony or evidence be considered by DPU in lieu of physical attendance at the hearing?

A:

We invite the alleged violator to appear. The reporting party does not attend the informal conference. Written evidence is an option instead of appearing (as mentioned in previous question). But we strongly encourage all alleged violators to attend the hearings as a conversation often provides more detail than a written response.

Fines for violation of Dig Safe laws are up to $1,000 for first offense and a minimum of $5,000 (to a maximum of $10,000) for repeat offenses occurring within a 12 month period. Please see the following page for the Dig Safe Violation Report. For more information go to: www.mass.gov/dpu. n continued on page 27

Crushed Stone & State Specified Dense Graded Base Manufacturer & Installer of Bituminous Concrete Products:

Q:

If a contractor wants to check with DPU to see if there have been any violation reports submitted against him, is there a way to do this?

A:

contractor were to inquire about a Dig Safe violation that may (or may not) exist, the request would be treated as a public records request and the inquiry would be directed through the DPU public records process.

Normally, we issue a violation letter to the contractor and they receive notice that way. If a

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OCTOBER, 2014

DPU continued from page 26

Massachusetts Department of Public Utilities (DPU) Pipeline Engineering and Safety Division One South Station Boston, MA 02110 Phone: (617) 305-3537 Fax: (617) 478-2589 Email: robert.hayden@state.ma.us

Dig Safe Violation Report Complete as thoroughly as possible and send to Robert Hayden at the above DPU address Today=s date:_________________________ Reporting Party:________________________ Company_______________________________ Mailing Address:_________________________________________Phone:__________________ Specific Location of Incident (Street)_______________________________________(Town)_________________ Date of Incident__________________Time of Incident:_______________________ Operator of Underground Facility/Utility Company:______________________________ Name of Excavator (or Excavating Company):_________________________________Phone:________________ Address:___________________________________________________ZipCode:____________ Dig Safe (Ticket) Number:___________________________________(Attach Dig Safe Msg. If applicable) Facility is on:

[ ] a Public Way

[ ] Private Property

Injury occurred:

[ ] Yes

[ ] No

Damage Occurred:

[ ] Yes

[ ] No

If yes, describe:

Did damage cause a service interruption? [ ] Yes

[ ] No

Facility Damaged is:

[ ] a Primary Line

[ ] a Secondary Line

Type of Facility:

[ ] Gas, [ ] Electric, [ ] Other

[ ] Communication, [ ] Water, [ ] Drain/Sewer,

Were photographs taken? [ ] Yes

OCTOBER, 2014

[ ] No

continued on page 29

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DPU continued from page 27 Provide a description of the damaged facility, including; material, voltage, pressure, depth of cover, repair cost and other pertinent _____________________________________________________________________________ _____________________________________________________________________________ _____________________________________________________________________________ _____________________________________________________________________________ What type of tool/equipment was used to excavate?____________________________________________ If a Dig Safe number was obtained, did the excavation occur within the area (scope) described in the Dig Safe ticket request? [ ] Yes [ ] No Available Proof that a Dig Safe Violation occurred: [ ] An admission was made by excavator. [ ] Incident was witnessed.

If so by who?____________________________________ [ ] Other. Explain: Please explain description of activity causing damage: _____________________________________________________________________________ _____________________________________________________________________________ _____________________________________________________________________________ _____________________________________________________________________________ Was the site marked?

[ ] Yes

[ ] No

If no, should the site have been marked? [ ] Yes [ ] No Were the marks within 18@ of the facility? [ ] Yes [ ] No Was the site marked correctly? [ ] Yes Explain:

[ ] No

Who is in violation of the Dig Safe law? [ ] Excavator [ ] Both Excavator & Operator

[ ] Operator of facility [ ] Neither Excavator, nor Operator

Explain why the party(s) above should be found in violation of the Dig Safe law: _____________________________________________________________________________ _____________________________________________________________________________ _____________________________________________________________________________ continued on page 31

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DPU continued from page 29 Is there any valid reason the above party(s) should not be found in violation of the Dig Safe law?_________________________________________________________________________ _____________________________________________________________________________ _____________________________________________________________________________ When was the incident reported and by whom?_____________________________________ Year of installation (if less than 12 months, provide month and date):_________________________ What were the weather conditions?____________________________________________ Depth of the Excavation?______________________________________________

ALLEGED VIOLATION(S) OF DIG SAFE (Check as many that apply) 1. [ ]

Excavator did not have a valid Dig Safe number at the time of the excavation. Excavator either had no Dig Safe number at all, or the Dig Safe number was invalid. If invalid, explain why.

2. [ ]

The underground facility was not marked. Excavator had a valid Dig Safe number but the underground facilities were not marked by the Utility Company (or locating company).

3. [ ]

The underground facility was inadequately marked by the operator of the facility.

(Excavator had a valid Dig Safe number, but the underground utilities were marked inadequately, inaccurately or incorrectly).

4. [ ]

The marking of underground facilities was lost or not maintained and remarking was not requested at least Twenty Four (24) hours before the excavation continued. (The excavator failed to keep the marks visible and should have called for a remarking, but did not).

5. [ ]

Excavation was not performed with precaution to prevent weakening of support to pipes, mains, wires, conduits or damage to the protective coating thereof and/or severance of any such pipe, main, wire or conduit. (Excavator could have avoided damage if additional/reasonable precaution was used).

6. [ ]

Damage occurred to underground facilities and operator thereof was not notified of damage by Excavator/Contractor.

7. [ ]

If blasting was employed, the initial notification or subsequent notification did not indicate the date and specific location of the blasting.

8. [ ]

The area of excavation was not premarked.

9. [ ]

Other (Explain)

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OCTOBER, 2014

Richard Wayne, Esq., Hinckley Allen, LLP

OSHA’s New Reporting Requirements Commence January 1, 2015 On September 11, 2014 OSHA issued new regulations changing the reporting requirements for workplace injuries and fatalities. These changes will significantly impact contractors. The new REPORTING requirements become effective on January 1, 2015. (By contrast OSHA’s existing RECORD KEEPING obligations, including Forms 300, 301, and 300A, for covered employers with 11 or more employees remain. But, OSHA did add employer classifications, which will be newly required to maintain these OSHA records). The new REPORTING requirements will dramatically increase threshold injury and illness reporting to OSHA and will significantly increase the likelihood of an OSHA inspection after an onsite accident, injury, or illness. The new regulations will institutionalize the local practice of first responders contacting OSHA when responding to a work place incident.

S

ubject to certain limitations listed below, under the new REPORTING requirements, an employer is now required to report: 1. An employee fatality resulting from a reportable work related incident; 2. Any inpatient HOSPITALIZATION of ONE (formerly three) or more employees caused by a work related incident; 3. Any employee AMPUTATION (inpatient or outpatient) as a result of a work-related incident; and 4. Any employee LOSS OF AN EYE (inpatient or outpatient) from a work-related incident.

Under the new regulations an employer DOES NOT have to report an inpatient hospitalization that involves only observation or diagnostic testing. But an employer must report inpatient hospitalizations that involve care or treatment. OSHA defines an inpatient as a person who is “formally admitted” to a hospital

OCTOBER, 2014

or clinic and stays at least one overnight. Under the new OSHA regulation, if a HEART ATTACK is a “work related incident”, the employer must report it to OSHA. The regulation goes on to state that the OSHA Area Director will decide whether or not to investigate the incident. Because of the Workers Compensation implications of designating a heart attack work related, before contacting OSHA, the incident, should be discussed with counsel or the insurer. Otherwise, the report may be considered an admission or evidence the employer believed the heart attack was work related.

OSHA sets time limits of whether an event is REPORTABLE. Any death that occurs within 30 days of a work-related incident must be reported to OSHA. The duty to report an inpatient hospitalization, amputation, or loss of an eye is limited to occurrences within 24 hours of the work-related incident. If the fatality occurs MORE than 30 days after the work-related incident, or the inpatient hospitalization, amputation, or loss of an continued on page 35

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Labor Issues continued from page 33 eye occurs MORE than 24 hours after the work-related incident, the employer does NOT have to REPORT the event to OSHA. However, the employer must RECORD the event on its OSHA injury and illness forms.

These regulations also set time limits within which a covered employer must REPORT a covered event. A covered fatality must be reported within EIGHT HOURS of the employer learning of the fatality. In regard to an inpatient hospitalization of one or more employees, an amputation, or loss of an eye, employers are required to REPORT to OSHA within 24 HOURS of learning of these events. If an employer does not learn about a reportable fatality, inpatient hospitalization, amputation, or loss of an eye at the time of the incident, they must still report these events to OSHA within EIGHT HOURS after knowledge of a reportable fatality and within 24 HOURS of notice of a reportable inpatient hospitalization, amputation, or loss of an eye.

In addition to the new reporting requirements, OSHA has also updated who must keep OSHA records and who is exempt. Because most UCANE contractors and subcontractors are subject to the existing OSHA record keeping requirements, this article will not address those changes. However, if you were previously exempt you should review the new record keeping requirements to determine if you are no longer exempt, or contact counsel.

An employer has three options for reporting a reportable event: 1. by telephone to the OSHA area office nearest the site of the work-related incident; 2. by telephone to the 24 hour OSHA hotline (1800-321-OSHA or 1-800-321-6742); or 3. electronically using the event reporting application found on OSHA’s website. In the event the area office is closed, the employer must report the fatality, inpatient hospitalization, amputation, or loss of an eye using either an 800 number or the reporting application.

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All employers subject to OSHA must REPORT a covered fatality, inpatient hospitalization, amputations, or loss of an eye even if it is exempt from maintaining OSHA injury and illness records and logs.

When reporting a covered incident, OSHA requires the following INFORMATION: 1. the establishment’s name; 2. the location of the work-related incident; 3. the time work-related incident occurred; continued on page 36

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Labor Issues continued from page 35 4. the type of reportable event (i.e., fatality, or covered inpatient hospitalization, amputation, or loss of an eye); 5. the number of employees who suffered a reportable fatality, inpatient hospitalization, amputation or loss of an eye; 6. the names of these employees; 7. the identity of the employer’s contact person and his or her phone number; and 8. a brief description of the work-related incident.

It is recommended, before contacting OSHA, you obtain and record this information. This will avoid being unprepared to answer OSHA questions, inadvertently omitting required information, and it will document the information you provided.

In regard to motor vehicle accidents, if the motor vehicle accident occurs in a construction work zone, the employer must report the covered event to OSHA. If the motor vehicle accident occurs on a public street, a highway, or outside a construction work zone, an employer is not required to report the event to OSHA. However, even though the employer does not have to REPORT this incident, it must RECORD it on its OSHA injury or illness records, provided, the

employer is required to keep these records. (Construction industry employers are generally required to keep these records. However, employers with ten or fewer employees during a calendar year are not required to keep OSHA injury and illness records unless OSHA or the Bureau of Labor Statistics informs the employer in writing that it must keep these records). Likewise, if the covered incident occurred on a commercial or public transportation system (train, subway, bus, airplane, etc.) the employer is not required to report the incident. But, as noted above, the employer must record the event on its OSHA injury or illness records and log (provided the employer is required to maintain these records).

Because of the new regulations, contractors should expect that OSHA will be hiring more personnel and whenever there is a REPORTABLE work site injury or hospitalization there will be an OSHA inspection. Failure to timely REPORT will subject the employer to a citation. Be prepared. Develop an updated OSHA REPORTING and INSPECTION RESPONSE PROTOCOL. n

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The Commonwealth of Massachusetts Department of Labor Standards (DLS) and Department of Public Safety (DPS)

Prevent Trench and Excavation Collapses Trench collapses cause dozens of fatalities and hundreds of injuries each year.

Trenches are recognized as one of the most hazardous construction conditions for workers and the public.

OSHA Highlights: www.osha.gov • 5 feet and deeper requires protective systems (shoring, sloping, or trench box) • Competent person required to provide inspections to trench and protective system • Safe means of access/egress every 25 feet when trench is 4 feet or greater • Keep excavated material (spoils) more than 2 feet from edge of excavation • Identify location of utilities by calling DigSafe 1-888-344-7233

DPS Highlights: www.mass.gov/dps • A trench permit must be obtained from the municipality prior to making a trench 3 feet or greater • The trench permit must be posted in plain view on the site of the trench • All regulated trenches must be either attended, covered, barricaded or backfilled • Excavators who use hoisting equipment must be licensed by Massachusetts Department of Public Safety Don’t forget other potentially fatal hazards exist, including asphyxiation due to lack of oxygen in a confined space, inhalation of toxic fumes, drowning, etc. Electrocution or explosions can occur when workers contact underground utilities.

The Department of Labor Standards offers a free consultation service designed to help private employers recognize and control safety and health hazards at their worksites, improve their safety and health program, and assist in training employees.

Commonwealth of Massachusetts Deval L. Patrick, Governor Timothy P. Murray, Lt. Governor Joanne F. Goldstein, Secretary Executive Office of Labor and Workforce Development Heather E. Rowe, Director Department of Labor Standards

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Department of Labor Standards Wall Experiment Station 37 Shattuck Street Lawrence, MA 01843 (978) 242-1351 or (508) 616-0461 www.mass.gov/dols/consult

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60 Shun Pike Johnston, RI 02919 401-942-9191

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5/15/13 3:42 PM

OCTOBER, 2014

American Equipment & Fabricating Corp.

100 Water Street E. Providence, RI 02914 Rep: Joe Gelardi Tel: (401) 438-2626 Fax: (401) 438-0764 Email: j.gelardi@american-equipment.com Website: www.american-equipment.com ASSOCIATE

J. Derenzo Co.

338 Howard Street Brockton, MA 02302 Rep: Andrew W. Daniels, Esq. Tel: (508) 427-6441 Email: adaniels@jderenzo.com Website: www.jderenzo.com CONTRACTOR

Lindon Supply

28 Sutton Avenue East Providence, RI 02914 Rep: Melinda Penney Tel: (401) 272-2081 Fax: (401) 276-0243 Email: mpenney@lindongroup.com Website: www.lindonsupply.com ASSOCIATE

TrenchTech Inc.

77 Lowell Junction Road Andover, MA 01810 Rep: Rick Buck Tel: (978) 771-4209 Email: rbuck@shoringsolutions.com Website: www.shoringsolutions.com ASSOCIATE

Serving the Bonding and Insurance needs of the N.E. construction industry for over 40 years.

Adam DeSanctis Gregory Juwa James Axon Michael Carney Wilder Parks Michael Gilbert Bryan Juwa David Boutiette Paul Patalano Dick Caruso Jonathan Duggan Eric Pratt

OCTOBER, 2014

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New England’s Premier Precaster!

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“BUY FROM THE ADVERTISERS IN CONSTRUCTION OUTLOOK”

OCTOBER, 2014

I

November and January are Critical Months for Ch. 90 Road Funds

t’s no secret among local officials that Investing more in Chapter 90 fundstate government needs to increase its ing to improve the quality of local roads investment in the “bricks and mortar” will actually save taxpayers millions of underpinnings of our public infrastructure dollars a year. According to the U.S. Deat the local and state level to ensure that partment of Transportation, once a local we can sustain and expand a modern road is in a state of good repair, every economy and vibrant communities. dollar invested to keep it properly maintained will save $6 to $10 in avoided reIn particular, our transportation syspair costs that become necessary to retem must be first-rate if we want Massabuild the road when it fails due to a lack chusetts to be competitive in today’s and of maintenance. Yet Chapter 90 has not tomorrow’s global economy. And the reGeoff Beckwith kept pace with the needed investment ality is that because state law imposes a strict cap on local property taxes and MMA Executive Director to prevent our roads and bridges from crumbling, and over the long term this revenues, the Commonwealth must be will drive repair costs even higher. In fiscal 2014 and a full partner with cities and towns, and it must provide the financial support necessary to ensure that 2015, the Legislature voted unanimously to increase all of our public infrastructure systems are adequately the Chapter 90 authorization from $200 million to maintained and expanded. $300 million, but the current administration has withheld the additional funds each year.

Communities are responsible for maintaining and repairing 30,000 miles of roads in Massachusetts, The MMA has called on all of the candidates for representing 90 percent of the roadways in the engovernor to indicate whether they would, if elected, tire state. In 2012, the MMA released a report docuimmediately release the $200 million in Chapter 90 menting that cities and towns need to spend at least authorizations that have been held back as one of $562 million every year just to bring local roads into a their first actions when they take office next January, state of good repair, the industry standard for ensurand to swiftly file a transportation bond bill for legislaing well-maintained roads in good condition. Due to tive enactment in early 2015 that includes a five-year inflation, that amount has increased to $568 million Chapter 90 program, with a minimum annual approin fiscal 2015. priation of $300 million, adjusted for inflation each Currently, municipalities spend far less because year. The major candidates for governor have each of inadequate resources and because, for most cities pledged to take this action, which is very good news and towns, the $200 million Chapter 90 program is for cities and towns. the only source of funds for road construction and reBut even before the next governor takes office in pair. Funding the Chapter 90 program at $300 million January, the future of transportation funding faces anannually, with an inflation-based adjustment each other hurdle that must be cleared: the November ballot year, will close a portion of this huge gap between current spending and the actual need. continued on page 42

OCTOBER, 2014

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41

MMA News continued from page 41 box. The voters of Massachusetts will determine the fate of Question 1, the referendum question that will decide whether to keep or jettison the new state law to annually adjust the gas tax to keep pace with inflation The transportation reform and funding package enacted by the Legislature in 2013 raised the gas tax by 3 cents, the first rate change in more than two decades, and incorporated the important provision to index the gas tax in the future in order to establish a predictable and adequate revenue stream that will keep pace with the rise in material and labor costs each year.

Estimates are that indexing the gas tax will cost consumers very little – only about $5 per year. But the funds will add up, and over the next decade the indexing provision will generate approximately $1 billion for transportation programs and projects, including Chapter 90. It only makes sense to index the gas tax if we want Chapter 90 funds to grow with inflation every year, too.

Because Question 1 seeks to repeal the gas tax indexing provision, the MMA’s official position is to oppose the ballot measure. In November, if voters render a “No” decision, the indexing provision will remain in law. A “Yes” vote would eliminate indexing, and remove $1 billion that cities, towns and the state

A “No” outcome on Question 1 in November to preserve gas tax indexing, and a “Yes” decision by the next governor in January to distribute the full $300 million Chapter 90 funding level are both essential for our state’s economic prosperity. are counting on to invest in critical transportation needs over the next decade.

And thus, the future of Chapter 90 funding for the repair and maintenance of 30,000 miles of local roads faces two tests: first, the November vote to affirm or reject indexing the gas tax, and second, the January decision by our next governor to release all of the withheld Chapter 90 funds and deliver on the Legislature’s commitment to provide a 50 percent increase in state funding for local roads.

A “No” outcome on Question 1 in November to preserve gas tax indexing, and a “Yes” decision by the next governor in January to distribute the full $300 million Chapter 90 funding level are both essential for our state’s economic prosperity.

Written by MMA Executive Director Geoff Beckwith. continued on page 43

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OCTOBER, 2014

MMA News continued from page 42

FEMA Expands Hazard Mitigation Assistance Program for Dams and Seawalls

A

recent policy change by the Federal Emergency Management Agency makes major projects related to the construction, demolition or improvement of dams, dikes, levees, floodwalls, seawalls, jetties, breakwaters, and erosion projects related to beach nourishment or re-nourishment eligible for consideration under the Hazard Mitigation Grant Program and Pre-Disaster Mitigation Program.

The need exceeds available funding, however.

There are approximately 3,000 dams in Massachusetts, and a 2011 report from the state auditor’s office identified 100 municipally owned dams in 62 communities that were in unsafe or poor condition.

The FEMA action, announced on June 18, represents a major change to the Hazard Mitigation Assistance Program.

Seawalls along the state’s 1,700 miles of coastline are also deteriorating. A 2009 report by the Department of Conservation and Recreation found that 85 percent of coastal protection structures are beyond their expected lifespan of 50 years and have never seen major repairs.

Communities across Massachusetts have been struggling to pay for the repair or removal of dams and seawalls and other infrastructure related to flooding. In order to help cities and towns deal with flood risk due to failing infrastructure, Massachusetts created a grant program and has funded several projects over the past two years.

For more information on the Hazard Mitigation Assistance Program, contact Dan Nietsche at Dan. Nietsche@state.ma.us or (508) 820-2016 in western Massachusetts, or David Woodbury at david. woodbury@state.ma.us or (508) 820-2034 in eastern Massachusetts.

Written by MMA Senior Legislative Analyst Tom Philbin. n

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“BUY FROM THE ADVERTISERS IN CONSTRUCTION OUTLOOK”

OCTOBER, 2014

UCANE’s Annual Christmas Party & Scholarship Auction Wednesday Evening December 3, 2014 5:00 p.m.

The Lantana

43 Scanlon Drive Randolph, MA

Our members’ commitment to our Scholarship Program begins when our Association holds its Annual Christmas party and Scholarship Auction. It is through the generosity of members who donate cash and auction items, and those who attend and bid for items that money is raised for our scholarships...all this to make certain that our Scholarship Program continues.

Your Company Must Have A Comprehensive Safety Program!

This year’s Safety Manual includes information on: • OSHA’s New Cranes & Derricks Standard (1926.47) • State and Federal Posting Requirements • OSHA’s Updated Trenching & Excavation Safety • New Cell Phone/Distracted Driver Federal Ruling • OSHA’s Changes to the Penalty Calculation Limit • Field Responsibility — Competent Person • Recordkeeping Requirements — Employee Reporting on Fatalities & Hospitalizations • OSHA 10-Hour Training 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 Company Name:_________________________________ Authorized By:______________________ Pocket Manuals w/ Signature Cards: Qty.__________________ x $3.25 Ea. = $________________ 55.00 Printing and Set Up Charge for Personalized Covers: $________________ 10.00 $________________ Total: $________________

Postage and Handling: Date:____________ ❏ Company Logo Enclosed

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Employee Pocket Safety Manuals are available to UCANE members only. PAyMENT MUST ACCOMPANy ORDER. Utility Contractors’ Association of New England, Inc. • 300 Congress Street, Suite 101 • Quincy, MA 02169

Environmental Viewpoint Robin L. Main, Esq.

Rhiannon Campbell, Esq.

Hinckley Allen, LLP

EPA’s Clean Power Plan Robin L. Main is a Partner in Hinckley Allen LLP’s litigation group and co-chair of the firm’s environmental practice group. Rhiannon A. Campbell is an Associate in Hinckley Allen LLP’s litigation and environmental practice groups.

I

n June of 2014 the Environmental Protection Agency (“EPA”) released its Clean Power Plan proposal, part of President Obama’s Climate Action Plan.

The proposal aims to reduce carbon emissions in the power sector by thirty percent of 2005 emission levels by the year 2030.

In order to accomplish these goals, the EPA has established state-by-state targets calculated on a rate base, meaning the number of pounds of pollutant released for every unit of energy produced in megawatt hours (“MWH”). The EPA has also provided interim goals that must be achieved on average over the period of 2020 to 2029. For example, Massachusetts’ 2012 emission rate was 925 pounds per MWH. The EPA has established an interim goal (the average emission rate for 2020 through 2029) of 655 pounds per MWH and a final goal for 2030 of 576 pounds per MWH. Although EPA provides these targets it does not mandate how each state should reach its goal. Each state would be responsible for creating its own emissions-reduction plan in accordance with EPA guidelines. States would not be required to act singularly in achieving these goals – they may collaborate with other states on multi-state plans.

The EPA has proposed that all state plans must be submitted to the EPA by June 30, 2016. The EPA has also provided for an optional two-phase submittal process under which a state may submit a plan by June 30, 2016 that is incomplete, but meets certain requirements and outlines the steps the state is planning to undertake to submit a completed plan. Those states may then submit a completed plan by June 30, 2017 or June 30, 2018, depending on the circumstances.

OCTOBER, 2014

The EPA is accepting public comments on its proposal through October 16, 2014 and is expected to finalize the proposal in June of 2015. To learn more about the proposal visit http://www2. epa.gov/carbon-pollution-standards / clean-power-plan-proposed-rule. If you would like to comment on the proposal you may do so online at http://www.regulations.gov/#!documentDetail;D=EPAHQ-OAR-2013-0602-0001. You may also email comments to A-and-R-Docket@ epa.gov and include docket ID No. EPAHQ-OAR-2013-0602. n

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162 GROVE STREET P.O. BOX N FRANKLIN, MA 02038 TEL 508-520-3629 FAX 508-520-4249

CONSULTING

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Palmer Paving is an industry leading heavy highway civil engineering construction firm, serving both public and private sector clients. With our own HMA and aggregate processing plants, we are fully integrated as a materials producer and roadway contractor for projects of any size.

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48

23 Arthur Street Easthampton, MA 01027 413-527-6900

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1000 Page Boulevard Springfield, MA 01104 413-737-4020

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OCTOBER, 2014

FYI...

New England Experienced Fewer Unhealthy Air Quality Days During Summer Ozone Season

T

he EPA recently confirmed that New Englanders experienced a decrease in the number of unhealthy air quality days this year, compared to 2013, and an even greater decrease when compared to 2012.

Based on preliminary data collected between April and September 2014, there were 9 days when ozone monitors in New England recorded concentrations above levels considered healthy. By contrast, in 2012 there were a total of 29 unhealthy ozone days, and in 2013 there were a total of 20 such days.

The number of unhealthy ozone days in each state this summer is as follows: • 8 days in Connecticut (compared to 18 in 2013, and 27 in 2012) • 1 day in New Hampshire (3 in 2013, and 3 in 2012) • 0 days in Rhode Island (7 in 2013, and 11 in 2012) • 0 days in Massachusetts (6 in 2013, and 17 in 2012) • 0 days in Maine (5 in 2013, and 4 in 2012) • 0 days in Vermont (0 in 2012, and 0 in 2013).

Although the number of unhealthy days may vary from year to year due to weather conditions, over the long-term, New England has experienced a significant decrease in the number of unhealthy ozone days. In 1983, New England had 113 unhealthy days, compared with 9 this year. This

OCTOBER, 2014

downward trend is due to a reduction in the emissions that form ozone.

“We can all feel proud of the progress we have made in reducing ozone pollution over the past several decades,” said Curt Spalding, regional administrator of EPA’s New England office. “Exhaust from cars and trucks is a big contributor to formation of groundlevel ozone, and EPA’s historic National Clean Car standards will help us all to breath cleaner air and save money. This program doubles fuel economy standards by 2025, cuts vehicle greenhouse gas emissions by half, and will save American families a whopping $1.7 trillion dollars in fuel costs.”

Ozone levels are unhealthy when average concentrations exceed 0.075 parts per million over an 8-hour period. Ground-level ozone is formed when volatile organic compounds and oxides of nitrogen chemically react in the presence of sunlight. Cars, trucks, and motorcycles give off the majority of the pollution that makes ozone. Fossil fuels burning at electric power plants, which run at high capacities on hot days, emit substantial amounts of ozonemaking pollution. Gas stations, print shops, household products like paints and cleaners, as well as gasoline-powered lawn and garden equipment, also contribute to ozone formation.

Although the 2014 ozone season is ending, pollution from small particles in the air is a yearround concern. Daily air quality forecasts will continue to be available online, as well as email alerts when high concentrations of ground-level ozone or small particles are predicted to occur. n

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OCTOBER, 2014

John E. Merchant, CPA

Cullen, Murphy & Co., P.C.

IN THIS ISSUE: • Planning for Retirement Income • As Collectibles Boom, Selling Can Be Taxing • S Corporation or LLC?

S

Smart Tax, Business & Planning I

Planning for Retirement Income

ave substantially. Invest your savings wisely. The conventional wisdom holds that this is the way to accumulate a nest egg for your retirement, and the conventional wisdom is right on the money.

However, you probably won’t always have earnings to invest. At some point, your work income is likely to cease or drop sharply in retirement, and you’ll need to draw down prior savings. Yet, studies have found that very few people have considered how they’ll go from investing earned income to generating retirement income. The sooner you give this issue serious thought, the more likely you’ll be prepared with a realistic spending plan when the paychecks stop. Here are a few options to consider.

Spend Income, Not Principal

Most people can rely upon Social Security benefits for some retirement income. Beyond Social Security, you probably will have to tap your own savings. The question, then, is how to go about drawing down the money you’ll spend. One method is to use only dividends and investment interest income for cash flow.

Example 1: Suppose Ed and Nancy Parker will each receive $20,000 a year from Social Se-

OCTOBER, 2014

curity, so their joint annual benefits will be $40,000 per year, indexed for inflation. The Parkers have a $600,000 portfolio, in this example, invested in high-quality stocks and bonds. If their interest income and dividends average 2.5%, the Parkers will receive another $15,000 a year (2.5% of $600,000).

By spending that $15,000, but leaving their stocks and bonds intact, the Parkers’ retirement income will be $55,000 a year, including $40,000 from Social Security.

Cracking Your Nest Egg Dividends and investment interest yields are low today, and may remain low in the future. The Parkers, in our previous example, may wish for greater retirement income than $55,000 a year. One alternate strategy is to follow the so-called 4% rule, which has been developed by financial advisors and academic researchers.

Example 2: The Parkers withdraw 4% of their $600,000 investment portfolio ($24,000) in the first year after they stop working. Now they have $64,000 continued on page 53

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Financial Management

John Hoadley and Sons Inc. John Hoadley Sons Inc. Water Worksand Specialist

continued from page 51

($40,000 from Social Security plus John Hoadl Water Works Specialist Tel:781-878-8098 Fax:781-878-5298 $24,000 from their portfolio) to Water Works Spe Tel:781-878-8098 spend rather than $55,000.

Tel: 781-878-8098 Fax: 781-878-5298 The 4% rule assumes “Our that theProducts Are the Most Trusted Names in the Industry” “OurIndustry” Products Are the Most Trusted N “Our Products Are the Most Trusted Names in the Parkers increase their withdrawals � U.S. Pipe ● Cultec � U.S. Pipe ● Cultec Chambers � Mueller Fire Hydrants ● Nation each year to keep up with infla• U.S. Pipe • Cultec Chambers Mueller Tapping Sleeves & Valves ● ADS P � Mueller Fire Pipe & Plastics tion. Going by historic investment • Hydrants Mueller Fire Hydrants ● National • National Pipe�� &Smith Plastics Blair Clamps & Couplings ● Genera Mueller Tapping Sleeves & Valves ● Valves ADS Pipe Chambers results, research indicates�a high • Mueller Tapping Sleeves & • &ADS Pipe & Chambers Mechanical Services � Tapping Sleeves & Gates Installed probability that the Parkers’�portfo• Smith Blair Clamps & Couplings • General Foundry Castings Smith Blair Clamps & Couplings ● General Foundry Castings � Line Stop / EZ Valves lio will last at least 30 years, with Mechanical Services � Cutting of Chilled Water Lines & Mechanical Services this method. � Pressure Testing & Disinfection o � Tapping Sleeves & Gates Installed / Cut � Installation & Testing of Backflow • Tapping Sleeves & Gates Installed / Cut To get that $24,000 in the � Large Diameter Hydraulic Pipe C � Line Stop / Valves EZ Valves • Line Stop / EZ first year of retirement, the Park� Hydrant Installation & Repair � Cutting ChilledWater WaterLines Lines&&Steam SteamLines Lines � Electronic Leak Detection • Cutting of of Chilled ers might spend their $15,000 of “Water-Sewer-Drain Supplies at a Com • Pressure Testing & Disinfection of New Mains � Pressure Testing & Disinfection of New Mains investment income, as explained, www.hoadleyandsons.com • Installation && Testing ofof Backflow and sell $9,000 of their invest� Installation Testing BackflowPreventers Preventers 24 24Hours Hours672 Union Street Rockland, MA • Large Diameter Hydraulic Pipe Cutting ments to raise the rest of their Sales& Service Sales & Service � Large Diameter Hydraulic Pipe Cutting • Hydrant Installation & Repair Serving ofof Servingallall cash. Over time, they would grad� Hydrant Leak Installation & Repair New England • Electronic Detection New England ually deplete their portfolio in this � Electronic Leak Detection manner.

“Water-Sewer-Drain Supplies at Supplies a Competitive Price” Price” “Water-Sewer-Drain at a Competitive The 4% rule likely will provide www.hoadleyandsons.com www.hoadleyandsons.com more retirement income than just spending interest and dividends.

672 Union Street MA Rockland, 672 Union Street Rockland, 02370MA 02370 However, active management will be involved—deciding which assets will be sold each year to proyears, if held in a taxable account. vide the cash flow. In addition, the Parkers run the On the other hand, annuities typically provide a risk that poor results in the stock or bond market fixed payment. The $36,000 the Parkers receive in will accelerate portfolio depletion.

2015 won’t buy as much in 2025 or 2035, assuming

Assessing Annuities Yet another approach is to put retirement funds in an immediate annuity, sometimes called an income or a payout annuity. You can give a lump sum to an insurance company and receive monthly income for the rest of your life. Joint annuities are available, so a married couple might get this payout as long as either spouse is alive.

Example 3: The Parkers, both age 65, weigh putting all of their $600,000 into a joint annuity. By using an online annuity calculator, they learn that such an annuity might pay them $3,000 a month, or $36,000 a year. If one spouse dies, the survivor will continue to get that $36,000 a year.

Now the Parkers will start retirement with $76,000 of income in the first year, with $36,000 from the annuity plus $40,000 from Social Security. The annuity will protect them from running short of money over a long retirement. They won’t have to make decisions about selling securities, and they’ll enjoy some tax benefits because most of their annuity payments will be treated as a tax-free return of principal for many

OCTOBER, 2014

inflation drives prices higher. Depending on the terms of the contract, a joint annuity may not leave anything to their children, even if the Parkers both die in a few years. Buying an annuity today, while interest rates are at historic lows, also will lock in a relatively low return, which might be surpassed by stocks and bonds over the coming decades.

Mix and Match The bottom line is that no method is absolutely better than the others. Some advisors suggest putting some retirement funds into an immediate annuity, for dependable lifetime income, while continuing to manage other assets under a withdrawal plan, such as the 4% rule. Other sources of income also might be considered: an inheritance, selling your home, using a reverse mortgage, even doing some part-time work.

By planning ahead you will have a better idea of how much cash you reasonably can expect to receive and where it will come from, so you can set your retirement expectations realistically. continued on page 54

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Financial Management continued from page 53

I

As Collectibles Boom, Selling Can Be Taxing

n the past two years, five paintings have been sold at auction for more than $100 million apiece, while another (by Cezanne) reportedly brought more than $250 million in a private sale. In the same time frame, a pink diamond was auctioned for a record $83 million.

As you can see, the collectibles market has been booming. You might not own a multimillion dollar item, but the chances are that the coins, stamps, or paperweights that you collect have grown in value. If you decide to cash in by selling one or more pieces from your collection, you may have to deal with unpleasant tax surprises.

Raising the Rates

Similarly, taxpayers in the next higher tax brackets (25% and 28%) also owe tax at their ordinary rate on long-term gains from collectibles. Taxpayers in higher brackets (33%, 35%, and 39.6%) do get some tax break from long-term gains on collectibles because the rate does not exceed 28%.

2 Example 2: Emily Larsen has taxable income over $500,000, so she is in the top 39.6% tax bracket continued on page 55

The tax code has special treatment for collectibles, which can include artwork, rugs, antiques, gems, stamps, metals, coins, and alcoholic beverages, according to the IRS. When you sell collectibles, the special 0%, 15%, and 20% tax rates on long-term capital gains don’t apply. Instead, you’ll owe tax at your ordinary tax rate, with a cap of 28%.

As is the case with all assets, short-term capital gains on the sale of collectibles are taxed at ordinary rates.

Example 1: Dan King bought a rare U.S. coin for $1,000 and sold it 11 months later for $1,300. Dan’s $300 gain was short-term, so he owes tax at his ordinary rate, 15% in this example.

Dan bought another coin at the same price at the same time; he sold that coin for a $300 gain as well.

This coin, though, was sold 13 months after Dan’s purchase. Because the holding period was over one year, Dan reports the $300 as a long- term capital gain.

Normally, a long-term capital gain is taxed at a 0% rate by taxpayers in the 15% tax bracket, such as Dan. That would be the case, for example, if Dan had a $300 long-term gain on a stock sale. A long-term collectibles gain, though, doesn’t qualify for the 0% rate. Thus, Dan will owe 15% in tax on this $300 gain ($45) from the second coin sale, just as he does on the first (short-term) coin sale.

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OCTOBER, 2014

Financial Management continued from page 54

Trusted Advice Collecting Net Investment Income Tax • Some taxpayers owe a 3.8% surtax, commonly called the net investment income tax, to help finance Medicare.

• This net investment income tax may be imposed if you report modified adjusted gross income (MAGI) over $200,000, or over $250,000 on a joint tax return.

• Your net investment income tax amount will depend on your MAGI and your net investment income.

• If you owe the net investment income tax, that may effectively increase the tax you owe on sales of collectibles: the maximum tax on a long-term gain could rise from 28% to 31.8%.

this year. She sells a painting for a $20,000 gain after holding the artwork for several years. On long- term gains from a stock, Emily would owe tax at the special 20% rate. However, Emily doesn’t qualify for the 20% tax rate on the sale of the painting because it is a collectible. Emily’s tax rate is higher than 28%, so she will owe the maximum 28% rate on her $20,000 long-term collectibles gain: $5,600 in tax.

Personal Use If you plan to sell collectibles at a loss, be aware that the tax code still works against you. If you sell collectibles for which you had “personal use,” you can’t claim a capital loss, and selling collectibles for which you had personal use at a profit will still result in a taxable capital gain.

Personal use will depend upon specific circumstances. Hanging a painting on the wall of your home might be considered personal use, depriving you of any tax benefit from a loss on a subsequent sale.

However, if you regularly buy a specific type of painting, keep some in careful storage when not on display, and maintain careful records of your collection, you might be able to make the case that the artworks were held for investment purposes. Such efforts could result in a capital loss that provides tax benefits. continued on page 57

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Financial Management continued from page 55

M

S Corporation or LLC?

any business owners structure their companies as S corporations or limited liability companies (LLCs). On the surface there are several similarities. Both types of entities avoid corporate income tax. Instead, business income is taxed only once, on the tax return of the S corporation shareholder or the LLC member. Moreover, both S corporation shareholders and LLC members have limited liability: their financial exposure from the company’s operation generally is no greater than the amount they invest and any notes they personally sign.

(In exceptional circumstances, creditors may gain access to additional personal assets of the business owner.)

Nevertheless, there are differences between the two structures, which you should consider when choosing between them.

OCTOBER, 2014

Looking into LLCs In some ways, an LLC resembles a sole proprietorship or a partnership, but with the advantage of limited liability. Usually, you can form an LLC with relatively little paperwork. Once an LLC is operating, there may be few tax returns to file and other recordkeeping and reporting requirements for LLCs are generally less burdensome than for corporations. If an LLC has multiple members, the business has a great deal of flexibility in how any profits are distributed among them.

A downside is that an LLC may have a limited life.

Depending on state law and the operating agreement, the death of a member may dissolve the LLC, for instance. In addition, taxes might be relatively high for LLC members. That’s because all net income of the LLC is passed through to members as earned income on their personal tax returns, per the LLC agreement.

The members are treated as if they were self-employed; they owe the employer and employee shares of items such as Social Security and Medicare tax, with a relatively small deduction as an offset. continued on page 59

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Financial Management continued from page 57 Considering S Corps Even after making an election to be taxed under Subchapter S of the Internal Revenue Code, an S corporation is still a corporation. There are meetings that must be held, minutes that must be kept, and extensive paperwork to process. Such efforts can be time-consuming and expensive.

In addition, S corporations must meet certain requirements. A business with more than one class of stock or a shareholder who is not a U.S. citizen or resident can’t be an S corporation, for example. Similarly, an S corporation can’t make disproportionate distributions of dividends or losses.

On the plus side, S corporation shareholders can receive a salary, on which they owe payroll tax, and dividends, on which they don’t. Although artificially low-balling a salary will draw the ire of the IRS (see August 2014 Financial Management), S corporation owners may pay thousands of dollars less per year in payroll taxes than LLC members pay on similar company related income. What’s more, S corporations can be long-lived, and this permanent nature may make them more attractive to lenders and investors than potentially short-lived LLCs.

SAND & STONE CORP. 192 Plain St. North Attleboro, MA 02760 (508) 699-2911 www.borocorp.com

Choosing or Combining Your choice of business structure may come down to whether you prefer the simplicity and flexibility of an LLC or the potential tax savings and lender and investor appeal of an S corporation. State laws vary, so a tilt in one direction or another may influence your decision.

Yet, another possibility is to set up your business as an LLC and then request S corporation taxation by filing IRS Form 2553, “Election By A Small Business Corporation.”

Reprinted from CPA Client Bulletin. n

Did You Know?

S

ix of the 10 costliest hurricanes in U.S. history occurred in 2004-2005. Katrina ($108 billion in damages) is by far the record holder.

Others on the list from those years are Wilma ($22 billion), Ivan ($18.8 billion), Charley ($15.1 billion), Rita ($12 billion), and Frances ($9 billion).

Source: weather.com

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Advertisers’ Index ATS Equipment, Inc. ...........................................................18 Adler Tank Rentals...............................................................58 Allied Recycling Center.......................................................20 American Shoring, Inc..................................... Ins. Back Cvr. Aon Construction Services Group..........................................7 Boro Sand & Stone Corp......................................................59 Dennis K. Burke, Inc............................................................42 Concrete Systems, Inc..........................................................12 Dagle Electrical Construction, Corp......................................6 Darmody, Merlino & Co., LLP............................................56 DeSanctis Insurance Agency, Inc. .......................................39 Dig Safe System, Inc............................................................50 Doering Equipment Co., Inc.................................................48 The Driscoll Agency ............................................................57 EJ.................................................................................14 & 35 Eastern Insurance Group, LLC............................................22 Eastern States Insurance Agency, Inc..................................26 T. L. Edwards, Inc................................................................56 Ferguson Waterworks...........................................................17 Foley Carrier Services, LLC................................................50 Geod Consulting, Inc............................................................48 Godwin a Xylem brand.........................................................11 L. Guerini Group, Inc...........................................................58 HD Supply Waterworks..........................................................2 A. H. Harris & Sons, Inc. ....................................................52 Hinckley Allen, LLP............................................................28 John Hoadley & Sons, Inc....................................................53 P. A. Landers, Inc.................................................................19 Lawrence-Lynch Corp..........................................................55 Lorusso Corp........................................................................36 Lorusso Heavy Equipment, LLC.........................................10 Mabey, Inc............................................................................43 Mass Broken Stone Company...............................................26 Milton CAT.......................................................................... 24 Norfolk Power Equipment, Inc...............................................9 North East Shoring Equipment, LLC...................................23 NorthStar Insurance Services, Inc.......................................34 Ocean State Oil.....................................................................52 Our Outhouses, Inc...............................................................59 Palmer Paving Corporation..................................................48 E. H. Perkins Construction Co., Inc.................................... 60 Podgurski Corp.....................................................................54 E. J. Prescott, Inc..............................................Ins. Front Cvr. Rain For Rent-New England...................................................8 Read Custom Soils ...............................................................35 Rogers & Gray Insurance Agency, Inc.................................16 Schmidt Equipment, Inc.......................................... Back Cvr. The Scituate Companies.......................................................30 Shea Concrete Products....................................................... 40 Smith Print............................................................................58 Starkweather & Shepley Ins. Brokerage, Inc.......................13 Ti-SALES, Inc. ....................................................................50 Albert J. Tonry & Co., Inc....................................................52 United Concrete Products, Inc. ............................................56 United Rentals Trench Safety.............................................. 44 C. N. Wood Co., Inc. ..............................................................4 Woodco Machinery, Inc.......................................................38

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