August 8, 2017

2017_CSE_Summer_Mtg.pngARTBA SUMMER CSE: FOCUS ON INDUSTRY ISSUES

Last week, LICA Executive Director Marc Herbst attended the American Road and Transportation Builders Association (ARTBA) Annual Summer Meeting for the Council of State Executives (CSE) in Park City, Utah. The CSE was chaired this year by New York’s own Denise Richardson, Executive Director of the General Contractors’ Association (GCA). Day one of the conference featured comments from and discussion with members of ARTBA’s leadership team including: ARTBA Chairman David Zachry of Zachry Corporation, ARTBA President & CEO Pete Ruane, Rich Juliano, Senior Vice President, Strategic Initiatives; Managing Director, Contractors Division and Public Private Partnerships Division; ARTBA-PAC Treasurer and Dr. Alison Premo Black, Senior Vice President, Policy; Chief Economist; Deputy Managing Director, Contracts. 

Chairman Zachry welcomed the group and outlined many of the activities and accomplishments of ARTBA over the past year. He expressed his sincere appreciation for the tremendous support ARTBA has received from its members, which is necessary to cover the expenses involved to try and move industry agendas and policies forward. Zachry also stated that ARTBA’s new Safety Certification Program is doing very well and added that they are currently developing a customized training for NAPA (National Asphalt Pavement Association). 

ARTBA President Pete Ruane spoke next, stating that our industry relations are currently in very good shape but stressed the need to remain focused on national issues while maintaining a strong non-partisan role. His summary of the current administration (in relation to transportation issues) is: “Drama, Not Direction” as very few actual details of the $1 trillion Trump infrastructure “plan” have emerged. In addition to daily chaos, part of the delay in providing details could be attributed to the fact that a large number of positions still remain vacant within the administration’s transportation department. 

Ruane also remarked on ARTBA’s strategy to promote the BOLD Act and feels our issues have been “elevated” in the senate. And although he believes Secretary Chao is a friend to our organization, he needs to educate leaders and stress to the administration that private investment (P3s) is NOT the answer for infrastructure funding.

ARTBA Chief Economist Alison Premo Black reminded the group about the many resources available through ARTBA including the use of their new office space which is an asset due to its close proximity to “The Hill.” Other resources included the CSE network website and listserv as well as Project Management Academy (PMA) opportunities which can be customized with different modules and speakers.

Group discussion with the State Executives (SEs) began with conversation about ARTBA's federal legislative activities which revolved around the BOLD Act, tax reform issues and the question of what, if anything, may materialize from Trump's trillion dollar infrastructure “plan”. Although ARTBA was pleased that FAST Act was finally passed, it is critically important that a stable funding source be found for the Highway Trust Fund (HTF) and they are working hard to get it included as part of an anticipated tax reform package. ARTBA asks that all its chapters continue to urge local politicians to make sure that an HTF fix is included as part of any tax reform bill.

A good part of the day was spent discussing industry and regulatory issues. Concerns were raised about several different issues, including:

  • Paid Family/Medical Leave/Sick Leave: Some of these mandates are extremely broad in scope. The fear is that these new laws could have dire financial implications for member organizations, as workers take unfair advantage of this benefit, including high level managers and foremen.

  • MBE/MWBE/DBE Goals: This issue was a hot topic of concern for the New York representatives in particular, who now have MBE goals as high as 30% and possibly more soon. Most other states had far more reasonable MBE goals which are attainable. Of greatest concern in NY is the proposal where MBEs receive a 10% price premium. If that comes to fruition, GCA will seek litigation to fight it vigorously and will need ARTBA's help.

  • Buy America Legislation: ARTBA and its members are looking for a reasonable interpretation, otherwise project costs could become wildly prohibitive.

  • OSHA Silica Ruling: ARTBA has requested another extension for compliance and hope to get further rule changes. However, if this rule does become effective in September as scheduled, we must start training our workers now. 

  • Reverse Auction Bidding: Council Executives from certain states are deeply concerned that reverse auctions are becoming more prevalent and are now being used for services as well as commodity-only contracts. ARTBA offered to provide historical information on this matter, including a study by the Army Corps of Engineers which showed this practice was not a good way to go.

  • Labor Issues: Concerns regarding the use of Paymaster Companies (which basically act as a temporary staffing agency, thereby allowing union members to work under “open shop” contracts) were discussed. ERISA law and Contractor Withdrawal Liability was also a topic of concern for several members.

  • National Crashworthiness Standards: This was a matter of immediate and high concern for many executives which involves the question of which governing body should set — and own — these standards. Currently, US product manufacturers (and contractors) are caught in the middle, with some being brought into costly plaintiff death and injury litigation. On July 25, ARTBA sent a letter to US Transportation Secretary Chao asking for her help in remedying the situation. No response has yet been received.

 

GUEST PANELISTS

ARTBA also brought in a panel of guests from our host state of Utah who serve as an ideal model for owner/industry cooperation. Panelists included Utah DOT Secretary Carlos Braceras, Richard J. Thorn, President/CEO of AGC Utah and Michael Kurz, Chairman of the Board, AGC Utah. The panel spoke in depth about the prior “us vs. them” mentality (DOT vs. contractors) which existed for many years until DOT brought in a leader from the construction industry that was well respected by all. He had the belief that “people mattered” and he worked with both his department and the contractors to change the culture into an atmosphere that promoted partnership - with mutual trust being the key to all relationships. If contractors are successful and projects go well, then it’s a win-win for everyone, including taxpayers. They have even created a formal “partnering” manual and all employees at a certain level (both DOT and contractors) must attend this training, sitting side by side. Braceras, a passionate and well-spoken leader outlined the 4 key players whose cooperation and buy-in is needed to achieve success: 1) the Legislature 2) The DOT Department/Staff 3) Contractors and 4) Businesses (noting that having active and supportive Chambers of Commerce can be key in pushing to get funding for additional projects, etc.). The speakers truly seemed to have a great mutual respect for one another and gave all CSEs a model of cooperation to strive for in each of their home states.

 

DAY TWO: HOT TOPICS

Day two of the conference brought attention to a few other matters which SEs expect may become “hot topics” in the months/years ahead and requested that ARTBA begin investigating so they can provide research, backup and recommendations moving forward on the following:

  • Marijuana Legalization/Testing: With more and more states legalizing the use of recreational marijuana, the CSEs recognized the need to get ahead of this issue with regard to developing new drug testing policies. The difficulty with marijuana vs. alcohol testing is the matter of how long marijuana remains in the system, even after the user is no longer experiencing the effects of the drug. The group asked that ARTBA begin investigating available testing options so they can be prepared to help make recommendations on policy and best practices for drug testing in the near future.

  • The “Border Wall” Contractor Blacklist: As if the wall itself wasn't controversial enough, the newest controversy involves contractors - in particular, those who work in sanctuary cities. Apparently the City of Tucson issued a memo which stated that any contractor who works on the Border Wall would be denied from doing any further work for the City of Tucson (basically, they would be blacklisted). And although such action would surely be deemed illegal (formally), many believe that municipalities would still find ways to legally “disqualify” them from winning other contracts. The SE from Arizona said his organization replied to this matter with letters of concern about how this could damage their members. Fear of these potential repercussions (even if deemed illegal) has already forced many contractors to opt out of bidding to do any “wall” work.

  • Asset Recycling: Although the concept of asset recycling (where states and localities are incentivized to do concessions worth a certain percentage of the asset) began in Australia, it is fast becoming “en vogue” in Washington, DC and many expect we’ll soon be hearing more about it. Some SEs were in favor of it, stating it’s “better to get something rather than nothing.” However others suggested we approach the matter cautiously. The group asked ARTBA to look into the benefits vs. drawbacks so they can make recommendations as to whether this policy is something the contractors could/should support or not.

 

CSEs ON MEDIA, MARKETING AND MEMBERSHIP

LICA Marketing Manager Lynn Barker, who also attended the CSE Summer Meeting, found the final hours of the conference to be of great interest as the meeting turned into an open exchange of ideas about various marketing programs and campaigns, including media coverage, the use of social media and the challenges of growing a membership base. Advice was sought by some on how to get both board members and member organizations to be more active and engaged. Others discussed the success (or failure) of particular member events, communications, campaigns and marketing programs. Many ideas were discussed and best practices shared. LICA looks forward to implementing some new ideas for our organization in the coming months. 

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