Vol. 20, No. 11

(518) 869-9800

May 2002

 

Inside This Edition:  DOL Policy Change On Aphalt/ Concrete Deliveries Will Remain In Effect; Suffolk County Approves Registered Apprenticeship Requirements;  President’s Message;  Lien Expires Where Lienor Fails To File Notice Of Pendency;  Look Before Leaping Into A Workers’ Compensation Trust; Welcome New Members;  Membership Committee Announces Year-End Member Recruitment Incentive;  

 

DOL POLICY CHANGE ON APHALT/ CONCRETE DELIVERIES WILL REMAIN IN EFFECT  Go Top

A recent policy change announced by the NYS Department of Labor requiring that prevailing wage rates be applied to the delivery of asphalt and concrete products from existing commercial plants (but only on Long Island) will remain in effect according to DOL Counsel Jerome Tracy.  Tracy reiterated DOL’s position at a March 28th meeting with representatives of NESCA, GBC, AGC and NY Construction Materials Association.

On February 22, 2002, NESCA received a notice from DOL’s Bureau of Public Work announcing a policy change regarding the application of the prevailing wage law to workers hauling asphalt and/or concrete from regular commercial batch plants to public work sites.  The notice stated that effective March 1, 2002, prevailing wages and supplements will be applied to workers hauling asphalt and/or concrete from existing commercial plants when such plants are less than 50 miles from a public work project and DOL determines that in the locality in question batch plants are not normally built specifically to supply public projects.  DOL later amended the policy change in a March 6, 2002 letter from the Bureau of Public Work by limiting application of the new policy to Nassau and Suffolk Counties only.  Both the initial notice and the subsequent amendment created a significant amount of confusion among contractors, subcontractors and asphalt/ concrete producers.

At the March 28th meeting, Mr. Tracy defended DOL’s position that prevailing wages should apply to the delivery of asphalt and concrete (while the delivery of other construction materials remain free of prevailing wage requirements) by stating that asphalt and concrete products have certain “unique factors”, that is, they are “perishable products”.  NESCA has yet to figure out how the perishability of a product is relevant to the application of the prevailing wage law.  DOL’s decision to apply the new policy to Nassau and Suffolk Counties only also appears to fall short on logic.  Nevertheless, unless successfully challenged in court, it appears that DOL will stand firm on this policy change.

SUFFOLK COUNTY APPROVES REGISTERED APPRENTICESHIP REQUIREMENTS  Go Top

 

                On March 19, 2002, the Suffolk County Legislature approved a resolution that requires contractors and subcontractors performing work for the County to participate in apprenticeship programs register with and approved by the New York State Department of Labor.  It is believed the Suffolk County Legislature is the first public body to act on requiring apprenticeship programs since legislation authorizing public owners to do so was signed by Governor Pataki last December.  The resolution was signed by County Executive Robert Gaffney on March 27th.

                Resolution No. 1266 requires all Suffolk County construction projects with a value in excess of $250,000 and up to $3,000,000 to include the requirement that contractors and subcontractors, prior to entering into a contract, have apprenticeship agreements for the type and scope of work to be performed which have been registered with and approved by the Department of Labor.

            The resolution took effect on March 27, 2002, and applies to construction contracts advertised for bids on or after the effective date.

 

PRESIDENT’S MESSAGE  Go Top

 

                At NESCA’s April 11th membership meeting, members fortunate enough to attend heard an informative presentation by Robert Palmer, Director of Construction at the New York State Office of General Services.  Mr. Palmer’s address included a discussion about OGS project close-out procedures, a heads-up on upcoming OGS projects, and some general information on ways OGS is seeking to improve their contract administration processes.  Some of the ideas OGS is exploring include the possibility of increasing the field order allowance on their projects, and getting up-front funding for change orders from their client agencies.  Both of these ideas would put money into the pockets of contractors and subcontractors quicker for changes in the work. 

I’d like to recognize and thank Alexis Mechanical, Inc. for sponsoring the April 11th membership meeting.  I’d also like to express my regrets to T & J Electrical Corp.  T & J Electrical was the name pulled in our monthly attendance drawing which means had someone from that company been at the April meeting, you would have won a free membership in NESCA for 2002-03.

NESCA has another good topic in store for our May 9th membership meeting.  Tony Duffy with Dorfman-Robbie, CPA’s P.C. will make a presentation entitled “Increasing Your Share of Profitable Work Through Pricing Strategies”.  I encourage all members of NESCA to consider attending what is sure to be a very informative meeting.   

The 7th Annual NESCA/GBC Joint Mid-Hudson Golf Outing will be held on Monday, June 10, 2002 at the Wiltwyck Country Club in Kingston.  Over the last six years, this tournament has grown into a very nice event, and last year we again had over 90 golfers participate.  Wiltwyck has a great golf course and I hope all you golfers consider signing up!  Registration information about this golf outing was recently mailed to all members.

Also please be on the lookout for information coming soon about NESCA’s 4th Annual Day at Saratoga Race Course, which will be held on Thursday, July 25, 2002.  We’ve reserved 120 spots in the Paddock Tent for the luncheon package which also includes clubhouse admission and a Post Parade program.  Reservations for this event will be taken on a first paid first served basis.

Finally, all members were recently mailed the update forms to begin preparations for NESCA’s 2002-03 Membership Directory.  When you receive these forms, please review your listing in the current Directory and make sure that is how you want to be listed.  If there are changes you wish to make, please note these changes on the forms and send them back to the NESCA office as soon as possible.  Please note that the NESCA office will not guess as to your classified listings.  If you want to be listed in particular places in the classified listing section of the Directory, you must complete the forms and return them to NESCA.  It is anticipated the 2002-03 Membership Directory will be printed and distributed to members, general contractors, and other construction industry professionals by late summer.

 

Bob Kind

President

 

LIEN EXPIRES WHERE LIENOR FAILS TO FILE NOTICE OF PENDENCY  Go Top

 

                The New York State Supreme Court, Appellate Division, First Department on March 7, 2002 handed down its determination with respect to the consolidation of two cases, Kellett’s Well Boring, Inc. v. The City of New York and Petosa Brothers, Inc., Action No. 1. Techno Construction Corporation v. The Comptroller of the City of New York, et al., Action No. 2: In Re Application of the Comptroller of the City of New York, et al. v. Kellett’s Well Boring, Inc., Techno Construction Corporation, et al.  In each case, the essential issue involved an interpretation of the statutory language of New York Lien Law, Section 18.  Section 18 provides in part:

“If a lien is for labor done or materials furnished for a public improvement, it shall not continue for a longer period than six months from the time of filing the notice of such lien, unless an action is commenced to foreclose such lien within that time, and a notice of pendency of such action is filed with the comptroller of the state or the financial officer of the public corporation with whom the notice of such lien was filed….”

                In each of the aforesaid cases, the lienor had commenced a timely foreclosure action but failed to file the notice of pendency within the statutory six month period.  The Court in finding that the liens had been discontinued stated “Although the New York Lien Law is to be ‘construed liberally’ and ‘substantial compliance’ thereof shall be sufficient in particular situations, New York Lien Law Section 23, such rules of liberal construction and substantial compliance cannot supplant the clear mandatory language of New York Lien Law Section 18: i.e., that a lien shall not continue longer than six months unless a lien foreclosure action is commenced and a notice of pendency is filed.  The notice of pendency is clearly an indispensable requirement to the continuation of the lien and the lack of any notice of pendency is a fatal omission.”

                The court in this case strictly applied Section 18 of the Lien Law and emphasized that a public improvement lien will automatically be continued upon the commencement of a lien foreclosure action and the filing of the notice of pendency within the statutory six  month period.  However, even if the action is commenced within the statutory period, a failure to file the notice of pendency will be a fatal omission as the lien which is the basis for the lien foreclosure action will not be continued beyond the six  month period.

 

Terence J. Burke, Esq.

NESCA Legal Counsel

 

LOOK BEFORE LEAPING INTO A WORKERS’ COMPENSATION TRUST  Go Top

 

                In recent years, many NESCA members may have considered whether or not to participate in a workers’ compensation trust as a possible cost-saving alternative to a fully insured workers’ compensation insurance policy.  Workers’ compensation trusts, also known as multiple employer trusts or self-insured consortiums, may appear to be an economical way for members to obtain state-mandated workers’ compensation coverage, however, members should proceed cautiously and fully consider the risk characteristics of the trust system before signing up to participate in a trust.

                There are multiple risks of involvement in a workers’ compensation trust that need to be considered before joining, such as:

·         Members of a trust have joint and several liability for the obligations of the trust and all its members which were incurred during the member’s term of membership in the trust.  This means your company agrees to become responsible to pay the bills of others who may go out of business or otherwise fail to meet their financial obligations.

·         The cost may be open-ended.  There is no limit to each participating member’s liability to pay for pricing inadequate to support trust losses or other member’s uncollected premiums.  The Workers’ Compensation Board has the authority to level assessments to fund unpaid claims of the trust.

·         There is no New York State solvency fund for trusts.  That means members of a trust cannot only be held liable for all the other members of that particular trust, but also any other failed trust.  One failed trust can cause the remaining trusts in New York State to be assessed for the funds needed to pay the losses of the failed trust.

·         Some trusts require large deposits of securities and/or cash and may require an irrevocable letter of credit.

NESCA members should understand that when joining a trust, there is no policy of insurance purchased.  Therefore, risk exposure is not transferred to a legally accountable insurance company.  Many of the workers’ compensation trusts currently operating in New York were formed within the last 5 years and have not demonstrated a track record of longevity.  Members should keep each of the foregoing risk factors in mind when considering the decision to join a trust as an alternative to a fully-insured program. 

 

WELCOME NEW MEMBERS  Go Top

 

Hanyan-Higgins, Inc.

P.O. Box 129

Watervliet, NY 12189

(518) 272-3741; Fax (518) 272-3743

Contact:  Dave Higgins

 

LESCO, Inc.

P.O. Box 258

Ballston Spa, NY 12020

(518) 885-1674; Fax (518) 885-8884

Contact:  Michael Leiser

 

Ward Commercial Supply

Glen Road

Jay, NY 12941

(518) 946-2112; Fax (518) 946-1220

Contact:  Mike Chesbro

 

 

Seventh Annual NESCA/GBC Joint

Mid-Hudson Golf Outing

 

Monday, June 10, 2002

Wiltwyck Country Club

Kingston, New York

 

$160 Per Person

Package Includes: Greens Fees, Cart, Driving Range, Locker Room, Beverages, Lunch, Reception, Dinner, Prizes

 

Registration/Lunch - 11:00 a.m.           Shotgun Start - 12 Noon

Reception - 5:00 p.m.                            Dinner/Prizes - 6:00 p.m.

 

Prizes Will Be Awarded for Low Gross, Low Net, Closest to the Pin, and Straightest Drive

 

Come Join the Fun!  Call the NESCA Office and Register Today!

 

MEMBERSHIP COMMITTEE ANNOUNCES YEAR-END MEMBER RECRUITMENT INCENTIVE  Go Top

 

NESCA Membership Committee Chairman Mark Woodward has announced a spring recruitment special as NESCA makes a final push for new members during 2001-2002.  Under the spring recruitment special, any company joining NESCA as a new member by May 31, 2002 will receive $100 off the regular annual membership dues rate of $575.  Sponsors of new members stand to benefit as well.  All NESCA members who recruit a new member will receive $50 for each and every new member sponsored.  In addition, at the May and June membership meetings, sponsors of new members each month will be eligible for a special $100 drawing.  Bringing new members into NESCA is a win/win proposition.  Their membership in the association will be beneficial to their companies and it will be beneficial to NESCA as well.  Remember, the more members we have, the stronger our organization will be!

 

Many Thanks to Alexis Mechanical, Inc. for Sponsoring NESCA’s April 11, 2002 Membership Meeting.

If Your Company Would Like to Sponsor a Future Meeting, Please Contact the NESCA Office.