Inside this Edition: State Contract Payments Could Become A Problem, ESSA W.C. Safety Group Issues 20% Dividend, President’s
Message, NY Court Of Appeals Holds “Additional Insured” Is
Entitled To Primary Coverage, Governor Signs Smoking Ban,
Joe Gomez Appointed To SBA National Advisory Council, Calendar Of Events, Welcome New Members,
STATE CONTRACT PAYMENTS COULD BECOME A PROBLEM (Go Top)
Payments on state contracts could soon become a problem for contractors and subcontractors if the impasse over a new state budget continues much longer. While state agencies are continuing to make contract payments on existing projects for now, that could quickly change if Governor Pataki and legislative leaders fail to adopt a budget by the middle of May.
On March 7, 2003, Budget Director Carole Stone issued a bulletin to all state government department and agency heads detailing “emergency austerity actions” to be implemented in order to maintain the cash flow necessary to meet essential obligations of the State. Agencies were directed to prepare contingency plans to reduce expenses and provide estimates of absolute minimum disbursement needs required for the period April 1, 2003 to June 30, 2003. Budget Director Stone stated “in the absence of an enacted budget on April 1, it will be necessary to limit ‘emergency’ appropriations to funding for State employee payrolls and for entitlement payments such as Medicaid and Welfare. Moreover, the exigencies of the cash flow situation are likely to require significant spending reductions by mid-May.” She directed that contingency plans should include:
· Taking the steps needed to terminate or suspend current contracts for capital construction and for goods and services at the earliest time possible, consistent with legal requirements – including giving timely notice to contractors to stop work no later than March 31 since there will be no authority to incur new liabilities after that date.
· Canceling or postponing plans for any new contracts.
The NYS Office of General Services reports that they are still make payments on “old” contracts, but that could end if the state runs out of money in May. As for new projects, OGS continues to receive bids, but they are holding off on awarding contracts until money has been appropriated by the Legislature.
While late budgets are nothing new for New York, this year’s difficulties are exacerbated by an $11 billion deficit. In short, the State could soon run out of cash.
ESSA W.C. SAFETY GROUP ISSUES 20% DIVIDEND (Go Top)
The Empire State Subcontractors Association (ESSA) Workers’ Compensation Safety Group 560 has announced the issuance of a 20% dividend to members of the safety group for the May 1, 2002 policy period. This marks the eighth consecutive dividend issued since the formation of the Safety Group in 1994.
The dividend was approved in conjunction with the May 1, 2003 group renewal, which is offering upfront discounts in the range of 20%-25%. These discounts are offered to all existing members as well as new potential members of the Safety Group. In addition, the ESSA Safety Group 560 has one of the strongest contingent balances among all of the construction safety groups in New York State.
The ESSA Safety Group is administered by Allied Safety Management, and group members receive the services and representation they need to maximize cost savings with: experience modifications; construction credits; discounts; payroll classification and audits; claims management; safety consultation and more! NESCA members who would like more information on the ESSA Safety Group should contact John Blackmore at Allied Safety Management - 516-733-9252.
Recently, all NESCA members were mailed the update forms for NESCA’s 2003-04 Membership Directory. All members are urged to 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, (address, phone, contacts) please detail these changes on the “member data” form and return this form to the NESCA office no later than June 1st. I would also like to call your attention to the fact that all members also have the opportunity to be listed in the “classified listings” section of the Directory. In order for the Directory to be of maximum value to users (such as general contractors and building owners), we have formatted the classified section based on the Construction Specifications Institute (CSI) Masterformat for construction specifications. If you want to be listed in the classified section under the appropriate categories, you must complete the classified listing form by checking the appropriate boxes. Please understand that NESCA cannot be expected to guess as to your classified listings. All members who wish to be included in the classified section must complete and return the form. It is anticipated the 2003-04 Directory will be printed and distributed to members, general contractors, designers and other construction industry professionals by late summer.
Regarding several upcoming events and activities, NESCA has another good program in store for our May 8th membership meeting at the Century House. Jim Connolly, Executive Vice President of Glens Falls Hospital, will be on hand to discuss the hospital’s $40 million capital construction program. I encourage all members to make plans to attend what will surely be a very informative meeting.
On Monday, June 9, 2003 NESCA and the General Building Contractors of NYS (GBC) will hold our 8th Annual Joint Mid-Hudson Golf Outing at Wiltwyck Golf Club in Kingston. I hope we will see you out on the course this year because this year’s Golf Outing is going to be every bit as good as last year’s! All members are welcome - not just members located in the Mid-Hudson region. If you do business in the Hudson Valley, you may want to sign up for this tournament. Even if you don’t do business in the Hudson Valley and you’re just an avid golfer who would like to play the Wiltwyck course, you should sign up for this event! Over the last seven years, this tournament has grown into a very nice event, and the Wiltwyck golf course is fantastic! Registration information for this golf outing was recently mailed to all members.
Please be on the lookout for information coming soon about NESCA’s 5th Annual Day at Saratoga Race Course, which will be held on Thursday, July 24, 2003. We’ve reserved 150 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, I’d like to recognize and thank Vellano Bros., Inc. for sponsoring our April 10th membership meeting.
James M. Elacqua, President
NY COURT OF APPEALS
HOLDS “ADDITIONAL INSURED” IS ENTITLED TO PRIMARY COVERAGE (Go Top)
The
NYS Court of Appeals on February 13, 2003 decided the Pecker Iron Works of
New York, Inc. v. Travelers Insurance Company case. Pecker Iron Works had engaged Upfront
Enterprises as a subcontractor and Upfront had agreed to furnish Pecker with
Certificates of Insurance for liability and workers’ compensation and to name
Pecker as an additional insured.
Upfront’s insurance contract with the Travelers Indemnity Company
provided Upfront with primary coverage and also covered “such additional
insured” as Upfront would designate in a written contract. Another provision of the policy provided
that for those additional insureds, coverage would only be excess unless
Upfront had agreed in a written contract for this insurance to apply on a
primary basis.
An
Upfront worker was injured at the site and brought suit against the owner of
the property and the general contractor.
They in turn commenced a third-party action against Pecker. Pecker then sought a judicial determination
that the Travelers Insurance Company was obligated to provide primary coverage
for any liability resulting from any accident.
The lower court held that the Travelers policy provided only excess
coverage in the absence of a written express designation of primary coverage
and that the Upfront-Pecker contract contained no such written
designation. The Appellate Division
reversed the lower court’s determination and determined that coverage for
additional insureds was primary coverage unless unambiguously stated otherwise.
The
Court of Appeals affirmed the Appellate Division’s determination and stated
that the well understood meaning of the term “additional insured” is an entity
enjoying the same protection as the named insured.
The
lesson to be learned for subcontractors from this case is that a subcontractor
must pay particular attention to its insurance policy and the insurer’s
liability with respect to coverage for additional insureds. Certainly, the subcontractor should
understand that if it represents to the contractor that the contractor is being
provided with primary coverage by the subcontractor, the subcontractor should
be certain that its insurance company has agreed to primary coverage for an
“additional insured” and not just excess coverage.
GOVERNOR SIGNS
SMOKING BAN (Go
Top)
On
March 26, 2003, legislation restricting smoking in almost all public places,
including places of employment, was passed by the Senate and Assembly and then
quickly signed into law by the Governor.
The new smoking ban will take effect on July 24, 2003.
Under
this new law, “employer” is defined as any person, partnership, association,
limited liability company, corporation or nonprofit entity which employs one or
more persons. “Place of employment” is
defined as any indoor area or portion thereof under the control of an employer
in which employees of the employer perform services and shall include, but not
be limited to, offices, school grounds, retail stores, banquet facilities,
theaters, food stores, banks, financial institutions, factories, warehouses,
employee cafeterias, lounges, auditoriums, gymnasiums, restrooms, elevators,
hallways, museums, libraries, bowling establishments, employee medical
facilities, rooms or areas containing photocopying equipment or other office
equipment used in common, and company vehicles.” In other words, virtually all members of NESCA are covered by the
law, and must prohibit smoking not only in company offices and warehouses, but
also in company vehicles.
In
addition to places of employment, the law also restricts smoking in the
following indoor areas: Bars; Food service establishments; enclosed indoor
areas open to the public containing a swimming pool; public means of
transportation; ticketing, boarding and waiting areas in public transportation
terminals; youth centers and facilities for detention; child day care centers;
group homes for children; public institutions for children; public and private
colleges, universities and other educational institutions; hospitals and other
health care facilities; commercial establishments used for the purpose of
carrying on any trade, profession, vocation or charitable activity; indoor
arenas; zoos, and bingo.
JOE GOMEZ APPOINTED TO SBA NATIONAL ADVISORY COUNCIL (Go Top)
Joseph
A. Gomez, president of Gomez Electrical Contractors, Inc. and a past president
of NESCA, has been appointed to a two-year term as a member of the U.S. Small
Business Administration’s National Advisory Council. The SBA’s National Advisory Council advises SBA officials about
vital issues affecting small business throughout the country.
CALENDAR OF EVENTS (Go
Top)
May 8, 2003
Century House, Latham, 5:30
pm
May 8, 2003
Century House, Latham, 6 pm
May 22, 2003
Building Ind. Center, 10:30
am
June 5, 2003
Century House, Latham, 6 pm
June 12, 2003
Century House, Latham, 6 pm
WELCOME NEW MEMBERS (Go Top)
C&K
Insulation, Inc.
179 Dimmock Hill Road
Binghamton, NY 13905
(607) 770-6112; Fax (607)
770-6218
Contact: Chester Ingraham
HL Gage Sales,
Inc.
P.O. Box 5170
Albany, NY 12205
(518) 456-8871; Fax (518)
456-0705
Contact: Tom Hans
Spinnenweber
Supply Company
190 Broadway
Port Ewan, NY 12466
(845) 331-0143; Fax (845)
331-0827
Contact: Jack Spinnenweber
Tort Reform – Assembly Republicans have introduced a sweeping
tort reform bill that seeks to lower government costs and save taxpayers and
consumers billions of dollars through a package of reforms aimed at putting a
stop to the “lawsuit lottery”. In
addition to reforming the “Scaffold Law” for contractors, the bill would: Cap
non-economic damages at $250,000; Repeal joint and several liability; Create a
10-year statute of limitations on product liability lawsuits; and require cases
against municipalities to be heard in the State Court of Claims.
OCP Policies – The New York State Office of General Services has
dropped the requirement that contractors provide Owners & Contractors
Protective (OCP) Insurance Policies on OGS work. Last year OGS dropped the requirement that contractors provide
Builders Risk policies.
Wicks Law – The New York State School Boards Association and
its allies have stepped up attacks on the state’s multiple prime contracting statute
(Wicks Law). The School Boards
Association now has a website dedicated to repealing the Wicks Law. To see what they are saying about Wicks go
to www.wicksreform.net.
Sales Tax – NESCA has a small number of sales tax manuals
left over from our recent seminar on “Sales Tax Requirements for the
Construction Industry”. These
comprehensive manuals are available for sale to members at $30 (our cost). Contact the NESCA office if you would like
to purchase one.
Volunteers Wanted – If you would like to become more involved
in NESCA through committee assignments, or even if you have an interest in one
day serving on the Board of Directors, we’d like to hear from you.
Eighth Annual NESCA/GBC Joint
Mid-Hudson Golf Outing
Monday, June 9, 2003 - Wiltwyck
Country Club - Kingston
$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.
Come Join the Fun! Call the NESCA Office and Register Today!