Construction Confusion Surrounding Delta Variant

Construction Confusion Surrounding Delta Variant

You have probably heard talks of the delta variant of COVID-19 while scanning the latest news headlines.

Within New York State, we are entering into yet another phase of unchartered territory for private companies to navigate during this ongoing public health crisis. Given how much more easily delta is spread, should employers be concerned about this new threat? We want to ensure that your team is prepared for the next steps to stay safe and healthy on your job sites, with as little disruption as possible.

The delta variant is a more transmissible, more contagious strain of COVID-19.

Currently, it accounts for about 83% of new cases in the United States. It is surging in areas with lagging vaccination rates, like the Midwest and upper Mountain States, where cases and hospitalizations have recently spiked. Evidence is mounting that the delta variant is capable of infecting fully vaccinated people at a greater rate than previous versions, and concerns have been raised that they may spread the virus to extremely vulnerable, unvaccinated populations, according to virologists and epidemiologists. Ironically as the conversation surrounding the rapid delta strain spread heats up, statewide precautions are cooling down.

When June’s federal statistics indicated that New York State cleared the 70 percent of vaccinated adults threshold, Gov. Cuomo lifted all state-mandated COVID-19 health and safety requirements.

And while current CDC evidence finds that the current vaccines are effective against the delta variant (meaning those vaccinated will likely avoid getting severely sick or dying), discussion is swirling about vaccine effectiveness beyond the six-month mark. Just weeks ago, the city’s building department relaxed face-covering guidance per state and federal regulations. “The Department is rescinding our COVID enforcement to reflect changes in state guidelines,” said Department of Buildings spokesperson Seth Stein in early July. Just this week, however, New York City Mayor Bill de Blasio announced that all New York City workers, including police, fire, and education employees, will be required to be vaccinated by September 13 or else submit to a weekly test. The mayor also urged private entities to consider setting similar vaccine mandates for their workplaces. If you’re confused about what the wisest next move is as an employer, you’re not alone.

As you’ve likely noticed, there has been a lot of mixed messaging from state officials throughout the pandemic, and new data is constantly changing the game plan for public safety, which means you need to be diligently aware of official health guidance.

Construction companies have largely adopted their own, individualized variations of safety precautions to protect workers. Some sites require masks to be worn at all times, others only require masks for unvaccinated employees or site visitors. Some are still adhering to six-foot social distancing measures, others have lifted that requirement completely. While construction site requirements in the city do not represent sites throughout the state, oftentimes the industry sees a ripple effect statewide. At this time, your company should reassess current site work safety protocols and determine whether or not workers are satisfied and feeling protected. If you haven’t checked in with your team via an in-person meeting or a digital anonymous survey lately, now is the time. Ultimately while health officials and lawmakers are citing rising concern over the new delta strain, it is up to your team to determine what course of action makes the most sense for your business and work culture. At RBT, we aim to pass along useful, relevant information to help our communities succeed, grow and prosper. As we continue to dedicate time and resources to helping our construction clients achieve success, we look forward to connecting with you and your team.

Sources: DOL, CDC, NPR, Reuters

What it Means to Get Lean: 4 Steps to Smarter Manufacturing

What it Means to Get Lean: 4 Steps to Smarter Manufacturing

Manufacturing success typically relies this golden rule: produce more, spend less.

There is no better illustration of how to successfully follow that rule, than to practice lean manufacturing. Lean manufacturing is defined by Twi Global as a production process based on an ideology of maximizing productivity while simultaneously minimizing waste within a manufacturing operation. The lean principle sees waste as anything that does not add to the value that customers are willing to pay for. The benefits of lean manufacturing include reduced lead times and operating costs and improved product quality. Lean companies operate as efficiently as possible, using the least possible staff time, equipment, and raw materials. In the high-cost, high-risk environment we’re living in, efficient use of raw materials is more essential than ever before. Below are four steps your team can take to boost profits as we finish out the year and head into 2022.

  1. Use Raw Materials More Efficiently

As you’re well aware, the prices of many manufacturing inputs — like metals, chemicals, and lumber — have skyrocketed over the last year. In June, manufacturers reported the biggest price jump in 42 years. The Institute for Supply Management’s manufacturing price index rose to 92.1% last month, up 4.1% and hitting its highest mark since July 1979. It was the 13th straight month of price increases in the sector. Add to the mix that rising fuel prices have increased shipping costs, cyberattacks, and geopolitical instability threaten the viability of supply chains due to delays and price fluctuations. It’s not exactly an easy environment to operate in.

Rethink the term “waste” if you think it just refers to scraps on the plant floor. Waste can include excessive energy consumption, defects, motion, transport, queue time, and inventory. Analytical tools can help reduce waste by limiting the number of “touchpoints” that slow down or complicate the production process. Start by collecting data at every touchpoint in the supply chain and production cycle. Apply the metrics that make sense for your industry. If your processes require raw materials to cool down or heat up, factor the time into your equation. When your fact-finding is complete, assess the ways you can increase future efficiency.

  1. Give Incentives to Workers

Remember, frontline workers often provide the most effective solutions. As a bonus, engaging your workers in the brainstorming process can help with their buy-in when you implement changes. We cannot overstate enough how essential workers are in terms of successful lean manufacturing. Financial incentives can help persuade your employees to ramp up production. You can approach this through:

Individual incentives: which focus on specific tasks performed by frontline workers to increase productivity and avoid delays. If you can isolate certain tasks where a definitive need for improvement is identified, giving individuals a specific list of set goals may be the optimal approach.

Team incentives: which reward collective efforts. Because most tasks are done in conjunction with others, team incentives are usually easier to implement. Manufacturers can provide team incentives to improve the overall efficiency of the assembly line and encourages cooperation among workers.

  1. Extend Lean Principles to Offices

Lean efforts initially focus on the production process because it provides the most significant direct benefits, but the same principles can be applied to your back offices and corporate headquarters. These locations may also be affected by cost increases, supply disruptions, and delays. Apply the principles you’ve learned on the plant floor to selling, accounting, and other administrative functions. For instance, you might break office staffers into groups based on products or marketing aspects.

  1. Seek Outside Guidance

It’s easy to miss operational inefficiencies when you’re too close to the process. At some point, you might call in external guidance. This could include reaching out to industry specialists or financial consultants with experience helping companies in your niche implement lean strategies. Do your research and rely only on reputable sources. For more insight on how to help your business thrive and adapt, contact our Manufacturing Services Group today to schedule a conversation. Whatever the size of your venture, we can help you meet your immediate and long-term goals.

Source: © 2020, Powered by Thomson Reuters Checkpoint

Have You Considered this USDA Loan Program?

Have You Considered this USDA Loan Program?

Looking for loan money? It’s time to consider The United States Department of Agriculture (USDA). Yes, even if you are scratching your head and thinking, “but my manufacturing operation has nothing to do with farming,” you could still be eligible. The USDA is indeed responsible for developing and executing federal laws related to farming, forestry, rural economic development, and food. But your company may still qualify for USDA guaranteed loans regardless. These loans are very similar to Small Business Administration (SBA) loans, but with a focus on promoting small businesses and creating jobs in rural communities. The USDA Rural Development program improves the economic health of rural communities by increasing access to business capital through loan guarantees which enable commercial lenders to provide affordable financing for rural businesses.

Who qualifies for the Business and Industry (B&I) Guaranteed Loan Program?

  • For-profit or non-profit businesses
  • Cooperatives
  • Federally-recognized Tribes
  • Public bodies
  • Individuals engaged or proposing to engage in a business

In terms of restrictions: individual borrowers must be citizens of the United States or reside in the U.S. after being legally admitted for permanent residence. Additionally, private-entity borrowers must demonstrate that loan funds will remain in the U.S., and the facility being financed will primarily create new or save existing jobs for rural U.S. residents.

 What is considered an eligible area?

  • Rural areas not in a city or town with a population of more than 50,000 inhabitants
  • The borrower’s headquarters may be based within a larger city as long as the project is located in an eligible rural area
  • The lender may be located anywhere in the United States
  • Projects may be funded in either rural or urban areas under the Local and Regional Food System Initiative
  • Check eligible addresses for Business Programs

How can my company use these loan funds?

  • Business conversion, enlargement, repair, modernization or development
  • The purchase and development of land, buildings and associated infrastructure for commercial or industrial properties
  • The purchase and installation of machinery and equipment, supplies or inventory
  • Debt refinancing when such refinancing improves cash flow and creates jobs
  • Business and industrial acquisitions when the loan will maintain business operations and create or save jobs

What can these loan funds NOT be used for?

  • Lines of credit
  • Owner-occupied and rental housing
  • Golf courses or golf course infrastructure
  • Racetracks or gambling facilities
  • Churches or church-controlled organizations
  • Fraternal organizations
  • Lending, investment and insurance companies
  • Agricultural production, with certain exceptions (1)
  • Distribution or payment to a beneficiary of the borrower or an individual or entity that will retain an ownership interest in the borrower

What is the maximum amount of a loan guarantee?

The loan guarantee percentage is published annually in a Federal Register notice. B&I loans approved in Fiscal Year 2021 will receive an 80 percent guarantee. While there is no minimum loan amount, USDA B&I loans generally do not exceed $10 million (with some exceptions going up to $25 million or more). Most USDA business loans are between $200,000 and $5 million, with the average loan amount around $3 million. There are, however, requirements on the loan-to-value ratio, which are based on how you plan to use the funds. This also means that you’ll need to make a down payment for the loan.

What are the loan terms?

The lender will establish and justify the guaranteed loan term based on the use of guaranteed loan funds, the useful economic life of the assets being financed and those used as collateral, and the borrower’s repayment ability. The loan term will not exceed 40 years. Interest rates are negotiated between the lender and borrower. Rates may be fixed or variable. There is an initial application guarantee fee, currently 3 percent of the guaranteed amount. There is a guarantee retention fee, currently 0.5 percent of the outstanding principal balance, paid annually (2). Reasonable and customary fees for loan origination are negotiated between the borrower and lender. Qualifying projects may receive a reduced fee of 1 percent.

How do I get started?

Applications are accepted from lenders through USDA local offices year-round. Interested borrowers should inquire about the program with their lender, and lenders interested in participating in this program should contact the USDA Rural Development Business Programs Director in the state where the project is located. For more ideas to help your business thrive in these challenging times, contact our Manufacturing Services Group today. Whatever the size of your venture, we can help you meet your goals, now and for the future.

Sources: USDA, Value Penguin

The Shocking Truth Construction Companies Need to Confront Now

The Shocking Truth Construction Companies Need to Confront Now

The pandemic continues to present endless challenges for the construction industry.

Many of the same employees who helped keep companies afloat, or found themselves unemployed over the past year and a half are now feeling depleted or overwhelmed. Physically demanding jobs coupled with unpredictable work schedules often take a hefty toll on mental health, and while suicide affects many different people, you may be shocked to learn that the construction industry represents one of five major sectors with the highest suicide rates in America, according to the Center for Disease Control (CDC). While this disturbing truth is unsettling to confront, consider using this May Mental Health Awareness Month as an opportunity to shed light on challenging issues and actually save lives.

Mental Health Awareness Month coincides with updated CDC guidelines for construction companies to consider.

The CDC is asking contractors to prioritize the well-being of their workers, with a new checklist that encourages employers to start conversations about how the pandemic is affecting work; communicate clear expectations; anticipate behavior changes, (such as irritation, anger, increased sadness, or trouble concentrating) and ensure that there is a system in place to identify and provide mental health services to those in need. So, why is this troubling issue plaguing this industry, and what can you do to better support your team, increase morale and productivity, and ultimately prevent a tragedy? Read on for expert advice you can weave into your company culture starting today.

According to the U.S Labor of Bureau Statistics, 97% of the construction workforce is male and 59% of those workers are white, which is also the leading demographic with the highest rates of suicide.

Additionally, many U.S. Veterans choose construction career paths, and statistically, vets are at an increased risk of suicide. Typically, employees are expected to work long, inconsistent hours and push through the pain they may experience. A recent study exploring the link between bodily pain and mental health in construction workers found that participants who experienced pain from work-related tasks had significantly higher levels of anxiety and depression. Social stigmas perpetuating the notion that these workers are supposed to be tough, strong, and not show emotion or discuss feelings paired with the factors mentioned above creates a perfect storm for workers to fall victim to this silent epidemic. Dangerous stereotypes can leave construction workers pulling from an empty toolbox of resources, ill-equipped to seek help before it’s too late.

A common aspirational safety culture goal is “Zero Incidents,” but ironically, few have paused to consider mental wellness.

Often, our reluctance to discuss mental health issues stems from fear. Providing accessible educational opportunities can help employees reduce fear and replace it with a sense of community and hope. Consider the following approaches to pave the way for healthier work environments:

Oversee focus groups of 10-15 people who represent critical groups within the company and perform in-depth interviews with key influencers like business leaders, HR directors, safety directors, and others.

Teach coping skills for life’s challenges from new employee onboarding, to supervisor training, to executive coaching, to ongoing wellness workshops – these skills help employees at all levels integrate mental health into their lives and break down stigmas about seeking help. In-person or digital workshop completion can be incentivized as part of a wellness contest among teams or to meet health insurance engagement goals.

Develop a “buddy check program” that encompasses more than just physical safety. A formal peer support program is one of the best ways to promote a caring culture. In fact, many military and first responder communities have discovered this type of program is the key to building a link in the chain of survival, especially among stoic, “tough guy” cultures where men are particularly reluctant to seek professional mental health services.

Successful companies take the time to listen to employees. One of the most important initiatives a company can apply today is simply reaching out to employees on a human level. Start conversations and open up in team meetings to help employees feel supported, and comfortable sharing personal challenges. Distributing resources like the Suicide Prevention Lifeline and this list of resources from the Occupational Safety and Health Administration can be a step in the right direction for employers. Another suggestion? Make team members aware of Mental Health First-Aid training courses covering issues surrounding mental health and substance abuse, and openly encourage participation. Many organizations like The Construction Industry Alliance for Suicide Prevention (CIASP) are committed to raising suicide awareness within the industry and providing prevention tools to create a zero-suicide industry. At RBT, we pride ourselves on assisting construction professionals in building the most sustainable businesses possible with our comprehensive services. But most importantly, we aim to pass along useful, relevant information to help our communities succeed, grow and prosper. As we continue to dedicate time and resources to helping our construction clients achieve success, we look forward to connecting with you and your team.

Youth, CIA, Salley Spencer-Thomas & Cal Beyer

The Shocking Problem Manufacturing Companies Need to Fix Now

The Shocking Problem Manufacturing Companies Need to Fix Now

The pandemic continues to present endless challenges for the manufacturing industry.

Many of the same employees who helped keep companies afloat, or found themselves unemployed over the past year and a half are now feeling depleted or overwhelmed. While mental health affects many different people, you may be shocked to learn that research ranks the manufacturing industry as the fourth-highest industry in which employees are likely to suffer from anxiety or depression. A 2015 study calculated the prevalence of anxiety and depression in the manufacturing industry is 36% above the national average. While this is an unsettling reality to confront, consider using this May Mental Health Awareness Month as an opportunity to shed light on challenging issues and improve the lives of your team members.

Mental Health Awareness Month can act as a catalyst for starting hard conversations and effecting lasting change.

Start conversations about how the pandemic is affecting work; communicate clear expectations; anticipate behavior changes, (such as irritation, anger, increased sadness, or trouble concentrating) and ensure that there is a system in place to identify and provide mental health services to those in need. Did you know the productivity costs of mental health issues due to decreased performance were calculated in 2011 to be up to $1,601 per employee per year? If you adjust this figure for inflation ($1,850) and then add 36% to factor in industry-specific rates of anxiety and depression, mental health issues in the manufacturing industry are costing businesses up to $2,516 per employee per year – although some sources claim the figure could be as high as $9,450 per employee per year. So, what can you do to better support your team, increase morale and productivity, and ultimately prevent a tragedy? Read on for expert advice you can weave into your company culture starting today.

Social stigmas perpetuating the notion that these workers are supposed to be tough, strong, and not show emotion or discuss feelings creates a perfect storm for workers to fall victim to this silent epidemic.

Dangerous stereotypes can leave manufacturing workers pulling from an empty toolbox of resources, ill-equipped to seek help before it’s too late. A comparison of the segments of the population struggling the most with mental health issues against Bureau of Labor Statistics (BLS) data suggests manufacturing employees may be among the segments of the population at the highest risk. For example:

  • 70% of the workforce in manufacturing is male
  • The median age of employees in manufacturing is 44 years
  • Only 40% of manufacturing employees are educated to college degree level or higher

A common aspirational safety culture goal is “Zero Incidents,” but ironically, few have paused to consider mental wellness.

Often, our reluctance to discuss mental health issues stems from fear. Providing accessible educational opportunities can help employees replace fear with a sense of community and hope. To pave the way for a healthier, happier work environment, consider integrating the following approaches:

Oversee focus groups of 10-15 people who represent critical groups within the company and perform in-depth interviews with key influencers like business leaders, HR directors, safety directors, and others.

Teach coping skills for life’s challenges from new employee onboarding, to supervisor training, to executive coaching, to ongoing wellness workshops – these skills help employees at all levels integrate mental health into their lives and break down stigmas about seeking help. In-person or digital workshop completion can be incentivized as part of a wellness contest among teams or to meet health insurance engagement goals.

Develop a “buddy check program” that encompasses more than just physical safety. A formal peer support program is one of the best ways to promote a caring culture. In fact, many military and first responder communities have discovered this type of program is the key to building a link in the chain of survival, especially among stoic, “tough guy” cultures where men are particularly reluctant to seek professional mental health services.

Successful companies take the time to listen to employees. One of the most important initiatives a company can apply today is simply reaching out to employees on a human level. Start conversations and open up in team meetings to help employees feel supported, and comfortable sharing personal challenges. Distributing resources like the Suicide Prevention Lifeline and this list of resources from the Occupational Safety and Health Administration can be a first step in the right direction. Another suggestion? Openly encourage employee participation in training courses like Mental Health First-Aid which covers issues related to mental health and substance abuse. At RBT, we pride ourselves on assisting manufacturing professionals to build more sustainable businesses with our comprehensive services. But most importantly, we aim to pass along useful, relevant information to help our communities succeed, grow and prosper. As we continue to dedicate time and resources to help our manufacturing clients achieve success, we look forward to connecting with you and your team.

Youth, Salley Spencer-Thomas & Cal Beyer, RAVEMobileSafety

How a Low-Finance Program is Saving NY Manufacturing Companies

How a Low-Finance Program is Saving NY Manufacturing Companies

Are you interested in improving your company’s competitiveness, modernize your equipment or develop new products – but aren’t quite sure how to fund your expansion? The Linked Deposit Program (LDP) may just be the best-kept secret that you’ve been waiting for. Read on to learn more about how this economic development initiative can be a game-changer for your business this year and help you and your team to undertake exciting projects that will improve your company’s productivity, performance, and competitiveness.

What is the LDP?

The Linked Deposit Program (LDP) helps existing New York State firms obtain reduced-rate financing so they can undertake investments to make borrowing less expensive. Eligible businesses can obtain loans from commercial banks, savings banks, savings and loan associations, farm credit institutions, and the New York Business Development Corporation. Ultimately, the program helps the State to improve business competitiveness, create new jobs, generate overall economic growth, and build opportunities for disadvantaged businesses. Under LDP, eligible businesses can obtain commercial loans at an interest rate that is up to 2 or 3 percentage points lower than the prevailing rate on such loans, making borrowing less expensive.

Why was the LDP created?

In 1994, the State began the LDP to assist and encourage firms, manufacturers, and small businesses to make investments. The economy of New York State, and the nation, is undergoing fundamental change. International competition has dramatically intensified with the adoption of advanced technologies and modern production methods. In many ways, this technological renaissance is eroding the competitive position of NYS manufacturers and other businesses in the global economy, threatening profitability, employment and prospects. Economic change has had a particularly detrimental effect on minority and women-owned businesses, which are generally smaller, younger, and less well-capitalized than other businesses. All this is occurring at a time when small businesses are facing a serious shortage of bank credit, impeding their ability to take on projects to modernize their operations, improve their competitiveness, access new markets, and increase their export trade activities. In 2001, legislation was enacted to lift the sunset date and make the LDP a permanent program.

Eligible Borrowers:

  • Manufacturing Firms – with 500 or fewer full-time NYS-based employees
  • Service Businesses – independently owned and operated and not dominant in their field, with 100 or fewer full-time NYS-based employees

To review the extensive list of qualifying projects which may make your company LDP eligible, click here.

How does an applicant apply for an LDP, and how long before an applicant hears back?

The applicant (borrower) must apply for the loan to a participating lender, and the lender will complete and send the LDP application to the Linked Deposit Program Office of Empire State Development (ESD). The application will be approved or rejected within 28 days. (The average LDP approval time is 5 business days.) Keep in mind that the most common problems the Office of ESD encounters with applications are insufficient/incomplete information, no statement of how the project will improve the borrower’s competitiveness, an inadequate “impede” statement, or a missing NYS-45 form.

What lenders (banks) can participate in the LDP?

Commercial banks, savings banks, savings and loan associations, and farm credit institutions that are, or are qualified to become, approved depositories for NYS linked deposit funds. The New York Business Development Corporation (NYBDC) is also an approved lender. Lenders are compensated with a deposit of State funds at comparably reduced rates. LDP currently has 70 participating lenders you can review on ESD’s website, here.

Is there a maximum amount that may be borrowed under the program?

Yes. A borrower’s lifetime maximum is $2 million (including prior deposits). Every single deposit is limited to $2 million, and companies can have multiple deposits totaling up to $2 million outstanding at any time. There is no minimum loan amount.

A vibrant business sector is essential to create economic growth and generate jobs. A 2017 report for the governor and the Legislature showed assistance from the LDP created 253 jobs in 2016 and would retain an additional 268 through at least 2021. Since the program’s inception in 1994, LDP has lowered the interest rate for over 5,680 loans, resulting in $1.93 billion in bank lending and leveraging $4.03 billion in new capital investment by businesses across New York State (as of 2018 data). It is our hope that by sharing this important program with our clients and manufacturing industry professionals, New York’s businesses and the health of New York’s export trade will grow in a positive direction. For more information and instructions on applying, click here. To connect with one of our Manufacturing Service Group Team Members, please schedule an appointment through our website.

Sources: ESD, Assemblyman Will Barclay

Budget Battle: Rising Material Costs – End in Sight?

Budget Battle: Rising Material Costs – End in Sight?

Since the start of the pandemic, we’ve been looking for indications of a return to normalcy. Last week, we got some good news for contractors. After months of being sidelined, nearly 2,000 New York construction projects are getting the green light by the end of March. As part of its pandemic recovery effort, New York City Mayor Bill de Blasio announced that the city is restarting $17 billion of capital construction projects. Other projects around the state are resuming too, and while workers are excited to dust off their hard hats, many are left scratching their heads as they face historically high building material costs.

How Much Have Material Costs Spiked?

Lumber prices have skyrocketed more than 180% since last spring. A recent National Association of Home Builders analysis found that spikes in softwood lumber prices in the wake of the COVID-19 pandemic have caused the price of an average, new single-family home to increase by nearly $16,000. The price gains are having a ripple effect on other essential materials, too – costs for drywall, copper, steel studs and even vinyl siding have risen, as well as those for other items that include steel.

How Can Contractors Stay Competitive?

The reality is, builders can only pass on so much of their costs to buyers. Higher costs will continue to cut deeply into builder profitability and margins. According to Associated General Contractors of America Chief Economist Ken Simonson, lingering supply chain delays could end up muting the anticipated rebound in construction activity in the latter half of 2021. “Construction demand will remain spotty, both geographically, and by project type,” Simonson said. “Any owner who is expecting to build new or renovate had better factor in the likelihood that there will be delays, and depending on how the risk is shared with contractors, price increases.” Some construction attorneys are advising contractors to write in contingencies for material cost increases upfront in the form of force majeure clauses. Being transparent about the realities of the market is important so clients know what to expect. Another suggestion to avoid major delays and keep jobs on track? By closely tracking fluctuating material costs, substitute in different materials when you can. For example, while OSB is normally far less expensive than plywood, that’s not necessarily true right now, so when plywood is cheaper, spec it instead.

When Will Pricing Return to Normal?

Unfortunately, there isn’t a projected timeline for exactly when the industry can expect prices to come down, and because falling lumber prices are largely dependent on a return to “normalcy,” we need to continue to wait this period out. What we do know is for prices to drop, several things need to happen first. In the U.S., lumber production will need to increase to cover the lost supply from Canada or Canadian import duties will need to come down so that Canada can export more lumber to the United States. Shutdowns within the lumber industry will need to come to an end, and timber producers will need to increase the amount they’re producing. Joe Sanderson, managing director of natural resources at Domain Timber Advisors, points to these recent developments to keep an eye on:

  • The Canadian lumber tariff dropped in December from 20% to 9%, making Canadian lumber cheaper and sending more lumber imports to the U.S.
  • La Nina conditions are resulting in a dry weather pattern across much of the South. The drier-than-normal winter has led to additional logging capacity, which bolsters lumber supplies.
  • New lumber mills have come online in recent months.

The good news? America continues making strides in vaccination access across the country which is a major step in returning to pre-pandemic material pricing. Since vaccine distribution began in December, more than 90 million doses have been administered, reaching 17.7% of the total U.S. population, according to federal data collected by the Centers for Disease Control and Prevention. Industry advocates continue to seek prompt action from the Biden administration and other lawmakers by calling on domestic lumber producers to ramp up production to ease growing shortages, and making it a priority to work with Canada on a new softwood lumber agreement. RBT has the necessary experience to manage cash flows for projects both large and small. If you want to connect to learn about how we can help your business thrive even in these trying times, contact us today.

Sources: NEBS, AGC, Construction Dive, NAHB, CNBC, NPR

Time is Running Out on CAA Tax Breaks

Time is Running Out on CAA Tax Breaks

The clock is ticking on the massive tax benefit extensions that can help manufacturers save big thanks to The Consolidated Appropriations Act (CAA). Want to learn about the savings your business is eligible for? Let’s review some of the time-sensitive highlights you can take advantage of before time runs out.

PPP Round Two

As RBT has mentioned in previous thought leadership pieces, the CAA expanded and revised the PPP, providing $284 billion for the second round. The “second-draw” opportunity allows eligible businesses with fewer than 300 employees to apply. The maximum second-draw loan amount is $2 million, through March 31, 2021, or until funding is exhausted. Plus according to the new law, expenses paid for with forgiven PPP loans are tax-deductible.

Employee Retention Credit

Under the CARES Act, eligible employers could claim the refundable employee retention credit (ERC) for 50% of the first $10,000 of wages paid to eligible employees from March through December of 2020. The CAA extends the ERC through June 30, 2021, and indicates that employers that receive PPP loans can qualify for the ERC. As of 2021, the new law:

  • Increases the maximum credit to $14,000 based on a 70% credit rate for the first $10,000 of qualified wages per quarter, for the first two quarters of 2021
  • Increases the number of employees allowed for eligible employer status from 100 to 500
  • Makes employers that didn’t exist for all or part of 2019 eligible to claim the credit

Work Opportunity Tax Credit

Hiring workers who fall into certain disadvantaged groups? Be sure to claim the Work Opportunity Tax Credit (WOTC), which offers a maximum of $2,400 per employee (or $9,600 for a disabled veteran). This tax break was scheduled to end after 2020. The CAA extends the WOTC to cover first-year wages paid to qualifying employees who are hired in 2021 through 2025. Here is a list of target groups that qualify you for the WOTC credit.

Employer Credit for Sick and Family Leave Payments to Employees

The Families First Coronavirus Response Act (FFCRA) created an employer tax credit to cover the cost of paying for mandatory paid sick and family leave related to COVID-19. Eligible employers can claim a federal payroll tax credit for 100% of qualified leave payments which offsets the employer’s 6.2% Social Security tax component of the federal payroll (FICA) tax. Initially, it was available from April through December of 2020. As the pandemic continues, the CAA extended the credit through March 31, 2021.

Payroll Tax Deferral

You may remember that because of a 2020 presidential executive order, an employer could choose to postpone payment of the 6.2% Social Security tax component of FICA tax withheld from qualified employee wages of less than $4,000 for a biweekly pay period. Previously, the employer had to deposit the deferred tax amount with the IRS by April 30, 2021, but the CAA now extends the payment deadline for employers to December 31, 2021.

The CAA also creates various other incentives, like extending the increased deduction limit for corporate charitable cash contributions from 10% of taxable income to 25% of taxable income through 2021 and temporarily allowing taxpayers to deduct 100% of the cost of business-related food and/or beverages provided by restaurants in 2021 and 2022. The “provided by” language means this break is available for take-out and sit-down meals. The CAA also includes a provision regarding the H-2B visa program, which permits employers to temporarily hire nonimmigrants to perform non-agricultural labor or services in the United States. There are likely untapped opportunities for your manufacturing company to generate valuable saving if you only know where to look. Need help navigating the complexities of the CAA? It’s what our experts love to do. Contact our team today for a free consultation.

Sources: IRS, DOL, © 2020, Powered by Thomson Reuters Checkpoint

Need to Know: Substantial Completion Bill

Need to Know: Substantial Completion Bill

Ah, substantial completion. Practically speaking, it occurs when there’s only minor, corrective, or warranty work remaining for a project. But you and your team know it means a sigh of relief, and cause for celebration. Why? Because payday is on the way! It also sets the timeline for liabilities, warranties, and corrective work, which is crucial. Under the New York State Finance Law and General Municipal Law, reaching this milestone triggers the reduction of retainage from 5% to two times the value of the punch list. As you may be aware, on December 15, 2020, Governor Cuomo signed S.7664/A.9117, the Empire State Subcontractors Association’s “Substantial Completion” bill, into law.

So what does this mean for you and your business?

This bill is a win for contractors (and by extension subcontractors) because it will ensure contractors on public works receive their retainage in a timely manner and will also prevent public owners from prolonging a project’s final completion. The new legislation will require public works contracts to define substantial completion and require public owners to provide the prime contractor with a complete punch list no later than 45 business days after substantial completion has been reached. The prime contractor, in turn, must provide subcontractors with their portions of the punch list within 7 days thereafter. So in essence, public owners will no longer be able to drag out the procedure for generating punch list items for many months or even years, long after a building is occupied and being utilized for its intended purpose.

While some of the timing language was kept in, Cuomo “secured an agreement with the legislature to make certain technical changes to the bill, allowing public owner contracts to retain their distinct definition of substantial completion.” This was something the Governor’s Office apparently would not budge on because Cuomo wanted to retain flexibility for state agencies and other public owners to have their own definition of “substantial completion” in their contracts. Is that ideal for you and your business? Rarely, anything is in life, or politics. But ultimately, while the final agreement led to the removal of the language defining substantial completion in the legislation, new language was added to clarify that substantial completion should be defined by public owners in their contracts. So at the end of the day, this bill still represents a key improvement in the law regarding the reduction and release of retainage on public projects, a win for contractors.

These are particularly challenging economic times, but even in a booming economy, getting paid for work performed remains one of the biggest construction industry challenges. Often, contractors who are struggling to get paid do not fully understand their statutory rights to prompt payment, therefore they don’t exercise their rights properly. “I would encourage contractors to gain a better understanding of the laws here in New York that have been written for their protection,” says Mike Misenheimer, Executive Director of NESCA. Misenheimer describes a few state laws contractors should familiarize themselves with to protect their business including the prompt payment laws for both public and private commercial construction projects, statutory limitations on the amount of retainage that may be held, their lien rights, and the trust provisions of Article 3-A of the Lien Law.

It is the hope of the entire RBT team that by keeping our industry clients and contacts informed, we can further assist you in making business decisions that will secure your future success. We thank you for your continued commitment to remain up to date on the news that impacts your field, and invite you to contact us with any specific business questions.

Traffic Trend: Is Congestion Pricing Coming?

Traffic Congestion

If you’re cruising down I-84 between Dutchess and Putnam Counties, you might notice a smoother ride thanks to the completion of an $11 million project this month that resurfaced over seven miles of roadway. The project, which began in spring 2020 – is a step in the right direction as New York struggles to boost regional economies and create safer, updated infrastructure. But zip down to Manhattan, and as you slow to a halt in maddening traffic, you’ll quickly understand why so many industry experts are advocating to push through the congestion pricing plan that was originally slated to launch on January 1, 2021. The start date may inevitably be further delayed, but the payoff of this program could be big. What’s the plan all about and what could it mean for construction companies statewide? Read on to learn more.

Sometimes called value pricing – congestion pricing works by shifting some rush hour travel to other transportation modes or off-peak periods, taking advantage of the fact that the majority of rush-hour drivers on a typical urban roadway are not commuters.

Under the plan backed by Cuomo and passed by state lawmakers in 2019, drivers will have to pay tolls to enter Manhattan south of 60th Street, making New York the first state in America to implement congestion pricing. But there’s no solid green light just yet, as the federal government still hasn’t told the Metropolitan Transportation Authority what sort of environmental review it should carry out to get federal approval. MTA spokesman Ken Lovett is looking towards the future to get the program up and running. “There’s no reason this should have been held up for as long as it has been, and we’re hopeful the New Year will breathe new life into this vital project,” Lovett said. But whether 2021 will mark the start of a new chapter with the program remains to be seen. The MTA recently released a statement projecting the plan could be delayed until 2023 if the Federal Highway Administration does not act. This lack of clarity continues as the MTA settles into a particularly precarious position – seeking a sizeable $12 billion federal bailout to avoid drastic service cuts.

How much revenue could it raise, and where would the money go?

Once we accept the unknown timeline of the plan, the payoff may be worth the wait. According to state officials, the revenue from congestion pricing would generate around $1 billion annually for major projects, like upgrading the MTA’s aging subway system. It’s a bittersweet reality because the rest of the state wouldn’t see the revenue funnel into local projects, but the success or failure of the MTA largely reflects the state’s economy as a whole. According to Mitchell Moss, the director of the Rudin Center for Transportation, New York is responsible for 10% of the entire national gross domestic product. “The city has a disproportionate role in the national economy and global economy,” said Moss, “and the U.S. has a stake making sure this region is vital, just like we need to make sure airlines are vital.”

What do Hudson Valley contractors have to gain, or lose?

Bigger infrastructure budgets to improve tunnels, bridges and roadways ultimately means more job opportunities for contractors to bid on, even if it also means diversifying your portfolio and bidding on projects in the five boroughs. Long-term, as local municipalities struggle with floundering revenue streams, congestion pricing models could be adopted on smaller, regional scales to generate infrastructure dollars in the future which could mean more capital for more local projects. Plus as congestion continues to expand regionally, it could also mean cutting down on valuable time wasted in transit. According to the FHA, based on current trends, a medium-sized city should expect their congestion in 10 years to be as bad as or worse than what large cities currently experience. The rate of congestion growth has been greater in rural areas than in urban areas, signifying increased congestion in communities of all sizes. While we know it’s a concept that will take some getting used to, it will undoubtedly be in New York’s five-year economic forecast. So as with most changes, it’s best to digest congestion pricing before it takes effect. Want to discuss the latest trends impacting your industry? Schedule a call with one of our dedicated professionals today and stay ahead of the latest news!