Author: Susan L. Howell

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 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 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:

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

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?

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

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.

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?

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!

Breaking Through to the Next Generation

They say, “You don’t know what you don’t know,” and we think that phrase sums up the massive manufacturing generational gap we’re experiencing. Without an introduction to the incredible career paths that exist within this industry, many kids grow up without manufacturing on their radar. We want to help you change that.

Did you know the median wage of Hudson Valley Region STEM occupations is 70% higher than the median annual wage for all workers in the region? Beyond competitive compensation, we know the growth projection is enormous. In New York State, between 2010 and 2015, employment in core STEM job titles grew by 10.5% and over the same time period, the nation’s core STEM job count grew by 11.3%. But how do we appeal to this generation? To better engage youth, manufacturers should focus on how this field offers a dynamic, meaningful, and purposeful line of work built on creativity and critical thinking.

Imagine sitting in class as a 13 year old kid. Your teacher announces a hands on team challenge you can partake in with your friends to build and program industrial-size robots to play a field game for a prize. Sounds pretty cool, right? There are programs you may not be aware of (even you “don’t know what you don’t know”) that are introducing manufacturing in fun, innovative ways. Robotics programs are popping up all over the country, aiming to build foundational knowledge about STEM careers and break down the negative stigmas that often surround the manufacturing industry. In the last year, nonprofit FIRST generated over 320,000 mentor, coach, judge and volunteer roles, to meet growing student interest. Getting kids excited about a career that touches virtually every corner of life – from environmental improvements, to building better medicines, and simplifying everyday tasks – is the key to the industry’s future.

One noteworthy local initiative is the Rockland BOCES Hudson Valley Pathways in Technology Early College High School known as the Hudson Valley P-TECH program. It’s designed to engage students in grades 9-14 with hands-on, project-based learning. Local businesses are encouraged to get involved to enable Hudson Valley P-TECH to prepare students for the workplace of today and tomorrow. The Business Partnership Program connects students with professionals in their pathway by providing students with work site visits, job shadowing, field experiences and more. Monthly Mentor Lounge events focus on topics to develop professional skills. Business partners also work collaboratively with teachers to design industry challenges in which students solve real-world challenges facing the industry partner. The end result? Creating a more robust and skilled pipeline of a qualified workforce that will benefit our entire region.

Shifting the stigma is the priority. How can we get schools to embrace industry tools like artificial intelligence and virtual reality? By talking to our educators about ways we can help engage scientific minds. Peter Harris, the Director of Learning and Design for the Career Pathways Programs, encourages manufacturing professionals to connect with local middle school educators and offer facility tours or classroom visits to strengthen outreach. You can create a lightbulb moment for a student once they realize a passion like playing video games can be translated into learning an exciting and rewarding advanced technology such as robotics programming or virtual metal cutting. Harris describes a sense of relief, release and pride that overcomes the students who walk into BOCES technical centers. Establishing stimulating alternative pathways to success is the first step to break down traditional education barriers.

To bridge the employment gap we’re headed towards, we must increase awareness and change misperceptions about the industry through exposure to engaging content and hands-on experiences. By offering high school and postsecondary mentorships, you will be helping prepare students for challenging, rewarding and lucrative careers in manufacturing. After all, many of the same kids you reach out to today will become the future of the company you’ve worked so hard to grow. Together, we can change perceptions, one student at a time. Please share this article with colleagues to spread the word, and contact RBT CPA’s dedicated team to have a deeper conversation about youth outreach you can get involved in.

Dealing With Delayed Payments During a Pandemic

Remember the good old days when you completed a construction job without a hitch and got paid on time for your work?

Yeah, neither do we. Historically, high upfront costs and razor-thin margins have made it difficult for contractors to pay what they owe to their subcontractors and suppliers before they’ve been paid themselves. The result? Everyone has to wait to get paid until job requirements are met and obligations are fulfilled. The 2020 National Construction Payment Report found 80% of companies surveyed spend a significant portion of their workweek chasing down payments and only 50% of construction businesses say they receive payment within 30 days of invoicing. Today, many contractors are faced with the added stressor of huge payment delays from current clients who claim they can’t pay because of the pandemic. We know, this scenario sounds like the cherry on top of an already problematic year. But don’t panic, there are steps you can take to protect your business before you fall into a messy financial and legal battle.

Contractors should spend extra time reviewing their submissions for payment.

Spend additional time upfront to ensure language is concise, and that the backup your client is requesting is clearly stated. A well-crafted contract will eliminate confusion about payment terms and enforce your payment rights. The contract should specify the scope of the work, payment schedule, and legal repercussions of late payments. Remember: your lien rights are designed to protect you. For over two centuries, the mechanics lien has been empowering materials suppliers, contractors, subcontractors, and other construction stakeholders with the most effective weapon they can wield against delinquent, non-paying clients. You want to get liens filed on anything that’s unpaid or late. A more proactive move is to ensure your lien rights are protected at all times as you get more work.

Consider converting to digital invoicing and payment solutions.

Taking advantage of technology helps streamline the entire process and often means contractors get paid faster. Every second that passes after a job is completed is time where there is a receivable with no cash flow. When customers pay with the click of a mouse instead of waiting a week for the mail and checks to clear, your business is generating cash faster which allows you to focus more energy on growth and leads and less on covering bills and payments.

Increasing your cash cushion as much as possible will set you up for success.

Obtain working capital loans, monitor new opportunities for SBA programs and new stimulus money. Try to get credit terms extended with suppliers and research third parties that offer longer credit terms for suppliers. At RBT, our goal is to help you feel empowered to get what you’ve earned and that means preparing for unpleasant obstacles down the road before they strike.

When you walk on to a construction site, there is an entire community of stakeholders on the job. Every person who touches your business is impacted by COVID-19 in some way, and we know you are in a unique position. You’re tasked with juggling a lot of moving parts and personalities at play with the end goal of getting paid for the hard work your team has completed. While illnesses, quarantines, and local regulations have exacerbated an existing industrywide issue, we hope you can use some of this advice to better prepare yourself for the pitfalls ahead. When you find yourself in a challenging scenario and you’re not sure who to turn to, please know you can call our dedicated professionals for a personalized consultation.