STA July/August 2014 Newsletter

1July/August 2014

NYC Helmets to Hardhats Dedicated to Helping Veterans Find Future in Construction

SUBCONTRACTORS NEWSBringing New York’s Union Subcontractors Together to Build a Stronger Construction Industry

July/August 2014

2 President’s Message

3 NYC Helmets to Hardhats Provides Thousands of Trained Veterans to Subcontractors

5 Revised New York City Construction Safety Code To Be Implemented Soon

6 Mayor de Blasio Appoints New Buildings Commissioner

7 Save the Date! STA General Membership Meeting, Oct. 1

8 Liquidating Agreement Strategies – Don’t Let The Owner Slip Away

12 STA Member Profile: United Iron, Inc.

16 Fraud Detection/Prevention And Insurance Coverage

22 See the Captain for the Last Time at Yankee Stadium with the STA Discount Code!

IN THIS ISSUE

Email Feedback to the STA Office

P R E S I D E N T ’ S M E S S AG E

STA Subcontractors News2

As this is my inaugural President’s Message, I would like to take this opportunity

to thank the membership of the STA for their continuing ongoing support of our

organization.

Remember Nothing Happens Without Subcontractors

As most of you know, I have been an active member of the association and a

member of the Board of Directors for many years now and I look forward to working with friends

and colleagues in my new role. I would like to set some goals or directions that we can accomplish

together, namely prompt pay, prompt issuance of change orders, standardizing safety requirements on

all projects, 240/241 Reform, onerous contract requirements, stronger participation by our members,

more participation with associations, items that will make it a better industry for all subcontractors,

contractors, owners, agencies and organizations.

I would like to sincerely thank Jerry Liss, our outgoing President, for his service, leadership and the

professional stature he has brought to the industry and to the surrounding issues that are important

to subcontractors.

I am also pleased to welcome the new Commissioner at New York City’s Department of Buildings, Rick

Chandler, to his new role, and I know that the entire construction community looks forward to working

with him.

As you will see in this issue of the STA newsletter, we are pleased to highlight our partner, Helmets to

Hardhats, an association that continues to assist in placing qualified veterans into construction jobs in our

region—as this is a priority for our membership and our industry and we appreciate their contribution to

our workforce.

Thank you to all who supported our Annual Awards Dinner in May, our golf outing in June, and our

various programs throughout the year. We have a full calendar of meetings and events kicking off this

fall, prepared by STA Board of Directors member James Flynn of Independent Temperature Control.

I look forward to working with all of you in advancing the STA as New York City’s premier resource

for subcontractors.

Sincerely,

Robert Ansbro

President

3

NYC Helmets to Hardhats Provides Thousands of Trained Veterans to Subcontractors

July/August 2014 3

NYC Helmets to Hardhats, Inc. (NYC H2H) is a non-

profit organization dedicated to positioning military

veterans in building trades apprenticeship programs

throughout New York City. In addition to placing

candidates within construction training programs,

NYC H2H is committed to situating veterans and

transitioning military personnel in managerial,

supervisorial, administrative and clerical positions

within the construction industry.

As a subcontractor, human capital is a major asset.

Military veterans exhibit intense dedication to their

civilian careers and NYC H2H can be a vital resource to

develop a veteran workforce.

NYC H2H will partner with subcontractors for all their

placement needs and its process is simple:

1. Veteran candidates register on the NYC H2H website

(www.helmetstohardhats.org).

• Registration requires basic contact information

(name, address, phone number and email) and a

current resume or the candidate must complete

a resume profile using the online resume builder.

2. Any veteran that is registered within New York

or New York City is contacted by NYC H2H and

goes through a rigorous screening process.

3. NYC H2H then matches candidates with employers

based on character, civilian experience, military

experience and career goals.

The advantages of working with NYC H2H include:

• Thousands of leading, industry-specific veteran

candidates.

• Initial and thorough job screenings.

• Assistance in managing the job application process.

• A streamlined recruitment process.

• A continuous pipeline of veteran candidates for

subcontractors.

Since 2003, NYC H2H has helped place over 2,000

military veterans in building trades apprenticeship

programs. NYC H2H’s mission is ambitious and it needs

continuous support to expand. Candidates frequently

thank NYC H2H for not only placing them into a job,

but for placing them into a career. NYC H2H is essential

for every subcontractor’s veteran placement needs.

https://www.helmetstohardhats.org/

http://www.nych2h.org/

BY KELLY SAELI, DIRECTOR OF OPERATIONS, NYC HELMETS TO HARDHATS, INC.


4 STA Subcontractors News

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Revised New York City Construction Safety Code To Be Implemented Soon

July/August 2014 5

When the appointment of Rick Chandler as the new

Commissioner for the New York City Department

of Buildings (DOB) was recently announced, much

emphasis was placed on his role in implementing the

City’s revised Building Code which was passed by the

City Council and signed by Mayor Bloomberg last year.

The new Building Code is scheduled to be implemented

on October 1, 2014.

While the revised New York City Building Code will

affect all phases of construction, special attention will

be focused by the construction industry on Chapter 33

which regulates and enforces safety in construction

operations. While at the Building Trades Employers’

Association (BTEA), I had the honor to co-chair the

Department of Buildings industry advisory committee

for Chapter 33. Composed of stakeholders from

various facets of the industry such as contractors, real

estate owners and developers, government officials,

architects, engineers, unions and safety professionals,

the Chapter 33 advisory committee dissected every line

of the safety code over a period of 20 months. After

much discussion and debate, a consensus document

was forwarded to the Department of Buildings and

subsequently included in the overall New York City

Buildings Code that was enacted into law.

The soon to be implemented Chapter 33 will not have

a large number of significant changes in prescribing

safety operations on construction sites throughout New

York City. Most changes in this part of the Code will

consist of fine tuning the language that was developed

during the 2008 Building Code review process.

Hopefully, the transition to the new Safety Code will

be relatively uneventful and seamless come October 1.

As he oversees the implementation of the new code, I

would urge Commissioner Chandler to instill a “common

sense” rather than “punitive” approach within DOB to

the enforcement of the new code. Instead of adding

to the already high cost of construction in New York

City, code enforcement activities should perhaps look

to remedy minor violations before moving to fines

and stop work orders. That is not to say that repeat

and serious violators should not be subject to serious

financial and site sanctions however.

In order to assist our members in gaining a clear

understanding of the new Safety Code, the STA will be

cosponsoring, along with the BTEA, a half day seminar

on this subject on September 23 at the McGraw-

Hill Gallery in New York City from 8:00 a.m. to 1:00

p.m. The presenters at this seminar will be staff from

the New York City Department of Buildings. I urge

the members of the STA to take advantage of this

educational opportunity and gain further knowledge

on this important part of the construction process.

Please click here for more information or to register for

this event. For questions, please contact Lena Vega at

the BTEA at [email protected].

BY HANK KITA, EXECUTIVE DIRECTOR, SUBCONTRACTORS TRADE ASSOCIATION



6

On July 17, 2014, New York City Mayor Bill de Blasio appointed Rick Chandler as the new Commissioner of the Buildings Department.

Mr. Chandler has served as assistant Vice President of facilities at Hunter College in New York following his position as a Borough Commissioner of Queens, Brooklyn and the Bronx from 1995-2002.

He was part of the Buildings Department teams that inspected structures surrounding Ground Zero after 9/11 and the damages at Hunter College following

Hurricane Sandy. Mr. Chandler is a professional engineer and brings with him many years of large-scale management experience and expertise in the building code and zoning.

Please see the following link for more information on newly appointed Commissioner of the Buildings Department Rick Chandler.

For more information, please visit http://observer.com/2014/07/bill-de-blasio-appoints-buildings-commissioner/


Mayor de Blasio Appoints New Buildings Commissioner

Mayor Bill de Blasio, left, and new Buildings Commissioner Rick Chandler, right

7July/August 2014

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Where: The Automotive Center for Education and Training 15-30 Petracca Place Whitestone, NY 11357

$65 for Members ($70 at the door) $75 for Non-Members

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8

It is clear that owner-caused acts and omissions frequently damage a subcontractor. However, to whom can a subcontractor turn to for compensation for owner-caused damages? The subcontractor is precluded from bringing suit directly against the owner to collect damages because it does not have a direct contractual relationship, that is, it is not in “privity of contract” with the owner. Furthermore, ordinarily a general contractor is not responsible for purely owner-caused problems because, as held by New York’s Court of Appeals, a general contractor is not liable for the actions or omissions of an owner. This can create a “privity trap” for a subcontractor. If an owner’s acts and/or omissions, solely, led to a subcontractor’s increased costs, the subcontractor will need a way to bridge the privity gap to hold the owner accountable.

In many states and under federal law, a subcontractor may commence an action against the general contractor for owner-caused damages and the general contractor may, in turn, sue the owner. These lawsuits will allow the rights and liabilities of all the parties to be sorted out in one lawsuit. In New York, if the general contractor is sued by a subcontractor, it may be able to successfully assert the defense that the source of any liability for a “solely owner-caused” issue is the owner’s exclusive responsibility.

To address these privity concerns, subcontractors and general contractors commonly enter into “liquidating agreements” to address the issue of owner-caused damages. A liquidating agreement is an agreement between the general contractor and its subcontractor, which allows the general contractor to

sue the owner on behalf of its subcontractor. New York courts do recognize liquidating agreements as a valid mechanism for bridging the privity gap between an owner and subcontractor, but only if very specific provisions, as set forth below, are included.

In a liquidating agreement, the general contractor and its subcontractor agree to liquidate the damages in the amount, if any, which the general contractor recovers from the owner for the damages the subcontractor incurred as the result of the owner’s acts or omissions. Therefore, whether a general contractor sues the owner, or the subcontractor sues in the name of the general contractor, under such a liquidating agreement, the general contractor will not be required to pay more money to the subcontractor than it collects from the owner.

As held by New York courts, liquidating agreements must have all three of the following basic elements:

1. The imposition of liability upon the general contractor for the subcontractor’s increased costs, thereby providing the general contractor with a basis for legal action against the owner;

2. A “liquidation of liability” in the amount of the general contractor’s recovery against the owner;

3. A provision that provides for the ‘pass-through” of that recovery to the subcontractor.

Note the first element in particular. For a liquidating agreement to be valid, it must expressly state that the general contractor acknowledges its liability to


Liquidating Agreement Strategies – Don’t Let The Owner Slip Away

BY HENRY L. GOLDBERG, MANAGING PARTNER, GOLDBERG & CONNOLLY AND STA LEGAL COUNSEL

continued on page 10

9July/August 2014

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the subcontractor (at least to the extent it collects on its sub’s behalf from the owner). Without this express “magic language,” a liquidating agreement is unenforceable in New York.

A liquidating agreement may take many forms. It may be memorialized by language in a subcontract itself or in a separate written agreement. Moreover, courts have even recognized liquidating agreements that contain language from previous/multiple documents executed by the parties at different times. Therefore, provided all the strictly required elements are present, New York courts have allowed for creativity in the drafting of liquidating agreements, so that the subcontractor and the general contractor can tailor a case-specific liquidating agreement to achieve fair and satisfactory results.

The liquidating agreement benefits both the subcontractor and general contractor. For the subcontractor, it bridges the “privity gap” and allows the subcontractor to either sue in the name of the general contractor, or creates an obligation of the general contractor to “pass through” the subcontractor’s claim in a lawsuit against the owner. The benefits to a general contractor are also clear. It receives its subcontractor’s release of all claims it may have against the general contractor beyond what the general contractor might collect from the owner on behalf of its subcontractor. Therefore, the liquidating agreement helps to efficiently allocate potential liability, and to avoid the expense and waste of duplicative or inconsistent litigation.

G&C CommentaryLiquidating agreements are commonly utilized in the construction industry to allocate liability among subcontractors, general contractors and owners, despite a lack of contractual privity among all of the parties. Such agreements are accepted by New York courts and are permitted as a basis for recovery. Unfortunately, we rarely see properly drafted, and thereby enforceable, liquidating agreements in our practice.

It is prudent for a subcontractor to enter into a liquidating agreement with its general contractor to preserve and enforce its rights against owner-caused impacts, changes or delays. A liquidating agreement gives a subcontractor access to the actual cause of such damages, the owner, which would otherwise be unavailable to the subcontractor. A liquidating agreement could also prevent a potential windfall for an owner. Don’t lose a valuable claim against an owner due to the failure to obtain a liquidating agreement or because of a poorly drafted liquidating agreement.

Mr. Goldberg can be contacted by email [email protected] or by telephone at 516-764-2800.

Jeffrey I. Scott, an associate with Goldberg & Connolly, assisted with the preparation of this article.

© Goldberg & Connolly 2014

This article has been prepared for informational purposes only. It is not a substitute for legal advice addressed to particular circumstances. You should not take or refrain from taking any legal action based upon the information contained herein without first seeking professional, individualized counsel based upon your own circumstances. The hiring of a lawyer is an important decision that should not be based solely upon advertisements. Before you decide, ask us to send you written information about our qualifications and experience.

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continued from page 8


11July/August 2014

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12

Although STA member United Iron is currently a top steel subcontractor in New York, their work in the trade industry began years ago in Italy, where current owner Randy Rifelli’s grandfather, Guyatano Rifelli, was an ironworker who specialized in custom decorative railings.

United Iron, now in its 55th year, has over 50 employees in all five boroughs and has done work on big-name projects like Brooklyn’s Navy Yard and the Museum of Art and Design in Manhattan. The company specializes in the fabrication and erection of structural steel, steel stairs, miscellaneous metals and architectural metals.

Randy, who succeeded his father as the head of United Iron, started at a young age in the steel shop and in the field erecting steel up to his graduation with a degree in Civil Engineering from Villanova University in Pennsylvania. He took a job at Chicago Bridge and Iron, building and designing nuclear reactor plants after college, and then went on to work at John T. Brady as a field engineer, working on the JFK Air Mail Facility in New York and the Stamford Town Center Mall in Connecticut.

With his engineering experience in hand, Randy returned to United Iron, received his masters in business from Iona College and changed the way the company operated by advancing their technology, job costing and estimating.

Randy sits on the STA Board of Directors and has found great value in United Iron’s membership.

“I found the STA to be a learning facility and that’s when I decided to join-- to this day I still use information I learned from meetings over 30 years ago,” Randy said, citing General Membership Meetings as educational vehicles.

He also finds the networking opportunities that the STA provides as a tool to increase United Iron’s business.

“You can meet directly with many general contractors, construction managers and even other subcontractors by being part of the STA, that’s been a great opportunity to broaden United Iron’s sales base,” he said.

You can contact Randy Rifelli at [email protected].

United Iron, Inc.6 Roslyn PlaceMount Vernon, NY 10550T: 914-667-5700F: 914-667-5925www.unitedironinc.com


STA Member Profile: United Iron, Inc.

BY SAMANTHA SWEENEY, SUBCONTRACTORS TRADE ASSOCIATION

13July/August 2014

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Fraud Detection/Prevention And Insurance Coverage

BY LISA M. RICCIARDI, CPA, CCA, PARTNER, CASTELLANO, KORENBERG & COMPANY


In the present business environment, owners and managers of closely held enterprises have to be both astute at managing day-to-day operations and also acutely aware of the need to safeguard the assets which have already been accumulated. The following data will provide you with some guidance regarding fraud detection/prevention and insurance coverage.

EMBEZZLEMENTThe typical embezzler is between the ages of 26 and 45, has above average intelligence, and has worked his or her way into responsible positions, making theft easier.

Weaknesses in internal controls of a company can help embezzlers flourish. The weaknesses include failure to segregate jobs, inadequate recordkeeping, and no performance reviews of the employee.

The following are some danger signs of embezzlement:

• Unusual rise in accounts receivable write-offs.

• Unexplained differences between physical

inventory counts and inventory records.

• Missing files.

Weaknesses in ControlsSome of the most commonly overlooked weaknesses that make embezzlement easier for the dishonest employee are as follows:

• Checks received in the mail go directly to the person

who records, posts them and prepares the deposits,

with no independent record being made of the

receipts.

• Bank statements go directly to the person who

reconciles them.

REVIEW OF COMPANY’S INSURANCE COVERAGEIn these days of rapidly changing values and increased risks, a periodic insurance review is highly recommended.

The following checklist may help you identify areas of vulnerability in your company’s insurance coverage.

Property and Casualty Insurance

1. Liability

• Are the policy limits high enough to cover the

company’s exposure and protect its assets?

• Are key employees included as additional named

insureds?

2. Property

• Should any exposures be self-insured?

• Do actual property values greatly exceed the

insured values?

3. Automobile

• Are the policy limits high enough? Should an excess

liability policy be purchased?

• Are the deductibles for collision and comprehensive

coverage realistic?

4. Fidelity

• Is there sufficient protection against employee

dishonesty?

Employee Benefits Plans

1. Major Medical

• Are the maximum benefits sufficient to take care of

catastrophic illnesses?

• Are premiums being paid on employees who are no

longer with the company?

2. Salary Continuation (Sick Pay)

• Are the plan benefits realistic?

• Does the plan include employees whom the


continued on page 18

17July/August 2014

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We have attached a list of some common embezzlement methods.

Castellano, Korenberg & Co., CPA’s will be pleased to discuss any questions you may have regarding the safeguarding of your assets.

SOME COMMON METHODS OF EMBEZZLEMENTA. Misappropriation of Cash ReceiptsCash salesCovered by:

1. Not recording sales; destruction or omission of sales

slips.

2. Tampering with cash register tapes; understating

footings of cash sales reports.

Collections on accounts and notes receivableCovered by:1. Lapping2. Kiting, or inter-bank check transfers.3. Entry in customer’s accounts only, concealed by:

• Over-footing of cash receipts book and tampering

with adding machine tapes.

• Tampering with bank statements, pass books, and

customers’ statements.

Receipts of miscellaneous income and creditsCovered by:1. Not recording.2. Recording as exchange item.

B. Misappropriation of DisbursementsCash on handCovered by:1. Cashing vouchers a second time.2. Raising amounts on legitimate vouchers.

Cash with banksCovered by:1. Fictitious creditors’ invoices (checks cashed through

petty cash, secret or falsely named bank accounts, or forged endorsements).

2. Increasing amounts on creditor’s invoices; refund of

excess pocketed or split with creditor.

C. Securities

• Unrecorded illegitimate sale, or hypothecation for

speculation.

• Utilizing securities of one company as cover for

appropriation of securities of another, by officer or

both.

D. Merchandisellegitimate removal of merchandise.Covered by:1. Overstatement of lists of physical inventory.2. Unauthorized requisitions.3. Entry only in stock records of fictitious purchase

returns.

Reporting as received, items not received (usually associated with collusion between the creditor and the receiving clerk)

E. Miscellaneous

• Undercharging customer.

• Allowing officer or employee free services or

merchandise, or at reduced rate, when not entitled

thereto.

About Castellano, Korenberg & Co., CPAs, P.C.Castellano, Korenberg & Co. is a full-service accounting firm providing audit, accounting and tax services to privately held clients throughout the New York metropolitan area. The firm’s clientele includes individuals and companies spanning various industries including construction, manufacturing, distribution and real estate. Castellano, Korenberg & Co. has built a reputation for delivering professional expertise and personal attention to every client. The firm’s experienced professionals have provided timely and intelligent solutions based in their comprehensive financial and industry-specific knowledge since 1991. For more information, visitwww.castellanokorenberg.com.

Lisa Ricciardi, CPA, CCAPartnerCastellano, Korenberg & Company313 West Old Country Road, Hicksville, NY 11801Tel: 516-937-9500http://www.castellanokorenberg.com/index.html

18July/August 2014

continued from page 16

19July/August 2014

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22

The Subcontractors Trade Association (STA) and the New York Yankees have partnered to offer STA members discounted home game tickets at Yankee Stadium for the remainder of the 2014 season. Tickets will be available at 10%, 25% and 50% off for select games.

To search for tickets, please CLICK HERE and enter the special promotional code STA when prompted.

Take advantage of this offer to see five-time World Series Champion and 14-time American League All Star Derek Jeter before he retires!

If you have any questions or comments, please contact Samantha Sweeney at [email protected] or (212) 398-6220.


See the Captain for the Last Time at Yankee Stadium with the STA Discount Code!

23July/August 2014

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BUILD WITH

CONFIDENCE


Subcontractors Trade Association 1430 Broadway Suite 1600 New York, NY 10018T: 212.398.6220 F: 212.398.6224e-mail: [email protected] website: www.stanyc.com OfficersRobert J. Ansbro, President The New York Roofing Company Robert Weiss 1st Vice President A.J. McNulty & Co. Inc. Peter Cafiero 2nd Vice President Island Painting John A. Finamore Treasurer Jordan Panel Systems Joseph Leo Secretary Atlantic Contracting & Specialties, LLC

Active Past PresidentsGreg S. Fricke, Jr.Leonard Powers, Inc. Jerry LissA. Liss & Co. Inc. Alan Nathanson (Honorary)Forsythe Plumbing & Heating Corp. Lawrence RomanWDF, Inc. Arthur RubinsteinSkyline Steel Corp.

Robert SamelaA.C. Associates Gary Segal (Honorary)Five Star Electric Corp. Lawrence WeissA.J. McNulty & Co., Inc. Scott RivesWoodworks Construction Co, Inc. Board of DirectorsJoseph Azara Jr. C.D.E. Air Conditioning

Christine Boccia JD Traditional Industries Dan J. DeVita Penava Mechanical Corp. John Dierks Dierks Heating Company, Inc Andrew Drazic ATJ Electrical Brent Fleisher Environet Systems James Flynn Independent Temperature Control Patrick Gallagher BP Mechanical Corp. Stephen Gianotti Arcadia Electrical Co., Inc. Sandra Milad Gibson Milad Contracting Corporation Craig Gilston Gilston Electrical Contracting Gloria Kemper Recon Construction Corp.

Randy Rifelli United Iron, Inc. Guy VandeVaarst Five Star Electric Corp. (no longer at Empire System Solutions) John Villafane Eldor Electric Upcoming Events

Executive Committee MeetingThursday, September 48:30AM Board MeetingTuesday, September 95:30PM General Membership MeetingWednesday, October 15:30PM

trengthen New York’s construction industry

each member firms to increase business opportunities

dvocate to preserve subcontractors’ rights

O U R M I S S I O N S TAT E M E N T

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Manhattan Long Island212-661-6166 516-256-3500www.grassicpas.com

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For more than 30 years, Grassi & Co.’s Construction Practice has been assisting contractors, engineers, suppliers and distributors minimize their tax liability, uncover potential savings, and build a successful future.

STA July/August 2014 Newsletter

Documents

Transcript of STA July/August 2014 Newsletter