PRESIDENTIAL ADDRESS

I hope everyone had a nice summer vacation and time to relax with their families. Now “we” have to get back to work. WELL, maybe after the annual IFCA Golf Outing—I want to thank our sponsors and members for attending and for supporting this industry event!

Anyway, back to business! This past spring IFCA started to support House Bill 2400, and I want to thank all of the members for writing to their Senators to seek support from them to vote in favor of this bill. Hopefully, this fall, Pennsylvania will pass it into law (New Jersey already passed a similar bill into law back in 2007). House Bill 2400 proposes to make the misclassification of employees a criminal offense. Why you ask???? Because when an employee is misclassified and sent a 1099 they do not pay social security, Medicare, workers’ compensation, or unemployment taxes — the combination of these is at least a 30% savings in labor costs. How can we compete against those contractors who consider their employees to be labor subs when they aren’t???? House Bill 2400 redefines the definition of employees, adds penalties for the misuse of 1099s, etc., etc.

PLEASE continue to help IFCA support this important bill — its’ passage is crucial to all legitimate contractors!!! Keep sending letters to your Senators. If you have any questions about how to communicate with them or wish to view House Bill 2400, please do not hesitate to contact Kim Clerkin ... she will be happy to provide you assistance concerning this matter.

Respectfully submitted by Ray Shoemaker, Raymond Shoemaker, Inc.

Disclaimer: While this newsletter is designed to provide accurate and authoritative information on the subjects covered, IFCA is not engaged in rendering legal, accounting, other professional or technical advice. IFCA cannot warrant the accuracy of the information contained in this newsletter and disclaims any and all liability which may result from publication or of reliance on the information provided herein. If legal advice or other expert assistance is required, the services of a competent, professional person should be sought.

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UNION UPDATE

METROPOLITAN REGIONAL COUNCIL

Edward Coryell, Executive Secretary-Treasurer/Business Manager

The Federal Reserve Bank of Philadelphia is one of 12 Regional Reserve Banks in the United States. The Federal Reserve Bank of Philadelphia helps formulate and implement monetary policy, supervises banks and bank holding companies, and provides financial services to depository institutions and the Federal Government. The Philadelphia Fed serves the Third District, which is composed of Eastern Pennsylvania, Southern New Jersey, and Delaware.

The Economic Advisory Council includes representatives from tourism, health-care, retail, and food industries. The council’s 14 members represent the region’s economic base and geographic area and will advise Federal Reserve official’s on regional business conditions and economic issues that have an impact on the marketplace. Edward Coryell is the only member on the Council from organized labor.

AT IFCA, we are proud of Ed’s appointment and congratulate him!!!

PLEASE CONTINUE TO send in your JOB STARTS. QUESTIONS about our Pin Pointing Program can be directed to Rob Naughton (215-569-1634) or to Kim Clerkin @ the IFCA office.

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INTERNATIONAL UNION OF PAINTERS & ALLIED TRADES DISTRICT COUNCIL 21 ("DC 21")

Harry Williams, Business Manager/Secretary Treasurer

There will be an employers’ breakfast meeting, hosted by District Council 21, on Wednesday, September 17 in the Fountain Room, 2980 Southampton Road, Philadelphia, PA, at 10:00 a.m.. The purpose of this meeting is to discuss contract rules and industry concerns raised by our signatory employers.

District Council 21 has been working to achieve full “Accreditation” from the Council of Occupational Education (COE), an accrediting agency for the Department of Education. The COE will vote on this matter in November ... we will keep you informed of this very important vote!!!

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LABORERS' DISTRICT COUNCIL ("LDC")

Ryan Boyer, Business Manager

IFCA congratulates the new Business Manager for Laborers’ District Council — Ryan Boyer. Although this is a new appointment for Ryan he isn’t a stranger to the UNION. We also congratulate James Harper, Sr. on his appointment as Secretary-Treasurer. We look forward to working with LDC’s new team!

The LDC is launching a new Benefit Contribution System (BCS). The system will become available to all employers on October 1, 2008. Contact the association office for printed details.

IFCA is available to assist any contractor member with respect to labor relations-contact Kim Clerkin, the Executive Director (610-225-1050).

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JUST THE FACTS

The line-up for Guest Speaks at our monthly General Membership meetings is as follows:

• October 6, 2008: There will be a meeting of the Board of Directors and General Membership. Guest Speaker—TBD.
• November 3, 2008: There will be a meeting of the Board of Directors and General Membership. Our Guest Speakers will talk to us about OSHA — one speaker is an OSHA representative and the other is our attorney.
• December 2008:There will NOT be a meeting of the General Membership.

EDUCATION:

• OSHA TRAINING:OSHA training is available to our members through several sources — the Mid-Atlantic Construction Safety Council, the JAC or District Council 21. For more details, contact the association office.
• COLLEGE COURSES: If you are interested in taking construction-related courses, tuition reimbursement is available to any field or office personnel. In order to be eligible you must work for an IFCA member in good standing or industry contributor and you must send in your Tuition Reimbursement Application to the IFCA office in accordance with our Guidelines. For information about Drexel, contact the Carpenters JAC @ 215-824-2300. For information regarding the community colleges, contact the Consortium @ 215-218-3886. Any accredited university qualifies too as long as you register for construction-related courses and adhere to IFCA’s guidelines.
• COMPUTER CLASSES: The association can arrange for you and your office personnel to take computer classes @ DC 21 or the JAC. Scheduling is flexible — we request a minimum of 8 participants. Contact IFCA for more details.

BOND REIMBURSEMENT: Bond reimbursement is available to our members and industry contributors. The carpenters require a $75,000 bond; the tapers’ bond is tiered based on manpower (1-15 is $30, 000; 16-35 is $40,000; over 35 is $50,000). Contact IFCA to discuss reimbursement.

AWCI: IFCA belongs to AWCI which entitles all IFCA members to AWCI’s benefits. Each year, the Foundation of the Wall & Ceilings Industry, a division of AWCI, publishes an industry paper. The newest publication is called “Green Building—Understanding, Bidding and Building Green.” You should have received your copy by mail, but if you didn’t, you can go to www.awci.org to download it. It’s worth reading!!!

“Don’t let what you cannot do interfere with what you can do.” -J. Wooden

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HEALTH & SAFETY SEGMENT

electrical safety

Electrical Standards have been on OSHA’S “Top Ten” most frequently cited violations list for the last three years. In 2007, for example, number 7 on the list was “Electrical wiring, methods and equipment for general use”, and number 10 was “General Electrical requirements”. These Standards affect workers in their day to day contact and safe use of electric equipment on job sites. It includes common every day use of tools, extension cords and temporary power.

There are a number of important electrical safety considerations to protect the people on your jobsites. First, Ground Fault Circuit Interrupters (GFCI) should be used with any temporary electric service. Temporary service is anytime you are not using the permanent building service. Check that the outlet being used or the extension cord has GFCI protection. Protect tool and extension cords from damage. As much as possible, keep walking areas, stairs and passageways free of cords. Check cords for cuts, breaks, and cracked insulation. Inspect cords for intact grounding conductors and do not allow multiple plug adaptors.

Keep ladders, duct and conductive materials away from energized circuits. Stay away from fuse boxes, electrical switches, etc. unless you are trained to handle them. Lockout/ tagout procedures should be used for ëlive’ circuits and equipment whenever possible. Identify the chance of electric shock or arc-flash that may be present. Minimize these hazards by guarding and following established ëapproach distances.

Although the increased use of battery/ re-chargeable tools has greatly decreased electrical hazards, working with electricity is still dangerous. Training, planning and awareness can reduce your exposure to accidents, injuries and maybe OSHA citations.

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ROBIN KRAMER & GREEN

Business for sale? Watch out for Scams ...

You’ve spent years developing your business, building its value, enhancing its reputation. Now you’re ready to move on. You place a “Business for Sale” advertisement in the Internet classifieds, and the next day an eager — overly eager — buyer approaches you with a deal that seems too good to be true. The buyer offers full price and wants to structure the deal as a stock sale. A stock sale means the buyer will get the entire business, including all its assets (cash, checking accounts, receivables, inventory and so on) at closing. The buyer doesn’t ask tough questions about the firm and seems in a hurry to close the sale. He or she offers a 10% down payment and says the full balance will be paid off within a year.

Seller beware!!! Business owners and regulators have found that scam artists use these types of transactions to strip value from companies, pulling out cash, and leaving the seller with a fistful of worthless stock. Within days of closing the sale, the buyer factors (sells) the receivables for cash, runs up company credit cards, sells off inventory, and empties cash accounts. The firm’s creditors don’t get paid. Your formerly prosperous business becomes an empty shell.

How can you avoid these types of scams when selling your business? Here are a few suggestions.

• Perform an extensive background check on any potential buyer, including a review of the person’s credit reports, litigation history, tax liens, and so forth. A skilled attorney can often help with this research.
• Beware of sales that go too smoothly. Legitimate buyers will perform due diligence, asking tough questions, inspecting financial records, and calling customers and vendors. If the buyer wants to close the sale in a hurry and doesn’t seem interested in the firm’s ongoing prospects, beware!
• The buyer must meet deadlines and supply all requested data in a reasonable time. If he or she is always late, move on. Find a buyer who’s serious about the transactions.
• Before turning over ownership, require a substantial percentage of the purchase price up front. Some advisors suggest 50% in cash at closing. Serious buyers, who want to continue growing the firm, will put their money on the line.

If you need help navigating the sale of your business, call Robin, Kramer & Green.

Robin Kramer & Green, LLP
425 Commerce Dr.
Ft. Washington, PA

215-641-8300 (O)
215-641-8335 (F)
info@rkgcpa.com

IFCA MEMBERS RECEIVE DISCOUNTED RATES-GIVE KIM A CALL!!!

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KIM Says...

2008 annual Industry Golf Outing

We had a fabulous day for our annual outing and thank all participants. Special recognition goes out to our 2008 Sponsors:

Armstrong Ceilings *** Bell/Shore Supply *** Keith Bush Associates *** Grabber Const. Products *** Kamco Building Supply *** Kass Industrial Supply *** Geo. F. Kempf Supply *** Steven Kempf Company *** Marino/Ware *** Marjam Supply Company *** S & S Recourses, Inc. *** Specialty Products & Insulation *** Stevens & Lee *** USG Building Systems *** Carpenters Union of Philadelphia & Vicinity *** I.U.P.A.T. District Council 21

Beasley Reece joined us to meet and greet our guests! He was able to fit in a little golf too but only to help out “the needy not the greedy” golfers. He was great fun and we look forward to our next encounter with Beasley, which will be at our 2009 Finish First Awards.

Cedarbrook Country Club’s golf course offers all of our players a challenge. We end our day congratulating those players that out-played the others ... we have 7 levels of prizes ... join me in congratulating IFCA’s winners:

Team Low (63): Raymond Shoemaker, Inc. — Kevin Shawver, Frank Williams, Paul Bennet and Industry Guest Jim Wollner (USG).

2nd Team (63): Aimm Philadelphia Installations — Marty Monteleone, Bob Sullivan, Steve Landis and Industry Guest Mike Tierce (Stevens & Lee).

3rd Team (65): Ceilings Inc. — Tom Clerkin, Geoff Furtaw and Industry Guests Glenn Reilly (Kamco) and Kenny Yakopcic (Marino/Ware).

4th Team (65): Peter Bradley Const. — Pete Bradley, Ron Martin, Tom Kueny and Industry Guest Steve Cardarelli (Geo. F. Kempf Supply).

5th Team (66): Blasz Const., LLC — Gary Blaszczyk, Frank Capecci, Fran Stevens and Industry Guest Mike Dougherty (Kamco).

6th Team (66): Landco, Inc. — Jim Landis and Roger Taylor, IFCA’s Executive Director Kim Clerkin and Industry Guest Greg Snyder (USG).

7th Team (67): Plumbline Const. — John Matter, Andy Uhrik, Edward St. Pierre and Industry Guest Steve Kempf (Steven Kempf Company).

Closest to the Pin went to Steve Landis, Doug Tocco, Joe Kelly and Peter Bradley. Long Drive in the Fairway went to Frank Zepka and Mike Tangradi. Closest to the Line to Bill Cornish.

“I’d give up golf but I have too many sweaters.” Bob Hope

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LEGAL NOTES FROM STEVENS AND LEE

On June 17, 2008, President Bush signed the Heroes Earnings Assistance and Relief Tax (HEART) Act of 2008 into law which amends the Internal Revenue Code and provides tax breaks to military service personnel and their families. Some of the provisions include a tax credit for small businesses that pay a salary differential to employees called up for active duty. Small businesses employing Guard and reserve members may receive up to a $4,000 tax credit to make up salary differences for employees who are mobilized for military duty. The Act also includes an exemption for reservists from the “use it or lose it” rule for unused health care flexible spending account balances. Service members who contribute to an employer-provided flexible spending account can get refunds of contributions at the end of a calendar year, rather than lose the money, if they have been mobilized, since mobilizations could interfere with their ability to spend money as expected.

The law would also modify the Uniformed Services Employment and Re-employment Rights Act (USERRA) to allow the day prior to the date of a service person's death to be treated as the date the employee returned to work for purposes of triggering payment of benefits under a qualified retirement plan. It would permit an employer to make certain contributions to a qualified pension plan on behalf of an employee who is killed or becomes disabled in combat. The law would also make permanent the special rules that permit penalty-free withdrawals from retirement plans. Generally, there is a ten percent withdrawal tax on early distributions from certain retirement plans. However, since reservists called to active duty may need access to amounts that they have contributed to their retirement plans in order to meet their personal financial obligations while serving, the Act would extend the rules that permit active duty reservists to make penalty-free withdrawals from their retirement plans, and a reservist has two-years from the last day of the active duty period to contribute distributions to an IRA.

Any payments voluntarily made by an employer after December 31, 2008, to an employee on active duty for a period of more than 30 days will be treated as “differential wage payments” to the extent the payments represent all or a portion of the wages the individual would have received from the employer absent being called to active military service. Any such payments will be subject to federal withholding rules and will be reportable as W-2 wages (currently differential wage payments are treated as benefits reportable on IRS Form 1099). Moreover, in the retirement plan context, participants receiving differential wage payments must be treated as active employees and the payments treated as compensation for purposes of determining plan benefits.

Submitted by Stevens & Lee (Michael G. Tierce/Theresa M. Zechman).

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LOBBYING EFFORTS

Wolf Block .... submitted by Brian Preski, Esquire
1650 Arch St., 22nd Flr., Phila., PA 19103 (215) 977-2000 • e-mail: bpreski@wolfblock.com

As the summer comes to a close, eyes are once again turning to Harrisburg and the General Assembly to determine what will occur in the final days of the legislative session. The House is scheduled to return to session on Monday, September 15, 2008 and the Senate the following day on the 16th. Please remember that the majority Senate Republicans announced that they will not reconvene the Senate Chamber after the November elections for a lame duck session. The House has not made a similar announcement. Rumors run rampant concerning what will the Senate do if the House returns to session after the election, however, having spent much time with Senate Majority Leader Dominic Pileggi (Delaware County) during the Republican National Convention it was clear that he does not intend to change that decision.

Accordingly, there are only 9 announcedsession days available before the November elections and that leaves very little time to accomplish anything. As I wrote to you last time, national issues surrounding the Presidential election are sure to dominate this abbreviated pre-election session. Indeed a review of the issues that were subject to public hearings over the summer months, it is clear that health-care, fuel prices, energy rate caps and infrastructure funding will be center stage.

With eyes now on the November election, all of the 203 seats in Pennsylvania’s House of Representatives are up for election and 25 of the 50 Commonwealth's Senate seats are up as well. The Presidential McCain-Obama race will dominate all issues, and both parties are planning major get out the vote pushes across Pennsylvania with particular attention being paid to the voter rich nature of Southeastern Pennsylvania.

On the legislative front, matters of particular interest to our members include:
House Bill 2400 (Construction Industry Independent Contractor ). This legislation passed the House on June 9, 2008 and is now in Senate Committee. As you will remember this legislation was directed at employers in the construction industry who cut costs by misclassifying workers as independent contractors. Violators would face criminal penalties. Senator John Gordner, Chairman of the committee, convened a meeting of the interested parties over the summer. Although he has not decided what he intends to do with this legislation he indicated to me that he believed the following were the issues that needed to be dealt with:

• Construction industry vs. an all-in approach - he prefers an all-in approach, but that splits the interest groups and believes it is a heavy political lift for only nine session days. My instincts tell me that it will remain a construction bill only.

• Safe harbor - opposed by union groups but a must for the business community - he prefers a limited safe harbor. This piece can be compromised.

• Penalties - he believes they are far too punitive as currently written. He is probably correct. Pennsylvania has never imposed criminal penalties for this type of action in the past.

• He is concerned with the complete decision making authority of the secretary and would like to see some check and balance on this power. We need to explore his ideas here.

Working with the Majority Chairman is a good start; however, passage of HB 2400 in its current form in the Republican-controlled state Senate is uncertain at best.

- Mechanics Liens - changes proposed by the general contractors remain bottled up in House Committee and appear they will remain that way.

- Certificates of Occupancy and new proposals akin to the existing Maryland Trust Statute - clearly these are pieces that will move to the next session. I have been successfully working with members to garner support for, but election issues and the mere lack of time may push full consideration to early 2009.

A final note of great importance concerning upcoming projects. If you recall, when I reported to you last concerning the passage of the State's Budget there were proposals to add an additional 15 Keystone Opportunity Zones (KOZ) to the Commonwealth's existing program and an environmental stimulus package of $650.0 million was under consideration. Both have passed the General Assembly and have been enacted into law. Currently, the appropriate agencies are working on regulations to administer these programs. Once they are ready to roll out, they should provide a steady stream of business to the AGMA/IFCA membership. The KOZ piece will involve a lot of refurbishing and retrofit work and the environmental piece should be heavy on LEEDS requirements. I will keep you informed as the particulars of these programs are announced.

We will continue to track and report back to the membership of matters of import in Harrisburg.

“ADDING TOMORROWS EVERYDAY ...” Kim & Kevin Galie, Heartwood Building Group, are chairs for this year’s Wishes and Dreams Gala to benefit Cystic Fibrosis. This event is celebrating it’s 15th Anniversary and will attempt to reach the goal of $1 million dollars raised for the Cystic Fibrosis Foundation. To attend the gala on October 17 or to fill out a form to support the 2008-09 Calendar, please contact Kim Galie direct (215-487-7780). The deadline is September 22!!!

CALENDAR

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IFCA

Kimberly A. Clerkin, Executive Director
Valley Forge Office Center
530 E. Swedesford Rd., Ste. 106
Wayne, PA 19087
Phone: 610-225-1050
Fax: 610-225-1052
Email: kim@ifcassociation.com

We're on the web at www.ifcaassociation.com