Real-WoRld Issues affectIng PRofessIonal PlumbeRs and PIPefItteRs of coloRado

CAMPC/MCA Colorado Mark 125 Years by Honoring the Past and Inspiring the FutureIn the Spring of 2013, the CAMPC office received an interesting phone call from a woman proclaiming to have found, in the attic of her newly purchased home in Littleton, eleven framed “In Memoriam” notices for members of The Denver Master Plumbers

Association dating back to 1908. Soon after, she brought them to our office, and we embarked on historical research that led to the remarkable discovery that The Denver Master Plumbers Association, the predecessor organization to CAMPC and its affiliated associations including the Mechanical Contractors Association of Colorado, was formed in 1889. This means that CAMPC/MCA will be celebrating our 125th anniversary in 2014! And, we are possibly the oldest trade association in Colorado.

With this milestone, we have a unique opportunity to honor our history and unique heritage, promote today’s contributions to the industry, local communities and the state’s economy as well as envision the future. Our theme — Honoring our past … Inspiring our future — will allow us

to explore our industry’s and our members’ past, present, and future throughout the year including monthly announcements and historical reflections, culminating with a celebration event in 2014. More detailed information on our plans will soon be shared.

As members, you play a key role in helping us to celebrate this milestone. We invite you to use the 125th proud member logo in your advertising, communications and materials, which will provide support to our efforts to distinguish the association and our members within the industry.

We are also seeking photos taken from any decade of our history, 1880’s – 2013, to be used for anniversary promotion and at the Fall event. Subjects might include photos of: mechanical, plumbing and HVAC company buildings, vehicles, and staff; homes or buildings worked on by members; special industry events and participants.

Job done RIghtJanuaRy 2014

In THIs Issue:

CSA Safety Resources Now Page 2 Available to MCA Members

Legislative Update Page 3

Legal Update Page 4

CAMPC Holiday Page 5 Celebration Photos

Events & Education Page 6

MCAA Officers Attend Page 6 National Student Summit

Mark Breslin Article Page 7

Building Jobs 4 Colorado Page 8

2014 Colorado Construction Page 9 Outlook: Back to Work

Managing Cash Flow Page 10 to Stay Alive – and Thrive

Welcome New Members Page 12

Member Spotlight: Page 13 Refrigerants Inc.

Rick Allen Article Page 14

New MCA Board Members Page 15 and Officers

Dave DaviaEVP/CEOColorado Association of Mechanicaland Plumbing Contractors

Continued on page 2

Colorado assoCiation of MeChaniCal and

PluMbing ContraCtors

2 © 2014 CAMPC Job Done Right • January 2014

CAMPC/MCA Colorado Mark 125 Years ... Continued from cover.

All photos must be submitted no later than February 28, 2014. Original photos, prints or scanned copies are acceptable. Hard copies or CDs containing digital images may be mailed to: CAMPC, Attention: 125th Anniversary Photos, 1114 W. 7th Avenue, Ste. 250, Denver, CO 80204. Please indicate where we should return them.

Note that photos digital copies must be a resolution of 300 dpi or more. Please include a description with the photo(s) noting what or who is in the picture with dates.

Electronic photos (also a resolution of 300 dpi or more) may be emailed to: kim@mpccolorado.org).

If you have questions, please contact the CAMPC/MCA office at 303-757-3956 and ask for Kim.

Thanks to our members for your commitment to the industry and the association! We are looking forward to honoring our past and inspiring our future with you throughout the year.

Members of the MCA Can now Access safety Resources Through an Alliance Program withthe Colorado safety Association (CsA)Access a variety of safety programs including OSHA updates and standards training

UPCOMIng COUrsEs

Jan 15 & Mar 26 8 am – 4 pm First Aid/CPR

January 16 8 am – 9 am Breakfast with OSHA

January 17 1 pm – 3 pm OSHA Recordkeeping Seminar - Colorado Springs

January 21 8 am – 10:30 am Hazard Communication and GHS Training for Employees get in Compliance Today!

Jan 22 & Mar 13 8 am – 4 pm Defensive Driving 6-Hour Basic

January 24 8 am – 10:30 am Danger Signs: Hypothermia and Frostbite

January 29 8 am – 12:30 pm Coaching the Van Driver

February 7 8 am – 10:30 am Job Hazard Analysis

February 12 8 am – 12:30 pm Defensive Driving 4 Hour Basic

March 4 8 am – 10:30 am Colorado Cost Containment Certification Workshop

MCA Colorado announces that, beginning January 1, 2014, the Colorado Safety Association, the state’s leading safety resource for businesses, will provide safety training, at CSA member pricing, to MCA Colorado members.

CSA is located at 1114 W. 7th Avenue, Suite 150, Denver, which is on the first floor in the same building as the MCA Colorado office, making it convenient for members to access the year-round training.

“We are very excited to partner with the Colorado Safety Association which allows us to provide additional safety resources to our membership including quarterly Breakfast with OSHA meetings, safety awards, conferences and a safety media library,” said Dave Davia, executive vice president and CEO of the Colorado Association of Mechanical and Plumbing Contractors, the management company for MCA Colorado.

Courses available to members include occupational safety training programs, an annual safety and health conference, forklift training, defensive driving, OSHA training, first aid, CPR and AED training.

A course list, detailed program information and registration is available at www.ColoradoSafety.org.

Job Done Right • January 2014 © 2014 CAMPC 3

On January 8, 2014 the 69th Colorado General Assembly kicked off its annual 120 day session in Denver. We anticipate that 2014 will be another busy year under the Golden Dome for our industry.

After the unprecedented September 2013 recall of two Democratic state senators from southern Colorado, Democrats maintain only a slim 18-17 majority in the State Senate. Many anticipate that means the Democratic majorities in both the House and the Senate will not pursue an aggressive legislative agenda, as they did in the 2013 session. But that doesn’t mean the 2014 will be boring, by any stretch of the imagination.

Workers Comp – The AFL-CIO is backing legislation to make changes to the state’s workers’ comp system. Labor is looking to allow an injured worker to select their own medical provider rather than picking from the two options they are given today. They are also looking at limiting the ability of employers to require separation from the job as a condition to settling a disputed workers’ compensation claim. Lastly, they are looking to change the incentives built into the work comp system to penalize workers or employers where failure to follow safety procedures results in an injury (an example of a safety policy violation would be if a worker consumed alcohol while at work).

CAMPC, representing MCA Colorado, and others are currently in discussions with the AFL-CIO over their proposals.

Plumbing Inspectors – The Legislature reauthorized the State Plumbing Board in 2013. In doing so, the Legislature authorized the state to perform more inspections previously handled by local governments and the bill funded the hiring of additional plumbing inspectors to handle the increased workload.

On behalf of MCA Colorado, CAMPC is monitoring the progress of this hiring and pushing to speed it up.

Construction Lawsuits – Many local governments in Colorado are growing convinced that the lack of multi-family attached housing units, like condos and townhomes, poses long-term problems for their communities (also known as construction defects). The negative litigation and insurance climate in Colorado is a major cause of the lack of projects for this particular housing product. Local governments are currently working with contractors and the business community to find a solution.

At this time, it is unclear if legislation on this topic will be introduced in 2014, but behind-the-scenes discussions are robust.

State Construction Spending – After years of very low state spending on construction and maintenance of state buildings, the slowly recovering economy is permitting the state to catch up on deferred maintenance and construction projects. The Fiscal Year 2013-14 budget calls for nearly $300 million in state and higher ed projects, a significant increase over recent years. Governor Hickenlooper’s proposed FY 2014-15 budget again calls for boosting state investments in controlled maintenance and capital construction.

MCA Colorado is meeting with legislative budget writers urging them to again spend one-time tax revenues on one-time spending like construction projects.

Retainage in Private Projects – The controversial subject of legislating terms and conditions in construction contracts will return yet again in 2014. MCA Colorado is anticipating legislation from the American Subcontractors Association of Colorado that would cap retainage in private construction projects at 5% and impose interest penalties on late retainage release.

MCA Colorado was a key backer of legislation to cap retainage in public contracts at 5% and is currently reviewing this new legislative proposal.

Water Efficient Fixture Mandates – We expect to see legislation introduced in 2014 that would mandate water efficient plumbing fixtures in order to promote water conservation. The bill, originating from Denver Water, would phase out the sale of lavatory faucets, shower heads, toilets and urinals that don’t meet the EPA “WaterSense” criteria. We are meeting with Denver Water and other interested groups to discuss the legislation.

2014 Agenda for The Colorado General Assembly By Jeff Weist

Jeff WeistWeist Capitol

LeGIsLATIve uPdATe

4 © 2014 CAMPC Job Done Right • January 2014

stop Thief! Government Continues to Chase empoyers Who Commit Workplace FraudDOL will aggressively enforce laws against the misclassification of workers as independent contractors

By sue schaecher

In 2011, the U.S. Department of Labor (DOL) initiated aggressive measures for combating workplace fraud by entering cooperative agreements with other state and federal agencies. Three months into his appointment as the new United States Secretary of Labor, Thomas Perez has pledged that the DOL will remain aggressive in enforcing laws against workplace fraud, including the misclassification of workers as independent contractors. Every business should review its independent contractor relationships periodically for compliance with applicable legal standards. The cost of defending audits and liability for violations can easily outweigh the cost of compliance.

Misclassifying employees as independent contractors violates multiple federal and state laws. An employer who wrongly treats an employee as an independent contractor fails to make or keep employment records, pay minimum wage or overtime, provide workers’ compensation insurance, contribute to unemployment insurance or pay federal, state, and local employment taxes as required by law. Misclassification also denies employees access to employee benefits such as health insurance, retirement plans, various forms of leave, and protections to which they are entitled including family and medical leave, other mandated leave and prohibitions against discrimination and retaliation.

The DOL’s Wage and Hour Division has written agreements with the Internal Revenue Service and with 15 states, including Colorado, to share information and cooperate in investigations of workplace fraud. The Division shares its misclassification findings with the IRS and exchanges information with states and other federal agencies responsible for enforcing these laws. In the past two years, the Division has nearly doubled the back pay amount it has collected for misclassified workers. Because of the agreements, an audit or complaint of misclassification showing violation of one law can lead to audits and investigations by multiple agencies and result in multiple penalties under multiple laws. The liability can be substantial. No matter who raises it or how large or small it may initially appear, any complaint about an employer’s classification of workers must be taken seriously from the start.

Complicating the issue is the fact that tests for independent contractor status vary among these laws. For example, under the Colorado Employment Security Act, service an individual performs for another person or business is deemed to be employment unless it is shown that the individual is free from control and direction in the performance of the service and is customarily engaged in an independent trade, occupation, profession or business related to the service performed. A written agreement can create a rebuttable presumption of independent contractor status if it properly addresses nine criteria and contains certain language. The Fair Labor Standards Act applies an “economic realities” test that looks for the worker’s investment and opportunities for profit and loss. The Internal Revenue Service considers

Sue SchaecherAttorneyFisher & Phillips, LLP

1801 California StreetSuite 2700Denver, CO 80202

Continued on page 6

LeGAL uPdATe

Every business should review

its independent contractor

relationships periodically for

compliance with applicable

legal standards. The cost of

defending audits and liability

for violations can easily outweigh

the cost of compliance.

Job Done Right • January 2014 © 2014 CAMPC 5

CAMPC Holiday Celebration On November 8, 2013, CAMPC held its annual holiday party along with co-hosts SMACNA, NECA and HARP.

Here are some of the photos from the event with nearly 250 attendees.

Thanks to Colorado Construction & Design Magazine for providing the below photos.

rob Berry and Liz Couture, Executive Director, Colorado safety Association

(L) Charlie Hushek, CsU, MCA, student Chapter; Cody White, CsU, MCA, student Chapter, Vice President, programming with randy Baumgardner, state senator

Al stone, Karen Burgwald and Tom stone from Braconier Plumbing & Heating

Tim richter, Tom stone and scott Calahan,

Braconier Plumbing & Heatiing

Arlene and Henry Vera, northwestern Electric

Thanks to Kellie Coughlin Photography for providing the below photos.

CsU MCA student ChapterKirk nelson & Tony shaffer, Commercial Design Engineering

Larry and Terry Bell, Bell Plumbing & Heating Jeff Weist & Laura Long from Weist Capitol group The Bluzinators Band

6 © 2014 CAMPC Job Done Right • January 2014

events & educatIon For more information about any of the activities listed below contact Ann Woosley at (303) 757-3956 or ann@mpcColorado.org. Watch your email for sign-up sheets and flyers.

EDUCATION & TRAININg DATE TIME LOCATION

Managing Cash Flow to January 21 4:30 PM – 6:00 PM AGC Education Center (classroom)Stay Alive & Thrive 686 Mariposa, Denver

Leadership In the Field: Series I January 29 – 31 1:00 PM – 4:00 PM AGC Education Center (classroom) 686 Mariposa, Denver

MSCA: Dispatcher Training February 10 – 11 8:00 AM – 4:00 PM AGC Education Center (classroom) 686 Mariposa, Denver

Total Opportunity Performance Systems February 12 or February 13 8:00 AM – 4:00 PM AGC Education Center (classroom)(“TOPS”) Technician Training 686 Mariposa, Denver(sponsored by: Wholesale specialties (Premier); Honeywell and Federated Insurance (Program)

Project Management Essentials February 25 – 27 8:00 AM – 4:00 PM AGC Education Center (classroom) 686 Mariposa, Denver

behavioral control, financial control and the type of relationship between the parties. Misclassified employees have successfully sued for retroactive benefits such as insurance, paid vacation or sick days, and participation in pension or retirement plans even though they had signed statements agreeing that they were not entitled to benefits. In such cases, independent contractor status may be determined under a common law test that focuses on the right of control.

Clearly, independent contractor status cannot be proven merely by showing that an individual has registered as a business with the state. Labels are not controlling and agencies and courts look past the paperwork to determine whether the independent contractor in fact functions as an independent business, considering the factors listed above and additional evidence including whether the independent contractor works for more than one customer; performs the type of work that is not integral to its customers’ businesses; performs work in its own discretion and not under the direction and supervision of the customer, uses its own tools and equipment; employs its own assistants, and has arms-length (preferably written) agreements with its customers providing for payment typically on a job, not hourly, basis.

Legal Update ... Continued from page 4.

This article is provided for general information purposes only and does not constitute legal or other professional advice. Readers are advised to seek specific legal advice from qualified labor and employment legal counsel in relation to any decision or course of action contemplated.

Scott Clancy and Hayden Rice, officers of the Mechanical Contractors Association of America student chapter, travelled to Memphis, Tennessee, to attend the MCAA Student Chapter Summit October 3-5. This event exposes students to the mechanical, plumbing and service industries and allows them to exchange chapter development ideas while attending sessions on various topics related to the mechanical industry.

On the second day, student attendees split up and formed teams with members of other chapters from around the country to compete in a mini-competition that consisted of creating a construction plan for a library remodel. The team on which Clancy participated received second place. “It was really cool to get to know some fellow MCAA chapter leaders and learn how they conduct business at their universities,” said Rice.

Before their departure on the final day, the students received details of the project for the upcoming MCAA competition. It consists of a processing plant retrofit for which the teams will act as the mechanical prime contractor. Proposals must be submitted in December and the top four teams will present at the MCAA National Convention in March 2014.

MCAA Officers Attend national student summit

scott Clancy, Hayden rice, Dennis Pettit and Mostafa Khattab in Memphis.

Job Done Right • January 2014 © 2014 CAMPC 7

Of all the things I do in my professional career, this is my least favorite: the phone rings, and like so many times before – more times than I can remember – a contractor is on the other end of the line. Even before he spills the details, I can tell by the tone of his voice that something is very wrong.

I don’t know how it all started, really, but as the CEO of a large California contractors’ association for the past twenty-seven years, I have turned into the reluctant go-to guy whenever there is a serious accident, injury or fatality on one of my members’ jobs. I am one of the first to be consulted. It’s a ringside seat to something you never want to see or experience, but over time, you build up a kind of resistance; you form some tough emotional scar tissue. As a result, I have developed a keen sense of what should be done at that exact moment. I have learned how to set the proper emotional tone – how to help manage the shock, anxiety and grief the contractor is feeling while, at the same time, take whatever urgent, pragmatic actions are necessary. Also, I have gained insight into the true benefits of safe construction operations and – sadly – what can happen when those high standards aren’t met. So, based on my experience, I would like to share a few strategies for safer operations in our industry.

What I want to emphasize in this article is the recognition of the human element – people’s feelings and their impact on safety. Feelings drive behavior. Feelings help form values. Feelings create person-to-person understanding and behavioral norms. There’s no debate about it: most behavior is driven by emotion and feelings. Logic and reason play a significant role, but if you want the most reliable motivator of behavior, look at feelings and emotion. Bearing this fact in mind, a safety culture must be more than the sum total of the policies, rules, training, consequences, incentives, and reports. An effective safety culture must stimulate positive feelings that will drive positive behavior.

What kinds of feelings and emotions might drive an effective safety culture? As a contractor, how about communicating the following to your crews:

• Everyone is sincerely cared about by their employer – not just as workers, but as people. They hear it, see it and feel it. In an environment that fosters this value system, workers are going to be more likely to emulate similar behaviors for and with each other.

• Caring for one another is communicated (and demonstrated) from the owner of the company all the way down the supervisory chain of command. Foremen and other front-line supervisors are expected to take safety to a personal place with their crews. It is not just enforcing the company line; it is emphasizing care, empathy, loyalty and support. The culture message is simple: care about the other guy even if

you don’t like him. Peer to peer safety accountability can also be driven by loyalty to one another, an ethos based on empathy and not disciplinary consequence. Cops, military and others who work in harm’s way most often have the “got your back” mindset. It needs to be the same within our industry as well.

• A true understanding of the human cost of failure. These feelings can be sadness, regret, apprehension and even fear. Reckless, short-sighted or stupid jobsite behaviors need to be balanced against the consequences. In a macho, male-dominated industry, risk taking behaviors often do not take into account the terrible ripple effect of a bad compromise. I taught safety courses for around ten years. In all my classes I would often ask those who had seen a bad accident on the job to raise their hands. Over 50% of those in the class had that experience. I would then ask them to share what they saw, how they felt and if it changed them. Hearing them speak form the heart riveted the class. This was the most powerful part of any of the course content, and the part that I believe changed behaviors more than anything else I said.

All of these are examples of what is often missing from the “safety message.” Workers in our industry are absolutely barraged with information, training and reinforcement of safety as a priority. They will hear the messages thousands of times in their careers. But quantity alone does not get it done; the content and the delivery have to reach the person at a level where it leaves an imprint. And in an industry like ours, where focusing on “feelings” is generally categorized as a weakness, it can be a challenge for owners, managers and foremen to consider this powerful and effective strategy.

One of my contractor clients has, in my view, mastered this. His firm has worked six million man-hours without a lost time injury. I simply could not believe it. As I dug deeper, past the training and policies and safety director’s capabilities, I discovered a common theme among every person I talked to. That they did it because they cared and because the company had driven that message home for years.

They cared about the company. The company cared about them. They cared about each other. And they were really proud of it. They would call a guy out if he was out of line and not even think about it. They would create and sustain accountability – because they felt it was important.

Life, death, and the Human elementBy Mark Breslin

Mark Breslin

Continued on page 15

8 © 2014 CAMPC Job Done Right • January 2014

Building Jobs4Colorado Construction & design Coalition updateBy Jenn Penn

The Building Jobs4Colorado coalition (BJ4C) remains dedicated to bringing construction industry leaders, including the Mechanical Contractors of Colorado, together to collaborate on issues that impact the construction industry at the state and city level.

Policy Survey Results

In October 2013, the BJ4C coalition conducted a policy survey of its members. The coalition used the information to determine where to focus its future efforts and to prepare for the 2014 legislative session.

Approximately one-hundred industry members completed the survey with the majority of responses coming from specialty contractors (69%). The survey results show the main issues facing the construction industry are construction defect and liability issues as well as payment issues. Fifty-seven percent (57%) of respondents indicated they have stopped bidding on for-sale, multi-family residential construction projects due to liability, risk of litigation, increased insurance premiums and/or inability to secure insurance for such projects. We anticipate state legislation in 2014 to help address this issue. Final release of retention continues to be an area of focus for the industry taking an average of 120 days or more for release in both public and private work.

BJ4C Coalition Industry Event: North Denver Cornerstone Collaborative/I-70 Corridor Reconstruction

On December 10, 2013, BJ4C held its first member breakfast event with nearly 500 attendees including legislators as well as city and state officials. Denver Mayor Michael B. Hancock kicked off the presentation followed by Kelly Leid, City and County of Denver, Don Hunt and Tony DeVito, CDOT, Richard Clarke, RTD, and Tom Clark, MDEDC. The speakers discussed the

construction opportunities available with the six major redevelopment and infrastructure projects taking place in the Corridor of Opportunity, from Denver Union Station to Denver International Airport. To learn more about these project, visit www.denvergov.org.

Legislative Reception: Save the Date - February 4th, 2014

BJ4C’s third annual Legislative Reception will be February 4, 2014. Details will be sent in the near future. The Legislative Reception provides an opportunity for BJ4C members, construction and design professionals to network and mingle with Colorado elected officials and policy makers.

Building Jobs4Colorado is a broad coalition of construction design professionals, general contractors, sub-contractors, sub-sub-contractors and owner organizations across Colorado. BJ4C represents more than 90% of the Colorado construction industry. CAMPC, representing MCA Colorado, is a steering committee member of BJ4C and continues to play a leading role within the coalition.

Jenn PennBuilding Jobs for Colorado Coalition Lobbyist

Above (left to right): richard Clarke, Kelly Leid, Don Hunt, Tony DeVito, and Tom Clark.

Left: Mayor Michael B. Hancock

Job Done Right • January 2014 © 2014 CAMPC 9

Economic indicators in Colorado generally point to a state that is outperforming the nation. Colorado ranked 40th in job growth of the 50 states in 2010, a year when most states were continuing to shed jobs. The state soared to the fifth position in 2012, posting a 2.4 percent increase in employment. Colorado reached a point of full economic recovery in June 2013, one of just 14 states to do so by that time, meaning that all jobs lost during the Great Recession have now been added back.

The construction sector was the hardest hit sector of the Colorado economy during the Great Recession. Construction employment fell by 55,300 jobs in the four years from 2007 to 2011, a 33 percent decline. Times have finally changed. Construction employment began to increase in 2012 and the number of jobs rose by about 6 percent in 2013, representing the fastest-growing sector in 2013. Still, construction employment remains about 45,000 jobs below peak employment in 2007. Unemployment data tell a similar story. While the current unemployment rate of 10.5 percent for experienced construction and extraction workers throughout the U.S. is down from its peak of 26.5 percent in February 2010, the rate remains higher than the all-industry rate of 7 percent.

The residential construction market has picked up in Colorado. Since the number of residential units constructed throughout the state fell to 9,355 in 2009, the lowest value in records dating back to 1960, the number of residential units permitted increased an average of 33 percent per year through 2013. The pace of growth is expected to slow slightly in 2014, with the Colorado Office of State Planning and Budgeting forecasting a 26 percent increase to 37,300 units.

Data from the U.S. Census Bureau indicate that about 45 percent of the housing units constructed in Colorado in 2012 were apartment units, or those in structures with three or more units. The 30-year average suggests that about 25 percent of the new housing units constructed in Colorado have generally been for rent multi-family units. After witnessing high foreclosure activity in recent years, it is not surprising that households have been opting for rental housing rather than for-sale options. Indeed, the homeownership rate in Colorado fell to 65.9 percent in 2011, down from the peak rate of 71.3 percent in 2003. Multi-family developers have responded to the low apartment vacancy rates and rising lease rates by constructing new units, particularly in the seven-county Metro Denver area.

However, low mortgage rates and greater consumer confidence suggest that single-family homes are coming back into vogue, and the residential construction mix should start to tip back to historic norms. In the seven-county Metro Denver area, about one-third of the new residential units constructed in 2013 were multi-family units, and the percentage is expected to drop to closer to 30 percent in 2014.

2014 Colorado Construction Outlook: Back to WorkBy Patricia silverstein, President, Development research Partners

Phone: 303-991-0070www.Developmentresearch.net

Continued on page 12

Colorado Construction Employment

Construction employment began

to increase in 2012 and the

number of jobs rose by about 6

percent in 2013, representing the

fastest-growing sector in 2013.

DevelopmentResearchPartners

10 © 2014 CAMPC Job Done Right • January 2014

Cash is King: Managing Cash Flow to stay Alive — and ThriveBy steve Coughran, CPA

Seventy percent of the businesses that go bankrupt are profitable when they close their doors. Sadly, many thriving companies fail simply because they lack adequate cash to sustain their operations.

It’s possible for a company to operate at a loss and remain in business. However, if it runs out of cash, it will shut down and may even collapse. Employees won’t work long without pay, and vendors won’t sell to a delinquent account. A company can’t afford to be indolent in its cash flow and financial management responsibilities. Owners and managers must create an accounting system that forecasts the inflows and outflows of cash and allows them to take advantage of cash flow surpluses so they’ll be able to stay afloat in times of deficits.

It’s All About TimingEvery company should have a line of credit to help manage the inevitable seasonable fluctuations in the cash flow cycle. The best time to secure such a line is when the business is prospering. What usually happens is that most business owners frantically approach their banker only when they’re out of cash and financially weak. Unfortunately, most bankers tend to be cautious of lending funds to a business with a deteriorating balance sheet and negative cash flow.

Credit card financing shouldn’t be confused with a line of credit. Credit cards are typically the most expensive forms of financing and should only be used in emergency situations. If you find yourself relying on credit cards to fund shortages in cash flow, stop and rethink budgeting strategies to ensure that in the future, this will be the method of last resort.

Establishing RelationshipsThe best strategy for borrowing funds from a lending institution is to start by establishing a strong personal relationship with a banker early on. Invite the banker to your company to gain a better understanding of your business environment. Point out how certain aspects of your business strategy and operations affect cash flow and capital requirements. This understanding will help build the confidence the banker needs to approve loans and lines of credit for the business. Finally, once the relationship is established, have regular contact with the banker, because familiarity builds the trust needed to acquire financial help.

What Banks Are Looking ForBesides establishing rapport and trust, focus on improving the financial health of your business. This usually involves with working with a CPA and/or a consultant who can help set up key performance indicators to monitor performance.

Banks and other lending institutions often analyze leverage, profitability, and liquidity ratios when qualifying businesses for loans. To qualify for funding, banks want to ensure your business has sufficient assets, solid cash flows to repay the debt, and a track record of profitability. It’s crucial to have a high accounts receivable turnover ratio, a high current ratio, and a low debt-to-equity ratio. These key financial ratios, coupled with other financial statement indicators, should be closely monitored and constantly improved upon to qualify the business for future borrowing.

On the Fast Track for GrowthThe most crucial time for strong cash flow management is during periods of growth. As a company grows, it burns through a lot of cash as it invests in capital expenditures, hires key employees, and expands its operations. In addition, as revenue increases, so do cash balances that are trapped in accounts receivable and accounts payable. Before

any company plans to grow, it’s crucial that they set up a budget and real-time cash projection tools to avoid the death blow of running out of money.

Other Sources of CashAlthough bank financing tends to be the most advantageous cash source for businesses, it may also be the most difficult to secure, given the current tightening of the credit markets. Apart from bank lending, companies may seek financing from the following resources:

Steve CoughranCPA

Continued on page 15

Plan to attend the upcoming

Managing Cash Flow to Stay Alive and Thrive

Tuesday • January 21 • 4:30 PM – 6:00 PM Contact Kim gill or Ann Woosley

at 303-757-3956 for details or to register.

Job Done Right • January 2014 © 2014 CAMPC 11

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12 © 2014 CAMPC Job Done Right • January 2014

Welcome new Members! InDuSTRy PARTnERS COnTACT PHOnE EMAIL Buche & Associates Tim Gallardo 303-934-4969 tgallardo@buchecarmco.com

Milwaukee Tools Kenneth Cochran 303-242-7784 Kenneth.Cochrane@milwaukeetool.com

Refrigerants, Inc Danny Cedar 303-629-1222 Danny@refrigerantsinc.com

The value of nonresidential construction activity in Colorado – as reported by Dodge Analytics and including new construction, additions, and major remodeling projects at commercial and manufacturing facilities, educational institutions, and medical and government buildings – declined 6.5 percent in Colorado in 2012 to $3.7 billion. After an expected slight decline of 3 percent in 2013, the value of activity is forecasted to increase by 4 to 5 percent in 2014.

The commercial real estate market in Metro Denver now reflects job growth and heightened demand for expansion. Commercial construction activity is picking up, with much of the new space being build-to-suit. Throughout all of 2012, about 2.04 million square feet of office, industrial, and retail space was added to the Metro Denver market. This total was surpassed in just the first half of 2013, with 2.06 million square feet completed by the end of June. Nearly 2.4 million square feet is currently under construction throughout the region, with nearly 30 percent of this activity being office development in the Lower Downtown area of Denver.

Infrastructure projects present additional construction opportunities throughout Colorado. The floods in northern Colorado required the reconstruction and repair of 200 lane miles of state highway and 50 bridges. On-going maintenance and improvement of the highway system continues throughout all corners of the state. Construction zones abound at Denver International Airport, with gate expansions, hotel development, and construction of the public transit center to accommodate the arrival of the East Rail Line of the FasTracks project as well as other transit needs. Other FasTracks projects include the redevelopment of Union Station into the intermodal hub for the region and the $2.2 billion Eagle P3 project, consisting of the East Rail Line, Gold Line, Commuter Rail Maintenance Facility, and the first segment of the Northwest Rail Line. While infrastructure funding challenges exist at the local, state, and federal levels, better economic conditions are resulting in heightened funding opportunities.

Colorado’s healthy economy and attractive business environment continue to earn the state accolades. For example, Forbes ranked Colorado fifth on its 2013 “Best States for Business and Careers” list and CNBC ranked Colorado as the seventh-best state for business in its annual “Top States for Business.” As the Colorado economy settles into a new growth trend, renewed residential, nonresidential, and infrastructure development activity throughout the state means that it is time to put the state’s construction expertise back to work.

Development Research Partners specializes in economic research and analysis, combining extensive experience in real estate economics and economic development to provide clients with reliable consulting services in four areas of expertise: Economic and Demographic Research, Industry and Workforce Studies, Fiscal and Economic Impact Analysis, and Real Estate Economics.

2014 Colorado Construction Outlook ... Continued from page 9.

• Colorado construction rose by 6 percent in 2013 making it the fastest growing sector in Colorado in 2013.

• residential construction is expected to grow in 2014. A 26 percent increase in residential units is forecasted.

• Approximately 45 percent of housing units constructed in 2012 were multi-family units compared to a 30-year average of 25 percent. This is expected to drop closer to 30 percent in 2014.

• The value of non-residential construction activity is expected to rise 4 to 5 percent in 2014.

• Commercial construction activity is picking up and infrastructure projects are providing additional construction opportunities.

Job Done Right • January 2014 © 2014 CAMPC 13

Denver-based Refrigerants Inc. (RI) operates one of the few EPA Certified facilities in the nation. Designed to test, process and package refrigerants, the plant receives used refrigerant from companies located virtually anywhere in the country. The Denver Refrigerants Inc. facility assists mechanical contractors, refrigeration, HVAC, supermarkets, maintenance and property management companies that are eco-friendly and active recyclers.

In the refrigerant industry since the early 90s, RI developed the facility almost a decade ago to offer end users and companies in the HVAC and refrigeration fields an alternative to storing or sending used refrigerant long distances – generally a costly choice. Since then, the company has constantly expanded the facility to meet the growing demand for reclaimed refrigerant as part of the national effort to reduce the amount of potentially environmentally harmful refrigerants being produced. The Denver facility assists mechanical contractors in recovering refrigerant from supermarkets, restaurants and demolition projects. RI technicians are highly qualified to evacuate and recover high and low pressure refrigerants. Refrigerants Inc. also works with mechanical contractors by providing them with new refrigerant for the retrofit of new RTU equipment and replacing new refrigerants in existing systems.

The company operates nationwide and, in addition to the Denver complex, has full service locations in Chicago, Omaha and Grand Junction, Colorado. Each location offers professional services and information upon request.

RI works in all areas of the refrigerant industry, from the sale of new and reclaimed refrigerant to onsite refrigerant recovery to

free cylinder exchange programs to make gas recovery simpler and easier. All RI’s programs are designed to maximize refrigerant recovery while reducing the expense, time and effort involved.

Denver Refrigerants Inc. is committed to recycling used refrigerant to the extent possible, both by processing it for future use and by paying for certain refrigerant – R-22, for example – as an additional incentive. The company offers cash for many refrigerants based on their Current Market Value (CMV). For R-22, RI also has a banking program through which companies not only recycle R-22 but also “bank” recovered refrigerant by paying a one-time fee. RI inventories and stores the R-22 for customers until such time as they need all or part of it.

RI’s Onsite recovery of refrigerant for demolition or retrofit projects becomes more manageable for demolition and mechanical contracting companies. Company technicians bring a wealth of experience, power, cylinders, and all necessary equipment to a jobsite, reducing contractor costs, increasing efficiency and—very importantly—bring recovered refrigerant to an EPA certified facility for processing and long and short-term record keeping.

In all phases of refrigerant recovery, processing and recycling, Denver Refrigerants Inc. offers multiple services designed to increase refrigerant recycling, decrease project costs and promote the importance of protecting our environment from certain refrigerants identified as potentially harmful. Denver Refrigerants Inc. is a partner you want in the industry. For more information about Denver Refrigerants Inc.’s program and services, call 303-629-1222.

MeMBeR sPOTLIGHT

14 © 2014 CAMPC Job Done Right • January 2014

Rocky Mountain Pipe Trades district Council #5By rick Allen, Business Manager

The Rocky Mountain District Council No. 5 (RMDC5) was established to bring the local unions (comprised of UA Locals, 3, 58, 145, 208, 192 Cheyenne, 669 Sprinkler Fitters, and 798 Pipe Liners) and contractors together to build a labor management team that works in concert to achieve common goals including increasing market share.

If we trust each other without reservation and believe we each have the other’s best interest at heart, we could work together to figure out new ways to go after projects and win work for union contractors and UA members. We certainly won’t agree on everything but acknowledging and accepting that we will have differences every now and then means we can look past those differences, while continuing to work toward our same goals. These ideas are not new and they are achievable.

I’ve had conversations with numerous people who traveled the country visiting UA Locals and contractor associations. It seems while most of us have the same goals in mind, there are many areas around the country that have not had great success in increasing market share, and in some cases struggles still exist between labor and management.

I am of the belief that we do not have time to fail and we do not have time to waste with an “us vs. them” attitude on either side of the fence. We are one team. Everyone working for a signatory contractor and everyone working for a local union or a District Council and every member in the field is on that team.

For way too many years it wasn’t looked at as one team but as two separate teams – a labor team and a management team and we often fought each other. Not to mention negotiations, which were great battles that would end up with relationships destroyed and anger on both sides. It would take two to three years to rebuild relationships just to go and destroy them again. I would venture to guess nobody reading this article would think this is a healthy scenario. It is the past, and how things used to be done.

We have taken great strides to prevent this from happening again. Bringing in an expert, and probably the sharpest mind we could have in Richard Barnes, to help us get into a healthier business model. As Richard said, we should be bargaining to create wealth, not to split-up the wealth.

These are simple things to write down but difficult things to actually do. One thing I learned early on in life that has been reinforced since becoming a leader in the labor movement, is that nothing worth doing is easy, but if it is worth doing it is worth doing well.

We have a big task in front of us but it is achievable and the only thing at stake is our future. We can decide what that future looks like and I am certain our visions are not that different. I know I speak on behalf of everyone at RMDC5 when I say we are ready, willing and able to do this right and we are glad you are all on our team. We look forward to 2014 and the positive change and great opportunity it brings.

We wish everyone on our team a great and prosperous new year.

Sincerely, Rick Allen RMDC5

We certainly won’t agree on everything but acknowledging and accepting that we will have differences every now and then means we can look past those differences, while continuing to work toward our same goals.

Job Done Right • January 2014 © 2014 CAMPC 15

• Angel investors

• Venture capital or private equity

• Factoring

• Credit from trade suppliers

• Liquidation

• Accounts receivable management

• Cash injection from owners

Next StepsOwners and managers have a fiduciary responsibility to acquire the knowledge and resources to effectively manage the financing activities of their companies. Failure to take an active role in cash flow management may inhibit business growth or, worse, lead to bankruptcy. Financial management covers a wide range of activities including capital expenditure, growth management, investing, and operations. Although financial strategies may be complex, they shouldn’t be ignored. Seek additional knowledge or the help of professionals to put the right systems in place and avoid the pitfalls associated with the cycles of cash flow management.

Steve Coughran, CPA, is a thought leader with expertise in business strategy, estimating, structuring, finance, and accounting. His experience in the construction industry is extensive, as he has worked with some of the largest general contractors, architects, builders, and trade contractors in the region. For more information, visit his website at coughranconsulting.com or email him at scoughran@coughranconsulting.com.

Life, Death, and the Human Element ... Continued from page 7.

Cash is King ... Continued from page 10.

Announcing New MCA Colorado Board Members and OfficersThe following directors and officers were seated at the November MCA Colorado Board of Directors meeting for a two-year term ending January 31, 2016:

PresidentBob BrunsonU.S. Engineering

Vice PresidentEd Becker Murphy Company

secretary/Treasurer Paul Dense Trautman & Shreve

newly elected Director Jeremy FaughtApollo Mechanical Contractors

In short, safety is not an end objective. It is a byproduct of the environment shaped by the shared values of the workers. It is not about binders, OSHA citations, policies, training programs or risk management policies. All these are means by which we collectively attempt to shape behaviors. To create a safe, positive and mutually accountable workplace, an employer should harness the power of the human element. Make it personal by focusing not only on the head, but also the heart. Convince people to be open to the idea of “being a brother or sister’s keeper” or having someone’s back with no compromises allowed. Building success in any venture or organization requires creating a shared belief system. Tapping into the human element at a personal level is one powerful way to do it.

16 © 2014 CAMPC Job Done Right • January 2014

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The “TOPS” program is a 1-day class instructed

by Quality Service Contractors’ (QSC)

Business Coach, Beth Dobkin.

“TOPS” is a training session designed for

service providers to help them understand and

develop specific activities and “attitudes” that will improve their

level of professionalism, before, during, and after

their time spent with your customers.