Building Support in New York
Associated General Contractors of America New York State
As the New York chapter of the Associated General Contractors of America, AGC NYS has been protecting the interests of its members for 80 years. These members represent the full gamut of the state’s non-residential construction industry, from heavy civil contractors to vertical builders active in both the public and private sectors.
“Our members range from small, family owned firms to national and even multinational companies that are working all over the globe,” says President & CEO Mike Elmendorf.
AGC NYS provides a range of services to these members. Knowledge is power, and the association works hard to keep the industry abreast of the latest trends – such as Lean Construction – by offering a wide variety of classes. Safety must be given top priority in the construction industry, so AGC NYS maintains an active safety program, with two full time safety professionals spearheading onsite safety services for member firms around the state. Onsite job inspections, OSHA certifications, and safety training are all a part of the program, as are two safety labs that members can access. “You have to have a focus on safety,” Mr. Elmendorf states.
Members have the security of knowing they don’t have to go it alone; subject matter experts are always on hand to help walk members through virtually any situation, from technical issues and contract issues to government regulations. A professional engineer is on staff to assist members needing assistance in the heavy civil sector, while a professional with 30 years’ experience in vertical construction provides services to building contractors.
The construction industry’s current labor shortage has become a major focus for AGC NYS. “It is a big challenge,” Mr. Elmendorf shares. “From Long Island to the north country we hear contractors say they are having trouble finding people.” The Global Financial Crisis is largely to blame. “You lost a whole crop of people when this industry was on its back. For a number of years, the construction industry was looking at double-digit unemployment; it was in bad shape because the economy was in bad shape. So you had a lot of people who left the industry and didn’t come back, or who decided not to get into an industry that had a double-digit unemployment rate.” Construction managers, supervisors, and estimators are in particularly short supply.
Attracting Millennials into the construction industry will be key to overcoming this shortage. “We are involved in organizing construction career days all over the state. We work with local high schools, with organized labor, with contractors, and others, to give a real hands-on experience to young people to [show them] what a career in the construction industry is all about. It is not just about swinging a hammer and pouring concrete; we try to show young people the types of opportunities and careers that are out there in the construction industry.” The association has funding set aside to help these young people pursue a career in construction. “AGC New York has the most successful scholarship program of any AGC chapter in America,” Mr. Elmendorf says. “We have given out hundreds of scholarships to students around the state who are headed to careers in construction to help get them into the industry.”
Advocacy is another huge area for AGC NYS. “We are the voice and the eyes and the ears of the construction industry here at the state capital and in Washington D.C. We are engaged in a wide variety of public policy issues that impact the industry.” One of the policy issues getting the most attention at the moment is the New York Scaffold Law. “That is a huge one for not just the industry, [but] for virtually everyone in New York State.”
The century-old law creates a standard of absolute liability for both contractors and property owners for any gravity related injury on a construction site. “It is so crazy that it sounds made up,” Mr. Elmendorf remarks. “You could have a situation where a worker refuses to adhere to established safety protocols – doesn’t tie off, doesn’t use a safety harness, or could be intoxicated – the bottom line is the facts don’t matter.” These facts, he explains, are largely irrelevant in court because if someone falls on a construction job in New York State, it is a virtual certainty that the contractor and property owner will be found liable. “You create an environment in which the contractor who does everything right and who has a rigorous safety program and enforces it is treated the same way as a contractor who doesn’t do those things. That’s just wrong.”
The law’s unintended consequences can be felt throughout the state. “It is very hard for the insurance industry to manage risk because it is irrational,” Mr. Elmendorf explains. “As a result, the insurance industry has largely fled the state,” while companies that can get coverage are enduring skyrocketing premiums. Many firms are having trouble getting coverage at any price. “It is much more difficult to get the appropriate insurance because the carriers just aren’t carrying in New York.”
Taxpayers are often on the hook for the high coverage costs. “The state has by far the highest property taxes in America. Your property taxes are higher because of this law, because your school district is paying more whenever they need to build something, your local governments are paying more whenever they need to build something… It is an economic issue.” The amount of dollars that are lost each year is shocking. “Take the Tappan Zee Bridge for example. We believe there is an additional $200 million to $300 million cost for that one project because of this one law. That is in some cases more than double the annual capital budget of the freeway authority, excluding the Tappan Zee Bridge.” The NY Works Task Force found that “if you had insurance costs that were in line with the rest of the country, a billion dollars of what the state spent would have gone to actual infrastructure and building, as opposed to insurance. A billion dollars in one year.”
This billion could have been used to create tens of thousands of jobs as well as infrastructure, Mr. Elmendorf insists. “Because for every billion dollars you spend on infrastructure, you create about 28,000 direct and indirect jobs. So it is a real problem for everybody, not just the construction industry.”
AGC NYS believes that raising New York’s infrastructure budget is crucial. “We led a very successful broad based campaign this year that included the business community, organized labor, other facets of the construction industry, other industries, local elected officials, and state legislatures all over New York [all] making the case that we need to make a real down payment on New York’s infrastructure needs.” The spending will help the construction industry, of course, but it could also benefit the state as a whole. “We have very clear, dramatic infrastructure needs,” Mr. Elmendorf reports. “We have one of the highest percentages of deficient bridges in the country. We have a very high percentage of major roads that are in poor condition… A lot of it was built 60 plus years ago for a 50-year lifespan.”
New York’s underground infrastructure is also in need of updating. “I don’t think a day went by this winter and early spring when I did not see at least one story about a major water main break somewhere in New York,” Mr. Elmendorf recalls. “We had over 100 here in the town of Colonie where I live and where our office is – and that is just in one town. All over New York that was happening.” As with the state’s transportation infrastructure, age is the major problem. “You’ve got water and sanitary infrastructure elements in cities in New York – including New York City – that are over a century old. You’ve got wood pipes and clay pipes in the ground that haven’t been touched since they were built and they are falling apart.” These pipes are out of sight, out of mind so most people are blissfully unaware of the crises – until their water main bursts.
AGC NYS’ joint campaign to drive infrastructure spending was a huge success. “That campaign spent about $1.5 million and there was more than $3 billion of additional infrastructure investment included in the final enacted budget. That’s a pretty good return on an investment. It was a big win not just for the construction industry but for the public and the economy.”
AGC NYS is eager to follow up this success with more winning efforts. From education and safety to advocacy, the team is active across a multitude of fronts. “We are busy,” Mr. Elmendorf remarks. “There is no shortage of activity here.” It’s all in a day’s work for the industry’s leading voice.