Labor Monitoring Report for Piller USA, Inc. · 4/17/2018 · Labor Monitoring Report for Piller...
Transcript of Labor Monitoring Report for Piller USA, Inc. · 4/17/2018 · Labor Monitoring Report for Piller...
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Labor Monitoring Report for Piller USA, Inc.
Retford Investments, LLC and Piller, USA
Office Space and Light Manufacturing/Assembly Building
45 Wes Warren Drive
Middletown, New York 10941
Prepared by:
Fellenzer Engineering, LLP
22 Mulberry Street, Suite 2A
Middletown, New York 10940
Project 16-269
Representing:
Orange County Industrial Development Agency
4 Crotty Lane, Suite 100
New Windsor, NY 12553
Attn: Ms. Lauri Villasuso, C.O.O., V.P. of Economic Development
April 17, 2018
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Table of Contents
Executive Summary .........................................................................................................................3
Authorization ...................................................................................................................................4
Overview of OCIDA’s Labor Policy ...............................................................................................5
Retford Investment’s Piller USA Project .........................................................................................6
Labor Audit Findings .......................................................................................................................7
Appendix, Breakdown of Reported Labor Hour ...................................................................................9
Appendix, Labor Tables.................................................................................................................10
Appendix, Exemption Request for Zitone Construction ................................................................11
Appendix, Zitone and Competitor Bids .........................................................................................12
Appendix, Exemption Request for Station Steel ...........................................................................15
Appendix, Exemption Request for Century Lodge .......................................................................17
Appendix, Example of Typical Documentation Received ...........................................................18
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Executive Summary
As authorized and contracted by the Orange County IDA, the auditing team represented by
Fellenzer Engineering, LLP has begun auditing the Local Labor Policy compliance of Retford
Investment’s Piller USA project. The Local Labor Policy creates two major requirements for
projects that receive benefits from the Orange County IDA; a labor requirement mandating the
use of 85% local labor and a procedural requirement that “every effort” be made to use local
vendors, material suppliers, subcontractors, and professional services.
Based on the extensive records produced by Piller USA, we can conclude that the project meets
the 85% local labor requirement. Three exemption requests have been made and have been
accepted by the Orange County IDA. Excluding exemptions, local labor made up 93.5% of the
on-site labor. Local architecture and engineering professionals were chosen for the project as
well. The detailed reporting of labor hours allowed the project to receive credit for many local
contractors and services that are normally not considered when evaluating a major capital
project. It also provides an overview of how this project benefited businesses and professionals
in the local area.
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Authorization
Fellenzer Engineering, LLP as the prime contact for our labor audit team consisting of Fellenzer
Engineering, LLP, Pangia & Company, LLC, Certified Public Accountants, and Blustein,
Shapiro, Rich & Barone, LLP were authorized, via an audit agreement dated August 15, 2016.
This authorization retained the auditing team to assist with monitoring adherence to the OCIDA
Local Labor Policy and assigned them to monitor the Piller USA project.
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Overview of the IDA’s Labor Policy
The IDA’s Labor Policy creates two labor based restrictions for projects benefiting from IRA
benefits. Both of these restrictions exist to benefit construction workers and construction related
companies that are local to Orange, Ulster, Sullivan, Dutchess, Putnam, Rockland, and
Westchester Counties and to promote the general welfare of Orange County.
First, 85% of the construction labor for IDA approved projects must be provided by workers
living in the 7 counties area. The scope of this 85% is limited to construction workers as outlined
by the IDA, not including suppliers, professional services, and vendors. The labor policy does
not define whether the 85% compliance is in regards to total hours or value (in dollars). For
compliance, the IDA requires the construction manager to “keep a log book on site detailing the
number of workers on the job for each trade and the counties in which they reside” and to make
these records available for periodic inspection. Based on Fellenzer Engineering’s discussions
with the IDA, the 85% local labor amount was meant to be calculated by hours of labor worked
across contractors and sub-contractors. It is noted that the log book of workers onsite and their
home counties may be insufficient for determining the percentage of local labor hours spent on
the project, as workers across different trades may have different lengths of time on the job site.
Exemptions are available on warranty support, specialized construction, cost differential, labor
scarcity, and special skills bases. Exempted construction labor does not count against the 85%
requirement. These exemptions are at the discretion of the Executive Director of the IDA and are
reported to the Board of Directors at each meeting.
Second, the IDA applicant and contractors “shall make every effort to utilize vendors, material
suppliers, subcontractors, and professional services from Orange County and the surrounding
counties.” This is a much wider requirement; it establishes a very high priority for both local
construction labor and local construction related businesses. The meaning of “every effort” isn’t
rigorously defined, but the IDA’s labor policy requires records of solicitations and awards to
demonstrate compliance.
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Retford Investment’s Piller USA Project
Fellenzer Engineering, LLP was contracted to assess the compliance of Retford Investment
Group’s project in Wallkill, NY. The project is a new headquarters and light manufacturing
facility for Piller USA, a manufacturer and distributor of uninterruptible power supplies and
switching hardware for data centers. It is located on Wes Warren Drive, just off of Route 211 in
the town of Walkill. Construction began in April 2015 and concluded in June 2016. The 24,000
square foot building represented a $4.6 million dollar capital investment and the project was
expected to provide 84 temporary construction jobs.
Fellenzer Engineering was not assigned labor monitoring responsibilities for this project till after
construction had concluded. On September 8th
, we attempted to contact Michael Haber, Piller’s
financial controller and the project contact listed by the IDA. Our emails and calls were
redirected to Joseph McFadden, who had replaced Michael Haber. Joseph McFadden connected
us with Anthony Martinisi, another Piller employee, who asked for a few weeks to compile their
available records.
After several attempts to check on Piller’s progress, we were referred to Charles Daling, who had
taken over the compilation project from Anthony Martinisi. On October 5, 2016, Daling
informed Fellenzer Engineering that records of the hours and contractors’ employees on-site had
been kept and that Piller is putting together those records. Records of labor hours were first
received on December 7th
, 2016 and documentation was not complete until January 25th
, 2017.
During this documentation process, Piller reported that they had considered several contractors
exempt, but had not formally received exemption from the IDA. This appears consistent with
how the IDA had treated labor policy exemptions during the project’s construction phase. In
order to maintain consistency with current IDA projects, Piller USA has submitted 3 formal
requests for exemption.
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Labor Audit Findings
Piller USA has supplied a very detailed record of hours, both for onsite and offsite labor related
to their new headquarters. This includes work from the design and planning phase through to
relocation of their corporate offices. To properly assess compliance, we have separated
construction services and on-site work from planning and design. We have considered both
under the two requirements of the labor policy.
In order to verify the hour reports, Piller USA supplied letters from several contractors
confirming their hour reports. These letters were reviewed and compared against the spreadsheet
of hours provided to ensure accuracy.
The IDA’s labor policy specifies that “shall make every effort to utilize vendors, material
suppliers, subcontractors, and professional services from Orange County and the surrounding
counties.” To this point, we can acknowledge that much of the professional services required in
the design and planning of the building were from local companies. While these companies are
not considered on-site construction labor (and not tabulated as part of the 85% under the local
labor policy), all five of the design, architecture, and engineering firms responsible for the new
Piller headquarters were from Orange County. This fulfills at least the intent of the IDA labor
policy’s second requirement with regards to professional services.
Of the 48 companies that worked on-site, 37 were from the local counties in the IDA policy.
Exemption requests were filed for three of the non-local companies. These include Zitone
Construction, the general contractor; Station Steel Services, the steel erectors; and Century
Lodge LTD, the metal stud and drywall installers. We have reviewed each of these requests and
the Orange County IDA has granted all of them; a letter outlining the requests and
recommendations has been submitted with this report. These exemptions cover 7,379 labor hours
out of the total of 25,693 labor hours reported by Piller, or almost 1/3 of the on-site labor. While
Zitone Construction’s non-local labor hours are exempt, the project is given credit for the local
labor hours that Zitone reported.
Local labor made up 93.5% of the non-exempt on-site labor, or 17,124 out of 18,314 labor hours.
This exceeds the 85% required by the IDA labor policy. Included in this tally are the labor hours
required for all on-site work, ranging from excavation and site clearing to the final relocation of
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offices. Charts are provided in the appendix to break down the sources of local labor. As would
be expected, the electrical contractor and the HVAC/plumbing contractor make up the bulk of
local labor hours.
Overall, this project fulfilled the intent and purpose of both IDA labor policy elements. The level
of detail in the reported labor hours allows for a more in-depth review than usual. This depth
allows the project to be given credit for the use of local services not ordinarily considered in the
scope of such capital project, such as the local moving services used for the office relocation, and
for a more complete review of the project’s overall contribution to Orange County businesses
and professionals.
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Appendix, Breakdown of Reported Labor Hours
Local; 17124;
67% Non-Local;
1190; 4%
Exempt; 7379; 29%
Total Labor Hours
LocalLocal
hours; 17124 hours; 94%
Non-Local hours; 1190
hours; 6%
Non-Exempt Labor Hours
Local
Rotolo Electric; 4381; 26%
Perry Plumbing Heating & Cooling; 2118; 12%
David Wieboldt; 1328; 8%
Piller USA, Inc.; 1292; 8% Lanc & Tully; 824; 5%
Bud DeVries & Sons Concrete; 702; 4%
Callahan & Nannini; 700; 4%
Arnoff Moving & Storage; 588; 3%
Zitone Construction; 552; 3%
Sullivan Sprinkler; 537; 3%
Checke's Metal Products; 500; 3%
Jesse G's; 320; 2%
Precision Roofing; 320; 2%
AJM Trucking; 310; 2%
Blake Engineering; 300; 2%
KC Engineering; 272; 2%
Frontier Communications; 200;
1%
Otis Elevator; 199; 1% Other Companies (27); 1681; 10%
Local Labor
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Appendix, Labor Tables
Sub Location Man Hours Local Non-Local Exempt
A&R Concrete Products New Windsor, NY 140 140 0 0
Advanced Testing Campbell Hall, NY 183 183 0 0
AJM Trucking Monroe, NY 310 310 0 0
Arnoff Moving & Storage Newburgh, NY 588 588 0 0
Blake Engineering Westtown, NY 300 300 0 0
Bud DeVries & Sons Concrete Wallkill, NY 702 702 0 0
Callahan & Nannini Salsbury Mills, NY 700 700 0 0
Checke's Metal Products Middletown, NY 500 500 0 0
David Wieboldt Middletown, NY 1328 1328 0 0
Dick's Concrete New Hampton, NY 82 82 0 0
Dutchess Overhead Door Poughkeepsie, NY 80 80 0 0
Franks Lawn Care Port Jervis, NY 48 48 0 0
Frontier Communications Warwick, NY 200 200 0 0
Jesse G's Glen Spey, NY 320 320 0 0
John to Go Spring Valley, NY 70 70 0 0
JTJ Tapping Hyde Park, NY 16 16 0 0
K&P Cleaning Services Poughkeepsie, NY 102 102 0 0
KC Engineering Circleville, NY 272 272 0 0
Ketcham Fence Otisville, NY 16 16 0 0
Lanc & Tully Goshen, NY 824 824 0 0
Lewis Sign Co. Slate Hill, NY 152 152 0 0
Liberty Iron Liberty, NY 134 134 0 0
Neversink Lumber Neversink, NY 10 10 0 0
Newburgh Win Wholesale Newburgh, NY 20 20 0 0
Organic Recycling Inc Tappan, NY 24 24 0 0
Peenpack Sand and Gravel Huguenot, NY 6 6 0 0
Perry Plumbing Heating & Cooling Cornwall on Hudson, NY 2118 2118 0 0
Piller USA, Inc. Middletown, NY 1292 1292 0 0
Pine Bush Equipment Pine Bush, NY 6 6 0 0
Precision Roofing Southfields, NY 320 320 0 0
Rotolo Electric Middletown, NY 4381 4381 0 0
Safe & Sound Cornwall on Hudson, NY 112 112 0 0
Scmitt's Wholesale Monticello, NY 26 26 0 0
Sullivan Sprinkler South Fallsburg, NY 537 537 0 0
Tam Enterprises Goshen, NY 12 12 0 0
Tank Specialist Plus Middletown, NY 80 80 0 0
Taylor Recycling Montgomery, NY 16 16 0 0
TG Elliot & Sons Pearl River, NY 24 24 0 0
United Rental Newburgh, NY 18 18 0 0
Valley Construction Corp Pine Bush, NY 80 80 0 0
Viking Enterprises Middletown, NY 24 24 0 0
Ward Paving Goshen, NY 184 184 0 0
A Plus Stripping Glenwood, NY 16 16 0 0
Binghamton Material Handling Binghamton, NY 384 0 384 0
Century Lodge Berwick, PA 2442 0 0 2442
CJM Painting Berwick, PA 160 0 160 0
Deanna Turvin, DBA CNJ Construction Webb, Al 352 0 352 0
Guzzo Stucco Masonary Vineland, NJ 24 0 24 0
Malishchak Brothers Naticoke, PA 144 0 144 0
Mesko Glass & Mirror Avoca, PA 126 0 126 0
Otis Elevator Albany, NY 199 199 0 0
Station Steel Erectors Milford, PA 1850 0 0 1850
Zitone Construction Sussex, NJ 3639 552 0 3087
25693 17124 1190 7379
Local Labor Percentage 93.5%
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Appendix, Exemption Request for Zitone
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Appendix, Zitone and Competitor Bids
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Appendix, Zitone and Competitor Bids
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Appendix, Zitone and Competitor Bids
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Appendix, Exemption Request for Station Steel
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Appendix, Exemption Request for Station Steel
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Appendix, Exemption Request for Century Lodge
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Appendix, Example of Typical Documentation Received