Thursday, 30 April 2009

NC slated for $7.7 billion


Perhaps none of President Barack Obama's efforts in his first 100 days will have as direct an impact on North Carolina as the estimated $7.7 billion in stimulus funding from the $790 billion economic recovery bill. The News and Observer reports money from the American Recovery and Reinvestment Act will create or save 105,000 jobs here.

The money will go to transportation projects, energy weatherization, neighborhood revitalization, education programs, crime-fighting grants and a variety of human services needs. Many of the construction projects, such as a new fire station in Wayne County, were already in the pipeline but had yet to be funded.

Critics lambasted the stimulus package as wasteful spending that will cost taxpayers for years. Their arguments were boosted this week when the U.S. Department of Commerce showed the nation's gross domestic production fell 6 percent the first quarter of this year.

Vice President Joe Biden said Wednesday the economy would have been worse without the bill. "We've been criticized for being too ambitious," he said. "The truth of the matter is we have no choice."

Click Here to read the News & Observer article.

Wednesday, 29 April 2009

Triangle, Charlotte home prices fall


For the first time in 25 months the decline in housing prices was not a record, a sign the crisis could be hitting bottom. Prices were off 18.6 percent from February 2008.

In another sign the housing crisis could be reaching the bottom, the News & Observer reports home prices dropped sharply in February but for the first time in 25 months the decline was not a record.

The Standard & Poor's/Case-Shiller index released Tuesday showed home prices in 20 major cities tumbled by 18.6 percent from February 2008. That was slightly better than January's 19 percent and the first time since January 2007 that the index didn't set a record.

"We've seen early signs of over the last couple of months of some stabilization, particularly in the markets that were hardest hit," Housing Secretary Shaun Donovan said.

But the good news was mixed. All 20 cities in the report showed monthly and annual price declines, but half recorded annual records. Prices fell by more than 10 percent in 15cities, including Las Vegas, San Francisco and Phoenix. In fact, Phoenix home prices have lost more than half their value since peaking in July 2006.

Yet, nine of the metros -- including Dallas, Denver and Boston -- showed improvement in their yearly losses compared with the month before.

Last week, home sales data for March also contained some glimmers of hope for a turnaround. Existing home sales fell just 3 percent from February to March, and new home sales seemed to have hit bottom.

In the Triangle, the average price of a resold home was $213,800 in March, down 2.8 percent from March 2008, according to Triangle Multiple Listing Service data.

Charlotte area sales prices declined 9.4 percent compared with February 2008, according to the S&P/Case-Shiller Home Price Index. That marks the region's 11th month of declining prices, according to the index, which measures price changes for repeat sales of existing homes.

Click Here to view the News & Observer article online.

Tuesday, 28 April 2009

Financial responsibilities of PMs in lean times


In today’s tough A/E market, you need to rely even more on your project managers to lead projects with the overall financial performance of your firm in mind. Make sure your project managers understand your firm’s current financial condition and what they must do in critical areas to improve financial performance relative to your firm’s peer groups.

PSMJ Resources Inc. believes your ability to weather the current economic storm and position your firm for success in an economic upturn depends heavily on how your PMs manage these seven financial responsibilities:

Budgeting: High on a PM’s to-do list is formulation of the project business plan. It should reflect the financial balance between professional, quality work and a client’s ability and willingness to pay.

Profit making: Even higher on the list is the PM’s responsibility to deliver the project as-sold planned profit—or more.

Billing: Regardless of the project status, clients should receive invoices regularly, without delay. So the PM must keep the billing cycle short. Delays in billing may assuage an unhappy client, but they don’t solve the problem, and they can cause you to work with an empty larder.

Collecting: To continue to operate every day, firms need cash, not completed projects. Since the PM is closest to the client, he or she is ideally positioned to “assist” the client in the payment process. The best expression of confidence in the quality of one’s work is to insist on prompt payment for it.

Reviewing charges: The project manager should see that all charges are appropriate, and that all appropriate charges are billed. This includes ensuring that subconsultants submit their invoices promptly; you want to pay no late fees. A good financial history on each and every project is critical for future budgeting.

Using resources effectively: Clients will pay professional fees that yield profits to the firm—as long as they’re not paying for inefficiency or waste. The PM must control the effective use of people, materials, information technology, and all project resources.

Utilizing time: Salaries are the biggest expense for any professional services firm. Direct salary costs produce revenue; indirect salary costs drain profits. Project managers are responsible for seeing that their own time and that of their team meet utilization goals.

PSMJ’s A/E Financial Performance Survey can help you and your PMs easily pinpoint how your direct project labor, utilization, and backlogs compare to those of your peers – firms just like yours! You also get detailed analysis of the data helping you take decisive steps to improve your cash flow and project efficiency. To order, call (800) 537-7765, email customerservice@psmj.com or order online Here.

Monday, 27 April 2009

Recovery funds awarded to 30 counties


The North Carolina News Network reports nearly $46 million will be awarded to 36 communities for wastewater and stormwater projects from the first-round distribution of American Recovery and Reinvestment Act monies by the Department of Environment and Natural Resources.

Moore County, the town of Highlands, the Tuckaseigee Water and Sewer Authority and the town of Lake Lure were each awarded the maximum amount allowed by the ARRA program: $3 million.

“Aging wastewater infrastructure from one end of the state to the other will now begin to see the benefit of the economic recovery funds,” said Gov. Perdue. “Not only will these projects help improve public health and the environment, but they’ll create jobs and boost the local economy.”

The full list of first-round award recipients can be found at: www.nccgl.net/Stimulus.html.

Friday, 24 April 2009

Economists say recession should be over by end of '09


Unemployment rates could stay high well into 2010, but the national recession should be over by the end of this year, economists David Berson and James Smith said during talks Thursday at UNC Asheville.

The Asheville CITIZEN-TIMES reported economist Berson expects the national Gross Domestic Product to start growing again by the fourth quarter of this year, though he forecasted that unemployment nationwide could reach 9.4 percent before the job market begins to improve.

“That's still months away, and even when the recession is done, things like unemployment will continue to get worse for months afterwards,” said Berson, chief economist for the PMI Group and former Fannie Mae vice president and chief economist.

John Smith, who has twice been named the best economic forecaster by the Wall Street Journal, is chief economist for Parsec Financial with a 25-year career in economics.

While the plummeting housing market signaled the start of the economic downturn, the pair said it will also lead the way to recovery. “There's not much good that's come out of this downturn with housing, but one of the good things is housing has been made incredibly more affordable, so first-time buyers can afford them,” Berson said, noting that first-time buyers accounted for 51 percent of sales last month.

It will take some time for the housing market to expunge foreclosed homes, but it should emerge stronger than before as more buyers with sound credit purchase houses they can actually afford, the economists said.

The recession has had a sobering effect on financial advisers who hopefully will realize now that investing represents a real risk that isn't guaranteed to bring sky-high profits, Smith said. “People took too much risk, and that always gets us in trouble.”

But Smith, sees positive signs in the stock market rally, expects investor and consumer confidence to return slowly. Click here to view the CITIZEN-TIMES article.

Thursday, 23 April 2009

Going green would bring jobs, money to North Carolina


State and federal officials say urban areas, like Wilmington or Charlotte, would stand to benefit from a green economy that would provide jobs and income for underserved communities.

In the wake of the national economic downturn, the Wilmington Journal reports the term "green" may hold out hope for economic opportunity to black and other communities of color hard hit by a massive loss of jobs and commerce.

So says Vann Jones, special adviser for Green Jobs Enterprise and Innovation for the White House Council on Environmental Quality. Jones, an African-American attorney out of Philadelphia, is the founder of Green For All, a nonprofit national organization dedicated to building ‘’an inclusive green economy strong enough to lift people out of poverty."

President Barack Obama was so impressed with Jones’ pioneering work, that he brought him onboard at the White House to head up his Green Jobs Initiative per Obama’s American Recovery and Reinvestment Act.

While North Carolinians are still waiting for Gov. Perdue to determine how she is going to spend the $6.1 billion in stimulus money, Jones says African-Americans need to aggressively bone up now on the prospects and promise a green economy offers the black community through those dollars.

"Obviously the African-American community has been hit twice as hard by the recession," Jones said during a White House Black Press teleconference last week. "The number for the African-American community is [13.3] percent in terms of unemployment, which is about double the national average."

He continues, “So what we are needing obviously across the country, and in some places more so than others, are some real rungs put back on the ladder of opportunity, and this president has made a strong commitment that many of those rungs will be green rungs."

Jones says the president’s stimulus package holds the key.

‘’In some ways you could say Barack Obama is not just the first black president, but the first “green” president," he said. "If you look at the $787 billion recovery package, about $20 billion of that is specifically targeted toward things that you would consider green. Energy efficiency and weatherization - creating jobs for people weatherizing houses, blowing in clean, non-toxic insulation; double-paining glasses; breaking out the caulk guns so that there aren’t cracks and crevasses; replacing [old] boilers and furnaces that are outdated and inefficient."

Jones says, “That is the kind of activity that is funded in the recovery package...Not only does it create jobs and cut unemployment, but it also cuts people’s energy bills. So we’re talking about a president who has a green agenda that’s about not people spending more money, but people saving more money and earning more money through green jobs, weatherization and efficiency."

Highway and bridge construction, yes. Education and healthcare, certainly. Those and other standard areas of endeavor are clearly understood by African-Americans to be areas of both bountiful employment and small business opportunity. But Jones says in a global economy, blacks have to now think out of the box.

“A lot of folks in the African-American community think when they hear green that automatically we’re talking about somebody else, some other community, those are not jobs that we will be able to see in [our] community,” he said. “I hope that we can dispel that myth. There’s a wingspan on [green jobs] that really goes from the GEDs to the PhDs.

Every kind of person, every color, every class can participate, and I think that it’s important that all communities look at the opportunity to get in at the ground floor."

But would the green jobs opportunities in the black community be temporary for both workers and small businesses? Jones says far from it.

“Our cities produce about seventy-five percent of our greenhouse gas emissions - pollution that is causing the Earth to heat up - which means we cannot beat global warming without greening our cities. Our cities have buildings that leak too much energy.

“Fixing that requites jobs. Buildings don’t weatherize and retrofit themselves. [So] the solutions for global warming are jobs and contracts in the urban environment,” he said.

‘’The fact that traffic patterns in our cities produce all of this smog and greenhouse gas pollution means [we must] fix our traffic patterns in terms of having smarter transit. That requires jobs and contracts. Putting up solar panels and wind turbines, and manufacturing them, everything that is good in the fight against global warming is a job or a contract, therefore it’s good for people.”

Jones says when it comes to balancing the needs of economic development with environmental protection, ‘’solution to one problem is the solution to the other problem...Urban America is ground zero. You cannot beat global warming without greening the cities, and bringing in new technologies to create energy in a clean way for millions and millions of buildings."

Jones encouraged local communities to call their city and county governments about those dollars, opportunities and programs. Green job training is on the horizon, Jones says.

"There’s $500 million in job training money that is going to the Dept. of Labor that organizations like the [National] Urban League and others should be able to compete for and begin to train people [with] to get in on the ground floor of this clean energy revolution," he says.

For example, Jones noted that people trained now to become solar panel installers can, in a couple of years as the industry grows, become managers of crews, or start their own companies.

He adds, ‘’People in the community could become investors in neighborhood solar panel companies...There are green pathways out of poverty through prosperity that this president is making available to all Americans, and I think all communities should pay very, very close attention."

How can people access these green jobs and contracts? Jones says per the Recovery Act, money is coming from the federal government through certain departments and agencies. In the case of green jobs, the US departments of Energy and Labor are on point for overseeing those funds for distribution to the states and cities. Those local entities, in turn are responsible for funding contracts and programs.

‘’Therefore, what I’m encouraging people to do is pay attention to the websites that the government has set up to keep us informed,’‘ says Jones.

On the federal side, www.recovery.gov, www.energy.gov, and www.dol.gov/ recovery/ for the US Dept. of Labor. In North Carolina, www.ncrecovery.gov is where all updated state information can be found. Click Here to view the complete Wilmington Journal article.

Wednesday, 22 April 2009

Charlotte area schools downshift construction plans


The Charlotte Observer reports that work on new and old schools in the greater Charlotte area has slowed. Schools such as McClintock, Bain and Pineville will wait longer for makeovers. New elementary schools that were supposed to open in 2010 won't even be under construction then.

Mecklenburg County government, like so many families, made big plans based on ample credit during good times. Now that the county's income is dwindling, it's time to scale back.

The debt crunch will play out most dramatically in the school system, which traditionally takes the biggest bite out of the county's capital budget.

The immediate result: projects promised when voters approved $516 million in school bonds two years ago will be delayed, possibly by several years. And voters aren't likely to see another school bond on the ballot until at least 2013.

Voters endorsed a faster construction plan with their approval of the 2007 bond, the largest ever on a Mecklenburg ballot. The more work CMS can do while the recession keeps construction costs low, the more bricks taxpayers get for their buck.

“You know what's going to happen: As soon as we're able to let things loose, prices are going to rise again,” Associate Superintendent Guy Chamberlain said.

County officials say they'll pay for all school projects that are under construction, including six elementary and middle schools opening in August and two high schools opening in 2010.

Commissioners are still working out a plan for borrowing after that. A rough draft sets out $47 million for school projects in 2010-11 and $80 million for each of the next three years. Under that plan, the 2007 bond – essentially a line of credit authorized by voters – wouldn't be tapped out until the final year 2013-14.

Commissioners could bump those totals up a bit, but only by taking the money from jails, parks and other county projects. Commissioner Vilma Leake, who was on the school board when the 2007 package was approved, agonized recently over being forced to choose between schools and a senior citizens center.

Decisions about school projects are always rooted in the past and guided by predictions about the future.

Construction can be an effort to compensate for decades of neglect, or to adjust to enrollment patterns that have shifted or been misjudged. In the booming 1990s, for instance, CMS got voter approval to replace many dilapidated center-city schools and build some new ones.

The result: Students moved into large, light-filled buildings wired for modern technology. But when court-ordered desegregation ended in 2002, many of those schools were left with empty classrooms.

Some have since filled, but others – from Phillip O. Berry Academy of Technology, designed as a corporate-style state-of-the-art magnet for 1,500 teens, to Westerly Hills Elementary, with only 300 children – remain oversized for enrollment.

Meanwhile, students surged toward suburban Mecklenburg when the assignment plan changed to focus on neighborhood schools. Soon, many suburban schools overflowed into encampments of trailers surrounding the main building.

Recent borrowing has focused on catching up with new suburban schools. But the district's plan continues to include a hefty share of renovations – partly to ensure that older schools aren't neglected and partly to give voters across the county a stake in saying yes to bonds.

CMS's latest 10-year plan, which assumes the district can tackle about $250 million worth of work each year, was crafted when enrollment was booming and the economy was healthy.

Normally, the school board would have updated it by now, and a slowdown in spending would mean a much shorter 10-year list. But the borrowing crunch makes the effort largely theoretical. The district's first priority is to deliver on projects promised in the 2007 bond campaign.

CMS officials have been urged to find creative ways to build schools, but the sagging economy has thrown them some twists.

Crescent Resources, the developer of the huge Palisades subdivision in southwest Charlotte, agreed to provide free land for an elementary school, as long as construction began by July 1, 2009. That seemed like plenty of time seven years ago; now it's an unmeetable deadline. CMS recently negotiated a one-year extension and hopes to meet that under the slowed-down borrowing plan.

To get land in the booming Ballantyne area of south suburban Charlotte, CMS agreed to buy 39 acres from a developer who already had it zoned for a small subdivision. The plan was for CMS to build roads and lay utility lines, get the lots ready for construction and sell them to a company that would build the houses.

Ballantyne Elementary opened in August, and in September CMS staff told the school board there were interested buyers. But the board held off, asking officials to explore whether the district could require developers to include affordable housing.

Since then, the housing market has plummeted even further. The potential buyers lost interest, says Chamberlain, the administrator in charge of construction. Mecklenburg County now has a two- to three-year backlog of developed lots, he said.

That means for the foreseeable future, the school will continue to nestle among empty roads bearing such names as Knowledge Circle and Great Future Drive.

Despite the twists and turns, Chamberlain says CMS has hit important targets. Come August, the district will pull about 350 of its 1,200-plus mobile classrooms out of circulation, delivering on a promise to move students into regular buildings.

After a 2005 bond defeat, CMS found ways to pare construction costs, such as designing smaller rooms. The district's square-foot construction costs are well under state averages, according to N.C. construction tallies.

And with the slowdown making builders eager for work, several projects have come in under budget, a total of $14 million under costs projected during bond campaigns.

To the dismay of many officials, though, that's not $14 million in the county piggy bank. It's just an extra $14 million left on the line of credit – credit that county officials must dole out more slowly now.

Any unspent money would be available for new projects only after CMS works its way through the 2007 bond list. Click Here to read the complete Charlotte Observer article.

Tuesday, 21 April 2009

Recession means bargains for state and local government projects


Green Square will house the Nature Research Center and the N.C. Department of Environment and Natural Resources.

The economic downturn is wreaking havoc on state and local government budgets the News & Observer reports. But amid the gloom there is a bright spot: construction costs.

During the past nine months, the state of North Carolina, Raleigh, Durham, Wake County and other local governments have seen all types of construction projects coming in under budget, some by as much as 30 percent. But the friendliest building climate in years is coming when many private and public entities have little or no money.

"It's a strange dichotomy," said Lynn Raynor, a senior project engineer with the city of Raleigh.

Governments are benefiting from a confluence of factors that is helping to drive down construction costs.

Just two years ago, a global building boom had caused the cost of labor, materials and construction services to rise to unprecedented levels. But as credit markets have tightened in the past year and a half, and as the economy has slowed, financing and demand for most commercial and residential construction projects have evaporated.

Now, hungry contractors, from demolition crews to graders to architects, are looking to the public sector for work and aggressively bidding down the costs of their services.

"Private industry has just about dried up, and the public [sector] is where the work is," said Gregory Driver, the state's construction director.

The number of bidders on public works projects is now double or triple the usual number. Chuck Wilson, president of C.T. Wilson Construction in Durham, said many contractors had commercial work through the end of 2008, but little work this year.

"Now, everyone is trying to replace the current projects with new projects, and there are so few," Wilson said. "Unfortunately, a lot of contractors and subcontractors will have a hard time weathering this storm."

Small government projects that in better times would draw only modest interest are now being hotly contested. At Haw River State Park in Alamance County, a $500,000 state project to improve the park's conference center has drawn proposals from 36 design firms.

Fierce competition among bidders means contractors are doing their due diligence about just how low they can go.

When Raleigh recently solicited bids for a renovation of its downtown district police station, the winning bid was about $1.2 million or 15 percent less than the city had expected. Wayne Baker, the city's construction administrator, said the two lowest bids were separated by just $150.

The precipitous decline in construction costs poses a dilemma for public officials. On the one hand, governments are grappling with declining revenue. And their constituents, who are facing economic struggles in their own homes, may balk at any big government expenditures.

At the same time, the deflation in construction costs is a boon for state, county and municipal governments, which can use their tax bases as a guarantee to lenders. For them, financing projects may not be a problem, and they can move forward at reduced costs.

The state has not increased spending on construction projects, but it has not slacked off, either. So far this year, the State Construction Office has bid 74 projects totaling $186 million. All have come in under budget.

"We are maintaining," Driver said. "They realize prices are lower. It's also an effort to stimulate the economy. Construction is a huge driver of our economy. It affects so many people - not just the guy on the construction site."

The News & Observer reports low bids on road, water and sewer, and building projects are coming in below original estimates, sometimes by as much as 30 percent. Click Here to see a sampling of some projects that have come in under budget.

Monday, 20 April 2009

Stimulus is helping the construction industry


The Associated General Contractors of America (AGC) report their member companies involved in highway and transit construction have been pleased with the speed with which the federal government and its state partners have been able to move in identifying and awarding stimulus-funded projects.

North Carolina has earmarked $679 million of the $735 million it will receive in stimulus-funds mostly for road and bridge improvements.

Stephen E. Sandherr, AGC's chief executive said members have consistently cited the transportation program as a model for being able to quickly and effectively fund projects in a way that puts construction workers back to work quickly while restoring America’s aging infrastructure.

"Given the extremely challenging economic environment our contractors are operating in, with significant declines in private-sector construction activity, it is hard to imagine how much worse conditions would be if not for the stimulus. The bottom line is our members are eager and anxious to get to work rebuilding America’s economy and the stimulus is helping them do just that,” Sandherr added.

The News & Observer reports a wave of federal transportation stimulus money is heading to the Triangle, where millions of dollars will be spent in the next eight months to widen U.S. 401 in northern Wake County and improve other roads, build a new bus garage in Raleigh, and build sidewalks and bike paths.

Next year Raleigh will start building a $22.5 million Capital Area Transit bus garage and operations center on 23 acres off Poole Road. The city recently secured $4 million in stimulus money and $10 million from other federal sources.

Click Here to see a breakdown of contracts Federal stimulus funds will pay for that will be awarded in coming months (with cost estimates).

Friday, 17 April 2009

Feds seek outside firms to manage stimulus-funded projects


Obama meets road crews at DOT headquarters while marking transportation stimulus milestone.

Lists of stimulus-funded projects are now rolling out of federal agencies, but there are still many questions about how government entities will effectively manage the nearly $135 billion in work hitting the market in coming months.

With many agencies hampered by staff cutbacks in key areas such as procurement and contract oversight, Engineering News-Record reports federal officials are seeking answers from within their ranks and debating the need to tap private industry for help. Many project-management and construction-management firms believe trends are in their favor.

Todd Wager, executive vice president of business development at Pasadena, Calif.-based Parsons Corp., says the steady loss of contracting officers and other administrative positions in federal agencies over the past decade has created a demand for contracted PM and CM services, something that is likely to increase in response to the stimulus. “Over the last 10 years, you’ve seen far more of the non-inherently governmental operations go to contractors as these cuts have taken place,” he says. “With all of this work coming, [internal staff] isn’t something you can grow quickly. It’s a huge challenge for some of these agencies, especially the smaller ones.”

Parsons Transportation Group is currently on the management team for the Terminal 3 RDU Airport Expansion project in Raleigh-Durham.

Because the stimulus program is designed to get projects started and completed quickly, the U.S. General Services Administration sees its staffing demands as temporary, says Bill Guerin, head of the agency’s new Recovery Act Program Management Office. Rather than hiring new permanent staff, GSA is seeking private-sector help to ensure that the agency meets its short-term goals, he says.

“We have a great opportunity now with so many qualified people out of work to bring people in to support us,” Guerin says. “We also have contractors, including large construction managers that we work with regularly. [GSA] can reach out to [those firms] directly to offer additional work.”

Similar strategies are expected within the Dept. of Defense. Tom Bishop, senior vice president of the construction services division of San Francisco-based URS Corp., anticipates the U.S. Army Corps of Engineers and the Naval Facilities Engineering Command will lean more heavily on project managers, as they did under the Base Realignment and Closure program.

“They are building up in the right ways, which is at the programmatic control level,” Bishop says. “That allows them to get the contracts out the door quickly. That’s the appropriate place to focus.”

NAVFAC has brought on program managers under BRAC, particularly in high-activity regions, such as the Mid-Atlantic and Southwest. Joseph Gott, NAVFAC chief engineer and director for capital improvements, says he expects to continue using program-management firms in those regions to help with stimulus projects.

Click Here to read the complete ENR article.

Thursday, 16 April 2009

Foreclosure filings down in N.C


The number of foreclosure filings reported in North Carolina in March fell by 40 percent to 1,977, compared with March 2008, according to a RealtyTrac report released by the Winston-Salem Journal. The number of filings was down 3 percent from February.

There were 471 foreclosure filings in the Charlotte-Gastonia-Salisbury MSA (down 58 percent from March 2008), 321 in the Greensboro-High Point MSA (up 21 percent), and 287 in the Raleigh-Cary MSA (down 38 percent).

In the Winston-Salem metropolitan statistical there were 254 foreclosure filings, up from 222 in February and 188 in March 2008. The Winston-Salem MSA consists of Davie, Forsyth, Stokes and Yadkin counties. Forsyth accounted for 234of the foreclosure filings in February.

View the Winston-Salem Journal article here.

Wednesday, 15 April 2009

NC roads, bridges and rail get low scores


North Carolina hasn’t improved very much according to an engineering report on roads, water and other infrastructure needs. The federal stimulus money isn’t helping much either. The report by the American Society of Civil Engineers only found a slight improvement in drinking and waste water treatment. Roads and rail had a lower score.

Spokesman David Peterson says the federal stimulus package, which was supposed to improve the infrastructure, wouldn’t solve the situation, just maintain it. State Transportation Secretary Gene Conti says the stimulus projects are coming in under budget so that means money is left over to spend on other needs. He complains the state is not getting a fair share of the federal funds despite its growth. Conti says the distribution is made with an outdated formula.

For the complete ASCE report, click here.

Monday, 13 April 2009

Incentives, tax breaks bring down cost of energy-saving upgrades


Workers from Southern Energy Management begin installing solar modules on the roof of a Chapel Hill home.

N.C. homeowners will be able to take advantage of the same kinds of financial subsidies that have helped residents in other states retrofit their homes with solar panels and other energy-saving devices, the Charlotte Observer reports.

Prodded by public demand, utility companies in NC are beginning to roll out conservation programs to subsidize the cost of “green” upgrades in the home.

State regulators last month approved financial incentives to help customers of Charlotte-based Piedmont Natural Gas and PSNC Energy offset the cost of energy-efficient furnaces and water heaters. Similar incentives were approved in February for Duke Energy's customers, but they were part of a proposal whose status is still unsettled.

By the end of the year, a NC homeowner will be able to choose from a smorgasbord of financial incentives – federal, state and local. The money-saving opportunities for customers will increase in coming years as the state's electric utilities respond to a 2007 conservation law and offer more financial incentives.

“If you haven't checked in lately on these things, there is this opportunity for combo incentives where you get anywhere from 30 percent to 50 percent off on these high-dollar (upgrades),” said Stephen Smith, executive director of the Southern Alliance for Clean Energy. “They can be amazing. And as electricity rates continue to creep up, these things will become more and more utilized.”

But proceed with caution. Don't rush out today to buy an appliance with a “green” label and expect a financial reward down the road. To qualify for the incentives, homeowners will have to demonstrate that the appliance – and the contractor who installed it – meet specific criteria. Some conservation incentives in this state are merely proposed and not approved by the N.C. Utilities Commission. Others have been approved but won't be available to the public until later this year.

The main problem is that the incentives are more complicated than they first appear. Homeowners are advised to make sure they qualify for the subsidies before spending on upgrades, not after.

Air conditioners provide a good case study. Local utilities are offering, or proposing, rebates for central cooling-heating systems with efficiency ratings ranging from SEER 13 to SEER 15. But none of those energy-efficient models might qualify for the $1,500 federal tax credit, because in some cases the federal incentive applies to systems rated SEER 16 and higher.

Then there's the matter of installation of the HVAC systems, water heaters, windows and other upgrades. These aren't do-it-yourself projects – the terms require licensed contractors to qualify for incentives.

Calculating the financial benefits also can be a headache. The N.C. state tax credit counts as taxable income by the IRS. The utility incentives reduce the basis for the federal tax credit, so that the credit on a $1,000 expense with a $100 incentive is only good for $900.

Financial incentives for conservation and renewables are constantly evolving, with new ones being added and federal benefits set with expiration dates.

The terms of federal incentives changed this year, when Congress removed financial caps and extended expiration dates for some programs. For instance, the $500 overall incentive was increased to $1,500. The cap on geothermal and solar energy was removed. At the state level, conservation advocates in N.C. are pushing for more generous incentives in the state's tax credit program. For a summary of federal, state and utility incentives, check:


http://www.energytaxincentives.org/
http://www.energystar.gov/index.cfm?c=products.pr_tax_credits
http://www.dsireusa.org/
http://www.piedmontng.com/
http://www.duke-energy.com/north-carolina/savings.asp.

Click here to read the complete Charlotte Observer feature.

Friday, 10 April 2009

New rules for contractors working on stimulus projects


The Ameridan Subcontractors Association report that new rules, effective March 31, mandate how federal agencies will provide oversight of contractors on federal stimulus projects, including reporting and transparency requirements that apply to subcontractors.

First, the rules require prime contractors and subcontractors identified as “first-tier subcontractors” working on stimulus projects to provide progress updates, estimates on job creation, and the names and compensation for the five most highly compensated company officers to the Web site, www.FederalReporting.gov.

Second, the rules grant whistleblower protections that prohibit employers on stimulus projects from “discharging, demoting or discriminating against an employee” who reports fraud, waste or mismanagement.

Next, the rules give the Government Accountability Office and an agency’s inspector general access to any employee or documents associated with a stimulus project when investigating allegations raised by the public.

Finally, the rules implement the law’s Buy American provision, which prohibits the use of steel, iron and other manufactured goods not produced in the United States. A contracting officer who deems the Buy American provision too expensive to implement can waive it in certain circumstances.

Contractors can send comments on the rules, FAR Case 2009–008, FAR Case 2009–009, FAR Case 2009–011, and FAR Case 2009–012 at www.regulations.gov.

Click Here to read more about ASA's federal procurement initiatives.

Thursday, 9 April 2009

NCDOT ready to spend stimulus funds


The American Recovery and Reinvestment Act came along just as traditional revenues for new roadwork were drying up in North Carolina and road lettings were being reduced to a small fraction of recent levels.

McGraw-Hill's Southeast Construction reports NCDOT has between only $15 million and $20 million available monthly for traditional lettings. That’s down 75% from 2008, when the state let $948.6 million in new contracts, or an average of nearly $80 million per month.

Revenues are down about 11% overall, but the highway-use tax, derived from vehicle sales, is down about 30% this year, says Burt Tasaico, state program analysis engineer for NCDOT, adding that the highway use tax primarily funds the highway trust fund account, which is used to pay for capital projects in the state’s transportation improvement program.

“We have to ensure the monies will be there in the future to meet and pay contractors for the work that they have just performed,” Tascaico says. “It’s a balancing act between meeting the obligations that we know into the future and being able to obligate more and still meet our financial responsibilities.”

North Carolina’s long-term funding shortage is in the billions, Tasaico says. Resolving the funding problems will require additional revenue sources, such as increases to the fuel and highway taxes or other user fees associated with driver licenses or titles.

“It has a lot of implications, not only internal but external to the department,” Tasaico says. “It impacts every citizen on a day-to-day basis.”

Thanks to the stimulus, “We’re beginning to be a bit more optimistic,” says Berry Jenkins, North Carolina Heavy-Highway Division director for Carolinas Associated General Contractors.

The state will receive $838 million in federal funding, with $735 million designated for highway and bridge improvements and $103 million for aviation, transit and other modes of transportation. States must obligate half of the dollars within 120 days, and all of the money must be committed within one year. The federal government will give priority to projects that can be completed within three years and are located in economically distressed areas.

“North Carolina is trying to focus the projects on ones where North Carolina suppliers for materials can be utilized,” Jenkins says.

By June, NCDOT plans to let $466 million of the stimulus money to fund about 70 projects, the majority of which had been delayed or deferred due to funding constraints. The department considered more than $5 billion in potential highway projects, evaluating them for their ability to create and sustain jobs for a wide variety of industry partners throughout the state.

State transportation officials estimate this round of infrastructure improvements will create or retain about 14,000 jobs.

NCDOT has experienced an up-and-down work program over the past few years. For example, the department let $948.6 million in 2008, $1 billion in 2007, $666.8 million in 2006, $475 million in 2005, $1.3 billion in 2004 and $1.2 billion in 2003, according to department records.

In 2007, Steve Varnedoe, chief engineer for NCDOT, began using Grant Anticipation Revenue Vehicles or “GARVEE” bonds to finance jobs. Jenkins says GARVEE bonds have not created a problem for the agency, as it has used them judiciously to build large projects.

Currently federal revenue is holding at the same level or is a little higher than last year, says Laurie Smith, in the funds administration section of the NCDOT.

“We’re borrowing future dollars to hedge inflation,” Tasaico says. “We’re able to get the North Carolina motorist on the road, using the facilities, years ahead of schedule.”

However, in early 2009, Jenkins says, contractors were expressing some concern about NCDOT’s ability to pay on current project, especially a couple of design-build jobs that were ahead of schedule.

“Now, to the best we can learn, current projects being paid is not a problem,” Jenkins says. “And we don’t anticipate it is a problem.” Click Here to view the Southeast Construction article.

Wednesday, 8 April 2009

State may shift money to highway repairs


The Charlotte Observer reports state senate budget writers want to set aside more money to fix North Carolina's deteriorating highways, so they plan to divert funds from a program that paves dirt roads and improves other secondary roads.

The Senate budget proposal released this week would cut the entire $84.8 million in the Highway Fund's secondary road improvement program next year, using it instead to shore up maintenance spending. Included in that money is about $15 million that would have been earmarked for putting asphalt on unpaved roads.

Senate leaders said they would leave untouched a separate Highway Trust Fund account that is expected to generate $57.5 million next year, all for paving dirt roads. To put that in perspective, it's a little more than half the proposed budget of $110.8 million for building urban freeway loops.

North Carolina had 16,000 miles of dirt roads in 1989 when the legislature made a commitment to pave most of them. The unpaved count has dropped since then, and now the state has about 4,800 miles of dirt roads.

Environmental and other obstacles will keep about 3,000 miles unpaved forever. Still, DOT still hopes to put asphalt on 1,800 miles of dirt roads in 85 counties – even on quiet lanes that serve two or three houses and see fewer than 50 cars a day.

Shifting the $84.8 million would give the state Department of Transportation a total of $910 million for road maintenance next year.

“I think that makes sense,” said Sen. Neal Hunt, a Raleigh Republican who serves on the transportation appropriations committee. “If you ever let your roads get to a certain point of deterioration, the repair costs will quadruple.”

To read the complete Charlotte Observer article Click Here.

Tuesday, 7 April 2009

NC can be the nation's leader in renewable energy


Renewable energy can provide job-creating opportunities for NC engineering and construction firms. “Green is gold in North Carolina and America,” Gov. Bev Perdue told energy summit participants yesterday.

The Charlotte Observer reports Gov. Bev Perdue visited the Queen City on Monday to tout renewable energy at a gathering of business leaders who believe creating a jobs-rich “energy cluster” can help pull the region out of recession.

Representatives of more than 50 energy organizations attended the first Charlotte Energy Summit, sponsored by Duke Energy, the Charlotte Chamber and the Charlotte Regional Partnership.

The region's manufacturing base and existing energy core could give the state a head start. The six nuclear reactors planned for construction in the Carolinas are drawing engineering and construction firms.

North Carolina's requirement that utilities draw 12.5 percent of their electricity from renewable energy by 2021, meanwhile, is luring companies that make power from the sun, wind and organic wastes. Federal support, in the form of stimulus dollars for energy-efficiency and renewables, is beginning to flow to the states.

But barriers to renewables' growth include the oddball connotations of a single word.

“Nobody wants to be considered ‘alternative,'” said Maria Kingery, co-founder of Southern Energy Management, which does energy-efficiency and renewable-energy work in Charlotte and Raleigh. “I really like the idea of ‘sustainable,' because it implies something that's going to last.”

Perdue's prescription for growing energy jobs: Make smart state use of federal stimulus money for energy. Create a tax credit to reward entrepreneurs who don't move their growing companies out of the state. Invest more in the state's Green Business Fund, which makes grants to innovators, such as Charlotte's Sencera solar-panel start-up. And provide job training for a growing work force, from engineers to technicians.

“If we get this right,” she said, “I believe we can make North Carolina the nation's leader in renewable energy.”

The Charlotte Regional Partnership, a 16-county economic development agency, says energy jobs would add some healthy diversity to the region's economy. Opportunities also exist here, said vice president David Swenson, to cross-pollinate related industries – such as energy with environment, and security with defense.

The partnership met with solar, plastics and other energy-related firms during a visit to California in late March. “When we showed our cost of living, and our costs of labor, to guys in California, it just floored them,” he said.

UNC Greensboro geographer Keith Debbage last year identified 519 manufacturers in the Charlotte region that could supply components for wind, solar, biomass and geothermal companies.

UNC Charlotte recently created its Energy Production and Infrastructure Center to supply engineers for the industry. Some estimates say that nearly half the energy industry's engineers could retire by 2012.

Click Here to view the Charlotte Observer article.

Monday, 6 April 2009

NC lawmakers question demands on homebuilders


L'Hermitage at Beaver Creek, an unfinished Apex subdivision, contains only two occupied homes.

Congressmen from the Triangle say that lenders are making unreasonable demands of homebuilders, pushing responsible borrowers out of business and sending more pain through a battered economy, the News & Observer reported.

Now they're asking federal regulators to investigate whether the banks are doing it by choice, or if they're being pressured by government examiners tasked with ensuring the health of lenders.

"Homebuilders are experiencing an untenable constriction in terms and availability on land acquisition, land development and home construction loans, and builders with outstanding loans are facing mounting challenges," U.S. Rep. Brad Miller, a Raleigh congressman, wrote to Treasury Secretary Timothy F. Geithner on Friday. "This cascading freeze in home building credit is placing additional strain on local economies already suffering job and revenue loss."

The lending crisis isn't crippling just builders. Once-promising communities are being abandoned in the middle of construction, leaving subdivisions pocked with half-built homes and red-clay lots. Homeowners, meanwhile, are being saddled with falling property values and grief.

The letter, which was signed by 47 representatives from both parties, is among the latest efforts by lawmakers to repair the nation's lending system. It comes after months of lobbying by the Home Builders Association of Raleigh and Wake County, which is among the nation's biggest builder trade groups.

Lenders have tightened underwriting standards as the economy has soured. But some are being too strict, builders and lawmakers say. Banks, meanwhile, say that federal regulators are urging an extreme level of conservatism that is constraining loans. The finger pointing comes as the federal government is spending hundreds of billions of dollars on efforts to unfreeze lending.

Amid the worst housing bust since World War II, it may seem odd for Miller to shoulder the cause of struggling builders. After all, his district has avoided the brunt of the housing downturn, becoming the envy of builders in harder-hit parts of the country. Yet the fact that tight consumer and commercial lending are hammering homebuilders even in the Triangle, one of the nation's fastest-growing regions, may give his voice weight.

Tighter mortgage standards have pushed Triangle home sales to a decade-low this year. That has pinched the cash flow of builders, who usually borrow money to build.

During the boom, it was standard practice for lenders to renew expiring short-term loans, especially to those who were making payments on time. But in recent months, dozens of homebuilders -- including many who say they are current on payments -- have detailed an indiscriminate reversal. When loans are due, builders say, some lenders are asking for payment in full or requiring borrowers to pay more equity into loans and pay higher interest rates.

Transferring a loan is more difficult, now that many banks are trying to reduce residential construction loans. And covering new -- and more expensive -- terms is impossible for many builders because their assets are largely tied up in dirt and building materials.

"There are homebuilders who have made it through every other downturn in the economy, who are some of the soundest homebuilders in the area, that are very worried about whether they'll survive this downturn," Miller said in a telephone interview.

Almost one-fifth of the region's builders have been wiped out by the crunch. And some of the region's biggest builders, including Den-Mark Construction, St. Lawrence Homes and Anderson Homes, have been forced to seek bankruptcy protection. Click Here to view the complete News & Observer story.

Friday, 3 April 2009

NC contractors look for ways to get federal dollars



NC contractors and other local business owners attended a government procurement event in Salisbury yesterday that focused on tapping into the billions of dollars federal and state governments spend every year, the Salisbury Post reported.

"We have a GSA contract on just about everything," said Dinora Gonzalez, small business technical advisor with the U.S. General Services Administration.

The program, organized by the Salisbury-Rowan Economic Development Corp., came at a time when federal and state agencies are beginning to pump funds from the $787 billion American Recovery and Reinvestment Act into the economy.

"The bottom line is, there's going to be more federal spending than there has ever been in our lifetime," said Robert Van Geons, executive director of the EDC.

If they came away with anything, the participants learned they must register to do business with government, that they'll find out about most projects online, that often their opportunities will be as subcontractors and that the government usually throws in some extra administrative and inspection steps if they are awarded contracts.

But it's worth the time, speakers said Thursday.

"All of this stuff is so overwhelming, you have to hear it over and over again before it sinks in," the GSA's Gonzalez said.

GSA is a key player in awarding and managing federal contracts. It essentially serves as the purchasing agent for products and services in support of most federal agencies. GSA also serves as landlord for all federal buildings and courthouses — all of which need to be maintained, furnished, refurbished and repaired.

To do business with the GSA, Gonzalez explained, a company has to register online, have a basic knowledge of how federal contracts work and have a performance history.

Other speakers Thursday included Glenn Harris of the Small Business Administration; Archibald Black, procurement counselor for the N.C. Small Business and Technology Center; James D. Staton Jr., the state's purchasing officer; Ritchie Hearne, project engineer for Division 10 of the N.C. Department of Transportation; and Scott Dorney, executive director of the N.C. Military Business Center.

Procurement Technical Assistance Centers serve as a bridge between the government and local businesses.

Black said the assistance centers — there are five counselors in North Carolina — can help in applying for GSA schedules, marketing to government agencies, understanding government requirements, locating bid opportunities and more.

"Everything you can think of in government procurement," Black said, "we're here to help you."

Jack Staton, the state purchasing officer, told the local business representatives to make themselves familiar with several state Web sites connected to purchasing and contracts.

Scott Dorney said Rowan County businesses — and others in North Carolina — could do a lot better job selling to the Department of Defense and other government entities.

His agency's MatchForce.org is "a dating service for federal contracts," he said.

Businesses should take the 15 minutes or so needed to fill out their company's profile and register for information on the military-support opportunities that might be available, Dorney said.

Military construction spending in North Carolina over the next four years will amount to $5 billion to $7 billion. Every new stimulus project is listed on the center's Web site, Dorney said.

Every $100 million spent on defense contracts creates or saves 3,000 jobs and leads to $7 million in corporate tax revenues, according to Dorney. Click Here to read the complete Salisbury Post article.

Thursday, 2 April 2009

Biden touts aid in rural NC


Vice President Joe Biden outlined ways yesterday that the federal stimulus package will help rural North Carolina thrive once the economy recovers during his visit to Faison and Pikeville NC, the Winston-Salem Journal reported.

Biden announced that federal officials will distribute $1.8 billion in loan guarantees for nearly 10,000 rural families to buy houses nationwide. The state will receive $322.9 million as part of that program.

Biden visited Eastern North Carolina with Agriculture Secretary Tom Vilsack in the White House's latest effort to highlight the $787 billion federal stimulus package. The two communities are in, respectively, Duplin and Wayne counties, southeast of Raleigh.

Biden, whom President Obama chose to oversee the enactment of the recovery program, focused on how the money will help improve health care and public safety in rural communities.

During a tour of Goshen Medical Center in Faison, Biden said that $635,000 from the package will help the community health-care clinic hire two physicians and two nurses to serve 5,000 more patients a year. The clinic now sees about 41,000 people annually at 20 sites in five counties.

The stimulus includes about $2 billion for community-health centers, and nearly $500 million has been pledged to clinics nationwide. North Carolina's 27 community health clinics, which provide low- or no-cost health care to uninsured patients, will get $8.6 million.

In Northwest North Carolina, the West Caldwell Health Council Inc. has received $100,000 in stimulus money that it will use to hire a health educator, said Valerie McRary, the council's chief executive officer. The educator will provide health information to uninsured people and patients with such chronic illnesses as diabetes.

The council runs the Collettsville Medical Center in Collettsville and the Happy Valley Medical Center in Patterson, both rural health clinics in Caldwell County. Their patients include people who live in Wilkes, Watauga and Alexander counties.

Biden and Vilsack also went to the Pleasant Grove Volunteer Fire Department in Pikeville, which is getting money to replace an aging station.

In Forsyth County, the Lewisville Volunteer Fire Department plans to apply this summer for stimulus money to build a second fire station, Chief Scott Alderman said. The U.S. Department of Homeland Security has $210 million in stimulus money for building and renovating fire stations nationwide.

The fire department has bought five acres at the corner of Shallowford and Williams Roads near the West Bend Vineyard for the station, Alderman said.

The Winston-Salem Fire Department also has plans to apply for stimulus money to renovate two stations near the city's outskirts and replace some fire trucks, Chief Antony Farmer said.

"All of those things are on our radar," Farmer said. To view the complete Winston-Salem Journal article Click Here.

Wednesday, 1 April 2009

State Web site on contracts, grants begins operation


An Internet site that allows people to search for information on North Carolina state government contracts and grant awards is up and running, the Winston-Salem Journal reports.

Gov. Bev Perdue announced that the first phase of the Web site www.ncopenbook.gov went online yesterday.

The site has a database of about 2,500 contracts and 5,000 grants that can be searched using keywords such as vendors and grant recipients. The state budget office is working so that more transactions will be included later this year, including state agency performance measures.

Perdue said during last fall's campaign for governor that she would create such a site to improve transparency in government. Click Here to view the Journal article.