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Construction Industry in State of Decline in New Jersey

Over our past few blog posts we’ve talked about how the construction industry is seemingly on the rise, how contractors are shaping the world of tomorrow and where you may fit into that overall picture. Unfortunately, we have some bad news. Two years ago, New Jersey was hit hard by Superstorm Sandy, a storm that claimed the lives of 34 people living in the state, destroyed homes and disrupted life as we know it for countless numbers of people residing in New Jersey. Contractors were quick to lend a hand as opportunities to rebuild were fairly abundant as the Federal Government and the state sought to return everyone to some semblance of normalcy. But, the industry that had grown so much and restored so much hope has finally experienced a state of decline which gives rise to the question; what will New Jersey contractors do as opportunities for employment dry up within the state?

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Hurricane Sandy debris removal scams have feds worried

When people think about the impact of a superstorm or a hurricane they typically think about the damage inflicted upon people’s homes as well as their communities. They think about rebuilding and creating a new hope. What they don’t consider is all of the rubble (left behind by the storm) that must be cleared away before contractors can even think about setting foundations and paving new roads. It’s not a particularly fun job but it’s a necessary one if the community is ever to regain some semblance of normalcy.

After major tragedies there are plenty of stories of contractors doing the right thing (and sometimes going above and beyond that) to help those in need yet (like every profession), there are those who will abuse their position in order to gain either political leverage or some form of illicit cash flow. That’s exactly what happened in Belmar, New Jersey as federal auditors have recently questioned over $500,000 in Hurricane Sandy debris removal costs, which apparently stem from a suspicious relationship between two firms and a local politician.

Matthew Doherty, the mayor of Belmar, has recently come under increased scrutiny from the federal government. Auditors from the Department of Homeland Security’s Office of Inspector General found that both J.H. Reid of South Plainfield and Ferreira Construction of Branchburg (who both have relations to Mr. Doherty’s wife) accounted for over half of the town’s debris removal costs (roughly $1.6 million dollars in all).

Doherty claims that the costs were substantially higher than they should have been as they were awarded on an emergency basis. Though the costs may have been higher it is not immediately apparent why the federal government has become involved. But, look a little closer at the report and it becomes much clearer. The town of Belmar wants the Federal Emergency Management Agency (FEMA) to cover $285,000 in markups. A price Inspector General has refused to accept on the condition that the firms used a cost-plus-percentage-of-cost method of billing which does not adhere to federal regulations.

Using that method of billing and the relationship to Mr. Doherty’s wife both firms were able to charge a sum that was substantially higher than the norm. With superstorms and hurricanes frequenting the East coast more often towns and local governments should take care to come up with a reasonable plan of action for debris removal that will increase the incentive for contractors to control costs and hopefully result in a much smoother phase of redevelopment. With debris still littered across the tri-state area keep your eyes open for those who may be misusing their power when it comes to clean-up. We would much rather have good contractors such as yourself rebuilding neighborhoods instead of those who may do more harm than good. Happy building!

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Bayonne Dry Dock Employees Displaced by Sandy Finally Paid

Jutting out into the Upper Bay, just across the water from Sunset Park in Brooklyn, lies a large rectangular peninsula whose rigid edges betray the rest of the landscape. Covered by a mass of concrete and blacktop, the structure appears dead; deserted like a minute, urban desert. This is the Military Ocean Terminal.

Created in the years before World War II, the man-made peninsula was designed to give the U.S. Navy extra space to dock their ships in the Upper Bay, which separates New Jersey from New York. Plans were made in the early 2000s to turn the abandoned shipyard into a residential community that overlooked downtown Manhattan, but then the recession hit, crippling Bayonne’s economy. The plans never came to fruition, and the terminal continued to decay.

Today, the site serves as a home to ship repair companies, who, like the land they occupy, are in some pretty serious trouble. Bayonne Dry Dock and Repair Corp, as well as Coastwide Material Supply, have been made to pay $720,000 in unpaid wages and damages to the US Department of Labor (DOL). The US DOL will then distribute that money to over 200 workers who were wrongfully denied proper overtime.

Dry Dock and Repair had a federal contract to repair US Navy and Coast Guard vessels, while Coastwide Material (which shares common ownership) was hired as a subcontractor for the work. Neither company kept accurate records, and when the DOL looked into the matter, they found that 224 workers were not paid properly. Moral of the story: don’t sign a government contract and then blatantly break the law.

Perhaps the most abhorrent part of this story is that most of the workers were displaced after Hurricane Sandy, and without a substantial income, they have had a difficult time keeping their heads above water.

“These back wages will go far to help these workers, many of whom were displaced from jobs after Hurricane Sandy,” stated John Warner of the Wage and Hour Division’s Northern New Jersey District Office. “The workers did what was expected of them and sought employment to provide for themselves and their families. They deserve proper payment for hard work.”

Yes, they do. And one would think that they should earn a bit more because of the delay.



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Rising Sediment Has NJ DOT Concerned About Marine Safety

From the beaches by the Leonardo State Marina one can just make out the silhouetted skyline of Staten Island and Brooklyn. Ocean water laps lazily against the shoreline, covering the white sand with shades of blue and green. Though only a few miles from downtown Manhattan, this part of New Jersey feels like it’s a world away.

Here and there, the remains of Hurricane Sandy still haunt the streets of Middletown, New Jersey. Buildings are without siding, glass shards penetrate the ground around a plethora of broken windows and mangled fences. Those images are not uncommon in the tri-state area. What is uncommon are images that show the damage that the superstorm inflicted below the surface.

If you were to dive down into one of these affected waterways (with some reference of how the sea-floor previously looked), you would notice a sizable difference. Mud, rock, and sediment have begun to form an underwater series of hills. You look up and notice an ocean liner has passed above you, leaving a trail of bubbles in its wake. While the hills may not represent much of a problem at the moment they could eventually disrupt transportation between New Jersey river-systems, and the Atlantic which has prompted the state Department of Transportation to bid for channel dredging projects across New Jersey.

“Our state channels are vital waterways that are used by recreational boaters and commercial fisherman,” NJ DOT Commissioner James S. Simpson said. “Providing safe navigation channels will have a positive economic impact on small businesses such as marinas, bait and tackle shops and charter companies, as well as New Jersey’s seafood industry.”

Projects are currently scheduled for Monmouth, Ocean, Cape May and Atlantic counties. The dredging of the Waackaack and Thorns Creeks in Keansburg in Monmouth County began fielding bids in mid-March. Yet, the actual removal of sediment will not begin until June.

“Typically the state would not dredge in the summer, but the new program features and aggressive schedule to maximize efforts during periods of favorable dredging conditions to alleviate hazards to boaters and commercial vessels,” according to a NJ DOT press release. “Efforts will be made to ensure work does not unnecessarily impede navigation.

With sediment rising and boating season about to hit a peak, the state has quite a lot on their plate in order to ensure the safety of New Jersey residents. Nearly a year and a half later, communities are still recovering from the most devastating storm the tri-state area has seen in recent memory. But through all the hardships, the people who reside in this region have met adversity with no small amount of courage and resilience. As they rebuild, we will do what we can to help them, one new dredge, business, or home at a time.

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PSEG’s Power Grid Just Got Hurricane-Proofed

After Sandy hit, a good portion of the East Coast was left without power. On Long Island and in New Jersey those outages left millions without heat, leaving residents at risk of hypothermia and carbon monoxide poisoning (due to the improper use of generators). The resultant super storms of climate change have forced gas and electric companies to upgrade their infrastructure in an effort to provide better service to their clients.

Public Service Electric and Gas (PSEG) has reached a tentative settlement with the New Jersey Board of Public Utilities (BPU) to spend 1.2 billion dollars to improve its infrastructure, which is a bit more than the $1 billion program that the BPU hoped for. But the widely contested plan may soon be green-lit according to Tom Johnson, a reporter for NJ Spotlight. Details are still in the works but people familiar with the settlement believe an agreement could be reached in the next few days.

If the proposal is agreed upon it will show how desperate the state is to prevent the power outages that many New Jersey residents experienced during Hurricane Sandy, despite the effect that the upgrade will have on residents’ utility bills. PSEG contends that the project investments will have a marginal impact on customer rates, but others aren’t so sure.

The New Jersey Rate Counsel believes the PSEG’s infrastructure upgrades will increase distribution rates by up to 20% for electric customers and 16.5% for gas customers. Stefanie Brand, director of the Counsel, stated that, “While the record does show an interest (by PSEG) on everyone’s part to improve resiliency, the record also shows that PSEG has not put together a program that will reasonably meet that goal.”

Public Service Electric and Gas does not intend to increase utility bills to the extent described by the rate counsel.  The company does understand that their upgrades will likely cost their customers, but the improvements will pay for themselves in a few years.

“It comes down to this: you can pay to keep the lights on in advance or you pay to fix them after they’ve gone out, “ said Kathleen Fitzgerald, vice president of PSEG, “We think doing it in advance makes more sense.”

Regardless of the dollar amount, the company will eventually be improving their infrastructure (that much seems certain). When the deal comes to fruition, power transfer stations will need to be flood proofed, gas lines will have to be replaced and laid, and computerized equipment will have to be installed, which should open the door for contractors to help ready the area for the next big storm.